Monthly Archives: August 2012

Successful Entrepreneurship: A Matter of Location?

Entrepreneurship and Geography: An Evolutionary Perspective

By Erik Stam (Utrecht University)



This paper is an inquiry into the role of entrepreneurship in evolutionary economic geography. The focus is on how and why entrepreneurship is a distinctly spatially uneven process. We will start with a discussion on the role of entrepreneurship in the theory of economic evolution. Next, we will review the empirical literature on the geography of entrepreneurship. The paper concludes with a discussion of a future agenda for the study of entrepreneurship within evolutionary economic geography.

Review by Beatriz Rodríguez-Satizábal

This paper was distributed by NEP-HIS on 2012-07-29. For the business historians immerse in the research of the history of entrepreneurship, this paper by Erik Stam is a piece to read. The thoughtful review of the challenges that the relation between entrepreneurship and geography present to future research invites to open the discussion on the differences among countries based on the characteristics of the entrepreneur’s location rather than only on its cultural values and the institutional environment.

Stam challenges the growing view of entrepreneurship as a subject exclusively to be deal by management scholars. The paper brings the history back to the discussion and innovates in the use of evolutionary economic geography. As Jones and Wadwhani (2006) explain, the historical research on entrepreneurship has been particularly concerned with understanding the process of structural change and development within economies using Schumpeter’s approach to innovation.

Understanding the importance of the newcomers is beyond the focus of only one discipline and the use of economic geography will allow the researcher to deal with the question on how the location increases the chances to have entrepreneurs that introduce organizational and product innovations, without falling in the vicious cycle of explaining the increase of entrepreneurs exclusively by social variables such as religion, family values, or networks.

Moreover, by explaining that the entrepreneurs are hardly lone individuals who rely primarily on their extraordinary efforts and talents to overcome difficulties, Stam introduces the argument that for nascent entrepreneurs the focal choice is what kind of firm to start given their location, not so much choosing a location for a given firm. Therefore, it deals with the concern on the spatial distribution of entrepreneurship by searching the aspects of the interaction between the newcomers and the geographical distribution.

Stam claims that “in order to improve the insights in the spatial variations of entrepreneurship, we need to specify the type of entrepreneurship” (p. 10). Although, this is not new for those who study entrepreneurship, Stam’s proposition to include evolutionary geography gives space to a new research agenda. In the future the study of entrepreneurship should take into account the spatial concentration of the industry, the combined use of the entrepreneur and the firm as a unit of analysis, and the study of the exit of young firms to accomplish a deep analysis of the role of entrepreneurs in economic development.

“If credence is given to colonial writers.” Revisiting the Colonial Money Puzzle

Chronic Specie Scarcity and Efficient Barter: The Problem of Maintaining an Outside Money Supply in British Colonial America

Farley Grubb (, University of Delaware (United States)


Abstract: Colonial Americans complained that gold and silver coins (specie) were chronically scarce. These coins could be acquired only through importation. Given unrestricted trade in specie, market arbitrage should have eliminated chronic scarcity. A model of efficient barter and local inside money is developed to show how chronic specie scarcity in colonial America could prevail despite unrestricted specie-market arbitrage, thus justifying colonial complaints. The creation of inside fiat paper monies by colonial governments was a welfare-enhancing response to preexisting chronic specie scarcity, not the cause of that scarcity.

Review by: Manuel Bautista González

Farley Grubb

“Assuming money rather than explaining it allows economists to do money-price-output analysis without caveats” – Grubb 2012: 22

This paper distributed in NEP-HIS 2012-05-22 embeds institutional, regulatory and market constraints within a transactions cost model to account for the chronic specie scarcity affecting British colonial America. In so doing, Grubb offers interesting insights on how to tackle problems in the history of commodity money systems.

The model offered in this paper is part of Grubb’s project to assess what has been called “the colonial money puzzle”, a heated scholarly controversy on the applicability of the quantity theory of money in explaining monetary phenomena in colonial America.

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