Nascent entrepreneurship: empirical studies and developments

The key ideas behind the empirical study of 'nascent entrepreneurs'—or 'firms in gestation'—are the following: First, the research aims to identify a statistically representative sample of on-going venture start-up efforts. Second, these start-up efforts are subsequently followed over time so that insights can be gained also into process issues and determinants of outcomes. This approach over comes several shortcomings of archival data and/or cross-sectional surveys, such as under coverage of the smallest and youngest entities and non-comparability across countries; selection bias resulting from including only start-up efforts that actually resulted in up-and-running businesses, as well as hindsight bias and memory decay resulting from asking survey questions about the start-up process retrospectively. The approach further gets the temporal order of measurement right for causal analysis. The purpose of this paper is to take stock of the developments of ‘nascent entrepreneur’—or ‘firm gestation’—research so far, and to suggest directions for future research efforts along those lines. For this purpose a review has been made of some 75 journal articles, book chapters, conference papers and research reports from the Panel Study of Entrepreneurial Dynamics (PSED); its international counterpart studies, and scholarly articles based on the Global Entrepreneurship Monitor (GEM) data. The review covers empirical findings organized under the following headings: Person factors leading to nascent entrepreneur status; The discovery process; The exploitation process; Some particular themes (Teams; Gender; Ethnicity, and Growth aspirations), and Aggregate level antecedents and effects of nascent entrepreneurship. After taking stock of the theoretical and methodological developments so far in this line of research the rear end of the manuscript is devoted to a thorough discussion of Further development needs presented as a comprehensive set of specific propositions regarding improvements that can be made in future research efforts within this general research approach. The review has attempted to shows that the PSED/GEM approach to capturing on-going start-up efforts and studying their concurrent development longitudinally is a basically sound, workable approach that has opened up a new and very promising avenue for entrepreneurship research. While many interesting results have already been reported and while considerable improvements on both the method and theory sides of research have been made, there is still room and need for further improvements. While no researcher should be expected to consider all these improvements their identification should facilitate other researchers’ progress in this area of research. From the perspective of a new entrant to the field it is still close to virgin ground and the interesting opportunities and challenges to take on are innumerable.