A Real Options Perspective on Entrepreneurial Orientation and Government Ties

Izuchukwu Mbaraonye, Varkey Titus and Jeffrey Cavanaugh

Entrepreneurship Theory and Practice, 2025, vol. 49, issue 3, 817-845

Abstract: Firms’ strategic orientation toward entrepreneurship exposes them to regulatory uncertainties. Prior research suggests that addressing these uncertainties through corporate political activities (CPA) may require costly trade-offs, such as the loss of strategic flexibility. We argue that some of these trade-offs can be mitigated by the way firms structure their CPA. We extend the insights from real options reasoning (ROR) to offer a framework for how firms may circumvent some of these trade-offs through greater CPA breadth, which allows firms to retain their strategic flexibility while reaping some of the benefits of CPA.

Keywords: government policy; regulation; real options; entrepreneurial orientation; corporate entrepreneurship; government contracts (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:sae:entthe:v:49:y:2025:i:3:p:817-845

DOI: 10.1177/10422587241292074

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