The Theory of Entrepreneurial Rent

Mishra Chandra S. ()
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Mishra Chandra S.: Florida Atlantic University, Boca Raton, FL, USA

Entrepreneurship Research Journal, 2019, vol. 9, issue 1, 4

Abstract: The theory of entrepreneurial rent posits that powerful incentives for managerial learning are provided by giving managers the opportunity to share the firm surplus, which further enhances the management cognition and situation awareness. These incentives enable management to seek cognitively distant opportunities that provide the firm entrepreneurial rent. Further, the greater the firm-specific risk, the greater the entrepreneurial rent. The source of entrepreneurial rent is the uncertainty associated with the firm’s value opportunities. Further, since managerial attentional resource is shared between the firm’s current operations and the exploitation of the value opportunities, the managerial attentional resources are greater when the firm has greater value opportunities.

Keywords: entrepreneurial behavior; entrepreneurial rent; competitive advantage; managerial incentive; business model (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1515/erj-2018-0237

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