The Role of Knowledge in Business Start-up Activity

Summary by Tytti Aalto

The study focuses on knowledge-based determinants for business startup activity. It focuses specifically on the role of knowledge in the decision to start a new business.

The central research question in this article is: ‘How do knowledge-based factors, in addition to other factors that have been suggested in the literature, affect one’s propensity to become an entrepreneur?’. The authors argue for the role of knowledge based on the notion of self-efficacy and the confidence in capabilities. In this study, the authors build on and extend the self-efficacy explanation for business start-up activity by emphasizing the role of two groups of knowledge-related components, i.e., individuals’ existing knowledge base on the one hand, and their exposure to external knowledge on the other. The analyses are drawn on a sample of nascent entrepreneurs from two European countries (Belgium and Finland).

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