Essays on economic sociology of innovation and entrepreneurship

Abstract

This dissertation considers how innovation and entrepreneurship are developed, encouraged, and evaluated with the theoretical lens of economic sociology. The first chapter investigates who becomes an entrepreneur among the pool of general consumers. The process by which individuals become entrepreneurs is often described as a decisive moment of transition, yet it necessarily involves a series of smaller steps. By breaking down the transition stages of knitting hobbyists' transition to producers who sell their original design patterns, the study examines the distinctive characteristics that affect users' decision to (a) create new products and (b) commercialize them. The second chapter examines the role of social capital in revealing and encouraging entrepreneurship. To the question of how social capital benefits innovation and entrepreneurship, existing literature has provided one dominant answer: access to information and resources.

In this study, I suggest an alternative mechanism how social capital benefits an individual's entrepreneurial transition: social networks provide potential entrepreneurs self-confidence on the promise of their new ideas and encourages their entry into the market. Using a matched sample of potential innovators, I show that an individual's participation in a local group encourages her transition to an entrepreneur, especially for those who already have the necessary skills for the transition. The empirical analysis resonates with qualitative evidence that hobbyists make the transition to entrepreneurs when encouraged by their friends. The third chapter (co-authored with Pierre Azoulay and Ezra Zuckerman) considers commitment-based typecasting among knit designers. We show that "commitment-based typecasting" has two characteristic features: asymmetry in audience valuation and retrospective reevaluation.

When a novice performer experiences an "identity shock" that suggests that she is more committed to the audience for one category than another, "betrayed" audience tends to regard her as having always been less committed to the rival audience/category. We test this theory in the domain of knitting, where there is a divide between avant-garde knitters and traditional knitters, and we show that when a novice knit designer is first published in the publication associated with one category, this elicits a retrospective devaluation of her prior work by the audience of the opposing category.