Novelty and Appropriability: The Role of Entrepreneurial Knowledge in Sharing Information

Abstract

Why do entrepreneurs share information? This paper examines why entrepreneurs share information when others can steal their ideas. I present an information sharing framework which builds on the assumption that ideas are abundant and of predominantly poor quality. Rather than hold ideas as stable constructs, the framework examines the case where profiting from innovation is related to the complementarities of specific assets, facing the "lemons" selection problem under conditions of novelty. In building the framework I introduce the construct of entrepreneurial knowledge to address the theoretical disconnects between (1) economic models addressing quality uncertainty and information asymmetry and (2) entrepreneurial models of appropriability. The evidence for entrepreneurial knowledge is illustrated in both a historical example, and illustrated from primary data. The implications of this framework on key topics in strategy, knowledge management, and entrepreneurship are also discussed.

Keywords: Entrepreneurship

JEL Classification: M13