The heterogeneity of animal spirits: a first taxonomy of entrepreneurs with regard to investment expectations

Michael Lainé
2016 Cambridge Journal of Economics  
To cite this version: Michaël Lainé. The heterogeneity of animal spirits: a first taxonomy of entrepreneurs with regard to investment expectations. Cambridge Journal of Economics, Oxford University Press (OUP), 2016, <10.1093/cje/bew039>. literatures consistent with his theory in order to derive a general theory of investment expectations on which to ground our taxonomy. A taxonomy should be analytical, and not merely descriptive. Its purpose is to disentangle to a certain extent the influence
more » ... f all possible causes given that the same causes do not have the same consequences on each and every entrepreneur. In other words, general conclusions may hide complex phenomena; conclusions may differ from one type of entrepreneur to another. We cannot suppose that animal spirits are the same for all entrepreneurs. A taxonomy offers an assessment of entrepreneurs' subjectivity, i.e. of their diverse ways to expect. Therefore, it goes beyond the mere clustering of data by also linking a set of independent variables to another set of dependent variables (here pertaining to expectations in matters of productive investments). Entrepreneurship has quite extensively studied entrepreneurs' heterogeneity so far, but not with regard to productive investment expectations. Most scholars seem to have focused more on the differences between entrepreneurs and non-entrepreneurse.g. Shane, Locke and Collins 2003 , Chell 2008, Johnson 1990, Robinson et al. 1991, Busenitz and Barney 1997, Begley and Boyd 1987. Various taxonomies of entrepreneurs have been proposed, revolving around motivations, skills (education, experience) and management styles (ways of thinking) as independent variables in order to account for performance, practices, innovation and perception of opportunities (the dependent variables)see Woo, Cooper and Dunkelberg 1991 , Filion 2000 , Tang, Tang and Lohrke 2008 , for surveys, and Smith 1967 , Smith and Miner 1983 for pioneering studies. Alas, to date, despite the growing interest in affect, no specific taxonomy revolving around it has been proposed. In our view, the best way to avoid creating a statistical artifact is to be as comprehensive as possible, that is to include virtually all potential causal factors of investment decisions as classification variables. Thus, we will heavily draw on past research on entrepreneurs' subjectivity, from Austrian economics to Post-Keynesianism and the growing strand of research on entrepreneurial affect (e.g. Baron 2008, Foo et al. 2013, since the argument goes that it influences opportunities' identification and evaluation, risk-taking propensities, and, generally speaking, cognition (e.g. Lerner and Keltner 2010, Podoynitsina et al. 2012, Hayton and Cholakova 2012, Baron, Hmielski and Henry 2012, Foo 2011. Consequently, our classification variables will not only encompass motivations, skills and management styles, but also dispositional affect. Of course, we do not claim to offer the definitive taxonomy of entrepreneurs. Rather, given the inherent limitations of our approach, we consider our work as a speculative experiment designed to explore the feasibility of deriving an assessment of heterogeneity on all relevant material that can be collated from various sources. In other words, we consider it as the first step towards a useful taxonomy. Our hope is to open discussion, not to close it. The rest of the paper will proceed as follows. In the second section, we will first of all give proper definitions and expound our theoretical framework. In the third section, we'll present our research design and methodology. In particular, we will present which variables we retained for our study. Then we will introduce our results and the corresponding taxonomy. Finally, we'll conclude by discussing about the limitations of our research and the directions of future research.
doi:10.1093/cje/bew039 fatcat:aferalksnvh4zl77cza6nmnra4