Entrepreneurial causation and effectuation logics in a regional context: Assessing the importance of population density

Abstract

ABSTRACTThe purpose of the article is to assess whether an entrepreneurial causation or effectuation logic is a function of geographical location in densely populated economic regions versus sparsely populated economic regions. A causation logic implies that the entrepreneur primarily focuses on a predefined goal and further aims to identify the means to reach that goal. By contrast, an effectuation logic implies that the entrepreneur to a larger extent focuses on the means at hand, which she or he aims at materialising into one or more goals that are not necessarily predefined. The empirical data for the study are based on an investigation and evaluation of Norwegian entrepreneurs in business incubation that are located in many different economic regions of the country. Multilevel regression analyses showed that geographical location in sparsely populated economic regions is associated with a causation logic, whereas a location in densely populated economic regions is associated with an effectuation logic. An implication of the article is that entrepreneurial stakeholders, such as policymakers, incubator managers, public and private partners, and entrepreneurs themselves should be aware of differences in causation and effectuation logics between entrepreneurs located in densely versus sparsely populated economic regions.