The firm, uncertainty, and entrepreneurship

Abstract

[ACCESS RESTRICTED TO THE UNIVERSITY OF MISSOURI AT AUTHOR'S REQUEST.] Uncertainty provides entrepreneurs with profit opportunity and, also, dissipates the opportunity. Therefore, entrepreneurs have intention to utilize and cope with uncertainty with their entrepreneurial perception on the market. One of the ways to use firms to manipulate uncertainty is merger and acquisition. In this dissertation, the influences of merger and acquisition, especially vertical integration, on uncertainty, and of entrepreneurial judgment in merger and acquisition decision are discussed. First, the effect of asset specificity on firm-level uncertainty is discussed by comparing the values of market transactions and vertical integration. Second, the influence of asset specificity on systematic and unsystematic risks of the vertically integrated firm is tested by estimating and comparing on the difference of systematic and unsystematic risks of before and after vertical integration under the consideration of the influence of asset specificity on business profiles. Lastly, I explain the influence of entrepreneurship in sourcing decisions with the analysis of transaction cost economics, the resource based view, and real options from perspective of entrepreneurship.