Economics Dictionary of ArgumentsHome
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| Business failure: Business failure in economics refers to a company ceasing operations due to inability to cover costs, repay debts, or generate sufficient revenue. It often results from poor management, market changes, or economic downturns, leading to bankruptcy, liquidation, or closure. See also Bankruptcy._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
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Joseph A. Schumpeter on Business Failure - Dictionary of Arguments
Sobel I 11 Business Failure/Schumpeter/Sobel/Clemens: A growing, vibrant economy depends not only on entrepreneurs discovering, evaluating, and exploiting opportunities to create new goods and services, but also on the speed at which ideas are labeled as successes or failures by the profit-and-loss system. From an economic standpoint then, business failure has a positive side; it gets rid of bad combinations of resources, freeing up those resources to be used in other endeavours, and provides information and signals to other entrepreneurs about that losing combination. A vibrant economy will have both a large number of new business start-ups and a large number of business failures. In an economy where all entrepreneurs - even those with crazy ideas for new pizza combinations - can try them out in the marketplace, there will be a lot of mistakes. However, Schumpeter points out that this process is not one of entrepreneurs simply chasing a target created by a given set of consumer wants. Entrepreneurs also play an important role in anticipating and driving those wants. >Innovation/Schumpeter, >Entrepreneurship/Schumpeter._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
EconSchum I Joseph A. Schumpeter The Theory of Economic Development An Inquiry into Profits, Capital, Credit, Interest, and the Business Cycle, Cambridge/MA 1934 German Edition: Theorie der wirtschaftlichen Entwicklung Leipzig 1912 Sobel I Russell S. Sobel Jason Clemens The Essential Joseph Schumpeter Vancouver 2020 |
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