The Role of the Entrepreneur in Strategy Decision in the Context of Agribusiness
Abstract: This paper introduces the analysis of the entrepreneur to a more comprehensive understanding of strategies in Agribusiness. Current theories on Economic literature explain strategy adoption according to forces of the competitive environment (Porter 1985), organization arrangements and coordination among agents by the characteristics of the transactions (Williamson 1985) but provide limited explanations about what firms innovate and induce heterogeneity of strategies. Indeed, firms seek alternatives to the equilibrium to create and appropriate value. In this sense, the literature on Entrepreneur’s human capital provides a broader understanding of strategy choice. For instance, the creative destruction from Schumpeter (1961), entrepreneur’s alertness from Kirzner (1973), entrepreneur’s judgment capacity from Knight (1964) and entrepreneur’s education and experience from Schultz (1961). We investigate the entrepreneurial ability assessed by human capital framework to understand strategy choice due to an institutional change in the late 80s, based on a survey of 409 Brazilian coffee producers. Our findings suggest that entrepreneur’s formal education and experience explain strategy choice. For instance, higher formal education improves the probability to adopt a differentiation strategy which is a more entrepreneurial decision compared to the commodity strategy.
