The impact of human capital on the early success of necessity versus opportunity-based entrepreneurs

This paper examines whether founders’ backgrounds influence new firm survival in the early years after startup, focusing, in particular, on the impact of unemployment-driven entrepreneurship. For entrepreneurs who left their previous employment to found a new firm, both general and specific human capital play a key role in enhancing early survival chances. However, various forms of human capital have little effect on early survival of unemployment-driven entrepreneurs, who rely mostly on previous entrepreneurial experience to persevere. Results suggest that pre-entry capabilities play an important role in the early success of opportunity-based entrepreneurs, but have little influence on the early success of necessity-based ones.     

Technological capabilities and the decision to outsource/outsource offshore R&D services

We analyze firm and environmental factors influencing the decision to outsource and outsource offshore R&D services. To do so, we have adopted a co-evolutionary approach adapted to firm internationalization, according to which these decisions are conditioned by the institutional environment (the IPR system), managerial intentionality (firms’ international strategy) and organizational path dependence and learning (firms’ technological and governance capabilities). Specifically, we argue that: (1) firms with more technological capabilities will tend to both outsource and outsource offshore R&D services, (2) the positive effect of technological capabilities would be leveraged when the institutional context of the firms’ country of origin has allowed them to transform their technological expertise into governance capabilities, and (3) that those firms with a higher local responsiveness attitude will be more likely to outsource offshore R&D services. We have found support for our hypotheses using survey data from a sample of 182 technology intensive firms from the European Union and the US.     

Is success hereditary? Evidence on the performance of spawned ventures

A common phenomenon in entrepreneurship is that employees turn away from employment to found their own businesses. Prior literature discusses the former employers’ characteristics that influence the creation of entrepreneurial ventures. An investigation of whether these characteristics also affect the success of the spawned ventures is missing so far. This paper contributes to the literature by showing that entrepreneurial ventures spawned by well performing firms are financially more successful than ventures stemming from poorly performing firms. This suggests that spawned entrepreneurs are able to exploit valuable knowledge from their previous employers which impacts their ventures’ performance positively. The analysis is based on a linked employee–employer data set for the Netherlands for the period 1999–2004.     

Ownership Concentration and CSR Policy of European Multinational Enterprises

This study investigates how ownership concentration in European multinational firms is associated with these firms’ corporate social responsibility (CSR). We employ factor analysis on responsibility data from EIRiS and use a regression analysis. Using firm-level data for almost 700 European firms, we find that shareholder concentration is significantly related to such policies. That is, more concentrated ownership goes hand in hand with poorer CSR policies. In our analysis, we control for size, leverage, profitability, industry, and country of origin. We use several indicators for ownership concentration. We also find that with more concentrated ownership, CSR of the firm gets worse. We suggest that especially with large shareholders, CSR would need to be included in their performance assessment.     

What is the value of entrepreneurship? A review of recent research

This article examines to what extent recent empirical evidence can collectively and systematically substantiate the claim that entrepreneurship has important economic value. Hence, a systematic review is provided that answers the question: What is the contribution of entrepreneurs to the economy in comparison to non-entrepreneurs? We study the relative contribution of entrepreneurs to the economy based on four measures that have most widely been studied empirically. Hence, we answer the question: What is the contribution of entrepreneurs to (i) employment generation and dynamics, (ii) innovation, and (iii) productivity and growth, relative to the contributions of the entrepreneurs’ counterparts, i.e., the ‘control group’? A fourth type of contribution studied is the role of entrepreneurship in increasing individuals’ utility levels. Based on 57 recent studies of high quality that contain 87 relevant separate analyses, we conclude that entrepreneurs have a very important—but specific—function in the economy. They engender relatively much employment creation, productivity growth and produce and commercialize high-quality innovations. They are more satisfied than employees. More importantly, recent studies show that entrepreneurial firms produce important spillovers that affect regional employment growth rates of all companies in the region in the long run. However, the counterparts cannot be missed either as they account for a relatively high value of GDP, a less volatile and more secure labor market, higher paid jobs and a greater number of innovations and they have a more active role in the adoption of innovations.     

‘Information and Communication Technologies’ and entrepreneurial activity: drivers of economic growth in Europe

Innovation and entrepreneurial activities have become increasingly important elements for economic growth and are also decisive factors in a country's level of development. As regards the scope of this work, the European region as a whole occupies the top positions in most of the technological indicators. Entrepreneurial activity plays a significant role for the economy of a country owing, among other matters, to its effects on the labour market and economic growth. Apart from fomenting job creation, the presence of entrepreneurs may be related to the structure and performance of a country's economy. The main purpose of this work is to analyse what relationship exists between technological availability and the presence of entrepreneurs in European countries.     

Health Insurance,Job Lock,and the Supply of Self‐Employment

Unlike most wage earners, self‐employed Americans have limited access to health insurance and face higher costs. Thus, social commentators and policymakers argue that many potential entrepreneurs are “locked” into their current jobs for fear of losing their health coverage even though they could be more productive in self‐employment. Using a large data set for the period 2000–2008, we find the availability of employer‐provided health insurance to be negatively correlated to the likelihood of self‐employment in the long run, but the effect to be mediated by individual and family health status. However, we find employer‐provided health insurance to have no significant effect on the probability of switching in the short run. Finally, we find differences in the magnitude of the effects between our samples of husbands and wives.     

Host country’s environmental uncertainty,technological capability,and foreign market entry mode: Evidence from high-end equipment manufacturing MNEs in emerging markets

The paper investigates the impact of the host country’s environmental uncertainty on the choice of entry mode and also discusses the moderating role of technological heterogeneity in this relationship. Based on the resource-based view and institutional theory framework, we first analyze the investment motivation of emerging industries in emerging markets and evaluate the environmental uncertainty from two dimensions, including the institutional environment (country level) and industry environment (market level). Then, the theoretical predictions are empirically tested using 173 overseas investment events in China’s high-end equipment sector from 2010-2018. Our findings suggest that when the uncertainty of the industry environment is low, no matter how uncertain is the institutional environment, most firms tend to choose a cooperative strategy. Once the industry environment indicators become turbulent, a high degree of institutional environment uncertainty causes firms to evade trade barriers by choosing a new plant. Alternatively, choosing a relatively conservative mode, such as export. Meanwhile, technological capability weakens the influence of environmental uncertainty on entry mode.     

Entrepreneurial characteristics and the size of the new firm: A model and an econometric test

This paper examines entrepreneurial influences on the size of the new firm. Theory and previous empirical research indicate that the entrepreneurial attributes most likely to influence the characteristics and performance of new firms are motivation, workskills and information. The results of a regression analysis confirm these hypotheses when turnover and total assets are the dependent variables but are less conclusive when employment is the dependent variable. Possibly the most interesting finding is that the entrepreneurs who create the most jobs are those who are highly motivated, have managerial skills and whose firms are in the manufacturing sector.     

Innovation and risk-taking in a transitional economy: A comparative study of chinese managers and entrepreneurs

This research was set in the People's Republic of China. As former socialist China moves from central planning toward a more market-driven economy, improved knowledge about the new environment and firm decisions within such an environment has significant implications. For organizational researchers, such a transition represents a genuine shift of paradigm, and thus offers a unique opportunity to test existing organizational theories and develop new ones. For multinational businesses seeking business opportunities, they have to compete or cooperate with these Chinese firms, whether state-owned or privately owned.Motivated by a deep curiosity in, using the language of Williamson (1996), “What is going on there” behind the “bamboo curtain,” and underpinned by a strong conviction that organizational researchers have much to gain as well as to offer by focusing on transitional economies, I undertook this study to examine characteristics of a regulatory environment and the impact on innovation and risk-taking among Chinese managers and entrepreneurs. I collected original primary data that represents managers from large state-owned enterprises (SOEs) and entrepreneurs from small privately-owned enterprises (POEs) through personal interviews and a survey. Significant differences were found between managers and entrepreneurs in their reported environmental characteristics, strategic orientations, size, and firm performance, indicating that managers are not as innovative and are less willing to make risky decisions than entrepreneurs. Being smaller and faster than SOEs, entrepreneurial firms have adopted some strategies that distinguish them from their larger and more established competitors. Speed, stealth, and sound execution allow entrepreneurs to harvest first-mover advantages and thus increase their chances for survival in a turbulent environment.     

Female‐Led High‐Growth: Examining the Role of Human and Financial Resource Management

We integrate research on upper echelons theory, the resource‐based view, and gender to explore conditions that facilitate high growth for female‐led firms. We argue that female entrepreneurs have certain advantages that help them leverage their firms’ human and financial capital to achieve high growth. In support, using a sample of U.S.‐based entrepreneurial firms, we found evidence that having a female lead entrepreneur positively moderated the positive relationships between indicators of firms’ human and financial capital and high growth. The findings have implications for programs, policies, and practices to encourage more high growth in firms with female lead entrepreneurs.     

Chinese immigrant entrepreneurs’ involvement in internationalization and innovation: Three Canadian cases

In international entrepreneurship literature, entrepreneurs moving across borders have received less attention than other entrepreneurs. Also, only scant attention has been paid to immigrant entrepreneurs’ contributions to their organizations. This paper aims to contribute to the emerging international immigrant entrepreneurship literature by studying Chinese immigrant entrepreneurs’ roles in their firms’ international and innovative activities in Canada, China, and other countries. It is based on three cases of Chinese entrepreneurs who established businesses in Canada. We conclude that these immigrants’ experience of doing business in China and Canada, their network relationships and knowledge of these markets quickened their firms’ internationalization considerably. Moreover, these firms became active in product or service innovation as the case immigrants also involved other immigrants and locals. Consequently, immigrant entrepreneurs should actively use their connections both in their new country of residence and also in their previous home country, but to become even more successful, they should also reach beyond their ethnic ties.     

Distance from core competences and new export survival: Evidence from multi‐product exporters

We study the determinants of the survival of new export products of multi‐product firms. We use micro‐level data from Chile to estimate linear fixed‐effects and non‐linear survival models to show that a measure of “distance” between a firm's new export and its previous export basket is a negative and significant determinant of the survival of the new export, especially during its first year. Our interpretation of this finding is that exports further away from firms’ core competences have lower chances of survival in exports since it is more difficult for firms to achieve competitiveness in them. Our results suggest that country‐level diversification, at least through existing firms, should be gradual.     

Modeling productive entrepreneurship in developing countries

This paper develops a model of entrepreneurial start ups in an economy with costly firm creation, costly entry to the skilled labor market, and a mismatch between skilled workers and available jobs, as prevailing in many developing countries. It examines several mitigating policies, such as improving the business environment, reducing tax rates and cost of starting business, and subsidizing entrepreneurial search and skilled employment. To be effective, policies need to target the most binding constraints to productive entrepreneurship. When the constraints are on the side of firms, search subsidies would be more effective in encouraging productive start ups than subsidies to skilled employment, although fewer entrepreneurs may choose to operate in the formal sector than under the latter. Both types of subsidies should be phased out with reforms of the business environment and improved labor markets.     

How do European trade promotion organisations manage their stakeholders?

Trade Promotion Organisations (TPOs) exert significant influence on the internationalisation potential of domestic firms and improving the indigenous country’s trade balance. However, TPOs’ strategies to uphold their impact as to the relationship vis-à-vis their stakeholders are largely unknown. This is an important gap in the literature considering that effective stakeholder management can enhance TPOs’ performance and the value they develop for three primary stakeholder groups, namely home country government, domestic firms and foreign trade offices. In this study, we employ the stakeholder theory and draw upon in-depth case studies of 14 European TPOs to address this gap. We advance six related propositions on how funding sourcing, services to domestic firms and functions of foreign trade offices can be effectively associated with TPOs’ relationship management towards these stakeholder groups. The contribution of the study lies on the application of stakeholder theory in trade promotion and the derivation of related sets of strategies.     

The Dilemma of Growth: Understanding Venture Size Choices of Women Entrepreneurs

In recent years the number of women-owned firms with employees has expanded at three times the rate of all employer firms. Yet women remain underrepresented in their proportion of high-growth firms. A number of plausible explanations exist. To develop richer insights, a two-stage research project was undertaken. A mail survey was sent to a sample of female entrepreneurs to assess motives, obstacles, goals and aspirations, needs, and business identity. Based on the survey results, follow-up, in-depth interviews were conducted with entrepreneurs, selecting equally from modest-growth and high-growth ventures. In terms of quantitative findings, growth orientation was associated with whether a woman was "pushed" or "pulled" into entrepreneurship, was motivated by wealth or achievement factors, had a strong women's identity in the venture, had equity partners, and believed women faced unique selling obstacles. The qualitative research made clear that modest- and high-growth entrepreneurs differ in how they view themselves, their families, their ventures, and the larger environment. The results of both stages suggest that growth is a deliberate choice and that women have a clear sense of the costs and benefits of growth and make careful trade-off decisions.     

The search for skills: Knowledge stars and innovation in the hiring process

The effective utilization of knowledge has become an important part of how firms gain competitive advantage in the marketplace. However, the recruitment, search, and selection processes used to obtain workers who would develop and deploy that knowledge have not materially changed for many years, with human resources (HR) frequently automating legacy procedures. We believe that the hiring processes for exceptional knowledge workers, whom we call knowledge stars, must adapt to the current business environment. Using the framework of architectural innovation, we propose that HR’s recruitment of knowledge stars should begin before specific jobs are announced, should be done in partnership with line managers, and should be done in coordination with implementation of other workplace innovations such as the development of communities of practice and participative management. We conclude by discussing how changes in the search processes for knowledge stars fit in context with some other ongoing challenges for HR personnel.     

Foreign Firms and Chinese Employment

This paper examines the effect of foreign direct investment (FDI) on employment in the Chinese manufacturing sector. As one of the world's largest recipients of FDI, China has arguably benefited from foreign multinational enterprises in various respects. However, one of the main challenges for China, and other developing countries, is job creation, and the effect of FDI on employment is uncertain. The effect depends on the amount of jobs created within foreign firms as well as the effect of FDI on employment in domestic firms. We analyse FDI and employment in China using a large sample of manufacturing firms for the period 1998–2004. Our results show that FDI has positive effects on employment growth. The relatively high employment growth in foreign firms is associated with their firm characteristics and their high survival rate. Employment growth is also relatively high in private domestic Chinese firms. There also seems to be a positive indirect effect of FDI on employment in private domestically‐owned firms, presumably caused by spillovers.     

Explaining National Differences in the Size and Industry Distribution Employment

What forces determine national differences in the size and industry distribution of employment? We stress the role of the economic policy environment as determined by business taxes, employment security laws, credit market regulations, the national pension system, wage-setting institutions and the size of the public sector. We characterize these aspects of the economic environment in Sweden prior to 1990–91 and compare them to the situation in other European countries and the United States. Our characterization and international comparisons show that Swedish policies and institutions strongly disfavored less capital-intensive firms, smaller firms, entry by new firms, and individual and family ownership of business.

We also compile evidence that these forces affect outcomes. Taking the U.S. industry distribution as a benchmark that reflects a comparatively neutral set of policies and institutions, Sweden's employment distribution in the mid-1980s is sharply tilted away from low-wage industries and industries with greater employment shares for smaller firms and establishments. Compared to other European countries, Sweden has an unusually high share of employment in large firms. Furthermore, the Swedish rate of self- employment in the 1970s and 1980s is the lowest among all OECD countries.

The institutional and policy factors emphasized by our study differ greatly across countries. This fact suggests that our approach can be fruitfully applied to other studies of national differences in industry and size structures and their evolution over time. As an example, the tax reform wave of the 1980s – which largely evened out cross-country differences in corporate taxation among OECD countries – offers some basis for projecting a movement towards greater similarity among wealthy countries in the size and industry distribution of employment.