Responding to Digital Transformation by External Corporate Venturing: An Enterprising Family Identity and Communication Patterns Perspective

Digital transformation increasingly requires activities located outside firm boundaries, for example via alliances with start‐up companies. Despite this, German Mittelstand firms, primarily owned and managed by enterprising families and seen as role models of innovation, appear reluctant to place strategic emphasis on venturing outside the firm’s boundaries when it comes to digital transformation. Drawing on the concepts of identity and communication patterns, we theorize on the mechanisms behind this behaviour. Applying structural equation modelling to a sample of 254 members of the next generation in enterprising families from Germany, we find that family communication patterns impact the strategic priority for or against external corporate venturing via identity‐related considerations.     

THE 2007–2008 U.S. RECESSION: WHAT DID THE REAL‐TIME GOOGLE TRENDS DATA TELL THE UNITED STATES?

In the extant literature of business cycle predictions, the signals for business cycle turning points are generally issued with a lag of at least 5 months. In this paper, we make use of a novel and timely indicator—the Google search volume data—to help to improve the timeliness of business cycle turning point identification. We identify multiple query terms to capture the real‐time public concern on the aggregate economy, the credit market, and the labor market condition. We incorporate the query indices in a Markov‐switching framework and successfully “nowcast” the peak date within a month that the turning occurred. (JEL E37, G17)     

Do Newly Founded Firms Pay Lower Wages? First Evidence from Germany

Using a linked employer–employee data set for Germany, this paper analyses wage setting in a cohort of newly founded and other establishments from 1997 to 2001. While theory provides alternative explanations for higher or lower wages in newly founded firms, we show empirically that start-ups tend to pay lower wages, ceteris paribus. On average, wages in newly founded establishments are 8% lower than in similar incumbent firms. This negative wage differential is substantially smaller in eastern than in western Germany. The wage differential is shown to decline over time as the newly founded firms become more mature.     

Global Entrepreneurship Monitor: Data Collection Design and Implementation 1998–2003

The Global Entrepreneurship Monitor research program was designed as a comprehensive assessment of the role of entrepreneurship in national economic growth. The conceptual model reflected in a wide range of factors associated with national variations in entrepreneurial activity and the major contextual features. Empirical tests of the many relationships in the model required four major data collection activities: adult population surveys, unstructured interviews with national experts, self-administered questionnaires completed by national experts, and assembly of relevant standardized measures from existing cross-national data sets. Adult population surveys were implemented to identify those entrepreneurially active, which required a set of precise criteria and careful processing to ensure harmonized counts and prevalence rates across 41 countries. Existing evidence on measures of reliability indicates that the measures met contemporary standards and the project was cost-effective.     

Unpacking the interplay between organisational factors and the economic environment in the creation of consumer vulnerability

ABSTRACT

Access to credit is a key enabler of modern life. Yet many consumers face factors beyond their control which sometimes render them unable to borrow from mainstream lenders. This paper documents how firm-related factors determine lending thresholds and shape who is, or is not, a creditworthy customer. The impact of the 2008 economic recession on lending decisions is explored, an aspect that has been insufficiently discussed even though recessions are cyclical events. Drawing on semiotics and using multiple case studies, the study captures not only the groups that were excluded but also the reasons for exclusion. Empirical support is offered for the notion of vulnerability as a fluid state and the role of the timing of decisions as a source of vulnerability is described.     

Tax incentives… or subsidies for business R&D?

We study whether firms’ actual use of R&D subsidies and tax incentives is correlated with financing constraints -internal and external- and appropriability difficulties and investigate whether both tools are substitutes. We compare the use of both policies by SMEs and by large firms and find significant differences both across instruments and across firm size. For SMEs, financing constraints are negatively correlated with the use of tax of credits, while they are positively associated with the likelihood of receiving a subsidy. The use of legal methods to protect intellectual property is positively correlated with the probability of using tax incentives, but not with the use of subsidies. For large firms external financing constraints are correlated with instrument use, but results regarding appropriability are ambiguous. Our findings suggest that (1) direct funding and tax credits are not perfect substitutes in terms of their ability to reach firms experiencing barriers associated to market failures; (2) one size may not fit all in innovation policy when the type or intensity of market failure differs across firm size, and (3) subsidies may be better suited than tax credits to encourage firms, especially young knowledge-based firms, to start doing R&D.