Attracting cross-border venture capital: the role of a local investor

Examining an increasingly prevalent but under-researched phenomenon, cross-border venture capital investments, it is observed that local venture capitalists typically invest first, followed by foreign venture capitalists in later rounds. A model is developed that explains the role of a domestic venture capital investor in attracting foreign investors and which also accounts for the impact of various circumstances on the importance of this role. In our model based on analysis of nine cross-border venture capital-backed companies, local venture capitalists have several important roles in increasing the venture's cross-border investment readiness including advice to operational management and contributing contacts and local market knowledge. The importance of these roles is mitigated if the entrepreneurial team is highly experienced or if the home market is not important for the venture. The prominence of the local investor has signalling value. Finally, the local investor's international social capital facilitates the formation of cross-border syndicates. Overall, the model developed in the paper contributes to a better understanding of cross-border venture capital and in particular to the division of labour between domestic and foreign venture capitalists in international venture capital syndicates. The paper also contributes to the emerging literature on international social capital.     

Financial bootstrapping and venture development in the software industry

Access to finance has been identified as a significant constraint on the development of technology-based businesses. Although important, institutional venture capital and business angel finance are used by only a small proportion of new and growing ventures. The role of bootstrapping – defined here as access to resources not owned or controlled by the entrepreneur – has been largely overlooked in studies of small firm financing. This paper redresses this omission by analysing the role and importance of bootstrapping in product development and business development in the independently-owned software industry. Results from two regions of the UK – Northern Ireland and South East England – are compared with equivalent data from the USA (Massachusetts). Overall, bootstrapping techniques are less extensively used in the Northern Ireland industry than in South East England, and in both regions bootstrapping is less common than in Massachusetts. This may account for the smaller employment size, growth profile and stronger service/consulting orientation of these firms. Moreover, there appear to be considerable variations in the use of bootstrapping. Larger firms tend to make more use of bootstrapping for product development, and consider it more important than do smaller firms, who more highly value business development-related bootstrapping. Small firms are also more likely to use and value cost-reducing bootstrapping techniques, whereas larger firms make more use of the exploitation of value-chain based relationships.     

Bringing Political Skill into Social Networks: Findings from a Field Study of Entrepreneurs

The authors integrate the entrepreneurship literature's sociological and behavioural perspectives and examine the processes through which entrepreneurs first build social networks and then use the network resources for enhancing venture performance. Field interviews of entrepreneurs during a six‐month period reveal that political skill is an important individual‐level factor that influences the construction and use of social networks. Theoretical and practical implications of the major findings are discussed.     

Collaboration,Co-Production,Networks: Convergence of theories

Abstract

This article suggests a framework to study service delivery networks that draws on the theories of collaboration, co-production, and networks combined. We introduce four dimensions of co-production under ‘coproduction-oriented collaborations’. This framework allows us to ‘zoom in and zoom out’ when we study networks. Using the case method approach, the framework is applied to analyse four networks in Singapore. Findings suggest that network process, network structure, and characteristics of actors are crucial to a network’s performance and coproduction’s effectiveness. This article also offers implications for practice that in certain contexts the usage of these concepts is for managerial effectiveness and not for enhancing democratic values.     

创业投资公司的后续管理模式设计

文章认为创业投资的后续管理是创业投资机构或专家减少投资风险,确保预期的投资收益率的重要手段。文章以某创业投资公司设计的积极干预型后续管理模式为例,探讨该管理模式把增值服务揉合在监控过程之中,使其能有效地介入创业企业的管理,并进一步突破信息不对称的束缚、减少各种代理风险。     

The versatile role of sustainable market entrepreneurs in market transformation: An intervention framework for institutional change

This article investigates in which way sustainable entrepreneurship can generate institutional change that transforms markets towards sustainability. A transformation of models of economic organization and market structures through sustainable entrepreneurship fosters the path towards sustainability. Institutional change involves sustainable market entrepreneurs as institutional entrepreneurs that operate in an effectual manner in different market transformation phases. Sustainable market entrepreneurs while seeking entrepreneurial opportunities simultaneously shape existing market structures and market conditions in different sustainable market transformation phases thereby creating new opportunities. Accordingly, a framework that explains institutional change prompted by sustainable market entrepreneurs in market transformation phases is developed. In this framework, various interventions which encourage sustainable market entrepreneurs to co-create with the stakeholders of their choice are strategized. The provided framework enhances the understanding of the versatile role of sustainable market entrepreneurs and potentially the leverage of their actions towards institutional impact over time.     

Resource Dependence and Network Relations: A Test of Venture Capital Investment Termination in China

This study examines how venture capital (VC) firms terminate investments in an emerging economy context. We contend that due to the weak institutional environment, it is appropriate to draw on insights from power and social relation perspectives for a better understanding of the phenomenon. Specifically, we argue that a termination decision hinges on not only the dependence relationship between a VC firm and its portfolio companies, but also the social relationships among VC firms. Event history analyses of approximately 12,000 VC deals made in China between 2001 and 2012 reveal that when a VC firm has a greater number of investments in an industry, it is more likely to terminate investments on a portfolio company in that industry. Moreover, such effect on termination is moderated by the focal VC's embeddedness with its syndicate partners and collaboration opportunities with other VC firms outside the immediate access of the syndicate partners. Our study sheds light on research on VC decision making in emerging markets by integrating insights from resource dependence relationships and interorganizational network characteristics.     

Financing high-tech SMEs in China: A three-stage model of business development

This article examines the financing of high-tech Small and Medium-sized Enterprises (SMEs) in China at different stages of business development, based on a survey of 74 face-to-face interviews with high-tech SMEs and additional nine informal face-to-face interviews with bank and government officials in the two Chinese provinces of Guangdong and Guangxi. Attention is focused on distinguishing different financing methods according to particular stages of an SME's business life cycle. The findings show the importance of informal financial sources from individuals and firms’ employees for high-tech SMEs at all three development stages. Such sources have become a central aspect of the financial infrastructure for the private sector in China. The article distinguishes between the alternative methods or practices used by firms at all three stages, seeking to either overcome particular financial constraints or to avoid the commitment of large capital investments in relatively long-term projects. It identifies the absence of demands and a gap for medium- and long-term funding for high-tech SMEs, placing a serious barrier on the ability of high-tech SMEs to engage in R&D for making more fundamental innovation and developing new/distinctive products. It concludes by making the implications of these findings for China, and internationally.     

Entrepreneurial renewal in a peripheral region: the case of a winter automotive-testing cluster in Sweden

This research paper generates new insights into renewal processes that may occur in peripheral regions. Key findings are presented from an explorative study on a regionally clustered automotive-testing industry, located in northern Sweden. The findings suggest that despite theoretically unfavourable conditions it is possible to progress regional industry after a peripheral setting's socio-economic relapses. Moreover, this research shows how, notwithstanding the importance of profitable service offerings, an entrepreneurial environment can be encouraged within a peripheral region and subsequent renewal achieved by advancing local networks, improving internationalization and enhancing local infrastructures related to a service-based regional industry. Consequently this research offers us a glimpse into a pioneering service-based renewal case which, in essence, differs from previously reported entrepreneurship scholarship.     

The symbiosis of entities in the social engagement network: The role of social ventures

Social entrepreneurship is increasingly recognized as a mechanism for creating social and economic value. By applying population ecology, resource dependency and resource-based view perspectives, this paper develops a conceptual model to provide greater insight into how social entrepreneurship ventures collaborate with other organizations in a network to fulfill resource requirements. Through this process social ventures address unmet social needs to create value which leads to the development and growth of individuals, communities, and regions. Using a large city's economic development actors involved in small business promotion as test cases, this exploratory study illustrates that social ventures effectively acquire resources from the primary social engagement network actors: corporations, governments, and other social ventures. The framework introduced in the paper provides a means by which to better understand the context in which relevant social engagement players in a network exist and the synergies that they can develop.     

Itchy feet vs cool heads: Flow of funds in an agent-based financial market

Investors tend to move funds when they are unhappy with their current portfolio managers׳ performance. We study the effect of the size of this flow of funds in an agent-based model of the financial market. The model combines the discrete choice approach from agent-based modelling, where all capital is mobile, with the evolutionary finance framework where all growth is endogenous. Our results show that, if investors exhibit recency bias in evaluating portfolio managers׳ performance, even a small amount of freely flowing capital has a huge impact on the market dynamics and the survival of noise traders. We also find that investors׳ intensity of choice is a driving force for excess volatility and extreme price movements when the size of the flow of funds is large.     

Product co-development in an emerging market: The role of buyer-supplier compatibility and institutional environment

In emerging markets, supply chains increasingly serve as critical value chains through which ideas, practices and knowledge flow to and from suppliers and buyers. Drawing on buyer-supplier collaboration literature and organizational learning theory, we examine the antecedents and underlying mechanisms of product co-development. Due to emerging markets' unique institutional environments, we further investigate how government intervention and guanxi importance moderate supplier-buyer collaborative outcomes. Dyadic data from 323 supplier-buyer pairs in China largely support our theoretical framework. Partners' knowledge commonality has a curvilinear (inverted U-shaped) relationship to product co-development, whereas goal compatibility has a positive impact on product co-development. Mutual learning partially mediates the main effect. Furthermore, government intervention weakens the positive effect of mutual learning on product co-development whereas guanxi importance strengthens this relationship. This research provides fresh theoretical and managerial implications to supply chain collaboration in emerging markets.     

Between a rock and a hard place: corporate elites in the context of religion and secularism in Turkey

Drawing on discourse analyses of 36 in-depth interviews with elite business people from Turkey, the study identifies the networking patterns of new and established business elites in the context of economic liberalization and socioreligious transformation of the country. Through a comparative analysis of the so-called secular and religious elite networks, we demonstrate the role of institutional actors such as the government, and identity networks, based on religion and place of birth in shaping the form and content of social networks among business elites in Turkey. In order to achieve this, we operationalize Bourdieu's notion of theory of practice and Granovetter's theory of social networks, illustrating the utility of combining these approaches in explicating the form and content of social networks in their situated contexts, in which power and divergent interests are negotiated.     

The relationship of mentoring and network resources with career success in the Chinese organizational environment

The relationship of mentoring and network resources, the two components of social capital, with career success was investigated in a sample of 113 Chinese white-collar workers. The findings suggested that the prevalence of mentoring in the Chinese workplace is substantially higher than in the Anglo-Saxon workplace, and that Chinese employees do not distinguish their network ties or Guanxi into expressive and instrumental. These results were in line with the presumption that mentoring is an integral part of the Chinese culture and with the view that network ties or Guanxi in the Chinese society cannot exist in a purely instrumental form. In contrast to hypotheses, however, the findings suggest a limited relationship between social capital and career success. In particular, the amount of mentoring, participants reported they had received, was related to their intrinsic career success but not to their extrinsic career success; and the amount of network resources or Guanxi was related neither to extrinsic nor to intrinsic career success. These results were largely at odds with the accumulated knowledge on the benefits of social capital for career success. The findings are discussed with respect to the changing nature of the Chinese business and organizational environment, and their implications for human resource practices.     

The role of Embeddedness in Industrial Symbiosis Networks: Phases in the Evolution of Industrial Symbiosis Networks

Industrial symbiosis (IS) has emerged as a body of exchange structures to progress to a more eco‐efficient industrial system, by establishing a collaborative web of knowledge, material and energy exchanges among different organizational units. However, even given the potential economic and environmental benefits derived from IS networks, the process of emergence and development of these networks seems far from straightforward. The effective operation of such networks relies heavily on aspects such as trust and general reciprocity, aspects insufficiently covered in the IS literature. Based on the theoretical framework provided by social network analysis and economic geography and the empirical data collected through qualitative methods, based on the approach of Grounded Theory, the authors propose a modelling framework to analyse the main mechanisms in the building of trust and embeddedness and identify different phases in cooperation leading to effective IS exchanges. Copyright © 2010 John Wiley & Sons, Ltd and ERP Environment.     

邻里资本视角下的城市住区空间变革

对当下城市住区邻里社会资本的缺失现状和背景成因进行了探讨,揭示出当前住区空间变异与邻里社会网络退化的相互消极影响,在此基础上提出必须重新审视城市住区发展的价值取向,并结合住区空间营造提出变革策略.     

Risk-neutral skewness and market returns: The role of institutional investor sentiment in the futures market

This paper investigates the effect of index risk-neutral skewness on subsequent market returns and explores whether this effect will vary with various types of institutional investor sentiment in the futures market. Using index futures returns as the proxy of market returns, the empirical results show that the index risk-neutral skewness has a significantly negative effect on subsequent index futures returns. Moreover, the effect of institutional investor sentiment on subsequent index futures returns varies with various types of institutional investor sentiment. Finally, the effect of index risk-neutral skewness on subsequent index futures returns relies on various types of institutional investor sentiment.     

Entrepreneurship in action: bringing together the individual,organizational and institutional dimensions of entrepreneurial action

There is increasing recognition that entrepreneurship research needs to achieve a better balance between studying to entrepreneurial activities and setting these activities in their wider context. It is important that these good intentions are realized and one way of doing this is to bring together ethnographic research with concepts from sociology and from pragmatist thinking. In this study, field research material is interwoven with a set of key concepts to ensure that balanced attention is paid to issues at the levels of the enterprising individual, the organization and societal institutions. The field research is innovative in combining depth study of several enterprises and their founders with the analysis of broader aspects of ‘entrepreneurship in society’. It achieves this through a process of ‘everyday ethnographic’ observation, reading, conversation and ongoing analysis. In the spirit of a pragmatist conception of social science, the underlying logic of entrepreneurial action is identified. This is a logic which needs to be appreciated by all of those who wish to understand and/or engage with the entrepreneurial dimension of contemporary social and economic life.     

Taking a Second Look in a Warped Crystal Ball: Explaining the Accuracy of Revised Forecasts

The fundamental questions we address are whether firms with a higher initial forecasting ability are able to accurately revise the exit forecasts of their investments; and how co‐investment partners and value‐adding commitment with their investment influence the main effect. We explore these questions with novel and unique data collected via mixed research methods on venture capital firms’ forecasts of 114 portfolio companies. We find that venture capital firms that are better at making initial forecasts are less effective in revising their forecasts. In addition, while the number of co‐investment partners positively moderate this relationship, venture capital firms’ value‐adding commitment moderates it negatively. Our findings contribute to the literature on organizational forecasting as well as inter‐organizational knowledge transfer and knowledge creation. They also provide novel insights into venture capital literature and practice.     

Overcoming the liability of smallness by recruiting through networks in China: a guanxi-based social capital perspective

We investigate the role of guanxi in Chinese entrepreneurial firms’ recruitment practices in attempting to overcome the liability of smallness. Combining insights from the social capital and guanxi literature, we theorize the guanxi-based social capital perspective and use it to analysis 96 in-depth interviews with multiple members (entrepreneurs, senior managers and factory workers) from 15 die-casting entrepreneurial firms in Guangdong province, China. We find that the use of guanxi in recruitment practice can overcome the liability of smallness because it makes the hiring process more convenient, improves firms’ attractiveness to jobseekers and enhances the person-organizational fit between new hires and firms. We discuss how Chinese entrepreneurs and their senior managers use guanxi strategically to achieve these advantages. On the other hand, our findings suggest that jobseekers can also use guanxi to increase their options, improve their bargaining power and distract firms’ attention away from hiring the most appropriate candidate for the job in order to undermine the effectiveness of Chinese entrepreneurial firms’ recruitment procedures. We explore the implications of these findings for academic research and managerial practice.