The impact of early imprinting on the evolution of new venture networks

Given the argued importance of networks to new ventures, this paper is intended to fill a noted gap in the literature pertaining to the factors that influence the evolution of new ventures' alliance networks. Drawing on the imprinting literature, we propose that one has to look beyond the first partner per se, and instead focus on the extant relationships the initial partner has with other firms. More specifically, we argue and find that the network size and centrality of a new venture's initial alliance partner influence the subsequent size of the new venture's network.     

Parent inheritance,founder expertise,and venture strategy: Determinants of new venture knowledge impact

A genealogical theory of new venture creation posits that “parent” firm routines are transferred to “progeny” ventures founded by the former employees of these parents. This study examines how the knowledge available to a venture from its parent firms and individual founders, as well as its initial technological direction, influences its own creation of impactful knowledge. We argue that new knowledge creation involves the recombination of underlying knowledge elements and hypothesize that the degree to which the venture's knowledge domain overlaps with the parents' knowledge has positive, but diminishing effects on the impact of knowledge created by the venture. We also predict that the breadth of founders' personal knowledge has a positive effect, but that the divergence between individual founders' and parent firm's knowledge domains has a negative effect on the creation of impactful knowledge by the venture. We test our predictions using a sample of 219 biotechnology ventures founded over the eleven year period 1990–2000 and tracked through 2010. Our results contribute to the entrepreneurship, knowledge creation, and genealogical literatures.     

The impact of the information and communications technology revolution on the internationalisation of corporate technology

The rising pace of technological change in information and communications technology (ICT) has doubtless provoked the rise of “techno-globalism” at a cross-firm level by providing a new mode of diversification. As a result of the increasing process of technological interrelatedness, the specialisation in a core pervasive technology (as ICT is nowadays) allows the firm to develop tacit capabilities, which, in turn, facilitate its corporate activity in different kinds of technology across national boundaries in an intra-firm network. Therefore ICT can be view as a platform for entry into new products as well as an enabler of fusion of technology.This paper investigates whether the increased specialisation in ICT has influenced the geographical diversification or internationalisation of firms. The association between the two phenomena is found in the later (but not in the former) period under analysis. By adopting a more detailed level of sectoral aggregation within the ICT field, the econometric analysis seems to indicate computing (rather than communications) as the ICT component driving the relationship between internationalisation of research and development activity and ICT specialisation.     

Incremental impact of venture capital financing

This paper investigates the differences in the return generating process of venture capital (VC)-backed firms and their peers that operate without VC financing. Using a unique hand-picked database of 990 VC-backed Belgian firms and a complete population of Belgian small and medium-sized enterprises (SMEs), we focus on the extent to which the presence of a VC investor affects the sensitivity of a firm’s returns to the changes in the capital structure, in the operating cycle, and in the industry dynamics. The differences may stem from the (self-) selection of better companies into VC portfolios, from the venture capitalists’ (VCs) value-adding activities, and/or from both. We examine these factors in the context of a complex simulation procedure which allows separating selection from value-adding when traditional approaches are difficult to implement. Our results indicate that VC-backed firms are able to extract more rent from the changing industry conditions and from the optimizations in their capital structure. The presence of VCs in the firm’s equity seems to have only a marginal effect on the operating cycle efficiency. Overall, the results are suggestive of the value-adding being the main driver of the VC-backed firm’s performance.     

New venture development: The costs and benefits of public sector assistance

In recent years there has been an extraordinary level of entrepreneurial activity occurring in the United States. Venture start-ups, new incorporations even bankruptcies are reaching record numbers. Concurrent with the increase in entrepreneurial activity has been an effort within the Reagan Administration to privatize public sector programs designed to aid new and small, ongoing business ventures. The premise behind this movement is that private sector initiatives can better, and more efficiently, serve the needs of entrepreneurs and small business managers and can also offer new business opportunities for some entrepreneurs. At the same time, however, privatization could reduce the assistance programs currently targeting fledgling ventures, many of which are unable to afford a private consultant.The purpose of this article is to examine the economic impact of one public sector assistance program, the Small Business Development Center (SBDC), in terms of its contributions to new venture initiation in Georgia and South Carolina. The focus on the SBDC program is appropriate since over 50% of the counseling activities of most of the centers is devoted to pre-venture clients, i.e., individuals or groups considering starting a business. This study is important and timely, not only in respect to assessing the effectiveness of public sector assistance programs for pre-ventures, but also for assessing whether it is worthwhile from an economic perspective, to offer assistance to such individuals in the first place.Although it is difficult to be precise in attributing cause to effects in dynamic business ventures, our study indicates that the Small Business Development Center's client sample experienced a greater than expected number of business starts, and a higher than expected rate of survival. The results suggest that the net taxable sales, generated by these new ventures in 1984. was approximately $20 million in Georgia and $10 million in South Carolina. Results also suggest that almost 500 new jobs were created in Georgia and 600 new jobs were created in South Carolina between 1981 and 1984 as a result of successful business starts among SBDC pre-venture clients.While such figures are impressive, the bottom line of this study is that the new tax revenues generated by client firms exceeded the cost of delivering the services. Specifically, our conservative estimates suggest a $3.80 to $1.00 and $1.50 to $1.00 benefit to cost ratio for the center's pre-venture consulting services in Georgia and South Carolina, respectively. Furthermore, the value attached to the assistance received, by the entrepreneurs themselves, closely paralleled our estimates, lending additional validity to our conclusions. Resource constrained entrepreneurs can obtain effective business assistance from the SBDC free-of-charge, and the benefits to society accruing from this service far outweigh the cost of providing them.     

The resource dynamics of international new venture networks

Building on network theory and the resource-based view of the firm, this paper uses three case studies to explore how networks facilitate resource development in the international new venture. Set in the context of the conception, commercialization and growth stages of venture development, four propositions are advanced. These pertain to the dynamics of organizational, human, physical, financial and social capital, and the nature of these resource flows as they pertain to the INV network. Implications for research and INV management are discussed.     

The impact of venture capital on the persistence of innovation activities of start-ups

In this study we investigate the impact of early stage venture capital on innovation activities of start-ups. This is done based on a cohort of start-ups that is representative of all firms founded in Switzerland in 1996/97, as recorded by a census of the Swiss Federal Statistical Office for this period. We analyze not only the impact of early stage venture capital on innovation performance 3 years after firm foundation, but also 6 and 9 years after firm start, respectively, for those firms that survived and reported continuously innovation activities (persistence of innovation). The results support neither the hypothesis of a positive impact on initial innovation activities nor the hypothesis of a positive time-persistent effect on innovation performance of start-ups.     

Launching a new venture

With the current economic storm raging, can a better understanding of business models make for smoother sailing for today's entrepreneur? What strategies can entrepreneurs adopt to help them weather this storm? John Mullins has researched entrepreneurial ventures and offers some valuable insights.     

Financing new venture exporters

This paper investigates the demand for, and access to, financing for young small and medium-sized enterprises (SMEs). The work compares, theoretically and empirically, two sets of new firms—those that export and those that do not export—as to the frequency with which they seek and obtain external financing. The work hypothesizes that new growth firms and new exporter firms are especially likely to seek external financing yet less likely to obtain financing. Empirical findings confirm these expectations, demonstrating that young growth firms were more likely than non-growth firms to seek all forms of capital and exporters were particularly likely to apply for equity and trade credit. Commercial lenders were less likely to approve loan applications from early stage growth firms, and especially so for applications from young, growth-oriented SME exporters. The implications of these results for research and public policy are discussed.     

Criteria used by venture capitalists to evaluate new venture proposals

A questionnaire was administered to one hundred venture capitalists to determine the most important criteria that they use to decide on funding new ventures. Perhaps the most important finding from the study is direct confirmation of the frequently iterated position taken by the venture capital community that above all it is the quality of the entrepreneur that ultimately determines the funding decision. Five of the top ten most important criteria had to do with the entrepreneur's experience or personality. There is no question that irrespective of the horse (product), horse race (market), or odds (financial criteria), it is the jockey (entrepreneur) who fundamentally determines whether the venture capitalist will place a bet at all.The question is if this is the case, then why is so much emphasis placed on the business plan? In a business plan there is generally little to indicate the characteristics of the entrepreneur—it is generally devoted to a detailed discussion of the product/service, the market, and the competition. To us, the implications are obvious—such content is necessary, but not sufficient. The business plan should also show as clearly as possible that the “jockey is fit to ride” —namely, indicate by whatever feasible and credible means possible that the entrepreneur has staying power, has a track record, can react to risk well, and has familiarity with the target market. Failing this, he or she needs to be able to pull together a team that has such characteristics and show that he or she is capable of leading that team.Factor analysis of the results indicate that venture capitalists appear to assess ventures systematically in terms of six categories of risk to be managed. These are: risk of losing the entire investment: risk of being unable to bail out if necessary; risk of failure to implement the venture idea; competitive risk; risk of management failure; and risk of leadership failure.Finally, three clusters of venture capitalists were identified: those who carefully assess the competitive and implementation risks: those who seek easy bail out; and those who deliberately keep as many options open as possible.     

The paradox of new venture legitimation within an entrepreneurial ecosystem

The current rise in research on entrepreneurial ecosystems notes that many questions are still unanswered. We, therefore, theorize about a unique paradox for entrepreneurs trying to establish legitimacy for their new ventures within and beyond an entrepreneurial ecosystem; that is, when pursuing opportunities with high levels of technological or market newness, entrepreneurs confront a significant challenge in legitimizing their venture within an entrepreneurial ecosystem, while those entrepreneurs pursuing ventures using existing technologies or pursuing existing markets have a much easier path to garnering legitimacy within that ecosystem. However, the diffusion of that legitimacy beyond the ecosystem will be wider and more far-reaching for those pursuing the newer elements compared to those using existing technologies or pursuing existing markets, thus, creating a paradox of venture legitimation. Prior research outlines approaches for new venture legitimacy but it is unclear when these approaches should be applied within and beyond an entrepreneurial ecosystem. To address this paradox, we integrate ideas from the entrepreneurship and innovation literature with insights from the legitimacy literature to describe how different types of venture newness employ different legitimation strategies which results in different levels of legitimacy diffusion beyond an ecosystem. We conclude with a discussion of our concepts and offer suggestions for future research efforts.     

The impact of institutional sources of capital upon the minority-oriented venture capital industry

Venture capital (VC) funds specializing in investing equity capital in minority-owned businesses have grown rapidly over the past decade, fueled by the willingness of major institutional investors to support this traditionally neglected niche. We investigate impacts of public pension funds upon the minority VC sector. These funds, providing over half of all capital invested in minority VCs, selectively invest, seeking to fund only those VCs likely to generate high returns. Although they attempt to pick the winners, our findings indicate that they have failed to do so. The influence of public pension funds upon the minority VCs is nonetheless real, skewing investing away from traditional practices and toward those of the venture capital mainstream. In the process, minority VCs funded by pension fund money invest in high-tech fields more than other minority-oriented VC funds do. Further, they are less likely to fund minority-owned small firms, focusing increasingly upon firms owned by nonminority Whites. Neither of these trends has resulted in increased returns. Rather, diverting minority-oriented VCs away from their traditional mission of investing in minority firms operating in a broad range of industries has resulted in lower returns over the years studied.     

Navigating liminality in new venture internationalization

Prior research describes international expansion as a series of discrete steps and notes that taking them threatens new ventures' survival, especially due to unexpected setbacks. Seen through the lens of social science, the source of such threat becomes clearer. In this paper, we argue that internationalization in new ventures involves what social anthropologists call a liminal transition – a betwixt-and-between period lying between the intent to internationalize and the realization of a stable internationalized state. The ambiguous and transitory nature of this liminal transition has the potential to increase the odds of overreach (e.g. a high-cost market entry without sufficient resources). Avoiding the negative influence of liminality – and instead harnessing its positive effect – relies on three sources of support that we refer to as opportunity scaffolding: self-reflective learning, peer learning and consultative learning. We argue that entrepreneurs with personality profiles high in levels of core self-evaluation (CSE) are more likely to utilize the scaffolding like that available in business incubators effectively. This leads to the development of a more reflective mindset, making capability learning more likely, preventing decisions that lead to overreach and reducing the threat to INV survival. However we also strike a note of caution in that at excessive (hyper) levels of CSE, the internationalizing new venture could become the victim of hubris. Emboldened with unrealistically high self-confidence, hubristic entrepreneurs are more likely to rebuff use of scaffolding, leading to a more reactive mindset, increasing the probability of liminal overreach and threatening INV survival.

The impact of search costs on consumer behavior: A dynamic approach

Prices for grocery items differ across stores and time because of promotion periods. Consumers therefore have an incentive to search for the lowest prices. However, when a product is purchased infrequently, the effort to check the price every shopping trip might outweigh the benefit of spending less. I propose a structural model for storable goods that takes into account inventory holdings and search. The model is estimated using data on laundry detergent purchases. I find search costs play a large role in explaining purchase behavior, with consumers unaware of the price of detergent on 70 % of their shopping trips. Therefore, from the retailer’s point of view raising awareness of a promotion through advertising and displays is important. I also find a promotion for a particular product increases the consumer’s incentive to search. This change in incentives leads to an increase in category traffic, which from the store manager’s perspective is a desirable side effect of the promotion.     

Technology commercialization, incubator and venture capital, and new venture performance

This study examines the effects of technology commercialization, incubator and venture capital supports on new venture performance from the resource-based view. This study uses regression analysis to test the hypotheses in a sample of 122 new ventures. The findings highlight the role of technology commercialization as a mediator between organizational resources, innovative capabilities, and new venture performance. Also, the empirical evidence indicates that incubator and venture capital supports moderate the effects of technology commercialization on the performance of new ventures. Finally, this study discusses managerial implications and highlights future research directions.     

Assessing the impact of communication costs on international trade

Communication costs are frequently cited as an important determinant of trade costs. We test this relationship by incorporating alternative measures of communication costs in a model of bilateral trade. We find that international variations in communication costs indeed have a significant influence on trade patterns. Furthermore, estimates using disaggregated data reveal that communication costs are more important for trade in differentiated products than for trade in homogenous products.     

International experience,growth aspirations,and the internationalisation of new ventures

The aim of this paper is to investigate the impact of the breadth and depth of international experience on subsequent new venture internationalisation and to what extent growth aspirations moderate these relationships. Drawing upon previous literature on international new ventures, human capital and growth aspirations, we tested our hypotheses using longitudinal data from the Comprehensive Australian Study of Entrepreneurial Emergence (CAUSEE). Our results support the hypothesis that breadth of international experience has a positive impact on internationalisation. Depth of international experience on its own does not predict subsequent internationalisation activities. However, results support our hypothesis that the interplay of a high growth aspiration and depth of international experience has a positive effect on internationalisation activities. Our study contributes to the research stream on new venture internationalisation by distinguishing between breadth and depth of international experience, suggesting that these dimensions are differentially linked to internationalisation. Further, we test for interaction effects between international experience and growth aspirations. We thereby add to the knowledge by illustrating that some types of human capital are only utilised when accompanied by growth aspirations.     

新会计准则对会计核算的影响

文章分析了新会计准则对会计搬算的影响.