Examining the formation of human capital in entrepreneurship: A meta-analysis of entrepreneurship education outcomes

Effective human capital formation through the medium of entrepreneurship education and training (EET) is of increasing concern for governments, as EET is growing rapidly across the world. Unfortunately, there is a lack of consistent evidence showing that EET helps to create more or better entrepreneurs. We undertake the first quantitative review of the literature and, in the context of human capital theory, find that there is indeed support for the value of EET. Based on 42 independent samples (N = 16,657), we find a significant relationship between EET and entrepreneurship-related human capital assets (r_w = .217) and entrepreneurship outcomes (r_w = .159). The relationship between EET and entrepreneurship outcomes is stronger for academic-focused EET interventions (r_w = .238) than for training-focused EET interventions (r_w = .151). We find evidence of heterogeneity in many of our correlations, and recommend that future studies examine potential moderators to more clearly delineate EET effect sizes. We also find a number of methodological weaknesses among the studies analyzed and that those studies with lower methodological rigor are overstating the effect of EET. Recommendations to improve the quality of future work in the field are provided.     

Financing entrepreneurship: Bank finance versus venture capital

This paper examines the entrepreneur's choice between bank finance and venture capital. With bank finance, the entrepreneur keeps full control of the firm and has efficient incentives to exert effort. With venture capital finance, there is a two-sided moral hazard problem as both the entrepreneur and venture capitalist (VC) provide unverifiable effort. The entrepreneur benefits from the VC's managerial input but must surrender partial ownership of the venture, thus diluting the entrepreneur's incentive to provide effort. Venture capital tends to be preferred to bank finance when VC productivity is high and entrepreneurial productivity is low.     

The future of public efforts to boost entrepreneurship and venture capital

The promotion of new high-potential business ventures and venture capital is of critical importance to economic growth. Well-considered policies can profoundly influence such opportunities, but many public initiatives are misguided. This article reviews the evidence behind these claims, as well as the criteria that can delineate appropriate and inappropriate policies towards the promotion of venture capital and high-potential entrepreneurship.     

Crime,community social capital and entrepreneurship: Evidence from Australian communities

Crime is an anti-social blight on communities that increases the cost of doing business, including for entrepreneurs. Drawing on Australian longitudinal data, this study examines the links between crime rates and the propensity for entrepreneurship within communities. We do so by matching propensity for entrepreneurship with types of crime found at the community level where crime occurs. We find that higher total crime rates, crimes against the person and property crime, significantly lower the propensity for entrepreneurship in communities. We also show that the core facets of community social capital – trust, membership in voluntary organizations and support and cooperation – mediate this relationship.Executive summaryWe comprehensively examine whether higher community crime rates – crime on people and crime on property – cause lower rates of entrepreneurship. Entrepreneurship research extensively examines how gaining social capital, defined as the social resources one gains within one's community, promotes entrepreneurship. This study considers whether a pervasive community dynamic in crime impedes entrepreneurship. Specifically, we show that the two main kinds of crime – people and property – inhibit entrepreneurship.We show the facets of community social capital that mediate the relationship between crime and entrepreneurship. We inform the role of community-based social capital in promoting entrepreneurship (Kwon et al., 2013) by considering how higher crime lowers social capital and in turn entrepreneurship. We show that core facets of relational social capital – trust, voluntary membership in community bodies, support, and cooperation – mediate the relationship between crime and entrepreneurship. Likewise, communities with more robust reserves of social capital are better able to withstand crime and promote entrepreneurship.Examining the link between crime and entrepreneurship allows us to contribute to the literature on entrepreneurship and social capital. We discuss the various ways in which crime diminishes social capital to shape entrepreneurship. In our framework that is predicated on theory on community social capital, crime creates distrust because it causes citizens to be wearier and more suspicious of each other, impeding sharing of ideas and knowledge for ventures. Crime impedes the efficacy and membership of community-based organizations that allow entrepreneurs to network. Crime reduces the support available for founders to start and sustain businesses in focal communities, as individuals seek opportunities and resources outside their communities. Crime diminishes the extent to which people take pride in and identify with their communities, as evidenced by voluntary membership in community organizations. Crime reduces collaboration because it leads to self-protective behaviors, including flight from high-crime communities, that hinder norms of reciprocity. Crime reduces cooperation as criminals are more likely to resort to coercion, as enforced by monitoring and violence, to solve business problems.Findings rely on a comprehensive database of crime rates across Australian postcodes. Crime is typically a localized phenomenon – it affects business outcomes in local communities. We obtain community-level crime rates from each Australian state and territory police force or relevant government agencies and match these data with entrepreneurship rates by postcode. Our primary identification strategy follows Dustmann and Fasani (2016), who estimate the effect of local area crime on mental health in the United Kingdom (UK). This identification strategy removes the effects of residential sorting and correlates crime with time-varying unobserved entrepreneurship determinants if there is no endogenous migration from local crime. The main findings are robust to instrumenting for local area crime to which movers are exposed and for historical abortion rates in the state or territory where the individual lives, as well as a number of other approaches to obtaining causal inference.The article holds considerable practical relevance for policymakers seeking to promote community entrepreneurship. Our study is highly relevant to community leaders and policymakers working to boost local entrepreneurship. Findings strongly suggest that efforts to reduce crime are a primary mechanism to protect social capital within communities and, therefore, entrepreneurship. Policy initiatives dedicated to creating and expanding social ventures would a) boost entrepreneurship and social capital and b) mitigate the detrimental effects of crime on entrepreneurship (Wry and York, 2017).     

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.     

The impact of human,social, and psychological capital on academic spin-off internationalization

Journal of International Entrepreneurship - Academic spin-offs (ASOs) are companies with a strong international vocation for two main reasons: first, they market their products and services in...     

农村人力、物质资本测算对农村经济发展影响——以新疆为例

运用因子分析测算了新疆农村人力资本投资综合水平,用永续盘存法测算了新疆农村物质资本存量,然后运用岭回归方法分析了新疆农村人力资本和物质资本对新疆农村经济发展的影响研究结果表明：新疆农村人力资本和物质资本存量水平均不高,农村人力资本对新疆农村经济发展的贡献率是农村物质资本贡献率的一半左右,农村人力资本外部性作用不明显.     

社会资本对农村家庭人力资本投资行为影响的实证分析

基于苏北农村的抽样调查,本文在控制了苏北农村家庭的年收入、未婚子女数量等变量之后,利用Eviews6.0的多元线性回归分析,考察了苏北农村家庭的社会资本对其人力资本投资状况的影响作用.研究发现,苏北农村家庭的社会资本对其人力资本投资具有不可忽略的作用,但并不具有非常积极的作用,具体表现为:家庭结构社会资本时家庭人力资本投资具有一定的促进作用,但作用的力度并不理想;而家庭认知社会资本与家庭人力资本投资却具有反向作用.     

The impact of social norms on entrepreneurial action: Evidence from the environmental entrepreneurship context

Using insights from institutional theory, sociology, and entrepreneurship we develop and test a model of the relationship between centralized and decentralized institutions on entrepreneurial activity. We suggest that both decentralized institutions that are socially determined as well as centralized institutions that are designed by governmental authorities are important in promoting firm foundings in the environmental context. In a sample of the U.S. solar energy sector we find that state-sponsored incentives, environmental consumption norms, and norms of family interdependence are related to new firm entry in this sector. Our findings also suggest that the efficacy of state-level policies in the sponsoring of entrepreneurial growth is dependent upon the social norms that prevail in the entrepreneur's environment. We expand entrepreneurship theory and the study of institutions and the natural environment by demonstrating the integral role that social norms play in influencing the creation of new firms and by illustrating the potential effect social norms have on the effect of policy that seeks to encourage environmentally responsible economic activity.     

The impact of venture capital on family businesses: Evidence from Spain

We analyzed growth in family and non-family Spanish venture capital-backed firms. When the venture capital (VC) firm does not hold a majority stake, the usual risk aversion attitudes in family firms may lead to conflicts between the management cultures of the existing and new shareholders, which may affect growth. We found lower firm growth after the initial round in family firms only when the investor holds a minority stake. Our results may explain the under-representation of family firms in VC portfolios and highlight the need to align the objectives of family managers and VC investors before the initial VC round.     

The impact of FDI on the performance and entrepreneurship of domestic firms

This paper examines how foreign direct investments influence the performance and entrepreneurship of domestic firms, a crucial question for economies driven by incursion of exogenous factors and especially transition economies. The intent is to investigate the way foreign direct investments shape the capabilities of domestic firms; hence, for this purpose, we take Macedonia, a Southeast European economy, as a case study. We find that (i) foreign ownership has helped restructure and enhance the productivity of domestic firms, (ii) FDI has positive influence in reinforcing the creation of new firms, and (iii) in line with the established literature, a foreign investment is likely to influence the job seeker to get employed rather to start their own business. Overall, the results confirm the influence of foreign firms in assisting entrepreneurial activity. The impact of foreign investment is, in general, positive and tends to influence the restructuring process of domestic enterprises.     

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.     

Leveraging brand equity to attract human capital

We propose that brand equity can influence job seekers’ perceptions of job opportunities. Our results suggest that job seekers view working for a strong brand as a way to build the power of their résumé. The belief that strong brands build powerful résumés is, in part, the outcome of job seekers’ beliefs that working for a strong brand will allow them to advance to better positions internally, provide them job-related training and skills, and demonstrate their willingness to work hard. In turn, job seekers express a greater desire to work for strong brands as measured by salary requirements and perceptions of job appeal in experiment 1 and job choice in experiment 2.

Exploring the innovation strategies of young firms: Corporate venture capital and venture capital impact on alliance innovation strategy

We investigate how governance structure and power influence alliance exploration strategy. Adopting a real options perspective and the agency view, we suggest that innovation strategies differ based on the firm's governance authority. We find that the motivations of corporate venture capitalist firms, venture capitalists, and firm founders may have an impact on the formation of exploratory alliances among adolescent firms. Using a sample of 122 adolescent firms, we examine the influence that governance structure has on the firm's alliance portfolio and innovation potential. While the influence of corporate venture capitalist firms alone do affect alliance formation strategy, corporate venture-backed firms with founders having high influence (knowledge or ownership in the firm) are more likely to form innovation-focused alliances. In contrast, venture capitalist-backed firms tend to avoid innovation-focused alliances, preferring more exploitive ones, even when founders have high influence within the firm.     

Communities at the nexus of entrepreneurship and societal impact: A cross-disciplinary literature review

Although there is wide recognition of the importance of entrepreneurship for generating societal impact, entrepreneurial activities alone rarely achieve a positive impact without the engagement of communities. To date, however, entrepreneurship researchers have tended to overlook the importance of community for creating societal impact through entrepreneurship, and lack a comprehensive understanding of the nature and roles of communities. To address this, we conduct a systematic review of the literature published in 51 journals across the Management and Entrepreneurship, Economic Development/Community Development, Economic Geography and Regional Science, Energy, and Public Administration disciplines that makes three contributions. First, it identifies a new typology of community and proposes a comprehensive framework of roles through which societal impact is created by entrepreneurship for, in, with, enabled by, and driven by communities. Second, it demonstrates that the key to understanding how community relates to societal impact creation is to jointly account for both its type(s) and role(s). By linking community types and roles, the findings also suggest a theoretical contribution based on the relationship between the degree of formalization of a community type, and the degree of agency that a community role enacts. Third, the review underscores that communities are not just static settings but can also be dynamic actors in efforts to use entrepreneurship to create societal impact. Our cross-disciplinary review highlights trends and gaps in the extant literature and provides researchers with an evidence-based research agenda to guide future inquiry on this vital topic.     

Phase transitions and emergence of entrepreneurship: The transformation of Chinese SOEs over time

Configurational theory has been a key building block of organizational research. An understanding of how certain configurations evolve over time, especially during discontinuous changes such as economic transition, has been largely a missing link in the literature. Considering economic transition as a process rather than an outcome, this study examined strategic adaptations among Chinese SOEs in two phases, 1990 and 2002. Findings from two surveys and from interviews revealed that environmental characteristics changed significantly over time and that firms responded with more entrepreneurial strategies aimed at firm growth rather than at satisfying state planners. Such changes were related to improved performance. The study closes by offering implications for research and practice.