Entrepreneurial Orientation,Managerial Networking,and New Venture Performance in China

Based on institutional theory, this study investigates the moderating effects of different types of managerial networking (political networking, financial networking, and business networking) on the relationship between entrepreneurial orientation (EO) and new venture performance in China. The study finds that political networking has a negative moderating effect on the positive relationship between EO and new venture performance, financial networking has an inverse U‐shaped impact, and business networking has a positive effect. The findings not only enrich our understanding of the impact of managerial networking on the performance implication of EO in new ventures, but also offer new ventures some guidance on how to use EO and different types of managerial networking to enhance performance in China's transition economy.     

Dysfunctional competition & innovation strategy of new ventures as they mature

Drawing on a sample of 288 new ventures from three disperse locations in China, we examine how dysfunctional competition impacts the innovation strategy of new ventures as they mature. Our results show that: 1) innovation strategy has a positive effect on new venture competitive advantage; 2) the impact of dysfunctional competition positively moderates this relationship in the early stages of the venture; 3) dysfunctional competition negatively moderates it as the venture matures. Thus, dysfunctional competition forces new ventures to focus on their resource shortages through innovation strategy. However, as these ventures mature, they accumulate greater resources, and dysfunctional competition acts to limit the firm's competitive advantage. With these findings, we contribute to the theoretical understanding of innovation strategy in a dysfunctional competition environment and how new ventures strive for competitive advantage in such a setting.     

Social networks and speed of new venture internationalization during institutional transition: A conceptual model

This paper examines the role of social networks in the internationalization process of new ventures in the context of transition economies. We introduce a conceptual model in which the relationship between various dimensions of an entrepreneur’s network and new venture internationalization speed is contingent upon a country’s stage of institutional transition. We theorize that strong national ties and weak international ties, accessible through brokers, contribute to speedier new venture internationalization in contexts characterized by fundamental institutional upheaval. We also theorize that the value of various structural aspects of an entrepreneur’s network changes as transition progresses.     

The internationalization of entrepreneurial firms from emerging economies: The roles of institutional transitions and market opportunities

This paper examines the influence of institutional transitions and market opportunities in emerging economies on the internationalization of entrepreneurial firms from these economies. We conceptualize and examine a three-stage model of institutional transition in emerging economies, and their effects on the internationalization strategies of new venture firms. Propositions are developed in examining how the different stages of the institutional transition can influence the strategic choices for the internationalization of new venture firms. In responding to the calls for more research on institutions and international entrepreneurship, this paper is an attempt extending the linkages between the two to the context of emerging economies. The paper also has managerial implications for entrepreneurs and the associated policy implications in international entrepreneurship.     

Entrepreneurial passion diversity in new venture teams: An empirical examination of short- and long-term performance implications

Empirical evidence is mounting that passion is an important part of entrepreneurship, contributing to behavior and outcomes for entrepreneurs, employees, and ventures. Yet knowledge of the performance implications of passion within new venture teams is sorely lacking. We examine how both the average level of entrepreneurial passion and the diversity of passion within new venture teams contributes to venture performance in both the short- and long-term. We test our model with multi-source, multi-wave data collected from 107 new venture teams participating in an accelerator program. Our findings indicate that average team passion is not significantly related to performance, but passion diversity, particularly intensity separation, is negatively related to performance. These findings have important implications for the literature on passion, new venture teams, and group affective diversity.Executive summaryWhile existing studies have substantially improved our understanding of entrepreneurial passion, its sources, and its subsequent impact, insight into this topic remains limited in at least three ways. First, most new ventures are founded and led by teams rather than individuals, yet existing studies predominantly focus on entrepreneurial passion at the individual rather than team level. Second, while there is a prevailing assumption in existing literature that entrepreneurial passion leads to beneficial outcomes consistent with longstanding work in psychology, there is emerging evidence in entrepreneurship that passion may not always be functional and that it can even be dysfunctional. Despite this, we have limited understanding of what types of passion or when or for whom it is dysfunctional. And third, extant work on entrepreneurial passion for individuals and within teams has focused on behavioral or self-report measures of performance (e.g. Cardon and Kirk, 2015; Santos & Cardon, 2019) as well as venture survival, rather than objective team or firm performance in the short- and long-term.In this paper, we study the influence of team passion on new venture team performance. We draw on theory concerning entrepreneurial passion within venture teams (Cardon et al., 2017) that suggests that different aspects of entrepreneurial passion within teams shape team dynamics and venture outcomes. While generally, theories of passion suggest that entrepreneurial passion is positively related to team outcomes due to the positive emotions it brings about, we find that in teams, the relationships are more complex. While the average level of passion among team members is positively related to team performance when considered alone, this effect is not significant when passion diversity is also considered. Diversity of passion among individual team members has a negative relationship with team performance, including diversity in the level of passion team members experience (intensity separation), as well as diversity in the object of their passion (focus variety). These negatively affect team dynamics due to conflicting emotions and identities among team members associated with passion diversity. We examine these relationships on specific team performance outcomes including evaluation of the business idea in the short-term and venture performance five years after their participation in an accelerator.The sample used in this study includes 107 entrepreneurial teams that were part of an accelerator program in the Netherlands. Teams were evaluated on the quality of their business ideas at the end of the accelerator program and the amount of investment the team had received five years later. Our results provide no support for positive effects of average team passion on the quality of the business ideas and confirm the negative effects of passion intensity separation on the quality of the business idea and the negative effects of passion focus variety on later venture performance.This paper makes several contributions. First, we expand the literature on passion in entrepreneurship, specifically adding to our understanding of passion within new venture teams. More specifically, we contribute to the growing body of evidence concerning potential dysfunctions of passion by uncovering a dysfunctional property of team passion diversity that uniquely manifests itself at the team level of analysis. We contribute to the literature on new venture teams by examining team composition in the form of passion diversity, and its relationship with team performance. Finally, our study extends work on the effects of entrepreneurial passion by looking at objective team performance outcomes in both the short- and long-term.For entrepreneurs, our findings confirm the importance of affect and identity for new venture teams, and specifically our findings indicate that there is a dark side to team passion. While passion is generally positioned as a positive phenomenon, we highlight the negative outcomes that passion can have in the team context. Diversity in the amount of passion team members experience can diminish the quality of the business ideas the team is able to generate in the short-term, while diversity in the focus of team members' passion can diminish the firm's long-term performance. For investors and accelerator communities this research validates the importance of considering entrepreneurial team composition and specifically entrepreneurial passion levels and domains when investing in teams or when supporting venture building.     

Effectuation,Exploratory Learning and New Venture Performance: Evidence from China

This paper examines the effect of effectuation on new venture performance in the context of Chinese transitional economy. To determine how new ventures benefit from effectuation, we examine the role of exploratory learning as a key mediator. Using data from 266 Chinese new ventures, our results show that effectuation has a positive effect on new venture performance. Exploratory learning plays a fully mediating role in the relationship between effectuation and new venture performance. This empirical evidence contributes to the development of the theory of effectuation and also provides managerial guidelines for new ventures facing uncertain business environments like transitional economies.     

Out of Africa: The role of institutional distance and host-home colonial tie in South African Firms’ post-acquisition performance in developed economies

The colonial ties and institutional distance affect the cross-border acquisition performance of internationalizing South African firms who acquire targets in developed economies. Along with these main effects, this paper examines the moderating effect of the colonial tie on the effects of institutional distance on post-acquisition long-term operating performance. Using data on South African acquisitions in developed economies, this study finds that the colonial tie has a negative impact on the long-term operating performance of South African acquirers. Yet, the colonial tie also moderates the effects of institutional distance. This work contributes to the discussion on host-home country institutional distance and its impact on post-acquisition long-term operating performance and how colonial past can influence the performance of acquirers from South Africa and other such countries with colonial history.     

Internationalization of emerging-economy new ventures: The role of within-country differences

New ventures are increasingly internationalizing from emerging economies, but the role of their home country and any associated within-country regional differences are not well understood. In this article, we look at a new venture in China and how its headquartered region promotes its internationalization. We present empirical evidence that shows the interrelatedness between a venture’s region and internationalization: When institutional development in a region is strong, the impact of foreign firm presence on venture internationalization becomes even stronger. We discuss implications for managers of multinational enterprises and new ventures operating in emerging economies as well as policymakers in these economies.     

Social ties and venture creation by returnee entrepreneurs

Recent years have witnessed the return of individuals of Indian or Chinese origin from developed markets to their home countries to start new ventures. Returnee Entrepreneurs (REs) facilitate both direct technology transfer and indirect technology spillovers to local firms, thus contributing to the technological development of emerging economies. Much previous work is based on the integration of ethnic entrepreneurs in their host countries or business activities of transnational entrepreneurs that traverse their host and home countries. This study explores the role of social ties in venture creation by REs. Based on twenty case studies in India, the findings show that (1) local ties are indispensable for venture creation, and (2) the heterogeneity in the way REs leverage social ties across the host and home countries is contingent on the location of their intention to start up and generation of idea for their venture. The implications of these findings are discussed.     

Scale economies,entry, and welfare

This study shows how scale economies, initial size differences among firms, potential competition, and adjustment costs may influence the entry of firms into a dynamic oligopoly. It also examines the effects of these factors on the final size distribution of firms in an industry, and on the welfare levels of consumers and producers. We find that low to moderate scale economies are insufficient for Cournot-Nash competition to drive small firms from the market. Only when scale economies are quite high will the distribution of firm sizes become degenerate. Potential competition and the size of incumbent firms' capital stocks are additional barriers to entry. The welfare conclusion is that there may be a government role to preserve potential competition, but also to dissuade small firms from entering certain markets where there are economies of scale.     

The moderating effect of environmental dynamism on the relationship between entrepreneur leadership behavior and new venture performance

This article outlines a model of when, why, and how the influence of entrepreneur leadership behavior on new venture performance is likely to be moderated by the level of environmental dynamism. The model is tested using a sample of 66 new ventures. The results indicate that environmental dynamism has a significant positive moderating effect on the relationship between transformational leadership and new venture performance, and a significant negative moderating effect on the relationship between transactional leadership and new venture performance. Implications for theory and practice are discussed.     

Networks in Entrepreneurship: The Case of High-technology Firms

The value of networks as an integral part of the explanation of entrepreneurial success is widely acknowledged. However, the network perspective does not specify the role of networks in the emergence and early growth of a venture. We have distinguished three entrepreneurial processes in new venture development, i.e. discovery of opportunities, securing resources, and obtaining legitimacy, which are of importance for survival and performance. This paper examines how these processes are influenced by strong and/or weak ties and whether the degree of innovation (incremental versus radical) acts as a contingency factor in the way network ties support entrepreneurial processes. In this explorative study three cases on high technology firms in The Netherlands provide empirical material enabling us to develop a number of propositions on the network effect, in particular the mix of strong and weak ties, on the three entrepreneurial processes.     

Entrepreneurial orientation,market orientation,network ties,and performance: Study of entrepreneurial firms in a developing economy

Entrepreneurial orientation (EO), market orientation (MO) and network ties are typically modeled as separate antecedents of performance. However, the boundary conditions for such models are under-explored, as is their applicability to developing economy settings. Accordingly, drawing on institutional and social capital theories, the current paper argues that the performance benefits of EO and MO are complementary, and vary across different levels of social and business network ties. Using primary data gathered from entrepreneurial firms operating in Ghana, the study findings indicate that aligning high levels of EO and MO improves business performance, and particularly so when social and business network ties are well developed, since under these latter conditions, the performance benefits of aligning EO and MO are greatest.     

Institutional development and firm profitability in transition economies

Although transition economies experience significant institutional transformations that vary in their pace and magnitude, our understanding of how such changes influence firm performance is rather limited. We examine how variations in institutional reforms and international openness in 16 transition economies in Central and Eastern Europe (CEE) influence firm profitability. We enhance the understanding of this subject by showing that such institutional changes have different effects on the competitive advantages and in turn profitability of domestic firms and foreign subsidiaries. Our analysis of over 230,000 observations reveals that institutional reforms benefit domestic firms. Conversely, a completely different pattern emerges for foreign subsidiaries, indicating that institutional reforms have negative consequences for their profitability. Hence, in contrast to the established assumption that developed institutional environments are advantageous for foreign subsidiaries, the nature of institutional changes makes domestic firms the main beneficiaries.     

National distances,international experience,and venture capital investment performance

This study examines how the performance of cross-border venture capital investments is affected by national institutional and cultural distances between the environments of venture capitalists (VCs) and investee ventures. We propose that institutional and cultural distances will decrease VCs' effectiveness in conducting venture capital activities and negatively affect investment performance in terms of exit success, and obtain supportive evidence while controlling for geographic distance. We further analyze how VCs can use their international experience to mitigate the negative consequences of national distances. We find that while broad international experience in diverse countries attenuates the deleterious effects of institutional distance in a significant way, it does not have a similar impact in attenuating the negative effects of cultural distance.     

Exploring nonlinear effects of family involvement in the board on entrepreneurial orientation

Family business research suggests that family involvement in the board (FIB) may have both positive and negative effects on entrepreneurship. To reconcile these conflicting views, this study builds on stewardship theory, agency theory, and the resource-based view and proposes a nonlinear relationship between FIB and entrepreneurial orientation (EO) to explore how board task performance moderates this relationship. Using a sample of 208 Belgian private family firms, the findings show an inverted U-shaped relationship between FIB and EO, with EO declining beyond moderate levels of FIB. Furthermore, board monitoring task limits the negative effects of high FIB on EO, whereas the board service task does not have any significant effect. This study offers a more nuanced view of the governance conditions that affect EO in the context of private family firms, an overlooked topic in the family business field.     

Dynamic capabilities and venture performance: The effects of venture capitalists

After going through the initial public offering (IPO), new ventures face increased competition, greater public examination, and increased government scrutiny. Resource base weaknesses and external forces pose severe threats to the survival and success of new ventures. Building from resource-based theory, we first examine and delineate dynamic capabilities from entrepreneurial capabilities in entrepreneurship. We then develop theory to explain how venture capitalists (VCs) endue their ventures with greater dynamic capabilities in order to address these weaknesses and threats. We test our hypotheses on a match-pair sample of VC-backed and non-VC-backed new ventures and find that VC-backed ventures demonstrate greater dynamic capabilities as they relate to product and management development but do not display any greater dynamic capabilities as they relate to legal and government regulation threats. Further analysis also revealed that VC experience and VC reputation were positively related to 1-year stock price returns.     

Corporate Entrepreneurship, Informal Ties, and Firm Performance: Evidence from China

How can a firm achieve superior performance through corporate entrepreneurship in a transition economy? To address this question, we draw upon the resource-based view and the institutional theory to explore distinct roles of business ties and political ties in fulfilling resource needs confronted by different corporate entrepreneurial activities (i.e., internal innovation, venturing and strategic renewal). Using data of 228 firms from the Pearl River Delta area in China, our empirical findings reveal that corporate entrepreneurial activities do not always positively lead to performance in transition economies. Furthermore, the possession of high levels of business ties is more beneficial to the success of internal innovation and strategic renewal, while the possession of high levels of political ties contributes more to the success of venturing.     

创业者先前经验、学习模式与新技术企业绩效

创业者先前经验是影响新技术企业绩效的重要初始条件。为此以科技企业孵化器在孵企业为样本,以创业学习模式为中介变量研究了创业者先前经验对新技术企业绩效的作用路径。结果表明,行业经验和创业经验对开发性学习具有显著正向影响,对探索性学习具有显著负向影响;职能经验对两种创业学习模式没有显著影响。开发性学习对新企业生存绩效和成长绩效具有显著正向影响;探索性学习对新企业生存绩效具有显著负向影响,对成长绩效没有显著影响。创业学习模式在创业者先前经验与新技术企业绩效间起到部分中介作用。