Entrepreneurship and survival over the business cycle: how do new technology-based firms differ?

We investigate the survival performance of new technology-based firms (NTBFs) over the business cycle and compare them against other entrepreneurial firms. Our data comprise the entire population of entrepreneurial firms entering the Swedish economy from 1991 to 2002, which we follow until 2007. Discrete-time duration models are employed to investigate whether the business cycle impacts differently on the survival likelihood of NTBFs vis-à-vis other entrepreneurial firms. Our main findings are three. First, NTBFs generally experience a lower hazard rate compared to other entrepreneurial firms, which is interpreted as a sign of their high ‘quality.’ Second, all entrepreneurial firms are sensitive to and follow a pro-cyclical pattern of survival likelihood over the business cycle. Three, when comparing NTBFs with the broader group of other entrepreneurial firms, we find that NTBFs are more sensitive to business cycle fluctuations. The above results come with a qualification, though. The sensitivity during the business cycle mainly pertains to self-employed NTBFs. Also, NTBFs’ higher survivability is only linked to not being characterized as self-employed.     

Market-oriented institutional change and R&D investments: Do business groups enhance advantage?

Emerging market firms (EMFs) are increasingly relying on innovation to find their competitive advantage, but our understanding of how institutional change affects firm innovation has been limited. We analyzed Korean manufacturing firms from 1994 to 2006 to test the proposition that market-oriented institutional change in an emerging economy alleviates firms’ financing constraints and monitoring problems and improves the effectiveness of their innovation activities. Institutional evolution in the economy was found to affect Korean business groups and independent firms differently. Institutional change reduced the financing constraints on independent firms more than for business group affiliates in R&D investment. Independent firms, however, appeared less capable than group affiliates of translating the benefits of improved institutional environments into efficient R&D investment. This asymmetry may lead to a wider gap in the efficiency of R&D investment between business group affiliates and independent firms.     

Does innovativeness of knowledge-intensive business services differ from other industries?

This article seeks to determine whether the innovative capabilities of knowledge-intensive business services (KIBS) do actually differ from other industries through comparing the innovation capacities and financial performance of KIBS with firms operating in other sectors (non-KIBS). Based upon a 1000-firm sample, the results of our estimated econometric model demonstrate that non-KIBS firms are in possession of significantly greater innovation capacities than KIBS firms. These differences were observed across factors such as organisational process innovation, the launch of already existing products in new markets, branding and new product designs. Nevertheless, as regards the actual importance attributed to product/service innovation, KIBS firms place a greater comparative importance on innovation in comparison with their non-KIBS peers. In addition, the empirical evidences display a significantly different range of effects of innovation capacities on financial performance and concludes that non-KIBS firms turn in better comparative performances than specialist KIBS firms.     

Why does the effect of new business formation differ across regions?

We investigate regional differences in the effect of new business formation on employment growth in West Germany. We find an inverse U-shaped relationship between the level of start-up activity and employment change. The main variables that shape the employment effects of new businesses in a region are population density, the share of medium-skilled workers, the amount of innovation activities as measured by the proportion of research and development (R&D) employees, and an entrepreneurial character of the regional technological regime. In contrast, a high share of small-business employment has a negative influence on the employment effect of start-ups. Other indicators for education, innovation activity, and labor productivity do not prove to be statistically significant.     

How do business and financial cycles interact?

This paper analyzes the interactions between business and financial cycles using an extensive database covering 44 countries for the period 1960:1–2010:4. Our analysis shows that there are strong linkages between the different phases of business and financial cycles. In particular, recessions associated with financial disruptions, notably house and equity price busts, tend to be longer and deeper than other recessions. Conversely, while recoveries following asset price busts tend to be weaker, recoveries associated with rapid growth in credit and house prices are often stronger. These findings emphasize the importance of financial market developments for the real economy.     

Credit market failure intervention: Do government sponsored small business credit programs enrich poorer areas?

Using local market employment rates as our measure of economic performance, we find a positive and significant correlation between the average annual level of employment in a local market and the level of SBA guaranteed lending in that local market. Furthermore, the intensity of this correlation is much larger in low-income markets. Indeed, our results suggest that this correlation is positive and significant only in low-income markets. This result has important implications for public policy in general and SBA guaranteed lending in particular.

Beyond the corporation: Who represents business to the government and public?

A new kind of business leadership has emerged during the past decade, a leadership devoted to the public interest. What are the stages that characterize the development of these leaders?     

Conclusion: Korean business and management – the end of the model?

Recent financial crisis has raised questions about the underpinnings and longevity of economic success in Asia, and has reminded us to be sceptical of pundits and the eponymous populist predictions relating to the region. Several perspectives can guide the analysis and evaluation of industrialization, from ‘state’ versus ‘market’, ‘internal’ versus ‘external’, and ‘macro’ versus ‘micro’. Companies in Korea as ‘latecomers’ have pursued ‘catch-up’ strategies. However, Korean corporate capabilities reside in a restricted number of industries, firms and functions (production), and are poor elsewhere, such as in marketing, technology (design and development) and organization, and small and medium-sized enterprises. Furthermore, many factors regarded once as sources of Korea's success are now seen as weaknesses. The future challenges facing Korea include its dirigiste economy, organizational structures and governance, financial transparency and labour market flexibility. While there are undoubted problems, its urgent tasks are not insurmountable.     

Religious belief and international business negotiations: Does faith influence negotiator behaviour?

Religious observance is widespread and continues to influence managerial behaviour in many parts of the world. However, its role in international business negotiations has not received much scholarly attention. This study explores some of the key ways in which religious belief shapes negotiation behaviour. Focusing specifically on the Islamic context, and drawing on interviews with 27 religiously observant Muslim managers in Malaysia, the study found that commitment to a common religion among negotiators positively influenced certain components of the negotiation process through, for example, the use of religious/emotional appeal, which emphasised their ‘spiritual camaraderie’. In some instances, however, we observed something of a paradox, whereby differing religious beliefs among negotiating counterparts were claimed to actually enhance, rather than hinder, negotiations.     

Shopping trip value: Do stores and products matter?

Previous research indicates the importance of shopping trip value but recognises that consumers do not shop independent of the environment; both products and stores contribute to overall shopping trip value. This study identifies the impact of product and store value on overall shopping trip value and investigates the interrelationship among their utilitarian and hedonic components. In addition, it proposes a store value scale. The authors find empirically that utilitarian store value and performance-related product value have significant effects on utilitarian shopping trip value, whereas hedonic shopping trip value is influenced most by hedonic store value and emotional product value. In addition, women appear more prone to hedonic shopping trip value yet also utilitarian store value, while men were more attentive to utilitarian product value.     

Do MNEs from developed and emerging economies differ in their location choice of FDI? A 36-year review

This study examines the extent to which MNEs from developed (DMNEs) and emerging (EMNEs) economies differ in Location behaviour. Studies on MNE location choices have failed to capture the changing FDI landscape and leave the inconsistent findings unexplained. We address this gap by systematically reviewing the extant literature on location choices of DMNEs and EMNEs over the past 36 years – from the introduction of the OLI model to 2016. Key themes emerging from the review reflect a comprehensive picture, capturing the impact of multiple factors affecting location choices of DMNEs and EMNEs. Future research is challenged by: a. adopting an integrated approach examining three levels – individual (managerial), firm (ownership structure, type of FDI, internationalisation stages, and the different nature of ownership advantage), and context of location decisions (home, host, sub-national, regional, supranational, and networking); b. refining or developing theories to capture the dynamic picture of MNE internationalisation.     

Fairness in business: Does it matter,and what does it mean?

Fairness is a value that is touted and typically reinforced from childhood onward. Its association is universally positive. But does fairness have a place in business? Does it extend to the realm in which profit is emphasized? This Business Law & Ethics Corner delves into the matter and provides guidance for decision makers regarding fairness and its implications for business.     

Editorial Essay On business theory and influential scholarship: What makes research interesting?

Couched within a theory of business, I explore what makes business scholarship influential and examine aspects that make a paper interesting to its audience. I present a framework that combines several attributes of influential scholarship and a model for interesting research. I provide examples of interesting scholarship and theorize as to why they are interesting and why they might be influential. I conclude with suggestions for what individuals and institutions can do to promote and sustain influential scholarship. Copyright © 2016 ASAC. Published by John Wiley & Sons, Ltd.     

Are success and survival factors the same for social and business ventures?

Despite the growing interest in social entrepreneurship, there exist gaps in research that compares traditional business-oriented entrepreneurship with the social kind. This study attempts to fill the gap by answering the following questions: Are there significant differences between the survival chances of business and social ventures? and Do the traits of the entrepreneur and the firm play the same role as success factors for both types of venture? Hypotheses are tested using data collected from 2,179 firms. The results show that significant differences exist between social and business-oriented entrepreneurship in the form and intensity of the independent variables related to survival.