How external partnering enhances innovation: evidence from Chinese technology-based SMEs

If China is to make the leap from being a manufacturer of goods, often for others, to being a world-class innovator, then Chinese small and medium sized enterprises (SMEs) have an important role to play in achieving this future goal. Much recent debate has focused on innovation activities of multinational corporations in China, with little attention paid to the role of indigenous SMEs and how they attempt to become more innovation oriented. This paper presents findings from 10 case studies of SME firms based in the Zhejiang Province of China to try and establish to what extent external partnerships have helped them become more innovative and competitive. The most common forms of partnering used by these firms is collaboration with universities, with customers and key suppliers, which has implications for how learning and absorptive capacity affects the firm's innovation strategy.     

Standards and innovation: US public/private partnerships to support technology-based economic growth

This paper examines how strategic alliances to create and use standards affect economic growth and development. The explanation of the link from standards to economic growth and development is through the effects of standards on the incentives to perform industrial research and development (R&D). We examine product standards, metrology traceable to national and international standards, and regulatory standards to address negative externalities. The paper develops a theoretical explanation for the link from standards to growth, survey/interview-guides to gather information from industrial R&D experts about the explanation, and case-study evidence about the explanation. We discuss the standard-setting process and explain that it entails strategic alliances among firms and with government involvement. Case studies of R&D projects in firms and in a national laboratory support the belief that standards implemented via strategic alliances leverage economic growth and development.     

Impact of different patent cooperation network models on innovation performance of technology-based SMEs

ABSTRACT

Patent cooperation network, an important way for technology-based SMEs to enhance innovation performance, has become a research hotspot in recent years. Different types of patent cooperation network models and different degree of SMEs embedding them will lead to different effects on enterprise innovation performance improvement. This research selected the ICT industry and the pharmaceutical industry technology-based SMEs with rich patent output as research objects. Based on binary structure perspective of network breadth and depth, the patent cooperation networks are divided into four types: ‘strong exploration’, ‘weak exploration’, ‘strong utilisation’ and ‘weak utilisation’. Through the multi-selection model and the negative binomial regression model, the general factors in the selection of patent cooperation network models and the impact of different models on enterprise innovation performance are analysed. This research provides path breakthroughs and development proposals for technology-based SMEs to access innovative resources and enhance their innovation capabilities on patent cooperation networks.     

Culture and innovation: The moderating effect of cultural values on corporate entrepreneurship

In the few last decades researchers have paid attention to the role of entrepreneurship and innovation in productivity, employment, and economic and social development. In addition, literature has focused on the entrepreneurship that occurs within organizations, such as corporate entrepreneurship. Also, the role of culture is crucial for the development of innovation. Consequently, it is vital to understand why some firms are more innovative and develop more entrepreneurial projects than others, and what determines innovation performance. This research uses Institutional Economics as a conceptual framework with the objective of analyzing the environmental factors that condition innovation within the firms. Specifically, the study determines the moderating effect of cultural values on corporate entrepreneurship. The study uses a logistic regression and the Global Entrepreneurship Monitor – GEM – database from the years 2004–2008, with information of 62 different countries (718.758 observations). The main findings highlight the impact of the environmental factors on organizational innovation, specifically on corporate entrepreneurship. Variables such as living in an entrepreneurial culture and media exposure (informal factors), and the number of procedures necessary to create a new business or access to finance (formal factors), appear to be significant for corporate entrepreneurship. Moreover, informal factors behave as moderators between formal factors and corporate entrepreneurship. The article has several implications from both theoretical perspective (advancing in the application of Institutional Economics for the study of innovation within the firms) and from the practical point of view (providing insights for governmental policies interested in fostering innovation and corporate entrepreneurship).     

Risk-bearing and entrepreneurship

In the “Knightian” theory of entrepreneurship, entrepreneurs provide insurance to workers by paying fixed wages and bear all the risk of production. This paper endogenizes entrepreneurial risk by allowing for optimal insurance contracts as well as occupational self-selection. Moral hazard prevents full insurance; increases in an agent's wealth then entail increases in risk borne. Thus, even under decreasing risk aversion, there are robust instances in which workers are wealthier than entrepreneurs. This empirically implausible result suggests that risk-based explanations for entrepreneurship are inadequate.     

Creatine and entrepreneurship

Creatine is a nitrogenous organic acid which supplies energy to body cells and enhances physical performance. Using the Young Finns Study combined with the Finnish Linked employer-employee data we show that quantities of creatine measured in 1980 prior to labour market entry affect entrepreneurial success as measured by capital income accumulation over the period 1993–2010 (in particular for females). However, we do not find evidence that creatine affects the propensity to become an entrepreneur. Our study contributes to the emerging literature on biomarkers and entrepreneurship.     

Hierarchies and entrepreneurship

We establish a correlation between the hierarchical structure of a firm and the likelihood of business creation among its former employees, using a sample of 16 million observations of Swedish workers and a novel proxy for hierarchies based on occupation data. Conditional on firm size and many other variables, employees in firms with more layers are less likely to enter entrepreneurship, to become self-employed, and to switch to another employer. The effects of layers are much stronger for business creation than for job-switching and they are stronger for entrepreneurship than for self-employment. We discuss two potential explanations for the distinctive hierarchy effect we find. Part of the effect could be to be due to preference sorting by employees, and part due to employees in firms with fewer layers having a broader range of skills. One test showing that the probability of entrepreneurship increases with their prior rank in an organization is consistent with ability sorting and inconsistent with preference sorting.     

The impact of entrepreneurship education on entrepreneurship skills and motivation

This paper analyzes the impact of a leading entrepreneurship education program on college students’ entrepreneurship skills and motivation using an instrumental variables approach in a difference-in-differences framework. We exploit that the program was offered to students at one location of a school but not at another location of the same school. Location choice (and thereby treatment) is instrumented by the relative distance of locations to parents’ place of residence. The results show that the program does not have the intended effects: the effect on students’ self-assessed entrepreneurial skills is insignificant and the effect on the intention to become an entrepreneur is even negative.     

Attachment orientations and entrepreneurship

This research presents a theoretical model and examines it empirically to associate attachment orientations with various types of entrepreneurs. The results show clear evidence that attachment orientations not only predict an adult’s tendency to become an entrepreneur but also the type of entrepreneur he will become. Specifically, the results show that attachment anxiety is the dimension that is the most responsible for the variability of becoming an entrepreneur, while anxiety and avoidant dimensions predict his characteristics and attitudes as an entrepreneur. This paper makes five important contributions to the research of both attachment theory and entrepreneurship. First, it adds to the theoretical understanding of the psychology of entrepreneurs. Second, the attachment theory enables us to extend our understanding beyond the predictions of personality traits regarding entrepreneurial intentions in order to further predict the type of entrepreneur he will turn out to be. Third, it stresses the role of early childhood events regarding the prediction of future entrepreneurial orientation. Fourth, it uses a unique data set of real young entrepreneurs in a single industry homogenous design in Israel, which is known worldwide as a startup nation. Fifth, it focuses on the opportunity validation stage (rather than the opportunity identification of the resource allocation stages), which is often neglected in entrepreneur personality research.     

Collaboration in new technology-based product markets

In the context o f an apparently increasing contemporary interest in the phenomenon of collaboration, this paper reviews some of the major issues associated with such cooperative activity.Possible reasons for an increase in collaboration are suggested, as are the ofen neglected non-benifits of collaboration, before the variety of influences on the process of collaboration management are discussed. The authors adopt a critical stance towardsjnancial measures as indicators of 'success' and 'failure':arguing that such an approach is simplistic and neglects may of the more intangible benifits of engaging in collaboration. A model of the possible factors aJecting the process of collaboration is proposed and two case studies ofproduct development collaborations in new technolopbased sectors illustrate some of the issues discussed in the paper.     

Renascent entrepreneurship

Why should individuals who have exited their firm consider re-entering into entrepreneurship, i.e. become renascent entrepreneurs? According to the logic of economic models of firm dynamics there is no reason to re-enter into entrepreneurship following firm failure. In contrast, research on nascent entrepreneurship has shown the positive effect of entrepreneurial experience on planning a new firm start. Based on empirical evidence from a database consisting of ex-entrepreneurs, this study shows that renascent entrepreneurship is a pervasive phenomenon. Next to passive learning, active learning plays an important role in the explanation of entrepreneurial preferences subsequent to firm exit. This study provides new insights into the role of prior knowledge and firm exit in the entrepreneurial process.     

Cultural entrepreneurship

Cultural entrepreneurship is a new character in the cultural sector. This paper characterizes the cultural entrepreneur paying homage to the hermeneutic approach of Don Lavoie and others. The challenge is to render the “cultural” meaningful. An invention is the highlighting of the rhetorical qualities of entrepreneurship. A cultural entrepreneur is the character who is entrepreneurial in the realization of cultural values, so is the conclusion.     

How technological innovation affects the structure of an industry: entrepreneurship evolution in the biotechnology and pharmaceutical industry since 1980

Challenges faced by the biotechnology and pharmaceutical industry, including reduced R&D productivity and the expiration of drugs that are high in demand, are recently being addressed through technological innovation. Such innovations are highly likely to change the structure and functioning of the industry. Since 2000, biotechnology and pharmaceutical companies have actively made strategic alliance, and technological innovations have changed the source of innovation from R&D to entrepreneurship within the industry. In this study, we identify the evolution of entrepreneurship and discuss the changes caused by technological advancements since 1980 by analysing patterns of exporting and acquiring technology data from Medtrack. Over difference period, biopharmaceutical firms have gained new knowledge and improved technology, and have implemented this newly acquired knowledge and innovation to introduce drugs to the market.     

Social capital access and entrepreneurship

We investigate the effect of social capital access on entrepreneurship. Social capital helps entrepreneurs to overcome resource constraints. This is especially important in small communities where we often see a lack of market-oriented institutions such as venture capital firms. Entrepreneurs gain access to social capital via club memberships. Combining differences in the number of individual club memberships with differences in the importance of social capital across communities, we identify a causal small community mark-up effect of individual club memberships on entrepreneurship. Assuming that unobserved heterogeneity that might influence both the individual's selection into clubs and the occupational choice to be an entrepreneur is independent of community size, we find that the effect of club membership on the propensity to be an entrepreneur is 2.6 percentage points larger in small communities than in large communities. Robustness tests support the validity of our identifying assumption and results.     

The efficient-markets hypothesis and entrepreneurship

The author thanks D.S. Ball, C.P. Jones, M.L. Walden, Murray Rothbard, J.W. Wilson, and several anonymousReview of Austrian Economics reviewers for helpful comments and suggestions.     

Housing price and entrepreneurship in China

Housing price has increased dramatically in China during the past decade. The appreciation of house value could relax credit constraint and thus encourage entrepreneurship. However, a house serves as both an important investment channel and a prerequisite for marriage in China. The continuous high return of investment in housing and intensified marriage market competition make house purchase a priority for young people and their parents, which would crowd out entrepreneurial activities. Using two large datasets, we find that high housing price in general discourages entrepreneurial activities for urban adults. For house owners, while house value appreciation has a positive wealth effect, the ratio of mortgage over income has a negative effect. For non-owners, a higher ratio of housing price over income corresponds to a lower probability of entrepreneurship. This study highlights the negative consequences of surging housing price on entrepreneurship in developing countries.     

Dynamic capabilities and radical innovation performance in established firms: a structural model

The paper extends Teece’s model of dynamic capabilities (2007 Teece, D. 2007. “Explicating Dynamic Capabilities: The Nature and Microfoundations of (Sustainable) Enterprise Performance.” Strategic Management Journal 28 (13): 1319–1350. doi: 10.1002/smj.640[Crossref], [Web of Science ®] , [Google Scholar]) into four types of capabilities: sensing, coordination, autonomy and reconfiguration capabilities. We further develop a structural model between four types of dynamic capabilities and radical innovation performance (RIP) in established firms. Based on a dataset of top 500 manufacturing established firms in Taiwan, the proposed hypotheses are tested using the structural equation models. The results reveal that four types of dynamic capabilities and RIP are positively correlated in a sequential and structural manner. This paper concludes the systemic development of dynamic capabilities can improve RIP in established firms. Finally, we point out some managerial implications for improving RIP in established firms.     

Politics and entrepreneurship in the US

There is a strong belief that Republicans are more pro‐business than Democrats. In this paper, we investigate the causal impact of partisan allegiance of governors (Republican or Democratic) on entrepreneurial activity by exploiting random variation in close gubernatorial elections in 50 states over the last three decades in a regression discontinuity design. We find that Republican governors are no different than Democratic governors in their effects on entrepreneurship. Our findings are robust to several sensitivity checks.     

Property rights,entrepreneurship and coordination

The notion of plan coordination enjoys a central place in the analysis of institutions and competitive market processes. The conventional wisdom is that institutions and policies vary in the extent to which they promote competition and how quickly and completely they bring individuals’ plans into closer coordination with one another. Kirzner has provided the most fully elaborated statement on the use of coordination as a positive analytical device for explaining market dynamics and as a normative criterion for evaluating economic policies. We identify the core propositions in his analysis that elucidate how economic coordination depends upon that most fundamental of market institutions – the system of private property rights. We also probe into Kirzner's claims about inherent limitations in our ability to compare the coordinative potential of alternative property rights systems. We unpack the consequences of these core propositions using the economic theory of property rights. We also examine Kirzner's assertion that dynamic competition – including Schumpeterian innovation – is necessarily coordinative in its market effects. We find that his argument rests on the implicit assumption that property rights remain constant during the process of market adjustment. We provide a case study of the advent of commercial aviation as a potential counterexample to his claims.