Modeling productive entrepreneurship in developing countries

This paper develops a model of entrepreneurial start ups in an economy with costly firm creation, costly entry to the skilled labor market, and a mismatch between skilled workers and available jobs, as prevailing in many developing countries. It examines several mitigating policies, such as improving the business environment, reducing tax rates and cost of starting business, and subsidizing entrepreneurial search and skilled employment. To be effective, policies need to target the most binding constraints to productive entrepreneurship. When the constraints are on the side of firms, search subsidies would be more effective in encouraging productive start ups than subsidies to skilled employment, although fewer entrepreneurs may choose to operate in the formal sector than under the latter. Both types of subsidies should be phased out with reforms of the business environment and improved labor markets.     

The evaluative legitimacy of social entrepreneurship in capitalist welfare systems

Social entrepreneurs start ventures to tackle social problems, and these ventures have the potential to outperform other social service providers in welfare states. We leverage theories of legitimacy and Varieties of Capitalism to examine national experts’ (N = 361) assessments of the efficiency of social enterprises relative to state and civil society. Our multilevel analysis across 11 welfare states shows that social enterprises are perceived as a more efficient solution to social problems when a liberal or socialist logic dominates a given state’s market coordination and social welfare provision. However, when institutional logics are in conflict, the assigned legitimacy of social entrepreneurship is diminished.     

The promise and problems of price subsidization in social entrepreneurship

Social entrepreneurship research has often focused on the benefits and challenges of designing hybrid organizations that integrate competing institutional logics to tackle social problems using market-based methods, especially in developing economies. Drawing on case evidence from the Safe Water for Africa program, we show how and why pricing new products at other than market prices offers a seductive but dangerous mechanism for managers seeking to pursue dual objectives in hybrid organizations. We identify five strategic and operational challenges with ethical implications that manifest as pricing dilemmas and show how and why they are likely to elicit moral dilemmas among stakeholders of social entrepreneurship who are not equally committed to both social and economic objectives.     

Designing a global standardized methodology for measuring social entrepreneurship activity: the Global Entrepreneurship Monitor social entrepreneurship study

Although there is a high level of practitioner, policymaker, and scholar interest in social entrepreneurship, most research is based on case studies and success stories of successful social entrepreneurs in a single country. We develop a methodology to measure population-based social entrepreneurship activity (SEA) prevalence rates and test it in 49 countries. Our results provide insights into institutional and individual drivers of SEA. Using the Global Entrepreneurship Monitor (GEM) methodology of Total Entrepreneurial Activity (TEA), we find that countries with higher rates of traditional entrepreneurial activity also tend to have higher rates of social entrepreneurial activity. We develop a broad definition of social entrepreneurship and then explore types based on social mission, revenue model, and innovativeness.     

The value of an educated population for an individual's entrepreneurship success

Human capital obtained through education has been shown to be one of the strongest drivers of entrepreneurship performance. The entrepreneur's human capital, though, is only one of the input factors into the production process of her venture. In this paper we will analyze to what extent the education levels of other (potential) stakeholders affect the entrepreneur's performance. The education level of consumers may shape the demand function for an entrepreneur's output, whereas the education level of employees may affect the entrepreneur's productivity and thereby shape her supply function. Based on this, we hypothesize that the performance of an entrepreneur is not only affected positively by her own education level but also by the education level of the population. We find empirical support for this hypothesis using an eight year (1994–2001) panel of labor market participants in the EU-15 countries. An implication of our finding is that entrepreneurship and higher education policies should be considered in tandem with each other.     

Investigating social entrepreneurship: A multidimensional model

Social entrepreneurship is an emerging area of investigation within the entrepreneurship and not-for-profit marketing literatures. A review of the literature emerging from a number of domains reveals that it is fragmented and that there is no coherent theoretical framework. In particular, current conceptualizations of social entrepreneurship fail to adequately consider the unique characteristics of social entrepreneurs and the context within which they must operate. Using grounded theory method and drawing on nine in-depth case studies of social entrepreneurial not-for-profit organizations, this paper addresses this research gap and develops a bounded multidimensional model of social entrepreneurship. Implications for social entrepreneurship theory, management practice, and policy directions are discussed.     

"花之林"的创业之路

追求卓越花之林人文茶馆,创立于1997年7月1日,是上海最老、最著名的泡沫红茶坊之一。“花之林”前身为赫赫有名的玫瑰园(今上海花之林仙霞店),后更名为“花之林”。取“玫瑰”之“花”意,更“园”之狭义突破为“林”,即为“花之林”。中国诗词中。对     

The value of social presence in mobile communications

Texting via mobile devices is used as a primary means for day-to-day communications among an increasing number of consumers and, as a result of this trend, more companies are engaging with consumers and addressing service complaints using social media platforms, such as Facebook. This study addresses the use of two-way mobile texting via Facebook to resolve service complaints with applications from social presence theory. Research shows that marketers’ warm emotions are important in addressing service complaints, yet prior works mainly focus on the significance of human warmth in face-to-face contexts. Therefore, this study uses an experimental design to investigate the value of social presence in mobile texting as a means for providing service recovery. In triangulating the data, we use focus groups in confirmatory analysis. The findings show that social presence cues add human warmth to text messages with respect to two-way communication perceptions, control perceptions, responsiveness perceptions, satisfaction, attitudes, and repurchase intentions. The article concludes with a discussion of the importance of social presence cues in improving customers’ experiences and overall satisfaction.     

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.     

Non-profit organizations,entrepreneurship, social capital and economic growth

Traditional economic growth literature focuses mainly on the neoclassical approach. According to this view, firms try to maximize their benefits so that there is no place for non-profit organizations (NPOs). However, the activity of NPOs has a higher relevance in society, and it is necessary to analyze its effects on economic growth. These effects are not direct, but occur through other variables that directly promote economic growth, such as entrepreneurship activity and human capital, and through the improvement of education. We engage in an empirical analysis of these issues using data from 11 countries.     

The microstructures of rhetorical strategy in social entrepreneurship: Building legitimacy through heroes and villains

For social entrepreneurs who seek to change existing community practices, the difficulties in building legitimacy may pose a challenge that compromises their ability to create sustainable institutional change. Case studies of 10 social enterprises reveal that rhetorical strategy aims to overcome this barrier. The findings suggest that the rhetorical strategy used by these enterprises casts the organization as protagonist and those that challenge the change as antagonists. The microstructures underlying this strategy include vocabulary sets that invoke socially accepted meta-narratives, and rhetorical devices that heighten the positive of the protagonist meta-narratives and the negative of the antagonist meta-narratives. The rhetorical strategy weaves together these protagonist and antagonist themes to create tension and persuade the audience of the organization's legitimacy.     

The potentials and perils of prosocial power: Transnational social entrepreneurship dynamics in vulnerable places

Social entrepreneurs can be powerful change agents for alleviating the suffering of the disadvantaged. However, their prosocial motivation and behavior frequently result in detrimental impacts on those they intend to support, especially when their operations span different socio-spatial contexts. We conducted a multiple comparative case study among 12 transnational social entrepreneurs of foreign, domestic non-indigenous, and local indigenous origin, who are seeking to improve the livelihoods of indigenous communities in rural Ecuador. We introduce the concept of prosocial power to social entrepreneurship research and demonstrate how it can work as a double-edged sword in the hands of transnationally embedded social entrepreneurs who operate in vulnerable places. Context-bound variations in social distance, bi-directional learning, reflexive impact measurement, and socio-spatial dominance were identified as being decisive for prosocial power to lead to positive or negative impacts on disadvantaged others.     

The interplay of entrepreneurship education and national cultures in entrepreneurial activity: a social cognitive perspective

Does entrepreneurship education result in entrepreneurial activities across national cultures? For the most part, prior research has examined the relationship between entrepreneurship education and entrepreneurial activity, using country-specific samples. However, many of these results are inconsistent. One reason for such inconsistent results may be a limitation of country-specific samples, given that they are valid in a domestic context but not generalizable. Our study addresses this limitation by using a cross-national sample of 24,457 respondents from 38 countries to examine the role of diverse national cultures. Building on the social cognitive theory, our results show that entrepreneurship education is more seminal for entrepreneurial activities that take place in countries with greater individualism, less uncertainty avoidance, and a high level of masculinity. This research presents a more complete picture of how entrepreneurship education may affect international entrepreneurship contingent upon national culture, and has implications for researchers, educators, and policy makers.     

The financing of alliance entrepreneurship

It is popular nowadays for entrepreneurial firms to advance their entrepreneurship outside their boundaries through alliances. This paper studies how the financing of entrepreneurship changes in strategic alliances. We model a financially constrained entrepreneur and a deep-pocket incumbent developing an innovative product through a strategic alliance, which generates externalities on the incumbent. We find that i) in contrast to traditional theories, the entrepreneur's financial constraint can be tightened by an increase in his endowment; ii) an outside investor is introduced as a third party to deal with the free-riding agency problem; and iii) the externalities have a significant effect on the design of financial claims in the alliance contract, and the incentive-compatible financial instruments are consistent with empirical observations.     

What is the value of entrepreneurship? A review of recent research

This article examines to what extent recent empirical evidence can collectively and systematically substantiate the claim that entrepreneurship has important economic value. Hence, a systematic review is provided that answers the question: What is the contribution of entrepreneurs to the economy in comparison to non-entrepreneurs? We study the relative contribution of entrepreneurs to the economy based on four measures that have most widely been studied empirically. Hence, we answer the question: What is the contribution of entrepreneurs to (i) employment generation and dynamics, (ii) innovation, and (iii) productivity and growth, relative to the contributions of the entrepreneurs’ counterparts, i.e., the ‘control group’? A fourth type of contribution studied is the role of entrepreneurship in increasing individuals’ utility levels. Based on 57 recent studies of high quality that contain 87 relevant separate analyses, we conclude that entrepreneurs have a very important—but specific—function in the economy. They engender relatively much employment creation, productivity growth and produce and commercialize high-quality innovations. They are more satisfied than employees. More importantly, recent studies show that entrepreneurial firms produce important spillovers that affect regional employment growth rates of all companies in the region in the long run. However, the counterparts cannot be missed either as they account for a relatively high value of GDP, a less volatile and more secure labor market, higher paid jobs and a greater number of innovations and they have a more active role in the adoption of innovations.     

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).     

Crescive entrepreneurship in complex social problems: Institutional conditions for entrepreneurial engagement

This paper explores entrepreneurship in the context of complex social problems (often referred to as ‘social’ entrepreneurship). Most management research in this area studies the entrepreneurs; we explore the institutional conditions which frame the likelihood of entrepreneurial engagement. We name these conditions ‘crescive’ and, following A.O. Hirschman's studies on institutional conditions for development we identify two analytically different sets of conditions: those that can stir up actors' motivations to engage and those that can alter their decision making logic. Our exploration of crescive conditions yields a novel conceptual model for entrepreneurial engagement in the context of complex social problems, which we label ‘crescive entrepreneurship’ and place in a space between functionalist and institutional action.     

The knowledge spillover theory of entrepreneurship

Contemporary theories of entrepreneurship generally focus on the recognition of opportunities and the decision to exploit them. Although the entrepreneurship literature treats opportunities as exogenous, the prevailing theory of economic growth suggests they are endogenous. This paper advances the microeconomic foundations of endogenous growth theory by developing a knowledge spillover theory of entrepreneurship. Knowledge created endogenously results in knowledge spillovers, which allow entrepreneurs to identify and exploit opportunities.

The theoretical side of teaching entrepreneurship

There is an on-going debate in the entrepreneurship academy about whether we can actually teach students to be entrepreneurs. Its resolution is inextricably connected with our theoretical assumptions because they affect how and what we teach. This article is the first in a set of two contained in this issue that argues that we should develop more refined, cumulative theory and teach it to students in a way that emphasizes learning by doing, which should accelerate student mastery. This first article treats the theoretical side of teaching entrepreneurship, whereas the second addresses the pedagogical side of entrepreneurship theory.Those who advocate that entrepreneurship can be understood and taught to students assume that researchers will eventually develop a more general theory of entrepreneurship. Theory is an essential part of what we teach because we do not know any other way to help students anticipate the future, which is a key to entrepreneurial success, unless we counsel them to rely on luck or intuition. The limitation of luck and intuition is that we do not know how to teach either of them. If students could accurately anticipate the future, they could allocate their resources in the most productive manner, which would ensure their survival, satisfaction and prosperity. Despite the current limitations of our theorizing, theory still offers the most promise as course content for students.This article sides with Kuhn (1970) who argued that theory is the most practical thing that we can teach to students. Its purpose is to comment on the progress to date in developing entrepreneurship theory. It begins by analyzing the contents of 18 syllabi provided by participants at a retreat for entrepreneurship scholars. It notes a wide divergence in topics, and possible causes for this divergence, which seem to be characteristic of a developing academic discipline. It appeals for more theory in our courses and suggests questions to which entrepreneurship scholars can provide distinctive answers when compared with those offered by scholars from other disciplines.One way to add more theoretical content to entrepreneurship courses is to teach students what they ought to do, which is coded language for theory. In addition, instructors should not merely describe what entrepreneurs do, particularly in light of the observation that most of them fail and accordingly have been described as ill-fated fools. Finally, assuming that scholars can offer a more general theory of entrepreneurship, they would be able to emphasize more deductive approaches as opposed to inductive ones.These appeals for more theoretical content depend on several assumptions, which include: (1) the improbability that students can encounter circumstances that would be similar to anecdotal lessons learned in entrepreneurship school; (2) the existence of a process that can be explained theoretically; (3) studying ideal types can be discouraging to aspiring entrepreneurs if they do not fit a special profile; (4) the high failure rate among entrepreneurs makes suggesting to students that they ought to pattern their activities after them seem illogical; (5) studying average profiles, anecdotal recommendations, rules of thumb or war stories can only lead to average returns, given semi-strong information efficiency; and (6) leveraging the motivational benefits of studying successful entrepreneurs may have detrimental, unintended consequences, among others.This article notes possible causes of non-cumulative theory building and suggests several opportunities to build cumulative theory. Although it acknowledges that the field of entrepreneurship currently lacks cumulative theory, it offers a contingency approach for teaching entrepreneurship, which is actually very similar to the scientific method used by scholars to develop hypotheses about the future.