Entrepreneurs learning together: The importance of building trust for learning and exploiting business opportunities

This longitudinal, qualitative case study examines trust-building processes and learning outcomes among entrepreneurs who participated in formal networks designed to develop competence and knowledge. This study is built on rich data collected through observation and video recordings made during network meetings and get-togethers. Additional data was gleaned from personal interviews with participating entrepreneurs. All data sources reveal on how trust develops and how entrepreneurs can use networks to learn and improve their capacity to exploit business opportunities. Studying how trust is built over time among entrepreneurs who demonstrate a low level of trust when they join the network, this study provides insights into micro-processes and important components of building trust. Findings suggest three processes that build commitment, companionship, and competence trust. Moreover, acknowledging the notion of social learning, the findings suggest that when entrepreneurs build trust with one another they can experience cognitive, emotional, and social changes by participating in a network. This may bring potential consequences for their exploiting opportunies. Implications for academics and managers are discussed.     

The tax-spending nexus: Evidence from a panel of US state-local governments

We re-examine the tax-spending nexus using a panel of 50 US state-local government units between 1963 and 1997. We find that, unlike tax revenues, expenditures adjust to revert back to a long-term equilibrium relationship. The evidence on the short-term dynamics is also consistent with the tax-and-spend hypothesis. One implication of this finding is that the size of the government at the state-local level is not determined by expenditure demand, but rather by resource supply. This is consistent with the fact that many US state and local governments operate under constitutional or legislative limitations that seek to constrain deficits.     

Testing for Error Correction in Panel Data*

This paper proposes new error correction‐based cointegration tests for panel data. The limiting distributions of the tests are derived and critical values provided. Our simulation results suggest that the tests have good small‐sample properties with small size distortions and high power relative to other popular residual‐based panel cointegration tests. In our empirical application, we present evidence suggesting that international healthcare expenditures and GDP are cointegrated once the possibility of an invalid common factor restriction has been accounted for.     

A systematic literature review of entrepreneurial opportunity recognition: insights on influencing factors

In the last three decades, research studies investigating how individuals recognize entrepreneurial opportunities have advanced rapidly and have become a key topic in the modern entrepreneurship literature. To advance this important concern further, we present a systematic literature review of the entrepreneurial opportunity research field and its status. Contrary to conventional wisdom, this research suggests that the field is fragmented and empirically underdeveloped. A comprehensive literature analysis shows that only a handful of authors have contributed specifically to developing dialogues related to opportunity recognition and that the topic is considered primarily as an ancillary issue by many authors and academic journals. Based on analyzing 180 articles, we classify existing contributions into six influential factors: prior knowledge, social capital, cognition/personality traits, environmental conditions, alertness, and systematic search. Moreover, by developing a framework, we communicate critical insights regarding the opportunity recognition process. The contribution of individual articles to the proposed factors is presented in a research synthesis table. We conclude by presenting several directions for future research related to opportunity recognition.     

Role stress and entrepreneurship research

Entrepreneurship as a domain of research has grown by benefiting from more established disciplines. However, a commonality in the early stages of applying established theories to entrepreneurship is the lack of grounded research frameworks. This paper reviews literature on role stress and develops a conceptual framework that illustrates how this construct can serve entrepreneurship research. Based on a review of psychological and sociological literature, the paper proposes a model of antecedents and consequences to entrepreneur role stress. Suggestions for future research and practical implications are also presented.     

Effects of rent dependency on quality of government

This paper introduces quality of government rather than regime type as dependent variable in studies of political effects of natural resources. It consists of two parts. First, it argues for an effect of fiscal dependency of oil and gas rents on quality of government. Second, it finds significant, negative effects of oil and gas rent dependency on three empirical indicators of quality of government—low corruption, bureaucratic quality and legal impartiality—in a sample of 139 states in the period 1984–2006. The results hold for inclusion of control variables such as regime type, income, region and religion.     

Contrarians or momentum chasers? Individual investors’ behavior when trading exchange-traded funds

Conducting the first study of momentum impact on households’ exchange-traded fund (ETF) trading behavior, we find that Finnish households are less contrarian when trading benchmark index ETFs than when trading common stocks. Also, their propensity to chase recent positive momentum is higher when purchasing ETFs than when purchasing stocks. As expected, results are stronger for ETF purchases than sales. Our findings are consistent with hypotheses that households are less overconfident trading index ETFs than common stocks, that contrarian behavior is more often rational when trading stocks than when trading ETFs, and that households trade ETFs for the long run.     

Exploring outward FDI and the choice of destination: evidence from Swedish firm-level data

Using Swedish firm-level data on all firms and their affiliates abroad, we investigate what observable firm and country characteristics affect the size of an affiliate in a particular destination. We employ the richness of the data to investigate the importance of destination country factors in explaining firm outward FDI activities and distinguish between the factors that affect such activities in manufacturing versus services firms as well as vertical versus horizontal investments. Our results lend support to existing theories of multinational activity of manufacturing but not services firms. We also find observable differences between vertical and horizontal manufacturing firms that are not always explained by theory.     

Environmental Orientation and Economic Performance: a Quasi‐experimental Study of Small Swedish Firms

This paper investigates the relationship between the environmental orientation and economic performance of small firms. We conduct a quantitative analysis on a sample of 299 environmentally oriented and all other small (2–49 employees) Swedish firms. We estimate the effect of environmental orientation on profit margin to examine how environmentally oriented firms perform in relation to non‐environmentally oriented firms. To do this, we employ a quasi‐experimental design in which we create a control group of non‐environmentally oriented firms that are very similar to their environmentally oriented counterparts. We use two measures of environmental orientation: (i) a third‐party classification, and (ii) a self‐assessment of environmental differentiation. The findings show a negative effect of environmental orientation on economic performance. Our contribution to the literature is in using a novel and more rigorous way to measure the relationship between environmental orientation and economic performance and providing implicit support for the existence of a causal link from economic performance to environmental orientation. Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment