Theories of economic and social exchange in entrepreneurial partnerships: an agenda for future research

Entrepreneurship research tends to focus on individuals and their actions. However, some entrepreneurial activities are borne and maintained through the efforts of several parties in entrepreneurial partnerships such as franchisor-franchisee relationships. Due to their very nature, these partnerships include economic and social exchanges. Such exchanges received limited attention in entrepreneurship literature. To address this omission, this study first delves into the theories of economic and social exchange to illuminate their relevance for entrepreneurial partnerships. Next, this paper puts forward an agenda for future research agenda based on the tenets of interdependent reciprocal exchange in entrepreneurial partnerships. This research effort has a potential to spur future studies on the use reciprocity in other areas of entrepreneurship such as social entrepreneurship and international entrepreneurship.     

Should banks diversify or focus? Know thyself: The role of abilities

The paper investigates whether diversification/focus across assets, industries and borrowers affects bank performance when banks’ abilities (screening and monitoring) are considered. The initial results show that diversification (focus) at the asset, industry and borrower levels is expected to decrease (increase) returns. However, once banks’ screening and monitoring abilities are controlled for, the effect of diversification/focus either gets weaker or disappears. Further, in some cases, these abilities enhance banks’ long-run performance, but in others they prove to be costly, at least, in the short run. Thus, the level of monitoring and screening abilities should be taken into consideration in understanding, planning and implementing diversification/focus strategies.