The value of business planning before start-up — A decision-theoretical perspective

In this paper we analyze business planning from the perspective of the nascent entrepreneur. We measure its value for the entrepreneur at the point where he must decide whether or not to plan, and we contrast our results with empirical studies that compare firms' performance after market entry. Within a formal decision-theoretical framework we show that the value of planning is driven by the possibility of evaluating alternative actions and being able to improve strategies. Before market entry, the main purpose of evaluation is to pursue good and terminate bad business ideas. We show how the value of planning is determined by the venture under consideration and how it depends on the quality of planning. Our theoretical model yields several behavioral and statistical implications that we compare with empirical observations found in the literature. In particular, we show how our model of rational decision making can be used to explain important hypotheses and contradictory observations that have fueled the debate on business planning.     

Challenges facing European labour markets: Is a skill upgrade the appropriate instrument?

The financial and economic crisis shattered the Lisbon Strategy’s attempt to increase the EU’s employment rate to 70% among 15–64 year olds by 2010. The new Europe 2020 strategy envisages a 75% adult employment rate by 2020; however, this goal also seems unrealistic in light of the economic crisis which has caused the EU’s employment rate to drop significantly below 70%. A crucial question now is whether a skill upgrade of the European labour force would help to increase the employment rate, especially among youth. This Forum explores the relationship between education and employment throughout the EU.     

Social capital of venture capitalists and start-up funding

How does the social capital of venture capitalists (VCs) affect the funding of start-ups? By building on the rich social capital literature, we hypothesize a positive effect of VCs?? social capital, derived from past syndication, on the amount of money that start-ups receive. Specifically, we argue that both structural and relational aspects of VCs?? social networks provide VCs with superior access to information about current investment objects and opportunities to leverage them in the future, increasing their willingness to invest in these firms. Our empirical results, derived from a novel dataset containing more than 1,500 first funding rounds in the Internet and IT sector, strongly confirm our hypotheses. We discuss the implications of our findings for theories of venture capital and entrepreneurship, showing that the role and effect of VCs?? social capital on start-up firms may be more complex than previously argued in the literature.     

Heroin Consumption,Prices and Addiction: Evidence from Self‐reported Panel Data*

Estimation models of drug demand should encompass the aspect of addiction. Here, we consider two static panel data regression models and two cross‐section models with lags or leads in drug consumption as additional regressors. Heroin injectors attending a needle exchange service in Oslo were interviewed twice, with a one‐year interval. Despite our relatively small sample, we obtain statistically significant price and income responses for nearly all of the models and specifications applied. The sample is split by dealing status, with dealers obtaining price elasticities in the range of [?0.15, ?1.51] and non‐dealers [?0.71, ?1.69]. Somewhat surprisingly, the estimates of the variance of the latent individual‐specific variable are rather low in the panel data models, although higher for non‐dealers than for dealers.     

Upper San Pedro Basin: fostering collaborative binational watershed management

Successful binational planning and management of water resources is a complex process dependent on informed decision‐making across diverse economic, social and political sectors. Additional technical and scientific information is often required as a part of this process. A critical factor in this process is how effectively social and physical scientists can help build collaboration and trust among stakeholders, water and land managers, and policy‐makers. Within the international San Pedro River Basin, disparities between Mexico and the USA regarding economic development and political orientation, combined with a highly variable and complex physical setting, suggest that the successful engagement of scientists with communities and stakeholders will be essential for addressing challenges in water management. Based upon concepts associated with collective action theory, adaptive management and conflict resolution, the present paper proposes a process for fostering collaborative binational water management in basins such as the San Pedro that span international borders.     

Trends in disposable income among teenage boys and girls in Finland from 1977 to 2003

This article explores changes in the money Finnish young people aged 12–18 years have at their disposal, over a 26‐year period 1977–2003. Previous studies suggest that the amount of money young people have is not necessarily dependent on traditional socio‐economic variables, but there are no systematic studies on the development of the disposable income of the teenagers. The analyses of this study are based on a series of 14 biannual nationally representative surveys of 12‐, 14‐, 16‐ and 18‐year‐olds in Finland from 1977 to 2003, with a total of 84 404 respondents. Time‐trends are shown and analysed by gender, family structure, place of residence and socio‐economic status of family using analysis of variance and linear regression modelling. The results show that teenagers’ disposable money has increased little between 1977 and 2003 in comparison with the general income development. Economic booms and depressions can be seen in rising and falling amounts of disposal money, particularly among 16‐ to 18‐year‐old respondents. There were also significant differences between the genders. Young boys clearly had more money at their disposal than young girls. Children of single parents had more money than their peers from nuclear families. Urban youth had more money than those living in the countryside and the difference increased during the period under examination. The socio‐economic position of the family had little impact.