Entrepreneurial Dynamism Research Articles

Zooming in or zooming out: Energy strategy, developmental parity and regional entrepreneurial dynamism

In this paper, we analyze the economic impacts of the West-East Electricity Transmission Project (WEETP) project using the multi-period difference-in-difference (DID) method based on county-level data from 2000 to 2020. Our findings indicate that the WEETP project inhibits firm entry in electricity-exporting regions while encouraging firm entry in electricity-importing regions, thus hindering regional development equalization. Specifically, the initiation of WEETP discouraged firm activity in the southern and central corridors' exporting regions but boosted firm activity in the northern corridor. Additionally, WEETP exacerbated infrastructure overbuilding and environmental damage in energy-exporting regions, further weakening entrepreneurial dynamism (ED) and widening the development gap with energy-importing regions. Our study provides insights into the real impact of national energy strategies on regional development and highlights the institutional factors contributing to the resource curse. The findings demonstrate the limitations of non-market pricing approaches to resource allocation, thereby offering an empirical basis for narrowing the development gap and promoting developmental affirmative action.

Digital economy and economic competitive pressure on local governments: Evidence from China

For decades, fiscal decentralization and gross domestic product growth targeting have resulted in fierce economic competition among local governments in China, putting tremendous economic competitive pressure on them. The latter has serious social and economic implications and is a major issue for policymakers. This study analyzes data from China's 30 provinces for 2011–2021. It demonstrates that digital economic development could considerably reduce economic, competitive pressure on local governments, with trade openness and entrepreneurial dynamism serving as impact mechanisms. This study also found that the alleviating effects are more pronounced in regions with a poor innovation environment, a less developed economy, or lagging human resources. These findings emphasize the important role of the digital economy in increasing regional competitiveness and reducing regional disparities.

Do high housing prices inhibit entrepreneurial activity?—Evidence from Yangtze River Delta cities, China

AbstractContrary to the existing literature that suggests the inhibitory or facilitating effect of housing prices on entrepreneurial dynamism, this paper explores the nonlinear effect of housing prices on entrepreneurship and countervailing effect of entrepreneurial dynamism on housing prices, in addition to investigating the spatial interaction between the two. This paper constructs a simultaneous equation model (SEM) to empirically test the interaction and spillover effects between housing prices and entrepreneurial dynamism. The results show that: (1) there is a two‐way interaction between housing prices and entrepreneurial dynamism; (2) the estimated coefficients of housing prices and the quadratic square term of housing prices (14.285 and −0.744, respectively) are consistent and significant as expected, indicating an inverted U‐shaped effect of housing prices on entrepreneurial dynamism; and (3) in geospatial terms, there are positive spatial spillovers and negative spatial interaction effects for both house prices and entrepreneurial dynamism in Yangtze River Delta cities.

Entrepreneurial dynamism and sustainability: Unveiling Europe’s economic growth patterns through cluster analysis

This paper highlights the complex relationship between entrepreneurship, sustainable development, and economic growth in 41 European countries, using a reliable K-Means cluster analysis. The research thoroughly evaluates three key factors: the SDG Index for sustainable development, GDP per capita for economic well-being, and the New Business Density Rate for entrepreneurial activity. Our methodology reveals three distinct narratives that embody varying degrees of economic vitality and sustainability. Cluster 1 comprises the financially stable and sustainability-oriented countries of Western and Northern Europe. Cluster 2 showcases the variegated economic and sustainability initiatives in Central and Southern Europe. Cluster 3 envelopes the economic titans with noteworthy business expansion but with the potential for better sustainable practices. The analysis reveals a favourable association between economic prosperity and sustainable development within clusters, although with nonlinear intricacies. The research concludes with a series of strategic imperatives specifically crafted for each cluster, promoting economic variation, increased sustainability, invention, and worldwide collaboration. The resulting findings highlight the crucial need for policy-making that considers the specific context and the potential for combined European resilience and sustainability.

Crowdfunding adoption in emerging economies: insights for entrepreneurs and policymakers

PurposeCrowdfunding has emerged as an alternative financing tool and recently gained attention to foster entrepreneurial dynamism and innovation. The current research has identified the determinants impacting the behavioral intentions of entrepreneurs to use crowdfunding for financing their small and medium-sized enterprises (SMEs).Design/methodology/approachThe current article is based on a cross-sectional research design. This research collected the data of 422 owners and managers of SMEs through self-administered questionnaires in the Indian National Capital Region (NCR). The responses were collected from July 17 to October 27, 2022. This article used “partial least squares structural equation modeling” (PLS-SEM) for data analysis.FindingsThis article offered a robust model with a high explanatory value of 66% of behavioral intention and 62.1% variance in crowdfunding use behavior. The finding also highlighted that performance expectancy, social influence, facilitating conditions, trialability and perceived value significantly impact behavioral intention. However, effort expectancy and perceived risk insignificantly influence behavioral intention. Notably, facilitating conditions, trialability and behavioral intention positively impact use behavior.Practical implicationsThe results of this study will bridge the gap in empirical research on crowdfunding adoption, shedding light on why entrepreneurs hesitate to adopt crowdfunding for financing. Moreover, these results will offer strategic insights for crowdfunding managers and policymakers, aiding them in making informed decisions.Originality/valueTo the best of the authors' knowledge, this pioneering study built the theoretical framework using three credible technology determinant models. The authors examined crowdfunding-specific contextual factors to improve understanding of the positive effect of technological orientation. This addition assists in strategically arranging entrepreneurs' fundraising conversations more efficiently.

E-commerce Transformation in Indonesia

This study investigates the interplay between entrepreneurial dynamism, innovation, and technological advancement in Indonesia's burgeoning e-commerce sector. Framed through the lenses of Creative Destruction and Disruptive Innovation, the research delves into the transformative impact of digital globalization on traditional business models. By tracing the historical development of e-commerce and scrutinizing the closure of offline stores in 2017, this study highlights the potential of digital globalization to disrupt established market players, paving the way for MSMEs to explore unconstrained market segments. The study introduces the Model of Disruption-Destruction Cycle, elucidating how entrepreneurs' innovations lead to technological advancements and business model transformations. These dynamics enrich our understanding of Indonesia's evolving digital economy. The contribution lies in its comprehensive analysis of the transformative forces redefining the e-commerce landscape. While the study presents valuable insights, it also acknowledges limitations, including the need for further empirical validation. Finally, this paper offers a platform for empirically validating and exploring the ever-evolving landscape of entrepreneurship, innovation, and technological advancement in Indonesia's e-commerce realm.

Corporate Networks and Business Groups in Egypt, 1924–1948: Economic Necessity or Entrepreneurial Dynamism

By providing fresh insights into the development of Egyptian corporate networks and business groups between the early 1920s and late 1940s, this article extends the geographical ambit of an expanding field of study. Data from contemporaneous sources were analyzed through social network analysis techniques, in the search for an improved understanding of both the nature of and motivations behind networking in Egypt. In conducting this exercise, this article assesses the success with which the state acted to stimulate local entrepreneurship in its search for greater economic independence. By linking the Egyptian case to a wider literature on corporate networks, the article reveals similarities with other cases of how developing economies responded to the challenges of that era.

Reconciling theories on why employees of small firms are more likely to become entrepreneurs

Abstract A common finding in the literature on heterogeneity in entrepreneurial entry is that workers of small firms relative to large firms are more likely to become entrepreneurs (i.e., the “small firm effect”). Researchers disagree, however, on how to interpret this relationship, and in which contexts. A traditional argument is that work experience in small firms facilitates the acquisition of knowledge relevant to entrepreneurship, which, in turn, facilitates transitions into entrepreneurship. An alternative explanation argues that, at least in technical domains, the small firm effect derives from the potential for large firms to better integrate ideas internally (i.e., intrapreneurship). We inform this debate by leveraging a unique, nationally representative survey that provides rich details about the emergence of entrepreneurial ideas and their potential implementation inside vs. outside of firms. Consistent with the former explanation of the small firm effect, for the average worker, we find strong evidence that small firms (relative to large firms) are better at providing an environment that facilitates transitions to entrepreneurship. However, we also find that technical workers are more likely to attempt to implement ideas in larger firms relative to non-tech workers. Our results thus imply that while the traditional mechanism drives the small firm effect for non-tech workers, both mechanisms contribute to the effect for the tech workers, thus helping to reconcile competing explanations in prior studies. In addition to unpacking the drivers of the small firm effect, our study has broader implications for the recent discussion on the drivers of entrepreneurial dynamism.

Has Digital Village Construction Improved Rural Family Resilience in China? Evidence Based on China Household Finance Survey

The development of digital village construction to improve rural family resilience (RFR) is emerging as a key focus area and target of China’s rural revitalization strategy. However, there is limited evidence available on the impacts of digital village construction on RFR measures. This paper aimed to examine the effect and mechanism of digital village construction on rural family resilience based on the micro panel data of the China Household Finance Survey (CHFS) from 2015 to 2019 to empirically test the effect and mechanism of targeted digital village construction on the resilience of rural family. This research also examined the role of farmers’ entrepreneurial dynamism in the process. Unlike previous studies, we included family welfare into the measurement framework of RFR. Therefore, RFR was represented by the probability that household welfare exceeds a certain standard. The research found that rural communities quickly transformed from one stable state to another when the external shocks exceeded the threshold of rural resilience. The development of digital village construction can effectively reduce the probability of changing the existing steady state when rural families face shocks. At the national level, farmers’ entrepreneurial dynamism had a positive moderating effect on the RFR of the digital village. In the more developed eastern region, digital village construction was relatively advanced and had a significant effect on farmers’ income growth. Conversely, the digital village construction in the central, northeastern, and western regions was less developed; moreover, it had a weaker impact than that in the eastern area. Therefore, the regional reality and gap should be fully considered when constructing a digital village.

Does digital finance enhance industrial green total factor productivity? Theoretical mechanism and empirical test.

The development and application of digital finance has brought profound changes to the real economy, and its impact on industrial green total factor productivity is worthy of attention and evaluation. The industrial green total factor productivity of each province in China is measured by using EBM-ML index with the provincial panel data collected from 2011 to 2020. The panel fixed effects model is used to estimate the impact of digital finance on industrial green total factor productivity. The intermediary effect model is constructed to analyze its conduction mechanisms. The heterogeneity of the impact of digital finance on industrial green total factor productivity is further explored. The results indicate that digital finance makes a significant contribution to the promotion of industrial green total factor productivity. Digital finance indirectly promotes the enhancement of industrial green total factor productivity by promoting technological innovation, driving industrial upgrading and stimulating entrepreneurial dynamism. The impact of digital finance on industrial green total factor productivity has obvious sub-dimension heterogeneity and regional heterogeneity. Based on the above conclusions, we also suggest policy recommendations such as unblocking the conduction channels of digital finance and implementing the differentiated digital finance development strategy. The highlight of this paper is that it takes digital finance as the entry point and shifts the research content to the real economy, broadening the research perspective of "digital finance".

Informal Institutions as Inhibitors of Rent-Seeking Entrepreneurship: Evidence From U.S. Legal History

Rent-seeking entrepreneurship occurs whenever an entrepreneur expends resources on activities that benefit their firm while reducing overall economic efficiency. Since rent-seeking ultimately makes nations poorer, we need to know more about how institutions can discourage rent-seeking entrepreneurship. Using historical data from the Unites States, we explore how changes in judicial thinking altered individuals’ incentives to engage in rent-seeking entrepreneurship. Traditionally, entrepreneurship researchers interested in policy issues have paid little attention to changes in judicial thinking. We argue that entrepreneurship researchers who are interested in why levels of entrepreneurial dynamism vary over time should pay more attention to how judges think.

The role of entrepreneurial skills as a vehicle for business growth: a study in Spanish start-ups

PurposeBusiness growth is one of the most studied areas over the years. However, with the current uncertainty and entrepreneurial dynamism it becomes relevant to consider new variables such as entrepreneurial skills and competencies that influence its development. Accordingly, this research refers to the impact that the individual's skills have on the entrepreneurial environment. For this purpose, a survey has been developed of employees of different organizations considering the variables of high degree of proactivity in the employees' attitude, entrepreneurial training, innovation, previous experience or risk aversion.Design/methodology/approachThe research has been conducted through fuzzy set qualitative comparative analysis (fsQCA) and the result shows the differences between the combination of variables for business growth through the consideration of sales growth and profit.FindingsThe results of this research provide new insights that allow the development and boosting of business growth.Originality/valueThe main contribution of this work is to pay attention to the human team of startups and show the role that this has in their growth.

Determinants of entrepreneurial dynamics and the performance of competitiveness clusters

Today, the weight and importance of the entrepreneurial dynamic in the economy of a country or territory cannot be overestimated. This means that this dynamic constitutes a real platform for the economic development of territories, especially for competitiveness clusters. The objective of this article is to study the effect of entrepreneurial dynamics on the economic performance of these clusters. Hence the central question is the following: To what extent do entrepreneurial dynamics contribute to the improvement of the economic performance of clusters? To answer this question, we conducted a theoretical study based on a literature review of the determinants of entrepreneurial dynamics and indicators of the economic performance of these clusters. A careful analysis of theoretical data led us to observe that the entrepreneurial dimension occupies a key place in the structuring of clusters, and to reveal that the improvement of specific indicators measuring the economic performance of clusters, including economic growth, employment, value added generated and total productivity, requires an entrepreneurial dynamism reflected in the evolution of business creation, their development and a diversity of entrepreneurial activity within the clusters.

Application of Data Envelopment Analysis (DEA) in Information and Communication Technologies

The consistent improvements and fast-growing trend of information and communication technology (ICT) have impacted all areas of society and the economy. In 2020, with the sudden pandemic of COVID-19, businesses worldwide faced great challenges and had to transform and become digital-native enterprises by using data analytics, digital business platforms and personalized customer approaches. In such a digital era, innovation, entrepreneurial dynamism and ICT are the key ingredients for business' success and sustainability. Furthermore, it has become very clear that the influence of the ICT industry on economic growth is immense. Therefore, it should not come as a surprise that the interest in research of the ICT industry is great. Data Envelopment Analysis (DEA) is the leading non-parametric mathematical technique for assessing performance and measuring efficiency of complex entities called Decision-Making-Units (DMUs), by conversion of multiple input variables to multiple output variables. DEA has experienced rapid growth in use in many areas ever since its introduction by Charnes, Cooper and Rhodes in 1978. The purpose of this paper is to present and describe Data Envelopment Analysis as the leading mathematical programming technique for data analysis and to provide an extensive literature review, to identify the studies implementing the DEA methodology in Information and Communication Technologies (ICT) and to present its findings. Furthermore, this study's goal is to inspire and encourage researchers to employ this methodology in the fields of ICT and to give guidance for future research in this area.

Globalization and entrepreneurial entry and exit: Evidence from U.S. households

Using a database on U.S. individuals and households, we examine whether rise in globalization and trade integration of product markets have contributed to the observed decline in US entrepreneurship in trade-exposed sectors. US trade policy that lowered tariffs on China dampens entrepreneurial dynamism through lower entry (especially by incorporated entrepreneurs) and higher exit in exposed sectors but increases entry by highly educated individuals in skill-intensive nontradable industries. The results are robust to secular trends, labor market specialization, local collateral and credit shocks, and long-run bank distress. They are also robust to aggregation at local, state, and national industry levels.

National Innovation Systems and Global Value Chain Participation: The Role of Entrepreneurship

The national innovation systems (NISs) literature has focused on institutional and industrial structures while overlooking creative individual agencies. This gap may leave unanswered the question of why some countries with weak institutional structures still improve global value chain (GVC) participation. This study, thus, investigates how national entrepreneurial dynamism impacts a country’s GVC participation as conditioned by other elements of NISs. The empirical results show that entrepreneurship is positively associated with GVC participation. Additionally, this positive relationship is stronger among countries with lower levels of intellectual property rights (IPR) protection and smaller amounts of R&D employment. The findings suggest that entrepreneurship contributes to a country’s GVC participation and helps a country overcome its institutional weaknesses and, thus, achieve better globalization performance. Therefore, the study adds to NISs literature with creative individual agency, reveals the national internal avenue for GVC participation, and enriches the research on the NIS-GVC relationship.

Out with the Old or Out with the New: The Uncertain Role of Entrepreneurship in Developing Countries in the Post-COVID-19 Context

The promotion of policies and initiatives that support job creation through entrepreneurship in developing countries is at the heart of the 2030 sustainable development goals (SDG) agenda, and, in particular, SDG 8 and 9. Yet, entrepreneurship remains an abstract concept difficult to define and comprehend, and the literature on entrepreneurship has been developed mostly in a developed country context. In the current global context, dominated by the dramatic impact of the COVID-19 pandemic, the relevant policies to be adopted by developing countries to face the socioeconomic consequences of the pandemic must be identified and analyzed. One of the main concerns of these policies is unemployment. The simultaneous supply and demand shocks caused by the pandemic have raised calls for an unprecedented level of public intervention in both developing and developed countries to prevent massive unemployment and chains of bankruptcies. The objective of this paper is to study the role of entrepreneurship in job preservation or job creation at the macroeconomic level. After reviewing different taxonomies of entrepreneurship and discussing motivations of entrepreneurs in a developing country context, the fundamental relationship between entrepreneurship, job creation, and macroeconomic performance in developing countries in both the pre- and post-COVID-19 contexts is analyzed. Using panel data for a sample of 24 countries members of the Organization of Islamic Cooperation (OIC) across the period 2009-2018, the paper demonstrates a U-shaped relationship between entrepreneurship and the level of economic development of nations, which translates into a negative correlation between economic growth and entrepreneurial dynamism for developing countries with per capita income below a certain limit. This proves that different phases of the economic cycle require different policies and promotion of entrepreneurship should therefore be adjusted to the economic conditions of each country.

Household Inequality, Entrepreneurial Dynamism, and Corporate Financing

AbstractEconomic theories posit conflicting hypotheses on how wealth inequality affects entrepre-neurial dynamism. We investigate the impact of wealth inequality on business dynamics by constructing local measures of household wealth inequality based on financial rents, home equity, and 1880 farmland. We then identify the effect of wealth inequality on entrepre-neurship by instrumenting it with land distribution under the 1862 Homestead Act. Wealth inequality decreases firm entry and exit, and the proportion of high-tech businesses across metropolitan statistical areas. Wealth inequality also lowers the supply of public goods, such as education. Growth in income per capita consequently lags.

The Problem of ‘Freezing’ An Economy in a Pandemic

The 2020 global pandemic abruptly brought into question many of our social, economic and political institutions. COVID-19 is more than a public health crisis—as economies and states falter there are deep questions about the resilience and robustness of our political and economic systems. Are we too reliant on global supply chains? If regulations don’t make sense in a crisis, do they make sense afterwards? Today we are presented the opportunity to rebuild the institutions and organisations of our modern economy. If we do this right, through a process of entrepreneurial discovery and bottom-up solutions, then we will emerge with a political-economic system that acts as an engine for prosperity, and one that is more resilient and robust to future shocks. In this book we tackle those questions and fill some of the current void of ideas and thinking about economic and political recovery. We develop a framework and principles for an institutional re-build, presenting a path to recovery based on the ideas of private governance, permissionless innovation and entrepreneurial dynamism.

Spatio-temporal dynamics in municipal rates of business start-ups in Chile

ABSTRACT While there is a growing body of studies on persistence and change in municipal start-up rates in more developed countries, this type of study for developing countries is still scarce. This work analyzes the spatio-temporal dynamics of municipal business start-up rates in Chile between 2005 and 2015 using spatial panel data for 342 Chilean municipalities from the Internal Revenue Service (SII) database and the National Municipal Information System (SINIM). We employ descriptive statistics, spatial analysis, Markov chains and econometric models to identify persistence and change in the start-ups rates and identify the determinants of the spatio-temporal dynamics in entrepreneurship rates. Results confirm a high level of persistence in the most and least entrepreneurial areas of the county but, at the same time, show mobility in the intermediate municipalities. Econometric models confirm that past rates of entrepreneurship can explain current business start-up rates, and also validate the influence of spatially sticky characteristics, in many cases related to extreme differences in economic development among Chilean municipalities. Increasing diversity and urbanization favour persistence and change, while density, poverty, mining activity and the percentage of large firms and mining have a negative impact. The results suggest place-based policies according to entrepreneurial dynamism.