Implications For Entrepreneurs Research Articles

The impact of the quality of VC financing and monitoring on the survival of IPO firms

PurposeThe purpose of this paper is to analyze the impact of venture capital (VC) involvement on the survival rate of French initial public offerings (IPOs) during the period 1996-2006. The paper examines the link between the survival rates of IPO companies, and several proxies for the quality of venture capitalist financing and monitoring.Design/methodology/approachTo analyze the impact of the involvement of VC on both long and short run post-IPO survival, two methods are used: survival analysis (the Cox proportional hazard), and a logit model.FindingsThis paper shows that the quality of venture capitalist monitoring, measured by the duration of their investment before the IPO, is positively correlated with company survival rates. However, the author does not find the expected result when the author considers the experience of venture capitalists measured by their age.Research limitations/implicationsThe findings are limited to a sample of VC-backed companies that went public.Practical implicationsThe findings have implications for entrepreneurs. When analyzing the advantages and disadvantages linked to the presence of VC firms in the capital of their companies, entrepreneurs should consider that certain types of venture capitalists might be more or less able to be involved in the monitoring and value adding process.Originality/valueTo date, there is no comprehensive study on the French IPO market analyzing both long and short run post-IPO survival of VC-backed companies. This paper fills this gap.

Entrepreneurial implications, prospects and dilemmas in rural festivals

Festivals play an important role in rural communities, and they are typically embedded in the local ecosystems of sports, culture, business and other types of associations, where they might deliver elements of coherence, commitment and meaning, as well as occasional economic benefits. This study aims to showcase the business entrepreneurship aspect of festivals in Danish rural areas, and it is based on primary data from 315 festivals. Special emphasis is placed on the nature, prevalence and importance of business activities at such festivals and on the opportunities for entrepreneurs to utilize festivals as a means of business development in relation to sales, marketing, product testing, and customer feedback. On the one hand, the results show that very few of the surveyed festivals are entirely commercial and that commercial objectives are, due to ideological and relational reasons, generally low-ranked by organizers. On the other hand, there is strong evidence that local businesses actually participate in rural festivals' ecosystems and that there are numerous mutual interactions among local businesses, festival organizers and residents that together create an excellent means for driving entrepreneurial activity. It is a delicate undertaking to strengthen partnerships with entrepreneurs without compromising community objectives. Several potential courses of action are proposed.

An Empirical Study on Country Risk as A Predictor of Market Entry Decisions: Impact of Political, Economic and Financial Risks on FDI Inflows of Horn of Africa and Middle East North Africa Region (MENA)

This study examines how risks affect firm’s entry to the market and operations in foreign countries. Based on a critical literature review, key risks were identified which compromise focus area of current study. We have conceptualized the decision of firms to enter foreign market and attractiveness of Mena and Horn region as a country risk- FDI inflow relationship. The analysis was performed on a macroeconomic level. The country risks include political risks, financial risks and economic risks. A quantitative study encompassing inferential statistical analysis was utilized. The Country risks data was sourced from International Country Risk Guide (ICRG), whereas the FDI data has been collected from World Bank database. The results derived by using multiple regression analysis showed there are significant relationship between the country risks, and FDI inflows. The findings therefore imply that FDI levels in countries, and decision of market entry as well as business operations are significantly affected by political, financial, and economic risks of the host country. Moreover, the study suggests that firms need to increase the risk awareness and prepare risk management plans to minimize the occurrence of risks. There is a real need for companies to recognize, plan for and manage risks as a part of their strategic planning and everyday business operations. This becomes particularly evident in unfamiliar environments with increased risks, such as foreign markets. The problem still exists as managers of companies do not spend sufficient time on risk preparation and only deal with the consequences after risk occurs. Our study findings have implications for entrepreneurs, firms, and governments.

In Alain Gibb's footsteps: Evaluating alternative approaches to sustainable enterprise education (SEE)

This study examines the impact of contrasting pedagogies of sustainable enterprise education, focussing on the intention to create a social enterprise, as well as related entrepreneurial behaviours, values, competences and outcomes. The empirical context involves Peruvian MBA students, a corporate social responsibility curriculum and the undertaking of self-initiated social enterprise projects by students. Developing and applying a pre- and post-course survey underpinned by a multi-perspectival theoretical approach that particularly draws on Alain Gibb's theory of entrepreneurial behaviours, values, competencies and outcomes, we compare experiential learning to traditional lecture and case-based learning. We were, in particular, interested in those students who changed their mind about becoming an entrepreneur after they had participated in the experiential learning component of the course. A probit model was used to establish which factors were involved in explaining potential changes in students' attitudes. We show that students involved in the experiential learning experience increased in entrepreneurial attitudes and intention, at least in the short run. Demographic and attitudinal constructs are shown to be moderators. Our findings have implications for entrepreneurship and social enterprise teaching, particularly regarding the design and implementation of training involving high-engagement, de-routinised interventions.

Trapped by the entrepreneurial mindset: Opportunity seeking and escalation of commitment in the Mount Everest disaster

Building on regulatory focus theory and the theory of action phases, we propose that the opportunity seeking of the entrepreneurial mindset is fueled by promotion focus, but transformed from something that liberates individuals from sub-optimal goals into something that traps them in escalation scenarios depending on the stability of environmental conditions faced, the duration of the project, and the specificity of the goal being pursued. Our meta-theoretical process model of escalation of commitment suggests that the decision to persist is set into motion long before individuals engage in the cost-benefit analysis examined in most escalation studies. We argue that, when individuals seek opportunities in a promotion-focused state of goal striving, they are likely to forego contingency planning, which precludes the formation of an exit strategy and leaves them unable to disengage despite an emerging desire to do so. Worse yet, opportunity seeking under the aforementioned conditions delays detection of an action crisis, which increases risk exposure and allows resources, time, and reputation invested to further accumulate, making disengagement that much more difficult once the entrepreneur realizes that a decision is necessary. Using the events of the 1996 Mount Everest disaster made famous by Jon Krakauer's Into Thin Air, we illustrate our proposed model and discuss its implications for entrepreneurship, escalation, and self-regulation research.

Workability: The Path to Entrepreneurship

Since the late twentieth century, it has been seen that the progress of information technology is changing everyday business. Advents such as telecommunications, for example, are increasing the speed of work, facilitating communication between people and changing to the way of doing business. From the moment at which transform organizational processes, information technologies also bring changes to the dynamics of the work. Thus, both the job security as employability, which is a job for life, are concepts that are becoming distant from everyday human. Emerge a new concept, the workability, which involves the individual's ability to generate income without necessarily having an employment relationship. In this sense, the worker becomes a production unit itself, from the administration of their own abilities and skills, acting as an entrepreneur. Given this, the purpose of this article is to show that the concepts of workability and entrepreneurship go together, and this concept dependent on that. The construction of this article was carried out bibliographic research with the issues involved. This study is structured as follows: in the first part, is carried out a review of existing changes in the current world and the implications for entrepreneurship. Then the concepts of entrepreneurship, workability and employability are explained. Then the methodology is presented, followed by the results and discussion. Finally, this study is closed through the final considerations.

Distributive justice, corruption, and entrepreneurial behavior

This article introduces equity theory to the economic growth literature to examine whether a relationship exists between perceptions of distributive justice and the productivity of entrepreneurial behavior. Using survey responses from 317 entrepreneurs in India, we find that productive entrepreneurship is positively related to distributive justice perceptions but negatively related to perceptions that corruption is pervasive. In contrast, nonproductive forms of entrepreneurship are negatively related to distributive justice but positively related to corruption. Unexpectedly, the findings also show that corruption mediates the relationship between distributive justice and legal entrepreneurial behavior while distributive justice mediates the relationship between corruption and illegal entrepreneurial behavior. We conclude with a discussion of the study’s findings and their implications for entrepreneurship and economic growth.

Shared and shared alike? Founders' prior shared experience and performance of newly founded banks

Research summary: Pre-entry industry experience is a central construct in the founding team literature. Research on prior shared experience (PSE) emphasizes that founding teams face challenges integrating and acting on independent experiences, so PSE should be beneficial for new venture performance. Existing studies, however, typically study PSE in blunt terms, expecting that more is better. Instrumental variable analyses of a unique sample of 344 commercial banks founded in four U.S. states between 1996 and 2006 showed that industry-specific PSE may be more or less beneficial, depending on several founding team characteristics. Our findings provide nuance and caution to the narrative that PSE is always beneficial. Under some circumstances, firms with founding team PSE may be no better off than those without founding team PSE, suggesting more research is necessary to understand when and why founding team experience matters to new firms. Managerial summary: Pre-entry experience of founding teams affects new firm performance, but is hard for founders to leverage separately gained experience. Knowledge moves more readily if sets of managers leave together to start a new firm. But, it may be simplistic to conclude that prior shared experience (PSE) is always good, or better than the sum of independent experiences. In a set of banks founded in four U.S. states between 1996 and 2006, we find that PSE is not necessarily a direct pathway to better bank performance. Characteristics of the PSE, such as the part of industry the former and new banks operate in, can lower its benefit. We also found that the benefits of PSE erode as the entire founding team develops shared history after startup. Our findings have implications for entrepreneurs, investors, and policy-makers. Copyright © 2015 John Wiley & Sons, Ltd.

The impact of communist imprint prevalence on the risk-taking propensity of successful Russian entrepreneurs

Scholars debate whether entrepreneurs socialised under communism exhibit an increased or subdued risk-taking propensity after that experience. Some note that communism discouraged standing out and thus risk-taking, while others counter that communism necessitated risk-taking to survive. We reconcile this debate by differentiating between reformist and hard-line communist imprints. In so doing, we extend communist imprinting theory by introducing the concept of imprint prevalence and studying how the degree to which one type of communist imprint prevailed over the other affects the subsequent risk-taking propensity of successful Russian entrepreneurs. Our findings also have implications for entrepreneurship in other transition and emerging economies.

The Role of Sustainable Entrepreneurship in Sustainability Transitions: A Conceptual Synthesis against the Background of the Multi-Level Perspective

This paper conceptually synthesizes prior studies on sustainable entrepreneurship against the background of the multi-level perspective. It thereby relates separate streams of literature on sustainable entrepreneurship, sustainability transformations and ecopreneurship, which have previously not been systematically connected and synthesized, to the multi-level perspective. The paper furthermore provides suggestions on how the multi-level perspective can be advanced based on the inspirations of these previously only sparsely-connected streams of literature. Finally, implications for entrepreneurs, academia and politics are presented: means to increase the contribution of sustainable entrepreneurship to sustainability transitions are suggested, and the importance of growth and degrowth is discussed in the context of sustainable entrepreneurship.

Tertiary Students’ Entrepreneurship Learning Socialization: Factor Analysis and Structural Equation

This study examines 728 tertiary students’ entrepreneurship learning socialization and its influencing factors to serve as a school reference for the development of internship and entrepreneurship education. The results show that students’ internship experience has a significant direct effect on entrepreneurship learning socialization, and entrepreneurship intention has a significant effect on entrepreneurship learning socialization through internship experience. The influence pattern and empirical data of entrepreneurship intention and internship experience on entrepreneurship learning socialization has a good fit. This paper gives an insight from Taiwan tertiary institutions about entrepreneurial learning socialization of students and contributions to them. We describe the development of the influencing factors, discuss its implications for entrepreneurship and internship education, and finally offer suggestions for further entrepreneurship education development.

What could Entrepreneurship do for Sustainable Development? A Corporate Social Responsibility-Based Approach

Entrepreneurship is seen as an alternative to unemployment and poverty which could be the panacea for development (Bogan & Darity, 2008). Today, there is a growing perception among entrepreneurs that success cannot be achieved solely through maximizing short-term profits and the growing importance of corporate social responsibility (CSR) on business success and positive impact on society is accepted (İyigün, 2013). Entrepreneurship and small businesses are the basics of economy, responsible for breakthrough innovations that influence the growth of free market economy and its general performance.This study aims to serve as an impetus for multidisciplinary research and further discussion on the entrepreneurial implications of CSR for sustainable development. Observing the positive social impact of entrepreneurs catering to basic needs, this study recognizes the important role in efficiently contributing to the achievement of sustainable development. Moreover, possible reasons of why entrepreneurs should be involved in sustainable development to reveal the motivations for sustainable development and underlying dimensions in decision making will be discussed. The study will provide a unique contribution to the literature as an example from a CSR-based perspective for the related field.

How knowledge affects resource acquisition

Purpose– This study aims to examine how the interactions between the entrepreneur’s technical and market knowledge and the intra- and extra-industry ties affect resources acquisition.Design/methodology/approach– The authors made a questionnaire from a sample of 300 high-technology companies located in the incubator in Xi’an, of which 165 were usable, and the final response rate was 55 per cent, the authors used optimal scaling regression analyses to analyze the data and test the hypotheses.Findings– There is a positive relationship between the entrepreneurs’ knowledge and the resources acquisition. The effects of the technical knowledge and the market knowledge are contingent on the intra-industry ties and the extra-industry ties in different ways. In particular, an entrepreneur with technical knowledge has an easier access to required resources from the intra-industry ties than extra-industry ties. In contrast, an entrepreneur with market knowledge can obtain more easily the needed resources from the extra-industry ties than the intra-industry ties.Originality/value– The paper conducted an empirical test of how the interactions between the entrepreneurs’ knowledge and industry ties affect the resources acquisition in the context of China’s emerging economy, which has not been studied in the current literature. This paper provides implications for entrepreneurs with technical and market knowledge in finding the right way to obtain needed resources through their industry ties.

Exploring Quality Management Practices and Its Pattern Analysis in Indian Service SMEs

Substantial research exists on quality management practices in context to large organisations with plethora of studies in manufacturing organisations while exiguously aiming service sector SMEs. As more and more organisations strive to remain competitive, the concepts and practices of quality management have received increased attention by Indian industry. The contribution of service sector in Indian economy has increased at a faster rate in comparison with other sectors. Considering the pressing need this research explores the literature for a near exhaustive list of practices in quality management by deploying qualitative and descriptive approach. Thereafter, twenty service organizations were surveyed for comprehending their adoption of the type of quality management practices. On the basis of their prioritization or apportioning weight to those practices, a descriptive pattern analysis has been deployed to detect perceived level of adoption/implementation of quality management practices. The findings represent that out of twenty one quality management practices; thirteen practices substantially have been ranked on priority while others require phenomenal acclimatization towards implementation in the Indian scenario. Analysis also reflects that the strength of service SMEs lies with customer focus, management leadership and customer feedback. Further with the integration of contextual factors, as supported by theory, a conceptual framework has been proposed exhibiting relationship between quality management practices with performance and growth. The methodological approach led to the emergence of unique dimensions culminating into new findings with both managerial and entrepreneurial implications. Directions for future scope of research and suggestions for improvement have also been recommended.

Entrepreneurial implications of crowdfunding as alternative funding source for innovations

Crowdfunding (CF) is a form of early-stage financing for innovative ventures, which has seen tremendous growth in the past few years – partly because it provides a desperately needed alternative to the scarcity of traditional sources of finance during the so called ‘credit crunch’. CF ranges from a simple form of pre-financing to full grown debt or equity investments, but they are typically small pledges that can add up to incredible amounts. Scholarly literature has only started to examine CF and is still in an early stage when it comes to identifying implications for entrepreneurs apart from often over-simplified anecdotal evidence of success. The authors argue that CF can by no means be seen from a financial perspective only, rather it needs to be addressed as a bundle of processes leading to innovative entrepreneurial business-models. This qualitative study explores four extreme cases from the information and communications technology sphere to find out non-financial implications of CF as alternative funding source for innovative entrepreneurs and their business models.

Beyond traditional developmental models: a fresh perspective on entrepreneurial new venture creation

Opportunity discovery and creation are key areas of research in entrepreneurship literature. Based on the ongoing discussion, this paper proposes an integrative view of a dynamic multi-stage new venture emergence. In particular, the findings of our research show how to match these approaches with the life cycle stages of an emerging venture. This paper contributes to existing entrepreneurship research by acknowledging the value of parallel sequential process combinations, by including customer demand as part of a market participant's selection criteria, and by recognising failure as valuable outcome. The implication for entrepreneurs is that, beyond discovering a potential venture idea, substantial development efforts are required to form a sustainable business model. For entrepreneurship research, our model is a first step towards an integrative discussion of new venture emergence aimed at fostering further research and the advancement of new theoretical insights.

Education and entrepreneurship in Canada: evidence from (repeated) cross-sectional data

This paper estimates the causal effect of education on entrepreneurship choice in Canada taking into account the endogeneity of education. The data come from the General and Social Surveys (2000–2009). We consider the effect of two extreme education levels: university and some/no education. Regressions are based on fixed effects with two-stage least squares. We find that university education positively impacts entrepreneurship but some/no education reduces self-employment propensity. Implications for entrepreneurship are discussed.

Entrepreneurial Remixing: Bricolage and Postmodern Resources

The innovation of organizations has been likened to the improvisation capacity of musicians playing jazz – a modernist form of music that emphasizes improvisation within the boundaries of a particular genre. But recent bricolage research suggests that this metaphor is incomplete when applied to entrepreneurs. The innovation of entrepreneurs lies not only in the improvisational combining of resources, but also in the eclectic selection of resources and the embedding of these innovative combinations into novel contexts. This makes entrepreneurs less like jazz musicians and more like hip-hop DJs – a postmodern form of music that emphasizes sampling and remixing of musical fragments from diverse genres. This paper places entrepreneurial bricolage into a larger postmodern context and thereby identifies other unexplored implications for entrepreneurial value creation. By drawing from postmodern theorists, it explicates broader design principles that are latent only in the current narrow bricolage perspectives. A model is developed for how entrepreneurs enact postmodern resources and markets through hyperdifferentiation, how they develop novel pastiches using techniques such as bricolage, and how they embed these pastiches into novel contexts that create value from three distinct sources. Specific propositions and implications for entrepreneurs and researchers are developed.

Social Movements and Economic Systems: From Market Change to Industry Creation

The past several years have brought public awareness of social movements to the forefront, from the Arab Spring to Occupy Wall Street, highlighting their ability to advocate for social change. In management research, the role of social movements in facilitating the emergence of new markets has increasingly become a research focus. This symposium brings together new research on social movements and the mechanisms through which they impact and alter economic systems. More specifically, it presents four studies that examine how and when social movements are able to address social issues by challenging existing markets and fostering the development of new ones. By explicating some of the key processes by which movement-supported markets emerge, this symposium facilitates discussion among scholars interested in the potential of markets to elicit social change. It also catalyzes dialogue on the implications for entrepreneurs and policy makers active in the development and promotion of markets benefiting the greater social good. Welcome to the Jungle: Activist and Firm Discourse and the Struggle Over Market Change Presenter: Jocelyn M. Leitzinger; U. of Wisconsin, Madison Presenter: Theodore L. Waldron; Baylor U. Presenter: Chad Navis; U. of Wisconsin, Madison SMO Strategy Choices and the Conditions that Affect Them Presenter: Charlene E. Zietsma; York U. Toward a Theory of Movement Driven Markets Presenter: Brandon H. Lee; Melbourne Business School The Institutional Antecedents of Greenwashing: SMOs and the Implementation of State RPS Policy Presenter: Wesley David Sine; Cornell U. Presenter: Arkangel Miguel Cordero; Cornell U.

Preliminary Assessment of Wealth Creation in Wood Products’ Business in Ghana: The Perspective of Lumber and Furniture Production and Implications for Entrepreneurship

Export values of lumber appear lesser than those of garden furniture parts, but in Ghana, lumber entrepreneurs dominate the market. This study investigated the demand trends of wood species used for garden furniture and the Free-On-Board (FOB) export values of their kiln-dried (KD) lumber and furniture. The study aimed at identifying and assessing the demand trends of wood species used for garden furniture production for exports, and making preliminary wealth creation assessment on converting lumber to garden furniture, all with the cardinal aim of arousing interests of entrepreneurs. The study covered a ten (10) year period from 2001 to 2010. Monthly export reports on wood products were reviewed to obtain relevant information for analyses. Findings indicated that, twenty-six Ghanaian hardwood species were demanded in the international garden furniture market, but Milicia excelsa (odum) wood species’ garden furniture was the most preferred. However, Pericopsis elata (afromosia) wood species’ furniture had the highest FOB value of €3,300.788/m3 and Chrysophyllum albidum (akasaa) produced the highest additional income of €2,203.09 after value addition. After processing lumber to garden furniture, one is likely to obtain additional income averaging from €188.599 (emire- Terminalia ivorensis) to €2, 203.099 (akasaa). In conclusion, further processing lumber to garden furniture before exports may be economically viable, if labour cost and expenses are managed prudently. Entrepreneurs in Ghana should consider converting lumber to furniture for exports, as one good avenue for wealth creation and development. However, further studies to factor production costs into the analyses would be necessary to confirm the profitability in processing lumber to garden furniture.