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Article
Publication date: 19 October 2023

Lingyun Huang, Jiankun Liu and Zhigang Huang

The operational framework of external financing in the correlation between the gender of entrepreneurs and firm performance remains to be resolved. This study aims to investigate…

Abstract

Purpose

The operational framework of external financing in the correlation between the gender of entrepreneurs and firm performance remains to be resolved. This study aims to investigate the mediating effect of external financing on gender-based disparities in private firm performance and to explore its heterogeneity within the Chinese context.

Design/methodology/approach

Based on national data from the 10th to 13th Chinese Private Enterprise Survey, this study used a bootstrap-based mediation effect model to analyze the role of external financing as a mediator in the relationship between entrepreneur gender and firm performance.

Findings

This study found that external financing is a constructive mediator between entrepreneur gender and firm performance. Heterogeneity analysis revealed that external financing plays a complementary mediation role in the impact of entrepreneur gender on performance in West China. In the tertiary industry, external financing acts as the sole mediator for the impact of gender on firm performance. Notably, this mediating effect is present in non-startups but not in startups.

Practical implications

The findings suggest that external financing can improve the firm performance of female entrepreneurs. Governments and policymakers should strengthen financial support for female entrepreneurs in West China, tertiary industry and non-startup enterprises.

Originality/value

This paper contributes to the literature on gender and corporate governance by shedding light on the mediating role of external financing in the relationship between the gender of business owners and firm performance.

Details

Gender in Management: An International Journal , vol. 39 no. 3
Type: Research Article
ISSN: 1754-2413

Keywords

Article
Publication date: 7 September 2023

Shaun Shuxun Wang

This paper provides a structural model to value startup companies and determine the optimal level of research and development (R&D) spending by these companies.

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Abstract

Purpose

This paper provides a structural model to value startup companies and determine the optimal level of research and development (R&D) spending by these companies.

Design/methodology/approach

This paper describes a new variant of float-the-money options, which can act as a financial instrument for financing R&D expenses for a specific time horizon or development stage, allowing the investor to share in the startup's value appreciation over that duration. Another innovation of this paper is that it develops a structural model for evaluating optimal level of R&D spending over a given time horizon. The paper deploys the Gompertz-Cox model for the R&D project outcomes, which facilitates investigation of how increased level of R&D input can enhance the company's value growth.

Findings

The author first introduces a time-varying drift term into standard Black-Scholes model to account for the varying growth rates of the startup at different stages, and the author interprets venture capital's investment in the startup as a “float-the-money” option. The author then incorporates the probabilities of startup failures at multiple stages into their financial valuation. The author gets a closed-form pricing formula for the contingent option of value appreciation. Finally, the author utilizes Cox proportional hazards model to analyze the optimal level of R&D input that maximizes the return on investment.

Research limitations/implications

The integrated contingent claims model links the change in the financial valuation of startups with the incremental R&D spending. The Gompertz-Cox contingency model for R&D success rate is used to quantify the optimal level of R&D input. This model assumption may be simplistic, but nevertheless illustrative.

Practical implications

Once supplemented with actual transaction data, the model can serve as a reference benchmark valuation of new project deals and previously invested projects seeking exit.

Social implications

The integrated structural model can potentially have much wider applications beyond valuation of startup companies. For instance, in valuing a company's risk management, the level of R&D spending in the model can be replaced by the company's budget for risk management. As another promising application, in evaluating a country's economic growth rate in the face of rising climate risks, the level of R&D spending in this paper can be replaced by a country's investment in addressing climate risks.

Originality/value

This paper is the first to develop an integrated valuation model for startups by combining the real-world R&D project contingencies with risk-neutral valuation of the potential payoffs.

Details

China Finance Review International, vol. 14 no. 1
Type: Research Article
ISSN: 2044-1398

Keywords

Article
Publication date: 12 April 2023

Lalit Sharma

The purpose of the study is to review and understand firm selection mechanism involved in government venture capital (GVC) funding and identify key factors influencing selection…

Abstract

Purpose

The purpose of the study is to review and understand firm selection mechanism involved in government venture capital (GVC) funding and identify key factors influencing selection of tech-based firms for GVC funding.

Design/methodology/approach

This paper is based on real-time methodology. The data was generated from interviews of 60 young applicants, who applied for startup funding, and analyzed using statistical techniques to draw the results.

Findings

This review identifies financial viability, market viability and technological innovation to have the strongest predictive ability in firm selection process of the GVC funding program for tech-based youth-owned startups in the first round of interview. This review also highlighted that social impact is not a statistically significant variable in firm selection process in GVC funding.

Originality/value

This study tests the validity of the theory of GVC based on quantitative analysis of field data and identifies key factors with strong predictive abilities for GVC funding, more particularly for the youth-owned tech-based startups. This study brings to light the mechanism adopted for GVC funding and addresses gaps in the literature relevant to firm selection mechanism in GVC programs. This study would help GVC Fund Managers to review their own GVC programs in terms of selection mechanism and help them in appropriate designing of such programs.

Details

Journal of Research in Marketing and Entrepreneurship, vol. 26 no. 1
Type: Research Article
ISSN: 1471-5201

Keywords

Article
Publication date: 29 June 2023

Samer Abaddi and Moh'd Anwer AL-Shboul

Digital entrepreneurship is the key to economic survival and the lantern of jobs in developing countries. The debate about the challenges facing early digital entrepreneurs (DEs…

Abstract

Purpose

Digital entrepreneurship is the key to economic survival and the lantern of jobs in developing countries. The debate about the challenges facing early digital entrepreneurs (DEs) in developing countries is still ambiguous. This study attempts to fulfill the gap with an in-depth examination of Jordan.

Design/methodology/approach

Referring to a digital start-up database hosted by the Ministry of Digital Economy and Entrepreneurship in Jordan, the study interviews a random sample of (n = 45) early (less than one-year seniority) DEs. Thematic analysis is carried out facilitated by NVivo 20 software. E-Commerce, agriculture technology, data and artificial intelligence and entertainment were at the top of the interviewed start-ups.

Findings

Nine challenges were observed, critically analyzed and discussed. The challenges are (1) the lack of realistic funding in terms and guarantees; (2) the negligence of guidance and advisory of incubators and entrepreneurship centres; (3) the emergence of unexpected risks; (4) the stringent economic situation; (5) competition; (6) legal and legislative obstacles; (7) obstacles to accessing markets; (8) team management and finally (9) disorganization in the entrepreneurial environment. The study sets recommendations to support early DEs in their journey.

Practical implications

This study highlights the significant implications for aspiring DEs by focusing on some challenges that might face their start-ups such as institutional, technology and local dimensions of context and measures to develop the entrepreneurial and digital competencies. This includes sustainable funding, poor direct guidance and advisory, unexpected failures/risks, and economic obstacles. This study might be considered a road map for the decision-makers to build their strategies for eliminating the main barriers for early DEs and start-ups.

Originality/value

Although recent literature discussed the challenges of entrepreneurs in Jordan, this is the first that identifies early DEs’ challenges and uses 45% samples of the community.

Details

Management & Sustainability: An Arab Review, vol. 3 no. 1
Type: Research Article
ISSN: 2752-9819

Keywords

Article
Publication date: 28 February 2023

Aswathy Sreenivasan and M. Suresh

Innovation in technology is nothing new. However, a strong surge of inventions centered on digital apps and platforms has emerged over the past decade and has come to be…

Abstract

Purpose

Innovation in technology is nothing new. However, a strong surge of inventions centered on digital apps and platforms has emerged over the past decade and has come to be associated with the tech sectors. The purpose of this research is to know whether deep-tech can be unlocked in startups for their long-term success.

Design/methodology/approach

Papers and websites that included the term deep-tech startups were considered for this study.

Findings

The authors have seen no explanation why India cannot develop several global deep-tech firms in the coming five years, similar to what China did in the previous 10 years, if Indian deep-tech entrepreneurs receive solid support from domestic industry giants, supportive regulatory changes and prompt access to finance. The authors think that the epidemic has made conditions for this to pick up speed that is highly favorable.

Research limitations/implications

This research is limited to a few numbers of papers and websites.

Practical implications

Due to the unanticipated disruption, the pandemic caused, clever robotics and hands-free technology were urgently needed. The development of smart, self-monitoring, simple, tailored and potential on-the-go improvement solutions are the talk of the day. Deep-tech solutions have the ability to provide limitless benefits in a variety of fields to the world's 1.3 billion inhabitants.

Social implications

This research will help startups to know more about deep-tech and implement them to be the first-mover advantage in this competitive and turbulent environment.

Originality/value

The novelty of this research is based on its presentation of an organized and thorough evaluation, which defines the current state of the art with regard to deep-tech startups. Not many studies have been performed in the area of deep-tech startups. In order to create a sustainable startup, a thorough study on how deep-tech can be unlocked in startups and its opportunities, challenges and funding is presented.

Details

Technological Sustainability, vol. 3 no. 1
Type: Research Article
ISSN: 2754-1312

Keywords

Article
Publication date: 13 June 2023

Mohd Azeem and Ashu Khanna

This paper aims to provide a brief review of the work on startup survival and a conceptual framework of factors influencing a startup firm’s survival. In addition, it lists…

Abstract

Purpose

This paper aims to provide a brief review of the work on startup survival and a conceptual framework of factors influencing a startup firm’s survival. In addition, it lists significant gaps and recommends avenues for future research.

Design/methodology/approach

This paper conducted a systematic literature review of peer-reviewed journal articles indexed in Scopus, Web of Science and EBSCO databases using Preferred Reporting Items for Systematic Reviews and Meta-Analyses guidelines. A total of 140 articles published in 72 journals between 1993 and 2021 were considered for the review.

Findings

The comprehensive review revealed that most of the studies have applied a single theoretical lens and have taken place in advanced economies, with a narrow focus on emerging economies. Empirical research has prominently applied regression-based models to analyse the relationship between the antecedents and the outcomes. Internal resources such as human capital, financial capital and physical capital and non-financial performance measures such as survival, growth and employment are the studies’ prominently used antecedents and outcome variables. However, a limited number of studies have used mechanisms of mediation and moderation.

Originality/value

Despite the substantial scientific and practical discussion on startup survival, to the best of the authors’ knowledge, no comprehensive review has been undertaken to date, which provides a systematic and comprehensive compilation of the knowledge on the topic. This study aims to develop a unique landscape of scientific advancement by methodically reviewing, categorising and synthesising the current body of knowledge on the topic.

Details

Journal of Research in Marketing and Entrepreneurship, vol. 26 no. 1
Type: Research Article
ISSN: 1471-5201

Keywords

Article
Publication date: 25 December 2023

Christoph Emanuel Mueller

In a recent quasi-experimental study, the effects of a large German public startup support measure entitled “EXIST – Business Startup Grant” (EGS) on a variety of outcomes were…

Abstract

Purpose

In a recent quasi-experimental study, the effects of a large German public startup support measure entitled “EXIST – Business Startup Grant” (EGS) on a variety of outcomes were determined, but without examining which factors are responsible for these program effects. The present study investigates the contribution of several factors to the success of the program in promoting product development and business planning.

Design/methodology/approach

By means of a two-wave panel design and fixed-effects panel regressions, evidence is generated that provides unique insights into the effect mechanisms of a publicly funded startup grant. The data for the study come from the program monitoring of the startup support measure.

Findings

Several factors were identified that significantly drive the effects of the program on the product development and business planning stages, namely the program-induced improvement of the skills of the startup team, intensification of cooperation with pilot customers/users, increase in the degree of networking and advice/support from third parties and the effort put into business plan preparation.

Originality/value

Startup support programs are a crucial aspect of technology and innovation policies, which are often evaluated in order to find out whether they generate effects. Assessing whether a program is effective or not, however, does not usually allow specific recommendations on how to improve the measure to be developed. Further information on the mechanisms of intervention is needed for this purpose. The present study takes up on this idea and provides this information for a specific type of public startup support measure.

Details

Journal of Entrepreneurship and Public Policy, vol. 13 no. 1
Type: Research Article
ISSN: 2045-2101

Keywords

Article
Publication date: 20 June 2023

Fabrizio Errico, Antonio Messeni Petruzzelli, Umberto Panniello and Angelo Scialpi

This paper aims to explore the effects of two drivers, namely, the received fundings and its interaction with the specialized competences owned by the managerial board, on the R&D…

Abstract

Purpose

This paper aims to explore the effects of two drivers, namely, the received fundings and its interaction with the specialized competences owned by the managerial board, on the R&D activities performed by start-ups.

Design/methodology/approach

This paper tests hypotheses on a sample of 405 innovative start-ups established in Italy and registered into the Chamber of Commerce official database. This study uses the R&D expenses as a measure of the innovative performance of start-up, and the authors also collected the number and total amount of grants received by them and the presence of high qualified team in their management board.

Findings

The analysis reveals that both the number and total amount of grants received by start-ups positively impact the innovative performance. The same is for the integration of the total amount of grants with the presence of high qualified team in the management board.

Research limitations/implications

This study did not distinguish between different types of grants adopted by start-ups, while it would be interesting to study whether any difference does exist among them in terms of their influence on innovative performance. Also, this paper considers the total number of specialized people in the team while it would certainly be interesting to analyze people’s background and competences in relation to the innovative performances.

Practical implications

This paper allows us to offer some provisional conclusions such as having funds in the preliminary phase of start-up life cycle, and investments mainly for R&D expenses. The start-up must also leverage its skills and therefore it is necessary to invest in human capital.

Social implications

Findings suggest that policymakers should introduce integrated measures to support start-ups throughout the entire life cycle, from the creation of the idea to incubation up to industrial consolidation.

Originality/value

This paper focuses on the determinants of start-up innovative performance because both external (such as political, economic, social and technological) and internal (such as organizational) influencing factors have to be considered as crucial for start-ups innovation and growth. Finally, this study is one of the few attempts exploring the phenomenon by using an empirical methodology based on real and certificated data.

Details

Journal of Knowledge Management, vol. 28 no. 2
Type: Research Article
ISSN: 1367-3270

Keywords

Article
Publication date: 8 August 2023

Aswathy Sreenivasan and M. Suresh

The purpose of this study is to provide a literature review of the past literature on the use of blockchain for attaining sustainability in start-ups, covering major…

314

Abstract

Purpose

The purpose of this study is to provide a literature review of the past literature on the use of blockchain for attaining sustainability in start-ups, covering major characteristics of current findings, limitations and prospective study possibilities.

Design/methodology/approach

Papers that included the term “Blockchain,” “Sustainability” and “Start-ups” were considered for the analysis. Biblioshiny package under the R programming tool was considered for a detailed paper analysis.

Findings

Numerous sectors are quickly adopting blockchain technology, which has enormous potential to remove middlemen and boost sustainability in start-ups.

Research limitations/implications

This research is limited to 147 papers from the Scopus database through 2022.

Practical implications

This paper stresses the crucial part that blockchain technology has played in igniting a conversation about innovation and technology. This research will aid in advancing the researcher’s knowledge of blockchain technology in start-ups.

Social implications

Blockchain technology will give transparency and sustainable product or services to consumers of the start-ups.

Originality/value

The novelty of this research is based on its presentation of an organized and thorough literature evaluation, which defines the current state of the art concerning the use of blockchain for sustainability in start-ups. To create a sustainable start-up, a thorough study of how the information gained in respect of its implementation might be spread into the start-ups is presented.

Details

Management Research Review, vol. 47 no. 3
Type: Research Article
ISSN: 2040-8269

Keywords

Open Access
Article
Publication date: 14 March 2024

Andreas Joel Kassner

Many studies have analysed the impact of various variables on the ability of companies to raise capital. While most of these studies are sector-agnostic, literature on the effects…

Abstract

Purpose

Many studies have analysed the impact of various variables on the ability of companies to raise capital. While most of these studies are sector-agnostic, literature on the effects of macroeconomic variables on sectors that established over the last 20 years like property technology and financial technology, is scarce. This study aims to identify macroeconomic factors that influence the ability of both sectors and is extended by real estate variables.

Design/methodology/approach

The impact of macroeconomic and real estate related factors is analysed using multiple linear regression and quantile regression. The sample covers 338 observations for PropTech and 595 for FinTech across 18 European countries and 5 deal types between 2000–2001 with each observation representing the capital invested per year for each deal type and country.

Findings

Besides confirming a significant impact of macroeconomic variables on the amount of capital invested, this study finds that additionally the real estate transaction volume positively impacts PropTech while the real estate yield-bond-gap negatively impacts FinTech.

Practical implications

For PropTech and FinTech companies and their investors it is critical to understand the dynamic with mac-ro variables and also the real estate industry. The direct connection identified in this paper is critical for a holistic understanding of the effects of measurable real estate variables on capital investments into both sectors.

Originality/value

The analysis fills the gap in the literature between variables affecting investment into firms and effects of the real estate industry on the investment activity into PropTech and FinTech.

Details

Journal of European Real Estate Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1753-9269

Keywords

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