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1 – 10 of 83Leon Schjoedt and Justin B. Craig
Given the nature of entrepreneurship, a domain-specific self-efficacy scale should pertain to venture creation, be unidimensional, and be developed and validated using nascent…
Abstract
Purpose
Given the nature of entrepreneurship, a domain-specific self-efficacy scale should pertain to venture creation, be unidimensional, and be developed and validated using nascent entrepreneurs – persons for whom self-efficacy may be most important. Extant measures employed in entrepreneurship research do not meet all these criteria. The purpose of this paper is to develop and validate a unidimensional entrepreneurial self-efficacy (ESE) scale based on samples of nascent entrepreneurs.
Design/methodology/approach
Data from a sample of nascent entrepreneurs and items from PSED I were used to develop and assess the validity of a new ESE scale. To further establish scale validity, a comparison group from PSED I along with a sample of nascent entrepreneurs from PSED II were employed.
Findings
A unidimensional three-item self-efficacy scale for assessing a person’s belief that s/he can create a new business successfully is developed and validated using samples of nascent entrepreneurs and a control group.
Research limitations/implications
The scale offers opportunity to enhance research-based assessment using a parsimonious, reliable, and valid unidimensional measure of ESE. The scale may enhance future research findings, as well as promoting reconsideration of past research findings, on many issues in the entrepreneurship literature.
Originality/value
This research uses a sample of nascent entrepreneurs to provide a new three-item scale for assessment of ESE that is parsimonious, valid, and unidimensional.
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David Gras, Todd W. Moss and G. T. Lumpkin
The purpose of this study is to assess the current prevalence of empirical research in the field of social entrepreneurship. Further, we identify secondary datasets and explain…
Abstract
Purpose
The purpose of this study is to assess the current prevalence of empirical research in the field of social entrepreneurship. Further, we identify secondary datasets and explain their relative strengths and weaknesses for use by social entrepreneurship scholars.
Methods
The authors conducted a search of academic articles in the EBSCO and ProQuest databases mentioning social entrepreneurship, social venture(s), social enterprise(s), or social entrepreneur(s) in the title, abstract, or keywords published from 2009 to 2013. Papers were coded and analyzed based upon the nature of their methods.
Findings
We find that while qualitative studies are still the norm, quantitative methods are increasing, thanks to the creation of large-scale datasets and the use of analysis techniques new to the field. Three such large-scale datasets – the PSED II, GEM, and nonprofit tax collections – are discussed in depth. We find several strengths and weaknesses for each dataset, yet each provides social entrepreneurship scholars with fruitful opportunities.
Value of chapter
Through a deeper understanding of empirical research and sources of social entrepreneurship data, scholars may be more attracted to social entrepreneurship, better equipped to conduct high-quality research and publish in high-quality outlets. Moreover, by moving beyond case studies and small-sample research to engaging larger pools of subjects and producing more generalizable findings, social entrepreneurship scholars will have the ability to impact a much broader scope of practitioners.
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Casey J Frid, David M Wyman, William B. Gartner and Diana H Hechavarria
The purpose of this paper is to explore the relationship between low-wealth business founders in the USA and external startup funding. Specifically, the authors test whether a…
Abstract
Purpose
The purpose of this paper is to explore the relationship between low-wealth business founders in the USA and external startup funding. Specifically, the authors test whether a founders’ low personal net worth is correlated with a lower probability of acquiring funding from outside sources during the business creation process.
Design/methodology/approach
The authors use a double-hurdle Cragg model to jointly estimate: first, the decision to acquire external financing; and second, the amount received. The sample is the US-based Panel Study of Entrepreneurial Dynamics II (PSED II). The PSED II tracks business founders attempting to start ventures from 2005 to 2012.
Findings
Receipt of outside financing during business formation is largely determined by the business founder’s personal finances (controlling for human capital, venture type and industry, and whether money was sought in the first place). A higher household net worth results in larger amounts of external funding received. Low-wealth business founders, therefore, are less likely to get external funds, and they receive lower amounts when they do. The disparity between low-and high-wealth business founders is more pronounced for formal, monitored sources of external financing such as bank loans.
Research limitations/implications
Because the study eliminates survivor bias by using a nationally representative sample of business founders who are in the venture creation process, the findings apply to both successful business founders and those who disengaged during the business creation process. The authors offer insights into the sources and amounts of external funds acquired by individuals across all levels of wealth. The authors accomplish this by disaggregating business founders into wealth quintiles. The study demonstrates the importance of personal wealth as a factor in acquiring external startup financing compared to human capital, industry, or personal characteristics.
Social implications
If the ability to acquire external funding is significantly constrained, the quality of the opportunity and the skill of the business founder may be less a determinant of success at creating a new business as prior studies have suggested. Consequently, entrepreneurship (as measured by business formation) as a path toward upward, socioeconomic mobility will be afforded only to those individuals with sufficient financial endowments at the outset.
Originality/value
Unlike prior studies, the data used are not subject to survivor bias or an underrepresentation of self-employment. The statistical model jointly estimates acquisition of financing and the amount received. This resolves selection and censoring problems. Finally, the dependent variables directly measure liquidity constraints in the context of business formation, that is, before a new venture is created. Prior research contexts have typically studied existing businesses, and are therefore not true examinations of conditions affecting business creation.
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Roy Cerqueti, Caterina Lucarelli, Nicoletta Marinelli and Alessandra Micozzi
This paper aims to dismantle the idea that sex per se explains entrepreneurial outcomes and demonstrates the influence of a gendered motivation on forging and shaping new venture…
Abstract
Purpose
This paper aims to dismantle the idea that sex per se explains entrepreneurial outcomes and demonstrates the influence of a gendered motivation on forging and shaping new venture teams, which is a disruptive choice affecting the future of start-ups.
Design/methodology/approach
A two-level research model is validated on data from the Panel Study of Entrepreneurial Dynamics II (PSED II), with a system of simultaneous equations. First, if team features affect the performance of new ventures is tested; then, the study investigates determinants of team features with a focus on sex and motivation of nascent entrepreneurs.
Findings
Human capital (HC) in terms of education and experience of team members consistently explains venture evolution only when considering the larger team of affiliates. The HC gathered by nascent entrepreneurs is not because of the simplistic sex condition, but rather to a gendered motivation related to the inferior need of achievement of women.
Research limitations/implications
Limitations of discretionary scoring assigned to items of the PSED II survey are present, but unavoidable when processing qualitative data.
Practical implications
Women need to be (culturally) educated on how to re-balance their personal motivation towards entrepreneurship by fostering their incentives for achievement. Political and educational programmes could trigger success in the creation of new businesses led by women.
Originality/value
This paper contributes to the literature on nascent entrepreneurship, focusing on the entrepreneurial teams in the initial phase of business creation, and provides the basis for further studies aimed at eradicating the stereotypes of gender roles that lead women to self-exclusion and organizational errors.
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Jan P. Warhuus, Casey J. Frid and William B. Gartner
This study offers empirical evidence from a nationally representative panel dataset of nascent entrepreneurs (PSED-II) regarding when external financing is acquired and how…
Abstract
Purpose
This study offers empirical evidence from a nationally representative panel dataset of nascent entrepreneurs (PSED-II) regarding when external financing is acquired and how certain factors affect this timing during the cumulative process of nascent entrepreneurs taking actions toward establishing an operational entity. By assessing the relationship between the external financing event and the cumulative set of actions that nascent entrepreneurs undertake to create new businesses, we improve our understanding of how the timing of acquiring external financing affects organizational survival and growth.
Design/methodology/approach
We apply nonparametric and semiparametric survival analysis techniques to a nationally representative panel dataset of nascent entrepreneurs. This ascertains the probability of an external financing event at any given moment in time and a set of startup conditions that we hypothesize will affect this timing. First, we use Kaplan–Meier analysis to explore when external financing occurs during new business creation. We then use discrete-time survival analysis to investigate whether certain startup conditions affect when external financing occurs. Finally, we conduct a test of independence to examine the external financing event relative to other startup activities completed during new business creation.
Findings
Nascent entrepreneurs tend to acquire external funding relatively late in the new venture startup process – on average, about two-thirds of the way from conceiving of the idea and becoming operational. They tend to take actions that are less resource-demanding early in the startup process to build their organizations to a fundable stage. Net worth tends to speed up the acquisition of external funding as wealthy entrepreneurs tend to ask for funding earlier in the process. Finally, entrepreneurs in capital-intensive industries do not seem to get outside funding before entrepreneurs in other industries.
Originality/value
This study is unique in three ways. First, we investigate the timing of the highly important external financing event. Timing is critical in unpacking and making sense of the very early stages of a new business and in guiding entrepreneurs and students about when to do what. Second, we do so in a subsample of preoperational, nascent, funded entrepreneurs derived from a nationally representative panel dataset of startup attempts. Third, our findings provide a counter-intuitive yet systematic understanding of organizational emergence and very early-stage financing.
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Fernando Muñoz-Bullón, Maria J. Sanchez-Bueno and Mattias Nordqvist
The purpose of this paper is to investigate how family ties in new venture teams (NVTs) influence the intended future growth of a nascent entrepreneur’s business. The authors…
Abstract
Purpose
The purpose of this paper is to investigate how family ties in new venture teams (NVTs) influence the intended future growth of a nascent entrepreneur’s business. The authors posit that R&D-oriented entrepreneurs in NVTs with family ties have higher growth intentions relative to those who are less oriented toward R&D.
Design/methodology/approach
The hypotheses were tested using data from the Panel Study of Entrepreneurial Dynamics II (PSED II). One distinctive feature of the PSED is that it is based on a random sample of 1,214 nascent entrepreneurs in the process of starting new ventures in the USA, which overcomes the recall biases associated with surveying entrepreneurs already in business and potential survivorship biases.
Findings
The results show that growth intentions in NVTs with family ties is greater when the nascent entrepreneur shows an R&D behavior, even though the presence of family members in the team is negatively related to the intentions of nascent entrepreneurs with regard to new venture growth. This effect is attributed to entrepreneurs’ long-term vision and a more favorable attitude toward change.
Research limitations/implications
Data on startup teams in the PSED II come from one team member (the respondent). Therefore, differences in perceptions regarding growth intentions cannot be determined. Moreover, the sample consisted exclusively of nascent entrepreneurs in the USA.
Practical implications
Knowledge about the determinants of growth intentions during the venture creation phase becomes relevant if we want to influence and support the growth of newly founded firms. Nascent entrepreneurs need to understand the trade-off between emotional and financial concerns.
Social implications
Nascent entrepreneurs more oriented toward R&D become more risk tolerant, and may accept certain losses to their emotional endowment in favor of pure financial goals, being more able to access the additional external resources (tangible and intangible) needed for growth.
Originality/value
The research expands previous evidence on the family involvement-performance debate in large firms by focusing on new ventures with family ties, with distinctive characteristics that may affect growth intentions. The authors also shed new light on the interplay between family business and entrepreneurship. In particular, the research helps gain an understanding of how NVTs with family ties deal with the opposition between the benefits from venture growth and the tendency to preserve team member’s emotional attachment.
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Given the importance of technology in competitive advantage, this paper seeks to better understand the factors associated with entrepreneurs' decision to incorporate innovative…
Abstract
Purpose
Given the importance of technology in competitive advantage, this paper seeks to better understand the factors associated with entrepreneurs' decision to incorporate innovative technologies in new ventures. It aims to explore three questions: “Are the reasons given for starting technologically innovative new ventures (TINVs) different from those given for starting ventures based on traditional technologies?”; “What is the role of human capital in the TINV startup decision?”; and “Do gender differences exist in the reasons and human capital associated with starting a TINV?”.
Design/methodology/approach
Data were obtained from the Panel Study of Entrepreneurial Dynamics II (PSED II), which is a national database of individuals in various stages of starting a business. The overall sample consisted of 950 individuals. Non‐parametric methods and logistic regressions were used to test hypotheses.
Findings
Results show that men start the TINV for self‐realization reasons, and that wealth seeking and employment reasons are negatively associated with the technology startup decision among women, but not among men. Human capital positively predicts the decision to start TINV, but gender differences exist as well: specific human capital (industry and occupational background) positively predicts the technology startup decision among men, whereas general human capital (education and employment breadth) positively predicts the decision among women.
Practical implications
Better understanding of the factors that motivate and encourage entrepreneurs to utilize innovative technologies is useful for policymakers, practitioners, and educators. This understanding can help when allocating resources for the purpose of encouraging innovation and when trying to train entrepreneurs to enhance competitiveness of new ventures.
Originality/value
The study highlights some of the factors associated with the decision to start firms that are technologically innovative. Given that incorporating technology in new venture is often considered a key factor in sustainability and long term competitive advantage, the study provides possible explanations for potential sources of competitive advantage. Implications for the role of motives and human capital in the startup decision and in the decision to incorporate technology are discussed, with specific reference for male and female owned business.
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Using the Panel Study of Entrepreneurial Dynamics II dataset, we examine the role that household income plays in the emergence of consumer-oriented start-ups by individual (solo)…
Abstract
Using the Panel Study of Entrepreneurial Dynamics II dataset, we examine the role that household income plays in the emergence of consumer-oriented start-ups by individual (solo), family-based (family), and non-family based start-ups (team). In particular, we address the research question: Does household income impact firm emergence, and if so, is emergence impacted differently based on start-up configuration? Our results indicate that household income does have a significant impact on average firm emergence, as well as on emergence growth rates for solo and family firms, playing an especially significant role for family firms. Furthermore, we found that household income is not a significant predictor of start-up activity completion for teams. Results from our study reinforce the extant literature on the benefits of starting a firm with teams, and suggests that these enterprise types may provide a more stable platform on which to launch a start-up. Implications of these findings and opportunities for future research are offered.
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The purpose of this paper is to explore direct and indirect effects of pre-venture managerial experience (PVME) on new venture innovation. Using opportunity-costs framework, the…
Abstract
Purpose
The purpose of this paper is to explore direct and indirect effects of pre-venture managerial experience (PVME) on new venture innovation. Using opportunity-costs framework, the following questions are explored: does the entrepreneur's PVME directly affect the extent of innovation in the new venture? What is the role of expectation for high returns in the relationship between PVME and innovation? What is the role of expectation for high returns in the relationship between PVME and innovation? Is there a relationship between abilities and expectancies and does it affect innovation?
Design/methodology/approach
Data were obtained from the Panel Study of Entrepreneurial Dynamics II, which is a national database of individuals in various stages of starting a business. Overall sample consisted of 982 nascent entrepreneurs. Statistical methods explored a multiple serial mediation model using OLS regressions supplemented by analyses based on bootstrapping for assessment of indirect effects.
Findings
PVME effect on innovation is associated with abilities and financial motives, supporting a partial serial multiple mediation model in which PVME affects innovation indirectly through abilities and where abilities affect innovation directly as well as indirectly through expectations. Results also suggest a suppression effect and a possible negative effect of PVME.
Originality/value
Abilities facilitate innovation, which has implications for policy makers who aim to enhance innovations, for investors in assessing potential of innovations, and for entrepreneurs who aim at improving innovation. Shedding light on the mechanism by which prior experience affects innovation, including the role of financial expectations and how abilities possibly negate negative effects associated with experience improve the understanding of and ability to enhance innovation and improve new venture competitive stand.
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Benson Honig and Christian Hopp
In this chapter, we examine two theorized approaches to entrepreneurial activity: experiential versus prediction based strategies. We empirically assess the comparative…
Abstract
In this chapter, we examine two theorized approaches to entrepreneurial activity: experiential versus prediction based strategies. We empirically assess the comparative performance of several commonly recommended approaches – researching customer needs, researching the competitive landscape, writing a business plan, conceptually adapting the business plan or experimentally adapting the primary business activity. We found that the majority of nascent entrepreneurs began with a business plan, but only about a third adapted their plan in later stages. We also found that talking with customers and examining the competitive landscape were normative activities. Those who started a plan were more likely to create a venture, although the effects much stronger for those who changed their plan later on, as well as for those who researched customer needs.
Our results show that the selection of these activities is both ubiquitous and driven by pre-start-up experience and new venture characteristics. The activities themselves do not robustly link with successful new venture foundation. Hence, pre-start-up experiences, venture characteristics, and the institutional environment are more important in explaining successful performance than recommended activities. Implications for research, practice, and pedagogy are discussed.
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