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1 – 10 of over 1000Martin Ramirez-Urquidy, Jose N. Martinez and Pedro Orraca
The research aims to applying Baumol’s framework to address some research gaps in the literature. This paper aims to analyze how institutional variations at the subnational level…
Abstract
Purpose
The research aims to applying Baumol’s framework to address some research gaps in the literature. This paper aims to analyze how institutional variations at the subnational level impact entrepreneurship decisions and the path toward productive or unproductive entrepreneurship in an institutionally underdeveloped country. The results offer potentially new theoretical insights and practical implications for developing or emergent countries.
Design/methodology/approach
The research applies Baumol’s framework to Mexico’s context. The research collects data compounded by individual- and state-level variables from diverse sources for the 32 Mexican states. The individual level and some controls were obtained from sources of regular frequency, but the institutional variables were derived from surveys of irregular frequency, nonsynchronic and mostly nonoverlapping, which required aligning and centered them around 2016 and 2019 to match with the individual variables. The authors apply multilevel nonlinear mixed-effects probit regression to test nine hypotheses regarding the impact of institutional variables on entrepreneurial decisions and the path toward productive or unproductive entrepreneurship.
Findings
Improved formal institutions across the Mexican states reduce the entrepreneurship probability, implying interactions with other variables and indirect effects; encourage the selection of productive entrepreneurship, e.g. formal ventures; and discourage self-employment. Consequently, those institutions do not encourage entrepreneurship selection as an occupation but entrepreneurial quality, i.e. the selection of productive-formal entrepreneurship and larger ventures. Deficient informal institutions increase the entrepreneurship and formal entrepreneurship probabilities, implying the interactions with other variables and indirect effects and supporting the corruption “greases the wheels” hypothesis, consequently encouraging productive ventures. New evidence of the positive relationship between criminality and entrepreneurship types in Mexico is reported.
Research limitations/implications
Our findings indicate important impacts of the individual-level variables on the entrepreneurship decisions and that most of those decisions are potentially necessity driven and a minority are driven by opportunity, given their relationship with the macroeconomic controls and the institutional variables. The authors report mixed results on the relationship between institutions and entrepreneurship partially consistent with the literature; some results contribute additional evidence on controversial hypotheses or imply the existence of indirect effects. Overall, the results suggest that institutions impact the individual decisions to venture and the type of venture consequently affecting the amount and quality of entrepreneurship across states.
Originality/value
The research addresses some of the literature gaps by providing empirical evidence on a middle-income country and how diverging regional institutional contexts, including formal and informal institutions, impact the individual’s entrepreneurship decisions within an institutionally underdeveloped country. The paper contributes new knowledge and insights into entrepreneurship in emerging or developing countries with implications for Baumol’s framework in this context and adds to the debated hypothesis on the relationship between some institutions, e.g. corruption and criminality and entrepreneurship.
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Isa Mustafa, Justina Pula-Shiroka, Besnik A. Krasniqi, Veland Ramadani and Liridon Kryeziu
Informal entrepreneurship challenges sustainable economic performance and is a barrier to productive entrepreneurship. In this context, the level of development of formal and…
Abstract
Informal entrepreneurship challenges sustainable economic performance and is a barrier to productive entrepreneurship. In this context, the level of development of formal and informal institutions and their impact on informal entrepreneurship is crucial. This chapter examines the informal sector entrepreneurship in Kosovo using institutional theory lenses. Using a survey with 500 owners/managers of private companies, the study finds that the service industry has the highest participation in the informal economy compared to other sectors. On average small firms, compared to larger ones, report a higher percentage of unreported incomes. Our findings also suggest that when informal entrepreneurs perceive penalties for tax avoidance from tax authorities as high, they tend to have higher compliance with reporting their income. In addition, our findings indicate that the higher the vertical (trust in formal institutions) and horizontal distrust (trust in business partners), the higher the involvement in the informal economy. The chapter concludes with some policy implications for tackling the informal economy in Kosovo and similar institutional contexts.
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Lukman Raimi, Nurudeen Babatunde Bamiro and Hazwan Haini
The relationships among institutions, entrepreneurship, and economic growth are hotly contested topics. The objective of this present study is to conduct a systematic literature…
Abstract
Purpose
The relationships among institutions, entrepreneurship, and economic growth are hotly contested topics. The objective of this present study is to conduct a systematic literature review aimed at comprehensively assessing the relationships between institutional pillars, entrepreneurship and economic growth.
Design/methodology/approach
Specifically, a comprehensive analysis of 141 empirical publications was carried out using the PRISMA protocol. The reviewed publications were taken from the Web of Science, Scopus and Google Scholar databases. Thirty-three articles that met the eligibility criteria of quality, relevance and timeliness of the publications were included in the the study.
Findings
Three key lessons emerged from the review. First, it was discovered that entrepreneurship and economic growth are influenced by three institutional pillars at various levels, including the regulatory, cognitive and normative pillars. Second, according to the type of institutional quality, the institutional pillars in a causal framework have a good or negative impact on entrepreneurship. Third, novel enterprise creation, self-employment, citizen employment, poverty alleviation, radical innovation, formalization of the informal sector, promotion of competition in existing and new markets, Gross Domestic Product (GDP) growth and the emergence of new business models that significantly improve quality of life.
Originality/value
The study proposes a conceptual framework for further exploring this important relationship based on solid empirical evidence. By providing a theoretically grounded framework, the paper fills the gaps in the literature and helps to clarify the relationship between institutional foundations, entrepreneurship and economic progress.
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The impacts of institutional quality on entrepreneurship are well established. However, the effects of an external factor, such as the shadow economy, that moderates this…
Abstract
Purpose
The impacts of institutional quality on entrepreneurship are well established. However, the effects of an external factor, such as the shadow economy, that moderates this relationship have largely been neglected in existing literature. As such, this paper investigates how the shadow economy moderates the effects of institutional quality on entrepreneurship in a global sample of 79 economies from 2006 to 2018, when the latest required data are available.
Design/methodology/approach
This paper utilizes the fixed-effect and generalized method of moments (GMM) estimation techniques. Various scenarios have been considered for the robustness of the analysis, including different estimation techniques, different estimates of the shadow economy and various subsamples of countries with different income levels.
Findings
Empirical findings indicate that improved institutional quality boosts entrepreneurship activities, while the extended shadow economy is associated with reduced entrepreneurship activities. Interestingly, the positive impacts of institutional quality on entrepreneurship will be lessened with a larger shadow economy. These findings have remained largely unchanged across samples of countries and different proxies and estimation techniques.
Practical implications
Findings from this paper offer policymakers the relationships between institutional quality, shadow economy and entrepreneurship and the moderating effects of shadow economy on the institutional quality–entrepreneurship nexus. The implication is that institutional quality should be strengthened while the shadow economy should be controlled to promote entrepreneurship initiatives.
Originality/value
To the best of the author's knowledge, this is the first empirical study to explore the moderating effects of the shadow economy on the institutional quality–entrepreneurship nexus.
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The Department of Defense (DOD) has long partnered with universities and other nonprofit organizations to perform early-stage, military-related research using research centers…
Abstract
Purpose
The Department of Defense (DOD) has long partnered with universities and other nonprofit organizations to perform early-stage, military-related research using research centers established under long-term contracts known as Federally Funded Research and Development Centers (FFRDCs). Over the last 25 years, there has been a shift in the type of arrangement used to University Affiliated Research Centers (UARCs) that this paper argues is the result of bureaucrats acting as evasive entrepreneurs in response to changing regulations.
Design/methodology/approach
Extending the theory of evasive entrepreneurship to bureaucrats, the author shows how regulations increase the cost of bureaucratic action and incentivize the creation of substitute actions to avoid those regulatory costs and capture benefits. Qualitative evidence from DOD documents is used to support the contention that UARCs serve the same function as FFRDCs. Quantitative evidence on the number of FFRDCs and UARCs and their funding illustrates how bureaucrats respond to political restrictions.
Findings
Bureaucrats have little to no recourse to respond to budgetary cuts or spending ceilings. In the case of FFRDCs, spending ceilings were introduced starting in the 1960s and led to a decline in the number of DOD FFRDCs. Bureaucrats can however strategically evade new regulations by reorganizing transactions justified by existing federal law that contradicts new regulations. Once FFRDCs were federally regulated in 1990 there were strong incentives to create substitute arrangements leading to the creation of UARCs in 1996 that have ultimately replaced FFRDCs as the research center of choice for the DOD.
Originality/value
The article makes three contributions. First, it applies the concept of evasive entrepreneurship to a political context and then use that framework to understand the creation and establishment of the DOD's UARCS. Second, the organizational features and purpose of UARCs are analyzed. Third, the evidence provided shows how regulations resulted in a shift in the DOD's R&D strategy toward working with universities.
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Andreas Kuckertz and Alexander Brem
All over the world, countries are searching for ways to foster innovation and growth through startups. This viewpoint paper presents the aims, development procedure and contents…
Abstract
Purpose
All over the world, countries are searching for ways to foster innovation and growth through startups. This viewpoint paper presents the aims, development procedure and contents of Germany's “Startup Strategy,” published for the first time in 2022, along with a fundamental assessment of its potential usefulness.
Design/methodology/approach
In this opinionated viewpoint paper, the authors provide an overview of the strategy's contents and discuss it against established policy frameworks focusing on the determinants of innovative entrepreneurial activity and the potential consequences of the strategy on the micro-, meso- and macro levels of the German economy. Additionally, the authors evaluate and analyze the strategy's proposed fields of action to illustrate its potential impact on innovative entrepreneurial activity.
Findings
The strategy's development avoids considering an evidence-based, fundamental framework to structure its fields of action and instead relies on diverse input from various entrepreneurial agents. As a result, it emphasizes access to finance for startups and building entrepreneurial capabilities as its main fields of action. On the one hand, the authors show how the contents of the German “Startup Strategy” can be matched with the OECD (2017) framework. On the other hand, the authors offer detailed insights into how the “Startup Strategy's” fields of action might influence the German economy's micro, meso and macro levels.
Research limitations/implications
To the best of the authors' knowledge, this article is the first one commenting on the German government's first-ever published startup strategy. Hence, this might offer several starting points for other researchers to analyze future startup strategies. Also, comparing such strategic approaches in other European countries and beyond might be a starting point for developing public policies in this field. Also, researchers on entrepreneurial ecosystems and innovation ecosystems will find concrete anchor points for these subject areas.
Practical implications
Policymakers can use this viewpoint paper to devise future actions. The paper provides concrete fields of action on the individual and company levels, as well as on a national economic and regional ecosystem level, to derive such recommendations.
Originality/value
Germany is one of the strongest economic nations in the world and by far in Europe. Hence, this startup strategy comes with the potential for substantial impact. This viewpoint paper may inspire the development of other national strategies to create a positive economic and societal environment supporting the emergence of more innovative startups. In particular, the strategy's focus on diversity and social entrepreneurship seems promising.
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This paper aims to analyse the impact of institutional quality, economic factors and unemployment on entrepreneurial activity. The dynamic approach adopted in this study permits…
Abstract
Purpose
This paper aims to analyse the impact of institutional quality, economic factors and unemployment on entrepreneurial activity. The dynamic approach adopted in this study permits to evaluate the simultaneous influence of specific factors on total entrepreneurial activity.
Design/methodology/approach
A quantitative approach through a panel vector autoregression analysis was adopted to take into account possible endogeneity issues, and a short-run Granger test was used to test causality between variables to fill the theoretical and empirical gap about the joined and dynamic effect of institutional quality, economic factors and unemployment on total entrepreneurship activity as a dependent variable.
Findings
The use of a dynamic estimation approach demonstrates that three kinds of relative effects exist: durable and positive effects between industrial production index (IPI), stability and self-employment, a limited positive effect which exists during a predeterminant period between dimensions of institutional quality and unemployment rate (UR) and finally negative effects between IPI and UR.
Research limitations/implications
In general, this study identifies three main effects: negative, temporary positive and perpetual positive. This is the same conclusion for the link between self-employment rates (SER) and institutional quality, measured by six dimensions. Three of these dimensions are especially important: political stability and the absence of violence, governmental effectiveness and regulatory quality.
Practical implications
In light of this study’s results and contrary to the idea admitted about the negative effect of unemployment on entrepreneurial activity, it seems that a relatively positive effect exists. By relative, the author means during a determinant period. It also has to be remembered that entrepreneurial activity was appreciated by the SER according to the recommendation of many previous researchers discussed at the beginning of this paper. Based on the model, three levels of relations emerge. This permits this study to dress a hierarchical list of alternatives to promote entrepreneurial activity. Economic policymakers have to reconsider the importance of the UR as the best occasion to create firms if good institutions and economic support are provided. Good governance and stability are the most important institutional determinants with a long positive effect. This conclusion suits Glaeser and Saks (2006) as well as Ojeka et al. (2019).
Social implications
This research offers considerable scientific evidence to make decisions and orient decisions-makers about policies adopted to increase institutional quality, reducing unemployment and stimulate economic activity, but it is still necessary to reconsider these results for developing countries. It is hoped that future researchers enrich and reinforce the model to provide a critical pathway for successful entrepreneurship activity in this new normal. In the end, this crisis can be also treated as a good occasion to innovate and reconsider the thinking process to manage and operate in the economic world.
Originality/value
This study’s contribution is to help and assist economic policymakers to be aware of the relative importance of such determinants at the country level. The introduction of the relative importance of time is in agreement with the concept of entrepreneurial opportunity.
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Mariarosalba Angrisani, Lorella Cannavacciuolo and Pierluigi Rippa
This research aims to shed new lights on the most shared constructs developed on Innovation Ecosystems, Entrepreneurial Ecosystems and Technology Transfer Ecosystem proposing an…
Abstract
Purpose
This research aims to shed new lights on the most shared constructs developed on Innovation Ecosystems, Entrepreneurial Ecosystems and Technology Transfer Ecosystem proposing an additional stand-alone ecosystem.
Design/methodology/approach
This research is built upon a qual-quantitative analysis of an empirical case. The latter analysis is performed through a single case study methodology on the San Giovanni Hub of the Federico II University of Naples.
Findings
Evidences show how a technological hub orchestrates three main ecosystems for the knowledge exploitation: the technology transfer ecosystem, devoted to gather knowledge form universities' labs towards industries; the innovation ecosystem, able to manage the exploration and exploitation of new knowledge and techniques; the entrepreneurial ecosystem, that supports startup/spinoff creation process.
Research limitations/implications
Limitations mainly concern the fact that it is centred on just one case study.
Practical implications
Practical implications imply new opportunities of collaboration involving different stakeholders as university administrators, researchers, businesses and policymakers, creating a supportive environment for innovation.
Originality/value
The research offers a new vision about the role of Universities as creators and enablers of ecosystems pursuing diverse value propositions. The Academic Innovation Ecosystem is a new conceptualization of this role played by a university, and it can convey innovation and entrepreneurial attitude within its ecosystem leveraging on the transfer of university knowledge and technology.
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This study aims to explore a range of institutional, environmental and policy conditions that influence the creation of “bossless” or “flat” companies, i.e. firms with little or…
Abstract
Purpose
This study aims to explore a range of institutional, environmental and policy conditions that influence the creation of “bossless” or “flat” companies, i.e. firms with little or no formal hierarchy.
Design/methodology/approach
The author builds on the theory and evidence presented by Foss and Klein (2022) in their study of the costs and benefits of organizing without hierarchy. The author also draws on a variety of related theoretical insights and empirical evidence. The paper is exploratory and anecdotal though and is intended to motivate further research rather than provide a definitive account of bossless organizing.
Findings
The paper develops nine propositions. It suggests that high levels of economic freedom create maximum scope for entrepreneurs to experiment with different organizational forms (1). Likewise, a lack of economic freedom increases the scope for the government to experiment (2). Markets characterized by technological innovation and uncertainty are likely to discourage bossless organizing (3 and 4), while stagnating industries with major capital requirements are likely to encourage it (5). Labor market interventions that increase the cost of employment contracts sometimes encourage firms to flatten (6), but more generally, these interventions encourage expanding management layers (7). In environments with strong intellectual property (IP) laws, companies with more modular and knowledge-based work are more likely to flatten (8). The creation of low-hierarchy firms such as cooperatives is encouraged by public subsidies, access to cheap credit and preferential tax treatment (9).
Originality/value
Studies of bossless or flat firms focus almost exclusively on describing their internal organization and evaluating their performance; little attention is paid to the conditions that encourage or discourage the emergence of these firms. This paper focuses on the latter, with a view to encouraging more scholarly interest in this field.
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The purpose of this paper is to review the utilization of game theory in the entrepreneurship literature. Game theory can potentially be employed to assess strategies…
Abstract
Purpose
The purpose of this paper is to review the utilization of game theory in the entrepreneurship literature. Game theory can potentially be employed to assess strategies incentivizing productive entrepreneurial activities and subsequent economic development. Therefore, the author reviews entrepreneurship articles and explores the application of game-theoretic models and concepts in the literature.
Design/methodology/approach
First, the author provides an overview of the entrepreneurship ecosystem concept, highlighting key challenges in its study. The author also briefly highlights successful applications of game theory in the innovation literature. Second, the author systematically reviews and synthesizes entrepreneurship research employing game-theoretic models and concepts. The author's objective is to provide a state-of-the-art overview of the use of game theory in entrepreneurship.
Findings
Broadly, the author categorizes entrepreneurship-game theory articles into three groups based on their scope and purpose: entrepreneurial policy applications, inter-firm applications and entrepreneurship theory applications. Entrepreneurial policy applications include entrepreneurs and the government or policy as the main players in a game. Inter-firm applications encompass games between entrepreneurs and other private entities. Entrepreneurship theory applications include articles that utilize game theory to advance the author's understanding of entrepreneurial behavior and/or mechanisms in the market.
Originality/value
To the best of the author's knowledge, no previous paper has reviewed the use of game-theoretic approaches and models in entrepreneurship literature. This study addresses this research gap.
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