better together signaling interactions in new venture pursuit of initial external capital after new ventures have exhausted the limited financial resources of founders family and friends they often pursue initial external capital to secure investment entrepreneurs can signal about

what do entrepreneurs pay for venture capital affiliation this study empirically evaluates the certification and value added roles of reputable venture capitalists vcs using a novel sample of entrepreneurial start ups with multiple financing offers i analyze financing offers made by competing vcs at the first professional round of start up funding holding characteristics of the start up fixed offers made by vcs with a high reputation are three times more likely to be accepted and high reputation vcs acquire start up equity at a 10 14 discount the evidence suggests that vcs extra financial value may be more distinctive than their functionally equivalent financial capital these extra financial services can have financial consequences a central issue for early stage high tech entrepreneurs is obtaining external resources when the assets of their start up are intangible and knowledge based particularly for entrepreneurs without an established reputation convincing external resource providers such as venture capitalists vcs to provide financial capital may be challenging the literature contains two main lines of research for overcoming this problem one research stream has concentrated on designing institutional structures to permit financing early stage ventures this contractual and monitoring based approach is aimed at solving potential agency problems between investors and entrepreneurs e g admati and pfleiderer 1994 lerner 1995 hellmann 1998 and kaplan and str omberg 2001 2002 2003 a second research stream has suggested that when the quality of a start up cannot be directly observed external actors rely on the quality of the start up s affiliates as a signal of the start up s own quality

entrepreneurs perceived chances for success abstract entrepreneurs involved in planning or starting firms must engage in a continuing process of appraising prospects for success these assessments presumably bear upon the preparations they make as well as at some later point whether they decide to make major changes or even to discontinue the business in this study data from 2994 entrepreneurs who had recently become business owners were analyzed to determine their perceived changes of success although previous evidence on business survival led to the hypothesis that the entrepreneurs would only be cautiously optimistic this was not the case they perceived their prospects as very favorable with 81 seeing odds of 7 out of 10 or better and a remarkable 33 seeing odds of success of 10 out of 10 in considering the prospects for other businesses like their own they perceived odds which were significantly lower but still moderately favorable based upon previous research on factors associated with new business success it was hypothesized that those who were more likely to succeed based upon their personal backgrounds and the nature of their new firms would be more optimistic however this was not the case those who were poorly prepared were just as optimistic as those who were well prepared at this point shortly after having become business owners the assessment by entrepreneurs of their own likelihood of success was dramatically detached from past macro statistics from perceived prospects for peer businesses and from characteristics typically associated with higher performing new firms the psychological literature on post decisional bolstering suggests that decision makers in many settings tend to bolster or exaggerate the attractiveness of an option after it has been chosen this coupled with the tendency of entrepreneurs to believe that they can control their own destinies implies that the extreme optimism observed here is probably a typical occurrence for entrepreneurs the findings suggest that it is probably natural to experience feelings of entrepreneurial euphoria when first becoming a business owner with the available evidence it is difficult to judge whether this leads to inadequate preparations or an inability to diagnose problems and make adjustments after the business is started this extreme optimism probably does contribute to the heavy personal commitments observed here in which the median entrepreneur devoted more than 60 hours per week to the business the entrepreneur would seem well advised to form relationships with outsiders such as board members and professional advisors who can be objective and detached in diagnosing problems and assessing objectively the prospects for the business in its current form

public subsidies and the employment growth of high tech start ups assessing the impact of selective and automatic support schemes the aim of this article is to assess the impact of public subsidies on the employment growth of new technology based firms ntbfs contingent on i the type of policy scheme either selective or automatic and ii the age of the firms at the time of receipt of the subsidy for this purpose we analyze a sample composed of 536 italian independent ntbfs observed during a 10 year period 1994 2003 we estimate augmented gibrat law type dynamic panel data models using different techniques aimed at controlling for the potentially endogenous nature of public financing namely the generalized method of moments system fixed effect instrumental variable and inverse probability treatment weights estimators the results of the estimates show that selective support schemes had a larger impact on employment growth than automatic ones but only if they were awarded in the very early period of the recipient firms lives however selective subsidies awarded to young ntbfs are rare in italy calling into question the capability of the italian industrial policy to sustain the growth of the high tech entrepreneurial sector

a new production function bowled by a googly this paper clarifies the nature of the ces production function described in a recent paper by bairam howells and turner bht in this journal it is shown that the standard constant returns to scale ces function is a special case of the bht function in all other cases the bht function is not homogeneous of any degree in its inputs and hence cannot be considered a neoclassical production function further the bht function is restrictive in that it does not admit homogeneous non constant returns to scale ces functions

from the crowd to the market the role of reward based crowdfunding performance in attracting professional investors abstract we focus on new technology based entrepreneurial ventures engaging in reward based crowdfunding and examine the effect of their performance in such funding channel on the likelihood of securing subsequent funding from professional investors we also study how this effect is influenced by the presence of patents granted for the new product idea and the entrepreneur social capital results from a sample of technology projects launched on kickstarter demonstrate that pledging a higher amount of money in crowdfunding can ignite professional investors interest and thus help secure subsequent funding however this positive evidence is effective only when complemented by the presence of patents or a large network of social ties

beyond bankruptcy does the us bankruptcy code provide a fresh start to entrepreneurs abstract this paper assesses the extent to which the us bankruptcy system is effective in providing small businesses a fresh start after a bankruptcy filing i use data from the 1993 1998 and 2003 national survey of small business finances to explore how firms fare after a bankruptcy filing on the positive side previously bankrupt firms are not any more burdened than the average small firm by problems relating to profitability cash flow health insurance costs or taxes further the fact that these firms are surviving several years after the filing is itself a testament to the efficient functioning of the us bankruptcy system it suggests that the bankruptcy system goes a long way toward helping businesses recover after a bankruptcy filing however the one area of concern that persists after a filing is financing or credit access in general these firms have a nearly 24 percentage point higher likelihood of being denied a loan and are charged interest rates that are more than 1 percentage point higher than those charged to other businesses a bankruptcy affects all types of financing even trade credit which is a significant form of lending between businesses in fact it appears that firms with a bankruptcy record are rationed out of the market with all types of loans being denied at significantly higher rates than other firms further my results show that bankruptcy leads to a class of discouraged borrowers who are significantly less likely to even apply for a loan

government as fund of fund and vc fund sponsors effect on employment in portfolio companies governments around the world have set up fund of fund programs to increase the supply of venture capital financing to young growth oriented firms in these programs a government fund of fund acts as limited partner in a venture capital fund the venture capital investment process is hereby delegated to external investors which were selected by the government fund of fund we investigate employment growth in 108 portfolio companies that benefited from the arkimedes fund of fund in flanders accounting for the heterogeneity in the types of venture capital investors managing hybrid funds and the associated goal diversity and resource endowments we find that portfolio companies backed by hybrid independent venture capital funds show greater employment growth than those backed by hybrid captive or hybrid government venture capital funds this finding is relevant because it indicates that the financial objectives of hybrid independent venture capital funds are highly compatible with the government s objective of employment growth as providing companies with superior monitoring and value adding services with the objective of realizing a successful exit creates employment in the process

on the concept of territorial competitiveness sound or misleading in an era of globalisation the issue of territorial competitiveness is of increasingly central importance for regional development policies this paper aims to deal directly with the issue from a theoretical viewpoint in particular examining two related questions more thoroughly the question of the soundness of the concept of territorial competitiveness itself in terms of economic theory and the question of the new foundations on which this competitiveness is based using a cognitive evolutionary type approach

the relationship between governance structure and risk management approaches in japanese venture capital firms abstract this paper attempts to understand what drives japanese venture capital jvc fund managers to select either active managerial monitoring or portfolio diversification to manage their firms investment risks j bus venturing 4 1989 231 unlike u s venture capitalists that use active managerial monitoring to gain private information in order to maximize returns j finance 50 1995 301 jvcs have traditionally used portfolio diversification to attenuate investment risks hamada y 2001 nihon no bencha kyapitaru no genkyo current state of japanese venture capital nihon bencha gakkai vc seminar may 7 we found that performance pay is positively related to active monitoring and that management ownership is positively related to active monitoring and negatively related to portfolio diversification the managerial implication of our study is that venture capitalists should be as concerned about the structure of their incentive systems for their fund managers as they are for their investee firm entrepreneurs agency theory says that contingent compensation is a self governing mechanism for individual effort that is difficult to measure and verify when properly applied equity ownership and performance based pay can have powerful influencing effects on the strategic choices of managers

the entrepreneur s search for capital abstract the popular media have been inundated with stories of the spectacular success of start up companies whose very existence let alone their meteoric growth would not have been possible without the infusion of venture capital by comparison there is a dearth of scientific research on the topic of venture capital in this article we take a systematic look at entrepreneurs in search of risk capital this inquiry is based upon five data bases including surveys of venture capitalists and entrepreneurs we have tracked 193 ventures which were denied venture capital surveyed 179 new high technology companies in northern california and reviewed the dun bradstreet credit reports of 145 new ventures in california in sic codes related to the high tech sector with follow up interviews of 86 of these 145 start ups

racial segregation in the public schools and adult labor market outcomes the case of black americans residential segregation has played a central role in theories of minority entrepreneurship and in the diversification of the u s labor market racial diversity in public accommodations including schools has been an issue of continuous public policy debate at least since the u s supreme court s plessy versus ferguson decision 1896 this study applies theory from the literature on social capital to an examination of the role of racial segregation in the public schools of blacks during childhood on their adult likelihood to become self employed and their level of occupational status the model results indicate that after controlling for a number of individual household and metropolitan area factors lower rates of segregation during public schooling results in higher likelihood of wage salary employment and self employment among a cohort of black americans that attended public schools during the 1960s

policy reform and labour demand in branches of sri lankan manufacturing industry many policy reforms in developing countries aim to remove factor market distortions whether such reforms reduce unemployment depends partly on the substitution possibilities between labour and other factors of production this paper examines labour demand in seven branches of sri lankan manufacturing industry using data on 4 digit industrial categories over the 1990 to 1997 period the box cox transformation is used to allow for flexible and data dependent elasticities the elasticity of capital labour substitution varies widely across the branches of industry and is usually variable rather than constant the average long run own wage elasticity of labour demand for the manufacturing sector is estimated as 0 80 so factor price policy should have an important effect on labour demand in this setting

a novel approach for analyzing the effectiveness of the r d capital for resource conservation comparative study on germany and uk electricity sectors abstract limited access to energy resources and increasing demand for mitigation of the environmental impacts have necessitated higher production efficiencies therefore the promotion of r d activities has been one of the main parts of national energy policies in this research work two methods are used for assessing the effectiveness of the r d capital on resource conservation first by developing the resource included knowledge production function of the energy sector and second through direct assessment of the functionality of resource productivity from r d capital based on official data provided by national statistical centers a comparative analysis has been conducted to examine the effectiveness of r d in the electricity generation sectors in the united kingdom and germany in these analyses non renewable exergy cost is used as an index of resource depletion and environmental burden it is shown that due to non economic energy transition policies the inclusion of the r d investment does not result in statistically meaningful elasticity of production for the r d capital however according to the second method it is shown that the r d investment in the united kingdom has been more effective in resource conservation than in germany possible reasons for such differences are discussed and recommendations for further investigations are presented

venture capital internationalization synthesis and future research directions research on venture capital internationalization vc has expanded rapidly over the last decade this paper reviews the extant literature on vc internationalization and highlights gaps in our knowledge we identify three major research streams within this literature which revolve around the following questions 1 which vc firms invest across borders and what countries do they target with a macro economic or a micro economic focus 2 how do vc firms address the liabilities of non domestic investing and 3 what are the real effects of international vc investments we provide an overview of the contributions in these research streams discuss the role of public policy and suggest avenues for future research specifically we call for a deeper understanding of 1 the functioning and impact of vc firms modes of internationalization 2 micro level processes such as the functioning and decision making of international investment committees the interaction between headquarters and local offices or the development of international human and social capital 3 the role of country institutions in vc internationalization and its real effects and 4 the interplay of international vc with alternative financing sources

on growth drivers of high tech start ups exploring the role of founders human capital and venture capital abstract in this paper we jointly analyze the effects of the human capital of founders and access to venture capital vc financing on the growth of 439 italian new technology based firms ntbfs we rely on econometric models that control for survivorship bias and the endogeneity of vc financing as to non vc backed firms the competence based argument that the capabilities of ntbfs coincide with founders skills is confirmed nonetheless once a ntbf obtains vc this coincidence vanishes pointing to the coach function performed by vc investors conversely the view that sees the scout function as the main task performed by vc investors is not supported

strategic reference point theory how can executives achieve a match between expected external environmental conditions and internal organizational capabilities that facilitates improved performance this paper argues that a firm s choice of reference points can help achieve strategic alignment capable of yielding improved performance and potentially even a sustainable competitive advantage building upon prospect theory and other relevant theoretical perspectives the strategic reference point srp matrix is developed a firm s srp consists of three dimensions internal capability external conditions and time a theory is developed which posits an optimal srp structure and propositions are offered which articulate the expected relationships between the srp strategic choice behavior and firm performance the paper closes with some suggestions for using strategic reference points in both research and practice

farm productivity and efficiency in rural bangladesh the role of education revisited this article reassesses the debate over the role of education in farm production in bangladesh using a large dataset on rice producing households from 141 villages average and stochastic production frontier functions are estimated to ascertain the effect of education on productivity and efficiency a full set of proxies for farm education stock variables are incorporated to investigate the internal as well as external returns to education the external effect is investigated in the context of rural neighbourhoods our analysis reveals that in addition to raising rice productivity and boosting potential output household education significantly reduces production inefficiencies however we are unable to find any evidence of the externality benefit of schooling neighbour s education does not matter in farm production we discuss the implication of these findings for rural education programmes in bangladesh

spread of low cost carriers tourism and regional policy effects in spain vera rebollo j f and ivars baidal j a spread of low cost carriers tourism and regional policy effects in spain regional studies low cost carriers form the most dynamic segment in the international tourism traffic toward spain their recent evolution shows high growth rates that contrast with the stagnation of traditional companies a phenomenon which is part of the transformations experienced by the tourism market and air transport in europe and which has caused both quantitative and qualitative changes in spain s tourist activity however the effects of low cost carrier operations go beyond the context of the tourism sector and affect land use and infrastructure planning policies gradually shaping a new scenario where the specialization of tourism in real estate along the spanish mediterranean coast becomes reinforced vera rebollo j f et ivars baidal j a le developpement des transporteurs a faible cout effets du tourisme et de la politique regionale en espagne regional studies les transp

the demand and supply of external finance for innovative firms access to finance has figured prominently in the debate on barriers to firm growth even though existing empirical research has not found conclusive evidence of a finance gap moreover it is not clear to what extent innovation aggravates financial constraints and what role innovation inputs processes and outputs play in the market for external capital in this article we analyze how firm level innovation affects i the likelihood of seeking external finance and ii the likelihood of obtaining it we analyze an original data set of 3095 uk and us firms small and medium size enterprises and middle market containing information on firms innovation behaviors performance and finances for the period 2002 2004 controlling for firm specific characteristics we provide novel and extensive evidence on the links between innovation in its input process and output dimensions and the demand for external capital and its supply

aspirations market offerings and the pursuit of entrepreneurial opportunities abstract in this paper we focus on two core questions 1 why do some people seek entrepreneurial opportunities 2 under what conditions is the pursuit of entrepreneurial opportunity most likely we attempt to answer these questions by creating a theoretical framework that considers the interaction between an individual s level of aspiration and their appraised value in the labor market we propose that when there is disequilibrium between the aspiration vector av of an individual and the perceived valuation of the market offering vector p mov an individual tends to pursue entrepreneurial opportunities in addition when hiring officers hr directors or other relevant parties involved in the hiring decision are biased or when existing organizations have limitations in reflecting an individual s av prospective entrepreneurs begin searching for new opportunities in society finally and in our view most crucially we consider the interaction between an individual s subjective consideration and his perceived assessment by the labor market a novel approach which we hope takes into account the complexity and richness of entrepreneurship we offer seven specific propositions that derive from the disequilibrium predicted by our framework

bank lending to new and growing enterprises abstract this paper confirms and expands on an earlier study churchill and lewis 1985 into the profitability of bank lending to small businesses those under 50 million in sales the earlier study found that bank lending to small companies was more costly than lending to large corporations due primarily to administrative costs and risk that were higher per dollar of loan than the interest differential charged it found however that the larger deposit balances left with the bank not only offset these costs but made lending to small firms 2 76 percentage points more profitable this suggested that small businesses should be able to continue to borrow from large banks in spite of the consolidation now taking place in the banking industry the research reported upon here addresses the issue left open by the initial study that possible different lending policies and account profitability exist for different size companies under 50 million in sales this issue was examined by looking at 116 individual account relationships representing both large and small borrowers taken as a group the bank relationships of these companies are comparable to those in the original study the return to the bank on it assets loans outstanding for companies under 50 million was much higher 3 34 versus 1 94 for larger companies the amount of deposits left by the borrower with the bank was 43 of loan dollars for the smaller companies versus 9 for the larger ones and the risk class assigned by the bank was essentially the same when comparisons were drawn by size for companies under 50 million in sales the main purpose of this study many similarities and only a few differences were obtained these were for the six size categories from under 500 000 to 25 million and over as follows first and most importantly loan relationships were profitable for small companies of all sizes and for all but those in the smallest category more profitable than loan relationships with large companies second and of almost equal importance essentially no differences that are significant to managers were found as between companies of different size the most important of differences were found as follows perceived risk to the bank assigned risk class of loans to companies in the largest category over 25 million was lower than for all others and was greater for companies in the 1 million to 2 9 million category non performing loan data provided some foundation for this deposits with the bank were lowest for companies in the smallest category increased with size until the largest category was encountered and then dropped off on the whole the study paints a very encouraging picture for the future availability of credit to small and growing businesses except for very young businesses primarily those just starting out banks treat small companies in a rather even handed manner and do no seem to discriminate with respect to size bank relationships with small companies of any size are in general more profitable than relationships with large companies deposits kept by small businesses are the key to this greater profitability but losses and administrative expenses do not seem to be unduly burdensome the major messages emerging from these studies are banks can view small businesses as a very attractive source of profit the owner manager can continue to receive bank financing as long as profit continues to be a motivator for banks the relationship between bankers and entrepreneurs need to be adversarial both sides can be winners

introduction funding gaps theoretical and empirical foundations of government policies to plug alleged business funding gaps are highly controversial but rarely subject to wide ranging in depth debate this symposium from major scholars in the field provides a counterbalance topics addressed cover the theory of lending under asymmetric information its implications for overlending relationship lending as a market solution to information asymmetries government emulation of private sector decision making to eliminate underprovision of high tech equity and theoretically based empirical work testing for funding deficiencies in the high tech sector despite the very different and potentially contradictory contributions the result is surprisingly a set of mutually agreed policy conclusions

toward a theory of affordable loss although dozens of empirical studies have been published on effectuation as a whole much work remains to be done on elaborating each principle in more depth based on an exploratory study of seven ventures from the caribbean island of curacao this paper develops an elaborated process model of the affordable loss heuristic in effectuation the model breaks affordable loss into two components ability and willingness and connects these to the concept of loss aversion from prospect theory furthermore these components are encapsulated in a process involving identity affect and resourcefulness leading to the entry stage entrepreneurial investment decision

panel studies of new venture creation a methods focused review and suggestions for future research longitudinal panel studies of large random samples of business start ups captured at the pre operational stage allow researchers to address core issues for entrepreneurship research namely the processes of creation of new business ventures as well as their antecedents and outcomes here we perform a methods orientated review of all 83 journal articles that have used this type of data set our purpose being to assist users of current data sets as well as designers of new projects in making the best use of this innovative research approach our review reveals a number of methods issues that are largely particular to this type of research we conclude that amidst exemplary contributions much of the reviewed research has not adequately managed these methods challenges nor has it made use of the full potential of this new research approach specifically we identify and suggest remedies for context specific and interrelated methods challenges relating to sample definition choice of level of analysis operationalization and conceptualization use of longitudinal data and dealing with various types of problematic heterogeneity in addition we note that future research can make further strides towards full utilization of the advantages of the research approach through better matching from either direction between theories and the phenomena captured in the data and by addressing some under explored research questions for which the approach may be particularly fruitful

scott a shane winner of the global award for entrepreneurship research scott a shane is the 2009 winner of the global award for entrepreneurship research in this article we discuss and analyze shane s most important contributions to the field of entrepreneurship his contribution is extraordinarily broad in scope which makes it difficult to pinpoint one or a few specifics that we associate with shane s scholarship instead they can be summarized in the following three points first he has influenced what we view as central aspects of entrepreneurship shane has been a leading figure in redirecting the focus on entrepreneurship research itself second he has influenced how we view entrepreneurship shane s research is arguably theory driven and it applies and develops theoretical lenses that greatly improve our understanding of entrepreneurship third he has contributed to how we conduct entrepreneurship research shane has been a forerunner in examining relevant units of analysis that are difficult to sample research designs and databases specifically designed for studying entrepreneurial processes and sophisticated analytical methods this has contributed to advancing the methodological rigor of the field summing them up the contributions are very impressive indeed

the economics of organization the transaction cost approach the transaction cost approach to the study of economic organization regards the transaction as the basic unit of analysis and holds that an understanding of transaction cost economizing is central to the study of organizations applications of this approach require that transactions be dimensionalized and that alternative governance structures be described economizing is accomplished by assigning transactions to governance structures in a discriminating way the approach applies both to the determination of efficient boundaries as between firms and markets and to the organization of internal transactions including the design of employment relations the approach is compared and contrasted with selected parts of the organization theory literature

technology based adolescent firm configurations abstract managers and stakeholders of entrepreneurial firms have an obvious vested interest in understanding those factors that contribute to the success or failure of such firms insight into strategic and contextual factors related to success for 162 adolescent 5 12 years old firms competing within a variety of rapidly changing technology based industries results from this study analyses focus on pinpointing patterns of strategy context and performance in the first stage of analysis six nonmutually exclusive dimensions of strategy were identified 1 technology product leader 2 product market breadth 3 marketing sales expertise 4 quality service 5 customer alliances and 6 specialization second cluster analysis was conducted to group the firms on their overall pattern of strategic emphasis six groups clusters were identified each group corresponded with one of the following four strategy quadrants 1 defenders k specialists 2 entrepreneurs r specialists 3 analyzers k generalists and 4 prospectors r generalists subsequent analysis of variance demonstrates significant differences across the six clusters on three contextual variables environmental instability stage of product development and firm age and on six outcomes rd direct sales and support these firms compete on their reputation in their targeted market segment their ability to find and sell to a narrow range of customers and customer service this strategy occurred in relatively stable and mature industries and resulted in high performance in operating efficiency market development financial stability and overall performance sales growth was average cluster 2 n 12 spin offs reliant on contracts with original employers these firms represent an outsourcing opportunity for larger companies not desiring to develop in house expertise in a product area they are the youngest and the smallest and have products in the earliest stage of development their environment is relatively stable given the dependence of their large customers for their product they are average performers except for having relatively high operating efficiency they trade high performance for the security of long term arrangements with major clients cluster 3 n 39 marketing and sales expertise targeted at narrow market these firms likely assemble and package others technological products or if they manufacture follow the technological developments of their competitors they create value through their marketing and sales expertise and effort and through customer service support they face average environmental instability and stage of product development this strategy however creates insufficient value added for the long term viability of the firms they have low performance on sales growth market development operating efficiency and financial stability and also have low expectations for their future prospects cluster 4 n 23 technology leaders with a high degree of specialization quality and service these firms differentiate their products based on technology leadership in a specialized product domain where high quality and service are emphasized they compete in relatively unstable environments attributable to rapid technological change and are in an early stage of product development they are relatively small consistent with their narrow product domain they have the highest performance on r d results sales growth and future prospects and are very high on overall performance cluster 5 n 24 lacking in a clear strategic profile these firms lack any clear pattern of strategic activity although faced with average environmental instability these firms compete in the most mature product areas therefore while other firms are becoming more entrenched in their competitive positions advantages these firms are floundering they are poor performers and lack long term viability they score low on sales growth market development r d results operating efficiency and overall performance cluster 6 n 46 broad and aggressive product market reach with relatively high quality and service these firms pursue a full line of products sold through a wide variety of methods this approach evolved in a highly unstable environment due to rapid change and growth yet has a large number of growth opportunities they are highly successful in market development sales growth and financial stability they are also highly optimistic about their future prospects this identification of firm configurations can help managers and stakeholders recognize the relationships among strategy context and performance for young technological firms this should lead to more effective managerial decisions on strategic and contextual issues leading to better performance

perceiving and managing business risks differences between entrepreneurs and bankers abstract we compared entrepreneurs with bankers in their perception and management of a variety of risks problems included financial risk risk to human life and health and risk of a natural disaster cluster analysis and content analysis of think aloud protocols revealed surprising details entrepreneurs accept risk as given and focus on controlling the outcomes at any given level of risk they also frame their problem spaces with personal values and assume greater personal responsibility for the outcomes bankers focus on target outcomes attempting to control risk within structured problem spaces and avoiding situations where they risk higher levels of personal responsibility

characteristics of opportunities search of entrepreneurs versus executives sources interests general alertness abstract a recent article by low and macmillan 1988 suggests that at the current stage of entrepreneurship research empirical studies that are not theory driven and do not test hypotheses are no longer acceptable p 155 this paper is written in the spirit of this directive it starts with an explicit theory of entrepreneurship developed by israel kirzner and tests three hypotheses derived from the theory the theoretical thrust of the paper emphasizes the role of information and information seeking behavior as a central element of entrepreneurial behavior entrepreneurship is based on discovering of opportunities and resources to exploit them our interpretation of kirzner s theoretical works leads to the formation of hypotheses regarding the differences that should exist in the way entrepreneurs as opposed to managers seek this information these concern 1 differences in the manner in which entrepreneurs and corporate managers expose themselves to information 2 differences in the sources of information used and 3 differences in evaluating information cues in addition we test the hypotheses that success and experience will erode the above differences between entrepreneurs and corporate managers our sample involved 51 founders of companies in new jersey and 36 executives of a very large financial company a questionnaire was used to gather the data and scales were formed using principal component factor analysis with a varimax rotation differences were tested using univariate and multivariate statistical methods significant differences were found in five of the nine factors examined entrepreneurs spent significantly more time searching for information in their off hours and through nonverbal scanning they employed different sources than executives and paid special attention to risk cues about new opportunities executives on the other hand tended to focus on the economics of the opportunity these results are only partially consistent with a previous study comparing entrepreneurs and small companies managers suggesting a contextual contingency to the behaviors under study the most persistent finding was regarding the time and volume of search for information reinforcing the idea developed in the recent network theory of entrepreneurship that entrepreneurs are avid information gatherers and opportunistic learners but not necessarily or not uniquely in a verbal social networking manner finally with success and experience the differences become smaller it seems that success and experience reduce the need or desire of entrepreneurs to search for new opportunities no such effect was found with our executive sample

functional form and new production functions some comments and a new ves function this paper discusses new production function forms which are devised to generalise two restrictive features of the maintained hypotheses concerning homogeneity and the substitution effect of the original acms function

low cost carriers economies of flows and regional externalities williams a m and bala v low cost carriers economies of flows and regional externalities regional studies the emergence of low cost carriers following air travel re regulation in europe has major implications for individual firms and regional economies understanding regions as economies of flows the paper explores largely conceptually how uneven fluctuating and fragmentary changes in air travel and connectivity resulting from the activities of low cost carriers have had substantial impacts on flows of labour migrants knowledge business connectivity investment and mobile markets especially tourism the resulting modifications to institutions and regional externalities contribute to net changes in the transaction costs of individual firms regional competitiveness and the unfolding and increasingly interconnected map of uneven regional development in europe williams a m et bala v transporteurs a faibles couts economies de flux et externalites regionales regional studies l emer

small firm entry in us manufacturing a cross section empirical analysis examining the entry behavior of small firms is provided in this paper while the authors find that certain traditional market structure characteristics and entry barriers have a strong impact on small firm entry behavior the reliance upon innovative strategy by small firms also explains a significant amount of the variation in the pattern of entry by small firms they conclude that small firm entry is at least partially determined by entry barriers industry specific characteristics facilitating retaliatory conduct by incumbent firms and the reliance upon innovative strategy by small firms copyright 1989 by the london school of economics and political science

on the choice of production functions the case of us manufacturing industries a new ces bairam 1989 1991 production function that has the cobb douglas and leontief functions as special cases is considered and estimated for the nondurable goods and durable goods sectors in us manufacturing the translog and ces functions cannot be estimated properly due to multicollinearity whereas the cobb douglas and new ces functions yield coefficients that have the correct sign and are significant at the 1 or 5 level both sectors exhibited increasing returns to scale though the nondurable goods sector is more efficient than the other sector although the cobb douglas function cannot be rejected the new ces functions has the maximized value of the log likelihood function and the advantage that the variable output elasticity with respect to inputs can be tested

factors affecting equity capital acquisition the demand side abstract this article summarizes a study of 318 private entrepreneurs who have sought equity capital in amounts of 100 000 or more these individuals are normally considered prime clients of venture capitalists entrepreneurs success in acquiring funding is related to four general variable categories 1 characteristics of the entrepreneurs including education experience and age 2 characteristics of the enterprise including stage industry type and location e g rural or urban 3 characteristics of the request including amount business plan and prospective capital source and 4 sources of advice including technology preparation of the business plan and places to seek funding the study is unique because it includes many entrepreneurs who were unsuccessful in acquiring capital thereby reducing the survey bias in fact only 59 of those surveyed actually acquired funding this article provides specific insights into businesses seeking capital for example the entrepreneurs who are most successful in acquiring funding are those who are prepared to surrender a larger percentage of equity and who are very aggressive in going directly to a number of potential equity providers at an early stage contrary to common belief older and more experienced entrepreneurs seem to have more difficulty acquiring financing likewise entrepreneurs attempting to start businesses in rural areas are more apt to have difficulty acquiring equity capital in amounts of 100 000 or more entrepreneurs may experience difficulty in acquiring equity capital for certain business types in specific capital markets firms in the health medical technology and communication fields for example have much more success acquiring funding in minnesota and wisconsin than those in electronics and factory automation it is vital that the entrepreneur get to the proper source of capital wherever it is to be found as quickly as possible this study also indicates that private investors not identified as formal venture capitalists are the primary source of financial assistance the study revealed that the quality of advice provided to entrepreneurs may need improvement entrepreneurs who fail to seek assistance are less successful in acquiring equity capital it is less clear where good advice is to be found attorneys appear to offer positive advice regarding marketing and referrals to non venture capital sources bankers in contrast are more frequently associated with advice that fails to secure capital public agencies and university related organizations are in some cases also associated with a failure to acquire capital it may be that the weakest cases ultimately find their way to these sources of consultation the article provides a number of specific public policy recommendations for those governments interested in improving equity capital market efficiency for example as entrepreneurs seeking equity capital in small amounts seem to have difficulty public governments might choose to facilitate the movement of equity capital in smaller amounts by bundling several small requests together and then selling them to interested investors the public might choose to improve information linkages between entrepreneurs and capitalists by educating intermediaries such as accountants attorneys and bankers regarding sources of equity capital or by developing publicly supported linkage networks to whom entrepreneurs might turn special information programs on sources of equity capital might also be instituted in rural areas or with specific groups experiencing capital access problems private equity capital markets are not apt to serve adequately certain types of businesses there may be some need for providing direct capital subsidization to firms that are expanding or to those with growth potential that for some reason are unattractive to private capitalists e g the entrepreneurs are older the expected growth rate is slow these businesses may have the potential of making a substantial contribution to a regional economy but lack the short term high growth impact that attracts venture capitalists

learning patterns in venture capital investing in new industries using an organizational learning perspective we link the decision by venture capital vc firms to invest early in a new high technology industry to three experiential learning mechanisms the familiarity associated with accumulation of early funding decisions the shaping or imprinting effect of the firm s very first such decision and the decay or forgetting associated with the dormancy of prior such decisions we find support for these learning patterns using data on the investments made by us vc firms between 1962 and 2004

multistage selection and the financing of new ventures using a random sample of 221 new swedish ventures initiated in 1998 we examine why some new ventures are more likely than others to successfully be awarded capital from external sources we examine venture financing as a staged selection process in which two sequential selection events systematically winnow the population of ventures and influence which ventures receive financing for a venture to receive external financing its founders must first select it as a candidate for external funding and then a financier must fund it we find evidence that founders select ventures as candidates for external finance based on their perceptions of market competition market growth and employment growth while financiers base funding decisions on objective verifiable indicators of venture development such as the completion of organizing activities marketing activities and the level of sales of the venture our findings have implications for venture financing and evolutionary theories of social processes

perspectives on positive political economy this volume serves as an introduction to the field of positive political economy and the economic and political processes with which it is concerned this new research tradition is distinct from both normative and historical approaches to political economy grounded in the rational actor methodology of microeconomics positive political economy is the study of rational decisions in a context of political and economic institutions more analytical than traditional approaches it is concerned with the derivation of principles and propositions against which real world experience may be compared its focus is on empirical regularities and its goal is theoretical explanation the field has focused on three main areas of research models of collective action constraints on competitive market processes and the analysis of transaction costs developments in all of these areas are covered in the book the first part of the volume surveys the field while the second part displays positive political economy at work examining a variety of subjects the final part contains essays by leading political economists on the theoretical foundations of the field

entrepreneurial ability venture investments and risk sharing a number of issues that relate to the desirability and implications of new venture financing are examined within a principal agent framework that captures the essence of the relationship between entrepreneurs and venture capitalists the model suggests 1 as long as the skill levels of entrepreneurs are common knowledge all will choose to involve venture capital investors since the risk sharing provided by outside participation dominates the agency relationship that is created 2 the less able entrepreneurs will choose to involve venture capitalists whereas the more profitable ventures will be developed without external participation because of the adverse selection problem associated with asymmetric information 3 if a costly signal is available that conveys the entrepreneur s ability some entrepreneurs will invest in such a signal and then sell to investors these entrepreneurs however need not be the more able ones the implications for new venture financing of these and other findings are discussed and illustrated by example

the benefits of lending relationships evidence from small business data this paper empirically examines how ties between a firm and its creditors affect the availability and cost of funds to the firm we analyze data collected in a survey of small firms by the small business administration the primary benefit of building close ties with an institutional creditor is that the availability of financing increases we find smaller effects on the price of credit attempts to widen the circle of relationships by borrowing from multiple lenders increases the price and reduces the availability of credit in sum relationships are valuable and appear to operate more through quantities rather than prices

the regional economic impact of an airport the case of amsterdam schiphol the completion of the so called third package in the liberalization of european aviation has changed the environment in which airports operate considerably the continued growth of air traffic has led to a public debate in many western countries about the expansion of airport capacity in the light of the externalities emanating from these traffic nodes in this paper we try to measure the economic impact of amsterdam schiphol airport on the greater amsterdam region by means of a social accounting matrix of this region the paper tries to avoid some of the pitfalls of earlier studies by using a counterfactual approach in measuring the economic impact we are able to distinguish employment created in sub regions of the greater amsterdam region and the education and qualification levels associated with this employment our results indicate that the total multiplier of direct employment on amsterdam schiphol airport is approximately 2 one job on the airport leads to approximately one job in indirect and

production functions in the sports industry an empirical analysis of professional cricket production functions are estimated for english county cricket using samples of data for the county championship and the john player league in the seasons of 1981 83 results suggest possible lessons for the management and conduct of the game at the level of the individual club in particular the allocation of resources for developing playing skills the composition of playing staffs selection of teams for particular games and strategies on the field results also provide statistical evidence for some points of conventional wisdom regarding the professional game

the evolution of mass tourism destinations new approaches beyond deterministic models in benidorm spain although deterministic models of the evolution of mass tourism coastal resorts predict an almost inevitable decline over time theoretical frameworks of the evolution and restructuring policies of mature destinations should be revised to reflect the complex and dynamic way in which these destinations evolve and interact with the tourism market and global socio economic environment the present study examines benidorm because its urban and tourism model and large scale tourism supply and demand make it one of the most unique destinations on the mediterranean coast the investigation reveals the need to adopt theories and models that are not purely deterministic the dialectic interplay between external factors and the internal factors inherent in this destination simultaneously reveals a complex and diverse stage of maturity and the ability of destinations to create their own future

the advantages of entry in the growth stage of the product life cycle an empirical analysis in this article the authors examine how the stage of product life cycle in which a brand enters affects its sales through brand growth and market response after controlling for the order of entry

bundling governance mechanisms to efficiently organize small firm loans abstract bank loans are a common source of financing for small firms while scholars have examined specific conditions that affect small firm loan approval and interest rates practical questions remain about how these loans are structured to address characteristically acute challenges from asymmetric information this paper suggests collateral reputation and relationship banking each perform unique exchange organizing tasks and that small firms systematically use them in predictable combinations a multiple discriminant analysis of 796 small firm loans suggests four governance bundles are commonly employed in this setting the implications for managers focus on how loan governance mechanisms are most efficiently bundled together

moderating effects of investor experience on the signaling value of private equity placements abstract we contend that young start up firms requiring external capital are able to differentiate themselves from competitors through their choices of investors and financing mechanisms private placements of equity convey efficient signals to markets for several reasons they are short term irreversible occur after a more rigorous analysis than public offerings provide contain governance mechanisms and are generally observable by outsiders the disclosure that investors possess a superior reputation for evaluative ability conveys an additional endorsing signal of the firm s prospects this proves especially valuable for younger firms less capitalized firms and firms that have more recently received private equity from an experienced investor using an event history analysis on a sample of 329 publicly held biotechnology firms we find firms that are perceived to be more uncertain and that disclose the presence of more prominent investors are better able to attract subsequent financing