the influence of guided preparation on the long term performance of new ventures this article further develops a theory of guided preparation and new venture performance and tests its fundamental relationships on a sample of 159 new ventures that received outsider assistance 5 9 years earlier and had been in business for 3 8 years the results suggest that the long term growth of the ventures since start up is significantly related to guided preparation however a curvilinear model rather than a linear model was found to best capture the relationships of interest this suggests that there are diminishing marginal returns associated with guided preparation and that too much may even have a negative influence on performance

interrogating inclusive growth formal informal duality complementarity conflict i find through analyses of across state across industry over state and pooled data involving state and time on the indian economy that the behaviour of the urban informal unorganised sector is explained by the modern formal organised sector besides petty agriculture but the vast rural informal sector is like surplus population associated only with petty agriculture i also show there could be interactions between the formal sector and modern agriculture these empirical relations are analysed and theoretical departures from the literature are identified i propose using a structuralist kaleckian framework with accumulation in the formal sector a large part of petty agriculture is modernised or converted to suit the needs of accumulation and thereby we have a long run drain of resources from petty agriculture and hence from informal sectors as well however even under such a resource drain the urban informal sector may sustain or expand due to productivity advantages and due to pull from the formal sector at the cost of its rural counterpart in the short run when the formal sector and hence the urban informal sector expand or when the government promotes the urban or productive part of informal economy a basic conflict between urban and rural informal sectors is exposed given the generic agricultural supply constraint thus the paradigms of inclusive growth and development management are questioned copyright oxford university press

entrepreneurship entrepreneurial training and x efficiency theory abstract a basic motivational component of entrepreneurship is an individual s commitment to overcome gaps and obstacles in imperfect markets research associated with n achievement theory indicates the possibility of the selection and training of potential entrepreneurs and therefore a means to increase the supply of entrepreneurs a tendency to glorify entrepreneurship and the use of a tight equilibrium concept make it difficult to integrate entrepreneurship into standard economic theory despite the desirability of doing so x efficiency theory accommodates a non heroic view of entrepreneurs which in turn allows for the inclusion or entrepreneurial training in the model

the future and dynamics of global systemically important banks abstract the purpose of this paper is to analyse some of the issues associated with supervision and regulation of global systemically important banks g sib the paper highlights the importance of managing liquidity risk and creating a global financial system that can minimise regulatory arbitrage by large financial institutions the paper argues that unlike some industries such as the airline industry in which risk has been contained and yet the size and capacity of aircrafts have increased in the banking system less progress has been made to contain financial risk and allow large banks to expand their global activities the paper argues that g sib are able to continue remaining large provided that a globally integrated financial system ensures effective global supervision of these large banks the paper compares the us banking crises in the 19th century and the subsequent emergence of the us federal reserve system to the possibility of establishing a world central bank and a global supervisory board such new global institutions will have the capacity to reduce regulatory arbitrage increase effective supervision reduce systemic and liquidity risk and create a more stable global financial system

new evidence on the structure of production real and austrian business cycle theory and the financial instability hypothesis abstract this article develops the relationships among real business cycle rbc theory austrian business cycle abc theory and minsky s financial instability hypothesis fih in rbc models recessions are caused on the supply side by random technology shocks which are independent of monetary policy however in abc models credit expansion results in negative productivity shocks as the marginal return on investment is lowered and the production structure is extended by commitment to more capital intensive activities thus abc theory helps resolve several problems with rbc theory the fih describes a process of endogenous overleveraging which unsustainably overvalues assets and exposes the financial sector to greater risk this paper argues that the overleveraging described by the fih is compatible with the unsustainable expansion of production described in abc theory and further argues that credit expansion would both provide additional funds to finance overleveraging as well as encourage the process by making it cheaper with lower interest rates

evidence of bank market discipline in subordinated debenture yields 1983 1991 we examine debenture yields over the period 1983 1991 to evaluate the market s sensitivity to bank specific risks and conclude that investors have rationally reflected changes in the government s policy toward absorbing private losses in the event of a bank failure although this evidence does not establish that market discipline can effectively control banking firms it soundly rejects the hypothesis that investors cannot rationally differentiate among the risks undertaken by the major u s banking firms an increasingly important issue in the regulation of financial institutions concerns the extent to which market investors can will recognize and control the risks of banking firms although the banking act of 1933 replaced some private risk bearing with federal deposit insurance legislators were reluctant to displace market discipline very extensively flood 1992 by the early 1980s however u s regulators had come to protect virtually all bank liability holders from credit losses most visibly at large banks which were deemed too big to fail sprague 1986 o hara and shaw 1990 this extension of the government safety net largely reflects a skepticism on the part of regulators that normal market forces could adequately identify and control bank risks while u s regulators have recently shown an increased willingness to let some bank investors bear default losses an official suspicion of the efficacy of market discipline remains widespread by contrast some prominent academic economists argue that market investors in bank debentures could provide timely and effective control over banking firms risk exposures and that the social cost of supervising banks would be lower if regulators ceded greater

the international entrepreneurial dynamics of accelerated internationalisation the initial stages of internationalisation prior to firms having established their definitive sources of advantage remain the relatively unexplored area of the international business ib literature at these early stages where firms are seeking to establish themselves and new multinational firms are appearing to exploit new opportunities created by globalisation the entrepreneurial aspects of internationalisation come to the fore in this paper we aim to delineate an emerging field of ib scholarship we use the appearance of international new ventures and the phenomenon of accelerated internationalisation that they feature to identify a set of issues that has slipped through the net of some of the existing ib frameworks we propose that the salient features of accelerated and early internationalisation by the newly internationalising firm are best captured in a framework that is found at the intersection of entrepreneurial and internationalisation perspectives which we propose be known as international entrepreneurial dynamics we discuss such a framework in terms of entry points and pathways mapped by firms as they probe the ib arena and the key factors that impinge on behaviour and strategic choices in line with recent developments in the entrepreneurship literature these are grouped into three milestones of entrepreneurial processes that extend across national boundaries 1 the discovery of new opportunities 2 the deployment of resources in the exploitation of these opportunities and 3 the engagement with competitors implications for mne and internationalisation theory are discussed

institutional activism in the early american automobile industry abstract a common proposition is that new industries gain constitutive legitimacy through claim making by institutional activists yet neoinstitutional research seldom analyzes the effects of claim making on the formation of new organizations and how the effect of claim making is moderated by other sources of constitutive legitimacy advertising legal recognition and a policy regime favorable to business i explore the relationship between claim making by activists and new organization building in a study of the early american automobile industry when auto clubs organized reliability contests to validate the automobile the results show that the visibility of reliability contests within the focal state increased foundings of car firms in the state but that this effect diminished with advertising legal recognition of the car and the existence of a business friendly governor in the focal state taken together these results demonstrate that claim making is crucial in the early phase of gaining legitimacy for new industries

mating competition and entrepreneurship abstract we used a natural experiment in taiwan to test whether mating competition is a major motive for entrepreneurship after being defeated in mainland china more than half million solders retreated to taiwan in 1949 the soldiers were not allowed to get married until the military marriage ban was lifted in 1959 the policy change created a severe marriage squeeze for local men triggering their animal spirits to engage in entrepreneurial activities empirical results show that local men exposed to high sex ratios as a result of the removal of the marriage ban were more likely to become entrepreneurs later on

the network of relationships between the economic environment and the entrepreneurial culture in small firms abstract in this article we maintain that the cultural evolution processes of small firms are strongly influenced by the type of relationships that they establish with the economic environment in the first part of the article the main points of the discussion are set forth here the theoretical debate is presented and the existing relations between the entrepreneurial culture and the interaction of firms with their economic environment is analyzed in the second part of the article the methodologies adopted for the statistical analysis are explained and the results of the empirical analysis are presented finally in the third part the implications for practitioners industrial policies and future directions in research are discussed the importance of openness to change in the entrepreneurial culture is a basic assumption in this study it is well known that in small and medium firms entrepreneurs often demonstrate a resistance to change that limits the firm s competitiveness in some observed territorial and industrial contexts this resistance to change is determined by a cultural entrepreneurial homogeneity this homogeneity is a result of the similarity of the social educational and entrepreneurial experiences of the subjects observed indeed the entrepreneurs studied had for generations received the same education lived in the same area and come from the same social setting this entrepreneurial culture is typified by distrust of innovation and discontinuity which leads these entrepreneurs to favor already proven solutions and initiate the behaviors of others rather than take innovative actions principal component analysis has been used to identify the influences that various factors within and external to the firm have in the forming of an entrepreneurial culture and thus on the openness of entrepreneurs and firms to learning in the sample a trade off emerged between tendencies to homologous behaviors and the spirit of initiative through cluster analysis we identified categories of entrepreneurs with a different propensity to innovation regarding established firm routines learning entrepreneurs belong mainly to industries that serve the final consumer while bounded entrepreneurs tend to specialize in commodities more often for export the implications of our results might interest new entrepreneurs who can include this element when analyzing the viability of new ventures small already operational firms can evaluate opportunities arising from export processes or might adjust their position on the production filiere to be closer to the final market this empirical analysis should be reapplied to firms in areas with different environmental characteristics or to production filieres where the relationship between customer and supplier is different as for example in high tech industries so as to verify whether the intensity of the relations with the market differs according to external factors or the technological intensity of the industries examined

modern theories of entrepreneurial behavior a comparison and appraisal this paper compares and appraises three principal contemporary theories of entrepreneurial decision making neoclassical austrian and behavioral we employ theory appraisal criteria made available in fritz machlup s 1967 celebrated article on alternative theories of the firm the paper considers theories that treat sequences of behavior by which individual entrepreneurs reach decisions on two levels the discovery of profit opportunities and their exploitation we also consider how each theory characterizes the entrepreneur s decision making process by contrast with the posited behavior of other economic agents austrian theory is suited to explaining novel adventurous behavior at the discovery stage the algorithm for opportunity exploitation in both the neoclassical and austrian approaches is a single repertoire optimization rule neoclassical theory is situated in frictionless atomistic walrasian markets and emphasizes mathematical tractability austrian and behavioral theories conceive entrepreneurial acts taking place in market processes understood as complex institutional phenomena there are strong theoretical complementarities between austrian and behavioral approaches both approaches value descriptive accuracy though the behavioralists place more weight on operational tractability austrians and behavioralists share an interest in heuristics they emphasize the role of prior micro level knowledge at the discovery stage therefore more collaborative research in future between austrians and behavioralists should prove fruitful

systemic risk governance and global financial stability abstract the paper argues that while attempts have been made to reform four of the five key pillars of banks operation i e competition resolution supervisory and auditing and valuation policies less attention has been paid to the role of bank governance and systemic risk despite a strong link between governance and risk taking the paper offers four solutions to strengthen bank governance first the regulatory capital base of banks could be increased second the compensation structure of managers could be reformed third effort could be focussed on creating and implementing resolution regimes which offer the credible prospect of bailing in creditors in the event of stress and fourth solution is to reform the structure of company law for example by extending control rights beyond shareholders furthermore the paper argues that given the diversity of the whole financial system it is expected that the risks individual financial institutions face are also diverse it cannot be assumed that the appropriate capitalisation is constant across all risks while leverage ratios are a useful backstop measure and guard against potential gaming of risk weights their appropriate role is as a backstop the diversity within the financial system also supports the fact that a single measure of systemic risk is unlikely to be universally applicable nor is a single instrument of financial stability policy

learning about the unknown how fast do entrepreneurs adjust their beliefs this paper seeks to measure the extent to which entrepreneurs adjust their beliefs in the light of new information instead of relying on past experience to guide their decision making we build a model in which entrepreneurs continually receive valuable but noisy market signals about the true but unobserved productivity of their effort and use this information to update their expectations of unobserved productivity the model is estimated using a sample of over 700 self employed britons interviewed in 1999 and 2000 it is found that on average these individuals adjust their expectations of unobserved productivity in the light of new information by only 16 this suggests that while entrepreneurs do exploit new information they give much greater weight to their prior beliefs when forming their expectations also there are no significant differences in terms of expectation formation between males and females employers and non employers and experienced and less experienced entrepreneurs however younger entrepreneurs respond significantly more sensitively to new information than older entrepreneurs do with adjustment rates of 21 compared with 14 respectively we go on to discuss some policy implications of these findings and briefly discuss several features of entrepreneurship education programs that might help entrepreneurs improve this aspect of their business performance

growth and barriers to growth among nairobi s small and medium sized garment producers abstract few of nairobi s small and medium sized garment enterprises actually grow understanding why this should be so requires recognition both of their common problems and of the variations in their organization and market relations two factors appear critical for the growth of all of the producers demand for new clothing and the firm s initial capital other growth constraints differ according to the type of firm space constraints are highlighted as especially important for businesses presently operating in market stalls the design of policy and donor interventions needs to consider both the commonalities and the differences among firms

experiment on entrepreneurial discovery an attempt to demonstrate the conjecture of hayek and kirzner friedrich hayek conjectured that the free enterprise system is most effective in making discoveries israel kirzner refines the conjecture as follows the availability of profit opportunities tends to evoke entrepreneurial discovery we hoped to demonstrate the conjecture in an outdoor experiment we asked subjects to transfer water from one bucket to another there were two methods of doing so an obvious method and a nonobvious and much superior method we varied the payment schedules to see if higher potential rewards would more readily evoke discovery of the superior method the hoped for demonstration was not achieved the investigation holds several lessons for those who would attempt to demonstrate the entrepreneurship conjecture investigators must make the opportunity discoverable but not obvious operationalize motivation not merely vary monetary rewards and separate entrepreneurial discovery from other types of discovery such as that had by deliberate problem solving

an essay on the origins of entrepreneurial opportunity in this article we apply a process of logical inference to draw conclusions about the origins of entrepreneurial opportunity from existing conversations in the field of strategic management we equate the execution of a competitive strategy as described in the strategic management literature to the exploitation of an entrepreneurial opportunity as described in the entrepreneurship literature given this assumption we survey five extant theories of strategy in an attempt to categorize and describe the circumstances that define how and with what consequence entrepreneurial opportunity exploitation results in future opportunity given this review we characterize the outcomes of strategy execution as a function of the match between strategy and environment in an effort to extend and refine holcombe s holcombe randall 2003 review of austrian economics16 1 25 43 position that entrepreneurial opportunity is born of prior entrepreneurial action let your hook always be cast in the pool where you least expect it there will be a fish ovid a d 17

when should entrepreneurs expedite or delay opportunity exploitation abstract we theorize on the performance implications of the timing at which entrepreneurs stop exploring their business opportunities and start exploiting them using an optimal stopping approach we characterize the time when exploitation should begin based primarily on when an entrepreneur s ignorance has been sufficiently reduced through knowledge accumulation this ignorance threshold captures a tradeoff between the time needed to increase legitimacy and the necessity to act now to minimize competition changes in legitimacy and competition are based on how entrepreneurs manage their knowledge tacit versus explicit under differing degrees of novelty for the business opportunity these changes in turn impact the performance and timing of opportunity exploitation

systemic risk macroprudential policy frameworks monitoring financial systems and the evolution of capital adequacy abstract this paper analyses various issues that need to be tackled when promoting financial stability reviewing the progress made in certain key areas and the remaining challenges it explores the measurement of systemic risk and of individual institutions contribution to it it discusses aspects of macroprudential frameworks including how the countercyclical capital buffer envisaged in basel iii takes into account the properties of the financial cycle and the strengths and weaknesses of macro stress tests it analyses some of the challenges of how best to monitor financial systems and the broader economy in order to detect signs of vulnerability that might lead to future bouts of financial instability and of how to set prudential policy accordingly and it discusses the evolution of capital adequacy standards and the new emphasis on liquidity standards in international regulation

the heterogeneity of animal spirits a first taxonomy of entrepreneurs with regard to investment expectations investment expectations are highly subjective and subjectivity is inherently diverse we propose an analytical taxonomy of entrepreneurs with regard to investment expectations of how diverse animal spirits are we draw on past research so as to outline the relevant independent classification variables motivations skills management styles and affective traits comprise our four groups of classification variables based on a field study using a sample of 289 entrepreneurs and performing two different cluster analyses we find 11 stable groups of entrepreneurs we portray them as ideal types a la weber there may be major and minor memberships our 11 groups are the neoclassical manager the builder the administrator the paternalistic manager the hero the mogul the prophet the craftsman the inventor the gambler and the explorer

the evolution and nature of young firm networks a longitundial perspective this paper describes the evolution of networks during the first three years after start up and puts forward explanations of the nature of networks of young firms after three years we extend current research on networks by explicitly including both temporal change and spatial variation in our analyses of the longitudinal dataset in this paper we define networks as the main business relationships with respect to sales supply outsourcing and cooperation the nature of these business relationships is specified by four main characteristics type number source and location the longitudinal network analysis is therefore at the micro level the individual young firm and the characteristics of its most important business contacts are central in contrast to the literature our analyses show that sales relationships become increasingly social in source during the first three years after start up we also find a persistent geographical concentration strategy in the main business relationships it seems that extra regional relationships are losing ground to intra regional relationships over time firms are narrowing their spatial scope in their first three years in addition we trace important effects of gender education innovative firm behaviour region and sector on the nature of young firm networks three years after start up

the alert and creative entrepreneur a clarification israel m kirzner is the 2006 winner of the international award for entrepreneurship and small business research the fsf nutek award in this prize lecture he argues that a number of those who have commented on his work have misunderstood certain aspects of his theoretical system and as a result the common distinction in the literature between schumpeterian and kirznerian entrepreneurs is flawed he also argues that his understanding of the market process set in motion by entrepreneurial decisions provides a theoretical underpinning for public policy vis a vis entrepreneurship professor kirzner s main contributions to the economics of entrepreneurship were also presented and evaluated by douhan et al small business economics 29 1 2 213 223 2007

is your firm a creative destroyer competitive learning and knowledge flows in the technological strategies of firms abstract a firm s technology strategy can be described either as a war of position or a war of movement the first kind of strategy leads the firm to hoard its technological assets in an attempt to defy the equilibrating action of market forces neoclassical or n learning the second pushes for a selective diffusion of its technological assets that will move it beyond market equilibrium and towards new opportunities schumpeterian or s learning using boisot s 1986 culture space as an analytical tool the paper explores the difference between n and s learning and how they each affect a firm s technological prospects

israel m kirzner an outstanding austrian contributor to the economics of entrepreneurship israel m kirzner is the 2006 winner of the international award for entrepreneurship and small business research in this essay we present and evaluate his main contributions to the economics of entrepreneurship