measuring welfare latent variable models for happiness and capabilities in the presence of unobservable heterogeneity the paper contributes to the operationalisation of the capabilities approach to welfare economics by developing and analyzing data on the freedoms of adults in argentina specifically it reports on the development and delivery of a survey instrument for measuring capabilities calculates for each respondent a nehring puppe type index of capabilities and examines the distribution of index scores the main analytic part of the paper then goes on to develop a generalized linear latent and mixed model gllamm for assessing the impact of capabilities on life satisfaction in which allowance is made for i unobserved heterogeneity and ii possible endogeneity by introducing latent individual effects and by instrumenting capability variables using income and other socio economic variables our empirical results show that empathy self worth goal autonomy discrimination safety and stress are statistically significant determinants of life satisfaction in a decreasing order of importance the paper concludes by suggesting that if replicated the findings have profound implications for the conceptualisation and evaluation of economic progress

the quantification of qualitative survey data a critical assessment abstract data obtained from business and consumer surveys are often used in forecasting models and in testing different expectation formation schemes their use however requires a previous step of transformation of the qualitative data into quantitative figures this paper contains a critical review of the different quantification methods highlighting the limits of their use in macroeconomic modelling

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

direct measurement of popular price expectations expectations are an important determinant of economic behavior the analysis of economic expectations however has suffered from inadequate measurement throughout the literature expectations have been treated as unobservable and have therefore been measured only indirectly the object of this paper is to develop and test a direct measure of the expectations of inflation a particularly critical economic variable a direct measure of inflationary expectations is here taken to be one constructed from a sample survey in which individuals are asked to state their expectations explicitly the paper focuses on a popular forecast of the rate of change of consumer prices in the forthcoming year as calculated from responses to the survey of consumer finances scf this measure is presented in section i the scf and others like it have existed for some time but a few recent studies notwithstanding most economists continue to regard survey measures as inherently unreliable their principal criticism is that the opinions an individual expresses

persistence survival and growth a closer look at 20 years of fast growing firms in austria for survival persistence and growth hifs show a much higher persistence than hgfs the average growth rate after the high growth episode is quite modest for both hifs and hgfs policy implications of the ndings are discussed

speciation through entrepreneurial spin off the acorn arm story abstract can the concept of speciation explain evidence on how technologies branch and advance can evidence on innovation through spin off usefully inform the concept of speciation these questions are addressed through a case study of detailed processes enabling the shift of technology to new domains of application an innovative it firm developed its own semiconductor technology to remedy supplier deficiencies but it required a joint venture with a completely new business model to adapt and move the technology into new market domains we propose the concept of techno organizational speciation to delineate this phenomenon competing perspectives on speciation compatibility niche and lineage approaches are found to illuminate the evidence while complementarities between these conceptual dimensions are revealed by the case causal processes uncovered include the following 1 techno organizational speciation through spin off may be needed to launch a dominant technical standard compatible with multiple applications 2 this can be achieved through niche creation from which develops a new business ecosystem 3 inherited knowledge together with organizationally based learning foster the branching and renewal of technological lineages

structuring small firms for rapid growth abstract small firms confront significant dilemmas as they struggle to capitalize on growth opportunities surges in demand frequently result in the hiring of additional operating and administrative personnel rapid growth in employment however creates managerial problems whose resolution requires firms to design collateral systems that both mobilize staff attention toward a shared vision and support the firm s strategic outlook hambrick and crozier 1985 kotter and sathe 1978 this article reports on a cross sectional study of 95 small u s firms that experienced a five year surge in growth findings indicate that the internal systems designed by these firms to support their rapid growth varied systematically by strategic orientation and degree of product diversity contrary to expectations the relationship between strategy and structure failed to demonstrate a significant effect on these firms levels of performance indeed the data suggest that in fashioning these systems firms managements may in fact be responding to contradictory pulls 1 bureaucratization versus decentralization increased hiring stimulates bureaucracy firms formalize procedures as staffing doubles and triples employee participation and autonomy decline and internal labor markets develop tied to growth however is also an increased diversity in product offerings that favors less formalized decision processes greater decentralization and the recognition that the firm s existing human resources lack the necessary skills to manage the broadening portfolio 2 environment versus strategy high environmental turbulence and competitive conditions favor company cultures that support risk taking autonomy and employee participation in decision making firms confront competitors however through strategies whose implementation depends on the design of formal systems that inhibit risk taking and autonomy 3 strategic emphases on quality versus cost versus innovation rapidly growing firms strive to simultaneously control costs enhance product quality and improve product offerings minimizing costs and undercutting competitors product prices however are best achieved by traditional hierarchical systems of decision making and evaluation that contrast with the kinds of autonomous processes most likely to encourage the pursuit of product quality and innovation the findings suggest that managing surges in growth involves multiple challenges resolving the stresses and strains induced by attempts to control costs while simultaneously enhancing quality and creating new products to maintain competitive parity and centralizing to retain control while simultaneously decentralizing to encourage the contributions of autonomous self managed professionals to the embryonic corporate culture rapidly growing firms are challenged to strike a balance between these multiple pulls when designing their managerial systems

the effect of answering practices on the relationship between cbi survey data and official data 1983 the effect of answering practices on the relationship between cbi survey data and official data applied economics vol 15 no 2 pp 213 224

disclosure venture capital and entrepreneurial spawning venture capital vc funds have been facing increasing regulatory scrutiny since the 2007 financial crisis particularly with respect to calls for increased disclosure requirements in this paper we examine the effect of more stringent securities regulation on the supply and performance of vc as well as on new business creation i e entrepreneurial spawning using country level and investment level data from 34 countries over the years 2000 2008 we find that more stringent securities regulation is positively associated with the supply and performance of vc around the world more stringent securities regulation is also positively associated with entrepreneurial spawning induced by vc among different forms of securities regulation disclosure stands out as having the most economically meaningful impact which casts doubt on the oft repeated objections to disclosure in vc that it would stifle the vc industry because secrets would have to be revealed to competitors and the public these findings are robust to numerous robustness checks for endogeneity the policy implications are clear however regardless of endogeneity concerns vc and entrepreneurship markets are enabled not curtailed in countries with better disclosure standards when one compares the existing differences in disclosure around the world and changes thereto over the 2000 2008 period

venture capital investment cycles the impact of public markets abstract it is well documented that the venture capital industry is highly volatile and that much of this volatility is associated with shifting valuations and activity in public equity markets this paper examines how changes in public market signals affected venture capital investing between 1975 and 1998 we find that venture capitalists with the most industry experience increase their investments the most when public market signals become more favorable their reaction to an increase is greater than the reaction of venture capital organizations with relatively little industry experience and those with considerable experience but in other industries the increase in investment rates does not affect the success of these transactions adversely to a significant extent these findings are consistent with the view that venture capitalists rationally respond to attractive investment opportunities signaled by public market shifts

deprivation and social exclusion social exclusion manifests itself in the persistent relative lack of an individual s access to functionings compared with other members of society and we model it as being in a state of deprivation over time we view deprivation as having two basic determinants the lack of identification with other members of society and the aggregate alienation experienced by an agent with respect to those having fewer functioning failures using an axiomatic approach we characterize new individual and aggregate measures of deprivation and social exclusion the aggregate measures are then applied to eu data for the period 1994 2001

a quantitative content analysis of the characteristics of rapid growth firms and their founders a group of firms that is attracting attention are rapid growth firms these firms are of particular interest because rapid growth is an indication of market acceptance and firm success by studying rapidgrowth firms researchers can help all firms better understand the attributes associated with firm growth despite these positive outcomes however rapid firm growth is difficult to achieve and maintain this study adds to the literature through a quantitative content analysis of the narrative descriptions of 50 rapid growth firms and a comparison group of 50 slow growth companies the purpose of the study was to draw from the narratives a list of empirically grounded growth related attributes that are associated with rapid growth firms the findings of the study resulted in the advancement of a conceptual model of the attributes of rapid growth firms in four areas founder characteristics firm attributes business practices and human resource management hrm practices

high growth entrepreneurial firms in africa a quantile regression approach this article analyses the growth performance of a large set of entrepreneurial firms in ten manufacturing sectors of 11 sub saharan african countries the focus of the article is on identifying those entrepreneurs attributes and firm characteristics that tend to generate a significant number of high growth firms in these countries to this end we use a quantile regression which provides a more complete estimation of the growth distribution of firms conditional on different attributes the results indicate that firms that engage in product innovation have their own transport means and are connected to the internet through their own website are especially characterized by higher growth rates and also display a distribution of growth rates skewed to the right hosting a higher number of high growth firms the effect of the last two variables which relate to distance bridging modes of infrastructure points to the self reinforcing growth effects they generate in creating wider input and output markets education raises growth opportunities by affecting the lower quantiles but it does not appear to influence the upper quantiles the estimated conditional growth distributions for the technology intensive machinery and electronics sectors show more extreme tails and a lower mean in comparison to the traditional industries indicating the more risky nature of doing business in these industries

high growth firms introduction to the special section high growth firms hgfs have attracted considerable attention recently as academics and policymakers have increasingly recognized the highly skewed nature of many metrics of firm performance a small number of hgfs drives a disproportionately large amount of job creation while the average firm has a limited impact on the economy this article explores the reasons for this increased interest summarizes the existing literature and highlights the methodological considerations that constrain and bias research this special section draws attention to the importance of hgfs for future industrial performance explores their unusual growth trajectories and strategies and highlights the lack of persistence of high growth consequently while hgfs are important for understanding the economy and developing public policy they are unlikely to be useful vehicles for public policy given the difficulties involved in predicting which firms will grow the lack of persistence in high growth levels and the complex and often indirect relationship between firm capability high growth and macro economic performance

institutional differences and the development of entrepreneurial ventures a comparison of the venture capital industries in latin america and asia this paper examines how differences in distinct institutional clusters of countries impact on the vital entrepreneurial activity of venture capital and how individuals organizations and their collective action in turn shape those institutions the focus on venture capital offers researchers the opportunity to view an industry that comes from a common root with strong and consistent traditions in which to examine how the differing institutional settings impact on behaviors in different markets and how the institutions themselves may change in these settings we also focus on emerging economies since such economies offer a natural laboratory to study the impact of institutional change specifically this paper employs an institutional theory perspective to examine venture capital in two regions of the world that form institutional clusters of countries latin america and asia it is found that the venture capital industry exhibits a strong consistency across many dimensions yet institutions in these two distinct settings result in significant differences in industry practice therefore this research is able to contribute to both empirical and theoretical understanding of emerging economies institutions in those environments and venture capital

more on output expectations in manufacturing two misspecifications in a recent study of cbi survey data are corrected and the relationship between firms expectations of output change and their subsequent perception of the same change ex post and the utility of output expectations in forecasting are examined

the economics of private equity funds this article analyzes the economics of the private equity industry using a novel model and dataset we obtain data from a large investor in private equity funds with detailed records on 238 funds raised between 1993 and 2006 we build a model to estimate the expected revenue to managers as a function of their investor contracts and we test how this estimated revenue varies across the characteristics of our sample funds among our sample funds about two thirds of expected revenue comes from fixed revenue components that are not sensitive to performance we find sharp differences between venture capital vc and buyout bo funds bo managers build on their prior experience by increasing the size of their funds faster than vc managers do this leads to significantly higher revenue per partner and per professional in later bo funds the results suggest that the bo business is more scalable than the vc business and that past success has a differential impact on the terms of their future funds jel g10 g20 g24

what happens to gazelles the importance of dynamic management strategy the starting point of this study is gibrat s law which is contrasted with strategic management this logic is subsequently applied to a group of remarkably dynamic high growth firms gazelles strategic management theory emphasises the importance of firms adjusting strategies in response to changes in the external environment in our study it is used to explain several key empirical findings using a novel british data set containing information on more than 100 gazelles these findings help explain 1 why gibrat s law of random firm growth processes does not generally hold 2 which strategy and environmental variables have a predictable influence on firm performance and 3 why routine application of best practice strategies is unlikely to foster firm growth in a changing economic environment in so doing this paper contributes to the large body of literature on small firm growth

robust multidimensional poverty comparisons we demonstrate how to make poverty comparisons using multidimensional indicators of well being showing in particular how to check whether the comparisons are robust to aggregation procedures and to the choice of multidimensional poverty lines in contrast to earlier work our methodology applies equally well to what can be defined as union intersection or intermediate approaches to dealing with multidimensional indicators of well being to make this procedure of some practical usefulness the paper also derives the sampling distribution of various multidimensional poverty estimators including estimators of the critical poverty frontiers outside which multidimensional poverty comparisons can no longer be deemed ethically robust the results are illustrated using data from a number of developing countries

after the exit acquisitions entrepreneurial recycling and regional economic development mason c m and harrison r t 2006 after the exit acquisitions entrepreneurial recycling and regional economic development regional studies 40 55 73 most studies of the impact of mergers and acquisitions suggest they have a detrimental impact on economic development in peripheral regions over the longer term however such assessments fail to consider the post acquisition behaviour of the cashed out entrepreneurs it is argued here that acquisition triggers a process of entrepreneurial recycling in which the entrepreneurs use their newly acquired wealth allied to the experience they have accumulated to engage in other entrepreneurial activities notably starting new business ventures and investing in other businesses as business angels or venture capitalists case studies of five scottish technology based firms that were acquired by non uk companies illustrate this process when entrepreneurial recycling is taken into account the overall impact of acquisition on regional economic development

the role of alliances in the early development of high growth firms rapid growth is sought after but may overstretch a firm s resources can alliances supply compensating support for rapidly growing firms longitudinal data on firms in a technology cluster are used to investigate rapid growth in relation to alliances and other factors known to be associated with firm growth rapid firm growth appears beneficial in terms of higher survival rates and earlier attainment of mid size but is rarely sustained alliances are predictors of rapid growth as are international operations venture capital is not directly associated with firm growth in the findings but there is a high incidence of alliances among venture capital backed firms copyright 2014 the author 2013 published by oxford university press on behalf of associazione icc all rights reserved oxford university press

venture capital entrepreneurship and economic growth abstract using a panel of u s metropolitan areas we find that increases in the supply of venture capital positively affect firm starts employment and aggregate income our results remain robust to a variety of specifications including ones that address endogeneity the estimated magnitudes imply that venture capital stimulates the creation of more firms than it funds which appears consistent with two mechanisms first would be entrepreneurs anticipating financing needs more likely start firms when the supply of capital expands second funded companies may transfer know how to their employees thereby enabling spin offs and may encourage others to become entrepreneurs through demonstration effects

stumblers and stars in the management of rapid growth this article examines the problems of managing a rapid growth firm we contend that instead of being a time for entrepreneurial celebration and relief a period of over 50 growth is a time for wariness and some very difficult decisions such firms face a fragile transition they are beyond being intimate cohesive entrepreneurial ventures but they have not yet become secure stable entities not only are they in flux but these firms are often disoriented by the pace at which change is occurring firms such as atari cray research cullinet osborne computers people express and rolm recently have faced or now face these challenges with very different degrees of success this article presents observations drawn from several sources a study of thirty rapid growth firms which we have underway literature and press accounts of rapid growth and our consulting and discussions with executives in such firms while far from definitive the article reports several themes that are very pronounced in the situations we have studied these themes are of two types 1 recurring challenges and traps faced by rapid growth companies and 2 characteristics af firms which seem to avoid or surmount these traps these are the four fundamental challenges that we see confronting rapid growth firms 1 1 instant size these firms double and triple in size very quickly this in turn creates problems of disaffection inadequate skills and inadequate systems 2 2 a sense of infallibility by virtue of their success to date rapid growth firms often view their strategies and behaviors as infallible the unfortunate irony is that they become convinced of their wisdom while the environment is turbulent and large competitors are entering 3 3 internal turmoil as a social organism a firm growing at 50 per year is under great strain there is a stream of new faces people who do not know each other and who do not know the company decision making suffers turf battles abound and people burn out 4 4 extraordinary resource needs rapid growth firms are typically cash starved instead of abundance they often face a bare bones existence each of these challenges calls for its own solutions but we have observed some overarching themes in firms that have successfully traversed a period of rapid growth the chief executive is able to envision and anticipate the firm as a larger entity the team needed for tomorrow is hired and developed today the original core vision of the firm is constantly and zealously reinforced new big company processes are introduced gradually as supplements to rather than replacements for existing approaches hierarchy is minimized employees hold a financial stake in the firm beyond developing these themes for success the article concludes with a brief discussion of the effectiveness of owner founders in rapid growth situations

venture capitalists decision policies across three countries an institutional theory perspective this paper examines the influence of economic institutions upon venture capitalists vcs decision policies we conducted policy capturing experiments on 119 vcs across three countries representing distinct economic institutions us mature market economy south korea emerging economy and china transitional economy results show that vcs in rules based market economies us rely upon market information to a greater extent than vcs in emerging economies korea and chinese vcs transitional economy weight human capital factors more heavily than either us or korean vcs findings suggest that although professional institutions may dictate which information is included in vc decision policies the extent to which that information is emphasized is determined partly by the economic institution in which the decision maker operates journal of international business studies 2007 38 691 708 doi 10 1057 palgrave jibs 8400291

a theory of the early growth of the firm economic enterprise consists in the matching of resources and opportunities to create value growth processes of the new enterprise are here explored in a systems model inspired by penrose a sequence of phases in the early life of the firm reflects growth processes and problems solutions giving rise to new problems firms must access mobilize and deploy resources before they can generate resources for growth subsequent phases in which growth reinforcement and growth reversal forces content are not universal but are set in motion in an important minority of firms the major job creators beyond the early phases critical problems facing the firm are more diverse the growth of the firm is related to the building of the competence needed to respond to changing industrial opportunities copyright 1998 by oxford university press

understanding global flows of venture capital human networks as the carrier wave of globalization industry participants and observers view venture capital as fundamentally a local business however recent data show an increasing share of us venture capital investments flowing overseas we suggest that cross border venture capital flows are associated with the formation of transnational technical communities ttcs groups of immigrants active in both home and host country technical networks our results highlight the role of human networks as a mechanism of industry globalization and support the view that ttcs are emerging economic actors in their own right

scitovsky meets sen endogenising the dynamics of capability sen s capability approach is especially focused on human development as freedom from deprivations while scitovsky s the joyless economy is focused on how people can expand their internal capability endogenously by enjoying learning as a socially embedded process this paper uses the complementarity between the two authors to build a comprehensive dynamic approach to people s functionings and capabilities different groups of functionings are thus characterised by their different patterns of development in interaction with the resources available and the social context as a result sen s problems of evaluating functionings and measuring capability can be alleviated harmful functionings can be predicted children s welfare can be better evaluated and sen s definitions of capability agency and well being can be refined

from the editors endogeneity in international business research this essay builds on the exposition by thomas et al and focuses on analyzing cause and effect in international business research we attempt to explain how endogeneity problems occur and why they are so prevalent in international business research in a non technical fashion we then discuss the importance of explicitly identifying how the chosen research design best approximates a randomized controlled experiment finally we provide some guidelines on achieving this goal and emphasize the practices that seem most relevant to jibs reviewers in evaluating high quality international business research