André O. Laplume

What motivates entrepreneurial entry under economic inequality? The role of human and financial capital

Based on a multilevel analysis of nearly 120,000 observations across 31 countries between 2001 and 2008, we provide novel insights into the moderating effects that economic inequality may have on the distinct roles that human and financial capital play on different types of entrepreneurship. As inequality increases, both forms of capital become weaker deterrents of entry into necessity entrepreneurship, whereas for opportunity entrepreneurship, only financial capital becomes a stronger predictor of entry. We also show that, regardless of inequality levels, both human and financial capital exhibit decreasing marginal returns on the likelihood of entry into necessity entrepreneurship, and that in the case of opportunity entrepreneurship, financial capital exhibits increasing marginal returns. However, inequality does impact the magnitude of marginal returns. Additionally, our statistical analysis provides quantitative support to extant literature arguing that higher levels of economic inequality foster both types of entrepreneurship albeit having a stronger impact on necessity entrepreneurship, and that human and financial capital have distinct effects on entry into necessity versus opportunity entrepreneurship. All these findings have pertinent policy implications and shed light on the under-researched role of inequality on entrepreneurship.

Inbound foreign direct investment and domestic entrepreneurial activity

There is an interesting and lively debate going on in the academic literature intersecting trade policy and entrepreneurship. Several studies have shown that inbound foreign direct investment (FDI) has a negative effect on rates of entrepreneurship, while others find the opposite – a higher rate of new firm creation associated with increased inbound FDI. We study the phenomenon using a cross-country analysis of data on entrepreneurs from 38 countries and from 2001 to − 2008. Results indicate that inbound FDI has negative associations with five types of entrepreneurship (nascent, new, early-stage, established, and high-growth) measured by the Global Entrepreneurship Monitor survey. In our discussion, we argue that our study supports the contention that studies counting new limited liability company registrations do not always measure the same thing as entrepreneurial entries (self-reports), leading to different, even opposite results when subjected to empirical analysis.

A Multi-Level Empirical Study of Ethnic Diversity and Shadow Economy as Moderators of Opportunity Recognition and Entrepreneurial Entry in Transition Economies

Our multi-level model about the relationship between opportunity recognition and entrepreneurial entry in transition economies suggests that ethnic fractionalization along with the size of the shadow economy are moderators of individual-level opportunity recognition. Whereas ethnic diversity increases entrepreneurial entries, a large informal sector appears to decrease them. We also find that opportunity recognition may be a more important predictor of entry when ethnic diversity is low and when the shadow economy is small. Thus, our study contributes to the literature examining the influence of contextual factors on entrepreneurial entry. Succinctly, ethnic diversity can substitute for opportunity recognition, whereas the informal economy increases its importance. Consequently, it appears that ethnic heterogeneity in transition economies may be a valuable driver of entrepreneurial entry even in the absence of opportunity recognition, while the size of the informal economy makes opportunity recognition dearer.

Inward foreign direct investment: Does it enable or constrain domestic technology entrepreneurship?

Whether or not foreign direct investment (FDI) is essential for domestic technological and economic development remains a contentious question. The controversy is illustrated by comparing the Celtic and Asian Tigers experiences from 1995 to 2000. Based on IMF and World Bank data in constant prices, Ireland and China averaged an annual growth rate of 8% in GDP per capita. However, FDI per capita grew at an average pace of 98% per year in Ireland, while in China it decreased by 1% -- absolute values averaged US

Entrepreneurship in Transition Economies: The Role of Corruption and Individual Attributes.

3,397 versus US

Influence of institutional profiles on time to recall

144, respectively. This suggests that, rather than a one-policy-fits-all approach, customized policies are more appropriate; and, if any generalization can be made, it should be based on a country’s stage of economic development.

Firm newness, product novelty and aesthetic failure

Corruption has been shown to discourage entrepreneurship in transition economies and previous research corroborates that individual dispositions affect entrepreneurial intentions. It is less clear, however, to what extent individual attributes impact entrepreneurial behaviours in different institutional contexts. Here, we assess the cross-level moderation effect of corruption at the national level and attributes of entrepreneurs at the individual level, on the likelihood of individuals entering into entrepreneurship. Hence, we contribute to the emerging literature examining contextual influences on entrepreneurialism by focusing on transition economies. Our results indicate that self-efficacy, fear of failure and opportunity recognition may be more important determinants of entrepreneurial intentions in less corrupt contexts, whereas ties with other entrepreneurs become more relevant in contexts where corruption is endemic.

The Influence of Self and Group-Enhancing Innovations on User Self-Construal: An Experimental Study

Purpose – This paper aims to understand why firms expedite or delay product recall decisions involving international sourcing. Design/methodology/approach – This paper combines US toy recall data from the Consumer Products Safety Commission database for the period from 1988to 2011 with World Economic Forum data on institutional environments to predict the effect the host country conditions have on recall timing decisions. Findings – Firms tend to expedite decisions to recall defective products sourced from countries where the informal institutional profile is perceived to be unfavorable for quality manufacture. Research limitations/implications – The reported research is empirical in nature and uses pooled cross-country, single-industry data. Practical implications – Managers should be careful not to allow their biases to affect their product recall timing decisions. Originality/value – Whereas previous research has examined recall timing decisions, this study is the first to consider the institutional en...

The Politics of Intellectual Property Rights Regimes

Purpose – The purpose of this paper is to examine product failures in the consumer technology products industry to explain why some firms experience more aesthetic-related failures than others. Design/methodology/approach – The study uses a unique data set of failed high technology consumer products identified by expert product reviewers of 75 online magazines during 2000-2010. The variables are constructed using two coders as well as using an automated content analysis process based on the information provided in the online product reviews. The study tests a hypothesis using multilevel logistic regression techniques on a sample of 606 product reviews of 323 products associated with 171 firms. Findings – The study demonstrates that older firms are much more susceptible than younger firms to suffer from aesthetic-related product failures when they pursue product innovations that are new for them. Likewise, older firms suffer fewer aesthetics-related product failures than younger firms when they exploit pro...

Matching Technology Strategy with Knowledge Structure: Implications for Firm Performance

This research paper introduces the concepts of self-enhancing and group-enhancing innovations and explains how they may affect user self-construal differently. It is argued that self-enhancing innovations decrease the interdependent self-construal of the user, whereas, group-enhancing innovations decrease the independent self-construal of the user. Pre-test was conducted to identify of the concepts of self-enhancing and group-enhancing innovations. Then a pilot test using a randomized pre-test/post-test design was conducted to pretest the study research design. Employing a sample of consumers in a randomized pre-test/post-test design, the study presents results supporting the hypothesized effect of self-enhancing innovation, and provides partial support for the hypothesized effects of group-enhancing innovation. We discuss the implications of this research for the nexus of business and society as manifested by the interaction of technology and culture.