Arndt Werner

How Exactly Do Network Relationships Pay Off? The Effects of Network Size and Relationship Quality on Access to Start‐Up Resources

Entrepreneurs are expected to profit from network relationships. Research addressing the link between entrepreneurs’ network characteristics and their performance, however, has so far produced inconclusive results. In an attempt to explain these inconsistencies, we investigate the resource returns connected to network size and relationship quality. Based on a sample of 379 nascent entrepreneurs, we find that increasing network size and relationship quality results in diminishing marginal returns in terms of access to financial capital, knowledge and information, and additional business contacts. Additionally, we observe that the returns vary strongly by resource type.

Entrepreneurship education in Germany and Sweden: what role do different school systems play?

Purpose – The question arises whether entrepreneurship education will be able to facilitate the entrepreneurial attitude in the near future. Unfortunately, the decisive role of compulsory schooling has long been neglected in this context. Until recently it was considered sufficient to provide education in entrepreneurship in universities (especially in the area of Business Administration) or in the form of special courses for people who consider starting their own business. Picking up the discussion at this point, the purpose of this paper is to analyse to what extent compulsory school education in Germany and Sweden facilitates a more entrepreneurial way of thinking among pupils.Design/methodology/approach – First, the paper briefly summarises the relevant research literature and specify important components of entrepreneurship education. Second, it discusses what exactly is to be understood by entrepreneurial qualities and present a holistic approach based on a model by Dahlgren. Third, it describes the...

The Two Sides of the Story: Network Investments and New Venture Creation

It is widely recognized that networks provide access to resources necessary for founding a new venture. However, they also come along with opportunity costs of time. We therefore argue that maintaining a set of network relationships is an investment that may not always pay off. More specifically, we develop detailed hypotheses on why the relationship between investing time in developing and maintaining a larger network and more intense network relationships and success in new venture creation may be best described by an inverted U. Testing our hypotheses on longitudinal data of 137 nascent entrepreneurs, we find broad support for our propositions.

The Impact of Balanced Skills, Working Time Allocation and Peer Effects on the Entrepreneurial Intentions of Scientists

To date, little is known about the effects of the composition of skills on academic entrepreneurship. Therefore, in this paper, following Lazear’s (2005) jack-of-all-trades approach, we study how his or her composition of skills affects a scientist’s intention of becoming an entrepreneur. Extending Lazear, we examine how the effect of balanced entrepreneurial skills is moderated by a balanced working time allocations and peer effects. Using unique data collected from 480 life sciences researchers, we provide the first evidence that scientists with more balanced skills are more likely to have higher entrepreneurial intentions, particularly when they are in contact with entrepreneurial peers. Furthermore, we find even higher entrepreneurial intentions when balanced skill sets are combined with balanced working time allocations. Thus, to encourage the entrepreneurial intentions of life scientists, one has to ensure that they are exposed to diverse work experiences, have balanced working time allocations across different activities and work with entrepreneurial peers; i.e., collaborating with colleagues or academic scientists who have started new ventures in the past is important.

Internationalisation in new ventures what role do team dynamics play

The role of team size and dynamics in the internationalisation process of new ventures has received little attention in entrepreneurship literature so far. We hope to fill this gap by investigating how team formation and the intertemporal dynamics of teams in the first years of new ventures affect their propensity for early-stage-internationalisation. Using the resource-based view and matching theory, our study generates new insights in this field regarding productivity effects. Using regression models for binary outcome variables, we test our hypotheses with a data set of start-ups that are either internationalised or not (Cologne Founder Study). We find that new ventures with productive matched teams will overcome barriers to internationalisation easier than single person start-ups. In particular, we can show that a variation in team size (a decrease) enhances the productivity of the management and increases the probability to internationalise.

Entrepreneurial Signaling: Success Factor for Innovative Start-Ups

Innovative start-ups and their respective market partners are faced with severe problems of asymmetric information due to their lack of prior production history and reputation. We study whether entrepreneurial signaling can help solve these problems and thereby increase the potential success of innovative start-ups. We concentrate our analysis on the credit and labor market because they are crucial for the success of innovative start-ups and focus on the role of educational signals. We argue that entrepreneurs signal their quality to potential employees and creditors with certain characteristics of their educational history. According to our theoretical considerations we expect potential employees to use an entrepreneurs university degree as a quality signal when deciding whether to accept a job at an innovative start-up. And we expect banks to use a more precise indicator, namely the actual length of study in relation to a standard length, as a signal when deciding upon credits for an innovative founder. However, since asymmetric information problems and skill requirements are different for traditional start-ups we do not expect employees or banks to use the same signals for traditional start-ups. We empirically test our implications based on a dataset of more than 700 German start-ups collected in 1998/99. All implications are borne out in the data. So contrary to conventional wisdom, educational degrees and studying fast (not just studying) are even more important success factors for innovative than for traditional start-ups.

Nascent migrant entrepreneurship in Germany – is there a cultural imprinting effect?

Based on an empirical investigation of 1,806 potential entrepreneurs, this article provides indications that with growing integration, people with a migrant background are increasingly less distinguishable from their German counterparts with regards to the willingness to found a new company. A ‘cultural imprinting’ effect in the sense of temporally stabile founding tendencies between different cultures cannot be identified. Interestingly, our analysis also shows that a higher tendency of non-integrated migrants to start a business is mostly attributable to their background in an industrialised nation, and not from the former ‘Anwerberstaaten’ or developing/emerging countries.

How Exactly Do Networking Investments Pay Off? Analyzing the Impact of Nascent Entrepreneurs Networking Investments on Access to Start-Up Resources

It is widely recognized that networks provide access to the resources necessary for founding a business. Up until now, however, the relationship between networking investments and the availability of resources has not been analyzed in depth. Using a sample of 416 nascent entrepreneurs, we address this issue, and provide evidence that networking investments lead to diminishing marginal resource returns in terms of financial, informational, emotional and contact support. Our results also show that resource returns strongly vary with resource type. While emotional support is quite easy to get, many more networking investments are needed to achieve financial support.

Repatriates as entrepreneurs? – A theoretical analysis

This contribution raises the question as to whether repatriates may pursue entrepreneurship and aims to theoretically determine if repatriates are particularly suitable candidates for venturing into self-employment. To address this research question, the Jack-of-all trades view and the human and social capital theories are employed. Research shows that insufficient repatriation strategies in international firms, lead these usually qualified, skilled and experienced employees to change employers after an international assignment. Clear insights into whether they also opt for self-employment as a career path are unavailable. To investigate this prospect, the opportunity recognition and development approach is applied because the realisation and exploitation of market opportunities is a precondition for venturing into self-employment. The above named theories are also employed to compare repatriates and start-up entrepreneurs as they have been found to facilitate the identification and exploitation of ideas. Profile similarities are found to prevail thus supporting our proposition.

Why Do Employees Leave Their Jobs for Self-Employment? – The Impact of Entrepreneurial Working Conditions in Small Firms

Based on the finding that entrepreneurs who found new firms tend to work as employees of small rather than large firms prior to start-up, we test how different working conditions, which enhance entrepreneurial learning, affect their decision to become entrepreneurs when moderated by firm size. Based on data of the German Socio-Economic Panel (SOEP), we find a significant relationship between entrepreneurial learning (extracted in an orthogonal factor analysis based on twelve working conditions as proxy for entrepreneurial human capital and work experience) and firm size when predicting the probability of leaving paid employment for self-employment. We think, that this is a special kind of knowledge spillover. We also control for other aspects such as gender, age, wage, etc. – factors that may potentially influence the decision to become self-employed. Thus, our analysis sheds new light onto the black box of SMEs as a hotbed of new start-ups.