Boris F. Blumberg

Cooperation Contracts between Embedded Firms

Successful inter-firm cooperations require that the participating partners mitigate potential opportunistic behaviour. Contractual commitments are one management mechanism to achieve stable mutual cooperation. However, the impossibility in designing complete, explicit and easily enforceable contracts restricts their efficacy as a management mechanism. Mechanisms based on the social embeddedness of the partners can form a viable alternative and compliment for contracts. Hence, the usage of contractual commitments is explained by combining transaction cost economic reasoning with arguments on the social embeddedness of economic transactions. Finally, the derived hypotheses are tested on a data-set of 92 cooperations within five Dutch multinationals.

Efficient partner search: Embedded firms seeking co‐operative partners

This article analyses firms’ efforts to find a suitable partner for a technology cooperation. Although more theoretical studies acknowledge that search costs are an essential part of transaction costs, empirical research on interfirm co‐operation neglects searching. This paper explicitly addresses this lacuna. Hypotheses on the search behavior of firms are derived by applying considerations of transaction cost economics and arguments concerning the social embeddedness of firms to a search model widely used in economics. It is argued that on the one hand the problem potential of co‐operation, which is determined by the co‐operations volume and the involved relation‐specific investments and uncertainty, affects the benefits a firm can gain from searching. On the other hand, the social embeddedness of a firm influences the costs of searching. Further, I consider the size and homogeneity of the pool of potential partners in the analysis. The derived hypotheses are tested on a dataset of 94 technology cooperations within five Dutch multinationals. The results clearly show that transaction cost economics does explain the search efforts of firms. In addition, I find evidence that the social embeddedness also affects searching.

Roads Leading to Self-Employment: Comparing Transgenerational Entrepreneurs and Self-Made Start-Ups

This article studies the event history of business foundation. Three theoretical concepts—human, financial, and social capital—are linked to investigate how entry into self–employment varies over time. Data from a cohort of Dutch inhabitants born in 1939/1940 who have been interviewed three times during their lives (in 1952, 1983, and 1993) allows for testing hypotheses that state clear differences between two different roads toward business ownership. Empirical results show that the baseline hazard decreases with time for transgenerational entrepreneurs with self–employed parents, but increases for self–made start–ups. Social capital is a better predictor for starting an enterprise than human capital.

Which Business Starters Experience Limited Access to Bank Funds

In this paper we investigate which individuals face difficulties in raising funds from financial institutions when starting a business. We argue that banks are more likely to provide financial funds the more they are convinced that the loan is repaid timely and the business is likely to succeed. Thus, potential business founders can increase their chance to obtain a bank loan by committing themselves to repayment and their new business. Further, they can signal to the bank that they are good lenders. Our empirical analysis proceeds in two steps reflecting the supply and demand side of the market for business loans. First, we estimate the denial rate of banks and then we also look whether potential business founders differ in their likelihood to apply for credit. Our main findings are that home ownership, experience obtained in previous jobs, education, family composition, nationality, parental self-employment, multiple-ownership and income derived from previous occupation affect access to external financial resources. We argue that business plans and support obtained from an accountant are effective ways to signal credibility to a bank.

Work relationships: : counteracting the negative effects of conflict

Purpose Guided by social resource theory, this study aims to examine the influence of conflict (i.e. task and relationship) on performance. The authors investigated whether job engagement mediates this relationship and whether social network quality moderates the relationship between conflict, job engagement and performance. Design/methodology/approach The authors built and tested a moderated mediation model, using data from 217 graduate students. Findings Results showed that job engagement operates as a mediating mechanism between task conflict and performance. The authors also found that the indirect effect of job engagement depended upon the quality of the social networks. When the quality of the social network was high, both the task and relationship conflict did not negatively influence the association between job engagement and performance. Research limitations/implications These findings provide new insights into how social embeddedness in the form of social network quality can create a social context in which conflict works out less detrimental. Practical implications Given that employees are interdependent and coworkers are likely to differ in their personal values and opinions, the authors conclude that managers should facilitate the development of meaningful relationships at work. Originality/value Whereas prior research has found conflict (i.e. task and relationship) to negatively associate with performance, the authors show that social networks do affect the strength of the relationship between conflict (i.e. task and relationship) and performance.