Daniel Erian Armanios

How Entrepreneurs Leverage Institutional Intermediaries in Emerging Economies to Acquire Public Resources

Research Summary: Governments in emerging economies often use institutional intermediaries to promote entrepreneurship, and bridge the void between ventures and public funding. While prior literature describes what institutional intermediaries do, it leaves open how intermediaries support different types of entrepreneurs. By comparing science park and non-science park firms in Beijing and across China, we distinguish which entrepreneurs benefit from certification v. capability-building through the introduction of two new constructs: skill adequacy and context relevance. Broadly, our study adds insights at the nexus of emerging economies and entrepreneurship research, and to the tie formation and institutional intermediaries literatures.Managerial Summary: A key dilemma facing entrepreneurs is how to finance their ventures. While entrepreneurs in developed economies can seek VC or angel investment, entrepreneurs in emerging economies often need to pursue potential government funding opportunities. Our study highlights three strategies for acquiring government funding. Well-connected entrepreneurs can leverage their political ties to acquire such funding. Less-connected entrepreneurs can leverage science parks that in emerging markets are designed to help governments to identify promising ventures. For returnees whose ample experience abroad may not fit with local ways of doing business, gaining science park admission can certify quality and so ease the path to government funding. For technically skilled local entrepreneurs who lack business skills, science parks can help build such skills which then ease the path to government funding.

What Makes a Winner? Quantifying Luck in Sustained Performance

This study is an empirical examination of the extent to which either managerial skill or random external influences — i.e., luck — are responsible for firm performance. To adjudicate between the respective theoretical claims, we examine how much of the observed cross-sectional dispersion of outcomes can be attributed to differences in luck rather than differences in skill. Using a unique empirical strategy of bootstrap simulations that we compare to the observed results of public companies, we demonstrate that a substantial portion of performance variation depends on random influences rather than on managerial skill. Specifically, our results show that we can expect to observe substantial differences in realized (i.e., actual) performance outcomes even if all CEOs in a given sample are equally skilled, thus suggesting that the true underlying differences in CEO skill are substantially smaller than implied by simply looking at the raw difference in performance outcomes. Our results not only assist researchers in interpreting firm outcomes but also inform ideas of executive pay and responsibility.This study is an empirical examination of the extent to which luck can explain sustained performance. Using a unique empirical strategy of bootstrap simulations that we compare to actual performances of public companies, we observe that over 95% of the differences in performance outcomes between “top” versus “average” performers can be attributed to luck, even if all CEOs are equally skilled. Through this novel empirical approach, we can better incorporate the role of luck into studies of sustained performance, and our findings suggest that more attention should be placed on the role of unanticipated and even uncontrollable changes on performance.

Does More Certification Always Benefit a Venture

An implicit assumption in institutional theory is that more certifications improve a venture’s likelihood for success. However, under certain conditions, we argue more certifications may be detrimental to the venture’s performance. We advance this notion by examining both who is doing the certification and, in turn, what information is revealed to others through the certification. Our study advances two new constructs based on varying instances of follow-on certification: certification broadening, where the initial and follow-on certifiers are different institutions, and certification redundancy, where the initial and follow-on certifiers are the same institution. By studying sequences of certification in the U.S. Small Business Innovation Research federal and state programs, we find that certification broadening generally increases a firm’s ability to acquire private resources, whereas certification redundancy generally decreases a firm’s ability to acquire private resources. This study advances a more d...

What Makes a Winner? Toward Resolving the Role of Luck and Skill in Sustained CEO Performance

This study is an empirical examination of the extent to which either managerial skill or random external influences — i.e., luck — are responsible for firm performance. To adjudicate between the respective theoretical claims, we examine how much of the observed cross-sectional dispersion of outcomes can be attributed to differences in luck rather than differences in skill. Using a unique empirical strategy of bootstrap simulations that we compare to the observed results of public companies, we demonstrate that a substantial portion of performance variation depends on random influences rather than on managerial skill. Specifically, our results show that we can expect to observe substantial differences in realized (i.e., actual) performance outcomes even if all CEOs in a given sample are equally skilled, thus suggesting that the true underlying differences in CEO skill are substantially smaller than implied by simply looking at the raw difference in performance outcomes. Our results not only assist researchers in interpreting firm outcomes but also inform ideas of executive pay and responsibility.This study is an empirical examination of the extent to which luck can explain sustained performance. Using a unique empirical strategy of bootstrap simulations that we compare to actual performances of public companies, we observe that over 95% of the differences in performance outcomes between “top” versus “average” performers can be attributed to luck, even if all CEOs are equally skilled. Through this novel empirical approach, we can better incorporate the role of luck into studies of sustained performance, and our findings suggest that more attention should be placed on the role of unanticipated and even uncontrollable changes on performance.

The Winds (and Walls) of Change: A Theoretical Framework for Understanding Entrepreneurship in the Midst of Reform

The analogy of ‘letting a thousand flowers bloom’ leads to a perspective that institutional change should focus on making it easier to become an entrepreneur. In this paper, we develop a theoretical framework that links the attributes of institutional change and its local context with the nature of entrepreneurship and implications for firm performance. Contributing to the institutional theory literature, the framework offers a compelling deviation from our traditional view that more entrepreneurship is always better. It highlights that there are several distinct types of institutional changes that influence entrepreneurship by at times unexpected consequences. The framework leads to a novel view that we may be able to alter the nature of the entrepreneurial firms in society and their performance through careful reforms in institutions. This framework also contributes to research on entrepreneurial firms by offering a view of how the role of new actors entering the market, the type of institution ushering such change, and the local context in which the change occurs all present rich opportunities to understand the dynamics between institutions and entrepreneurs.