Iván Arribas

An entrepreneur's social capital and performance: The role of access to information in the Argentinean case

Purpose - The aim of this paper is to analyze the impact of an entrepreneurs social capital on their access to information, and how such access improves the performance of their entrepreneurial project. Design/methodology/approach - A structural equations model (SEM) is estimated and validated from a database including information from 282 Argentinean entrepreneurs who answered a questionnaire specifically designed for this research. The analysis of this model allowed the impact of dependent latent variables on the performance of the start-up to be determined. Findings - The performance of an entrepreneurial project depends on an entrepreneurs access to finance, markets and information. Specific dimensions of social capital facilitate access to these resources: the relational dimension facilitates access to information; the resources dimension makes access to finance easier; the structural dimension helps the entrepreneur to access markets. Research limitations/implications - The sample is not large enough to analyze differences among specific types of entrepreneurial projects: for instance, the role of social capital in industrial and service entrepreneurship (activity sector), the differences between the federal capital, Buenos Aires, and the rest of the country (location), and between female and male entrepreneurs (gender). Originality/value - The results help in understanding which dimensions of an entrepreneurs social capital facilitate access to information and how these specific dimensions enhance the performance of the project. Hence, this paper has managerial and policy implications for the generation of dynamic entrepreneurial projects capable of becoming development drivers.

A New Interpretation of the Distance Puzzle Based on Geographic Neutrality

Abstract One of the most remarkable features of globalization is that advances in technology have contributed to reducing the costs of trade (e.g., transportation and communication costs) and thus have boosted international trade. Under these circumstances, the importance of distance should have diminished over time, which would constitute a boon for countries that are far from the main centers of economic activity. However, one of the best-established empirical results in international economics is that bilateral trade decreases with distance. This apparent contradiction has been labeled the “missing globalization puzzle.” We propose yet another explanation for this apparent contradiction that is based on the concept of geographic neutrality, which we use to construct indicators of international trade integration for two different scenarios: when distance matters and when it does not. Our results indicate that the importance of distance varies greatly across countries, as revealed by disparate gaps between distance-corrected and distance-uncorrected trade-integration indicators for different countries. Some factors that are rooted in the literature explain away the discrepancies, but their importance varies according to the trade-integration indicator that is considered—trade openness or trade connection.

Are social and entrepreneurial attitudes compatible?: A behavioral and self‐perceptional analysis

Purpose – The aim of this paper is to analyze the compatibility between entrepreneurial and social attitudes. Specifically, we analyze if subjects with a more developed economic entrepreneurial attitude exhibit a less social attitude. Design/methodology/approach – Our methodology integrates an economic experimental approach with a standard entrepreneurial intention questionnaire to analyze the interaction between entrepreneurial and social self-perceptions and behavior. Findings – There is empirical evidence that experimental entrepreneurial behavior (characterized by detecting an opportunity and accepting risk to take an economic advantage from it in laboratory experiments) reduces the incentive for social behavior. However, this effect does not appear if just self-perceptions instead of experimental behaviors are considered. Research limitations/implications – The social attitude of entrepreneurs may be overestimated in those empirical research studies based only on data obtained from entrepreneurs’ answers to hypothetical questions in a survey. Originality/value - To the best of our knowledge, this is the first paper presenting a laboratory experiment to represent the key features of entrepreneurial behavior instead of a case-control analysis to set differences in the experimental behavior of sub-samples of subjects defined in terms of their entrepreneurial motivation or experience.

The Determinants of International Financial Integration Revisited: The Role of Networks and Geographic Neutrality

Over the last two decades, the degree of international financial integration has increased substantially, becoming an important area of research for many financial economists. This paper explores the determinants of the asymmetries in the international integration of banking systems. We consider an approach based on both network analysis and the concept of geographic neutrality. Our analysis focuses on the banking systems of 18 advanced economies from 1999 to 2005. Results indicate that banking integration should be assessed from the perspective of both inflows and outflows, given that they show different patterns for different countries. The parametric techniques point out the remarkable role of both geographic distance and trade integration. However, the most relevant results are yielded by nonparametric techniques, which we use due to the lack of well-established results on the determinants of trade in assets. These techniques reveal that the effect of the covariates on banking integration is not constant over the conditional distribution which (in practical terms) implies that the sign of the relationship varies across countries.

Guanxi, performance and innovation in entrepreneurial service projects

This paper analyzes the role played by two dimensions of entrepreneurs’ private social capital in the survival, growth and innovativeness of entrepreneurial service ventures: local size and preferential attachment degree. We build a bi-dimensional measure of social capital based on network models and a methodology to estimate this measure for any group of entrepreneurs. Based on a survey of service entrepreneurs who launched their business in the city of Shanghai, we show that roles played by each dimension are quite different. A large local size of the network increases the chances of survival of the new venture. However, the chance to become a dynamic venture is only related to entrepreneurs’ preferential attachment degree. This finding has relevant political and managerial implications.

Mass appraisal of residential real estate using multilevel modelling

Mass appraisal, or the automatic valuation of a large number of real estate assets, has attracted the attention of many researchers, who have mainly approached this issue employing traditional econometric models such as Ordinary Least Squares (OLS). However, this method does not consider the hierarchical structure of the data and therefore assumes the unrealistic hypothesis of the independence of the individuals in the sample. This paper proposes the use of the Hierarchical Linear Model (HLM) to overcome this limitation. The HLM also gives valuable information on the percentage of the variance error caused by each level in the hierarchical model. In this study HLM was applied to a large dataset of 2,149 apartments, which included 17 variables belonging to two hierarchical levels: apartment and neighbourhood. The model obtained high goodness of fit and all the estimated variances of the parameters in HLM were lower than those calculated by OLS. It can be concluded as well that no further neighbourhood variables need be added to the model to improve the goodness of fit, since almost all the residual variance can be attributed to the first hierarchical level of the model, the apartment level.

Modelling Farmers’ Behaviour Toward Risk in a Large Scale Positive Mathematical Programming (PMP) Model

Agricultural production is characterized for being a risky business due to weather variability, market instability, plant diseases as well as climate change and political economy uncertainty. The modelling of risk at farm level is not new, however, the inclusion of risk in Positive Mathematical Programming (PMP) models is particularly challenging. Most of the few existing PMP-risk approaches have been conducted at farm-type level and for a very limited and specific sample of farms. This implies that the modelling of risk and uncertainty at individual farm level and in a large scale system is still a challenging task. The aim of this paper is to formulate, estimate and test a robust methodology for explicitly modelling risk to be incorporated in an EU-wide individual farm model for Common Agricultural Policy (CAP) analysis, named IFM-CAP. Results show that there is a clear trade-off between the behavioural model (BM) and the behavioural risk model (BRM). Albeit the results show that both alternatives provide very close estimates, the latter increases three times the computation time required for estimation. Despite this, we are convinced that the modelling of risk is crucial to better understand farmer behaviour and to accurately evaluate the impacts of risk management related policies (i.e. insurance schemes).

Multiproduct trading with a common agent under complete information: Existence and characterization of Nash equilibrium

This paper focuses on oligopolistic markets in which indivisible goods are sold by multiproduct firms to a continuum of homogeneous buyers, with measure normalized to one, who have preferences over bundles of products. By analyzing a kind of extended contract schedule (mixed bundling prices), the paper shows that pure strategy efficient equilibria always exist in such settings. While inefficient equilibria may exist, this can be ruled out by refining the equilibrium correspondence using the concept of subgame perfect Strong equilibrium. In addition, the paper shows that each principals set of equilibrium contracts of minimum cardinality may contain at least three offers. When the social surplus function is monotone and unit costs are constant, only two offers are required at the equilibrium outcome.

The Convenience of Applying Multilevel Modeling on Real Estate Valuation

There are many economic agents interested in valuing big amounts of real estate assets. One of these agents are the financial institutions, which must value their vast mortgage portfolios periodically. In this paper we analyze the use of the Hierarchical Linear Model to value real estate portfolios. This model gives valuable information compared with the traditional OLS models and is more accurate, as it takes into account the hierarchical structure of the data. DOI: http://dx.doi.org/10.4995/ICBM.2015.1314

A Model for Estimating Cash Flows in Firms Backed by Venture Capital

Venture Capital only backs firms for a short period of time. When the time to exit arrives, the firm must inevitably be valued in order to obtain a basis for negotiating the exit price. Discounted cash flow is precisely one of the valuation methods that are used most by Small and Medium-sized Enterprises (SMEs).