Jessica Lindbergh

The Development of Social Capital and Financing of Entrepreneurial Firms: From Financial Bootstrapping to Bank Funding

This paper uses a three–dimensional perspective on social capital to investigate how entrepreneurs develop their social capital when relying on bootstrapping strategies becomes insufficient and financing needs to be acquired from external debt and equity financiers. Findings from six case studies of entrepreneurs in the fashion industry show that to acquire funding, due to perceived deficiency in the existing network, entrepreneurs develop the structural dimension by adding relationships based on function. However, when seeking financial information that is perceived as sufficient in the existing network, they do so by developing cognitive and relational dimensions to preexisting network ties.

Factors Affecting SME Export Channel Choice in Foreign Markets

Determining market channels is usually considered a discrete decision made by the expanding firm (e.g., Anderson & Coughlan, 1987; Bello & Gilliland, 1997; Solberg & Nes, 2002). In reality, this decision is often limited by knowledge constraints and customer demands. We find an example of this in Gammas attempt at entering the Italian market (Hohenthal, 2001).

International Experience and the Recognition of Business Opportunities in Foreign Markets — A Study of SME’s International Experiences and Choice of Location

International expansion of business firms has often been seen as a choice among various international investment opportunities (e.g. Young, 1989). These investment opportunities are characterised by different probability distributions of returns that are initially unknown. As the firm acts, more information about returns is gathered and the firm gains a clearer picture of the alternatives (Arrow, 1974; Radner, 1979; Radner and Rotschild, 1975). The decision maker is supposed to choose the investment opportunity with the highest expected return, unless that opportunity poses a higher risk. Risk is a variation in outcome that can be calculated and considered when deciding. There are, however, several problems with this view of optimal decision-making behaviour. For example, managers do not consider all alternatives; they tend to search in the vicinity of the current problem (Cyert and March, 1963). Moreover, people assess the same situation differently which means that risk is in the eye of the beholder.

Cultural diversity and culture specific experiences effect on development of institutional experiential knowledge in SMEs

Institutional experiential knowledge results from experience of cultural diversity and culture specific experiences. It is studied empirically through a field-scenario questionnaire of ongoing business relationships. Cultural diversity has a negative effect on a firms institutional experiential knowledge, whereas culture specific experience has a positive effect. These two experiences contribute very differently to the development of institutional experiential knowledge and the interaction effect should enable one to differentiate kinds of experience, and thus gain greater insight into scale and scope economies.