Karl Wennberg

How culture moulds the effects of self-efficacy and fear of failure on entrepreneurship

We use data from the Global Entrepreneurship Monitor and the Global Leadership and Organizational Behavior Effectiveness study for 42 countries to investigate how the effects of individuals self-efficacy and of fear of failure on entrepreneurial entry are contingent on national cultural practices. Using multi-level methodology, we observe that the positive effect of self-efficacy on entry is moderated by the cultural practices of institutional collectivism and performance orientation. Conversely, the negative effect of fear of failure on entry is moderated by the cultural practices of institutional collectivism and uncertainty avoidance. We discuss the implications for theory and methodological development in culture and entrepreneurship.

What do we really mean when we talk about ‘exit’? A critical review of research on entrepreneurial exit

Much of the research on entrepreneurial exit has focused on exit as a dichotomous outcome whereby exit is viewed negatively and survival positively. This perspective is quite different from that of practising entrepreneurs, who are more likely to be concerned with various types of exit, viewing some options as the ultimate fulfilment of the new venture process. Further, research on exit frequently fails to account for performance (for example, earnings from self-employment or firm-level profitability) in empirical models, even though performance is arguably the critical component of determining whether an exit is successful or unsuccessful. This review article delves into these issues – founder exit intentions, strategies for executing the exit, the process of exit and the importance of controlling for, or including, performance measures in academic research – thereby outlining an agenda for future research regarding entrepreneurial exit.

Improving Business Failure Prediction for New Firms: Benchmarking Financial Models with Human and Social Capital

Abstract Business failure prediction is a prominent issue in research and practice. However, the relation between financial performance and firm default in new firms is more complex than previously assumed and both finance researchers and practitioners can benefit from the existing research on entrepreneurship and new firm performance. Developing measures for human and social capital grounded in previous research, we find that either of these variables have considerably higher predictive power than the standard financial model in predicting which firms stay in business and which firms that default. With regards to new firms in high-technology and service industries, the traditional financial model does not beat the predictive accuracy of simply flipping a coin.

A Real Options Model of Stepwise Entry Into Self-Employment

This paper tests a real options model of stepwise entrepreneurial entry. We distinguish between part time and full time entry among the self employed in Swedish knowledge intensive industries. Two multinomial logit models tests the entry from employment to part- or full time entry in 1998, and to subsequent full time entry in 1999. The empirical evidence indicates the need to distinguish between part time and full time entry, something overlooked in earlier research. We find strong support for our notion that entrepreneurs used part time entry as a strategy to test the value of their conceived business opportunity without risking their full income. However, our hypothesis that entrepreneurs use a real options heuristic shaped by the uncertainty and the irreversibility of entry received only mixed support.

Entrepreneurship Research through Databases: Measurement and Design Issues

This article provides an account of how databases can be effectively used in entrepreneurship research. Improved quality and access to large secondary databases offer paths to answer questions of great theoretical value. I present an overview of theoretical, methodological, and practical difficulties in working with database data, together with advice on how such difficulties can be overcome. Conclusions are given, together with suggestions of areas where databases might provide real and important contributions to entrepreneurship research.

Succession in Family Firms

The process of succession in family firms is often both lengthy and complex, and is influenced by factors such as the personal goals of the owner-manager, family structure, ability and ambitions of ...

Causal mechanisms in organization and innovation studies

We outline the guiding ideas behind mechanisms-based theorizing in analytical sociology as a fruitful alternative to economics-inspired research on identification of causal effects, and discuss the potential of mechanisms-based theorizing for further development in organization and innovation studies. We discuss the realist stance on providing broader explanations as an identifying characteristic of the mechanism approach, its focus on the dynamic processes through which outcomes to be explained are brought about, and outline theoretical and methodological implications for organization and innovation studies.

Studying exit from entrepreneurship: New directions and insights

Research on entrepreneurial exit has established itself as a more recognized component of the entrepreneurial process and a distinctive domain of entrepreneurship research. Despite the progress made, there still exists important topics within entrepreneurial exit where scholarly understanding is scant. This special issue discusses new and open topics of research on entrepreneurial exit. Three papers examine three such topics including pricing intentions of exiting entrepreneurs, exit considerations among angel investors, and the relationship between exit and failure in new ventures.

Mobility and Entrepreneurship: Evaluating the Scope of Knowledge‐Based Theories of Entrepreneurship

Knowledge–based theories of entrepreneurship infer transfer of knowledge from the effect of labor mobility on entrepreneurial entry. Yet, simple selection or situational mechanisms that do not imply knowledge transfer may influence entrepreneurial entry in similar ways. We argue that the extent to which such alternative mechanisms operate, labor mobility predicts entry but not subsequent performance for entrepreneurs. Analyses of matched employee–employer data from Sweden suggest that high rates of geographical and industry mobility increase individuals’ likelihood of entrepreneurial entry but have no effects on their entrepreneurial performance. This indicates that the relationship between labor mobility and entrepreneurial entry do not necessarily imply knowledge transfer.

University Knowledge Spillovers & Regional Start-up Rates: Supply and Demand Side Factors

This paper investigates regional start-up rates in the knowledge intensive services and high-tech industries. Integrating insights from economic geography and population ecology into the literature on entrepreneurship, we develop a theoretical framework which captures how both supply- and demand-side factors mold the regional bedrock for start-ups in knowledge intensive industries. Using multi-level data of all knowledge intensive start-ups across 286 Swedish municipalities between 1994 and 2002 we demonstrate how characteristics of the economic and political milieu within each region influence the ratio of firm births. We find that economically affluent regions dominate entrepreneurial activity in terms of firm births, yet a number of much smaller rural regions also revealed high levels of start-ups. Knowledge spillovers from universities and firm R&D strongly affect the start-up rates for both knowledge intensive manufacturing and knowledge intensive services firms. However, the start-up rate of knowledge-intensive service firms is tied more strongly to the supply of highly educated individuals and the political regulatory regime within the municipality. This suggests that knowledge intensive service-start-ups are more susceptible to both demand-side and supply-side context than manufacturing start-ups. Our study contributes to the growing stream of research that explains entrepreneurial activity as shaped by contextual factors, most notably educational institutions that contribute to technology startups.