Lawrence A. Plummer

Agency and Governance in Strategic Entrepreneurship

This paper aims to highlight the opportunity to contribute to our understanding of strategic entrepreneurship by exploring the construct through the lens of agency theory. In particular, we claim a fundamental link between a new ventures control of critical resources and the distribution of equity between the principal and agent. According to agency theory, assigning top executives ownership in the firm provides arrangements that are compatible with the incentives of the owners of the firm. This paper suggests that agency theory has special relevance when considered in a strategic entrepreneurship context. This is because the function of managers in entrepreneurial new ventures is fundamentally different from their counterparts in large established, incumbent corporations. While both types of managers have to provide managerial and organizational expertise, managers in entrepreneurial new ventures have an additional function that is essential to the competitive advantage and performance of the new venture—providing knowledge and human capital, which, in many cases, is intrinsically linked to the capital resources of the new venture. Our framework is tested using patent ownership as a proxy for both relationship–specific investments and indispensable human capital of the top manager of the new venture. The empirical results support the main hypotheses posited by the entrepreneurial governance model. In particular, patent ownership of the top manager significantly increases the percentage of equity held, while the number of patents held by the firm significantly decreases the percentage of ownership.

Entrepreneurship Research (1985–2009) and the Emergence of Opportunities

In order to identify shifts and trends in the entrepreneurship literature over the past 25 years, we conduct a bibliometric study involving new data from the 2000–2009 era building on 1985–1999 data to study entrepreneurship research published in the major management journals. Our findings indicate that entrepreneurship articles now have a significant presence in the mainline “A” journals. Furthermore, we contend that this presence signals legitimacy and, more importantly, a growing exchange among researchers studying entrepreneurship. The area of entrepreneurial opportunities and nascent ventures is showing signs of growth and in our view represents an area where entrepreneurship is contributing back to the broader research conversation in organizational studies.

Localized Competition in the Knowledge Spillover Theory of Entrepreneurship

The knowledge spillover theory of entrepreneurship predicts that the relationship between new knowledge and entrepreneurial activity depends on the commercialization efficiency of incumbents. We extend the theory to contend that localized competition impedes entrepreneurial activity by reducing the incentive to exploit new knowledge, and we test this conjecture using spatial panel estimation. We find a positive relationship between new knowledge and entrepreneurial activity, which is negatively moderated by localized competition. We also find that greater agglomeration counteracts the moderating effect localized competition has on the relationship between new knowledge and entrepreneurial activity.

Spatial Dependence in Entrepreneurship Research: Challenges and Methods

Measures used in entrepreneurship research are often subject to spatial dependence. Spatial dependence renders ordinary least squares (OLS) estimation inappropriate because the estimates will be biased, inconsistent, and/or inefficient. The aims of this article are (a) to demonstrate how spatial dependence is especially problematic for entrepreneurship research and (b) to arm researchers with spatial modeling techniques that are more appropriate for such analysis. As such, not only will this article illustrate how to incorporate spatial dependence explicitly into the linear regression model, it also discusses how these techniques make it possible to explore and locate areas with particularly high levels of spatial dependence (i.e., hot spots). These techniques, although new to the management literature, are well known in both the regional science and geography literatures and are rapidly diffusing to economics, sociology, and related social sciences.

The Geography of Entrepreneurship

From the earliest records of ancient civilizations to present-day accounts of the knowledge-economy, the geographic concentration of people and their activity has been and always will be a constant feature of human existence. In broad historical terms, the concentration of people in villages, towns, and cities has served many cultural, security, and commercial ends (Kotkin, 2005). Dense pockets of people enable a shared culture, ease enforcement of the rule of law, facilitate a common defense, allow efficient economic exchange, and free people to acquire specialized skills and knowledge. In the modern era, the defensive walls of ancient cities have given way to the provision of public goods and the operation of local markets open to all to buy and sell consumer and commercial necessities.

Penetrating the Knowledge Filter in the Rust Belt

A new model of economic growth introduces the knowledge filter between new knowledge and economically useful knowledge. It identifies both new ventures and incumbent firms as the mechanisms that penetrate the knowledge filter. Recent empirical work has shown that new firms are more proficient at penetrating the knowledge filter than are incumbent firms; however, the analysis has only examined expanding economies and has relied on purely cross-sectional regression methodologies. This study explores the role of new and incumbent firms in penetrating the knowledge filter utilizing recent developments in spatial panel estimation techniques to provide a more robust set of findings. The results suggest those new firms are more proficient at penetrating the knowledge filter in declining and growing regions alike.