Institutions and Entrepreneurship Quality Chowdhury, Farzana; Audretsch, David B.; Belitski, Maksim
Entrepreneurship Theory and Practice,
01/2019, Volume:
43, Issue:
1
Journal Article
Peer reviewed
Open access
Entrepreneurship contributes importantly to the economy. However, differences in the quality and quantity of entrepreneurship vary significantly across developing and developed countries. We use a ...sample of 70 countries over the period of 2005–2015 to examine how formal and informal institutional dimensions (availability of debt and venture capital, regulatory business environment, entrepreneurial cognition and human capital, corruption, government size, government support) affect the quality and quantity of entrepreneurship between developed and developing countries. Our results demonstrate that institutions are important for both the quality and quantity of entrepreneurship. However, not all institutions play a similar role; rather, there is a dynamic relationship between institutions and economic development.
The use of both research and development (R&D) and knowledge spillovers has been identified as the source of relative innovation underperformance in Europe vis-à-vis the United States. In this paper, ...we investigate R&D and knowledge spillovers at the firm level to evaluate the extent to which they complement innovation and firm productivity. We use data on a large unbalanced panel of 9213 UK firms constructed from six consecutive waves of a community innovation survey, an annual business registry survey and a business enterprise research and development survey during 2002–2014. We estimate the knowledge spillover-augmented version of the CDM model of R&D, innovation, and productivity to find that complementarities between R&D and knowledge spillovers are strongly associated with firm productivity rather than firm innovation. R&D is important for both innovation and productivity, while knowledge spillovers are more important than R&D for firm productivity. We also explore the differences between returns to R&D and knowledge spillovers across three distinctive innovation strategies.
The existential threat to small businesses, based on their crucial role in the economy, is behind the plethora of scholarly studies in 2020, the first year of the COVID-19 pandemic. Examining the 15 ...contributions of the special issue on the “Economic effects of the COVID-19 pandemic on entrepreneurship and small businesses,” the paper comprises four parts: a systematic review of the literature on the effect on entrepreneurship and small businesses; a discussion of four literature strands based on this review; an overview of the contributions in this special issue; and some ideas for post-pandemic economic research.
Plain English Summary
Responding to COVID-19 involves not just shielding small business jobs, supporting entrepreneurship, and raising government debt but also creating productive entrepreneurship and resilient location-specific entrepreneurial ecosystems. The COVID-19 pandemic is an unprecedented challenge for small businesses that also brings new market opportunities. The papers in this special issue of Small Business Economics Journal aim to shed light on the economic effects of the COVID-19 pandemic by looking at the macro- and microeconomic effects on entrepreneurship and small businesses as well as the role of financial support policies and well-being in both developed and developing countries. Future research should focus on the role of digitization and financial mechanisms supporting small businesses during crises.
This article provides and tests a theoretical framework with a multilevel (country–city) nested model to analyze the relationship between national business regulations (NBRs) and city level ...entrepreneurship. While public interest theory predicts a positive relationship between NBR and city level entrepreneurship, public choice theory predicts the opposite, a negative relationship. Based on multilevel analysis for a matched country–city panel of 228 cities across 20 European countries for the years 2004 to 2009, the empirical evidence from panel data estimation explains how changes in NBRs influence changes in city level entrepreneurial activity over time.
Entrepreneurship activity varies significantly across cities. We use the novel data for 1,652 ecosystem actors across sixteen cities in nine developing and transition economies during 2018-2019 to ...examine the role that institutional context plays in facilitating the productive entrepreneurship and reducing the unproductive entrepreneurship. This study is the first to develop and test a model of multi-dimensional institutional arrangements in cities. It demonstrates that not just that institutions matter in shaping the entrepreneurship ecosystem in cities, but in particular those institutional arrangements enhancing the productive and reducing unproductive entrepreneurship. Our findings suggest that differences between normative, cognitive, and regulatory pillars are associated with variance in both types of entrepreneurship in cities. For the formation of productive and high-growth entrepreneurs, all three pillars of institutional arrangement matter. For unproductive entrepreneurship normative pillar of institutions and the role of civil society matter most. This study has theoretical and practical implications for entrepreneurship ecosystem policy in cities.
Government size, corruption, and tax policy can influence allocation towards necessity or opportunity-driven entrepreneurship. Using a comparative multi-source sample across 52 countries during ...2005–2015, we apply a mixed-process estimation of the simultaneously unrelated system of equations and unpack these heterogeneous and complex effects. Interestingly, our results show that the influence of tax policy and corruption on necessity and opportunity entrepreneurship depends on government size. Our results hold for numerous robustness analyses.
Plain English summary
Institutions matter for the choice of opportunity and necessity-driven entrepreneurship. Government size, the level of corruption, and tax policy directly affect entrepreneurs’ motivation and incentives. We study 52 countries during 2005–2015 to find out to what extent tax rate, corruption, and a range of government expenditure change the allocation of necessity and opportunity entrepreneurship. Our main implications are for (1) Research: Formal and informal institutions need to be considered when studying entrepreneurship allocation, particularly in an emerging and developing country context. Results suggest that the impact of the same institutional settings and informal institutions such as corruption on necessity and opportunity entrepreneurship is not uniform in size and scope and have different magnitude. The effect of government expenditure on necessity and opportunity entrepreneurship is not ubiquitous. (2) Management: The broader institutional context affects allocation of entrepreneurship, and potential entrepreneurs can consider how corruption in particular can affect them. (3) Policy: Policymakerscan measure the extent to which opportunity and necessity entrepreneurship are likely to change, when they make changes to tax policy, resources for public spending, and take anti-corruption measures.
This study investigates the role of female ownership, and its moderating role in shaping the effect of firm age and access to finance on firm growth. We use a sample of 7203 firms in Bangladesh, ...India and Pakistan and a mixed effects model, where both firm and regional characteristics are included. First, we test how women’s ownership affects two measures of firm growth (employment growth and Birch Index). Second, we investigate how women’s ownership influences the relationship between firm age and access to finance for firm growth. Our results indicate that gender is an important determinant of firm growth, but this is closely tied to firm age, access to finance, and varies with region and country. We conduct a robustness check using firm productivity instead of growth and we find largely opposite results for productivity compared to employment growth ownership. We also identify questions that emerge from our findings for managers and policy makers interested in women-owned firms.
This study establishes and empirically explores the relationship between knowledge, cultural diversity and various entrepreneurial outcomes across European cities in 2008–2010. We demonstrate that ...the mechanism of knowledge spillover entrepreneurship is contextual and contend that cultural diversity and knowledge have differential impact on entrepreneurial outcomes across cities and countries. Cities with high cultural diversity provide more opportunities for entrepreneurship in sectors where technology and knowledge play more important role. While in technology-based sectors, we observe a decline in employment, in cities where cultural diversity is moderately high, this effect is counteracted by an increase in demand for skilful labour that is more concentrated in culturally diverse contexts. Implications for regional and national policy makers and international entrepreneurs are offered.
Start-ups, Innovation and Knowledge Spillovers Audretsch, David Bruce; Belitski, Maksim; Caiazza, Rosa
The Journal of technology transfer,
12/2021, Volume:
46, Issue:
6
Journal Article
Peer reviewed
Open access
The knowledge spillover theory of entrepreneurship (KSTE) seeks to explain the mechanisms of how uncommercialized knowledge can be turned into new to market products. This paper uses a large ...unbalanced panel of 16,542 UK firms constructed from six consecutive waves of a community innovation survey and annual business registry survey during 2002–2014 to test the differences in the returns to knowledge spillover for innovation between start-ups and incumbent firms. The theoretical, managerial, and policy implications of the study are discussed.
While the disruptive potential of knowledge has been receiving growing attention in small business economics and entrepreneurship research and application over the last decade, its boundaries and ...frontiers, including technological, spatial, institutional, cognitive, and cultural has not been fully explored. Here we present some reflections and a collection of papers on the role of knowledge investment across different cultural, institutional, geographical, and industrial contexts for this emerging area in entrepreneurship and management research. While being careful of the swift changes in knowledge creation, dissemination, and testing in a digital age, geography of knowledge diffusion, knowledge embeddedness into industries and places, skills, and strategies continue to change the way firms assimilate, absorb, create, and transfer knowledge. In this special issue, we extend our knowledge boundaries through knowledge collaboration theory, resource theory, open innovation theory, knowledge and creativity spillover of entrepreneurship theory, economic geography, and creative class and institutional theories. We give researchers and practitioners future directions for a very relevant and fast-growing area of entrepreneurship and small business research.
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