Small Business Economics

http://link.springer.com/journal/11187

List of Papers (Total 180)

Industrial policy evaluation in the presence of spillovers

The shortage of studies on spatial spillovers of capital subsidy policies is rather surprising, considering that such policies are usually designed to generate spatial externalities. We propose a new framework that allows positive agglomeration effects to be contrasted with the negative cross-sectional substitution and the crowding-out effect. The global evaluation of the ATT and...

Should securities regulation promote equity crowdfunding?

In this paper, we show that too strong investor protection may harm small firms and entrepreneurial initiatives, which contrasts with the traditional “law and finance” view that stronger investor protection is better. This situation is particularly relevant in equity crowdfunding, which refers to a recent financial innovation originating on the Internet that targets small and...

Investigating a neglected part of Schumpeter’s creative army: what drives new-to-the-market innovation in micro-enterprises?

Schumpeterian arguments related to creative destruction place small, entrepreneurial firms at the centre of the innovation process. The exclusion of micro-enterprises (with less than 10 employees) from most innovation surveys means, however, that we know relatively little about innovation among this group of firms. Here, using new survey data on a thousand micro-enterprises, we...

The wisdom of the crowd in funding: information heterogeneity and social networks of crowdfunders

Crowdfunding has enabled large crowds to fund innovative projects. This type of funding might tap into the wisdom of crowds who were previously disconnected from the funding process. We distinguish between in-crowd and out-crowd funders (with and without ties to project creators) in order to test for heterogeneity in their information use. Based on the analysis of a large-scale...

Gender differences in the contribution patterns of equity-crowdfunding investors

This paper is an exploratory attempt to understand gender-related differences in the behavior of investors in firms seeking equity financing. Using data from the Swedish equity crowdfunding platform FundedByMe, we find that female investors are less likely to invest in the equity of firms that are younger and high tech and have a higher percentage of equity offerings. This...

New players in entrepreneurial finance and why they are there

The landscape for entrepreneurial finance has changed strongly over the last years. Many new players have entered the arena. This editorial introduces and describes the new players and compares them along the four dimensions: debt or equity, investment goal, investment approach, and investment target. Following this, we discuss the factors explaining the emergence of the new...

Effects of foreign acquisitions on R&D and high-skill activities

Using Swedish microdata, we find no evidence for the concerns circulating in the public debate that foreign acquisitions lead to reductions in both R&D expenditures and high-skilled activities in targeted domestic firms for either MNEs or non-MNEs. Previous studies have only focused on larger firms. In this paper, we are able to study the impact on smaller firms (fewer than 50...

The entrepreneur’s experiential diversity and entrepreneurial performance

This study examines the relationship between the entrepreneur’s experiential diversity and entrepreneurial performance. First, we argue that entrepreneurial and industry experiences are positively associated with performance. Second, by combining Lazear’s jacks-of-all-trades theory with the cognition and learning literatures, an inverted U-shaped experience diversity-performance...

Drivers of SME performance: a holistic and multivariate approach

To examine the drivers of small- and medium-sized enterprise (SME) growth, we adopt a holistic multivariate modelling approach, integrating macroeconomic determinants with the internal (firm characteristics and firm strategy) drivers more commonly investigated in firm growth studies. Utilising such an extended set of variables addresses a gap in the extant firm growth literature...

Prospect theory and the effects of bankruptcy laws on entrepreneurial aspirations

We apply prospect theory to explain how personal and corporate bankruptcy laws affect risk perceptions of entrepreneurs at time of entry and therefore their growth ambitions. Previous theories have reached ambiguous conclusions as to whether countries with more debtor-friendly bankruptcy laws (i.e. laws that are more forgiving towards debtors in bankruptcy proceedings) are likely...

Entrepreneurship and growth: lessons from an intellectual journey

This lecture is the story of an intellectual journey, that of elaborating a new—Schumpeterian—theory of economic growth. A theory where (i) growth is generated by innovative entrepreneurs; (ii) entrepreneurial investments respond to incentives that are themselves shaped by economic policies and institutions; (iii) new innovations replace old technologies: in other words, growth...

Pricing shares in equity crowdfunding

We analyze the pricing of cash flow rights in start-up companies using a unique data set of 44 equity crowdfunding campaigns. Our sample consists of 499 backers who invested during the period from November 6, 2011, to March 25, 2014, on the German equity crowdfunding portal Innovestment. In contrast with all other European equity crowdfunding portals, Innovestment runs a multi...

Philippe Aghion: recipient of the 2016 Global Award for Entrepreneurship Research

Professor Philippe Aghion is the 2016 recipient of the Global Award for Entrepreneurship Research, consisting of 100,000 Euros and a statuette designed by the internationally renowned Swedish sculptor Carl Milles. He is one of the most influential researchers worldwide in economics in the last couple of decades. His research has advanced our understanding of the relationship...

The impact of habitual entrepreneurial experience on new firm closure outcomes

In this paper, we argue that it is difficult for habitual entrepreneurs to use their experiential knowledge to develop a more viable new firm than novice entrepreneurs. Hindered by the difficulty of disentangling how actions lead to outcomes in low predictive environments such as new firm settings; hampered by the novelty and uncertainty of new firm closure; and misguided by...

Risk, balanced skills and entrepreneurship

This paper proposes that risk aversion encourages individuals to invest in balanced skill profiles, making them more likely to become entrepreneurs. By not taking this possible linkage into account, previous research has underestimated the impacts of both risk aversion and balanced skills on the likelihood individuals choose entrepreneurship. Data on Dutch university graduates...

R&D profitability: the role of risk and Knightian uncertainty

This paper provides the first empirical attempt of linking firms’ profits and investment in R&D revisiting Knight’s (Risk, uncertainty and profit, Hart, Schaffner & Marx, Boston, 1921) distinction between uncertainty and risk. Along with the risky profit-maximising scenario, identifying a second, off-setting, unpredictable bias that leads to heterogeneous returns to R&D...

Company metamorphosis: professionalization waves, family firms and management buyouts

We explore the process of professionalization pre- and post-buyout (MBO) or buyin (MBI) of former private family firms using longitudinal evidence from six UK family firms undergoing an MBO/I in 1998. Professionalization behaviour was monitored up to 2014. Previous studies have conceptualized professionalization as a threshold to be attained. We demonstrate that...

Entrepreneurial practices in research-intensive and teaching-led universities

In recent years, there has been increased pressure on universities to deliver on their third mission. In the UK context, universities are encouraged to explicitly assume responsibility for facilitating economic growth, with a particular emphasis being given to the role played by the research-led institutions. Using a broad definition of entrepreneurial practices in universities...

My first employee: an empirical investigation

The challenge for solo entrepreneurs to add their first employee is arguably the single biggest growth event facing any growing firm. To understand how this event affects performance, and the antecedents of hiring, we analyse Danish matched employer–employee data. Those who hire enjoy superior sales outcomes in subsequent years, while the dispersion in profits increases...

Leveraging knowledge as a competitive asset? The intensity, performance and structure of universities’ entrepreneurial knowledge exchange activities at a regional level

Universities are no longer considered to be isolated islands of knowledge, but as institutions increasingly engaged with a range of external partners through entrepreneurial activities. This paper examines the associations between the intensity and performance of knowledge exchange activities undertaken in UK universities with non-academic actors. Drawing on data concerning the...

Is there a Spirit of Overseas Chinese Capitalism?

The economic miracle of the Chinese Diaspora in Southeast Asia has been attributed to their unique economic culture forged from Confucian thought and the emigration experience. However, this Spirit of Overseas Chinese Capitalism (SOCC) hypothesis, based largely on qualitative research, has not been validated through quantitative work. This paper provides, for the first time...

Capital structure of Chinese listed SMEs: an agency theory perspective

Prior work examining the antecedents of capital structure for small and medium-sized enterprises in emerging markets is limited. This paper sheds light on how the corporate governance mechanisms adopted by firms on the newly established Growth Enterprise Market (GEM) in China influence their use of debt. We find that the financial leverage of GEM firms is positively influenced by...

Are women graduates jacquelines-of-all-trades? Challenging Lazear’s view on entrepreneurship

This study challenges the basic reasoning behind Lazear’s theory on entrepreneurship (2005). Based on the key motive of maximizing one’s lifetime income, Lazear posits that individuals with a balanced set of skills should have a higher probability of being self-employed. His “Jack-of-all-trades” hypothesis presumes that entrepreneurs need sufficient knowledge in a variety of...

Predicting new venture survival and growth: Does the fog lift?

This paper investigates whether new venture performance becomes easier to predict as the venture ages: does the fog lift? To address this question we primarily draw upon a theoretical framework, initially formulated in a managerial context by Levinthal (Adm Sci Q 36(3):397–420, 1991) that sees new venture sales as a random walk but survival being determined by the stock of...

Public policy to promote entrepreneurship: a call to arms

We debate the motivation for and effectiveness of public policies to encourage individuals to become entrepreneurs. Reviewing established evidence we find that most Western world policies do not greatly reduce or solve any market failures but instead waste taxpayers’ money, encourage those already intent on becoming entrepreneurs, and mostly generate one-employee businesses with...