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2007b), 'Why are black-owned businesses less successful than whiteowned businesses? The role of families, inheritances, and business human capital', forthcoming Journal of Labor Economics
"... Using confidential microdata from the Characteristics of Business Owners survey, we examine why African American–owned busi-nesses lag substantially behind white-owned businesses in sales, prof-its, employment, and survival. Black business owners are much less likely than white owners to have had a ..."
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Cited by 49 (15 self)
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Using confidential microdata from the Characteristics of Business Owners survey, we examine why African American–owned busi-nesses lag substantially behind white-owned businesses in sales, prof-its, employment, and survival. Black business owners are much less likely than white owners to have had a self-employed family member owner prior to starting their business and less likely to have worked in that family member’s business. Using a nonlinear decomposition technique, we find that the lack of prior work experience in a family business among black business owners, perhaps by limiting their acquisition of general and specific business human capital, negatively affects black business outcomes. I.
Crowdfunding: Tapping the right crowd
, 2012
"... The basic idea of crowdfunding is to raise external finance from a large audience (the “crowd”), where each individual provides a very small amount, instead of soliciting a small group of sophisticated investors. The paper develops a model that associates crowdfunding with pre-ordering and price dis ..."
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Cited by 31 (1 self)
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The basic idea of crowdfunding is to raise external finance from a large audience (the “crowd”), where each individual provides a very small amount, instead of soliciting a small group of sophisticated investors. The paper develops a model that associates crowdfunding with pre-ordering and price discrimination, and studies the conditions under which crowdfunding is preferred to traditional forms of external funding. Compared to traditional funding, crowdfunding has the advantage of offering an enhanced experience to some consumers and, thereby, of allowing the entrepreneur to practice menu pricing and extract a larger share of the consumer surplus; the disadvantage is that the entrepreneur is constrained in his/her choice of prices by the amount of capital that he/she needs to raise: the larger this amount, the more prices have to be twisted so as to attract a large number of
DO THE STORIES THEY TELL GET THEM THE MONEY THEY NEED? THE ROLE OF ENTREPRENEURIAL NARRATIVES IN RESOURCE ACQUISITION
, 2007
"... Second re-submission to the Academy of Management Journal ..."
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Cited by 22 (0 self)
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Second re-submission to the Academy of Management Journal
The Role of Managers’ Political Networking and Functional Experience in New Venture Performance: Evidence from China’s Transition Economy
- Strategic Management Journal
, 1995
"... Drawing upon the resource-based view and transaction cost economics, this study aims to examine how various types of managerial resources (i.e., political networking and functional experience) can be beneficial to new ventures in a transition economy. Using survey data from a sample of new ventures ..."
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Cited by 22 (3 self)
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Drawing upon the resource-based view and transaction cost economics, this study aims to examine how various types of managerial resources (i.e., political networking and functional experience) can be beneficial to new ventures in a transition economy. Using survey data from a sample of new ventures in China’s high-technology industries, we demonstrate that managers ’ political networking and functional experience are positively related to new venture performance. We also find that the positive relationship between functional experience and new venture performance is moderated by the type of ownership of the ventures and the level of dysfunctional competition in their environments. Theoretical and managerial implications are discussed. Copyright 2007 John Wiley & Sons, Ltd. It has long been argued that new ventures expe-rience liabilities from their newness and have a high failure rate, because they often have limited resources and their stable links to clients, support-ers, and customers have not yet been established (Stinchcombe, 1965). The literature suggests that top managers play an important role in new ven-ture success (e.g., Eisenhardt and Schoonhoven, 1990; Keeley and Roure, 1990; McGee, Dowl-ing, and Megginson, 1995). Managers can gen-erally offer two types of resources: human cap-ital as indicated by their experience (Eisenhardt and Schoonhoven, 1990; McGee et al., 1995) and social capital as indicated by their external ties
Beyond the Single-Person, Single-Insight Attribution in Understanding Entrepreneurial Opportunities
"... This article helps develop the creativity perspective within entrepreneurship in two ways. First, it elaborates on the nature of opportunity as a creative product. Rather than viewing opportunities as single insights, it suggests that they are emerging through the continuous shaping and development ..."
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Cited by 20 (2 self)
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This article helps develop the creativity perspective within entrepreneurship in two ways. First, it elaborates on the nature of opportunity as a creative product. Rather than viewing opportunities as single insights, it suggests that they are emerging through the continuous shaping and development of (raw) ideas that are acted upon. Second, rather than attributing them to a particular individual, it highlights the contextual and social influences that affect the generation and shaping of ideas. This helps move entrepreneurship research beyond the single-person, single-insight attribution that currently permeates it.
Requisite expertise, firm reputation and status in venture capital investment allocation decisions
- Journal of Business Venturing
, 2007
"... expertise, firm reputation, and status in venture capital ..."
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Cited by 16 (2 self)
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expertise, firm reputation, and status in venture capital
Contextual factors surrounding reputational damage with potential implications for reputation repair
- Academy of Management Review
, 2009
"... We explore the contextual factors surrounding reputation damage and their potential implications for reputation repair. We propose a model that examines how (1) the multidimensional property of reputation, (2) organizational age, (3) the diversity of market segments served by the organization, and ( ..."
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Cited by 15 (3 self)
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We explore the contextual factors surrounding reputation damage and their potential implications for reputation repair. We propose a model that examines how (1) the multidimensional property of reputation, (2) organizational age, (3) the diversity of market segments served by the organization, and (4) third parties influence a firm’s perceived capability to cope with a reputation-damaging event and the external visibility of the event, which, in turn, determine the difficulty of the firm’s reputation-repairing activities. Firms compete on numerous levels in order to maximize profits and mitigate future risks, with reputation being one of the most impor-tant ways firms can compete for economic re-sources and differentiate themselves from oth-ers in uncertain environments (Allen, 1984; Horner, 2002). International executives have reported on the importance of building and
The effect of social capital in new venture creation: the Cambridge hightechnology cluster
- Strategic Change
, 2005
"... Earlier studies of clusters have been carried out at the level of companies and industry as units of analysis. In this paper we explore the Cambridge High technology cluster with individuals as the unit of analysis as they help to shed light on entrepreneurial processes, particularly on how their pr ..."
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Cited by 13 (0 self)
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Earlier studies of clusters have been carried out at the level of companies and industry as units of analysis. In this paper we explore the Cambridge High technology cluster with individuals as the unit of analysis as they help to shed light on entrepreneurial processes, particularly on how their prior work experience together has shaped many of the start-ups and spin outs from the University of Cambridge, local consulting organizations and other companies. Findings indicate that there are mini-clusters in the Cambridge area, both in hitechnology and in biotechnology, suggesting that the limited number of entrepreneurs in the cluster. This means that we might have to look at cluster formation in different ways. It would appear that the Pareto principle is alive and well. This paper explores serial entrepreneurship in the Cambridge high technology cluster using a family-tree and interlocking directorships approach.The paper has highlighted a mini-cluster of Cambridge entrepreneurs as the key influence on the success of the cluster growth process and their links between the companies as the structural and relational social capital of the cluster.
Is there an e–Bay for Ideas? Insights from online knowledge marketplaces
- European Management Review
, 2011
"... The market for knowledge has grown dramatically over the past decades. Extant work underscores the factors shaping market efficacy: (a) the cost of searching for innovative knowledge; (b) asymmetric-information between inventors and investors; and (c) the inherent difficulty in maintaining ownership ..."
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Cited by 8 (0 self)
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The market for knowledge has grown dramatically over the past decades. Extant work underscores the factors shaping market efficacy: (a) the cost of searching for innovative knowledge; (b) asymmetric-information between inventors and investors; and (c) the inherent difficulty in maintaining ownership over knowledge. Recently, market transactions have been taking place online, matching disperse owners (entrepreneurs or inventors), and seekers (investors or licensees), of knowledge. This phenomenon constitutes a sharp departure from past practices where transactions tend to materialize around one’s social circle (e.g., venture capitalists ’ social ties). We investigate the drivers of market efficacy in a setting where social ties are not available ex-ante, and identify alternative market mechanisms that emerge in such settings. Using novel hand-collected data for 30 online knowledge marketplaces, we find overwhelming evidence of adverse-selection-mitigating mechanisms (e.g., screening through upfront fees and disclosure requirements). We discuss theoretical explanations that are consistent with the observed mechanisms.
Small firms, big patents? Estimating patent value using data on israeli start–ups’ financing rounds
- European Management Review
, 2013
"... This paper considers the impact of the intellectual property (IP) system on the market for entrepreneurial finance. If the market for entrepreneurial finance were efficient, investors’ valuations of start-up firms should be independent of whether their patents ’ were pending or granted. However, dur ..."
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Cited by 4 (0 self)
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This paper considers the impact of the intellectual property (IP) system on the market for entrepreneurial finance. If the market for entrepreneurial finance were efficient, investors’ valuations of start-up firms should be independent of whether their patents ’ were pending or granted. However, during the pre-grant period, the need to disclose unprotected knowledge, asymmetric information and adverse selection could result in lower valuations. This study therefore estimates whether patent grant, which reduces uncertainty about the scope of the IP rights conferred, enhances start-up valuations by venture capitalists. Original panel data pertaining to 188 Israeli technological start-ups, who received more than 600 financing rounds, enter a fixed-effects analysis that controls for firms ’ unobserved heterogeneity. The results show a positive association between patent applications and firm valuations. The additional impact of granted patents is positive and significant for younger firms and during early financing rounds but small and insignificant for more mature start-ups. These findings suggest that, in the case of younger start-ups, uncertainty about patent scope, coupled with imperfections in the entrepreneurial finance market, adversely affect the relationship between entrepreneurs and investors. A more speedy examination process of younger firms ’ patent applications therefore could enhance their ability to attract financing. 3
