ACE research briefing paper 006 : Anatomy of new business activity in Australia: Some early observations from the CAUSEE Project

The Comprehensive Australian Study of Entrepreneurial Emergence (CAUSEE) is the largest study of new firm formations ever undertaken in Australia . In a nutshell, CAUSEE aims to uncover the factors that initiate, hinder and facilitate the process of emergence and development of new, independent firms. Through contacts with a random sample of 30,000 Australian households the project has identified and interviewed close to 600 founders of on-going business start-ups – Nascent Firms; i.e., efforts that are under way but have not yet become operating businesses – as well as more than 500 owner-managers of Young Firms – that is, firms that started trading in 2004 or later. Founders of these firms have been taken through a comprehensive telephone interview about the state and development of their start-ups. The project will follow the development of these nascent and young firms over a four year period. This report represents a first release of selected, descriptive findings from the first wave of data analysis. Although some reported findings may have important implications it should be realised that what is presented here represents just a glimpse of the rich academic and practice-orientated output that is expected from the project

Early stage start-ups: Evidence from the Comprehensive Australian Study of Entrepreneurial Emergence (CAUSEE)

In this chapter, the picture of Australian small business is supplemented by using data from the Comprehensive Australian Study of Entrepreneurial Emergence (CAUSEE) . This data tracks large numbers of on-going business start-ups over time. The Australian Centre of Entrepreneurship Research at Queensland University of Technology collected data in four annual waves. (Wave 1 to Wave 4) from 2007 to 2011. CAUSEE allows the analysis of entrepreneurial entrants at two stages of development, i.e. nascent and young firms. Nascent firms are defined as firms in the process of being created, but not yet established in the market, and young firms are defined as having been operational for up to four years. An analysis of nascent firms provides unique insights, as no other known Australian database captures and follows the development of business start-ups at the pre-operational stage. In addition, the project captured judgment over samples of high-potential start-ups

Encountered Problems and Outcome Status in Nascent Entrepreneurship

The relationship is investigated between outcome status and encountered problems in the business start-up process. Contrary to expectations, we find that starters do not differ from quitters in number and type of problems encountered, and that problems encountered generally do not affect outcome status. This Dutch research uses a design that is comparable to the U.S. PSED (Panel Study of Entrepreneurial Dynamics) in which a sample of 414 nascent entrepreneurs were followed over a three year period.encountered-problems;nascent-entrepreneurship;outcome-status

Better means more: property rights and high-growth aspiration entrepreneurship

This paper contrasts the determinants of entrepreneurial entry and high-growth aspiration entrepreneurship. Using the Global Entrepreneurship Monitor (GEM) surveys for 42 countries over the period 1998-2005, we analyse how institutional environment and entrepreneurial characteristics affect individual decisions to become entrepreneurs and aspirations to set up high-growth ventures. We find that institutions exert different effects on entrepreneurial entry and on the individual choice to launch high-growth aspiration projects. In particular, a strong property rights system is important for high-growth aspiration entrepreneurship, but has less pronounced effects for entrepreneurial entry. The availability of finance and the fiscal burden matter for both

Performance and strategy:simultaneous equations analysis of long-lived firms

A simultaneous equations model of performance, strategy and size is tested using fieldwork evidence on long-lived firms in Scotland. Estimation is by I3SLS, with correction for sample selection bias. The contributions of this paper are that it: (a) grounds estimation on fieldwork evidence; (b) calibrates performance and competitive strategy; (c) tests and models endogeneity; and (d) computes robust trade-off elasticities between firm size and performance. It shows how this trade-off provides the entrepreneur with two strong incentives: (i) to seek greater efficiency typically by an increase in the human capital of the ‘core’ workforce; (ii) to achieve higher levels of performance by adopting more diverse competitive strategies

Thinking about growth : a cognitive mapping approach to understanding small business development

School of Managemen

Better Means More: Property Rights and High-Growth Aspiration Entrepreneurship

This paper contrasts the determinants of entrepreneurial entry and high-growth aspiration entrepreneurship. Using the Global Entrepreneurship Monitor (GEM) surveys for 42 countries over the period 1998-2005, we analyse how institutional environment and entrepreneurial characteristics affect individual decisions to become entrepreneurs and aspirations to set up high-growth ventures. We find that institutions exert different effects on entrepreneurial entry and on the individual choice to launch high-growth aspiration projects. In particular, a strong property rights system is important for high-growth aspiration entrepreneurship, but has less pronounced effects for entrepreneurial entry. The availability of finance and the fiscal burden matter for both.entrepreneurship, high-growth aspiration entrepreneurship, start-ups, property rights

High-growth firms: introduction to the special section

High-growth firms (HGFs) have attracted considerable attention recently, as academics and policymakers have increasingly recognized the highly skewed nature of many metrics of firm performance. A small number of HGFs drives a disproportionately large amount of job creation, while the average firm has a limited impact on the economy. This article explores the reasons for this increased interest, summarizes the existing literature, and highlights the methodological considerations that constrain and bias research. This special section draws attention to the importance of HGFs for future industrial performance, explores their unusual growth trajectories and strategies, and highlights the lack of persistence of high growth. Consequently, while HGFs are important for understanding the economy and developing public policy, they are unlikely to be useful vehicles for public policy given the difficulties involved in predicting which firms will grow, the lack of persistence in high growth levels, and the complex and often indirect relationship between firm capability, high growth, and macro-economic performance

The post-investment impact of Business Angels upon their investee companies.

Awarded Small Business Service Award for Best ‘Newcomer’ Paper (£1k). Nominated for Best Paper, ‘Venture Capital and Micro-Finance for SB’ Track, ISBE 2006. Original approach measuring BA impact; employing new indicators (efficiency, survival, profile). Emphasises strategic activities and further financing impact but negative impact of BAs becoming ‘employed’ with investees

Institutional environment, innovative entrepreneurial entry and venture capital financing

We analyse the determinants of high growth expectations entrepreneurial entry (HGE) using individual data drawn on working age population, based on the Global Entrepreneurship Monitor (GEM) surveys for the 1998-2004 period. Individual level explanatory variables are combined with country-level factors. Our results suggest that availability of venture capital and intellectual proper rights protection are strong predictors of HGE. In addition, we also find that innovative start-ups are associated with highest growth expectations in countries with extensive supply of venture capital and strongest intellectual property rights. Once we introduce venture capital, we detect no significant effects of other elements of financial systems on high-powered entry