FIRM FORMATION AND ECONOMIC FREEDOM: A LOOK AT THE EFFECT OF REGULATION AND FISCAL POWER ACROSS STATES

This paper looks at the effect of economic freedom, a cost of investment for entrepreneurial action, on the amount of firms established across states and years. My hypothesis is that economic freedom has a positive effect on the number of firms that are established in a given year. My assumption for why this is the case is because greater economic freedom implies that costs of investing in a new firm will decrease thereby increasing the incentive to create new firms. I use data from the Mercatus Institutes Freedom index and the United States Census Bureau for firm formation and economic freedom, respectively. I use data that is across states for 2002, 2008, and 2010 I find that economic freedom has a statistically significant economic effect on the number of firms established

New Design Thinking Tools for the Next Generation of Designer-Entrepreneurs

AbstractThis paper analyses a new phenomenon to date poorly researched both in entrepreneurship and Design Thinking literature: Design-Intensive Start-ups (DIS), i.e. start-ups that focus on design as primary source for their development.Two main questions underpin the study: what are the specific features that describe design-intensive start-ups? Which are possible conceptual tools supporting designers in the creation of their own design-based enterprises?A multiple case studies protocol was adopted to investigate the first question. According to our results, DIS diverge from New-Technology Start-ups on several dimensions, and represent an alternative entrepreneurial model, which is not supported by extant literature. Currently, there are no tools helping designers to become entrepreneurs. Therefore, we developed a set of Design Thinking tools addressing the specific traits of DIS in the steps of their creation and evolution. Such tools are intended to support the decision-making process of designers-ent..

External Ventures: Why Firms Don't Develop All Their Inventions In-house

In this paper we consider why firms sometimes choose an external development path for their own inventions, despite the costs of contracting and the risks of opportunistic behaviour and expropriation. We model the probability that firms adopt an external development strategy using survey data from over 2700 Australian inventions. Our results indicate that firms pursue external development strategies in response to perceived project-level risk about the technical feasibility of the invention, especially when suported by confidence in the patent system. Our findings also confirm that small to medium size enterprises, highly leveraged large firms and firms with few co-specialized assets are more likely to pursue an external development strategy.Outsourcing R&D, managing technological risk, licensing innovation

The Patenting Behavior of Academic Founders

This study explores why academic entrepreneurs patent their inventions before and after creating a firm. Drawing on start-up data combined with patent data, we specifically examine the impact of five, relatively under-researched factors (scientific field, pace of technological development, technological uncertainty, entrepreneurial orientation, and patent effectiveness. The study shows that some scientific fields, technological uncertainty, and patent effectiveness are positively related to patent propensity, both before and after founding. The effects of pace of technological development and entrepreneurial orientation were timespecific. Our study suggests that patenting by academic entrepreneurs is driven by special rationales and that prior research on full-time scientists and established firms does not necessarily generalize to them. We discuss the implications of our findings both in terms of contribution to the current literature and technology transfer policies. --academic patenting

Value chain envy: explaining new entry and vertical integration in popular music

The desirability of establishing a value chain at a particular stage in a value system can be considered to depend on the relation between the value that can be created and the value that can be captured at that particular stage. Value chain envy motivates firms to invade the more desirable stages of the value system, either through new entry or vertical integration. The feasibility of establishing a value chain, however, can be considered to depend on the efficacy of the means to value protection at that particular stage. The concepts of value creation, capture, and protection within value systems are employed to analyze recent developments in the recorded music industries, particularly those affecting the stage of music publishing. Over the course of the 20th century the value created at the stage of music publishing diminished steadily, while the value captured remained high, thereby giving rise to value chain envy. On the basis of the proposed theoretical framework one could expect these developments to trigger strategic responses to remedy this value chain envy. However, most actors, except the major record companies, were unable to do so until new information communication technologies were introduced. Industry level data do indeed corroborate that vertical integration by major record companies was followed, from the mid-1990’s onwards, by a significant increase in the prevalence rate of newly founded SMEs in the music publishing industry in the Netherlands. These newly founded firms are testimony to new entry or vertical integration by musician-entrepreneurs, thereby providing support for the advanced arguments.

Optimal project rejection and new firm start-ups

Entrants are typically found to be more innovative than incumbent firms. Furthermore, these innovative ideas often originate with established firms in the industry. Therefore, the established firm and the start-up firm seem to select different types of projects. We claim that this is the consequence of their optimal project allocation mechanism, which depends on their comparative advantage. The start-up firm may seem more "innovative" than the established firm because the comparative advantage of the start-up firm is to commercialize "innovative" projects, i.e. projects that do not fit with the established firms' existing assets. Our model integrates various facts found in the industrial organization literature about the entry rate, firm focus, firm growth, industry growth and innovation. We also obtain some counter-intuitive results, such as that a reduction in the cost of start-ups may actually slow down start-ups, or that the firm may voluntarily give away the property rights to the inventions discovered within the firmManagement; Innovation management;

Institutional Influences on strategic entrepreneurial Behaviours

The purpose of this paper is to examine the existence of cross-level moderating effects between national appropriability conditions, individual level predictors and entrepreneurial growth aspirations. We test a multi-level model that connects the determinants of strategic resource allocation decisions at the individual level with the strength of the intellectual property rights regime at the national level. The results suggest that the strengths of the intellectual property regime will moderate negatively the relationship between an individual's education and her growth aspirations and moderate positively the relationship between an individual's income and her growth aspirations. The findings support claims that strategic entrepreneurial behavior cannot be fully understood without giving attention to the context in which those behaviors are observed.strategic entrepreneurship, multi-level analysis, intellectual property protection, growth aspirations

Technology-based Transformation of Digital Ecosystems: The DETT Framework

This article develops the Digital Ecosystem Technology Transformation (DETT) framework for explaining technology-based transformation of digital ecosystems. In digital ecosystems, the fusion relation between business and technology means that the decision of technical compatibility of the offering is also the decision of how to position the firm relative to the coopetive relations that characterize business ecosystems. The DETT framework depicts ecosystem transformation as distributed and emergent from micro-, meso-, and macro-level coopetition, based on interrelated business and technology ecosystems positioning. As such, the DETT framework consists an alternative to the existing explanations of digital ecosystem transformation as the rational management of one central actor balancing ecosystem tensions. We illustrate the use of the framework by a case study of technology-based transformation in the digital payment ecosystem

Technology Transfer in Public University-Industry Cooperation Programmes. Proposal of a Model based on empirical evidence.

Technology transfer has been defined as goal-orientated intentional interaction between two or more social entities during which the stock of technological knowledge remains stable or is increased through the transfer of one or more components of the technology. One of the recognised problems in the innovation and technology management in Spain is related to the transfer of technology and knowledge between university and industry. The challenges faced by public innovation policies are correlated to an improvement in the transfer of knowledge and technology from universities and research centres to industry; hence the fact that some European authors have emphasised the need to provide this activity with more visibility and prestige, being this one of the new directions of national and European Union technology policies. The objective of this paper is to contribute to the understanding of the underlying factors in the technology transfer process from universities to industry dealing with robotics and production technologies. It aims to provide answers to a number of questions related to success facilitating factors and barriers which hinder the transfer of technology and its ultimate impact on industry. Furthermore, the paper seeks to construct a model which will explain the differences between both transfer processes: those taking place in either an industry or a university context. The methodology for this research is based on a survey carried out on a sample of public research organisations (universities and R&D centres) and firms participating in two types of projects. The first group corresponds to R&D projects funded by the Interministerial Science and Technology Commission of Spain. These projects were coordinated by universities, with the participation of firms and R&D centres. Second group was composed of projects funded by the Centre for Industrial Technology Development (CDTI). These projects were coordinated by firms, with the participation of universities and R&D centres. The survey, which was completed by 250 organisations, covered a number of aspects related to the attitudes of the participant, questions related to the technology, the barriers encountered, the technology transfer mechanisms and the final impact of the programme. As conclusions, differences between both groups are highlighted. For universities and R&D centres, the relevant variables are therefore the initial exploitation objectives, legal barriers, access to new knowledge, relevance of knowledge acquisition and fulfilment of these objectives. In other words, the aspects relating to knowledge are clear determinants in the project. For firms, the relevant variables are therefore the initial industrial exploitation objectives, the relevance of knowledge acquisition objectives and the fulfilment of objectives related to innovation, the commercial exportation of results, the transfer of technology into patents and licences, engineering activities and risk sharing. In firms group, those aspects related to innovation and the exploitation and transfer of results are shown as determinants in the project. Finally, when considering the barriers or obstacles to fulfilling project objectives, it can be concluded that only the technological aspects are shown to be important and that there is no significant difference between the opinion of firms and universities