Testing for complementarity and substitutability in the case of multiple practices.

Recent empirical studies of firm-level performance have been concerned with establishing potential complementarity between more than two organizational practices. These papers have drawn conclusions on the basis of potentially biased estimates of pair-wise interaction effects between such practices. In this paper we develop a consistent testing framework based on multiple inequality constraints that derives from the definition of (strict) supermodularity as suggested by Athey and Stern (1998). Monte Carlo results show that the multiple restrictions test is superior for performance models with high explanatory power. If practices explain only a minor part of organizational performance no test is able to identify complementarity or substitutability in a satisfactory manner.Complementarity; Constraint; Effects; Empirical study; Firm performance; Framework; Interaction effects; Model; Models; Performance; Power; Studies; Supermodularity;

Internal and external R&D: complements or substitutes? Evidence from a dynamic panel data model.

We examine the impact of internal and external R&D on labor productivity in a 6-year panel of 304 innovating firms. We apply a dynamic linear panel data model that allows for decreasing returns to scale in internal and external R&D with a non-linear approximation of changes in the knowledge stock. We find complementarity between internal and external R&D, with a positive impact of external R&D only evident in case of sufficient internal R&D. The findings confirm the role of internal R&D in enhancing absorptive capacity and hence the effective utilization of external knowledge. These results suggest that empirical studies examining complementarities between continuously measured practices should adopt more general non-linear specifications to allow for correct inferences.R&D; Panel data; Innovating firms; Knowledge; Empirical study; Specifications;

The Contribution of Universities to Growth: Empirical Evidence for Italy

New entrepreneurial ventures may represent a viable and effective mechanism to transform academic knowledge into regional economic growth. We test this notion for the Italian provinces between 2001 and 2006. We evaluate three outputs of academic activities: teaching, research and Intellectual Property Rights (IPR) activities management. New ventures may be able to transform the mentioned outputs into improved economic performance. The findings show that the effects of academic outputs on provincial economic growth (all sectors) are appreciable when they are associated with sustained entrepreneurial activities in the province. It suggests that academic inquiry may provide new ventures with valuable commercial opportunities overseen by established companies.

What Makes Entrepreneurs Happy? Determinants of Satisfaction Among Founders

This study empirically investigates factors influencing satisfaction levels of founders of new ventures, using a representative sample of 1,107 Dutch founders. We relate entrepreneurial satisfaction (with income, psychological burden and leisure time) to firm performance, motivation and human capital. Founders with high levels of specific human capital are more satisfied with income than those with high levels of general human capital. Intrinsic motivation and that of combining responsibilities lowers stress and leads to more satisfaction with leisure time. Women are more satisfied with their income than men, even though they have a lower average monthly turnover