Emergence of Firms: A Sociogeographic Demand Side Perspective

This paper presents an analysis of regional start-up rates in the knowledge intensive services and high-tech industries. To supplement prevailing frameworks focusing mainly on supply-side economic factors, we integrate insights from economic geography and population ecology to the entrepreneurship literature as to present a theoretical framework that captures both supply-and demand-side factors, with a specific emphasis on the demand side. Using a rich multi-level data material on all knowledge intensive start-ups across the 286 Swedish municipalities between 1994 and 2002, the empirical analysis focuses on how characteristics of the economic milieu of regions influence firm births. We find that economically affluent regions dominate entrepreneurial activity in terms of firm births, yet a number of much smaller rural region revealed high levels of start ups. Both economic and sociological variables such as knowledge spillovers from universities and firm R&D, and the political regulatory regime within the municipality, exhibit strong influences on firm births. These patterns points to strong support for the notion that ‘the geographic connection’ is important for analyzing entrepreneurial processes.Firm birth; Geography; Entrepreneurship

Endogenous growth through knowledge spillovers in entrepreneurship: An empirical test

Endogenous growth theory is based on the notion that technological knowledge stimulates growth, yet the micro foundations of this process are rarely investigated and remain obscure. Knowledge spillover theory posits that growth is contingent on the technology dependence of industries, forming the landscape for technology entrepreneurs to launch and grow new ventures. We investigate these theoretical contingencies of endogenous growth with two research questions at two levels of analysis: First, do industries with a greater need for new technology-based entrepreneurship grow disproportionately faster than other industries? Second, do the knowledge spillover effects foster the growth of new technology based firms contingent on certain industry structures? These questions are examined empirically, using a comprehensive employee-employer data set on the science and technology labor force in Sweden from 1995 to 2002.Endogenous Growth; Entrepreneurship; Industry Evolution

Emergence of firms: A sociogeographic demand side perspective

This paper investigates the contextual conditions affecting the entry, growth and exit of knowledge intensive firms. On the aggregate or regional level, entry and exit are often intimately related. We suggests that the entrepreneurial process by which individuals engage in the start, the growth, and the exit of a firm is strongly path-dependent. Second, based on the importance of initial conditions at the regional level, we present empirical analysis on how characteristics of the economic milieu of regions influence firm births. The data material provides information on all knowledge intensive start-ups across the 286 Swedish municipalities between 1994 and 2002. We present an empirical model that captures both supply- and demand-side factors, with a specific emphasis on the demand side. We address the imperative role of initial conditions during firm founding, as these are strongly emphasized by I/O economics, organizational ecology, and entrepreneurship research alike. We describe and explain the substantial variation in start-up rates across municipalities and over time. The paper advanced econometric analysis where we use a number of variables derived from our theoretical framework to formulate and test a model of regional start-up rates. The model is tested on separate samples of services firms and manufacturing firms, yielding interesting results that are in line with the theories of organizational ecology and economic geography, but with somewhat stronger results for start-ups in services. Analyses of firm growth an survival further shows that the factors present during founding are strongly path-dependent, but differ for medium-growth and high-growth firms, and for firms exiting by closure and firms exiting by merger

Succession in Private Firms as an Entrepreneurial Process – A Review and Suggestions of New Research avenues

In considering firm succession as the acts of both entrepreneurial exit and entry, this paper adds to work that seeks to integrate entrepreneurship and family business research. We provide a comprehensive literature review of succession research over the past 35 years and identify seven thematical clusters within which succession can be understood as a distinct part of the entrepreneurial process, and three areas of particular interest for future research seeking to advance the literatures on entrepreneurship, family firms, and governance in private firms. The paper explores theoretical, conceptual, and methodological ways of integrating these findings into the research on entrepreneurship and family business.Family firms; Succession; Entrepreneurship

Implications of Intra-Family and External Ownership Transfer Of Family Firms: Short Term and Long Term Performance

We contrast the performance consequences of intra-family vs. external ownership transfers. Investigating a sample of all private family firms in Sweden that went through ownership transfers during ten years, we find family firms transferred to external owners outperforming those transferred within the family, but that survival is higher among intra-family transfers. We attribute these performance differences to the long-term orientation of family firms passed on to the next generation and to the entrepreneurial willingness of acquirers to bear uncertainty. Based on distinct ownership transition routes and theoretical mechanisms explaining performance differences, we outline implications for family business and entrepreneurship research.long-term orientation; succession; ownership transfer; family firms; performance

Entrepreneurship and embeddedness : process, context and theoretical foundations

Author's accepted version (postprint).This is an Accepted Manuscript of an article published by Taylor & Francis in Entrepreneurship & Regional Development on 31/03/2022.Available online: https://www.tandfonline.com/doi/full/10.1080/08985626.2022.2055152In this article, we introduce the special issue on entrepreneurship and embeddedness. We do so by providing a brief overview of existing research on the topic focused on three important conversations related to process, context and theoretical foundations. The overview highlights essential contributions from extant research and suggests that expansion and advancement in the research conversation can be accomplished by focusing on dynamic and multilayered conceptualizations of embeddedness and by broadening the theoretical foundations of our research. We also present and position the papers in the special issue within the conversations on process, context and theoretical foundations in entrepreneurship research on embeddedness.acceptedVersionpublishedVersio

The Composition of New Venture Teams : Its Dynamics and Consequences

New venture team composition lies at the heart of this thesis. Drawing on social-psychological explanations and human capital reasoning, the thesis addresses the social as well as the instrumental foci facing new venture teams. This is done by addressing four research questions: 1) What are the characteristics of new venture teams and their team members? 2) What impact does team composition and firm performance have on team dynamics? 3) What impact does team member characteristics and individual deviation have on individual dynamics? 4) How does team composition and team dynamics influence firm performance? Dynamics is studied by investigating the adding and dropping of team members. Research on entrepreneurial teams is characterized by several methodological challenges that this thesis takes on. First, there is a lack of longitudinal studies. Second, no studies are based on truly random samples of teams. Third, the unit and level of analysis has been the team and the firm. Rarely is the individual considered. In addition, the thesis sheds light on team diversity and its effects as well as the relationship with performance, both as an antecedent and as a consequence. The empirical setting is based on a unique database covering all individuals entering into self-employment in knowledge-intensive industries in Sweden during the 1996 to 2000 period. Their firms are tracked annually up to 2002, providing a census panel three to seven years long consisting of five cohorts. This is done by using secondary data from Statistics Sweden (SCB) covering information on individuals as well as their firms. By combining individual and firm level data, the thesis demonstrates how team level constructs can be obtained. Overall, the hypothesized relations predicting team member and individual exits receive strong support. Entries to teams and the performance of the firms are not as well explained by the chosen constructs. The findings show that greater internal diversity along some but not all demographic dimensions is positively associated with a higher rate of team member exits. More precisely,when diversity can be linked to status differences, the impact is more pronounced. Furthermore, the findings show that deviation from others in the group has an impact on which individual is likely to leave the team. There are also considerable differences in behavior between teams consisting of spousal pairs and other teams. In fact, the findings show that spousal couples venturing together are very common and that the typical team does not match the entrepreneurial team as it often is portrayed in the literature. In sum, the study suggests that diversity in attributes related to status can influence team stability. In addition, trust and prior relationships appear to be especially important for the creation and development of new venture teams

Stigmatization of failed entrepreneurs: prevalence and solutions

This paper investigates why entrepreneurs experience stigma after firm failure and what can be done to reduce it. We use attribution theory as an overarching theoretical framework and hypothesize that entrepreneurs are held more accountable than employees for their unemployment after firm failure irrespective of the circumstances causing the failure. To test this hypothesis we conduct a between group, 2x2 full factorial experiment where the cause of the failure is manipulated. We find that entrepreneurs are held more accountable for firm failure irrespective of the circumstances causing the failure and that respondents who view failure as an inherent risk of firm ownership are less likely to stigmatize failed entrepreneurs

Location Attributes and Start-Ups in Knowledge Intensive Business Services

We study start-ups in Knowledge Intensive Business Services (KIBS) across regions in Sweden by individuals with a formally recognized capacity to produce and develop advanced business services. The empirical analysis is based on a theoretical framework which emphasizes both supply- and demand-side factors. Supply-side variables pertain to accessibility to knowledge and information upon which a new firm can be established. Demand-side variables refer to market-size and pertain to the ability to recover fixed start-up costs and economize on costs associated with face-to-face interaction. 78 percent of the KIBS founders have prior work experience from business services, suggesting that KIBS start-ups are more frequent in regions where the KIBS sector is already large. Controlling for the stock of potential entrepreneurs and the stock KIBS firms, we show that both supply- and demand-side factors influence KIBS start-up activity. Results are consistent with that KIBS start-ups are stimulated by the simultaneous presence of (i) knowledge resources conducive for the generation and diffusion of knowledge and ideas upon which new firms can be established and (ii) a large market. The findings suggest that the geography of KIBS is shaped in cumulative and self-reinforcing processes, and can explain the tendency of KIBS firms to agglomerate in large city-regions.knowledge intensive business services; knowledge spillovers; start-ups; entrepreneurship; location