Space and social capital : The degree of locality in entrepreneurs' contacts and its consequences for firm success

Social capital is valuable for entrepreneurs starting a business. Although many small businesses are located at the entrepreneurs’ dwelling, little is known about entrepreneurs’ local ties and their relevance for firm success. Distinguishing between local and non-local social capital, this contribution looks at the following: (1) The availability of local social capital (2) The relation between social capital and local social capital, and characteristics of firms and entrepreneurs (3) The relation between social capital and local social capital and firm performance. Analysing data from the Survey of the Social Networks of Entrepreneurs, which contains information on entrepreneurs and their networks in 141 Dutch neighbourhoods, this study finds a positive relation between social capital and firm performance.

Starting anew: Entrepreneurial intentions and realizations subsequent to business closure

We know that most businesses fail. But what is not known is to what extent failed ex-entrepreneurs set up in business again. The objective of this article is to explore potential and realized serial entrepreneurship. Based on three disciplines – psychology, labour economics, and the sociology of careers – we formulated propositions to explain (potential) serial entrepreneurship. We tested these propositions empirically with a longitudinal database of 79 businesses that had closed within 5 years after start-up. A large majority of the ex- entrepreneurs maintained entrepreneurial intentions subsequent to business closure, while almost one in four business closures were followed by a new business (serial entrepreneurship). Our results show that the determinants of restart intention (potential serial entrepreneurship) and actual restart realization (realized serial entrepreneurship) are different. Ex-entrepreneurs who are young, who worked full-time in their prior business, and who recall their business management experience positively are likely to harbour restart intentions. Only ‘being located in an urban region’ transpired to have a significant effect on the start of a new business. Although entrepreneurial intentions are a necessary condition for the start of a new business, this study shows that the explanation of entrepreneurial intentions is distinct from the explanation of new business formation subsequent to business closure.serial entrepreneurship, business closure, entrepreneurial intentions, new business formation, The Netherlands

Starting Anew: Entrepreneurial Intentions and Realizations Subsequent to Business Closure

We know that most businesses fail. But what is not known is to what extent failed ex-entrepreneurs set up in business again. The objective of this article is to explore potential and realized serial entrepreneurship. Based on three disciplines – psychology, labour economics, and the sociology of careers – we formulated propositions to explain (potential) serial entrepreneurship. We tested these propositions empirically with a longitudinal database of 79 businesses that had closed within 5 years after start-up. A large majority of the ex-entrepreneurs maintained entrepreneurial intentions subsequent to business closure, while almost one in four business closures were followed by a new business (serial entrepreneurship). Our results show that the determinants of restart intention (potential serial entrepreneurship) and actual restart realization (realized serial entrepreneurship) are different. Ex-entrepreneurs who are young, who worked full-time in their prior business, and who recall their business management experience positively are likely to harbour restart intentions. Only ‘being located in an urban region’ transpired to have a significant effect on the start of a new business. Although entrepreneurial intentions are a necessary condition for the start of a new business, this study shows that the explanation of entrepreneurial intentions is distinct from the explanation of new business formation subsequent to business closure.The Netherlands;Business Closure;Entrepreneurial Intentions;New Business Formation;Serial Entrepreneurship

Creative Destruction and Regional Productivity Growth: Evidence from the Dutch Manufacturing and Services Industries

Do processes of firm entry and exit improve the competitiveness of regions? If so, is this a universal mechanism or is it contingent on the type of industry or region in which creative destruction takes place? This paper analyses the effect of firm entry and exit on the competitiveness of regions, measured by Total Factor Productivity (TFP) growth. Based on a study across 40 regions in the Netherlands over the period 1988-2002, we find that firm entry is related to productivity growth in services, but not in manufacturing. The positive impact found in services does not necessarily imply that new firms are more efficient than incumbent firms; high degrees of creative destruction may also improve the efficiency of incumbent firms. We also find that the impact of firm dynamics on regional productivity in services is higher in regions exhibiting diverse but related economic activities.entrepreneurship, entry & exit, turbulence, creative destruction, regional competitiveness, total factor productivity

Geographical scale and the role of firm migration in spatial economic dynamics

Spatial economic change can be decomposed in it's demographic constituents firm formation, closure, relocation and growth. This paper focusses on the role of relocation in the balancing equation of spatial economic dynamics: Total Change(zone i) = New firms(i)-Closures(i)+ Growth(i)-Decline(i)+ Inmoves(i)-Outmoves(i). Whereas the other components are scale invariant (i.e. a firm birth is a birth whether measured at the local or the regional level) for firm relocation the geographical scale is very important. The larger the size of the region, the smaller the number of border crossing relocations. The question about the role of firm migration in regional economic change can therefore only be answered taking into account the geographical scale. In this paper we will answer this question for various geographical scales. The data that we use are from the longitudinal business register of the province of Gelderland, in the east of the Netherlands, covering the period 1988-2002.

Creative Destruction and Regional Competitiveness

New firms stimulate competitiveness via market selection and competitive pressures, by forcing less efficient incumbents to exit or to improve their productivity. This way, both the creation and destruction of firms (turbulence) may improve competitiveness. In this paper the effect of turbulence on regional competitiveness (measured as total factor productivity and employment growth) is analysed in 40 regions in the Netherlands over the period 1988-2002. Our analyses suggest that turbulence leads to productivity growth in services but not so in manufacturing. Employment growth appears to benefit from firm dynamics in manufacturing.

Whither a flat ladscape? Regional differences in Entrepreneurship in the Netherlands

In this paper we contribute to the set of studies that focus on explanations of regional differences in entrepreneurship by taking into account the entrepreneurial processes at the individual level. We investigate entrepreneurial attitudes and entrepreneurial activity in three contrasting labour market regions in the Netherlands in two stages. In the first stage we extensively explore regional differences in entrepreneurial activity by looking at several types of entrepreneurs and phases in the entrepreneurial process. In the second stage we investigate to what extent the observed regional differences in perceptions to entrepreneurship and involvement in entrepreneurial activity change when controlling for determinants at the individual level. We find that the observed regional differences in levels of early-stage entrepreneurial activity can to large extent be explained by these individual characteristics. Furthermore we find the regional pattern of overall early-stage entrepreneurial activity to be different from the pattern of ambitious early-stage entrepreneurial activity.

Home-Based Business: Exploring the Place Attachment of Entrepreneurs

Entrepreneurship is crucial to a vital and thriving economy, even on the neighbourhood level. This fits into current urban planning policy in the Netherlands, which aims at combining housing and economic functions within neighborhoods. Since an increasing number of entrepreneurs start from home, this calls for insight in the combination of work and home. However, there is limited knowledge about the specific role of the dwelling in the decision to start a firm from home and to stay put. This explorative paper focuses on the use of the dwelling as location of a firm, both in the start-up phase and beyond in the firm life course, and its explanations. Our research questions are: what determines the decision to start a firm within the dwelling of the entrepreneur and its duration in time, and how does this relate to the propensity and decision to move? In our empirical analyses a combination of quantitative and qualitative research methods is used. We analyzed data from 130 questionnaires send out in April 2005 to young entrepreneurs who owned a firm in two Dutch urban neighborhoods. These questionnaires were followed by in-depth interviews with 10 entrepreneurs. We have found that most home based businesses did start from home and are strongly tied to the dwelling - and therefore the neighbourhood. Both firms with past growth in number of personnel and firms with growth aspirations do want to move relatively often. With respect to firm relocation and the personal propensity to move, housing characteristics as adapted dwellings, and owner-occupied, single family and large houses are important. With respect to future home-based business, to most firms breaking the work-home combination is not a realistic option. Household characteristics and more specifically the care of small children keeps entrepreneurs home-based. Also entrepreneurs who work almost full-time are relatively strong attached to their home, which may point to an explicit -and maybe also longlasting- choice for home-basedness. Economic policy should therefore foster start-ups within urban neighbourhoods, as many of them seem to be firmly anchored locally by attachment to their home.

Repeating Routines? How transfer and inheritance to corporate spin-offs varies among gestation contexts

In economic geography literature the attention for spin‐off entrepreneurship has been steadily growing. Its main driver is that spin-off firms are said to have intrinsic advantages over other start-ups because of their embedded link to a parent company. Through this embedded link spin-off firms have a relatively ââ¬Ëeasyââ¬â¢ access to resources for production which has several interesting implications on both the firm and the regional level. At the firm level, spin-off firms seem to outperform other entrants on at least some aspects of success including employment growth and survival chances. At the regional level, they may play a key role in the development of clusters. Despite the increasing number of studies addressing the effects of spin-off processes, important issues remain unresolved. Most importantly, there is still work to be done in identifying what it is that spin-off entrepreneurs take with them from their previous employer and how this affects their innovative behavior, business strategies and performance; and ultimately their alleged contribution to regional economic development. This has been acknowledged before: ââ¬Åââ¬Â¦ we know little about how conversion [between knowledge and technology commercialization] actually occurs, even though knowledge conversion is at the core of what spin‐offs doââ¬Â¦Ã¢â¬ (Zahra et al., 2007: 570). Based on a review of recent spin-off studies, this paper draws on key inheritance mechanisms in an attempt to develop a new conceptualization of explanations of spin-off effects. Following Koster (2006), initially a distinction will be made between direct resource transfers between parent and spin‐off (providing accommodation or guaranteed turnover) and indirect transfers (spin‐off entrepreneurs capitalizing on previously gained skills). We explore the concept of indirect transfers further in differentiating between personal skills of spin-off entrepreneurs gained while working in the parent organization on the one hand, and the inheritance of specific features of the parental organization, in particular its organizational characteristics and strategies. This closely fits in with the evolutionary economics vocabulary, especially with Nelson and Wintersââ¬â¢ (1982) famous DNA metaphor: the knowledge and routines of firms (their ââ¬ËDNAââ¬â¢) are partially inherited by their spin‐offs (Boschma et al., 2002).