Antecedents of New Director Social Capital

Prior research shows that firms benefit from the social capital of their boards of directors but has not explored the antecedents of new director social capital. We argue that firms can attract directors with social capital by offering more compensation. We also argue that more complex firms (firms with a greater scale and scope of operations) are more attractive to such directors because of the greater experience and exposure that such directorships provide. Similarly, we argue that firms with high-status directors on their current boards will be more attractive to directors with social capital. We analyse the social capital of new outside directors added to boards of semiconductor firms between 1993 and 2007. Surprisingly, we find no support for the hypothesis that higher compensation is associated with adding directors with high status or board ties. However, firm complexity is associated with the ability to add new directors who have social capital, and the status of current board members is associated with the ability to add new directors who also have high status

An exploratory study of how potential family and household capital impacts new venture start-up rates

Drawing from social capital theory, the authors examine the relationship between family capital characteristics and new venture start-up rates in the United States. The results of this study improve the understanding of (a) how families matter in an entrepreneur’s decision to start a business, (b) how wealth and health care considerations affect the start-up decision, and (c) whether and how these effects differ among the largest ethnic groups in the United States

Dynamic Creation: Extending the Radical Austrian Approach to Entrepreneurship

We develop a new perspective on entrepreneurship as a dynamic, complex, subjective process of creative organizing. Our approach, which we call ‘dynamic creation’, synthesizes core ideas from Austrian ‘radical subjectivism’ with complementary ideas from psychology (empathy), strategy and organization theory (modularity), and complexity theory (self-organization). We articulate conjectures at multiple levels about how such dynamic creative processes as empathizing, modularizing, and self-organizing help organize subjectively imagined novel ideas in entrepreneurs’ minds, heterogeneous resources in their firms, and disequilibrium markets in their environments. In our most provocative claim, we argue that entrepreneurs, by imagining divergent futures and (re)combining heterogeneous resources to create novel products, drive far-from-equilibrium market processes to create not market anarchy but market order. We conclude our exposition of each dynamic creative process by offering one possible direction for future research and articulating additional conjectures that help point the way. Throughout, we draw examples from CareerBuilder—a firm that has played a major role in creating and shaping the online model in the job search/recruiting industry—and its industry rivals (e.g. Monster, Yahoo’s HotJobs) to illustrate selected concepts and relationships in dynamic entrepreneurial creation

Shareholder Influence over Director Nomination via Proxy Access: Implications for Agency Conflict and Stakeholder Value

Corporate governance research indicates that corporate boards of directors may be overly beholden to management, which can be detrimental to firm value creation. Drawing upon agency theory and the governance law literature, we examine the effects of a new SEC rule designed to lessen managerial power by increasing large, long-term shareholders’ influence in the director nomination process. We predict and find support for a positive overall market reaction to the rule’s announcement as well as a greater reaction for firms with characteristics that suggest compromised board independence or greater CEO control. Moreover, we examine the implications of greater shareholder voice for another key stakeholder group, firm bondholders, and find evidence that it is also value increasing. We conclude by discussing important implications for theory and practice

The Philosophical Foundations of a Radical Austrian Approach to Entrepreneurship

The equilibrium-based approaches that dominate entrepreneurship research offer useful insights into some aspects of entrepreneurship, but they ignore or downplay many fundamental entrepreneurial phenomena such as individuals’ creative imaginations, firms’ resource (re)combinations, and markets’ disequilibrating tendencies—and the genuine uncertainty and widespread heterogeneity these imply. To overcome these limitations, scholars have recently introduced a nonequilibrium approach to entrepreneurship based on Ludwig Lachmann’s “radical subjectivist” brand of Austrian economics. Here, this radical Austrian approach is extended beyond Lachmann to include the work of radical subjectivism’s other noted theorist: George Shackle. More important, the article extends entrepreneurship research by systematically comparing and contrasting the nascent, radical Austrian approach to entrepreneurship with three dominant equilibrium-based approaches: neoclassical, Kirznerian, and Schumpeterian economics. Specifically, the article (a) explicates the paradigmatic philosophical assumptions about the nature of individuals, firms, and markets that underlie these approaches; (b) demonstrates how metaphor is employed as a device to concretize these assumptions; (c) examines the research questions that arise from the assumptions these metaphors reflect; and (d) uses the Japanese “beer wars” of the 1980s and 1990s to illustrate one methodological approach (hermeneutics) researchers can adopt to apply these assumptions, metaphors, and questions to study entrepreneurial phenomena from a radical subjectivist perspective