Foreign Direct Investment and Indigenous Entrepreneurship: Evidence from Wales and Ireland

Foreign direct investment (FDI) plays an important role in the economic development strategies of several countries. FDI inflows bring in the latest technology, create employment and lead to tradable goods. FDI not only enables the transfer of intangibles to another country but also makes knowledge spillovers possible and therefore may play a major role in indigenous entrepreneurship. These knowledge spillovers can lead to the establishment of new indigenous enterprises in the host country leading to further economic development (Young, Hood & Peters, 1994). However, not all types of FDI have the same potential for knowledge spillovers. The potential for knowledge spillovers is related to the type of FDI and the level of human capital in the host country. FDI in high technology industries is more likely to generate knowledge-intensive spillovers (Buckley, Newbould & Thurwell, 1988). High levels of human capital (formal education, on-the-job training including industry, management and business development experience) make it easier for entrepreneurs to start high value-added firms. Individuals working in MNEs obtain higher levels of training and development than in local firms (Chen, 1983; UNCTAD, 1994) and wish to obtain the best returns for these skills. Individuals may feel unable to realize appropriate returns in the existing firm or may believe that the bureaucratic MNE does not value this knowledge, and seize the opportunity to create a new entity (Acs & Varga, 2004). While several studies examine the relationship between formal education and FDI (OECD, 2002), and other studies are concerned with the relationship between human capital and entrepreneurship (Bates, 1990), very few studies explore the relationship between FDI, human capital and entrepreneurship. Using a combination of case studies and Global Entrepreneurship Monitor (GEM) population surveys in four regions, we explore how the link between FDI spillovers and indigenous entrepreneurial activity varies by human capital and cultural context in Ireland and Wales

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

Entrepreneurship, Stages of Development, and Industrialization

Unlike in the past where industrial policy was either focused on creation and growth of state-owned firms or alternatively consisted merely of broadly functional policies without consideration for firm or entrepreneurial specifics, the requirement now is that future industrial policy ought to be a nuanced partnership between entrepreneurs and the state. In this paper we outline some considerations for such an industrial policy where the entrepreneur.state nexus is paramount. Moreover, we argue that such an industrial policy will need to take into consideration that the entrepreneur.state nexus is evolving, and that it depends on the stage of development of a particular country.entrepreneurship, industrialization, structural change, industrial policy, innovation, development

Innovation and Social Capital: A Cross-country Investigation

This study explores the impact of social capital on innovation by constructing a more general measure of social capital indicator consisting of generalized and institutional trust, associational activities and civic norms. We test the hypothesis that social capital has a positive impact on innovation at the national level. After controlling for R&D expenditure and human capital there is a positive relationship between social capital and innovation. Social capital interacts with entrepreneurship and the strongest relationship is between associated activities and entrepreneurship. This is consistent with the need to build social relationships in today's networked economy.human capital, social capital, entrepreneurship, innovation, generalized and institutional trust, civic norms, associational activities

Knowledge Spillovers from Creation to Exploitation: A Theoretical Model with Implications for Firms and Public Policy

In this paper we present an endogenous growth model in which we investigate the implications of knowledge spillovers between knowledge creators (inventors) and commercializers (innovators). We then turn to the question how such knowledge spillovers affect value creation within and among organizations as well as at the aggregate level and discuss how the internalization of these knowledge spillovers can help improve economic performance at both levels.knowledge spillovers; innovation management; strategic entrepreneurship

A Model of Destructive Entrepreneurship

The current research on entrepreneurship as an economic phenomenon often assumes its desirability as a driver of economic development and growth. However, entrepreneurial talent can be allocated among productive, unproductive, and destructive activities. This process is theorized as driven by institutions. Although the tradeoff between productive and unproductive entrepreneurship has been examined, destructive entrepreneurship has been largely ignored. We build from existing theory and define destructive entrepreneurship as wealth-destroying. We propose three assumptions to develop a model of destructive entrepreneurship that presents the mechanisms through which entrepreneurial talent behaves in this manner. We present four key propositions on the nature and behavior of destructive entrepreneurship. We conclude by identifying policy and research streams that emerge from our model.destructive entrepreneurship, entrepreneurship, allocation, rent-seeking, incentives, informal institutions

What does"entrepreneurship"data really show ? a comparison of the global entrepreneurship monitor and World Bank group datasets

This paper compares two datasets designed to measure entrepreneurship. The Global Entrepreneurship Monitor dataset captures early-stage entrepreneurial activity; the World Bank Group Entrepreneurship Survey dataset captures formal business registration. There are a number of important differences when the data are compared. First, GEM data tend to report significantly greater levels of early-stage entrepreneurship in developing economies than do the World Bank data. The World Bank data tend to be greater than GEM data for developed countries. Second, the magnitude of the difference between the datasets across countries is related to the local institutional and environmental conditions for entrepreneurs, after controlling for levels of economic development. A possible explanation for this is that the World Bank data measure rates of entry in the formal economy, whereas GEM data are reflective of entrepreneurial intent and capture informality of entrepreneurship. This is particularly true for developing countries. Therefore, this discrepancy can be interpreted as the spread between individuals who could potentially operate businesses in the formal sector - and those that actually do so: In other words, GEM data may represent the potential supply of entrepreneurs, whereas the World Bank data may represent the actual rate of entrepreneurship. The findings suggest that entrepreneurs in developed countries have greater ease and incentives to incorporate, both for the benefits of greater access to formal financing and labor contracts, as well as for tax and other purposes not directly related to business activities.Banks&Banking Reform,E-Business,Access to Finance,Microfinance,Information Security&Privacy

The Global Entrepreneurship Monitor United Kingdom 2008 Executive Report

This report compares Global Entrepreneurship Monitor (GEM) measures of entrepreneurial attitudes, activity and aspiration in the UK with participating G7 countries and the large industrialized or industrializing countries of Brazil, Russia, India and China ('BRIC'). It also summarizes entrepreneurial attitudes, activity and aspiration within Government Official Regions of the UK and, for the first time, demonstrates the pattern of entrepreneurial activity at the sub-regional (NUTS2) level

The Good, the Bad, and the Talented: Entrepreneurial Talent and Other-Regarding Behavior

Talent allocation models assume that entrepreneurial talent is selfish and thus allocates into unproductive or even destructive activities if these offer the highest private returns. This paper experimentally analyzes other-regarding preferences of entrepreneurial talent. We find that making a distinction between creative talent and business talent explains systematic differences in other-regarding behavior. Generally, business talent is less willing, and creative talent more willing, to forego private payoffs to avoid losses to others. A moderator analysis reveals that uncreative business talent is significantly less other-regarding than creative business talent, a finding applicable to both certain and risky payoffs with and without negative externalities. The paper makes a contribution to entrepreneurship research by qualifying the implications of talent allocation models and discovering the importance of distinguishing between the two types of entrepreneurial talent. We also add to the field of experimental economics by advancing research on social preferences under risk and with negative externalities.development, destructive entrepreneurship, property rights, institutions, poverty trap