Issues in Entrepeneurship: Volume 14

Entrepreneurship is essential for the growth of both individual firms and overall economies. Through the creativity entrepreneurship fosters, new products, processes, and organizations emerge. Entrepreneurship provides the necessary flexibility and dynamism for responding to new market opportunities and challenges. Accordingly, it is important to understand entrepreneurship – how it takes place, the characteristics of entrepreneurs, the factors that encourage or discourage it, and how it differs across countries. Fortunately, research on entrepreneurship is active across the social sciences. This volume presents a collection of chapters that report on recent studies across a variety of areas, and the material reflects the vibrancy of both this emerging field of study and its subject area – entrepreneurship.

This study investigates the conditions that shape the contractual structure of pharmaceutical-biotechnology R&D agreements and whether these collaborations have produced measurable impact on the overall R&D productivity of pharmaceutical companies. In one section, the effect of uncertainty due to the advances in technology on the structure of R&D contracts is discussed. Specifically, it is shown that newer technologies associated with higher uncertainty result in the choice of more hierarchical contract structures. In addition, the significance of R&D collaborations on the overall innovation process of pharmaceutical companies is evaluated. The results indicate that only some types of R&D alliances, signed in earlier stages of research, have a significant role in the patent production and drug discovery process.

Building dynamic capabilities that are differentiated from those of the emerging competitors is the major challenge for growing firms. Becoming a great company is a function of management’s ability to integrate entrepreneurship at strategic and operational levels within the organization. Corporate entrepreneurship represents a framework for the facilitation of ongoing change and innovation in established organizations. It provides a blueprint for coping effectively with the new competitive realities that companies encounter in the global marketplace. This paper examines the latest research concerning the triggering of corporate entrepreneurship and the critical link of middle managers to the implementation of the process.

This study tests the “Resource Balance Proposition” that is developed from the Resource-Based View (RBV) of strategy. While recent research using RBV to study new ventures has focused primarily on the identification and acquisition of resources (Alvarez & Busenitz, 2001; Lichtenstein & Brush, 2001), this investigation examines the deployment of given resources in the pursuit of growth. It argues that the effective management of the resource base is at least as important to long-term survival as securing that base in the first place. Further, it assumes that firm growth is a desirable goal (especially for young firms) but posits that growth is not without cost and highly accelerated growth is particularly costly. Therefore, the hypotheses presented in this paper propose that there is a growth trajectory that optimizes profits and net worth by striking a balance between the resource deployments necessary to fuel growth and those needed to meet current obligations. The findings from this study confirm that both too little and too much growth have detrimental effects on firm vitality. More specifically, the data show a curvilinear relationship between the absolute rate of firm growth and the levels of both profits and net worth. This finding provides significant support for the Resource Balance Proposition, which states that the allocation of firm resources must be properly balanced between current resource positions and future resource positions to maximize wealth creation.

We propose that strategies typically applied to support corporate entrepreneurship can be extended and applied at the national level, with the objective of stimulating not just entrepreneurship – but new ventures that grow. Only when individual ventures grow, can sustained growth occur at the level of the macroeconomy. Keys to growth of new ventures in this model include effective management of knowledge, resources, rewards, and infrastructure.

The economic development of Taiwan, from a poor island colony to a world leader in electronic hardware manufacturing, has been spectacular. This study shows that the success of Taiwan may be largely attributed to the synergistic combination of two separate factors: (1) the utilization of unique social capital inherent in the Chinese family entrepreneurs, and (2) the institutional support from the government and other entities, such as Technology Parks, for the creation of scientific and technical knowledge and, most important, for the diffusion and exploitation of technology-based opportunities by these family businesses.

This paper considers efficient venture capital investment duration for different types of entrepreneurial firms so that on exit information asymmetries between the venture capitalist (as seller) and the new owners of the investment are minimized, and capital gains maximized. We hypothesize that a number of factors are likely to affect investment duration, and our empirical tests confirm the statistical significance of some of these variables (stage of firm at first investment, capital available to the venture capital industry, whether the exit was preplanned, and whether the exit was made in response to an unsolicited offer). However, the fit between our theoretical model and the data is stronger in the United States than in Canada, offering evidence in support of the view that institutional factors have distorted investment duration in Canada.

In this chapter, Lituchy, Reavley, and Bryer report on their interviews with women entrepreneurs from the Czech Republic, Poland, and Japan. Eastern European respondents expressed a desire for and the importance of business training. Many who had attempted to get bank loans were refused for lack of collateral or because their business plans were inadequate. Japanese respondents felt that experience was most valuable. They stated that gender adversely affected their financing prospects. Human resources issues as well as dealing with clients or suppliers from other cultures were concerns for all the women. Discussion and implications are presented.

High technology entrepreneurs have received increased attention over the past decade as it is now recognized that these entrepreneurs are able to build companies that generate high wage employment and high levels of wealth. While much anecdotal evidence has been offered as to who these entrepreneurs are, little is known about their early efforts to launch a high technology company. Based on the most recent data that specifically profiles nascent entrepreneurs throughout the United States, we extrapolate and discuss implications of our findings. Specifically, we identify who, where, when, and why these entrepreneurs are engaged in this important form of business launch. We conclude by suggesting how decision-makers and institutions can better facilitate and nurture the launch of high technology firms.

As entrepreneurship education has seen substantial growth over the last ten years, so has the debate over the right mix of academic theory and practical insights that best equips entrepreneurial minded business students to realize their entrepreneurial goals and to impact economies. The University of Texas at Austin’s acclaimed Moot Corp Program has not only laid the groundwork for effective, powerful entrepreneurship education, it has created a model that integrates the most value added contributions from the academic and business worlds. The Moot Corp Competition, has been a pioneer as a showcase for new ventures developed at universities across the world.