Prior research investigates the role of start-up costs and taxes with regard to entrepreneurship. Yet, little distinction is made regarding the type of entrepreneurship, particularly innovative versus non-innovative entrepreneurship. We shall argue that start-up costs and taxes are associated in different ways with innovative versus non-innovative entrepreneurship. Taxes being recurring costs should mainly relate to innovative entrepreneurship, whereas start-up costs being one-off costs should mainly relate to non-innovative entrepreneurship. Analyzing a dataset of 632,116 individuals, including 43,223 entrepreneurs from 53 countries, we can partially confirm our predictions. Corporate taxes show a negative relationship with innovative entrepreneurship, whereas income taxes seem to have no relationship. High start-up costs have a positive relationship with innovative entrepreneurship, although this finding only holds true in cross-sectional investigations. Our paper contributes to the discussion on how governmental regulation and taxes relate to entrepreneurship.
In this conceptual paper, we demonstrate how modern data science techniques can advance our understanding of important decisions in the context of entrepreneurship that involve social interactions. We know that individuals' decision-making is strongly affected by nonverbal behavior. The emerging domain of social signal processing aims at accurate computerized analysis of such behavior. Behavioral cues stemming from, for example, gestures, posture, facial expressions, and vocal expressions can now be detected and analyzed by state-of-the-art technologies utilizing artificial intelligence. This paper discusses and illustrates their potential value for future research on decision-making by entrepreneurs as well as by others yet directly affecting them (e.g., investors). In brief, social signal processing is more accurate and more efficient than conventional research methods and may reveal important characteristics that so far have been omitted in explaining decisions that are vital for firm survival and growth. We derive a total of five propositions from our newly developed conceptual framework, which we hope will be subject to extensive empirical scrutiny in future research.
Entrepreneurs start and grow their ventures in a widely varying set of institutional contexts. One differentiator is a country’s regulatory efficiency which encompasses the freedom to start and to run a business without excessive government interventions around registering, hiring, and firing employees, and price controls on currency. The efficiency of regulations varies substantially among countries and imposes additional costs and risks on entrepreneurs’ activities. We integrate insights from institutional theory and recent literature on gender and entrepreneurship to better understand how a country’s regulatory efficiency affects male and female entrepreneurs’ employment growth ambitions. We explore three aspects of regulatory efficiency: business freedom (e.g., to start, operate, and close a venture), labor freedom (e.g., laws around minimum wage, layoffs, severance), and monetary freedom (e.g., price stability) using data from over 47,000 entrepreneurs in 68 countries. We find that entrepreneurs’ growth ambitions are higher in countries with more efficient regulations, particularly those countries characterized by fewer labor law restrictions and greater monetary freedoms. These findings are further exacerbated by gender by such that, relative to their female counterparts, male entrepreneurs have significantly greater venture growth ambitions. Our paper contributes to the discussion on how formal institutions influence women and men entrepreneurs in distinct ways.
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