Does an institutional change that lowers failure barriers improve new firm growth? We take advantage of a quasi-natural experiment in Japan that drastically reduced the stringency of bankruptcy regulations to examine this question. Using longitudinal data over a 10-year period, we find that bankruptcy reform increases the rates of bankruptcy and founding—and, more importantly, the likelihood of high-growth ventures—by disproportionately encouraging elite individuals (i.e., those with superior human and social capital) to start firms. In turn, these firms are more likely than others to achieve high growth. Broadly put, we contribute to research at the nexus of institutional theory and entrepreneurship by emphasizing the connectedness of barriers to failure, venture growth, and elite entrepreneurs. We also highlight how institutional change that eases bankruptcy change can foster a regenerative cycle of failure, founding, and growth by attracting more capable entrepreneurs. Overall, we conclude that lowering barriers to failure via lenient bankruptcy laws encourages more capable—and not just more—entrepreneurs to start firms. The online appendix is available at https://doi.org/10.1287/orsc.2017.1110 .

Abstract. We contribute to the institutions and entrepreneurship literature by examining the interactive influence of formal and informal institutions on new business creation, survival, and growth. Prior literature demonstrates how formal and informal institutions shape the level of entrepreneurship. This paper extends this to examine the cases when formal and informal institutions conflict with one another to cast an analytic eye on why countries differ in the type of entrepreneurial activity in terms of entry, survival, and growth. We argue that national and regional differences can be better explained by the interactive influence of formal and informal institutions. Moreover, we argue that informal institutions dominate formal institutions due to the former's characteristics of deep embeddedness and resistance to change over time. These ideas are presented and summarized into a typology of institutional effects on entrepreneurship activity depending on the combination of formal and informal institutions. The paper concludes with implications for future theory and research on the joint influence of different institutional effects and particularly on the intersection between institutions and entrepreneurship.

Research Summary: Our study shows how institutional intermediaries established to foster the creation of new firms might hinder new firm growth instead. We show that intermediaries can reduce new firm growth rates due to institutional conflict. To analyze this idea, we examine the setting of junior stock exchanges, which are commonly formed to facilitate entrepreneurial growth. The introduction of these exchanges focused investment into new technology firms, reduced investment in other sectors, and led to diminishing new firm growth. Our findings demonstrate how institutional conflict causes unintended effects and reveals the complexity of influencing entrepreneurship with institutional intermediaries. Managerial Summary: Investors and entrepreneurs face uncertainty when deciding what firms to start and fund. We show that an intermediation effort to make entry easier for entrepreneurs increases the uncertainty that entrepreneurs and investors face. For investors, the enthusiasm for technology firms engendered by the new exchange can motivate investment in marginal firms to maintain as desired deal flow. However, lower firm growth and less liquidity in the future is likely. For entrepreneurs, our results indicate that it is more challenging to manage technology firm growth as well as there is potential opportunity to investigate other industries. Finally, for policymakers and supporters of the new exchanges, our results imply that investment flows are altered as intended, but unless listing standards remain high, the virtuous cycle of † The authors dedicate this work to the memory of Dr. William Miller-a mentor and friend to both of us whom we deeply miss. We especially thank Khonika Gope for her excellent research assistance. We also acknowledge the generous help of

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We explore the acceptance of new contingent work relationships in the United States to reveal an emergent entrepreneurial ideology. Our argument is that these new work relationships represent a new social order not situated in the conglomerates and labor unions of the past, but on a confluence of neoliberalism and individual action situated in the discourse of entrepreneurialism, employability, and free agency. This new employment relationship, which arose during the economic and social disruptions in the 1970s, defines who belongs inside an organization (and can take part in its benefits) and who must properly remain outside to fend for themselves. More generally, the fusing of entrepreneurship with neo-liberalism has altered not only how we work and where we work but also what we believe is appropriate work and what rewards should accompany it.

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Purpose -This paper aims to present evidence that the adoption by Japanese firms of a shareholder-oriented, more transparent, system of corporate governance creates greater corporate value in comparison to the traditional system of statutory auditors.Design/methodology/approach -This study uses panel data of Tokyo Stock Exchange listed companies to explore the potential convergence of corporate governance systems by examining the value differences between Japanese firms selecting one of two legal systems. A random-effects panel regression is used to analyze the data. The dependent variable of the study is Tobin's q.Findings -This paper finds a significant increase in firm valuation, as measured by Tobin's q, for companies that adopted the alternative of the Anglo-American type committee system, even though comparative financial data show little difference in performance after adoption. This finding is attributed to signal sending, as companies that adopted this system signal a choice toward transparency via monitoring by outsiders, suggesting a reduction of asymmetric agency costs. The paper finds that the committee corporate governance system produces higher corporate value than the traditional auditor governance. The study also finds evidence that it is the signal provided by adoption of the credible system, not the financial performance variables, that accounts for this difference. Social implications -The data support the central idea that corporate governance laws have consequences and encourages additional study of the effects of corporate signaling and the consequences of increased shareholder orientation of agents.Originality/value -This paper takes advantage of the unique opportunity afforded by Japan's introduction of a dual system of corporate governance in 2003, when companies were offered a choice to adopt a new system of outside directors, which is a shareholder-oriented committee system. It establishes that firm value can be created by a signal that corporate governance provides.