Failure is an Option: Failure Barriers and New Firm Performance

Eberhart, Robert; Eesley, Charles E.; Eisenhardt, Kathleen M.

doi:10.2139/ssrn.1982819

Cited by 12 publications

(11 citation statements)

References 79 publications

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“…We use three related research streams to develop our hypotheses. First, research on institutional voids focuses on gaps in emerging markets such as capital markets, regulatory agencies, and other institutions that aid market exchange (Eberhart, Eesley, and Eisenhardt, ; Khanna and Palepu, ). Individuals may overcome these voids through social ties (Batjargal et al, ; Xin and Pearce, ), such as business group and family firm ties (Khanna and Palepu, ; Luo and Chung, ).…”

Section: Theory Development and Hypothesesmentioning

confidence: 99%

How entrepreneurs leverage institutional intermediaries in emerging economies to acquire public resources

Armanios

Eesley

et al. 2016

Strategic Management Journal

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254

190

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Research summary: Governments in emerging economies often use institutional intermediaries to promote entrepreneurship, and bridge the void between ventures and public funding. While prior literature describes what institutional intermediaries do, it leaves open how intermediaries support different types of entrepreneurs. By comparing science park and non‐science park firms in Beijing and across China, we distinguish which entrepreneurs benefit from certification versus capability‐building through the introduction of two new constructs: skill adequacy and context relevance. Broadly, our study adds insights at the nexus of emerging economies and entrepreneurship research, and to the tie formation and institutional intermediaries literatures. Managerial summary: A key dilemma facing entrepreneurs is how to finance their ventures. While entrepreneurs in developed economies can seek VC or angel investment, entrepreneurs in emerging economies often need to pursue potential government funding opportunities. Our study highlights three strategies for acquiring government funding. Well‐connected entrepreneurs can leverage their political ties to acquire such funding. Less‐connected entrepreneurs can leverage science parks that in emerging markets are designed to help governments to identify promising ventures. For returnees whose ample experience abroad may not fit with local ways of doing business, gaining science park admission can certify quality and so ease the path to government funding. For technically skilled local entrepreneurs who lack business skills, science parks can help build such skills, which then ease the path to government funding. Copyright © 2016 John Wiley & Sons, Ltd.

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Section: Theory Development and Hypothesesmentioning

confidence: 99%

How entrepreneurs leverage institutional intermediaries in emerging economies to acquire public resources

Armanios

Eesley

et al. 2016

Strategic Management Journal

Self Cite

254

190

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“…This process requires separating the entrepreneur from the firm, as is accomplished to some extent by the limited liability provision that entrepreneurs are not personally liable for the debts of a firm, and thus provides entrepreneurs with the ability to terminate projects and move on. As an example, Eberhart et al (2012) find that a bankruptcy reform in Japan that reduced the consequences of closing a firm encouraged greater levels of entrepreneurship and risk taking following the reform. The best policy appears to involve striking a balance between a good measure of limited liability for entrepreneurs, allowing them to transition across projects without severe and lasting penalties, along with some protections or restrictions for small or unsophisticated investors who may not comprehend fully the low likelihood of the entrepreneur's success.…”

Section: Democratizing Entry and Facilitating Efficient Failurementioning

confidence: 99%

Entrepreneurship as Experimentation

2014

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acknowledged. Research results and conclusions expressed are the authors and do not necessarily reflect the views of the Census Bureau or the NSF. This paper has been screened to ensure that no confidential data are revealed. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peerreviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

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“…Recent efforts to better understand the relationship between institutions and entrepreneurial activity have drawn scholars to scrutinize the influence from a variety of perspectives, including: institutional barriers to growth [4,5], the use of intermediaries to precipitate institutional change [6], the use of "soft power" [7,8] and use of nonmarket strategies [9][10][11] to influence firms, industries and institutions through the activation of political and social leverage [12][13][14][15]. To varying degrees, each of these perspectives reinforces Baumol's [16] notion that entrepreneurial activity will emerge to varying degrees and with varying characteristics and intents as a function of the prevailing economic, political, and legal institutions.…”

Section: Introductionmentioning

confidence: 99%

“…There are, however, reasons to doubt whether the distinctive, underlying mechanisms of entrepreneurial opportunity pursuit by women have been aptly captured by extant theories [22]. Similarly, it is far from clear that research connecting institutional change to entrepreneurial activity [4][5][6] accurately conveys the specific set of circumstances faced by female entrepreneurs, particularly those confronting institutional barriers in developing economies [23]. Scholars such as Ehlers and Main [3], Harper [24], and Elam [25] have convincingly asserted that the descriptive accuracy and predictive reliability of existing frameworks are suspect.…”

Section: Introductionmentioning

confidence: 99%

Deinstitutionalization through Business Model Evolution: Women Entrepreneurs in the Middle East and North Africa

Hunt¹,

Ortiz-Hunt²

2018

Entrepreneurship - Development Tendencies and Empirical Approach

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Additional information is available at the end of the chapter "The first day I sold my perfumes was the best day of my life. Customers loved them. No one had ever bought such a good product at such a low price. I was overjoyed with the success, even though I worried about getting caught running my own business…In the early years, I couldn't even open my own Abstract This chapter is among the first to examine the interplay between deinstitutionalization and the rollout of novel business models by women entrepreneurs in developing countries. Much of the existing literature has examined the ways in which policy directives by formal institutions are the key drivers of entrepreneurial activity among women. Implicitly, this orientation suggests that the fate of women entrepreneurs is tied to, and cascades from, macro-level deinstitutionalization efforts, arising through changes in policies, laws and regulations championed at the highest levels. While this top-down view may intuitively be attractive, there are empirical reasons to doubt that the "institutional cascading" model accurately captures the underlying mechanisms of entrepreneurial activity among women. Taking a radically different tack, we develop and test an alternative, market-based perspective in which novel business models developed by women drive deinstitutionalization in bottom-up fashion. The context for our study involves detailed case histories of 95 women who started new businesses in the Middle East and North Africa (MENA), 1960-2012. Using a question-driven research design, our findings indicate that deinstitutionalization is strongly associated with the timing and substance of entrepreneurial action taken by MENA women.

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Failure is an Option: Failure Barriers and New Firm Performance

Cited by 12 publications

References 79 publications

How entrepreneurs leverage institutional intermediaries in emerging economies to acquire public resources

How entrepreneurs leverage institutional intermediaries in emerging economies to acquire public resources

Entrepreneurship as Experimentation

Deinstitutionalization through Business Model Evolution: Women Entrepreneurs in the Middle East and North Africa

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