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

Abstract

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.

Innovation practices in emerging economies: Do university partnerships matter?

“…In this regard, Barge-Gil (2010) have explained this fact by the existence of obstacles in terms of response to the initiatives (universities do not follow the same market times as enterprises because they have more bureaucratic burdens), understanding (universities and enterprises do not speak the same language), and knowledge about the existence of grants (only a limited number of enterprises have access to information about the programs). However, at difference of current studies in emerging economies (Armanios et al 2016;Bastos et al 2014;Kruss and Visser 2017;Santarelli and Tran 2016) that continue pay attention on those emerging economies' negative conditions (obstacles, dilemmas and challenges) that limited university-enterprise partnerships, this paper tried to contribute on the debate about the contribution of universities in the radical innovation process of enterprises motivated by a direct enterprises interest for strategic purposes as well as by an indirect enterprises interest of covering the government requirements for accessing to R&D subsidies. Elements that are part of agendas of research lines such as university technology transfer, quadruple helix perspective (Miller et al 2016), university-enterprise relationships, open innovation, innovation performance (Gassmann 2006;Greco et al 2016;Perkmann and Walsh 2007;Van de Vrande et al 2009) and effectiveness of R&D subsidies (Dimos and Pugh 2016;García-Quevedo 2004).…”

“…In certain scenarios characterized by several constraints, the main policymakers' assumption is to transfer to universities and government research centres responsibilities linked to innovation and commercialization practices (Marzo et al 2008) as well as to pay attention to industry's needs (Cohen et al 2002). Even these policy makers intentions, subsidies or incentive innovation programmes also represent for universities and enterprises an excellent opportunity to develop subsidized innovation (de facto lowering the costs for all the participants in these initiatives) as well as a risk to adopt an university-industry opportunistic when the relationship is relatively fragile and tend to be discontinued when the public funds for the initiative dried up (Gianiodis et al 2016) or with the existence of opportunism from intermediaries when governments use them as a bridge between enterprises and public funding (Armanios et al 2016).…”

“…Similarly, previous studies have estimated the effect of public subsidies on the promotion of R&D activities and university-enterprise cooperation (Segarra-Blasco and Arauzo-Carod 2008), and have concluded that enterprises with access to such public subsidies tend to cooperate with one another (Cassiman and Veugelers 2002). Current researches in the field are paying more attention on university-enterprise partnership across emerging economies providing interesting insights concerning dilemmas experimented in university-enterprise partnership for innovation purposes in Brazil (Bastos et al 2014), exploring the role of intermediaries in the innovation process in China (Armanios et al 2016), the partnership intensity influenced by the technological change and expected profitability translation of innovative effort in Vietnam (Santarelli and Tran 2016), the elements like reputation and national priorities that defined the incentives that drives innovation partnerships in South African (Kruss and Visser 2017). Based on these arguments, in emerging economies where public subsidies are oriented to reinforce enterprise-university collaborations, we expected to find that these government intervention allows an effective exchange of knowledge, generation of radical innovations and spillover effects (Astrom et al 2008;Boschma 2005;Brenes et al 2016;Perkmann and Walsh 2007;Perkmann et al 2013).…”

Institutions and Entrepreneurial Activity: The Interactive Influence of Misaligned Formal and Informal Institutions

“…The effects of regulatory action depend on the circumstance of the potential entrepreneurs. That is, given regulatory aid some entrepreneurs may benefit and others differently situated may not (Armanios et al 2017). In sum, formal regulations affect entrepreneurial activity yet the specific effects depend on more than the regulations themselves.…”

The Role of Accelerator Designs in Mitigating Bounded Rationality in New Ventures

“…Like others, we define organizational sponsorship as the ''intervention by government agencies, business firms, and universities to create an environment conductive to the birth and survival of organizations'' (Flynn, 1993: 129). This definition encompasses different types of sponsors, including incubators, science parks, universities, government programs, franchisors, and venture capital investors (Phan, Siegel, and Wright, 2005;Rothaermel and Thursby, 2005a;Shane, 2012;Amezcua et al, 2013;Dutt et al, 2015;Armanios et al, 2017). Research shows that sponsors provide new ventures with legitimacy via certification, help them develop capacities (Armanios et al, 2017), and provide access to knowledge in the local environment (Amezcua et al, 2013).…”