State-Based Conflict and Entrepreneurship: Empirical Evidence

Naudé, Wim; Amorós, Ernesto; Brück, Tilman

doi:10.2139/ssrn.4360829

Cited by 2 publications

(8 citation statements)

References 61 publications

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“…Judging from the answers of those investors with an investment focus in Eastern Europe, it seems that the (short-term and immediate) impact of the war on entrepreneurship is clearly negative. This finding is in line with the results of Naudé et al (2023) showing a negative relationship between statebased conflict and productive entrepreneurship.…”

Section: Introductionsupporting

confidence: 92%

“…The paper also relates to the growing literature on entrepreneurship in (post-) conflict countries (Brück et al, 2013;Moritz et al, 2023;Naudé et al, 2023). During the time of the conflict, the conflict is likely to reduce entrepreneurial opportunities and damage the institutions that are needed to attract entrepreneurial finance and other resources.…”

Section: Entrepreneurial Opportunities In (Post-) Conflict Countriesmentioning

confidence: 96%

“…During the time of the conflict, the conflict is likely to reduce entrepreneurial opportunities and damage the institutions that are needed to attract entrepreneurial finance and other resources. In a recent study, Naudé et al (2023) show that there is a negative relationship between statebased conflict and productive entrepreneurship exploiting entrepreneurial opportunities. Yet, the situation can change in post-conflict times, where there is a strong need to replace or repair damaged assets.…”

Section: Entrepreneurial Opportunities In (Post-) Conflict Countriesmentioning

confidence: 99%

“…In particular, financial criteria and entrepreneurial experience become more important. The fourth contribution is to the literature on entrepreneurship in conflict countries (Brück et al, 2013;Moritz et al, 2023;Naudé et al, 2023). Judging from the answers of those investors with an investment focus in Eastern Europe, it seems that the (short-term and immediate) impact of the war on entrepreneurship is clearly negative.…”

Section: Introductionmentioning

confidence: 99%

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Entrepreneurial finance in Europe and the Russian war against Ukraine

Kraemer-Eis,

Block,

Botsari

et al. 2024

J Technol Transf

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Prior research has investigated how the prices of stocks and commodities as well as inflation levels have been affected by the Russian war against Ukraine. So far, however, we know little about the impacts of the war on the entrepreneurial finance sector. Prior research on the effects of unexpected exogenous crisis events on entrepreneurial finance suggests a strong negative impact on new and follow-on funding for entrepreneurial ventures. Our study regards the Russian war against Ukraine as an unexpected exogenous crisis event and explores its impact on the entrepreneurial finance sector. It goes beyond a mere sentiment and impact analysis and also explores the underlying reasons and mechanisms as well as potential response and coping strategies employed by entrepreneurial finance investors. Based on two surveys of European venture capital (VC) and private equity (PE) investors, we find that the war had a strong negative impact on the two types of investors and their respective funds. Both VC and PE investors report more risk-aversion of limited partners (LPs) and LPs leaving the market as important challenges resulting in an overall lower willingness of LPs to invest. This applies in particular to banks, insurance funds, and pension funds. On the portfolio firm level, securing equity financing and maintaining liquidity were considered pressing issues. Overall, the situation seems to be more difficult for portfolio companies of VC as compared to PE investors. For the former, the financing- and liquidity-related issues seem to be more existential and survival-threatening. Responding to these challenges, both VC and PE investors altered their industry focus and put more emphasis on entrepreneurial experience. Financial investment selection criteria such as financial valuation, profitability, and cash- as well as revenue-generating capacity also increased in importance. Again, differences between VC and PE investors exist. Our study has implications for entrepreneurial finance theory and practice and concludes with an agenda for research on the impacts of the Russian war against Ukraine on entrepreneurial finance.

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Section: Introductionsupporting

confidence: 92%

Section: Entrepreneurial Opportunities In (Post-) Conflict Countriesmentioning

confidence: 96%

Section: Entrepreneurial Opportunities In (Post-) Conflict Countriesmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Entrepreneurial finance in Europe and the Russian war against Ukraine

Kraemer-Eis,

Block,

Botsari

et al. 2024

J Technol Transf

View full text Add to dashboard Cite

show abstract

“…This leaves open the possibility for entrepreneurial behaviour to lead to an underdevelopment trap if violent conflict becomes significant" (Brück et al, 2013, p.10). Naudé et al (2023), instead, provided a cross-country empirical study using UCDP/PRIO data on violent conflict (state-based) and entrepreneurship data from the Global Entrepreneurship Monitor (GEM) and the International Labour Organization (ILO) covering 91 countries over 18 years. The authors found that violent conflict significantly alters the institutional context against productive entrepreneurship.…”

Section: Understanding the Dynamics Of Violent Conflictmentioning

confidence: 99%