Knowledge that Transforms

Despite the assumption that symptoms of hypomania are detrimental, they may prove beneficial within self-employment contexts. Drawing on person-environment (P/E) fit theory and using the first National Epidemiologic Survey on Alcohol Related Conditions (NESARC 1), our conservative inferences are that for self-employed individuals, hypomania has a positive association with income, self-employed individuals with higher education have higher levels of income with increasing hypomania score, and older self-employed individuals with a higher hypomania score have a higher income. These findings have implications for the literature on hypomania symptoms and self-employment related labor market outcomes.

The social ties of the owners, directors, and managers of firms have cross-level effects on firms’ network development. Firms can develop affiliations with a business group and connections across business groups. We expand the theoretical focus of Mani and Durand’s examination of the family and community ties of firm leaders and their impact on firms’ business group networks. We discuss the relational content heterogeneity of those ties and the associated logic in developing a firm’s networking strategy. Thus, we suggest alternative developmental processes for a firm’s network development strategy.

We extend McLarty, Vardaman, and Barnett’s analysis of how family firm supervisor attributes, in terms of familial status and socioemotional wealth importance, affect supervisee performance by considering the supervisee attributes. We further integrate the concept of restricted and generalized social exchange to provide a theoretical basis for how hierarchical dyadic (in)congruence moderates the relationship between supervisee commitment and performance. By providing a more fine-grained conceptualization, we contribute to the family business literature at its organization behavior interface.

This paper studies how critical entrepreneurial finance outcomes such as the investment return and equity division are shaped by venture characteristics, financier risk preferences, and competitive searching. Our analysis uses a double-hazard agency model in which financiers determine the equity division to maximize the expected utility of their investment return while entrepreneurs search for the best deal. Model results provide new theoretical insights on the venture funding cycle, the coexistence of angels/venture capitalists (VCs) with heterogeneous risk aversion, and risk separation in the entrepreneurial finance market. The model predicts that financiers with higher funding capacity and advisory capabilities (e.g., VC firms) will prefer to fund at later stages as their expected investment return rises with the venture’s initial value and financier productivity. Competitive searching by entrepreneurs enables financiers with a diverse set of risk preferences to coexist profitably by reducing the advantage (disadvantage) of lower (higher) risk aversion financiers and making investment returns more similar. Further, the model shows the emergence of a risk separation cutoff beyond which only angels/VCs with lower levels of risk aversion can profitably fund riskier ventures.

More often than not, corporate acquisitions are expensive and difficult, especially those transacted for the purpose of advancing the aims of corporate entrepreneurship (CE). Motivated by frequent, high-cost failures, firms are experimenting with novel organizational structures and fresh approaches to acquisition-driven CE. In this study, we examine the effectiveness of corporate spin-ins—acquisitions in which the acquired company is founded by former employees of the acquiring firm—in resolving key challenges of CE-motivated acquisitions Using a matched pairwise dataset of spin-in and non-spin-in acquisitions, we discover that spin-ins generate superior outcomes, positioning them as a high-potential facet of CE portfolios.

The literature has posited that agglomeration economies and the formation of social relationships resulting from the geographic concentration of incumbents constitute the forces that “pull” new entrants into industry clusters. However, this proposition overlooks how the collective action of incumbents in pursuit of their own benefits affects new entrants. This study examines how business associations as collective action organizations established by incumbents to promote and safeguard group-wide interests contribute to de novo entrants. The empirical evidence from Canada’s telecommunication equipment manufacturing industry between 1995 and 2005 reveals that the prevalence of local business associations encourages de novo entrants. However, the impact is curvilinear such that excessive collective action on the part of local fellow incumbents can create a clubby environment and “push” new entrants away.

Lude and Prügl explored “family business bias,” a cognitive tendency where the family nature of a firm can often reduce investors’ perceived risk in investments. As a result, investors would display lower risk-avoidance in the gain domain and reinforced risk-seeking in the loss domain. We expanded the authors’ work by introducing four cognitive factors (anchoring, representativeness, stereotype heuristic, and information availability) that can explain the underlying mechanisms behind the prevalence of “family business bias” and other cognitive misperceptions surrounding family businesses when it comes to investment decisions.

We develop a behavioral–decision model to highlight entrepreneurs’ decision making behind venture opportunism. We find that opportunism can present to entrepreneurs and their new ventures a risky yet beneficial choice to secure short–term gains at potential social costs. We posit that, motivated by loss aversion, entrepreneurs may accept the risk and engage in opportunism when their ventures confront economic losses. For instance, a high risk of venture failure may motivate entrepreneurs to act opportunistically in the hope that the failure can be averted. We further posit that such loss–averse decisions will be moderated by the entrepreneurs’ personal bonds to their new ventures. That is, the scale of entrepreneurs’ personal investment in their ventures will intensify their economic loss aversion posed by venture failure risk. In contrast, when entrepreneurs use their personal social capital to support their ventures, they will personally bear more of the down–side risks of opportunistic behavior and thus be less likely to act opportunistically to countervail a potential economic loss. Results based on the data collected from 244 NEEQ–listed new ventures in Beijing and Tianjin in China support our predictions.

By focusing on the impact of different types of family routines and how they change, this commentary builds on concepts regarding the influence of perceived parental support and psychological control on next-generation engagement in family firms. Drawing on the organizational routines literature and the family studies literature, I propose that attention to family routines, and how these routines change (or not) over time can reveal additional insights regarding next-generation engagement in the family business.

The novelty of new business domains demands that internal corporate ventures (ICVs) exhibit an ability to learn over the course of the venture's development. Nonetheless, ICV learning proficiency may be differentially related to venture performance as a function how various aspects of business planning for the venture are initially approached and evolve. Results from the current research indicate that ICV learning proficiency is more positively related to venture performance when the ICV's initial value propositions are unclear and when the ICV's goals do not extensively evolve over the course of the venture's development.