Knowledge that Transforms

status: Published

Research summary How do entrepreneurs on a sharing economy platform (SEP) with a limit to aggregate output (capacity constraints) respond to a platform design change emphasizing buyer feedback? Not all supply‐side complementors can diversify or scale their offerings. Focusing on those who can change the former, but not the latter, we examine how entrepreneurs change their product portfolio size after the platform design changed to emphasize buyer feedback. We found that their product portfolio size decreased following the change, and more so for those with more positive feedback. While the sales increased for entrepreneurs after the change, buyer feedback deteriorated. Our results show how SEPs in emerging economies can foster entrepreneurship and elucidate the importance of nonscale‐free resources of supply‐side entrepreneurs to better understand platform dynamics. Managerial summary Do sellers change the number of products on offer when the app owner rewards sellers with high user ratings? While research has examined how sellers adjust the number of products to get high ratings, little attention has been paid to sellers with capacity constraints. This is problematic, as sellers on sharing economy apps often have a limit on the total quantity of products they can produce. Using data from a Chinese home cooked meal selling app, we show that sellers decreased the number of products they sell when the app owner began to reward high user ratings. The decrease was more pronounced for sellers with higher ratings. As a result, sales revenue increased, but user ratings decreased. Implications for practitioners and policymakers are discussed within.

What is a crisis? According to Merriam-Webster's dictionary (n.d.), the concept refers to "an unstable or crucial time in which a decisive change is impending, especially with the distinct possibility of a highly undesirable outcome." The COVID-19 pandemic that is sweeping across the globe certainly qualifies as a crisis, even a mega one. It has already caused vast economic and social instability, sent shock waves through national health systems and global supply chains, and upended people's lives abruptly and in unprecedented ways, causing hardship and misery. As we are writing this article, more than 1 million people have already lost their lives to the pandemic, and countless others have suffered its dire consequences.

Research Summary Speed is often critical for successful commercialization of a new technology, and patents help entrepreneurs secure funding, enter the market, and avoid expropriation of their ideas. In this article, we employ a recent change to U.S. patent law—the introduction of an elective program accelerating patent examination—to investigate the role of patent examination speed in strategic entrepreneurship. We find that small firms with limited patent portfolios are the most likely to expedite their patent applications. Moreover, accelerated patents are cited and litigated at higher rates than other patents, and these outcomes are more sensitive to exogenous changes to patent scope. Our results suggest that providing the option to accelerate patent examination may help increase incentives for innovation by strategic entrepreneurs. Managerial Summary Patents are essential to high‐tech businesses, helping them to secure funding and exclude competitors from the marketplace. We evaluate a USPTO pilot program that allowed patent applicants to accelerate patent examination, yielding a patent in less than 1 year when typically 3 or more years are required. We find that entrepreneurs are more likely to use the program than large firms. Moreover, patents examined under the program tend to be strategically important. They are litigated and cited at higher rates than other patents, and the scope of the patents' claims plays a key role in these outcomes. Collectively our results suggest that multi‐track patent examination programs are likely to have a positive effect on generating new ideas, increasing value capture for entrepreneurs, and facilitating the growth of small businesses. Our results also suggest that the USPTO has implemented the program successfully by accelerating examination without sacrificing quality.

Research Summary As a firm‐level attribute, entrepreneurial orientation (EO)'s beneficial relationship to firm performance has been established in the corporate sector; however, its implications in other sectors including university settings remain a rather underexplored area. Based on a sample of 107 universities in the United States, we examine the impact of EO on a wide range of university performance measures from commercialization of intellectual property to more comprehensive university performance metrics. Our findings underscore the critical importance of EO in the context of universities and also reveal the moderation effects of university characteristics such as size and the presence of science, technology, engineering and math (STEM) focus. Managerial Summary This study examines the impact of EO on university performance. Our findings can be of significance to higher education administrators in several ways. First, we draw attention to the need to recognize university EO as the glue that binds resources together for discovery and exploitation of opportunities. Furthermore, the evidence connecting EO to the U.S. News and World rankings demonstrates that leveraging university EO has potential to impact metrics that many of its stakeholders pay attention to. In addition, our findings suggest that large universities and those with a STEM focus are able to better leverage the EO shift upward in their rankings, which provides guidance for university administrators on how to strategically create and develop new academic programs.

Research Summary Specialized knowledge can be a facilitator of entrepreneurial orientation (EO), but little is known about how management teams transform their knowledge resources into entrepreneurial activity. Complementing the knowledge‐based view with social interdependence theory, we suggest that team processes mediate the impact of teams' transactive memory system (TMS) on EO. Our empirical analysis of data from interdisciplinary management teams shows that a strong TMS serves as a starting point to initiate a beneficial “domino effect” of positive team interaction patterns (enhanced team learning and participative decision‐making) and positive team psychological processes (enhanced team identification), which, in turn, foster the development of EO. We thereby contribute new insights to the largely unresolved questions about the “where” and “why” of EO genesis within organizations. Managerial Summary Enhancing entrepreneurial orientation (EO) is of major importance for established firms to stay competitive in the market. This study sheds light on the question how EO emerges within management teams of a firm's decentralized units and specifically gives insights about how team design and team processes can foster the EO of these units. We find that teams with specialized experts who share a common meta‐knowledge about who knows what in their team (i.e., teams with a strong transactive memory system) engage in more team learning and participative decision‐making and identify themselves more strongly with their team, which consequently spurs unit EO. Our results highlight that well‐designed and well‐functioning management teams below the executive level can play an important role in fostering entrepreneurship in multiunit organizations.

Research Summary We investigate the effects of patent disclosure on corporate venture capital (CVC) investments in technology startups. Toward this end, we focus on the passage of the American Inventor's Protection Act (AIPA), which mandated public disclosure of patent applications. Theoretically, technology disclosure enables CVCs to better evaluate startups and thus, could increase the likelihood of investment relations. Conversely, such disclosure may already satisfy the technology‐acquisition objectives of CVCs, reducing CVCs willingness to form an investment relation after disclosure. Our empirical analysis finds that patent disclosure through AIPA increased the likelihood of receiving CVC investments for startups—specifically in industries where patents have higher information significance. We provide evidence that the observed pattern is mainly driven by a reduction of information constraints regarding startups with patent applications. Managerial Summary Receiving corporate venture capital (CVC) funding is an important success factor for technology startups. Would disclosure of a startup's innovation increase or decrease its chance of receiving CVC funding? On the one hand, disclosure by startups would reduce uncertainty and search costs for CVC investors, which could increase the chance of CVC funding. On the other hand, such a disclosure would reveal the startups' technology to the corporations, which would in turn reduce corporate incentive to use funding as a window to the startup's technology . Thus, disclosure could also reduce the chance of CVC funding of startups. In this paper, we study the above issue by examining the case of the American Inventor's Protection Act (AIPA), which mandated public disclosure of patent applications. Our results suggest that innovation disclosure significantly improves the likelihood of CVC funding of startups.

Research Summary We examine the role of managerial job security in the adoption of innovative practices and structures. Utilizing state level antitakeover protections as an exogenous shock, we find that when managers are afforded greater job security through these protections they exhibit a higher probability of initiating a Corporate Venture Capital (CVC) program. Furthermore, the positive effect of job security on CVC adoption is stronger when firms are research intensive, and when there are slack financial resources. Our results suggest that providing managers leeway to experiment while ensuring job security is important for corporate entrepreneurship and the willingness to experiment with innovative strategies. Managerial Summary Entrepreneurial activity often involves identifying opportunities that the rest of the marketplace overlooks. While this risk taking is celebrated as part of entrepreneurial folklore, in pragmatic terms, for managers of public organizations, it requires going against the prevailing wisdom of important stakeholders. Since stakeholders can hold considerable influence over top managers' employment, managers may avoid innovation if they feel experimentation and/or failure could cost them their jobs. This study demonstrates that when top managers have more job security, they are more likely to experiment with new organizational forms and structures by establishing Corporate Venture Capital units. The study demonstrates that job security not only impacts the amount of risk taken within existing operations, but also the willingness to experiment with novel ideas and activities.

Research Summary We consider what configurations of historical and geographic dimensions influence entrepreneurial growth aspirations (EGA). Our theoretical framework combines geography (coastal location, resource dependence), long‐term colonial history (ethnic heterogeneity, legal origins), and postcolonial history (low levels of conflict and population displacement; not having “bad neighbors”). We employ abductive reasoning to link the social science and historical literatures via analytically structured histories of Ghana, Nigeria, and Angola. Next, we undertake a fuzzy set qualitative comparative analysis on sub‐Saharan Africa countries to investigate which particular configurations of these dimensions are important for EGA. We demonstrate the importance of configurations over individual variables and add context‐bound dimensions to the study of entrepreneurship in developing countries, through historical analysis. Managerial Summary Our analysis may offer entrepreneurs a template for identifying potential opportunities and threats in order to calibrate their strategies for scaling up their venture in sub‐Saharan Africa. We argue that environments rich in entrepreneurial growth opportunities are associated with configurations where negative aspects are more than compensated by positive ones. For Botswana, the low levels of internal conflict compensate for unfavorable location. For Angola, the positive impact of coastal location and relatively low ethnic heterogeneity counterbalance the negative effect of resource rents. Resource‐driven economies are more entrepreneurial: better economic opportunities can sometimes result from having extractive industries. For African entrepreneurs it is not only relevant what happens in their own countries, as their opportunities are directly affected by economic or political turmoil in neighboring countries.