Knowledge that Transforms

Research Summary We explore how changes in labor unions and related labor environments affect employees' likelihood of starting a new business. We suggest that the enactment of stringent anti‐union laws reduces incentives for employees to stay with their respective workplaces and increases the attractiveness of becoming self‐employed. Using the adoption of right‐to‐work (RTW) laws in Michigan and Indiana as a quasi‐natural experiment, we find that the likelihood of employees becoming self‐employed increased by 53% compared with that of states without RTW laws. Moreover, this tendency is more pronounced for blue‐collar and low‐wage workers who start unincorporated businesses. These findings offer novel insights on the relationship between anti‐labor environments and necessity‐driven entrepreneurship by focusing on individual‐level incentives in non‐knowledge‐intensive sectors. Managerial Summary Changes in employment conditions influence employees to consider starting their own businesses, yet our understanding of how these changes drive individuals toward entrepreneurship remains limited. This study explores how weakened labor union power affects workers' engagement in entrepreneurial activities, with a focus on the types of employees impacted and the businesses that they start. By examining the adoption of RTW laws in Michigan and Indiana, we find that weakened labor union power disproportionately affects blue‐collar and low‐wage workers, increasing their likelihood of starting unincorporated businesses. These results suggest that managers and policymakers should consider the challenges faced by these workers and how changes in employment conditions may shape their career choices.

Research Summary The paper explores how the deep historical roots of informal institutions influence current informal businesses. It proposes that both pre‐colonial institutions—the tradition of cousin marriage—and the subsequent shocks of colonization still impact the performance of informal firms. We theorize on how the effects of historical family systems are moderated by the traumatic and spatially heterogeneous shocks of colonialism, in particular the cultural values of the colonizers (individualism) and their religious (missionary) activities. Our hypotheses are tested by regression analysis based on surveys of informal businesses in multiple regions of eight African countries. We find that the cousin marriage tradition is negatively associated with the performance of current informal businesses though this relationship is attenuated in places where colonizers were more individualistic. Managerial Summary This paper explores how the pre‐colonial family institutions—the tradition of cousin marriage—and the subsequent shocks of colonization jointly impact the performance of contemporary informal firms in sub‐Saharan Africa. We propose that the historical tradition of cousin marriage has persistent and negative effects on the revenue and labor productivity of contemporary informal businesses. This is because informal entrepreneurs in ethnic areas with the cousin marriage tradition may prioritize social obligations over economic incentives. However, these relationships are attenuated in ethnic areas colonized by European countries with more individualistic cultural values. Our findings highlight the importance for business owners and managers to understand the deep historical roots of the social norms of the communities and groups with which they interact.

Research Summary In an agenda setting seminar in 1997, when entrepreneurship was just emerging as a serious field of scholarship, Nobel Laureate Kenneth Arrow offered a challenging null hypothesis, namely, that entrepreneurship being a stochastic phenomenon, educational content is unlikely to make a difference in startup rates or success thereafter. With a view to begin tackling this null, we utilize a nationwide educational reform as a quasi‐experiment to investigate the effect of business and entrepreneurship‐oriented education on (i) early age startup (i.e., direct effects) and (ii) postgraduation choices that may lead to startup activity later (i.e., indirect effects). We find evidence for positive direct and indirect effects and discuss implications for future research into the design of entrepreneurship education policies as well as content and teacher training. Managerial Summary A variety of entrepreneurship programs exist at prestigious universities to stimulate startup for students who enroll in these based on entrepreneurial preferences and intentions. The resulting new ventures created are important drivers of innovation, economic growth, and job creation. Our study indicates that exposure to business and entrepreneurship content at an earlier age is equally important. Both in terms of obtaining a realistic insight into entrepreneurship as a career, leading to more realized startups of high quality but also in terms of developing a preference for entrepreneurship affecting subsequent choices regarding tertiary education and employment in favor of future entrepreneurship. We suggest investments in broadening entrepreneurship education for all in contrast to for specific targeted groups such as university or technology entrepreneurs.

Research Summary There is limited evidence on how university spin‐offs (USOs) respond to external crises. We fill this gap by assessing how UK digital USOs responded to the recent COVID‐19 pandemic. Specifically, we examine how USOs' capabilities (scaling‐up, fundraising, and intellectual property) and access to their parent university's financial resources/infrastructures interact intertemporally to address demand and supply challenges associated with the pandemic. Our analysis revealed that the interplay of (a) USOs' scaling‐up and fundraising capabilities and (b) USOs' fundraising capabilities and university parent's support infrastructure constituted the best strategy for developing intertemporal resilience during the crisis. Managerial Summary We investigate the impact of the COVID‐19 pandemic on digital USOs. Assuming support from parent universities, we explored how their scaling‐up efforts, fundraising efforts, and intellectual property addressed demand and supply challenges during these unprecedented times. First, USOs that could scale up while fundraising were more likely to sustain operations and satisfy demand through various stages of the pandemic. Second, USOs with fundraising capabilities and parent university support demonstrated greater resilience. These findings suggest valuable insights for CEOs of USOs and their parent universities in handling external crises.

Research Summary This study draws on the behavioral theory of the firm and a duality perspective to investigate the impact of founders' focus on academic goals on the financial performance of academic spin‐offs (ASOs)—a specific type of hybrid venture. We theorize that such relationship follows an inverse U‐shaped curve and is moderated by the degree of academic ownership. These hypotheses are tested using a sample of 179 Italian ASOs. Our findings indicate that when academic ownership is low, the relationship displays an inverted U‐shape. Moreover, as academic ownership increases, the relationship flattens and eventually shifts to a U‐shape. These results challenge the prevailing notion of inherent conflicts between economic and non‐economic logics in hybrid ventures, demonstrating when focusing on non‐economic (e.g., academic) goals enhances financial outcomes. Managerial Summary Academic spin‐offs (ASOs) play a pivotal role in science commercialization and often pursue academic goals due to their academic origins. However, the extent to which founders' focus on academic goals benefits or hinders ASOs' financial performance has remained largely underexamined. In this study of 179 Italian ASOs, we investigate the relationship between a focus on academic goals and firm performance. Our findings reveal that at lower levels of academic ownership, a moderate focus on academic goals is optimal for ASOs' financial performance. Conversely, at higher levels of academic ownership, either a low or high focus on academic goals proves optimal for financial performance. These insights can help practitioners improve ASO performance by aligning goal and ownership structures.

Research Summary Do employees benefit from acting entrepreneurially in a corporate environment? Drawing on signaling theory, we propose that entrepreneurial behaviors lead to tangible career benefits through the creation of new internal ventures, which serve as a credible signal of an employee's leadership potential. Using a time‐lagged design with a sample of 643 employees, we found in Study 1 that employees engaging in higher levels of entrepreneurial behaviors are more likely to create new internal ventures, which subsequently lead to more promotions and—in larger organizations—higher compensation. Study 2 employed a within‐subjects design to directly evaluate the signaling value of new internal venture creation. Together, our findings highlight internal venturing as a key mechanism through which entrepreneurial employees can gain career benefits within established organizations. Managerial Summary Entrepreneurial employees are often seen as organizational misfits. Yet, our research shows that acting entrepreneurially in a corporate environment can enhance employees' career success through new internal venture creation. In two studies, we find that employees engaging in higher levels of entrepreneurial behaviors—asking questions to challenge the status quo, observing with fresh perspectives, exchanging ideas across diverse networks, and experimenting with new approaches—are more likely to launch new internal corporate ventures. The act of new internal venture creation, in turn, leads to more promotions and—in larger organizations—higher compensation, because it sends a positive signal of an employee's leadership potential. Our findings offer practical insights for both entrepreneurial employees and organizations seeking to foster entrepreneurial spirit.

Research Summary University spinoffs (USOs) translate scientific advancement to economic gains, but the role of the university's governance as a public or private institution is infrequently explored. With a novel dataset of academic entrepreneurs with National Science Foundation I‐Corps training, we examine institutional governance as a fundraising signal. We demonstrate how angel investors and venture capitalists (VCs) show a preference for private USOs. However, with different investment objectives, the groups conduct distinct sensemaking that weighs this cue differently. For angels, industry moderates the effect such that they prefer private university life science firms to public USOs. However, industry mediates the effect for VCs, who prefer life sciences to engineering. We describe this variation as mixed salience—when a signal yields differences in decision‐making for distinct audiences. Managerial Summary University spinoffs (USOs) are important for economic growth, but little is known about differences between USOs from public and private universities. We study how angel investors and venture capitalists (VCs) fund USOs of public and private schools. These two investor groups make funding decisions with different priorities and approaches. Both groups appear to prefer private universities. A deeper look reveals that angel investors prefer private university life science teams to the public university counterparts. On the other hand, VCs prefer life sciences teams to engineering teams—and life sciences teams are more likely to come from private schools. Evidently, the two investor audiences respond to the public/private distinction in different ways.

Research Summary Building on recent studies on founders' entry strategy and the attention‐based view, our study examines the underexplored relationship between entrepreneurial entry mode and funding performance. We offer a novel perspective on how different entry strategies—such as hybrid, portfolio, and full‐time entrepreneurship—impact start‐up performance. Additionally, we develop a theoretical framework highlighting founder attention as a mediator in this relationship. Our research was conducted in the crowdfunding context, with findings remaining consistent across multiple measures of founder attention and funding performance. To address potential endogeneity concerns, we employ two‐stage instrumental variable analyses and a propensity score matching method, ensuring the robustness of our results. Managerial Summary Entrepreneurs' choice of entry strategy plays a critical role in shaping their ability to secure funding and drive their start‐up success. Our study highlights how different entry strategies—hybrid, portfolio, and full‐time entrepreneurship—affect funding performance, particularly in the crowdfunding context. A key insight is the role of founder attention in mediating the relationship between entry strategy and funding success. The way founders allocate their focus across different pursuits influences investor perceptions and financial outcomes. Therefore, aligning entry strategies with the ability to effectively manage and signal commitment to ventures is essential from a practical standpoint. Moreover, entrepreneurs and investors should consider how strategic entry choices impact not only operational execution but also the likelihood of securing financial support.

Research Summary This paper examines how academic entrepreneurs—scientists who found research‐based startups while remaining in academia—construct and sustain their professional identities amid frequent transitions between academic and entrepreneurial roles. Drawing on 27 interviews with Swedish academic entrepreneurs, we show that hybrid identities are not simply the result of reconciling abstract role categories but are shaped through the material and practical organization of everyday work. We introduce the concept of professional micro‐transitions as a key site of identity formation and argue that material artifacts and routines play a central role in this process. This study contributes to the literatures on identity work, role transitions, and academic entrepreneurship by offering a granular, materially grounded account of how hybrid identities are enacted and sustained in practice. Managerial Summary This article investigates how academic entrepreneurs—university scientists who create startups to commercialize research results while remaining in academia—manage to build a hybrid professional identity when frequently switching back and forth between their jobs as academics and for‐profit entrepreneurs. The findings reveal how they creatively find cross‐fertilizing effects between their academic and entrepreneurial work tasks. This in turn allows them to reevaluate and extend their professional identity. For universities, incubators, and policymakers, this study suggests that supporting academic entrepreneurship is not just about funding or IP policies. It also requires recognizing the practical identity work involved and creating flexible environments that allow scientists to integrate both roles in meaningful ways.

Research Summary This article enters the debate on the effects of digital platforms on entrepreneurial opportunities by estimating whether the entry of a home‐sharing platform shapes entrepreneurial decisions in marginal areas. We add a novel perspective to the literature, as we contend that when economic conditions are unfavorable, digital platforms, acting as External Enablers, stimulate entrepreneurship. We test these arguments on the unique setting of 270 Italian Borghi and the entry of Airbnb, employing a staggered difference‐in‐difference design. We show that, following the entry of Airbnb, the entrepreneurial activity of the surrounding area increases, with effects that are heterogeneous across sectors and stronger in more depressed areas. We also show qualitative–quantitative evidence of the mechanisms explaining these effects. Finally, we discuss theoretical contributions to digital‐entrepreneurship literature and implications. Managerial Summary This study provides implications for both prospective entrepreneurs and policymakers willing to incentivize the creation of new businesses in marginal and remote areas. First, we show that, in marginal locations, digital platforms act as facilitators for entrepreneurs facing a complex and risky decision to embark on new business activities, particularly, if these are along the scope of the platform. This happens because platforms create demand—if not existing—and reduce entry and operating costs by internalizing specific business processes. Second, we offer a clear recommendation to policymakers. We show that digital platforms represent an indirect and effective way of pursuing the development of entrepreneurship in marginal areas. This aspect is relevant as scholars have demonstrated that direct approaches are not always effective.