Knowledge that Transforms

Although political turnover is said to be a healthy component of the business environment, the literature is equivocal about the effects of regime change on early-stage entrepreneurial activity. I present incumbent displacement—the electoral defeat of an incumbent political party's candidate—as a source of regime change, and I analyze how this affects business formation through the lens of real options theory. I test my theory using US gubernatorial elections from 2004 to 2022, leveraging a Regression Discontinuity design to compare changes in business formation trends following elections where a challenger party candidate wins or loses by a close margin. I find that regime change reduces venture creation activity for growth-oriented ventures specifically. I also find evidence of a partial rebound in subsequent months—suggestive that some entrepreneurs delay entry while others permanently abandon their ventures.

We examine how parental divorce in early life affects performance in entrepreneurship in adulthood. Drawing on life course theory and empirical analyses of US self-employment and childhood data from the National Longitudinal Survey of Youth 1979, we show that entrepreneurs' experience of parental divorce in childhood benefits their entrepreneurial performance in adulthood through a gain in self-efficacy while simultaneously suppressing entrepreneurial performance through a shortfall in human capital. We also show that whether the performance advantages or disadvantages from parental divorce dominate depends on parental human capital. While parental divorce is associated with underperformance for entrepreneurs whose parents have high levels of human capital, it is positively related to entrepreneurial performance for those with low parental human capital. Our study contributes new theory and evidence on the intertemporal relationship between past family contexts and present entrepreneurial performance.

We examine whether and when female representation in decision-making groups of venture capital firms affects the firms' decision to fund woman-led businesses. By developing an intra- and inter-group categorization framework for group decision-making, we argue that, in the male-dominated venture capital industry, decision-making groups with higher female representation are less likely to fund woman-led businesses. However, this negative effect is mitigated when the decision-making group has more politically neutral members or when members have more shared prior employment affiliations. Using a longitudinal panel dataset of funding decisions by 151 U.S.-based venture capital firms, the empirical analyses support our theoretical predictions. We also enriched and complemented our empirical findings with qualitative evidence.

In many informal economies, entrepreneurs face a visibility paradox: increasing visibility to resource-granting stakeholders simultaneously increases exposure to resource-extracting stakeholders. To investigate this phenomenon, we leverage a unique, hand-collected, small-area census dataset of firms in the township of Delft in Cape Town, South Africa, providing rare insight into a population of otherwise unobserved firms. Through an abductive, multimethod approach, we address three interrelated research questions: (i) How do informal economy entrepreneurs make their firms visible? (ii) Which informal economy entrepreneurs make their firms visible? (iii) How does firm visibility relate to firm performance? Our analysis identifies distinct dimensions of authority- and community-oriented visibility and introduces the concept of selective visibility, which refers to making a firm visible to certain stakeholders (e.g., community members) but not others (e.g., authorities). Using a social embeddedness lens, we find that while highly embedded entrepreneurs are more associated with invisibility, less embedded entrepreneurs are more associated with community-oriented selective visibility. The QCA results also indicate a configurational relationship such that visibility's association with performance varies with an entrepreneur's level of embeddedness. As a whole, our study builds theory regarding the taken-for-granted concept of firm visibility and provides important insights that are generative for entrepreneurship research in informal economies and other difficult-to-access settings.

Entrepreneurship education and training targeting individuals living within impoverished regions has proliferated. However, empirical results suggest recipients are failing to adopt the newly prescribed practices, particularly the practice of experimenting with product, process, and marketing innovations. Research on institutional logics suggests the way practices are framed plays an important role in adoption. In a field experiment involving 683 entrepreneurs within rural Sri Lanka, we compared the effectiveness of two framing tactics: within-logic contrasting, and cross-logic analogizing. We find that cross-logic analogizing is more effective, and suggest our findings likely extend to other contexts where logics are highly institutionalized.

Persistent war is an increasing reality for millions of people worldwide. War contexts create a wide range of problems, but paradoxically may fuel some entrepreneurial activities. This inductive, qualitative study explores how an entrepreneurial ecosystem was launched and sustained amid an ongoing civil war despite repeated setbacks, disruptions, and impediments to pursuing collective goals. Building on our longitudinal qualitative data, we show how the entrepreneurial ecosystem was repeatedly reshaped by altering collective goals as well as providing the pathways and sense of agency needed to make progress toward ever-shifting goals. Our research culminates in a grounded theoretical model of an entrepreneurial ecosystem of hope, which contributes to our comprehension of entrepreneurship within war-affected regions and provides valuable insights into the dynamics of collective hope. This study offers practical implications for policy makers and practitioners by illuminating the role of entrepreneurial phenomena in the challenging context of war.

Nascent entrepreneurs (NEs) take action in the startup process by initiating startup activities in hopes of manifesting a new firm, though some NEs experience a quit outcome. Other NEs find themselves in a still trying status (i.e., continuing to work on the startup) after a span (window) of time. We draw upon recent entrepreneurial action. theory on how temporal enactment – the ways in which NEs map, or initiate, startup activities within a span of time –helps NEs navigate the uncertainty in the startup process and avoid the still trying status to instead reach a startup outcome. We take an exploratory approach to examine framing questions of: (1) How does pace (12-, 24-, or 36-month time windows) (2) engaging in specific categories of startup activities and (3) initiating specific sequences of categories of startup activities impact NEs' likelihood of reaching startup outcomes? Using logit analysis with data from the harmonized PSED, our findings show that categories of startup activities (i.e., what NEs do) as well as the pace and sequential ordering of these activities (i.e., when they do them) matter for NEs reaching startup outcomes and avoiding the still trying status. Our findings point to a consistent sequential pattern of action that maximizes NE's likelihood of reaching a startup outcome, offering an early roadmap for temporal enactment among NEs.

We investigate the impact of friction-reducing labor market reforms on regional high-growth entrepreneurship (HGE) through the effects of reduced legal enforceability of noncompete agreements (NCAs). We draw on new institutional economic theory and the external enablement framework, with insights from the theory of market-preserving federalism, to explore how these reforms enable (disable) HGE within the context of other, concurrent institutional changes at different governance levels. We assemble a novel multi-level longitudinal dataset and employ staggered difference-in-differences estimation to assess causal effects. Our findings suggest that while reducing the enforceability of NCAs can foster regional HGE, the effectiveness of such reforms is heavily influenced by concurrent federal and local institutional changes. In sectors facing significant federal regulatory expansion, the benefits brought by the reduction of NCA enforceability are negated. However, local pro-market institutional changes can counteract the disabling effects of federal regulatory expansion. This highlights the need to consider how the evolving institutional environment influences potential enablers of HGE, cautioning against claims that these labor market reforms (or other exogenous environmental changes) universally yield positive entrepreneurship outcomes.

The primary purpose of this research is to examine the extent to which positioning hybrid ventures as more or less congruent with their category influences perceptions of their legitimacy. To do so, we first introduce and define the notion of a hybrid category as an institutional context which combines two or more dominant institutional logics that both constrain and enable organizational action. We then construct a theoretical framework instantiated within a hybrid category, suggesting that moderate incongruence between a new venture's identity narrative and the expectations most strongly associated with the category will positively influence perceived legitimacy. We further predict specific relationships among dimensions of perceived legitimacy, as well as their downstream effects on an individual's willingness to contribute resources. Across three studies in which we experimentally manipulate congruence with a hybrid category, we find a consistent pattern of support for our hypotheses and reveal a unique benefit for new hybrid ventures who position themselves in a manner that is moderately incongruent with the hybrid category. In addition, our results suggest that moral legitimacy perceptions act as a precursor to cognitive legitimacy perceptions in new hybrid categories.

While age is positively related to entrepreneurial success, the prevailing stereotype favors younger entrepreneurs. To better understand how these contradictory perspectives influence funding decisions, we examine the role of age in a sample of 41,602 reward-based crowdfunding campaigns from Indiegogo. We find a negative correlation between an entrepreneur's apparent age and funding performance, indicating a preference for younger entrepreneurs. However, we also find age-based homophily where older entrepreneurs' campaigns attract older backers. Our study distinguishes between statistical and status-based discrimination to understand the multi-faceted nature of age in reward-based crowdfunding and demonstrate how investment motives mitigate and reinforce age-based discrimination.