Knowledge that Transforms

Political connection in China is often tested for correlation with business success and government support under a suspicion that connected entrepreneurs enjoy special favors and protection. Research evidence is mixed. In revisiting the debate on political capital in China, we apply a socially embedded perspective on political connection. To this end we introduce two methodological innovations: (a) We develop a broader measure of political connectedness that covers the continuum from political connection to disconnection. (b) We integrate data on political connection with social network data. Specifically, we explore how the social structure around the individual entrepreneur affects performance above and beyond the often tested association between political ties and performance. We draw two conclusions: (1) The success association with political connection is discontinuous. Advantage is less for entrepreneurs weakly connected politically, but significant additional disadvantage arises for the politically disconnected. (2) The additional is that entrepreneurs disconnected from government show no benefit from having an advantaged business network. The politically connected with an advantaged business network show more prosperous business, higher returns on assets, and more likely survival over time. The politically disconnected show none of these benefits. We caution the entrepreneur who plans to ignore the government.

This article theorizes how short-term revenue volatility affects new venture viability and how such volatility develops over time. Tracking the bank accounts of 6,578 new ventures over a 10-year period, we find that, even after controlling for a range of other factors, short-term revenue volatility is a strong predictor of venture exit. Although short-term revenue volatility is associated with the depletion of buffer resources and financial default, surviving ventures do not, on average, decrease their short-term revenue volatility over time. However, short-term revenue volatility decreases at the cohort level due to higher exit rates of volatile ventures.

We examine how the prior experiences of new venture leaders (NVLs) affect networking behaviors during the early stages of opportunity exploitation. We argue that lack of prior experience increases the unknowns that NVLs face when pursuing opportunity exploitation. Lack of technical experience increases technical unknowns, whereas lack of startup experience increases startup unknowns. Using a qualitative methodology, we investigate 22 NVLs and find that they differ on three dimensions: networking time orientation (short-term vs. long-term), desired benefits (operational vs. symbolic), and networking actions (deepening vs. broadening). We find that novice NVLs, those who lack technical or startup experience, tend to utilize short-term orientation, engage in network-deepening actions, and seek operational benefits from their networks to mitigate technical and startup unknowns. In contrast , dual-experienced NVLs, those with technical and startup experience, are guided by long-term orientations, network-broadening actions, and a focus on symbolic benefits. We also find that technical and startup veterans exhibit a combination of those behaviors. We contribute to the literature by posing a set of three propositions depicting differences in NVL networking behaviors based on differences in startup and/or technical experiences. This study, thus, highlights the influence of NVL experience on early-stage networks.

Despite mounting interest in growth mindset interventions, this approach has yet to be applied to the domain of entrepreneurship. In the present research, we developed and tested if a growth mindset intervention could be leveraged to promote students’ entrepreneurial self-efficacy and if this, in turn, predicted career development (i.e., academic interest, career interest, task persistence, and academic performance). We report on our findings, from an Open Science Framework (OSF) preregistered study, that is a randomized controlled trial implementing a growth mindset intervention. We randomly assigned undergraduate students ( N = 238) in an introduction to entrepreneurship class to either the growth mindset intervention or to a knowledge-based attention-matched control. Students in the growth mindset intervention, relative to the control, reported greater entrepreneurial self-efficacy and task persistence on their main class project. The intervention also indirectly improved academic and career interest via entrepreneurial self-efficacy. However, the intervention failed to directly or indirectly impact performance on a classroom assignment. Additionally, and somewhat surprisingly, gender and past experience in the field failed to moderate any effects of the intervention on outcomes. Theoretical implications, limitations, and future directions are discussed.

Given variance in entrepreneurs’ capital endowments, the question of sufficient (or insufficient) starting conditions enabling a pathway to survival is critical in entrepreneurship. Drawing on the subjectivist theory of entrepreneurship (STE), we adopt a configurational approach. Our results show how combinations of human and social capital are related to survival while overreliance on financial capital is not. From a subjectivist perspective, we reveal a potential gap between identifying and exploiting an opportunity. The findings provide some novel insights that help reframe conflicting results as to whether capital endowments are substitutes or complements.

Long-established family firms are endowed with a bundle of beliefs and practices that constitute their tradition. However, to remain competitive, they need to renew their products and production processes. Such forces pulling toward the past and the future, antithetically calling for continuity and change, seem paradoxical. In an abductive analysis of eight long-established family firms in Turkey, we identify four equifinal strategies to manage this paradox. Adopting a family imprinting perspective, we theorize how the long-lasting legacy of previous family generations shapes different approaches to innovation and tradition depending on the content imprinted on the current family generation. Contributing to family business, imprinting and innovation research, we identify the new construct of temporal symbiosis as a firm’s simultaneous adoption of retrospective and prospective approaches to using its resources to concurrently perpetuate tradition and achieve innovation, highlighting its crucial role as a shield of the past and engine for the future.

Reflecting on common empirical concerns in quantitative entrepreneurship research, recent calls for improved rigor and reproducibility in social science research, and recent methodological developments, we discuss new opportunities for further enhancing rigor in quantitative entrepreneurship research. In addition to highlighting common key concerns of editors and reviewers, we review recent methodological guidelines in the social sciences that offer more in-depth discussions of particular empirical issues and approaches. We conclude by offering a set of best practice recommendations for further enhancing rigor in quantitative entrepreneurship research.

How can problems be turned into something good? We develop and test a theoretical model suggesting that error mastery orientation influences whether problems have positive or negative outcomes. We argue that problems increase or decrease entrepreneurial learning and venture progress depending on error mastery orientation. We tested our theoretical model using a longitudinal design with one baseline measurement and 11 weekly measurements. Analyses were based on 1,016 lagged observations from 168 individuals, who engaged in venture creation as part of entrepreneurship training courses. The results suggest that error mastery orientation functions like a switch, turning problems into something good.

Crowdfunded microfinance research has routinely examined how campaign characteristics drive funding to crowdfunding campaigns but has neglected to examine the critical role of the microfinance institution (MFI). We leverage signaling theory to contend that entrepreneurs’ MFI affiliation is a salient third-party signal that shapes the performance of their crowdfunding campaign and examine how the financial and social performance of MFIs drive campaign funding. Our examination of 220,649 loans paired 173 MFIs supports our arguments. We provide insight into the importance of third-party signals in crowdfunding and into how investors seek to balance social motives with financial concerns in crowdfunded microfinance.

Building new space for institutional theory, we propose how the severity of formal and informal institutional voids shapes the productivity of entrepreneurial activities within society. Our theory makes the key assumptions that voids can exist in both formal and informal institutions and that they are capable of hindering entrepreneurial behavior that is favorable to development progress. We extend new theoretical domains by conceptualizing informal institutional voids and proposing how both formal and informal institutional voids and their interaction influence two qualitative outcomes within localities: (1) the unique forms of entrepreneurial activity, and (2) the objectives underlying this entrepreneurial activity.