Knowledge that Transforms

We develop a recombinant framework of technological information disclosure by integrating the insights of the recombinant innovation perspective and the crowdfunding literature. We propose that the technological information disclosed in a technology project’s crowdfunding description can boil down to two recombinant features, that is, the number of disclosed technological domains ( N) and the interdependence thereof ( K). We further posit that the N and K of disclosed technological information about a project have distinct implications for crowdfunders’ perceived usefulness and complexity of the project’s rewards, thus affecting crowdfunding performance in distinct ways. That is, N has an inverted U-shaped effect on crowdfunding performance, while K has a monotonically negative effect on crowdfunding performance. Such effects of N and K of disclosed technological domains are further moderated by crowdfunders’ knowledge about the disclosed technological domains. Evidence from the field data from Kickstarters.com and a scenario-based study support our predictions.

Metric conjoint studies are a popular research design in the entrepreneurship domain. For these studies, test-retest reliabilities of ρ > .70 or higher are an often-cited reliability criterion. Despite their widespread use, however, there is little rigorous analysis of whether test-retest reliability in metric conjoint studies relates to model efficacy. Informed by a systematic literature review, we conducted two Monte Carlo simulations to evaluate the effects of various determinants of test-retest reliability in conjoint experiments. We then illustrate a workflow for entrepreneurship researchers employing conjoint designs to better evaluate—and communicate—confidence in statistical models estimated from conjoint data.

Using three theory-based performance criteria as decision attributes, we conducted a conjoint analysis experiment with 105 social venture founder-CEOs to examine their decisions to exit their firms voluntarily. Multilevel regression analysis of founders’ choices revealed that various exit preferences were chosen that did not support theoretical prescriptions. While achieving desired social impact was the main influence on founder exit choices, the heterogeneity of exit preferences led us to parcel them into four distinct groups: idealists, traditionalists, realists, and pragmatists. We discuss our contributions to the entrepreneurial exit and social entrepreneurship research literature and list the implications of our results for practice.

Investing in sectors that a firm has never invested in before is fundamentally a form of entrepreneurial experimentation and an integral part of wealth creation. We consider how the broader market conditions and sociocognitive cues jointly affect venture capital (VC) firms’ investment decisions in new industries that are unrelated to their past experience. Although VCs are more likely to enter an unrelated new industry when the overall market is hot, they also take sociocognitive cues from their own social contacts and news media. Using the population of U.S. VC investments between 1990 and 2016, we find support for our predictions.

Despite many calls, functional brain magnetic resonance imaging (fMRI) studies are relatively rare in the domain of entrepreneurship research. This methodological brief presents the brain-imaging method of resting-state fMRI (rs-fMRI) and illustrates its application in neuroentrepreneurship for the first time. In contrast to the traditional task-based fMRI approach, rs-fMRI observes the brain in the absence of cognitive tasks or presentation of stimuli, which offers benefits for improving our understanding of the entrepreneurial mind. Here, we describe the method and provide methodological motivations for performing brain resting-state functional neuroimaging studies on entrepreneurs. In addition, we illustrate the use of seed-based correlation analysis, one of the most common analytical approaches for analyzing rs-fMRI data. In this illustration, we show that habitual entrepreneurs have increased functional connectivity between the insula (a region associated with cognitive flexibility) and the anterior prefrontal cortex (a key region for explorative choice) as compared to managers. This increased connectivity could help promote flexible behavior. Thus in brief, we provide an exemplar of a novel way to expand our understanding of the brain in the domain of entrepreneurship. We discuss possible directions for future research and challenges to be addressed to facilitate the inclusion of re-fMRI studies into neuroentrepreneurship.

The extant theory posits that ethno-racial diversity promotes entrepreneurship by increasing the novelty of information and perspectives available for recombination in a region. This view presupposes the flow of novel information among potential entrepreneurs. Yet, we know comparatively little about how regional social structures (e.g., collective social capital) that affect information flows condition this relationship. We build on the sociological literature to theorize how the interplay between collective social capital and residential segregation moderates the relationship between ethno-racial diversity and entrepreneurship. We test, and find empirical support for, our hypotheses among all registered new ventures started in the United States between 1990 and 2018.

Psychological mediators underlie many entrepreneurship phenomena. Unfolding psychological mechanisms enhances our understanding of theoretical relationships in entrepreneurship. This paper first reviews the current state of entrepreneurship studies examining psychological mediators and identifies the hurdles that push researchers away from employing randomized experiments to unfold the causal relationships underlying mediation. To alleviate these hurdles, we then propose parsimonious yet rigorous experimental designs that make experiments testing psychological mediators in entrepreneurship feasible and cost efficient. In addition, when manipulating the mediator is not feasible, we theorize and identify two remedies a single experiment can use to examine the causal chain underlying mediation.

Despite growing numbers of corporate venture capital (CVC) deals and alliances, their effectiveness is not guaranteed. This paper investigates the positive and negative impacts of CVC and alliance activity on product safety under different levels of market turbulence. Using a resource-based learning perspective and panel data from large U.S. firms, we find that both CVC and alliance activity have inverted U-shaped relationships with product recall likelihood. Market turbulence moderates both relationships, but differently. We discuss how learning theory complements the resource-based view to understand why no or rather bold external venturing are less harmful than small-scale “stuck-in-the-middle” initiatives.

This paper develops a new concept, entrepreneurial political activity based on corporate political activity to understand when an entrepreneur, representing both the firm and the individual simultaneously, will engage in political activity. The case of petty traders in Kumasi, Ghana generates grounded theory of entrepreneurial political activity. Faced with an existential threat, informal entrepreneurs had to decide whether to try to influence government policy by engaging in political activity. Findings from over 200 interviews demonstrated entrepreneurs carefully considered the state’s willingness to allow for the extra-legal economic activity in the informal economy to continue, and if they had trust in the leadership of the collective action before engaging in political action. Policy saliency motivating action was determined by growth orientation and dependency on the venture for household survival, both driven by the entrepreneur’s social role in the social system.

We suggest a new category of “rogue entrepreneurship,” that describes entrepreneurial activity where the core business idea violates established or expert consensus, to be contrasted with “conforming entrepreneurship,” where it does not. There are large entrepreneurial rents hidden behind a bulwark of expert consensus that predicts doom for a venture based upon a rogue and unlikely claim. The “rogue” cases, where the predominant assessment context is different from the entrepreneur’s, result in broad skepticism against the entrepreneurial claim. We explain what rogue entrepreneurship is and how it works.