International Journal of Entrepreneurship and Small Business

This paper examines good governance assessments in Croatia and in selected CEE countries. It aims to confirm that the quality of governance should be evaluated by considering phenomena- or country-specific institutional environment. Based on the analysis of good governance indicators slight improvements in all dimensions of good governance for all of the selected countries were observed in a period from 1996 to 2002. Using constructed aggregate Good Governance Index (GGI) and Human Development Index (HDI) tested the general assumption that good governance is connected to economic and social development. Spearman rank order correlation analysis confirmed that for all selected countries in 2000 there was a high positive correlation between their GGI rank and HDI rank. The correlation matrix for CEE countries in 2000 confirmed our hypothesis that government effectiveness; regulatory quality and rule of law positively correlate with control of corruption. The paper concludes that research on interdependencies among good governance and development indicators as well as on determinants and effects of good governance dimensions remains to be done for Croatia.

Business dynamics in an industry is generally seen as an important indicator of the industry's level of competitiveness and economic performance. Two types of business dynamics may be distinguished: business dynamics reflecting competition by new-firm entries and business dynamics reflecting competition among incumbent firms. A growing literature pays attention to the important role of the former type of business dynamics (the starting up of new firms) for achieving economic growth. However, the latter type of business dynamics tends to be overlooked in this type of literature. In part this is due to the large requirements, both in terms of data and in terms of methodology, of measuring competition among incumbent firms. A sophisticated indicator for measuring the extent of business dynamics among incumbent firms in an industry is the mobility index. In the current paper we compute mobility indices for 16 industries -covering the whole private sector except for the primary sectors of economy- in the Netherlands over the period 2000-2006, and compare the values of the mobility indices across the sectors.

This paper analyzes empirically the determinants of new born firms' initial size. As survival prospects of young firms tend to be linked to a firm's start-up size, a better understanding of the factors influencing start-up size is crucial. Most of the rare literature on initial firm size focuses on industry characteristics. We contribute to the understanding of the determinants of initial firm size by analyzing firm specific factors such as founders' human capital composition and entry strategies. We find that in addition to industry effects start-up size is considerably influenced by the human capital of firm founders. We distinguish between generic and specific human capital. Generic human capital refers to the general knowledge acquired through formal education and professional experience and usually coincides with a higher personal wealth. Specific human capital comprises competences that can be directly applied to the entrepreneurial job. For generic human capital we find that having a university degree has a positive influence on start-up size. The same applies for general working experience proxied by the founder's age. For the specific human capital components we find that successful entrepreneurial experience and managerial experience gained in dependent employment support a higher start-up size. Altogether, specific human capital tends to have a larger impact on initial size than generic human capital. Entry strategies are expected to have a crucial influence on start-up size, because objectives of market entry largely determine the resources a firm requires. We distinguish between different types of entry strategies. On the one hand, we look at entry strategies based on innovation. We measure innovation by a variable which indicates if a firm carries out continuous R&D. On the other hand, entry is classified according to the main motive of the founders for firm formation. We conclude that different motives are accompanied by diverse entry strategies. The

This study focuses on the relation between innovation and the international involvement of small and medium sized enterprises (SMEs), taking into account export as well as import activities of firms. The analysis is based on a sample of more than 1.800 Dutch SMEs using regression analysis. The results of this study suggest that innovative investments as well as several innovative realisations or practices have a positive impact on international involvement. Also, some evidence is found that international involvement may stimulate firms to investment in product innovations and in new distribution systems.

Given the importance of green entrepreneurs in the transition towards a truly sustainable society, this paper proposes frameworks for investigating the motives of entrepreneurs who set up green businesses. Different perceptions of 'green' are explored and although the paper focuses particularly on 'green-green' businesses, the scope for investigation encompasses all possible forms of green start-ups. The main approach taken in the paper is to review the literature on entrepreneurs generally, and approaches to classifying entrepreneurs with a view to gaining useful insights for the green context. An exploratory typology of green entrepreneurs is proposed, which has been adapted and developed from Thompson's four dimensions of entrepreneurship (1998). The terms 'ethical maverick', 'ad hoc environpreneur', 'visionary champion' and 'innovative opportunist' are coined to describe different motives or orientations of the green entrepreneur. Frameworks are proposed to investigate the motives of, and influences on, green entrepreneurs. The ultimate aim is to gain insights for policy makers and educators into ways to foster green entrepreneurship.

We explore if the Knowledge Spillover Theory of Entrepreneurship, applied to FDI, provides at least a partial explanation for the greater emergence of recent knowledge-based entrepreneurship in Ireland compared with Wales. In order to examine how FDI and entrepreneurship policy in these two regions might have influenced the levels of knowledge-based entrepreneurship, we outline FDI and entrepreneurship policies for Wales and Ireland and key measures of knowledge creation, and evaluate the extent and nature of FDI activity and its relationship with entrepreneurship in general and knowledge-based entrepreneurship in particular. Implications include possible policy directions for countries that are characterized by weak knowledge-creating institutions yet wish to encourage knowledge-based entrepreneurship.

Recently, more and more enterprises recognise the importance of the quality of products and services and business excellence. By gaining new markets and new customers in the world market, the enterprises meet numerous challenges, confrontations, new legislation and technology. Taking into account the European Foundation for Quality Management (EFQM) excellence model, our research defines the endeavours of the enterprises that strive for better structure, behaviour and communication paths to reach the final customers, with emphasis on improved quality, higher competitiveness and customer satisfaction. In our research, we compare the enterprises holding a business excellence certificate with those that do not hold it. We establish that they differ in some characteristics of their management, which are defined by nine criteria. For years, several Slovene enterprises have been successfully selling their products to the industrially developed countries in Europe and to the USA. They are the first to develop and achieve high growth in their enterprises and, in turn, their own business excellence.

Individual efforts to create new firms are reflected in the total early-stage activity (TEA) index. The TEA index is a measure of the prevalence of individuals engaged in the start-up or gestation phase or in managing a young business, less than 42 months old. The GEM adult population survey identifies such individuals who will own part of the business and have been active in implementing the new firm. TEA reflects the percentage of the adult population (18 64 years) who are active in the creation of a new business. With an overall rate of 13.6% TEA rate, New Zealand maintains its rank as the most entrepreneurial country amongst the developed countries. New Zealand's rate of individual entrepreneurship was exceeded by four developing countries. They include Uganda, Venezuela, Argentina, and Chile. Although New Zealand may rank higher, statistically there is no difference between New Zealand and Brazil, USA, Australia, China, and Iceland.

This qualitative study examines the motivations for venture capitalists and entrepreneurs to act opportunistically toward one another. Structured interviews with 14 employees and 5 investors in a venture capital-funded start-up revealed that venture capitalists expect opportunistic behaviour from entrepreneurs during investment rounds but largely trust entrepreneurs between financing rounds. Both venture capitalists and entrepreneurs reported that venture capitalists act opportunistically towards the entrepreneur and other venture partners during all stages of start-up development. These findings have important implications for entrepreneurship research, most notably the applicability of agency theory as a theoretical perspective from which to view the complex relationship between venture capitalists and entrepreneurs.

Previous studies have focused on the degree of standardisation or adaptation and, to a lesser extent, on the determinants of adaptation. This paper advances the literature in four respects. Firstly, we are able to evaluate the relative importance of internal (commitment, experience) versus external (culture, economic) determinants of adaptation. Secondly, we have examined several firm size categories, so we can evaluate how the relative roles of internal and external factors vary by firm size. Thirdly, rather than treat adaptation as one of adjusting one or more of the four Ps, we use a more holistic concept of adaptation, namely brand adaptation, which subsumes marketing mix adaptation. A scale has been developed to capture this holistic concept. Fourthly, we have developed a new culture scale, one based on the perceptions of Small- and Medium-sized Enterprise (SME) businesses, using domestic operations as a benchmark. Yes Yes

This paper contributes to a new area of research, namely: institutional preparedness of economic development agencies for developing small and medium-sized enterprises (SMEs). The cases presented illustrate variations in the micro-finance lender agency-enterprise development of processes for sharing vision and interdependence. In clarifying the nature of the agency-enterprise relationship along these two dimensions, we develop a set of propositions. Our model contends 1 that effective processes for sharing vision and good cooperation maximise the likelihood of explication of tacit knowledge 2 that ineffective processes for sharing vision and good cooperation lead to ad hoc explication of tacit knowledge 3 ineffective processes for sharing vision and poor cooperation minimise the likelihood of explication of tacit knowledge 4 effective processes for sharing vision and poor cooperation maximise the likelihood of explication of tacit knowledge.

Research suggests that barriers and constraints encountered by women are gender-specific, and that women are subject to discriminatory practices. However, by focusing on what women are prevented from doing, much research portrays women as victims of circumstance rather than as individuals with different identity constructions and value systems. This paper challenges the widespread assumption that female entrepreneurial agency is confronted by gender-specific barriers, and proposes an alternative perspective based on the integration of role and identity concepts. This portrays women as agents in their own lives rather than merely victims of structural gender-specific barriers. In consequence, the paper proposes that female entrepreneurs construct and reconstruct their identity under the influence of institutionalised practices, which can only be changed from within.

There is increasing attention on the attitudes towards entrepreneurship as an important predictor of entrepreneurial activity. So far, the focus has mainly been on the individual or national levels. This paper describes, based on the existing literature, the link between the entrepreneurial attitudes and entrepreneurial activity at the regional level. We explore both the entrepreneurial attitudes and activity using data from the Global Entrepreneurship Monitor over the period from 2001–2006. We provide newly constructed and harmonised regional indices on entrepreneurial attitudes and entrepreneurial activity across 18 European countries. By mapping these indices, patterns emerge on different spatial levels. We observe a positive link between entrepreneurial attitudes and entrepreneurial activity, but argue that this relationship is not clear-cut, in particular, when linking to economic development. Regional and national forces – in terms of population density, national institutions and the differences in cultures – matter in determining how the link between entrepreneurial attitudes and entrepreneurial activity is established.

This paper investigates the decision by Small and Medium Enterprises (SMEs) to raise funding via the sale of equity. Prior theoretical and empirical work on the ‘pecking order’ of funding has indicated that we should not expect SMEs to prefer equity funding over internal funding and external debt, except under particular circumstances relating to the risk aversion and autonomy aversion of the owner-manager. We utilise data from the Business Longitudinal Survey undertaken by the Australian Bureau of Statistics to investigate relationships suggested by the literature. We found that only about 5% of SMEs intended to raise funds from the sale of equity. Of these, the decision to seek equity funding was significantly and positively related to the owner-manager’s intention to sell the firm; to the firm’s intention to increase the number of markets targeted; and to the firm’s growth intentions. The decision was also negatively related to the firm being a family business.

In this paper we present the concept of authentic learning as an integrated part of competence-based learning in entrepreneurship education, focusing on the relevance of this conceptual framework for education in entrepreneurship. The study aims to verify a set of design principles for entrepreneurship education for science students at the university level, based on the theory of authentic learning. The design principles of authentic learning, which are presented in this paper, are deduced from an initial design of a course in entrepreneurship in ICT at Utrecht University in the Netherlands. The outcomes of this course were evaluated in starting ventures, learning effects and perception of students. Based on the evaluation results, the design principles were adjusted and new principles were added. Design principles can help in describing interventions in education in entrepreneurship in forthcoming studies.

An entrepreneurial environment is conformed by factors that play a favourable role in the development of entrepreneurship. Economic literature on innovative milieus identifies those elements that are decisive in improving the competitive performance of companies. We analysed whether Barcelona Activa's specific environment promotes the development of an innovative milieu, which favours entrepreneurial attitudes. The results show how the combination of incubation experience, development of ICT-based innovations and cooperation considerably improve the success probability of new firms. Moreover, participation in institutional activities that strengthen commercial and social networks also improves their chances. The local agency seems to be particularly suitable for entrepreneurs with labour experience and it plays a complementary role in the framework of the wide range of university spin-off centres in the metropolitan region.

The objective of this paper is to provide empirical evidence about the importance of barriers to entry. In particular, the perceptions of firms are considered. Three questions are addressed: which entry-barriers are important in the perception of firms in the Dutch economy? Do these perceptions differ between sectors? Do these perceptions differ between small and large firms? It is shown that the procurement of a viable sales volume, access to capital and financial risk, are considered to be the major barriers. The ranking of the importance of specific barriers to entry coheres among the sectors under study. The most remarkable result is that the figures indicate that micro firms perceive lower barriers to entry than medium-sized and large firms.

The terms enterprise, entrepreneurship and small business are frequently used in the context of education and small business formation. Particular countries have preference for the use of the terms in specific circumstances, for example, entrepreneurship is more common in the USA and Canada, while enterprise is more often used in the UK and Australia. Because the terms are often used interchangebly, there is confusion about their exact meaning. In Australia the term entrepreneur has negative connotations not related to the true meaning of the word. This has confused the general public and the poor image that is associated with the term is often then shared with the other terms. The purpose of this paper is to clearly set out distinctions between the three terms in order to improve the level of understanding of the issues where the terms are commonly used. It involves an analysis of the literature to identify similarities and distinctions particularly in areas of education and business start-ups. The findings indicate that while there is a degree of overlap between the concepts, with the boundaries blurred in certain areas, it is possible to differentiate between the three terms.

Following the emergent trend to deconstruct the conventional view of Schumpeterian entrepreneurship, this paper specifically addresses the questions of how psychological meanings and moral factors affect rural microentrepreneurship in developing countries and how the calculative practices of such rural entrepreneurs are embedded within their culture and politics. Our Sri Lankan case study employs a critical ethnographic approach, with the evidence displaying the presence of 'bounded emotionality' in entrepreneurial calculations as determined and influenced by society and structures of morality and meaning. The paper emphasises the need to adopt broader critical frameworks, of a multidisciplinary form, to understand rural entrepreneurship in developing countries as they particularly address situational realities at local levels. This can assist policymakers in constructing and adopting more appropriate microentrepreneurship development programmes to better fit individual contexts.

The recent proliferation of academic works on 'place branding' has led to a burgeoning interest in 'island branding'. This paper posits that islands are geographical features that possess unique characteristics and experience distinctive circumstances and, thus, deserve to be analysed on their own terms. In particular, it explores the intricacies in the branding of Kinmen Island, Taiwan, as a battlefield tourism destination. This case study confronts the typical island lure – of sun, sand and sea – and creates an opportunity for some distinct positioning in the global tourism market. The discussion shows the importance for tourism planners to recognise the unique character of the island to localise development projects in terms of its geographical particularity and landscape identity. Furthermore, it is argued that the branding of Kinmen is not merely a top-down process; the Kinmen brand is a result of both top-down 'imagineering' efforts by the state and the bottom-up branding practices of local entrepreneurs, Kinmen's people and tourists. It is believed that tourists' identification of an island has to be substantiated by locals' self-recognition with the island's identity to sustain any branding effort.

Many studies found that women-owned firms underperform. The performance gap might be attributed to gender differences in personal and firm characteristics affecting performance. This paper shall contribute to explain the female underperformance using data from the KfW/ZEW start-up panel. We track the performance of about 4,700 German start-up firms over up to four years after foundation. Sales, two measures of employment growth, and return on sales are used as performance indicators. We find that female-founded firms perform worse for the different performance indicators. At the same time, significant gender differences in many of the characteristics are observed. Compared to male entrepreneurs, female entrepreneurs have a lower level of formal education, less professional experience, are part of smaller start-up teams, are more often driven by necessity, and are overrepresented in the retail and service industries and in lower-tech industries in general. These differences can explain parts of female entrepreneurial underperformance.

The purpose of this article is to address the effects of social exchange, in particular leadership communication, between the current leader of a family business and the prospective future leader when one is the parent and the other, a next-generation offspring. In light of previous literature that identified seven personal characteristics of the family business leader that could contribute to the occurrence of destructive, counterproductive behaviours, a model has been formulated that examines the probable effects of destructive leadership on the respective welfares of each generation of leaders and examines the resultant willingness of the next generation, i.e., son or daughter, to contribute their time and effort to the firm. The use of a 'communication compass' is proposed as a way of ensuring that the communication patterns between generations is perceived as appropriate to enable both the leader and the follower to benefit in the long run.

We analyze different types of effects that new businesses may have on regional employment. We introduce different measures for employment change by separating employment change in incumbent businesses and employment change in new businesses. There are pronounced differences between regions with regard to the different employment effects. The average indirect employment effects of new business formation on incumbent employment are positive and are considerably larger than the employment that is directly generated in the new businesses.

This study focuses on the transfer process and the importance of human capital and succession planning as firm resource from the seller’s perspective. It further differentiates amongst two types of human capital - specific and generic - to predict the transfer duration, obtained price and satisfaction with the transfer. A representative dataset of 112 Dutch small firm owners, who sold their firm in 2005 and 2006, is analyzed. Hierarchical multiple regressions show that specific human capital, like flexibility, social skills and market awareness predict transfer performance better than generic human capital like general education. Results also indicate that succession planning in business transfers is unrelated to the objective transfer performance indicators transfer duration and obtained price. Succession planning is strongly related to the subjective transfer performance indicator satisfaction. Results also show that familiarity between seller and buyer rather than kinship or family ties is a key predictor for all transfer performance indicators.

This paper explores within the framework of new venture legitimation how and why international new ventures acquire external legitimacy and strive for survival in the face of critical events. Following a longitudinal multiple-case study methodology that was adopted for the purpose of theory building, the paper introduces the typology of captivity, and the four types that have emerged: captive industry supplier, captive dyadic partner, captive market leader, and free market leader. The effects of captivity types on the acquisition of external legitimacy and its survival, on reaching legitimacy threshold, and on the valuation of the venture are discussed and respective propositions are put forward to guide future research.