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Germany experienced a unique rise in the level of self-employment in the first two decades following unification. Applying the nonlinear Blinder-Oaxaca decomposition technique, we find that the main factors driving these changes in the overall level of self-employment are demographic developments, the shift towards service sector employment and a larger share of population holding a tertiary degree. While these factors explain most of the development in self-employment with employees and the overall level of self-employment in West Germany, their explanatory power is much lower for the stronger increase in solo self-employment and in self-employment in former socialist East Germany.
What Makes an Employer?
(2019)
As the policy debate on entrepreneurship increasingly centers on firm growth in terms of job creation, it is important to better understand which variables influence the first hiring decision and which ones influence the subsequent survival as an employer. Using the German Socio-economic Panel (SOEP), we analyze what role individual characteristics of entrepreneurs play in sustainable job creation. While human and social capital variables positively influence the hiring decision and the survival as an employer in the same direction, we show that none of the personality traits affect the two outcomes in the same way. Some traits are only relevant for survival as an employer but do not influence the hiring decision, other traits even unfold a revolving door effect, in the sense that employers tend to fail due to the same characteristics that positively influenced their hiring decision.
The positive aspects of open innovation projects are widely discussed in innovation management research and practice by means of case studies and best practices. However, enterprises, particularly small and medium-sized enterprises (SMEs) also face miscellaneous challenges in open innovation practice, leading to uncertainty and even renunciation of open innovation project participation. Thus, it is essential for SMEs to find the right balance between possible positive effects and negative consequences - the latter being the less studied "dark sides" of open innovation. However, appropriate methods of finding this balance are still lacking. In this article, we discuss the assessment of open innovation project participation by presenting a weighing and decision process framework as a conceivable solution approach. The framework includes an internal, external, and integrated analysis as well as a recommendation and decision phase. Piece by piece, we investigate the current situation and the innovation goals of the enterprise as an initial point for a decision for or against engaging in open innovation. Furthermore, we discuss the development of a software tool that automatically applies this framework and allows self-assessment by SMEs.
Predicting entrepreneurial development based on individual and business-related characteristics is a key objective of entrepreneurship research. In this context, we investigate whether the motives of becoming an entrepreneur influence the subsequent entrepreneurial development. In our analysis, we examine a broad range of business outcomes including survival and income, as well as job creation, and expansion and innovation activities for up to 40 months after business formation. Using the self-determination theory as conceptual background, we aggregate the start-up motives into a continuous motivational index. We show – based on a unique dataset of German start-ups from unemployment and non-unemployment – that the later business performance is better, the higher they score on this index. Effects are particularly strong for growth-oriented outcomes like innovation and expansion activities. In a next step, we examine three underlying motivational categories that we term opportunity, career ambition, and necessity. We show that individuals driven by opportunity motives perform better in terms of innovation and business expansion activities, while career ambition is positively associated with survival, income, and the probability of hiring employees. All effects are robust to the inclusion of a large battery of covariates that are proven to be important determinants of entrepreneurial performance.
Why do entrepreneurship rates differ so markedly by gender? Using data from a large representative German household panel, we investigate to what extent personality traits, human capital, and the employment history influence the start-up decision and can explain the gender gap in entrepreneurship. Applying a decomposition analysis, we observe that the higher risk aversion among women explains a large share of the entrepreneurial gender gap. We also find an education effect contributing to the gender difference. In contrast, the Big Five model and the current employment state have effects in the opposite direction, meaning that the gender gap in entrepreneurial entry would be even larger if women had the same scores and the same employment status as men. (JEL codes: L26, J16, D81, J24, M13).
The impact of traits in entrepreneurship has been subject to intense discussion. Apart from favorable traits fostering opportunity recognition, entrepreneurial orientation, venture performance, and other variables, a younger research stream also addresses the role of negative traits. Among them, the dark triad, comprising of narcissism, Machiavellianism, and psychopathy, have gained specific attention. This systematic literature review aims to structure the field, identify current research themes, and provide a better understanding of prior research outcomes. Our results show that dark triad research addresses entrepreneurial activity, opportunity recognition, entrepreneurial orientation, entrepreneurial leadership, the and entrepreneurial motives. Among the dark triad traits, narcissism is stressed most in research so far. It relates to firm performance, risk, and leadership behavior, whereas Machiavellianism and psychopathy relate to opportunity recognition and exploitation. We also identify several research gaps, which can be addressed in future research.
Strategic entrepreneurship
(2020)
Purpose:
Strategic entrepreneurship (SE) depicts the nexus of strategic management and entrepreneurship, suggesting that firms can create superior wealth when simultaneously pursuing advantage-seeking and opportunity-seeking behavior. As the rapid growth in SE research led to a multidisciplinary, scattered and fragmented literature landscape, the authors aim to structure this research field.
Design/methodology/approach:
The authors employ a bibliographic coupling and literature review of the strategic entrepreneurship research field.
Findings:
The authors identify and describe five major research streams with 15 sub-themes in recent SE research. Based on our findings, the authors propose an integrated research framework and research gaps for future research.
Originality/value:
To the authors' knowledge, this is the first review on SE based on a bibliographic coupling.
Start-up incentives targeted at unemployed individuals have become an important tool of the Active Labor Market Policy (ALMP) to fight unemployment in many countries in recent years. In contrast to traditional ALMP instruments like training measures, wage subsidies, or job creation schemes, which are aimed at reintegrating unemployed individuals into dependent employment, start-up incentives are a fundamentally different approach to ALMP, in that they intend to encourage and help unemployed individuals to exit unemployment by entering self-employment and, thus, by creating their own jobs. In this sense, start-up incentives for unemployed individuals serve not only as employment and social policy to activate job seekers and combat unemployment but also as business policy to promote entrepreneurship. The corresponding empirical literature on this topic so far has been mainly focused on the individual labor market perspective, however. The main part of the thesis at hand examines the new start-up subsidy (“Gründungszuschuss”) in Germany and consists of four empirical analyses that extend the existing evidence on start-up incentives for unemployed individuals from multiple perspectives and in the following directions:
First, it provides the first impact evaluation of the new start-up subsidy in Germany. The results indicate that participation in the new start-up subsidy has significant positive and persistent effects on both reintegration into the labor market as well as the income profiles of participants, in line with previous evidence on comparable German and international programs, which emphasizes the general potential of start-up incentives as part of the broader ALMP toolset. Furthermore, a new innovative sensitivity analysis of the applied propensity score matching approach integrates findings from entrepreneurship and labor market research about the key role of an individual’s personality on start-up decision, business performance, as well as general labor market outcomes, into the impact evaluation of start-up incentives. The sensitivity analysis with regard to the inclusion and exclusion of usually unobserved personality variables reveals that differences in the estimated treatment effects are small in magnitude and mostly insignificant. Consequently, concerns about potential overestimation of treatment effects in previous evaluation studies of similar start-up incentives due to usually unobservable personality variables are less justified, as long as the set of observed control variables is sufficiently informative (Chapter 2).
Second, the thesis expands our knowledge about the longer-term business performance and potential of subsidized businesses arising from the start-up subsidy program. In absolute terms, the analysis shows that a relatively high share of subsidized founders successfully survives in the market with their original businesses in the medium to long run. The subsidy also yields a “double dividend” to a certain extent in terms of additional job creation. Compared to “regular”, i.e., non-subsidized new businesses founded by non-unemployed individuals in the same quarter, however, the economic and growth-related impulses set by participants of the subsidy program are only limited with regard to employment growth, innovation activity, or investment. Further investigations of possible reasons for these differences show that differential business growth paths of subsidized founders in the longer run seem to be mainly limited by higher restrictions to access capital and by unobserved factors, such as less growth-oriented business strategies and intentions, as well as lower (subjective) entrepreneurial persistence. Taken together, the program has only limited potential as a business and entrepreneurship policy intended to induce innovation and economic growth (Chapters 3 and 4).
And third, an empirical analysis on the level of German regional labor markets yields that there is a high regional variation in subsidized start-up activity relative to overall new business formation. The positive correlation between regular start-up intensity and the share among all unemployed individuals who participate in the start-up subsidy program suggests that (nascent) unemployed founders also profit from the beneficial effects of regional entrepreneurship capital. Moreover, the analysis of potential deadweight and displacement effects from an aggregated regional perspective emphasizes that the start-up subsidy for unemployed individuals represents a market intervention into existing markets, which affects incumbents and potentially produces inefficiencies and market distortions. This macro perspective deserves more attention and research in the future (Chapter 5).
Self-efficacy reflects the self-belief that one can persistently perform difficult and novel tasks while coping with adversity. As such beliefs reflect how individuals behave, think, and act, they are key for successful entrepreneurial activities. While existing literature mainly analyzes the influence of the task-related construct of entrepreneurial self-efficacy, we take a different perspective and investigate, based on a representative sample of 1,405 German business founders, how the personality characteristic of generalized self-efficacy influences start-up performance as measured by a broad set of business outcomes up to 19 months after business creation. Outcomes include start-up survival and entrepreneurial income, as well as growth-oriented outcomes such as job creation and innovation. We find statistically significant and economically important positive effects of high scores of self-efficacy on start-up survival and entrepreneurial income, which become even stronger when focusing on the growth-oriented outcome of innovation. Furthermore, we observe that generalized self-efficacy is similarly distributed between female and male business founders, with effects being partly stronger for female entrepreneurs. Our findings are important for policy instruments that are meant to support firm growth by facilitating the design of more target-oriented offers for training, coaching, and entrepreneurial incubators.
Self-efficacy reflects the self-belief that one can persistently perform difficult and novel tasks while coping with adversity. As such beliefs reflect how individuals behave, think, and act, they are key for successful entrepreneurial activities. While existing literature mainly analyzes the influence of the task-related construct of entrepreneurial self-efficacy, we take a different perspective and investigate, based on a representative sample of 1,405 German business founders, how the personality characteristic of generalized self-efficacy influences start-up performance as measured by a broad set of business outcomes up to 19 months after business creation. Outcomes include start-up survival and entrepreneurial income, as well as growth-oriented outcomes such as job creation and innovation. We find statistically significant and economically important positive effects of high scores of self-efficacy on start-up survival and entrepreneurial income, which become even stronger when focusing on the growth-oriented outcome of innovation. Furthermore, we observe that generalized self-efficacy is similarly distributed between female and male business founders, with effects being partly stronger for female entrepreneurs. Our findings are important for policy instruments that are meant to support firm growth by facilitating the design of more target-oriented offers for training, coaching, and entrepreneurial incubators.
Institutional entrepreneurship comprises the activities of agents who disrupt existing social institutions or create new ones, often to enable diffusion, especially of radical innovations, in a market. The increased interest in institutional entrepreneurship has produced a large number of scholarly publications, especially in the last five years. As a consequence, the literature landscape is somewhat complex and scattered. We aim to compile a quantitative overview of the field within business and management research by conducting bibliometric performance analyses and science mappings. We identified the most productive and influential journals, authors, and articles with the highest impact. We found that institutional entrepreneurship has stronger ties to organization studies than to entrepreneurship research. Additionally, a large body of literature at the intersection of institutions and entrepreneurship does not refer to institutional entrepreneurship theory. The science mappings revealed a distinction between theoretical and conceptual research on one hand and applied and empirical research on the other hand. Research clusters reflect the structure–agency problem by focusing on the change agent’s goals and interests, strategies, and specific implementation mechanisms, as well as the relevance of public agents for existing institutions, and a more abstract process rather than agency view.
Institutional entrepreneurship comprises the activities of agents who disrupt existing social institutions or create new ones, often to enable diffusion, especially of radical innovations, in a market. The increased interest in institutional entrepreneurship has produced a large number of scholarly publications, especially in the last five years. As a consequence, the literature landscape is somewhat complex and scattered. We aim to compile a quantitative overview of the field within business and management research by conducting bibliometric performance analyses and science mappings. We identified the most productive and influential journals, authors, and articles with the highest impact. We found that institutional entrepreneurship has stronger ties to organization studies than to entrepreneurship research. Additionally, a large body of literature at the intersection of institutions and entrepreneurship does not refer to institutional entrepreneurship theory. The science mappings revealed a distinction between theoretical and conceptual research on one hand and applied and empirical research on the other hand. Research clusters reflect the structure–agency problem by focusing on the change agent’s goals and interests, strategies, and specific implementation mechanisms, as well as the relevance of public agents for existing institutions, and a more abstract process rather than agency view.
Growing out of the crisis
(2013)
Greece’s currently planned institutional reforms will help to get the country going with limited economic growth. With an economy based primarily on tourism, trade, and agriculture, Greece lacks an established competitive industry and an innovation-friendly environment, resulting in a low export ratio given the small size of the country and its long-time EU-membership. Instead, Greece exports only its nation's talent, with low returns. To become prosperous, the country must better capitalize on its Eurozone membership and add innovative sectors to its economic structure. Given Greece's hidden assets, such as the attractiveness of the country, a small number of strong research centers and an impressive diaspora in research, finance and business, we envision a Greek “Silicon Valley” and propose a ten point policy plan to achieve that goal.
In response to strong revenue and income losses facing a large share of self-employed individuals during the COVID-19 pandemic, the German federal government introduced a €50bn emergency-aid program. Based on real-time online-survey data comprising more than 20,000 observations, we analyze the impact of this program on the confidence to survive the crisis. We investigate how the digitalization level of self-employed individuals influences the program’s effectiveness. Employing propensity score matching, we find that the emergency-aid program had only moderately positive effects on the confidence of self-employed to survive the crisis. However, self-employed whose businesses were highly digitalized, benefitted much more from the state aid than those whose businesses were less digitalized. This only holds true for those self-employed, who started the digitalization processes already before the crisis. Taking a regional perspective, we find suggestive evidence that the quality of the regional broadband infrastructure matters in the sense that it increases the effectiveness of the emergency-aid program. Our findings show the interplay between governmental support programs, the digitalization levels of entrepreneurs, and the regional digital infrastructure. The study helps public policy to improve the impact of crisis-related policy instruments, ultimately increasing the resilience of small firms in times of crises.
The promotion of self-employment as part of active labor market policies is considered to be one of the most important unemployment support schemes in Germany. Against this background the main part of this thesis contributes to the evaluation of start-up support schemes within ALMP. Chapter 2 and 4 focus on the evaluation of the New Start-up Subsidy (NSUS, Gründungszuschuss) in its first version (from 2006 to the end of 2011). The chapters offer an advancement of the evaluation of start-up subsidies in Germany, and are based on a novel data set of administrative data from the Federal Employment Agency that was enriched with information from a telephone survey. Chapter 2 provides a thorough descriptive analysis of the NSUS that consists of two parts. First, the participant structure of the program is compared with the one of two former programs. In a second step, the study conducts an in-depth characterization of the participants of the NSUS focusing on founding motives, the level of start-up capital and equity used as well as the sectoral distribution of the new business. Furthermore, the business survival, income situation of founders and job creation by the new businesses is analyzed during a period of 19 months after start-up. The contribution of Chapter 4 is to introduce a new explorative data set that allows comparing subsidized start-ups out of unemployment with non-subsidized business start-ups that were founded by individuals who were not unemployed at the time of start-up. Because previous evaluation studies commonly used eligible non-participants amongst the unemployed as control group to assess the labor market effects of the start-up subsidies, the corresponding results hence referred to the effectiveness of the ALMP measure, but could not address the question whether the subsidy leads to similarly successful and innovative businesses compared to non-subsidized businesses. An assessment of this economic/growth aspect is also important, since the subsidy might induce negative effects that may outweigh the positive effects from an ALMP perspective. The main results of Chapter 4 indicate that subsidized founders seem to have no shortages in terms of formal education, but exhibit less employment and industry-specific experience, and are less likely to benefit from intergenerational transmission of start-ups. Moreover, the study finds evidence that necessity start-ups are over-represented among subsidized business founders, which suggests disadvantages in terms of business preparation due to possible time restrictions right before start-up. Finally, the study also detects more capital constraints among the unemployed, both in terms of the availability of personal equity and access to loans. With respect to potential differences between both groups in terms of business development over time, the results indicate that subsidized start-ups out of unemployment face higher business survival rates 19 months after start-up. However, they lag behind regular business founders in terms of income, business growth, and innovation. The arduous data collection process for start-up activities of non-subsidized founders for Chapter 4 made apparent that Germany is missing a central reporting system for business formations. Additionally, the different start-up reporting systems that do exist exhibit substantial discrepancies in data processing procedures, and therefore also in absolute numbers concerning the overall start-up activity. Chapter 3 is therefore placed in front of Chapter 4 and has the aim to provide a comprehensive review of the most important German start-up reporting systems. The second part of the thesis consists of Chapter 5 which contributes to the literature on determinants of job search behavior of the unemployed individuals by analyzing the effectiveness of internet search with regard to search behavior of unemployed individuals and subsequent job quality. The third and final part of the thesis outlines why the German labor market reacted in a very mild fashion to the Great Recession 2008/09, especially compared to other countries. Chapter 6 describes current economic trends of the labor market in light of general trends in the European Union, and reveals some of the main associated challenges. Thereafter, recent reforms of the main institutional settings of the labor market which influence labor supply are analyzed. Finally, based on the status quo of these institutional settings, the chapter gives a brief overview of strategies to adequately combat the challenges in terms of labor supply and to ensure economic growth in the future.
This dissertation consists of five self-contained essays, addressing different aspects of career choices, especially the choice of entrepreneurship, under risk and ambiguity. In Chapter 2, the first essay develops an occupational choice model with boundedly rational agents, who lack information, receive noisy feedback, and are restricted in their decisions by their personality, to analyze and explain puzzling empirical evidence on entrepreneurial decision processes. In the second essay, in Chapter 3, I contribute to the literature on entrepreneurial choice by constructing a general career choice model on the basis of the assumption that outcomes are partially ambiguous. The third essay, in Chapter 4, theoretically and empirically analyzes the impact of media on career choices, where information on entrepreneurship provided by the media is treated as an informational shock affecting prior beliefs. The fourth essay, presented in Chapter 5, contains an empirical analysis of the effects of cyclical macro variables (GDP and unemployment) on innovative start-ups in Germany. In the fifth, and last, essay in Chapter 6, we examine whether information on personality is useful for advice, using the example of career advice.
Entrepreneurship education (EE) has attracted much scholarly attention, showing exponential growth in publication and citation numbers. The research field has become broad, complex, and fragmented, making it increasingly difficult to oversee. Our research goal is to organise and integrate the previous literature. To this end, we use bibliometric analyses, differing from prior analyses, which are outdated or have a different focus. Our results show an immense growth in publications and citations over the last decade and an almost equal involvement of business and educational research. We identify the most productive and influential journals and authors. Our co-citation analysis reveals two research clusters, one focusing on psychological constructs relating to EE, and the other on entrepreneurial behaviour and new venture creation. Based on a review of the 25 most-cited articles on an annual basis, we identify and quantify the most relevant research themes and integrate them into a research framework that we propose for future research. A major finding is that extant research centres around the outcomes of entrepreneurship education, whereas its pedagogy is still mainly a black box.
Entrepreneurship education (EE) has attracted much scholarly attention, showing exponential growth in publication and citation numbers. The research field has become broad, complex, and fragmented, making it increasingly difficult to oversee. Our research goal is to organise and integrate the previous literature. To this end, we use bibliometric analyses, differing from prior analyses, which are outdated or have a different focus. Our results show an immense growth in publications and citations over the last decade and an almost equal involvement of business and educational research. We identify the most productive and influential journals and authors. Our co-citation analysis reveals two research clusters, one focusing on psychological constructs relating to EE, and the other on entrepreneurial behaviour and new venture creation. Based on a review of the 25 most-cited articles on an annual basis, we identify and quantify the most relevant research themes and integrate them into a research framework that we propose for future research. A major finding is that extant research centres around the outcomes of entrepreneurship education, whereas its pedagogy is still mainly a black box.
Both entrepreneurship and innovation play a key role for business growth and economic development and are conceptually highly intertwined. Both fields have received extensive attention that has resulted in a large number of publications. The aim of this work is to provide an overview on the coevolution of entrepreneurship and innovation over the last decades, with particular attention to recent research trends. To track the evolution at the intersection of both fields, we employ a bibliometric analysis, which allowed us to identify the key concepts, the backbone of research, and to provide a systematic classification of main research themes diagnosed including: 1) entrepreneurial innovation and digital transformation, 2) sustainable innovation and entrepreneurship, 3) product innovation and knowledge, 4) entrepreneurial orientation and leadership, and 5) regional entrepreneurship and innovation (innovative entrepreneurship and historical roots). The findings of this bibliometric review are reported in the form of a knowledge graph that represents the results obtained in terms of the knowledge base (key terms), knowledge domains, and knowledge evolution (themes and bursts), based on which themes for future research are suggested.
Entrepreneurial persistence is demonstrated by an entrepreneur’s continued positive maintenance of entrepreneurial motivation and constantly renewed active engagement in a new business venture despite counterforces or enticing alternatives. It thus is a crucial factor for entrepreneurs when pursuing and exploiting their business opportunities and in realizing potential economic gains and benefits. Using rich data on a representative sample of German business founders, we investigated the determinants of entrepreneurial persistence. Next to observed survival, we also constructed a hybrid persistence measure capturing the motivational dimension of persistence. We analyzed the influence of individual-level (human capital and personality) and business-related characteristics on both measures as well as their relative importance. We found that the two indicators emphasize different aspects of persistence. For the survival indicator, the predictive power was concentrated in business characteristics and human capital, while for hybrid persistence the dominant factors were business characteristics and personality. Finally, we showed that results were heterogeneous across subgroups. In particular, formerly unemployed founders did not differ in survival chances, but they were more likely to lack a high psychological commitment to their business ventures.