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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.
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.
Zentrale Aufgaben von Kommunen in Deutschland umfassen die Gewährleistung der Daseinsvorsorge, des öffentlichen Verkehrs, Wirtschaftsförderung, Zugang zu ausreichender Breitbandinfrastruktur, gesundheitliche und soziale Betreuung und Zugang zu kulturellem Leben. Kommunen in ländlichen Regionen stehen gleichzeitig vor zahlreichen gesellschaftlichen, wirtschaftlichen, sozialen und politischen Herausforderungen. Neuartige Ansätze und innovative Akteure und Netzwerke werden daher im Kontext der Schaffung von sozialen oder digitalen Innovationen von den Kommunen als Antwort auf diese Herausforderungen begrüßt, stoßen aber auch teilweise auf Barrieren.
In dem Sammelband wird von den Herausgebenden die Frage untersucht, wie sich digitale Vorreiter:innen, die wir „Digitale Pioniere“ nennen, in ländlichen Regionen vernetzen, um einen positiven Beitrag zur ländlichen Regionalentwicklung zu leisten. Dabei liegt der Fokus hauptsächlich auf der kommunalpolitischen Ebene und auf der Frage, wie Digitale Pioniere als Schlüsselakteure in der ländlichen Governance agieren. Die Forschungsergebnisse kommunaler Governance sind anhand ländlicher Untersuchungsteilregionen in Baden-Württemberg und Mecklenburg-Vorpommern im Rahmen des Forschungsprojekts „DigPion – Digitale Pioniere in der ländlichen Regionalentwicklung“ (2020–2023) erarbeitet worden. Abschließend wird überprüft, wie die Erkenntnisse und erarbeiteten Handlungsempfehlungen für das Bundesland Brandenburg zu übertragen sind.
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.
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).
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.
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.
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.
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.
From an active labor market policy perspective, start-up subsidies for unemployed individuals are very effective in improving long-term labor market outcomes for participants. From a business perspective, however, the assessment of these public programs is less clear since they might attract individuals with low entrepreneurial abilities and produce businesses with low survival rates and little contribution to job creation, economic growth, and innovation. In this paper, we use a rich data set to compare participants of a German start-up subsidy program for unemployed individuals to a group of regular founders who started from non-unemployment and did not receive the subsidy. The data allows us to analyze their business performance up until 40 months after business formation. We find that formerly subsidized founders lag behind not only in survival and job creation, but especially also in innovation activities. The gaps in these business outcomes are relatively constant or even widening over time. Hence, we do not see any indication of catching up in the longer run. While the gap in survival can be entirely explained by initial differences in observable start-up characteristics, the gap in business development remains and seems to be the result of restricted access to capital as well as differential business strategies and dynamics. Considering these conflicting results for the assessment of the subsidy program from an ALMP and business perspective, policy makers need to carefully weigh the costs and benefits of such a strategy to find the right policy mix.
Entrepreneurial failure
(2022)
Although entrepreneurial failure (EF) is a fairly recent topic in entrepreneurship literature, the number of publications has been growing dynamically and particularly rapidly. Our systematic review maps and integrates the research on EF based on a multi-method approach to give structure and consistency to this fragmented field of research. The results reveal that the field revolves around six thematic clusters of EF: 1) Soft underpinnings of EF, 2) Contextuality of EF, 3) Perception of EF, 4) Two-sided effects of EF, 5) Multi-stage EF effects, and 6) Institutional drivers of EF. An integrative framework of the positive and negative effects of entrepreneurial failure is proposed, and a research agenda is suggested.
Entrepreneurial failure
(2022)
Although entrepreneurial failure (EF) is a fairly recent topic in entrepreneurship literature, the number of publications has been growing dynamically and particularly rapidly. Our systematic review maps and integrates the research on EF based on a multi-method approach to give structure and consistency to this fragmented field of research. The results reveal that the field revolves around six thematic clusters of EF: 1) Soft underpinnings of EF, 2) Contextuality of EF, 3) Perception of EF, 4) Two-sided effects of EF, 5) Multi-stage EF effects, and 6) Institutional drivers of EF. An integrative framework of the positive and negative effects of entrepreneurial failure is proposed, and a research agenda is suggested.
Access to digital finance
(2024)
Financing entrepreneurship spurs innovation and economic growth. Digital financial platforms that crowdfund equity for entrepreneurs have emerged globally, yet they remain poorly understood. We model equity crowdfunding in terms of the relationship between the number of investors and the amount of money raised per pitch. We examine heterogeneity in the average amount raised per pitch that is associated with differences across three countries and seven platforms. Using a novel dataset of successful fundraising on the most prominent platforms in the UK, Germany, and the USA, we find the underlying relationship between the number of investors and the amount of money raised for entrepreneurs is loglinear, with a coefficient less than one and concave to the origin. We identify significant variation in the average amount invested in each pitch across countries and platforms. Our findings have implications for market actors as well as regulators who set competitive frameworks.
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.
Although the search for promising business models (BMs) is crucial for every profit-oriented venture, searching for those challenges in particular entrepreneurs. Limited resources, missing expertise and absolute uncertainty call entrepreneurs to strongly rely on their cognition in searching for a promising BM. However, as prior studies have examined cognitive search activities in isolation and neglected cognitive differences, explanations of how cognitive factors affect the BM process and outcomes are thus far insufficient.
Addressing the overall question of how BMs emerge, the dissertation contributes to the cognitive perspective in entrepreneurship and BM research. Building on the dual-process theory from cognitive psychology, the micro-foundations of managerial decision-making and insights from framing literature, this dissertation explicitly investigates the impacts of different cognitive dispositions, search activities and visual framing effects. The core assumption is that cognitive dispositions and entrepreneurs’ searches for information determine their BM decision-making. Furthermore, BM visualisations have become popular instruments with which to explain and manage today’s complex business interactions. As they abstract from reality, they can also unfold impacts on the cognitive processes.
This dissertation offers new explanations to these aspects and consists of three studies and one reflective article. The first study explores the impacts of differences in search activities and cognitive dispositions in a qualitative study with 70 entrepreneurship students. The second qualitative study explores the cognitive impacts of 103 BM visualisations. Third, a quantitative PLS-SEM experiment with 197 entrepreneurs illuminates the link between BM visualisations and cognition. The reflective article expresses the results’ meaning for the teaching of BMs.
In sum, the studies have resulted in a new theory of stabilising factors explaining how cognitive dispositions, search activities and visual framing determine entrepreneurs’ decisions to imitate or deviate from existing BMs. It indicates that the decision depends on the context-dependent strategic orientation and cognitive disposition-dependent cognitive safety, that is the correspondence between characteristics of cognitive dispositions and search activities. Moreover, the studies identified five visual framing effects that are independent of cognitive dispositions and prior experiences. This provides fertile contributions to the literature on BM methods and how BM visualisations affect decisions. Most importantly, BM visualisations provide an emotionally stabilising function to rational entrepreneurs, a cognitively stabilising function to experiential participants and do not affect indifferent participants in general.
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.
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.
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.