Entrepreneurial entry:which institutions matter?

In this paper we explore the relationship between the individual decision to become an entrepreneur and the institutional context. We pinpoint the critical roles of property rights and the size of the state sector for entrepreneurial activity and test the relationships empirically by combining country-level institutional indicators for 44 countries with working age population survey data taken from the Global Enterprise Monitor. A methodological contribution is the use of factor analysis to reduce the statistical problems with the array of highly collinear institutional indicators. We find that the key institutional features that enhance entrepreneurial activity are indeed the rule of law and limits to the state sector. However, these results are sensitive to the level of development.

Hierarchy of governance institutions and the pecking order of privatisation

This article discusses property rights, corporate governance frameworks and privatisation outcomes in the Central–Eastern Europe and Central Asia (CEECA) region. We argue that while CEECA still suffers from deficient ‘higher order’ institutions, this is not attracting sufficient attention from international institutions like EBRD and the World Bank, which focus on ‘lower order’ indicators. We discuss factors that may alleviate the negative impact of the weakness in institutional environment and argue for the pecking order of privatisation, where equivalent privatisation is given a priority but speed is not compromised.

Institutional environment, innovative entrepreneurial entry and venture capital financing

We analyse the determinants of high growth expectations entrepreneurial entry (HGE) using individual data drawn on working age population, based on the Global Entrepreneurship Monitor (GEM) surveys for the 1998-2004 period. Individual level explanatory variables are combined with country-level factors. Our results suggest that availability of venture capital and intellectual proper rights protection are strong predictors of HGE. In addition, we also find that innovative start-ups are associated with highest growth expectations in countries with extensive supply of venture capital and strongest intellectual property rights. Once we introduce venture capital, we detect no significant effects of other elements of financial systems on high-powered entry.

Finance and entrepreneurial entry

This paper investigates the determinants of both the volume of finance and the sources of finance of business start-ups in 42 countries. Using the Global Entrepreneurship Monitor (GEM) surveys for 1998-2003, we jointly examine how the institutional business environment and individual characteristics of entrepreneurs affect the financing of entrepreneurs. We find that the property rights system is the most significant determinant of both the total volume of finance and of the use of external finance for the individual start-up project. In addition, our findings suggest that that the supply of informal finance is associated with the higher share of external sources in start-up finance, whereas the size of the formal financial sector appears to play a more important role for the volume of entrepreneurial self-finance. Our results suggest that the use of external finance by start-ups correlates with the extent of financial restrictions in a country in a non-monotonic way. We find that some financial restrictions may enhance the use of external funds by entrepreneurs, yet the sign of this effect reverses and the coefficient becomes stronger for the high level of financial repression by the government. Finally, our findings imply that the characteristics of the start-up finance are also affected by various individual characteristics of entrepreneurs, their growth intentions and ownership structure.

Start-up financing:a comparative perspective

We investigate the determinants of start-up financing in 41 countries, using the Global Entrepreneurship Monitor surveys for 1998-20032. High quality of property rights increases both the total volume of finance and the use of external finance for the individual start-up. The size of the formal financial sector affects the start-up finance via enhancing the volume of self-finance. In addition, the use of external finance by start-ups correlates with the extent of financial restrictions in a country in a non-linear way. Supply of informal finance may to some extent substitute for the use of formal finance.

Which institutions encourage entrepreneurial growth aspirations?

We develop entrepreneurship and institutional theory to explain entrepreneurial growth aspirations across individuals and institutional contexts. Our framework generates hypotheses at the national level about the negative impact of higher levels of corruption, weaker property rights and greater government activity on entrepreneurs' aspirations to increase employment. We further explore whether individual's social networks compensate for weaknesses in national institutions. We use the Global Entrepreneurship Monitor surveys in 42 countries for 2001-2006, applying a multilevel estimation framework to test our ideas. We find that the relationship between growth aspiring entrepreneurs and institutions is complex; they benefit simultaneously from strong government (in the sense of property rights enforcement), and smaller government, but are constrained by corruption. Social networks mediate some but not all institutional deficiencies. © 2012 Elsevier Inc.

Case Comment : Jones v Kernott:which road to Rome?

Jones v Kernott [2011] UKSC 53 (SC) Stack v Dowden [2007] UKHL 17; [2007] 2 A.C. 432 (HL). Casenote explores the implications of the ruling in Jones v Kernott by the Supreme Court and assesses its implications for English Property Law. Building on the commonwealth experience the casenote calls for the intorduction of a statutory scheme so as to allow courts to reallocate property rights to unmarried cohabitants in the event of relationship breakdown.

Hanchett-Stamford V (1) HM Attorney-General and (2) Dr William Johnston Jordan [2008] Ewhc 330 (CH), 2008 WL 1968855

Casenote considers meaning and impact of ruling of High Court in Hanchett Stamford v HM A.G. The decision of Mr Justice Lewison in Hanchett-Stamford v HM Attorney General and Dr William Johnston Jordan1 provides us with a useful analysis of the legal principles relating to the thorny issues of: (i) how unincorporated associations hold property; (ii) the applicability of the law of charities to unincorporated associations and (iii) the property rights of a declining membership upon the dissolution of such associations.

Entrepreneurship, social capital, and institutions:social and commercial entrepreneurship across nations

We model and test the relationship between social and commercial entrepreneurship drawing on social capital theory. We propose that the country prevalence rate of social entrepreneurship is an indicator of constructible nation-level social capital and enhances the likelihood of individual commercial entry. We further posit that both social and commercial entrepreneurial entry is facilitated by certain formal institutions, namely strong property rights and (low) government activism, albeit the latter impacts each of these types of entrepreneurship differently. We apply bivariate discrete choice multilevel modeling to population-representative samples in 47 countries and find support for these hypotheses. © 2013 Baylor University.

The relationship between internationalisation and innovation:internationalisation strategies, foreign firms', patenting behaviour and FDI spillovers

This thesis aims to contribute to the understanding of the relationships between internationalisation and innovation. Based on large comprehensive firm level data from China, this thesis comprises of three empirical chapters examining internationalisation from different aspects. Specifically, the first empirical work studies how firms internationalise. It links the choice of firms’ internationalisation strategies with firm characteristics. Additionally, it re-examines the stepwise internationalisation theory by distinguishing different foreign direct investment (FDI) motives. It proposes two pecking orders of firm performance in internationalisation strategies. The second empirical study investigates what kind of innovation activities internationalised firms do. It analyses the factors that drive foreign firms to patent in an emerging host country context. It stresses the importance of the intellectual property rights protection aspect of business environment at regional level in promoting patents, the role of industry dependence on external finance in shaping foreign firms’ patenting behaviour, as well as links foreign firms’ patent production with FDI motivation. The third empirical research examines the effect of internationalisation by examining the links between inward FDI and domestic innovation in a host country. It specifically examines technology spillovers from inward FDI through the direct lens of innovation (captured by grant patents), instead of adopting the indirect productivity approach widely employed by the literature. Distinguishing different types of innovation, it provides direct evidence of heterogeneous innovation spillovers from FDI.

International trade law, plain packaging and tobacco industry political activity:the Trans-Pacific Partnership

Tobacco companies are increasingly turning to trade and investment agreements to challenge measures aimed at reducing tobacco use. This study examines their efforts to influence the Trans-Pacific Partnership (TPP), a major trade and investment agreement which may eventually cover 40% of the world's population; focusing on how these efforts might enhance the industry's power to challenge the introduction of plain packaging. Specifically, the paper discusses the implications for public health regulation of Philip Morris International's interest in using the TPP to: shape the bureaucratic structures and decision-making processes of business regulation at the national level; introduce a higher standard of protection for trademarks than is currently provided under the Agreement on Trade Related Aspects of Intellectual Property Rights; and expand the coverage of Investor-State Dispute Settlement which empowers corporations to litigate directly against governments where they are deemed to be in breach of investment agreements. The large number of countries involved in the TPP underlines its risk to the development of tobacco regulation globally.

Shadow economy and entrepreneurial entry

The impact of the shadow economy on entrepreneurial entry across countries is analyzed utilising 1998-2005 individual-level Global Entrepreneurship Monitor data and national macro-economic variables. A simple correlation coefficient suggests a positive relationship between the size of the shadow economy and the likelihood of entrepreneurial entry. However, this masks more complex relationships, if, as argued, the shadow economy is an embedded social phenomenon. With appropriate controls and instrumenting for potential endogeneity, the impact of the shadow economy on entry in a linear specification is found to be negative. Further, there is evidence of a U-shaped relationship: entrepreneurial entry is least likely when the shadow economy amounts to about a quarter of gross domestic product (GDP). At the individual level, an extensive shadow economy has a more negative impact on respondents who are risk averse. In addition, in the economies where property rights are stronger, the negative impact of the shadow economy is weaker. © 2012 Blackwell Publishing Ltd.

Institutions matter: essays on the determinants and consequences of socio-political institutions

ONLY AVAILABLE FOR CONSULTATION AT ASTON UNIVERSITY LIBRARY WITH PRIOR ARRANGEMENT This thesis seeks to contribute to the socio-political literature. It comprises of three individual chapters examining the determinants and consequences of different social-political institutional factors. Specifically, the first study combines game theoretical and empirical techniques to examine how bureaucrats favour other agents within their social group and the effects this will have on the level of corruption in the economy. To this end, I develop a simple model of allocation of time between economic activities and leisure (time spent building social network ties), to illustrate the underlying causal mechanism between social network and corruption. It shows that large social networks and low levels of economic activities provides the condition for high levels of corruption. However, the ability of the government to punish corruption through well-established laws and property rights enforcement acts as a deterrent to corruption. he second work also combines game theoretical and empirical techniques. It aims to clarify the relationship between the degree of competition and political influence of firms, paying particular attention to the level of government regulations that exist in the countries in which the firms operates. The interplay between economic and political institutions is vital to any analysis on understanding the workings of political influence. The third study is purely empirical. It examines the role of two types of business network, namely, political connections and business group affiliations on a firm’s performance. Evidence was provided on Chinese firms’ performance during the 2008 financial crisis.