The influence of socio-cultural environments on the performance of nascent entrepreneurs:an instrumental variable approach

The importance of informal institutions and in particular culture for entrepreneurship is a subject of ongoing interest. Past research has mostly concentrated on cross-national comparisons, cultural values, and the direct effects of culture on entrepreneurial behavior, but in the main found inconsistent results. The present research adds a fresh perspective to this research stream by turning attention to community-level culture and cultural norms. We hypothesize indirect effects of cultural norms on venture emergence. Specifically that community-level cultural norms (performance-based culture and socially-supportive institutional norms) impact important supply-side variables (entrepreneurial self-efficacy and entrepreneurial motivation) which in turn influence nascent entrepreneurs’ success in creating operational ventures (venture emergence). We test our predictions on a unique longitudinal data set (PSED II) tracking nascent entrepreneurs venture creation efforts over a 5 year time span and find evidence supporting them. Our research contributes to a more fine-grained understanding of how culture, in particular perceptions of community cultural norms, influences venture emergence. This research highlights the embeddedness of entrepreneurial behavior and its immediate antecedent beliefs in the local, community context.

Comparing methods to separate treatment from self-selection effects in an online banking setting

The literature discusses several methods to control for self-selection effects but provides little guidance on which method to use in a setting with a limited number of variables. The authors theoretically compare and empirically assess the performance of different matching methods and instrumental variable and control function methods in this type of setting by investigating the effect of online banking on product usage. Hybrid matching in combination with the Gaussian kernel algorithm outperforms the other methods with respect to predictive validity. The empirical finding of large self-selection effects indicates the importance of controlling for these effects when assessing the effectiveness of marketing activities.

The impact of university research on corporate patenting

This paper analyses the association between the number of patenting manufacturing firms and the quantity and quality of relevant university research across UK postcode areas. We show that different measures of research `power' and `excellence' positively affect the patenting of small firms within the same postcode area. Patenting by large firms, in contrast, is unaffected by research undertaken in nearby universities. This confirms the commonly held view that location matters more for small firms than large firms. We also investigate specific channels of technology transfer, finding that university-industry knowledge transfer occurs through both formal and informal channels. From a methodological point of view, we contribute to the existing literature by accounting for potential simultaneity between university research and patenting of local firms by adopting an instrumental variable approach. Moreover, we also allow for the effects of the presence of universities in neighbouring postcode areas to influence firms' patenting activity by incorporating spatial neighborhood effects.