Three essays on self-employment transitions, organizational capital, and firm formation

This dissertation explores how economic, organizational, and personal factors affect self-employment transitions, occupational decisions, and firm formation activities of individuals at different positions in the skill distribution. The first essay of my dissertation studies how local unemployment rates differentially affect entry into self-employment by individuals at different places in the skill distribution. The empirical results show a positive correlation between local unemployment rates and entry into self-employment for low-ability workers, but not for high-ability workers. Including employer size to eliminate possible distortions showed that the positive association between unemployment and self-employment among low-ability workers is in fact driven by the small firm effect. Controlling for firm size yields a negative association between unemployment and self-employment among high-ability workers. Effects of organizational capital, human capital and physical capital, on the firm formation activities of people at distinct skill levels depend on the type of the industry which is chosen for the new firm. Two types of industries, capital-intensive and ability-intensive, are utilized to explore this hypothesis in the second essay. A capital-intensive industry requires more physical investment, and consequently more funds, whereas, an ability-intensive industry requires more human capital. It is shown that high human capital requirements are associated with higher earnings among the most able individuals, and therefore makes them more likely to found firms in an ability-intensive industry. Wealthy people are more likely to establish both capital-intensive and ability-intensive firms, even though the amount of funds necessary for two industry types differs. Moreover, entry into both industries is predicted to happen later in life due to the removal of entry barriers constituted by required investment spending using savings when old. Empirical mixed results are observed. The third essay investigates earning differentials between future entrepreneurs and their non-entrepreneurial colleagues. Results show that high-ability firm-owners in an ability-intensive industry were earning more than those that remained in wage-work, whereas, low-ability firm-owners in a capital-intensive industry were earning less than those remaining in paid-work.

The role of market knowledge in recognizing and exploiting entrepreneurial opportunities in technology intensive firms

Entrepreneurial opportunity recognition is an increasingly prevalent phenomenon. Of particular interest is the ability of promising technology based ventures to recognize and exploit opportunities. Recent research drawing on the Austrian economic theory emphasizes the importance of knowledge, particularly market knowledge, behind opportunity recognition. While insightful, this research has tended to overlook those interrelationships that exist between different types of knowledge (technology and market knowledge) as well as between a firm’s knowledge base and its entrepreneurial orientation. Additional shortfalls of prior research include the ambiguous definitions provided for entrepreneurial opportunities, oversight of opportunity exploitation with an extensive focus on opportunity recognition only, and the lack of quantitative, empirical evidence on entrepreneurial opportunity recognition. ^ In this dissertation, these research gaps are addressed by integrating Schumpeterian opportunity development view with a Kirznerian opportunity discovery theory as well as insights from literature on entrepreneurial orientation. A sample of 85 new biotechnology ventures from the United States, Finland, and Sweden was analyzed. While leaders in all 85 companies were interviewed for the research in 2003-2004, 42 firms provided data in 2007. Data was analyzed using regression analysis. ^ The results show the value and importance of early market knowledge and technology knowledge as well as an entrepreneurial company posture for subsequent opportunity recognition. The highest numbers of new opportunities are recognized in firms where high levels of market knowledge are combined with high levels of technology knowledge (measured with a number of patents). A firm’s entrepreneurial orientation also enhances its opportunity recognition. Furthermore, the results show that new ventures with more market knowledge are able to gather more equity investments, license out more technologies, and achieve higher sales than new ventures with lower levels of market knowledge. Overall, the findings of this dissertation help further our understanding of the sources of entrepreneurial opportunities, and should encourage further research in this area. ^

The role of market knowledge in recognizing and exploiting entrepreneurial opportunities in technology intensive firms

Entrepreneurial opportunity recognition is an increasingly prevalent phenomenon. Of particular interest is the ability of promising technology based ventures to recognize and exploit opportunities. Recent research drawing on the Austrian economic theory emphasizes the importance of knowledge, particularly market knowledge, behind opportunity recognition. While insightful, this research has tended to overlook those interrelationships that exist between different types of knowledge (technology and market knowledge) as well as between a firm’s knowledge base and its entrepreneurial orientation. Additional shortfalls of prior research include the ambiguous definitions provided for entrepreneurial opportunities, oversight of opportunity exploitation with an extensive focus on opportunity recognition only, and the lack of quantitative, empirical evidence on entrepreneurial opportunity recognition. In this dissertation, these research gaps are addressed by integrating Schumpeterian opportunity development view with a Kirznerian opportunity discovery theory as well as insights from literature on entrepreneurial orientation. A sample of 85 new biotechnology ventures from the United States, Finland, and Sweden was analyzed. While leaders in all 85 companies were interviewed for the research in 2003-2004, 42 firms provided data in 2007. Data was analyzed using regression analysis. The results show the value and importance of early market knowledge and technology knowledge as well as an entrepreneurial company posture for subsequent opportunity recognition. The highest numbers of new opportunities are recognized in firms where high levels of market knowledge are combined with high levels of technology knowledge (measured with a number of patents). A firm’s entrepreneurial orientation also enhances its opportunity recognition. Furthermore, the results show that new ventures with more market knowledge are able to gather more equity investments, license out more technologies, and achieve higher sales than new ventures with lower levels of market knowledge. Overall, the findings of this dissertation help further our understanding of the sources of entrepreneurial opportunities, and should encourage further research in this area.

Essays on durable goods consumption and firm innovation

This dissertation comprises three individual chapters. Chapter Two examines how free riding across neighbors influenced the diffusion of color television sets in rural China. Chapter Three tests for asymmetric information between a firm’s management and other investors concerning its patent output. Chapter Four discusses how knowledge stocks influence a patenting firm’s later diversification. Chapter Two documents the existence of a type of network effects—free riding across neighbors—in the consumption of color television sets in rural China, which reduces the propensity of non-owners to purchase. I construct a model of the timing of the purchase of a durable good in the presence of free riding, and test its key implications using household survey data in rural China. Chapter Three tests for asymmetric information between a firm’s management and other investors about its patent output by examining insider trading patterns and stock price changes in R&D intensive firms. It demonstrates that management has considerable information about its patent output beyond what is known to investors. It also shows that the predictive power of insider trading patterns on patent output comes from purchases rather than sales. Chapter Four discusses two sequential channels through which knowledge stocks may influence a firm’s later diversification. One is that firms with more knowledge are more likely to enter a new industry. The other is that firms’ businesses have a better chance of surviving, conditional on being formed. By examining U.S. public patenting firms in manufacturing sectors for 1984-1996, I find that knowledge stocks predict the likelihood of new industry entry when controlling for firm size. However, this predictive power is weakened when diversification effects are included. On the other hand, a survival study of newly established segments shows that initial knowledge stocks have significant positive effects on segment survival, whereas diversification effects are insignificant.

An empirical study of Kirkpatrick's evaluation model in the hospitality industry

This study examined Kirkpatrick’s training evaluation model (Kirkpatrick & Kirkpatrick, 2006) by assessing a sales training program conducted at an organization in the hospitality industry. The study assessed the employees’ training outcomes of knowledge and skills, job performance, and the impact of the training upon the organization. By assessing these training outcomes and their relationships, the study demonstrated whether Kirkpatrick’s theories are supported and the lower evaluation levels can be used to predict organizational impact. The population for this study was a group of reservations sales agents from a leading luxury hotel chain’s reservations center. During the study period from January 2005 to May 2007, there were 335 reservations sales agents employed in this Global Reservations Center (GRC). The number of reservations sales agents who had completed a sales training program/intervention during this period and had data available for at least two months pre and post training composed the sample for this study. The number of agents was 69 ( N = 69). Four hypotheses were tested through paired-samples t tests, correlation, and hierarchical regression analytic procedures. Results from the analyses supported the hypotheses in this study. The significant improvement in the call score supported hypothesis one that the reservations sales agents who completed the training improved their knowledge of content and required skills in handling calls (Level 2). Hypothesis two was accepted in part as there was significant improvement in call conversion, but there was no significant improvement of time usage. The significant improvement in the sales per call supported hypothesis three that the reservations agents who completed the training contributed to increased organizational impact (Level 4), i.e., made significantly more sales. Last, findings supported hypothesis four that Level 2 and Level 3 variables can be used for predicting Level 4 organizational impact. The findings supported the theory of Kirkpatrick’s evaluation model that in order to expect organizational results, a positive change in behavior (job performance) and learning must occur. The examinations of Levels 2 and 3 helped to partially explain and predict Level 4 results.

Club COO Leadership: A Comparative Study of Industry

A true leader continues the quest for personal knowledge. The quest is designed to better the leader's life, not necessarily the leader's livelihood. While change is a constant in the lives of club leaders, and some days the leader's vision and purpose change, the underlying ideas and convictions remain constant. Many leadership qualities must be present to be an effective leader. The author's survey club chief operating officers to elicit the characteristics and essential qualities of club leadership

Transforming the Hospitality Industry into E-Business

The emergence of a technology-intensive economy requires the transformation of business models in the hospitality industry Established companies can face technological, cultural, organizations and relationship barriers in moving from a traditional business model to an e-business model. The authors suggest that market, learning, and business process orientations at the organizational level can help remove some of the barriers toward e-business and facilitate the development of e-business within existing organizational infrastructures.

Service Quality and Black Customer Satisfaction - A Perspective on the United States Restaurant Industry

This paper examines the issue of racial discrimination of Black United States (U.S.) restaurant patrons from a service quality and customer satisfaction perspective. In spite of the progress the industry has made in recent years to alleviate this problem, many contemporary examples clearly demonstrate that racial discrimination is still of great concern. The articles stresses the importance of an ethical approach in human resource management-intensive and offers suggestions for reducing discriminatory practices in U.S. restaurant service delivery.

The Food Service Industry: Beliefs Held by Academics

In his study - The Food Service Industry: Beliefs Held by Academics - by Jack Ninemeier, Associate Professor, School of Hotel, Restaurant and Institutional Management at Michigan State University, Associate Professor Ninemeier initially describes his study this way: “Those in the academic sector exert a great deal of influence on those they are training to enter the food service industry. One author surveyed educational institutions across the country to ascertain attitudes of teachers toward various segments of the industry.” Those essential segments of the industry serve as the underpinnings of this discussion and are four-fold. They are lodging, institutional, multi-unit, and single-unit properties. For each segment the analysis addressed factors relating to Marketing, management and operating concerns: Marketing, operations, fiscal management, innovation, future of the segment Employee-related concerns: quality of work life, training/education opportunities, career opportunities The study uses a survey of academicians as a guide; they point to segments of the food service industry students might be inclined to enter, or even ignore. The survey was done via a questionnaire sent from the campus of the School of Hotel, Restaurant and Institutional Management at Michigan State University to 1850 full-time faculty members in two and four-year hospitality programs in the United States. Through the survey, Ninemeier wishes to reasonably address specific problems now confronting the food service industry. Those problems include but are not limited to: reducing employee turnover, retaining staff, increasing productivity and revenue, and attracting new staff. “Teachers in these programs are, therefore, an important plank in industry's platform designed to recruit students with appropriate background knowledge and interest in their operations,” Ninemeier says. Your author actually illustrates the survey results, in table form. The importance to an employee, of tangibles and intangibles such as morale, ego/esteem, wages, and benefits are each explored through the survey. According to the study, an interesting dichotomy exists in the institutional property element. Although, beliefs the academics hold about the institutional element suggest that it offers low job stress, attractive working conditions, and non-demanding competitive pressures, the survey and Ninemeier also observe: “Academics do not believe that many of their graduates will enter the institutional segment.” “If academic beliefs are incorrect, an educational program to educate academics about management and employee opportunities in the segment may be in order,” Ninemeier waxes philosophically.

Industry Expresses Attitudes Toward Accounting, Finance Curricula

A survey of hospitality financial executives provides guidance for those planning accounting and finance curricula for schools of hospitality management. The authors discuss the results of their survey sponsored by the Association of Hospitality Financial Management Educators.

The Influence of Purchase Confidence on Information Source Selection: Implications for Hospitality Industry

Whether the product of choice is a restaurant, vacation resort or hotel, it is important for hospitality marketers to understand how consumers treat purchase decisions and the influence purchase confidence and situation play on that decision. This study investigated the role purchase confidence plays with knowledge in the selection of sources of information during purchase decisions. The results indicate sources of information are perceived differently by consumers and depending on the purchase situation, subjective knowledge is influenced by purchase confidence affecting the source of information considered when making a purchase decision. The results also indicated that those with high purchase confidence and subjective knowledge will rely on themselves as a source when making a purchase rather than a retail clerk or published material.