Advancing the psychology of entrepreneurship:a review of the psychological literature and an introduction

This article provides a narrative review of psychology of entrepreneurship research published in leading psychology journals, based on which we develop an organising framework for future psychological contributions to this field. Furthermore, we introduce the manuscripts collected in this special issue. Our review identified five research areas, broadly corresponding with basic psychological domains, namely personal differences; careers; health and well-being; cognition and behaviour; and leadership; as well as three cross-cutting themes: gender issues; genetic and biological foundations; and context. With the aim to stimulate integration across different approaches and disciplines, we propose a framework to understand how psychologists can offer innovative contributions to the multi-disciplinary entrepreneurship literature. This includes a focus on the entrepreneur embedded in and in interaction with his or her immediate and wider context; attention to different types of entrepreneurs; and a focus on dynamic within-person processes evolving over time.

Human capital in social and commercial entrepreneurship

We advance research on human capital and entrepreneurial entry and posit that, in order to generate value, social entrepreneurship requires different configurations of human capital than commercial entrepreneurship. We develop a multilevel framework to analyse the commonalities and differences between social and commercial entrepreneurship, including the impact of general and specific human capital, of national context and its moderating effect on the human capital-entrepreneurship relationship. We find that specific entrepreneurial human capital is relatively more important in commercial entrepreneurship, and general human capital in social entrepreneurship, and that the effects of human capital depend on the rule of law.

Creative thinking experimentations for entrepreneurship with a disruptive, personalised and mobile game-based learning ecosystem

Based on an unprecedented need of stimulating creative capacities towards entrepreneurship to university students and young researchers, this paper introduces and analyses a smart learning ecosystem for encouraging teaching and learning on creative thinking as a distinct feature to be taught and learnt in universities. The paper introduces a mashed-up authoring architecture for designing lesson-plans and games with visual learning mechanics for creativity learning. The design process is facilitated by creativity pathways discerned across components. Participatory learning, networking and capacity building is a key aspect of the architecture, extending the learning experience and context from the classroom to outdoor (co-authoring of creative pathways by students, teachers and real-world entrepreneurs) and personal spaces. We anticipate that the smart learning ecosystem will be empirically evaluated and validated in future iterations for exploring the benefits of using games for enhancing creative mindsets, unlocking the imagination that lies within, practiced and transferred to multiple academic tribes and territories.

Explaining the off-the-books enterprise culture of Ukraine:reluctant or willing entrepreneurship?

In recent years, there has been a growing realisation that beyond the realm of legitimate entrepreneurship is a large, hidden enterprise culture composed of entrepreneurs conducting some or all of their trade off-the-books. Until now, however, few have evaluated how many entrepreneurs start-up their ventures trading off-the-books and why they do so. Reporting face-to-face interviews conducted in Ukraine during 2005-2006 with 331 entrepreneurs, the finding is not only that the vast majority (90%) operate partially or wholly off-the-books, but also that they are not all driven by necessity, as a last resort and as a survival strategy into entrepreneurship. Revealing how many are willing rather than reluctant entrepreneurs; and that even those who were initially reluctant and ventured into it out of necessity, became more willing entrepreneurs over time as their business became established - the paper concludes by discussing the implications of these findings for both further research and public policy. © 2010 Wiley Periodicals, Inc.

Beyond cultural values? Cultural leadership ideals and entrepreneurship

This paper offers a fresh perspective on national culture and entrepreneurship research. It explores the role of Culturally-endorsed implicit Leadership Theories (CLTs) – i.e., the cultural expectations about outstanding, ideal leadership – on individual entrepreneurship. Developing arguments based on culture-entrepreneurship fit, we predict that charismatic and self-protective CLTs positively affect entrepreneurship. They provide a context that enables entrepreneurs to be co-operative in order to initiate change but also to be self-protective and competitive so as to safeguard their venture and avoid being exploited. We further theorize that CLTs are more proximal drivers of cross-country differences in entrepreneurship as compared with distal cultural values. We find support for our propositions in a multi-level study of 42 countries. Cultural values (of uncertainty avoidance and collectivism) influence entrepreneurship mainly indirectly, via charismatic and self-protective CLTs. We do not find a similar indirect effect for cultural practices.

Entrepreneurial Inclination and Entrepreneurship in Hungary and in Europe

The lecture has two parts. The first part – based upon Eurobarometer data - briefly investigates the proportion and social characteristics of potential entrepreneurs in European comparative perspective. It proves that the Hungarian data are close to the European average. The second part – based on Hungarian panel data (1992-2007) - examines the predictive force of entrepreneurial inclination upon future entrepreneurial career and well-being. The results reveal that potential and actual entrepreneurship have strong social similarities and lasting connections despite the great volatility of both. Entrepreneurial inclination and more concrete plans have influenced the entrepreneurial career chances with nearly identical force, without cancelling each other’s effect. Entrepreneurial motivation has also to do with subjective well-being. The “push” factors of initial dissatisfaction with work and material conditions have lost their significance while the connection between entrepreneurial inclination and satisfaction with future perspectives persists in the longer run. The matrix of original motivation and further career provides a typology of four economic actors: that of “conscious” employees, “blocked”, “forced” and „conscious” entrepreneurs.

Three essays on entrepreneurial entry, serial entrepreneurship, and labor turnover

This study explores two important aspects of entrepreneurship — liquidity constraints and serial entrepreneurs, with an additional analysis of occupational choice among wage workers. In the first essay, I revisit the question of whether entrepreneurs face liquidity constraints in business formation. The principle challenge is that wealth is correlated with unobserved ability, and adequate instruments are often difficult to identify. This paper uses the son's birth order as an instrument for household wealth. I exploit the data available in the Korean Labor and Income Panel Study, and find evidence of liquidity constraints associated with self-employment in South Korea. The second essay develops and tests a model that explains entry into serial entrepreneurship and the performance of serial entrepreneurs as the result of selection on innate ability. The model supposes that agents establish businesses with imperfect information about their entrepreneurial ability and the profitability of business ideas. Agents continually observe signals with which they update their beliefs, and this process eventually determines their next business choice. Selection on ability induces a positive correlation between entrepreneurial experience (measured by previous business earnings and founding experience) and serial business formation, as well as its subsequent performance. The predictions in the model are tested using panel data from the NLSY79. The analysis permits a distinction to be made between selection on innate ability and learning by doing. Motivated by previous empirical findings that white-collar workers had higher turnover rates than blue-collar workers during firm expansion, the third essay further examines job turnover among workers with or without specific skills. I present a search-matching model, which predicts that when firm growth is driven by technological advance, workers whose skills are specific to the obsolete technology show a higher tendency to separate from their jobs. This hypothesis is tested with data from the PSID. I find supportive evidence that in the context of technological change, having an occupation requiring specific skills, such as computer specialists or engineers, increases the odds of job separation by nearly eight percent. ^

Exploring the goals, content, and methods of entrepreneurship professors: A multiple case study

Along with the accumulation of evidence supporting the role of entrepreneurship in economic development (Acs & Armington, 2006; Kuratko, 2005, Reynolds, 2007), governments have persisted in encouraging people to become entrepreneurs (Acs & Stough, 2008; Brannback & Carsrud, 2008). These efforts have tried to reproduce the conditions under which entrepreneurship emerges. One of these conditions is to develop entrepreneurial skills among students and scientists (Fan & Foo, 2004). Entrepreneurship education within higher education has experienced a remarkable expansion in the last 20 years (Green, 2008). To develop entrepreneurial skills among students, scholars have proposed different teaching approaches. However, no clear relationship has been demonstrated between entrepreneurship education, learning outcomes, and business creation (Hostager & Decker, 1999). Despite policy makers demands for more accountability from educational institutions (Klimoski, 2007) and entrepreneurship instructors demands for consistency about what should be taught and how (Maidment, 2009), the appropriate content for entrepreneurship programs remains under constant discussion (Solomon, 2007). Entrepreneurship education is still in its infancy, professors propose diverse teaching goals and radically different teaching methods. This represents an obstacle to development of foundational and consistent curricula across the board (Cone, 2008). Entrepreneurship education is in need of a better conceptualization of the learning outcomes pursued in order to develop consistent curriculum. Many schools do not have enough qualified faculty to meet the growing student demand and a consistent curriculum is needed for faculty development. Entrepreneurship instructors and their teaching practices are of interest because they have a role in producing the entrepreneurs needed to grow the economy. This study was designed to understand instructors’ perspectives and actions related to their teaching. The sample studied consisted of eight college and university entrepreneurship instructors. Cases met predetermined criteria of importance followed maximum variation strategies. Results suggest that teaching content were consistent across participants while different teaching goals were identified: some instructors inspire and develop general skills of students while others envision the creation of a real business as the major outcome of their course. A relationship between methods reported by instructors and their disciplinary background, teaching perspective, and entrepreneurial experience was found.

Three essays on entrepreneurial motivation, entry, exit and monetary rewards

This dissertation analyzes rewards and motivations of self-employment. In light of recent research contributions of Barton Hamilton (2000), which find entrepreneurship not as financially rewarding as wage work, my dissertation attempts to both verify and explain this claim. The first essay proposes a theoretical model of evolution of erroneous earnings expectations on part of a nascent entrepreneur. Inability to observe, survey, and take into account all of the returns to entrepreneurship prior to business entry creates a biased set of beliefs on part of the potential entrants. Using Bayesian learning, a nascent entrepreneur starting out with correct perception of profit distribution arrives at erroneous beliefs by incorporating limited information collected from existing businesses. An observed distribution of surviving businesses would exhibit higher earnings because of previous, unobserved, business failure entrepreneur get an overly positive view of her profit potential. Hence, the chapter offers a unique method of modeling overconfidence. The second essay undertakes dynamic empirical comparison of earnings received by business owners and their wage counterparts. Using Survey of Income and Program Participation (SIPP) I examine both short and long run returns to entrepreneurship comparing theses rewards to wage earners returns. I pay particular attention to transitions into and out of business ownership. I estimate entire earnings distribution. To characterize dynamic aspect of changes to individuals’ earnings I split the income distribution into five income quintiles and follow survey participants over the period of seven years. I find that period-to-period transitions to be Markovian. I find business tenure to be short, business ownership is costly in the short and rewarding in the long run. The third essay considered different reporting schemes applied to the self-employed. It is another empirical investigation of entrepreneurial earning uses Panel Study of Income Dynamics (PSID). I find entrepreneurs while reporting lower than wage workers earnings enjoy significant consumption premiums. I observe evidence of income underreporting by entrepreneurs. This finding suggests a need for better earning comparison metrics and proposes to use consumption rather than income metrics for future comparisons.

Revisiting Entrepreneurship Education Literature: Implications for Learning and Teaching Entrepreneurship

Courses and programs about entrepreneurship show so much variation that it is hard to identify typical teaching strategies. Although diversity is good, consistency is needed because the value of entrepreneurship education has not been established. A literature review on teaching and learning in entrepreneurship was conducted; three challenges were identified.

Political strategy, leadership, and policy entrepreneurship in Japanese defense policy and politics: A comparison of three prime ministerships

Since the end of the Cold War, Japan's defense policy and politics has gone through significant changes. Throughout the post cold war period, US-Japan alliance managers, politicians with differing visions and preferences, scholars, think tanks, and the actions of foreign governments have all played significant roles in influencing these changes. Along with these actors, the Japanese prime minister has played an important, if sometimes subtle, role in the realm of defense policy and politics. Japanese prime ministers, though significantly weaker than many heads of state, nevertheless play an important role in policy by empowering different actors (bureaucratic actors, independent commissions, or civil actors), through personal diplomacy, through agenda-setting, and through symbolic acts of state. The power of the prime minister to influence policy processes, however, has frequently varied by prime minister. My dissertation investigates how different political strategies and entrepreneurial insights by the prime minister have influenced defense policy and politics since the end of the Cold War. In addition, it seeks to explain how the quality of political strategy and entrepreneurial insight employed by different prime ministers was important in the success of different approaches to defense. My dissertation employs a comparative case study approach to examine how different prime ministerial strategies have mattered in the realm of Japanese defense policy and politics. Three prime ministers have been chosen: Prime Minister Hashimoto Ryutaro (1996-1998); Prime Minister Koizumi Junichiro (2001-2006); and Prime Minister Hatoyama Yukio (2009-2010). These prime ministers have been chosen to provide maximum contrast on issues of policy preference, cabinet management, choice of partners, and overall strategy. As my dissertation finds, the quality of political strategy has been an important aspect of Japan's defense transformation. Successful strategies have frequently used the knowledge and accumulated personal networks of bureaucrats, supplemented bureaucratic initiatives with top-down personal diplomacy, and used a revitalized US-Japan strategic relationship as a political resource for a stronger prime ministership. Though alternative approaches, such as those that have looked to displace the influence of bureaucrats and the US in defense policy, have been less successful, this dissertation also finds theoretical evidence that alternatives may exist.

Social-cognitive antecedents of ambidextrous orientation in family-owned startups: The role of family ties, achievement motivation, and internal locus of control

Regulatory Focus Theory predicts that the motivation to self-regulate goal-directed thought and behavior depends on two distinct regulation strategies: a promotion focus based on attaining gains and a prevention focus based on avoiding losses. This study took a social-cognitive approach predicting that regulatory focus has an impact on how family startups (several family related founders) explore "new ideas", exploit "old certainties" and achieve the balance of both (ambidexterity), compared to lone founder startups (only one founder present). It was proposed that the social context of family ties among founders leads them to a prevention focus concerned with avoiding the loss of the socio-emotional benefits of those ties. In order to avoid such a loss, family founders were expected to increase their risk perceptions and thus, explore less than lone founders, who lack such socio-emotional ties. It was also proposed that two commonly used psychological traits in entrepreneurship research —achievement motivation and internal locus of control, predispose entrepreneurs to a promotion focus. Founders with a promotion focus, in turn, were hypothesized to lead startups to more risk-seeking behaviors and to more explorative orientation. The previous argument was used as a springboard to derive hypotheses about ambidexterity (the ability to exploit and explore simultaneously) and survival hazards. Using Regulatory Focus Theory, exploitative orientation, conceptualized as the motivational strength to continue on previous paths of action, was hypothesized to be not significantly different from that of lone founder startups. Taking previous arguments together, lone founder startups were hypothesized to be more ambidextrous than family startups. Finally, ambidexterity and internal locus of control were hypothesized to reduce survival hazards in family startups. The findings suggested that family startups explore less than lone founder startups even after controlling for group effects. Interesting but contradictory findings revealed that internal locus of control have both a positive direct effect and a positive interaction that increases the explorative and ambidextrous orientation gap of family startups over lone founder startups. As expected, ambidexterity and internal locus of control reduced survival hazards on family startups. Implications for practitioners were derived based on a sample of 470 nascent entrepreneurs.

Foreign direct investment via M&A and domestic entrepreneurship:blessing or curse?

There are conflicting predictions in the literature about the relationship between FDI and entrepreneurship. This paper explores how foreign direct investment (FDI) inflows, measured by lagged cross-border mergers and acquisitions (M&A), affect entrepreneurial entry in the host economy. We have constructed a micro-panel of more than two thousand individuals in each of seventy countries, 2000–2009, linked to FDI by matching sectors. We find the relationship between FDI inflows and domestic entrepreneurship to be negative across all economies. This negative effect is much more pronounced in developed than developing economies and is also identified within industries, notably in manufacturing. Policies to encourage FDI via M&A need to consider how to counteract the prevailing adverse effect on domestic entrepreneurship.

University Teaching of entrepreneurship: a practitioner's analysis

This is a practitioner doctorate aimed at both Universities about to introduce Entrepreneurship as a subject and practitioners who may be turning to teaching what they know building on their business experience. In this Portfolio the transition from Entrepreneur to Lecturer in Entrepreneurship is explored and several approaches were used to support the transition. A Professional Development Memoir offers a review of the life of an entrepreneur through the lens of Meaning Making Systems in order to bring clarity to the theories used by the Entrepreneur implicitly in his practice. Reflecting on these theories offers insight as to how the entrepreneur perceived and acted on market opportunities. Imparting some of the knowledge accumulated from practice is one goal in teaching. Economics and pedagogical theories were identified, researched and applied to inform the structure, design and delivery of a module in Entrepreneurship within a post graduate programme that focussed on business practice. Theories of Entrepreneurship grounded in Economics indicate the importance of this business function within the broad Economic System for economic development. The role of theory is to offer students ways of organising how they think about entrepreneurship. Gardner’s Teaching for Understanding framework is used to bring structure to the development of the module. Several leading exemplars on the teaching of Entrepreneurship are attended to offer a context both for the content of the Module and its subsequent implementation within a framework of best practice in the teaching of Entrepreneurship. The practical running of a business by the students as a central element of the Module provided a deep and valuable learning experience allowing them to experience Entrepreneurship in a real way for themselves.