We examine the spatial pattern of agglomeration effects on firm births, distinguishing between domestic and foreign ownership among incumbent firms. Using data from Polish municipalities, our analysis considers both domestic and foreign firm births, capturing neighbourhood effects with spatial lags. We argue that the spatial pattern of agglomeration effects results from a combination of competition for resources and positive externalities, where the latter are mostly associated with foreign incumbents. We find that foreign incumbents in the neighbourhood have a stronger positive association with firm births than those in the focal municipality; in contrast, the reverse pattern applies to domestic incumbents.

This study investigates the short-term effects of CEO change on firm growth under the conditions of complexity. Drawing primarily on information processing theory, we argue that more complex firms face greater cognitive and coordination demands, making leadership transitions particularly challenging, as newly appointed CEOs require time to process information and establish effective decision-making routines. In the context of authoritarian state capitalism, these mechanisms imply that CEO turnover may initially lead to disruption, as new CEOs require more time to adapt and operate effectively. Thus, we propose that complexity moderates negatively the short-term relationship between leadership change and firm growth. We postulate and empirically examine two sources of complexity, namely organisational complexity raising from size and group affiliation, and operations-related complexity associated with cross-border trade. Our findings, based on a dynamic panel estimator applied to a large dataset of Russian firms, show that in complex firms, CEO change negatively impact short-term growth.

Economically motivated entrepreneurship is argued to contribute to society by creating economic growth and jobs, while socially and environmentally motivated entrepreneurship is positioned as a way of addressing societal needs. We relate this heterogeneity in entrepreneurs’ motivations to growth expectations and ask whether the effects of these motivations differ under conditions of adversity, specifically in the context of an economic crisis. We argue that during an economic crisis, socially and environmentally motivated entrepreneurs may expect to grow, in contrast to economically motivated entrepreneurs who often scale back their growth expectations in times of adversity. We test our predictions in multilevel analyses of data from 5605 entrepreneurs across 48 countries collected during the Global Financial Crisis. We find that socially and environmentally motivated entrepreneurs had higher growth expectations than economically motivated entrepreneurs. These relationships were mediated by lower perceived market competition. For environmentally motivated entrepreneurs, higher opportunity perception also acted as a mediating mechanism. By bridging research on growth expectations with research on social and environmental entrepreneurship, our study contributes new insights to both streams of research. It also contributes to entrepreneurship research on crises and adversity by highlighting how motivations shape entrepreneurs’ responses to crises and by unpacking the individual-level cognitive mechanisms involved. Do socially and environmentally motivated entrepreneurs thrive when the economy shrinks? Surprisingly, we find that they hold higher growth expectations than their economically motivated counterparts during an economic crisis. While economic downturns often lead profit-driven entrepreneurs to scale back their growth expectations, our findings suggest that entrepreneurs with social and environmental motivations respond to urgent societal needs that a crisis creates with higher growth expectations. Thus, socially and environmentally motivated entrepreneurs can play an important role not only in addressing broader societal challenges, but also in sustaining job creation during periods of adversity and possibly beyond. The implication is that policy makers should pay attention to the growth expectations of socially and environmentally motivated entrepreneurs which are often overlooked. More generally, this research highlights the importance of understanding the diverse motivations of entrepreneurs because these affect their economic strategies during crises.

Strong kinship structures correspond to important informal institutions that provide some social insurance to businesses in developing economies. More specifically, we posit that, during an economic crisis, businesses located in areas characterised by an in-group supporting marriage tradition (cousin marriage) will experience weaker negative effects on their profitability. We speculate that the cousin marriage tradition is associated with dense structures of kinship-based contacts between individuals, which creates the basis for effective social sanctions that support the cooperation needed during crises. Such structures may enhance the resilience of the local social systems; and local businesses may draw on local, socially available resources, which will attenuate the impact of crises on their financial performance. We utilise the data from the 2018-2019 Nigeria Living Standard Survey and find support for our hypotheses.

We present a Schumpeterian model of new venture creation, under uncertainty, which explains the tradeoff between speed-to-breakeven and revenue-at-breakeven and relates this to the level of innovation. We then explore the tradeoffs between these outcomes empirically in a sample of 331 information and communication technology (ICT) ventures using a multi-input, multi-output stochastic frontier model. We estimate the contribution of financial capital and labor to the outcomes and the tradeoffs between them, as well as address heterogeneity across ventures. We find that more innovative (and therefore more uncertain) ventures have lower speed-to-breakeven and/or lower revenue-at-breakeven. Moreover, for all innovativeness levels, new ventures face a tradeoff between speed-to-breakeven and revenue-at-breakeven. Our results suggest that it is the availability of proprietary resources (founder equity and founder labor) that helps ventures overcome bottlenecks in the venture creation process, and we propose a line of research to explain the variation in venture creation efficiency.

This study uses both secondary and primary data on perceptions of 1789 ecosystem actors from 17 cities in Europe to perform an empirical analysis of three institutional dimensions: regulatory, cultural values and socio-cultural practices - and tests their association with the entrepreneurial ecosystem's growth orientation. As a result, we develop a framework for the entrepreneurial ecosystem's factors and provide policy recommendations for those interested in supporting the entrepreneurial ecosystem's growth orientation in cities. Among other conclusions, the findings suggest a positive association between the socio-cultural practices of environmental sustainability behaviour in businesses with entrepreneurial ecosystem's growth orientation.

We develop a conceptual framework that links local social capital with different types of business start-ups (necessity and opportunity, low- and high-growth ambition, exporting and not, innovative and less innovative). We empirically test these relationships, utilising UK data, between 2018 and 2021. We gain unique insights at a granular spatial level on the diverse impact of local social capital on types of entrepreneurial activity. Our findings show that local social capital may be important in supporting less ambitious forms of entrepreneurship, particularly during crises.

Research SummaryThe paper explores how the deep historical roots of informal institutions influence current informal businesses. It proposes that both pre-colonial institutions-the tradition of cousin marriage-and the subsequent shocks of colonization still impact the performance of informal firms. We theorize on how the effects of historical family systems are moderated by the traumatic and spatially heterogeneous shocks of colonialism, in particular the cultural values of the colonizers (individualism) and their religious (missionary) activities. Our hypotheses are tested by regression analysis based on surveys of informal businesses in multiple regions of eight African countries. We find that the cousin marriage tradition is negatively associated with the performance of current informal businesses though this relationship is attenuated in places where colonizers were more individualistic.Managerial SummaryThis paper explores how the pre-colonial family institutions-the tradition of cousin marriage-and the subsequent shocks of colonization jointly impact the performance of contemporary informal firms in sub-Saharan Africa. We propose that the historical tradition of cousin marriage has persistent and negative effects on the revenue and labor productivity of contemporary informal businesses. This is because informal entrepreneurs in ethnic areas with the cousin marriage tradition may prioritize social obligations over economic incentives. However, these relationships are attenuated in ethnic areas colonized by European countries with more individualistic cultural values. Our findings highlight the importance for business owners and managers to understand the deep historical roots of the social norms of the communities and groups with which they interact.

This article examines the role of parental transmission of entrepreneurship in the sales performance of small and micro-enterprises. We posit that while the intergenerational transmission of attitudes may be crucial for the entrepreneurial entry decision (as highlighted by the literature), cognitive elements and transmission of knowledge are more important for actual venture performance. Applying social cognitive theory (SCT), we leverage a large World Bank dataset to understand the drivers of small and micro-enterprise performance in the understudied developing economy context of Sri Lanka. The study illuminates how parental transmission is conditioned by cognitive skills. We also highlight that both the education and business-specific managerial experience of founders, as captured by firm age, may substitute for the parental transmission of business knowledge. The research offers theoretical and practical implications, interpreting the human capital drivers of small and micro-enterprise success through the lens of SCT and considering the complementary and compensatory influences on outcomes.

We analyse entrepreneurial entry along the dimensions of informal -formal and necessityopportunity entrepreneurship, distinguishing between them yet considering them jointly. While the dominant view in the literature conflates necessity with informal entry, and opportunity with formal entry, we hypothesise that informal entrepreneurship may be attractive to higher-income individuals as a testing ground for entrepreneurial ideas. We also explain why higher-income individuals may undertake necessity entrepreneurship. We utilise individual Global Entrepreneurship Monitor (GEM) data from Chile (2019 - 2021), which identifies informal -formal and necessity-opportunity entrepreneurial entry modes, to test hypotheses on the role of individuals income in the four types of entrepreneurial entry. We also consider changes in entrepreneurial entry during a crisis and a non-crisis periods. Our results confirm that the patterns in the data are consistent with hypotheses derived from our proposed theoretical framework. Executive summary: Emerging markets economies have very large informal sectors, and their entrepreneurial entry is often motivated by economic necessity rather than by business opportunity. But neither informal nor necessity entrepreneurship are usually expected to generate the positive benefits for growth and development predicted for formal and opportunity entrepreneurship. We argue that the dominant stream in the literature actually conflates informal and necessity entrepreneurship, both of which have been associated with low human and financial capital and productivity. We propose that the appropriate typology is more complex than this because there are examples of successful and dynamic informal firms. This leads us to identify four categories of entrepreneurial entry: informal-necessity (Type 1), formal-opportunity (Type 2), informal-opportunity (Type 3), and formal-necessity (Type 4). While necessity entrepreneurship has typically been associated with low-income individuals, we propose that formalnecessity entrepreneurship may be an entry path for both low- and high-income individuals, though for different reasons. Informal opportunity entry may likewise be an option for people with low-income as well as high-income. We therefore seek to disentangle the analysis of opportunity-necessity and of formal -informal entry and to demonstrate that the two less explored entry modes - informal-opportunity, and formal -necessity - are of considerable theoretical and practical significance in emerging economies. We test our framework in the emerging market economy setting of Chile, one of the more prosperous and open economies in Latin America. We use Global Entrepreneurship Monitor (GEM) data which uniquely for Chile allow us to distinguish between individuals along both the formal -informal and the necessity -opportunity dimensions. On this basis, we distinguish empirically between these four categories of entrepreneurial entry and explain how higher -income individuals may use informal -opportunity entrepreneurial entry as a "seed bed" to test their new business ideas. At the same time, we show that necessity entrepreneurship may be attractive to both lower- and higher -income individuals. We also show that the interplay between individuals income groups and four entrepreneurial entry modes is stable over "normal times" versus "crisis periods". We observe that in response to a crisis, individuals with lower -incomes are likely to engage more in informal -necessity entrepreneurship while opportunity -informal entry by higher -income individuals will decline. These changes represent a more complex adjustment pattern than has been identified for developed economies, where entrepreneurial activity has been found to be countercyclical. Thus, in emerging markets, informal -necessity entrepreneurship plays a stabilizing role for those individuals with a more marginal position in the labor market during the crisis. In contrast, for those individuals who have access to higher household income, all forms of entrepreneurship become a less attractive option. We interpret this as indicating that these individuals have the option to wait for higher return opportunities to re-emerge. This is one of the first papers to explore the impact of the COVID-19 pandemic on entrepreneurship in an emerging market economy.

After over two decades, the debate on the female underperformance hypothesis remains not concluded. This study sheds some new light on the hypothesis by (i) showing that surrounding institutional forces play an important role in determining how female businesses perform and (ii) arguing that to understand gender differences (or lack of those) in performance, we need to look at productivity alongside profitability, revenues, and growth. Specifically, we posit that, in certain developing countries, female entrepreneurs devise specific strategies to cope with challenging institutional contexts. In such contexts, female entrepreneurs have less opportunity to realize economic rents compared to males, but they respond to these constraints by becoming more efficient in resource use through relying on female employment. Investigating a large set of longitudinal data from Vietnam, we find that female businesses are more productive than male businesses, and that this effect is stronger when female owner-managers employ more female employees, or even female employees only. However, we also find that these positive effects are weakened with increased corruption. This provides important implications for female entrepreneurs and policymakers in developing countries. For developed economies, there is an ongoing debate on how female-run firms perform relative to those run by males. However, less is known about these differences in developing economies, where the institutional environment is less stable. Moreover, the answer may depend on the measure of performance. This study aims to shed light to this question by examining a large number of SMEs in Vietnam over a period of 12 years. Interestingly, we found that female entrepreneurs devise specific strategies to cope with challenging institutional contexts. Specifically, they respond to institutional constraints by becoming more efficient in resource use through relying on female employment. Thus, the principal implication of this study is that policymakers should, on the one hand, encourage more women to participate in the workplace, while on the other hand, urge emerging market firms, especially female-run firms, to take on more female employees, not only for the sake of gender equality but also to benefit their organizational productivity.

We posit that the quality of information and communication technology (ICT) infrastructure and the effectiveness of crisis-specific policy response are essential for entrepreneurial growth aspirations during major external shocks. Enhancing the quality of ICT infrastructure is a relevant strategy for building ecosystems that are resilient to multiple types of crises. It enhances entrepreneurs' growth ambitions during the crisis, and makes them less reliant on crisis-specific response policies adopted by governments. We provide empirical support for this, utilizing Global Entrepreneurship Monitor (GEM) data from the pandemic period in Chile.

Purpose This study aims to examine how the effect of gender on entrepreneurial growth aspirations is moderated differently by individual resources (human and financial capital) compared to those within the social environment (availability of entrepreneurial knowledge and role models). Design/methodology/approach A multilevel estimator is used to investigate the determinants of growth aspirations of owners-managers of nascent start-ups. The Global Entrepreneurship Monitor database is employed, covering the period 2007–2019, with 99,000 useable cases drawn from 95 countries. Findings The results suggest that individual financial resources and human capital have positive effects on entrepreneurial growth aspirations; yet these effects are weaker for female entrepreneurs relative to males. In contrast, the impact of the availability of entrepreneurial social knowledge and role models on their growth aspirations is more positive than for male entrepreneurs. Originality/value This study offers a novel insight into entrepreneurial growth ambition, as it utilises a global perspective to scrutinise whether individual and social resources contribute differently to male versus female growth-aspirations, employing a multilevel approach. It also integrates insights from the resource-based view and from the relevant business literature on entrepreneurs’ gender to develop theoretical explanations.

This paper examines how the ethnic composition of SMEs’ business teams, also in conjunction with their strategic behaviour (including digitalisation, innovation and exporting), affect their employment growth. The study conceptualises different forms and aspects of social capital to develop the theoretical framework and hypotheses. We utilise the UK Office for National Statistics’ Longitudinal Small Business Survey data for the period of 2018–2020 to test our hypotheses. Our study shows that ethnically diverse business teams achieve relatively higher employment growth as compared to more homogeneous teams. Moreover, ethnically diverse business teams that embrace innovation, international expansion, and digitalisation translate these strategies more effectively into increased employment compared to their more homogenous counterparts. Culturally diverse business teams of small and medium-sized enterprises (SMEs) boost employment growth through a richer internal pool of knowledge, amplifying this effect via strategic choices. Exploring the impact of ethnic diversity within business teams on the employment growth of SMEs, we find that ethnically diverse teams tend to outperform more homogenous ones in terms of employment growth. We posit that this advantage arises from a richer pool of knowledge shared within diverse teams, which is facilitated by close cooperation within SME teams that builds internal social capital. Furthermore, diversity within business teams enhances attitudes of openness and tolerance that in turn may facilitate motivation and ability of team members to access knowledge outside the firm. This drives employment growth and also amplifies the effects of digitalisation, exporting, and innovation strategies. Our study suggests that fostering ethnic diversity within SME business teams can enhance both knowledge resources and social capital, affecting business growth. Entrepreneurs should consider embracing cultural diversity within their SME business teams as beneficial, while policymakers may appreciate that within-firms micro-effects of diversity may accumulate to help local community-building and economic development.

Since the mid-twentieth century, we observe large differences in the development paths of countries, even when characterised by similar starting positions. Taiwan and South Korea hold world records in the speed of development, some of Latin America score in the middle, and few African countries are poorer per capita than they were seventy years ago. The main puzzle relates to countries stuck in the middle range of development. At this stage, innovativeness, openness, and adaptability are characteristics that become critical for further development. Yet, these successful development strategies may not be followed, when middle-income traps arise in a form of lock-ins of oligarchic political and economic power structures. This implies that political institutions matter early on, and small institutional differences may be amplified over time due to path dependence. Supporting empirical tests based on PENN World Table data are offered.

Utilising institutional theory, we reconsider the relationship between foreign subsidiary profitability and host country corruption, and offer two key insights. First, when corruption is at a medium level, the profitability of foreign subsidiaries is strongly negatively affected, consistent with prospect theory. However, when corruption is widespread and becomes an uncertainty-reducing norm, subsidiary profitability becomes relatively stronger, albeit remaining at a lower level than in a corruption-free environment. Second, extensive business restrictions weaken the relationship between corruption and foreign subsidiary profitability. Furthermore, foreign companies operating in digital sectors are less affected both by host country corruption and by business restrictions. In addition, we consider lobbying to be an alternative non-market strategy to bribery, which can reduce the negative impact of business restrictions for companies in digital sectors. Our hypotheses have been supported by estimations drawing on over 18,000 foreign subsidiaries in emerging markets.

This virtual special issue includes research on the effects of crises, in particular the COVID-19 pandemic, on entrepreneurship, and entrepreneurial responses to deal with consequences of crises. This issue highlights how crises affect entrepreneurs' well-being and reinforce the importance of agency of entrepreneurs and other citizens. The special issue also highlights the need for resilience; the ability of entrepreneurs, organizations, and economies to absorb and adapt to shocks; and how it can be strengthened. We discuss the importance of data in times of crisis and the greater need for engaged scholarship.

Purpose Utilising the Theory of Planned Behaviour as the conceptual framework, the authors argue that entrepreneurial financial failure enhances entrepreneurial growth aspirations for the subsequent start-up projects. Furthermore, this effect is particularly strong for individuals rich in human capital, both general and specific; for them, financial failure of an entrepreneurial business is likely to be subsequently transformed into higher entrepreneurial growth aspirations. Design/methodology/approach The authors employ multilevel estimation techniques applied to Global Entrepreneurship Monitor data consisting of annual subsamples, each with at least 2,000 observations drawn from the working age population of 95 countries, for the period 2007–2019. Findings The results confirm that the experience of financial failure, both individual and societal, leads to higher growth aspirations for subsequent ventures, while exit for opportunity reasons has an even stronger positive effect on growth aspirations. Furthermore, higher education and entrepreneurial experience enhance the positive impact of financial failure on the growth aspirations of subsequent start-ups. Originality/value The authors demonstrate that the Theory of Planned Behaviour, which centres on intentions, can be successfully utilised to understand why entrepreneurial failure may be transformed into high growth aspirations for subsequent projects and why this effect may be enhanced by the human capital of the entrepreneur. Furthermore, the authors apply multilevel methods to a large international dataset from Global Entrepreneurship Monitor and produce novel empirical evidence supporting their theoretical predictions.

Multi-level analysis enables us to avoid both the ecological fallacy (drawing conclusions about individuals based on macro level data) and compositional fallacy (drawing conclusions at macro level from individual data). Multi-level modelling, connecting macro- meso- and micro-levels, is particularly useful when applied to entrepreneurship ecosystems and institutions seen in a comparative or international perspective. The purpose of this panel symposium is to engage a group of panelists in a timely, interactive discussion on multi-level theories and practice on institutions and entrepreneurship ecosystems. Centering around a coherent, common theme of multi-level theorization and analysis of institutions and entrepreneurship ecosystems, the panelists will draw from each of their own work and speak on a number of interrelated and complementary topics, including theorization and operationalization of institutional context in entrepreneurship and IB research, institutions and agency in entrepreneurship, the role of meso-level in multilayered structures of entrepreneurship ecosystems, institutional configurations that promote or damper internationalization patterns of start-ups, and country-level institutional conditions and individual-level entrepreneurship dynamics.

We posit that societal cultural values of creativity and security are associated with the likelihood that a person will engage in a business start-up. Creativity supports the opportunity identification and security the opportunity exploitation aspects of entrepreneurship. In contrast, both emphasis on performance and acceptance of risk-taking may not play the role that is typically assumed. To verify our hypotheses we construct a multilevel dataset, combining Global Entrepreneurship Monitor individual-level data with country-level data from the World Values Survey. We use a multilevel logit model to address the hierarchical structure of our data. We found that odds of start-up engagement are higher if people in a society value security, yet also appreciate thinking up new ideas and being creative. Our results support McCloskey's distinction between aristocratic and bourgeois values, and John and Storr's proposition that different cultural traits support different aspects of entrepreneurship.