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Purpose: This paper explores the drivers and inhibitors of the transition of entrepreneurial family firms from small to large firms. We adopt two contrasting theoretical perspectives, i.e. agency and stewardship, to explore the effects of family power on size transition. Design/methodology/approach: We adopted an original research design that leverages a unique longitudinal database built starting from the list of the 500 best Italian manufacturing family firms published by the AUB Monitor in 2018. Specifically, we tested our hypotheses using a comprehensive set of financial and governance data from 89 Italian manufacturing family firms covering a 10-year period. To test our hypotheses, we conducted a survival analysis using a Cox regression. Findings: We find an inverted U-shaped relationship between family involvement in ownership and size transition: size transition is more likely to happen at intermediate levels of family involvement in ownership. Additionally, our analysis shows that family involvement in the board of directors negatively impacts size transition, while the presence of a family CEO has a positive influence. Originality/value: To the best of our knowledge, this study represents the first exploration of the phenomenon of size transition within entrepreneurial family firms. We believe it was worthwhile for two reasons. First, small size is frequently regarded as a weakness when competing in international markets, investing in R&D, or rewarding shareholders. Second, since small family firms are the major contributors to the world economy, understanding the factors that facilitate their transition to large firms can have a significant impact on overall economic development and prosperity.

We aim to ascertain to what extent the better performance of European venture capital (VC)- backed firms in high-tech industries is due to either ‘screening’ or ‘value added’ provided by VC investors. We compare portfolio firms’ productivity growth before and after the first VC round, using a matched control group as benchmark. We show that productivity growth is not significantly different between VC and non-VC-backed firms before the first round of VC financing, whereas significant differences are found in the first years after the investment event. We also find that the value-adding services provided by VC investors 'imprint' the portfolio firm., European Comission, 7th European Framework Program (Grant agreement no.: 217485), Depto. de Administración Financiera y Contabilidad, Fac. de Ciencias Económicas y Empresariales, TRUE, pub

Small entrepreneurial firms often need to be quite creative when allocating and deploying their limited resources. Especially in grasping international opportunities, social media provides a seemingly affordable and far-reaching medium. However, challenges—such as the controllability of the content and the outcomes of using social media—become apparent as the reach of social media marketing expands beyond certain threshold limits. In this study, we rely on data from multiple case studies to evaluate to what extent and under which conditions social media can support small entrepreneurial firms’ international expansion. Thereby, we contribute to research on SME internationalization and business implications of digitalization. Our findings indicate that small entrepreneurial firms face somewhat different social media–related challenges in the international business environment compared to domestic settings. The controllability of the contents comes with new tones. Furthermore, small firms’ resources, both in terms of social media use and in different functions, play an important role in determining the extent to which the use of social media supports these firms’ internationalization.

This systematic review covers the extant literature on corporate governance in entrepreneurial firms. Using a sample of 137 research papers published from pre-1990 through June 2018 in 60 journals, we categorize outlets, research methods (quantitative, qualitative, review, and non-empirical), theoretical perspectives, and research questions, highlighting key patterns. We then summarize the concepts under study in the sample literature, and the geographical sources and model specification of quantitative empirical studies. The conclusion highlights the quite fragmented nature of the field and the substantial knowledge gaps, and then proposes an actionable agenda for future research in terms of theories, research questions, research settings, and research designs. In particular, we describe the need to explore how corporate governance mechanisms interact with one another and affect firm outcomes, by applying novel theoretical perspectives and methods that could provide a better understanding of entrepreneurial firms' functioning.

Entrepreneurial, innovative entry can have devastating effects disrupting a market. However, the many players involved including all current producers, sellers and suppliers and the often non-technological but organizational nature of the innovation may lead to a gradual restoration of the market, viz., to a new equilibrium. Entrepreneurial entry can be regarded as a disaster while the restoration towards a new equilibrium as disaster management. Hardly any empirical models have been developed in order to test these ideas. This paper conducts the first empirical dynamic simultaneous equilibrium analysis of the role of entry and exit of firms, the number of firms in an industry, and profit levels in industry dynamics. Our model enables to discriminate between the entrants’ entrepreneurial function of creating disequilibrium and their conventional role of moving the industry to a new equilibrium. Using a rich data set of the retail industry, we find that indeed entrants perform an entrepreneurial function causing long periods of disequilibrium after which a new equilibrium is attained. Notably, shocks to the entry rate have permanent effects on the industry, emphasizing the entrepreneurial function of entrants rather than their passive reactive function as postulated in classical economics.

The idea that start-ups and young firms (hereafter entrepreneurial firms) create jobs is very popular among policy-makers and has led to a large number of studies investigating the effect of entrepreneurship on job creation. Recently, however, society and many players in the political arena have begun to care not only about job quantity and quantitative employment levels, but also about the quality of the jobs created. This study provides the first systematic literature review of research on the quantity and quality of jobs created by entrepreneurial firms. Our review shows that entrepreneurial firms have a long-lasting and positive effect on job creation. This effect seems to be due to a very small fraction of young, high-growth firms. With regard to job quality, however, the findings are less clear cut: while some studies indicate that entrepreneurial firms do create higher-quality jobs, a multitude of studies indicate that these jobs are of lower quality. We also show that entrepreneurial firms attract a different type of employee than established firms. For example, employees in entrepreneurial firms attach a lower weight to salary and job security than those in established firms, and instead assign greater value to responsibility, innovation, and challenges. Another finding is that many jobs in entrepreneurial firms are filled by formerly unemployed individuals. The review concludes with policy implications and avenues for future research.

The idea that start-ups and young firms (hereafter entrepreneurial firms) create jobs is very popular among policy-makers and has led to a large number of studies investigating the effect of entrepreneurship on job creation. Recently, however, society and many players in the political arena have begun to care not only about job quantity and quantitative employment levels, but also about the quality of the jobs created. This study provides the first systematic literature review of research on the quantity and quality of jobs created by entrepreneurial firms. Our review shows that entrepreneurial firms have a long-lasting and positive effect on job creation. This effect seems to be due to a very small fraction of young, high-growth firms. With regard to job quality, however, the findings are less clear cut: while some studies indicate that entrepreneurial firms do create higher-quality jobs, a multitude of studies indicate that these jobs are of lower quality. We also show that entrepreneurial firms attract a different type of employee than established firms. For example, employees in entrepreneurial firms attach a lower weight to salary and job security than those in established firms, and instead assign greater value to responsibility, innovation, and challenges. Another finding is that many jobs in entrepreneurial firms are filled by formerly unemployed individuals. The review concludes with policy implications and avenues for future research.

Combining concepts regarding the make-or-buy decision, such as Williamson’s (1981) ideas on transaction costs in conjunction with theories of supply chain management, the thesis outlines what factors should be of importance to firms when deciding to make or buy certain processes within the supply chain. Using Porter’s (1985) division of the supply chain into 5 sections we analyze the make-or-buy decisions of Catamaran Sports/Adidas sailing, finding that while many decisions taken match the theory-based predictions, a lot of processes are handled the way they are because of external constraints faced by the firm. In the case of Adidas their main reason for taking certain strategic decisions are to maintain their competitive advantage in the market, which they build on a benefit leadership strategy. This has resulted in them often choosing a production method that has a relatively high accounting cost, compared to what could have been achieved, in order to maintain flexibility, reduce lead times and provide a higher level of service.

We explore the innovation performance benefits of alliances for spin-off firms, in particular spin-offs from either other firms or from public research organizations. During the early years of the emerging combinatorial chemistry industry, the industry on which our empirical analysis focuses, spin-offs engaged in alliances with large and established partners, partners of similar type and size, and with public research organizations, often for different reasons. We seek to understand to what extent alliances of spin-offs with other firms (either large or small and medium sized firms) affected their innovation performance and also how this performance may have been affected by their corporate or public research background. We find evidence that in general alliances of spin-offs with other firms, in particular alliances with large firms, increased their innovation performance. Corporate spin-offs that formed alliances with other firms outperformed public research spin-offs with such alliances. This suggests that, in terms of their innovation performance, corporate spin-offs that engaged in alliances with other firms seemed to have benefitted from their prior corporate background. Interestingly, it turns out that the negative impact of alliances on the innovation performance of public research spin-offs was largely affected by their alliances with small and medium sized firms.

We develop a theoretical Bayesian learning model to examine how a firm’s learning horizon, defined as the maximum distance in a network of alliances across which the firm learns from other firms, conditions its optimal number of direct alliance partners under technological uncertainty. We compare theoretical optima for a ‘close’ learning horizon, where a firm learns only from direct alliance partners, and a ‘distant’ learning horizon, where a firm learns both from direct and indirect alliance partners. Our theory implies that in high tech industries, a distant learning horizon allows a firm to substitute indirect for direct partners, while in low tech industries indirect partners complement direct partners. Moreover, in high tech industries, optimal alliance formation is less sensitive to changes in structural model parameters when a firm’s learning horizon is distant rather than close. Our contribution lies in offering a formal theory of the role of indirect partners in optimal alliance portfolio design that generates normative propositions amenable to future empirical refutation. © 2015, The Author(s).

We explore the innovation performance benefits of alliances for spin-off firms, in particular spin-offs from either other firms or from public research organizations. During the early years of the emerging combinatorial chemistry industry, the industry on which our empirical analysis focuses, spin-offs engaged in alliances with large and established partners, partners of similar type and size, and with public research organizations, often for different reasons. We seek to understand to what extent alliances of spin-offs with other firms (either large or small and medium sized firms) affected their innovation performance and also how this performance may have been affected by their corporate or public research background. We find evidence that in general alliances of spin-offs with other firms, in particular alliances with large firms, increased their innovation performance. Corporate spin-offs that formed alliances with other firms outperformed public research spin-offs with such alliances. This suggests that, in terms of their innovation performance, corporate spin-offs that engaged in alliances with other firms seemed to have benefitted from their prior corporate background. Interestingly, it turns out that the negative impact of alliances on the innovation performance of public research spin-offs was largely affected by their alliances with small and medium sized firms.

We develop a theoretical Bayesian learning model to examine how a firm’s learning horizon, defined as the maximum distance in a network of alliances across which the firm learns from other firms, conditions its optimal number of direct alliance partners under technological uncertainty. We compare theoretical optima for a ‘close’ learning horizon, where a firm learns only from direct alliance partners, and a ‘distant’ learning horizon, where a firm learns both from direct and indirect alliance partners. Our theory implies that in high tech industries, a distant learning horizon allows a firm to substitute indirect for direct partners, while in low tech industries indirect partners complement direct partners. Moreover, in high tech industries, optimal alliance formation is less sensitive to changes in structural model parameters when a firm’s learning horizon is distant rather than close. Our contribution lies in offering a formal theory of the role of indirect partners in optimal alliance portfolio design that generates normative propositions amenable to future empirical refutation. © 2015, The Author(s).

Combining concepts regarding the make-or-buy decision, such as Williamson’s (1981) ideas on transaction costs in conjunction with theories of supply chain management, the thesis outlines what factors should be of importance to firms when deciding to make or buy certain processes within the supply chain. Using Porter’s (1985) division of the supply chain into 5 sections we analyze the make-or-buy decisions of Catamaran Sports/Adidas sailing, finding that while many decisions taken match the theory-based predictions, a lot of processes are handled the way they are because of external constraints faced by the firm. In the case of Adidas their main reason for taking certain strategic decisions are to maintain their competitive advantage in the market, which they build on a benefit leadership strategy. This has resulted in them often choosing a production method that has a relatively high accounting cost, compared to what could have been achieved, in order to maintain flexibility, reduce lead times and provide a higher level of service.

We investigate the effect of public (PUVC) and private (PRVC) venture capital funds on the sales growth of 6513 European New Technology-Based Firms (NTBFs) during the period from 1992 to 2009. Our results show that PUVC-backed NTBFs underperform with respect to PRVC-backed ones and do not grow more than non–venture capital-backed companies. The impact of PUVC is still not statistically significant (even though it is positive) when PUVC funds target young NTBFs. The only notable exception suggesting a positive and statistically significant impact for PUVCs is when PUVC funds cofinance with PRVC funds, and both target young firms.

Networking among entrepreneurial firms is a widely researched and debated topic amongst academics; however, there are still research gaps. Most research is based on quantitative studies and researchers have called for more qualitative analysis to gain a deeper understanding in what impact networks have on entrepreneurial firms. The purpose with this dissertation is to explore in what way networks are important (or not) for small entrepreneurial firms, and if this changes over the firms’ development. The study has an interpretive philosophy and an exploratory research design. To collect data eight semi-structured interviews, with entrepreneurs in Kristianstad and the nearby area, were completed. The findings of this study are that networks look different for all entrepreneurial firms and the importance of different relationships changes over the firms’ life cycle. Informal relationships (family and friends) are important for the entrepreneur when it comes to encouragement and support, while formal relationships (suppliers, employees, customers and other entrepreneurs) contribute to the success of the firm by providing the entrepreneur with knowledge and advice. The conclusions, from the collected data, are that all relations are not of equal importance to all entrepreneurs. The importance depends on the entrepreneur’s personality and the industry the entrepreneur operates in. However, we found that the importance of talking to other entrepreneurs has grown and that the most important relationship seems to be with family and friends. The demarcations of this study are that only entrepreneurs in one area of one country were interviewed, also that a qualitative method was used; therefore, we cannot show any statistical proof of the findings.

In this paper we present a framework of how board chairperson practices may promote innovation in small entrepreneurial firms. A case study approach is employed involving interviews with experienced board members. In our analysis we identify a set of chairperson practices related to issues such as structure, processes and culture, which serves as prerequisites for effective board work. In addition, we distinguish another set of innovation-driving chairperson practices related to the cognitive aspects of the board’s work. Overall, our findings provide a conceptual foundation for the value creating potential of board leadership embedded within the boundaries of the entrepreneurial firm and its operations.

Networking among entrepreneurial firms is a widely researched and debated topic amongst academics; however, there are still research gaps. Most research is based on quantitative studies and researchers have called for more qualitative analysis to gain a deeper understanding in what impact networks have on entrepreneurial firms. The purpose with this dissertation is to explore in what way networks are important (or not) for small entrepreneurial firms, and if this changes over the firms’ development. The study has an interpretive philosophy and an exploratory research design. To collect data eight semi-structured interviews, with entrepreneurs in Kristianstad and the nearby area, were completed. The findings of this study are that networks look different for all entrepreneurial firms and the importance of different relationships changes over the firms’ life cycle. Informal relationships (family and friends) are important for the entrepreneur when it comes to encouragement and support, while formal relationships (suppliers, employees, customers and other entrepreneurs) contribute to the success of the firm by providing the entrepreneur with knowledge and advice. The conclusions, from the collected data, are that all relations are not of equal importance to all entrepreneurs. The importance depends on the entrepreneur’s personality and the industry the entrepreneur operates in. However, we found that the importance of talking to other entrepreneurs has grown and that the most important relationship seems to be with family and friends. The demarcations of this study are that only entrepreneurs in one area of one country were interviewed, also that a qualitative method was used; therefore, we cannot show any statistical proof of the findings.

We aim to ascertain to what extent the better performance of European venture capital (VC)- backed firms in high-tech industries is due to either ‘screening’ or ‘value added’ provided by VC investors. We compare portfolio firms’ productivity growth before and after the first VC round, using a matched control group as benchmark. We show that productivity growth is not significantly different between VC and non-VC-backed firms before the first round of VC financing, whereas significant differences are found in the first years after the investment event. We also find that the value-adding services provided by VC investors 'imprint' the portfolio firm.

This article approaches proactiveness in firms, considered to be one of the dimensions of the entrepreneurial orientation. Its goal is to introduce the results of an exploratory and qualitative study, which aimed to characterize the proactiveness in entrepreneurial software firms. The theory resumes the concepts of entrepreneurial firms, entrepreneurial orientation and proactiveness. The data gathering was accomplished through deeper interviews with executives from 13 software firms that stand out in terms of entrepreneurship in Rio Grande do Sul state. The results of the study demonstrate that firms are proactive and show a characterization regarding this behavior, starting from the conceptual base adopted in the present study. Among the proactiveness elements in the researched organizations, the ones related to environment monitoring and opportunities quest are highlighted. The study also consoliding a components’ set of proactiveness based on the theory and organizational practice reported by executives., Este artigo aborda a proatividade em organizações, considerada uma das dimensões da orientação empreendedora. Tem como objetivo apresentar os resultados de um estudo exploratório e qualitativo, que buscou caracterizar a proatividade em organizações de software consideradas empreendedoras. A revisão teórica faz uma breve retomada conceitual sobre organizações empreendedoras, orientação empreendedora e proatividade. A coleta de dados foi realizada por meio de entrevistas em profundidade com executivos de 13 organizações de software do estado do Rio Grande do Sul, consideradas destaque em empreendedorismo. Os resultados do estudo demonstram que as organizações são proativas e apresentam uma caracterização sobre esse comportamento, a partir de base conceitual adotada no estudo. Entre os elementos de proatividade, destaque, nas organizações pesquisadas, os relacionados ao monitoramento do ambiente e à busca de oportunidades. O estudo também consolida um conjunto de elementos e categorias agregadoras sobre a proatividade, com base na teoria e na prática organizacional relatada pelos executivos.

This article approaches proactiveness in firms, considered to be one of the dimensions of the entrepreneurial orientation. Its goal is to introduce the results of an exploratory and qualitative study, which aimed to characterize the proactiveness in entrepreneurial software firms. The theory resumes the concepts of entrepreneurial firms, entrepreneurial orientation and proactiveness. The data gathering was accomplished through deeper interviews with executives from 13 software firms that stand out in terms of entrepreneurship in Rio Grande do Sul state. The results of the study demonstrate that firms are proactive and show a characterization regarding this behavior, starting from the conceptual base adopted in the present study. Among the proactiveness elements in the researched organizations, the ones related to environment monitoring and opportunities quest are highlighted. The study also consoliding a components’ set of proactiveness based on the theory and organizational practice reported by executives., Este artigo aborda a proatividade em organizações, considerada uma das dimensões da orientação empreendedora. Tem como objetivo apresentar os resultados de um estudo exploratório e qualitativo, que buscou caracterizar a proatividade em organizações de software consideradas empreendedoras. A revisão teórica faz uma breve retomada conceitual sobre organizações empreendedoras, orientação empreendedora e proatividade. A coleta de dados foi realizada por meio de entrevistas em profundidade com executivos de 13 organizações de software do estado do Rio Grande do Sul, consideradas destaque em empreendedorismo. Os resultados do estudo demonstram que as organizações são proativas e apresentam uma caracterização sobre esse comportamento, a partir de base conceitual adotada no estudo. Entre os elementos de proatividade, destaque, nas organizações pesquisadas, os relacionados ao monitoramento do ambiente e à busca de oportunidades. O estudo também consolida um conjunto de elementos e categorias agregadoras sobre a proatividade, com base na teoria e na prática organizacional relatada pelos executivos.