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A significant share of new technology-based ventures exit through trade sale at an early stage of firm development. While trade sale is an important exit route for entrepreneurs and investors, and a potential source of new innovations and technology for acquiring firms, we have limited knowledge about the factors that help to effectively achieve a trade sale. We employ a unique dataset tracking the population of research-based spin-offs in Norway and conduct in-depth case studies of nine trade sales. Building on 52 interviews and other secondary data, we inductively develop propositions outlining three dimensions that lead to a successful trade sale—potential synergies, credible alternatives, and uncertainty reduction. We show that these enablers of trade sales are not only linked to the focal venture but also related to the idiosyncratic dyad with the buyer, reflecting both the potential for and likelihood of trade sale. Consequently, our study contributes to the literatures on entrepreneurial exit and academic entrepreneurship by mapping the important but under-explored area of trade sale as an exit mode. Plain English SummaryPotential synergies and credible alternatives increase the potential of a research-based spin-offs' trade sale, but the likelihood of a trade sale depends on how uncertainty reduction is managed. A trade sale is an important exit route for entrepreneurs and investors, and a potential source of new innovations and technology for acquiring firms. Research-based spin-offs are often acquired during their early stages of development by large corporations. We track the population of Norwegian research-based spin-offs and study nine trade sales in depth. Our findings concerning the importance of synergy potential, credible alternatives, and uncertainty reduction have implications for both academic entrepreneurs and potential buyers for how they can complete an exit through trade sale. Since scientific research is critical for society, our findings have implications for policymakers in the form of interesting ideas for influencing trade sales, a potentially important route for commercialization of scientific research. [ABSTRACT FROM AUTHOR]

This paper introduces narratives in entrepreneurial ecosystems as drivers of effectuation vs. causation. Drawing on 43 interviews with successful players in Silicon Valley, Munich, and Singapore, we found ecosystem-specific narratives indicate what is common, appropriate, and successful in each ecosystem, and these narratives encourage either effectuation or causation. Our findings indicate that the narratives in the ecosystem in Silicon Valley facilitate effectuation, in Munich causation, and in Singapore a cautious balance of both. Our research suggests that narratives can explain mechanisms how ecosystems influence entrepreneurship: the national culture, market characteristics, available resources, and networks in an ecosystem spark ecosystem-specific narratives, which in turn shape tendencies towards effectuation and causation. Thereby, we introduce a new ecosystem-focused perspective on predictors of effectuation and causation. Plain English Summary: The ecosystems in Silicon Valley, Munich, and Singapore spark different narratives about entrepreneurship, which indicate what is common, appropriate, and successful in the ecosystem and in turn encourage different kinds of entrepreneurial approaches. We conducted 43 interviews with successful players in Silicon Valley, Munich, and Singapore. We found ecosystem-specific narratives indicate what is common, appropriate, and successful in an ecosystem and encourage different kinds of entrepreneurial behavior and decision-making. Those narratives seem to shape tendencies towards specific strategic logics. The narratives either encourage "effectuation" (i.e., when they focus on building partnerships and utilizing the networks, and when they encourage confidence and speed) or "causation" (i.e., when they focus on developing systematics and structured plans, and when they encourage harmony and conformity). Narratives in Silicon Valley seem to facilitate effectuation, in Munich causation, and in Singapore both. Our research suggests that narratives explain mechanisms how ecosystems influence entrepreneurship: the national culture, market characteristics, available resources, and networks in an ecosystem spark ecosystem-specific narratives, which in turn shape tendencies towards effectuation and causation. Thereby, we introduce a new ecosystem-focused perspective on predictors of effectuation and causation. Our findings suggest specific strategies and success factors in each ecosystem. For example, the narratives prevalent in Silicon Valley have a sales focus, in Munich a need for detailed plans, and in Singapore value conformity. Thus, our findings provide insights for entrepreneurs for strategic location choices and on how to position their new venture at a specific location. VCs and policy makers gain from insights into how to leverage strengths and how to counteract problematic mechanisms in an ecosystem. [ABSTRACT FROM AUTHOR]

The National Science and Technology Council (CONACYT) was established in 1970 by the Mexican government. CONACYT was formed to promote the scientific development and technological modernization of Mexico through developing high-level human resources, encouraging research projects, and disseminating scientific/technological information. In 2009, CONACYT launched the Innovation Stimulus Program (PEI) to foster enterprises' innovation activities and to encourage collaboration on innovation activities among firms and between firms and public research institutes and higher education institutions. Based on an analysis of project data from the PEI program over the years 2009 through 2014, we found that large firms are more innovative than small firms. And, firms that are more innovative are those that had prior funded research, collaborated with universities in the funded research project, added new employees during the research project, and faced larger markets for their innovations. Plain English Summary Only a few studies have systematically compared publicly supported innovative behavior between groups of large and small firms within developing countries, and absent from this list is an analysis of Mexico. In this paper, we study research projects funded through Mexico's Innovation Stimulus Program, and we find that large firms are more innovative than small firms. We also find that firms with previously funded research, that collaborated with universities in the funded research project, that added new employees during the research project, and that faced larger markets for their innovations are more innovative. Thus, the findings in this paper might provide an initial indication about those firms that will have a greater innovation-related response to the public funding to support their research. [ABSTRACT FROM AUTHOR]

Entrepreneurial universities contribute directly and indirectly to supporting all stages of entrepreneurship. The challenge for entrepreneurial universities is how they can best support academic entrepreneurs through these stages of entrepreneurship. This has led to the creation of different and often ad hoc organizational units within an entrepreneurial university. The organizational challenge for entrepreneurial universities is the selection of the appropriate formal organizational architecture to support the stages of entrepreneurship. The purpose of this paper is to examine the organizational architecture of entrepreneurial universities and how it supports the stages of entrepreneurship — latent, emergent, launch, and growth. Our conceptual organizational framework conflates the stages of entrepreneurship with the actual needs of university-based entrepreneurs and how these needs are supported through different formal organizational units within the organizational architecture of entrepreneurial universities. Therein, we categorize three types of formal organizational units — those that focus on exploration stages of entrepreneurship, those that straddle exploration and exploitation stages of entrepreneurship, and those that boundary span all stages of entrepreneurship. We conclude by discussing the resultant organizational tensions for entrepreneurial universities and highlight future avenues of research. Plain English Summary: One of the challenges that managers of entrepreneurial universities face relates to the necessary formal organizational structures that are needed to be put in place to support university-based entrepreneurs and meet their actual needs across the stages of entrepreneurship (latent, emergent, launch, and growth). We categorize three types of formal organizational units — those that have an exclusive focus on exploration stages of entrepreneurship, those that have a selective focus on exploration and exploitation stages of entrepreneurship, and those that have an overarching focus on all exploration and exploitation stages of entrepreneurship. We further highlight some organizational tensions as a result of these configurations that entrepreneurial university managers have to handle. Such tensions relate to resource, skill, and competence synergies, seamless organizational support for university-based entrepreneurs across the different stages of entrepreneurship, appropriate governance structures, alignment of organizational units with the wider entrepreneurship context, and the appropriate configuration and mix of organizational units to support the stages of entrepreneurship. [ABSTRACT FROM AUTHOR]

The DUI (learning by doing-using-interacting) mode offers a promising theoretical framework to explain why many small- and medium-sized enterprises (SMEs) are successful in innovation without research and development (R&D) efforts. In this context, we argue that—because of the informal, person-centered, and interactive nature of the DUI mode—small business owners should be in a key position to trigger DUI learning processes at the company level. Based on a large SME data set from Germany, we show empirically that Big Five personality traits of small business owners positively affect self-selection into DUI-based innovation in less R&D-intensive SMEs. That is, companies operating largely under the DUI mode seem to benefit in particular from certain owners' personality characteristics. In addition, we present novel evidence that complementarities between different Big Five traits exist in terms of self-selection into the DUI mode, thereby pointing to the role of personality prototypes. The paper concludes with implications for policy and further research. Plain English Summary: Solving the SME innovation puzzle—resilient owner personalities boost small firm innovativeness. This psychological effect only exists in non-R&D SMEs, providing a new explanation for their surprising innovation success. SME owners are involved in most day-to-day activities of their company. An owner's personality therefore directly affects external and internal communication flows, laying the foundation for a company's innovation culture. We show that a resilient personality type—an owner who is characterized by emotional stability, openness, extraversion, and conscientiousness—benefits innovation in non-R&D SMEs. According to our analysis, resilient owners are about 5.5% more likely to trigger an innovation mode within their company that builds on non-R&D-based knowledge, communication, and interaction. Our research implies that entrepreneurship education and consultancy should foster psychological self-awareness, and thereby increase an owner's understanding of his/her most effective role in terms of firm-level innovation. Successful entrepreneurship and innovation is not fully determined by one's personality type, but knowing one's own strength and weaknesses can help to carve out an effective niche, defining the scope of one's responsibility, as well as its limits. [ABSTRACT FROM AUTHOR]

The market for acquisitions has been a blind spot in exploration-exploitation research in the new venture context. The introduction of the acquisition exit outcome as a performance dimension for new ventures, especially among high-tech ventures, shifts the traditional temporal logic of exploration-exploitation theory by introducing previously unacknowledged short-term benefits of exploration. We bring the acquisition outcome into the picture and investigate the relationship between the exploration-exploitation continuum and profitability, survival, and acquisition likelihood simultaneously. Using the Kauffman Firm Survey data, we provide evidence for a link between exploration and the likelihood of acquisition (defined as the business being sold to or merged with another business), although industry technology level poses a boundary condition such that the association is not observed in low- and medium-technology firms. An inverse U-shaped relationship that is monotone negative for most of the data range was found between exploration and the profitability of low- and medium-tech firms, and a negatively linear relationship was found for exploration and the profitability of high-tech firms. Our findings lend some support to the viability of "born to flip" strategies involving comparatively higher exploration levels in high-tech start-ups and sacrifice of short-term profitability. Plain English Summary Built-to-flip strategy really does work, but only for some startups. There has been a debate on whether start-ups should be managed specifically with the aim of short-term exit through M&As (built to flip) or if they should always focus on long-term viability (built to last). We tap into the Kauffman Firm Survey data to provide evidence-based insights on this issue. Our results support the viability of "built-to-flip" strategies among some new firms at least when it comes to the balance of exploration and exploitation, measured as relative allocation of employees to R&D vs. sales. High-tech ventures that exited through M&A had higher exploration levels compared to all other sub-groups including high-tech ventures that closed or did not exit, and all low- and medium-tech ventures. Among high-tech ventures, increased exploration does—to a point—lead to a higher likelihood of acquisition, but it comes at the price of reduced profitability. After this peak point, further increase in exploration reduces both acquisition likelihood and profitability. [ABSTRACT FROM AUTHOR]

Using a recursive bivariate probit model and survey data covering the period 2014–2018, the present paper aims to assess which factors in the financial market (supply side) have a higher impact on firms' likelihood to be financially constrained. The results show that after controlling for potential endogenous bias due to unobservable firm characteristics, being an innovative firm increases the probability of being financially constrained between 21 and 32%. The nature of the innovation strategy also seems to influence the severity of financing constraints. For financially constrained firms, the main factors that limit future financing for growth ambitions are the lack of collateral, bureaucracy, and too high a price. Findings also indicate that measures to facilitate equity investments and making existing public measures easier are the most important factors for future financing while tax incentives only play a minor role. [ABSTRACT FROM AUTHOR]

The aim of this paper is to introduce the special issue of Small Business Economics on "Radical Innovation, Entrepreneurship, and (Regional) Growth" and present a roadmap for future research in the area. This article argues that the link between the literature on radical innovation, entrepreneurship, and (regional) growth is still an underresearched topic. This paper also reviews the special issue's contributions that allow for a more nuanced understanding of this important link. [ABSTRACT FROM AUTHOR]

We analyze transfer channels of radical innovations launched by small and medium-sized firms (SMEs) using an ego network approach. Based on a unique longitudinal dataset covering the observation period 1996–2016, we identify and trace back radical innovations of SMEs in German Biotech in order to analyze the extent to which SMEs themselves—or eventually also other organizations in their direct cooperation surrounding—benefit from radical innovations in terms of subsequent innovation performance. Results from negative binomial panel regressions indicate that direct cooperation partners of radical innovators show higher innovative performance than partners of the control group, i.e., statistical twin firms without radical innovations. Our results confirm that radical innovations initiate a positive impulse for innovation through direct cooperative relationships. Interestingly, geographical proximity does not play a role, and especially technologically different partners benefit from direct cooperation with radical innovators. Plain English Summary Radical innovations are rare but have a great importance for the economy. Our study shows that not only radically innovating biotech SMEs themselves but also various types of directly linked cooperation partners benefit significantly. We investigate whether directly linked cooperation partners of radically innovating firms benefit from knowledge spillover transferred through formal cooperation. A radical innovation represents a novel and often complex combination of already existing knowledge. Thus, knowledge transfer process differs for radical and non-radical innovations. Project-based formal cooperation can support the transfer of radical knowledge. In this context geographical and technological factors matter. Using the example of German small and medium-sized biotechnology firms, we show that collaboration with radical firms is positively related to innovation performance of directly linked project partners. Interestingly, this effect is higher for partners located in other regions as well as for technologically distant partners. Our study extends the research on knowledge transfer by emphasizing the role of formal collaboration projects, especially in knowledge intensive high-tech industries. [ABSTRACT FROM AUTHOR]

The positive effect of public research on industrial innovations is beyond controversy: public research institutions produce knowledge that is subsequently transferred into product and process innovations by private businesses. Besides this rather passive role in commercializing inventions, public research institutions may also proactively exploit new knowledge through public sector entrepreneurship activities. Especially entrepreneurial universities are perceived as a conduit of knowledge spillovers; they serve as central actors of innovation networks and stimulate network activities. Whereas the linkages between network embeddedness and innovation activities have been largely explored, the determinants of patent quality in terms of radicalness, originality, and generality remain rather unclear. Considering Germany's diverse public research infrastructure (universities, polytechnics, and non-university research institutes), our findings reveal that the type of institution and the corresponding scientific orientation (basic vs applied research) matter for the quality of inventions. The centrality of respective institutions within innovation networks reinforces the radicalness of inventions. However, we do not find support for the general assumption that an entrepreneurial orientation of public sector entities augments the quality of inventions. We conclude the paper with policy recommendations and with future avenues of research. Plain English Summary This study explores the relation between network embeddedness, scientific orientation, entrepreneurial orientation, and the quality of inventions of public research. Our results imply that a basic research focus induces inventions that are more radical, and a more central network position reinforces the production of more radical, original, and general patents. In contrast, an entrepreneurial orientation does not seem to stimulate a higher quality of inventions. Our results give impetus to nuanced public sector entrepreneurship policies that take the type of institution and the optimal level of regional embeddedness into account. A sole focus on the entrepreneurial transformation of public research institutes may not be sufficient to leverage the full potential of knowledge created therein. Instead, more support and guidance for creating links with other network entities is needed along with incentives to commercialize new knowledge. [ABSTRACT FROM AUTHOR]

External linkages allow nascent ventures to access crucial resources during the process of new product development. Forming external linkages can substantially contribute to a venture's performance. However, little is known about the paths of external linkage formation, as well as the circumstances that drive the choice to pursue one rather than another path. This gap deserves further investigation, because we do not know whether insights developed for incumbent firms also apply to nascent ventures: To address this gap, we explore a novel dataset of 370 venture creation processes. Using sequence analyses based on optimal matching techniques and cluster analyses, we reveal that nascent ventures pursue one of overall four distinct paths of linkage formation activities during new product development. Contrary to the findings of the strategy literature, we find that if nascent ventures engage in external linkages at all, they do not combine exploration- and exploitation-oriented linkages but form either exploration- or exploitation-oriented linkages. Additional regression analyses highlight the circumstances that lead nascent ventures to pursue one rather than the other pathways. Taken together, our analyses point out that resource scarcity constitutes an important factor shaping the linkage formation activities of nascent ventures. Accordingly, we show that nascent ventures tend not to optimize by adding complementary knowledge to the firm's knowledge base but rather to extend the existing knowledge base—a strategy which we call bricolage. [ABSTRACT FROM AUTHOR]

Experienced entrepreneurs are typically considered to be wellsprings of both wealth creation and innovation. However, given that prior research has provided evidence of an inverse relationship between economic performance and innovation performance, innovation performance of experienced entrepreneurs requires greater scrutiny. In this study, we examine the question: under what conditions do serial entrepreneurs produce impactful innovations in their subsequent ventures? Using data on 334 VC-funded companies, our study suggests that the familiarity garnered by founders through their prior industry experience may limit the venture's propensity to produce impactful innovation. Our findings contribute to the literature on serial entrepreneurship and innovation. [ABSTRACT FROM AUTHOR]

We investigate how the emergence of fintech start-ups and their financing is shaped by regional knowledge creation and lack of trust in financial services incumbents across 21 OECD countries, 226 regions and over the 2007–2014 period. We find that knowledge generated in the IT sector is much more salient for fostering new fintech start-ups than knowledge generated in the financial services sector. Additionally, the importance of new knowledge created in the financial services sector (IT sector) increases (decreases) as fintech start-ups grow and seek financing. When the level of trust in financial services incumbents falls within a region, this is followed by an increase in the financing provided to fintech start-ups. Nevertheless, regions with historically low average levels of trust in financial services incumbents attract less fintech investment overall. [ABSTRACT FROM AUTHOR]

We analyze what we consider to be an unanticipated consequence of the SBIR program, namely, that firms, publicly funded through the SBIR program, are going public based on their new technology developed with support from the SBIR program. There is a conspicuous void with regard to publicly funded firms that do go public. Through the estimation of a qualitative choice model, we identify firm and project characteristics that are associated with an increased likelihood of a firm making (or planning to make) an initial public offering (IPO). [ABSTRACT FROM AUTHOR]

Entrepreneurial firms that rely on public research institutes, the third sector of R&D, are also firms that are more innovative in terms of introducing new or significantly improved goods or services to the market. This finding is based on an analysis of 4004 knowledge-intensive entrepreneurial (KIE) firms located in ten European Union countries. We interpret our findings as suggestive evidence of the importance of policymakers continuing to support financially public research institutions. [ABSTRACT FROM AUTHOR]

The concept of entrepreneurial ecosystems has been used as a framework to explain entrepreneurial activities within regions and industrial sectors. Despite the usefulness of this approach, the concept is under-theorized, especially with regard to the evolution of entrepreneurial ecosystems. The current literature is lacking a theoretical foundation that addresses the development and change of entrepreneurial ecosystems over time and does not consider the inherent dynamics of entrepreneurial ecosystems that lead to their birth, growth, maturity, decline, and re-emergence. Taking an industry lifecycle perspective, this paper addresses this research gap by elaborating a dynamic entrepreneurial ecosystem lifecycle model. We propose that an ecosystem transitions from an entrepreneurial ecosystem, with a focus on new firm creation, towards a business ecosystem, with a core focus on the internal commercialization of knowledge, i.e., intrapreneurial activities, and vice versa. Our dynamic model thus captures the oscillation that occurs among entrepreneurs and intrapreneurs through the different phases of an ecosystem's lifecycle. Our dynamic lifecycle model may thus serve as a starting point for future empirical studies focusing on ecosystems and provide the basis for a further understanding of the interrelatedness between and co-existence of new and incumbent firms. [ABSTRACT FROM AUTHOR]

New drug introductions are key to growth for pharmaceutical firms. However, not all innovations are the same and they may have differential effects that vary by firm size. We use quarterly sales data on UK pharmaceuticals in a dynamic panel model to estimate the impact of product (new drugs) and marketing (additional pack varieties) innovations within a therapeutic class on a firm's business unit growth. We find that product innovations lead to substantial growth in both the short and long run, whereas a new pack variety only produces short-term effects. The strategies are substitutes but the marginal effects are larger for product innovations relative to additional packs, and the effects are larger for smaller business units. Nonetheless, pack introductions offer a viable short-term growth strategy, especially for small- and medium-sized businesses. [ABSTRACT FROM AUTHOR]

Due to risk aversion, nonprofit firms are believed to have a lower propensity to innovate than for-profits. In turn, social enterprises have arisen as a popular alternative to nonprofits under the expectation that their for-profit practices will lead to increased social innovation. Yet, hybrid firms face uncertainty in their organizational identity, which may detract from their propensity to innovate. Further, there is little empirical work on the actual differences of risk-taking outside of for-profit firms. This paper assesses how the organizational identity of a firm impacts their decisions of risk. Using survey data from the US state of North Carolina, logistic estimations reveal that organizational identity has differential impacts across firm structures. Specifically, for-profit firms benefit from an entrepreneurial identity, while nonprofit firms are hindered by a hybrid identity. This paper provides important developments in our understanding of the role of organizational identity on risk-taking behavior beyond traditional for-profit firms. [ABSTRACT FROM AUTHOR]

We explore the innovative performance of firms resulting from their Phase II Small Business Innovation Research (SBIR) research-funded projects in terms of the gender dynamics of the firms. Using commercialization as the relevant performance metric, we find that Phase II projects led by a female principal investigator (PI) have greater probability of being commercialized in female-owned firms than in male-owned firms. This result is consistent with the findings from other settings that females tend to perform better when working under a female supervisor. [ABSTRACT FROM AUTHOR]

It is generally acknowledged that in order to have access to locally accumulated industrial knowledge, firms have to collaborate and take part in cluster knowledge networks. This study argues that the inherited capabilities of spinoff enable them to cooperate and exchange knowledge more easily and to gain more from positive knowledge externalities in clusters. The basis of the analysis is a relational dataset on a printing and paper product cluster in Hungary, and I use exponential random graph models to explain the formation of knowledge ties. I demonstrate that besides geographical proximity, ownership similarity and network structural effects, being a spinoff company enhances tie formation in the local network. Results suggest that spinoffs are indeed more likely to collaborate and take advantage of knowledge concentration. [ABSTRACT FROM AUTHOR]

We investigate the extent to which firms' innovation persists in "times of crisis." Following an eclectic theoretical background, we expect that innovation persistence limitedly emerges in these times and that SMEs persist to a different extent than large firms. We argue that innovation persistence is affected by the kind of public support firms receive and by the type of business strategy they follow. Merging three waves of the MET survey on Italian firms over the period 2005–2013, we find that the persistence of those having survived the crisis is limited to process innovations, and to radical ones in particular, being lower for SMEs. The detected persistence is reinforced by the public support firms receive for their ICT, but it is attenuated by the support directed to their employment. In terms of business strategies, intensifying research and innovation efforts attenuates innovation persistence, while diversification appears a conditional strategy for its unfolding. [ABSTRACT FROM AUTHOR]

While the concept of entrepreneurial ecosystems is now a prominent topic and an important stream in entrepreneurship research, the question of how ecosystems can specifically promote sustainable entrepreneurship and contribute to the Sustainable Development Goals (SDGs) set by the United Nations is a neglected issue. With the papers in this special issue, we address this research gap, serving as a catalyst sparking more research at the nexus of contextualization of entrepreneurship and sustainability. This research has, since the 1990s, developed in three waves; the explicit linkage to SDGs and the investigation of impacts of entrepreneurship and entrepreneurial ecosystems in achieving societal and environmental goals might be considered as the "fourth wave." We first introduce relevant research streams and concepts for investigating sustainable entrepreneurial ecosystems. Then, we explain why this special issue and its articles represent a fourth wave in entrepreneurial research ("sustainability"). Thereafter, we provide an overview of the papers of this special issue and then end with a brief consideration of future research demands. [ABSTRACT FROM AUTHOR]

In recent years, research on corporate entrepreneurship (CE) has expanded and aroused an increasing amount of attention. Although the importance of CE, innovation, and knowledge conversion within organizations is recognized, the link between them is still theoretically and empirically little understood. Thus, it seems important to support knowledge sharing (KS) within organizations through the implementation of digital platforms (DP), in order to enrich the existing knowledge about CE strategy and product innovation (PI). Indeed, the rise of Internet and ICTs, alongside the development of the sharing economy, has enabled organizations to be connected with suppliers and consumers and other actors through DPs. The current paper therefore aims to understand and contribute to the literature about how CE, through the implementation of DPs, enhances product innovation. This is done using an exploratory longitudinal study, drawing on multiple case studies. Specifically, a variety of data sources collected within three Tunisian SMEs operating in the sector of dairy products are analyzed. The findings indicate the significance of DPs as a motivation, opportunity, and ability (MOA) framework. This enables a CE process and promotes a favorable climate wherein knowledge can be freely exchanged and captured, the process of organizational learning (OL) is well established, and the absorptive capacity of the company is optimized. Results indicate that CE affects product innovation and several conditions are recommended to ensure success. [ABSTRACT FROM AUTHOR]

In this paper, we review and comment upon the development of the literature on diversity, innovation, and entrepreneurship. In an overview of previous studies and various strands of literatures, we outline and argue that to better understand the intricate dynamic relationships between diversity, innovation, entrepreneurship, and regional development there is a strong need to further develop "the economics of spatial diversity." We further argue that this development may benefit from combining various literatures based upon sound economic micro-foundations, to develop a more absolute understanding of diversity and fulfill the need of more clear mechanisms for future empirical testing. Obviously, this is important both from a research point of view and in order to provide policymakers with a powerful set of analytical tools. We call for more analytical work and more high-quality empirical studies. With a set of papers, we believe this special issue to provide a contribution in this direction. [ABSTRACT FROM AUTHOR]

Scholars have advocated the development of entrepreneurship as a design science. One foundational challenge in a design science is to identify design principles. We argue that a particular field can draw on a design knowledge from different design sciences to develop design principles. In particular, we show that entrepreneurship research can learn from one branch of artificial intelligence studies called "genetic algorithm," which is a design field that creates solutions for complex, nonanalytical, and ill-structured problems. We illustrate the analogous transfer process by identifying complementary design principles for one exemplary entrepreneurship theory, namely effectuation. In turn, these additional effectual design principles further effectuation theory as a design science and help advance entrepreneurship as a nascent design science. [ABSTRACT FROM AUTHOR]

While the importance of innovation as a primary source of economic growth has never been in dispute, its impact on employment has remained indeterminate. On one hand, the pessimists indicate that firm innovation destroys jobs because of the immediate indirect labour-saving nature of the effect of innovation, while the optimists argue that there are several compensation mechanisms that are known to counterbalance the initial effect of innovation and render the final effect indeterminate. Using data on a panel of 421 firms in Ghana, the paper investigates the relationship between innovation introduced at the firm level and employment. Relying on the panel fixed effects and Hausman-Taylor estimation techniques, this study finds a robust statistically significant positive impact of product innovation on employment but not for process innovation. In terms of policy relevance, this finding reemphasizes the need for policy makers in Ghana to intensity efforts in promoting technology diffusion particularly through FDI. This study thus contributes to the literature on innovation in Africa by providing evidence on why technological innovation in the form of product innovation can be a panacea to alleviating employment challenges in Ghana. [ABSTRACT FROM AUTHOR]

Since the early 2000s, effectuation has gained substantial interest in literature. Whereas Sarasvathy in her seminal 2001 article distinguished effectuation from causal decision-making, still effectuation seems to get confused with ad hoc decision-making or strategy absence. On the basis of a qualitative study with 12 managers from 10 Swiss small-to-medium enterprises (SMEs), this manuscript analyzes their decision-making approaches and distinguishes between causal, effectual, and absence-of-strategy reasoning. Whereas principles for effectuation and causation are well established, this study reveals new categories on which strategy absence can be mapped. The three decision approaches and their interplay are then investigated in four business contexts (founding, takeover, new artifact creation, and existing artifacts). Whereas causal reasoning is found in all four, signs of strategy absence are apparent in three. Effectual logic dominates all four contexts. Further, this manuscript finds that choice of the strategic decision approach does not depend on company size but rather on decision context. Also, firms demonstrate the ability to switch between effectual and causal decision models according to the specific decision context. [ABSTRACT FROM AUTHOR]

Cubism was the most influential movement in modern art, and Pablo Picasso transformed the art world like no other figure before him. Changes in institutional and market conditions have been until now mainstream explanations for the emergence of art movements such as Cubism. However, we argue that there are complementary explanations centered on the agency of the artists themselves and based on entrepreneurial decision-making processes, in particular on the theory of effectuation. We have analyzed the detailed accounts of art history experts to generate a longitudinal process model of the creation of Cubism. Cubism emerged because Picasso and Braque transformed their common set of means into a variety of effects. Cubist innovations originated sequentially, as part of a chain of achievements. One innovation and artistic achievement led to another. Picasso and Braque's methods of producing series of paintings and drawings and building upon previous achievements enrich our existing understanding of effectuation on a central point—the transformation of means into effects. This research also uncovers relationships among effectuation, bricolage, and subversion. This study illustrates how the theory of effectuation can be a method for the creation of new artifacts in fields beyond entrepreneurship and how effectuation can be a general-purpose decision-making schema for operating under conditions of uncertainty. The results of our study offer lessons of interest to scholars and practitioners in both art and entrepreneurship. [ABSTRACT FROM AUTHOR]

In this paper, we address issues related to the measurement of effectuation. We identify and examine 81 empirical studies focusing on research tensions (fundamental assumptions, theoretical underpinnings, boundary conditions, units of analyses, measures, and temporal issues) within the effectuation literature. Our findings suggest these tensions inhibit the accumulation of empirical knowledge. We highlight the challenges involved in effectively measuring effectuation and offer solutions and recommendations for systematic knowledge accumulation. [ABSTRACT FROM AUTHOR]

Reflecting on the 12 works that compose this special issue, we are struck by the distinctiveness of effectuation as a theory native to the domain of entrepreneurship. While theoretical perspectives from disciplines including economics, psychology, and sociology have been applied to understanding the new venture phenomenon, entrepreneurship scholars have historically had little to offer in return beyond the testing bed. The authors in this special issue begin to make the case for transforming the bed into fertile soil in which the disciplines can grow and bear new fruit. Moreover, uncertainty, co-creation, resources, goals, and control all represent important and current issues in management, marketing, organizations, finance, and operations. Effectuation has something new to offer to each of these. In this article, we summarize what we learn from the works in the special issue in order to construct a research agenda that can move effectuation from entrepreneurship to the disciplines and beyond into new futures. [ABSTRACT FROM AUTHOR]

We provide greater theoretical precision to the concept of productive opportunities of Penrose. We show firm emergence as a recursive cycle of changing productive opportunities. We show how those opportunities result from the technological base of the firm and are associated with the particular characteristics of the technology. We also show how productive opportunities require the assembly of different internal and external resources, and therefore partners. We address explicitly how the firm and its potential partners perceive uncertainty and single out the different mechanisms used by the firm to address uncertainty—envisioning, pooling, and staging—to secure resources from external partners and exploit the identified productive opportunities in a timely manner. [ABSTRACT FROM AUTHOR]

We investigate whether public support for innovation increases the propensity of SMEs in traditional manufacturing industries to cooperate for innovation—in particular, for incremental innovation—with other firms and external knowledge providers. Using data from seven EU regions, we find that support programmes do not promote cooperation with competitors, marginally promote cooperation with customers and suppliers and strongly promote cooperation with knowledge providers. These findings suggest that, in this case, the role of public policy is systems conforming rather than systems creating. Innovation support programmes can assist SMEs in traditional manufacturing industry to consolidate and/or extend their innovation ecosystems beyond familiar business partners by promoting cooperation with both private and public sector knowledge providers. Finally, our findings suggest that evaluation studies of innovation support programmes should be designed to capture not only input and/or output additionality but also behavioural and systemic effects. [ABSTRACT FROM AUTHOR]

By taking insights from the behavioral theory, this study analyzes how performing below aspiration levels influences innovation efficiency. Furthermore, this research analyzes whether firms respond differently to performance pressures depending on certain factors at the organizational level, such as financial slack and family management. Conducting a panel data analysis on 3116 observations of Spanish manufacturing firms over the 2001–2013 period, we find that performing below aspiration levels improves the firm's conversion rate of innovation efficiency in both the short and the long term. Furthermore, this study confirms that two contingencies, namely the levels of financial slack and family management, are quite relevant towards gaining a full understanding of the complex nuances associated with the investigated core relationship. [ABSTRACT FROM AUTHOR]

Financial constraints have an important impact on the development of eco-innovations but their effect varies according to the type of funding. This article studies the interaction between public funding on the one hand, and internal and external lack of funding on the other. The empirical analysis is based on a sample of European small- and medium-sized enterprises, and exploits information on firms' involvement in eco-innovation activities, their drivers, and obstacles. Our results show that, even accounting for demand-pull effects and regulatory interventions, access to public funds and fiscal incentives is effective for improving the firm's ability to introduce eco-innovations, particularly if the company has ample funds from either internal or external sources. Our findings suggest also that public funding is perceived by firms as complementary to other external finance. [ABSTRACT FROM AUTHOR]

Using structural equation modelling on 291 small and medium enterprises in Australia, we examine the impact of knowledge transfers from supply chain actors on innovation and firm performance and how knowledge quality influences these relationships. We find that knowledge transfers from customers and suppliers are positively related to innovativeness, which has a significant influence on firm performance. The results also show that knowledge transfers from suppliers (only) influence knowledge quality, and knowledge transfer from suppliers, in turn, has an indirect effect on innovation through knowledge quality. Thus, the results underscore the importance of knowledge transfers from suppliers to knowledge quality and knowledge transfers from suppliers through knowledge quality for achieving innovation. The results also underline the need to distinguish knowledge transfers from specific actors, in order to understand the influence of knowledge quality on external knowledge transfers and innovation, adding to research into the conditions under which external knowledge transfers contribute to innovation and firm performance. [ABSTRACT FROM AUTHOR]

In this paper, we explore the spatial distribution and the location determinants of new green technology-based firms across European regions. Integrating insights from evolutionary economic geography and the literature on knowledge spillovers, we study the importance of new knowledge creation and the conditioning role played by regional technological relatedness in fostering combinatorial opportunities underlying the process of green technological entry. The analysis is based on a dataset covering over 900 NUTS3 regions for 15 European countries obtained merging economic data from ESPON-Eurostat and patent information from the PATSTAT-CRIOS database for the period 1996-2006. Our results show that the geographical distribution of green technological entry across European regions is not evenly distributed, offering evidence of spatial path dependence. In line with this, we find evidence of a significant role played by the characteristics of the regional innovation system. New green innovators are more likely to develop in regions defined by higher levels of technological activity underlying knowledge spillovers and more dynamism in technological entry. Moreover, our findings point to an inverted-U relationship between regional technological relatedness and green technological entry. Regions whose innovation activity is defined by cognitive proximity to environmental technologies support interactive learning and knowledge spillovers underlying entrepreneurship in this specific area. However, too much relatedness may cause technological lock-ins and reduce the set of combinatorial opportunities. [ABSTRACT FROM AUTHOR]

This article explores the pattern and breadth of collaboration activities of innovating firms active in renewable energy (RE), and the impact of collaboration on firm-level innovation performance. We deploy a unique dataset from a special section of the 2014 CIS survey in Denmark, in which we included questions that enable us to unambiguously identify RE innovators. In a quantitative analysis, we contrast collaboration patterns of RE and non-RE innovators, where we find RE innovators to show a higher tendency to collaborate, and with a more diverse set of partners. We complement this analysis with a qualitative single-case study within the offshore wind industry in order to illuminate longitudinal and contextual effects that were only indicative in the quantitative analysis. We focus particularly on changes in the pattern of collaboration as the firm matures and its links with performance. The case shows that because the needs of RE innovators vary through their development, the purpose and types of collaborations change. Further, both from our quantitative and qualitative studies, we find weak relationship between RE firms' collaboration breadth and innovative performance. We ascribe this to the long time-lags between product innovation and market penetration in RE. We thereby highlight the heterogeneity of collaboration rationales, patterns, and impact across sectors and over time. [ABSTRACT FROM AUTHOR]

In this paper, links between creativity, design, and innovation are explored through the literature specific to the textile and apparel industries. We discuss the ways that the apparel industry embodies entrepreneurial innovation through creativity and design that makes it an exemplar of the idea of "Main Street" entrepreneurship, albeit one that relies in part on "Silicon Valley" innovation via its relationship with the textile industry. We conclude with a discussion of the need for more research on the topic and offer recommendations for future empirical investigations. Further research specific to the apparel industry would augment the thin foundation of existing literature and shed light on how innovation occurs through creativity and design within a key global industry and "Main Street" endeavor. [ABSTRACT FROM AUTHOR]

Research into the link between national institutions and entrepreneurship is characterized by three shortcomings: First, clear-cut concepts of institutions are rare. Second, a parsimonious understanding of how a few core institutions influence entrepreneurship is missing. Third, scholars often ignore that incrementally innovative ventures constitute a distinct (and under-researched) type of entrepreneurship next to the (over-researched) form of radically innovative, high-growth or high-tech entrepreneurship. By addressing these three shortcomings, the Varieties-of-Capitalism (VoC) literature can explain how a core group of distinct national institutions facilitate the development of different types of entrepreneurship between countries. In particular, the VoC framework illustrates the comparative institutional advantage that continental European economies offer to incrementally innovative ventures. Applications of the VoC reasoning to entrepreneurship studies would thus allow researchers to, first, perform focused rather than eclectic analyses of institutional influences on entrepreneurship. Second, it would pave the way for research into institutionally induced equifinality. Third, entrepreneurship research could move away from its wishful ideology displaying radically innovative entrepreneurship as the most desirable form of entrepreneurship. As a consequence, policymakers could target entrepreneurial support measures more specifically to their economy's institutional environment. [ABSTRACT FROM AUTHOR]

Research on entrepreneurial ecosystems has largely taken a macro-perspective to better conceptualize and map the determinants and evolution of entrepreneurial ecosystems, yet has neglected the micro-level interactions of various entrepreneurial ecosystem actors. Recent criticisms of entrepreneurial ecosystems have centered on the lack of explicit case and effect relationships, attribution, units of analysis, the different use of network definitions as well as the static nature of existing frameworks. The purpose of our paper is to present a micro level principal investigator (PI)-centered governance framework that addresses these posited criticisms and in doing so identifies the value creation indicators (benefits), PI capabilities, the problem categories (costs), and solving mechanisms that PIs can use to govern effectively and efficiently large-scale publicly funded research programs. In leading such research programs, PIs interact with different actors within entrepreneurial ecosystems and manage governance issues, conflicts, and tensions effectively at the micro level to deliver the anticipated benefits and costs for each actor. Our framework provides the basis for future empirical research on entrepreneurial ecosystem as we have attributed cause and effect at an individual actor level and conceptualized the governance challenges at a micro rather than at the macro level that overcomes the static nature of previous frameworks. [ABSTRACT FROM AUTHOR]

This paper provides novel empirical evidence on the effectiveness of regional research and innovation policies for small and medium-sized enterprises (SMEs). It investigated two subsidy programs implemented at the regional level in central Italy. One program targeted SMEs' investments in individual research projects, and the other focused on collaborative research projects between SMEs and universities. Using a matched difference-in-differences approach, the empirical analysis showed that the two programs had different effects. The first was successful in stimulating additional private research and development (R&D) investment and improving firms' performance. The second had weaker effects, mostly restricted to R&D expenditure and employment. These effects were not always uniformly distributed among project participants. [ABSTRACT FROM AUTHOR]

This paper explores small and medium enterprises’ (SMEs) proximity preferences when selecting partners for collaborative process innovation. Drawing on a survey of 362 Danish SMEs, we address four partner proximity characteristics: geographic, cognitive, organizational, and social. The results show that SMEs prioritize geographic openness over regional clustering. Furthermore, to simultaneously facilitate collaboration and ensure innovation, firms tend to collaborate with partners that are characterized by cognitive similarity at a technological level and knowledge distance at a market level. Technological proximity is also found to be more relevant than social proximity when it comes to bridging the potential geographic and market distance between the collaborative partners. Finally, the results indicate that the tendency of organizational proximity to facilitate informal interactions with partners enhances process innovation only at two of four process innovation levels. Thus, the results highlight the fact that the value of partner proximity characteristics change with the level of process innovation considered. [ABSTRACT FROM AUTHOR]

Introducing the Knowledge Spillover Theory of Intrapreneurship, we examine how labour mobility impacts innovation distributed by firm size. A matched employer-employee dataset, pooled with firm-level patent application data, is implemented in the analysis. We provide new evidence that knowledge workers’ mobility has a positive and strongly significant impact on all firms’ innovation output, measured as patent applications. The patterns and effects do however differ between large and small firms. More precisely, for small firms, intraregional mobility of knowledge workers who have previously worked in a patenting firm (the learning-by-hiring effect) is shown to be statistically and economically highly significant, whereas only limited impact could be detected for firms losing knowledge workers (the learning-by-diaspora effect). [ABSTRACT FROM AUTHOR]

Empirical research on the consequences of the use of the balanced scorecard (BSC) has mostly been conducted in large firms. Previous findings are not easily applied to the small business literature, and assumptions about the benefits of BSC for small- and medium-sized enterprises (SMEs) are not based on quantitative empirical evidence. We investigated the effects of SME’s use of BSC in terms of financial performance and innovation outcomes. Our arguments are based on the efficiency gains and potential flexibility losses associated with formalizing managerial practices in SMEs. We propose that the developmental stage of the firm may influence this trade-off. Based on a survey of 201 SMEs in Spain, we found that firms using BSC for feedforward control obtained better financial performance and presented higher levels of exploitative innovation. We also found that the positive effect of BSC on perceived and attained financial performance is stronger in more established SMEs. [ABSTRACT FROM AUTHOR]

Prior findings are inconclusive concerning the innovation output of family and non-family SMEs. The study at hand takes one step back and examines the drivers of innovation output. Applying a contextualized approach, we use data of 1.870 SMEs located in Germany, arguing that the main characteristic of family SMEs is the unity of ownership and leadership. These specific elements affect both the drivers and the output of innovation leading to a more detailed understanding of family firm innovation. Our results indicate that a long-term perspective positively affects innovation output in small family firms. We also show that family firms are better able to preserve the knowledge of the workforce through lower fluctuation rates which leads to higher levels of innovation output. Finally, the succeeding generations of family firm leaders seem to be more risk averse than the founder generation. As a result, the innovation output continuously decreases from generation to generation. [ABSTRACT FROM AUTHOR]

This paper describes and analyzes the strategies of young highly innovative companies to appropriate the returns from their innovations. Upon controlling for other firm and industry characteristics, we show that firms combining a young age and small scale with a high R&D intensive profile are more likely to use intellectual property (IP), specifically combining formal and informal appropriation mechanisms. They are especially more likely to choose secrecy in combination with formal IP. This holds primarily when they introduce more radical innovations new to the market. [ABSTRACT FROM AUTHOR]

In this paper, we present descriptive findings on the research success of U.S. research joint ventures (RJVs). Using survey-based data of a sample of U.S. RJVs, we build on the theory of dynamic entrepreneurship to develop an empirical model of cross-RJV differences in performance. We find that ventures that include a university as a research member are relatively more successful, measured in terms of research goals completed, than ventures that do not. We also find that those RJVs that have a longer research duration and that are led by a firm with prior RJV experience are similarly more successful. Our empirical analysis also shows that membership size is not a significant covariate with research success. We conclude the paper with a call for additional research and with a policy statement that is based on our finding of a positive and significant relationship between university membership and RJV success. [ABSTRACT FROM AUTHOR]

This paper investigates the implications that complementary assets needed for the formation of start-ups have on the innovative efforts of incumbent firms. In particular, we highlight a strategic incentive effect by which the innovative efforts of incumbents are decreasing in the availability of the complementary assets needed for the creation of a start-up. Furthermore, we argue that the R&D investments of incumbents are positively related to the presence of policy support to innovation, and to the firm's endowment of human capital. The empirical relevance of our theoretical hypotheses is investigated-and supported-by using firm level data. [ABSTRACT FROM AUTHOR]

We investigate the relation between the introduction of innovation and subsequent firm growth employing a dataset representative of the Chilean productive structure. By means of quantile treatment effects (QTE), we estimate the effect of the introduction of innovation by comparing firms with a similar propensity to innovate for different quantiles of the firm growth distribution. Our results indicate that process innovation positively affects sales growth for those firms located at the 75th and 90th percentiles. Contrarily, product innovation appears not to be a driver of firm performance. We also find that process innovation benefits mature firms at higher quantiles while it positively affects young firms located at low-medium quantiles. [ABSTRACT FROM AUTHOR]

We propose an empirical framework for assessing the vibrancy and trajectory of regional entrepreneurial ecosystems. We apply this framework to study the US National Capital Region's localized cluster of biotechnology-related entrepreneurship by building our analysis around a set of indicators of ecosystem vitality proposed by Stangler and Bell-Masterson (2015). This application constitutes an initial attempt at mapping the dynamics of an industry cluster within the adaptive life cycle of a wider regional ecosystem. We find that the biotechnology cluster in the National Capital Region entered a 'reorientation' stage in the early 2000s, building up stored energy, capital, and connectedness in non-research-oriented activities. An increasing regional presence of large biotech firms in the past 5 years, a highly active and diverse start-up sector, increasing merger and acquisition activity, and declines in regional public funding for medical and clinical trials all suggest a transition of entrepreneurial activity in the region from a dynamic driven by federal research spillovers to one increasingly driven by private sector actors. [ABSTRACT FROM AUTHOR]