Entrepreneurial orientation and start-ups' external financing

Vaznyte, Egle; Andries, Petra

doi:10.1016/j.jbusvent.2019.01.006

Cited by 69 publications

(45 citation statements)

References 95 publications

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“…Both of these groups of companies are likely to provide conflicting results in terms of debt-productivity dependency. Nevertheless, we need to point out that the optimal level of debt depends on many other factors, including the type of business and entrepreneurial (growth) orientation of the firm (Vaznyte and Andries, 2019). Hoogstra and van Dijk (2004) contributed to the literature by documenting an indisputable role of location factors and growth and firm performance.…”

Section: Theoretical Backgroundmentioning

confidence: 99%

Exploring firm-level and sectoral variation in total factor productivity (TFP)

Dvouletý

Blažková

2021

IJEBR

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PurposeThe objective of the study is to identify and explore factors affecting the productivity of companies in the Czech Republic with a focus on the role of firm size, firm age, indebtedness and long-term negative equity, efficiency of assets usage, liquidity, legal form, location and sector affiliation.Design/methodology/approachThe study utilizes a large unbalanced panel dataset of 91,257 firms (548,998 observations in total) covering the period 2000–2019. The dependent variable, i.e. total factor productivity (TFP), reflecting the overall firm productivity, was estimated by ordinary least squares (OLS) regression. The main findings were obtained through the estimation of two econometric models explaining the effects of factors on firm-level TFP. First, the OLS regressions together with Nomenclature of Territorial Units for Statistics (NUTS) 3 regions, year dummies and robust standard errors were estimated. Second, as a robustness check, the very same model was estimated with the random effects (RE) generalized least squares (GLS) method.FindingsThe analysis has shown a statistically significant U-shaped relationship (with the turning point of 38, resp. 36 years) between firm age and the overall TFP among the Czech enterprises. The authors provide two key findings in terms of a firm size-productivity relationship. Firms with fewer employees, often officially registered as self-employed individuals/freelancers, report higher levels of productivity. Nevertheless, when it comes to firm property (assets), the authors find a positive relationship between firm size and TFP. A high proportion of debts in the capital structure of analysed companies, or even negative equity, has been negatively associated with TFP levels.Research limitations/implicationsMore research is needed in the deeper exploration of sectoral and regional determinants of firm TFP, as both regional and sectoral heterogeneity were observed in the study. The authors propose the employment of a multi-level modelling approach, including a range of continuous variables and investigation of their role in shaping firm-level productivity.Practical implicationsConcerning the results, managers should be mindful of optimal capital structure principles due to the negative impact of a high level of debts on the productivity level. High indebtedness means high-interest payments drawing earnings off, which may be, especially in the long term, a hindrance to investments. The entrepreneurship and small- and medium-sized enterprise policies may be targeted at the soft policy actions, including advisory services and counselling on business development or risk and on the provision of financial capital allowing firms to strive for growth-oriented projects.Originality/valueTo the best of the authors' knowledge, this is the first attempt to provide insight into the firm-level productivity determinants, based on the large dataset covering enterprises across the whole economy over the long term, representing the structure of the country's entrepreneurial activity.

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Section: Theoretical Backgroundmentioning

confidence: 99%

Exploring firm-level and sectoral variation in total factor productivity (TFP)

Dvouletý

Blažková

2021

IJEBR

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“…We have invited a professional research company to assist in the study. The company has a database of new ventures; we used a benchmark of eight years to define whether a business is a start-up enterprise (Vaznyte and Andries, 2019). This database was built in 2015.…”

Section: Samples Methodology and Measurements 41 Samplesmentioning

confidence: 99%

Size, entrepreneurial experience and organizational decentralization

Gu¹,

Lin²

2021

CMS

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Purpose Based on the cognitive bias theory, this study aims to explore the relationship among the size of new ventures, entrepreneurial experience and organizational decentralization. Design/methodology/approach This study uses 175 entrepreneurial companies in the Bohai Bay Rim as samples. The hypotheses are tested through partial least squares (PLS). Findings A clear positive relationship is found between size and organizational decentralization, and entrepreneurial experience is found to have a negative effect on this relationship. Research limitations/implications The influences of other variables at the organizational level on organizational decentralization are not taken into consideration, and the measurement of entrepreneurial experience is not accurate enough. Practical implications This study also has practical implications. Compared with inexperienced entrepreneurs, experienced entrepreneurs do not always have many advantages. Entrepreneurs should decentralize power at the right time in the process of expanding their businesses and continuously reflect and learn, instead of exaggerating their own intelligence, consequently making more rational decisions. Originality/value This study has three theoretical implications. First, it provides a theoretical implication for understanding the characteristics of changes in the organizational decentralization of new ventures, which enriches the literature on organizational decentralization in the field of entrepreneurship. Second, it derives theoretical implications for understanding the role of organizational size in organizational development. Third, this study, which applies the cognitive bias theory to assess the effect of entrepreneurial experience, helps supplement existing research on the relationship between entrepreneurial experience and new ventures.

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“…Business angels form the main financing and investment pathway for entrepreneurs because they cover the capitalization needs precisely at the time of life of the company in which no other of the existing types of investors are willing to take the investment risk (Kelly and Hay, 2003). Companies in which founders have a low entrepreneurial orientation, tend to prefer accessing to finance through formal financial sources, that is, with debt (Vaznyte and Andries, 2019). For the start-up survival rates it is crucial the way in which the company access to formal financial sources (Cole and Sokolyk, 2018).…”

Section: Theoretical Frameworkmentioning

confidence: 99%

Data retrieval from online social media networks for defining business angels’ profile

Morales-Alonso

Vila²,

Lemus-Aguilar

et al. 2019

JEC

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Purpose Entrepreneurship is the basis of economic development but is somehow limited by the lack of access to financing sources, especially in the crucial moments of start-up early-stage development. For crossing the so-called “valley of death,” start-ups need to access informal finance sources, such as business angels. This study aims at defining the profile of business angels and comparing it with the existing literature. Design/methodology/approach A novel methodology for sampling the business angles population has been used, which extracts data from online social media networks. This allows taking a closer look at informal sources of entrepreneurial finance. A total of 500 real business angels, acting worldwide, from the LinkedIn and Crunchbase databases has been retrieved for this study. Findings Results point out that younger investors seem to be entering the entrepreneurial informal finance market. They are mainly males between 40 and 50 years of age, with a previous entrepreneurial record, and more highly educated than previously stated. They tend to have studies from Business Administration and Economics, although they prefer to invest in the ICT sector. Originality/value Besides the novel data retrieval technique for analyzing the informal sources of finance, the originality of the work lies in updating the archetype for business angels.

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Entrepreneurial orientation and start-ups' external financing

Cited by 69 publications

References 95 publications

Exploring firm-level and sectoral variation in total factor productivity (TFP)

Exploring firm-level and sectoral variation in total factor productivity (TFP)

Size, entrepreneurial experience and organizational decentralization

Data retrieval from online social media networks for defining business angels’ profile

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