2020
DOI: 10.1002/sej.1361
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Entrepreneurs' socioeconomic status and government expropriation in an emerging economy

Abstract: Research Summary This study focuses on a salient challenge for entrepreneurs in emerging economies: government expropriation. Drawing on signaling arguments, we propose that an owner's high socioeconomic status (SES) attracts government attention to her start‐up by conveying information about its resource endowments. The empirical tests based on start‐ups in China support that an owner's high SES increases government expropriation. The effect is stronger for start‐ups in regions with greater income inequality … Show more

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Cited by 24 publications
(12 citation statements)
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“…Additionally, ventures from developing countries find it harder to establish their legitimacy because stakeholders initially take time to establish trust with such organizations (Ahlstrom et al , 2008). Previous research indicates a more positive perception toward the trustworthiness of people from developed countries (Zhou et al , 2020). Referring to the inherent information asymmetry between an accelerator and a new venture, we explain the importance of relying on signals to infer conclusions about the firm.…”
Section: Theoretical Background and Hypotheses Developmentmentioning
confidence: 92%
“…Additionally, ventures from developing countries find it harder to establish their legitimacy because stakeholders initially take time to establish trust with such organizations (Ahlstrom et al , 2008). Previous research indicates a more positive perception toward the trustworthiness of people from developed countries (Zhou et al , 2020). Referring to the inherent information asymmetry between an accelerator and a new venture, we explain the importance of relying on signals to infer conclusions about the firm.…”
Section: Theoretical Background and Hypotheses Developmentmentioning
confidence: 92%
“…Relevant to this limitation, future work can also examine how different entrepreneurial competencies can enable entrepreneurs to manage the destructive effects of institutional voids in EDEs. For example, compared with the counterparts in developed countries, entrepreneurs with higher socioeconomic status in EDEs may confront a higher risk of government expropriation while entrepreneurs with political connections can alleviate this risk (Zhou et al, 2020).…”
Section: Limitations and Future Researchmentioning
confidence: 99%
“…Whereas early studies suggest that technology-intensive new ventures located outside of science parks are more efficient in commercializing technology (Watkins-Mathys & Foster, 2006), later studies show that science park-based start-ups have a higher R&D efficiency (Yang et al, 2009), because the location has helped new ventures to upgrade their business models over time, adding more services along the value chain (Tang et al 2021). Recent studies also show that the business models, strategies and performance of Chinese new ventures continue to be strongly influenced by the socio-economic development of the regions or cities in which they are located (Xiao & North, 2017;Zhou et al, 2020). A study on technology incubators in Taiwan argues that government-supported incubator programs need to be more demand-oriented and should be run by private management teams (Ng et al, 2019).…”
Section: Entrepreneurial Ecosystemsmentioning
confidence: 99%