A tale of soil and seeds: the external environment and entrepreneurial entry

Dario Maimone Ansaldo Patti, Ram Mudambi, Pietro Navarra and Daniela Baglieri
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Dario Maimone Ansaldo Patti: Universita di Messina
Pietro Navarra: University of Pennsylvania
Daniela Baglieri: Universita di Messina

Small Business Economics, 2016, vol. 47, issue 4, No 8, 955-980

Abstract: Abstract While the study of international entrepreneurship has been dominated by studies of international new ventures, the study of comparative international entrepreneurship has received relatively little attention. We argue that since such international differences are often the underlying drivers for entrepreneurship that crosses borders, this area of research has a rich potential to improve our understanding of international entrepreneurship. In this paper, we develop a theoretical framework to examine the effects of the external business environment (the soil) on the entrepreneurial entry by individuals (the seeds). This leads us to fundamental predictions regarding differences in the extent of entrepreneurship in different national contexts. While in developed economies business ventures are more likely to be launched when the turnover rate of incumbent firms is high, the opposite is true in developing economies. Estimates generated using a large-scale data set provide empirical support for our theoretical predictions. Our findings suggest important avenues for new research regarding the role of factors such as the liability of newness and the stigma of failure in different national contexts, as well as the manner in which entrepreneurial dynamics evolve over time.

Keywords: Comparative entrepreneurship; Corporate instability; Entry; Liability of newness; Stigma of failure (search for similar items in EconPapers)
JEL-codes: L22 L26 M16 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (5)

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DOI: 10.1007/s11187-016-9744-7

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