Journal of Entrepreneurship and Public Policy

2012 - 2012

Edited by Professor Noel Campbell

from Emerald Group Publishing
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Volume 1, issue 4, 2012

Entrepreneurial action and the rules of the game: An editorial to introduce the Journal of Entrepreneurship and Public Policy pp. 4-11

Noel D. Campbell

Purpose – This paper aims to examine some basic pathways to bring issues of public policy into entrepreneurship classes. Design/methodology/approach – The paper looks at policy issues related to taxation, regulation and employment which all offer important topics that can be integrated into a variety of standard entrepreneurship courses. Findings – Integrating policy issues into entrepreneurship classes is important to assist students understand the importance of compliance, to see the linkages to their broader university education, and to help make them more informed citizens. Originality/value – This paper hopes to foster more integration of public policy into both the entrepreneurship classroom and into more traditional streams of entrepreneurship research pp. 12-21

Jeffrey R. Cornwall and William J. Dennis

Purpose – This paper seeks to analyze empirically the net effect of trade openness on “economic culture”, measured by indicators of trust, respect, level of self-determination, and obedience. Openness to international trade means that societies are more likely to be exposed to alternative attitudes, beliefs, ideas, and values leading to a Schumpeterian process of creative destruction whereby culture is destroyed on some margins and enhanced on others. Design/methodology/approach – Using data on trade openness from Quinn and Sachs and Warner, the paper empirically evaluates the impact of trade openness on economic culture. The paper's measure of culture is taken from Tabellini and Williamson and Kerekes, where data from the World Values Survey is aggregated to create a culture variable. The paper isolates the impact of trade policies on economic culture through a variety of empirical strategies including both panel and cross sectional analysis. Findings – The central finding of the study is that a society's openness to international trade generates, on net, positive effects on economic culture. The more open a country is to trade, the more likely it is to possess culture conducive to economic interaction and entrepreneurship. Originality/value – This paper contributes to the existing literature by studying the impact of trade openness on culture. While previous studies have asked “Does culture affect economic outcomes?”, this paper explores the answer to the related question, “How does openness to trade affect culture?” pp. 22-49

Christopher J. Coyne and Claudia R. Williamson

Purpose – Over the past decade more than 20 states have begun to offer tax credits to angel investors in an attempt to increase state economic growth. These credits are intended to increase new venture investment, create high-paying and knowledge-based jobs, and increase tax revenue collections, but there is some debate over costs and benefits associated with these credits. This paper aims to investigate this issue. Design/methodology/approach – This paper will examine the implementation and perceived effectiveness of tax credit programs in Hawaii, Louisiana, Wisconsin, Minnesota, Oregon, and Vermont. These states were chosen for this research sample based on their differing physical locations within the USA and the uniqueness of the characteristics of each state's chosen tax credit program. Findings – The paper reveals that state investment tax credit programs vary widely in areas of eligibility, level of funding available per investment and per year, and whether or not the credits are refundable. All of these factors can cause significant variability in effectiveness of a state program. Practical implications – Recommended criteria for achieving an outcome that may result in lawmaker support for tax credit incentives will be outlined based on the success, trial, and error of various state programs. These criteria will allow some commonality in analysis of potential or ongoing incentive programs. Originality/value – This paper provides an analysis of the various existing state investment tax credit programs and identifies characteristics of such programs that may, if used during program formation, result in greater confidence by lawmakers in the program's overall effectiveness and provide a greater commitment to program success pp. 50-62

John R. Hendon, Joseph R. Bell, Brittany Blair and Don K. Martin

Purpose – The purpose of this paper is to apply the theory of guided preparation to investigate the relative impact of outside counseling assistance and entrepreneurship courses on new venture creation and performance. Design/methodology/approach – To attain a sample of nascent entrepreneurs who had been impacted by entrepreneurship education and entrepreneurial counseling, 256 individuals who received counseling from the Pennsylvania Small Business Development Center in 1996 or 1998 were surveyed. The authors ran a logistic regression model using venture start-up as the categorical dependent variable to investigate whether entrepreneurial education and counseling had an influence on the creation of new ventures. To test whether entrepreneurial education or counseling had a long-term impact on the growth of new ventures, hierarchical regression analyses were run using employment in 2003 as the dependent variable. Various control variables were used for both sets of analyses. Findings – Findings indicate that counseling has a significant impact on venture performance but entrepreneurship courses do not. In contrast, entrepreneurship courses are related to venture creation while counseling is not. Research limitations/implications – Consistent with theory, the results suggest that counseling programs allow entrepreneurs to develop context-specific tacit knowledge about their ventures and are best delivered immediately prior to venture start-up. Entrepreneurship courses appear to indirectly influence new venture performance by increasing the odds of start up. Originality/value – This comparative test of the theory of guided preparation contributes to the understanding of the effects of education and counseling on the creation and long-term performance of new ventures, informing how the delivery of such programs can be improved pp. 63-83

James J. Chrisman, W.E. McMullan, J. Kirk Ring and Daniel T. Holt

Purpose – This paper seeks to examine how productive entrepreneurial activities, such as innovation, influence unproductive entrepreneurial activities, such as regulatory rent seeking. Design/methodology/approach – To investigate the argument the authors consider Bavaria's brewing industry in the fourteenth through sixteenth centuries using an analytic narrative approach. Findings – The example of Bavaria's brewing industry suggests that productive entrepreneurial activities may increase unproductive entrepreneurial activities. Confronted with a situation in which innovation erodes their monopoly returns, legally protected producers and policymakers reregulate industry to recapture lost rents. Regulation policy under such reregulation tends to be more encompassing, and thus produces more unproductive entrepreneurial activity, than pre-innovation regulation policy. This reflects the greater number or variety of producers that new regulation policy must encompass for reregulation to recreate rents. Originality/value – The paper builds on Thomas’ work, which suggests that innovation can undermine existing regulatory institutions and result in deregulation. This paper identifies an alternative channel through which productive entrepreneurial innovation may influence unproductive entrepreneurial rent seeking. It argues that productive entrepreneurial innovation by legally unprotected producers in an industry can also increase, rather than decrease, the extent of unproductive entrepreneurship in that industry pp. 84-95

Diana W. Thomas and Peter T. Leeson