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The previous chapter reviewed evidence on individual-level drivers of entrepreneurship: the present chapter outlines evidence relating to of rates of entrepreneurship at the regional and macroeconomic levels. Neighborhoods, cities, clusters and entire regions differ systematically in terms of the quality and quantity of entrepreneurship: evidence on these outcomes and their deep causes are documented. The chapter explores the impacts of entrepreneurs on regional employment and income growth dynamics, before analyzing how innovative entrepreneurs enhance macro-economic productivity and spur economic growth and development. The chapter closes with a summary of evidence about the two-way relationship between entrepreneurship and the business cycle.
Entrepreneurs often claim that they face barriers in credit markets, obtaining less finance for their ventures than they request. This chapter outlines theories of entrepreneurial finance which predict inefficient allocation of funds in credit markets. Both too much and too little investment can arise in free credit markets, owing to incomplete and asymmetric information between borrowers and lenders. The chapter delineates signaling and separating equilibria as outcomes of strategic games between banks and entrepreneurs. The theoretical effects of over-optimism among entrepreneurs are also discussed.
Complementing chapter 2’s focus on theoretical determinants of entrepreneurship, this chapter presents an overview of its empirical determinants. A vast amount of literature has addressed this topic, and the chapter is organized into several large sections summarizing these determinants, including financial and non-financial factors; human capital; social capital; risk aversion, psychological and cognitive predispositions; and numerous socio-demographic characteristics. Additional empirical results are presented regarding the drivers of nascent and habitual entrepreneurship. Most entrants to entrepreneurship formerly worked in organizations: the characteristics of organizations associated with entrepreneurial employees are explored, both for those who start new independent ventures and those who undertake corporate ventures (intrapreneurs’). The chapter closes with some conclusions about the state of empirical knowledge about entrepreneurship and directions for future research.
This chapter explains, in a straightforward, accessible but rigorous way, the principal quantitative methods used in contemporary entrepreneurship research. The chapter starts by identifying the regression-based problems of omitted variable bias, endogeneity and sample selection – and how to cope with them. It then discusses estimation of binary and multiple state models widely used in the study of entrepreneurial occupational choice. Next, several experimental and quasi-experimental methods are described; these are becoming increasingly popular among entrepreneurship researchers. The chapter then treats time series, panel and hazard (event history) models, before closing with a treatment of some extensions to standard regression models. This chapter constitutes a useful self-contained module which is ideally suited for use in a doctoral program.
This chapter is the first of four which deals exclusively with public policy towards entrepreneurship and entrepreneurs. This first chapter sets out several arguments which make the case both for and against intervention to support entrepreneurs; it goes on to establish some principles of public policy targeted at this group. The importance of evaluating entrepreneurship public policies is highlighted; and criteria for gauging the success or otherwise of these policies are proposed.
Entrepreneurs play a key role in the commercialization of new technologies and products: this chapter explores their sources of comparative advantage vis-à-vis large incumbent organizations which often have deeper pockets and established distribution systems. In general, innovative entrepreneurs engage in a strategic game with incumbents. Models of this kind can explain the counter-intuitive finding that small-scale independent entrepreneurs often produce the most radical innovations while incumbents settle for more incremental improvements to processes and products. Organizational limitations of existing firms, as well as agency costs and learning trajectories can also explain why some firms spawn spinoffs. These spinoffs can drain value from incumbents and nurture sharp new competitive threats to their very existence. A rich body of theory and evidence is discussed which elucidates these ideas. The chapter closes with a brief discussion of inventors as well as academic entrepreneurs who commercialize new ideas developed in universities.
This article provides evidence that firm value declines when credit default swaps (CDSs) are initiated and that the effect is greater when CDS trading activity is higher. This decline, which arises from an increase in the cost of capital as opposed to a decrease in free cash flows, traces to a deterioration in the firm’s credit quality and stock liquidity. Firm value declines less when CDS trading is likely to produce incremental information, suggesting that CDS trading has informational benefits for firm value. However, the evidence does not indicate that firm value increases because CDS availability facilitates investments.
Goal-setting is fundamental to organisational management, yet not every manager knows how to do it well. A narrative literature review was done to explore current knowledge of definitions and classifications of goals, and principles of goal-setting in the healthcare sector. Online databases generated 65 relevant articles. Additional literature sources were snowballed from referenced articles, and textbooks. Most academic authors define ‘goal’ synonymously as ‘aim’ or ‘objective’, but there is evidence of hermeneutical confusion in general literature. Goal classifications are diverse, differing according to their contextual, structural, functional, and temporal characteristics. Many authors agree that goal-setting is problem-based, change-oriented, and can effectively motivate attainment if the goal statement is formulated with a specific and challenging or SMART framework. However, recent authors report varying definitions for SMART, and evidence of past studies that empirically examined the nature and efficacy of frameworks currently used for formulating goal statements for health programmes are lacking.