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See detailRisk of burnout in French entrepreneurs during the COVID-19 crisis
Torrès, Olivier; Benzari, Alexandre; Fisch, Christian UL et al

in Small Business Economics (2022), 58(2), 717-739

The COVID-19 crisis presents manifest threats for entrepreneurs since their business survival is often directly at stake given the alarming economic downturn. This existential threat, together with their ... [more ▼]

The COVID-19 crisis presents manifest threats for entrepreneurs since their business survival is often directly at stake given the alarming economic downturn. This existential threat, together with their crucial role in the economy, is the reason for the plethora of public financial support schemes being implemented throughout the entire world. However, support schemes for mental health are lacking. We aim to investigate, first, whether burnout levels have increased during the crisis and, second, whether burnout levels during the COVID-19 crisis depend on the threat of becoming ill, having to stay at home due to the lockdown, and/or having to file for bankruptcy due to the economic downturn. We do so using seven data sets of French entrepreneurs with a temporal comparison of averages and two data sets of French entrepreneurs with a cross-sectional analysis of individuals. Our findings show that indeed, the risks of burnout have increased during the pandemic and that the threat of bankruptcy is the dominant threat. As an increasing number of studies in the entrepreneurship literature indicate that entrepreneurs’ mental health influences their activities, as well as the growth and sustainability of their ventures, our study is important and timely in its contribution, as it takes a close look at the perception of burnout in general and more specifically during the COVID-19 pandemic. [less ▲]

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See detailCOVID-19 and the global venture capital landscape
Bellavitis, Cristiano; Fisch, Christian UL; McNaughton, Rod

in Small Business Economics (2022), 59(3), 781-805

We assess the effect of the COVID-19 pandemic on venture capital (VC) investments, documenting a significant decline in investments using a dataset of 39,527 funding rounds occurring before and during the ... [more ▼]

We assess the effect of the COVID-19 pandemic on venture capital (VC) investments, documenting a significant decline in investments using a dataset of 39,527 funding rounds occurring before and during the pandemic in 130 countries. In line with our theoretical considerations, we show that this decline is more pronounced for investments characterized by higher uncertainty, namely investments in seed-stage ventures, industries affected more heavily by the COVID-19 crisis, international investments, and non-syndicated investments. Investor prominence partially moderates these effects. [less ▲]

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See detailThe determinants of bootstrap financing in crises: evidence from entrepreneurial ventures in the COVID-19 pandemic
Block, Jörn; Fisch, Christian UL; Hirschmann, Mirko UL

in Small Business Economics (2022), 58(2), 867-885

Bootstrap financing refers to measures that entrepreneurial ventures undertake to preserve liquidity (e.g., reducing expenses, collecting receivables, delaying payments, preselling). Prior research shows ... [more ▼]

Bootstrap financing refers to measures that entrepreneurial ventures undertake to preserve liquidity (e.g., reducing expenses, collecting receivables, delaying payments, preselling). Prior research shows that bootstrap financing is an important enabler for the growth of resource-constrained early-stage ventures. However, little is known about the use of bootstrap financing in crises, during which the preservation of liquidity is particularly salient. We investigate the determinants of bootstrap financing in the 2020 COVID-19 crisis using a sample of 17,046 German entrepreneurial ventures. We formulate hypotheses about the determinants of bootstrap financing from a necessity, human capital, and opportunity cost perspective. Among others, our results show that the severity of the crisis for the venture, the level of private consumption, and self-employment experience are positively associated with an increased use of bootstrap financing measures. Our study contributes to the literature on bootstrap financing and illuminates how entrepreneurial ventures maintain liquidity in crises. [less ▲]

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See detailSpillovers to small business credit risk
Wolff, Christian UL

in Small Business Economics (2021), 57

Do large credit risk shocks spill over to small businesses and affect their real economic activity? Using information on small business credit risk, we find that small businesses show increased default ... [more ▼]

Do large credit risk shocks spill over to small businesses and affect their real economic activity? Using information on small business credit risk, we find that small businesses show increased default and bankruptcy rates following a shock to a customer industry. On an industry level, the shock to a customer industry is followed by a decrease in industry markups, disproportionate closure of firms, and cutbacks in inventories. Our analysis quantifies the elevated credit risk among small businesses and suggests a non-negligible 0.83% increase in expected losses on a diversified loan portfolio following a credit risk shock. This study provides banks and supervisors with greater clarity on timing and on the extent of elevated small business credit risk. It also allows them to assess the exposure of a bank portfolio to fluctuations in small business default rate. Such improved default prediction reduces credit rationing to the small business economy. [less ▲]

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See detailHow shared pre-start-up moments of transition and cognitions contextualize effectual and causal decisions in entrepreneurial teams
Tryba, Anne; Fletcher, Denise Elaine UL

in Small Business Economics (2019), 52(3), 1-24

Although it is reported that early venture decisions are influenced by the relationships and common history of entrepreneurial team members, little is known about how the mutual interests and ambitions ... [more ▼]

Although it is reported that early venture decisions are influenced by the relationships and common history of entrepreneurial team members, little is known about how the mutual interests and ambitions experienced in the pre-start-up phase provide a shared and relational context for joint decisions. Drawing on a multiple case study approach of nine entrepreneurial teams in new ventures, this study identifies the shared pre-start-up moments of transition during which team members’ prior work and life patterns start to change. We show that in these intense moments, shared entrepreneurial cognition evolves among team members – the relationality of which provides a unique social context for decision behaviors. Our findings conclude that effectual behaviors advance a theory of context because in simultaneously working with effectual and causal logics (albeit with varying intensities), team decisions are realized that are consistent with the relational context that emerges in the pre-start-up moment. [less ▲]

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See detailEntrepreneurial personalities in political leadership
Obschonka, Martin; Fisch, Christian UL

in Small Business Economics (2018), 50(4), 851-869

Societies around the globe respond to the contemporary technological and economic change by defining entrepreneurship and innovation as core principles for future competitive advantage. Does this rise of ... [more ▼]

Societies around the globe respond to the contemporary technological and economic change by defining entrepreneurship and innovation as core principles for future competitive advantage. Does this rise of the Bentrepreneurial society also imply that entrepreneurial personalities are becoming increasingly widespread and powerful in political leadership? Joseph A. Schumpeter already argued that highly influential entrepreneurs are unique and show a certain personality pattern that can be described as being not only high in creativity and change orientation but also high in competitiveness and rule-breaking. It is interesting to ask whether such Schumpeterian personalities indeed play an increasingly important role in political leadership, given that daily routines of policy leaders, at least at first glance, usually require rather non-entrepreneurial strategies such as careful, risk-averse diplomacy. To address this question, we first survey the existing literature on personality and political leadership.We further present a novel personality analysis of an influential business leader that recently made a transition to political leadership: Donald J. Trump, the incumbent US president. Employing a language-based, computerized method of analyzing Twitter statements, we compare his online personality to the online personality of other influential entrepreneurs and business managers, who do not engage in political leadership. The results indicate that Trump is indeed distinct in that he shows stronger features of a Schumpeterian personality. However, he is also comparatively high in Neuroticism. We discuss these findings focusing on the potential implications of a concentration of entrepreneurial mindsets in political leadership. [less ▲]

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See detailIs Success Hereditary? Evidence on the Performance of Spawned Ventures
Dick, Johannes; Hussinger, Katrin UL; Blumberg, Boris et al

in Small Business Economics (2013)

A common phenomenon in entrepreneurship is that employees turn away from employment to found their own businesses. Prior literature discusses the former employers’ characteristics that influence the ... [more ▼]

A common phenomenon in entrepreneurship is that employees turn away from employment to found their own businesses. Prior literature discusses the former employers’ characteristics that influence the creation of entrepreneurial ventures. An investigation of whether these characteristics also affect the success of the spawned ventures is missing so far. This paper contributes to the literature by showing that entrepreneurial ventures spawned by well performing firms are financially more successful than ventures stemming from poorly performing firms. This suggests that spawned entrepreneurs are able to exploit valuable knowledge from their previous employers which impacts their ventures’ performance positively. The analysis is based on a linked employee–employer data set for the Netherlands for the period 1999–2004. [less ▲]

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See detailFactor substitution, average firm size and economic growth
Aquilina, M.; Klump, Rainer UL; Pietrobelli, C.

in Small Business Economics (2006), 26(3), 203-214

This paper extends the Lucas (1978, The Bell Journal of Economics 9(2), 508-523) analysis of firm size by taking into account a normalised aggregate CES production function. In a general equilibrium ... [more ▼]

This paper extends the Lucas (1978, The Bell Journal of Economics 9(2), 508-523) analysis of firm size by taking into account a normalised aggregate CES production function. In a general equilibrium framework it is proved that there is an inverse relation between the elasticity of substitution and average firm size. If interpreted together with the fact that richer countries are characterised by a higher elasticity of substitution, this result can explain why the recent literature finds a positive association between the importance of SMEs in an economy and its stage of development, but seems to fail in finding causality between the two. Both have a common origin: a high value of the elasticity of substitution. This paper also provides a first empirical test of the theory proposed using cross-country data from both developed and developing countries. © Springer 2006. [less ▲]

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See detailThe Evolution of the Distribution of Plant Size: Evidence from Luxemburg
Bertinelli, Luisito UL; Cardi, Olivier; Pamukçu, Mehmet Teoman et al

in Small Business Economics (2006), 27(4), 301-311

In a recent paper, [Cabral, L. M. B. and J. Mata, 2003, American Economic Review, 93, 1075–1090] using Portuguese manufacturing data have shown for the first time that the plant size distribution is ... [more ▼]

In a recent paper, [Cabral, L. M. B. and J. Mata, 2003, American Economic Review, 93, 1075–1090] using Portuguese manufacturing data have shown for the first time that the plant size distribution is significantly right-skewed at the early part of the life cycle and then changes to become more log-normal. Using a similar proxy for plant age we compare this stylised fact for both Luxembourg manufacturing and services. Use of plants’ true age, however, reveals that the size distribution reverses back towards right-skewness for very old plants. We confirm the finding that the right-skewness is likely driven by financial constraints. Copyright Springer 2006 [less ▲]

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