Sustaining entrepreneurship in “unsustainable communities”: informal investment rates in England across the business cycle
This study examines the effect of community deprivation and the economic cycle on the distribution of informal investments across communities in England. The results suggest that informal funds may be the only accessible source in the most deprived areas, while in the least deprived areas they may be a function of higher rates of successful start-ups. The research highlights the role of local conditions which generate various opportunities and bring about different outcomes. This issue is particularly topical given the current UK government’s aim of devolving local economic development powers to local communities rather than central government, which was signaled by its Localism Bill in 2010. This research demonstrates the critical role that informal investment makes in the most deprived communities. Without it, entrepreneurship would struggle to survive in these communities in times of recession.
The literature suggests that interpersonal trust is essential for building effective entrepreneurial networks. According to the 2011 World Values Survey and recent national surveys, more than 60% of Russians believe that caution is warranted when dealing with others. Low levels of social trust may affect entrepreneurs’ readiness to build networks based on trust, which is defined as a psychological state comprising a willingness to act based upon positive expectations of other person’s intentions or behaviour. This paper addresses the role trust plays in the building of business networks by Russian entrepreneurs. It also considers how trust between network participants changes over time. The findings are based on qualitative data gathered from in-depth interviews of 59 entrepreneurs from traditional, low, medium, and highly innovative SMEs. The paper identifies and compares the mechanisms that Russian entrepreneurs representing SMEs in four innovativeness categories use to build trust in their business networks, especially in terms of the cognitive, affective, and behavioural aspects of trust. It also highlights differences in how entrepreneurs representing SMEs in various innovativeness categories use mechanisms of trust to build and govern their business networks. The derived understanding can help entrepreneurial network participants be more effective, especially in terms of avoiding mistakes associated with the underestimation of the importance of trust in building long-term business relations.
These proceedings represent the work of contributors to the 13th European Conference on Innovation and Entrepreneurship (ECIE 2018), hosted this year by the University of Aveiro, Portugal on 20-21 September 2018. The Conference Chair is Professor Carlos Costa and the Programme Co-Chairs are Dr. Manuel Au-Yong-Oliveira and Dr. Marlene Paula Castro Amorim. ECIE is a well-established event on the academic research calendar and now in its 13th year the key aim remains the opportunity for participants to share ideas and meet the people who hold them. The scope of papers will ensure an interesting two days. The subjects covered illustrate the wide range of topics that fall into this important and ever-growing area of research.
The study of business law is an essential requirement for a business lawyer, businesspersons (including managers and entrepreneurs), as well as for academics. Consider this – what would you do if (1) your client or company has a legal issue in Russia, or (2) you want to tell your students about recent law developments in business transactions in Russia, or (3) you are simply interested in learning about the new Russian law system regulating business relations and conditions of the market economy? Whom would you ask, or where would you look up first? Answers may vary according to the situation: one could hire a law firm, call a friend, or just “google” it. However, it would be much more convenient to have something to use that is reliable, concise, and comprehensive. The absence of a helpful resource in English encouraged our team mainly of professors, PhD students, and graduates of the Lomonosov Moscow State University Business Law Department to prepare this book, which tells about the regulation of business in Russia. However, one should not consider that its main purpose is to simply retell the content of legal acts related to the regulation of business relations. Our team strove to resolve a much more complex problem: on the one hand, to show in what way particular areas of business are regulated, and on the other, to define the fundamentals of business regulation in Russia.
The paper deals with the problem of founders’ impact on the process of organizational development and performance. The goal of the research is to provide a comparative analysis of activity in founder‐run and non‐founder‐run Russian firms. In order to run this analysis 224 companies created from scratch by Russian entrepreneurs in the period of years from 1992 to 1998 were studied.
Statistical analyses were performed on two independent samples of companies, namely 162 companies managed by the founders and 62 companies that were run by hired professional managers. As a result of the analysis, statistical differences were found in relation to the criteria of number of employees and hierarchical levels; firms managed by founders usually have less staff and fewer hierarchical levels than the non‐founder companies. Nevertheless the dynamics in sales of the two samples of founder and non‐founder companies during the last 3 years were quite similar.
Institutions play a key role in building entrepreneurial ecosystems (EEs). However, the academic literature does not well represent the historical roots of these institutions and most works are devoted to developed countries. This article examines the institutional conditions for the development of scientific and entrepreneurial activities at universities in the context of the transition to a market economy. It considers the «path dependence» (mentality and infrastructure inherited from the past), as well as specific mechanisms for regulating the interaction of universities and other subjects of EE developed during the transition period. Such an approach allows us to assess the potential of universities for the development of entrepreneurship in countries with a transition economy and the impact of historical development paths upon the current structural conditions and the specific features of the EE.
The paper analyses effects of corruption on innovative activities. It argues that despite corruption is traditionally considered as a highly negative phenomenon, it may have a positive effect on innovation. This position allows to explain why developing countries with a high level of corruption sometimes demonstrate better indicators of innovative activity in particular areas than less corrupt advanced economies. However, our study shows that this positive relationship exists because of the prevalence of more serious problems associated with the persistent presence of the state in various spheres of economy. Moreover, we argue that not all innovations are in fact socially desirable, and those that are an outcome of rent-seeking behavior and incorporation of private interests in the legal system often negatively affect market mechanisms and undermine sustainable economic performance.
The innovative potential of Russian small business is not completely realized that is indicated by the comparison of its innovative activity with small entrepreneurship in many developed countries. The development of measures to support and stimulate the activity of small enterprises in Russia is attended, and the priority task is the search for mechanism to increase the participation of small enterprises in innovative transformations of economy. The aim of this research is to analyze development factors of small enterprises innovative activity in Russia considering substantial regional differentiation.
The conducted analysis was based on the data of Federal State Statistics Service representing the results of the survey of small enterprises innovative activity as well as the characteristics of socio-economic development of Russian regions. Multivariate statistical methods were applied. Principal component analysis was used to estimate the level of the development of small enterprises innovative activity. Discriminant analysis and logistic regression with further comparison of its results measured the influence of socio-economic characteristics of Russian regions on the level of small enterprises innovative activity.
Among tested socio-economic characteristics of Russian regions the expenditures on technological innovations of large and medium-sized enterprises, the indicators of population's educational potential, the level of ICT development and the population's standard of living had a significant impact on the level of small enterprises innovative activity development. The comparative analysis of the results of applied logistic regression and discriminant analysis showed high degree of their consistency and indicates appropriate predictive probabilities of the models.
The innovative activity of small enterprises in Russia is influenced by the complex factors characterizing scientific, technological and socio-economic regional development. The analysis allowed revealing key factors of small enterprises innovative activity growth and showed the necessity of targeted support of small business innovative activity considering regional features.
Th is paper, based on the data of sample observation of population incomes and participation in social programs for the period from 2014 to 2018 prepared by the Federal State Statistics Service, evaluates the diff erences in the incomes of employees and entrepreneurs, the latter fall into ownaccount workers and employers. In this study the methods of ordinary least squares and quantile regression are employed. Th e results show that in Russia entrepreneurs’ median and average earnings are higher than employees’ ones. Th e highest positive diff erences are in the incomes of employers who earn more than own-account workers and employees respectively. Also, entrepreneurs earn more than employees during the period of economic growth as well as recession. It indicates that the positive income diff erence between entrepreneurs and employees is kept during economic slowdowns. Th is fi nding distinguishes Russia from the countries with high income per capita and a larger contribution of small and medium-sized businesses to the gross domestic product, such as the USA, Great Britain, Germany, Finland, where entrepreneurs oft en earn less than employees. Th us, the monetary reward might be a primary reason for persons to opt for entrepreneurship in Russia than in high-income economies.