Volume 15, Issue 2

Entrepreneurial exits can come with various conditions attached. This study investigates the use of earnouts in small business acquisitions, particularly with entrepreneurial firms where uncertainty and valuation challenges are prevalent. Through a comprehensive analysis of 6,184 firms between 2013 and 2019, we explore the factors influencing the likelihood of earnout inclusion, such as sell price, firm leverage, firm age, employment agreements, and noncompete clauses. Employing a Logit model and a treatment effects model, our research reveals which entrepreneurial firms have to earn their exit versus those that do not have to earn their acquisition price. The findings not only enhance our theoretical understanding of earnouts but also provide practical insights for structuring small business acquisition transactions that align buyer and seller interests, mitigate risks, and facilitate smoother post-acquisition integration.

This article takes a unique perspective on official misconduct, viewing official misconduct as an entrepreneurial manifestation. We propose a typology of misconduct based on discovery and creation, structured around three dimensions that represent entrepreneurial choices to explore or exploit. We empirically apply this typology through an analysis of 11 official misconduct cases in Danish municipalities, a robust institutional context. This research enhances understanding of the relationship between strong institutions and unproductive entrepreneurial behavior, offering practical insights for policymakers and public administrators.

This study explores the impact of gender on entrepreneurial finance, analyzing both the supply and demand sides of early-stage equity financing through Business Angel (BA) investments. The research investigates the probability of men and women-owned businesses securing BA investments and assesses whether the gender of BA investors influences financial transaction magnitudes, potentially disadvantaging women-owned businesses. Additionally, the study explores the intersection between the gender of BA investors and investees to test for the presence of any potential heterogenous behaviors in terms of average invested amounts by men (women) Business Angels towards women-(men-) owned target companies. Results reveal that women entrepreneurs receive less equity financing than men, with a lower probability of securing larger investments from men BAs. Notably, this bias is absent when women BAs invest in men-owned businesses. These patterns persist regardless of information availability and consideration of unobservable factors, suggesting a connection between this disadvantage and taste-based prejudice among men BAs.

This study represents a longitudinal in-depth investigation of entrepreneurial opportunity development in a Finnish start-up company. A qualitative interpretive case study method is applied here that enables us to provide in-depth findings to promote opportunity-related research in the fields of entrepreneurship and International Entrepreneurship. We create an empirical process model that unlocks the longitudinal development of entrepreneurial opportunity and internal and external features contributing to it. The findings indicate that the development process represents a transformation from the assessment of demand into the creation of actual solutions. In addition, the process model reveals how the objectives and motivations of individuals, as well as external features in the industry and events, drive the development of entrepreneurial opportunity.

While previous studies on individual entrepreneurial orientation have evolved more from environmental, social and cultural features, far less attention has been dedicated to personal agency factors, especially during the crisis period of post COVID-19 pandemic. Relying on personal agency theory and the entrepreneurial cognitive logic concept, this study investigates how entrepreneur’s internal locus of control affect their individual entrepreneurial orientation, particularly during periods of crisis and scarcity-post COVID-19 pandemic. Data were collected from 500 small and medium scale entrepreneurs via an online questionnaire and analyzed using partial least square (PLS-SEM) methodology. The findings show that causation, bricolage and effectuation’s affordable loss and flexibility, which are most responsive to internal locus of control, significantly impact individual entrepreneurial orientation. However, no evidence has been found on how gender, education level and education background impacts the internal locus of control to promote entrepreneurial orientation. Finally, the paper highlights the relevance of considering personal agency factors, namely internal locus of control, for policy makers, especially those involved in institutions of learning and government ministries, to boost citizens perceptions and entrepreneurial orientation and behaviour particularly in developing countries.

In the digital age, certain digital platforms, such as Google Android and Tencent, have experienced remarkable growth. Nevertheless, other digital platforms encounter severe challenges that contribute to their downfall. The development disparities among digital platforms are primarily attributed to the opportunity set, an aspect still underexplored in the existing research. Based on the Chinese context, this study adopts the dynamic capabilities view to investigate how digital platform capabilities, specifically platform integration and reconfiguration capabilities, influence the opportunity set from the perspective of complementors. Additionally, we examine the moderating impact of governance mechanisms, encompassing formal contracts and relational mechanisms, challenging the prevailing notion that formal contracts always benefit platforms. Drawing insights from survey data including 476 complementors across 48 Chinese digital platforms, our findings reveal that the positive relationship between platform integration capability and the opportunity set is strengthened when formal contracts are employed. However, the positive relationship between platform reconfiguration capability and the opportunity set weakens with formal contracts but strengthens with relational mechanisms. Our study enriches the opportunity set research by empirically revealing the formation mechanism of the opportunity set in digital platforms from the dynamic capabilities view. Furthermore, it extends the application of platform governance literature by introducing nuanced perspectives on the boundary conditions of governance mechanisms in the Chinese context. Ultimately, this paper offers valuable practical insights for platform owners in China, guiding them in enhancing their capabilities and crafting effective governance mechanisms. Simultaneously, it provides direction for Chinese complementors to leverage both formal and informal relationships with platform owners, effectively transforming digital platform capabilities into the opportunity set.

Although a hybrid logic is widely recognized as the best institutional logic for social enterprises, why and how such a hybrid logic works for social enterprises is under-explored. Based on the institutional logic theory, we conduct a multiple-case study to investigate how and why the two competing logics are combined to form a hybrid logic during social entrepreneurial process. Data are collected from the in-depth semi-structured interviews with social entrepreneurs from three leading social enterprises in China. We categorize a hybrid logic model as a dominant logic model, which includes a social-dominant logic model and a commercial-dominant logic model, and an equality of dual logic model. We find that the adoption of a hybrid logic is affected by the type of a social enterprise and the motivation to acquire different legitimacy. Specifically, an integrated social enterprise adopts a commercial-dominant logic model while an external social enterprise employs a social-dominant logic model to achieve sustainability. An embedded social enterprise can adopt an equality of dual logic model from its establishment. Our study contributes to research on strategic social entrepreneurship by revealing the dynamic relationship among different types of social enterprises, the adoption of a hybrid logic at different entrepreneurial stages, the motivation to acquire different legitimacy, and business outcomes.

Irrespective of support or opportunities, evidence suggests that most higher education business students in emerging markets are still primarily guided reactively (out of personal need or temporarily) into for-profit entrepreneurship rather than through personal incentive raising doubts on the impact of University entrepreneurial push strategies and programmes. We address the lack of meso level quantitative studies and propose a new student-related context sensitive conceptual model for student entrepreneurial intention in emerging markets exploring the extent to which a context-based and feasibility-oriented conceptual model is required. We propose the components Risk and Innovation, Autonomy, National norms and number of languages spoken all affect entrepreneurial intention. Furthermore, we suggest that education has a moderating effect overall and more so on the risk and innovation component. Our theoretical framework was partially supported as we show compelling evidence that risk and innovation, autonomy, and languages spoken have a significant effect on student entrepreneurial intention. The results indicate that conceptual frameworks differ by context and entrepreneurship education in emerging markets is contingent on specific human capital of students but can be stimulated through improving cognitive institutional structures and curricula focusing on context and attitudes towards risk taking.