Volume 2, Issue 3

Despite decades of research since Stinchcombe’s original essay on the liability of newness, questions remain regarding the forms and the causes of emerging organizations’ liabilities. Stinchcombe argued that newly-founded organizations face complex challenges that limit their viability, including managing relationships among strangers, assembling required resources quickly, and coping with difficult environments. In the 1980s researchers began investigating whether the liability of newness really was, in fact, a universal principle. However, we believe that researchers have never properly tested Stinchcombe’s original propositions because they have mostly focused on registered new firms rather than emergent ones. Lacking a clear theoretical framework that explains emerging organizations’ liabilities, the field of entrepreneurship has ignored Stinchcombe’s emphasis on emerging organizations. Research on emerging organizations needs to pay more attention to the pragmatic tasks that nascent entrepreneurs cope with and the activities that they undertake to accomplish these tasks. In addition to a systematic conceptual framework, future research on the “liability of newness” also requires a suitable research design and appropriate statistical procedures. Were investigators to follow the suggestions we have offered, we believe that scholars would gain a better understanding of the conditions under which some emerging organizations are more likely than others to survive.

Education is a well-known driver of (entrepreneurial) income. The measurement of its influence, however, suffers from endogeneity suspicion. For instance, ability and occupational choice are mentioned as driving both the level of (entrepreneurial) income and of education. Using instru-mental variables can provide a way out. However, two questions remain: whether endogeneity is really present and whether it matters for the size of the estimated relationship. Using Bayesian methods, we find that the relationship between education and entrepreneurial income is indeed en-dogenous and that the impact of endogeneity on the estimated relationship between education and income is sizeable. Implications of our findings for research and practice are discussed.

Based on a sample of 539 angel investors, we empirically test the impact of new ventures’ resource acquisition/allocation strategies in different development stages on angels’ abnormal returns and their extremeness. Our exploratory findings suggest that at early stages of development, ventures whose entrepreneurs focus more on resource acquisition/allocation strategies tend to not only give angel investors lower returns, but also pull angel’s returns back to the industry average. Furthermore, these effects at early stages are more visible than those at late stages of the ventures.

The main question of this paper is to show why individuals residing in highly entrepreneurial regions are more likely to become entrepreneurs. It deals with the so-called social dimension of entrepreneurship, that is with those elements of social capital which can be relevant for explaining local entrepreneurship. Our theoretical results suggest that the existing set of social norms and relations affect the occupational reward structure and, as a result, entrepreneurial preference. If this were the case, entrepreneurship could be stimulated by influencing institutions and social norms, as such changes would, in due course, produce effects both on pecuniary and non-pecuniary rewards.