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Comprehensive Australian Study of Entrepreneurial Emergence
Australian Research Council (ARC), National Australia Bank, BDO
The Entrepreneurial Process
There is growing consensus that entrepreneurship is the process of creation of new business ventures. However, there is limited supply of solid, widely agreed-upon knowledge about entrepreneurship from a process perspective. This project aims to first thoroughly review and assess the extant literature on entrepreneurial processes and then develop theory and empirical evidence in this domain. The research team is Prof. Per Davidsson and Jan Gruenhagen.
The Duration of Venture Creation Processes
This study aims to discern the duration of venture creation processes that end in successful venture emergence as well as those ending with abandonment. We applied Inverse Probability Weighting (IPW) and analyzed the venture creation duration of 1673 nascent ventures in the Harmonized PSED (Panel Study of Entrepreneurial Dynamics). The weighting analyses for the duration show that the emergence chance is maximized around three months after inception of the process, implying that venture creation in the typical case is faster and simpler than previously believed. Past three months the emergence chance decreases, whereas the abandonment hazard constantly increases over time and surpasses the emergence chance after seven months. The results show that weighing strongly influences duration time estimates and also can influence other estimates based on samples using the same type of sampling mechanism. Thus we conclude that IPW should be considered for all analyses using this type of data. Our study offers a possible interpretation of the different mechanisms of emergence and abandonment and provides guidance and insights for future studies. This study has been conducted by Dr Jaehu Shim and Professor Per Davidsson, and published in the Journal of Business Venturing Insights.
Ignition of New Product Diffusion in Entrepreneurship: An Agent-Based Approach
New product diffusion is critical to entrepreneurship. Although we have several well-established models of the diffusion phenomenon, these models mainly describe the macro-level diffusion patterns after their ignition, thereby ignoring the ignition mechanism. This study conceptualizes an entrepreneur’s introduction of a new product and its diffusion as a generative emergence from a complexity science perspective and employs agent-based modelling and simulation (ABMS) to explain the full ignition-diffusion process as well as ignition failures. In this study’s model, the ignition process is made of individual consumers’ heterogeneous thresholds and their relative levels of activities. These micro-level characteristics and behaviours influence the speed and scope of the diffusion at the macro-level. Our simulations reveal the minimum number of initial adopters required to ignite the diffusion process and show how an entrepreneur’s advertising campaign may accelerate the ignition and diffusion speed. The simulations also reveal how consumers’ negative word-of-mouth may reduce the diffusion scope. This study has been conducted by Dr Jaehu Shim and Dr Martin Bliemel, and published in the Entrepreneurship Research Journal.
Estimating Country-level Social Network Density and Supportive Surroundings by Simulation
The purpose of this study is to estimate country-level social network properties by reproducing plausible social network structures of each country. For this purpose, we suggest and utilize a novel simulation procedure using Agent-Based Modelling and Simulation (ABMS) method and the Global Entrepreneurship Monitor (GEM) data. Specifically, we estimate two types of country-level social network properties that can be related to entrepreneurial activities, i.e. social network density and supportive surroundings in each country. As a result, this study provides estimated values of the social network properties for 69 countries. This study has been conducted by Dr Jaehu Shim and one Higher Degree student, Jiyoung Kim, and published in the Journal of Business Venturing Insights.
External Enablement of Entrepreneurship
The project investigates how external enablers such as new technologies, regulatory or demographic shifts, and changes to the socio-cultural, economic, political, or natural environments influence entrepreneurial actions and outcomes. A first paper has been accepted for publication in Entrepreneurship Theory and Practice in July 2017, one of the leading entrepreneurship journals. This paper focuses on the role of digital technologies as external enablers in creating a recent surge in IT Hardware start-ups. Two other papers are currently under review in later stages of the review process at leading Management and Information Systems journals: the first paper develops a new framework that conceptualizes external enablers in terms of their characteristics, roles, and mechanisms. The second paper conceptualizes how differences between digital technologies that form the core of new ventures’ market offerings influence ensuing venture creation process. The project is conducted in collaboration between Prof. Per Davidsson, Prof. Jan Recker, and Dr. Frederik von Briel
Immigrant Entrepreneurship in Australia
Australia can be considered an immigrant country, with 26% of the population foreign-born (6 million) and another 20% (4.1 million) second generation migrants (ABS, 2011). Many of these immigrants engage in entrepreneurship, with an estimated 16% (1.6 million) of first generation or second generation immigrants engaged as owner-managers of new businesses based on our Comprehensive Australian Study of Entrepreneurial Emergence (CAUSEE) (Davidsson, Steffens & Gordon, 2011). Immigrant entrepreneurs have been identified as a valuable resource by host countries, such as Canada and the United States of America (USA) (Wadhwa, 2012). Also based upon CAUSEE data, immigrants are more likely to start international new ventures, otherwise known as Born Global enterprises (Zolin & Schlosser, 2013). A 2013 ARC Discovery grant application was unsuccessful despite favorable reviews. The aim of this project is to gain a critical understanding of the mechanisms by which ethnic enclaves foster and inhibit entrepreneurship in first and second generation immigrants. The research setting is deemed to have high potential and efforts to secure external funding will continue. The research team includes A/Prof Roxanne Zolin, A/Prof Artemis Chang, and A/Prof Paul Steffens and Prof Benson Honig.