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A tale of soil and seeds: the external environment and entrepreneurial entry

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  • Dario Maimone Ansaldo Patti

    (Universita di Messina)

  • Ram Mudambi

    () (Temple University)

  • Pietro Navarra

    (University of Pennsylvania)

  • Daniela Baglieri

    (Universita di Messina)

Abstract

Abstract While the study of international entrepreneurship has been dominated by studies of international new ventures, the study of comparative international entrepreneurship has received relatively little attention. We argue that since such international differences are often the underlying drivers for entrepreneurship that crosses borders, this area of research has a rich potential to improve our understanding of international entrepreneurship. In this paper, we develop a theoretical framework to examine the effects of the external business environment (the soil) on the entrepreneurial entry by individuals (the seeds). This leads us to fundamental predictions regarding differences in the extent of entrepreneurship in different national contexts. While in developed economies business ventures are more likely to be launched when the turnover rate of incumbent firms is high, the opposite is true in developing economies. Estimates generated using a large-scale data set provide empirical support for our theoretical predictions. Our findings suggest important avenues for new research regarding the role of factors such as the liability of newness and the stigma of failure in different national contexts, as well as the manner in which entrepreneurial dynamics evolve over time.

Suggested Citation

  • Dario Maimone Ansaldo Patti & Ram Mudambi & Pietro Navarra & Daniela Baglieri, 2016. "A tale of soil and seeds: the external environment and entrepreneurial entry," Small Business Economics, Springer, vol. 47(4), pages 955-980, December.
  • Handle: RePEc:kap:sbusec:v:47:y:2016:i:4:d:10.1007_s11187-016-9744-7
    DOI: 10.1007/s11187-016-9744-7
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    Cited by:

    1. Rubina Romanello & Maria Chiarvesio, 2019. "Early internationalizing firms: 2004–2018," Journal of International Entrepreneurship, Springer, vol. 17(2), pages 172-219, June.
    2. David Urbano & Sebastian Aparicio & David Audretsch, 2019. "Twenty-five years of research on institutions, entrepreneurship, and economic growth: what has been learned?," Small Business Economics, Springer, vol. 53(1), pages 21-49, June.

    More about this item

    Keywords

    Comparative entrepreneurship; Corporate instability; Entry; Liability of newness; Stigma of failure;

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • M16 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - International Business Administration

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