Entrepreneurial ecosystems in cities: establishing the framework conditions

This study focuses on regional entrepreneurial ecosystems and offers a complex model of start-ups, Regional Entrepreneurship and Development Index (REDI) and six domains of the entrepreneurial ecosystem (culture, formal institutions, infrastructure and amenities, IT, Melting Pot and demand). Altogether they capture the contextual features of socioeconomic, institutional and information environment in cities. To explain variations in entrepreneurship in a cross-section of 70 European cities, we utilize exploratory factor analysis and structural equation modelling for regional systems of entrepreneurship using individual perception surveys by Eurostat and the REDI. This study supports policymakers and scholars in development of new policies conducive to regional systems of innovation and entrepreneurship and serves as a basis for future research on urban entrepreneurial ecosystems.     

Young innovative companies: Are they high performers in transition economies? Evidence for Vietnam

We study the economic value of both embodied technological change and Research and Development (R&D) investment as proxies for the inputs of innovative activities conducted by Vietnamese firms. Our main focus is on the profitability of young innovative companies (YICs), private innovative companies (PICs), and small and young companies (SYCs). In particular, we test whether YICs could prove successful in fostering economic development through their technological change activities. Results show that (a) although YICs are more R&D intensive and innovative than PICs and SYCs, in general they do not produce equivalent performance; however those specific YICs focusing on technological change potentially outperform their counterparts, and (b) PICs are more capable than the other types of firms in translating their innovative effort to higher profitability.     

Impact of public seed-funding on academic spin-offs

In the entrepreneurial economy of today, it is not the multinational firms which are the predominant driver in the creation of new knowledge, but the individual entrepreneur. Correspondingly, new ventures of small size are leading in commercializing new knowledge and transferring it to the market. This economic shift has been reflected by broad entrepreneurship policies, which aim at supporting the individual on the challenge of a high-growth start-up. However, prior experience shows that uniform entrepreneurship policies do not address the individual needs in different countries and ecosystems adequately. In this paper, we study the performance of academic spin-offs that received public funding from the German EXIST Business Start-Up Grant, a support program which aims at increasing the number of innovative start-ups from academia. Using a control group matching approach, we provide evidence that these start-ups are smaller by two full time equivalent employees, generate 1.7 times higher losses and have a nearly three times lower return on capital than science-based entrepreneurial firms with comparable characteristics in the first 5 years after foundation. We interpret these results to be primarily caused by the inferior financial contracting structure of the program compared to private venture capital funding and by the resulting adverse selection and incentive effects on the entrepreneurs. The evidence calls for rethinking public interventions in a national system of entrepreneurship.