Essays on Entrepreneurial Support and New Firm Exits
Abstract
The recent rise in research related to entrepreneurial support (ES) initiatives can be attributed to two closely intertwined insights that have garnered increased attention in recent years. Firstly, there is an increased acknowledgment of the significant role played by entrepreneurship in job creation and economic growth, consequently bolstering the emphasis on supporting entrepreneurship. Secondly, this focus on the economic importance of new businesses is accompanied by a growing understanding of the inherent vulnerabilities faced by ventures that encounter substantial challenges in their initial development stages. Considering these insights, governmental bodies and policymakers are progressively shifting their focus towards ES initiatives to bolster support for entrepreneurs.
Despite this surge in ES research, the field's findings offer limited insights into effectively supporting entrepreneurs due to shortcomings in the application of robust theoretical frameworks, a narrow concentration on specific support types, and an insufficient exploration of how environmental factors influence the outcomes of entrepreneurial support. To address these knowledge gaps, we adopt the nascent theory of Organizational Sponsorship (OS) as the primary underpinning for our research investigations. These inquiries encompass the examination of the impacts of various support programs on new firm exits, the moderating effect of the local environment within this framework, and the consequences of diverse OS initiatives on the relationship between industry switching and new firm exits.
In Chapter 2, we introduce the concept of "cost reduction sponsorship" as a form of organizational support geared towards minimizing operational expenses for ventures. Our investigation delves into how various agglomeration and regional innovation factors moderate the relationship between cost reduction OS and new firm exits. Moving on to Chapter 3, we present the notion of "resource infusion OS" as a type of organizational sponsorship, involving the provision of external resources to create a resource-rich environment for venture support. We then examine how agglomeration and regional innovation factors influence this relationship. In Chapter 4, our research focuses on the interplay between industry switching and new firm exits. We delve into how industry switching impacts new firm exits contingent upon three OS initiatives: cost reduction OS through state taxes, resource infusion OS facilitated by government loans, and hybrid OS facilitated by accelerators.