The Role of Mixed Emotions in the Risk Perception of Novice and Serial Entrepreneurs

Ksenia Podoynitsyna, Hans Van der Bij, and Michael Song (2012)

This study examines the role of mixed emotions in the risk perception of entrepreneurs, an important determinant of entrepreneurial decision making. We extend the literature on mixed emotions by applying the cognitive appraisal tendency approach and contrasting it with ambivalence stemming from the valence-based approach. We test our hypotheses on a data set of 253 entrepreneurs from the United States. We show that mixed and conflicting emotions are an important predictor of the risk perception of entrepreneurs. At the same time, we find that emotional reactions of entrepreneurs on strategic issues change substantially as they found more ventures and become habitual entrepreneurs.

 

Improved Immigration Laws Would Help Foreign Student Entrepreneurs Launch U.S. Companies, Create U.S. Jobs, Says Kauffman Paper

Anthony Luppino, John Norton, and Malika Simmons (2012)

U.S. colleges and universities nationally are seeing increasing numbers of international students with a passion for entrepreneurship, and many of those students want to start new ventures in the United States. However, current immigration laws make it difficult – if not impossible – for these budding innovators to establish startups while in school, or to remain in the country after graduation to grow their companies and create jobs that could bolster the U.S. economy.

In the paper "Reforming Immigration Law to Allow More Foreign Student Entrepreneurs to Launch Job-Creating Ventures in the United States," released today by the Ewing Marion Kauffman Foundation, a team of law and entrepreneurship experts from the University of Missouri—Kansas City (UMKC) outline specific measures to modify U.S. immigration law in an effort to attract and encourage talented international students to launch job-creating ventures in the United States.

 

Understanding competencies in platform-based product development: antecedents and outcomes

Kah-Hin Chai, Qi Wang, Michael Song, Johannes I.M. Halman, And Aarnout C. Brombacher (2012)

While previous studies have shed light on the benefits and antecedents of platform-based product development, there is still much to be learned on the subject, particularly through an empirical approach. Based on the literature, this study proposes the concept of product platform competency and identifies four antecedents related to the development process, knowledge sharing, and the organization of development. The study hypothesizes that such competency directly affects the performance of platform-based product development. To test these hypotheses, a large-scale survey was conducted in the United States with 242 firms. The study found empirical evidence to support the existence of the concept of product platform competency, which comprises the reusability of subsystems, the compatibility of subsystem interfaces, and the extensibility of platform-based products. The results show that a formalized development process, knowledge sharing across platform-based products, continuity of platform-based product development teams, and the existence of a champion in platform-based product development will significantly enhance product platform competency. More interestingly, the results show that factors which have a significant effect on platform development cost are statistically different from those that have a significant effect on platform development time. For example, while formalized product development process and continuity of development team play a very significant role in shortening development time, they are less crucial in reducing development costs. In contrast, the presence of a product champion is a significant factor in achieving cost efficiency, but it has relatively lower impact on development time. Knowledge sharing was found to affect both development time and cost. In sum, this study makes three main contributions to the existing literature. The first contribution is the empirical-tested concept of product platform competence based on key elements suggested by Robertson and Ulrich. The second contribution is the development of constructs specifically for platform development based on previous studies. Relating to this is the third contribution: the development and validation of measurement items related to key drivers to platform development, the three aspects of platform development competence, and the performance measurements. These measurement items can be used by practitioners as guidelines to identify areas for improvement as well as the level of capability in platform development.

 

Mental Models and Successful First-Mover Entry Decisions: Empirical Evidence from Chinese Entrepreneurs.

Y. Lisa Zhao And Mark E. Parry (2012)

Existing research has identified a variety of mechanisms through which early entrants may be able to develop competitive advantages that favorably influence performance relative to later entrants. At the same time, later entrants can sometimes enjoy cost advantages arising from free riding and the resolution of uncertainty. Despite the impressive array of possible explanations linking entry timing with performance, it is unclear how these explanations align with the cognitive representations that guide managerial decision making. The authors address this gap in the literature by arguing that the resource-based view of the firm provides potential insight into the way that perceived pioneer advantages and disadvantages influence managerial behavior. The resource-based view argues that the value of various pioneer advantages will depend on the degree to which those advantages enable pioneers to access and control resources that are costly to copy. Because legal and cultural variables also influence access to resources, the value of specific dimensions of pioneer advantage will vary depending on the macroenvironment within which a firm operates. To test this reasoning, the authors examine the impact of perceived pioneer advantages on the number of first-mover entry decisions of Chinese service entrepreneurs, who operate in an environment characterized by underdeveloped legal institutions and inadequate legal protections, a fledgling capital market, the limited availability of information about products and industries, and an emphasis on personal connections. The authors hypothesize that these unique characteristics of Chinese markets will affect the perceived importance of sources of pioneer advantage identified in studies of Western (primarily United States) firms. Using data collected from 302 Chinese service entrepreneurs, the authors find strong evidence that the number of pioneer entry decisions made by Chinese entrepreneurs are strongly tied to entrepreneurs’ perceptions that pioneer firms tend to outperform later entrants and have the ability to preempt key assets. In addition, the number of entry decisions is negatively related to perceptions of pioneer cost disadvantages and the level of uncertainty faced by pioneers relative to later entrants. However, consistent with the research hypotheses, perceptions of pioneer leadership and cost advantages do not significantly influence the entry decisions of Chinese service entrepreneurs.

 

Sub-National Institutional Contingencies, Network Positions, and IJV Partner Selection

Weilei (Stone) Shi, Sunny Li Sun, and Mike W. Peng (2012)

The differences in sub-national institutions within large and complex emerging economies have been increasingly noted. Drawing on social network theory and the institution-based view, we argue that two network structural attributes of domestic firms – centrality and structural holes – have distinctive values in different sub-national regions where institutional contexts differ widely. In addition, these sub-national institutional contingencies influence the attractiveness of different network attributes to foreign entrants seeking international joint venture (IJV) partners. Specifically, in regions where the degree of marketization is high, centrally positioned domestic firms are more likely to be selected by foreign entrants as IJV partners. In regions where the degree of marketization is low, domestic broker firms are more attractive IJV partners. Results from the electrical and information technology industries in 18 provinces in China largely support our hypotheses.

 

Foreign-born academic scientists: Entrepreneurial academics or academic entrepreneurs? 

Dirk Libaers And Tang Wang (2012)

Although foreign-born scholars make up a significant portion of the US professoriate, little is known about how their ‘foreign-born’ identity directly or indirectly affects their entrepreneurial prowess. This article integrates role identity theory with theoretical arguments from social network and cultural proximity theories to examine whether foreign-born academic scientists can better be characterized as entrepreneurial academics (strong government grant productivity) or academic entrepreneurs (strong involvement in the creation and commercialization of university-invented technologies). Our analysis indicates that foreign-born academic scientists seem more successful in attracting research resources, but are less successful in exploiting their inventions through entrepreneurial activities. They can therefore be best described as entrepreneurial academics. These findings may partially explain the tepid performance of many research-intensive universities in terms of technology transfer and commercialization. We discuss the policy implications of our findings and provide guidance for academic entrepreneurs.

 

Forecasting New Product Adoption with Probabilistic Neural Networks

Parry, E. Mark, Qing Cao, and Michael Song (2011)

Forecasting the adoption of innovative products is an important managerial task. In this paper we examine the usefulness of a probabilistic neural network (PNN) algorithm for forecasting new product adoption. We compare this approach with one widely accepted forecasting procedure, the binomial logit model, and two other neural network algorithms: a feed-forward neural network model estimated with backward propagation (NNBP), and a feed-forward neural network model estimated with a genetic algorithm (NNGA). To test the relative forecasting accuracy of these algorithms, we examine the first-time adoption of DVD players. Our analysis is based on longitudinal consumer data collected between March 2000 and March 2001. We find that the PNN algorithm significantly outperforms the logit model and the two remaining neural network algorithms.

 

Behind M&As in China and the United States: Networks, learning, and institutions

Haibin Yang, Sunny Li Sun, Zhiang Lin, and Mike W. Peng (2011)

Few scholars would dispute the argument that mergers and acquisitions (M&As) are different in China and the United States, but we know little about how they differ. This article reports one of the first studies that systematically compares and contrasts how M&As differ in these two countries. While prior research on M&As tends to emphasize economic and financial explanations while treating firms as atomistic actors severed from their institutional and network relations, we develop a new theoretical framework based on relational, behavioral, and institutional perspectives. We not only consider firms as learning actors embedded in network relations, but also compare and contrast their M&A patterns between China and the United States, two distinctive institutional contexts. We find that both a firm’s structural hole position and its learning orientation (exploration/exploitation) in alliances have direct and joint impacts on subsequent M&As. Further, such impacts differ across the two countries, due to their institutional disparities.

 

Michael Song's Articles Listed on SSRN's Top Ten

December 30, 2010

Michael Song's "Extending the Miles and Snow Strategic Framework: Strategic Types, Capabilities, Environmental Uncertainty, and Firm Performance" and "Pioneering Advantage in New Service Development: A Multi-Country Study of Managerial Perceptions" articles make the Social Science Research Network's (SSRN) top ten download lists.

 

Perspectives on Economic Conditions, Entrepreneurship, First-Product Development, and New Venture Success

Michael Song, Lisa Z. Song, and Mark E. Parry

Based on an analysis of 539 new ventures founded during the years 1991-2001, the authors reach the following conclusions. First, consistent with prior research, less than half of the 539 ventures survived more than 2 years. Second, economic downturns lead to higher failure rates for new ventures. Third, new venture success is highly correlated with first product success. Fourth, first product success is enhanced when those products are introduced into markets with emerging market needs but with established industry standards. Finally, first-product and venture performance are significantly higher for products based on ideas that came from the founders.

 

Success Factors in New Ventures: A Meta-analysis

Michael Song, Ksenia Podoynitsyna, Hans van der Bij, and Johannes I. M. Halman

After correcting for artifacts and sample size effects, the authors find that, among the 24 possible success factors identified in the literature, 8 are homogeneous significant success factors for new technology ventures (i.e., they are homogeneous positive significant meta-factors that are correlated to venture performance). They are supply chain integration, market scope, firm age, size of founding team, financial resources, founders' marketing experience, founders' industry experience, and existence of patent protection.

 

A Staged Service Innovation Model

Lisa Z. Song, Michael Song, and C. Anthony Di Benedetto

This article extends service innovation research by combining new product development and service quality development into a single study and opens the door to further work that could help improve the success rate of service innovations. The model can serve as a base model for future research extensions in service innovation research. A major takeaway for the academic reader is that the service innovation model demonstrates the value of using the SERVQUAL literature to understand how best to provide excellent quality that results in more fully satisfied customers and, ultimately, improved service performance. 

 

Do Market Information Processes Improve New Venture Performance?

Tang Wang and Michael Song

To test the theoretical model, the authors analyze data from 224 new ventures. Their findings indicate that, regardless of market condition, formal processes for the collection of market information are positively associated with the use of formal processes for market information utilization and this relationship is stronger among firms serving established markets. In addition, new venture performance is positively associated with the use of formal processes for utilizing market information and this relationship is also stronger in established markets. We also find that, in emerging markets, new venture performance is a positive function of the use of formal processes for collecting market information.

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