Institutional Conditions of Entrepreneurship

Question 1

According to Spigel and Harrison, what do entrepreneurs seek from their environment? Give more detailed examples.

Answer 1

• Cultural Resources (eg. acceptance, success stories)
• Social Resources (eg. mentorship, expertise)
• Material resources (eg. political infrastructure, physical infrastructure)

Question 2

Which kinds of entrepreneurs can we identify?

Answer 2

Schumpeterian Entrepreneurship and Non-Schumpeterian Entrepreneurship. While the first one has mainly 1) High Innovation 2) High aspirations, the second is usually permanently small.

The name comes from Schumpeter that introduces the theme of Creative Distruction and drastically replacing the old.

Question 3

Why are there differences in entrepreneurship across countries? Is it possible to establish one theory about it?

Answer 3

Entrepreneurship can be categorized as a dynamic dependent on the context. As such, we cannot sigularly look at the psychological aspects and similars but we need QUALITATIVE and DIVERSE data. Furthermore Institutional environments often offer a COMPARATIVE ADVANTAGE.

Question 4

What are institutions? What is the difference between formal and informal?

Answer 4

Institutions are conglomerates that set the rules for the entrepreneurial game. Formal institutions are subjected to tax and laws, while informal have the influence to SHAPE BEHAVIOUR but not to regulate it.

Question 5

Who wrote Varieties of Capitalism? What does it talk about or refer to?

Answer 5

Varieties of Capitalism was written by Hall & Soskice to explain that not all capitalistic economies find themselves in the same context. Instead, there is the presence of institutions that govern the educational systems, financial markets etc.

Question 6

What does degree of coordination mean when we talk about the VoC framework?

Answer 6

The VoC framework was proposed by Hall & Soskice = Varieties of Capitalism. In this sense, the degree of coordination indicate whether the country invests more on firm-specific skills or industry-specific skills.

Question 7

What two forms of coordinations are there in the VoC framework? What do they entail?

Answer 7

In the VoC framework by Hell & Soskice, there is the Strategic (relational) coordination and the arm’s length coordination.

• In a STRATEGIC COORDINATION, firms and training schools cooperate to work in the industry on a long-term.
• In a ARM STRENGHT COORDINATION (like the US) contracts are short-term and based on demand.

Question 8

What two main varieties of capitalism exist?

Answer 8

According to Hall & Soskice, who wrote about the VoC framework, there are LMEs and CMEs.

LMEs = LIBERAL MARKET ECONOMIES
- A lot of equity as mode of financing
- Generic education (non specific needed)
- Weak cooperation across industries

CMEs - COORDINATED MARKET ECONOMIES
- Loans through banks
- Vocational training (specialized universities)
- Stronger partnership collaboration