New Business Creation International Studies In Entrepreneurship Series Editors: Zoltan J. Acs Geroge Manson University Fairfox, VA, USA David B. Audretsch Indiana University Bloomington, IN, USA For other titles published in this series, go to www.springer.com/series/6149 Paul D. Reynolds Richard T. Curtin ● Editors New Business Creation An International Overview Editors Paul D. Reynolds Richard T. Curtin School of Public Policy Survey Research Center George Mason University University of Michigan Fairfax, VA, USA Ann Arbor, MI, USA [email protected] [email protected] ISBN 978-1-4419-7535-5 e-ISBN 978-1-4419-7536-2 DOI 10.1007/978-1-4419-7536-2 Springer New York Dordrecht Heidelberg London Library of Congress Control Number: 2010938796 © Springer Science+Business Media, LLC 2011 All rights reserved. This work may not be translated or copied in whole or in part without the written permission of the publisher (Springer Science+Business Media, LLC, 233 Spring Street, New York, NY 10013, USA), except for brief excerpts in connection with reviews or scholarly analysis. Use in connection with any form of information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed is forbidden. The use in this publication of trade names, trademarks, service marks, and similar terms, even if they are not identified as such, is not to be taken as an expression of opinion as to whether or not they are subject to proprietary rights. Printed on acid-free paper Springer is part of Springer Science+Business Media (www.springer.com) Dedicated to our wives, Eileen Curtin and Anne-Marie Reynolds, in recognition of their patience and support. Preface An Academy of Management Professional Development Workshop in August 2009 provided an overview of eight longitudinal panel studies of business creation. At an informal meeting of the various presenters, it was suggested that one way to facili- tate comparisons of the various projects and assist other researchers not familiar with the exciting challenges of collecting and analyzing panel data was to provide a collective progress report. Each national team agreed to provide an overview of their project and its status as of the end of 2009. This book is the product of that meeting and the subsequent efforts of the various national teams. Ironically, this volume will go to press just before the 2010 Academy of Management meetings, where the workshop of 2009 will be replicated with status reports from nine national projects. The editors very much appreciate the effort and time the national teams gave to make this book possible. The development, funding, and implementation of longitudinal studies of busi- ness creation is relatively recent, the first projects were implemented in the early 1990s. This volume represents a status report on 11 projects in nine countries. These projects form one of the more coherent and substantial research programs related to business creation and entrepreneurship. A substantial amount of new and unexpected information has been developed by this research program. The complexities of the business creation process and the long time required to reach fruition suggest there are major untapped opportunities for analysis and theoretical development. Our hope is that this book will encourage others to implement projects or invest in the analysis of the existing data sets to advance the understanding of this important topic. The chapters in this book demonstrate the complications of tracking the business creation process and the substantial scientific benefits of documenting one of the most critical features of market economies – new business creation. Richard T. Curtin Paul D. Reynolds Ann Arbor, MI, USA Steamboat Springs, CO, USA vii Contents 1 Introduction ............................................................................................. 1 Paul D. Reynolds and Richard T. Curtin 1.1 Introduction ...................................................................................... 1 1.2 Entrepreneurship and Firm Creation ................................................ 3 1.3 Conceptualization of the Entrepreneurial Process ........................... 5 1.4 Global Comparisons of Stages in the Business Life Course ............ 7 1.5 Overview of the Country Studies ..................................................... 11 1.6 Conceptual and Operational Definitions .......................................... 13 1.7 Chapter Overviews ........................................................................... 21 1.8 Commentary ..................................................................................... 24 References ................................................................................................. 24 2 Comprehensive Australian Study of Entrepreneurial Emergence (CAUSEE): Project Presentation and Early Results ........................... 27 Per Davidsson and Paul Steffens 2.1 Introduction ...................................................................................... 27 2.2 Context and Research Team ............................................................. 28 2.3 Definitions of Critical Events ........................................................... 29 2.4 Methodological Overview ................................................................ 32 2.5 Sample Characteristics and Early Results ........................................ 36 2.6 Additional Process Observations ..................................................... 43 2.7 A Brief Look at Outcomes ............................................................... 45 2.8 Concluding Remarks ........................................................................ 49 References ................................................................................................. 50 3 The Canadian Panel Study of Entrepreneurial Dynamics .................. 53 Monica Diochon, Yvon Gasse, and Teresa Menzies 3.1 Introduction ...................................................................................... 53 3.2 Research Collaboration .................................................................... 54 3.3 Conceptual and Operational Definitions of Critical Events ............. 55 3.4 Methodological Overview ................................................................ 55 ix x Contents 3.5 Data Collection .............................................................................. 56 3.6 Description of the Sample .............................................................. 58 3.7 Who Are Canadian Nascent Entrepreneurs? .................................. 64 3.8 Team Structures ............................................................................. 67 3.9 Nascent Entrepreneurs and Gender Issues ..................................... 68 3.10 Process ........................................................................................... 72 3.11 Outcome Overview ........................................................................ 72 3.12 Exploring the Factors Associated with Outcomes ......................... 75 3.13 Impact of the Project on Policy and Scholarship ........................... 90 3.14 Appendix ........................................................................................ 91 References ................................................................................................. 91 4 Anatomy of Business Creation in China: Initial Assessment of the Chinese Panel Study of Entrepreneurial Dynamics .................. 95 Yuli Zhang, Jun Yang, Kevin Au, and Paul D. Reynolds 4.1 Introduction ...................................................................................... 95 4.2 Research Context and Team ............................................................. 96 4.3 Previous Research and Design Considerations ................................ 96 4.4 Methodology .................................................................................... 102 4.5 Entrepreneurs: Number and Characteristics .................................... 105 4.6 The Start-up Process: What Nascent Entrepreneurs Do? ................ 111 4.7 The Outcome: What Types of Firms Are Started? ........................... 113 4.8 Conclusion ....................................................................................... 115 References ................................................................................................. 119 5 German Panel of Nascent Entrepreneurs ............................................. 123 Udo Brixy and Rolf Sternberg 5.1 Introduction ...................................................................................... 123 5.2 Project Development ........................................................................ 123 5.3 Intellectual Background and Framework ......................................... 124 5.4 Conceptual and Operational Definitions of Critical Events ............. 126 5.5 Methodological Overview ................................................................ 128 5.6 Entrepreneurs: How Many and What They Are Like? .................... 133 5.7 The Start-up Process ........................................................................ 136 5.8 Conclusions ...................................................................................... 140 References ................................................................................................. 141 6 Latvia: Panel Study of Entrepreneurial Dynamics Overview ............ 143 Vyacheslav Dombrovsky, Anders Paalzow, and Olga Rastrigina 6.1 Introduction ...................................................................................... 143 6.2 Project Development and Research Team ........................................ 144 6.3 Methodological Overview ................................................................ 145 6.4 Characteristics of Nascent Entrepreneurs and their Business Ventures ............................................................................ 151