Practice makes perfect

PublicationArticle (with peer review)

Entreprenörskap, Erfarenhet, Företagandets villkor, Karl Wennberg, Performance, Phillip H. Kim, Praktik, Rasmus Toft-Kehler

Abstract

This study tackles the puzzle of why increasing entrepreneurial experience does not always lead to improved financial performance of new ventures. We propose an alternate framework demonstrating how experience translates into expertise by arguing that the positive experience–performance relationship only appears to expert entrepreneurs, while novice entrepreneurs may actually perform increasingly worse because of their inability to generalize their experiential knowledge accurately into new ventures. These negative performance implications can be alleviated if the level of contextual similarity between prior and current ventures is high. Using matched employee–employer data of an entire population of Swedish founder-managers between 1990 and 2007, we find a non-linear relationship between entrepreneurial experience and financial performance consistent with our framework. Moreover, the level of industry, geographic, and temporal similarities between prior and current ventures positively moderates this relationship. Our work provides both theoretical and practical implications for entrepreneurial experience—people can learn entrepreneurship and pursue it with greater success as long as they have multiple opportunities to gain experience, overcome barriers to learning, and build an entrepreneurial-experience curve.

Related content: Working Paper No. 210

Toft-Kehler, R., Wennberg, K. & Kim, P. H. (2014). Practice makes perfect: Entrepreneurial-experience curves and venture performance. Journal of Business Venturing, 29(4), 453-470. DOI: 10.1016/j.jbusvent.2013.07.001

Does local government corruption inhibit entrepreneurship?

Article (with peer review)Publication

Wittberg, E., Erlingsson, G. Ó., Wennberg, K.

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Publication year

2024

Published in

Small Business Economics, 62(2), 775-806

Abstract

The dominant ‘sand in the wheels’ view holds that entrepreneurship is strongly inhibited by corruption. Challenging this, the ‘grease the wheels’ view maintains that corruption might increase entrepreneurship in highly regulated economies. We extend the basic predictions of these theories by examining entrepreneurs’ start-up decisions, as well as their location choices, in a seemingly low-corruption environment: Swedish municipalities. Combining a validated index of corruption perceptions in local government with population data on new entrepreneurs, nested logit models reveal that even in a low-corruption setting such as Sweden, perceptions of corruption can deter latent entrepreneurs. We also find that a minority of entrepreneurs relocate from their home municipalities to establish their start-ups elsewhere. Surprisingly and contrary to expectations, these relocating entrepreneurs often relocate from relatively low-corruption municipalities to others that are more corrupt. Implications for future research and public policy are discussed.

The state of the entrepreneurial state: Empirical evidence of mission-led innovation projects around the globe. In Moonshots and the New Industrial Policy (pp. 125–143)

Book chapterPublication

Batbaatar, M., Larsson, J. P., Sandström, C., & Wennberg, K.

Publication year

2024

Published in

In Moonshots and the New Industrial Policy (pp. 125–143). Springer.

Abstract

This chapter reviews theoretical rationales for mission-oriented innovation policy and provides an empirical overview of extant 28 papers and 49 cases on the topic. We synthetize varieties of mission formulations, actors involved, and characteristics of missions described as more or less failed or successful. Fifty-nine percent of the studied missions are still ongoing, 33 percent are considered successful, and 8 percent as failures. Sixty-seven percent of the studied missions have taken place in Europe, 24 percent in North America, and 8 percent in Asia. The majority of innovation projects referred to as missions do not fulfill the criteria defined by the OECD. Results suggest that missions related to technological or agricultural innovations are more often successful than broader types of missions aimed at social or ecological challenges. Challenges regarding the governance and evaluation of missions remain unresolved in the literature. We find no case that contains a cost-benefit analysis or takes opportunity cost into account.

How Fares the Entrepreneurial State? Empirical Evidence of Mission-Led Innovation Projects Around the Globe

Article (with peer review)Publication

Batbaatar, M., Larsson, J. P., Sandström, C., & Wennberg, K.

Publication year

2024

Published in

Foundations and Trends® in Entrepreneurship, 19(8), 664-772.

Abstract

While considerable efforts have been made to conceptualize and outline the theoretical and normative logic of mission-oriented innovation policies and the role of the entrepreneurial state, there is a stark lack of empirical studies concerning how missions are designed and executed, and when they may work or do not. This monograph reviews theoretical rationales for mission-oriented innovation policy and provides an empirical overview of 30 articles which together cover 51 concluded or ongoing missions from around the world. We synthetize varieties of mission formulations, actors involved, and analyze characteristics of missions described as more or less failed or successful. Among the projects analyzed, many do not fulfill common definitions of “innovation missions.” Missions related to technological or agricultural innovations seem more often successful than broader types of missions aimed at social or ecological challenges, and challenges in the governance and evaluation of missions remain unresolved in the literature. None of the mission cases contain a cost-benefit analysis or takes opportunity cost into consideration.

Abstract

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