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The Influence of Functional and Relational Proximities on Business Angel Investments

PublikationArtikel (med peer review)
Alexander Hjertström, Företagandets villkor, Johannes Herrmann, Sofia Avdeitchikova

Sammanfattning

Business angels are a vital source of capital for innovative startup firms. However, even among potentially attractive investment opportunities, most are rejected during the angels investment decision process. Information asymmetry, risk and distrust in the relationship between the investor and the entrepreneur result in investment barriers. The concept of proximity has been proposed as a suitable conceptual foundation to understand how the relationship between angel and entrepreneur might hinder or benefit the investment decision. Particularly, researchers distinguish between functional (geographical) and relational dimensions of proximity. This paper examines the influence of proximity on business angel investments based on data from 226 investment situations gathered in fall 2014 from 56 business angels and 87 entrepreneurs in Sweden and analyzed using Structural Equation Modelling technique. We find that the relationship between geographical proximity and the likelihood of positive investment decision is indeed positive and significant, as indicated in prior research, but that it is fully mediated by relational proximity.

Keywords: Business angels; investment decision; functional proximity; relational proximity; structural equation modeling; mediation.

Related content: Working paper 253

Herrmann, J., Avdeitchikova, S., & Hjertstrom, A. (2016). The Influence of Functional and Relational Proximities on Business Angel Investments. International Journal of Entrepreneurship and Small Business, 29(3), 468-490. DOI: 10.1504/IJESB.2016.079424

Baserat på innehåll

The Influence of Functional and Relational Proximities on Business Angel Investments
Article (with peer review)Publikation
Herrmann, J., Avdeitchikova, S., & Hjertstrom, A.
Publiceringsår

2016

Sammanfattning

Business angels are a vital source of capital for innovative startup firms. However, even among potentially attractive investment opportunities, most are rejected during the angels investment decision process. Information asymmetry, risk and distrust in the relationship between the investor and the entrepreneur result in investment barriers. The concept of proximity has been proposed as a suitable conceptual foundation to understand how the relationship between angel and entrepreneur might hinder or benefit the investment decision. Particularly, researchers distinguish between functional (geographical) and relational dimensions of proximity. This paper examines the influence of proximity on business angel investments based on data from 226 investment situations gathered in fall 2014 from 56 business angels and 87 entrepreneurs in Sweden and analyzed using Structural Equation Modelling technique. We find that the relationship between geographical proximity and the likelihood of positive investment decision is indeed positive and significant, as indicated in prior research, but that it is fully mediated by relational proximity.

Keywords: Business angels; investment decision; functional proximity; relational proximity; structural equation modeling; mediation.

Related content: Working paper 253

Nominated procurement and the indirect control of nominated sub-suppliers: Evidence from the Sri Lankan apparel supply chain
Artikel (med peer review)Publikation
Fontana, E., Öberg, C., Poblete, L.
Publiceringsår

2021

Sammanfattning

This article describes and discusses nominated procurement as a means through which buyers select sub-suppliers to achieve sustainability compliance upstream in emerging economies’ supply chains. Hence, it critically examines the ways buyers articulate nominated procurement and the unfolding supply chain consequences. Based on in-depth interviews and fieldwork in the Sri Lankan apparel supply chain, the findings indicate that buyers accomplish sustainability compliance among their sub-suppliers while prioritizing their own business agenda. In doing so, however, buyers perpetuate “suboptimal compliance” of raw material suppliers and “sandwiching” of direct suppliers as harmful consequences on the supply chain. These consequences link theoretically with commercial, geographical, compliance and extended-compliance pressure. This article contributes to the advancement of the Sustainable Supply Chain Management literature by theorizing about nominated procurement, direct and indirect pressure, and pointing to the supply chain consequences beyond achievements in sustainability compliance.

Government-sponsored entrepreneurship education: Is less more?
Artikel (med peer review)Publikation
Sjöö, K., Elert, N. & Wennberg, K.
Publiceringsår

2020

Sammanfattning

Entrepreneurship research suggests that entrepreneurship education and training can bridge the gender gap in entrepreneurship, but little empirical research exists assessing the validity and impact of such initiatives. We examine a large government-sponsored entrepreneurship education program aimed at university students in Sweden. While a pre-study indicates that longer university courses are associated with short-term outcomes such as increased self-efficacy and entrepreneurial intentions, results from a more comprehensive study using a pre-post design suggest little effect from these extensive courses on long-term outcomes such as new venture creation and entrepreneurial income. In contrast, we do find positive effects on these long-term outcomes from more limited but more specific training interventions, especially for women. Our study suggests that less extensive but more tailored interventions can be more beneficial than longer or more extensive interventions in promoting entrepreneurship in general, and entrepreneurship of underrepresented groups in particular. We discuss implications for theory, education, and policy.

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