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SBE Lect 5_ Part 5: ch7 Global entrepreneurship Monitor (Why economists…
SBE Lect 5_ Part 5: ch7 Global entrepreneurship Monitor
Implications
Social identity
plays crucial role in occupational choice (through gains and losses in identity)
◦ Multiple social identities are important (not only religious commitment)
Your social identity brings you more than “prescriptions”: Networks
Mediating effects are negative (as hypothesized)
Networks: Social capital
Cf. Human capital, financial resources (capital)
◦ Overcoming liability of newness: Lack of credibility to customers and suppliers of a business with no “track record”
Close relation between the business-owner and his/her business network
To start and run a small business, social capital is extremely important
‘...the sum of the actual and potential resources embedded within, available through, and derived from the network of relationships possessed by an individual or social unit. Social capital thus comprises both the network and the assets that may be mobilised through that network’
Network have specific features
Network governance – the ‘glue’ that binds people together is
trust: This makes it ‘cheaper’ to do business
Network structure – the types of ties (weak and strong). Focus then is on, for example, the size of the network, its density, its diversity and where the individual sits in a network
Network content – use and access of resources (e.g., financial, emotional support)
Why economists find networks difficu
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3. Ambiguous empirical evidence
– some ties are always needed.
4. Costs of networking
– get what you put in? Networking a ‘two way street’?
2. Compensation thesis
– people only network because they lack other resources?
5. Social embeddedness
– Oversocialised view of economic behaviour? People motivated by economic return rather than trust?
1. Definitional issues
– Close relation between nascent entrepreneur(s) and business, networks are subjective
Rather than networks, economists focus on framework conditions
GEM: National Experts Survey
Views of experts on conditions for entrepreneurship (SME) in a particular country
9 Entrepreneurial Framework Conditions (EFCs)
see slide 17/26
“The necessary oxygen of resources, incentives, markets and supporting institutions for the creation and growth of new firms”