Tenth Annual
SMITH ENTREPRENEURSHIP RESEARCH CONFERENCE
Thu-Sat, April 24-26, 2014
Conference Co-Chairs:
Anil Gupta (agupta@rhsmith.umd.edu; cell: 301.537.6738)
David Kirsch (dkirsch@rhsmith.umd.edu; cell: 301.760.4185)
Advisory Board:
Howard Aldrich, U-North Carolina
Kathleen Eisenhardt, Stanford
Will Mitchell, Toronto
Toby Stuart, UC-Berkeley
Conference Location:
Room 1505, Van Munching Hall
Smith Business School
The University of Maryland
College Park, MD 20742
Guest Lodging:
Marriott Inn & Conference Center
3501 University Drive E
Hyattsville, MD 20783
(301) 985-7385
Supported by:
Department of Management & Organization, University of Maryland
Ewing Marion Kauffman Foundation
Dingman Center for Entrepreneurship, Robert H. Smith School of Business
10th Annual Smith Entrepreneurship Research Conference
Conference Program
Doctoral Consortium
Thu, April 24, 2014 – Room 2511, Van Munching Hall
12:00-1:00pm
Registration & Lunch
1:00-2:00pm
THOUGHT LEADERSHIP TALK
• Rajshree Agarwal (Maryland)
2:00-3:00pm
ROUNDTABLE DISCUSSIONS – PHD STUDENTS’ RESEARCH
• 4 Roundtables (4-5 students + 1-2 faculty per table)
3:00-3:30pm
Break
3:30-4:30pm
PANEL - COMPLETING THE DISSERTATION AND MANAGING THE JOB
SEARCH PROCESS
• Mahka Moeen, Univ of South Carolina
• Shweta Gaonkar, Univ of Maryland
• Robert Vesco, Univ of Maryland
4:30-5:30pm
ROUNDTABLE DISCUSSIONS – PHD STUDENTS’ RESEARCH
• 4 Roundtables (4-5 students + 1-2 faculty per table)
5:45pm onwards
COCKTAILS AND DINNER – ROOM 2517
Research Conference
Fri, April 25, 2014 – Room 1505, Van Munching Hall
8.00-8.30am
Registration & Continental Breakfast
8:30-10:00am
SESSION 1: ENTREPRENEURIAL CHOICE
• Deepak Hegde (NYU): Unobserved ability and entrepreneurship (20 min) –
with Justin Tomlinson (Munich)
• Amy Nguyen-Chyung (Michigan): Why some entrepreneurs are more
entrepreneurial than others (20 min)
• Comments (20 min): Brent Goldfarb (Maryland)
• Open Discussion (30 min)
10:00-10:30am
Break
10:30amSESSION 2: CROWDFUNDING AND ACCELERATORS
12:00pm
• Christian Catalini (MIT): Some simple economics of crowdfunding (20 min) –
with Ajay Agarwal (Toronto) and Avi Goldfarb (Toronto)
• Comments (10 min): Siva Viswanathan (Maryland)
• Susan Cohen (Richmond): Unpacking the role of vicarious learning in new
venture strategy formation and implementation (20 min) – with Chris Bingham
(UNC)
• Comments (10 min): Christine Beckman (Maryland)
• Open Discussion (30 min)
12:00-1:30pm
Lunch - Rm 2333
1:30-3:00pm
SESSION 3: EMERGENCE AND DIFFUSION OF INNOVATIONS
• Lite J. Nartey (South Carolina): Drivers of adoption of bottom-of-the-pyramid
innovations: The case of mobile money (20 min)
• Comments (10 min): Anil Gupta (Maryland)
•
3:00-3.30pm
3:30-5:00pm
6:00pm
7:00pm
Tim Hannigan (Oxford): Network text analysis of the pre-history of a product
market (20 min) – with Marc Ventresca (Oxford) and Victor Seidel (Babson &
Oxford)
• Comments (10 min): David Kirsch (Maryland)
• Open Discussion (30 min)
Break
SESSION 4: PANEL ON “VENTURE CAPITAL SYNDICATION”
• Grant Allen, Senior Vice-President, ABB Technology Ventures
• Kiran Hebbar, General Partner, Valhalla Partners
• Tom Scholl, Venture Partner, Novak Biddle Venture Partners
• Anil Gupta, Univ of Maryland - Moderator
Marriott Inn & Conference Center
Cocktails – The Common
Dinner – Private Room
Keynote: Howard Aldrich, UNC (“The Maker Movement: Everyone a Capitalist
and the Democratization of Entrepreneurship”)
Sat, April 26, 2014 - Room 1505, Van Munching Hall
8.00-8.30am
Continental Breakfast
8:30-10:00am
10:00-10:30am
10:30am12:00pm
12:00-1:00pm
SESSION 5: RECOMBINATIONS
• Elizabeth Pontikes (Chicago): Perspectives on recombination (20 min)
• Comments (10 min): David Waguespack (Maryland)
• Brad Greenwood (Maryland): A Brief History of Stenting: Antecedents of
organizational technology adoption and abandonment (20 min) – with Ritu
Agarwal (Maryland), Rajshree Agrawal (Maryland) & Anand Gopal (Maryland)
• Comments (10 min): Diane Burton (Cornell)
• Open Discussion (30 min)
Break
SESSION 6: STATUS, COMPETITION AND INNOVATION
• Daniel Malter (HBS): Status hierarchies, incentive structures, and competition:
a matched-sample study of two organizational status hierarchies (20 min)
• Comments (10 min): Waverly Ding (Maryland)
• Alex Oettl (Georgia Tech): Why are some regions more innovative than others?
The role of firm size diversity (20 min) – with Ajay Agarwal (Toronto), Iain
Cockburn (Boston Univ), and Alberto Galasso (Toronto)
• Comments (10 min): Wilbur Chung (Maryland)
• Open Discussion (30 min)
Lunch & Close
Smith 2014Entrepreneurship Research Conference
Faculty Paper Abstracts
Unobserved ability and entrepreneurship
Deepak Hegde (NYU) - with Justin Tomlinson (Munich)
Why do individuals become entrepreneurs? When do they succeed? We develop a formal model in which
individuals use pedigree (educational qualifications) as a signal to convince employers of their
unobserved ability. However, this signal is imperfect, and individuals who correctly believe their ability is
greater than their pedigree conveys to employers, choose entrepreneurship. Since ability, not pedigree,
matters for productivity, entrepreneurs earn more than employees of the same pedigree. Our preliminary
empirical analysis of two separate nationally representative longitudinal samples of individuals residing in
the US and the UK supports the model’s predictions that (A) Entrepreneurs have higher ability than
employees of the same pedigree, (B) Employees have better pedigree than entrepreneurs of the same
ability, and (C) Entrepreneurs earn more than employees (conditional on pedigree), on average, and their
earnings display higher variance. We discuss the implications of our findings for entrepreneurship,
education, and public policy.
Why some entrepreneurs are more entrepreneurial than others
Amy Nguyen-Chyung (Michigan)
This study posits that prospective entrepreneurs face a spectrum of entrepreneurial choices rather than a
binary employment-entrepreneurship decision and explores how key cognitive and behavioral
determinants may influence entrepreneurs’ divergent choices in unexpected ways. Using novel panel data
in an industry in which the individuals are all self-employed but some own businesses whereas others are
more employee-like, I show that talent, risk attitudes and overconfidence predict selection into
entrepreneurial choices that vary by risk, autonomy and returns to talent. My results also reveal
differences in the effects between specialized and general talent and effects of overconfidence that vary
by talent. Among less productive entrepreneurs, overconfidence increases the likelihood that one exits
whereas among more productive entrepreneurs, more overconfidence increases the likelihood of
becoming an owner. These findings suggest that research over the last three decades that relies solely on a
self-employment definition of entrepreneurship or on uni-dimensional drivers obscures complex choices
and has incompletely measured the determinants of entrepreneurial choice.
Some simple economics of crowdfunding
Christian Catalini (MIT) – with Ajay Agarwal (Toronto) and Avi Goldfarb (Toronto)
It is not surprising that the financing of early-stage creative projects and ventures is typically
geographically localized since these types of funding decisions are usually predicated on personal
relationships and due diligence requiring face-to-face interactions in response to high levels of risk,
uncertainty, and information asymmetry. So, to economists, the recent rise of crowdfunding - raising
capital from many people through an online platform - which offers little opportunity for careful due
diligence and involves not only friends and family but also many strangers from near and far, is initially
startling. On the eve of launching equity-based crowdfunding, a new market for early-stage finance in the
U.S., we provide a preliminary exploration of its underlying economics. We highlight the extent to which
economic theory, in particular transaction costs, reputation, and market design, can explain the rise of
non-equity crowdfunding and offer a framework for speculating on how equity-based crowdfunding may
unfold. We conclude by articulating open questions related to how crowdfunding may affect social
welfare and the rate and direction of innovation.
Unpacking the role of vicarious learning in new venture strategy formation and implementation
Susan Cohen (Richmond) – with Chris Bingham (UNC)
How firms form and implement strategy is of central importance to the field of strategic management. To
date, however, research on this topic largely assumes that entrepreneurs select and advance their initial
strategy on their own -- with little help from ‘others’ outside the organization. This notion largely
understates the role of vicarious learning in the formation and implementation of strategy. Using an
inductive multiple-case research design of new ventures participating in accelerators—intensive
entrepreneurship education programs - this study reveals the critical and nuanced role of vicarious
learning in strategy formation and implementation. More subtly, we show the importance of both the type
and the timing of vicarious learning. Some external actors are more useful for strategy formation while
others are more useful for strategy implementation and still others are useful throughout. Besides
contributing to strategy and organization theory by unpacking the role of vicarious learning in the genesis
of firm strategy, we add to entrepreneurship by pioneering academic research on the purpose and
effectiveness of accelerators.
Drivers of adoption of bottom-of-the-pyramid innovations: The case of mobile money
Lite J. Nartey (South Carolina)
An important means to create social value and change the fortunes of the 4 billion poor at the bottom of
the pyramid while symbiotically creating financial value for firms, is through the creation of
technological innovations that create new markets for these individuals. However, even with tailor-made
innovations, if the actors at the BOP do not adopt the innovation, the means of the firm to create social
and financial value is limited. Using the emergent mobile money industry in Ghana, I explore the question
of knowledge and trust as key drivers of the adoption of mobile money technology by BOP actors. I use a
novel hand-coded database created from 2,250 surveys conducted in the poor urban areas in Accra.
Network text analysis of the pre-history of a product market
Tim Hannigan (Oxford) – with Marc Ventresca (Oxford) and Victor Seidel (Babson & Oxford)
Product market emergence has typically been studied through market action. Different product designs
eventually settle into a dominant design that serves as a platform for market growth. Less studied are
historical antecedents that impact nascent market activity. We know that discourse is fundamental to
sensemaking amidst ambiguity, but its impact in a pre-history is not well understood. To analyze this, we
developed a novel text network analysis method using computational linguistics. We applied this method
to technology-blog data to analyze the pre-history of the ‘tablet’ computer. The network text analysis of
these data show concepts cohering in advance of a main firm announcement. This paper contributes a new
method to analyze pre-history discourse, and provides substantive evidence about product ontologies in
advance of a market.
Perspectives on recombination
Elizabeth Pontikes (Chicago)
Research in economics and sociology over the past century has pointed to recombination as the source for
novel social and economic developments. This study suggests that the categorical structure a person uses
to understand a domain is fundamental to this concept. This is studied in an investigation of venture
capital financing of software organizations. Findings show that venture capitalists are more likely to
invest in companies that engage in recombination based on market categories, but that traditional
measures of recombination based on patent classes do not have predictive value. Results are strongest for
private equity venture capitalists and weakest for corporate venture capitalists, suggesting that people who
value novelty based on breaking down existing boundaries will favor recombination, while those who
prefer progress that reinforces existing categories will avoid it.
A Brief History of Stenting: Antecedents of organizational technology adoption and abandonment
Brad Greenwood (Maryland) – with Ritu Agarwal (Maryland), Rajshree Agrawal (Maryland) &
Anand Gopal (Maryland)
Although the adoption of technology has received significant attention in management research
the study of the abandonment has lagged. In this work, we investigate how factors which
influence an organization’s willingness to adopt technology also influence its decision to
abandon technology after its efficacy is questioned. Arguing that organizational incentives which
are aligned during periods of adoption may become misaligned during periods of abandonment,
we investigate how economic and non-economic organizational incentives moderate the
abandonment of technology. Results indicate that pecuniary incentives will retard the
abandonment of technology, if it can still be leveraged for economic gain. However, reputational
incentives to adhere to scientific norms and exist on the cutting edge of practice dominate these
economic motives (resulting in an accelerated abandonment). Importantly, while we find that
while non-pecuniary incentives dominate economic incentives at the organizational level, this
same domination is not observed with individual level reputational incentives.
Status hierarchies, incentive structures, and competition: a matched-sample study of two
organizational status hierarchies
Daniel Malter (HBS)
This paper offers the first quantitative comparison between two organizational status hierarchies. I study
the incentive structures and the competition for quality in two wine-growing areas in Bordeaux in which
the status hierarchies differ in their rigidity but share the same institutional context otherwise.
Surprisingly, the incentives to invest in quality as well as producer mobility in terms of quality and price
are virtually indistinguishable between these two areas. These non-results suggest that status hierarchies
among organizations are natural characteristics of markets and that the size of the advantage they confer
is independent of the rigidity of the status hierarchy. The implications for competition, policy, and
entrepreneurship, and the limitations of this study are discussed.
Why are some regions more innovative than others? The role of firm size diversity
Alex Oettl (Georgia Tech) – with Ajay Agarwal (Toronto), Iain Cockburn (Boston Univ), and
Alberto Galasso (Toronto)
Large firms spawn spin-outs caused by innovations deemed unrelated to the firm's overall business. Small
firms generate demand for specialized services that lower entry costs for others. We study the interplay of
these two localized externalities and their impact on regional innovation. We examine MSA-level patent
data during the period 1975-2000 and find that innovation output is higher in regions where large and
small firms coexist. The finding is robust to across-region as well as within-region analysis, and the effect
is stronger in certain subsamples consistent with our explanation but not the plausible alternatives.