Entrepreneurial management equity allocation and financing structure optimization of technology-based entrepreneurial firm

2018 ◽  
Vol 9 (3) ◽  
pp. 395-412 ◽  
Author(s):  
Xiang Hui ◽  
Bingxiang Li ◽  
Mingmin Li
Keyword(s):  
Human Capital ◽  
Structure Design ◽  
Debt Financing ◽  
High Tech ◽  
Allocation Model ◽  
Financing Structure ◽  
Content Type ◽  
Entrepreneurial Firm ◽  
Entrepreneurial Management ◽  
Stock Incentive

Purpose To satisfy the demand of initial investor for above-average capital return and the expectation of entrepreneurial management to establish their own business, this paper aims to explore a dynamic equity allocation model in which the shareholding ratio of the technology-based entrepreneurial firm changes with its growth and profit. Based on the dynamic equity allocation model, the authors design a financing structure which not only ensures timely and adequately obtaining the fund but also avoids equity dilution and safeguards the integrity of equity. Design/methodology/approach The paper selects high-tech companies listed in China as the sample for empirical research to identify the role of stock incentive and uses model deduction to find the equitable quantized benchmark for entrepreneurial management equity allocation. The study uses capital exclusivity as an entry point to perform theoretical analysis and demonstrates how the equity allocation of a technology-based entrepreneurial firm changes dynamically as the presentation speed of entrepreneurial management’s human capital exclusivity accelerates. The paper then constructs a conceptual model to design the financing structure of the technology-based entrepreneurial firm. Findings The study finds that stock incentive upwardly regulates debt financing and downwardly regulates equity financing. Based on characteristics of technology-based entrepreneurial firms, the paper suggests that the immediate surplus capital increment can signify the increasing presentation speed of human capital exclusivity, and it is proposed as an equitable quantized benchmark for equity allocation to entrepreneurial management. Based on the dynamic equity allocation model, the paper designs an internal equity and external debt financing structure. Originality/Value The conclusions enrich the theoretical foundation for entrepreneurial management to participate in residual claim and provide practical guidance for equity allocation and financing structure design in the context of mass entrepreneurship and innovation. The paper also sets up a conceptual framework for solving two major issues of the technology-based entrepreneurial firm: timely acquisition of external funding and lasting maintenance of entrepreneurial management stability.

Human capital and innovation: mixing apples and oranges on the board of high-tech firms

2019 ◽  
Vol 58 (5) ◽  
pp. 897-926 ◽  
Author(s):  
Fabrizia Sarto ◽  
Sara Saggese ◽  
Riccardo Viganò ◽  
Marianna Mauro
Keyword(s):  
Human Capital ◽  
Ordinary Least Squares ◽  
Primary Sources ◽  
Limited Attention ◽  
High Tech ◽  
Firm Innovation ◽  
High Tech Industry ◽  
Content Type ◽  
The Relationship ◽  
Practical Implications

Purpose The purpose of this paper is to provide insights into the implications of board human capital heterogeneity for company innovation by focusing on the educational and the functional background of directors. Moreover, it examines the moderating effect of the CEO expertise-overlap within the innovation domain on the relationship between board human capital heterogeneity and firm innovation. Design/methodology/approach The hypotheses are tested through a set of ordinary least squares regressions on a unique dataset of 149 Italian high-tech companies observed between 2012 and 2015. Findings Findings show that the educational and the functional background heterogeneity of directors increase both the innovation input and output. However, results highlight that these relationships are negatively moderated by the CEO expertise-overlap within the innovation domain. Practical implications The paper emphasizes the importance of appointing directors with different and specific educational and functional backgrounds to foster the company innovation. Originality/value The paper fills a gap in the literature as it has devoted limited attention to the performance implications of board human capital heterogeneity in the high-tech industry where knowledge and skills are the primary sources of value. Moreover, the paper integrates the research on the CEO-board interface by shedding light on how the CEO expertise within the innovation domain affects the contribution of heterogeneous boards to company innovation.

Towards a more integrated view of entrepreneurial careers

2015 ◽  
Vol 21 (6) ◽  
pp. 756-777 ◽  
Author(s):  
Jelena Zikic ◽  
Souha Ezzedeen
Keyword(s):  
Social Capital ◽  
Human Capital ◽  
Career Counseling ◽  
High Tech ◽  
Theory Approach ◽  
Structured Interviews ◽  
Content Type ◽  
Career Capital ◽  
Human And Social Capital ◽  
Entrepreneurial Careers

Purpose – The purpose of this paper is to employ intelligent career theory to simultaneously explore the relationships between three types of entrepreneurial career capital (i.e. motivations, human, and social capital). It illustrates the interconnectedness of these three forms of capital as an important way to study entrepreneurial careers and provide a new lens for understanding both personal and venture success. Design/methodology/approach – This qualitative study of 22 in depth semi-structured interviews explores career stories of entrepreneurs in the high tech industry. The interviews focus on examining three aspects of their career, motivations to become an entrepreneur, ways of learning and developing their human and social capital. Interviews were transcribed and coded using grounded theory approach. Findings – The findings describe how entrepreneurial careers as simultaneously shaped by three types of career capital: motivations (knowing-why), knowledge (knowing-how), and relationships (knowing-whom). It also illustrates the accumulation of career capital as a continuous cycle of interrelationships between these three types of capital. Research limitations/implications – In sum, the findings add to the knowledge on entrepreneurial careers and the role that the three types of capital play in venture formation and success. It also points to the importance of a more integrated view of these careers, embedded in a web of motivational, social, and human capital. Practical implications – The study’s findings suggest that entrepreneurs should paid equal attention and nurture each form of career capital throughout their careers. It also has implications for entrepreneurship programs as well career advisers to. Originality/value – Prior entrepreneurship research has examined aspects of entrepreneur’s career capital (e.g. intentions, social, and human capital) typically in isolation from one another and little is known about their reinforcing relationships in entrepreneurial careers. This study provides novel insights for understanding the three types of career capital and the importance of this more integrated view in entrepreneurship education and career counseling.

scholarly journals Entrepreneurial preparedness: an exploratory case study of Chinese private enterprises

2014 ◽  
Vol 20 (4) ◽  
pp. 351-374 ◽  
Author(s):  
Catherine L. Wang ◽  
Mohammed Rafiq ◽  
Xiaoqing Li ◽  
Yu Zheng
Keyword(s):  
Future Research ◽  
High Tech ◽  
Private Enterprises ◽  
Longitudinal Case Study ◽  
Structured Interviews ◽  
Content Type ◽  
Exploratory Case Study ◽  
Entrepreneurial Management ◽  
Practical Implications

Purpose – The purpose of this paper is to advance the conceptualisation of entrepreneurial preparedness (EP), and study how EP occurs in new venture creation and management. Design/methodology/approach – The paper primarily draws evidence from an exploratory case study of two Chinese high-tech private enterprises operating in the healthcare industry in Beijing, following a two-stage sampling process: informal, purposive sampling; and formal, theoretical sampling. Qualitative data collected from multiple semi-structured interviews within each firm were analysed using a thematic analytical framework. Findings – The paper advances the conceptualisation of EP as a cumulative, social and purposeful learning process. Accordingly, the paper highlights the roles of experiential learning, social learning and entrepreneurial goals (both performance and learning goals) as mechanisms that enable EP in entrepreneurial management. Research limitations/implications – The findings reveal idiosyncrasies of EP in a particular context. Future research may investigate different types of entrepreneurs or entrepreneurial firms. Furthermore, this study uses triangulation of retrospective interview data with concurrent interview and secondary data. Future research may pursue concurrent longitudinal case study data to unpack real-time events in entrepreneurial management. Practical implications – The findings have practical implications for entrepreneurs and “would-be” entrepreneurs to better understand their learning needs and how they can prepare themselves for entrepreneurial challenges. Originality/value – EP as an emerging concept within the entrepreneurial learning (EL) literature requires conceptual and empirical development. The paper advances the conceptualisation of EP, supported with empirical evidence. By articulating the cumulative, social and purposeful nature of EP, the paper contributes to the understanding of the human and social dynamics of EL.

The impact of intellectual capital on SMEs’ performance in China

2019 ◽  
Vol 20 (4) ◽  
pp. 488-509 ◽  
Author(s):  
Jian Xu ◽  
Jingsuo Li
Keyword(s):  
Human Capital ◽  
Intellectual Capital ◽  
Manufacturing Sector ◽  
Operating Efficiency ◽  
High Tech ◽  
Relational Capital ◽  
Content Type ◽  
Structural Capital ◽  
Capital Efficiency ◽  
The Impact

Purpose The purpose of this paper is to explore and compare the extent of intellectual capital (IC) and its four components in high-tech and non-high-tech small and medium-sized enterprises (SMEs) operating in China’s manufacturing sector, and to examine the relationship between IC and the performance of high-tech and non-high-tech SMEs. Design/methodology/approach The study uses the data of 116 high-tech SMEs and 380 non-high-tech SMEs listed on the Shenzhen stock exchanges during 2012–2016. The modified value added intellectual coefficient (MVAIC) model is used incorporating four components, namely, capital employed, human capital, structural capital and relational capital. Finally, multiple regression analysis is utilized to test the proposed research hypotheses. Findings The findings of this paper reveal that there is significant difference in MVAIC between high-tech and non-high-tech SMEs. The results further indicate a positive relationship between IC and financial performance of high-tech and non-high-tech SMEs. Specifically, IC is positively associated with firms’ earnings, profitability and operating efficiency. Additionally, capital employed efficiency, human capital efficiency and structural capital efficiency are found to be the most influential value drivers for the performance of two types of SMEs while relational capital efficiency possesses less importance. Practical implications This paper will provide a valuable framework for executives, managers and policy makers in managing IC within the Chinese context. Originality/value To the best knowledge of the authors, this is the first empirical study that has been conducted on high-tech and non-high-tech SMEs in the manufacturing sector in China.

scholarly journals The role of human capital in the foreign market performance of US SMEs: does owner ethnicity matter?

2021 ◽  
Vol 22 (7) ◽  
pp. 24-42
Author(s):  
Lorenzo Ardito ◽  
Viviana D'Angelo ◽  
Antonio Messeni Petruzzelli ◽  
Enzo Peruffo
Keyword(s):  
Human Capital ◽  
Ethnic Minorities ◽  
Intellectual Capital ◽  
Market Performance ◽  
Foreign Market ◽  
High Tech ◽  
Content Type ◽  
Market Expansion ◽  
Practical Implications

PurposeThis paper adopts an intellectual capital perspective to investigate the role of owners who are ethnic minorities in the foreign market expansion performance of SMEs, and in particular considers the human capital dimension of intellectual capital.Design/methodology/approachBased on the empirical investigation of a sample of 10,326 small- and medium-sized US high-tech manufacturing enterprises, the authors’ results reveal a positive relationship between the number of foreign markets where these SMEs operate and their financial performance, and that this effect is reinforced by the presence of ethnic minority owners, as ethnic minorities constitute a valuable source of intellectual capital which bring value to firms.FindingsThe authors’ findings reveal the importance of intellectual capital in an SME’s leadership position, specifically in terms of having individuals from normally disadvantaged groups as owners. In this sense, policymakers are crucial in supporting the inclusion of ethnic minorities in SME ownership, through advantageous treatment in firms, for example.Practical implicationsThe study presents practical implications for managers seeking foreign market expansion. In addition, when defining ownership structure (e.g., in the start-up phase), the role of human capital, in the form of ethnic minorities, should not be neglected, especially if an SME intends to operate or is already operating in different national contexts.Originality/valueThe authors’ results provide important insights into the positive effect of human capital on SME foreign market performance. The idea of a moderating role played by owners from ethnic minorities suggested here contributes to the literature on human capital and is one of the first attempts to consider this moderating factor in this relationship, especially in the SME context.

scholarly journals The Impact of CSR on the Capital Structure of High-Tech Companies in Poland

2021 ◽  
Vol 13 (10) ◽  
pp. 5467
Author(s):  
Barbara Grabinska ◽  
Dorota Kedzior ◽  
Marcin Kedzior ◽  
Konrad Grabinski
Keyword(s):  
Capital Structure ◽  
Financial Reporting ◽  
Academic Research ◽  
Debt Financing ◽  
High Tech ◽  
High Tech Industry ◽  
Reporting Practices ◽  
Csr Reporting ◽  
The Impact ◽  
The Capital Structure

So far, CSR’s role in the high-tech industry is not fully explained by academic research, especially concerning the most burdensome obstacle to firms’ growth: acquiring debt financing. The paper aims to solve this puzzle and investigate whether young high-tech companies can attract more debt by engaging in CSR activity. To address the high-tech industry specificity, we divided CSR-reporting practice into three broad categories: employee, social, and environmental and analyzed their impact on the capital structure. Our sample consists of 92 firm-year observations covering the period 2014–2018. Using a regression method, we found out that only employee CSR plays a statistically significant role in shaping capital structure. We did not find evidence for the influence of the other types of CSR-reporting practices. The results suggest that employees are the key resource of high-tech companies, and, for this reason, they are at the management’s focus. This fact is visible at the financial reporting level and, as we interpret results, is also considered by credit providers. In a more general way, our results suggest that firms tend to choose CSR based on the importance of crucial resources.

Towards a taxonomy of intergenerational knowledge transfer practices

2018 ◽  
Vol 25 (2) ◽  
pp. 81-91
Author(s):  
Kerstin Kuyken ◽  
Mehran Ebrahimi ◽  
Anne-Laure Saives
Keyword(s):  
Knowledge Transfer ◽  
Comparative Study ◽  
Design Methodology ◽  
Qualitative Case Study ◽  
High Tech ◽  
Content Type ◽  
Case Study Design ◽  
Younger Workers ◽  
Intergenerational Knowledge

Purpose This paper aims to develop a better understanding of intergenerational knowledge transfer (IKT) practices by adopting a context-related and comparative perspective. Design/methodology/approach A qualitative case study design involving 83 interviews and non-participative observation in German and Quebec organizations has been chosen. Findings Two distinctive archetypes of IKT emerge from both national contexts: “we-individualizing” (Germany) and “I-connecting” (Quebec), leading to an eightfold taxonomy of IKT practices. Research limitations/implications This research is limited to young and senior workers and to high-tech sectors. Originality/value Comparative and inductive study of IKT, adaptation of IKT practices to national contexts, retaining younger workers. This inductive and comparative study allows a better adaptation of IKT practices to national contexts and therefore a better retention of younger workers.

scholarly journals Developmental Human Resource Configuration, Unique Human Capital, and Employee Innovative Work Behavior: A Multilevel Moderated Mediation Model

SAGE Open ◽  
2021 ◽  
Vol 11 (2) ◽  
pp. 215824402110279
Author(s):  
Po-Chien Chang ◽  
Man-Jing Zhang ◽  
Ting Wu
Keyword(s):  
Human Capital ◽  
Human Resource ◽  
Social Exchange ◽  
Work Behavior ◽  
High Tech ◽  
Full Time ◽  
Resource Configuration ◽  
Innovative Work Behavior ◽  
Innovative Work ◽  
Empowerment Climate

Drawing on social exchange theory (SET), the purposes of this research are to investigate the effect that developmental human resource configuration (DHRC) has on employee innovative work behavior (IWB) and to examine the role that an empowerment climate plays in the relationship. The study assumes that knowledge workers perform IWB if they perceive the application of DHRC and the empowerment climate to support autonomy, information sharing, and team accountability. The data were collected from 37 R&D managers and 370 full-time R&D engineers, constituting 37 different high-tech companies in Guangdong province, China. Results show that a positive relationship between DHRC and IWB was found and was partially mediated by unique human capital. Findings also demonstrate that empowerment climates strengthen this relationship. The implications of the findings and future directions for research are further discussed.

Globalization and Transnational Human Capital: Overseas and Returnee Scholars to China

2004 ◽  
Vol 179 ◽  
pp. 735-757 ◽  
Author(s):  
David Zweig ◽  
Chen Changgui ◽  
Stanley Rosen
Keyword(s):  
Human Capital ◽  
Foreign Capital ◽  
High Tech ◽  
Employment System ◽  
Goods And Services ◽  
New Ideas ◽  
Chinese Scholars ◽  
The Government ◽  
Education And Employment ◽  
People’S Perceptions

As societies internationalize, the demand for, and the value of, various goods and services increase. Individuals who possess new ideas, technologies and information that abets globalization become imbued with “transnational human capital,” making them more valuable to these societies. This report looks at this issue from five perspectives. First, it shows that China's education and employment system is now highly internationalized. Secondly, since even Chinese scholars sent by the government rely heavily on foreign funds to complete their studies, China is benefiting from foreign capital invested in the cohort of returnees. Thirdly, the report shows that foreign PhDs are worth more than domestic PhDs in terms of people's perceptions, technology transfer and in their ability to bring benefits to their universities. Finally, returnees in high tech zones, compared to people in the zones who had not been overseas, were more likely to be importing technology and capital, to feel that their skills were in great demand within society, and to be using that technology to target the domestic market.

scholarly journals Rough diamonds in emerging markets: legacy, competitiveness, and sustained high performance

2019 ◽  
Vol 26 (3) ◽  
pp. 363-386
Author(s):  
Seung Ho Park ◽  
Gerardo R. Ungson
Keyword(s):  
Human Capital ◽  
Emerging Markets ◽  
High Performance ◽  
Core Competencies ◽  
Market Potential ◽  
Government Support ◽  
Screening Tests ◽  
Institutional Voids ◽  
Content Type ◽  
Over Time

Purpose The purpose of this paper is to uncover the underlying drivers of sustained high performing companies based on a field study of 127 companies in Brazilian, Russian, Indian and Chinese (BRIC) and Association of Southeast Asian Nations (ASEAN) emerging markets. Understanding these companies provides a complementary way of appraising the growth, development and transformation of emerging markets. The authors synthesize the findings in an overarching framework that covers six strategies for building and sustaining legacy that leads to the succession of intergenerational wealth over time: overcoming institutional voids, inclusive markets, deepening localization, nurturing government support, building core competencies and harnessing human capital. The authors relate these strategies to different levels of development using Prahalad and Hart’s BOP framework. Design/methodology/approach This study examines the underlying drivers of sustained high-performance companies based on field studies from an initial set of 105,260 BRIC companies and close to 500 companies in ASEAN. The methods employed four screening tests to arrive at a selection of the highest-performing firms: 70 firms in the BRIC nations and 58 firms from ASEAN. Following the selection, the authors constructed cases using primary interviews and secondary data, with the assistance of Ernst & Young and with academic colleagues in Manila. These studies were originally conducted in two separate time periods and reported accordingly. This paper synthesizes the findings of these two studies to arrive at an extended integrative framework. Findings From the cases, the authors examine six strategies for building and sustaining legacy that lead to high performance over time: overcoming institutional voids, creating inclusive markets, deepening localization, nurturing government support, building core competencies and harnessing human capital. To address the evolving state of institutional voids in these countries, the authors employ similar methods to hypothesize the placement of these strategies in the context of the world economic pyramid, initially formulated as the “bottom of the pyramid” framework. Originality/value This paper synthesizes and extends the authors’ previous works by proposing the concept of legacy to describe the emergence and succession of local exemplary firms in emerging markets. This study aims to complement extant measures of nation-growth based primarily on GDP. The paper also extends the literature on institutional voids in shifting the focus from the mix of voids to their evolving state. Altogether, the paper provides a complementary narrative on assessing the market potential of emerging markets by adopting several categories of performance.

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