An analysis of factors affecting the profits of new firms in Spain: Evidence from the food industry

Using the logistic model, this article investigates the influence of financial factors on gaining profits for new firms in the Spanish food industry. Specifically, the firms founded separately during the crisis period and during the postcrisis period are observed for their first three years. The findings suggest that indebtedness (for both periods), previous profitability (for the postcrisis period) and accounts payable (for the crisis period) were most frequently statistically significant in the logistic model. Hence, for new firms, controlling debt burden, accumulating internally generated funds and using payables to establish business relationships can help to gain profits. Firm size and asset rotation were significant in the first year (especially during the postcrisis period), with a positive relationship to profits. Given that the food industry is highly competitive, enlarging firm size to reach efficiencies of scale and using a low-price strategy with high asset rotation to obtain market share are effective marketing strategies for new firms. This article contributes to the empirical studies about the financial effects on new firms' profits in the food industry; it can also help potential entrepreneurs make better decisions about starting new businesses and help to manage new firms better in different macroeconomic environments.

The Impact of COVID-19 on the Size Distribution of New Firms in Turkey

A surge in new firm registrations have been one of the most intriguing outcomes of the economic turbulence caused by the COVID-19 pandemic. Turkey followed a similar pattern to many other economies that observed an initial drop and a rapid V-shaped recovery of entry when the virus hit the country. However, the size distribution of new firms has been very different. While others experience a strong rise in smaller entrants, larger firms have dominated the pack in Turkey. As a widely-known long-term problem of the Turkish economy, which has been accused of causing the stagnation of growth, miniscule firms have been losing their weight rapidly among the entrants. It revives lost hopes for the future of the economy and also motivates questions regarding the other determinants of such transformation in new firm formation.

Do unions contribute to creative destruction?

We apply a shift-share approach and historical unionisation data from 1918 to study the impact of regional unionisation changes in Norway on regional wage and productivity growth, job-creation and -destruction and social security uptake during the period 2003–2012. As unionisation increases, wages grow. Lay-offs through plant closures and shrinking workplaces increase, causing higher retirement rates, while job creation, plant entry and other social security uptakes are unaffected. Productivity grows, partly by enhanced productivity among surviving and new firms and partly by less productive firms forced to close due to increased labour costs. Thus, unions promote creative destruction.

Are founder-CEOs resilient to crises? The impact of founder-CEO succession on new firm survival

This article explores whether new firms managed by founder-chief executive officers (CEOs) are more likely to survive than those managed by successor-CEOs in times of crisis. Drawing on the concept of ‘resilience’ to adversity, we argue that founder-CEOs increase the likelihood of new firm survival, especially in times of crisis. Using a sample of Japanese firms founded during the 2003–2010 period, we examine the impact of founder-CEO succession on new firm survival. The analysis shows that new firms managed by founder-CEOs are less likely to liquidate than those managed by successor-CEOs, especially during the 2008–2009 financial crisis. This suggests that founder-CEOs are more resilient to crises than successor-CEOs. In contrast, new firms managed by successor-CEOs are more likely to exit via merger than those managed by founder-CEOs, regardless of macroeconomic conditions. These findings are robust after controlling for the endogeneity of CEO succession.

Partisan Entrepreneurship

Republicans start more firms than Democrats. Using a sample of 40 million party-identified Americans between 2005 and 2017, we find that 6% of Republicans and 4% of Democrats become entrepreneurs. This partisan entrepreneurship gap is time-varying: Republicans increase their relative entrepreneurship during Republican administrations and decrease it during Democratic administrations, amounting to a partisan reallocation of 170,000 new firms over our 13 year sample. We find sharp changes in partisan entrepreneurship around the elections of President Obama and President Trump, and the strongest effects among the most politically active partisans: those that donate and vote.

The Effect of Dual-level Transformational Leadership on New Firm Performance

In recent years, entrepreneurial bricolage acts as an effective way to solve the problem of resource constraint in new firms, and then gradually attracted attention from related scholars in entrepreneurship field. However, the existing literatures have an obviously insufficient of the implementation and driving factor of entrepreneurial bricolage behavior. Therefore, in this paper, we integrate entrepreneurial bricolage theory with transformational leadership theory to construct a theory model among dual-level (i.e., individual-focused and group-focused) transformational leadership, entrepreneurial bricolage and new firm performance by means of 194 questionnaires to empirical analysis. The results show that the entrepreneurial bricolage has the mediated role in the relationship between dual-level transformational leadership and new firm performance.

The Effect of Dual-Level Transformational Leadership on New Firm Performance

In recent years, entrepreneurial bricolage acts as an effective way to solve the problem of resource constraint in new firms, and then gradually attracted attention from related scholars in entrepreneurship field. However, the existing literatures have an obviously insufficient of the implementation and driving factor of entrepreneurial bricolage behavior. Therefore, in this paper, we integrate entrepreneurial bricolage theory with transformational leadership theory to construct a theory model among dual-level (i.e., individual-focused and group-focused) transformational leadership, entrepreneurial bricolage and new firm performance by means of 194 questionnaires to empirical analysis. The results show that the entrepreneurial bricolage has the mediated role in the relationship between dual-level transformational leadership and new firm performance.

Investigating Pure Bundling in Japan’s Electricity Procurement Auctions

This study investigates the effect of bundling contracts on electricity procurement auctions in Tokyo. We conduct structural estimations that include elements of asymmetry between the incumbent and the new entrant firms and that endogenize the participation of bidders, and investigate the effect of bundling on the costs of firms, competition between the incumbent and the new firms, and auction outcomes. The results first confirm that bundling contracts raises the cost of firms, increases the asymmetry between incumbent and new firms and helps exclude new firms from auctions. We find the negative effect increasing the costs of firms is somewhat mitigated by a larger scale of bundling, but that the negative effect on participation is scarcely offset by scale. The payment of the auctioneer may decline if bundling results in a large-sized auction, but the profit of the winner is always found to be lower in bundled auctions, presumably because firms bid more aggressively owing to the smaller dispersion of the opponents’ cost distributions.