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Entrepreneurial Finance and Innovation: Informal Debt as an Empirical Case

Entrepreneurial Finance and Innovation: Informal Debt as an Empirical Case bs_bs_banner Strategic Entrepreneurship Journal Strat. Entrepreneurship J., 10:257–273 (2016) Published online 4 May 2016 in Wiley Online Library (wileyonlinelibrary.com). DOI: 10.1002/sej ENTREPRENEURIAL FINANCE AND INNOVATION: INFORMAL DEBT AS AN EMPIRICAL CASE 1 2,3 2 JIE WU, STEVEN SI, * and XIAOBO WU University of Macau, College of Business, Macau, China Zhejiang University, School of Management, Hangzhou, China Bloomsburg University of Pennsylvania, College of Business, Bloomsburg, Pennsylvania, U.S.A. Research Summary: Drawing on entrepreneurial finance theory, we examine the trade- offs among different sources of capital for entrepreneurial firms in emerging economies and their impact on innovation. In emerging economies, one of the unique aspects of firm financing is the presence of informal capital, as many formal sources of capital for new entrepreneurs have more constrained access than is the case in mature economies. We suspect that informal debt has an important effect on innovation, and this effect is contingent on the accessibility of formal debt and institutional development. The hypotheses are tested using survey data from 3,235 entrepreneurs in an emerging economy, China. Managerial Summary: This study demonstrates an inverted U-shaped relationship between the level of informal debt and entrepreneurial ventures’ innovation performance. The value of informal debt for promoting http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Strategic Entrepreneurship Journal Wiley

Entrepreneurial Finance and Innovation: Informal Debt as an Empirical Case

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References (54)

Publisher
Wiley
Copyright
Copyright © 2016 Strategic Management Society
ISSN
1932-4391
eISSN
1932-443X
DOI
10.1002/sej.1214
Publisher site
See Article on Publisher Site

Abstract

bs_bs_banner Strategic Entrepreneurship Journal Strat. Entrepreneurship J., 10:257–273 (2016) Published online 4 May 2016 in Wiley Online Library (wileyonlinelibrary.com). DOI: 10.1002/sej ENTREPRENEURIAL FINANCE AND INNOVATION: INFORMAL DEBT AS AN EMPIRICAL CASE 1 2,3 2 JIE WU, STEVEN SI, * and XIAOBO WU University of Macau, College of Business, Macau, China Zhejiang University, School of Management, Hangzhou, China Bloomsburg University of Pennsylvania, College of Business, Bloomsburg, Pennsylvania, U.S.A. Research Summary: Drawing on entrepreneurial finance theory, we examine the trade- offs among different sources of capital for entrepreneurial firms in emerging economies and their impact on innovation. In emerging economies, one of the unique aspects of firm financing is the presence of informal capital, as many formal sources of capital for new entrepreneurs have more constrained access than is the case in mature economies. We suspect that informal debt has an important effect on innovation, and this effect is contingent on the accessibility of formal debt and institutional development. The hypotheses are tested using survey data from 3,235 entrepreneurs in an emerging economy, China. Managerial Summary: This study demonstrates an inverted U-shaped relationship between the level of informal debt and entrepreneurial ventures’ innovation performance. The value of informal debt for promoting

Journal

Strategic Entrepreneurship Journal – Wiley

Published: Sep 1, 2016

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