Michael Fritsch , Korneliusz Pylak (p), Michael Wyrwich

Fernanda Ricotta

see extended abstract

Anna Rebmann (p), Carlo Corradini , Emma Folmer

Korneliusz Pylak

In this paper, we explore how to expand our empirical knowledge of spatially bounded social interactions and how they influence entrepreneurship by analysing big data to capture ‘buzz’ – the vibrancy and nature of localised informal communication flows. We propose a novel approach to capture such intangible element, reminiscent of the ‘industrial atmosphere’ discussed by Marshall, which has been proposed as a fundamental aspect of learning regions and the creative class but has yet proved difficult to observe or measure.
An exploratory econometric model is proposed where different measures of regional entrepreneurship are regressed on traditional determinants such as R&D expenditure, population density, education and industry structure across 170 NUTS3 regions in the UK. Using the information within all geo-located tweets in 2014, with around 1 million tweets per day, an additional variable defined by the relative intensity in the use of words related to innovation and start-up activity – such as “innovation”, “future”, “entrepreneurship”, – is added to proxy buzz.
We find a strong association, robust to different model specifications, between the intensity of Twitter discussions on innovation and entrepreneurship and ‘on the ground’ new venture creation. Our results therefore provide evidence, that regions characterised by a higher intensity of Twitter discussions on topics of innovation and new firm creation provide a more effective set of informal relational resources that underpin sharing and recombination of ideas defining regional capabilities to support and facilitate entrepreneurial processes.

Fernanda Ricotta (p), Rodrigo Basco

Anna Rebmann

The aim of this article is to investigate whether the quality of institutions influences the presence of family firms at regional level. Based on institutional theory (North, 1990), our main conjecture is that territories with low quality of institutions may affect the presence of family firms. In weak institutional environments, families create a particular order to generate trust, reduce risk, and mobilize resources to secure their economic activities. Therefore, economic activities organized around families may guarantee specific control mechanisms (Carney, 2005) which are the source of family firm competitive advantages. Consequently, a negative relationship is expected between the quality of local institutions and the likelihood of having a family firm versus the likelihood of having a non-family business (Liu et al 2012).
Our analyses are based on a sample of manufacturing firms operating in seven EU countries (Austria, France, Germany, Hungary, Italy, Spain and UK). As a proxy of the quality of institutions, the European Quality of Government Index (EQI), calculated at regional level over 27 EU countries, is used. Since the data have a clustered nature, the multilevel approach is used. In particular a logit model with random intercept at the regional level and fixed effects for countries and sectors is implemented. In the econometric specification, the probability to be a family firm depends on key-characteristics of firm, on the variable of interest, the indicator of the quality of regional government, and on some regional variables as control.
Preliminary results evidence that regions seem to have a role in explaining the probability of a firm to be family firm but this disappears when country effects are considered. As far as the specific scope of the paper, a high quality of regional government seems to be associated to a lower probability of having a family firm. This result holds when some regional variables are introduced as control and when the components of the EQI, the quality of services, the impartiality and the level of corruption are considered.
Our article contributes to the current academic debate about family business and context (Stough, Welter, Block, Wennberg, & Basco, 2015) and extends previous research that relates the overrepresentation of family firms in less developed regions (e.g., Chang, Chrisman, Chua, & Kellermanns, 2008) by explaining that the quality of formal institution seem to affect the presence of family firms.