How Entrepreneurs Leverage Institutional Intermediaries in Emerging Economies to Acquire Public Resources

Forthcoming, Strategic Management Journal

51 Pages Posted: 10 Jan 2012 Last revised: 10 Aug 2016

See all articles by Daniel Erian Armanios

Daniel Erian Armanios

University of Oxford, Saïd Business School; University of Oxford, St Anne's College

Charles E. Eesley

Stanford University - Management Science & Engineering

Jizhen Li

Tsinghua University - School of Economics & Management

Kathleen M. Eisenhardt

Stanford University - Department of Management Science & Engineering

Date Written: July 25, 2016

Abstract

Research Summary: Governments in emerging economies often use institutional intermediaries to promote entrepreneurship, and bridge the void between ventures and public funding. While prior literature describes what institutional intermediaries do, it leaves open how intermediaries support different types of entrepreneurs. By comparing science park and non-science park firms in Beijing and across China, we distinguish which entrepreneurs benefit from certification v. capability-building through the introduction of two new constructs: skill adequacy and context relevance. Broadly, our study adds insights at the nexus of emerging economies and entrepreneurship research, and to the tie formation and institutional intermediaries literatures.

Managerial Summary: A key dilemma facing entrepreneurs is how to finance their ventures. While entrepreneurs in developed economies can seek VC or angel investment, entrepreneurs in emerging economies often need to pursue potential government funding opportunities. Our study highlights three strategies for acquiring government funding. Well-connected entrepreneurs can leverage their political ties to acquire such funding. Less-connected entrepreneurs can leverage science parks that in emerging markets are designed to help governments to identify promising ventures. For returnees whose ample experience abroad may not fit with local ways of doing business, gaining science park admission can certify quality and so ease the path to government funding. For technically skilled local entrepreneurs who lack business skills, science parks can help build such skills which then ease the path to government funding.

Keywords: Networks, Institutions, Science Parks, Entrepreneurship, Public Policy, Public Infrastructure, Emerging Economies

Suggested Citation

Armanios, Daniel Erian and Eesley, Charles E. and Li, Jizhen and Eisenhardt, Kathleen M., How Entrepreneurs Leverage Institutional Intermediaries in Emerging Economies to Acquire Public Resources (July 25, 2016). Forthcoming, Strategic Management Journal, Available at SSRN: https://ssrn.com/abstract=1982817 or http://dx.doi.org/10.2139/ssrn.1982817

Daniel Erian Armanios (Contact Author)

University of Oxford, Saïd Business School ( email )

Park End Street
Oxford, OX1 1HP
Great Britain

University of Oxford, St Anne's College ( email )

Oxford
United Kingdom

Charles E. Eesley

Stanford University - Management Science & Engineering ( email )

473 Via Ortega
Stanford, CA 94305-9025
United States

HOME PAGE: http://chuckeesley.com

Jizhen Li

Tsinghua University - School of Economics & Management ( email )

Beijing, 100084
China

Kathleen M. Eisenhardt

Stanford University - Department of Management Science & Engineering ( email )

473 Via Ortega
Stanford, CA 94305-9025
United States

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