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Cross-Country Differences in Entrepreneurial Activity: The Role of Cultural Practice and National Wealth
Xiangyang Zhao, Hai Li, Andreas Rauch
Front Bus Res Chin. 2012, 6 (4): 447-474.
https://doi.org/10.3868/s070-001-012-0021-0
In this paper, we argue that national culture is important in interpreting the differences of entrepreneurial activities between countries. Furthermore, national wealth plays a moderating role between national culture and entrepreneurial activities. Datasets from the Global Leadership and Organizational Behavior Effectiveness (GLOBE) project and Global Entrepreneurship Monitor (GEM) study were analyzed. We find that there are interaction effects between GDP, a proxy for national wealth, and several cultural dimensions on entrepreneurial activities. More traditional cultural variables (in-group collectivism, humane orientation, and power distance) enhance early-stage and established entrepreneurship in low- and medium-GDP countries, but hinder early-stage and established entrepreneurship in high-GDP countries. More modernistic cultural variables (performance orientation, future orientation, and uncertainty avoidance) promote high-growth and high-innovation entrepreneurship in some situations, especially in high-GDP countries. Implications and limitations are discussed.
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The Effect of Cognition, Institutions, and Long Term Orientation on Entrepreneurial Ethical Behavior: China vs. U.S.
Sibin Wu, Arpita Joardar
Front Bus Res Chin. 2012, 6 (4): 496-507.
https://doi.org/10.3868/s070-001-012-0023-4
This paper presents a theoretical framework to examine if entrepreneurs think and behave differently at various phases of a venture, namely opportunity exploration and exploitation stages. It is also proposed that there is a difference between entrepreneurs in China and in the U.S. due to institutional voids. Furthermore, we argue that the difference increases across the two stages of the entrepreneurial process. Specifically, at the exploration stage, entrepreneurs in China and the U.S. behave similarly when ethics is concerned. However, entrepreneurial unethical behaviors seem to be more rampant at the exploitation stage in China compared with that in the U.S. Lastly, we provide future research directions to build a stream of research.
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How and Why Do Firms Adjust Their Cash Holdings toward Targets? Evidence from China
Yujun Lian, Yan Xu, Kaiguo Zhou
Front Bus Res Chin. 2012, 6 (4): 527-560.
https://doi.org/10.3868/s070-001-012-0025-8
We examine the dynamic adjustment of cash holdings of publicly traded Chinese firms during 1998–2006. The empirical evidence is supportive of the dynamic trade-off theory of cash holdings. In particular, there is strong evidence of asymmetric adjustments, i.e., adjustments from above the target are significantly faster than those from below. Moreover, the speeds of adjustment (SOA) are heterogeneous for firms facing differential adjustment costs. More specifically, the adjustment speed is higher in firms with bank lines of credit, positively related to the deviation from the target, but it is negatively related to firm size. Furthermore, in terms of adjustment method, firms make adjustments to their targets primarily through debt and equity financing when they are in cash shortage, On the other hand, the dividend payments play a minimal role in it. Lastly, in terms of motives for adjustment, we find that the precautionary motive arising from financial constraints well explains the cash holdings adjustment behaviors of Chinese listed firms.
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