Abstract: We suggest that venture firms face different challenges during the IPO process and at the post IPO stage, and propose that institutional equity ties to governmental agencies and to research institutes distinctly affect venture firms’ IPO performance and post-IPO market growth in emerging economies. The value of institutional ties is contingent on their contributions to firm legitimacy and competitiveness at different stages of organizational development. We investigate a set of pharmaceutical and chemical venture firms that went public in the Chinese stock market between 1994 and 2001. The empirical results indicate that although institutional equity ties to governmental agencies do not have any significant influence on the speed or returns of IPO, such governmental ties may hinder new ventures’ post-IPO asset growth. By contrast, we find that institutional equity ties to research institutes contribute positively to new ventures’ IPO performance and post-IPO market growth.

Abstract: Prahalad urges multinationals to seek “Fortune at the Bottom of the Pyramid”: turning the poor into valuable customers can both alleviate poverty and create profit for the MNC. However, vigorous criticism has emerged. For example, Karnani argues that these ideas are a mirage: there are no profits possible for MNCs, and the poor are more assisted than helped. Drawing from three case studies, our goal is to introduce yet another way of looking at this controversy and to explore what the real benefits of “corporate social innovations” could be. We suggest that by setting self-sustainability as a constraint, this type of experiment trains managers in double loop learning, enhancing a culture for strategic innovation, one of the most needed competencies in the current business environment.

Abstract: What drives (or limits) an innovation strategy in entrepreneurial firms? This paper examines whether financial constraints or constraints arising from a scarcity of more fundamental scientific and technological research have a greater impact on the decisions of entrepreneurs to attempt to commercialize innovations. Since the level of funding is endogenous to an innovation strategy, I use a differences-in-differences approach and use exogenous variation in the institutional funding environments and science and technology (S&T) stocks across the U.S. and China. Utilizing survey responses from 2,966 alumni of Tsinghua University in China and 43,000 alumni of MIT in the US, I compare and contrast, over time, the determinants of entrepreneurial behavior and performance within the Chinese and American environments. Both datasets include graduates from multiple decades, allowing some comparisons of trends over time.