סמינר באסטרטגיה ניהולית

Prof. David Deeds, University of St. Thomas

We focus on international differences in perceived stigma associated with entrepreneurial failure. We set up a theoretical model designed to capture the notion that the population of entrepreneurs in any economy develops through time governed by a hurdle process with feedback. We argue that the height of these hurdles is determined by institutional and cognitive factors. Variation in these factors amongst countries leads to variation in the rate and nature of entrepreneurship. We illustrate the theory using agent-based simulation techniques. We find that the higher the perceived stigma associated with entrepreneurial failure in a nation, the lower average quality of the entrepreneurial pool through adverse selection. Conversely, through the same mechanism, we find that lower perceived stigma leads to higher average quality of the entrepreneurial pool.