Papers by Charles H Matthews, PhD
While anecdotal and conceptual evidence indicates the value of social networking practices, detai... more While anecdotal and conceptual evidence indicates the value of social networking practices, details regarding the structure and efficacy of social capital theory, especially in microbusinesses, remain relatively unexplored. Examining relevant issues based in part on "Master Mind" methods, this investigation examines the prevalence of social capital networks, explores specific meeting formats' effectiveness, and illuminates the benefits of participation among microbusiness owners. While 79.5% of microbusiness survey respondents belong to at least one business or industry association, a surprising 52.6% indicated no Master Mind participation. Implications with regard to perceived benefits, as well as contributions to theory and practice, are discussed.
Journal of Small Business Strategy, 1998
Small, entrepreneurial, and family businesses have long been regarded as important contributors t... more Small, entrepreneurial, and family businesses have long been regarded as important contributors to the growth of a nation "s business activity and development. as well as a significant driving force in the nation "s overall economic health and stability. As such. business schools are becoming increasingly aware of the need to develop programs which are: I) tailored to the specific needs of students who represent the next generation of small, entrepreneurial, and family business owners; and 2) focused on the needs of the firm owners themselves. In recent years, business schools Worldwide have begun to develop, refine, and implement faculty-directed, student-based consulting programs as a teaching/learning tool in their undergraduate and MBA programs to address this dual need This paper traces the past, present and future path of one such program: the highly successful faculty-guided, student-based Small Business Institute™ (SB/) field case consultation program. The role of ...
The role of opportunities in the entrepreneurial process remains relatively underdeveloped. To ad... more The role of opportunities in the entrepreneurial process remains relatively underdeveloped. To address this issue, we develop a definition of an entrepreneurial opportunity and draw upon a distinction from the domain of knowledge management to suggest a continuum of entrepreneurial opportunities ranging from codified to tacit. Though both traditional and contemporary research has examined how individual differences relate to the identification of opportunities, we focus instead on the importance of differences in the opportunities themselves. Specifically, we examine how relative differences in the degree of opportunity tacitness relate to the process of opportunity identification. We find that relatively more codified opportunities are more likely to be discovered through systematic search, whereas more tacit opportunities are more likely to be identified due to prior experience. These findings contribute to an increased understanding of the role of the opportunity in entrepreneurs...
Journal of Small Business Strategy, 2015
The independent effects of education, personal experience, and advice networks in the development... more The independent effects of education, personal experience, and advice networks in the development of new venture creation intent is of considerable interest to educators, researchers, practitioners, and policy makers. Little research, however, has systematically considered the possibility that the relative importance of these factors varies in the early stages of entrepreneurial intent formation. Using a unique dataset (n=963), this study investigates these key relationships at two different points in time. Our results suggest that personal start-up experience and advice networks are particularly influential on the formation of intent to start a new venture, and that a marked shift in significance occurs from the former to the latter.
Innovation and Entrepreneurship, 2015
Annals of Entrepreneurship Education and Pedagogy – 2021, 2021
Handbook of Entrepreneurial Dynamics: The Process of Business Creation
New England Journal of Entrepreneurship, 2010
Relatively few comparative studies have examined how perceptions across cultures might converge o... more Relatively few comparative studies have examined how perceptions across cultures might converge or diverge regarding careers in general and new venture careers in particular. Our research addresses this gap by providing a comparative study of career perceptions among undergraduate business students in three countries with different levels of experience with capitalism: Ukraine, South Korea, and the United States. Results suggest both surprising differences and interesting similarities between undergraduate students in the three countries with regard to how they perceive characteristics associated with entrepreneurial careers. Findings are discussed in the context of distinct differences and commonalities across cultures and implications for future research provided.
Quality Management Journal, 2005
An empirical survey was conducted to determine how small business perceive and implement the high... more An empirical survey was conducted to determine how small business perceive and implement the high-performance management practices outlined by the Malcolm Baldrige Criteria for Performance Excellence. The survey identifies the practices that small firms..
Academy of Management Proceedings, 2012
Journal of Small Business Management, 1989
The main thesis of this article is that a corporate strategy perspective (which includes manageri... more The main thesis of this article is that a corporate strategy perspective (which includes managerial choice) may be superior to a traditional finance perspective in explaining small firm financing decisions. The traditional finance perspective tries to explain a complex financial decision process (e.g., optimal debt level) without fully considering the impact of managerial choice. It is likely, however, that managerial choice exerts considerable influence on small firm financing decisions. Thus, a new paradigm is needed which includes the many factors that are a part of the small firm financing decision process, among them: goals, risk aversion, and internal constraints. Such a paradigm would: (1) allow for a more complete understanding of the small firm financing process; (2) address more fully the needs and concerns of the small firm practitioner; and (3) provide a sound basis for future empirical research. Recent literature has attempted to explain small firm financing decisions using modern financial theory. For example, McConnell and Pettit' suggest that small businesses generally have proportionally less debt than large firms. They propose this is so because: (1) small firms generally have lower marginal tax rates than larger firms (suggesting less tax deduction benefit of debt); (2) small firms may have higher bankruptcy costs than large firms (which increases the financial risk of debt); and (3) small firms may find it more difficult to "signal" their business health to creditors (therefore raising the "cost" of debt to small firms). Another attempt to explain small firm financing behavior relies on agency theory.2 Agency theory holds that people who have equity or debt in a firm require costs to monitor the investment of their funds by management or the small business owner (i.e., agency costs). This view suggests that financing is based on the owner/ manager being able to assess these agency costs" for each type of financing, and then selecting the lowest-cost method of financing the firm's activities. One weakness of this explanation is that no one has yet been able to measure agency costs, even in large firms. Nor has agency cost theory (or any other modern financial theory) been able to explain capital structure in large, public firms, let alone in small, private ones.3 In contrast, recent theoretical and empirical work suggests that a strategic perspective (which includes multiple firm objectives and managerial choice) may have promise in explaining the financing decision in large, public firms. The objective of this article is to use a strategic perspective as a basis for developing propositions-and a new research paradigm-to explain the financing decisions of small, private firm management. First, the Barton and Gordon argument for the applicability of a strategic management perspective in understanding large firm financing decisions is reviewed.5 Second, the argument's validity and relevance as applied to small firm financing decisions is assessed. Third, propositions regarding the small firm financing decision are developed. Finally, follow-up empirical work is proposed. THE CASE FOR A STRATEGY PERSPECTIVE Barton and Gordon point out that while financing decisions are an important aspect of firm strategy, neither finance theory nor empirical research has provided useful guidance for practitioners or academics regarding this decision.6 They suggest that the finance paradigm may not permit adequate representation of complex behavior at the individual firm level. They point out that unrealistic assumptions are made in developing theoretical financial models, and note that the representation of the firm as a rational economic entity with the singular goal of shareholder wealth maximization is an oversimplification. Barton and Gordon suggest that the following characteristics must be accounted for in any explanation of firm financing decisions: (1) behavior at the firm level; (2) the fact that the capital structure decision is made in an open systems context by top management; (3) the capital structure decision must be consistent with an overall corporate plan; and (4) the decision reflects multiple objectives and environmental factors, not all of which are financial in nature. …
Journal of Small Business Management, Jul 1, 1996
Two of the most exciting events in the late 20th century have been the economic reform in China -... more Two of the most exciting events in the late 20th century have been the economic reform in China - the country where one-fourth of the world's population resides - and the collapse of communism in Russia - one of the world's "superpowers." As China and Russia step boldly toward free market systems, entrepreneurial ventures are increasing. While there are striking similarities among the emerging ventures in both countries, there are important differences which also need to be considered. Both researchers in entrepreneurship and business professionals interested in doing business in China and the former Soviet Union can benefit from a clearer understanding of these similarities and differences. This article traces the genesis of entrepreneurship in both countries, explores the characteristics of economic reform, and describes the similarities and differences in the development of entrepreneurial ventures in China and Russia. Three over-arching issues frame the discussion of entrepreneurial development in both countries: the political environment, the investment environment, and the management environment. In addition, implications for foreign investors are explored. The Concepts of Entrepreneurship and Entrepreneurial Ventures The motivation for entrepreneurial activities is to acquire profits; thus, "profit seeking" is a primary factor in entrepreneurship (Shumpeter 1934). Entrepreneurship can be defined as: The process that takes place in different environments and settings that causes changes in the economic system through innovations brought about by individuals who generate or respond to economic opportunities that create value for both these individuals and society (Hills 1994, 16). Innovation is a key feature of entrepreneurship (Schumpeter 1934). The following five criteria have proven useful in measuring economic innovation: (1) introduction of new goods; (2) introduction of new methods of production; (3) opening of new markets; (4) opening new sources of supply; and (5) implementing industrial reorganization (Carland et al. 1984). Furthermore, the uncertainty inherent in entrepreneurship makes risk taking an important element of entrepreneurship (Carland, Hoy, and Carland 1988). As Hills (1994, 15) states, "... it is considerably more accurate to say that entrepreneurship involves uncertainty and, almost always, the management of risk." In China to date, entrepreneurial ventures exist mainly in non-state economic sectors. Chow (1995) notes that to reform its centrally-planned economy, the Chinese government has successfully used market forces of entry and competition by creating a fast-growing non-state economic sector. Certain entrepreneurial characteristics have also developed in the state-owned economic sector with the passing of the State Enterprise Law and the Bankruptcy Law and with the adoption of the Contract Responsibility System. However, most state-owned enterprises still cannot be regarded as entrepreneurial ventures. For instance, even though many state-owned enterprises lose money, subsidies from the government allow them to survive. Therefore, the risk of bankruptcy is minimal. Simply stated, since state-owned enterprises are protected by the government to the extent that they bear few risks, they cannot be regarded as true entrepreneurial ventures. In contrast, Russian entrepreneurial ventures exist in the non-state economic sector, as well as the rapidly privatizing, formerly state-owned sector. As Russia's privatization plan moves forward, the risks for state-owned and formerly state-owned enterprises are increasing. According to Kranz (1994, 46): The rush of equity issues, coupled with a tough new bankruptcy law and cuts in state subsidies, is likely to spark a dramatic restructuring of Russia's economy. It marks the beginning of a new capitalist discipline that is certain to stir up Russia's old ways more than ever. As companies try to attract investors, layoffs and management shake-ups will be inevitable . …
New Firm Creation in the United States, 2009
Understanding Family Businesses, 2011
SSRN Electronic Journal, 2014
Given that the type of financing available during the earliest phases of the new firm founding pr... more Given that the type of financing available during the earliest phases of the new firm founding process can influence the likelihood of venture success or failure, start-up capital structure in nascent ventures is a topic of important and timely theoretical and practical relevance. This research explores the relationship between start-up capital structure and time to start-up outcomes consistent with Pecking Order Theory. In addition, we examine why some start-up financial models enable a particular outcome resolution faster than others in the nascent context. We hypothesize certain forms of start-up capital will attenuate or accelerate the incidence of either new firm founding or disbanding. In general, we find that as team size increases the proportion of debt and equity utilized increases; the percentage of personal funds decreases if start-ups aspire to maximize growth; greater percentages of debt financing decrease the incidence of quitting; greater percentages of equity financing had the most impact on the time to new firm founding; greater percentages of debt funds influenced the time to new firm founding; and greater percentages of personal funding accelerated the time to new firm founding. Limitations, considerations, and suggestions for further research are discussed.
An agency theory framework is used to test the effects of founding family control on firm efficie... more An agency theory framework is used to test the effects of founding family control on firm efficiency, capital structure and value. Both the finance literature and the management literature regarding the relationship between firm control and firm value are explored. Controlling for size, industry, and managerial ownership, the results suggest that founding family controlled firms have greater value, are operated
New Firm Creation in the United States, 2009
New Firm Creation in the United States, 2009
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Papers by Charles H Matthews, PhD