The influence of national institutions on venture creation over time

Abstract

This research report investigates how and at what point in time venture creation processes are differently arranged across countries. Concepts of the Varieties of Capitalism literature are used to find explanations in the institutional differences as to when and how start-ups “engage” in involving external labor and finance in their development process. Qualitative data is obtained from interviewing incubators and accelerator managers in the UK, Germany and Spain on the advice that they provide to start-up firms in their venture creation process. The results leading from this research paper are twofold: First, it is found that institutions do matter over time in venture creation due to evidence on different behavior and activities of start-up firms across the three market economies based on national regulatory schemes on labor and finance. Second, for both labor market and finance market applies that the more rigid a regulatory environment, the later start-ups engage in engaging in hiring external labor and acquiring external finance. It is thus concluded that start-ups “grow apart” in their venture creation characteristics over time, leading to different growth paths of entrepreneurship across different market economies.