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Although many start-ups struggle to grow partly due to institutional voids in transitioning economies, empirical observations have contradicted this dominant view in the literature in that even with deficient formal institutions many economies (e.g., China) have high rates of entrepreneurship in recent years. To understand this paradox, we propose a politically contingent view of the relationship between the institutional environment and entrepreneurs' reinvestment in their business. Our empirical study of entrepreneurs in China shows that the impact of institutional deterioration on entrepreneurial reinvestment substantially hinges on entrepreneurs' political connections. As such, institutional deterioration does not reduce entrepreneurial reinvestment for all entrepreneurs; rather, when entrepreneurs have political connections they are willing to reinvest in their business despite a weakening institutional environment. Our framework suggests that in an environment perceived as harsh to business, political connections can encourage entrepreneurs to see opportunities for growth. In contrast, entrepreneurs that lack political connections will mainly see threats in a deteriorating institutional environment and thus, limit their business reinvestment.

New ventures often require debt financing but face difficulties convincing lenders of their creditworthiness because of agency problems. Researchers have shown that social capital can help small firms reduce lenders' agency concerns but new ventures do not yet have their own social capital. We propose that family involvement increases a venture's ability to borrow family social capital for the purpose of obtaining debt financing. Empirical tests with 1267 new ventures suggest that family involvement directly and indirectly improves a new venture's access to debt financing.

Minniti [Minniti, M., 2004. Entrepreneurial alertness and asymmetric information in a spin-glass model. Journal of Business Venturing 19 (5), 637–658; Minniti, M., 2005. Entrepreneurship and network externalities. Journal of Economic Behavior & Organization 57 (1), 1–27] argues that new venture creation decisions are interdependent and that the non-pecuniary network externalities and path dependencies of such decisions influence the geographic concentration of venturing activities. We apply her framework at the county level to study the association between prior and subsequent new venture creation in the U.S. Our findings indicate that there is a non-linear relationship between prior new venture creation and subsequent new venture creation, with venturing activities increasing at an increasing rate based on the amount of prior new venture creation.

This study utilizes stewardship theory to explain why some family firms flourish while others are plagued by conflict. Our findings suggest that relationship conflict is negatively related and participative strategy process is positively related to family firm performance. In addition, we examine how altruism and control concentration affect relationship conflict and a participative strategy process. Altruism was found to significantly reduce relationship conflict and enhance a participative strategy process. However, control concentration was not significantly related to relationship conflict or a participative strategy process. The implications of our findings are discussed.