What’s in the Journal of Business Venturing for practising entrepreneurs? The Top 5 Papers

Over the past twenty years the academic field of entrepreneurship has exploded. The number of journals publishing research in the area has increased significantly along with the overall volume of academic papers. Around the world there are now thousands of academics engaged in research relating to entrepreneurship and related activities. Against this background of scholarly expansion there lies the question as to what does all this research activity actually deliver that might help a practising entrepreneur?

In this first of a series of articles I will overview some of the leading journals in the field to see what practical value an entrepreneur might gain from this research. We start with the Journal of Business Venturing (JBV). First published in 1986 the journal has become one of the leading academic journals in the field of entrepreneurship, and boasts an impact factor of 3.062 and a 5-year impact factor of 3.849.

We start this review by looking at the Top-5 most highly cited papers from JBV. This is based on the number of citations since these papers were published and is a reflection of the impact that these papers have had on the academic community who are citing them in their own work. The data is drawn from Anne Wil Harzing’s “Publish or Perish” analysis.

The role of social and human capital among nascent entrepreneurs

The most citied paper is Per Davidsson and Benson Honig’s (2003) paper on “The role of social and human capital among nascent entrepreneurs”. At time of writing this paper had been cited 1,271 times or an average of 127 times a year since publication. This paper draws on a sample of 380 Swedish people who were engaged in the process of establishing a new business venture and tracks their activities over an 18 month period. Their behaviour is also compared to that of a control group of 608 people.

The paper’s findings suggest that “nascent” entrepreneurs seeking to establish a new business venture will get benefit from having parents, friends or other close associates who are already in business. Support and encouragement from family and friends is also likely to assist their start up process. It also suggests that some benefit can come from undertaking formal classes in business, but such education alone is insufficient to guarantee success. There was also no evidence that having support from third-party small business assistance agencies significantly enhanced success.

Another interesting finding is that past managerial experience outside the small business environment did not seem to predict whether a person would launch a new venture. This may suggest that managerial experience is not a foundation for entrepreneurial behaviour, even if it might assist in the management of the business post-launch.

The key finding from the paper from an applied perspective is the notion that social capital is an important element for nascent entrepreneurs. What this means is that people seeking to launch a new venture should invest in strengthening their social networks within the business community. This is likely to yield better returns than taking business courses or seeking help from business support agencies.

The role of networks in the entrepreneurial process

The second most highly cited paper is that of Sue Birley (1985) on the role of networks in the entrepreneurial process.  Since its publication it has been cited 1,184 times or around 42 times a year.

This study took place in St Joseph County, Indiana in the United States where it drew on a sample of 160 respondents. The questionnaire looked at the decision making process and experiences these people had had in the process of starting up a new business venture.

The paper's findings highlight the importance of formal contacts such as accountants or business support agencies in assembling the key elements of the business. However, family and friends were the most useful source of contacts in addressing local issues associated with the creation of these new ventures.  

From an applied perspective the paper suggests that nascent entrepreneurs seeking to launch a new business venture need to develop both their formal and informal networks. What is important is the ability to have access to an “efficient network”, one in which the entrepreneur can easily find assistance and support. At whatever point they might enter this network they can quickly have their needs diagnosed and be passed from contact to contact until they get the necessary information or advice they need.

Initial human and financial capital as predictors of new venture performance

The third most highly cited paper is by Arnold Cooper, Javier Gimeno-Gascon and Carolyn Woo (1994) into initial human and financial capital as predictors of new venture performance. Since its publication the paper has been cited 1,171 times or an average of 61.63 times a year.

Another study from the United States, the research drew a sample of 2,994 people who had launched a new business venture in the previous 17 months. Follow up surveys were undertaken over a three year period to investigate their progress. The final results were drawn from 1,053 people, 668 who had survived and 385 who had abandoned their venture.

The key findings from this study were that business survival and growth appeared to be related to the level of education the person had, with higher levels of education seemingly related to greater problem solving skills. Also important to education seemed to be the individual’s commitment, motivation and discipline.

Racial background (as an American study whether the person was black or white) seemed to also be important. People from racial minorities were less likely to succeed than those from mainstream ethnic backgrounds.  This was attributed to such people lacking adequate business contacts upon whom they could call for support, finance or customers.

Gender also seemed to be important, with males generally achieving higher rates of growth than females. Once again the authors suggest that this might be a function of the men having superior networks than the women.

These novice entrepreneurs were also found to have greater probability of survival if they had parents who owned or had owned a business. However, it did not seem to enhance their level of business growth. Yet the firms that were founded by multiple owners were the most likely ones to achieve higher rates of growth. Management expertise alone was not viewed as having a strong influence on business performance.

The key conclusions the authors draw from their research for practical applications is that resources are important for the survival and growth of a new business venture. People who seek to found a new business should proceed with caution if they lack resources, and women and minority groups may be disadvantaged due to their lack of resources, networks and past experience.

Differences between entrepreneurs and managers in large organisations

The fourth most highly cited paper is by Lowell Busenitz and Jay Barney (1997) entitled “Differences between entrepreneurs and managers in large organizations: Biases and heuristics in strategic decision-making”. This paper has been cited at least 1,065 times since publication or an average of 72.25 times a year.

This study aimed to explore the differences between entrepreneurs and managers in large firms and drew on a sample of 124 entrepreneurs and 95 managers from large firms. The entrepreneurs were selected on the basis that they had launched their own business and had been in operation with it for an average of 1.7 years. The managers were selected on the basis that they had been given responsibility for at least two functional areas within their organisations.

The paper sought to explore how these managers approach decision making. Particular attention was given to situations of uncertainty and complexity, and their use of biases, heuristics and overconfidence in making decisions.

The findings suggested that entrepreneurs are likely to be more overconfident than managers from larger firms when making decisions. Further, it was suggested that entrepreneurs will use “representativeness” in their decision making, or what has been called in other papers “the law of small numbers”. This means that these entrepreneurs extrapolate from a small base of data to a much more general conclusion as to how the majority of situations will occur.

From an applied perspective the paper’s authors suggest that the tendency is for entrepreneurial people to use biases and heuristics in decision making and that this is necessary for them to take the calculated risks that they must take. Windows of market opportunity are often short and fleeting. It is not usually possible for entrepreneurs to obtain all the information they need to make a fully objective decision. Yet entrepreneurs may also risk making bad decisions due to their tendency to employ cognitive biases.

This intuitive decision making may be beneficial in the early years of a new business, but may not be appropriate over the longer term. For larger firms, the study suggests that managers who wish to encourage entrepreneurial behaviour need to understand the need for this type of decision making. While it may not be appropriate within a more considered, methodical organisational culture, it should not be dismissed or suppressed. However, in some cases it may be best to let such entrepreneurial people leave the firm and set up their own businesses.

What do venture capitalists do?

Our final paper is by Michael Gorman and William Sahlman (1989) titled “What do venture capitalists do?” This paper has been cited 1,065 times or around 44.38 times per year since its publication. The paper draws a sample of 49 venture financiers from the United States who undertook a survey sent to them by the researchers in 1984.

The paper describes that these individuals, who were working for formal venture capital firms, spent about half their time monitoring an average portfolio of nine investments. They also sat on the boards of at least five of these firms and spent around 80 hours a year on site at each of these businesses and a further 30 hours on the telephone with these firms’ management teams.

Their most important role was the raising of finance for the firms in their portfolios and also giving strategic level advice and assisting in the recruitment of management personnel. These venture financiers had the power to replace the senior managers from the firms over which they had financial ownership. They had replaced an average of three CEOs during their careers.

The authors conclude their paper with the observation that venture capital financiers play an important role in finding new investment opportunities and add them at a rate of two businesses each year. As noted above, they devote around half their time looking after their portfolio of investments and sit on the boards in many cases. They are generally very active in working with these firms although only for short periods and without executive responsibility. Their role is more of a strategic advisor and source of new resources. Most of their failures were attributed to poor management within their investment firms.

Five critical tests of relevance

 According to Thomas and Tymon (1982) there are five critical tests of relevance in managerial research studies. These are:

  1. Descriptive relevance – do the research findings capture the phenomena encountered by the business practitioner within their organisational setting?
  2. Goal relevance – does the research align with the objectives and goals the end-user practitioners are seeking to achieve?
  3. Operational validity – can the end user practising manager actually implement the findings by manipulating the same independent variables to achieve the same outcome on the dependent variable?
  4. Non-obviousness – are the findings able to offer information that is more informative than what the common sense theory of the practitioner already suggests?
  5. Timeliness – are the findings published in a manner that allows the practitioner to use it to deal with real world problems when they need it?

This provides a useful framework in which to assess the practical value of much of the research that has been published around the world in the academic journals. When we look at these five most highly cited papers in one of the entrepreneurship field’s leading journals what conclusions can we draw as to their managerial relevance?

It is clear that the first three papers are related closely to the issue of new venture creation and the factors likely to enhance the survival of such start-ups. This has been a key area of interest for academics within the entrepreneurship field for much of the past thirty years.

The overall pattern of findings from these three studies is that nascent and novice entrepreneurs are likely to benefit from building up their social network. This social capital is likely to be of more value to them than going to business education courses or even seeking help from formal support agencies.  However, they may still get benefit from having a network that can include formal sources of support as these can be useful at different times. Having good resources and networks to call upon are also important to survival and growth.

In terms of the five critical tests it may be concluded that these three studies have some descriptive and goal relevance for people seeking to start up a small business. However, they are less relevant in terms of their operational validity and “non-obviousness”. The ability for nascent and novice entrepreneurs to expand their social capital and resources is easier to recommend than to achieve. The papers also did not really offer any substantial recommendations as to how nascent or novice entrepreneurs might achieve these outcomes.

It might also be argued that these findings are, or should be, fairly obvious to people who are seeking to launch a new venture. Perhaps the finding that formal education, formal support agencies or even past managerial experience may not be as significant as may first be thought is a non-obvious finding. However, the papers do not really give much guidance as to why this is the case or how this problem might be addressed by policy makers.

The fourth paper in terms of the first three tests may be relevant as any practising entrepreneur will acknowledge that they probably do follow a fairly intuitive approach to decision making. However, this would seem fairly obvious to such individuals. The paper is more likely to be of benefit to managers from the larger organisations. Here they could take away the understanding that they should be careful how they encourage and seek to manage entrepreneurial people. Risk averse managers will find entrepreneurs difficult, perhaps even threatening.

The fifth paper is largely descriptive in nature but reflects the role and behaviour of formal venture financiers. It offers relatively little to the entrepreneur other than the observation that to take on formal venture capital is likely to subject your business to a more rigorous outside scrutiny. Further, you are likely to find yourself under pressure to step down from control over your company if things do not go as planned and shareholders become restive.

In future articles I will examine some of the more recent research published in the JBV and also the top 5 papers from some of the other leading journals. It should be recognised that these observations are not meant as a review or critical assessment of the methodology used by these studies. Nor is it a criticism of their contribution to the academic theory relating to entrepreneurship. My purpose is more to find out what practical relevance these leading papers have for those who seek to establish and run their own business ventures, and for those who would hope to support them in this quest.


Birley, S. (1985). "The role of networks in the entrepreneurial process" Journal of Business Venturing 1(1): 107-117.

Busenitz, L., and Barney, J.B. (1997). "Differences between Entrepreneurs and Managers in Large Organisations: Biases and Heuristics in Strategic Decision-Making." Journal of Business Venturing 12(1): 9-30.

Cooper, A. C., Gimeno-Gascon, FJ., and Woo, C.Y. (1994). "Initial human and financial capital as predictors of new venture performance." Journal of Business Venturing 9(5): 371-395.

Davidsson, P., and Honig, B. (2003). "The role of social and human capital among nascent entrepreneurs." Journal of Business Venturing 18(3): 301-331.

Gorman, M., and Sahlman, W.A. (1989). "What do venture capitalists do?" Journal of Business Venturing 4(4): 231-248.

Thomas, K. W., and Tymon, W.G. (1982). "Necessary Properties of Relevant Research: Lessons from Recent Criticisms of the Organizational Sciences." Academy of Management Review 7(3): 345-352.