Who does (not) benefit from entrepreneurship programs?

• Author: Laurina Zhang,Elizabeth Lyons
• Date: 01 January 2018
• DOI: http://doi.org/10.1002/smj.2704
• Published date: 01 January 2018

RESEARCH ARTICLE

Who does (not) benefit from entrepreneurship

programs?

Elizabeth Lyons

1

| Laurina Zhang

2

1

School of Global Policy and Strategy, University

of California, San Diego, California

2

Strategy & Innovation unit, Scheller College of

Business, Georgia Institute of Technology,

Atlanta, Georgia

Correspondence

Laurina Zhang, Scheller College of Business,

Georgia Institute of Technology, 800 W Peachtree

St NW, Atlanta, GA 30308.

Email: laurina.zhang@scheller.gatech.edu

Funding information

Social Sciences and Humanities Research Council

of Canada; Centre for Innovation and

Entrepreneurship at the Rotman School of

Management, University of Toronto; SSHRC

Research Summary: We evaluate a technology entrepre-

neurship training program by comparing career decisions

among applicants accepted into the program with unac-

cepted applicants who are program finalists. We find that

program participation is associated with an increased like-

lihood of subsequent entrepreneurship but that this is not

uniform across participants; the estimated relationship

between program participation and subsequent entrepre-

neurial activity is disproportionately lower for applicants

with ex-ante resources and capabilities in entrepreneur-

ship, measured by prior entrepreneurship experience.

Moreover, we only observe this reduced impact of the

program on subsequent entrepreneurial activity for partic-

ipants that have prior experience in founding a technol-

ogy company as opposed to other forms of

entrepreneurial activity. This suggests the program is

more effective for individuals that have otherwise limited

access to technology entrepreneurship opportunities.

Managerial Summary: Given the increasingly competi-

tive landscape for entrepreneurship education programs,

it is important to understand when and for whom they

have the greatest impact. Using 5 years of data from a

technology entrepreneurship training program, we show

that individuals with a higher predisposition toward the

type of entrepreneurship being taught by the program,

measured by prior technology entrepreneurship experi-

ence, are less likely to benefit from training. Our findings

imply that individuals who enter programs with the skill

set being taught benefit less from the program at the mar-

gin, and that individuals without prior experience can be

trained in entrepreneurship. These patterns have implica-

tions for entrepreneurial program strategy, individuals

considering entry into entrepreneurial careers, and firms

deciding whether to develop entrepreneurial capabilities

in-house or acquiring them externally.

Received: 27 September 2016 Revised: 8 June 2017 Accepted: 17 June 2017 Published on: 23 October 2017

DOI: 10.1002/smj.2704

Strat Mgmt J. 2018;39:85–112. wileyonlinelibrary.com/journal/smj Copyright © 2017 John Wiley & Sons, Ltd. 85

KEYWORDS

access to resources, entrepreneurial capabilities,

entrepreneurship programs, entrepreneurship training,

program evaluation

1|INTRODUCTION

Interest in entrepreneurship training programs has increased significantly over the past decade. The

number of start-up incubators and accelerators around the world has grown rapidly from one in

2005 to over 467 in 2015 and the number of start-ups funded by entrepreneurship programs has

increased by roughly 20 times in less than 10 years (AngelList, 2015; CrunchBase, 2013). Govern-

ment agencies are supporting this growth by allocating more resources towards the development of

incubators and accelerators.

1

In addition, a growing number of business schools are incorporating

entrepreneurship streams into their undergraduate and graduate curricula with the goal of producing

the next generation of entrepreneurs (Forbes, 2013). Given their proliferation, it is likely that these

programs are also changing how early-stage entrepreneurs allocate their time and how they execute

their visions.

Public and private resources directed toward entrepreneurship training and incubation programs

are based on the belief that they develop entrepreneurial ability and subsequently drive innovation

and economic growth by increasing the quantity and quality of firms started (Ribgy & Ramlogan,

2013). Yet, there is still little consensus on whether entrepreneurial abilities can be taught and when

training has the most impact on entrepreneurship.

2

While several studies find that entrepreneurship

programs may foster skills relevant for entrepreneurship (Huber, Sloof, & van Praag, 2014; Von

Graevenitz, Harhoff, & Weber, 2010), other studies find weak or no effects on short-term outcomes

(Fairlie, Karlan, & Zinman, 2015; Oosterbeek, van Praag, & Ijsselstein, 2010; Von Graevenitz et al.,

2010). At the extreme, some believe that the desire to be entrepreneurial cannot be trained because

it is a “genetic”trait and that using public resources for entrepreneurship training is wasteful

(Nicolaou & Shane, 2008; Shane, 2009; Shane, Nicolaou, Cherkas, & Spektor, 2010). Perhaps even

more importantly, there is little evidence on the extent to which such programs affect different types

of individuals and the components of the programs that are most likely to affect outcomes.

In this paper, we evaluate the impact of an entrepreneurship training program on subsequent

entrepreneurial activity, and in particular, for whom the training is most effective. We argue that

individuals have varying levels of predisposition towards entrepreneurship due to their resources

and capabilities before the program, and consequently, entrepreneurship training will have heteroge-

neous effects on participants. The theoretical impact of the program on participants with different

levels of resources and capabilities is ambiguous. On one hand, individuals with higher capabilities

for entrepreneurship before the program may be better able to absorb information (e.g., Glaeser &

Maré, 2001) and take advantage of the coursework provided through the program. Since the ability

1

For example, the U.S. Small Business Bureau has spent $127 million (SBA, 2012) on mentoring and coaching of entrepreneurs in

2012 and the Canada Job Grant initiative has dedicated $60 million (EY, 2013) to the development of incubators and accelerators

in 2013.

2

See Martin, McNally, and Kay (2013) for a review.

86 LYONS AND ZHANG