New book published (in Danish)

Jagten på fremtidens nye vækstvirksomheder

Jagten på fremtidens nye vækstvirksomheder

Nyetablerede virksomheder bidrager årligt netto med 60.000 nye job til dansk økonomi, mens ældre virksomheder i gennemsnit siger farvel til flere personer, end de ansætter. Det understreger vigtigheden af nye virksomheder på arbejdsmarkedet.

De mest succesfulde iværksættere har typisk stor brancheerfaring. Særligt interessante er de såkaldte spin-off-iværksættere, som kommer direkte fra en eksisterende virksomhed i samme branche. Disse iværksættere står bag omkring 30 % af de nye virksomheder, og de har større sandsynlighed for at overleve i længere tid og blive vækstiværksættere. Dvs. iværksættere, der skaber høj beskæftigelse og værdi til samfundet. Overlevelsen hos de nye virksomheder er central og en vigtig forudsætning for en langvarig positiv effekt på samfundsøkonomien.

Undersøgelsen er finansieret af Rockwool Fonden. Bogens resultater bygger bl.a. på en gennemgang af karakteristika ved mere end 26.000 iværksættere fra 1994-2006, suppleret med en spørgeskemaundersøgelse blandt 10.000 danskere.

Undersøgelsen peger på, at beskæftigelsen kan udbygges, hvis de nye virksomheders potentiale styrkes, så de vokser mere. Vi kan med andre ord øge gevinsten uden, at der nødvendigvis etableres flere virksomheder, hvis vi fokuserer på de virksomheder, som overlever bedre, og hvis ejere har en større sandsynlighed for at blive vækstiværksættere. Bogen går derfor videre med at præsentere de personlige karakteristika hos de iværksættere, som giver den største sandsynlighed for overlevelse og vækst.

Spørgeskemaundersøgelsen viser, at spin-off-iværksætterne udover deres brancheerfaring især adskiller sig fra de øvrige iværksættere på følgende dimensioner: De er yngre, og de har en højere indkomst på det tidspunkt, hvor de bliver iværksættere. De investerer mere tid i deres arbejdsliv, og de lægger væsentligt større vægt på selvstændighed. Derfor starter de oftere virksomheder, som er uafhængige af andre virksomheder. Spin-off-iværksætterne bruger ligeledes deres netværk mere aktivt og har forbindelse til flere iværksættere gennem deres netværk.

Michael S. Dahl, Pernille G. Jensen og Kristian Nielsen. ”Jagten på fremtidens nye vækstvirksomheder”, udkom den 19. november 2009 på DJØF Forlag

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The Embedded Entrepreneur – Out now

Michael S. Dahl and Olav Sorenson

Using comprehensive data on the Danish population, this paper examines the determinants of entrepreneurs’ choices of where to locate their new ventures. Our findings suggest that entrepreneurs place much more emphasis on being close to family and friends than on regional characteristics that might influence the performance of their ventures when deciding where to locate those businesses. Two factors could explain our findings: On the one hand, entrepreneurs may simply value proximity to family and friends. On the other hand, these relationships may help them to assemble the assets and to recruit the personnel that they need to succeed in their ventures. Our results suggest that the former plays the greater role in entrepreneurs’ location choices.

Update, May 28: Received the EMR Best Paper Award for 2009

Michael S. Dahl and Olav Sorenson (2009) “The embedded entrepreneur”, European Management Review, Vol. 6, pp. 172-181 [DOI Link] – Download here

Master Program in Innovation and Entrepreneurship

My research group has a master program, which deserves some attention on this site.

MSc in Innovation, Knowledge and Economic Dynamics (MIKE-E) – leading to a Master’s Degree in Economics. MIKE-E emphasises economic analysis and strategies in relation to knowledge, innovation and economic dynamics.

MSc in Innovation, Knowledge and Entrepreneurial Dynamics (MIKE-B) – leading to a Master’s Degree in Business Economics.MIKE-B has a special focus on knowledge management and innovation in relation to entrepreneurial dynamics.

The close collaboration between the two programmes gives a unique opportunity to combine macro- and micro perspectives, and gives students new possibilities to design and individual study profile. The programmes enroll both Danish and international students and the teaching language is English.

Visit the website or even better see this folder for more information.

Whom do new firms hire?

Michael S. Dahl and Steven Klepper

Using the matched employer-employee data set for Denmark and information on the founders of new firms, we analyze the hiring choices of all new firms that entered in 1995-2001. We develop a theoretical model in which the quality of a firm’s employees determines its average cost, a firm’s productivity is based on its pre-entry experience and persistent shocks, and over time firms learn about their productivity. The model predicts that more productive firms are larger and hire more talented employees, which gives rise to various predictions about how pre-entry experience, firm growth rates, and firm size influence the wages firms pay to their early hires. We find that beginning with the time of entry, larger firms consistently pay higher wages to their new hires. These are firms with greater survival prospects at the time of entry based on the pre-entry backgrounds of their founders and that grow at greater rates over time, both of which are predictive of the wages paid to new hires from the time of entry onward. Our findings suggest workers are allocated to firms according to their abilities, which can give rise to enduring firm capabilities.

The Social Attachment to Place

Michael S. Dahl and Olav Sorenson

Many theories either implicitly or explicitly assume that individuals readily move to locations that improve their financial well being. Other forces, however, counteract these tendencies; for example, people often wish to remain close to family and friends. We introduce a methodology for determining how individuals weight these countervailing forces, and estimate how both financial incentives and social factors influence the probability of geographic mobility in the Danish population from 2002 to 2003. Our results suggest that individuals respond to opportunities for higher pay elsewhere, but that their sensitivity to this factor pales in comparison to their preferences for living near family and friends.

Social Forces, Vol. 89, No. 2, December 2010, DOI link to paper

Are You Experienced? Prior Experience of Managers and the Survival of New Organisations

Michael S. Dahl and Toke Reichstein

This paper investigates the relationship between the experiences of managers and the likelihood of survival of their new firms. We take advantage of a comprehensive data-set covering the entire Danish labour market from 1980-2000. This is used to trace the activities of top ranked members of new firms prior to the founding and follow the fate of their firms after the founding.

Michael S. Dahl and Toke Reichstein (2007), “Are You Experienced? Prior Experience and the Survival of New Organizations“, Industry and Innovation. Vol. 14, No. 5, pp. 497-511. ISSN: 1366-2716. [DOI Link]

New paper accepted for publication

My paper with Toke Reichstein, "Are You Experienced? Prior Experience and the Survival of New Firms", has been accepted for publication in the international peer-reviewed journal, Industry and Innovation. It analyses the relationship between general industry experience and the type of firms in which the experience is achieved and how this influences the survival probabilities of new firms. It is expected to be published in the journal in the December 2007 issue.

Michael S. Dahl and Toke Reichstein (2007), "Are You Experienced? Prior Experience and the Survival of New Organizations", Industry and Innovation. Vol. 14, No. 5, pp. 497-511. ISSN: 1366-2716.

Tietgen Gold Medal Award 2006

I am very much honored to receive the Tietgen Gold Medal Research Award 2006 for my Post-Doc research. The Tietgen Gold Medal is awarded to younger Post-Doc researchers, which have completed a significant degree of internationally published research within business and economics.

C. F. Tietgen was one of the great forces behind the industrial revolution in Denmark. He was behind a number of the greatest corporations at the time. Many of which still exist today, notably GN Store Nord, Danisco, Tuborg, DFDS and Burmeister & Wain.

The award is administred by the Danish Society for the Advancement of Business Education [Foreningen for Unge Handelsmænds Uddannelse] and its Danish Business Research Academy [Dansk Erhvervsforskningsakademi].

The Gold Medal is accompanied with 100,000 Danish Kroner (€13,500 / $16,500) to support a longer visit at an international university.

More information:

• About C. F. Tietgen (1828-1901) [in English] [in Danish here and here]
• The Tietgen Gold Medal Award [in Danish]
• Aalborg University's Press Release [in Danish]

Spar Nord Foundation Research Award 2005

I am very much honored to receive the Spar Nord Foundation Research Award 2005 based on my PhD thesis, “Knowledge Diffusion and Regional Clusters: Lessons from the Danish ICT Industry” and the journal publications coming from this thesis.

The Spar Nord Foundation gives this annual research award to particularly outstanding doctoral work completed at Aalborg University by a young researcher.

• Read the official press release (in Danish)
• Read the news on the CTIF web page (in English)

Social networks in the R&D process: the case of the wireless communication industry around Aalborg, Denmark

Michael S. Dahl and Christian Ø. R. Pedersen (now Christian R. Østergaard)

Whether social networks diffuse knowledge across firm boundaries has been the topic of much debate. To inform these theories, this article considers two questions. First, who has contacts across firm boundaries? And second, when do these relations diffuse knowledge? Our empirical evidence comes from a survey of 346 engineers in the wireless communication industry around Aalborg in Northern Denmark. Our analysis finds that social contact between these engineers is frequent and is used to diffuse knowledge that receivers find useful. More experienced engineers are more likely to receive valuable knowledge from their networks. These findings show that the long-term relationships, which are more likely based on trust and reputation, are also more likely to be a channel valuable knowledge.

Michael S. Dahl and Christian Ø. R. Pedersen (2005), “Social Networks in the R&D Process: The Case of the Wireless Communication Industry Around Aalborg, Denmark”, Journal of Engineering and Technology Management. Vol. 22, No. 1-2, pp. 75-92. ISSN: 0923-4748. [DOI Link]