Abstract

Nowadays, entrepreneurship has received a large amount of attention in such studies as economics, sociology, finance, and public policy. Furthermore, The European Union and national government have implemented several policy interventions aimed to encourage new firm formation. Entrepreneurial education is now reinforced in schools, colleges, and universities. Nevertheless, entrepreneurship remains to be a black box. Making everyday decisions on firm organization and management is a complex process, which depends on how entrepreneurs perceive the environment and their own entrepreneurial abilities. These perceptions influence firm behavior that can be represented by combination of different actions. The main goal of this doctoral thesis is to examine how entrepreneurial perceptions and learning influence entrepreneur preferences for certain actions and thus, how they affect firm performance. The first essay aims to understand whether the effectiveness of the policy is altered by the behavioral assumption that entrepreneurs are overconfident about their entrepreneurial abilities and tend to be overoptimistic in the evaluation of future prospects. The essay applies the agent-based model that is a modified version of the financial fragility model of Delli Gatti et al. (2005). The simulation results suggest that the presence of misperceptions of entrepreneurial abilities influence the policy outcomes. The main purpose of the second essay is to reveal how entrepreneurial perceptions of competitive environment influence their preferences for competitive strategies. Competitive advantages of firms are defined on the basis of Porter’s (1980) model of generic strategies — differentiation and cost leadership. The results of the analysis suggest that perceived threat of competition pushes firms to take actions. The preferences for actions are explained by available resources such as human capital. The third essay aims to evaluate the impact of capital grants given to microenterprises operating in the Province of Trento, Italy in 2009 and 2010. The last essay empirically illustrates how lack of restrictions imposed on the amount of possible subsidy requests and fixed eligibility criteria has invoked subsidy-seeking behavior of firms. The results from econometric analysis suggest that subsidies have not been able to improve firm performance or to increase firm size in 2011. However, a positive effect of subsidies on the propensity to invest in training and in marketing and advertising in 2012 has been detected.