Garry Bruton Discusses His Research on Entrepreneurship & Emerging Economies

Scientist Interview: February 2011

Garry Bruton

Recently, Essential Science IndicatorsSM from Thomson Reuters named Dr. Garry Bruton a Rising Star  among scientists in the field of Economics & Business. His current record in this field includes 26 papers cited a total of 324 times between January 1, 2000 and October 31, 2010.

Bruton is a Professor of Management in the Neeley School of Business at Texas Christian University, where he holds the Fehmi Zeko, Jr. Faculty Fellowship. He is also the President of the Asia Academy of Management and the Editor of Academy of Management Perspectives.

Below, he talks with ScienceWatch.com about his highly cited work in international business and entrepreneurship.


SW: Would you tell us a bit about your educational background and research experiences?

My research focuses heavily on international issues. Particularly, I am concerned where there is an intersection between international business and entrepreneurship. My international research started in the early 1990s as I began to teach and conduct research in Russia and its economic transition. Today my research focuses on a wide range of emerging economies. This focus leads me to spend approximately a third of each year in emerging economies conducting research.

Today, I have ongoing research projects in Vietnam, Peru, the Dominican Republic, China, and Turkey. The ability to go and spend time in emerging economies—and in each of the aforementioned economies—is critical to understanding the strategic actions you see in these countries. Without a grounding from actually spending time in a country it is possible to obtain statistical significance in research without understanding if it reflects reality.

SW: More than half of your papers in our database deal with some aspect of business in Asia, largely China. How did you get interested in this particular area?

"We seek to understand how business, particularly entrepreneurship, can help to break these chains of poverty."

I lived in China in both 1997 and 2005. The ability to live in the region and work at Chinese University in Hong Kong led to both firsthand experience in China and related research. It is amazing to have been able to see the transformation of China from widespread poverty to a rich and expanding nation.

SW: Your most cited original paper in our database is the 2003Journal of Business Venturing paper, "An institutional view of China's venture capital industry—Explaining the differences between China and the West," (Bruton GD, Ahlstrom D, 18[2]: 233-59). Would you tell us a little about this paper—your goals and findings, and where you have taken this research since its publication?

This paper was a qualitative piece of research in which we examined venture capital in China. This research helped to establish that actions in China may look similar to what we understand in the United States since many of the venture capitalists in China were trained in the United States. However, the implementation of venture capital is very different in Asia, as the actions of venture capitalists in China are directed subtly by the culture of the nation. Thus, by looking deeper at the actual actions of the venture capitalist we were able to discern the impact of culture in this industry.

Qualitative research is critical to build the theoretical understanding of what occurs in different institutional settings. Without grounding and in-depth understanding of a research topic from qualitative research it is possible to make inaccurate assumptions.

SW: In 2009, you and your colleagues published a paper in theJournal of International Business Studies comparing venture capital industries between Latin America and Asia (Bruton GD, Ahlstrom D, Puky T, "Institutional differences and the development of entrepreneurial ventures: A comparison of the venture capital industries in Latin America and Asia," 40[5]: 762-78). Please tell us about this work.

The article in the Journal of International Business Studies contrasted the venture capital industry in Asia and Latin America. This research builds on our earlier research in Asia. This research was particularly interesting to me and my co-authors since Latin America remains a domain in which there is limited research. It was interesting also since it showed that the nature of the institutional settings radically impact this industry.

In Latin America entrepreneurs will vote with their feet and move to the United States or other nations when faced with barriers to their entrepreneurial activities. But in Asia the entrepreneurs stay and seek to overcome those barriers. In addition, the strong control by very wealthy families in Latin America acts to limit the opportunities in ways that do not occur in Asia.

"The ability to live in the region and work at Chinese University in Hong Kong led to both firsthand experience in China and related research. It is amazing to have been able to see the transformation of China from widespread poverty to a rich and expanding nation."

It is interesting to note that one of the co-authors for this research was my MBA student at TCU. TCU does not have a Ph.D. program so we seek to incorporate MBA students into our research efforts when we can.

SW: Last year, your group had a paper inStrategic Management Journal, "Governance, ownership structure, and performance of IPO firms: the impact of different types of private equity investors and institutional environments," (Bruton GD, et al., 31[5]: 491-509, May 2010). Please tell us about this study and its findings.

The paper in the Strategic Management Journal contrasted IPOs in France and England. The two nations reflect different legal traditions (civil and common). The ability to contrast the impact on IPOs and corporate governance of these institutional differences allowed us to develop a richer understanding of how institutions in subtle but pervasive ways impact the actions in business.

From strictly a finance theory point of view it may be expected that an IPO in an EU country is largely the same. We were able, however, to show substantive differences between the two nations' IPOs and through the controls we employed feel confident that the differences were due to institutions including their legal traditions.

SW: Are there any projects you have forthcoming that you are free to discuss?

My research is now focusing on poverty and how entrepreneurship can help to solve the issues of poverty, particularly for those who live on less than a $1.25 a day. The one-sixth of the world’s population that lives on less than $1.25 a day has largely not changed over the last 25 years if we remove the improvement in China. Thus, most of the world has made dramatic improvements in living standards, yet the lives of individuals living on $1.25 a day are largely unchanged.

We seek to understand how business, particularly entrepreneurship, can help to break these chains of poverty. As a result we have a forthcoming article in the Journal of International Business Studies that examines microlending. This form of lending loans very small amounts to very poor people to start new businesses.

Building on that article we have a wide variety of other projects forthcoming in this domain on not only microlending but also related topics like informal firms, or those firms that do not register with the government. In most poor emerging economies, over 50% or more of all businesses will be informal. My hope is that this research in some small way can help to generate more business for these desperately poor, and, in turn, improve their lives.

SW: In what directions do you see your field (or key aspects thereof) going in the next decade?

The field of management and particularly entrepreneurship and international business continue to strengthen their theoretical and statistical quality. These domains will continue to make great strides forward. It is exciting to be able to be part of these domains.End

Garry D. Bruton, Ph.D.
Neeley School of Business
Texas Christian University
Fort Worth, TX, USA


GARRY BRUTON'S MOST CURRENT MOST-CITED PAPER IN ESSENTIAL SCIENCE INDICATORS:

Young MN, et al., "Corporate governance in emerging economies: A review of the principal-principal perspective," J. Manage. Stud-Oxford 45(1): 196-220, January 2008 with 42 cites. Source: Essential Science Indicators from Clarivate Analytics.

KEYWORDS: INTERNATIONAL BUSINESS, ENTREPRENEURSHIP, RUSSIAN ECONOMIC TRANSITION, EMERGING ECONOMIES, VIETNAM, PERU, DOMINICAN REPUBLIC, CHINA, TURKEY, FIRSTHAND EXPERIENCE, VENTURE CAPITAL, CULTURE, ASIA, LATIN AMERICA, IPO'S, FRANCE, ENGLAND, POVERTY, MICROLENDING, INFORMAL FIRMS.

 
 

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