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On the utility of the stochastic processes in modeling the nexus between entrepreneurship and innovation: a nonparametric application of Bayesian inference

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Abstract

The application of stochastic processes in modeling uncertain phenomena will benefit researchers in the fields of various sciences like management, engineering, chemistry, physics, and business. The present article tries to apply several stochastic processes to modeling the relationship between entrepreneurial innovation and entrepreneurship. The Chinese restaurant process (CRP) and the Blackwell-MacQueen scheme are the processes that will be utilized to explore a predictive model. By presenting illustrative evidence, the CRP and the Blackwell-MacQueen scheme have helped us to understand how the Schumpeterian approach goes true. The study on the proposed equation demonstrated that the considered model also may signify levels of the decision in interpreting the nexus between innovation and entrepreneurship. Hence, a new function, arbitrary called “decision function,” was discovered and introduced in this study. After having reviewed the properties of the decision function, the relationship between entrepreneurship and entrepreneurial innovation (and also economic growth in its wake) was studied and interpreted. Regardless of mathematical models resulted from applying stochastic processes in investigating the relationship between entrepreneurship and innovation factors, the present paper reveals the importance of statistical models and stochastic processes in understanding the unmeasurable networks formed out of various factors.

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Data availability

The data are available on the official site of the World Intellectual Property Organization.

Notes

  1. Linear, logarithmic, inverse, quadratic, cubic, compound, power, S, growth, exponential, logistic

  2. A collection of simple and probability-based models, which is developed by considering colorful balls and several urns, that are widely used in other sciences such as economics, biology, medicine, engineering, etc.

  3. Suppose G0(S) is a probability function that, in parametric or nonparametric manner, can present the characteristics of new business status of country. Furthermore, clearly, this function may be different in any country.

  4. Herein, the Prior Density Function can be considered as the set of businesses that have not yet been launched in the area of interest.

  5. According to the Global Entrepreneurship Monitor (GEM) annual research, in the factor-driven economies, most of the entrepreneurs prefer to get into a similar business whereas, in the innovation-driven economies, each entrepreneur by perceiving the business opportunities desires to venture into an innovative and low-competitive business.

  6. The general definition of entrepreneurship by Global Entrepreneurship Monitor (GEM) is any business activity regardless of its ability to make money.

Abbreviations

CRP:

Chinese restaurant process

GEM:

Global Entrepreneurship Monitor

GII:

Global Innovation Index

TEA:

total early-stage entrepreneurial activities

WEF:

World Economic Forum

ERI:

Economic Resilience Index

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Acknowledgments

We are grateful to the reviewers for their wonderful comments and suggestions throughout the review process as well as do thank Mr. Moein Heydary for his endeavors in editing this paper. Additionally, we highly wish to thank our parents and family for inspiriting us during this research.

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Authors and Affiliations

  1. UNESCO, Paris, France

    Nezameddin Faghih

  2. School of Mathematics, Statistics, and Computer Science, University of Tehran, Tehran, Iran

    Ebrahim Bonyadi

  3. Faculty of Entrepreneurship, University of Tehran, Tehran, Iran

    Lida Sarreshtehdari

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  1. Nezameddin Faghih
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  2. Ebrahim Bonyadi
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  3. Lida Sarreshtehdari
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Contributions

Nezameddin Faghih: The main ideas behind the paper have been developed by him and also he acted as the supervisor trying to improve the structures of this article. Ebrahim Bonyadi: conceptualization, methodology, software (including R programing language, and SPSS), validation, formal analysis, data curation, writing—original draft, writing—review and editing, supervision, project administration. Lida Sarreshtehdari: investigation, resources, formal analysis, writing—original draft, visualization, project administration.

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Correspondence to Ebrahim Bonyadi.

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Faghih, N., Bonyadi, E. & Sarreshtehdari, L. On the utility of the stochastic processes in modeling the nexus between entrepreneurship and innovation: a nonparametric application of Bayesian inference. J Glob Entrepr Res 11, 97–111 (2021). https://doi.org/10.1007/s40497-021-00272-3

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