nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2005‒10‒29
four papers chosen by
Philip Yu
Hong Kong University

  1. Entrepreneurial engagement levels in the European Union By Isabel Grilo; Roy Thurik
  2. Firm Maturity and Product Processes R&D in Swedish Manufacturing Firms By Nyström, Kristina
  3. Intra-family succession in Italian farms By Alessandro Corsi
  4. Rent seeking in sequential group contests By Oliver Gürtler

  1. By: Isabel Grilo; Roy Thurik
    Abstract: A multinomial logit model and survey data from the 25 EU member states and the US are used to establish the effect of demographic and other variables on various entrepreneurial engagement levels. These engagement levels range from "never thought about starting a business" to "thinking about it", "taking steps for starting up", "having a young business", "having an older business" and "no longer being an entrepreneur". Data of the 2004 Entrepreneurship Flash Eurobarometer survey containing over 13,500 ob-servations is used. Other than demographic variables such as gender, age, education level and whether par-ents are self-employed, the set of explanatory variables used includes country specific effects, measures of risk tolerance, internal and external locus of control and four perceptions of 'obstacles'. The 'obstacle' vari-ables include the perception by respondents of administrative complexities, of availability of financial sup-port, of accessibility of information for start-up and whether the current economic climate is favorable. Among the four perception variables only administrative complexities displays an unambiguous obstacle profile in that its presence has a significant negative impact on higher entrepreneurial engagement levels. Country effects suggest a clear underperformance of Europe relative to the US in less mature entrepreneu-rial phases.
    Keywords: determinants of entrepreneurship, nascent entrepreneurship, multinomial logit, barriers to entry, Europe
    JEL: M13 H10 J23 R12
    Date: 2005–10
  2. By: Nyström, Kristina (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)
    Abstract: This paper investigates the commonly debated question about innovations and firm age. Are innovations made by incumbent firms, and does innovation therefore constitute a barrier to entry, or is innovation a way for new firms to successfully compete? The paper further investigates the relationship between firm size and innovation. Does innovation constitute a way for small firms to compete or are innovation a large firm phenomenon? In the analysis the paper explicitly distinguishes between product and process innovation. Data from 1997 and 1999 on product and process R&D, firm size and age in the Swedish manufacturing industry is used in the empirical analysis. A multinomial logit-model is used to estimate the probability of performing process and product R&D. The results show that there are complementarities between product and process R&D and very few firms conduct only process R&D. The probability of product R&D and combined product and process R&D is higher for large firms and firms that are older than 80 years. The size and age effects are more pronounced for firms that carry out both process and product R&D.
    Keywords: Product; process; R&D; firm size; firm maturity
    JEL: L11 O31 O33
    Date: 2005–10–18
  3. By: Alessandro Corsi
    Abstract: The succession in family farm is a critical issue: it not only involves the transmission of wealth, but also of specific skills and of specific farm management techniques. Since a large share of farmers in Italy are old, the lack of prospective successors in their farms would imply that a change in the farm management will take place. In some cases this could be a beneficial process, leading to the enlargement of neighbouring farms and, hence, to a greater efficiency but in other cases it might lead to the abandonment of farms and to degradation of the territory. It is therefore important to explore the conditions under which a farm household can transmit the farm management within the household itself. In our paper we try to assess which are the determinants of the likely farm succession within the family and we test in a developed country the hypothesis put forward by Rosenzweig and Wolpin (1985) for LDCs that farm-specific knowledge creates an incentive for children to take on the farm. To do this, we exploit a sample of individual farm data in Piedmont Region drawn from the 2000 Agricultural Census. Taking the presence of children and relatives working predominantly or exclusively on the farm as indicators for the presence of prospective successors, we estimate by a multinomial logit its determinants. Explanatory variables include personal characteristics of the operators, including their work status, and farm characteristics. The results suggest that specific knowledge does favour farm succession within the household, along with other variables already considered in the previous literature; nevertheless, the effects of these variables are in general weak, and more research is needed to identify them.
    Keywords: family, succession
    JEL: J0 J38
    Date: 2004–09
  4. By: Oliver Gürtler (Department of Economics, BWL II, University of Bonn, Adenauerallee 24-42, D-53113 Bonn, Germany)
    Abstract: In this paper, a group contest is analyzed, where the groups are allowed to determine their sharing rules either sequentially or simultaneously. It is found that in case the more numerous group determines its sharing rule prior to the smaller group, rent dissipation in the group contest is higher than in an individual contest. However, if the order of moves is endogenized, the smaller group will always act prior to the bigger group. Competition between the groups is in this way weakened and the groups are able to save on expenditures.
    Keywords: Group contest, rent seeking, sequential choices, sharing rule
    JEL: D72
    Date: 2005–05

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