nep-ent New Economics Papers
on Entrepreneurship
Issue of 2005‒05‒14
nine papers chosen by
Marcus Dejardin
Facultés Universitaires Notre-Dame de la Paix

  1. In search for the heffalump: an exploration of the cognitive style profiles among entrepreneurs By Bouckenooghe, Dave; Van den Broeck, Herman; Cools,Eva; Vanderheyden, Karlien
  2. The Survival of New Ventures in Dynamic versus Static Markets By Andrew Burke; Holger Görg; Aoife Hanley
  3. The Impact of Intellectual Property Rights on International Self-Employed Rates By Andrew Burke; Stuart Fraser
  4. Nascent entrepreneurship and the level of economic development By Sander Wennekers; André van Stel; Roy Thurik; Paul Reynolds
  5. Intellectual Property Rights and Market Dynamics By Fabrizio Cesaroni; Paola Giuri
  6. Commercialisation Strategies of Technology based European SMEs: Markets for Technology vs. Markets for Products By Paola Giuri; Alessandra Luzzi
  7. Private equity investments and disclosure policy By Beuselinck, C.; Deloof, M.; Manigart,S.
  8. Guía para la proyección de estados financieros y valoración financiera de un plan de negocios By Ignacio Vélez Pareja
  9. Times-To-Default:Life Cycle, Global and Industry Cycle Impact By Fabien Couderc; Olivier Renault

  1. By: Bouckenooghe, Dave; Van den Broeck, Herman; Cools,Eva; Vanderheyden, Karlien
    Abstract: n this article we reopen the search for those features that distinguish entrepreneurs from non-entrepreneurs. Because the trait psychology approach failed to fulfill this promise the cognitive psychology approach was adopted. The exploration of cognitive styles among 497 entrepreneurs and 521 non-entrepreneurs in Flanders distinguishes six profiles: omnipotent thinkers, lazy thinkers, pacesetters, experts, inventors, and implementors. A comparison of both groups yields differences in the prevalence of inventors and implementors. We find significantly more inventors in the group of entrepreneurs and significantly more implementors in the group of non-entrepreneurs. Finally, the results of this study also indicate that entrepreneurs may differ in the cognitive style profiles they hold.
    Keywords: cognitive styles, entrepreneurs, non-entrepreneurs, cluster analysis Note
    Date: 2005–05–09
  2. By: Andrew Burke; Holger Görg; Aoife Hanley
    Abstract: The paper uses a unique dataset comprise almost the population of 179,306 new ventures who enter the UK market in 1998. The central hypothesis is that the survival function of new ventures has a different specification in dynamic compared to static markets. Estimation of a hazard function supports this hypothesis. In dynamic markets the survival of new ventures is positively related to industry concentration and negatively related to industry growth. The opposite is found to be true for static markets. The results shed new insights into the competitive dynamics of new ventures, optimal strategies for firm survival and also highlight some important effects for competition policy.
    Keywords: new firms, start-ups, survival, turbulence, dynamic markets
    JEL: L11 M13
    Date: 2005–05
  3. By: Andrew Burke; Stuart Fraser
    Abstract: The importance of IPR regimes for large firm innovation is well documented but less is known about their impact on typically less innovative self-employed entrepreneurship. The paper estimates the net effect of the various elements that comprise an IPR regime including the political system, the laws, conventions and institutions as well as a general familiarity with and respect for IPR related products. Cumulatively, the analysis indicates that a well developed IPR regime raises self-employment rates significantly; by as much as 31% among males and 13% among females. Since the self-employed sector is possibly the only segment of the enterprise base where IPRs may be expected (and frequently assumed) to have a negative effect the research finding of a positive effect provides a useful contribution to our empirical understanding of the welfare effects of IPRs on the entrepreneurial economy more widely. The research also indicates that the formulation of effective enterprise policy which attempts to stimulate the less innovative self-employed sector of the entrepreneurial economy- particularly in developing countries - may need to look beyond the usual focus on industrial policy and consider wider political economy IPR determinants of self-employment activity.
    Keywords: self-employment, intellectual property rights, imitation
    JEL: L2 O33 O34 L2
    Date: 2005–05
  4. By: Sander Wennekers; André van Stel; Roy Thurik; Paul Reynolds
    Abstract: Based upon two strands of literature, this paper hypothesizes a U-shaped relationship between a country's rate of entrepreneurial dynamics and its level of economic development. This would imply a different scope for entrepreneurship policy across subsequent stages of development. Regressing GEM's 2002 data for nascent entrepreneurship in 36 countries on the level of economic development as measured either by per capita income or by an index for innovative capacity, we find support for a U-shaped relationship. Testing our results against several control variables, evidence is again found for this relationship with economic development, in addition to significant effects of the business ownership rate (+), social security expenditure (-), aggregate taxes (+) and population growth (+). The results suggest that a 'natural rate' of nascent entrepreneurship is to some extent governed by 'laws' related to the level of economic development. For the most advanced nations, improving incentive structures for business start-ups and promoting the commercial exploitation of scientific findings offer the most promising approach for public policy. Developing nations, however, may be better off pursuing the exploitation of scale economies, fostering foreign direct investment and promoting management education.
    Keywords: Nascent entrepreneurship, economic development
    JEL: J23 L16 M13 O11
    Date: 2005–01
  5. By: Fabrizio Cesaroni; Paola Giuri
    Abstract: Two opposite models are currently operating in the modern economy, the strong intellectual property rights (IPR) model, and the open source/open science model. They have traditionally been applied to alternative institutional contexts. The strong IPR model has been associated to the business environment, while the open science model has been associated to the academic or research system. More recently, a strengthening of the IPR system has occurred in the public research system, and open science models have been adopted in private sectors like the open source software. This paper discusses these different models and their implications on the innovative activity of firms and economies, and the market dynamics. One of the main benefits deriving from a strong IPR system is that it encourages the entry of new technology-based firms and the commercialisation of technologies in markets for technologies. At the same time, an increased patent protection is also associated to potential costs, such as those arising from a excessive fragmentation of property rights, an abuse of patent protection for strategic reasons (sleeping and blocking patents), and an increase in litigation costs.
    Keywords: Intellectual Property Rights, Patents, Patent Policy, Open Science, Open Source Software, Technology Commercialisation and Diffusion
  6. By: Paola Giuri; Alessandra Luzzi
    Abstract: This paper focuses on European small-medium "serial innovators" at the beginning of the 1990s and provides an empirical basis to answer the following questions: who are the upstream specialized small-medium technology producers? How are they distributed across countries? Are there technologies in which they show a relative advantage? By focusing on firms? history, activities, and the description of events obtained by different data sources, we also investigates if technology based SMEs choose to implement a strategy based on the commercialisation of their technologies or if they invest in the complementary assets of production, marketing and distribution becoming micro-chandlerian firms. Through this analysis we are able to propose a taxonomy of technology based SMEs? strategies in the market for technology, in the market for embedded technologies and in the market for products.
    Keywords: SMEs, Technology Strategies, Licensing.
  7. By: Beuselinck, C.; Deloof, M.; Manigart,S.
    Abstract: We investigate whether a firm’s disclosure policy is affected by the changing corporate setting and intensified corporate governance associated with private equity (PE) investments. For a unique sample of unquoted PE backed firms we observe a significant switch to increased financial disclosure in the pre-investment year, consistent with the hypothesis that entrepreneurs attempt to reduce information asymmetries inherent to the PE application by increasing their disclosure levels. Further, we document that the governance and professionalization impact of PE investors affects their portfolio firms’ financial disclosure positively. Finally, differentiating on investor type (government versus non-government related) reveals no overall effect on disclosure, both in the pre- as in the post-investment years. Results are robust to various sensitivity checks.
    Keywords: Disclosure, private equity, unlisted firms, monitoring, corporate governance Note
    JEL: G30 M10 M41
    Date: 2005–02–14
  8. By: Ignacio Vélez Pareja
    Abstract: Resumen En la creación o la valoración de una empresa es muy importante contar con estados financieros proyectados confiables y consistentes para poder tomar las decisiones apropiadas para el inicio y seguimiento de la firma. En esta guía mostramos paso a paso y de una manera muy clara el procedimiento para hacer las proyecciones de los estados financieros y a partir de allí calcular los flujos de caja necesarios para la valoración. Esta valoración se hace calculando el valor de la firma y su valor presente neto (VPN). Se calculan puntos de equilibrio tradicionales y lo que hemos denominado puntos de equilibrio dinámicos. El modelo cuenta con algunas complejidades y se presenta un análisis de sensibilidad sencillo basado en la identificación de variables críticas y escenarios. ABSTRACT When creating a firm or when we intend to value an ongoing concern it is very important to have reliable and consistent financial statements in order to make the proper decisions not only for the starting of a new firm but for the following up and monitoring that firm or simply an ongoing concern. In this guide we show a very clear and simple step by step procedure to construct proforma financial statements. From these financial statements we will derive the cash flows necessary to calculate the market value and net present value (NPV) for the firm. We calculate the traditional break even points and what we call the dynamic break even points. We present some complexities and show a simple sensitivity analysis that includes the determination of critical variables and scenario analysis.
    Keywords: Proyección de estados financieros
    JEL: D61
    Date: 2004–06–23
  9. By: Fabien Couderc (University of Geneva & FAME); Olivier Renault (Warwick Business School,UK)
    Abstract: This paper studies times-to-default of individual firms across risk classes. Using Standard & Poor’s ratings database we investigate common drivers of default probabilities and address two shortcomings of many papers in the credit literature. First, we identify relevant determinants of default intensities using business cycle and credit market proxies in addition to financial markets indicators, and reveal the time-span of their impacts. We show that misspecifications of financial based factor models are largely corrected by non financial information. Second, we show that past economic conditions are of prime importance in explaining probability changes: current shocks and long term trends jointly determine default probabilities. Finally, we exhibit industry contagion indicators which might be helpful to capture leading and persistency patterns of the default cycle.
    Keywords: censored durations; proportional hazard; business cycle; credit cycle; default determinants; default prediction
    JEL: C14 C41 G20 G33
    Date: 2005–03

This nep-ent issue is ©2005 by Marcus Dejardin. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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