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on Entrepreneurship |
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Issue of 2005‒12‒01
thirteen papers chosen by Marcus Dejardin Facultés Universitaires Notre-Dame de la Paix |
| By: | Marco Cagetti; Mariacristina De Nardi |
| Abstract: | Although the role of financial constraints on entrepreneurial choices has received considerable attention, the effects of these constraints on aggregate capital accumulation and wealth inequality are less known. Entrepreneurship is an important determinant of capital accumulation and wealth concentration and, conversely, the distribution of wealth affects entrepreneurial choices in presence of borrowing constraints. We construct a model that matches wealth inequality very well, for both entrepreneurs and non- entrepreneurs. We find that more restrictive borrowing constraints generate less wealth concentration, but also reduce average firm size, aggregate capital, and the fraction of entrepreneurs. We also find that voluntary bequests are an important channel that allows some high-ability workers to establish or enlarge an entrepreneurial activity: with accidental bequests only, there would be fewer large firms, fewer entrepreneurs, and less aggregate capital, but also less wealth concentration. |
| Keywords: | Loans ; Wealth |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedhwp:wp-05-09&r=ent |
| By: | Nauro F. Campos; Mariana Iootty |
| Abstract: | What are the determinants of firm entry and exit in Brazil? How do entry and exit rates affect productivity? This paper tries to answer these questions using panel data for about 104 Brazilian manufacturing sectors (3-digit level) for the period 1996 to 2002. Our results show that the share of exports in sectoral output is one main determinant of entry and exit rates. The results also suggest that in years of real per capita GDP decline, export propensity is associated with entry rates, while in years of GDP expansion, sectoral growth is positively associated with net entry. Finally, our results show that exit (and to a lesser extent, entry and net entry) is a very robust determinant of total factor productivity across industrial sectors in Brazil. |
| JEL: | L6 C33 O12 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:anp:en2005:095&r=ent |
| By: | Knockaert, M.; Lockett, A.; Clarysse, B.; Wright, M. |
| Abstract: | This paper uses a unique dataset to examine the neglected but important issue concerning the relationship between the human capital and fund characteristics of venture capitalists and post-investment follow-up behavior in early stage high tech investments. We found no indication that involvement in monitoring activities by the investment manager is determined by either fund or human capital characteristics. In relation to value-adding activities, human capital variables were the most important, with previous consulting experience and entrepreneurial experience contributing to a higher involvement in value-adding activities. Furthermore, the diversity of an investment manager’s portfolio was negatively related to involvement in value-adding activities. Finally, with respect to fund level characteristics, we found that investment managers of captive funds were less involved in value-adding activities. |
| Keywords: | venture capital, early stage high tech firms, post-investment follow-up behavior, human capital, fund characteristics |
| Date: | 2005–11–18 |
| URL: | http://d.repec.org/n?u=RePEc:vlg:vlgwps:2005-20&r=ent |
| By: | Clarysse, B.; Knockaert, M.; Lockett, A. |
| Abstract: | This study examines the selection behaviour of 68 European early stage high tech VCs. In particular, we examine whether or not these VCs exhibit heterogeneity in their selection behaviour. To examine these issues we employ a conjoint analysis methodology. Our results indicate that VCs exhibit substantial heterogeneity in investment selection behaviour. Employing a cluster analysis three types of investors emerge: those who focus on technology, those who focus on finance and those who focus on people. We then examine the drivers of these differences, being the sectoral focus, the sources of funds and the human capital of the investment manager. |
| Date: | 2005–11–18 |
| URL: | http://d.repec.org/n?u=RePEc:vlg:vlgwps:2005-21&r=ent |
| By: | Holger Patzelt; Dodo zu Knyphausen-Aufseß; Yasmin Habib |
| Abstract: | Motivated by the different development stages of both, the venture capital (VC) as well as the life science industry in the USA and Europe, we investigate portfolio strategies of US-American and European VC firms active in this sector. We analyse portfolios of 88 VCs financing a total of 1050 life science ventures. Our results show that US life science VCs are equally likely to have a focus on early stage ventures and to diversify across investment stages as their European counterparts. However, the latter invest more in the US industry than vice versa, more in traditional life science technologies developing therapeutics and diagnostics, and less in new medical technology and healthcare/IT firms. Regarding the VCs' internationalisation strategies, our results reveal that VCs investing globally and US VCs focusing on their home market invest more in medical technology and healthcare/IT and less in diagnostics firms than European VCs with European investees only. We conclude that European life science ventures developing medical and healthcare/IT technologies should internationalise early enough into the USA in order to access the US VC market. Therapeutics and diagnostics companies in the USA, on the other hand, may find good opportunities to raise VC in Europe. |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:esi:egpdis:2005-31&r=ent |
| By: | Sagiri Kitao (Economics NYU) |
| Keywords: | Income Taxation, Entrepreneurs, Dynamic General Equilibrium, Heterogeneous Agents |
| JEL: | E1 E6 H2 H3 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed005:514&r=ent |
| By: | Florin Bilbiie; Fabio Ghironi |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed005:842&r=ent |
| By: | Karen Bonner; Seamus McGuinness (Economic Research Institute of Northern Ireland) |
| Abstract: | This paper examines the extent to which marketing assistance administered to a group of high performing Northern Ireland SMEs led to improved export revenue growth. Standard OLS models provided no evidence to support the view that marketing grants substantially improved the export performance of assisted firms; however, substantial impacts were detected when treatment models were estimated, indicating that selection into marketing assistance tended to be a non-random event. Marketing assistance was found to be a highly effective policy tool when targeted towards SMEs already active in export markets and/or involved in product innovation. From a methodological standpoint the analysis highlights the potential benefits of using other grant information within the treatment model as a means of uncovering additional important information on firm level characteristics that might otherwise have been missed |
| Keywords: | SMALL ENTERPRISES, TECHNOLOGY |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:eri:wperin:4&r=ent |
| By: | Jose Wynne |
| Keywords: | Firm and industry dynamics, Asymmetric information, Credit frictions. |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed005:228&r=ent |
| By: | Dale T. Mortensen; Rasmus Lentz (Department of Economics Boston University) |
| Keywords: | Labor demand, labor productivity, firm size, firm growth, product innovation. |
| JEL: | E2 E6 J2 J3 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed005:910&r=ent |
| By: | David G. Blanchflower; Jon Wainwright |
| Abstract: | The main findings of this paper are that despite the existence of various affirmative action programs designed to improve the position of women and minorities in public construction, little has changed in the last twenty five years. We present evidence showing that where race conscious affirmative action programs exist they appear to generate significant improvements: when these programs are removed or replaced with race-neutral programs the utilization of minorities and women in public construction declines rapidly. We show that the programs have not helped minorities to become self-employed or to raise their earnings over the period 1979-2004, using data from the Current Population Survey and the Census, but have improved the position of white females. There has been a growth in incorporated self-employment rates of white women in construction such that currently their rate is significantly higher than that of white men. The data are suggestive of the possibility that some of these companies are 'fronts' which are actually run by their white male spouses or sons to take advantage of the affirmative action programs. |
| JEL: | J4 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11793&r=ent |
| By: | H. OOGHE; C. SPAENJERS; P. VANDERMOERE |
| Abstract: | We give an overview of the shortcomings of the most frequently used statistical techniques in failure prediction modelling. The statistical procedures that underpin the selection of variables and the determination of coefficients often lead to ‘overfitting’. We also see that the ‘expected signs’ of variables are sometimes neglected and that an underlying theoretical framework mostly does not exist. Based on the current knowledge of failing firms, we construct a new type of failure prediction models, namely ‘simple-intuitive models’. In these models, eight variables are first logit-transformed and then equally weighted. These models are tested on two broad validation samples (1 year prior to failure and 3 years prior to failure) of Belgian companies. The performance results of the best simple-intuitive model are comparable to those of less transparent and more complex statistical models. |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:rug:rugwps:05/338&r=ent |
| By: | Bettina Peters (Centre for European Economic Research ZEW) |
| Abstract: | This paper investigates whether firms innovate persistently or discontinuously over time using an innovation panel data set on German manufacturing and service firms for the period 1994-2002. We find that innovation behaviour is permanent at the firm-level to a very large extent. Using a dynamic random effects discrete choice model and a new estimator recently proposed by Wooldrigde (2005), we further shed some light on the driving forces for this phenomenon. The econometric results confirm the hypothesis of true state dependence for manufacturing as well as for service sector firms. In addition to past innovation experience, the results further highlight the important role of knowledge provided by skilled employees and unobserved individual heterogeneity in explaining the persistence of innovation. |
| Keywords: | innovation, persistence, state dependence, unobserved heterogeneity, dynamic random effects panel probit model |
| JEL: | O31 L20 C23 C25 |
| Date: | 2005–11–21 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpdc:0511021&r=ent |