nep-ent New Economics Papers
on Entrepreneurship
Issue of 2005‒12‒09
nineteen papers chosen by
Marcus Dejardin
Facultés Universitaires Notre-Dame de la Paix

  1. Renascent Men or Entrepreneurship as a One-Night Stand: Entrepreneurial Intentions Subsequent to Firm Exit By Audretsch, David B; Meijaard, Joris; Stam, Erik
  2. Growth and Entrepreneurship: An Empirial Assessment By Zoltan J. Acs; David B. Audretsch; Pontus Braunerhjelm; Bo Carlsson
  3. The Knowledge Spillover Theory of Entrepreneurship By Acs, Zoltán J; Audretsch, David B; Braunerhjelm, Pontus; Carlsson, Bo
  4. Learning to be an Entrepreneur By Guiso, Luigi; Schivardi, Fabiano
  5. Entrepreneurial Access and Absorption of Knowledge Spillovers: Strategic Board and Managerial Composition for Competitive Advantage By Audretsch, David B; Lehmann, Erik E
  6. The comparison of incomes of self-employed and salaried workers among German Nationals and immigrants By Amelie Constant; Yochanan Shachmurove
  7. Distribution of Natural Resources, Entrepreneurship, and Economic Development: Growth Dynamics with two Elites By Josef Falkinger; Volker Grossmann
  8. The Number of Bank Relationships of SMEs: A Disaggregated Analysis for the Swiss Loan Market By Prof. Dr. Doris Neuberger; Christoph Schacht
  9. New firm performance and territorial driving forces By Silvia Gorenstein; Raul Dichiara; Gustavo Burachik; Andrea Castellano; Valentina Viego
  10. Entrepreneurial Founder Effects in the Growth of Regional Clusters: How Early Succes is a Key Determinant By Michael S. Dahl; Christian Ø.R. Pedersen; Bent Dalum
  11. Could The Irish Miracle Be Repeated in Hungary? By Zoltan Acs; Colm O'Gorman; Laszlo Szerb; Siri Terjesen
  12. The Effects of Entry on Incumbent Innovation and Productivity By Aghion, Philippe; Blundell, Richard William; Griffith, Rachel; Howitt, Peter; Prantl, Susanne
  13. From Innovation Development to Implementation: Evidence from the Community Innovation Survey By Florence Jaumotte; Nigel Pain
  14. An Analysis of the Impact of Affirmative Action Programs on Self-Employment in the Construction Industry By David G. Blanchflower; Jon Wainwright
  15. La dinámica industrial y el financiamiento de las pyme By José Miguel Benavente; Alexander Galetovic; Ricardo Sanhueza
  16. The Role of Collateral and Personal Guarantees in Relationship Lending: Evidence from Japan's Small Business Loan Market By Arito Ono; Iichiro Uesugi
  17. The Political Economy of Financial Fragility By Feijen, Erik; Perotti, Enrico C
  18. Analyser l’impact d’un projet de Micro-finance : l’exemple d’ADéFI à Madagascar By Flore Gubert; François Roubaud
  19. Wirtschaftliche Entwicklung oder evolutorischer Wandel Ein integrativer Versuch zur Fundierung der evolutorischen Ökonomik By Fritz Rahmeyer

  1. By: Audretsch, David B; Meijaard, Joris; Stam, Erik
    Abstract: While a large literature has emerged focusing on nascent entrepreneurship, the propensity for ex-entrepreneurs to consider re-entering into entrepreneurship, or what we term here as renascent entrepreneurship, has been generally overlooked. According to the theory of selection and passive learning (Jovanovic, 1982), while there is a lot to be learned about the underlying but unobservable endowment of entrepreneurial skills from entering into entrepreneurship, there is virtually nothing that can be additionally learned from subsequently re-entering into entrepreneurship following termination of a previous firm. This paper suggests a different view of learning, where the entrepreneur can utilize her capacity to absorb and learn from the initial entrepreneurial experience, thereby augmenting her initial endowment of entrepreneurial skills. This leads to the theoretical prediction that those ex-entrepreneurs with characteristics more conducive to augmenting entrepreneurial abilities are more likely to become renascent entrepreneurs. Based on the empirical evidence from a database consisting of ex-entrepreneurs, we conclude that those ex-entrepreneurs with the characteristics facilitating the augmentation of entrepreneurial skills exhibit a higher propensity for becoming renascent entrepreneurs. This would suggest that there are two types of learning gained from entrepreneurship - both passive learning about the underlying endowment of entrepreneurial skills, but also active learning in that the (ex)entrepreneur learns how to do it better.
    Keywords: entrepreneurial learning; entrepreneurship; firm exit; nascent entrepreneurship; renascent entrepreneurship; restart
    JEL: J24 J23 M13
    Date: 2005–11
  2. By: Zoltan J. Acs; David B. Audretsch; Pontus Braunerhjelm; Bo Carlsson
    Abstract: This paper suggests that the spillover of knowledge may not occur automatically as has typically been assumed in models of endogenous growth. Rather, a mechanism is required that serves as a conduit for the spillover and commercialization of knowledge from the source creating it to the firm actually commercializing the new ideas. In this paper, entrepreneurship is identified as one such mechanism facilitating the spillover of knowledge. Using a panel of entrepreneurship data for 18 countries, empirical evidence is found that in addition to measures of R&D and human capital, entrepreneurial activity also serves to promote economic growth.
    Keywords: Entrepreneurship, Growth
    Date: 2005–11
  3. By: Acs, Zoltán J; Audretsch, David B; Braunerhjelm, Pontus; Carlsson, Bo
    Abstract: Contemporary theories of entrepreneurship generally focus on the decision-making context of the individual. The recognition of opportunities and the decision to commercialize them is the focal concern. While the prevalent view in the entrepreneurship literature is that opportunities are exogenous, the most prevalent theory of innovation in the economics literature suggests that opportunities are endogenous. This paper bridges the gap between the entrepreneurship and economic literature on opportunity by developing a knowledge spillover theory of entrepreneurship. The basic argument is that knowledge created endogenously via R&D results in knowledge spillovers. Such spillovers give rise to opportunities to be identified and exploited by entrepreneurs. Our results show that there is a strong relationship between knowledge spillovers and new venture creation.
    Keywords: entrepreneurship; knowledge; management science; opportunity
    JEL: J24 M13 O3 R1
    Date: 2005–11
  4. By: Guiso, Luigi; Schivardi, Fabiano
    Abstract: Is entrepreneurial talent entirely innate or do people learn to become entrepreneurs? We extend Lucas's (1978) model of entrepreneurship to allow for the possibility that entrepreneurial talents may be acquired by watching other entrepreneurs in action. This model implies that areas with a greater number of firms have higher average firm productivity. We confirm this prediction using Italian firm level data. We show that the endogenous accumulation of entrepreneurial talents is a more convincing explanation for clusters of firms than heterogeneous entry costs. The evidence supports the role of learning even after controlling for other potential sources of local externalities. We also find that other specific implications of the learning mechanism are confirmed by the data.
    Keywords: agglomeration economies; clustering; entrepreneurship; learning
    JEL: D24 D62 J23
    Date: 2005–10
  5. By: Audretsch, David B; Lehmann, Erik E
    Abstract: The resource theory of the firm implies that knowledge is a key resource bestowing a competitive advantage for entrepreneurial firms. However, it remains rather unclear up to now, how new ventures and small business can access knowledge resources. The purpose of this paper is to suggest two strategies in particular that facilitate entrepreneurial access to and absorption of external knowledge spillovers: the attraction of managers and directors with an academic background. Based on data on board composition of 295 high technology firms, the results clearly demonstrate the strong link between geographical proximity to research intense universities and board composition.
    Keywords: board composition; corporate governance; entrepreneurship; university spillover
    Date: 2005–11
  6. By: Amelie Constant (The Institute for the Study of Labor (IZA), Bonn); Yochanan Shachmurove (Departments of Economics, City College of The City University of New York and University of Pennsylvania)
    Abstract: This paper attempts to compare the economic success of immigrants and natives in Germany. Employing data from German Socioeconomic Panel, the paper investigates the factors affecting self-employment as well as compares the income of self-employed and employed workers among four groups – West Germans, East Germans, guest workers and ethnic immigrants. Increasing age, higher education and self-employed parents increases probability of an individual’s self-employment, with the last two applying only to West Germans. The self-employed earn more than their salaried counterparts, except for East Germans. Despite self-employed immigrants having the highest earnings of all groups, self-employment rates remain low among immigrants.
    Keywords: Entrepreneurship,self-employment,Occupational Choice,immigrants,Wage Differentials
    JEL: J23 M13 J24 J61 J31
    Date: 2005–11–01
  7. By: Josef Falkinger; Volker Grossmann
    Abstract: This paper develops a model in which the interaction of entrepreneurial investments and power of the owners of land or other natural resources determines structural change and economic development. A more equal distribution of natural resources promotes structural change and growth through two channels: First, by weakening oligopsony power of owners and thereby easing entrepreneurial investments for credit-constrained individuals whose investment possibilities depend on their income earned in the primary goods sector. Second, by shifting the distribution of political power from resource owners towards the entrepreneurial elite, resulting in economic policy and institutions which are more conducive to entrepreneurship and productivity progress. We argue that these hypotheses are consistent with a large body of historical evidence from the Americas and with evidence on transition economies.
    Keywords: credit constraints, distribution, economic development, entrepreneurship, institutions, oligopsony power, political elites
    JEL: H50 O10
    Date: 2005
  8. By: Prof. Dr. Doris Neuberger; Christoph Schacht (University of Rostock)
    Abstract: The present paper investigates the number of bank relationships of small and medium-sized enterprises in Switzerland using survey data from 1996 and 2002. We differentiate between overall bank relationships and lending relationships and disaggregate the loan market with respect to firm sizes, industries and banking groups. On average, bank lending declined, while the role of housebank relationships increased in 1996-2002. The development of the number of bank relationships seems to have been demand-driven as well as supply-driven for medium-sized firms, but only supply-driven for very small and small firms. Supply-side reductions resulted from the merger between two big banks and changes in credit risk management at major banks
    Keywords: relationship lending, housebank, loan market structure, multiple banks
    JEL: G21 G32
    Date: 2005
  9. By: Silvia Gorenstein (UNSUR); Raul Dichiara (UNSUR); Gustavo Burachik (UNSUR); Andrea Castellano (UNSUR); Valentina Viego (UNSUR)
    Abstract: The article analyses recent approaches on entry and post-entry performance by new firms, with particular focus on its applicability to small manufacturing firms recently borned in Argentina. The analysis is based on a sample of small firms created in the period 1990-2000 in three intermediate cities in Buenos Aires province (Argentina) in manufacturing sector. The survey collected data about microeconomic and mesoeconomic elements influencing firm performance. Results indicate that tradability is a key factor influencing firm performance. New firms entering markets where the spatial markets are reduced face limited perspectives on expansion. In turn, tradability is also affected by entrepeneurial motivation and, especially in underveloped regions, macroeconomic variables.
    Keywords: new firms, post-entry performance, transability
    JEL: L
    Date: 2005–11–25
  10. By: Michael S. Dahl; Christian Ø.R. Pedersen; Bent Dalum
    Abstract: How can the growth of regional clusters be explained? This paper studies in great detail the growth of the wireless communication cluster in Northern Denmark. Unlike the dominant theories, we argue that initial success of the first firms are the main driving force behind the generation of new firms that eventually lead to the formation of clusters. The success of the first firms tend to generate spinoffs, which becomes successful themselves due to the background of the founders.
    Keywords: Agglomeration; Clusters; Spin-offs; Knowledge Diffusion
    JEL: R10 O13 J60 L63
    Date: 2005
  11. By: Zoltan Acs; Colm O'Gorman; Laszlo Szerb; Siri Terjesen
    Abstract: In today's global knowledge economy, foreign direct investment (FDI) plays a major role in the economic development of emerging economies. Knowledge spillovers from multinational enterprises create entrepreneurial opportunities. These knowledge spillovers could have a positive effect on entrepreneurial activity and move a country from a knowledge-using to a knowledge-creating economy. Using case studies and data from Global Entrepreneurship Monitor (GEM), we explore how inward FDI impacts indigenous entrepreneurial activity in two countries, Ireland and Hungary. We find significant differences in entrepreneurial activity between Ireland and Hungary and suggest that enterprise development policies should focus on enhancing knowledge spillovers from FDI, increasing human capital and promote occupational choice, and enable the commercialization of new technology.
    Keywords: Entrepreneurial Activity, Economic Development, Entrepreneurs, Foreign Direct Investment, Knowledge Spillovers, Ireland, Hungary
    JEL: M13 F23 O10 O30
    Date: 2005–11
  12. By: Aghion, Philippe; Blundell, Richard William; Griffith, Rachel; Howitt, Peter; Prantl, Susanne
    Abstract: How does firm entry affect innovation incentives and productivity growth in incumbent firms? Micro-data suggests that there is heterogeneity across industries - incumbents in technologically advanced industries react positively to entry, but not in laggard industries. To explain this pattern, we introduce entry into a Schumpeterian growth model with multiple sectors which differ by their distance to the technological frontier. We show that entry threat spurs innovation incentives in technologically advanced sectors - successful innovation allows incumbents to prevent entry. In laggard sectors it discourages innovation - increased entry reduces incumbents' expected rents from innovating. We find that the empirical patterns hold using rich micro-level productivity growth and patent panel data for the UK, and controlling for the endogeneity of entry by exploiting the large number of policy reforms undertaken during the Thatcher era.
    Keywords: entry; growth; innovation
    JEL: D21 F21 L10 O31
    Date: 2005–10
  13. By: Florence Jaumotte; Nigel Pain
    Abstract: Innovation surveys provide a broad measure of the successful commercial introduction of new product and process innovations. The dual purposes of this paper are to establish whether survey-based measures of innovation are related to more widely used intermediate measures, such as R&D and patents, and to identify the principal factors that affect the probability of successful innovation. Cross-country panel data is used from the third European Community Innovation Survey (CIS3), with allowance made for possible differences by firm size and by sector of activity. The survey measures of innovative activity and success are found to be positively correlated with past R&D and patenting, suggesting that factors affecting the development of innovations also affect their subsequent implementation. The availability of qualified personnel and private financing, less rigid product and labour market regulations, greater co-operation in the innovation process and public financial support are all found to be positively associated with the proportion of successful innovators for at least some sectors and firm sizes. Innovation in small firms is found to be more dependent on co-operation and the availability of finance than in larger firms. <P>Du développement à la mise en oeuvre de l'innovation Les enquêtes sur l’innovation fournissent une large mesure de l’introduction commerciale réussie de nouvelles innovations produits et procédés. Les objectifs de ce papier sont d’une part d’établir si les mesures de l’innovation basées sur ces enquêtes sont corrélées aux mesures intermédiaires de l’innovation plus couramment utilisées, telles que la R-D et les brevets ; et d’autre part d’identifier les principaux facteurs qui déterminent la probabilité d’innover avec succès. Les données de panel pays utilisées proviennent de la troisième Enquête Communautaire sur l’Innovation (CIS3), et permettent de différencier les résultats par taille d’entreprise et secteur d’activité. Les mesures d’enquête de l’activité et des succès d’innovation sont positivement corrélées avec la R-D et les brevets observés sur les années précédentes, suggérant que les facteurs qui affectent le développement des innovations déterminent également leur mise en oeuvre ultérieure. D’autre part, la disponibilité de personnel qualifié et de financement privé, une réglementation des marchés de produits et du travail peu restrictive, une plus grande coopération dans le processus d’innovation et l’aide publique financière sont toutes positivement associées à la proportion de firmes ayant innové avec succès, du moins pour certains secteurs et tailles d’entreprise. Enfin, l’innovation dans les petites entreprises est plus dépendante de la coopération et de la disponibilité de financement que dans les grandes entreprises.
    Keywords: product and process innovations, firm size and industry differences, Community Innovation Survey data, innovations products et procédés, différences par taille d'entreprise et secteur d'activité, données de l'Enquête Communautaire sur l'Innovation
    JEL: D21 O31 O38
    Date: 2005–12–02
  14. By: David G. Blanchflower (Dartmouth College, NBER and IZA Bonn); Jon Wainwright (NERA Economic Consulting)
    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.
    Keywords: discrimination
    JEL: J70
    Date: 2005–11
  15. By: José Miguel Benavente; Alexander Galetovic; Ricardo Sanhueza
    Abstract: Las pyme pagan más que las empresas grandes por su financiamiento, se les exigen garantías, se las financia a plazos cortos y muchas no se pueden endeudar. Se piensa que estas prácticas son fallas de mercado que deberían corregirse con intervenciones regulatorias. Sin embargo, nosotros argumentamos que son respuestas apropiadas a (i) el mayor costo medio de los préstamos pequeños; (ii) el problema de la selección originado por la salida y reemplazo de firmas que ocurre en todas las industrias, que es más intenso cuando se trata de pymes; (iii) la necesidad de alinear los incentivos de deudores y acreedores cuando la información es asimétrica. Mostramos que estas prácticas también son comunes en países con mercados de capitales desarrollados. Finalmente, proponemos medidas para mejorar el financiamiento de las pyme. SMEs pay more for credits than large firms, their loans tend to be granted against collateral and on short repayment terms, and many are redlined. These practices have usually been interpreted as financial-market imperfections that discriminate against SMEs. We argue that they are responses to (i) the higher average cost of smaller loans; (ii) the selection problems due to the natural replacement of business in all industries, which is much more acute among SMEs; (iii) the need to align the incentives of financiers and entrepreneurs when information is asymmetric. We show that these practices are widspread in countries where capital markets are developed. We also make several proposals to increase access to financing by SMEs
    Date: 2005
  16. By: Arito Ono; Iichiro Uesugi
    Abstract: This paper investigates the role of collateral and personal guarantees in small business lending using the unique data set of Japan's small business loan market. Consistent with conventional theory, collateral is more likely to be pledged by riskier borrowers, implying they may be useful in mitigating debtor moral hazard. Contrary to conventional theory, we find that banks whose claims are either collateralized or personally guaranteed monitor borrowers more frequently. We also find that borrowers who establish long-term relationships with their main banks are more likely to pledge collateral. Our empirical evidence thus suggests that collateral and personal guarantees are complementary to relationship lending.
    Date: 2005–11
  17. By: Feijen, Erik; Perotti, Enrico C
    Abstract: While financial liberalization has in general favourable effects, reforms in countries with poor regulation is often followed by financial crises. We explain this variation as the outcome of lobbying interests capturing the reform process. Even after liberalization, market investors must rely on enforcement of investor protection, which may be structured so as to block funding for new entrants, or limit their access to refinance after a shock. This forces inefficient default and exit by more leveraged entrepreneurs, protecting more established producers. As a result, lobbying may deliberately worsen financial fragility. After large external shocks, borrowers from the political elite in very corrupt countries may successfully lobby for weak enforcement, and retain control of collateral. We provide evidence that industry exit rates and profit margins after banking crises are higher in the most corrupt countries.
    Keywords: entry; exit; financial crises; inequality; political economy; refinancing; strategic default
    Date: 2005–10
  18. By: Flore Gubert (DIAL, IRD, Paris); François Roubaud (DIAL, IRD, Paris)
    Abstract: (english) This study aims at assessing the impact of a microfinance institution serving micro-entrepreneurs in Antananarivo (Madagascar). It starts by reviewing the recent literature on the socioeconomic impact of microfinance, then moves on to describe the current state of supply and demand of micro-credit in Madagascar. Finally, the results of the examination of the impact of ADéFI financing on microentreprises are presented. The methodology consists of comparing the situation of a representative sample of micro-enterprise ADéFI clients with a control group, constructed in an almost experimental way through a standard matching technique. Overall, the results indicate a positive impact of the project. Taken as a snapshot, the studies conducted in 2001 and 2004 indicate that the microenterprises financed recorded better average performance than informal production units without funding. With a dynamic perspective however, the results were more nuanced. If the positive effect of the project is clear during growth phases, its effect during contractions appears less certain. _________________________________ (français) Cette étude s’attache à analyser l’impact d’une institution de microfinance opérant auprès de microentrepreneurs à Antananarivo (Madagascar). Elle débute par un passage en revue de la littérature récente consacrée à l’impact socio-économique de la micro-finance. Elle décrit ensuite succinctement l’état de l’offre et de la demande de micro-crédit à Madagascar. Elle présente enfin les résultats de l’analyse de l’impact des financements accordés par ADéFI. La méthodologie retenue consiste à comparer la situation d’un échantillon de micro-entreprises clientes d’ADéFI représentatives de l’ensemble de la clientèle de l’institution à celle d’un groupe de contrôle construit de façon quasiexpérimentale par une technique standard d’appariement. Dans l’ensemble, les résultats des analyses concluent à un impact positif du projet. En statique, les évaluations conduites en 2001 et 2004 montrent que les micro-entreprises financées enregistrent de meilleures performances en moyenne que les UPI non financées. En dynamique, les analyses menées sont plus nuancées. Si l’impact positif du projet est clairement établi en phase de croissance, son effet en période de récession paraît plus incertain.
    Keywords: Microfinance, impact assessment, propensity score matching, Madagascar, Microfinance, évaluation d'impact, score de propension.
    JEL: D24
    Date: 2005–11
  19. By: Fritz Rahmeyer (University of Augsburg, Department of Economics)
    Abstract: In two survey articles on evolutionary economics Hodgson points out that currently a consensus of opinion concerning the meaning and explanation of economic evolution does not exist. But most of the authors involved agree that the common characteristic of its subject is the central importance of endogenously emerging innovation activity of privately owned enterprises, causing a structured economic and organizational change. Compared with that, there is a lively dispute regarding the question if processes of technical and economic change can be explained analogously to the basic principles of biological evolution. From an economic point of view Schumpeter and Marshall, geared to the level of a single firm, are of great importance for the development of an evolutionary theory of economic change. The path-breaking approach of Nelson and Winter, also based on the significance of innovation activities of firms, but on their behaviour as well, points the way to a micro foundation of evolutionary change and its possible applications, for instance the theory of the firm and Schumpeterian competition. So, after the exposition of Schumpeter and Marshall on discontinous and gradual economic development, a concept of economic evolution following Neo-Darwinian biological evolution is worked out in detail. In that as a result the idea of „Universal Darwinism” is the focus of interest. A population of firms instead of a single firm comes to the fore, according to population thinking in biology. In enlarging the Schumpeter-Marshall model finally an evolutionary theory of innovation activity will be elaborated.
    Keywords: Marshall, Schumpeter, biological evolution, economic evolution, innovation activity management
    JEL: B30 B52 O31
    Date: 2005–11

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