nep-ent New Economics Papers
on Entrepreneurship
Issue of 2006‒02‒12
eleven papers chosen by
Marcus Dejardin
Facultes Universitaires Notre-Dame de la Paix

  1. Evolution on the Shoulders of Giants: Entrepreneurship and Firm Survival in the German Laser Industry By Guido Buenstorf
  2. Network and firm antecedents of spin-offs: Motherhooding spin-offs By Manuel Portugal Ferreira; Ana Teresa Tavares; William Hesterly; Sungu Armagan
  3. Competition, Innovation and Growth with Limited Commitment By Ramon Marimon; Vincenzo Quadrini
  4. Dependent Forms of Self-employment in the UK: Identifying Workers on the Border between Employment and Self-employment By René Böheim; Ulrike Muehlberger
  5. Middle managers in a medium-sized firm: Their involvement in the internationalization strategy process By Mair, Johanna; Thurner, Claudia
  7. Merge or Fail? The Determinants of Mergers and Bankruptcies in Switzerland, 1995-2000 By Stefan Buehler; Christian Kaiser; Franz Jaeger
  8. Knowledge networks and innovative performance in an industrial district. The case of a footwear district in the South of Italy By Ron A. Boschma; Anne L.W. ter Wal
  9. An evolutionary perspective on Internet adoption by retailers in the Netherlands By Ron A. Boschma; Jesse W.J. Weltevreden
  10. Networks and heterogeneous performance of cluster firms By Elisa Giuliani
  11. One or Many Knowlede Production Functions? Mapping Innovative Activity Using Microdata. By Andrea Conte; Marco Vivarelli

  1. By: Guido Buenstorf
    Abstract: This paper studies 40 years of evolution in the German laser industry to test the generality of evolutionary patterns observed in the U.S. laser industry. Key characteristics found in the U.S. industry are also present in Germany. There is sustained entry into the industry, and neither a shakeout nor first-mover advantages of early entrants are observed. A survival analysis finds that, similar to the U.S. industry, laser firm spin-offs have been systematically more successful than academic startups. Differences in survival and determinants of the spin-off process are traced for alternative kinds of spin-offs, including firms started by serial entrepreneurs.
    Keywords: Industry life cycle, submarkets, entrepreneurship, spin-offs, integrating distributors
    JEL: L10 M13 O33
    Date: 2006–01
  2. By: Manuel Portugal Ferreira (Escola Superior de Tecnologia e Gestão, Instituto Politécnico de Leiria); Ana Teresa Tavares (CEMPRE, Faculdade de Economia, Universidade do Porto); William Hesterly (David Eccles School of Business, The University of Utah); Sungu Armagan (David Eccles School of Business, The University of Utah)
    Abstract: We advance firm and network conditions that are favorable for the gestation of new spin-offs by entrepreneurial employees that exit the mother firm to constitute their own companies. This type of entrepreneurial activity has some unique characteristics. We suggest that spin-offs from certain parent firms have fundamental network benefits that increase their likelihood of survival and success. These benefits accrue on the form of social resources and a unique embeddedness in networks of other offspring and mother firms, and do not require the spin-offs to engage in any direct exchanges with the parent firm. The process which we call 'motherhood' highlights the potential for a mother-progeny and child-child model that promotes entrepreneurial action through spin-offs, and allow us to understand the conditions under which interorganizational networks of firms emerge and thrive as an entrepreneurial process. We conclude that considering a motherhood process, with the characteristics defined in this paper, contributes to the study of entrepreneurship and network evolution.
    Keywords: Entrepreneurship, spin-offs, motherhood, network benefits
    JEL: M13 D23 D85
    Date: 2006–02
  3. By: Ramon Marimon; Vincenzo Quadrini
    Abstract: We study how barriers to business start-up affect the investment in knowledge capital when contracts are not enforceable. Barriers to business start-up lower the competition for knowledge capital and, in absence of commitment, reduce the incentive to accumulate knowledge. As a result, countries with large barriers experience lower income and growth. Our results are consistent with cross-country evidence showing that the cost of business start-up is negatively correlated with the level and growth of income.
    Keywords: Innovation, Knowledge Capital, Enforcement, Growth, Competition, Commitment, Recursive Contracts, Mobility
    JEL: O30 O31 O40 J24 E22 D23
    Date: 2005–12
  4. By: René Böheim (Johannes Kepler University of Linz and IZA Bonn); Ulrike Muehlberger (Vienna University of Economics and B.A.)
    Abstract: We analyse the characteristics of workers who provide work on the basis of a civil or commercial contract, but who are dependent on or integrated into the firm for which they work. We argue that these dependent self-employed lose their rights under labour law, receive less favourable benefits from social security protection and are often beyond trade union representation and collective bargaining. Using data from the British Labour Force Survey we test two hypotheses: (1) Dependent self-employed workers are significantly different from both employees and (independent) self-employed individuals, thus forming a distinct group. (2) Dependent self-employed workers have lower labour market skills, less labour market attachment and, thus, less autonomy than self-employed workers. The data support our hypothesis that dependent self-employed workers are a distinct labour market group which differs from both employees and independent self-employed individuals. Men, older workers, those with low education and a low job tenure have greater odds of working in dependent self-employment than their counterparts. Our results suggest that dependent forms of self-employment are used by firms to increase labour flexibility.
    Keywords: self-employment, dependency, outsourcing
    JEL: K31 J21 L22
    Date: 2006–02
  5. By: Mair, Johanna (IESE Business School); Thurner, Claudia (IESE Business School)
    Abstract: While prior research has emphasized middle managers' important role in the strategy process and the benefits of their involvement, little is known about their role in the strategy process in medium-sized firms and, specifically, their participation in the internationalization strategy process (ISP). Our analysis of interviews conducted with the complete layer of middle managers at a medium-sized firm is intended to shed light on these issues by examining the extent and effect of middle managers' involvement in the formulation phase of the ISP. The medium-sized Italian firm chosen for our sample was going through a period of radical change as it expanded its international activities beyond its cultural boundaries. We found that not all the firm's middle managers perceived themselves to be involved in formulating the internationalization strategy. The perception of involvement was dependent on ownership of the outcome of internationalization. Middle managers with revenue accountability perceived themselves to be involved in strategy formulation. Furthermore, this perception of increased involvement was tightly linked to a more opportunity-oriented attitude toward internationalization. We suggest that medium-sized firms can actively manage middle managers' attitudes and behavior toward internationalization by managing perceptions.
    Keywords: Middle managers; internationalization strategy; small and medium-sized companies;
    Date: 2005–11–21
  6. By: Arturo Galindo; Alejandro Micco
    Abstract: We develop a model that shows that inefficient legal protections, disproportionately increase financial restrictions for debtors that have less wealth. Due to fixed monitoring costs in equilibrium banks will not monitor small firms and therefore these firms will adopt risky technologies that imply a higher probability of bankruptcy. This implies that inefficiencies in the bankruptcy procedure will have a greater effect on small firms vis a vis large ones. Using a survey of firms in 62 countries around the world (WBES) and econometric techniques that allow us to deal with observed and unobserved country specific components as well as with partial endogeneity, we explore the role of creditor protection on small and medium-size enterprises' access to bank credit. We find that better protection of creditors reduces the financing gap between small and large firms
    Date: 2005–09–10
  7. By: Stefan Buehler (Socioeconomic Institute, University of Zurich); Christian Kaiser (University of St. Gallen); Franz Jaeger (University of St. Gallen)
    Abstract: This paper examines the determinants of mergers and bankruptcies, using firm level data from the Swiss Business Census and the Dun & Bradstreet exit database for Switzerland (1995-2000). Employing duration analysis, we find considerable differences in the determinants of mergers and bankruptcies, in particular with respect to firm size, location and the impact of macroeconomic conditions. Our results support the notion that mergers are often undertaken to seize growth opportunities.
    Keywords: merger, bankruptcy, failure, survival, exit
    JEL: C41 L10 L20
    Date: 2005–03
  8. By: Ron A. Boschma; Anne L.W. ter Wal
    Abstract: The traditional district literature tends to assume that: (1) the competitiveness of firms depends on external sources of knowledge; (2) all firms in a district benefit from knowledge externalities; (3) relying on external knowledge relationships necessarily means these are confined to the district area. Our case study of the Barletta footwear district in the South of Italy suggests otherwise. Based on social network analysis, we demonstrate that the local knowledge network is quite weak and unevenly distributed among the local firms. A strong local network position of a firm tended to increase their innovative performance, and so did their connectivity to extra-local firms. So, it mattered being connected either locally or non-locally: being co-located was surely not enough. Having a high absorptive capacity seemed to raise only indirectly, through non-local relationships, the innovative performance of firms.
    Keywords: evolutionary economics, new economic geography, social networks, innovative performance, Italy
    Date: 2006–01
  9. By: Ron A. Boschma; Jesse W.J. Weltevreden
    Abstract: The paper analyses from an evolutionary perspective how retailers respond and adapt to b2c e-commerce. As such, the paper explores the diversity of behavior of retailers with respect to the adoption of e-commerce. More in particular, it examines empirically the extent to which the adoption of Internet strategies is affected by firm-specific features (e.g., habits of the entrepreneur, routines of firms), network relationships, and geographical proximity. Logistic regression analyses of 643 independent retailers in the Netherlands suggest that geography matters, controlling for other factors. That is, the probability of having an Internet strategy increases significantly when (a) the more knowledge spillovers are locally available; (b) the more demanding local customers are; and (c), the less rivalry is present locally.
    Keywords: evolutionary economics, Internet strategies, retailers, city centres, the Netherlands
    JEL: A12 D21 L81 R00
    Date: 2006–01
  10. By: Elisa Giuliani
    Abstract: This paper explores the relationship existing among the heterogeneous nature of firms in industrial clusters, their structural position in knowledge networks and their performance. Following the rising interest for spatially agglomerated industrial firms and their learning and innovative potential the paper shows empirically that the performance of firms in clusters is related with firm-level knowledge endowments and their position in the knowledge network using firm-level data on three wine clusters.
    Keywords: knowledge networks, clusters, firm performance, evolutionary economics, wine sector
    Date: 2006–01
  11. By: Andrea Conte; Marco Vivarelli
    Abstract: This paper discusses the determinants of three alternative measures of innovative output by looking at firm's own formal R&D activities and at the acquisition of external technology (TA) in its embodied and disembodied components. These input-output relationships are also discussed by distinguishing between small and large firms and those belonging to low-tech and high-tech sectors. The empirical analysis focuses on the Italian industrial sector over the period 1998-2000, using a subsample of 2,949 firms from the third European Community Innovative Survey (CIS 3). A bivariate probit analysis framework is used to investigate the determinants of product and process innovations, while truncated regressions are used to discuss innovation intensity. This paper also discusses an alternative test procedure that permits an extension of Cragg's test in the analysis of survey data with weighted observations. Results show that R&D is strictly linked to product innovation, while TA is crucial in fostering process innovation; however, both inputs increase a firm's innovative intensity. Significant evidence is also found that small firms and firms belonging to low-tech sectors rely more on the acquisition of external technologies and on cooperation agreements, while larger firms in high-tech sectors rely more on their own formal R&D.
    JEL: O31
    Date: 2006–02

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