nep-ent New Economics Papers
on Entrepreneurship
Issue of 2006‒02‒26
ten papers chosen by
Marcus Dejardin
Facultes Universitaires Notre-Dame de la Paix

  1. Dependent Forms of Self-employment in the UK: Identifying Workers on the Border between Employment and Self-Employment By René Böheim; Ulrike Muehlberger
  2. Perception and pursuit of entrepreneurial opportunities: an evolutionary economics perspective By G. Buenstorf
  3. Legal Status at Entry, Economic Performance, and Self-Employment Proclivity : A Bi-National Study of Immigrants By Amelie Constant; Klaus F. Zimmermann
  4. Human capital and the internationalization of venture capital firms By Manigart, S.; Collewaert, V.; Wright, M.; Pruthi, S.; Lockett, A.; Bruining, H.; Hommel, U.; Landstrom, H.
  5. Self-Employment Choice in Portugal: How Different are Women from Men By Aurora Galego
  6. The Effects of Entry on Incumbent Innovation and Productivity By Philippe Aghion; Richard Blundell; Rachel Griffith; Peter Howitt; Susanne Prantl
  7. African small and medium enterprises, networks, and manufacturing performance By Shah, Manju Kedia; Biggs, Tyler
  8. Globalization and SMEs: A Comment on Three Asian Experiences By Sumner La Croix
  9. Do innovation vouchers help SMEs to cross the bridge towards science? By Maarten Cornet; Björn Vroomen; Marc van der Steeg
  10. Innovation and the evolution of industries By Franco Malerba

  1. By: René Böheim (Department of Economics, Johannes Kepler University Linz, Austria and IZA, Bonn.); Ulrike Muehlberger (Department of Economics, Vienna University of Economics & 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 selfemployed 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 selfemployed 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.
    JEL: K31 J21 L22
    Date: 2006–02
  2. By: G. Buenstorf
    Abstract: Considerable debate surrounds the concept of entrepreneurial opportunities. This paper contributes to the discussion by bringing in concepts and findings from evolutionary economics. It makes three points. First, adopting an evolutionary market process perspective sheds new light on the nature of opportunities. Second, not only the pursuit of entrepreneurial opportunities, but also the further development of the entrepreneurial venture is dependent on subjective opportunity perception and interpretation. Third, findings on industry evolution help understand how opportunities, as well as agents’ ability and willingness to pursue them, change over time. Effects of pre-entry experience on opportunity recognition and firm performance are also discussed.
    Keywords: opportunities, market process, business conceptions, industry evolution, spin-offs
    JEL: B25 D21 M13 L10
    Date: 2006–01
  3. By: Amelie Constant; Klaus F. Zimmermann
  4. By: Manigart, S.; Collewaert, V.; Wright, M.; Pruthi, S.; Lockett, A.; Bruining, H.; Hommel, U.; Landstrom, H.
    Abstract: We examine the neglected area of internationalisation by VCs. Using a representative sample of 195 VCs, we show that the decision of a European VC firm to invest internationally is driven by its human resources. Having more VC executives in general and more VC executives with previous international experience in specific, results in a higher probability of investing internationally. In contrast, more VC executives with experience in the VC industry or with an engineering background lead to a higher probability of remaining domestic.
    Date: 2006–02–12
  5. By: Aurora Galego (Department of Economics, University of Évora)
    Abstract: Female self-employment has been increasing steadily over the last years in many countries. However, not much is know about women’s decision to become self-employed, especially in Europe. Some few studies typically conclude that most women choose self-employment because it offers more flexibility to combine work and family responsibilities or because of discrimination. Portugal displays one of the highest rates of self-employment in Europe and is one of the countries where the number of self-employed women has increased more. This paper studies gender differences in the determinants of self-employment in Portugal. Unlike other countries, there is no evidence that women choose self-employment because of family reasons. However, there are some suggestions that the choice of self-employment is driven by economic necessity, particularly in the case of women.
    Keywords: Occupational Choice, Self-employment, Gender differences
    JEL: J23 J16
    Date: 2006
  6. By: Philippe Aghion; Richard Blundell; Rachel Griffith; Peter Howitt; Susanne Prantl
    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 foreign firm 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 technologically advanced entry threat spurs innovation incentives in sectors close to the technological frontier--successful innovation allows incumbents to prevent entry. In laggard sectors it discourages innovation--increased entry threat 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.
    JEL: E2
    Date: 2006–02
  7. By: Shah, Manju Kedia; Biggs, Tyler
    Abstract: This paper examines the role of private support institutions in determining small and medium enterprise (SME) growth and performance in Sub-Saharan Africa (SSA). It finds that SMEs in SSA get around market failures and lack of formal institutions by creating private governance systems in the form of long-term business relationships and tight, ethnically-based, business networks. There are important links between these informal governance institutions and SME performance. Networks raise the performance of " insiders " and, in the sparse business environments of the SSA region, have attendant negative consequences for market participation of " outsiders, " such as indigenous African SMEs. This is indicated through the determinants of access to supplier credit. Policy interventions will be needed to improve the platform for relation-based governance mechanisms and to address the exclusionary effects of tight networks.
    Keywords: Economic Theory & Research,Banks & Banking Reform,Business in Development,Business Environment,Technology Industry
    Date: 2006–02–01
  8. By: Sumner La Croix (Department of Economics, University of Hawaii at Manoa)
    Abstract: This paper briefly discusses three case studies (Choi and Tcha 2005; Lin 2005; Motohashi 2005) of responses by small and medium-size manufacturing enterprises (SMEs) in Korea, Taiwan, and Japan to the rising tide of imports from China in their product markets. They find vastly different responses in each country, with some firms relocating plants to mainland China; others exiting affected product markets; and some maintaining home country production by moving up the product ladder and using new production technologies. This paper conjectures that outmoded production technologies may underpin the exit of Japanese SMEs from these product markets; considers the impact that potential impact of Chinese imports on Korea’s attachment to a market economy; and finds that Taiwan’s SME investments in mainland China have substantial political as well as economic roots. The long-run response by Northeast Asian SMEs to Chinese competition will, in all three countries, be closely tied to SME development (via in-house or cooperative R&D) or acquisition of rights to new products and technologies. I conclude that a better understanding of the public and private institutions structuring SME contracting vis-a-vis R&D projects and technology acquisition is vital to each country’s development of effective policy responses to the meteoric rise of China.
    Keywords: Globalization, SMEs, creative destruction, exports, imports, entry, exit
    Date: 2006
  9. By: Maarten Cornet; Björn Vroomen; Marc van der Steeg
    Abstract: The Dutch innovation voucher aims to stimulate the interaction between small and medium-sized enterprises (SMEs) and public research institutes. This document provides an estimate of the effectiveness of the innovation voucher instrument, employing the fact that the vouchers were assigned randomly by means of a lottery. The main conclusion is that the innovation voucher instrument does stimulate SMEs to engage in many new assignments with public research institutes. Out of every ten vouchers, eight are used for a project that would not have been assigned without such a voucher, one is used for a project that would have been assigned anyhow, and one voucher is not used. An overall assessment of the innovation voucher also needs to take into account the value added of the additional assignments, however. No insights have yet been obtained here.
    Keywords: policy evaluation; innovation; social exper
    JEL: O38 C93
    Date: 2006–02
  10. By: Franco Malerba (CESPRI, Università Bocconi, Milano, Italy)
    Abstract: The analysis of innovation and the evolution of industries evolution has witnessed major progress in several areas. Contributions at the empirical, appreciative, econometric and modelling levels have greater advanced our understanding of innovation, industrial dynamics and the different evolution of industries. The main part of the paper is centred around four challenges that are required for a better understanding of the relationship between innovation and the evolution of industries: the analysis of demand, knowledge, networks and coevolution.
    Keywords: Innovation; Industrial Dynamics; Demand; Networks; Knowledge
    JEL: L1 L6 O32
    Date: 2005–07

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