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on Entrepreneurship |
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Issue of 2006‒04‒01
seven papers chosen by Marcus Dejardin Facultes Universitaires Notre-Dame de la Paix |
| By: | Erik Stam; Veronique Schutjens |
| Abstract: | We know that most businesses fail. But what is not known is to what extent failed ex-entrepreneurs set up in business again. The objective of this article is to explore potential and realized serial entrepreneurship. Based on three disciplines – psychology, labour economics, and the sociology of careers – we formulated propositions to explain (potential) serial entrepreneurship. We tested these propositions empirically with a longitudinal database of 79 businesses that had closed within 5 years after start-up. A large majority of the ex- entrepreneurs maintained entrepreneurial intentions subsequent to business closure, while almost one in four business closures were followed by a new business (serial entrepreneurship). Our results show that the determinants of restart intention (potential serial entrepreneurship) and actual restart realization (realized serial entrepreneurship) are different. Ex-entrepreneurs who are young, who worked full-time in their prior business, and who recall their business management experience positively are likely to harbour restart intentions. Only ‘being located in an urban region’ transpired to have a significant effect on the start of a new business. Although entrepreneurial intentions are a necessary condition for the start of a new business, this study shows that the explanation of entrepreneurial intentions is distinct from the explanation of new business formation subsequent to business closure. |
| Keywords: | serial entrepreneurship; business closure; entrepreneurial intentions; new business formation, The Netherlands |
| Date: | 2006–03 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:0605&r=ent |
| By: | Ben R. Craig; William E. Jackson, III; James B. Thomson |
| Abstract: | SBA guaranteed-lending programs are one of many government-sponsored market interventions aimed at promoting small business. The rationale for providing SBA loan guarantees is often based on the argument that they reduce credit rationing in low-income markets for small business loans. In this paper we empirically test whether SBA-guaranteed lending has a greater impact on economic performance in low-income markets. Using local labor market employment rates as our measure of economic> performance, we find evidence consistent with this proposition. In particular, we find a positive and significant correlation between the average annual level of employment in a local market and the level of SBA-guaranteed lending in that local market. And the intensity of this correlation is relatively larger in low-income markets. Indeed, one interpretation of our results is that this correlation is positive and significant only in low-income markets. This result has important implications for public policy in general and SBA-guaranteed lending in particular. |
| Keywords: | Small business - Finance ; Small Business Administration ; Government-sponsored enterprises |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedcwp:0601&r=ent |
| By: | Dalhammar, Tobias (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Brown, Terrence E. (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology) |
| Abstract: | This paper is based on seven in-depth case studies of small businesses in Kista, Stockholm’s most northern district. This district provides an interesting example with its high technology setting, mixed with considerable numbers of immigrants living in the area. All the firms are led by people who have immigrant background, and therefore they all have ethnic minority backgrounds, either in terms of country of origin or as belonging to a definable ethnic group. The guiding question is if one can find differences between high tech and service-based immigrant businesses in terms of how they use ethnic resources in their resource acquisition efforts. In the case studies we explore (i) how ethnic resources contribute to the acquisition of crucial resources for these firms, and (ii) the utilization of ethnic resources indicates the influence and importance of ethnic minority background for immigrant businesses in different industries. The results show differences in what sources these firms use for acquiring resources. The service-based firms utilise ethnic resources to a greater extent than the high tech firms. These differences influence the importance of the business owners’ ethnic minority backgrounds. |
| Keywords: | Immigrant and ethnic entrepreneurship; high tech/science-and technology-based firms; service-based firms; resource acquisition; ethnic resources. |
| JEL: | L10 L20 L70 L80 |
| Date: | 2006–03–28 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0056&r=ent |
| By: | Erik Stam |
| Abstract: | How do changes in the spatial organization of entrepreneurial firms come about? This paper provides a conceptualisation of the process of locational change. A process model of locational change is constructed on the basis of an empirical study of 109 locational events during the life course of 25 young firms in knowledge intensive sectors (knowledge services and biomedicals). This process model of locational change maps both internal and external variation and selection processes. This model contributes to the development of a causal process theory of the spatial development of (new) firms. |
| Keywords: | location, entrepreneurial firms, evolutionary theory, decision-making, process models |
| Date: | 2006–03 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:0604&r=ent |
| By: | Kaiserfledt, Thomas (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology) |
| Abstract: | This paper review existing theories of invention and innovation putting them at the center of the understanding of cultural change. After a survey of different categories of inventions and innovations, it introduces a taxonomy relying on the origins of invention and innovation highligting individual qualities, social invironments, resources access and incentives for problem solving. Following this taxonomy, different theories are analyzed and compared. Features of theories are evaluated with respect to their explanatory power. Conclusively. historical trends of theories are outlined as well as some preliminary results ragarding different points of directionss of existing theories. |
| Keywords: | Innovation theory; innovation; invention |
| JEL: | B00 |
| Date: | 2006–03–28 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0047&r=ent |
| By: | Miguel Segoviano |
| Abstract: | This paper presents the Conditional Probability of Default (CoPoD) methodology for modelling the probabilites of loan defaults (PoD) by small and medium enterprises (SMEs) and unlisted firms as functions of identifiable macroeconomic and financial variables. The process of modelling PoDs represents a challenging task, since the time series of PoDs usually contain few observations, thus making ordinary least squares (OLS) estimation imprecise or unfeasible. CoPoD improves the measurement of the impact of macroeconomic variables on PoDs and consequently the measurement of loans' credit risk through time, thereby making a twofold contribution. First, econometrically, it recovers estimators that show greater robustness than OLS estimators in finite sample settings under the Mean Square Error criterion. Second, economically, on the basis of economic theory and empirical evidence, CoPoD can incorporate a procedure to select a relevant set of macroeconomic explanatory variables that have an impact on the PoDs. We implement CoPoD with information from Norway and Mexico. |
| Date: | 2006–03 |
| URL: | http://d.repec.org/n?u=RePEc:fmg:fmgdps:dp558&r=ent |
| By: | Miguel Segoviano |
| Abstract: | The estimation of the profit and loss distribution of a loan portfolio requires the modelling of the portfolio's multivariate distribution. This describes the joint likelihood of changes in the credit-risk quality of the loans that make-up the portfolio. A significant problem for portfolio credit risk measurement is the greatly restricted data that are available for its modelling. Under these circumstances, convenient parametric assumptions, however, usually do not appropiately describe the behaviour of the assets that are the subject of our interest, loans granted to small and medium enterprises (SMEs), unlisted and arm's length firms. This paper proposes the Consistent Information Multivariate Density Optimizing Methodology (CIMDO), based on the cross-entropy approach, as an alternative to generate probabilty multivariate densities from partial information and without making parametric assumptions. Using the probabilty integral transformation criterion, we show that the distributions recovered by CIMDO outperform distributions that are used for the measurement of portfolio credit risk of loans granted to SMEs, unlisted and arm's length firms. |
| Date: | 2006–03 |
| URL: | http://d.repec.org/n?u=RePEc:fmg:fmgdps:dp557&r=ent |