nep-ent New Economics Papers
on Entrepreneurship
Issue of 2006‒07‒02
eleven papers chosen by
Marcus Dejardin
Facultes Universitaires Notre-Dame de la Paix

  1. Innovativity: A comparison across seven European countries By Mohnen, Pierre; Mairesse, Jacques; Dagenais, Marcel
  2. Empirical studies of innovation in the knowledge driven economy By Hall, Bronwyn; Mairesse, Jacques
  3. Using stakeholder dialogue as a source for new ideas. A dynamic capability underlying sustainable innovation By Ayuso, Silvia; Rodriguez, Miguel A.; Ricart, Joan E.
  4. Capital humain et processus de création d’entreprise : le cas des primo-créateurs wallons By Michele Cincera; Lydia Greunz; Jean-Luc Guyot; Olivier Lohest
  5. A Naturalistic Approach to the Theory of the Firm: The Role of Cooperation and Cultural Evolution By C. Cordes; P. J. Richerson; R. McElreath; P. Strimling
  6. A two-part fractional regression model for the capital structure decisions of micro, small, medium and large firms By Joaquim J.S. Ramalho; Jacinto Vidigal da Silva
  7. Bank Size and Lending Relationships in Japan By Hirofumi Uchida; Gregory F. Udell; Wako Watanabe
  8. The Microfinance Collateralized Debt Obligation: a Modern Robin Hood? By Byström, Hans
  9. Rough Road to Market: Institutional Barriers to Innovations in Africa By Oyelaran-Oyeyinka, Banji; Gehl Sampath, Padmashree
  10. How Businesses Use Information Technology: Insights for Measuring Technology and Productivity By Sang Nguyen; B.K. Atrostic
  11. The theory of benchmarking and the measurement of industrial organization By Raa,Thijs ten

  1. By: Mohnen, Pierre (UNU-MERIT); Mairesse, Jacques (UNU-MERIT); Dagenais, Marcel (University of Montreal)
    Abstract: This paper proposes a framework to account for innovation similar to the usual accounting framework in production analysis and a measure of innovativity comparable to that of total factor productivity. This innovation accounting framework is illustrated using micro-aggregated firm data from the first Community Innovation Surveys (CIS1) for seven European countries: Belgium, Denmark, Ireland, Germany, the Netherlands, Norway and Italy for the year 1992. Based on the estimation of a generalized Tobit model and measuring innovation as the share of total sales due to improved or new products, it compares the propensity to innovate, and the innovation intensity conditional and unconditional on being innovative, across the seven countries and low- and high-tech manufacturing sectors. Even with relatively few explanatory variables our innovation framework already accounts for sizeable differences in country innovation intensity. It also shows that differences in innovativity across countries can be nonetheless very large.
    Keywords: Innovation, Research and development, comparison, self-selection, Europe
    JEL: C35 L60
    Date: 2006
  2. By: Hall, Bronwyn (UNU-MERIT); Mairesse, Jacques (UNU-MERIT)
    Abstract: This introduction to a special issue of EINT surveys a collection of ten papers that study various aspects of innovation and knowledge management and their impact on performance at the firm level for a number of countries. These studies have been conducted using data drawn from innovation surveys combined with data from a number of other sources. The issue illustrates the value of these surveys in improving our understanding of innovation in firms and raises a number of questions for future work in this area.
    Keywords: innovation, knowledge management, knowledge economy, firm performance
    JEL: O32 O33 D8 L25
    Date: 2006
  3. By: Ayuso, Silvia (IESE Business School); Rodriguez, Miguel A. (IESE Business School); Ricart, Joan E. (IESE Business School)
    Abstract: This paper attempts to gain a deeper understanding of the firm's ability for integrating stakeholder insights into the process of organisational innovation within the context of sustainable development. Given the early stage of empirical research on the topic, we used an exploratory case study method of two Spanish companies that have successfully learned from stakeholder dialogue and have generated innovations that are both beneficial for the company and for sustainable development in general. The evidence from the two case studies suggests the existence of two simple capabilities - stakeholder dialogue and stakeholder knowledge integration - for generating innovations in accordance with stakeholder needs. Whereas stakeholder dialogue leverages organisational resources that promote two-way communication, transparency and appropriate feedback to stakeholders, stakeholder knowledge integration relies on non-hierarchical structures, flexibility and openness to change. The paper sheds some light on the under-researched issue of linking stakeholder dialogue and sustainable innovation, and contributes to opening the 'black box' of dynamic capabilities and advancing in the understanding of this fundamental organisational concept.
    Keywords: sustainable development; stakeholders; innovation; capabilities;
    Date: 2006–05–29
  4. By: Michele Cincera (DULBEA-CERT, Université libre de Bruxelles, Brussels, and CEPR); Lydia Greunz (Collaborateur scientifique FNRS, DULBEA-CERT, Université libre de Bruxelles, Brussels); Jean-Luc Guyot (IWEPS, Institut wallon de l'évaluation, de la prospective et de la statistique); Olivier Lohest (IWEPS, Institut wallon de l'évaluation, de la prospective et de la statistique)
    Abstract: Ce working paper tente d’identifier, dans le cadre d’une démarche exploratoire et en articulation avec un cadre théorique original, les liens entre la trajectoire socio-professionnelle et le capital humain, défini sur la base des qualifications et de l’expérience professionnelle, d’un ensemble d’individus qui ont (ré)orienté cette trajectoire dans le sens d’un passage à l’entrepreneuriat. Cet ensemble est constitué de primo-créateurs, c’est-à-dire de personnes sans aucune expérience de création d’entreprise antérieure. La thèse défendue par les auteurs est celle d’une articulation forte, au niveau individuel, entre capital humain, tel qu’il peut être appréhendé par le niveau de qualification et l’expérience professionnelle, et dynamique entrepreneuriale. Dans cette optique, trois pistes sont envisagées : - celle des particularités du profil des primo-créateurs, principalement au niveau de ce capital, l’hypothèse étant que ces individus se différencient des non créateurs sur le plan des qualifications ; - celle d’une relation entre sphères d’expérience professionnelle et sphère entrepreneuriale, l’hypothèse étant que le contenu du projet entrepreneurial n’est pas étranger à l’expérience antérieure du créateur ; - celle d’une influence du niveau de qualification et de l’expérience du créateur sur la temporalité du processus de création. Pour ce faire, les données issues de deux larges enquêtes socio-économiques sont analysées en recourant aux outils de la statistique et de l’économétrie.
    Keywords: primo-créateurs d’entreprise, capital humain, expérience professionnelle, caractéristiques personnelles, durée du processus de création
    JEL: J23 J24 M13
    Date: 2006–06
  5. By: C. Cordes; P. J. Richerson; R. McElreath; P. Strimling
    Abstract: One reason why firms exist, this paper argues, is because they are suitable organizations within which cooperative production systems based on human social predispositions can evolve. In addition, we show how an entrepreneur – given these predispositions – can shape human behavior within a firm. To illustrate these processes, we will present a model that depicts how the biased transmission of cultural contents via social learning processes within the firm influence employees’ behavior and the performance of the firm. These biases can be traced back to evolved social predispositions. Humans lived in tribal scale social systems based on significant amounts of intra- and even intergroup cooperation for tens if not a few hundred thousand years before the first complex societies arose. Firms rest upon the social psychology originally evolved for tribal life. We also relate our conclusions to empirical evidence on the performance and size of different kinds of organizations. Modern organizations have functions rather different from ancient tribes, leading to friction between our social predispositions and organization goals. Firms that manage to reduce this friction will tend to function better.
    Keywords: Theory of the Firm, Cultural Evolution, Entrepreneurship, Firm Performance, Cooperation
    JEL: L25 D21 M13 M14 C61
    Date: 2006–06
  6. By: Joaquim J.S. Ramalho (Department of Economics, University of Évora); Jacinto Vidigal da Silva (Department of Mangment, University of Évora)
    Abstract: A key theme in corporate finance has been the study of the main factors that affect the financing decisions of firms. In this paper we examine the following two hypotheses which traditional theories of capital structure are relatively silent about: (i) the determinants of capital structure are different for micro, small, medium and large firms; and (ii) the factors that determine whether or not a firm issues debt are different from those that determine how much debt it issues. Using a binary choice model to explain the probability of a firm raising debt and a fractional regression model to explain the amount issued, we find strong support for both hypotheses. Nevertheless, the pecking-order theory seems to be suitable to describe the capital structure choices made by all size-based groups of firms.
    Keywords: Corporate finance, capital structure, leverage, micro firms, SMEs, fractional data, two-part model
    JEL: C51 G32
    Date: 2006
  7. By: Hirofumi Uchida; Gregory F. Udell; Wako Watanabe
    Abstract: Current theoretical and empirical research suggests that small banks have a comparative advantage in processing soft information and delivering relationship lending. The most comprehensive analysis of this view found using U.S. data that smaller SMEs borrow from smaller banks and smaller banks have stronger relationships with their borrowers (Berger, Miller, Petersen, Rajan, and Stein 2005) (BMPRS). We employ essentially the same methodology as BMPRS on a unique Japanese data set but our findings are different in interesting ways. Like BMPRS we find that more opaque firms are more likely to borrow from small banks. Unlike BMPRS, however, our methodology allows us to attribute this to the ability of large banks to deliver financial statement lending. Finally, quite unlike BMPRS we do not, on balance, find that small banks have stronger relationships with their SMEs. We offer some speculation on potential explanations for these differences. One possibility is that the credit culture and deployment of SME lending technologies differ in Japan from the U.S. However, we note that strong conclusions cannot be reached without more research.
    Date: 2006–06
  8. By: Byström, Hans (Department of Economics, Lund University)
    Abstract: The aim of this paper is to highlight a potentially very fruitful link between micro-entrepreneurs and the international capital markets. We discuss the role structured finance and credit derivatives could play in extending finance to micro-entrepreneurs on a much larger scale than today’s mainly non-commercial microfinance industry. The mechanisms of so called collateralized debt obligations (CDOs) are described and extended to the microfinance world. Finally, a hypothetical, but realistic, example of such a microfinance CDO (MiCDO) is used to discuss the implications of securitization and tranching of microcredits.
    Keywords: commercial microfinance; structured finance; securitization; collateralized debt obligation; MiCDO
    JEL: G15 G21 O16 R51
    Date: 2006–06–18
  9. By: Oyelaran-Oyeyinka, Banji (UNU-MERIT); Gehl Sampath, Padmashree (UNU-MERIT)
    Abstract: Translating R&D and inventive efforts into a market product is characterized by significant financial skills, and the ability to overcome technical and instititonal barriers. Research into and translation of new technologies such as biotechnology products to the market requires even greater resources. This paper aims to understand the key factors that foster or hinder the complex process of translating R&D efforts into innovative products. Different pathways exist in developed countries such as firm-level efforts, the use of IPs, the spin-off of new firms that develop new products, or a mixture of these. Developing countries differ substantially in the kinds of instruments they use because of their considerably weaker institutional environment and for this reason our framework takes a systemic and institutional perspective. The paper comtributes to this issue by examining systemic institutional barriers to commercializing biotechnology in a develping context within a systems of innovation framework.
    Keywords: research and development, biotechnology, commercialization, innovation, Africa, learning, institution building
    JEL: O32 L65 O34 O17
    Date: 2006
  10. By: Sang Nguyen; B.K. Atrostic
    Abstract: Business use of computers in the United States dates back fifty years. Simply investing in information technology is unlikely to offer a competitive advantage today. Differences in how businesses use that technology should drive differences in economic performance. Our previous research found that one business use – computers linked into networks – is associated with significantly higher labor productivity. In this paper, we extend our analysis with new information about the ways that businesses use their networks. Those data show that businesses conduct a variety of general processes over computer networks, such as order taking, inventory monitoring, and logistics tracking, with considerable heterogeneity among businesses. We find corresponding empirical diversity in the relationship between these on-line processes and productivity, supporting the heterogeneity hypothesis. On-line supply chain activities such as order tracking and logistics have positive and statistically significant productivity impacts, but not processes associated with production, sales, or human resources. The productivity impacts differ by plant age, with higher impacts in new plants. This new information about the ways businesses use information technology yields vital raw material for understanding how using information technology improves economic performance.
    Keywords: Information Technology, E-business Processes, Productivity
    Date: 2006–06
  11. By: Raa,Thijs ten (Tilburg University, Center for Economic Research)
    Abstract: If more productive firms grow relatively fast, an industry performs better, even when no firm exhibits technical or efficiency change. In other words, the two well-known sources of productivity growth-technology and efficiency-can be augmented by a third one, namely the industrial organization effect. In this paper the efficiency of an industrial organization and its contribution to performance are measured by benchmarking all firms on the industry. More precisely, efficiency is measured by the proximity between a firm and the best practices. Aggregation of firm efficiencies is imperfect. The bias is used to measure the efficiency of the industrial organization. In benchmarking, change transmitted by a firm represents productivity growth and change transmitted by the best practices represents technical change. Although I use a nonparametric framework, which requires only input and output information, duality analysis reveals the Solow residual. In discrete time Malmquist indices capture the measurement of the industrial organization effect, efficiency changes, and technical change. The industrial organization of Japanese banking is analyzed.
    Keywords: Industrail organization;Efficiency;Aggregation;Productivity
    JEL: L10 D24 O47
    Date: 2006

This nep-ent issue is ©2006 by Marcus Dejardin. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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