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on Entrepreneurship |
|
Issue of 2006‒07‒09
twelve papers chosen by Marcus Dejardin Facultes Universitaires Notre-Dame de la Paix |
| By: | Marco Caliendo; Frank M. Fossen; Alexander S. Kritikos |
| Abstract: | The influence of risk aversion on the decision to become self-employed is a much discussed topic in the entrepreneurial literature. Conventional wisdom asserts that the role model of an entrepreneur requires to make risky decisions in uncertain environments and hence that more risk-averse individuals are less likely to become an entrepreneur. Empirical tests of this assumption are scarce however, mainly because reliable measures for risk-aversion are not available. We base our analysis on the most recent waves of the German Socio-Economic Panel (SOEP) which allow us to use experimentally-validated measures of risk attitudes. Most importantly and in contrast to previous research, we are able to examine whether the decision of starting a business is influenced by objectively measurable risk attitudes at the time when this decision is made. Our results show that in general individuals with lower risk aversion are more likely to become self-employed. Sensitivity analysis reveals, however, that this is true only for people coming out of regular employment, whereas for individuals coming out of unemployment or inactivity risk attitudes do not seem to play a role in the decision process. |
| Keywords: | Risk attitudes, entrepreneurship, self-employment. |
| JEL: | D81 J23 M13 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp600&r=ent |
| By: | Karlsson, Charlie (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Nyström, Kristina (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology) |
| Abstract: | This paper investigates the role of knowledge for successful entrepreneurship. The paper explicitly discusses the role of accessibility to university and company R&D for new firm formation. Company R&D is assumed to contain a higher share of R&D directed towards generating technological knowledge. Hence, the accessibility to such R&D are expected to have a stronger influence on new firm formation than the accessibility to university R&D. Since knowledge can also be assumed to be spatially bounded and diffuses in geographical space, it is argued that local interaction, measured by intra-municipality accessibility to knowledge, have a stronger influence on new firm formation than interregional interaction. In the empirical analysis data on new firm formation in 288 Swedish municipalities and accessibility to university and company R&D for 1997 and 1999 are used. We find that accessibility to company R&D have a stronger impact on new firm formation than accessibility to university R&D. We also find that close knowledge interactions are more important for new firm formation than long distance knowledge interactions. Accessibility to inter-regional company R&D has even a negative impact on new firm formation. |
| Keywords: | knowledge; accessibility; regional; entrepreneurship; Sweden |
| JEL: | L10 R11 |
| Date: | 2006–07–07 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0070&r=ent |
| By: | Simeon Djankov (The World Bank); Yingyi Qian (UC Berkeley and CEPR); Gerard Roland (UC Berkeley and CEPR); Ekaterina Zhuravskaya (New Economic School/CEFIR and CEPR) |
| Abstract: | We compare results from a pilot study on entrepreneurship in China and Russia. Compared to non-entrepreneurs, Russian and Chinese entrepreneurs have more entrepreneurs in their family and among childhood friends, value work more relative to leisure and have higher wealth ambitions. Russian entrepreneurs have a better educational background and their parents were more likely to have been members of the communist party but Chinese entrepreneurs are more risk-taking and greedy and have more entrepreneurs among their childhood friends. |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:cfr:cefirw:w0049&r=ent |
| By: | Simeon Djankov (The World Bank); Yingyi Qian (UC Berkeley and CEPR); Gerard Roland (UC Berkeley and CEPR); Ekaterina Zhuravskaya (New Economic School/CEFIR and CEPR) |
| Abstract: | Social scientists studying the determinants of entrepreneurship have emphasized three distinct perspectives: the role of institutions, the role of social networks and the role of personal characteristics. We conduct a survey from five large developing and transition economies to better understand entrepreneurship in view of these three perspectives. Using data from a pilot study with over 2,000 interviews in 7 cities across China, we find that compared to non entrepreneurs, entrepreneurs are much more likely to have family members who are entrepreneurs as well as childhood friends who became entrepreneurs, suggesting that social networks play an important role in entrepreneurship. Entrepreneurs also differ strongly from non entrepreneurs in their attitudes towards risk and their work-leisure preferences. |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:cfr:cefirw:w0047&r=ent |
| By: | Simeon Djankov (The World Bank); Edward Miguel (UC Berkeley and NBER); Yingyi Qian (UC Berkeley and CEPR); Gerard Roland (UC Berkeley and CEPR); Ekaterina Zhuravskaya (New Economic School/CEFIR and CEPR) |
| Abstract: | Social scientists studying entrepreneurship have emphasized three distinct sets of variables: the institutional environment, sociological variables, and personal and psychological characteristics. We are conducting surveys in five large developing and transition economies to better understand entrepreneurship. In this short paper, using over 2,000 interviews from a pilot study in Russia, we find evidence that the three sets of variables matter: perceptions of the local institutional environment, social network effects and individual characteristics are all important in determining entrepreneurial behavior. |
| JEL: | M13 P12 |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:cfr:cefirw:w0048&r=ent |
| By: | Philip R. P. Coelho (Department of Economics, Ball State University); James E. McClure (Department of Economics, Ball State University) |
| Abstract: | Failures may lead to ultimate success in both nature and business. Just as dynamic ecosystems depend on death to replace senescent organisms with vigorous growth, the termination of uneconomic activities is essential to wealth creation. This paper explores the benefits of failures, and uses aspects of the analogy between death and business failure to analyze how failures in business economize upon resources and lead to better firms and greater efficiencies. A distinguishing feature of our work is the analytic use of competitive markets to provide insights into the processes of success and failure. Recognizable patterns of business failures are discussed in an effort to provide entrepreneurs and mangers with a basis for understanding and acting upon changing circumstances. |
| Keywords: | Entrepreneurship, Business Failure, Evolution, Uncertainty, Learning from Failure |
| Date: | 2004–01 |
| URL: | http://d.repec.org/n?u=RePEc:bsu:wpaper:200402&r=ent |
| By: | Ari – Ruuskanen Hyytinen |
| Abstract: | It is a well-documented empirical regularity that it is more satisfying to be self-employed han to work as an employee for an organization. A large part of this difference in job satisfaction is in the literature attributed to the strong perception of independence by the self-employed. In this paper we study people\'s time use as a source of entrepreneurial independence. By making use of disaggregated sequential microdata on people\'s time use, we are able to document that the perceived independence hardly derives from more flexible time use : The selfemployed work longer effective hours as well as more in the evenings and weekends than the organizationally employed. Albeit being able to time one\'s work may be a signal of flexibility in time use, the self-employed have less pure leisure and are less frequently absent from work in general and because of sickness on weekdays in particular. Moreover, we document that the self-employed who have small children are more likely to work after 5 p.m., when the communal day-care centers close. On the basis of these findings it is not surpirising that the selfemployed perceive that they are more often than the organizationally employed under time pressure and in hurry. |
| JEL: | M13 J22 J28 |
| Date: | 2006–06–30 |
| URL: | http://d.repec.org/n?u=RePEc:rif:dpaper:1029&r=ent |
| By: | Dean Yang |
| Abstract: | Millions of households in developing countries receive financial support from family members working overseas. How do migrant earnings affect origin-household investments? This paper examines Philippine households’ responses to overseas members’ economic shocks. Overseas Filipinos work in dozens of foreign countries, which experienced sudden (and heterogeneous) changes in exchange rates due to the 1997 Asian financial crisis. Appreciation of a migrant’s currency against the Philippine peso leads to increases in household remittances received from overseas. The estimated elasticity of Philippine-peso remittances with respect to the Philippine/foreign exchange rate is 0.60. These positive income shocks lead to enhanced human capital accumulation and entrepreneurship in migrants’ origin households. Child schooling and educational expenditure rise, while child labor falls. In the area of entrepreneurship, households raise hours worked in self-employment, and become more likely to start relatively capital-intensive household enterprises. |
| JEL: | D13 F22 I2 I3 J22 J23 J24 O12 O15 |
| Date: | 2006–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12325&r=ent |
| By: | Guido de Blasio (Bank of Italy, Research Dept.); Giorgio Nuzzo (Bank of Italy, Branch of L'Aquila) |
| Abstract: | Putnam (1993) argues that (i) center-northern Italy has developed faster than southern Italy because the former was better endowed with social capital; and (ii) that the endowments of social capital across Italian territories have been highly persistent over centuries. This paper provides an empirical investigation of Putnam’s case. To evaluate the relevance of social capital, we present a test based on worker productivity, entrepreneurship, and female labor market participation. Using as instruments regional differences in civic involvement in the late ninetieth century and local systems of government in the middle age, we show that social capital does have economic effects. |
| Keywords: | Social Capital, Economic Development |
| JEL: | Z10 O10 D10 |
| Date: | 2006–05 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_591_06&r=ent |
| By: | Eric Thompson; George Hammond; Stephan Weiler |
| Abstract: | This paper examines how amenities, asset indicators, and fiscal factors influence the growth in factors of production from 1972 to 1999 in the 466 non-metropolitan labor market areas in the continental United States. In developing our model of non-metropolitan factor markets, we combine the emphasis of Brown et al. (2003) on the affect of taxes and public expenditure policy on labor and capital formation with the emphasis of Beeson et al. (2001) on the importance of climate and natural features on localized population growth. We develop our own measure of capital stock in non-metropolitan areas using data from the Census of Manufacturing for 1967, 1972, 1977, 1982, 1987, and 1992. Results indicate that local taxes discourage both employment growth and manufacturing capital formation, but that local public infrastructure investment and the level of local entrepreneurship encourages employment growth. Amenities such as a favorable climate and the presence of surface water encourage the growth of employment, and greater local wealth, as measured by dividend, interest, and rent income, encourages the formation of manufacturing capital stock. Results fail to support an “export base” approach for rural economies where greater manufacturing capital stock encourages greater employment in a region. |
| Keywords: | Rural areas ; Rural development |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedkrw:rwp06-08&r=ent |
| By: | Elina Berghäll |
| Abstract: | The relationship between firm size and age relative to technical change and efficiency is examined in a highly innovative and dynamic sector, the Finnish ICT equipment manufacturing industry. A stochastic frontier model is applied to an unbalanced firm level panel over the period 1990?2003. The sample is representative of almost half of corporate R&D in Finland. The Method of Moments and Battese-Coelli efficiency measures are obtained to compare permanent and time-varying efficiency levels. Results show firm age to be relatively insignificant. New firms do not dominate technical change. In contrast, firm size makes a substantial contribution to productivity growth, technical change and efficiency. High elasticity of factor inputs result in, on average, highly increasing returns to scale. These factors point towards growing concentration and capital-intensity, which can be expected to further widen the productivity gap between small and large firms. To survive, smaller firms may need to combine frontier technology adoption with expanding scale, e.g., by mergers, to improve both technical and scale efficiency. |
| Keywords: | ICT industry, total factor productivity, technical change, technical efficiency, R&D elasticity, firm size, firm age |
| JEL: | O39 L63 O30 |
| Date: | 2006–05–04 |
| URL: | http://d.repec.org/n?u=RePEc:fer:dpaper:390&r=ent |
| By: | Bronwyn H. Hall; Jacques Mairesse |
| 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. |
| JEL: | O3 M2 |
| Date: | 2006–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12320&r=ent |