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on Entrepreneurship |
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Issue of 2006‒08‒26
eleven papers chosen by Marcus Dejardin Facultes Universitaires Notre-Dame de la Paix |
| By: | Miguel Angel Campo-Rembado (Stern School of Business, New York University) |
| Abstract: | Previous analysis of venture capital activity in Silicon Valley has highlighted the role of venture capital syndication as a mechanism through which venture capitalists (VCs) build trusting relationships within the investment venture capital community. But what are the dynamic properties of the resulting network? This paper analyzes the dynamics of syndicated deals in technology sectors. The results suggest that VCs build reputation by committing to provide future funds in a staged deal and honoring their commitment. Reputation increases cooperation, in terms of access to 'deal flow'. The commitment to provide future funding, however, is expensive in terms of the opportunity costs associated with a reduction in the number of new startups in which they can participate. The reputation system is enforced by established VCs, who have more exposure to the 'deal flow'. |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:net:wpaper:0511&r=ent |
| By: | Michael Fritsch; Pamela Mueller |
| Abstract: | We investigate the effects of new business formation on employment change in German regions. A special focus is on the lag-structure of this effect and on differences between regions. The different phases of the effects of new business formation on regional development are relatively pronounced in agglomerations as well as in regions with a high-level of labor productivity. In low-productivity regions, the overall employment effect of new business formation activity might be negative. The interregional differences indicate that regional factors play an important role. |
| Keywords: | Entrepreneurship, new business formation, regional development |
| JEL: | M13 O1 O18 R11 |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:esi:egpdis:2006-19&r=ent |
| By: | Alex Coad; Rekha Rao |
| Abstract: | We relate innovation to sales growth for incumbent firms in four high-tech sectors. A firm, on average, experiences only modest growth and may grow for a number of reasons that may or may not be related to ‘innovativeness’. However, given that firms are heterogeneous and that growth rates distributions are heavy-tailed, it may be misleading to use regression techniques that focus on the ‘average firm’. Using a quantile regression approach, we observe that innovativeness is of crucial importance for a handful of ‘superstar’ fast-growth firms. We also discuss policy implications of our results. |
| Keywords: | Innovation, Firm Growth, Quantile Regression, Innovation Policy |
| Date: | 2006–08–23 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2006/18&r=ent |
| By: | Stefania Albanesi |
| Abstract: | This paper studies optimal taxation of entrepreneurial capital and financial assets in economies with private information. Returns to entrepreneurial capital are risky and depend on entrepreneurs' hidden effort. It is shown that the idiosyncratic risk in capital returns implies that the intertemporal wedge on entrepreneurial capital that characterizes constrained-efficient allocations can be positive or negative. The properties of optimal marginal taxes on entrepreneurial capital depend on the sign of this wedge. If the wedge is positive, the optimal marginal capital tax is decreasing in capital returns, while the opposite is true when the wedge is negative. Optimal marginal taxes on other assets depend on their correlation with idiosyncratic capital returns. The optimal tax system equalizes after tax returns on all assets, thus reducing the variance of after tax returns on capital relative to other assets. If entrepreneurs are allowed to sell shares of their capital to outside investors, returns to externally owned capital are subject to double taxation- at the level of the entrepreneur and at the level of the outside investors. Even if entrepreneurs can purchase private insurance against their idiosyncratic risk, optimal asset taxes are essential to implement the constrained-efficient allocation if entrepreneurial portfolios are private information. |
| JEL: | D82 E22 E62 G18 H2 H21 H25 H3 |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12419&r=ent |
| By: | Fredrik Andersson; Matthew Freedman; John C. Haltiwanger; Julia Lane; Kathryn L. Shaw |
| Abstract: | Innovation in the U.S. economy is about employing and rewarding highly talented workers to produce new products. Using unique longitudinal matched employer-employee data, this paper makes a key connection between talent and firms in markets with risky product innovations. We show that software firms that operate in product markets with highly skewed returns to innovation, or high variance payoffs, are more likely to attract and pay for star workers. Thus, firms in high variance product markets pay more up-front—in starting salaries—to attract and motivate star employees, because if these star workers produce home-run innovations, the firm’s winnings will be huge. However, we also find these same firms pay highly for loyalty: star workers that stay with a firm have much higher earnings in firms with high variance product market payoffs. The large effects on earnings are robust to the inclusion of a wide range of controls for both workers and firm characteristics. One key control is that we also show that in firms that have actually hit home runs, with high revenues, the rewards for star talent are even greater. We also find that the dispersion of earnings is higher within firms with high variance product payoffs. |
| JEL: | J24 J31 L2 L86 |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12435&r=ent |
| By: | Marcus Dejardin (Faculté des Sciences économiques, sociales et de gestion, FUNDP - [Facultés Universitaires Notre-Dame de la Paix]) |
| Abstract: | La contribution néo-autrichienne en matière<br />d'entrepreneuriat est insérée dans un cadre d'analyse<br />économique dynamique tenant compte du fait<br />régional. Une introduction à la théorie kirznerienne de<br />l'entrepreneuriat est d'abord proposée. Nous traitons<br />plus spécialement de la notion de vigilance, de<br />l'absence de coût entrepreneurial d'un point de vue<br />analytique, ainsi que des coûts et des revenus<br />attendus de l'activité entrepreneuriale relativement à<br />d'autres activités en situation de système incomplet<br />de marchés. Le choix occupationnel des individus et<br />les effets de l'entrepreneuriat sur la croissance sont<br />ensuite discutés dès lors que la dimension régionale<br />des activités est introduite dans l'argumentation. Une<br />présentation systémique des arguments du choix<br />occupationnel et de la croissance conduit à mettre en<br />évidence le fait que les effets de l'action<br />entrepreneuriale sur la croissance peuvent<br />difficilement être considérés indépendamment des<br />effets en retour sur les paramètres de choix<br />individuels, a fortiori en référence à un ensemble de<br />ressources et d'activités économiques localisées en<br />interrelation ou en interaction. |
| Keywords: | Entrepreneuriat, territoire, croissance, Kirzner |
| Date: | 2006–08–17 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:halshs-00089329_v1&r=ent |
| By: | Nicholas Economides (Stern School of Business, NYU); V. Brian Viard (Graduate School of Business, Stanford University); Katja Seim (Stanford University) |
| Abstract: | See http://www.netinst.org/NET_Working_Papers.html #46 |
| JEL: | D43 K23 L11 L13 L96 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:net:wpaper:0508&r=ent |
| By: | Katja Seim (Graduate School of Business, Stanford University); V. Brian Viard (Graduate School of Business, Stanford University) |
| Abstract: | We test the effect of entry on the tariff choices of incumbent cellular firms. We relate the change in the breadth of calling plans between 1996, when incumbents enjoyed a duopoly market, and 1998, when incumbents faced increased competition from personal communications services (PCS) firms. Entry by PCS competitors differed across geographic markets due to the number of licenses left undeveloped as a result of the bankruptcy of some of the auctions’ winning bidders and due to variation across markets in the time required to build a sufficiently large network of wireless infrastructure. We find that incumbents increase tariff variety in markets with more entrants and that this effect is not explained by demographic heterogeneity or cost differences in maintaining calling plans across markets. We also find that incumbents are more likely to upgrade their technology from the old analog technology to the new digital technology in markets with more entry, suggesting that entry also has indirect effects on tariff choice via firms’ technology adoption decisions. |
| Keywords: | entry, market structure, cellular, price discrimination, nonlinear pricing, telecommunications |
| JEL: | L11 L13 L25 L96 |
| Date: | 2004–11 |
| URL: | http://d.repec.org/n?u=RePEc:net:wpaper:0313&r=ent |
| By: | Dhanoos Sutthiphisal |
| Abstract: | This paper investigates the impact of ¡§learning-by-producing¡¨ on inventive activity and shows that, in both emerging (electrical equipment and supplies) and maturing (shoes and textiles) industries, the geographic association between invention and production was rather weak during the Second Industrial Revolution. Regional shifts in production were neither accompanied nor followed by corresponding increases in invention. Instead, this paper finds that the geographic location of inventive activity tended to mirror the geographic distribution of individuals with advanced technical skills appropriate to the particular industry in question. Even in the craft-based shoe industry, much of the invention came from those with the advanced technical skills. The findings suggest that scholars have over-emphasized the importance of learning-by-producing in accounting for the geographic differences in inventive activity, and underestimated the significance of technical skills or human capital amongst the population. |
| JEL: | N0 O3 |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12469&r=ent |
| By: | Onsel Emre (University of Chicago); Ali Hortacsu (University of Chicago and NBER); Chad Syverson (University of Chicago and NBER) |
| Abstract: | While a fast-growing body of research has looked at how the advent and di®usion of e- commerce has a®ected prices, much less work has investigated e-commerce's impact on the number and type of ¯rms operating in an industry. This paper theoretically and empirically takes up the question of which producers most bene¯t and most su®er as consumers switch to purchasing products online. We specify a general industry model involving consumers with di®ering search costs buying products from heterogeneous-type producers. We inter- pret e-commerce as having created reductions in consumers' search costs. We show how such shifts in the search cost distribution reallocate market shares from an industry's low- type producers to its high-type businesses. We test the model using data for two industries in which e-commerce has arguably decreased consumers' search costs considerably: travel agencies and bookstores. We ¯nd evidence in both industries of the market share shifts predicted by the model. Interestingly, while both industries experienced similar changes, the speci¯c mechanisms through which e-commerce induced them were di®erent. For travel agencies, the shifts re°ected aggregate changes driven by airlines' reductions in agent com- missions as consumers started buying tickets online. For bookstores, on the other hand, industry-wide declines in small book stores re°ected aggregated market-speci¯c impacts, evidenced by the fact that more small-store exit occurred in those local markets where consumers' use of e-commerce channels grew fastest. |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:net:wpaper:0524&r=ent |
| By: | Uwe Cantner (University of Jena, Faculty of Economics); Andreas Meder (University of Jena, Faculty of Economics) |
| Abstract: | Dieses Paper untersucht auf Basis des ressourcen-basierten Ansatzes der Theorie des Unternehmens die Wirkungen von Forschungskooperationen auf den Unternehmenserfolg in einer explorativen Fallstudie. Dazu wird der Einfluss kooperativen Verhaltens im Bereich der Forschung und Entwicklung auf verschiedene Ebenen der Performance hin getest. Für die vorliegende Datenbasis kann gezeigt werden, dass die Wahrscheinlichkeit einer erfolgreichen Innovation nicht durch kooperatives Verhalten erhöht werden kann. Positive Wirkungen zeigten sich jedoch auf den langfristigen ökonomischen Erfolg. |
| Date: | 2006–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:jen:jenasw:2006-24&r=ent |