nep-ent New Economics Papers
on Entrepreneurship
Issue of 2006‒09‒23
eight papers chosen by
Marcus Dejardin
Facultes Universitaires Notre-Dame de la Paix

  1. Entrepreneurship in biotechnology: The case of four start-ups in the Upper-Rhine Biovalley. By Antoine Bureth; Julien Pénin; Sandrine Wolff
  2. What Makes a Die-Hard Entrepreneur? Beyond the ‘Employee or Entrepreneur’ Dichotomy By Andrew Burke; Felix FitzRoy; Michael A. Nolan
  3. Creative Destruction in Industries By Boyan Jovanovic; Chung-Yi Tse
  4. Banking and SME Financing in the United States By Charles Ou
  5. FU.S. banking deregulation, small businesses, and interstate insurance of personal income By Yuliya Demyanyk; Charlotte Ostergaard; Bent E. Sørensen
  6. Innovation Capabilities: The Knowledge Capital Behind the Survival and Growth of Firms By Baldwin, John R.; Gellatly, Guy
  8. Migration and innovation : does cultural diversity matter for regional R&D activity? By Niebuhr, Annekatrin

  1. By: Antoine Bureth; Julien Pénin; Sandrine Wolff
    Abstract: This paper explores entrepreneurship in biotech through the in depth analysis of four new ventures located in the Upper-Rhine Biovalley. One of the strengths of this paper is the presence of both successful cases of entrepreneurship and of cases of failures. This gives the opportunity to discuss the role of several factors on the performance of a new biotech venture. Three points particularly comes out of this study: The importance of public science, without which new biotech firms could hardly exist; the role of the patent system, the importance of which we link to the business model adopted by the firm; and the importance of collaborations, which we study through the concept of distributed entrepreneurship.
    Keywords: Intellectual property rights, patents, science, distributed entrepreneurship, collective invention.
    JEL: D2 O3
    Date: 2006
  2. By: Andrew Burke (Cranfield University and Max Planck Institute of Economics); Felix FitzRoy (University of St Andrews and IZA Bonn); Michael A. Nolan (University of Hull)
    Abstract: The paper makes three contributions to the economics literature on entrepreneurship. We offer a new measure of entrepreneurship which accounts for variations in persistence in selfemployment and as a result avoids the weakness of approaches which categorise an individual as an entrepreneur by observing their occupation at just one point in their career. We outline an econometric methodology to account for this approach and find that it is superior to probit/logit models which have dominated the literature. While our results indicate that this existing literature is good at explaining an individual’s propensity to try selfemployment, we find that entrepreneurial persistence is determined by a different model and unearth some new insights into the roles of early career experience, finance, role models, gender and the unemployment push effect.
    Keywords: self-employment, entrepreneurial persistence, count data
    JEL: J23 C25
    Date: 2006–09
  3. By: Boyan Jovanovic; Chung-Yi Tse
    Abstract: Most industries go through a "shakeout" phase during which the number of producers in the industry declines. Industry output generally continues to rise, however, which implies a reallocation of capacity from exiting firms to incumbents and new entrants. Thus shakeouts seem to be classic creative destruction episodes. Shakeouts of firms tend to occur sooner in industries where technological progress is rapid. Existing models do not explain this. Yet the relation emerges naturally in a vintage-capital model in which shakeouts of firms accompany the replacement of capital, and in which a shakeout is the first replacement echo of the capital created when the industry is born. We fit the model to the Gort-Klepper data and to Agarwal's update of those data.
    JEL: L11
    Date: 2006–09
  4. By: Charles Ou
    Abstract: Loan markets for most small business borrowers in the United States have become more competitive over the past decade, evidenced by the emergence of a nationwide market for credit lines and credit cards and the entry of large regional banks in local markets. However, the impact of increased competition on the cost of funds to small firms, as indicated by the rate spreads between small business rates and the rates paid by the banks’ best prime customers, is more difficult to assess because of data limitations.
    Date: 2006
  5. By: Yuliya Demyanyk (Federal Reserve Bank of St. Louis); Charlotte Ostergaard (Norwegian School of Management and Norges Bank); Bent E. Sørensen (University of Houston and CEPR)
    Abstract: We estimate the effects of deregulation of U.S. banking restrictions on the amount of interstate personal income insurance during the period 1970–2001. Interstate income insurance occurs when personal income reacts less than one-to-one to state-specific shocks to output. We find that income insurance improved after banking deregulation, and that this effect is larger in states where small businesses are more important. We further show that the impact of deregulation is stronger for proprietors’ income than other components of personal income. Our explanation of this result centers on the role of banks as a prime source of small business finance and on the close intertwining of the personal and business finances of small business owners. Our analysis casts light on the real effects of bank deregulation, on the risk sharing function of banks, and on the integration of bank markets.
    Keywords: Financial deregulation, integration of bank markets, interstate risk sharing, small business finance.
    Date: 2006–09–18
  6. By: Baldwin, John R.; Gellatly, Guy
    Abstract: This paper summarizes the findings of a research program aimed at outlining the importance to the firm growth process of competencies that arise from investments in intangible assets. The program has consisted of two parts. First, longitudinal databases have provided a rich set of studies on entry, exit, mergers and other aspects of dynamics related to growth and decline in firm populations. These studies have shown the pervasiveness of growth and decline in the firm population. By themselves, these studies do not demonstrate what strategies differentiate the most successful from the least successful. To do so, we have built a set of firm surveys that allowed profiles to be developed of the type of competencies that stem from investments in organizational capital. In turn, these are linked to administrative data that allow us to classify firms as either growing or declining. We then asked how differences in competencies were related to the performance of firms.
    Date: 2006–09–18
  7. 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 andproduction 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 learningby-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: 2006–09
  8. By: Niebuhr, Annekatrin (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "Recent theoretical research deals with economic costs and benefits of cultural diversity related to immigration. However, empirical evidence regarding the impact of cultural diversity on economic performance is still scarce. This paper investigates the significance of cultural diversity of the workforce on innovation output for a cross-section of German regions. The findings indicate that cultural diversity indeed affects innovative activity. The results suggest that differences in knowledge and capabilities of workers from diverse cultural backgrounds enhance performance of regional R&D sectors. However, education levels are also important. Diversity among highly qualified employees has the strongest impact on innovation output." (author's abstract, IAB-Doku) ((en))
    Keywords: Einwanderung - Auswirkungen, kulturelle Faktoren, Forschung und Entwicklung, Innovationspotenzial, Innovationsfähigkeit, regionale Faktoren, Arbeitskräftestruktur, regionale Herkunft, ausländische Arbeitnehmer, Wissensarbeit, Wissenstransfer, regionale Disparität, Arbeitsmigration - Auswirkungen, Migranten, Qualifikationsniveau, Patente - Quote, regionaler Vergleich
    Date: 2006–08–11

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