nep-ent New Economics Papers
on Entrepreneurship
Issue of 2006‒11‒18
ten papers chosen by
Marcus Dejardin
Facultes Universitaires Notre-Dame de la Paix

  1. The Entrepreneur's Mode of Entry: Business Takeover or New Venture start? By Simon C. Parker; Mirjam C. van Praag
  2. Testing the Entrepreneurial Intention Model on a Two-Country Sample By Francico Liñan; Yi-Wen Chen
  3. Migrant Female Entrepreneurship: Driving Forces, Motivation and Performance By Baycan-Levent, Tuzin; Nijkamp,Peter
  4. Entrepreneurship, Management Services and Economic Growth By Vicente Salas Fumas; Javier Sanchez Asin
  5. Academic entrepreneurship, patents, and spin-offs: critical issues and lessons for Europe By Chiara Franzoni; Francesco Lissoni
  6. An Empirical Relationship between Entrepreneurship and FDI. A Note. By Miltiades N. Georgiou
  7. Small-Scale Business Survival and Inheritance : Evidence from Germany By Dorothea Schäfer; Oleksandr Talavera
  8. A Closer Look at Serial Growth Rate Correlation By Alex Coad
  9. A Soft Budget Constraint Explanation for the Venture Capital Cycle By Georg Gebhardt
  10. The Efect of Relationship Lending on Firm Performance By Judit Montoriol

  1. By: Simon C. Parker (Durham University); Mirjam C. van Praag (Universiteit van Amsterdam)
    Abstract: We analyse the decision to become an entrepreneur by either taking over an established business or starting a new venture from scratch. A model is developed which predicts how several individual- and firm-specific characteristics influence entrepreneurs\' entry mode. The new venture creation mode is associated with higher levels of schooling and wealth, whereas managerial experience, new venture start-up capital requirements and risk promote the takeover mode. Entrepreneurs whose parents run a family firm are predicted to invest the least in schooling, since schooling reduces search costs and these individuals have the lowest probability of needing to search for a business opportunity outside their family. A sample of data on entrepreneurs from the Netherlands provides broad support for the theory; implications for policy-makers concerned about the survival of family firms lacking within-family successors are discussed.
    Keywords: entrepreneurship; human capital; business takeover; venture start up; family firm
    JEL: J24 M13
    Date: 2006–10–11
  2. By: Francico Liñan (Departamento de Economia Aplicada I, University of Seville); Yi-Wen Chen (Graduate Institute of Technology and Innovation Management, National Chengchi University)
    Abstract: This paper tests the Entrepreneurial Intention Model -which is adapted from the Theory of Planned Behavior- on a sample of 533 individuals from two quite different countries: one of them European (Spain) and the other South Asian (Taiwan). A newly developed Entrepreneurial Intention Questionnaire (EIQ) has being used which tries to overcome some of the limitations of previous instruments. Structural equations techniques were used in the empirical analysis. Results are generally satisfactory, indicating that the model is probably adequate for studying entrepreneurship. Support for the model was found not only in the combined sample, but also in each of the national ones. However, some differences arose that may indicate demographic variables contribute differently to the formation of perceptions in each culture.
    Keywords: Entrepreneurship, Entrepreneurial intention, Theory of Planned Behavior, Psychometric properties, Structural Equations
    Date: 2006–07
  3. By: Baycan-Levent, Tuzin (Vrije Universiteit Amsterdam, Faculteit der Economische Wetenschappen en Econometrie (Free University Amsterdam, Faculty of Economics Sciences, Business Administration and Economitrics); Nijkamp,Peter
    Abstract: The present paper investigates migrant female entrepreneurship on the basis of driving forces, motivation and performance of migrant women entrepreneurs. We review the factors that push migrant females towards entrepreneurship and that determine their entrepreneurial performance. In order to understand and test the determinant factors behind the motivation towards entrepreneurship as well as the economic and survival performance of migrant women entrepreneurs, this paper addresses in the empirical part Turkish female entrepreneurs in Amsterdam. The data and information used for evaluation are based on in-depth personal interviews. As a rather novel methodological contribution, a recently developed artificial intelligence method, i.e. rough set analysis, is deployed to assess and identify the most important factors in motivation and performance of migrant females.
    Keywords: Turkish female workers; Amsterdam
    JEL: M13 J61
    Date: 2006
  4. By: Vicente Salas Fumas (Departamento de Economia y Direccion de Empresas, Universidad de Zaragoza); Javier Sanchez Asin
    Abstract: We model the joint production of entrepreneurs and workers where the former provide both entrepreneurial (strategic) and managerial (coordination, motivation) services, and management services are shared with individual workers in an output maximizing way. The static equilibrium of the model determines the endogenous share of entrepreneurs in the economy in a given moment of time. The time dynamics of the solution implies that a given growth rate in quality of entrepreneurial services contributes to productivity growth proportionally to the share of entrepreneurs at the start of the period and improvement in quality of entrepreneurial services is convergence enhancing. Model predictions are tested with data from OECD countries in the period 1970-2002. We find that improvements in quality of entrepreneurial services over time explain up to 100% of observed average productivity growth in these countries.
    Date: 2006–01
  5. By: Chiara Franzoni (A. Young School of Policy Studies, Georgia State University, USA); Francesco Lissoni (Università di Brescia and CESPRI-Università Commerciale Bocconi, Milano, Italy)
    Abstract: The paper proposes a definition of “academic entrepreneur” which draws from draws from the economics, history, and sociology of science. Academic entrepreneurs are scientists with a brilliant scientific record, who build their careers through discipline-building, the creation and of new labs and teams, and an appetite for the economic resources necessary to pursue those goals. Long-standing institutional features of national university systems explain to what extent commercial activities may or may not help academic entrepreneurs to progress in their careers. European policies for technology transfer should address these features, rather than aiming straight at university patenting and firm creation.
    Keywords: Academic entrepreneurship, Technology transfer
    JEL: I23 M13 O31
    Date: 2006–09
  6. By: Miltiades N. Georgiou
    Abstract: In the present note an effort will be made for a contribution to economic theory by estimating an econometric relationship between the foreign direct investment [FDI] and total economy’s entrepreneurship reward [rEM]. This note is based mainly on the next two papers. First, it will be based on the discussion paper “Understanding the Role of Entrepreneurship for Economic Growth.” by Martin Carree and Roy Thurik, MPIoE, #2005, in which the authors show the importance of entrepreneurship to adapt to new technology, to develop capacity and reach economies of scale. Second, it will be based on the discussion paper “Does Entrepreneurship Create Enough Jobs in Europe? A Note.” by Miltiades N. Georgiou, MPIoE, #0806, in which entrepreneurship reward [rEM] is measurable and consequently can be related with the other measurable economic variables like the [FDI]. Hence, in the present note a relationship between [FDI] and [rEM] can be numerically estimated. More specifically, it will be pointed out with panel data econometric analysis that in all Western European Countries and the United States [FDI] is positively related with [rEM], and that decisions about [FDI] are mainly affected by [rEM].
    Date: 2006–11
  7. By: Dorothea Schäfer; Oleksandr Talavera
    Abstract: In this paper we investigate whether small-scale businesses face financial constraints that affect their survival. We develop a model of moral hazard in which financial constraints arise endogenously. The model predicts that higher private assets relax financial constraints and have a positive effect on the firm's probability of survival. We test this proposition using German Socio-Economic Panel (GSOEP) data, which cover the period 1984-2004. The release from financial constraints is measured by inheritance. The empirical analysis confirms that the entrepreneur has a higher propensity to stay in business when she inherits capital. This effect is particularly strong for entrepreneurs that switch from self-employment into wage employment. These results are consistent with hypothesis that financial frictions have a perceptible impact on bankruptcy among small business firms.
    Keywords: Entrepreneurship, survival, financial constraints
    JEL: G30 J20 L10
    Date: 2006
  8. By: Alex Coad
    Abstract: Serial correlation in annual growth rates carries a lot of information on growth pro-cesses – it allows us to directly observe firm performance as well as to test theories. Using a 7-year balanced panel of 10 000 French manufacturing firms, we observe that small firms typically are subject to negative correlation of annual growth rates, whereas larger firms display positive correlation. Furthermore, we find that those small firms that experience extreme positive or negative growth in any one year are unlikely to repeat this performance in the following year
    Keywords: Serial correlation, firm growth, quantile regression, French manufacturing, fast-growth firms
    Date: 2006–11–03
  9. By: Georg Gebhardt (Department of Economics, University of Munich, Ludwigstr. 28 (Rgb.), D-80539 Munich. Tel.: +49 89 2180 2876,
    Abstract: We explore why venture capital funds limit the amount of capital they raise and do not reinvest the proceeds. This structure is puzzling because it leads to a succession of several funds financing each new venture which multiplies the well known agency problems. We argue that an inside investor cannot provide a hard budget constraint while a less well informed outsider can. Therefore, the venture capitalist delegates the continuation decision to the outsider by ex ante restricting the amount of capital he has under management. The soft budget constraint problem becomes the more important the higher the entrepreneur’s private benefits are and the higher the probability of failure of a project is.
    Keywords: Contract Theory, Corporate Finance, Venture Capital
    JEL: G24 G31 D82
    Date: 2006–10
  10. By: Judit Montoriol (Department of Business Economics, Universitat Autonoma de Barcelona)
    Abstract: We examine how relationship lending affects firm performance using a panel dataset of about 70,000 small and medium Spanish firms in the period 1993-2004. We model firm performance jointly with the firm's choice of the number of bank relationships. Controlling for firm fixed effects and using instrumental variables for the decision on the number of bank relationships, we found that firms maintaining exclusive bank relationships have lower profitability. The result is consistent with the view that banks appropriate most of the value generated through close relationships with its borrowers as long as they do not face competition from other lenders
    Date: 2006–06

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