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on Entrepreneurship |
| By: | Metzger, Georg |
| Abstract: | The performance of young and newly founded firms depends largely to the human capital of the firm owner. The entrepreneur is therefore one of the main success factors for the firm. Yet entrepreneurs differ considerably in their background and characteristics. Particularly, founders’ individual entrepreneurial experience is a property that might be crucial for firm development, though it is part of the firm’s human capital, too. Business failures, namely bankruptcies, may trigger the transition from being a novice entrepreneur to becoming an entrepreneur who is entrepreneurially experienced. About 3 percent of novice entrepreneurs who file for bankruptcy reestablish afterwards. On average, slightly more than 15 months will elapse until such ‘fallen’ entrepreneurs venture out anew. They differ from entrepreneurs not willing or able to take a second chance in several respects. |
| Keywords: | Bankruptcy, Business Failure, Restart, Second Chance |
| JEL: | G33 J23 M13 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:4622&r=ent |
| By: | Daniela Glocker (DIW Berlin); Viktor Steiner (Free University Berlin, DIW Berlin and IZA) |
| Abstract: | This paper contributes to the policy-relevant question whether self-employment is a way out of (long-term) unemployment. We estimate the relationship between the entry rate into selfemployment and previous (long-term) unemployment on the basis of pseudo-panel data for Germany in the period 1996-2002. The estimation method accounts for cohort fixed effects and measurement errors induced by the pseudo panel structure. We find that previous (longterm) unemployment significantly increases entry rates into self-employment for both men and women. These effects are quantitatively important, both in absolute terms and compared to other potential determinants of self-employment transitions, such as age, the level of vocational qualification and certain household characteristics. |
| Keywords: | self-employment, entrepreneurship, entry rate, start-ups, unemployment, pseudo-panel, age and cohort effects |
| JEL: | J23 J64 C35 |
| Date: | 2007–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2561&r=ent |
| By: | David Audretsch; Erik Monsen |
| Abstract: | We review the role entrepreneurship capital in regional economic performance and extend it to explain the economic and entrepreneurial performance of organizations, teams, and individuals. Drawing on entrepreneurship and social capital research, we demonstrate that researchers at different level of analysis are in fact modeling the same underlying multi-level concept: entrepreneurship capital. We identify elements of entrepreneurship capital at and across the levels. Where there are gaps, we suggest new directions for research, public policy, and management practice that focus on enhancing organizational, interpersonal, and personal factors which promote entrepreneurial action at and across regional, organizational, team, and individual levels. |
| Keywords: | Entrepreneurship, Social Capital, Multilevel |
| Date: | 2007–02 |
| URL: | http://d.repec.org/n?u=RePEc:esi:egpdis:2007-06&r=ent |
| By: | Hessels, S.J.A.; Stel, A.J. van (Erasmus Research Institute of Management (ERIM), RSM Erasmus University) |
| Abstract: | While it is generally acknowledged that entrepreneurship as well as export activity may both be important strategies for achieving national economic growth, it has remained unclear how export activity among new ventures is related to economic growth. This paper investigates whether the presence of export-oriented entrepreneurs is a more important determinant of economic growth than entrepreneurial activity in general. We focus on the national or macro-level and use data from the Global Entrepreneurship Monitor for a sample of 36 countries. An important advantage of using the macro-level is that indirect effects of exporting entrepreneurs that reach further than the performance of these firms themselves (e.g. spillovers) are captured in the analysis. To our knowledge, no attempt has been made thus far to link international activity of early-stage ventures to macro-economic out-comes. Our results suggest that export-oriented entrepreneurship is indeed more important for achieving high economic growth rates than entrepreneurial activity in general. This suggests that international activity by small and new firms strongly contributes to higher levels of competition and, consequently, to the emergence of highly dynamic economies and higher levels of economic growth. |
| Keywords: | Entrepreneurship;Export;Economic growth;Global Entrepreneurship Monitor; |
| Date: | 2007–01–26 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:eureri:30009610&r=ent |
| By: | Clarysse, B.; Knockaert, M.; Lockett, A. |
| Abstract: | Board composition in large organizations has been subject to much empirical research, however, little attention has been focused on board composition in start-ups, and more specifically high tech start-ups. This lack of research is surprising given that many high tech start-ups have multiple equity stakeholders such as venture capitalists or public research organizations, such as universities. Given that high tech start-ups are commonly resource-poor these external stakeholders may play an important role in accessing critical external resources. Drawing on agency theory, resource dependence theory and social network theory we examine the tensions that exist between the founding team and external equity stakeholders in determining the presence of outside board members. In particular we focus on whether or not the outside board members have either complementary or substitute human capital to the founding team. We test our model on a sample of 140 high tech start-ups in Flanders. Our results indicate that high tech start-ups with a public research organization as an external equity stakeholder are more likely to develop boards with outside board members with complementary skills to the founding team. Conversely, in high tech start-ups where the founding team has had autonomy, or where a venture capitalist is an external equity stakeholder, the board tends to consist of outside board members with similar or substitute human capital to the founding team. Our findings the presence of an external equity stakeholder does not guarantee that outside board members have complementary human capital to the founding team. |
| Date: | 2006–10–04 |
| URL: | http://d.repec.org/n?u=RePEc:vlg:vlgwps:2006-34&r=ent |
| By: | Zoltan J. Acs; Monika I. Megyesi |
| Abstract: | Creativity is changing the way cities approach economic development and formulate policy. Creative metropolises base their economic development strategies, at least partly, on building communities attractive to the creative class worker. While there are countless examples of high-tech regions transforming into creative economies, traditionally industrial cities have received much less attention in this regard. This research draws on Baltimore to assess the potential of transforming a traditionally industrial region into a creative economy. It analyses Baltimore’s performance on dimensions of talent, tolerance, technology, and territory both as a stand-alone metropolitan area and in comparison to similar industrial metropolises. Using data from the US Census Bureau and research on creativity measures, this case study concludes that Baltimore has the opportunity to capitalize on the creative economy because of its openness to diversity, established technology base, and appealing territorial amenities. An important consideration in the transformation towards a creative economy is Baltimore's geographic proximity and access to the largest reservoir of creative talent in the US: Washington, DC. |
| Keywords: | creativity, creative class, creativity index, creative cities, talent, technology, tolerance, territory, bohemian index, gay index, old industrial cities, Baltimore, economic development, economic growth, entrepreneurship |
| Date: | 2007–02 |
| URL: | http://d.repec.org/n?u=RePEc:esi:egpdis:2007-08&r=ent |
| By: | Cools, E.; Van den Broeck, H. |
| Abstract: | The aim of this study was to get more insight into what typifies Flemish entrepreneurs. We compared entrepreneurs with non-entrepreneurs for five traits (tolerance for ambiguity, self-efficacy, proactive personality, locus of control, need for achievement) and for cognitive styles. Additionally, we used these trait and cognitive characteristics to predict variances in entrepreneurial orientation (EO). Whereas the link between EO and organizational performance has been studied intensively, the examination of possible antecedents of EO remains a white space. We found that entrepreneurs (N = 177) score significantly higher on all traits than non-entrepreneurs (N = 60). For the cognitive styles (measured with the Cognitive Style Indicator), we found that non-entrepreneurs score higher on the knowing and planning style. No differences were found for the creating style. With regard to the link between the entrepreneur’s profile and EO, we found a significant contribution of tolerance for ambiguity and proactive personality to EO. |
| Keywords: | traits; cognitive styles; entrepreneurial orientation; entrepreneurs versus non-entrepreneurs |
| Date: | 2006–10–04 |
| URL: | http://d.repec.org/n?u=RePEc:vlg:vlgwps:2006-42&r=ent |
| By: | Toke Reichstein; Michael S. Dahl; Bernd Ebersberger; Morten B. Jensen |
| Abstract: | This paper explores the firm growth rate distribution in a Gibrat’s Law context. The aim is to provide an empirical exploration of the determinants of firm growth. The work is novel in two respects. First, rather than limiting the analysis to focus on the conditional mean growth level, we investigate the complete shape of the distribution. Second, we show that the differences in the firm growth rate process between large and small firms are highly circumstantial. That industry dynamics have a substantial influence on the relationship between firm size and firm growth. The data used includes more than 9000 Danish firms from manufacturing, services and construction. We provide robust evidence indicating that firm growth studies should be less obsessed with explaining means and instead look to other parts of the firm growth rate distribution. |
| Keywords: | Firm growth; quantile regression; distribution shape |
| JEL: | C14 L11 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:aal:abbswp:06-34&r=ent |
| By: | Raquel Ortega-Argilés; Rosina Moreno |
| Abstract: | This paper analyses the impact that some managerial competitive strategies followed by a firm may have on its survival. We have not only considered the classic strategies related to the passive learning process defined by Jovanovic (e.g., R&D or advertisement expenses), but we have also taken into account the active learning process ideas given by Ericson and Pakes. This way, we study the effect of product and process innovative strategies, with a detailed desegregation of their functions, on firm’s survival likelihood. Several non-parametric, semi-parametric and parametric techniques are computed to check the effect of the active learning theory on business survival in a set of Spanish manufacturing firms (1990-2001). |
| Keywords: | firm survival, active learning theory, duration analysis. |
| JEL: | L11 M13 |
| Date: | 2007–02 |
| URL: | http://d.repec.org/n?u=RePEc:esi:egpdis:2007-05&r=ent |
| By: | Roberto Fontana; Lionel Nesta (Observatoire Français des Conjonctures Économiques) |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:fce:doctra:0702&r=ent |
| By: | Alicia M. Robb (University of California, Santa Cruz); Robert W. Fairlie (University of California, Santa Cruz, RAND and IZA) |
| Abstract: | Using confidential and restricted-access microdata from the U.S. Census Bureau, we find that Asian-owned businesses are 16.9 percent less likely to close, 20.6 percent more likely to have profits of at least $10,000, and 27.2 percent more likely to hire employees than whiteowned businesses in the United States. Asian firms also have mean annual sales that are roughly 60 percent higher than the mean sales of white firms. Using regression estimates and a special non-linear decomposition technique, we explore the role that class resources, such as financial capital and human capital, play in contributing to the relative success of Asian businesses. We find that Asian-owned businesses are more successful than whiteowned businesses for two main reasons - Asian owners have high levels of human capital and their businesses have substantial startup capital. Startup capital and education alone explain from 65 percent to the entire gap in business outcomes between Asians and whites. Using the detailed information on both the owner and the firm available in the CBO, we estimate the explanatory power of several additional factors. |
| Keywords: | Asians, entrepreneurship, startup capital, self-employment |
| JEL: | J15 L26 |
| Date: | 2007–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2566&r=ent |
| By: | Vijaya Ramachandran; Manju Kedia Shah |
| Abstract: | Much of the growth in Sub-Saharan Africa in the past decade has come from extractive industries, rather than from private, entrepreneurial activity. Furthermore, non-extractive activity in the private sector is often dominated by firms owned by ethnic minorities. This paper analyzes the characteristics of the formal private sector in five countries in sub-Saharan Africa, with a particular emphasis on Black African-owned (indigenous) firms. We find that indigenous firms start smaller and grow more slowly; however their rate of growth is positively influenced by whether the owner-entrepreneur has a university degree. We do not find overwhelming evidence that credit is the binding constraint but we do find that indigenous firms get less access to trade credit than firms owned by minority entrepreneurs. Finally, we discuss policy solutions that might enable a larger number of indigenous entrepreneurs to enter and survive in a vibrant, multi-ethnic private sector. |
| Keywords: | Sub Saharan Africa, extractive industries, formal private sector, indigenous entrepreneurs, credit |
| JEL: | O1 M20 |
| URL: | http://d.repec.org/n?u=RePEc:cgd:wpaper:104&r=ent |
| By: | Esben Sloth Andersen |
| Abstract: | Schumpeter’s unique type of evolutionary analysis can hardly be understood unless we recognise that he developed it in relation to a study of the strength and weaknesses of the Walrasian form of Neoclassical Economics. This development was largely performed in his first book Wesen und Hauptinhalt der theoretischen Nationalökonomie. This German-language book - which in English might be called ‘Essence and Scope of Theoretical Economics’ - was published a century ago (in 1908). Different readings of Wesen provide many clues about the emergence and structure of Schumpeter’s programme for teaching and research. This programme included a modernisation of static economic analysis but he concentrated on the difficult extension of economic analysis to cover economic evolution. Schumpeter thought that this extension required a break with basic neoclassical assumptions, but he tried to avoid controversy by presenting it as only requiring the introduction of innovative entrepreneurs into the set-up of the Walrasian System. Actually, he could easily define the function of his type of entrepreneurs in this manner, but the analysis of the overall process of evolution required a radical reinterpretation of the system of general economic equilibrium. He thus made clear that he could not accept the standard interpretation of the quick Walrasian process of adaptation (tâtonnement). Instead, he saw the innovative transformation of routine behaviour as a relatively slow and conflict-ridden process. This reinterpretation helped him to sketch out his theory of economic business cycles as reflecting the waveform process of economic evolution under capitalism. |
| Keywords: | Economic statics; evolutionary dynamics; business cycles; Joseph A. Schumpeter; Léon Walras |
| JEL: | B31 E30 O31 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:aal:abbswp:06-35&r=ent |