nep-ent New Economics Papers
on Entrepreneurship
Issue of 2007‒06‒23
seven papers chosen by
Marcus Dejardin
Notre-Dame de la Paix University

  1. The entrepreneurial decision: Theories, determinants and constraints. By Daniela Grieco
  2. Spin-offs and the market for ideas By Satyajit Chatterjee; Esteban Rossi-Hansberg
  3. High Growth Entrepreneurs, Public Policies and Economic Growth By Erik Stam; Kashifa Suddle; S. Jolanda A. Hessels; André van Stel
  4. New pecking order financing for innovative firms:an overview By Sau Lino
  5. From Science to License: An exploratory analysis of the value of academic patents By Eleftherios Sapsalis
  6. Entry and the accumulation of capital: a two state-variable extension to the Ramsey model By Brito, Paulo; Dixon, Huw
  7. Investment and firm dynamics By D'Erasmo, Pablo

  1. By: Daniela Grieco (CESPRI - Bocconi University, Milan, Italy.)
    Abstract: The pervasiveness of the entrepreneurial phenomenon attracts the attention on the determinants of the decision of becoming entrepreneur. As the entrepreneurial decision can be additionally conceived as firm entry, as a real business investment in the creation of a new business and as a career choice in favour of self-employment, the literature about entrepreneurship is integrated with industrial organization, financial economics and labour economics approaches to identify contextual and personal determinants. Finally, an analysis of the constraints that limit the entrepreneurial decision is carried out.
    Keywords: Entrepreneurial decision, Entry, Real investment, Self-employment.
    JEL: D21 D81 J23 G11
    Date: 2007–05
  2. By: Satyajit Chatterjee; Esteban Rossi-Hansberg
    Abstract: The authors propose a theory of firm dynamics in which workers have ideas for new projects that can be sold in a market to existing firms or implemented in new firms: spin-offs. Workers have private information about the quality of their ideas. Because of an adverse selection problem, workers can sell their ideas to existing firms only at a price that is not contingent on their information. The authors show that the option to spin off in the future is valuable so only workers with very good ideas decide to spin off and set up a new firm. Since entrepreneurs of existing firms pay a price for the ideas sold in the market that implies zero expected profits for them, firms’ project selection is independent of their size, which, under some assumptions, leads to scale-independent growth. The entry and growth process of firms in this economy leads to an invariant distribution that resembles the one in the U.S. economy.
    Date: 2007
  3. By: Erik Stam (University of Cambridge, Max Planck Institute of Economics Jena, Research group on Entrepreneurship, Economic Growth and Public Policy); Kashifa Suddle (EIM Business and Policy Research); S. Jolanda A. Hessels (EIM Business and Policy Research); André van Stel (EIM Business and Policy Research, Erasmus University Rotterdam, Max Planck Institute of Economics, Research group on Entrepreneurship, Economic Growth and Public Policy)
    Abstract: This paper investigates whether the presence of ambitious entrepreneurs is a more important determinant of national economic growth than entrepreneurial activity in general. We use data from the Global Entrepreneurship Monitor to test the extent to which high growth ambitions of entrepreneurs affect GDP growth for a sample of 36 countries. Our results suggest that ambitious entrepreneurship contributes more strongly to macro-economic growth than entrepreneurial activity in general. We find a particularly strong effect of high-expectation entrepreneurship for transition countries. These results are interpreted in light of the ongoing debate about public policies designed to stimulate high growth start-ups.
    Keywords: entrepreneurial activity, high growth entrepreneurs, growth ambitions, high growth start-ups, public policy, economic growth
    JEL: L16 L21 M13 O11 O40 O57
    Date: 2007–06–20
  4. By: Sau Lino (University of Turin)
    Date: 2007–04
  5. By: Eleftherios Sapsalis (Centre Emile Bernheim, Solvay Business School, Université Libre de Bruxelles, Brussels.)
    Abstract: This paper analyses the industrial and entrepreneurial value of 334 patent families applied for by six major Belgian universities. It identifies the value determinants underlying the patent documents and highlights the positive and significant impact of collaboration and tacit scientific knowledge of the inventors’ team on the probability to get licensed. It also shows that there are technological differences between patents licensed to existing companies and the ones licensed to spin-offs. It suggests that existing companies are more likely to license technologies to be cited by academia when spin-offs exploit academic patents that are cited by the industry. These results advocate that existing companies and start-ups are two different valorisation patterns to commercialise different types of academic technologies. The paper stresses also the importance of collaboration between public and corporate research teams in order to get patent licensed. It pleads for a better management and valorisation sheme of patents co-applied for by many academic assignees and draws attention on the need to focus on academic researchers with a high scientific profile in terms of publications in order to crystallize their tacit knowledge into valuable patents.
    Keywords: Patent value, patent indicators, knowledge sources, license, spin-off.
    JEL: L24 M13 O33 O34
    Date: 2007–06
  6. By: Brito, Paulo; Dixon, Huw (Cardiff Business School)
    Abstract: In this paper we consider the entry and exit of firms in a dynamic general equilibrium model with capital and a fixed labour supply. At the firm level, there is a fixed cost combined with increasing marginal cost, which gives a standard U-shaped cost curve with optimal firm size. Entry is determined by a free entry condition such that the costs of entry are equal to the present value of incumbent firms. As short run profits are a decreasing function of the number of firms, we add a new stability mechanism in addition to the diminishing returns to capital. Then equilibrium is saddle-point stable and the stable manifold is two-dimensional. Transitional dynamics can, under certain circumstances, be non-monotonic. We study the effects of productivity and fixed cost shocks on the aggregate activity, the number and the size of firms.
    Keywords: Entry; dynamics; Ramsey
    JEL: D92 C62 E32 O41
    Date: 2007–06
  7. By: D'Erasmo, Pablo
    Abstract: In this paper I ask whether a model of ¯rm capital accumulation with entry and exit calibrated to match the investment regularities of U.S. establishments is capable of generating the dependence of ¯rm dynamics on size and age. Firms face uncertainty in the form of idiosyncratic productivity shocks and are subject to non-convex capital adjustment costs. I solve for the stationary equilibrium to show that the model can account for the simultaneous dependence of industry dynamics on size (once we condition on age) and on age (once we condition on size).
    Keywords: firm dynamics; investment; financial constraints
    JEL: D21 G11 E22
    Date: 2006–03

This nep-ent issue is ©2007 by Marcus Dejardin. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.