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on Entrepreneurship |
| By: | C. Mirjam van Praag (University of Amsterdam, Tinbergen Institute, Max Planck Institute of Economics Jena and IZA); Peter H. Versloot (University of Amsterdam and Tinbergen Institute) |
| Abstract: | This paper examines to what extent recent empirical evidence can collectively and systematically substantiate the claim that entrepreneurship has important economic value. Hence, a systematic review is provided that answers the question: What is the contribution of entrepreneurs to the economy in comparison to non-entrepreneurs? We study the relative contribution of entrepreneurs to the economy based on four measures that have most widely been studied empirically. Hence, we answer the question: What is the contribution of entrepreneurs to (i) employment generation and dynamics, (ii) innovation, and (iii) productivity and growth, relative to the contributions of the entrepreneurs’ counterparts, i.e. the ‘control group’? A fourth type of contribution studied is the role of entrepreneurship in increasing individuals’ utility levels. Based on 57 recent studies of high quality that contain 87 relevant separate analyses, we conclude that entrepreneurs have a very important - but specific - function in the economy. They engender relatively much employment creation, productivity growth and produce and commercialize high quality innovations. They are more satisfied than employees. More importantly, recent studies show that entrepreneurial firms produce important spillovers that affect regional employment growth rates of all companies in the region in the long run. However, the counterparts cannot be missed either as they account for a relatively high value of GDP, a less volatile and more secure labor market, higher paid jobs and a greater number of innovations and they have a more active role in the adoption of innovations. |
| Keywords: | entrepreneur, entrepreneurship, self-employment, productivity, economic development, growth, employment, innovation, patents, R&D, utility, remuneration, income |
| JEL: | D24 D31 E23 E24 J21 J28 J31 L26 M13 |
| Date: | 2007–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3014&r=ent |
| By: | Ron A. Boschma (Utrecht University, Department of Economic Geography, Utrecht, Netherlands); Michael Fritsch (Friedrich Schiller University Jena, German Institute of Economic Research, Berlin, and Max Planck Institute of Economics, Jena, Germany) |
| Abstract: | We analyze the regional distribution and the effect of people in creative occupations based on data for more than 450 regions in eight European countries. The geographic distribution of the creative class is highly uneven. The creative class is not attracted to highly urbanized regions per se, but rather a climate of tolerance and openness seem to be rather important factors. We find that the creative class has a positive and significant effect on employment growth and new business formation at the regional level. Human capital as measured by creative occupation outperforms indicators that are based on formal education. |
| Keywords: | Creativity, innovation, entrepreneurship, regional development |
| JEL: | O31 O18 R12 |
| Date: | 2007–09–17 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2007-066&r=ent |
| By: | Carol Newman; John Rand; Finn Tarp |
| Abstract: | Much of the literature on industry evolution has found firm dynamics to be an important source of sector-level productivity growth. In this paper, we ask whether the delineation of entry and exit firms matters in assessing the impact of firm turnover. Using detailed firm level data from Vietnam, it emerges that efficiency differences between sector switchers and exit/entry firms exist. Distinguishing between switchers and firm entry/exit is crucial for understanding the contribution of firm turnover to overall productivity growth. Moreover, we uncover distinct and illuminating firm and sector-level determinants of firm exit and switching, which need to be carefully considered in the search for effective policy. |
| Date: | 2007–09–13 |
| URL: | http://d.repec.org/n?u=RePEc:iis:dispap:iiisdp230&r=ent |
| By: | Michele Moretto (Università di Padova); Gianpaolo Rossini (Università di Bologna) |
| Abstract: | From 1997 to 2001 we observe a faster growth in the number of Nonemployer businesses (mostly Partnerships) vis-à-vis Firms in the USA, a country with the mildest asymmetries between the two types of enterprise with respect to taxation, administrative entry barriers and other institutional aspects. The different speed of net entry may be due to the internal organisation of the two types of enterprise and its relation to some market features. In a continuous time stochastic environment, with sunk costs, we model entry as a growth option. Partnerships and Firms display speci c entry patterns in terms of output price and size since they react in diverse fashions to market uncertainty. In most cases, the Partnership is less risky and better suited to enter under conditions of high volatility, as during the years between 1997 and 2001. |
| Keywords: | Entry Strategies, Uncertainty, Partnership, Firm |
| JEL: | L21 L3 J54 G13 |
| Date: | 2007–09 |
| URL: | http://d.repec.org/n?u=RePEc:pad:wpaper:0049&r=ent |
| By: | Sharma, Siddharth |
| Abstract: | This paper uses firm level data from a cross-section of 57 countries to study how financial development affects innovation in small firms. The analysis finds that relative to large firms in the same industry, spending on research and development by small firms is more likely and sizable in countries at higher levels of financial development. The estimates imply that among firms doing research and development in a country like Romania, which is at the 20th percentile of financial development, a 1 standard deviation decrease in firm size is associated with a decrease of 0.7 standard deviations in research and development spending. In contrast, this decrease is only 0.2 standard deviations in a country like South Africa, which is at the 80th percentile of the distribution of financial development. Small firms also report producing more innovations per unit of research and development spending than large firms, and this gap is narrower in countries at higher levels of financial development. As a robustness check, the author shows that these patterns are stronger in industries inherently more reliant on external finance. |
| Keywords: | Debt Markets,Microfinance,,Access to Finance,E-Business |
| Date: | 2007–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4350&r=ent |
| By: | Núria Rodríguez-Planas |
| Abstract: | Recent empirical evidence has found that employment services and small-business assistance programmes are often successful at getting the unemployed back to work. One important concern of policy makers is to decide which of these two programmes is more effective and for whom. Using unusually rich (for transition economies) survey data and matching methods, I evaluate the relative effectiveness of these two programmes in Romania. While I find that employment services (ES) are, on average, more successful than a small-business assistance programme (SBA), estimation of heterogeneity effects reveals that, compared to non-participation, ES are effective for workers with little access to informal search channels, and SBA works for less-qualified workers and those living in rural areas. When comparing ES to SBA, I find that ES tend to be more efficient than SBA for workers without a high-school degree, and that the opposite holds for the more educated workers. |
| Keywords: | J21, J23, J31, J64, J65, J68 |
| Date: | 2007–09–13 |
| URL: | http://d.repec.org/n?u=RePEc:aub:autbar:712.07&r=ent |
| By: | Leonardo de Lima Ribeiro; Luis Fernando Tironi |
| Abstract: | The increase in the importance of intangibles in business competitiveness has made investment selection more challenging to investors and banks that, under high information asymmetry, tend to charge higher premiums to provide capital or simply deny it. Private Equity and Venture Capital (PE/VC) organizations developed contemporarily with the increase in the relevance of intangible assets in the economy. They form a specialized breed of financial intermediaries that are better prepared to deal with information asymmetry. This paper is the result of ten interviews with PE/VC organizations in Brazil. Its objective is to describe the selection process, criteria and indicators used by these organizations to identify and measure intangible assets, as well as the methods used to valuate prospective investments. Results show that PE/VC organizations rely on sophisticated methods to assess investment proposals, with specific criteria and indicators to assess the main classes of intangible assets. However, no value is given to these assets individually. The information gathered is used to understand the sources of cash flows and risks, which are then combined by discounted cash flow methods to estimate firm`s value. Due to PE/VC organizations extensive experience with innovative Small and Medium-sized Enterprises (SMEs), we believe that shedding light on how PE/VC organizations deal with intangible assets brings important insights to the intangible assets debate. |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:ipe:ipetds:1280&r=ent |
| By: | José Mauro de Morais |
| Abstract: | This paper evaluates the main programs of the Science and Technology Department (MCT) designed to give financial support for micro and small business. The programs, conducted by the technology development agency of the MCT, Financiadora de Estudos e Projetos (Finep), are the following: i) Zero Interest Rate Program, ii) Pappe - Program to Support Small Enterprises Research, iii) Pappe - Economic Subvention for Small Enterprise, iv) Economic Subvention for Enterprises ? with reserved funds earmarked for small enterprises, v) Finep/Sebrae partnership to support innovation projects in small enterprises, in cooperation with Science and Technology Institutions; vi) Inovar Project, a program directed to the development of venture capital and seed capital funds. To subsidize the analyses of the programs, developed in section five, the paper discusses, in section two, the difficulties of small firms in accessing conventional credit, and presents a conceptual model of the main types of equity financing for small firms, associated to their business life cycle. Section three reviews information about the support for research and innovation for small enterprises in some countries, and describes interesting experiences of programs to develop the venture capital market. Section four reviews the new Brazilian legislation directed for supporting research and innovation processes in the productive sector, which are made up of the following policy instruments and legislation: Funds for Science and Technology; Brazilian Industrial Technological and Trade Policy (PITCE); Law 10.973/2004 Foreign (Innovation Law) and the Micro and Small Firms? Statute, recently approved by the National Congress. Section six presents the summary and the final comments. |
| Date: | 2007–08 |
| URL: | http://d.repec.org/n?u=RePEc:ipe:ipetds:1296&r=ent |
| By: | Guilherme Delgado; Ana Carolina Querino; André Campos; Fábio Vaz; Leonardo Rangel; Matheus Stivali |
| Abstract: | The main objective of this paper is to proceed an impact evaluation of the "SIMPLES" Law (Lei nº 9.317 de 05/12/1996) relative to small enterpreneurship. The paper answers some relevante researcher`s questions about: 1) the strong moviment of new jobs criated in the informal sector and the rol of the Simples for formulization of a significative part of this jobs; 2) the focalization on small entrepreneurschip with employee, but not on "self-ocupation". There are implications of this net flows of employment formalitazion on two ways: a) positive inflows in current social security revenue; b) a relevant impact on the long term balance of benefits expentidures and social security taxes, that is not calculated in this paper. The adhesion to Simples rules has been incrising and there is a trend for continuity in the future. The new Law of Super Simples (Lei Complementar nº 123 - 14/12/2006 stress this trend. In consequence, there are strong requirements for especialization in two concepts in order to capture the adhesion to Simples sistem: I) the net current revenue impact; b) the long term actuarial balance on benefict expenditures and tax revenue. |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:ipe:ipetds:1277&r=ent |