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on Entrepreneurship |
| By: | David B. Audretsch (Max Planck Institute of Economics, Jena); Werner Boente (Max Planck Institute of Economics, Jena); Jagannadha Pawan Tamvada (Max Planck Institute of Economics, Jena) |
| Abstract: | While considerable concern has emerged about the impact of religion on economic development, little is actually known about how religion impacts the decision making of individuals. This paper examines the influence of religion on the decision for people to become an entrepreneur. Based on a large-scale data set of nearly ninety thousand workers in India, this paper finds that religion shapes the entrepreneurial decision. In particular, some religions, such as Islam and Christianity, are found to be conducive to entrepreneurship, while others, such as Hinduism, inhibit entrepreneurship. In addition, the caste system is found to influence the propensity to become an entrepreneur. Individuals belonging to a backward caste exhibit a lower propensity to become an entrepreneur. Thus, the empirical evidence suggests that both religion and the tradition of the caste system influence entrepreneurship, suggesting a link between religion and economic behavior. |
| Keywords: | entrepreneurship, religion, caste-system, India |
| JEL: | L26 Z12 |
| Date: | 2007–10–30 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2007-075&r=ent |
| By: | Michael Fritsch (Friedrich Schiller University Jena, Faculty of Economics and Business Administration); Alexandra Schroeter (Friedrich Schiller University Jena, Faculty of Economics and Business Administration) |
| Abstract: | We investigate regional differences of the effect of new business formation on employment growth in West Germany. We find an inverse ‘u’-shaped relationship between the level of start-up activity and employment change. The main variables that shape the employment effects of new businesses in a region are population density, the share of medium level skilled workers, the proportion of Research and Development conducted in small businesses (entrepreneurial technological regime), the unemployment rate as well as the degree of specialization of the regional economy. However, indicators for education and innovation activity in the region proved not to be statistically significant. Conducting our analysis for manufacturing and services separately confirmed the pattern of our previous results only for manufacturing but not for services. |
| Keywords: | Entrepreneurship, new business formation, regional development, entrepreneurship policy |
| JEL: | M13 O1 O18 R11 |
| Date: | 2007–10–30 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2007-077&r=ent |
| By: | Erzo G.J. Luttmer (Department of Economics, University of Minnesota); |
| Abstract: | When the rate at which any given blueprint can be replicated is subject to decreasing returns, it is optimal to replicate high-quality blueprints more quickly than low-quality blueprints. The cost of introducing high-quality “start-up” blueprints will also rise with the rate at which they are introduced, and so low-quality blueprints will continue to enter the population. This naturally leads to persistent heterogeneity in blueprint quality. If quality begets quality and firms are identified with collections of blueprints derived from the same initial blueprint, then firms grow at a constant mean rate along the balanced growth path. A firm size distribution with the thick right tail observed in the data can then arise only when the number of blueprints in the economy grows over time. When calibrated to match the firm entry rate and the right tail of the size distribution, a homogeneous quality version of this model implies that the median age among firms with more than 10,000 employees is about 750 years. If the relative quality of a firm’s blueprints depreciates over time, then firm growth rates are not constant but slow down with age. If the successful replication of new blueprints is rapid but noisy, and high relative quality is sufficiently persistent, this version of the model can explain high observed entry rates, the thick-tailed size distribution, and the relatively young age of large U.S. corporations. |
| Keywords: | firm size, productivity, replication |
| JEL: | L1 O3 |
| Date: | 2007–10–30 |
| URL: | http://d.repec.org/n?u=RePEc:min:wpaper:2007-4&r=ent |
| By: | Rohrbeck, Rene; Döhler, Mario; Arnold, Heinrich M. |
| Abstract: | After a long period of restructuring and outsourcing, companies are increasingly looking for new growth opportunities. Growth with existing prod-ucts or by expansion in new markets is limited. Therefore, companies are searching for ways to expand their activities in new businesses. A frequently used tool of multinational enterprises is corporate venturing. Within cor-porate venturing a further differentiation can be made in internal venturing and external venturing. Internal venturing promotes business ideas generated within the organization whereas external venturing promotes business ideas developed outside the company. Research has been able to show that venturing activi-ties both internal and external can create value. In this paper we explore a special case of venturing which we call the ‘spin-along approach’. It can be seen as a combination of internal and external ven-turing. In the spin-along approach, a company encourages its employees to take their business idea external and to found a company. Successful companies might later be bought back and integrated into the parent company or the paren-tal will exit the company by selling its equity share. Through literature re-view we have identified different motivations, best practices, and barriers to the successful implementation of a spin-along approach. Furthermore, two case studies will be discussed and compared. We conclude that the approach can successfully complement internal innovation management. |
| Keywords: | Corporate venturing; spin-along; venture leader; spin-out; spin-in; Deutsche Telekom Laboratories; Cisco Systems |
| JEL: | M13 M10 M0 |
| Date: | 2007–06–17 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:5563&r=ent |
| By: | Gerald A. Carlino; Robert M. Hunt |
| Abstract: | This paper extends the research in Carlino, Chatterjee, and Hunt (2007) to examine the effects of local economic characteristics on the rate of innovation (as measured by patents) in more than a dozen industries. The availability of human capital is perhaps the most important factor explaining the invention rate for most industries. The authors find some evidence that higher job market density is associated with more patenting in industries such as pharmaceuticals and computers. They find evidence of increasing returns with respect to city size (total jobs) for many industries and more modest effects for increases in the size of an industry in a city. This suggests that inter-industry spillovers are often at least as important as intra-industry spillovers in explaining local rates of innovation. A more competitive local market structure, characterized by smaller establishments, contributes significantly to patenting in nearly all industries. More often than not, specialization among manufacturing industries is not particularly helpful, but the authors find the opposite for specialization among service industries. Industries benefit from different local sources of R&D (academia, government labs, and private labs) and to varying degrees. |
| Keywords: | Technological innovations |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedpwp:07-28&r=ent |
| By: | Uwe Cantner (Friedrich-Schiller University Jena, School of Economics and Business Administration, Chair of Microeconomics); Kristin Joel (Friedrich-Schiller University Jena, School of Economics and Business Administration, Chair of Microeconomics) |
| Abstract: | The aim of this paper is to investigate the role of Knowledge Management (KM) for the innovation success of firms. It is assumed that the functional chains of KM lead directly and indirectly to more innovative success via enhancing the recombination of internal and external knowledge assets. To analyse the embedding of KM in a firm's internal system of innovation we establish a structural equation model. We capture KM as latent concept and trace different functional chains by which KM impacts. Using data on KM and innovation success of 351 German firms of the manufacturing sector and knowledge-intensive services located in Thuringia and Hesse, our findings confirm the (dynamic) capability function of KM, which leads via improving exploitation of internal and external innovation assets to more innovation success. |
| Keywords: | Knowledge management, innovation, absorptive capacity, resource-based view, structural equation modelling |
| JEL: | O32 D21 C3 |
| Date: | 2007–11–05 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2007-080&r=ent |
| By: | Uwe Cantner (Friedrich Schiller University Jena, Faculty of Economics and Business Administration) |
| Abstract: | This paper deals with innovative activities of firms, the resulting market success as well as the interdependencies between both. In a first theoretical part, different cases of those interdependencies are investigated by the way of a simple model based on replicator dynamics. It is shown that the resulting differential success (in those activities) of firms in a market leads to specific characteristic pattern of industry dynamics. The second empirical part of the paper is used to get an account of the working of replicator dynamics mechanism within German manufacturing. Doing so changes in firms' market shares and the relation to their respective relative technological performance and to their or innovative performance are investigated with productivity levels as a proxy for technological performance and productivity changes as proxy for innovative performance. |
| Keywords: | Innovation, market competition, replicator dynamics, productivity decomposition |
| JEL: | O3 L1 D24 |
| Date: | 2007–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2007-078&r=ent |
| By: | Jinyoung Kim (Department of Economics, Korea University); Sangjoon John Lee (Alfred University); Gerald Marschke (University at Albany and IZA) |
| Abstract: | It has long been recognized that worker wages and possibly productivity are higher in large firms. Moreover, at least since Schumpeter (1942) economists have been interested in the relative efficiency of large firms in the research and development enterprise. This paper uses longitudinal worker-firm-matched data to examine the relationship between the productivity of workers specifically engaged in innovation and firm size in the pharmaceutical and semiconductor industries. In both industries, we find that inventors?productivity increases with firm size. This result holds across different specifications and even after controlling for inventors?experience, education, the quality of other inventors in the firm, and other firm characteristics. We find evidence in the pharmaceutical industry that this is partly accounted for by differences between how large and small firms organize R&D activities. |
| Keywords: | Patents, Innovation, Labor productivity, Research, Firm size |
| JEL: | O30 O32 O34 J21 J24 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:iek:wpaper:0708&r=ent |
| By: | Ramón Faulí-Oller (Universidad de Alicante); Joel Sandonís (Universidad de Alicante) |
| Abstract: | We consider an upstream firm selling an input to several downstream firms through observable two-part tariff contracts. Downstream firms can alternatively buy the input from a less efficient source of supply. We show that downstream mergers lead to lower wholesale prices. They translate into lower final prices only when the alternative supply is inefficient enough. Downstream mergers are very profitable in this setting and monopolization is the equilibrium outcome of a merger game even for unconcentrated markets. Finally, the expectation of monopolization stimulates wasteful entry of downstream firms in the industry, which calls for policy intervention. |
| Keywords: | downstream mergers, entry, two-part tariff contracts |
| JEL: | L11 L13 L14 |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:ivi:wpasad:2007-21&r=ent |