|
on Entrepreneurship |
| By: | Fabrizi, Simona; Lippert, Steffen; Norback, Pehr-Johan; Persson, Lars |
| Abstract: | This paper constructs a model where entrepreneurial innovations are sold into oligopolistic industries and where adverse selection problems between entrepreneurs, venture capitalists and incumbents are present. We first show that aggressive development of a basic innovation by better informed venture-backed firms is used as a signaling device to enhance the sale price of the innovation. We then show that incumbents can undertake early, preemptive, acquisitions to prevent such signaling driven overinvestment, despite the risk of buying a non-productive innovation. Therefore, to exist in equilibrium, venture capitalists must be sufficiently more efficient in selecting innovation projects, otherwise preemptive acquisitions will take place. |
| Keywords: | venture-backed firm; innovation; signaling; overinvestment; interim development; M&A |
| JEL: | D21 L2 C7 D82 M13 G24 O3 |
| Date: | 2007–11–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:6265&r=ent |
| By: | Yakovlev, Evgeny; Zhuravskaya, Ekaterina |
| Abstract: | What determines the enforcement of deregulation reform of business activities? What are the outcomes of deregulation? We address these questions using an episode of a drastic reform in Russia between 2001 and 2004 which liberalized registration, licensing, and inspections. Based on the analysis of micro-level panel data on regulatory burden, we find that: 1) On average, the reform reduced the administrative costs of firms; but, the progress of reform had a substantial geographical variation. 2) The enforcement of deregulation reform was better in regions with a transparent government, low corruption, better access of the public to independent media sources, a powerful industrial lobby, and stronger fiscal autonomy. 3) Using the exogenous variation in regulation generated by the interaction of reform and its institutional determinants, we find a substantial positive effect of deregulation on net entry and small business employment and no effect on pollution and public health. The results support public choice theory of the nature of regulation and are inconsistent with the predictions of public interest theory. |
| Keywords: | Deregulation; Enforcement; Entry; Public choice; Reform; Regulation; Transparency |
| JEL: | H10 K2 K20 L50 |
| Date: | 2007–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6610&r=ent |
| By: | Memmel, Christoph; Schmieder, Christian; Stein, Ingrid |
| Abstract: | Relationship lending is a common practice in credit financing all over the world, particularly in Germany. On the basis of a comprehensive data set comprising information on firm-bank relationships for more than 16,000 observations, this study analyses the determinants of relationship lending in Germany. We find that small, young and R&D-intensive firms tend to choose relationship lending. Furthermore, we find that firms with a higher creditworthiness are more likely to choose a relationship lender. We find that the importance of relationship lending stayed roughly constant since the mid 90s. |
| Keywords: | Relationship banking, German banking system, SME |
| JEL: | G21 G32 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:bubdp2:6799&r=ent |
| By: | Alexander Coad |
| Abstract: | We attempt to describe the coevolution of employment growth, sales growth and growth of profits in a panel of French manufacturing firms 1996-2004. Our analysis entails ‘recursive’ panel vector autoregressions, whereby we impose the structure of employment growth leading to contemporaneous sales growth, which in turn is associated with contemporaneous growth of profits. We observe that whilst employment growth has a direct negative association with profit growth, there are indirect effects through which employment growth leads to sales growth which in turn has a large effect on profits growth. The net effect of employment growth is thus positive growth of profits. Counter to some ‘replicator dynamics’ theories of industrial development, profit growth is not followed by much subsequent growth of employment. |
| Keywords: | Firm Growth, Panel VAR, Recursive VAR, Employment Growth, Industrial Dynamics Length 15 pages |
| JEL: | L20 L25 |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:esi:evopap:2007-15&r=ent |