nep-ent New Economics Papers
on Entrepreneurship
Issue of 2008‒02‒23
six papers chosen by
Marcus Dejardin
Notre-Dame de la Paix University

  1. What is the Value of Entrepreneurship? A Review of Recent Research By C. Mirjam van Praag; Peter H. Versloot
  2. The Relationship between Entrepreneurship and Unemployment in Japan By André van Stel; Roy Thurik; Ingrid Verheul; Lendert Baljeu
  3. Institutional Profiles and Entrepreneurship Orientation: A Case of Turkish Graduate Students By Ethem, Duygulu
  4. Unsecured Debt, Consumer Bankruptcy, and Small Business By Césaire A. Meh; Yaz Terajima
  5. Chile : a strategy to promote innovative small and medium enterprises By Palladini, Eric; Goldberg , Mike
  6. SME’s main bank choice and organizational structure : Evidence from France By Hiba El Hajj Chehade; Ludovic Vigneron

  1. By: C. Mirjam van Praag (University of Amsterdam); Peter H. Versloot (University of Amsterdam)
    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; research; development; utility; remuneration; income
    JEL: J01 L26
    Date: 2007–08–27
  2. By: André van Stel; Roy Thurik; Ingrid Verheul (Erasmus University Rotterdam, and EIM, Zoetermeer); Lendert Baljeu (Erasmus University Rotterdam)
    Abstract: This paper examines the relationship between entrepreneurship (as measured by fluctuations in the business ownership rate) and unemployment in Japan for the period between 1972 and 2002. We find that, although Japan’s unemployment rate has been influenced by specific exogenous shocks, the effects of entrepreneurship on unemployment are not different when compared to other OECD countries. In the past, small firms in Japan benefited from the protective environment of the keiretsu structure. This secure environment no longer exists, and a new market environment conducive to new venture creation and growth has not yet been established. We argue that the Japanese government should actively stimulate an entrepreneurial culture.
    Keywords: entrepreneurship; business ownership; unemployment; Japan
    JEL: J23 J64 L26 O11 O53
    Date: 2007–10–11
  3. By: Ethem, Duygulu
    Abstract: In this study I aimed to describe and explain which factors affect entrepreneurship orientation. I expect that proactivity and entrepreneurial behavior is directly related, and country’s institutional factors play very important role on the entrepreneurship orientation. Therefore, I defined institutional profiles and entrepreneurship's characteristics. Institutional profiles are classified into three main dimensions which are based on Kostava’s (1997) research; cognitive, regulatory and, normative dimensions. On the other hand, following Kostova, I modified questionnaire to adopt Turkish culture and I articulated and measured these dimensions. To define operationally the perceived institutional profiles for entrepreneurship, I generated a large pool of items, as well. The institutional profile dimensions include thirty-four items; eleven for regulatory dimension, eight for cognitive dimension and fifteen items for normative dimension. On the other hand, my focus in this study is on the measurement and correlation of proactive behavior as a personal disposition relative to the stable behavioral tendency. Proactive person searches for opportunities, takes initiative, acts, but the proactive dimension of behavior is essentially rooted in people's needs to manipulate and control the environment. At the same time, the prospective entrepreneur's interpretation of the environment is also moderated by his/her beliefs about the environment. From this point of view, I selected my research sample among graduate students who are included 170 person, accepting them as potential investors. For the proactive personality measurement, which includes seventeen items, Bateman and Crant's (1993) questionnaire was used. Furthermore, data reliability was tested before the analysis has begun. To conclude, the findings of the research were discussed.
    Keywords: Entrepreneurship orientation; institutional profiles; culture
    JEL: M1 L26
    Date: 2008–02–18
  4. By: Césaire A. Meh; Yaz Terajima
    Abstract: In this paper we develop a quantitative model of entrepreneurial activity (risk-taking) and consumer bankruptcy choices and use the model to study the effects of bankruptcy regulations on entrepreneurial activity, bankruptcy rate and welfare. We show that eliminating bankruptcy exemptions leads to a modest increase in the fraction of entrepreneurs, a large decrease in the overall bankruptcy rate and a significant welfare gain. In contrast, eliminating the whole consumer bankruptcy system leads to a large fall in the fraction of entrepreneurs and a substantial welfare loss. These two findings suggest that the consumer bankruptcy system is desirable but it must be well-designed with regard to bankruptcy asset exemptions. In particular, excessive bankruptcy exemptions can be counter-productive. Finally, we argue that entrepreneurial activity is important when studying different bankruptcy rules or regulations.
    Keywords: Economic models; Financial stability; Financial system regulation and policies
    JEL: D31 E21 J23
    Date: 2008
  5. By: Palladini, Eric; Goldberg , Mike
    Abstract: With its strong export orientation and emphasis on competitiveness, the Chilean economic model has been the envy of its neighbors for more than a decade. However, there are underlying vulnerabilities. Historically, exports have been concentrated in mining and agriculture, sectors dominated by large firms that do not generate a large share of employment. Small and medium enterprises play a key role in employment generation and economic decentralization in Chile, yet their employment was stagnant between 2000 and 2004. Based on work completed in 2003, this study provides a review of the Chilean government ' s substantial investment in programs that support small and medium enterprises. This review of government programs confirms the importance of coordination and an overarching strategy, in the form of a National Innovation System, led by a single institution. The review also finds that demand-driven programs were more likely to be sustainable. Finally, the study demonstrates that Chile (and other countries with many support programs for small and medium enterprises in place) needs an integrated management information system to analyze, assess, coordinate, and streamline the program portfolio for small and medium enterprises in the future.
    Keywords: ,E-Business,Microfinance,Access to Finance,Banks & Banking Reform
    Date: 2008–02–01
  6. By: Hiba El Hajj Chehade; Ludovic Vigneron
    Abstract: The theory suggests that decentralized structures are more efficient than hierarchical ones in decisions based on soft information. According to this, small banks that often have a decentralised structure are more attractive when customers are opaque ones. We propose to test this affirmation using a panel of 6.258 couples (main bank/SME) working in the French market. The results of our several regressions show the existence of a strong tie between the firm’s informational opacity and the choice of a decentralised bank. Moreover, opaque firms are more likely to be credit constrained if they choose a hierarchical bank as their main bank.
    Keywords: Main bank, informational opacity, organizational structure, small and medium sized businesses, relationship lending.
    JEL: G21 D82
    Date: 2007

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