nep-ent New Economics Papers
on Entrepreneurship
Issue of 2008‒06‒13
nine papers chosen by
Marcus Dejardin
Notre-Dame de la Paix University

  1. Productive, Unproductive and Destructive Entrepreneurship: A Theoretical and Empirical Exploration By Arnis Sauka
  2. The Impact of Risk Attitudes on Entrepreneurial Survival By Marco Caliendo; Frank M. Fossen; Alexander S. Kritikos
  4. Wealth, Industry and the Transition to Entrepreneurship By Berna Demiralp; Johanna Francis
  5. Intrapreneurship; Conceptualizing entrepreneurial employee behaviour By Jeroen de Jong; Sander Wennekers
  6. Explaining Preferences and Actual Involvement in Self-Employment: New Insights into the role of Gender By Roy Thurik; Ingrid Verheul; Isabel Grilo
  7. Entrepreneurial acculturation in Malaysia: Efforta and achievements By Othman, Norfaizah Bt; Sulaiman, Muna Bt; Zainudin, Norlita Bt; Hasan, Zubair
  8. Second-Best Institutions By Dani Rodrik
  9. Bringing Science to Market: Commercializing from NIH SBIR Awards By Albert N. Link; Christopher J. Ruhm

  1. By: Arnis Sauka
    Abstract: Drawing on Baumol’s concepts of productive, unproductive and destructive entrepreneurship and relevant amendments, this thesis aims to contribute to the entrepreneurship literature by developing a conceptual framework which allows operationalising the concepts for empirical assessment. Furthermore, using data from longitudinal survey, author makes one of the first attempts to address the concepts empirically. The results provide with support for the conceptual framework highlighting the importance to shift the focus from firms’ activities to output on both, venture and societal levels, short and long term, when concepts are addressed empirically. Overall findings suggest that productive entrepreneurs are those who are less involved in behaviour such as tax avoidance or illegal business and show a higher level of entrepreneurial orientation.
    Keywords: value creation; productive, unproductive and destructive entrepreneurship; transition context, small firms
    JEL: L26 E26 H26
    Date: 2008–03–01
  2. By: Marco Caliendo; Frank M. Fossen; Alexander S. Kritikos
    Abstract: Risk attitudes have an impact on not only the decision to become an entrepreneur but also the survival and failure rates of entrepreneurs. Whereas recent research underpins the theoretical proposition of a positive correlation between risk attitudes and the decision to become an entrepreneur, the effects on survival are not as straightforward. Psychological research posits an inverse U-shaped relationship between risk attitudes and entrepreneurial survival. On the basis of recent waves of the German Socio-Economic Panel (SOEP), we examine the extent to which risk attitudes influence survival rates of entrepreneurs. The empirical results confirm that persons whose risk attitudes are in the medium range survive significantly longer as entrepreneurs than do persons with particularly low or high risks.
    Keywords: Entrepreneurship, Risk Attitudes, Survival and Failure
    JEL: D81 J23 M13
    Date: 2008
    Abstract: Does entrepreneurial optimism affect business performance? Using a unique data set based on repeated survey design, we investigate this relationship empirically. Our measures of ‘optimism’ and ‘realism’ are derived from comparing the turnover growth expectations of 133 owners-managers with the actual outcomes one year later. Our results indicate that entrepreneurial optimists perform significantly better in terms of profits than pessimists. Moreover, it is the optimist-realist combination that performs best. We interpret our results using regulatory focus theory.
    Keywords: Entrepreneurship, Optimism, Venture Growth, Regulatory Focus Theory, Latvia
    JEL: D21 L21 L26 M13
    Date: 2008–02–01
  4. By: Berna Demiralp (Old Dominion University, Department of Economics); Johanna Francis (Fordham University, Department of Economics)
    Abstract: Although the debate about the effect of wealth on entrepreneurship is now almost two decades old, there is little consensus among researchers about the significance of wealth as a determinant for self-employment. We re-visit the relationship between wealth and entrepreneurship using data from the National Longitudinal Survey of Youth. Like Hurst and Lusardi (2004), our results suggest the relationship between wealth and the probability of entering entrepreneurship is nonlinear. However, unlike Hurst and Lusardi, we find the probability of entrepreneurship increases at an increasing rate with wealth, starting at lower quantiles of the wealth distribution. We also observe that the aggregate relationship masks differences among entrepreneurs with respect to their industry. While high capital requirement industries and professional services display a convex relationship between wealth and the probability of self-employment, low capital requirement industries display a concave relationship. Since we find a positive relationship between wealth and the probability of entering entrepreneurship at lower quantiles of the wealth distribution, it is critical to check whether this relationship is caused by wealth endogeneity. In order to account for the possible endogeneity of wealth we instrument for wealth using changes in housing equity and the value of unexpected inheritances. The results of instrumental variable estimation reveal that there is no significant relationship between wealth and entering entrepreneurship for the full sample as well as for each of the three industries.
    Keywords: Entrepreneur, wealth, industry, liquidity constraints
    JEL: E21 G11 J24
    Date: 2008
  5. By: Jeroen de Jong; Sander Wennekers
    Abstract: Intrapreneurship refers to employee initiatives in organizations to undertake something new, without being asked to do so. As the detailed behavioural content of intrapreneurship is still uncharted, this paper surveys three relevant strands of literature. These are early-stage entrepreneurial activity (business founding) and two literatures on employee behaviour inside existing organizations, i.e. proactiveness and innovative work behaviour. By combining insights from these domains with those from the emerging intrapreneurship literature, we derive a detailed list of relevant activities and behavioural aspects of intrapreneurship. Major activities related to intrapreneurship include opportunity perception, idea generation, designing a new product or another recombination of resources, internal coalition building, persuading the management, resource acquisition, planning and organizing. Key behavioural aspects of intrapreneurship are personal initiative, active information search, out of the box thinking, voicing, championing, taking charge, finding a way, and some degree of risk taking. The paper next discusses the similarities and differences between intrapreneurship and independent entrepreneurship. Most but not all of the activities and behavioural aspects of the latter are also typical of the former phenomenon. Key differential elements of independent entrepreneurship are the investment of personal financial means and the related financial risk taking, a higher degree of autonomy, and legal and fiscal aspects of establishing a new independent business. Based on this discussion an integral conceptual model of intrapreneurial behaviour is presented. The paper closes with conclusions.
    Date: 2008–06–04
  6. By: Roy Thurik; Ingrid Verheul; Isabel Grilo
    Abstract: This paper investigates why self-employment rates of women are consistently lower than those of men. It has three focal points: it discriminates between the preference for self-employment and actual involvement in self-employment for women and men. It uses a huge data set from about 8,000 individuals across 26 countries while probit equations are estimated explaining (the preference for) self-employment. And a systematic distinction is made between different ways in which gender can influence the preference for and actual involvement in self-employment, including moderation, mediation and direct effects. Using the Theory of Planned Behaviour we investigate effects of risk attitude,social norms, locus of control, perceptions of the entrepreneurial environment as well as that of an individual’s age and educational attainment. Findings show that the lower preference of women to become self-employed largely explains their relatively low involvement in self-employment and that – other things equal – women and men who express a preference for it, have equal chances of becoming self-employed. This paper is a new version of H200622, "Determinants of self-employment preference and realization of women and men in Europe and the United States"
    Date: 2008–06–04
  7. By: Othman, Norfaizah Bt; Sulaiman, Muna Bt; Zainudin, Norlita Bt; Hasan, Zubair
    Abstract: The nature and pace of economic progress in a country depends, among others, on the venturesome qualities of its people. The development of entrepreneurship has, therefore, been taken as an important element in human development sphere in Malaysia. In fact, the Malaysian Government has restructured it entrepreneurship department, hence the birth of Ministry of Entrepreneur and Co-operative Development (MECD) in 2004. The main objectives of this department are to provide a conducive environment and to promote and assist the entrepreneurial development in the country. The effort of the Ministry is supported by many new policies and mechanisms including funding, entrepreneurial programs and activities, physical infrastructures and business advisory services. This paper endeavors to trace the progress of the entrepreneurial program and assess its achievements towards inculcating the spirit and culture of enterprise among the Malaysians. It also attempt to see whether the contribution increases the pace of development in the country and made an impact on income inequalities and poverty among the target groups.
    Keywords: Keyword: Growth; human resource development; risk taking; entrepreneurship; role of the state; Malaysia
    JEL: O1 H0
    Date: 2008
  8. By: Dani Rodrik
    Abstract: The focus of policy reform in developing countries has moved from getting prices right to getting institutions right, and accordingly countries are increasingly being advised to move towards "best-practice" institutions. This paper argues that appropriate institutions for developing countries are instead "second-best" institutions -- those that take into account context-specific market and government failures that cannot be removed in short order. Such institutions will often diverge greatly from best practice. The argument is illustrated using examples from four areas: contract enforcement, entrepreneurship, trade openness, and macroeconomic stability.
    JEL: O1
    Date: 2008–06
  9. By: Albert N. Link; Christopher J. Ruhm
    Abstract: We offer empirical information on the correlates of commercialization activity for research projects funded through the U.S. National Institutes of Health's (NIH's) Small Business Innovation Research (SBIR) award program. Based on this analysis we suggest possible recommendations for improving this aspect of the performance of NIH's SBIR program. Specifically, we estimate a model of the probability of commercialization as a function of the project's ability to attract additional developmental funding, along with other control variables. We find that additional developmental funding from non-SBIR federal sources and from own internal sources are important predictors of commercialization success, relatively more so than additional developmental funding from venture capitalists. We also find, among other things, that university involvement in the underlying research increases the probability of commercialization. Thus, these factors should be considered by NIH when making awards, if increased commercialization is an objective.
    JEL: I28 O38
    Date: 2008–06

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