nep-ent New Economics Papers
on Entrepreneurship
Issue of 2008‒10‒13
eight papers chosen by
Marcus Dejardin
Notre-Dame de la Paix University

  1. Direct and indirect effects of new businesses on regional employment - An empirical analysis By Michael Fritsch; Florian Noseleit; Yvonne Schindele
  2. Intellectual Property Rights and the Knowledge Spillover Theory of Entrepreneurship By Zoltan J. Acs; Mark Sanders
  3. Using Panel Data to Exactly Estimate Under-Reporting by the Self-Employed By John Gibson; Bonggeun Kim; Chul Chung
  4. Gender Differences in Business Performance: Evidence from the Characteristics of Business Owners Survey By Fairlie, Robert W.; Robb, Alicia M.
  5. Are women more credit constrained ? experimental evidence on gender and microenterprise returns By de Mel, Suresh; McKenzie, David; Woodruff, Christopher
  6. Institutional Determinants of New Firm Entry in Russia: A Cross Regional Analysis By Bruno, Randolph Luca; Bytchkova, Maria; Estrin, Saul
  7. Nepotism, Incentives and the Academic Success of College Students By Gevrek, Deniz; Gevrek, Zahide Eylem
  8. Growth Processes of Italian Manufacturing Firms By Alex Coad; Rekha Rao; Federico Tamagni

  1. By: Michael Fritsch (Friedrich Schiller University Jena, School of Economics and Business Administration); Florian Noseleit (Friedrich Schiller University Jena, School of Economics and Business Administration); Yvonne Schindele (Friedrich Schiller University Jena, School of Economics and Business Administration)
    Abstract: We analyze different types of effects that new businesses may have on regional employment. We introduce different measures for employment change by separating employment change in incumbent businesses and employment change in new businesses. There are pronounced differences between regions with regard to the different employment effects. The average indirect employment effects of new business formation on incumbent employment are positive and are considerably larger than the employment that is directly generated in the new businesses.
    Keywords: Entrepreneurship, new business formation, regional development, direct and indirect effects
    JEL: L26 M13 O1 O18 R11
    Date: 2008–10–01
  2. By: Zoltan J. Acs; Mark Sanders
    Abstract: We develop a model in which stronger protection of intellectual property rights has an inverted U-shaped effect on innovation. Intellectual property rights protection allows the incumbent firms to capture part of the rents of commercial exploration that would otherwise accrue to the entrepreneurs. Stronger patent protection will increase the incentive to do R&D and generate new knowledge. This has a positive impact on entrepreneurship and innovation. However, after some point, further strengthening patent protection will reduce the returns to entrepreneurship sufficiently to reduce overall economic growth.
    Keywords: Intellectual Property Rights, Endogenous Growth, Entrepreneurship, Incentives, Knowledge Spillovers, Rents
    JEL: J24 L26 M13 O3
    Date: 2008–09
  3. By: John Gibson (University of Waikato); Bonggeun Kim (Sungkyunkwan University and University of Waikato); Chul Chung (Korea Institute for International Economic Policy)
    Abstract: The income of the self-employed is often assumed to be understated in economic statistics. Debate exists about the extent of under-reporting and the resulting measures of the size of the underground economy. This paper refines a method developed by Pissarides and Weber (1989) and uses discrepancies between food shares and reported incomes to estimate under-reporting by the self-employed. In contrast to previous studies our panel data methodology distinguishes income under-reporting from transitory income fluctuations of the self-employed, and provides an exact estimate of the degree of under-reporting rather than just an interval estimate. Using panel data from Korea and Russia we estimate that 38 percent of the income of self-employed households in Korea and 47 percent of the income of Russian self-employed households is not reported.
    Keywords: Engle curve; measurement error; self-employment; underground economy
    JEL: D12 H26 H31 O17
    Date: 2008–10–06
  4. By: Fairlie, Robert W. (University of California, Santa Cruz); Robb, Alicia M. (University of California, Santa Cruz)
    Abstract: Using confidential microdata from the U.S. Census Bureau, we investigate the performance of female-owned businesses making comparisons to male-owned businesses. Using regression estimates and a decomposition technique, we explore the role that human capital, especially through prior work experience, and financial capital play in contributing to why female-owned businesses have lower survival rates, profits, employment and sales. We find that female-owned businesses are less successful than male-owned businesses because they have less startup capital, and business human capital acquired through prior work experience in a similar business and prior work experience in family business. We also find some evidence that female-owned businesses work fewer hours and may have different preferences for the goals of their business.
    Keywords: female entrepreneurship, business outcomes
    JEL: J15 L26
    Date: 2008–09
  5. By: de Mel, Suresh; McKenzie, David; Woodruff, Christopher
    Abstract: This paper analyzes data from a randomized experiment on mean returns to capital in Sri Lankan micro-enterprises. The findings show greater returns among men than among women; indeed, returns were not different from zero for women. The authors explore different explanations for the lower returns among female owners, and find no evidence that the gender gap is explained by differences in ability, risk aversion, or entrepreneurial attitudes. Differential access to unpaid family labor and social constraints limiting sales to local areas are not important. However, there is evidence that women invested grants differently from men. A smaller share of the smaller grants remained in the female-owned enterprises, and men were more likely to spend the grant on working capital and women on equipment. The gender gap is largest when male-dominated sectors are compared with female-dominated sectors, although female returns are lower than male returns even for females working in the same industries as men. The authors examine the heterogeneity of returns to determine whether any group of businesses owned by women benefit from easing capital constraints. The results suggest there is a large group of high-return male owners and a smaller group of poor, high-ability, female owners who might benefit from more access to capital.
    Keywords: Access to Finance,Debt Markets,Gender and Health,,Economic Theory&Research
    Date: 2008–10–01
  6. By: Bruno, Randolph Luca (University of Bologna); Bytchkova, Maria (London School of Economics); Estrin, Saul (London School of Economics)
    Abstract: We analyse a three-year panel data set of Russian firms spanning from 2000 to 2002 and we investigate the effect of regional institutional and economic factors on entry rates across time, industries and regions. The paper builds on a novel database and exploits inter-regional variation in a large number of institutional variables. We find entry rates in Russia are not especially low by international standards and are correlated with natural entry rates, institutions and firm size. Furthermore, industries that ─ for scale and technological reasons ─ are characterised by higher entry rates will experience lower entry within regions affected by higher business risk. In other words industries that naturally have low entry barriers are most affected by business constraints.
    Keywords: entry rate, business environment, Tobit model
    JEL: D21 L26 P31
    Date: 2008–09
  7. By: Gevrek, Deniz (University of Southern Mississippi); Gevrek, Zahide Eylem (University of Arizona)
    Abstract: This study investigates the role of self-employed parents on their children's post-graduation plans and college success by using a unique data set from a private university in Turkey. We assembled data set by matching college students' administrative records with their responses to a survey we designed. Self-employed parents have a strong negative effect on college success even after accounting for possible ability bias, intergenerational human capital transfers and controlling for various individual characteristics. This suggests that the changing importance of self-employment can alter the amount and mix of human capital flows. The children of self-employed parents are also more likely to have entrepreneurial intent, and are less likely to plan to attend graduate school.
    Keywords: academic success, self-employment, post-graduation plans
    JEL: J24
    Date: 2008–09
  8. By: Alex Coad; Rekha Rao; Federico Tamagni
    Abstract: We propose a multidimensional empirical analysis of the growth processes of firms, focusing on the coevolution of employment growth, sales growth, growth of profits and labour productivity growth. Based on firm level data about Italian manufacturing firms, 1989-1997, we apply a reduced-form vector autoregression model to analyze the lead-lag associations between the different dimension of firm growth. Findings suggest that employment growth precedes sales growth and growth of profits, and that sales growth is also associated with subsequent profits growth. There appears to be little feedback of either sales or profits on employment growth, however, and there is no clear association of employment, sales or profits growth with subsequent changes in labour productivity. Productivity growth, in turn, is more strongly associated with subsequent growth of profits than it does with subsequent growth of either employment or sales. Growth of profits, therefore, tends to represent the absorbing dimension of the overall processes of firm growth. Quantile regressions reveal asymmetries between growth processes for growing and shrinking firms.
    Keywords: Household Consumption Expenditure, Budget Shares, Sum of Log-Normal Distributions
    Date: 2008–10–02

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