nep-ent New Economics Papers
on Entrepreneurship
Issue of 2008‒12‒14
ten papers chosen by
Marcus Dejardin
Notre-Dame de la Paix University

  1. Research Faculty, Entrepreneurship and Commercialization: The Case of Kansas State University By Amanor-Boadu, Vincent; Metla, Chandra Mohan Reddy
  2. The two-way relationship between entrepreneurship and economic performance By Chantal Hartog
  3. Spin-outs By Karsten van den Berg
  4. Human Capital and New Firm Formation By Karlsson, Charlie; Backman, Mikaela
  5. Escalation of Commitment in Investment Decisions: The Role of Emotions under Uncertainty By Brundin, Ethel; Gustavsson, Veronica
  6. Firm Entry and Exit in Iowa, 1992 - 2004 By Yu, Li; Jolly, Robert W.; Orazem, Peter
  7. International Entrepreneurship: An Introduction, Framework and Research Agenda By Jolanda Hessels
  8. The Private Equity Premium Puzzle Revisited : New Evidence on the Role of Heterogeneous Risk Attitudes By Frank M. Fossen
  9. Entrepreneurial Communities in Rural Oklahoma By Brooks, Lara; Whitacre, Brian; Muske, Glenn; Woods, Mike
  10. Do Enterprise Zones Create Jobs? Evidence from California's Enterprise Zone Program By David Neumark; Jed Kolko

  1. By: Amanor-Boadu, Vincent; Metla, Chandra Mohan Reddy
    Abstract: In this study, we assess the relationships between the demographic characteristics of researchers and their perspectives on entrepreneurship and the commercialization of their inventions, and analyze the relationship between faculty perceptions of university commercialization policies and their entrepreneurial orientation. We conclude that there is a need for effective educational programs to address each of the issues and increase awareness among faculty and researchers.
    Keywords: Research and Development/Tech Change/Emerging Technologies, Teaching/Communication/Extension/Profession,
    Date: 2008
  2. By: Chantal Hartog
    Abstract: This paper examines the two-way relationship between entrepreneurship and economic performance, using a harmonized dataset covering 23 OECD countries in the period 1972-2006. We investigate the relationship in an integrated framework, accounting for the direction of causality, the lag structure, the short-run dynamics and the long-run equilibrium relation. More specifically, we estimate a Vector Error Correction Model (VECM) without imposing prior assumptions on the endogeneity of entrepreneurship and economic performance. Next to these variables, we also include several exogenous explanatory variables in the model. The VECM with cointegration allows us to unravel the genuine relationship between entrepreneurship and economic performance. We find that entrepreneurship (as measured by business ownership) causes economic performance and economic performance causes entrepreneurship, supporting the existence of a two-way relationship. Both these causal effects are found to be positive.
    Date: 2008–12–09
  3. By: Karsten van den Berg
    Abstract: The subject of this report is spin-outs in the Netherlands compared to those in the Cambridge area. The differences between the two areas have been found to be fewer than expected. The same type of initiatives are to be found in both areas, and the same type of problems are also encountered in both areas In general it seems that it would be advisable for universities to have spin-out stimulation added to the performance criteria to help the better facilitation of spin-outs.
    Date: 2008–12–04
  4. By: Karlsson, Charlie (Jönköping International Business School); Backman, Mikaela (Jönköping International Business School)
    Abstract: This paper investigates the impact human capital has on new firm formation, traditionally expected to have a positive influence. Individuals are attracted to regions with a stimulating atmosphere and tend to stay within the same region. Since human capital is partly spatially bounded, the size of municipality accessibility to human capital is expected to have a larger impact than intra-regional and inter-regional interaction. The empirical analysis is based on data on new firm formation at the municipality level in Sweden and accessibility to human capital, defined as minimum three years at tertiary level. The new firm formation is both measured in absolute and in relative terms. In the analysis, the municipalities are divided into four groups; (i) all municipalities, (ii) central municipalities (ii) municipalities within the hinterland in large functional regions and (iii) municipalities within the hinterland in small functional regions. This is done to make the comparison easy. The results indicate that it is the local market, measured as the size of the municipality accessibility to human capital that has a positive impact on new firm formation. Income per capita has a positive impact and average firm size has a negative impact on new firm formation.
    Keywords: human capital; new firm formation; municipalities; accessibility; Sweden
    JEL: L26 R11
    Date: 2008–04–03
  5. By: Brundin, Ethel (Jönköping International Business School); Gustavsson, Veronica (Jönköping International Business School)
    Abstract: The purpose of this study is to better understand whether emotional aspects affect entrepreneurs’ and owner-managers’ decisions in investment situations when escalation of commitment can be observed and where the level of uncertainty was also added to the emotional aspect. The study was performed using conjoint analysis (a.k.a stated preference technique) and yielded following results: positive emotions (self-confidence, challenge, and hope) increase the decision-maker’s propensity to escalate commitment. Negative emotions (embarrassment and strain) do not, on the other hand, make the entrepreneur prone to escalate. The result remains the same for all positive emotions where an increasing level of uncertainty tends to make the entrepreneur more prone to escalate. Strain and embarrassment, under high uncertainty, decrease the tendency to escalate. All results are significant except for frustration that does not show any significant relationship. The combination of cognitive decision theories and emotional theories enhances our knowledge about the emotive side of entrepreneurs’ motives to escalate. The results also enable us to supplement and refine existing theories on self-justification.
    Keywords: Emotions; Escalation of commitment; Uncertainty; Entrepreneurs
    JEL: M19
    Date: 2008–12–05
  6. By: Yu, Li; Jolly, Robert W.; Orazem, Peter
    Abstract: This paper uses the pattern of firm entry and exit to develop a classification system for industries. The classifications include urban-rural bias; long-term growth; and firm survival patterns. The first captures the fact that sector-specific economic growth may be favored in urban areas for some industries and may benefit from low population density for others. Some industries have experienced long-term expansion in firm numbers while others have experienced a decline. Finally, some industries are characterized by high rates of both entry and exit while others have low rates of both. A taxonomy classifying industries according to those three criteria is developed in this paper. The taxonomy is applied to the Iowa subset of the National Establishment Time-Series (NETS) database over the period from 1992 to 2004. County level entry and exit rates are shown to be positively correlated across nearly all 2 digit NAICS code industries. Industry growth is found to be biased against rural areas. Not all of the industries experienced expansion or have a positive net entry rate. Entry of new firms replaces old incumbent firms in each industry but to different degrees. Understanding firm entry - exit pattern can help design customized policies of fostering expansion of specific industries in Iowa according to their location bias, industry growth patterns and development dynamics.
    Keywords: Entry – Exit Pattern, Taxonomy, Location Bias, Expansion, Churning, Entrepreneurship, Economic Development
    Date: 2008–12–05
  7. By: Jolanda Hessels
    Abstract: This paper provides an introduction into the field of international entrepreneurship. A definition of international entrepreneurship and associated key concepts is given and the research domain of international entrepreneurship is described. A substantial part of the international entrepreneurship literature concentrates on the internationalization of small and medium-sized enterprises (SMEs) and new ventures. Based on an analysis of the existing literature the current paper provides a framework for the study of antecedents and outcomes of SME and new venture internationalization and presents a number of avenues for future research.
    Date: 2008–12–11
  8. By: Frank M. Fossen
    Abstract: The empirical finding that entrepreneurs tend to invest a large share of their wealth in their own firms despite comparably low returns and high risk has become known as the private equity premium puzzle. This paper provides evidence supporting the hypothesis that lower risk aversion of entrepreneurs, and not necessarily credit constraints, may explain this puzzle. The analysis is based on a large, representative panel data set for Germany, which provides information on asset portfolios and experimentally validated risk attitudes. The results show that both the ownership probability and the conditional portfolio share of private business equity significantly increase with higher risk tolerance.
    Keywords: Entrepreneurship, Private Equity, Investment, Risk Aversion
    JEL: G11 G32 L26 J23 D81
    Date: 2008
  9. By: Brooks, Lara; Whitacre, Brian; Muske, Glenn; Woods, Mike
    Abstract: This paper studies €ܥntrepreneurial communities€ݠusing both quantitative and qualitative data from the state of Oklahoma. Household-level survey data and community-specific characteristics are used to determine what factors affect whether a rural community operates in an entrepreneurial manner. Case studies from successful rural communities provide a more qualitative viewpoint of the factors that lead to entrepreneurial activity.
    Keywords: Entrepreneurship, communities, rural development, Community/Rural/Urban Development, R11, O18, C1,
    Date: 2008
  10. By: David Neumark; Jed Kolko
    Abstract: We use new establishment-level data and geographic mapping methods to improve upon evaluations of the effectiveness of state enterprise zones, focusing on California's program. Because zone boundaries do not follow census tracts or zip codes, we created digitized maps of original zone boundaries and later expansions. We combine these maps with geocoded observations on most businesses located in California. The evidence indicates that enterprise zones do not increase employment. We also find no shift of employment toward the lower-wage workers or manufacturing sector targeted by enterprise zone incentives. We conclude that the program is ineffective in achieving its primary goals.
    JEL: H25 H73 J23 R12
    Date: 2008–12

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