nep-ent New Economics Papers
on Entrepreneurship
Issue of 2008‒12‒21
seven papers chosen by
Marcus Dejardin
Notre-Dame de la Paix University

  1. A Proposal to Improve Our Understanding of Entrepreneurship Using the Panel Study of Income Dynamics By Camilo Mondragón-Vélez; Ximena Peña-Parga
  2. Entrepreneurship, methodologies in higher education an experience in a portuguese business school By Carvalho, Luísa; Costa, Teresa; Dominguinhos, Pedro; Pereira, Raquel
  3. Clusters’ development: spin-offs and external economies By Christian Garavaglia
  4. Start-Ups and Employment Growth - Evidence from Sweden By Martin Andersson; Florian Noseleit
  5. Firm Turnover and Productivity Growth in the Canadian Retail Trade Sector By Baldwin, John R.; Gu, Wulong
  6. The Unofficial Economy and Economic Development By Rafael La Porta; Andrei Shleifer
  7. Econometric Evidence on the Impacts of Privatization, New Entry, and Independent Industry Regulator on Mobile Network Penetration and Expansion By Yan Li

  1. By: Camilo Mondragón-Vélez; Ximena Peña-Parga
    Abstract: This paper aims to evidence how relatively marginal changes in the Panel Study of Income Dynamics survey, particularly on the measurement of returns to entrepreneurship – both financial and human capital – can yield sizeable benefits for research and policy on entrepreneurship. Accurate measurement of returns to all the resources invested in entrepreneurial endeavors is not only essential to understand the motivations and barriers to start a business, but can ultimately provide the basis to improve the effectiveness of programs and policies to foster entrepreneurial activity in the economy. In fact, recent studies question the importance of pecuniary benefits in the decision to become an entrepreneur. However, these are based on measures of total earnings and sample aggregate returns. Thus, adequate individual data on business income and its components has an enormous value for both research and policy design altogether.
    Date: 2008–11–06
  2. By: Carvalho, Luísa; Costa, Teresa; Dominguinhos, Pedro; Pereira, Raquel
    Abstract: Today entrepreneurship education is an important issue to improve the process of creating new firm assuming new risks and rewards. The theoretical discussion about around the question: “Entrepreneurs are born or made?” assume that is possible educate to be entrepreneurs. Schools have an important role in this process. Believing in this possibility our Business School developed a set of pedagogical methodologies supported in apprenticeship based on “learning by doing”. This pedagogical methodology was created through a study of best practices. This study aims to propose a set of innovative methodologies and students perceptions about their apprenticeship experience/process. The study concludes with a set of recommendations and a best practices manual useful to appliance in higher education.
    Keywords: Innovative methodologies; entrepreneurship education; learning by doing
    JEL: L26 A2 M13
    Date: 2008–12–12
  3. By: Christian Garavaglia (University of Milano-Bicocca, Milan and CESPRI/KITeS, Bocconi University, Milan - Italy)
    Abstract: The claim of the paper is that industrial clusters need to be studied from a dynamic perspective. The complexity of cluster formation may be ascribed to its multi-dimensional and multidisciplinary character. The former refers to the co-involvement of individuals’ decisions, firms’ activities and institutions. The latter relates to the psychological, social, cultural and economic aspects needed to explain the birth end evolution of firms’ agglomerations. The paper proposes that theoretical framework which integrate different explanations, as put in evidence by the different approaches in literature, is more apt for grasping the evolution and complexity of clusters. Particular emphasis is given to the processes of spin-off formation.
    Keywords: cluster, spin-off, entrepreneurship, social ties, external economies.
    JEL: R11 O18 L26 M13 D85
    Date: 2008–11
  4. By: Martin Andersson (Centre of Excellence for Science and Innovation Studies (CESIS), Royal Institute of Technology and Jönköping International Business School (JIBS)); Florian Noseleit (Friedrich-Schiller-University Jena, School of Economics and Business Administration)
    Abstract: We use longitudinal data over a decade on start-ups and employment in Swedish regions and analyze the effect of start-ups on subsequent employment growth. We extend previous analyses by examining the influence of regional start-ups in a sector on regional employment growth in the same sector and on other sectors. We find differences between different types of start-ups. Knowledge-intensive start-ups seem to have larger effects on the regional economy. In particular, start-ups in high-end services have significant negative impacts on employment in other sectors but a positive long-run impact. This is consistent with the idea that start-ups are a vehicle for changes in the composition of regional industry. Moreover, our results illustrate that the known S-shaped pattern can be attributed to different effects that start-ups in a sector have on employment change in the same sector and in others.
    Keywords: Entrepreneurship, Employment Growth, Regional Development, Start-ups
    JEL: J23 M13 O52
    Date: 2008–12–09
  5. By: Baldwin, John R.; Gu, Wulong
    Abstract: This paper examines firm turnover and productivity growth in the Canadian retail trade sector. Firm turnover occurs as the competitive process shifts market share from exiting firms and existing firms that contracted to entering firms and existing firms that expanded. There is considerably more firm turnover in the retail sector than in the manufacturing sector and more of it comes from entry and exit. Moreover, contrary to the manufacturing sector where only part of overall productivity growth comes from firm turnover and the re-allocation of resources from the less to the more productive, all of the aggregate productivity growth comes from this source in the retail sector. This suggests that the much-discussed Wal-Mart effect on retail sector productivity mainly comes from the Wal-Mart-created competitive pressure that shifts market share from exitors and declining incumbents to entrants and growing incumbents. Foreign-controlled firms contributed 30% of labour productivity growth and 45% of multifactor productivity growth in the retail trade sector in the period from 1984 to 1996, which are mainly due to the entry of foreign-controlled firms and expansion of more productive foreign-controlled existing firms.
    Keywords: Manufacturing, Retail and wholesale, Economic accounts, Productivity accounts
    Date: 2008–12–08
  6. By: Rafael La Porta; Andrei Shleifer
    Abstract: In developing countries, informal firms (those that are not registered with the government) account for about half of all economic activity. We consider three broad views of the role of such firms in economic development. According to the romantic view, these firms would become the engine of economic growth if not stopped by government regulation. According to the parasite view, informal firms, by avoiding taxes and regulations, unfairly compete with the more efficient formal firms and, by taking away their market share, undermine economic progress. According to the dual view, informal firms are highly inefficient, do not pose much threat to the formal firms, but also do not contribute to economic growth, which is driven by the efficient formal firms. Using data from World Bank firm level surveys, we find that informal firms are small and extremely unproductive, compared even to the small formal firms, and especially relative to the larger formal firms. Compared to the informal firms, formal ones are run by much better educated managers. As a consequence, they use more capital, have different customers, market their products, and use more external finance. Hardly any formal firms had ever operated informally. This evidence is inconsistent with the romantic and parasite views, but supports the dual view. In this "Walmart" theory of economic development, growth comes from the creation of the highly productive formal firms. Informal firms keep millions of people alive, but disappear over time.
    JEL: O17
    Date: 2008–12
  7. By: Yan Li (Centre for Competition Policy, University of East Anglia)
    Abstract: This study examines the impacts of reforms – privatization, new entry and independent regulatory authority – on mobile network penetration and expansion using a new and hitherto unused panel dataset for 30 national mobile markets (i.e. 29 OECD countries and China) over the time period 1991-2006 under a 3-equation econometric framework. The estimation results confirm that introducing new entry is, in general, positively correlated with mobile network penetration and expansion; and in particular, the third entry brings many more benefits than the second one. The results also highlight the crucial role of an independent regulator in privatized mobile markets. Especially, the dynamic estimation results suggest that without an independent regulator, privatization is, on average, negatively correlated with mobile network expansion, even in certain competitive market environments.
    Keywords: New entry, privatization, independent regulator, mobile network, econometric analysis
    JEL: L10 L51 L96 K23
    Date: 2008–12

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