nep-ent New Economics Papers
on Entrepreneurship
Issue of 2009‒01‒17
six papers chosen by
Marcus Dejardin
Notre-Dame de la Paix University

  1. Firm Formation with Complementarities: The Role of the Entrepreneur By Christian Roessler; Philipp Koellinger
  2. Investigating the Anatomy of the Employment Effects of New Business Formation By Michael Fritsch; Florian Noseleit
  3. Supporting Measures for Research & Development as a Stimulus for Technology Transfer and Academic Entrepreneurship in Estonia By Indrek Jakobson; Valter Ritso
  4. Self-Employment, State Dependence and Cross-Mobility Patterns By Marco Caliendo; Arne Uhlendorff
  5. Managerial Practices, Performance and Innovativeness: Some Evidence from Finnish Manufacturing By Heli Koski; Luigi -Mäkinen Marengo
  6. Culture and the Survival of UK Independent Games Software Firms By Denise Tsang

  1. By: Christian Roessler (Rice University, and University of Queensland, Australia); Philipp Koellinger (Erasmus University Rotterdam, The Netherlands)
    Abstract: We model the emergence of organization forms in a game between prospective entrepreneurs. Complementary roles arise endogenously in a way that admits a stable assignment of workers to firms. This contrasts with existing work on job matching, where stability typically requires workers to be substitutes. Our approach demonstrates that the labor market selection of entrepreneurs and their profit-maximizing choices lead to specific technologies in which certain workers are substitutes and others are complements. We give a simple characterization of equilibrium firm memberships and organizations. We show that payoffs in our non-cooperative solution lie in the core of the corresponding cooperative game, and can be obtained in a decentralized process that reduces information and planning requirements for the entrepreneur.
    Keywords: Entrepreneurship; job matching; occupational choice; firm formation; firm organization
    JEL: L26 J24 C78 D44
    Date: 2008–01–13
  2. 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)
    Abstract: Recent empirical research has found that the effect of new business formation on employment emerges over a period of about ten years and has identified a 'wave' pattern of these effects. In this study, we decompose the overall contribution of new business formation on employment change into direct and indirect effects. The results indicate that indirect effects of new business formation are quantitatively much more important than the direct effects. Furthermore, we find that regional differences of the employment change generated by new business formation can to a large part be explained by respective differences of the indirect effects. Hence, the interaction of the start-ups with their regional environment plays a great role for explaining their impact on regional development.
    Keywords: Entrepreneurship, new business formation, regional development, direct and indirect effects
    JEL: L26 M13 O1 O18 R11
    Date: 2009–01–05
  3. By: Indrek Jakobson (Tallinn School of Economics and Business Administration, Tallinn University of Technology); Valter Ritso (Tallinn School of Economics and Business Administration, Tallinn University of Technology)
    Abstract: The main aim of the article is to emphasise the need for governmental support in the process of building knowledge-based economy. The authors focus on the knowledge creating process in the form on R&D activities and also on entrepreneurial process, mostly in participation with universities. That means an analytical description of the survey provided by the Ministry of Economic Affairs and Communications of Estonia, outlining the major barriers to this process, proposes the main directions for development through business development of innovative and knowledge-based companies and also the survey conducted in Tallinn University of Technology about academic entrepreneurship. The authors are going to analyse companies’ cooperation with universities for better utilisation of their R&D possibilities, entrepreneurial attitude of universities and also to find out possibilities how further activate the stronger cooperation with universities in Estonia for better collaborative research. On the contrary, university as a partner for entrepreneurs is getting the possibilities to enhance the awareness of science-intensive entrepreneurship.
    Keywords: Research and development (R&D), innovation, technology transfer, knowledge transfer, academic entrepreneurship, spin-off, supporting measure
    JEL: L26 I23 O32 O38
    Date: 2008
  4. By: Marco Caliendo; Arne Uhlendorff
    Abstract: This paper analyzes the mobility between self-employment, wage employment and non-employment. Using data for men in West Germany, we find strong true state dependence in all three states. Moreover, compared to wage employment, non-employment increases the probability of self-employment significantly, and selfemployment goes along with a higher risk of future non-employment.
    Keywords: Self-Employment, State Dependence, Labor Market Dynamics, Unemployment
    JEL: J64 L26 C23 C25
    Date: 2008
  5. By: Heli Koski; Luigi -Mäkinen Marengo
    Abstract: ABSTRACT : Our study aims at shedding light on the organizational mechanisms that produce differences in the firms´ innovation performance. We use a survey data collected from 398 Finnish manufacturing firms for the years 2002 and 2005 to empirically explore whether and which organizational factors explain why certain firms produce larger innovative research output than others, and whether the incentives to innovate that certain organizational practices generate differ between the SME’s and large firms, and between those firms that are operating in low-tech and high-tech industries. Our study indicates that one size does not fit all when it comes to the selection of organizational practices creating a business environment that is fruitful for innovation. There are vast differences in the organizational practices leading to more innovation both between the small and large firms, and between the firms that are functioning in high- and low-tech industries. While innovation in the small firms tend to benefit from the practices that enhance employee participation in the decision-making, the large firms that have more decentralized decision-making patterns do not seem to perform better in terms of innovation than those with a more bureaucratic decision-making structure. The most efficient incentive-based compensation means encouraging innovation among the sampled companies seems to be the ownership of a firm’s stocks by the employees and/or managers. Performance based wages also relates positively to innovation, but only when it is combined with a systematic monitoring of the firm´s performance.
    Keywords: innovation, firm size, organizational practices, HRM practices
    JEL: L25 M54 O31
    Date: 2009–01–07
  6. By: Denise Tsang (School of Management, University of Reading)
    Abstract: This paper reports on qualitative research that investigates the culture of survival among entrepreneurial UK games software development firms within the interactive entertainment industry. The survival culture depicts a culture where firms strive for cost efficiency in order to maximize their chance of continued operation. In-depth interviews with 12 managers illustrated a framework for understanding the cost advantages of surviving firms. It was found it was based on focusing on human relations, building critical inter-firm relationships and acknowledging the importance of cash flow, which were in turn supported by innovative product orientation. The analysis highlights that competitiveness within the interactive entertainment industry could be attained within market constraint and pressure.
    Keywords: Firm culture, competition and the interactive entertainment industry
    Date: 2008

This nep-ent issue is ©2009 by Marcus Dejardin. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.