nep-ent New Economics Papers
on Entrepreneurship
Issue of 2009‒06‒17
six papers chosen by
Marcus Dejardin
Notre-Dame de la Paix University

  1. Entry, Exit and Investment-Specific Technical Change, Second Version By Roberto M. Samaniego
  2. Credit constraints and persistence of unemployment. By Nicolas L. Dromel; Elie Kolakez; Etienne Lehmann
  3. Measuring and managing credit risk in SMEs: a quantitative and qualitative rating model By Ivan DE NONI; Antonio LORENZON; Luigi ORSI
  4. Benchmarking for SMEs: toward a competitive rating system By Ivan DE NONI; Luigi ORSI; Diego TAVECCHIA
  5. Incorporation and Taxation: Theory and Firm-level Evidence By Peter Egger; Christian Keuschnigg; Hannes Winner
  6. Innovation and Social Capital in the Small-Medium Enterprises: a case of bamboo handicraft in Indonesia By Brata, Aloysius Gunadi

  1. By: Roberto M. Samaniego (Department of Economics, George Washington University)
    Abstract: Using European data, this paper finds that (1) industry entry and exit rates are positively related to industry rates of investment-specific technical change (ISTC); (2) the sensitivity of industry entry and exit rates to cross-country differences in entry costs depends on industry rates of ISTC. The paper constructs a general equilibrium model in which the rate of ISTC varies across industries and new investment-specific technologies can be introduced by entrants or by incumbents. In the calibrated model, equilibrium behavior is consistent with stylized facts (1) and (2), provided the cost of technology adoption is increasing in the rate of ISTC.
    Keywords: Entry, exit, turnover, investment-specific technical change, entry costs, vintage capital, embodied technical change, lumpy investment
    JEL: D92 L26 O33 O41
    Date: 2008–04–02
  2. By: Nicolas L. Dromel (Centre d'Economie de la Sorbonne - Paris School of Economics); Elie Kolakez (ERMES - TEPP, Université Paris 2 Panthéon-Assas); Etienne Lehmann (CREST-INSEE et IZA)
    Abstract: In this paper, we argue that credit market imperfections impact not only the level of unemployment, but also its persistence. For this purpose, we first develop a theoretical model based on the equilibrium matching framework of Mortensen and Pissarides (1999) and Pissarides (2000) where we introduce credit constraints. We show these credit constraints not only increase steady-state unemployment, but also slow down the transitional dynamics. We then provide an empirical illustration based on a country panel dataset of 19 OECD countries. Our results suggest that credit market imperfections would significantly increase the persistence of unemployment.
    Keywords: Credit markets, labor markets, unemployment, credit constraints, search frictions.
    JEL: E24 E44 J08 J64
    Date: 2009–05
  3. By: Ivan DE NONI; Antonio LORENZON; Luigi ORSI
    Abstract: The main aim of this paper is to develop a qualitative and quantitative credit risk rating model for SMEs. The scope of this model is to assign, through a discriminant function (see Altman,1969), a synthetic judgment of the firm management ( ). First of all it must characterize variables that multiplied for a weighted coefficient allow us to determine a score of the analyzed enterprises. The classification is based on a discriminating function that maximize the variance of the variables among the firms of two groups and to minimize the variance among the firms of the same group. An important aspect of the model is its ability to enclose in the judgment of rating also the qualitative part. The objective is to modify the quantitative score including the qualitative judgments that emerge from a qualitative questionnaire. The final rating, therefore, is constructed assigning the final score (quantitative plus qualitative) to the class of rating that it includes such value. So a synthetic judgment of the solvency, the solidity and the forecasts is supplied about the firm analysis. In conclusion we can say that the obtained results confirm the reliability of the model. The error percentage, in fact, is only of 13.65% for the performing firm and 8.91% for the non performing. Further analyses have demonstrated that the model turns out reliable also in relation to possible distortions generated from dimensional (analysis for number of employers) and geographical (analysis for province) effects. Contrarily a surveying on industry does not give the same results. Various industry are characterize from different variability coefficients and it implies a meaningful sectorial effect
    Keywords: SMEs, Rating Model, Competitiveness, Networking
    JEL: M14 G32 G33
    Date: 2007–10–15
  4. By: Ivan DE NONI; Luigi ORSI; Diego TAVECCHIA
    Abstract: The main aim of this paper is to develop a qualitative and quantitative Benchmarking model for SMEs. The Benchmarking is a methodology base on a comparison among performances born in some international industrial groups to answer to the strong competitive dynamics on the 70s. This approach to a model of territorial benchmarking for SME is based on a research project developed by “CNA Emilia Romagna”, “Ecipar” and “CNA Innovazione” with the scientific supervision of the University of Milan and the Association Benchmarking for Success (Italy) in the perspective to support competitiveness, innovation and development of SMEs’ businesses. The purpose of this project is to develop an integrated model of territorial benchmarking that allows estimating the value of the interaction processes that are developed in a specific territory and that help defining the potential business and the dynamic capability of a firm. The database with all budget data of the SMEs is offered by CNA itself. This database includes more or less 30,000 enterprises divided by firms with ordinary accounting (with data about economic account and statement of assets and liability) and with simplified accounting (with data about economic accou
    Keywords: SMEs, Benchmarking, Rating Model, Performance Evaluation.
    JEL: M10
    Date: 2007–11–19
  5. By: Peter Egger (Ifo Institute, University of Munich, WIFO and CESifo); Christian Keuschnigg (University of St. Gallen (IFF-HSG)); Hannes Winner (University of Salzburg)
    Abstract: This paper provides a theory and firm-level evidence on the incorporation decision of entrepreneurs in a model of taxes and corporate governance. The theory explains how the incorporation decision of entrepreneurs is driven by taxation (corporate and personal income taxes), corporate transparency, access to external capital and limited liability. We estimate features of this model using a large cross-section of more than 540, 000 firms in European manufacturing. We find that higher personal income tax rates favor incorporation while higher corporate tax rates reduce the probability to incorporate. These findings are robust to the inclusion of other economic and institutional determinants of external financing and choice of organizational form.
    Keywords: Incorporation, governance, taxes, discrete choice models
    JEL: H25 H73 F23 C21
    Date: 2009
  6. By: Brata, Aloysius Gunadi
    Abstract: This paper aims to seek what type of innovation and to estimate the impact of social capital on the innovation in the small-medium enterprises (SMEs) in Indonesia. The data used in this paper was collected from May to June 2008 in several clusters of bamboo handicraft producers in the district of Sleman, Yogyakarta Special Province. The research found that more than half of respondents are innovative producers. Innovation of product and organizational are the important types of innovation in the bamboo handicraft. Social capital, measured by an index of trust significantly influences the innovation index. Other important variables that influence the index of innovation are location, sex, and education. However, in the logistic regression, only education that significantlly explain the probability of innovation.
    Keywords: innovation; social capital; trust; bamboo handicraft; Indonesia
    JEL: D13 L6 Z13 O31
    Date: 2009

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