|
on Entrepreneurship |
| By: | Edward L. Glaeser (Harvard University, Faculty of Arts and Sciences; Harvard Kennedy School); William R. Kerr (Harvard Business School, Entrepreneurial Management Unit); Giacomo A. M. Ponzetto (CREI and Universitat Pompeu Fabra) |
| Abstract: | Employment growth is strongly predicted by smaller average establishment size, both across cities and across industries within cities, but there is little consensus on why this relationship exists. Traditional economic explanations emphasize factors that reduce entry costs or raise entrepreneurial returns, thereby increasing net returns and attracting entrepreneurs. A second class of theories hypothesizes that some places are endowed with a greater supply of entrepreneurship. Evidence on sales per worker does not support the higher returns for entrepreneurship rationale. Our evidence suggests that entrepreneurship is higher when fixed costs are lower and when there are more entrepreneurial people. |
| Keywords: | Entrepreneurship, Industrial Organization, Chinitz, Agglomeration, Clusters, Cities. |
| JEL: | J2 L0 L1 L2 L6 O3 R2 |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:hbs:wpaper:10-019&r=ent |
| By: | Sascha Walter; Dirk Dohse |
| Abstract: | This study examines how the effect of entrepreneurship education on students’ entrepreneurial intentions is (1) contingent on the mode of education (active, e.g. business plan seminar, vs reflective, e.g. theory lectures), (2) contingent on the regional context and (3) complemented by individual-level influences such as role models or work experience. Results show that active modes of entrepreneurship education directly increase intentions and attitudes, whereas the impact of reflective modes depends on the regional context. Parental role models and work experience are found to complement entrepreneurship education in different ways. The findings have important implications for theory building as well as for the practice of teaching entrepreneurship |
| Keywords: | entrepreneurship education, knowledge spillover, entrepreneurial intentions, theory of planned behavior |
| JEL: | A20 I23 O31 R19 |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1549&r=ent |
| By: | Block, J.H.; Thurik, A.R.; Zhou, H. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University) |
| Abstract: | The knowledge spillover theory of entrepreneurship seeks to explain the sources of entrepreneurship and its consequences with regard to economic performance. This paper extends this theory and links it to innovation performance. We propose that a high rate of entrepreneurship facilitates the process of turning knowledge into innovative products while it has no effect on the relation between knowledge and imitative products. We use European country-level data to test our propositions. Our results show that a high rate of entrepreneurship increases the chances that knowledge turns into innovative products. The findings highlight the importance of entrepreneurs in the process of commercialization of knowledge. Implications for innovation policy are discussed. |
| Keywords: | innovation;entrepreneurship;knowledge;patents;technology policy;knowledge spillovers;commercialization of knowledge;economic growth;O30 |
| Date: | 2009–09–15 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:eureri:1765016769&r=ent |
| By: | Boyan Jovanovic (Department of Economics, New York University); Peter L. Rousseau (Department of Economics, Vanderbilt University) |
| Abstract: | Investment of U.S. firms responds asymmetrically to Tobin's Q: Investment of established firms -- `intensive' investment -- reacts negatively to Q whereas investment of new firms -- `extensive' investment -- responds positively and elastically to Q. This asymmetry, we argue, reflects a difference between established and new firms in the cost of adopting new technologies. A fall in the compatibility of new capital with old capital raises measured Q and reduces the incentive of established firms to invest. New firms do not face such compatibility costs and step up their investment in response to the rise in Q. A composite-capital version of the model fits the data well using aggregates since 1900 and our new database of firm-level Qs that extend back to 1920. |
| Keywords: | Compatibility costs, composite capital, vintage capital, Tobin's Q, 20th century investment |
| JEL: | E3 N1 O3 |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:van:wpaper:0912&r=ent |
| By: | Rebel A. Cole; Hamid Mehran |
| Abstract: | This study analyzes differences by gender in the ownership of privately held U.S. firms and examines the role of gender in the availability of credit. Using data from the nationally representative Surveys of Small Business Finances, which span a period of sixteen years, we document a series of empirical regularities in male- and female-owned firms. Looking at the differences by gender, we find that female-owned firms are 1) significantly smaller, as measured by sales, assets, and employment; 2) younger, as measured by age of the firm; 3) more likely to be organized as proprietorships and less as corporations; 4) more likely to be in retail trade and business services and less likely to be in construction, secondary manufacturing, and wholesale trade; and 5) inclined to have fewer and shorter banking relationships. Moreover, female owners are significantly younger, less experienced, and not as well educated. We also find strong univariate evidence of differences in the availability of credit to male- and female-owned firms. More specifically, female-owned firms are significantly more likely to be credit-constrained because they are more likely to be discouraged from applying for credit, though not more likely to be denied credit when they do apply. However, these differences are rendered insignificant in a multivariate setting, where we control for other firm and owner characteristics. |
| Keywords: | Women-owned business enterprises - Finance ; Corporations - Finance ; Commercial credit |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednsr:383&r=ent |
| By: | Donato Iacobucci (Dipartimento di Ingegneria Informatica, Gestionale e dell’Automazione, Università Politecnica delle Marche); Peter Rosa (Centre for Entrepreneurship Research, Management School & Economics, University of Edinburgh) |
| Abstract: | Previous research demonstrates that entrepreneurial processes underpin the growth of business groups. A business group is a set of companies controlled by the same entrepreneur. Case studies of portfolio entrepreneurs suggest that one of the main reasons for business group formation is the need to create an entrepreneurial team, which is achieved by giving minority shares in the new ventures to others, mainly former employees. This enhances the portfolio entrepreneur’s ability to grow and diversify the businesses under their control. The paper identifies and discusses the different types of entrepreneurial teams developed by portfolio entrepreneurs, and their dynamics. |
| Keywords: | Business groups, entrepreneurship, entrepreneurial teams |
| JEL: | L25 L26 |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:cme:wpaper:0904&r=ent |
| By: | Frank M. Fossen; Davud Rostam-Afschar |
| Abstract: | The well-documented positive correlation between income risk and wealth was interpreted as evidence for high amounts of precautionary wealth in various studies. However, the large estimates emerged from pooling non-entrepreneurs and entrepreneurs without controlling for heterogeneity. This paper provides evidence for Germany based on representative panel data including private wealth balance sheets. Entrepreneurs, who face high income risk, hold more wealth than employees, but it is shown that this is not due to precautionary motives. Entrepreneurs may rather save for old age, as they are usually not covered by statutory pension insurance. The analysis accounts for endogeneity of entrepreneurial choice. |
| Keywords: | precautionary saving, precautionary wealth, entrepreneurship |
| JEL: | D91 D12 E21 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp920&r=ent |
| By: | Roosenboom, P.G.J. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University) |
| Abstract: | Private equity has become an increasingly important part of our economy. Around the world the companies owned by private equity investors account for a substantial percentage of Gross Domestic Product (GDP) and private sector employment. These investors have recently been under fire in the media when they takeover companies. Private equity investors are at best seen as ‘kings of capitalism’ and at worst as ‘barbarians’ and ‘weapons of mass destruction’. The first part of this address contrasts this negative press with what we know about the real effects of private equity from academic studies. In general, private equity seems to be more negatively written about in the media then is warranted based on recent empirical evidence. However, as this address will show the jury is still out on a large number of issues that deserve further attention. One of the issues we know surprisingly little about is the real effects of private equity. Although policymakers are extremely wary of buy-outs, they tend to welcome venture capital investments. They believe that venture capital helps to close the funding gap faced by small high-growth companies that banks are reluctant to finance. The second part of this address discusses recent research that investigates the impact of private equity on the creation of new businesses in Europe. We find that private equity positively impacts the number of start-up firms at the country and industry level. Especially the availability of venture capital to finance these new ventures has a positive impact on new business creation, as many European policymakers assume. |
| Keywords: | private equity;venture capital;entrepreneurial finance;buyouts |
| Date: | 2009–09–04 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:euriar:1765016710&r=ent |
| By: | Massimo Riccaboni; Fabio Pammolli; Sergey V. Buldyrev; Linda Ponta; H. Eugene Stanley |
| Abstract: | The relationship between the size and the variance of firm growth rates is known to follow an approximate power-law behavior $\sigma(S) \sim S^{-\beta(S)}$ where $S$ is the firm size and $\beta(S)\approx 0.2$ is an exponent weakly dependent on $S$. Here we show how a model of proportional growth which treats firms as classes composed of various number of units of variable size, can explain this size-variance dependence. In general, the model predicts that $\beta(S)$ must exhibit a crossover from $\beta(0)=0$ to $\beta(\infty)=1/2$. For a realistic set of parameters, $\beta(S)$ is approximately constant and can vary in the range from 0.14 to 0.2 depending on the average number of units in the firm. We test the model with a unique industry specific database in which firm sales are given in terms of the sum of the sales of all their products. We find that the model is consistent with the empirically observed size-variance relationship. |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:0904.1404&r=ent |
| By: | Cristiana Benedetti Fasil |
| Abstract: | Recent empirical evidence based on firm level data emphasizes firm heterogeneity in innovation activities and the different effects of process and product innovations on the productivity level and productivity growth. To match this evidence, this paper develops an endogenous growth model with two sources of firm heterogeneity: production efficiency and product quality.Both attributes evolve endogenously through firms’ innovation choices. Growth is driven by innovation and self-selection of firms and sustained by entrants who imitate incumbents. Calibrating the economy to match the Spanish manufacturing sector, the model enables to quantify the different effects of selection, innovation, and imitation as well as product and process innovation on growth. Compared to single attribute models of firm heterogeneity, the model provides a more complete characterization of firms’ innovation choices explaining the partition of firms along different innovation strategies and generating consistent firm size distributions. |
| Keywords: | endogenous growth theory, firm dynamics, heterogeneous firms, productivity, quality, innovation |
| JEL: | L11 L16 O14 O31 O40 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:eui:euiwps:eco2009/30&r=ent |