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on Entrepreneurship |
| By: | Benjamin Campbell; Martin Ganco; April Franco; Rajshree Agarwal |
| Abstract: | We theorize that differences in human assets’ ability to generate value are linked to exit decisions and their effects on firm performance. Using linked employee-employer data from the U.S. Census Bureau on legal services, we find that employees with higher earnings are less likely to leave relative to employees with lower earnings, but if they do leave, they are more likely to move to a spin-out instead of an incumbent firm. Employee entrepreneurship has a larger adverse impact on source firm performance than moves to established firms, even controlling for observable employee quality. Findings suggest that the transfer of human capital, complementary assets, and opportunities all affect mobility decisions and their impact on source firms. |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:09-32&r=ent |
| By: | Jing Chen (Department of Economics, Florida International University) |
| Abstract: | This paper develops and tests a model that explains entry into serial entrepreneurship and the performance of serial entrepreneurs as the result of selection on innate ability. The model supposes that agents establish businesses with imperfect information about their entrepreneurial ability and the profitability of business ideas. Agents continually observe signals with which they update their beliefs, and this process eventually determines their next business choice. Selection on ability induces a positive correlation between entrepreneurial experience (measured by previous business earnings and founding experience) and serial business formation, as well as its subsequent performance. The predictions in the model are tested using panel data from the NLSY79. The analysis permits a distinction to be made between selection on innate ability and learning by doing. |
| Keywords: | Serial entrepreneurs, selection, ability, entrepreneurial experience, learning by doing. |
| JEL: | J21 J24 J62 M13 |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:fiu:wpaper:0913&r=ent |
| By: | Hongbin Li; Zheyu Yang; Xianguo Yao; Junsen Zhang |
| Abstract: | This paper examines the impact of entrepreneurship on economic growth by using a panel data set of 29 provinces in China over 20 years. Two indicators of entrepreneurship are defined and introduced into the traditional growth regression framework that is estimated using the system generalized method of moments. We also use the ratio of staff and workers of state-owned enterprises and per capita sown land area as the instrumental variables to identify the causal effect of entrepreneurship on economic growth. Our results suggest that entrepreneurship has a significant positive effect on economic growth and this finding is robust even after we control for other demographic and institutional variables. Our study provides some evidence that may be used as a basis for evaluating the effect of China’s policy on private business which has been increasingly relaxed since the late 1970s. |
| JEL: | L26 O53 O53 |
| Date: | 2009–10 |
| URL: | http://d.repec.org/n?u=RePEc:chk:cuhkdc:00022&r=ent |
| By: | Alain Gabler; Omar Licandro |
| Abstract: | This paper contributes to the literature on both embodied technical progress and firm dynamics, by formulating an endogenous growth model where selection and imitation play a fundamental role in helping capital good producers to learn about the productivity of technologies embodied in new plants. By calibrating the model to some key aggregates particularly relevant for the embodied capital literature, among them the growth rate of the relative investment price, the model quantitatively replicates the main facts associated to firm dynamics, such as the entry rate and the tail index of the establishment size distribution. In line with the previous literature, it also predicts a contribution to productivity growth of embodied technical progress and selection of around 60% |
| Keywords: | endogenous growth; investment- specific technological change; selection and imitation; firm entry and exit. |
| JEL: | B52 O3 O41 |
| Date: | 2009–09–30 |
| URL: | http://d.repec.org/n?u=RePEc:aub:autbar:782.09&r=ent |
| By: | Peter Thompson (Department of Economics, Florida International University); Jing Chen (Department of Economics, Florida International University) |
| Abstract: | A team of managers engaged in production using technology x, is considering switching to technology y. The value of y is learned slowly over time, but constraints on the ability of individual managers to communicate their beliefs allow disagreements to emerge among team members. Managers who develop sufficiently strong disagreements with their colleagues choose to form new companies to implement their preferred strategy. Out of a symmetric model of disagreement, two distinct classes of spinoffs arise. A type 1 spinoff forms when an employee comes to believe it is worth switching to y but the firm does not. A type 2 spinoff arises when an employee sufficiently disagrees with the firm’s decision to switch strategy that he is willing to invest in order to continue with x. The comparative dynamics of the formation of type 1 and type 2 spinoffs are distinct, and yield some novel implications that are tested using data on spinoffs in the British automobile industry. |
| Keywords: | Spinoffs, learning, strategic disagreement. |
| JEL: | L2 D70 D83 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:fiu:wpaper:0910&r=ent |
| By: | Francesco Columba; Leonardo Gambacorta; Paolo Emilio Mistrulli |
| Abstract: | A large body of literature has shown that small firms experience difficulties in accessing the credit market due to informational asymmetries. Banks can overcome these asymmetries through relationship lending, or at least mitigate their effects by asking for collateral. Small firms, especially if they are young, have little collateral and short credit histories, and thus may find it difficult to raise funds from banks. In this paper, we show that even in this case, small firms may improve their borrowing capacity by joining mutual guarantee institutions (MGIs). Our empirical analysis shows that small firms affiliated with MGIs pay less for credit compared with similar firms which are not MGI members. We obtain this result for interest rates charged on loan contracts which are not backed by mutual guarantees. We then argue that our findings are consistent with the view that MGIs are better than banks at screening and monitoring opaque borrowers. Thus, banks benefit from the willingness of MGIs to post collateral since it implies that firms are better screened and monitored. |
| Keywords: | credit guarantee schemes, joint liability, microfinance, peer monitoring, small business finance |
| Date: | 2009–10 |
| URL: | http://d.repec.org/n?u=RePEc:bis:biswps:290&r=ent |
| By: | Jean-Claude Boldrini (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Université de Nantes : EA4272); Emmanuel Chené (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Université de Nantes : EA4272); Nathalie Schieb-Bienfait (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Université de Nantes : EA4272) |
| Abstract: | In the eighties, public bodies became aware of the importance of the SMEs in the regional economic development. In order to stimulate their innovativeness and to overcome their inward limits, public policies set up innovation agencies all over European countries. Criticisms arose after ten years of existence because of their low usefulness. This article aims to develop a better understanding of the relationship between SMEs and innovation agencies (RTTAs – Regional Technology Transfer Agencies) : it presents the implementation of a management scheme which experimented new solutions, in French SMEs, to overcome previous gaps. Our article seeks to enrich researches exploring the links between the SME and the RTTA ; it advocates new principles to improve SMEs' guidance in innovation processes. |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00423334_v1&r=ent |
| By: | Bahlmann, M.D. (Vrije Universiteit Amsterdam, Faculteit der Economische Wetenschappen en Econometrie (Free University Amsterdam, Faculty of Economics Sciences, Business Administration and Economitrics); Huysman, M.H.; Elfring, T. |
| Abstract: | Recent theorizing in cluster literature emphasizes the importance of inter-cluster knowledge linkages in addition to local knowledge dynamics, enabling new and innovative ideas to flow from one cluster to the other. This paper contributes to this topic by studying inter-cluster knowledge linkages at an individual level of analysis, making use of qualitative social network measures. Central to this case is the Amsterdam New Media-cluster, with a special focus on entrepreneurs engaging in lively inter-cluster exchange of knowledge and debate, resulting in the exchange of new visions and ideas across cluster boundaries. The proposed distinction between local buzz and global pipelines is complemented by adding a third category of inter-local knowledge exchange: global buzz. |
| Keywords: | pipelines; global/ local buzz; entrepreneurship; cluster |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:vuarem:2009-2&r=ent |
| By: | John Tang |
| Abstract: | Studies of entrepreneurship in nineteenth century Japan typically focus on the activities of leading industrialists who founded large, family-owned conglomerates known as zaibatsu. These individuals do not conform well with the archetypal Schumpeterian entrepreneur, but this discrepancy may be more an issue of context than behavior. However, due to a lack of documentation for smaller independent firms, it is difficult to make this comparison. To broaden the scope of analysis, I use data drawn from corporate genealogies, which provide a more complete cross-section of entrepreneurial activity. This dataset of firm entry during the Meiji Period (1868-1912) covers a wide range of industries, allowing me to analyze aspects of Japan's early industrialization that heretofore have relied on anecdotal or case evidence. I also propose a game-theoretic model of entry appropriate for entrepreneurs in late developing economies that exploit the qualitative nature of these data. |
| Keywords: | Meiji Japan, entrepreneurship, entry model, industrialization, late development,technology adoption, zaibatsu |
| JEL: | N85 O14 O33 |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:09-30&r=ent |
| By: | John Haltiwanger; Ron Jarmin; C.J. Krizan |
| Abstract: | In part due to the popular perception that Big-Boxes displace smaller, often family owned (a.k.a. Mom-and-Pop) retail establishments, several empirical studies have examined the evidence on how Big-Boxes’ impact local retail employment but no clear consensus has emerged. To help shed light on this debate, we exploit establishment-level data with detailed location information from a single metropolitan area to quantify the impact of Big-Box store entry and growth on nearby single unit and local chain stores. We incorporate a rich set of controls for local retail market conditions as well as whether or not the Big-Boxes are in the same sector as the smaller stores. We find a substantial negative impact of Big-Box entry and growth on the employment growth at both single unit and especially smaller chain stores – but only when the Big-Box activity is both in the immediate area and in the same detailed industry. |
| Keywords: | Big-Boxes, Small Business, Retail Trade, Firm Location, Structural Change |
| JEL: | R30 L16 |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:09-34&r=ent |
| By: | Galo Nuño (Banco de España) |
| Abstract: | In this paper we integrate Schumpeterian endogenous growth into a general equilibrium framework. By explicitely modelling the innovation and technology adoption process we are able to match some stylized economic facts such as entry rates and survival times of firms in the U.S. economy or the maximum convergence rates accross countries. Additionally, it allows us to propose a new definition of what a technology shock is and to compare it with the standard definition. Results show how this framework provides a plausible description of how economies grow and respond to the arrival of new technologies. |
| Keywords: | Medium-term business cycles, Schumpeterian growth, technology adoption |
| JEL: | E3 O3 O4 |
| Date: | 2009–10 |
| URL: | http://d.repec.org/n?u=RePEc:bde:wpaper:0922&r=ent |
| By: | Roy Chowdhury, Prabal |
| Abstract: | This paper examines Bertrand competition under free entry, when firm size vis-a-vis market size is exogenously given. A free entry Bertrand Nash equilibrium (FEBE) exists if and only if relative market size is sufficiently large. Further, there is a unique coalition-proof Nash equilibrium price that corresponds to the minimum FEBE price, leads to average cost pricing for all active firms and is decreasing in market size. |
| Keywords: | Bertrand competition; free entry; coalition-proof; contestability. |
| JEL: | D5 L3 |
| Date: | 2009–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:17837&r=ent |
| By: | Siegrun Brink (Schumpeter School of Business and Economics, Bergische Universität Wuppertal) |
| Abstract: | This paper reviews the impact of legitimacy on new ventures and explores the overlap between two similar constructs, legitimacy and reputation. A positive organizational reputation can be crucial to successful venture development. Building on the idea that reputation is socially constructed, this paper depicts reputation as the outcome of the process of legitimation. In this context the study investigates the influence of venture capital and the relationship among venture capital finance and venture’s reputation. Results of the empirical study reveal a correlation between venture capital finance and the organizational reputation and legitimation of start-ups. |
| Keywords: | Legitimation, Legitimität, Reputation, Institutionalismus, Venture Capital |
| Date: | 2009–10 |
| URL: | http://d.repec.org/n?u=RePEc:bwu:schdps:sdp09010&r=ent |