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on Entrepreneurship |
| By: | van Praag, Mirjam (University of Amsterdam); van Witteloostuijn, Arjen (University of Antwerp); van der Sluis, Justin (University of Amsterdam) |
| Abstract: | How valuable is education for entrepreneurs' performance as compared to employees'? What might explain any differences? And does education affect peoples' occupational choices accordingly? We answer these questions based on a large panel of US labor force participants. We show that education affects peoples' decisions to become an entrepreneur negatively. We show furthermore that entrepreneurs have higher returns to education than employees (in terms of the comparable performance measure 'income'). This is the case even when estimating individual fixed effects of the differential returns to education for spells in entrepreneurship versus wage employment, thereby accounting for selectivity into entrepreneurial positions based on fixed individual characteristics. We find these results irrespective of whether we control for general ability and/or whether we use instrumental variables to cope with the endogenous nature of education in income equations. Finally, we find (indirect) support for the argument that the higher returns to education for entrepreneurs is due to fewer (organizational) constraints faced by entrepreneurs when optimizing the profitable employment of their education. Entrepreneurs have more personal control over the profitable employment of their human capital than wage employees. |
| Keywords: | entrepreneurship, self-employment, returns to education, performance, personal control, locus of control, human capital, wages, incomes |
| JEL: | J23 J24 J31 J44 M13 |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4628&r=ent |
| By: | Jeong-Dong Lee (Technology Management, Economics and Policy Program(TEMEP), Seoul National University) |
| Abstract: | Firms experience birth (entry), growth and death (exit) as all living things do in any biological system. However, not all firms will show the same rate of growth and the same hazard rate of exit. Industry dynamics is a field of research that analyzes the dynamic patterns of entry, growth and exit of firms, and investigates the sources of those changes.On the other hand, productivity research has focused on the performance measurement of individual economic entities?such as firm, industry and country?and also on the examination of the sources. This paper reviews the past contribution of productivity research on industry dynamics and tries to specify the important future research areas that connect the two fields of research. For the past contribution, the paper emphasizes the following three issues: productivity as a measure of heterogeneity of firm population; productivity as an important source of the event in industry dynamics; source decomposition of industry-level productivity change. For the future work, the paper suggests the three areas of research: theoretical modeling that associates productivity with industry dynamics; accommodation of recent methodological developments of productivity analysis; rigorous study on the causal relationships among factors that affect the productivity change and industry dynamics. It is expected to better understand the logic behind pervasive yet complex behaviors of firms and industries, if the two research areas?productivity analysis and industry dynamics?interact more intensively |
| Keywords: | Industry Dynamics, Entry and Exit, Productivity, Survival Analysis, Firm Population |
| JEL: | D21 D24 L60 O30 C61 |
| Date: | 2009–11 |
| URL: | http://d.repec.org/n?u=RePEc:snv:dp2009:200929&r=ent |
| By: | Cieply, S.; Dejardin, M.A.F.G. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University) |
| Abstract: | We study financial constraints new firms suffer from in France during the mid-nineties. Three types of constraints are distinguished: the classic and well-known weak and strong credit rationing and the new concept of self-rationing bound to the theory of discouraged borrowers. We look for these constraints on a sample of new firms which survived at least 3 years during the mid-nineties. Empirical findings show credit constraints as a whole concern 41.96% of the sample and a very low proportion of new firms suffer from credit rationing “à la Stiglitz-Weissâ€. Weak credit rationing and self-rationing, caused by discouragement, are more widespread among French new firms. We highlight moreover the role of banks during the post-start up stage even if firms have suffered from credit rationing at the beginning of their life. Results not only suggest the absence of firms’ path of exclusion on the credit market but the rent expropriation by banks. |
| Keywords: | credit rationing;self-rationing;discouragement;banks |
| Date: | 2009–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:eureri:1765017430&r=ent |
| By: | Shuyun May Li |
| Abstract: | This paper discusses two ways to amend the optimal lending contract under asymmetric information studied in Clementi and Hopenhayn (2006) to change its long-run implications so that firm growth and exit driven by borrowing constraints exist in the long run. One way assumes that the entrepreneur has a lower discount factor than the bank, and the other assumes the bank has limited commitment. The optimal lending contracts under each variation closely resemble each other. |
| Keywords: | Optimal lending contract; Borrowing constraints; Asymmetric information; Limited commitment; Impatient entrepreneur |
| JEL: | G3 L2 D21 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:mlb:wpaper:1065&r=ent |
| By: | Llanto, Gilberto M.; Badiola, Jocelyn Alma R. |
| Abstract: | Using data from a quick survey of various rural (RFIs) and microfinance institutions (MFIs) in East Asia, the paper tries to find out how those institutions and their clientele have been affected by the global financial crisis, how they have coped with the ongoing crisis, and what they plan to do in the future to ensure the stability of the rural financial system and the continuing access of clients to financial services. The microfinance sector in Asia continues to evolve with emphasis on efficiency and strong growth in outreach. The limited data from the quick survey validate the growth in loan portfolios and increase in the number of clients, with growth varying significantly by country depending on internal and external factors during the period before the global financial crisis. Impacts vary depending on external and internal factors faced by RFIs and MFIs. However, they continue to maintain a positive attitude and expect that business will pick up as a result of an increase in demand for loans to finance livelihood projects and various microenterprises. They are aware of the threats and opportunities brought about by the global financial crisis. The analysis leads to some lessons for policymakers, bank regulators, rural financial institutions, and microfinance institutions that are committed to provide inclusive financial services to member clients. |
| Keywords: | regulatory framework, global financial crisis, loan portfolio quality, credit crunch, inclusive financial service |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:phd:dpaper:dp_2009-24_(revised)&r=ent |