nep-ent New Economics Papers
on Entrepreneurship
Issue of 2010‒02‒05
six papers chosen by
Marcus Dejardin
Notre-Dame de la Paix University

  1. Schumpeter versus Kirzner: An empirical investigation of opportunity types By Jeroen de Jong; Orietta Marsili
  2. Family ownership, innovation and other context variables as determinants of sustainable entrepreneurship in SMEs: An empirical research study By Gerrit de Wit; Lorraine Uhlaner; Marta Berent; Ronald Jeurissen
  3. Does interdisciplinarity lead to higher employment growth of academic spinoffs? By Müller, Bettina
  4. Social Business: A Step Toward Creating a New Economic and Social Order By Mohammad Yunus
  5. Innovative capability and financing constraints for innovation more money, more innovation? By Hottenrott, Hanna; Peters, Bettina
  6. Business Taxation, Corporate Finance and Economic Performance By Christian Keuschnigg; Evelyn Ribi

  1. By: Jeroen de Jong; Orietta Marsili
    Abstract: This paper empirically explores the distinction between Schumpeterian and Kirznerian opportunities by analyzing survey data of 184 high tech small business entrepreneurs. A multidimensional measure is developed documenting the extent in which entrepreneurial opportunities are either Schumpeterian or Kirznerian. It consists of five bipolar dimensions. We find that Schumpeterian opportunities are more likely to be pursued by innovative individuals with strong ambitions to grow their company. At the enterprise level, we find such opportunities in organizations with a strategic focus on proactive product development to satisfy future needs. Besides, Schumpeterian opportunities are found more often in relatively innovative organizations and pursued in rapidly growing markets. They seem to induce better growth in terms of sales and employment.
    Date: 2010–01–13
  2. By: Gerrit de Wit; Lorraine Uhlaner; Marta Berent; Ronald Jeurissen
    Abstract: This study focuses on the prediction of sustainable entrepreneurship, that is, behavior which demonstrates a firm’s concern about the natural environment, especially among small and medium sized enterprises (SMEs). Using a random sample of 642 Dutch SMEs we examine how organizational context (firm sector, size, ownership structure) and innovativeness influence SMEs engagement in sustainable entrepreneurship. Results show that manufacturing and construction firms, larger firms, family-owned firms, and firms with a more innovative orientation are more likely to report positive activity related to the natural environment. Results do not support the conclusion that the relationship between sustainable entrepreneurship and firm size is curvilinear. The paper discusses implications of the obtained results.  
    Date: 2010–01–22
  3. By: Müller, Bettina
    Abstract: Does heterogeneity in the educational backgrounds of the founders matter for firm success? Are team foundations more successful than single entrepreneurs? These questions are analysed using data on academic spinoffs in Germany. Firm success is measured by employment growth. I find that team foundations have higher employment growth than single entrepreneurs. Team foundations of engineers perform better when they have a business scientist in the team. However, different subjects per se and heterogeneity in the academic origins of the founders do not play a significant role for the employment growth of academic spinoffs. --
    Keywords: human capital,entrepreneurship,academic spinoffs,employment growth
    JEL: C12 L25 M13
    Date: 2009
  4. By: Mohammad Yunus
    Abstract: The concept of social business flows from a firm conviction that profit or benefit is not the only motivating factor for an entrepreneur and an entrepreneur can also be motivated by social goals and enjoy success. Social business, as advocated by the author, is essentially a non-loss, non-dividend business aimed at social objectives like education, health, environment, etc. Yet another type of social business is business that is profitable but is owned by the poor and the disadvantaged, who can gain either through receiving direct dividends or some indirect benefits.Seeing the effectiveness of social business, governments may decide to create their own social businesses or partner with citizen-run social businesses and/or incorporate the lessons from the social businesses to improve the effectiveness of their own programmes. [Second Professor Hiren Mukherjee Memorial Annual Lecture]
    Keywords: social business, microcredit, Nobel Laureate, Bangladesh,Economics, Political Science
    Date: 2010
  5. By: Hottenrott, Hanna; Peters, Bettina
    Abstract: This study presents a novel empirical approach to identify financing constraints for innovation based on the idea of an ideal test as suggested by Hall (2008). Firms were offered a hypothetical payment and were asked to choose between alternatives of use. If they choose additional innovation projects they must have had some unexploited investment opportunities that were not profitable using more costly external finance. That is, these firms have been financially constrained. We attribute constraints for innovation not only to lacking financing, but also to firms' innovative capability. Econometric results show that financial constraints do not depend on the availability of internal funds perse, but that they are driven by innovative capability. We find firms with high innovative capability but low financial resources to be most likely subject to financing constraints. Yet, we also observe constraints for financially sound firms that may have to put ideas on the shelf. --
    Keywords: Innovation,financing constraints,innovative capability,multivariate probit models
    JEL: O31 O32 C35
    Date: 2009
  6. By: Christian Keuschnigg; Evelyn Ribi
    Abstract: This survey of recent research in corporate finance discusses how business taxes, subsidies as well as a country's institutional development affect several important decision margins of heterogeneous firms. We argue that innovative firms, as a result of agency problems between insiders and outside investors, are most frequently finance constrained. We discuss how profit taxes reduce investment of constrained firms by their effect on cash-flow, and of unconstrained firms by their effect on the user cost of capital. Moreover, tax reform as well as tax financed R&D subsidies can enhance aggregate investment, innovation and efficiency by implicitly redistributing profits towards constrained firms where capital earns the highest return. We argue that the corporate legal form improves firms' access to external funds. We then explain the firms' choice between venture capital and bank financing and discuss how business taxation can affect venture capital financing on both the extensive and intensive margins. Finally, we review theory and evidence on how corporate finance may shape a country's comparative advantage in innovative industries as well as aggregate labor market performance when part of firms are finance constrained.
    Keywords: Financing constraints, innovation, business taxation, subsidies, entrepreneurial choice
    JEL: G38 H24 H25
    Date: 2010–01

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