nep-ent New Economics Papers
on Entrepreneurship
Issue of 2010‒03‒13
eight papers chosen by
Marcus Dejardin
Notre-Dame de la Paix University

  1. What's the Difference?! Gender, Personality, and the Propensity to Start a Business By Furdas, Marina; Kohn, Karsten
  2. Effects of Regional Human Capital Structure on Business Entry: A Comparison of Independent Startups and New Subsidiaries in Different Industries By Kenta Ikeuchi; Hiroyuki Okamuro
  3. Firm growth: empirical analysis By Alex Coad; Werner Hölzl
  5. Financial Crisis, Trade Finance, and SMEs: Case of Central Asia By Pasadilla, Gloria O.
  6. Plant Size, Nationality, and Ownership Change By Baldwin, John R.; Wang, Yanling
  7. The effects of tax incentives for small firms on employment levels By Corseuil, Carlos Henrique L.; Moura, Rodrigo Leandro de.
  8. R&D strategy of small and medium enterprises in India: Trends and determinants By Pradhan, Jaya Prakash

  1. By: Furdas, Marina (University of Freiburg); Kohn, Karsten (KfW Bankengruppe)
    Abstract: Women start fewer businesses than men. The start-up rate among women in Germany falls short of males' start-up rate by one third. We scrutinize this gender gap using individual-level data from the KfW Start-up Monitor, a large-scale population survey on start-up activity in Germany. As a unique feature, the data combine socio-demographic characteristics, entrepreneurship-related attitudes, and general personality traits of both business starters and non-starters. Estimating binary choice models and employing decomposition techniques, we find that gender differences in socio-demographics alone would even be in favor of higher start-up rates among women, while the distribution of personality traits is less favorable for business start-ups among women and explains about one third of the entire gender difference. Most substantially, men opt for a start-up more often even given identical human capital and related endowments. Qualificational policies targeted towards higher educational attainments of potential entrepreneurs do thus not suffice to increase the number of female business starters.
    Keywords: entrepreneurship, gender difference, start-up propensity, decomposition analysis, KfW Start-up Monitor, Germany
    JEL: J16 L26 M13
    Date: 2010–02
  2. By: Kenta Ikeuchi; Hiroyuki Okamuro
    Abstract: This paper aims to investigate the regional determinants of entry with special attention to the effects of regional human capital, using prefecture-level data from Japan. On the basis of some recent studies in the field, we investigate the effects of several regional factors on business entry, distinguishing between independent startups and new subsidiaries of existing firms on the one hand, and comparing different sectors on the other. Using pooled regional data at the prefecture level for our periods between 1996 and 2006, we estimate the impact of various regional factors, including human capital structure, on the number of independent startups and new subsidiaries for each industry sector, simultaneously. Estimation results demonstrate considerable differences between independent startups and subsidiaries as well as among different industry sectors with regard to the impact of regional human capital structure on business entry. First, the entry of independent startups in the manufacturing sector is positively related with regional human capital. Second, in contrast to our hypothesis, we found a positive relationship between regional human capital structure and the entry of new subsidiaries in the service sector. Third, the regional human capital structure is more important for regional entrepreneurship in more technology-intensive (high-tech) service industries. Considering the possible implications, we suggest that the regional policy to activate business startups should focus more on the differences between encouraging local entrepreneurship and attracting new subsidiaries, and recognize that these differences may vary even within the service sector, depending on what type of human capital is required.
    Keywords: entry, region, independent startup, subsidiary, entrepreneurial human capital
    JEL: L26 M13 R32
    Date: 2010–02
  3. By: Alex Coad; Werner Hölzl
    Abstract: Recent research has led to the empirical regularity that firm growth rate distributions are heavy tailed. This finding implies that a few firms experience spectacular growth rates and decline, but that most firms have marginal growth rates. The literature on high growth firms shows that high growth firms are the central drivers of job creation in the economy but that these firms are neither clustered in high technology sectors nor are these firms necessarily young and small. The evidence on the determinants of firm growth confirms that firm growth is difficult to predict. The finding that firm growth is well approximated by a random process does not only reflect the heterogeneity at the firm level but is also associated with the low persistence of growth rates over time.
    Keywords: firm growth Length 25 pages
    JEL: L11 L25
    Date: 2010–02
  4. By: Gerard Llobet (CEMFI, Centro de Estudios Monetarios y Financieros); Javier Suarez (CEMFI, Centro de Estudios Monetarios y Financieros)
    Abstract: We assess the effects of imitation and intellectual property (IP) protection in a model of industry dynamics in which the value of IP is eroded by further innovations and imitations. Innovations result from the development of ideas engendered by entrepreneurs. We find that innovation and welfare are decreasing in the protection of IP against further innovations, while their relationship with the protection against imitations typically has an inverted-U shape (partly because imitation reduces the resistance of incumbents to innovators). We also find that the welfare gains from increasing IP protection increase if entrepreneurs are financially constrained.
    Date: 2010–02
  5. By: Pasadilla, Gloria O. (Asian Development Bank Institute)
    Abstract: This paper surveys studies of the importance of Central Asian small- and medium-sized enterprises (SME) in the economy and their experience during the Russian financial crisis. It also uses survey data from the European Bank for Reconstruction and Development’s Business Environment and Enterprise Performance Surveys to infer noteworthy characteristics, features, and dependencies on financing of Central Asian SMEs and, consequently, derive the potential impact of the crisis on the sector. The paper also assesses government support for SMEs and the necessary market reforms that will give a boost to the sector’s development in the region.
    Keywords: smes; central asia; financial policies; financial development; small- and medium-sized enterprises
    JEL: E44 G18 G28 G38
    Date: 2010–01–25
  6. By: Baldwin, John R.; Wang, Yanling
    Abstract: This paper asks whether synergies or managerial discipline operates in different ways across small versus large plants to affect the likelihood of mergers. Our findings indicate that those characteristics which provide the type of synergies upon which ownership changes rely are important factors leading to plant-ownership changes across most size classes. The magnitudes, however, are different across plant-size classes, with synergies generally being more important in larger plants. Foreign plants in all size classes are more likely to be taken over. The effective rates of control change differ much more in the small than in the larger size classes. Compared to domestic plants, multinational plants in the smaller size classes contain relatively more of the type of intangible capital that makes them attractive vehicles for the transmission of new knowledge via takeover.
    Keywords: Business performance and ownership, Business adaptation and adjustment, Business cycles, Business ownership, Entry, exit, mergers and growth
    Date: 2010–02–25
  7. By: Corseuil, Carlos Henrique L.; Moura, Rodrigo Leandro de.
    Abstract: This paper will examine the effects of tax incentives for small businesseson employment level evaluating a program with this purpose implemented in Brazil in the 1990s. We first develop a theoretical framework which guides both the de nition of the parameters of interest and their identi cation. Selection problems both into the treatment group and into the data sampleare tackled by combining fi xed effects methods and regression discontinuity design on alternative sub-samples of a longitudinal database of manufacturing fi rms. The results show that on the one hand the size composition of thetreated fi rms may be changed due to the survival of some smaller fi rms that would have exited had it not been eligible to the program. On the other hand, the treated fi rms who do not depend on the program to survive do employ more workers.
    Date: 2010–02–22
  8. By: Pradhan, Jaya Prakash
    Abstract: The liberalization of economic policies in the last two decades and intensifying market competition tend to be a cause of policy concern for the survival of SMEs in emerging economies like India as these firms accounts for the largest chunk of industrial units and employment. Given their limited financial and intangible resources, the promotion of R&D among SMEs has become a very important policy parameter. The aim of this paper is to contribute to the literature on Indian R&D by analyzing the trends and patterns of R&D investment by Indian manufacturing SMEs during the period 1991−2008 and exploring various factors that determine their R&D behaviour. The results show that Indian SMEs have lowest incidence of doing in-house R&D and their R&D intensities have fallen in the last decade. A number of factors that play important role in determining SME R&D have been identified based on the three steps Censored Quantile Regression and some useful policy implications are suggested for enhancing R&D activities of small firms.
    Keywords: SMEs; R&D; Business Groups; Foreign Firms
    JEL: L11 F23 O32 L22 O31
    Date: 2010–02–24

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