|
on Entrepreneurship |
| By: | Henrekson, Magnus (Research Institute of Industrial Economics (IFN)); Sanandaji, Tino (Research Institute of Industrial Economics (IFN)) |
| Abstract: | Previous research, notably Baumol (1990), has highlighted the role of insti-tutions in channeling entrepreneurial supply into productive, unproductive or destructive activities. However, entrepreneurship is not only influenced by institutions—entrepreneurs often help shape institutions themselves. The bilateral causal relation between entrepreneurs and institutions is examined in this paper. Entrepreneurs affect institutions in at least three ways. Entrepreneurship abiding by existing institutions is occasionally disruptive enough to challenge the foundations of prevailing institutions. Entrepreneurs sometimes have the opportunity to evade institutions, which tends to undermine the effectiveness of the institutions, or cause institutions to change for the better. Lastly, entrepreneurs can directly alter institutions through innovative political entrepreneurship. As business entrepreneurship, innovative political activity may be productive or unproductive, depending on the incentives facing entrepreneurs. |
| Keywords: | Entrepreneurship; Innovation; Institutions; Regulation; Self-employment |
| JEL: | L50 M13 O31 P14 |
| Date: | 2010–04–19 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:0830&r=ent |
| By: | Lepoutre, J.; Van den Berghe, W.; Tilleuil, O.; Crijns, H. (Vlerick Leuven Gent Management School) |
| Abstract: | This papers aims to contribute to a better understanding of the effects of entrepreneurship education among secondary school pupils. Using a combination of retrospective pretest-posttest and self-perceived change measures, we assessed changes in entrepreneurial intent, creativity and attitudes towards entrepreneurs as a result of a variation of 21 entrepreneurship education programs among 3130 pupils in Flanders, Belgium. Furthermore, we grounded entrepreneurial intent in Shapero’s Entrepreneurial Event model and tested the impacts of the entrepreneurship perceived feasibility, perceived desirability and propensity to act. We find that the higher the intensity and experientiality of the entrepreneurship programs, the stronger their impact on some of the variables investigated. Furthermore, we found that the subjective evaluation of the program by the pupils had an even stronger effect on all investigated changes. As such, our findings highlight the importance of both objectively measurable program characteristics, as well as their subjective evaluation by the pupils in order to increase their effectiveness. |
| Date: | 2010–03–06 |
| URL: | http://d.repec.org/n?u=RePEc:vlg:vlgwps:2010-01&r=ent |
| By: | Sascha Ruhle (Schumpeter School of Business and Economics, Bergische Universität Wuppertal); Daniel Mühlbauer (Schumpeter School of Business and Economics, Bergische Universität Wuppertal); Marc Grünhagen (Lehrstuhl für Unternehmensgründung und Wirtschaftsentwicklung, Bergische Universität Wuppertal); Jens Rothenstein (Lehrstuhl für Empirische Wirtschafts- und Sozialforschung, Bergische Universität Wuppertal) |
| Abstract: | This working paper addresses the question which dimensions of Ajzens (1988) Theory of Planned Behavior, named attitude towards start-up, perceived behavioral control and subjective norms can be used to explain the entrepreneurial intentions of business students. Furthermore we hypotheses an influence of attendance in entre-preneurship lectures, having entrepreneurs within ones family and the cultural background as possible enhancers of entrepreneurial intentions via the dimensions of the TPB. We found not only a highly significant connection between all dimensions of Ajzens model and the entrepreneurial intention, but although evidences for an influ-ence of the individuals social and cultural background on the EI. |
| Keywords: | Entrepreneurial Intentions, Theory of planned behavior, university entrepreneurship, student survey, new firm creation |
| JEL: | L26 |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:bwu:schdps:sdp10004&r=ent |
| By: | Katalin Erdõs (Department of Economics and Regional Studies, University of Pécs); Attila Varga (Department of Economics and Regional Studies, University of Pécs) |
| Abstract: | Knowledge flows from universities to the regional economy can take different forms ranging from formal research collaborations to consultancy and informal personal connections. One of the knowledge communication channels drawing substantial interest of both researchers and regional policy makers is academic spin-off firm formation. According to the concept of the “academic entrepreneur” (Etzkowitz) university spin-off firm formation has grown naturally from the academic culture of the US where professors traditionally behave very much like entrepreneurs while setting up and maintaining research labs, hiring research assistants, “marketing” research results in conferences and publications or networking with colleagues and funding agencies. Spinning off a company is just a step forward from such entrepreneurial tasks of academics. Thus according to this concept academic motivations are main drivers in university spin-off firm formation in the US. Despite this challenging view the empirical literature pays relatively little attention to the particular “academic” features of university spin-offs and rarely considers the specificities of university entrepreneurship most notably the role of scientists as entrepreneurs. Empirical evidence suggests that Europe performs less successfully than the US in transferring knowledge from university labs to the regional economy via spin-off companies. One potential reason behind this difference is that institutions that determine the continental European research system hold back the emergence of academic entrepreneurs. Thus it is the main research question in our paper whether those specific “academic” drivers behind university spin-off firm formation are present at all in the continental European context. The related question is whether professional characteristics of the academics, their social capital, the norms of academia and the academic and business environment support or hinder these academic motivations? This paper is based on interviews carried out with university researchers who actively participate in firm formation in Hungary. Hungary is an excellent European case since the features of its university system are rooted in the continental (mainly German) tradition, but it also inherits some characteristics from the even more centralized socialist (soviet) tradition. |
| Keywords: | University, spin-off, academic entrepreneurship, regional university technology transfer |
| JEL: | I23 O18 O33 R11 |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:pec:wpaper:2009/7&r=ent |
| By: | Poschke, Markus (McGill University) |
| Abstract: | "Entrepreneurs out of necessity" identified by the Global Entrepreneurship Monitor survey are a sizeable group across countries. They tend to have low education, run smaller firms, expect their firms to grow less, but are likely to stay in the market. This evidence is a challenge for existing theories of heterogeneous firms. |
| Keywords: | entrepreneurship, firm size |
| JEL: | L26 O40 |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4893&r=ent |
| By: | Samaniego, Roberto |
| Abstract: | This paper uncovers evidence of s potentially important channel linking financial development to growth: the financing of innovations introduced by entrepreneurs. Using internationally comparable data on European countries, entry and exit in research-intensive industries are found to be disproportionately sensitive to the level of financial development. Furthermore, financial development is related to increased R&D spending. The results are robust to several different measures of financial development, and are supported by surveys of the sources of finance used by entrepreneurs. The evidence suggests that intellectual property rights provide the institutional underpinning for financial markets to direct funds towards innovative entrepreneurs. |
| Keywords: | Entry; exit; financial development; creative destruction; R&D intensity; entrepreneurship; intellectual property rights. |
| JEL: | G18 O16 L26 O33 O31 O14 |
| Date: | 2009–12–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:22348&r=ent |
| By: | Uwe Cantner (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Maximilian Goethner (Friedrich Schiller University of Jena, Department of Economics, DFG-GK-1411 "The Economics of Innovative Change"); Michael Stuetzer (Friedrich Schiller University of Jena, Department of Economics, DFG-GK-1411 "The Economics of Innovative Change") |
| Abstract: | Previous research on entrepreneurial teams has failed to settle the controversy over whether team heterogeneity helps or hinders new venture performance. Reconciling this inconsistency, this paper suggests a new conceptual approach to disentangle differential effects of team heterogeneity by modeling two separate heterogeneity dimensions, namely knowledge scope and knowledge disparity. Analyzing unique data on functional experiences of the members of 337 start-up teams, we find support for our contention of team heterogeneity as a two-dimensional concept. Results suggest that knowledge disparity negatively relates to both start-ups' entrepreneurial and innovative performance. In contrast, we find knowledge scope to positively affect entrepreneurial performance, while it shows an inverse U-shaped relationship to innovative start-up performance. |
| Keywords: | Entrepreneurial teams, New venture performance, Team heterogeneity, Team diversity |
| JEL: | L26 M13 L25 |
| Date: | 2010–04–26 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2010-029&r=ent |
| By: | Henrekson, Magnus (Research Institute of Industrial Economics (IFN)); Johansson, Dan (The Ratio Institute); Stenkula, Mikael (Research Institute of Industrial Economics (IFN)) |
| Abstract: | Public policy affects the prevalence and performance of both productive and high-impact entrepreneurship. High-impact entrepreneurship prospers when knowledge is successfully generated and exploited in the economy. This process depends on complementary key actors who use their competencies in what we denote a competence bloc. Although variations in economic contexts make prescribing a general panacea impossible, a number of relevant policy areas that affect key actors can be identified. In this paper this is done in the areas of tax policy and labor market policy. It is shown that high and/or distortive taxes and heavy labor market regulations impinge on the creation and functioning of competence blocs, thereby reducing high-impact entrepreneurship. |
| Keywords: | Entrepreneurship; Gazelles; High-growth firms; High-impact entrepreneurship Innovation; Institutions; Labor market policy; Tax policy |
| JEL: | H32 L25 L50 M13 O31 P14 |
| Date: | 2010–04–28 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ratioi:0149&r=ent |
| By: | Henrekson, Magnus (Research Institute of Industrial Economics (IFN)); Johansson, Dan (The Ratio Institute) |
| Abstract: | This essay argues that the economic contribution of certain firms – be they small, young or rapidly growing – has to be understood in a broader context of creative destruction. Growth of some firms requires contraction and exit of some other firms to free up resources that can be reallocated to expanding firms. Entry and expansion are flip sides to exit and contraction and the process through which the factors of production are put into different use defines structural transformation. We analyze institutions and policies conducive to structural transformation, in particular the expansion of high-growth firms (HGFs), since they have empirically been shown to contribute disproportionately to economic development. Firm growth is viewed as resulting from the continuous discovery and use of productive knowledge. Rapid firm growth requires a set of economic actors with complementary competencies that work together to identify and commercialize novel business ideas. The institutional framework determines the incentives for these individuals to acquire and utilize knowledge. We identify a number of institutions that encourage the creation of HGFs and promote structural transformation. In particular, our analysis points to the key roles played by tax structures, labor market regulation, and the contestability of service markets. Even in advanced economies, there is a large untapped economic potential which can be unleashed by institutional changes, such as the opening up of closed markets for entrepreneurial competition. However, there is no “quick-fix” that will boost the frequency of HGFs and structural transformation. Our analysis suggests that policymakers need to adopt a broad approach and implement a wide array of complementary institutional reforms to increase the prevalence of HGFs and to facilitate structural transformation. |
| Keywords: | Entrepreneurship; Firm growth; Gazelles; High-growth firms; High-impact firms; Institutions; Job creation; Rapidly growing firms |
| JEL: | D21 L25 M13 O10 O40 |
| Date: | 2010–04–28 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ratioi:0150&r=ent |
| By: | Collewaert, V.; Manigart,S. (Vlerick Leuven Gent Management School) |
| Abstract: | This paper investigates how angel investors’ human capital affects the valuation of their portfolio companies at initial investment, based on the pre-money valuation of 59 investments in young Belgian companies. We show that entrepreneurs are able to negotiate higher valuations with angel investors who have a business degree, more entrepreneurial experience or previous professional law experience. As such, this result is in contrast with the behavior of venture capital investors. Angel investors with financial experience, however, value their investments lower: their financial background leads them to stress the financial side of the deal more. |
| Keywords: | risk capital, business angels, angel investors, human capital, valuation |
| Date: | 2009–11–19 |
| URL: | http://d.repec.org/n?u=RePEc:vlg:vlgwps:2009-30&r=ent |
| By: | Sylvie Demurger (GATE Lyon Saint-Etienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - Ecole Normale Supérieure Lettres et Sciences Humaines); Hui Xu (GATE Lyon Saint-Etienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - Ecole Normale Supérieure Lettres et Sciences Humaines) |
| Abstract: | This paper analyzes return migrants' occupational choice upon their return to their home village, by using an original rural household survey conducted in Wuwei county (Anhui province, China) in 2008. We apply two complementary approaches : a horizontal comparative analysis of occupational choice between non-migrants and return migrants, and a vertical investigation of the impact of migration experience on returnees only. Two main findings are drawn up from the estimation of probit models which account for potential selection bias and endogeneity. First, return migrants are more likely to be self-employed and to opt for higher ability jobs than non-migrants. Second, both return savings and the frequency of job changes during migration increase the likelihood for return migrants to become self-employed. These findings suggest that (a) working experience during migration enhances individual's human capital and entrepreneurial ability, and (b) repatriated migration experience is a key stimulating factor in promoting rural entrepreneur activity. |
| Keywords: | Return migrants ; occupational change ; entrepreneurship ; Asia ; China |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-00477241_v1&r=ent |
| By: | Neffke, F. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University); Henning, M. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University) |
| Abstract: | This article studies path dependent regional structural change using a quantitative framework. Based on an inter-industry skill-relatedness indicator, the degree to which local skill-bases exist and force local economies onto a path-dependent development trajectory is studied. The main question is into which local industries new plants enter, while distinguishing between the plants of entrepreneurs and firms. Using a dataset on Swedish individuals and municipalities, it is found that entrepreneurs tend to reinforce established local industrial specializations, whereas new plants of already existing firms do less so. Moreover, outside actors deepen local economy’s core specialization more than do local actors. |
| Keywords: | structural change;region;path dependence;entrepreneurship;skill-relatedness;human capital |
| Date: | 2010–03–24 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:eureri:1765019207&r=ent |
| By: | Seghers, A.; Manigart, S.; Vanacker,T. (Vlerick Leuven Gent Management School) |
| Abstract: | This paper examines how entrepreneurs’ human and social capital influence their knowledge of finance alternatives. For this purpose, we use survey data from 125 Belgian start-ups. Results demonstrate that entrepreneurs with a business education and entrepreneurs with experience in accountancy or finance have a broader knowledge of finance alternatives. Having a strong network in the financial community further enhances the knowledge of finance alternatives. However, more generic human capital has almost no impact on the knowledge of finance alternatives. Overall, this study demonstrates how not only supply-side factors, but also demand-side factors may constrain entrepreneurs in their search for finance. |
| Date: | 2009–11–19 |
| URL: | http://d.repec.org/n?u=RePEc:vlg:vlgwps:2009-28&r=ent |
| By: | Pere Arqué Castells (Universitat de Barcelona & IEB) |
| Abstract: | This paper studies the relationship between venture capital (VC) and innovation using a self-collected dataset containing 119 innovative, VC-funded firms and 164,486 controls that operate in Spain. Probit model estimates indicate that firms that have applied for at least one patent are significantly more likely to obtain VC investments. However, when implementing a matching approach to correct for selectivity, no evidence is found of a significant impact of VC on firms’ patenting activity. Rather, evidence is found of a positive effect of VC on the sales growth of funded firms. These results suggest that, rather than having an impact on innovation activities, venture capitalists (VCs) focus on the commercialization of existing products. A finer breakdown by ownership and investment stage also provides evidence that private VCs and early stage investments are notably more effective at stimulating sales than public VCs and late stage investments respectively. |
| Keywords: | Venture capital, innovation, patents, matching estimator |
| JEL: | G24 O32 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:2010/4/doc2010-12&r=ent |
| By: | Erzo G.J. Luttmer |
| Abstract: | Although employment at individual firms tends to be highly non-stationary, the employment size distribution of all firms in the United States appears to be stationary. It closely resembles a Pareto distribution. There is a lot of entry and exit, mostly of small firms. This paper surveys general equilibrium models that can be used to interpret these facts and explores the role of innovation by new and incumbent firms in determining aggregate growth. The existence of a balanced growth path with a stationary employment size distribution depends crucially on assumptions made about the cost of entry. Some type of labor must be an essential input in setting up new firms. |
| Keywords: | Productivity |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedmwp:678&r=ent |
| By: | Sugato Chakravarty (Purdue University); Meifang Xiang (University of Wisconsin, Whitewater) |
| Abstract: | We use a unique firm-level survey database compiled by the World Bank to examine the drivers of discouraged small businesses in various developing economies around the world. We confirm that older and larger firms are less likely to be discouraged and that the level of competition and the relationships of the firms with banks have a significant impact on the probability of a firm in being discouraged. Further analysis suggests that drivers of discouragement work differently for firms operating in relatively developed and underdeveloped economies. We also provide evidence that firm discouragement, as an efficient self-screening mechanism, is not as efficient in underdeveloped economies as it is in the United States. |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:csr:wpaper:1003&r=ent |
| By: | Appelt, Silvia |
| Abstract: | Patent holders frequently attempt to mitigate the loss of monopoly power by authorizing generic entry prior to patent expiry (early entry). Competition in off-patent pharmaceutical markets may be adversely affected if early entry substantially impairs the attractiveness of subsequent market entry. I examine generic entry decisions made in the course of recent patent expiries to quantify the impact of early entry on incentives for generic entry. Using unique micro data and accounting for the endogeneity of early entry, I estimate recursive bivariate probit models of entry. Drug markets' pre-entry revenues largely determine both independent generic entry and early entry decisions. Early entry in turn has no significant impact on the likelihood of generic entry. Original drug producers appear to authorize generic entry prior to loss of exclusivity primarily fueled by rent-seeking rather than strategic entry-deterrence motives. |
| Keywords: | Generic Entry; Early Entry; Anticompetitive Practices |
| JEL: | L41 I11 O34 C35 |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:lmu:muenec:11476&r=ent |
| By: | Ederington, Josh; McCalman, Phillip |
| Abstract: | A perennial case for industrial policy is based on the protection of young or emerging industries. Despite a natural association with concepts of life cycles, industrial policy has not been analyzed in the context of an industry life-cycle model. In particular, an important life-cycle characteristic, the potential for very large changes in the rate of net entry, is ignored. In this paper, we demonstrate how the impact of industrial policy depends critically on the entry and exit dynamics within an industry. In particular, we construct a model of technology adoption in which the number of firms is endogenous, and derive a set of novel predictions about the effects of protection on firm technology decisions. Specifically, we show that permanent protection can induce earlier adoption, but also decreases the probability that a given firm adopts the new technology. Likewise, we demonstrate that reducing the duration of protection results in faster adoption than permanent protection, but also reduces a given firms probability of adoption. Finally, we show that, for industries characterized by flexibility in firm numbers, protection does not change the rate of technology adoption but does increase the size and probability of a shakeout (large scale net exit). |
| Keywords: | GATT/WTO; Trade Policy; Trade and Firm Productivity |
| JEL: | F1 |
| Date: | 2009–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:22361&r=ent |