nep-ent New Economics Papers
on Entrepreneurship
Issue of 2010‒06‒04
eight papers chosen by
Marcus Dejardin
Notre-Dame de la Paix University

  1. Evidence-Based Management for Entrepreneurial Environments: Faster and Better Decisions with Less Risk By Pfeffer, Jeffrey
  2. Performing in Dutch Book Publishing 1880-2008. The Importance of Entrepreneurial Experience and the Amsterdam Cluster By Barbara Heebels; Ron Boschma
  3. Ethnic Concentration, Cultural Identity and Immigrant Self-Employment in Switzerland By Giuliano Guerra; Roberto Patuelli; Rico Maggi
  4. The impact of the business environment on young firm financing By Chavis, Larry W.; Klapper, Leora F.; Love, Inessa
  5. Innovation, Credit Constraints, and Trade Credit: Evidence from a Cross-Country Study By Werner Bönte; Sebastian Nielen
  6. Obstacles to growth for small and medium enterprises in Turkey By Seker, Murat; Correa, Paulo Guilherme
  7. Entrepreneurship in French non profit organizations dealing with medical, sanitary and social sector By Madina Rival
  8. Sind Selbständige zeit- und einkommensarm? Eine Mikroanalyse der Dynamik interdependenter multidimensionaler Armut mit dem Sozio-ökonomischen Panel und den deutschen Zeitbudgeterhebungen By Joachim Merz; Tim Rathjen

  1. By: Pfeffer, Jeffrey (Stanford University)
    Abstract: Entrepreneurship is risky. Most new technologies and new businesses fail. Shane (2008) reported that 25% of new businesses failed in the first year and that by the fifth year, fewer than half had survived. In the United Kingdom, Stark (2001) presented data showing a 75% failure rate for small and medium-sized enterprises in the first three years. The risk and high failure rate is because most new ideas and technologies are not good and are, therefore, rejected by the marketplace.
    Date: 2010–03
  2. By: Barbara Heebels; Ron Boschma
    Abstract: This paper investigates the spatial clustering of the book publishing industry. By means of a hazard model, we examine the effect of agglomeration economies and pre-entry entrepreneurial experience on the survival chances of publishing firms. Whereas such survival analyses have been conducted for manufacturing industries, they are still scarce for cultural and service industries. Based on a unique dataset of all book publishers founded between 1880 and 2008 in the Netherlands, the paper demonstrates that the clustering of book publishers in the Amsterdam region did not increase the survival of Amsterdam firms. Instead, prior experience in publishing and related industries had a positive effect on firm survival. The Amsterdam cluster was characterized by high entry and exit levels mainly. Interestingly, the Amsterdam cluster did not function as an attractor for publishing firms from other regions, but rather acted as an incubator for firms that relocated to other regions.
    Keywords: evolutionary economic geography, publishing industry, clusters, spinoffs
    JEL: O18 R00 L80
    Date: 2010–05
  3. By: Giuliano Guerra (Institute for Economic Research (IRE), University of Lugano, Switzerland); Roberto Patuelli (Institute for Economic Research (IRE), University of Lugano, Switzerland; The Rimini Centre for Economic Analysis (RCEA), Italy); Rico Maggi (Institute for Economic Research (IRE), University of Lugano, Switzerland)
    Abstract: Immigrant self-employment rates vary considerably across regions in Switzerland. Business ownership seems to provide an alternative to wage labour, where immigrants have to face structural barriers such as the limited knowledge of the local language, or difficulties in fruitfully making use of their own human capital. Despite the historically high unemployment rates with respect to natives, immigrants in Switzerland are less entrepreneurial. It is therefore important to uncover the determinants that may facilitate the transition from the status of immigrant to the one of economic agent. Among others factors, concentration in ethnic enclaves, as well as accumulated labour market experience and time elapsed since immigration, have been associated to higher business ownership rates. In this paper we use a cross-section of 2,490 Swiss municipalities in order to investigate the role played by the ethnic concentration of immigrants, as well as cultural factors, in determining self-employment rates.
    Keywords: self-employment, immigrants, Switzerland, ethnic concentration, cultural identity
    JEL: C21 J24 J61 O15 R23
    Date: 2010–05
  4. By: Chavis, Larry W.; Klapper, Leora F.; Love, Inessa
    Abstract: This paper uses a dataset of more than 70,000 firms in over 100 countries to systematically study the use of different financing sources for new and young firms, in comparison to mature firms. The authors find that in all countries younger firms rely less on bank financing and more on informal financing. However, they also find that younger firms use more bank finance in countries with stronger rule of law and better credit information, and that the reliance of young firms on informal finance decreases with the availability of credit information. Overall, the results suggest that improvements to the legal environment and availability of credit information are disproportionately beneficial for promoting access to formal finance by young firms.
    Keywords: Access to Finance,Debt Markets,Bankruptcy and Resolution of Financial Distress,Banks&Banking Reform,Financial Intermediation
    Date: 2010–05–01
  5. By: Werner Bönte (Schumpeter School of Business and Economics, Bergische Universität Wuppertal); Sebastian Nielen (Schumpeter School of Business and Economics, Bergische Universität Wuppertal)
    Abstract: This paper studies the relationship between trade credit and innovation. While trade credit is well researched in the finance literature, its link to innovation has been neglected in prior research. We argue that innovative small and medium-sized enterprises (SMEs) are more likely to use trade credit than non-innovative SMEs because of credit constraints and that business partners may have incentives to offer trade credit especially to innovative SMEs. The relationship between innovation and trade credit is empirically examined by using a sample of SMEs from 14 European countries. The results of an econometric analysis confirm a positive relationship between innovation and trade credit. In particular, SMEs with product innovations have a higher probability of using trade credit than other SMEs. Moreover, the results suggest that the effect of product innovation is only statistically significant if SMEs report that access to financing or cost of financing are obstacles for the operation and growth of their businesses. Hence, the results point to the relevance of trade credit as a source of short-term financing for innovative SMEs which are credit constrained.
    Keywords: trade credit, innovation, credit constraints
    JEL: G32 O31 L20
    Date: 2010–05
  6. By: Seker, Murat; Correa, Paulo Guilherme
    Abstract: Many studies have shown that firm growth decreases monotonically with size and age. In this study, the authors investigate employment growth of firms in Turkey with an emphasis on small and medium size enterprises. In Turkey, small and medium size enterprises account for almost 77 percent of employment and play a crucial role in the economy. However, the analysis of firm dynamics in Turkey shows that medium-size firms (51-250 workers) are theslowest growing group in the economy. Moreover, small and medium size enterprises grow at a slower rate in Turkey than in several comparator countries in the Eastern Europe and Central Asia region. After determining this irregularity, the paper analyzes how the investment climate affects firm growth and finds that improved access to finance is the most important factor that significantly increases firm growth rates.
    Keywords: Microfinance,Achieving Shared Growth,Small Scale Enterprise,Access to Finance,Emerging Markets
    Date: 2010–05–01
  7. By: Madina Rival (GREG - CRC - Groupe de recherche en économie et en gestion – Centre de recherche en comptabilité - Conservatoire National des Arts et Métiers)
    Abstract: In France, a large number of non-profit organizations are part of the third sector (services to clients) and are as such at the intersection of the market, the state and the informal sector. At the same time, the extensive development of Civil Society Organizations (CSO) leads to the reproduction of the practices stemming from the company in these a priori non-profit organizations. Today, those French NPOs above government supervision have to justify themselves. For example, do they bring entrepreneurship in public management? Our double case study underlines the original emergence of plural forms of CSO entrepreneurship. Actors' games are observed. Besides, we can speak about social entrepreneurship when CSO configure an offer of trade service. Finally, we sometimes observe a reconfiguration of the institutional borders of the CSO.
    Date: 2010
  8. By: Joachim Merz; Tim Rathjen (LEUPHANA University Lüneburg,Department of Economic, Behaviour and Law Sciences, Research Institute on Professions (Forschungsinstitut Freie Berufe (FFB)))
    Abstract: It is common sense that the self-employed – as professions and entrepreneurs – are rich by money and, because of their independence and time sovereignty, are rich by time, too. However, time stress and the variety of small businesses sometimes tell another story. This study tries to shed empirically based light on the issue and its dynamics by asking not only about income poverty but also about time poverty within the framework of a new interdependent multidimensional poverty approach. Database is the German Socio-Economic Panel (GSOEP) for the evaluation of the substitution/trade-off of genuine leisure time and income as well as the German Time Use Surveys (GTUS) 1991/92 and 2001/02 for the actual poverty analyses. Main result: The self-employed are more often affected by single income poverty, single time poverty as well as interdependent multidimensional time and income poverty than all other poor employees (“working poor”) for both periods of observation. A remarkable percentage of not income poor but time poor employees in general, and the self-employed in particular, is not able to compensate their time deficit by income. Neglecting the self-employed in the poverty and well-being discussion would disregard an important group of the “working poor”.
    Keywords: Self-employed, liberal professions (Freie Berufe), entrepreneurs, interdependent multidimensional time and income poverty, time and income substitution, extended economic well-being, satisfaction/happiness, CES welfare function estimation, working poor, German Socio-Economic Panel, German Time Use Surveys 1991/92 and 2001/02
    JEL: D31 D13 J22
    Date: 2010–05

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