nep-ent New Economics Papers
on Entrepreneurship
Issue of 2010‒10‒16
eight papers chosen by
Marcus Dejardin
Notre-Dame de la Paix University

  1. Clusters and Entrepreneurship By Mercedes Delgado; Michael Porter; Scott Stern
  2. Entry Regulation and Entrepreneurship: Empirical Evidence from a German Natural Experiment By Davud Rostam-Afschar
  3. Differences between entrepreneurs and employees in their educational paths By Uschi Backes-Gellner; Simone Tuor; Daniela Wettstein
  4. The Regional Supply of Venture Capital - Can Syndication overcome Bottlenecks? By Michael Fritsch; Dirk Schilder
  5. The contribution of corporate ventures to radical innovation By Czarnitzki, Dirk; Dick, Johannes M. H.; Hussinger, Katrin
  6. Productivity increases in SMEs : with special emphasis on in-service training of workers in Korea By Woo, Kye Lee
  7. The investment in job training : why are SMEs lagging so much behind? By Almeida, Rita K.; Aterido, Reyes
  8. Einstiegsgeld als Gründungsförderung : Teilnehmerstrukturen und Determinanten der Förderleistung By Haller, Stefanie; Wolff, Joachim; Zabel, Cordula

  1. By: Mercedes Delgado; Michael Porter; Scott Stern
    Abstract: This paper examines the role of regional clusters in regional entrepreneurship. We focus on the distinct influences of convergence and agglomeration on growth in the number of start-up firms as well as in employment in these new firms in a given region-industry. While reversion to the mean and diminishing returns to entrepreneurship at the region-industry level can result in a convergence effect, the presence of complementary economic activity creates externalities that enhance incentives and reduce barriers for new business creation. Clusters are a particularly important way through which location-based complementarities are realized. The empirical analysis uses a novel panel dataset from the Longitudinal Business Database of the Census Bureau and the U.S. Cluster Mapping Project (Porter, 2003). Using this dataset, there is significant evidence of the positive impact of clusters on entrepreneurship. After controlling for convergence in start-up activity at the region-industry level, industries located in regions with strong clusters (i.e. a large presence of other related industries) experience higher growth in new business formation and start-up employment. Strong clusters are also associated with the formation of new establishments of existing firms, thus influencing the location decision of multiestablishment firms. Finally, strong clusters contribute to start-up firm survival.
    Keywords: Entrepreneurship, Industry Clusters, Dynamic Economies of Agglomeration
    Date: 2010–09
  2. By: Davud Rostam-Afschar
    Abstract: The amendment to the German Trade and Crafts Code in 2004 offers a natural experiment to asses the causal effects of this reform on the probabilities of being self-employed and transition into and out of self-employment, using cross-sections (2002-2006) of German microcensus data. This study applies the difference-in-differences technique in logit models for four occupational groups. Easing the educational entry requirement has fostered self-employment significantly for less qualified craftsmen, almost doubling the entry probability, even as exit rates remained unaffected. Weaker effects occur for other occupational groups. These findings have implications for the design of regulations with educational requirements.
    Keywords: Regulation, Entrepreneurship, Educational entry requirement, Natural experiment, Craftsmanship
    JEL: L51 J24 I28 M13
    Date: 2010
  3. By: Uschi Backes-Gellner (Institute for Strategy and Business Economics, University of Zurich); Simone Tuor (Institute for Strategy and Business Economics, University of Zurich); Daniela Wettstein (Institute for Strategy and Business Economics, University of Zurich)
    Abstract: This paper examines whether individuals who become either entrepreneurs or employees follow sys-tematically different educational paths to a given educational level. Following Lazear’s jack-of-all-trades theory, we expect that entrepreneurs aim at a balanced set of different skills (academic or voca-tional), while employees specialize in one skill. This means that entrepreneurs follow educational paths that combine different types of education, while employees follow same-type paths while climb-ing up the educational ladder. We use the Swiss Labor Force Survey to test our hypothesis. Our em-pirical findings are in line with Lazear’s theory. Individuals who change between different types of education are more likely to become entrepreneurs. Thus, the permeability of a national educational system is one crucial determinant for entrepreneurship.
    Keywords: Entrepreneurship, Jack-of-all-trades, Educational paths
    JEL: I21 J24 M50
    Date: 2010–10
  4. By: Michael Fritsch (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Dirk Schilder
    Abstract: We investigate whether the supply of venture capital (VC) is driven by spatial proximity between a VC company and the portfolio firm. Our analysis is based on information about VC investments in Germany between 2004 and 2009. We find that possible problems caused by the geographic distance to a portfolio firm seem to be overcome by syndication of investments with one of the VC firms located close to the investment. Our analysis does, however, suggest that short geographic distance between an investor and the investment has an increasing effeon the probability for syndication as well as on the number of firms that join the syndicate. Hence, local VC suppliers may assume a role of an 'anchor' connecting the regional economy to more distant parts of the industry.
    Keywords: Venture Capital, syndication, geographic proximity, start-up financing, equity gap
    JEL: G24 O16 D21 M13 R12
    Date: 2010–10–05
  5. By: Czarnitzki, Dirk; Dick, Johannes M. H.; Hussinger, Katrin
    Abstract: Established firms often face significant obstacles to innovation. As a solution, it has been suggested to form corporate ventures. Based on a sample of corporate and independent ventures in German manufacturing, we show that corporate ventures are more innovative than the control group, i.e. the independent ventures. In particular, corporate ventures are more successful at developing radical innovations. This effect, however, decreases with the ventures' degree of ownership concentration. We conclude that corporate ventures with a high ownership concentration are more likely to be controlled and monitored by their corporate sponsors, resulting in less favorable conditions for radical innovation. --
    Keywords: corporate entrepreneurship,start-ups,radical innovation
    JEL: L26 M13 O31 O32
    Date: 2010
  6. By: Woo, Kye Lee
    Abstract: This paper is about the evolution of an innovative in-service training program and its effects in Korea. In many developing countries, small and medium enterprises (SMEs) play important roles in outputs, exports, and employment. Therefore, governments have used various policy instruments to promote productivity of SMEs through in-service training of their workers. However, those policy tools have not been effective to date. An exception to this general trend was found in Korea. The Government of Korea tested a pilot in-service training project and achieved significant results.The government encouraged SMEs to organize themselves into training consortiums (TCs) and provided them with institutional and technical assistance by financing employment of training specialists who manages human resources development of TC-member SMEs. Since mainstreaming, nevertheless, the progress of the TC program has been less than magnificent. Some factors responsible for the lukewarm achievements are analyzed and policy measures for reinvigorating the program have been suggested, together with some lessons learned.
    Keywords: Education For All,Primary Education,Access&Equity in Basic Education,Tertiary Education,Water Education
    Date: 2009–11–01
  7. By: Almeida, Rita K.; Aterido, Reyes
    Abstract: This paper analyzes the link between firm size and the investment in job training by employers. Using a large firm level data set across 99 developing countries, we show that a strong and positive correlation in the investment in job training and firm size is a robust statistical finding both within and across countries with very different institutions and level of development. However, the findings do not support the view that this difference is mostly driven by market imperfections disproportionally affecting small and medium enterprise sector (SMEs). Rather, our evidence is supportive of SMEs having a smaller expected return from the investment in job training than larger firms. Therefore, the findings call for caution when designing pro-SME policies fostering the investment in on the job training.
    Keywords: Education For All,Labor Policies,Primary Education,Microfinance,Labor Markets
    Date: 2010–05–01
  8. By: Haller, Stefanie; Wolff, Joachim (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Zabel, Cordula (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "Business start-up schemes for the unemployed have been the focus of much research in recent years. However, not much is known about self-employment programs directed specifically towards welfare benefit recipients. For this latter group, a program granting start-up subsidies for up to 24 months was introduced in Germany in 2005, along with the implementation of Social Code II. Our research report investigates for the years 2005 to 2009 how the group of participants is structured. Specifically, we compare the participants' composition with respect to gender, age, education, nationality, and job-reentrant status to that of all unemployed welfare benefit recipients, based on figures provided by the statistics department of the Federal Employment Agency. Furthermore, using micro data we investigate determinants of the level of the start-up subsidy. Here, we focus on examining how the level of the subsidy varies with the participants' household size and unemployment duration. Legal regulations, implementation guidelines for job centers, as well as more recently a decree stipulate that the level of the subsidy should be adjusted according to these factors." (author's abstract, IAB-Doku) ((en))
    Keywords: Einstiegsgeld, Unternehmensgründung - Förderung, Arbeitslosengeld II-Empfänger, Förderungsgrundsätze, Geschlechterverteilung, Altersstruktur, Qualifikationsniveau, Nationalität, Teilnehmerstruktur, arbeitsmarktpolitische Maßnahme
    Date: 2010–09–30

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