nep-ent New Economics Papers
on Entrepreneurship
Issue of 2010‒11‒27
fourteen papers chosen by
Marcus Dejardin
Notre-Dame de la Paix University

  1. Financial Development, Entrepreneurship, and Job Satisfaction. By Bianchi, Milo
  2. Heterogeneous Exits: Evidence from New Firms By Masatoshi Kato; Yuji Honjo
  3. Government as Entrepreneur: Examples from U.S. Technology Policy By Link, Albert; Link, Jamie
  4. The Influence of Role Models on Immigrant Self-Employment: A Spatial Analysis for Switzerland By Giuliano Guerra; Roberto Patuelli
  5. A theoretical and empirical contribution for a better understanding of academic spin-offs’ growth patterns By Chiara Balderi; Andrea Piccaluga
  6. Pedagogical Innovations for Triggering Social and Economic Entrepreneurship among Youth By Gupta, Anil K
  7. Financial integration, entrepreneurial risk and global dynamics By Vasia Panousi; George-Marios Angeletos
  8. Entrepreneurial risk choice and credit market equilibria By Heiner Schumacher; Michal Kowalik; Kerstin Gerling
  9. Do Male and Female Loan Officers Differ in Small Business Lending?;A Review of the Literature By Andrea Bellucci; Alexander V. Borisov; Alberto Zazzaro
  10. Fiscal stimulus in model with endogenous firm entry By Totzek, Alexander; Winkler, Roland C.
  11. Microenterprise in Southeast Iowa: What Small Business Owners and Development Leaders Say By Burke, Sandra Charvat; Edelman, Mark
  12. Firm Characteristic Determinants of SME Participation in Production Networks By Charles HARVIE; Dionisius NARJOKO; Sothea OUM
  13. Business incubators in China: an inquiry into the variables associated with incubatee success By Zhang, Haiyang; Sonobe, Tetsushi
  14. Firm Performance in Vietnam:Evidence from Manufacturing Small and Medium Enterprises By Le, Viet; Harvie, Charles

  1. By: Bianchi, Milo
    Abstract: This paper shows that utility differences between the self-employed and employees increase with financial development. This effect is not explained by increased profits but by an increased value of non- monetary benefits, in particular job independence. We interpret these findings by building a simple occupational choice model in which financial constraints may impede the creation of firms and depress labor demand, thereby pushing some individuals into self-employment for lack of salaried jobs. In this setting, financial development favors a better matching between individual motivation and occupation, thereby increasing entrepreneurial utility despite increasing competition and so reducing profits.
    Keywords: Financial development; entrepreneurship; job satisfaction;
    JEL: L26 J20 O16
    Date: 2010
  2. By: Masatoshi Kato (School of Economics, Kwansei Gakuin University); Yuji Honjo (Institute of Economic Research, Hitotsubashi University)
    Abstract: This paper explores heterogeneous exits—bankruptcy, voluntary liquidation, and merger—by focusing on new firms. Using a sample of approximately 16,000 firms founded in Japan during 1997–2004, we examine the determinants of new-firm exit according to forms of exit. Regarding industry-specific characteristics, our findings indicate that new firms in capital-intensive and R&D-intensive industries are less likely to go bankrupt. In industries characterized by large amounts of capital and low price–cost margins, new firms are more likely to exit through voluntary liquidation and merger. Region-specific characteristics, such as regional agglomeration and unemployment rate, have significant effects on the hazards of exit, and their effects vary across different forms of exit. Moreover, we provide evidence that firm-specific characteristics, such as the number of employees, and entrepreneur-specific characteristics, such as educational background and age, play significantly different roles in determining each form of exit.
    Keywords: New firm; exit; bankruptcy; voluntary liquidation; merger; competing risks proportional hazards model.
    Date: 2010–11
  3. By: Link, Albert (University of North Carolina at Greensboro, Department of Economics); Link, Jamie (University of North Carolina at Greensboro, Department of Economics)
    Abstract: N/A
    Keywords: government; entrepreneur; technology
    JEL: O30
    Date: 2010–11–18
  4. 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, Italy)
    Abstract: Theoretical and empirical research suggests a connection between the presence of role models and the emergence of entrepreneurs. Existing entrepreneurs may act as role models for self-employment candidates by providing successful examples. By explicitly considering the self-employment rates of the natives, which may influence locally the decisions of immigrants towards entrepreneurship, we develop a simple model that explains immigrant self-employment rates for a sample of 2,490 Swiss municipalities. In addition, we accommodate for the presence of spatial spillovers in the distribution of rates, and test a spatial autoregressive model which takes into account the average self-employment rates of immigrants living in nearby municipalities. Our evidence shows a significant (positive) effect of such spatial network effects, which are characterized by a quick distance decay, suggesting spatial spillovers at the household and social network level. Additionally, we show that local conditions and immigrant pool characteristics differ, with respect to self-employment choices, when examining separately urban and rural contexts.
    Keywords: immigrants, self-employment, role models, Switzerland, spatial lag
    JEL: C21 J24 J61 O15 R23
    Date: 2010–01
  5. By: Chiara Balderi (Lab. MaIn – Scuola Superiore Sant’Anna, Pisa); Andrea Piccaluga (Lab. MaIn – Scuola Superiore Sant’Anna, Pisa)
    Abstract: The aim of this paper is to contribute to the current debate about the growth patterns of academic spin-offs by focusing on the Italian context. In order to identify some growth determinants, we study the initial resource base, the firms’ market strategy and their network of relationships with the parent Public Research Organisations (PROs), by controlling for industry, competitive forces, local context, firms’ age and size. In consideration of the complexity of growth phenomena, we study three growth measures, namely employment, revenues and total asset growth. Our multivariate analysis shows that the bundle of initial assets lying at the heart of the firms’ growth prospects include the formal involvement of an industrial shareholder, the targeting of a large and broadly-defined market and the availability of a strong network of formal relationships with the parent PROs. On the contrary, the volume of the Intellectual Property Rights (IPRs) portfolio, the experience previously ripened by the promoting partners in R&D and production functions and the availability of informal support mechanisms from the parent PROs do impact negatively and significantly on growth processes with regard to total assets. Finally, the specific New Product Development (NPD) stage, the amount of the starting capital, the formal involvement of a Venture Capital (VC), the experience previously ripened by the promoting partners in commercial and managerial functions and the breadth of the target market do not significantly affect growth processes.
    Date: 2010–04–01
  6. By: Gupta, Anil K
    Abstract: Recent economic meltdown triggered worldwide search for viable options for generating employment through entrepreneurial opportunities for the youth. Not many countries succeeded although India has fared much better. I discuss the challenges faced by India soon after meltdown and the strategies that could work. While many ideas have still potential to influence the pedagogy and the content of educational programmes in the short term, some have value for longer term entrepreneurial revolution. I pay particular attention to converting grassroots innovative communities into viable entrepreneurial networks. The need for empathetic innovation eco system cannot be over-stressed. I also underline the fact that ethical standards seem to be higher among micro and small and medium enterprises. There is a need for transition from mass consumption to high degree of customisation.
    Date: 2010–10–07
  7. By: Vasia Panousi; George-Marios Angeletos
    Abstract: How does financial integration impact capital accumulation, current-account dynamics, and cross-country inequality? This paper investigates this question within a two-country, general-equilibrium, incomplete-markets model that focuses on the importance of idiosyncratic entrepreneurial risk---a risk that introduces, not only a precautionary motive for saving, but also a wedge between the interest rate and the marginal product of capital. Our contribution is then to show that this friction provides a simple explanation for the emergence of global imbalances, a simple resolution to the empirical puzzle that capital often fails to flow from the rich or slow-growing countries to the poor or fast-growing ones, and a distinct set of policy lessons regarding the intertemporal costs and benefits of capital-account liberalization.
    Date: 2010
  8. By: Heiner Schumacher; Michal Kowalik; Kerstin Gerling
    Abstract: We analyze under what condiitons credit markets are efficient in providing loans to entrepreneurs who can start a new project after previous failure. An entrepreneur of uncertain talent chooses the riskiness of her project. If banks cannot perfectly observe the risk of previous projects, two equilibria may coexist: (1) an inefficient equilibrium in which the entrepreneur undertakes a low-risk project and has no access to finance after failure; and (2) a more efficient equilibrium in which the entrepreneur undertakes high-risk projects and gets financed even after an endogenously determined number of failures.
    Date: 2010
  9. By: Andrea Bellucci (Universit… di Urbino); Alexander V. Borisov (Indiana University); Alberto Zazzaro (Universit… Politecnica delle Marche, Department of Economics, MoFiR)
    Date: 2010–11
  10. By: Totzek, Alexander; Winkler, Roland C.
    Abstract: This paper explores different fiscal stimuli within a business cycle model with an endogenous mass of firms which we estimate for the U.S. economy using Bayesian techniques. We demonstrate that a changing mass of firms is a crucial dimension for evaluating fiscal policy since it can both accelerate and decelerate the impacts of fiscal stimuli. When fiscal interventions cause the mass of firms to decline, an additional crowding-out effect of investment in new firms results in a multiplier below that of the standard RBC model. In the presence of demand stimuli, fiscal multipliers are small and the mass of firms may decline. This holds in particular under distortionary tax financing. By contrast, policies that disburden private agents from income taxes are effective in boosting economic activity and product creation.
    Keywords: Fiscal Multipliers; Firm Entry; Product Variety
    JEL: E62 E32 E22
    Date: 2010–04–07
  11. By: Burke, Sandra Charvat; Edelman, Mark
    Abstract: Reports and summarizes issues important to entrepreneurs and small business owners.
    Keywords: Entrepreneurship; microenterprise; small business
    Date: 2010–11–19
  12. By: Charles HARVIE (Centre for Small Business and Regional Research School of Economics, University of Wollongong, Australia); Dionisius NARJOKO (Economic Research Institute for ASEAN and East Asia (ERIA)); Sothea OUM (Economic Research Institute for ASEAN and East Asia (ERIA))
    Abstract: This paper provides an empirical analysis of small and medium enterprise (SME) participation in production networks. It gauges firm characteristic determinants of SME participation in production networks. The empirical investigation utilizes results obtained from an ERIA Survey on SME Participation in Production Networks, conducted over a three month period at the end 2009 in most ASEAN countries (i.e., Thailand, Indonesia, Malaysia, Philippines, Vietnam, Cambodia, and Laos PDR) and China. The results suggest that productivity, foreign ownership, financial characteristics, innovation efforts, and managerial/entrepreneurial attitudes are the important firm characteristics that determine SME participation in production networks. The paper extends the analysis to identify the determinants that allow SMEs to move from low to high quality or value adding participation in production networks. The results suggest that size, productivity, foreign ownership, and, to some extent, innovation efforts and managerial attitudes, are the important firm characteristics needed by SMEs to upgrade their positions in production networks. The finding suggests that SMEs really exploit competitiveness from economies of scale only when they are able to engage in production networks.
    Date: 2010–10–01
  13. By: Zhang, Haiyang; Sonobe, Tetsushi
    Abstract: This paper examines the association between the outcome of business incubation and the resources used by incubators, by using a small panel of science and technology business incubators (STBIs) in China. We find that while the number of firms graduating from an STBI is closely correlated with the infrastructure as well as the human and financial resources at the STBI's disposal, the graduates' firm sizes, in terms of employment and value added, as well as their labor productivity are unrelated to such resource inputs. We also find that the educational levels of incubator managers and the financial support given to their clients have significant impacts on the number of graduates. However, the number of graduates does not increase with the scale and diversity of the cities in which their STBIs are located or with the presence of foreign ventures and universities in the locality. We do not find that university-based and government-established STBIs differ significantly in their incubation performance. --
    Keywords: business incubators,new firms,market failures,government policy,human resources,China
    JEL: M13 O31 O32 O38
    Date: 2010
  14. By: Le, Viet; Harvie, Charles (University of Wollongong)
    Abstract: This paper examines the performance of domestic non-state manufacturing small and medium enterprises (SMEs) in Vietnam. Specifically, it evaluates firm level technical efficiency and identifies the determinants of technical efficiency of these SMEs. The paper uses an econometric approach based on a stochastic frontier production function to analyse 5,204 observations of SMEs from three surveys conducted in 2002, 2005 and 2007. The results from the estimations reveal that manufacturing SMEs in Vietnam have relatively high average technical efficiency ranging from 84.2 percent to 92.5 percent. The paper further examines the factors influencing efficiency. It finds that firm age, size, location, ownership, cooperation with a foreign partner, subcontracting, product innovation, competition, and government assistance are significantly related to technical efficiency, albeit with varying degrees and directions. Exporting does not appear to influence technical efficiency. The paper offers some evidence-based policy recommendations to improve the technical efficiency and competitiveness of manufacturing SMEs.
    Keywords: manufacturing small and medium enterprises, firm performance, technical efficiency, stochastic frontier production function, Vietnam.
    JEL: L1 L6 O1 O12 O14
    Date: 2010

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