nep-ent New Economics Papers
on Entrepreneurship
Issue of 2010‒12‒18
seventeen papers chosen by
Marcus Dejardin
Notre-Dame de la Paix University

  1. Mirror, mirror on the wall, who is the most entrepreneurial of them all? By Werner Bönte; Monika Jarosch
  2. Universities as Research Partners: Entrepreneurial Explorations and Exploitations By Link, Al; Wessner, Charles
  3. Entrepreneurship education in Italian universities: trend, situation and opportunities By Donato Iacobucci; Alessandra Micozzi
  4. The impact of business environment reforms on new firm registration By Klapper, Leora; Love, Inessa
  5. Combinatoric innovation: environments for creation and mobilization of intellectual capital. By Iske, Paul Louis
  6. A Portfolio Approach to Venture Capital Financing By Pascal François; Georges Hübner
  7. From Rags to Riches: How Robust is the Influence of Culture on Entrepreneurial Activity? By Christian Busch; Andrea Lassmann
  8. What Determines the Innovation Capability of Firm Founders? By Spyros Arvanitis; Tobias Stucki
  9. The Underground Economy in a Matching Model of Endogenous Growth By Gaetano Lisi; Maurizio Pugno
  10. The determinants of growth for SMEs. A longitudinal study from French manufacturing firms By Nadine Levratto; Luc Tessier; Messaoud Zouikri
  11. Microeconometric evidence of financing frictions and innovative activity. By Tiwari, Amaresh K.
  12. Needs Hierarchy, Motivational Factors and Entrepreneurship in Bangladesh By Mostofa Haque
  13. Role and relevance of Business Incubators in ICT led global educational system: case for Eco-Enterprise Village By Koshy, Perumal
  14. The Instability of Joint Ventures: Learning from Others or Learning to Work with Others By José Mata; Pedro Portugal
  15. La croissance des PME par le biais des ressources et compétences : quelles voies ? By A.E Popa Postariu
  16. The size distribution of all Cambodian establishments By Tanaka, Kiyoyasu; Hatsukano, Naomi
  17. Reporte anual de emprendimiento en Bogotá 2009 - 2010 By Cámara de Comercio de Bogotá

  1. By: Werner Bönte (Schumpeter School of Business and Economics, University of Wuppertal); Monika Jarosch (Schumpeter School of Business and Economics, University of Wuppertal)
    Abstract: Recent empirical studies have shown that many employees would prefer to be self-employed, just as many nascent entrepreneurs are also in fulltime, paid employment. This paper investigates the factors determining individual preference for being self-employed, entrepreneurial intention and individual decision in taking steps to start a new venture. We argue that a cluster of psychological characteristics related to the tasks of an entrepreneur in an early stage of the entrepreneurial process, which we call individual entrepreneurial aptitude (IEA), is an important determinant of potential entrepreneurship and early stage start-up activities. To test our hypotheses we make use of a large scale general population survey conducted in 36 countries in the year 2009. We find a considerable variation of IEA between occupational groups, as well as within occupational groups. Our results suggest a strong positive relationship between IEA and self-employment preference. IEA is also a strong and robust predictor of entrepreneurial intention and nascent entrepreneurship, where the relationship appears to be non-linear. The probability of having entrepreneurial intention and being a nascent entrepreneur increases drastically if the level of IEA is very high. Moreover, our results indicate that IEA is positively related to the exploitation of perceived entrepreneurial opportunities.
    Keywords: self-employment, nascent entrepreneurship, individual entrepreneurial aptitude, personality
    JEL: L26 J24
    Date: 2010–11
  2. By: Link, Al (University of North Carolina at Greensboro, Department of Economics); Wessner, Charles (University of North Carolina at Greensboro, Department of Economics)
    Abstract: N/A
    Keywords: university; universities; entrepreneur
    JEL: O30
    Date: 2010–12–09
  3. By: Donato Iacobucci (Dipartimento di Ingegneria Informatica, Gestionale e dell’Automazione, Università Politecnica delle Marche); Alessandra Micozzi (Dipartimento di Ingegneria Informatica, Gestionale e dell’Automazione, Università Politecnica delle Marche)
    Abstract: The aim of this paper is to provide an analysis of the present situation and recent evolution in entrepreneurship courses and curricula in Italian universities. The analysis is based on a census of entrepreneurship courses and curricula run by Italian universities in 2004 and 2010. Entrepreneurship education in Italian universities is in its early development. Up to 2004 only a few universities had courses dedicated to entrepreneurship and the majority of them dealt with the development of the business plan. This situation has only slightly improved in the following years. Courses and curricula are mostly within business schools while very few exist in engineering and science schools. This situation contrasts with the need for entrepreneurship education in the Italian economy. Given the importance of traditional sectors in Italian industry we need to stimulate start-up in high-tech sectors: the development of entrepreneurship courses in engineering and in other science curricula could play an important role in this sense. At the same time we need to favor the growth process of small firms; this requires people who are able to play an entrepreneurial role in established firms.
    Keywords: entrepreneurship education, university courses, intrapreneurship, entrepreneurial competences.
    Date: 2010–11
  4. By: Klapper, Leora; Love, Inessa
    Abstract: The authors use panel data on the number of new firm registrations in 92 countries to study how the magnitude of reforms affects new firm registrations. They find that small reforms, in general less than 40 percent reduction in costs, days, or procedures required for business registration, do not have a significant effect on new firm creation. This suggests that small reforms do not have the intended effect on private sector development. They also find important synergies in multiple reforms of two or more business environment indicators. Finally, they show that countries with relatively weaker business environments require relatively larger reforms in order to impact new firm growth. These results can be helpful to motivate policymakers to make larger, broader reforms.
    Keywords: Environmental Economics&Policies,Enterprise Development&Reform,E-Business,Competitiveness and Competition Policy,Business in Development
    Date: 2010–12–01
  5. By: Iske, Paul Louis (Maastricht University)
    Date: 2010
  6. By: Pascal François; Georges Hübner
    Abstract: This paper studies the contracting choices between an entrepreneur and venture capital investors in a portfolio context. We rely on the mean-variance framework and derive the optimal choices for an entrepreneur with and without the presence of different kinds of venture capitalists. In particular, we show that the entrepreneur always has the incentive to share the risk and benefits of the venture whenever possible. On the basis of their objectives and characteristics, we distinguish the situations of the corporate, independent, and bank-sponsored venture capital funds. Our framework enables us to derive the optimal contract design for the entrepreneur, featuring the choice of investor, the entrepreneur’s investment in the venture, and her dilution in the project’s equity as a function of her bargaining power. This result allows us to characterize the choice of the investor depending on her cost of equity and debt capital. In addition to project size and risk, entrepreneur’s risk aversion turns out to be a critical determinant of VC investor choice –a finding which is strongly supported by a panel analysis of VC fund flows for 5 European countries over the 2002-2009 period.
    Keywords: Venture capital, Portfolio choice, Entrepreneur, Risk aversion
    JEL: G11 G32 G39
    Date: 2010
  7. By: Christian Busch (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Andrea Lassmann (KOF Swiss Economic Institute, ETH Zurich, Switzerland)
    Abstract: Entrepreneurial activity differs substantially across countries. While cultural differences across countries have often been proposed as an explanation, measuring a country's cultural characteristics suffers from various problems. This paper offers new evidence on the relative importance of cultural and institutional determinants of economic activity. In order to test the hypothesis that cultural factors influence entrepreneurial behavior, we observe differences in self-employment rates between immigrant groups within the same market. This approach allows holding constant the institutional environment. Using U.S. Census data for the year 2000, we find significant differences in the propensity to become self-employed across immigrants from 148 countries which is in line with previous findings. However, previous studies could not relate self-employment rates in the U.S. to self-employment shares in the immigrants' home-countries, contradicting a cultural explanation. We improve over the existing literature by additionally accounting for determinants of self-employment in the immigrants' home countries. We find evidence of a significantly positive relationship between self-employment rates of U.S. immigrants and entrepreneurial activity in their respective countries of origin that is robust to the inclusion of further variables, including institutions. We also find, however, a significant influence of home-country institutions on differences in immigrant activities. Our findings suggest that cultural factors (measured as behavioral persistence) are to some degree an expression of the behavior acquired under different institutional environments.
    Keywords: Entrepreneurship, culture, immigrants
    JEL: J21 J61 L26
    Date: 2010–11
  8. By: Spyros Arvanitis (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Tobias Stucki (KOF Swiss Economic Institute, ETH Zurich, Switzerland)
    Abstract: Innovative start-ups, not start-ups in general, seem to be important drivers of economic growth. However, little is known about how such firms look like. As activities of start-ups are strongly related to firm founders, we investigate this question focusing on the innovation capability of firm founders. We find that the combination of different founder characteristics such as university education (at best a combination of technical and commercial education), prior experience in R&D, and strong motivation to realize own innovative ideas increases innovative activities of start-ups by more than 40%.
    Keywords: Start-ups, innovation, founder characteristics
    JEL: M13 L26 O30
    Date: 2010–09
  9. By: Gaetano Lisi (University of Cassino); Maurizio Pugno (University of Cassino)
    Abstract: A matching model will explain both unemployment and economic growth by considering the underground sector. Three problems can thus be simultaneously accounted for: (i) the persistence of underground economy, (ii) the ambiguous relationships between underground employment and unemployment, and (iii) between growth and unemployment. The key assumptions adopted are that entrepreneurial ability is heterogeneous across individuals; skill accumulation determines productivity growth in the regular sector and a positive externality on the underground sector; job-seekers choose whether or not to invest in education and skill depending on the expected wages in the two sectors. The conclusions are that the least able entrepreneurs set up underground firms, employ unskilled labour, and do not contribute to growth. Underground employment alleviates unemployment only if the monitoring rate is sufficiently low. Policies for entrepreneurship and monitoring would help both economic growth and employment.
    Keywords: entrepreneurship, underground economy, shadow economy, unemployment, human capital, endogenous growth, search and matching models
    JEL: E26 J23 J24 J63 J64 L26 O40
    Date: 2010–12–12
  10. By: Nadine Levratto; Luc Tessier; Messaoud Zouikri
    Abstract: This paper investigates the structural and strategic determinants of firm growth using a unique data set for French firms employing between 10 and 250 employees in 1997 and active over the period 1997-2007. Starting from the idea that firm growth is not only a random process but that some regularities may be emphasized, we consider a growth model that combines different elements presented as determinant in the firm’s growth path. Results based on two families of multinomial logit model do not confirm the conclusions about the exclusive role played by the previous size. In addition, thanks to the references to legal structure, market share and localization, one observes these variables shape strongly the individual growth path. However environment and structural elements are not the only elements to focus on in order to provide an explanation of the employment growth rate at the firm level. Strategic factors matter too. In particular we demonstrate the crucial role of labor costs and financial structure as explanatory variables of firm growth.
    Keywords: Firm growth, SMEs, Gibrat’s law, French manufacturing, multinomial logistic regression
    JEL: L25 C1
    Date: 2010
  11. By: Tiwari, Amaresh K. (Maastricht University)
    Date: 2010
  12. By: Mostofa Haque (Litmus Communications Ltd.)
    Abstract: Every human being is driven by his/her desire to reach his/her needs, whereby the needs evolve to more ambitious needs once the most fundamental needs have been achieved. To reach more ambitious needs, accommodating socio-economic infrastructures and appropriate government support are required. Based on various surveys, this paper examines the needs hierarchy of Bangladeshi people as well as the main hindrances for not reaching higher up needs in Bangladesh. It analyzes the motivational factors of Bangladeshi employees and looks into the possibility and desirability of employees to become entrepreneurs in Bangladesh. Linking Bangladesh’s needs hierarchy, employee motivation and entrepreneurship in Bangladesh, the paper concludes with suggestions for measures that should be taken in an integrated way by individuals, family, social institutions and government to enable and encourage entrepreneurship in Bangladesh.
    Keywords: Needs Hierarchy, Motivational Factors, Entrepreneurship, Bangladesh
    Date: 2010–12
  13. By: Koshy, Perumal
    Abstract: Following paper presents the case of Business Incubators (BIs) as future educational and learning centres. It explores the question of how feasible and relevant is this concept andt how they can be designed to deliver educational & training programmes that meet the requirement of knowledge economy by suitably preparing youth to face the challenges of the global market. Business Incubators are businesses aiming at nurturing and establishing other businesses. They are considered to be an excellent tool for Small and Micro Enterprises (SMEs) development. Targeted assistance at small entrepreneurs & start-up businesses- help them grow and graduate to mature enterprises. According to ILO estimates 300 million jobs have to be created world over in the next 5 years. As many as 45 million young people enter the job market annually, at a global level. There are three different kinds of BIs and they are public, private, and university based BIs and are commonly classified by ownership. In the IT-led global knowledge village, there are seamless potentials for study, earning a degree and education outside of the college campuses. Virtual campuses are the reality today. What are needed then would be centres for imparting practical lessons on commercialising the knowledge, innovative ideas, and technical skills. Also it is important to impart real training in starting, managing, making profit and pursuing the growth of enterprises & ventures that a youth entrepreneur could launch. In the knowledge economy, BIs can be real learning centres. Also, technological and academic oriented knowledge & literacy is not the only skill required for attaining success, set-up a business or getting a well-paying job in the new knowledge based global economy. But what is required are a set of skills called 21st century skills, which can be well delivered through BIs, when they are turned as educational centres. The paper also presents a BI model, which has an objective of building businesses with a strategic orientation towards environment and sustainable development. The BI design presented is called as Eco-Enterprise Village.
    Keywords: Business Incubators; Micro; Small and Medium Enterprises; Information & Communication Technology; Education and Training; Eco Enterprise Incubator
    JEL: O43 M13
    Date: 2010–11–30
  14. By: José Mata; Pedro Portugal
    Abstract: We analyze the patterns of international joint venture termination, to compare the learning and trust views of joint ventures. We distinguish between three ways in which termination may occur and allow for the possibility that some joint ventures never confront the chances of terminating in these ways. We find that the chances of terminating a joint venture increase over time, in particular when the joint venture is terminated by dissolution of the firm and by acquisition by the foreign partner. Our findings thus support the view thatlearning outperforms trust in explaining the time patterns of joint venture survival.
    JEL: L25 L10
    Date: 2010
  15. By: A.E Popa Postariu (CERAG - Centre d'études et de recherches appliquées à la gestion - CNRS : UMR5820 - Université Pierre Mendès-France - Grenoble II)
    Abstract: Les PME sont des organisations particulières, bien différentes par rapport à la grande entreprise. Les PME en croissance sont vues comme des vrais leviers pour la création d'emploi et de richesse dans une économie. La croissance des PME est alimentée soit par les nouvelles ressources générées dans l'entreprise pendant le processus de croissance, soit par l'apport externe des ressources (par exemple les investisseurs). Les PME peuvent avoir une croissance différente d'une entreprise à l'autre, ce qui les rend d'autant plus difficile à comprendre pour les acteurs du financement et les pouvoirs publics. Surtout, les entreprises innovantes sont vues comme les entreprises avec un grand potentiel pour stimuler la croissance économique à long terme. Pour ce raison, il est important de mieux comprendre qu'est-ce qu'il y a derrière la croissance de ces entreprises, c'est-à-dire, quels sont les ressources et les compétences, les stratégies et les facteurs qui favorisent leur croissance. La question centrale de l'article est : « Quels sont les modèles de croissance dictées par les ressources et les compétences dans le cas des PME innovantes ? » La réponse a ce question a été apportée à l'aide d'une enquête quantitative sur un échantillon de 86 entreprises innovantes de la Région Rhône-Alpes. L'analyse des données à l'aide du logiciel SPSS version 17 a permis l'obtention d'un nombre de typologies d'entreprises en croissance, construites à partir des ressources, compétences et stratégies de croissance, en vue de dresser un panorama sur les facteurs endogènes de la croissance des PME
    Keywords: théorie des ressources et compétences ; stratégies de croissance ; PME
    Date: 2010
  16. By: Tanaka, Kiyoyasu; Hatsukano, Naomi
    Abstract: This paper presents empirical evidence on the size distribution of all Cambodian establishments in the nonfarm sector for 2009. Small- and large-scale establishments account for the largest share of employment, pointing to a “missing middle†that is commonly observed in developing countries. The analysis provides little evidence for Zipf’s law because Cambodian industry is characterized by a more dense mass of small establishments than the Zipf distribution would predict.
    Keywords: Cambodia, Industry, Small and medium-scale enterprises, Employment, Size distribution, Establishments
    JEL: L11 L25 O53 O17
    Date: 2010–09
  17. By: Cámara de Comercio de Bogotá
    Abstract: Reporte anual de emprendimiento en Bogotá 2009 - 2010: Presenta los resultados de la aplicación del estudio Global Entrepreneurship Monitor (GEM) que se realizó por primera vez en la ciudad de Bogotá en el año 2009 – 2010. El informe GEM – Bogotá 2009 - 2010, editado y publicado por la Cámara de Comercio de Bogotá (CCB) y la Facultad de Administración de la Universidad de los Andes, tiene el propósito de orientar las acciones públicas y privadas para promover el emprendimiento en Bogotá y en otras ciudades del país. Para ello, identifica los principales aspectos que caracterizan la dinámica del emprendimiento y la actividad de creación de empresas, como son: las actitudes y percepciones de los bogotanos frente a la creación de nuevas empresas, el perfil de la actividad emprendedora en Bogotá, las características de las nuevas empresas, el impacto de las nuevas empresas y las establecidas, programas de apoyo para el emprendimiento en Bogotá, condiciones generales del entorno en que se desarrolla la creación y el crecimiento de las nuevas empresas en Bogotá y la comparación entre Bogotá y otras ciudades en América Latina y en el mundo, según la metodología GEM. El GEM – Bogotá, dirigido a autoridades, empresarios y organizaciones públicas y privadas, es un instrumento moderno, validado internacionalmente, muy útil en la medición y el seguimiento del emprendimiento en la ciudad.
    Date: 2010–12–06

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