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on Entrepreneurship |
| By: | Henrekson, Magnus (Research Institute of Industrial Economics (IFN)); Sanandaji, Tino (Research Institute of Industrial Economics (IFN)) |
| Abstract: | In this introductory chapter to a collective volume,* we build on Baumol’s (1990) framework to categorize, catalog, and classify the budding research field that explores the interplay between institutions and entrepreneurship. Institutions channel entrepreneurial supply into productive or unproductive activities, which likely accounts for a great deal of the disparate economic development of nations. What’s more, entrepreneurship is not only influenced by institutions—entrepreneurs often shape institutions themselves. Entrepreneurship abiding by existing institutions is occasionally disruptive enough to challenge the foundations of prevailing institutions. Entrepreneurs also have the opportunity to evade institutions, which tends to undermine the effectiveness of the institutions in question, or cause them to change for the better. Lastly, entrepreneurs can directly alter institutions through innovative political entrepreneurship. Similar to business entrepreneurship, innovative political activity can be either productive or unproductive, depending on the entrepreneurs’ incentives. |
| Keywords: | Entrepreneurship; Innovation; Institutions; Property rights; Regulation; Self-employment |
| JEL: | H32 L50 M13 O31 P14 |
| Date: | 2010–10–07 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:0853&r=ent |
| By: | Kotsios, Panayotis |
| Abstract: | The entry of new competitors operates as a balancing force against high levels of industrial concentration and the abuse of dominant position by firms with large market shares. Entry increases supply, lowers prices, intensifies innovation and brings equilibrium to the markets that don’t operate in a socially desirable manner. This paper examines the impact of regulatory restrictions to the entry of new competitors in industrial sectors. It provides a short description of the 13 most important sources of regulatory barriers and assesses their role and importance as entry barriers. The conclusion is that regulatory restrictions can be a very important, almost insurmountable barrier to the entry of new competitors, but their role is not always socially harmful. The use of certain sources of regulatory barriers is effective in protecting social welfare instead of harming it. Barriers that promote new competition or are applied in order to protect consumer welfare are socially useful, while barriers that restrict competition and limit new competitor entry, in cases other than natural monopolies, are socially harmful. |
| Keywords: | entry; competition; industry; barriers |
| JEL: | L0 |
| Date: | 2010–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:27976&r=ent |
| By: | Rostam-Afschar, Davud |
| 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 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fubsbe:201024&r=ent |
| By: | Kjell Bjørn Nordal (Norges Bank (Central Bank of Norway)); Randi Næs (Norwegian Ministry of Trade and Industr) |
| Abstract: | We investigate the relationship between bankruptcy risk and expected future sales growth for Norwegian non-listed firms for the period 1988-2007. We find that firms with high bankruptcy risk also have high expected future growth. Financial ratios characterizing firms with high bankruptcy risk also characterize firms with high future expected growth. Small firms, firms with low levels of equity and retained earnings, firms with low profitability and low levels of sales per unit of capital, have all higher expected future growth rates than other firms. These findings suggest a tradeoff between the upside potential of high growth and the downside risk of bankruptcy. |
| Keywords: | Non-listed firms, growth, bankruptcy risk |
| JEL: | G10 G30 G33 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:bno:worpap:2010_31&r=ent |
| By: | Victoria Castillo (Ministry of Labor, Employment, and Social Security, Buenos Aires, Argentina); Alessandro Maffioli (Interamerican Development Bank, Washington, DC); Ana P. Monsalvo (Universidad Nacional de General Sarmiento, Buenos Aires, Argentina); Sofía Rojo (Ministry of Labor, Employment, and Social Security, Buenos Aires, Argentina); Rodolfo Stucchi (ECONFOCUS, Córdoba, Argentina) |
| Abstract: | This paper evaluates the impact of the Argentine SME support program PRE on employment, real wages, and exports. The program aimed at increasing the competitiveness of SMEs by co-financing up to fifty percent of expenditures in professional services and technical assistance. We use a unique panel dataset constructed with administrative records. We combine Propensity Score Matching and Difference in Differences methods to control for selection biases in the estimations. We find a positive and quantitatively important impact of the program on employment and a positive although smaller impact on real wages and the probability of exporting. We also find that the effect of the program on wages and the probability of exporting take place one year after beneficiaries receive the program. The effect of the program on employment takes place one, two, and even, three years after beneficiaries receive the program. |
| Keywords: | Public Policy Evaluation, SMEs, Employment, Wages, Exports, Argentina, Difference in Differences, Propensity Score Matching |
| JEL: | C23 H43 L25 O12 O54 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:idb:ovewps:0610&r=ent |
| By: | André van Stel; Ingrid Verheul; Hiroyuki Okamuro |
| Abstract: | Globalization and an increasing importance of knowledge in the production process cause many developed countries to move from a more 'managed' to a more 'entrepreneurial' economy in recent decades. In the former type of economy, large and incumbent firms play a dominant role, exploiting economies of scale in a relatively certain economic environment. In the latter type, small and new firms play an increasingly important role, introducing new products and services in highly uncertain economic environments while quickly adapting to rapidly changing consumer preferences. The speed of adjustment in this transition process from a managed to an entrepreneurial economy varies by country. In this paper we investigate the differences between a more 'managed' economy, Japan, characterized by relatively low levels of entrepreneurial activity, and a more 'entrepreneurial' economy, the Netherlands. Building on earlier work by Hartog et al. (2010), who explain cross-country differences in three measures of entrepreneurial activity using five broad groups of explanatory variables, we apply a decomposition analysis to better understand the differences in entrepreneurial activity between Japan and the Netherlands. We find that, in spite of higher levels of entrepreneurial activity in the Netherlands, the institutional framework in the Netherlands is considerably less favourable to entrepreneurship, compared to Japan. On the other hand, cultural differences between the Netherlands and Japan explain a substantial part of the difference in entrepreneurship rates between the two countries. |
| Date: | 2011–01–11 |
| URL: | http://d.repec.org/n?u=RePEc:eim:papers:h201102&r=ent |
| By: | Sugato Chakravarty (Purdue University); Meifang Xiang (University of Wisconsin, Whitewater) |
| Abstract: | We investigate the cross-country key factors of profit reinvestment decisions, using data compiled by the World Bank from over 7,000 businesses in 36 countries. We find that, compared to the security of property rights, it is a firm’s access to external financing that plays a significant role in a firm’s reinvestment decision in emerging economies. The extent of private ownership and the level of competition faced by firms are additional significant factors correlated with the reinvestment decision. Furthermore, we uncover a firm size effect in that the above factors driving firm reinvestment decision appears to impact small firms more than the relatively larger firms. Our findings complement, as well as build on, those from China and a few Eastern European countries. |
| Keywords: | Reinvestment,investment,external financing, property rights,private ownership, competition |
| JEL: | G21 D82 O16 |
| Date: | 2011–01 |
| URL: | http://d.repec.org/n?u=RePEc:csr:wpaper:1005&r=ent |
| By: | Yoo, Youngjin |
| Abstract: | Developments in digital technology offer new opportunities to design new products and services. However, creating such digitalized products and services often creates new problems and challenges to firms that are trying to innovate. In this essay, we analyze the impact of digitalization of products and services on innovations. In particular, we argue that digitalization of products will lead to an emergence of new layered product architecture. The layered architecture is characterized by its generative design rules that connect loosely coupled heterogeneous layers. It is pregnant with the potential of unbounded innovations. The new product architecture will require organizations to adopt a new organizing logic of innovation that we dubbed as doubly distributed innovation network. Based on this analysis, we propose five key issues that future researchers need to explore. |
| Keywords: | innovation, innovation, product architecture, design rules |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:hit:iirwps:10-09&r=ent |
| By: | Peters, Bettina; Schmiele, Anja |
| Abstract: | Recent years have shown a surge of firms globalising their innovation activities in order to gain from international knowledge. This paper evaluates this strategy by investigating whether firms with international R&D are more innovative than firms doing R&D only in their home country. One main novelty is that we shed light on two competing hypotheses whether stronger dispersed international R&D activities hamper or stimulate innovation. Second, we employ two well-established market-based indicators for innovation (introduction of and sales growth rates due to new products) instead of looking at inventions (patents). Using German CIS data for about 2100 firms, the econometric results show that firms with international R&D are more likely to launch new products (firm and market novelties) than firms with home-based R&D only. They are also more successful in terms of higher sales growth with firm novelties. However, given the introduction of a market novelty, the location of R&D doesn't matter for the sales growth with market novelties. The results concerning the degree of R&D internationalisation are mixed: The likelihood of introducing firm novelties increases with a stronger dispersion of foreign R&D activities (for market novelties only up to a specific point). The relationship between degree of R&D internationalisation and innovation success turns out to be inverse u-shaped. -- |
| Keywords: | R&D,Internationalisation,Innovation performance,Decentralisation |
| JEL: | O32 F23 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:10102&r=ent |
| By: | Simone Strambach (Department of Geography, Philipps University Marburg); Benjamin Klement (Department of Geography, Philipps University Marburg) |
| Abstract: | In recent years, innovation processes involve more heterogenous actors inside and outside the firm. Little is known however about the spatial impact of this organisational decomposition of innovation processes (ODIP): Does it lead to a geographical dispersion of innovation activities as well? Furthermore, which parts of the innovation process are carried out spatially or organisationally separated? To what extent are knowledge-creating activities subject to organisational decomposition? We propose the analytical ODIP framework which integrates research on innovation systems, global value chains and knowledge-intensive business services (KIBS). Thereby we provide a conceptual contribution to the debate on the globalisation of innovation in the identification of different modes of decomposed innovation processes by capturing the participating actors and their contribution in specific innovation events. The exploration of the spatial dimension of innovation processes in the software industry shows that the global-local dichotomy in the innovation debate does not suffice to describe their complex, multi-scalar nature. In analysing ODIP in a knowledge-intensive industry, we contribute to the debate about the ‘new geography of innovation’ by providing insights into the upgrading of subsidiary capabilities. |
| Keywords: | ODIP, innovation, software, territorial knowledge dynamics |
| JEL: | D83 F23 L14 L86 O32 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:pum:wpaper:2010-06&r=ent |
| By: | Alberto Martin |
| Abstract: | We analyze a standard environment of adverse selection in credit markets. In our environment, entrepreneurs who are privately informed about the quality of their projects need to borrow in order to invest. Conventional wisdom says that, in this class of economies, the competitive equilibrium is typically inefficient. We show that this conventional wisdom rests on one implicit assumption: entrepreneurs can only access monitored lending. If a new set of markets is added to provide entrepreneurs with additional funds, efficiency can be attained in equilibrium. An important characteristic of these additional markets is that lending in them must be unmonitored, in the sense that it does not condition total borrowing or investment by entrepreneurs. This makes it possible to attain efficiency by pooling all entrepreneurs in the new markets while separating them in the markets for monitored loans. |
| Keywords: | Adverse Selection, Credit Markets, Collateral, Monitored Lending, Screening |
| JEL: | D82 G20 D62 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:1257&r=ent |
| By: | Jean-Marc Suret |
| Abstract: | <P>Ce rapport Bourgogne récapitule les principaux éléments soulevés lors du symposium sur la finance entrepreneuriale et le capital de risque, organisé à Montréal en avril 2010. Nous avons choisi trois dimensions particulièrement importantes du point de vue des politiques publiques au Canada. La rentabilité de l’industrie du placement privé et du capital de risque est faible et les investisseurs institutionnels en ont pris conscience. Les émissions initiales sont en forte diminution, ce qui limite les possibilités de sortie très profitable du capital de risque. La conception et l’implantation de politiques publiques en faveur du capital de risque sont difficiles. <p> Elles doivent être orientées de façon telle que l’industrie attire des fonds privés. Les discussions font apparaître une définition plus précise du capital de risque, qui ne peut concerner qu’un nombre très limité d’entreprises qui peuvent atteindre une dimension mondiale. Notre principale suggestion est de centrer les efforts sur l’environnement des entreprises qui ne satisfont pas à ce critère, en améliorant les conditions dans lesquelles opèrent les anges-investisseurs. Il conviendrait également de s’intéresser aux normes d’admission des deux principales bourses canadiennes ainsi qu’aux obstacles réglementaires et fiscaux à l’intervention des investisseurs non canadiens. |
| Date: | 2011–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirbur:2011rb-01&r=ent |