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on Entrepreneurship |
| By: | Michael Fritsch (School of Economics and Business Administration, Friedrich-Schiller-University Jena) |
| Abstract: | This paper reviews the current state of knowledge about the effect of new business formation on regional development. After a brief sketch of the origins of research on this issue, the main results of different lines of inquiry are discussed. Main issues are the development of start-up cohorts, the relative magnitude of direct and indirect effects, and results by type of entry and by industry, as well as differences in the effects that have been found for different types of regions. After interpreting the results based on a common framework, I put forward a number of important questions for further research and draw some conclusions for entrepreneurship policy. |
| Keywords: | Entrepreneurship, new business formation, employment, regional development |
| JEL: | L26 M13 O1 O18 R11 |
| Date: | 2011–02–02 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2011-006&r=ent |
| By: | Gerrit de Wit; Mercedes Teruel |
| Abstract: | High-growth firms have been shown to be a key factor for economic growth and structural change. This paper analyses the determinants of the number of highgrowth firms in a country for 17 OECD countries between 1999 and 2005, using the Amadeus data set, the GEM data set, and others. The first contribution of this paper is that it is - as far as we know - the first empirical analysis of highgrowth firms at the country level on the basis of actual measured growth. Second, we find indicative empirical evidence for three driving forces of high growth, viz. entrepreneurship, institutional settings, and opportunities for growth, all in accordance with theory and empirical findings in related fields of research. Third, the paper gives a tentative explanation of the differences in the average percentage of high-growth firms between countries. Finally, the paper gives some clues for policy makers how to promote high-growth firms. |
| Date: | 2011–01–31 |
| URL: | http://d.repec.org/n?u=RePEc:eim:papers:h201107&r=ent |
| By: | Martin Binder; Alex Coad |
| Abstract: | Despite lower incomes, the self-employed consistently report higher satisfaction with their jobs. But are self-employed individuals also happier, more satisfied with their lives as a whole? High job satisfaction might cause them to neglect other important domains of life, such that the fulfilling job crowds out other pleasures, leaving the individual on the whole not happier than others. Moreover, self-employment is often chosen to escape unemployment, not for the associated autonomy that seems to account for the high job satisfaction. We apply matching estimators that allow us to better take into account the above-mentioned considerations and construct an appropriate control group. Using the BHPS data set that comprises a large nationally representative sample of the British populace, we find that individuals who move from regular employment into self-employment experience an increase in life satisfaction (up to two years later), while individuals moving from unemployment to self-employment are not more satisfied than their counterparts moving from unemployment to regular employment. We argue that these groups correspond to "opportunity" and "necessity" entrepreneurship, respectively. These findings are robust with regard to different measures of subjective well-being as well as choice of matching variables, and also robustness exercises involving "simulated confounders". |
| Keywords: | self-employment, happiness, matching estimators, unemployment, BHPS, necessity entrepreneurship Length 26 pages |
| JEL: | C21 J24 J28 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:esi:evopap:2010-20&r=ent |
| By: | Florian Noseleit |
| Abstract: | The ability to adjust to structural change is vital to economic development, and entries can be active participants in this process. While the importance of factor reallocations for growth is widely accepted, the role of entrepreneurs in managing these reallocations is rarely, if ever, mentioned in the empirical growth literature. This paper analyzes the role of entrepreneurial activity for adjustments of the sectoral structure and its relevance for regional economic development. The historical framework is the accelerated economic transformation that occurred in industrialized countries during the mid 1970s, resulting in an increasing need to adjust. Based on German data from 1975 to 2002, evidence is presented that sectoral reallocations are an important means for transforming entrepreneurial activity into growth. |
| Keywords: | Entrepreneurship, new business formation, regional development, structural change |
| JEL: | L26 M13 O1 O18 R11 |
| Date: | 2011–01 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:1104&r=ent |
| By: | Block, Joern; Spiegel, Frank |
| Abstract: | Family firms are important not only for a region but for the economy as a whole. In particular, the long-term orientation and the local embeddedness of family firms suggest a positive effect on regional innovation activity. Yet, despite the widely acknowledged importance of family firms for the economy, little research exists on this issue. This paper analyses the effect of family firms on regional innovation. Using a dataset of 326 German regions, our regressions show that regions with a higher share of family firms also show higher levels of innovation activity, as measured by the number of successful patent applications. The implications of these findings for policy and research are discussed. |
| Keywords: | innovation; family firms; geography; Mittelstand; patents |
| JEL: | L26 O3 |
| Date: | 2011–02–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:28604&r=ent |
| By: | Holger Breinlich; Stefan Niemann; Edna Solomon |
| Abstract: | We present a novel set of stylised facts on forms of firm expansion and contraction, using unique business register data for the United Kingdom between 1997 and 2005. We distinguish between adjustments of employment and turnover at existing establishments, expansions and contractions taking place via greenfield investments and disinvestments, and via acquisitions and sell-offs. We document the relative importance of these three channels and how firms choose between them. We interpret our findings in the light of existing theories of firm dynamics, and propose directions for future theoretical developments. |
| Date: | 2010–11–12 |
| URL: | http://d.repec.org/n?u=RePEc:esx:essedp:693&r=ent |
| By: | Martin Gächter; Peter Schwazer; Engelbert Theurl |
| Abstract: | Firm turnover has recently attracted increased interest in economic research. The entry of new firms increases competition and promises efficiency gains. Moreover, changes in the market structure influence productivity growth, because firm entry usually leads to increased innovation. The health care market exhibits important differences as compared to other markets, including various forms of market failure and, as a consequence, extensive market regulation. Thus, the economic effects of entries and exits in health care markets are less obvious. The following paper studies the determinants of entry and exit decisions of physicians in the private sector of the outpatient part of the Austrian health care system. We apply a Poisson panel estimation to a data set of 2,379 local communities and 121 districts in Austria in the time period 2002 - 2008. We are particularly interested in the question how public physicians (GPs/specialists) and their private counterparts influence the entrance and exit of private physicians. We find a significantly negative effect of existing capacities, measured by both private and public physician density of the same specialty, on the entry of new private physicians. On the contrary, we find a significantly positive effect of private GPs on the entry of private specialists. Interestingly, this cooperation/network effect also works in the other direction, as a higher density of private specialists increases the probability of the market entry of private GPs. Based on the results of previous literature, we thus conclude that private physicians establish networks to cooperate in terms of mutual referrals etc. Our estimations for market exits basically confirm the entry results, as higher competitive forces positively influence the market exit of private physicians. |
| Keywords: | Entry, Exit, Health Care, Physician location |
| JEL: | I11 I18 L14 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:inn:wpaper:2011-05&r=ent |
| By: | Marco Capasso; Elena Cefis; Koen Frenken |
| Abstract: | We compare the industrial dynamics in the core, semi-periphery and periphery in The Netherlands in terms of firm entry-exit, size, growth and sectoral location patterns. The contribution of our work is to provide the first comprehensive study on spatial differentiation in industrial dynamics for all firm sizes and all sectors, including services. We find that at the aggregate level the spatial pattern of industrial dynamics is consistent with the spatial product lifecycle thesis: entry and exit rates are highest in the core and lowest in the periphery, while the share of persistently growing firms is higher in the periphery than in the core. Disaggregating the analysis to the sectoral level following the Pavitt-Miozzo-Soete taxonomy, findings are less robust. Finally, sectoral location patterns are largely consistent with the spatial product lifecycle model: Fordist sectors are over-represented in the periphery, while sectors associated with the ICT paradigm are over-represented in the core, with the notable exception of science-based manufacturing. |
| Keywords: | Entry, exit, spatial product lifecycle, Fordist paradigm, ICT paradigm |
| JEL: | L25 L26 L60 L80 O18 O33 R10 |
| Date: | 2011–01 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:1103&r=ent |
| By: | Florian Mayneris (CORE) |
| Abstract: | This paper investigates theoretically and empirically the endogenous investment decision of firms conditioning on export decision. It shows that theoretically, whatever the form of preferences, firms that start exporting invest more and grow more than the others. However, it is shown that when preferences are CES, within each category of firms (domestic and switchers), initial productivity and investment are strategic complements, inducing intra-industrial divergence. On the contrary, when preferences are quadratic, initial productivity and investment are strategic substitutes: less productive firms invest more and grow more than the others, inducing intra-industrial convergence. Empirical results on French data support the predictions of the quadratic preferences model. |
| Keywords: | Export Decision, Investment, Firm Heterogeneity |
| JEL: | D21 D24 F12 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2010.153&r=ent |
| By: | GABSZEWICZ, Jean (Professor Emeritus, Université catholique de Louvain, CORE, B-1348 Louvain-la-Neuve, Belgium); TAROLA, Ornella (University of Rome "La Sapienza", Italy) |
| Abstract: | The paper explores the incentives for an incumbent firm to acquire an entrant willing to sell a product innovation, rather than openly compete with this entrant and, in case of acquisition, the incentives to sell simultaneously both the existing products and the new one, rather than specializing on a single variant. We prove that, in some circumstances, an incumbent firm can find it profitable to make an acquisition proposal to the entrant in order to deter entry. Nevertheless, in this acquisition scenario, a product proliferation strategy is never observed at equilibrium. Rather, the incumbent restricts itself to offer either its own variant or the product innovation produced by the entrant, depending on the quality differential existing between them. It follows that, while being available for sale, sometimes the innovation simply remains unexploited |
| Date: | 2010–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:cor:louvco:2010078&r=ent |
| By: | Armando Silva (Instituto Politécnico do Porto, Escola Superior de Estudos Industriais e de Gestão) |
| Abstract: | This paper analyzes the links between financial constraints and firm export behavior, at the firm level, by using data on Portuguese manufacturing enterprises. Theoretical models of Chaney (2005) and Manova (2010) suggest that credit constraints are detrimental for exports but no model explains consistently why exports could improve firms´ financial health. Previous empirical literature has not yet reached a consensus on these subjects and there is a great heterogeneity in measuring financial constraints and how to assess the causality relationships; results are also quite heterogeneous. Developing a very recent trend, we approximate credit constraints by using a financial score built on eight variables; to assess the effects of exports on the financial status of firms we apply, for the first time to these types of studies, a propensity score matching with difference in differences. This procedure is used to deal with the endogeneity problems, stemming from the fact that new exporters have most likely initial better financial health. We find that firms enjoying better financial health are more likely to become exporters and that new exporters show improvements in their financial situation. These findings have important policy implications as they suggest that public intervention to support exports is clearly justified. |
| Keywords: | exports, matching, financial constraints, corporate finances |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:por:fepwps:402&r=ent |