nep-ent New Economics Papers
on Entrepreneurship
Issue of 2011‒03‒12
five papers chosen by
Marcus Dejardin
Notre-Dame de la Paix University

  1. Intrapreneurship versus independent entrepreneurship: A cross-national analysis of individual entrepreneurial behavior By Niels Bosma; Erik Stam; Sander Wennekers
  2. Gazelles, Industry Growth and Structural Change By Jaap Bos; Erik Stam
  3. Entrepreneurship, Innovation and Institutions By Erik Stam; Bart Nooteboom
  4. Can endogenous participation explain price volatility? Evidence from an agent-based cobweb model. By Domenico Colucci; Vincenzo Valori
  5. Credit Termination and the Technology Bubbles By Jin, Yu

  1. By: Niels Bosma; Erik Stam; Sander Wennekers
    Abstract: This paper presents the results of the first international comparative study of intrapreneurship and independent entrepreneurship. The prevalence of intrapreneurship is about twice as high in high income countries as in low income countries. We find that at the individual level, intrapreneurs are much more likely to have the intention to start a new independent business than other employees. However, there is a negative correlation between intrapreneurship and early-stage entrepreneurial activity at the macro level. One explanation for these contrasting outcomes is the diverging micro level effect of education on intrapreneurship (positive effect) and early-stage entrepreneurial activity (negative effect).
    Keywords: intrapreneurship, comparative entrepreneurship, economic development, industrial organization, multi-level analysis
    Date: 2011–02
  2. By: Jaap Bos; Erik Stam
    Abstract: This paper examines to what extent gazelles are the drivers of the growth of industries and structural change. To this purpose we analyze gazelles over a 12 year period (annually from 1997 until 2008) in the Netherlands, and relate them to the dynamics in employment per industry. We use a panel vector autoregressive (PVAR) model to explore the relations between the presence of gazelles and industry (employment) growth (with 43 two digit industries). An increase in the presence of gazelles in an industry appears to have a positive effect on the subsequent growth of the industry. We do not find evidence for an inverse causal relation: there are no long run positive effects of increases in industry growth on the presence of gazelles. There is also no relation between the overrepresentation of gazelles and subsequent industry growth.
    Keywords: entrepreneurship, gazelles, industry growth, structural economic change
    JEL: C23 D31 J31 J60
    Date: 2011–02
  3. By: Erik Stam; Bart Nooteboom
    Abstract: This paper discusses the nature of entrepreneurship and its relation to innovation along a cycle in which exploration and exploration follow upon each other. We place the roles of entrepreneurship in innovation policy within this cycle of innovation. Different types of innovation along the cycle of innovation are realized with different forms of entrepreneurship, which are constrained or enabled by different legal institutions. One of the key roles of governments is to design, change or destruct institutions in order to improve societal welfare. The question is what governments should do in the context of innovation policy. Here, social scientists can make a contribution by providing insight into what entrepreneurship and innovation is (theories about these phenomena), and how institutions affect them in reality (empirical evidence about their effects). This requires social scientists to be engaged scholars and to provide new policy options as an honest broker between the academic world and the policy world. The key question of this paper is: How can policy best enable innovation based entrepreneurship? The answer is derived from looking at both theoretical tenets and empirical evidence using an institutional design perspective, which aims at providing arguments for the design, change and/or destruction of institutions, given the goals of the governments. We provide an overview of some (empirically tests of) institutions that enable or restrain particular types of entrepreneurship. Examples of these institutions are intellectual property rights and the Small Business Innovation Research program, employment protection, and non-compete covenants.
    Keywords: entrepreneurship, innovation, institutions, innovation policy
    JEL: E61 G38 H57 K29 L26 L53 M13 O12 O31 O33 O38
    Date: 2011–02
  4. By: Domenico Colucci (Dipartimento di Matematica per le Decisioni - Università degli Studi di Firenze); Vincenzo Valori (Dipartimento di Matematica per le Decisioni - Università degli Studi di Firenze)
    Abstract: The cobweb model literature has mostly overlooked the issue of firms' financial viability and the related question of market entry and exit. This paper tries to address these problems building an agent-based computational cobweb model with borrowing constraints and endogenous participation of heterogeneous firms. The flow of firms' profit affects their financial wealth and borrowing is possible up to a limit. Past such threshold the firm goes bankrupt and exits. At the same time at each period a pool of potential entrants have a constant positive probability of becoming a startup in the market, provided the incumbent firms have realized non-negative mean profits in recent periods. Bounded dynamics and endogenous volatility are shown to follow without resorting to nonlinearities. Indeed, with respect to the literature assuming nonlinearities and heterogeneous firms switching between different predictors (e.g. Brock and Hommes, 1997) our structure is simpler, given that the model's main message remains valid even with linear demand and supply and firms having heterogeneous-parameters adaptive expectations. Additional insights are provided by the numerical simulations of the model. The saliency of the borrowing constraint has a large impact on profits and ultimately on firms' survival chances, beside an effect on average prices and therefore on consumer surplus. Further, the model confirms that behavioral heterogeneity, even in the mild form assumed here, matters, and is in fact crucial to ensure bounded price dynamics. Finally, the model generates reasonable (given the stylized facts accepted by the empirical literature) patterns of firms survival times.
    Keywords: heterogeneous agents, expectations, price instability, market entry and exit
    Date: 2011–02
  5. By: Jin, Yu
    Abstract: We study the role of firms' credit histories in a business cycle model. Loans are dynamic contracts between banks and firms, and credit terminations are used as an incentive device. Banks deny future loans to an entrepreneur according to his credit histories in order to affect his choice of project ex ante. This will generate fluctuations from technology shocks to the riskiness of different types of projects as occurred during the technology bubbles. The model is used to explain the boom-and-bust of the dot-com bubble, one leading example of technology bubbles in the economy, in the late 1990s.
    Keywords: credit terminations; technology bubbles
    JEL: E32 G21
    Date: 2010–11

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