nep-ent New Economics Papers
on Entrepreneurship
Issue of 2011‒06‒11
twelve papers chosen by
Marcus Dejardin
Notre-Dame de la Paix University

  1. Mapping the (In)visible College(s) in the Field of Entrepreneurship By Aurora A.C. Teixeira
  2. Entrepreneurial Policymakers By Nyström, Kristina
  3. New Firm Creation and Failure: A Matching Approach By Thomas Gries; Stefan Jungblut; Wim Naude
  4. Financial Innovation and Endogenous Growth By Stelios Michalopoulos; Luc Laeven; Ross Levine
  5. Venture Capital, Patenting, and Usefulness of Innovations By Fabrizi, Simona; Lippert, Steffen; Norbäck, Pehr-Johan; Persson, Lars
  6. Evolution and the Growth Process: Natural Selection of Entrepreneurial Traits By Oded Galor; Stelios Michalopoulos
  7. On Firm Growth and Innovation. Some new empirical perspectives using French CIS (1992-2004) By Alessandra Colombelli; Naciba Haned; Christian Le Bas
  8. Small, Medium-sized and Large Businesses in the Canadian Economy: Measuring Their Contribution to Gross Domestic Product in 2005 By Gibson, Bob; Leung, Danny; Rispoli, Luke
  9. Japanese SMEs' Choice between Private Placement Bonds and Bank Loans (Japanese) By SATO Toyohiko; XU Peng
  10. Banks, Market Organization, and Macroeconomic Performance: An Agent-Based Computational Analysis By Quamrul Ashraf; Boris Gershman; Peter Howitt
  11. Uncertainty and the export decisions of Dutch firms By Harold Creusen; Arjan Lejour
  12. Le processus de rationalisation industrielle et professionnelle ainsi que la diversification des produits dans une institution de micro-finance française : le cas de l'ADIE By Gaëlle Martin

  1. By: Aurora A.C. Teixeira (CEF.UP, Faculdade de Economia, Universidade do Porto; INESC Porto; OBEGEF)
    Abstract: Despite the vitality and dynamism that the field of entrepreneurship has experienced in the last decade, the issue of whether it comprises an effective network of (in)formal communication linkages among the most influential scholars within the area has yet to be examined in depth. This study follows a formal selection procedure to delimit the ‘relational environment’ of the field of entrepreneurship and to analyze the existence and characterization of (in)visible college(s) based on a theoretically well-grounded framework, thus offering a comprehensive and up-to-date empirical analysis of entrepreneurship research. Based on more than a thousand papers published between 2005 and 2010 in seven core entrepreneurship journals and the corresponding (85 thousand) citations, we found that entrepreneurship is an (increasingly) autonomous, legitimate and cohesive (in)visible college, fine tuned through the increasing visibility of certain subject specialties (e.g., family business, innovation, technology and policy). Moreover, the rather dense formal links that characterize the entrepreneurship (in)visible college are accompanied by a reasonably solid network of informal relations maintained and sustained by the mobility of ‘stars’ and highly influential scholars. The limited internationalization of the entrepreneurship community, reflected in the almost total absence of non-English-speaking authors/studies/outlets, stands as a major quest for the field.
    Keywords: Invisible College; Entrepreneurship; Bibliometrics
    JEL: Z10 L26 C89
    Date: 2011–06
  2. By: Nyström, Kristina (The Ratio Institute)
    Abstract: This paper explores the entrepreneurial experience (and spirit) of Swedish policymakers. To what extent have they been involved in entrepreneurial activities? Are they planning to start any entrepreneurial activities? Are politicians more or less entrepreneurial than their voters? How important are entrepreneurship policies to Swedish politicians? Are entrepreneurship policies more or less important to policymakers compared to the voters they represent? The Members of Parliament were asked the same questions regarding their entrepreneurial activities as found in the Global Entrepreneurship Monitor (GEM). The empirical results indicate that when, we analyse the statistical significance of the differences and control for individual characteristics, policymakers have similar experiences and ambitions to the rest of the population when it comes to entrepreneurial activities. Policymakers have a high potential for becoming entrepreneurs in the future, but seem to be less optimistic about how entrepreneurs are perceived in the Swedish cultural context. In addition, there is a substantial discrepancy between how policymakers and voters perceive the ease of starting and running a business. Unlike policymakers, voters do not agree that it is easy to start and run a business in Sweden.
    Keywords: Entrepreneurship policy; attitudes; experience; culture
    JEL: L26 L53
    Date: 2011–05–30
  3. By: Thomas Gries (University of Paderborn); Stefan Jungblut (University of Paderborn); Wim Naude (United Nations University)
    Abstract: We propose that the rate of creation and failure of new firm start-ups can be modelled as a search and matching process, as in labor market matching models. Deriving an "entrepreneurial" Beveridge curve, we show that a successful start-up depends on the efficiency with which entrepreneurial ability is matched with business opportunity, and outline a number of possible applications of this matching approach to assist in formalizing the economics of entrepreneurship.
    Keywords: Entrepreneurship, start-ups, labor market matching
    JEL: L26 M13 O10 O14
    Date: 2011–06
  4. By: Stelios Michalopoulos (Tufts University); Luc Laeven (IMF and CEPR); Ross Levine (Brown University and NBER)
    Abstract: We model technological and ?nancial innovation as re?ecting the decisions of pro?t maximizing agents and explore the implications for economic growth. We start with a Schumpeterian growth model where entrepreneurs earn pro?ts by inventing better goods and ?nanciers arise to screen entrepreneurs. A novel feature of the model is that ?nanciers also engage in the costly, risky, and potentially pro?table process of innovation: Financiers can invent more e¤ective processes for screening entrepreneurs. Every screening process, however, becomes less e¤ective as technology advances. Consequently, technological inno- vation and economic growth stop unless ?nanciers continually innovate. The model also allows for rent-seeking ?nancial innovation, in which ?nanciers engage in privately pro?table but socially ine¢ cient innovation that slows growth. Empirical evidence is more consistent with this dynamic, synergistic model of ?nancial and technological innovation than with existing theories.
    Keywords: Invention, Economic Growth, Corporate Finance, Technological Change, Entrepreneurship
    JEL: G0 O31 O4
    Date: 2011–05
  5. By: Fabrizi, Simona; Lippert, Steffen; Norbäck, Pehr-Johan; Persson, Lars
    Abstract: We analyze incentives to develop entrepreneurial ideas for venture capitalists (VCs) and incumbent firms. If VCs are sufficiently better at judging an idea's value and if it is sufficiently more costly to patent low than high value ideas, VCs acquire valuable ideas, develop them beyond the level incumbents would have chosen, and use patents to signal their companies' high value to acquirers prior to exiting. This increases the VC-backed companies' patenting intensity and long-run performance, but also infl ates their acquisition prices, and lowers their acquirers' overall profits. Patent law usefulness clauses would reduce such excessive, signaling-driven investment and patenting intensity.
    Keywords: innovation; patent law; patenting intensity; preemptive vs late acquisition strategies; signaling; usefulness requirement; venture capital
    JEL: C70 D21 D82 G24 L26 M13 O31 O34
    Date: 2011–05
  6. By: Oded Galor (Department of Economics, Brown University); Stelios Michalopoulos (Tufts University and the Institute for Advanced Study)
    Abstract: This research suggests that the evolution of entrepreneurial spirit played a significant role in the process of economic development and the dynamics of inequality within and across societies. The study argues that entrepreneurial spirit evolved non-monotonically in the course of human history. In early stages of development, risk-tolerant, growth promoting traits generated an evolutionary advantage and their increased representation accelerated the pace of technological progress and the process of economic development. In mature stages of development, however, risk-averse traits gained an evolutionary advantage, diminishing the growth potential of advanced economies and contributing to convergence in economic growth across countries.
    Keywords: Risk Aversion, Growth, Technological Progress, Evolution, Natural Selection
    JEL: O11 O14 O33 O40 J11 J13
    Date: 2011–04
  7. By: Alessandra Colombelli; Naciba Haned; Christian Le Bas
    Abstract: In the paper we wish to examine if the firms that innovate know a higher growth than the firm that do not. We use diverse waves of CIS for the French industries over the period 1992- 2004 and carry out different models and new econometric methods (quantile regression). Our main findings are that innovative firms produce more growth than non innovative firms. The estimates show that the results are robust to the different types of models that we have implemented. Process innovators are more productive in terms of growth than product innovators when OLS and Random effects models are used. The reverse is true for Fix effect model and quantile regression. In the three growth equations estimated by GMM the coefficients related to innovation product are always higher. Our study does not give definitive results with respect to the magnitude of the effects of the type of innovation on firm growth.
    Keywords: Innovation, process and product, firm growth, CIS
    JEL: L20 L60 O31 O33
    Date: 2011–06
  8. By: Gibson, Bob; Leung, Danny; Rispoli, Luke
    Abstract: The paper estimates the contributions to gross domestic product (GDP) made by small, medium-sized and large businesses in the Canadian business sector for 2005. The contribution of large businesses with 500 or more employees to business-sector GDP was 45.7%. Small and medium-sized businesses, including unincorporated businesses, accounted for the other 54.3%.
    Keywords: Economic accounts, Business performance and ownership, Gross domestic product, Small and medium-sized businesses
    Date: 2011–05–30
  9. By: SATO Toyohiko; XU Peng
    Abstract: In this paper, we examine how and what types of Japanese small and medium-sized enterprises (SMEs) use the private placement market, exploring factors behind their choice between private placement bonds and bank loans as a means of raising capital. Privately placed corporate bonds tend to have a medium- to long-term maturity period and are often guaranteed by banks. The typical profile of an issuer of privately placed bonds is a medium-sized firm that is fairly profitable and has relatively low financial leverage. Meanwhile, poorly performing medium-sized enterprises - i.e., those posing a serious information asymmetry problem - and smaller firms tend to opt for bank loans. As compared to issuers of private placement bonds, firms relying on long-term bank loans generally have a higher fixed-to-total assets ratio. That is, smaller firms and information-problematic medium-sized firms tend to borrow from banks. We argue that issuing private placement bonds offers greater advantages to those firms capable of doing so, namely, profitable and medium sized firms with relatively low financial leverage because it enables them to secure medium- to long-term financing and thus avoid frequent bank interference with their business management. Furthermore, they can build a track record of successful bond issuance. These findings have important policy implications regarding SMEs' choice of financing. Meanwhile, firms show less of a tendency to issue bonds when their main creditor bank is saddled with more bad loans. This suggests that the credit crunch is not a reason for opting for private placement bonds.
    Date: 2010–12
  10. By: Quamrul Ashraf; Boris Gershman; Peter Howitt
    Abstract: This paper is an exploratory analysis of the role that banks play in supporting the mechanism of exchange. It considers a model economy in which exchange activities are facilitated and coordinated by a self-organizing network of entrepreneurial trading firms. Collectively, these firms play the part of the Walrasian auctioneer, matching buyers with sellers and helping the economy to approximate equilibrium prices that no individual is able to calculate. Banks affect macroeconomic performance in this economy because their lending activities facilitate entry of trading firms and also influence their exit decisions. Both entry and exit have conflicting effects on performance, and we resort to computational analysis to understand how they are resolved. Our analysis sheds new light on the conflict between micro-prudential bank regulation and macroeconomic stability. Specifically, it draws an important distinction between "normal" performance of the economy and "worst-case" scenarios, and shows that micro prudence conflicts with macro stability only in bad times. The analysis also shows that banks provide a "financial stabilizer" that in some respects can more than counteract the more familiar financial accelerator.
    JEL: C63 E0 E44 G20 G28
    Date: 2011–06
  11. By: Harold Creusen; Arjan Lejour
    Abstract: This paper analyses the export market entry decisions of Dutch firms and their subsequent growth or market exit. Exporters, particularly when entering new markets, have to learn about market conditions and to search for new trade relations under uncertainty. In that sense the paper also investigates the role of economic diplomacy and knowledge spillovers from colleague-exporters. We combine detailed international trade data by firm and destination between 2002 and 2008 with firm data and export market haracteristics in order to disentangle the firm and country determinants of successful and less successful export behaviour. First, we find that about 5% of all Dutch exporters have just started in their first market and a similar share of exporters ceases all exports. Still, the starting exporters increase their exports very fast. In each market their export growth in their third year as exporter is about twice as high as for established exporters. Many starters also increase their exports by expanding their number of destinations, but they will retreat swiftly if they are not successful. For all exporters we find that more productive and larger firms are more inclined to enter (additional) export markets, and that larger firms are less likely to leave a market. Market characteristics are important as well. Distance and import tariffs reduce the probability to enter the market and increase the probability to exit. Not only distance to the home country matters, but also the distance to export markets already accessed. Firms seem to follow a stepping stone approach for reaching markets further away (physically and culturally). They first enter more nearby markets before moving to more distant markets. Finally, we find that the presence of support offices abroad and trade missions in destination countries, particularly middle income countries, stimulate the entry of new exporters and the growth of export volume. Knowledge spillovers from exporters with the same destinations have also positive effects on market entry.
    Keywords: strategic export decisions, sequential export market entry and exit, export growth, economic
    JEL: F10 F13
    Date: 2011–05
  12. By: Gaëlle Martin (LEST - Laboratoire d'économie et de sociologie du travail - CNRS : UMR6123 - Université de Provence - Aix-Marseille I - Université de la Méditerranée - Aix-Marseille II, Faculté des Sciences Économiques et de Gestion - Aix-Marseille II - Université de la Méditerranée - Aix-Marseille II)
    Abstract: Le constat de départ de ce travail de recherche reposait sur la coexistence au sein de l'ADIE d'une rationalisation industrielle et professionnelle. Après avoir caractérisé les tensions et enjeux du secteur de la microfinance, nous nous sommes intéressés à la question de l'innovation au sein de cette organisation. En distinguant d'une part les acteurs de l'innovation, et d'autre part le type d'innovation. Concernant la typologie, nous avons réalisé une revue de la littérature dans le champ de l'innovation des services, l'approche intégrée nous est apparut la plus pertinente dans notre cas. Ces différents éléments nous ont conduit à formuler deux hypothèses de travail qui nous ont guidées dans la suite de notre analyse. En détaillant l'histoire de l'ADIE, il est apparu que l'innovation s'est trouvée au coeur du processus de développement de l'organisation, que ce soit à l'origine avec la phase expérimentale de définition de l'activité, ou dans les phases de rationalisation, notamment avec la mise en place de la réforme COSAC en 2006 et le chantier EQUILIBRE l'année dernière. En parallèle de ces différentes phases, l'association a instigué l'essor de nombreux projets pilotes et expérimentations, notamment ces dernières années. Ces projets ont structuré d'une certaine manière l'organisation, en externe par la diversification de l'activité et, en interne, du fait du modèle d'organisation inhérent au groupe-projet, à savoir le modèle adhocratique (Mintzberg, 1990). L'innovation apparaît donc comme un outil de cohésion comme ce fut le cas avec Créajeunes où l'ensemble des acteurs impliqués dans le projet, que ce soit les salariés, bénévoles ou créateurs ont coopéré à l'élaboration de cet outil. Toutefois, l'innovation apparaît également comme source de tensions du fait des transformations organisationnelles qu'elle engendre.
    Keywords: micro-finance, innovation, innovation des services, ressources humaines, changement organisationnel, création d'entreprise, association
    Date: 2010–09–01

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