nep-ent New Economics Papers
on Entrepreneurship
Issue of 2011‒07‒13
ten papers chosen by
Marcus Dejardin
Notre-Dame de la Paix University

  1. First-Round Entrepreneurial Investments: Where, When and Why? By Yochanan Shachmurove
  2. Nascent entrepreneurship and the developing individual: Early entrepreneurial competence in adolescence and venture creation success during the career By Obschonka, Martin; Silbereisen, Rainer K.; Schmitt-Rodermund, Eva; Stuetzer, Michael
  3. Entrepreneurship and Growth By Mueller, Dennis C.
  4. Self-Employment of Rural-to-Urban Migrants in China By Giulietti, Corrado; Ning, Guangjie; Zimmermann, Klaus F.
  5. Determinants of entrepreneurs’ growth intentions. A cognitive style perspective By M. KNOCKAERT; M. DER FOO; T. ERIKSON
  6. Who do High-growth Firms Employ, and Who do they Hire? By Coad, Alex; Daunfeldt, Sven-Olov; Johansson, Dan; Wennberg, Karl
  7. Employment Effects of Reducing Capital Gains Tax Rates in Ohio By William R. Melick
  8. Relationships and The Availability of Credit To New Small Firms By Colombatto, Enrico; Melnik, Arie; Monticone, Chiara
  9. Business Partners, Financing, and the Commercialization of Inventions By Thomas Åstebro; Carlos J. Serrano
  10. Von persönlicher Energie zur Führerschaft, von der Führerschaft zum schöpferischen Reagieren - Schumpeters Arbeit am Unternehmerbegriff By Ulrich Hedtke

  1. By: Yochanan Shachmurove (Department of Economics, University of Pennsylvania and The City College of The City University of New York)
    Abstract: This paper examines the where, when and why of first round entrepreneurial investment activity in the United States from the first quarter of 1995 until the second quarter of 2010. The paper analyzes these venture capital investments taking into consideration the role of macroeconomic variables, region, and industry. Additionally, trends in regional and industrial investments are evaluated using statistical and graphical analyses. By studying these findings, we are able to understand the impact of different periods of economic growth on venture capital investments. Lastly, the shock of the bubble and recent financial crisis are integrated into the findings.
    Keywords: Venture Capital; First Round of Financing; Innovations; Inventions; Economic Geography; Location; Biotechnology; Business Products and Services; Computers and Peripherals; Consumer Products and Services; Electronics and Instrumentation; Financial Services; Healthcare Services; Industrial and Energy; Information Technology Services; Media and Entertainment; Medical Devices and Equipment; Networking and Equipment; Retailing and Distribution; Semiconductors; Software; Telecommunications
    JEL: C12 D81 D92 E22 G12 G24 G3 M13 M21 O16 O3
    Date: 2011–06–22
  2. By: Obschonka, Martin; Silbereisen, Rainer K.; Schmitt-Rodermund, Eva; Stuetzer, Michael
    Abstract: What predicts a person's venture creation success over the course of the career, such as making progress in the venture creation process and multiple successful venture creations? Applying a life span approach of human development, this study examined the effect of early entrepreneurial competence in adolescence, which was gathered retrospectively by means of the Life History Calendar method. Human and social capitals during the founding process were investigated as mediators between adolescent competence and performance. Findings were derived from regression analyses on the basis of prospective and retrospective data from two independent samples (N=88 nascent founders; N=148 founders). We found that early entrepreneurial competence in adolescence had a positive effect on making progress in the venture creation process. Nascent founders' current human and social capital also had a direct effect, but it did not mediate the effect of early competences. Finally, the data revealed that early entrepreneurial competence in adolescence positively predicted habitual entrepreneurship (multiple successful venture creations) exhibited over a longer period of the individual career (specifically, 18 years). In linewith the results fromprospective longitudinal studies on early precursors of entrepreneurship, our findings underscore the long neglected importance of adolescent development in the explanation of entrepreneurial performance during the subsequent working life.
    Keywords: Nascent entrepreneurship; Entrepreneurial success; Adolescent competence; Venture creation; Human and social capital; Habitual entrepreneurship
    JEL: L26 J24 M13
    Date: 2010–10–06
  3. By: Mueller, Dennis C. (Department of Economics Fakultät für Wirtschaftswissenschaften University of Vienna)
    Abstract: In the year 2000 at a meeting in Lisbon, leaders of the European Union (EU) articulated a set of goals for the Union, which have come to be called the Lisbon Strategy or Lisbon Agenda. The agenda had three main goals: to promote growth through innovation, to create a learning economy, and to bring about social and environmental renewal. Exactly what the last goal implies is not clear, at least to me, but the intent and substance behind the first two certainly is. Research spending was to rise across the EU, university enrollments would rise with them, and a more friendly environment for innovation would be created as markets continued to be liberalized and integrated. The EU leaders meeting in Lisbon set the year 2010 as their goal for fulfilling this agenda. The year 2010 has come and gone. Today, growth rates in Europe are even lower than they were in 2000. Research and university budgets have been cut – sometimes drastically – across the EU. These developments are, of course, largely a response to the recent financial crisis and its impact on state finances. But the crisis would not have been nearly as severe as it has been, if EU countries had been well on their way to fulfilling the goals of the Lisbon Agenda when the crisis hit. The EU’s failure to come anywhere near meeting the goals set out in the year 2000 stems, I shall argue, to underlying structural factors and ideological perspectives, which constitute major obstacles to the kind of knowledge-based, innovative society that the EU leaders dreamed of in Lisbon more than a decade ago. This paper attempts to identify what these obstacles are.
    Keywords: Entrepreneurship; Economic Growth; Human Capital; European Union
    JEL: J24 L26 L53
    Date: 2011–07–01
  4. By: Giulietti, Corrado (IZA); Ning, Guangjie (Nankai University); Zimmermann, Klaus F. (IZA and University of Bonn)
    Abstract: This paper focuses on the determinants of self-employment among rural to urban migrants in China. Two self-selection mechanisms are analysed: the first relates to the manner in which migrants choose self-employment or paid work based on the potential gains from either type of employment; the second takes into account that the determinants of the migration decision can be correlated with employment choices. Using data from the 2008 Rural-Urban Migration in China and Indonesia (RUMiCI) survey, a selection model with endogenous switching is estimated. Earnings estimates are then used to derive the wage differential, which in turn is used to model the employment choice. The procedure is extended to account for migration selectivity and to compare individuals with different migration background and employment histories. The results indicate that self-employed individuals are positively selected with respect to their unobserved characteristics. Furthermore, the wage differential is found to be an important driver of the self-employment choice.
    Keywords: self-employment, wages, rural to urban migration, selection bias magnets, European Union
    JEL: J23 J61 O15
    Date: 2011–06
    Abstract: Despite the vital role high growth firms play in the economy, our understanding of drivers of growth intentions remains limited. We investigate the relation between cognitive styles and an individual’s growth intentions using a sample of 251 researchers at the University of Oslo. Our study indicates that cognitive style, defined as the characteristic way in which an individual processes and evaluates information, solves problems, and makes decisions is a crucial predictor of growth intentions. We find that a planning cognitive style promotes while a knowing cognitive style curbs growth intentions. Further, working experience positively moderates the relationship between a knowing style and growth intentions, with the curbing effects of a knowing cognitive style diminishing as people gain working experience. We discuss implications for academia and practitioners, including entrepreneurs and stakeholders in new ventures.
    Date: 2011–05
  6. By: Coad, Alex (Science and Technology Policy Research (SPRU), Freeman Centre, University of Sussex); Daunfeldt, Sven-Olov (The Swedish Retail Institute (HUI) and Dalarna University); Johansson, Dan (The Ratio Institute); Wennberg, Karl (The Ratio Institute and Stockholm School of Economics)
    Abstract: The purpose of this paper is to study who high- growth firms (HGFs) hire using a matched employer-employee dataset for all knowledge intensive industries in Sweden, where high growth is measured over the period 1999-2002. The results indicate that HGFs to a larger extent employ young people, immigrants, and individuals with longer unemployment periods. However, these patterns seem contingent on the stage of firm evolution. HGFs that have already realized rapid growth seem to start focusing on hiring individuals from other companies, even though immigrants are still overrepresented among new employees.
    Keywords: Gazelles; firm growth; rapid firm growth; high-impact firms
    JEL: D24 L25 L26
    Date: 2011–07–01
  7. By: William R. Melick
    Abstract: Entrepreneurial activity is a key driver of job creation, and entrepreneurs and their financiers are especially sensitive to capital gains taxes. As a result, a cut in the capital gains tax rate should be expected to stimulate job creation to some degree. We measure the magnitude of this effect by examining the treatment of capital gains across the 50 states over roughly the past 40 years. Our results suggest that a complete elimination of the taxation of capital gains realized by Ohio taxpayers would lead to the creation of 40,000 new jobs. Applying this estimate to proposals currently under discussion suggests a somewhat smaller effect.
    Keywords: capital gains tax rate, employment
    Date: 2011–06
  8. By: Colombatto, Enrico; Melnik, Arie; Monticone, Chiara
    Abstract: We analyze the loans that small, newly established firms obtain from the banks by certain relationships based on a set of small, young Italian companies founded during the 1992–2004 period. According to our investigation, the amount of borrowing is determined primarily by the size of the firm, and the ability to offer collateral. Contrary to expectations, however perceived risk has a weak influence. The length of relationship influences borrowing in a none linear way.
    Keywords: young firms, bank loans, collateral, relationships
    JEL: L26 G21 G32
    Date: 2011–07
  9. By: Thomas Åstebro; Carlos J. Serrano
    Abstract: This paper studies the effect of business partners on the commercialization of nvention based ventures, and it assesses the relative importance of partners’ human and social capital on commercialization outcomes. Projects run by partnerships were five times more likely to reach commercialization, and they had mean revenues approximately ten times greater than projects run by solo-entrepreneurs. These gross differences may be due both to business partners’ value added and to selection. After controlling for selection effects and observed/unobserved heterogeneity, our smallest estimate of partner value added approximately doubles the probability of commercialization and increases expected revenues by 29% at the sample mean.
    JEL: G24 J24 M13 O31
    Date: 2011–06
  10. By: Ulrich Hedtke
    Abstract: In May 2009 Ulrich Hedtke presented a paper at the Schumpeter School Kolloquium dealing with Schumpeter’s perception of the entrepreneur. In his paper he argues that Schumpeter’s concept of entrepreneurship changed over time, illustrates the transition of Schumpeter’s ideas, and discusses implications for research.
    Keywords: Schumpeter, innovation, leadership, entrepreneurship
    Date: 2011–06

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