|
on Entrepreneurship |
| By: | Cho, In Soo; Orazem, Peter |
| Abstract: | The link between measured risk aversion and the decision to become an entrepreneur is well established, but the link between risk preferences and entrepreneurial success is not. Standard theoretical models of occupational choice under uncertainty imply a positive correlation between an individual’s degree of risk aversion and the expected return from an entrepreneurial venture at the time of entry. Because the expected return is the risk neutral equivalent value, a higher expected return implies a higher survival probability, and so more risk averse entrepreneurs should survive more frequently than their less risk averse counterparts. We test that prediction using successive entry cohorts of young entrepreneurs in the National Longitudinal Survey of Youth 1979 (NLSY79). The empirical results soundly reject the prediction: the most successful entrepreneurs are the least risk averse. This surprising finding calls into question the interpretation of common measures of risk aversion as measures of taste for risk. Instead, measured risk attitudes perform as if they are indicators of entrepreneurial ability– the least risk averse are apparently those who can best assess and manage risks. Indeed, our interpretation is consistent with the work of recent experimental studies that find that the less risk averse have higher cognitive ability. |
| JEL: | J24 L24 M1 |
| Date: | 2011–08–24 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:34162&r=ent |
| By: | Lucio Carlos Friere-Gibb; Nielsen Kristian |
| Abstract: | The entrepreneurial dynamics of urban and rural areas are different, and this paper explores ’individual creativity’ and social network factors in both places. The probabilities of becoming an entrepreneur and of surviving are analyzed. The results are based on longitudinal data combined with a questionnaire, utilizing responses from 1,108 entrepreneurs and 420 non-entrepreneurs. Creativity is only found to be relevant for start-up in urban areas, but it does not influence survival in any of the two areas. The social network matters, in particular in rural areas. By combining the person and the environment, common entrepreneurship beliefs can be questioned and entrepreneurship theory benefited. |
| Keywords: | Entrepreneurship; Urban; Rural |
| JEL: | L26 O18 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:aal:abbswp:11-01&r=ent |
| By: | Andersson, Martin (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Braunerhjelm, Pontus (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Thulin, Per (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology) |
| Abstract: | Schumpeter claimed the entrepreneur to be instrumental for creative destruction and industrial dynamics. Entrepreneurial entry serves to transform and revitalize industries, thereby enhancing their competiveness. This paper investigates if entry of new firms influences productivity amongst incumbent firms, and the extent to which altered productivity can be attributed sector and time specific effects. Implementing a unique dataset we estimate a firm-level production function in which the productivity of incumbent firms is modeled as a function of firm attributes and regional entrepreneurship activity. The analysis finds support for positive productivity effects of entrepreneurship on incumbent firms, albeit the effect varies over time, what we refer to as a delayed entry effect. An immediate negative influence on productivity is followed by a positive effect several years after the initial entry. Moreover, the productivity of incumbent firms in services sectors appears to be more responsive to regional entrepreneurship, as compared to the productivity of manufacturing firms. |
| Keywords: | entrepreneurship; entry; business turbulence; incumbent firms; productivity; region; business dynamics |
| JEL: | D20 L10 L26 O31 R11 |
| Date: | 2011–08–25 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0256&r=ent |
| By: | Sierdjan Koster; Nardo de Vries |
| Abstract: | An increasing proportion of the Dutch labour market is formed by the solo selfemployed (i.e. one person enterprises, mainly offering their own human capital). Knowledge on solo self-employed is still limited and this makes tailoring policy measures towards this group difficult. Their network position may play a crucial role in economic performance of solo self-employed, as resources available are by definition limited. They are likely to depend heavily on their professional networks for acquisition and mobilizing additional resources. In this paper we use a specially constructed panel of solo self-employed from the Netherlands to explore the motives, gestation and spatial extent of their networks. (Multinomial) logit models are used to relate network position to their economic performance. The results suggest that the motives for and gestation of cooperation between solo self-employed differ from other groups of entrepreneurs. In contrast to existing ideas about network benefits, information sharing and knowledge spill-overs are not an important motive for solo self-employed. Rather, they focus on executing jobs and joint acquisition. Finally, we find that in terms of success a good network position is negatively related to economic performance. In more detail, cooperation on scope is connected to success, whereas joined acquisition is related to poor performing solo self-employed. It seems that solo self-employed reach out to their colleagues when business is slow. |
| Date: | 2011–08–29 |
| URL: | http://d.repec.org/n?u=RePEc:eim:papers:h201111&r=ent |
| By: | Lucio Cassia; Tommaso Minola; Stefano Paleari |
| Abstract: | The objective of this article is to analyze the relationship between entrepreneurship and change in technological domains, with the focus on possible causal relations in both directions. It aims at investigating how technological changes generate opportunities that entrepreneurs or entrepreneurial organizations can properly exploit, and shedding light on how entrepreneurial behavior can be a promoter of change in both technology-intensive and technology-adopting businesses. Finally, we contribute to the literature on technology entrepreneurship by suggesting an explicit theoretical relationship between innovation dynamics (or techniques) and the entrepreneurial behavior of firms. |
| Keywords: | technology entrepreneurship, technological change, knowledge-base innovation, entrepreneurial orientation |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:brh:wpaper:1103&r=ent |
| By: | Lichand, Guilherme (Harvard Kennedy School); Soares, Rodrigo R. (Pontifical Catholic University of Rio de Janeiro (PUC-Rio)) |
| Abstract: | Entrepreneurship is usually identified as an important determinant of aggregate productivity and long-term growth. The determinants of entrepreneurship, nevertheless, are not entirely understood. A recent literature has linked entrepreneurship to the development of the justice system. This paper contributes to this literature by evaluating the role of access to justice in determining the incidence of entrepreneurship. We explore the creation of Special Civil Tribunals in the Brazilian state of São Paulo during the 1990s. Special Civil Tribunals increased the geographic presence of the justice system, simplified judicial procedures, and increased the speed of adjudication of disputes. Using census data, and difference-in-differences and instrumental variable strategies, we find that implementation of Special Civil Tribunals led to increased entrepreneurship, defined as the probability that individuals are employers or self-employed. Results are particularly strong and robust for the case of self-employment, and do not seem to be related to other changes in infrastructure or public good provision at the local level, or to pre-existing trends in entrepreneurship. |
| Keywords: | access to justice, courts, entrepreneurship, institutions, Brazil |
| JEL: | K1 K41 K42 H41 O12 O17 O54 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5917&r=ent |
| By: | Raphael Anton Auer; Philip Ulrich Sauré |
| Abstract: | We develop a general equilibrium model of vertical innovation in which multiple firms compete monopolistically in the quality space. The model features many firms, each of which holds the monopoly to produce a unique quality level of an otherwise homogenous good, and consumers who are heterogeneous in their valuation of the good's quality. If the marginal cost of production is convex with respect to quality, multiple rms coexist, and their equilibrium markups are determined by the degree of convexity and the density of quality-competition. To endogenize the latter, we nest this industry setup in a Schumpeterian model of endogenous growth. Each firm enters the industry as the technology leader and successively transits through the product cycle as it is superseded by further innovations. The intrinsic reason that innovation happens in our economy is not one of displacing the incumbent; rather, innovation is a means to di-erentiate oneself from existing firms and target new consumers. Aggregate growth arises if, on the one hand, increasingly wealthy consumers are willing to pay for higher quality and, on the other hand, private firms' innovation generates income growth by enlarging the set of available technologies. Because the frequency of innovation determines the toughness of product market competition, in our framework, the relation between growth and competition is reversed compared to the standard Schumpeterian framework. Our setup does not feature business stealing in the sense that already marginal innovations grant non-negligible prots. Rather, innovators sell to a set of consumers that was served relatively poorly by pre-existing firms. Nevertheless, "creative destruction" prevails as new entrants make the set of available goods more di-erentiated, thereby exerting a pro-competitive e-ect on the entire industry. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:snb:snbwpa:2011-10&r=ent |
| By: | Art Kovacic |
| Abstract: | Over the last decade Slovenia has achieved clear and positive macro-economic results that have placed it among the most sucessful transitions countries. The basic indicators show that it has been integrating and catching up with European Union member states at an ever increasing pace. Despite this, the challenges of a global economy-where only innovation and entrepreneurship can compete succesfully, and the relative lag in the competitive capacity of our economy behind numerous other countries in the world rankings, require drastic changes to be made to Slovenia’s economic structure to adopt as much as possible to the demans of the knowledge based economy. That means the transformation from an economy with low added value whose competitiveness is based on low operative costs into an economy based on production and service activities whose competitive advantages are high added value, quality, innovation and entrapreneurship. Entrepreneurship and the diffusion of innovation, which considerably increase the speed at which new high-quality and low cost products replace existing products, are two driving forces of the knowledge based economy and they are changing the economic structure of leading countries.... |
| Keywords: | national competitiveness, benchmarking, development strategy, industrial policy |
| Date: | 2011–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:wdi:papers:2010-1009&r=ent |