nep-ent New Economics Papers
on Entrepreneurship
Issue of 2012‒01‒10
five papers chosen by
Marcus Dejardin
Notre-Dame de la Paix University

  1. Immigration Policy and Entrepreneurship By Mahuteau, Stéphane; Piracha, Matloob; Tani, Massimiliano; Lucero, Matias Vaira
  2. Universities as Research Partners in Publicly Supported Entrepreneurial Firms By Audretsch, David B.; Leyden, Dennis P.; Link, Albert N.
  3. Firms and workers: who fails in times of crisis? By Priscila Ferreira; Mark Taylor
  4. The Interdependence of R&D Activity and Debt Financing of Young Firms By Fryges, Helmut; Kohn, Karsten; Ullrich, Katrin
  5. The role of small and medium-size enterprises (SMEs) in the socio-economic stability of Karachi By Qureshi, Javed; Herani, Gobind M.

  1. By: Mahuteau, Stéphane (NILS, Flinders University); Piracha, Matloob (University of Kent); Tani, Massimiliano (Macquarie University, Sydney); Lucero, Matias Vaira (Macquarie University, Sydney)
    Abstract: This paper analyses the impact of a change in Australia's immigration policy, introduced in the mid-1990s, on migrants' probability of becoming entrepreneurs. The policy change consists of stricter entry requirements and restrictions to welfare entitlements. The results indicate that those who entered under more stringent conditions – the second cohort – have a higher probability to become self-employed, than those in the first cohort. We also find significant time and region effects. Contrary to some existing evidence, time spent in Australia positively affects the probability to become self-employed. We discuss the intuitions for the results and their policy implications.
    Keywords: immigration policy, entrepreneurship, migration
    JEL: C34 J24 J61
    Date: 2011–12
  2. By: Audretsch, David B. (Indiana University); Leyden, Dennis P. (University of North Carolina at Greensboro, Department of Economics); Link, Albert N. (University of North Carolina at Greensboro, Department of Economics)
    Abstract: Partnerships between universities and industrial firms can play a key role in enhancing competitiveness because they provide a conduit for the spillover of knowledge from the academic organization where knowledge is created to the firm where it is transformed into innovative activity. We set forth in this paper a model of industry/university participation, and we test the model empirically using research project data on entrepreneurial firms that were funded through the U.S. Department of Energy’s Small Business Innovation Research (SBIR) program. We find that larger firms are more likely to be involved in a research partnership with a university, in general, as are firms with founders who have an academic background. We find the latter result holds across disaggregated types of university partnerships, as well. We find no empirical evidence that the size of the SBIR award influences the likelihood of a research partnership.
    Keywords: Research partnership; Innovative behavior; Entrepreneurship; Industry/university relationship
    JEL: L24 L26 O31 O32 O34
    Date: 2012–01–04
  3. By: Priscila Ferreira (NIMA, Universidade do Minho); Mark Taylor (ISER, University of Essex)
    Abstract: Using a panel of linked employer-employee data from Portugal, we follow the performance of firms and workers during the first decade of 2000s in terms of the risk of firm shutdown and of chances of workers’ entering unemployment. This allows us to identify the characteristics of unsuccessful firms and workers over this period and, of most interest, whether these characteristics changed as a consequence of the global crisis. In addition, and different from previous works, we (i) assess whether there is a differential effect to crisis depending on firm size, and (ii) relate the workers’ risk of unemployment to the hazard of firm shutdown. In the analyses of hazard of shutdown and risk of unemployment most of the effects of observed covariates remained unchanged through the business cycle. There is a differential response to crisis depending on firm size. A small firm’s risk of shutdown is 9 times the risk of a large firm. However, the chances of becoming unemployed are less than twice larger for a worker in a small firm. This suggests that large firms may be less likely to shutdown, but they are not a shield from unemployment.
    Keywords: firm survival, employment, crisis, LEED
    JEL: C33 J21 L25
    Date: 2011–12
  4. By: Fryges, Helmut (ZEW Mannheim); Kohn, Karsten (KfW Bankengruppe); Ullrich, Katrin (KfW Bankengruppe)
    Abstract: We investigate the interdependence of debt financing and R&D activities of young firms. Using micro-level data of the KfW/ZEW Start-up Panel, our estimation results show that firm characteristics are more important than personal characteristics of the founders for explaining young firms' leverage, whereas firm characteristics and human capital of both founders and employees heavily influence R&D intensity. Applying a bivariate Tobit model, we find that there is a positive interdependent relationship between the share of loan financing and R&D intensity. A higher share of loan financing allows for more R&D in young firms and, at the same time, a higher R&D intensity allows for a higher loan share. This relationship cannot be detected by merely estimating single-equation models for R&D intensity and debt financing.
    Keywords: innovation financing, capital structure, business start-ups, KfW/ZEW Start-up Panel, Germany
    JEL: G32 O32 L26
    Date: 2011–12
  5. By: Qureshi, Javed; Herani, Gobind M.
    Abstract: Purpose: The purpose of this study is to identify the core constraints in financing of SMEs in Karachi that impede their growth and even undermine their liquidity and financial position. Literature review: The problems and constraints are faced by small and medium-size enterprises (SMEs) in Karachi with regard to access to financing. Along with Karachi, the other cities and areas in Pakistan are facing alike problems. Methods: This study is exploratory in nature and includes quantitative and qualitative data. Data was collected through well designed questionnaire from a sample group of 500 respondents of SMEs in Karachi. In addition, one-on-one formal and informal interviews were also taken from various businessmen and bankers. Conceptual Model: A conceptual model/ framework were devised to test and ascertain the statistical validity of the study. It includes dependent variable SME financing, and independent variables, financing constraints, functional/ internal barriers, government support and incentives, and SMEs growth and development. Findings: The findings revealed that most people/ SMEs feel reluctant to borrow from banks and financial institutes because of stringent collateral requirements, high mark up, lengthy and convoluted documentary process, and to some extent malpractices at banks and financial institutions. The preference of the lending institutions is to finance the large-scale corporate sector. The results of the data analysis confirmed profound relation of dependent and independent variables and accepted the hypotheses. Conclusion: A substantial portion of SMEs possesses great potential of growth. There exists unending opportunities to tap, while banking and financial system in Karachi and Pakistan enjoys enough liquidity but SMEs are unable to enjoy financial leverage because of various financial constraints, lack of support by government institutions and policy makers, and internal weaknesses and flaws of SMEs in managing their businesses. Finally recommendations were lodged.
    Keywords: Small and Medium enterprise; constraints in financing; Socio-economic Sustainability
    JEL: E44 D83 G21
    Date: 2011–06–30

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