nep-ent New Economics Papers
on Entrepreneurship
Issue of 2012‒05‒08
nine papers chosen by
Marcus Dejardin
Notre-Dame de la Paix University

  1. Entrepreneurship in Advanced and Developing Countries: A Microeconomic Perspective By Vivarelli, Marco
  2. The Effect of Early Entrepreneurship Education: Evidence from a Randomized Field Experiment By Rosendahl Huber, Laura; Sloof, Randolph; van Praag, Mirjam
  3. Risk Attitudes and Private Business Equity By Frank M. Fossen
  4. Homeownerhip and Entrepreneurship By Philippe Bracke; Christian Hilber; Olmo Silva
  5. Credit Constraints & Productive Entrepreneurship in Africa By Mina Baliamoune-Lutz; Zuzana Brixiová; Léonce Ndikumana
  6. Financing the Start-up and Operation of Immigrant-owned Businesses: the path taken by African Immigrants in the Cape Town Metropolitan Area of South Africa. By Tengeh, Robertson Khan /RKT; Ballard, Harry / HB; Slabbert, Andre /AS
  7. Self-Employment, Wage Employment and Informality in a Developing Economy By John Bennett; Matthew Rablen
  8. Job Creation and the Intra-distribution Dynamics of the Firm Size Distribution By Huber, Peter; Oberhofer, Harald; Pfaffermayr, Michael
  9. La dynamique des innovations d'exploration et d'exploitation des PME à travers les alliances stratégiques. By Bouzid, Inès

  1. By: Vivarelli, Marco (Università Cattolica del Sacro Cuore)
    Abstract: The purpose of this paper is to provide a contribution to the identification of the role of entrepreneurship in economic growth by mapping out: 1) alternative ways of looking at entrepreneurship, distinguishing 'creative destruction' from simple 'turbulence'; 2) the different microeconomic determinants of new firm formation, distinguishing 'progressive' from 'regressive' drivers; 3) the relationship between ex-ante characteristics (of the founder) and post-entry performance (of the new firm); and 4) the possible scope for an economic policy aimed at maximizing the impact of entrepreneurship on economic growth. Where possible and appropriate, throughout the paper particular attention is devoted to the specific features characterizing entrepreneurship in developing countries.
    Keywords: entrepreneurship, new firm, innovation, development
    JEL: L26 O12
    Date: 2012–04
  2. By: Rosendahl Huber, Laura (University of Amsterdam); Sloof, Randolph (University of Amsterdam); van Praag, Mirjam (University of Amsterdam)
    Abstract: The aim of this study is to analyze the effectiveness of early entrepreneurship education. To this end, we conduct a randomized field experiment to evaluate a leading entrepreneurship education program that is taught worldwide in the final grade of primary school. We focus on pupils' development of relevant skill sets for entrepreneurial activity, both cognitive and non-cognitive. The results indicate that cognitive entrepreneurial skills are unaffected by the program. However, the program has a robust positive effect on non-cognitive entrepreneurial skills. This is surprising since previous evaluations found zero or negative effects. Because these earlier studies all pertain to education for adolescents, our result tentatively suggests that non-cognitive entrepreneurial skills are best developed at an early age.
    Keywords: skill formation, field experiment, entrepreneurship education, entrepreneurship
    JEL: L26 I21 J24 C93
    Date: 2012–04
  3. By: Frank M. Fossen
    Abstract: Why do people engage in entrepreneurship and commit large parts of their personal wealth to their business, despite comparably low returns and high risk? This paper connects several streams of literature to shed some light on this puzzle and suggests possible future research avenues. Key insights from the literature are that entrepreneurs may operate in imperfect financial markets and that entrepreneurs are less risk-averse than the rest of the population. A focus of this paper is, therefore, on the role of heterogeneous risk attitudes in entrepreneurial decisions, specifically portfolio choice and the entry and exit decisions. Nonpecuniary benefits of entrepreneurship, such as being independent in the workplace, also contribute to an explanation of entrepreneurial behavior.
    Keywords: Entrepreneurship, risk aversion, portfolio choice
    JEL: J23 G11 L26
    Date: 2012
  4. By: Philippe Bracke; Christian Hilber; Olmo Silva
    Abstract: We study the link between homeownership and entrepreneurship by exploiting the longitudinal dimension of the British Household Panel Survey (BHPS) and constructing a detailed monthly-spell dataset that tracks individuals‟ job history and tenure choice, coupled with other time-varying characteristics. Our fixed-effects estimates show that purchasing a house reduces the likelihood of starting a business by 20-25%. This result is driven by homeowners with mortgages and persists for several years after entering homeownership. The negative link can be rationalized by portfolio considerations: leveraged housing investments crowd out entrepreneurial investments. Alternative explanations based on credit constraints find little support in our data.
    Keywords: Entrepreneurship, homeownership, panel estimation
    JEL: L26 D14 G11 R21
    Date: 2012–04
  5. By: Mina Baliamoune-Lutz; Zuzana Brixiová; Léonce Ndikumana
    Abstract: Limited access of entrepreneurs to credit constrains the creation and growth of private firms. In Africa, access to credit is particularly limited for small and medium enterprises (SMEs) due to unclear property rights and the lack of assets that can be used as collateral. This paper presents a model where firm creation and growth hinge on matching potential entrepreneurs with productive technologies, while firm growth depends on acquired capital. The shortage of collateral creates a binding credit constraint on borrowing by SMEs and hence private sector growth and employment, even though the banking sectors have ample liquidity, as is the case in many African countries. The model is tested using a sample of 20 African countries over the period 2005-09. The empirical results suggest that policies aimed at easing the binding credit constraints (e.g., the depth of credit information and the strength of legal rights pertaining to collateral and bankruptcy) would stimulate productive entrepreneurship and private sector employment in Africa.
    Keywords: credit constraints; productive entrepreneurship; employment, policies
    JEL: G21 L26 D24
    Date: 2011–12–01
  6. By: Tengeh, Robertson Khan /RKT; Ballard, Harry / HB; Slabbert, Andre /AS
    Abstract: Drawing a sample of 135 successful African immigrant-owned businesses, this paper sets out to investigate how their owners acquired the necessary capital for start-up and growth thereafter. The paper was designed within the quantitative and qualitative research paradigms, in which a triangulation of three methods was utilised to collect and analyse the data. The paper revealed that although African immigrants are characteristically at the disadvantage when it comes to accessing capital from formal financial institutions, this does not stop them from pursuing entrepreneurial activities. At the start-up stage, they typically resort to personal savings, business credit, family credit, and loans from informal financial institutions. According to the ability to raise capital, we found that a varying range of start-up capital was utilised, which tended to vary across the different ethnic groups studied. Once started, we found that the sources of additional finance available to these immigrants did not change significantly. They conventionally turned to friends, co-ethnics and self-help financial associations to ‘feed’ their need for further funding.
    Keywords: business start-up; immigrant-owned businesses; African immigrants; finance; capital; and South Africa
    JEL: M1 A10 M13
    Date: 2011
  7. By: John Bennett; Matthew Rablen
    Abstract: We construct a simple model incorporating various urban labour market phenomena obtaining in developing economies. Our initial formulation assumes an integrated labour market and allows for entrepreneurship, self-employment and wage employment. We then introduce labour market segmentation. In equilibrium voluntary and involuntary sel-employment, formal and informal wage employment, and formal and informal and informal entrepreneurship may all coexist. We illustrate the model by an example calibrated on Latin American data, examining individual labour market transitions and implications of education/training and labour market policies. To diminish informality, cutting the costs of formality is more effective than raising those of informality.
    Date: 2012–03
  8. By: Huber, Peter (Austrian Institute of Economic Research); Oberhofer, Harald (University of Salzburg); Pfaffermayr, Michael (University of Innsbruck)
    Abstract: Based on a three equations model for initial firm size, survival and firm growth we estimate firm-specific transition probabilities between size classes of the firm size distribution. This allows to analyze counterfactual scenarios that assess the impact of changes in exogenous variables on the intra-distribution dynamics of the firm size distribution. We find that a counterfactual decrease in average firm age increases the exit hazard of young firms, and at the same time reduces the probability to observe high growth firms. An increase in the industry-wide entry rate and an increase in market growth, by contrast, havw virtually no impact on the intra-distribution dynamics of the firm size distribution. Finally, a larger birth size increases the probability for the youngest and smallest firms to be fast growing ones.
    Keywords: Firm growth; survival; entry size; high growth firms; counterfactual scenario analysis; sample selection
    JEL: C24 D22 L11 L25 L26 M13
    Date: 2012–04–27
  9. By: Bouzid, Inès
    Abstract: L’objectif de cette recherche est de comprendre le rôle que peuvent jouer les alliances complémentaires et additives d’une PME pour concilier les innovations d’exploration et les innovations d’exploitation. La compréhension du contexte de la conclusion des alliances par la PME et les liens qui peuvent exister entre les différentes natures des alliances et des innovations étudiées a été conduite selon deux approches. En effet, la recherche réunit les apports d’une approche exploratoire qualitative et ceux d’une étude confirmatoire quantitative. La recherche montre que la conduite des innovations d’exploration et d’exploitation au moyen des alliances stratégiques est influencée par un ensemble de facteurs contextuels, organisationnels et stratégiques. La phase exploratoire a permis de distinguer clairement les alliances de la PME avec l’industrie et celles avec le monde académique. La phase confirmatoire quant à elle a permis d’éclairer les spécificités des différentes alliances des PME en termes de ressources mobilisées, de choix des partenaires, d’objectifs stratégiques et d’innovations conduites. Cette recherche montre que la conciliation des innovations d’exploration et d’exploitation au sein d’une même PME, au moyen de la mise en oeuvre des alliances complémentaires et additives, s’opère avec différentes natures de partenaires.
    Abstract: The aim of this research is to understand the role played by the complementary and additive alliances of Small to Medium sized Enterprises (SMEs) in order to conciliate both explorative and exploitative innovation. The understanding of the context of the conclusion of SMEs alliances and the links which can exist between the various natures of the alliances and the studied innovations was led according to two approaches. In fact, the research brings together both the contributions of a qualitative exploratory approach with those of a quantitative confirmatory study. The research shows that the driving of both explorative and exploitative innovations by means of the strategic alliances is influenced by a set of contextual, organizational and strategic factors. The exploratory phase has allowed distinguishing clearly between the SMEs’s alliances with the industry and those with the academic word. In the other hand, the confirmatory phase has allowed to clarify the specificities of the various alliances of the SMEs in terms of mobilized resources, partner’s choice, strategic objectives and driven innovation. This research shows that the conciliation of explorative and exploitative innovation within the same SMEs, by means of the implementation of the complementary and additive alliances, takes place with various natures of partners.
    Keywords: Explorative innovation; Exploitative innovation; Complementary alliance; Additive alliance; Resources and competencies; SMEs; Innovation d’exploration; Innovation d’exploitation; Alliance complémentaire; Alliance additive; Ressources et compétences; PME;
    JEL: L14 C93 O31
    Date: 2011–12

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