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on Entrepreneurship |
| By: | Nicola Gennaioli; Rafael Laporta; Florencio López-de-Silanes; Andrei Schleifer |
| Abstract: | We investigate the determinants of regional development using a newly constructed database of 1569 sub-national regions from 110 countries covering 74 percent of the worlds surface and 96 percent of its GDP. We combine the cross-regional analysis of geographic, institutional, cultural, and human capital determinants of regional development with an examination of productivity in several thousand establishments located in these regions. To organize the discussion, we present a new model of regional development that introduces into a standard migration framework elements of both the Lucas (1978) model of the allocation of talent between entrepreneurship and work, and the Lucas (1988) model of human capital externalities. The evidence points to the paramount importance of human capital in accounting for regional differences in development, but also suggests from model estimation and calibration that entrepreneurial inputs and human capital externalities are essential for understanding the data. |
| Keywords: | productivity, entrepreneurial education, regional externalities |
| JEL: | I25 O11 O15 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:581&r=ent |
| By: | Baumgarten Skogstrøm, Jens Fredrik (Ragnar Frisch Centre for Economic Research,) |
| Abstract: | I present a theory on the relationship between educational choice and entrepreneurship in a labour market with asymmetric information. The model shows that, in a labour market where education is used as a signalling device, an imperfect relationship between productivity in education and in the labour market can lead to an equilibrium where a fraction of the high-ability individuals choose to quit school and become entrepreneurs. Using a comprehensive set of Norwegian register data, I find that this is prediction is confirmed empirically: Individuals combining low education with high ability have the highest entrepreneurship rates in the population. |
| Keywords: | Entrepreneurship; self-employment; education; ability |
| JEL: | J24 L26 M13 |
| Date: | 2012–04–02 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:osloec:2012_010&r=ent |
| By: | Bing Guo; Yun Lou; David Pérez-Castrillo |
| Abstract: | We propose a model of investment, duration, and exit strategies for start-ups backed by venture capital (VC) funds that accounts for the high level of uncertainty, the asymmetry of information between insiders and outsiders, and the discount rate. Our analysis predicts that start-ups backed by corporate VC funds remain for a longer period of time before exiting and receive larger investment amounts than those financed by independent VC funds. Although a longer duration leads to a higher likelihood of an exit through an acquisition, a larger investment increases the probability of an IPO exit. These predictions find strong empirical support. |
| Keywords: | Venture Capital Funds, Start-ups, IPO, Acquisition |
| JEL: | G24 G32 G34 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:602&r=ent |
| By: | Francesca MARCHETTA (Centre d'Etudes et de Recherches sur le Développement International) |
| Abstract: | The literature shows that temporary international migrants have a high propensity to opt for an entrepreneurial activity upon return, but the prospects of survival of these activities have not been explored. We address this research question using longitudinal Egyptian data. We find that entrepreneurs' migration experience significantly improves the chances of survival of their entrepreneurial activities, adopting econometric techniques that control for return migrants' non-random selection in unobservables. We resort to a bivariate probit model and a two-stage residual inclusion estimator, using the rate of population growth and the real oil price as alternative instruments for migration. |
| Keywords: | return migration, entrepreneurial activities, panel data, endogeneity, North Africa, Egypt |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:cdi:wpaper:1354&r=ent |
| By: | Rijkers, Bob; Costa, Rita |
| Abstract: | Despite their increasing prominence in policy debates, little is known about gender inequities in non-agricultural labor market outcomes in rural areas. Using matched household-enterprise-community data sets from Bangladesh, Ethiopia, Indonesia and Sri Lanka, this paper documents and analyzes gender differences in the individual portfolio choice and productivity of non-farm entrepreneurship. Except for Ethiopia, women are less likely than men to become nonfarm entrepreneurs. Women's nonfarm entrepreneurship isn't strongly correlated with household composition or educational attainment, but is especially prevalent amongst women who are the head of their household. Female-led firms are much smaller and less productive on average, though gender differences in productivity vary dramatically across countries. Mean differences in log output per worker suggest that male firms are roughly 10 times as productive as female firms in Bangladesh, three times as those in Ethiopia and twice as those in Sri Lanka. By contrast, no significant differences in labor productivity were detected in Indonesia. Differences in output per worker are overwhelmingly accounted for by sorting by sector and size. They can't be explained by differences in capital intensity, human capital or the local investment climate, nor by increasing returns to scale. |
| Keywords: | Access to Finance,Gender and Development,Housing&Human Habitats,Economic Theory&Research,Population Policies |
| Date: | 2012–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6066&r=ent |
| By: | Traci L. Mach; John D. Wolken |
| Abstract: | This paper examines the effects of credit availability on small firm survivability over the period 2004 to 2008 for non-publicly traded small enterprises. Using data from the 2003 Survey of Small Business Finances, we develop failure prediction models for a sample of small firms that were confirmed to have been in business as of December 2003, with particular attention to the impact of credit constraints. We find that credit constrained firms were significantly more likely to go out of business than non constrained firms. Moreover, credit constraint and credit access variables appear to be among the most important factors predicting which small U.S. firms went out of business during the 2004-2008 period even though an extensive set of firm, owner, and market characteristics were also included as explanatory factors. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2012-10&r=ent |
| By: | Nicolas Antheaume (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Université de Nantes : EA4272); Paulette Robic (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Université de Nantes : EA4272) |
| Abstract: | In this article we highlight the role played by widows in French Family businesses. We take a historical point of view in order to highlight the significance of our topic. We show the role of French family law in enabling widows to become entrepreneurs. Then we relate the life of the wife of a company owner, in a French family business created at the beginning of the 20th century. We show why and how a spouse becomes an entrepreneur when her husband dies. We demonstrate what key roles she plays in maintaining the business within the realm of the family. |
| Keywords: | invisibility ; visibility ; widow entrepreneur ; wife ; family business |
| Date: | 2012–05–04 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00694367&r=ent |
| By: | Jaap W.B. Bos; Ryan C.R. van Lamoen; Mark W.J.L. Sanders |
| Abstract: | In this paper we estimate, using stochastic frontier estimation techniques, the relationship between R&D inputs a innovative output in a sample of Dutch firms. We find that over 63% of between firm variation in observed "innovativeness" can be attributed to inefficiency in the innovation process. The remainder is due to differences in the innovation production process itself. We derive our results including the usual controls and find in addition that large firms tend to look more innovative. But when considered more carefully large firms turn out to be less efficient. With standard estimation techniques this inefficiency is masked by a more productive innovation technology. We thus find evidence of economies of scale in line with the Schumpeter mark II hypothesis (large firms are more innovative), but also show that large firms tend to operate at lower levels of efficiency. |
| Keywords: | Innovation, Scale Economies, Frontier |
| JEL: | D21 G21 L10 O3 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:deg:conpap:c016_060&r=ent |
| By: | Cosh, A.; Zhang, J. |
| Abstract: | Whilst the variety of search activities promotes innovation, there is a central tension between a firm's potential benefits from wide and diverse search activities and its ability to reap these potential benefits. In this paper, we argue that the potential and realised benefits from a firm' search activities are influenced not only by its resources and capabilities, but also by the nature of innovation activities at sector level. Drawing upon a statistical analysis of a large scale survey conducted in the US, we examine the impact of a firm's external search strategy along two dimensions (search intensity and direction) on its innovative performance. Our findings suggest that manufacturing firms tend to benefit from wide and diversified search activities whereas knowledge intensive business services (KIBS) firms tend to benefit from narrow and specialised search activities. Furthermore, when taking account of firm size and absorptive capacity, a more nuanced picture emerges. Implications and contributions to the innovation search literature are discussed. |
| Keywords: | variety of search, open innovation, SME, manufacturing, Knowledge intensive business services, US survey |
| JEL: | L25 O14 O32 |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:cbr:cbrwps:wp431&r=ent |
| By: | Raphael Auer; Philip 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 that each hold 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 firms 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 becomes superseded by further innovations. The intrinsic reason of why innovation happens in our economy is not one of displacing the incumbent, but rather, innovation is a means to differentiate 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. Since the frequency of innovation determines the toughness of product market competition, in our framework the relation between growth and competition is reversed compared to standard Schumpeterian framework. Our setup does not feature business stealing in the sense that already marginal innovations grant non-negligible profits. Rather, innovators sell to a set of consumers that was served relatively poorly by pre-existing firms. Never the less, "creative destruction" prevails as new entrants make the set of available goods more differentiated, thereby exerting a pro-competitive effect on the entire industry. |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:deg:conpap:c016_067&r=ent |