nep-ent New Economics Papers
on Entrepreneurship
Issue of 2012‒09‒22
nine papers chosen by
Marcus Dejardin
Notre-Dame de la Paix University

  1. Entrepreneurial employees: Are they different from independent entrepreneurs? By Nyström, Kristina
  2. The Returns to Education for Opportunity Entrepreneurs, Necessity Entrepreneurs, and Paid Employees By Frank M. Fossen; Tobias J.M. Büttner
  3. The Role of Job Satisfaction in Transitions into Self-Employment By Giuliano Guerra; Roberto Patuelli
  4. Toward the Entrepreneurial Society By Jean Bonnet; Marcus Dejardin; Antonia Madrid-Guijarro
  5. Prevalence and Longitudinal Trends of Early Internationalisation Patterns among Canadian SMEs By Sui, Sui; Yu, Zhihao; Baum , Matthias
  6. Exploring Situations of the Community-Based Multifunctional Agriculture in the New England Region By Liang, Chyi-Lyi (Kathleen); Su, Flora; Dunn, Paul; Pescatore, Matthew
  7. Innovation at the Firm Level across Countries with Different Economic and Technological Capacity By Andreas Reinstaller; Fabian Unterlass
  8. Innovation and performance in KIBS: The moderating role of standard and modular services By Anna Cabigiosu; Diego Campagnolo
  9. Entrepreneurs, Managers and Inequality By Lee, Sang Yoon Tim

  1. By: Nyström, Kristina (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)
    Abstract: This paper uses individual-level data from the Swedish 2011 Global Entrepreneurship Monitor (GEM) to investigate differences with respect to individual characteristics associated with independent entrepreneurs (nascent entrepreneurship and new business ownership) and entrepreneurial employees. Are there any differences with respect to gender, age, income and education associated with these different forms of entrepreneurship? Furthermore, it can be argued that an entrepreneurial employee differs with respect to attitudes and perceptions about entrepreneurship. Do attitudes and perceptions about entrepreneurship, for example, perceiving entrepreneurship as good career choice, or the fear of failure differ between entrepreneurial employees and independent entrepreneurs? Our empirical findings shows what differs between entrepreneurial employees and independent entrepreneurs are their perceptions about opportunities and capabilities. Moreover, the probability of becoming an entrepreneurial employee increases with the level of education.
    Keywords: Entrepreneurial employees; Global Entrepreneurship monitor; Sweden
    JEL: D20 J24 L26
    Date: 2012–09–11
  2. By: Frank M. Fossen; Tobias J.M. Büttner
    Abstract: We assess the relevance of formal education for the productivity of the self-employed and distinguish between opportunity entrepreneurs, who voluntarily pursue a business opportunity, and necessity entrepreneurs, who lack alternative employment options. We expect differences in the returns to education between these groups because of different levels of control. We use the German Socio-economic Panel and account for the endogeneity of education and non-random selection. The results indicate that the returns to a year of education for opportunity entrepreneurs are 3.5 percentage points higher than the paid employees’ rate of 8.1%, but 6.5 percentage points lower for necessity entrepreneurs.
    Keywords: returns to education, opportunity, necessity, entrepreneurship
    JEL: J23 J24 J31 I20 L26
    Date: 2012
  3. By: Giuliano Guerra (Ufficio per lo sviluppo economico, Repubblica e Cantone Ticino, Switzerland); Roberto Patuelli (Department of Economics, University of Bologna, Italy; The Rimini Centre for Economic Analysis (RCEA), Italy)
    Abstract: As observed in many advanced economies experiencing an increase of self-employment rates since the late 1970s, a flourishing small- and medium-size enterprise sector is traditionally associated with positive economic development and growth. In the regional context, areas benefiting from an established entrepreneurial culture are in general more successful and innovative, as well as better equipped to sustain structural changes and to lessen unemployment. It is therefore important to investigate the reasons why individuals choose self-employment, and why they do it despite lower protection, higher risks, and possibly more effort than what is required in a comparable wage employment position. Existing research identifies better prospects of entrepreneurial earnings as compared to wages as a major stimulus towards self-employment. However, besides pecuniary motivations, other factors may be considered when it comes to the occupational choice. These include displacement, uncertainty, (the threat of) unemployment, and (dis)-satisfaction. Building on a job quits model, we propose a representation of transition behaviour from wage to self-employment which includes subjective evaluations of pecuniary and nonpecuniary satisfaction on the previous job. Individual microdata are drawn from the Swiss Household Panel (SHP), and cover the time period 1999–2008. Additionally, we focus on the dynamics of job satisfaction in order to highlight the role played by shocks in subjective evaluations, and introduce their interaction with levels to control for threshold effects.
    Keywords: self-employment, job satisfaction, job transition, Switzerland
    JEL: C25 J62 M13
    Date: 2012–09
  4. By: Jean Bonnet (University of Caen Basse-Normandie - CREM UMR CNRS 6211, France); Marcus Dejardin (Université Catholique de Louvain, IMMAQ CIRTES - FUNDP - University of Namur, CERPE); Antonia Madrid-Guijarro (Technical University of Cartagena, Financial Economics and Accounting Department, Spain)
    Abstract: Not only growth but better growth is required to address the tremendous challenges that European economies are facing. More entrepreneurs and more entrepreneurial firms -new and innovative firms- can contribute. A variety of factors may be considered to promote entrepreneurship among young people, and innovative activities among firms. Education is certainly one of the most relevant. The need to create a more favourable social climate for new businesses requires not only changing the state of mind but also improving globally the skills of entrepreneurs. It is also important to identify the most favourable context for the creation and development of sustainable, innovative companies, especially during economic crisis. This paper has been prepared to introduce and present original contributions from scholars in economics, management and sociology, that are collected in a book entitled The Shift to the Entrepreneurial Society: A Built Economy in Education, Sustainability and Regulation, to be published by Edward Elgar Publishing in July 2012.
    Keywords: entrepreneurship, socioeconomic challenges, education, sustainability, regulation
    JEL: L26 M13 I25 O10
    Date: 2012–06
  5. By: Sui, Sui; Yu, Zhihao; Baum , Matthias
    Abstract: Purpose: Recently, studies call for a more nuanced perspective on different internationalization patterns pursued by early internationalizers. These studies argue that most Born Global firms turn out to be Born Regional and that the proportion of true Born Global firms would be overestimated. Moreover, literature claims that the proportion of Born Global firms increases over time due to macroeconomic trends. We investigate these assumptions by providing a dynamic perspective on the prevalence of different types of internationalization patterns among Canadian small and medium-sized exporters (SMEs). Design/methodology/approach: To empirically examine the ideas above, we constructed a unique large-scale longitudinal (1997–2004) dataset. A multinomial logit model is employed to estimate a firm’s predicted probability, ceteris paribus, of choosing different internationalization patterns: Born Global, Born Regional, and Gradual Internationalization. Findings: We find that Born Global firms indeed account for a smaller proportion than Born Regional firms (16% vs. 27%). However, we find evidence that Born Globals and Born Regionals are increasingly established over time and that macroeconomic factors seem to account for this development at least partially. Originality/value Combining a rigorous empirical analysis with a unique large scale longitudinal dataset, we address two fundamental research questions in the international entrepreneurship (IE) literature a) which internationalization pattern prevails and b) if the Born Global pattern is increasingly established over time. We therewith theoretically contribute by comparing the predictive value of different internationalization frameworks international new venture (INV) framework, stage-models and regionalization hypothesis), toward which there is considerable current debate.
    Keywords: International New Ventures; Born Globals; Born Regionals; Longitudinal Study; Regional Strategy; Internationalization Process
    JEL: F13 O51
    Date: 2012–06
  6. By: Liang, Chyi-Lyi (Kathleen); Su, Flora; Dunn, Paul; Pescatore, Matthew
    Abstract: The purpose of this paper is to report preliminary findings of a comprehensive study of multifunctional farming operations in New England. The study shows that small farmers are involved in multifunctional activities that allow them to use existing resources to supplement their farming operations. The study clearly shows that small farmers are involved in broadening, deepening and re-grounding activities including direct sales, value added, agritourism and off farm income endeavors. The study provides much needed insight and specification into these actitives and provides important new implications for academics, practitioners and policy makers locally, regionally and nationally.
    Keywords: community-based agriculture, multifunctional agriculture, New England, Entrepreneurship, agritourism, value added, direct sales, off farm income, Agricultural and Food Policy, Community/Rural/Urban Development, Q1, Q12,
    Date: 2012–08
  7. By: Andreas Reinstaller (WIFO); Fabian Unterlass (WIFO)
    Abstract: This paper presents an analysis of innovation behaviour at the firm level across countries with different levels of technological capabilities and economic development. Using data from the Community Innovation Survey for 20 European countries the paper shows that the impact of total innovation expenditures – including next to R&D also outlays for technology transfer, the market introduction of innovations or new designs – increases monotonically across countries with their level of technological capabilities. R&D investments instead have a significant impact on the generation of innovations only for firms located in countries with higher levels of technological capabilities. Firm specific competencies to suggest or contribute to innovation projects have a more significant effect on the innovation output the higher the level of economic development of the countries in which firms are located. Finally, the paper presents also evidence that R&D does not generally increase the absorptive capabilities of firms.
    Keywords: Innovation decision, Catching up, Technological capabilities, R&D
    Date: 2012–09–14
  8. By: Anna Cabigiosu (Department of Management, Università Ca' Foscari Venezia); Diego Campagnolo (Department of Economics and Management, Università di Padova)
    Abstract: In this paper we study the relationship between service innovation and firm's performances in the KIBS domain. In line with previous works, we maintain that service innovation positively impacts firm's performances but we also claim that this relationship is likely to be moderated by how the service firm conceives its service configuration. Particularly, we point out that service configurations based on standard and modular services positively moderate the positive relationship between innovation and performance. Using a sample of 239 Italian KIBS firms, we empirically test our model. Results confirm that service innovation is positively associated with firmÕs performances both as market size and, albeit weakly, as ROI growth. Results also confirm the positive moderating role of standard services while the moderating role of modular services is only marginal. Overall, we contribute to the existing literature of KIBS and service innovation showing that service innovation and service customization should be considered as separate and that KIBS firms can experience increasing returns if they are able to combine service innovation and service standardization.
    Keywords: Services, Innovation, Performance, Standard services, Modular services
    JEL: O32 O33
    Date: 2012–05
  9. By: Lee, Sang Yoon Tim
    Abstract: Since the 1980s, the U.S. income distribution has become considerably more concentrated toward the top while the wealth distribution has not. I argue that this can be accounted for by occupational shifts caused by the decline in tax progressivity. To show this, I construct a dynamic general equilibrium model of occupational choice which distinguishes between entrepreneurs, who run their own firms, and managers, who run publicly owned firms. Collateral constraints induce entrepreneurs to hold more wealth, while managers earn higher wages as a result of competitive assignments to firms. Feeding observed tax policy changes from 1970 to 2000 into the model, I find that (i) less progressive taxation increases the relative mass of managers in equilibrium, and explains approximately 30% of the observed increase in the concentrations of earnings and income without increasing that of wealth, and (ii) reverting to historical tax policies has only a negligible impact on consumption equivalent welfare.
    JEL: C68 E21 E62 J3
    Date: 2012

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