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on Entrepreneurship |
| By: | Michael Fritsch; Michael Wyrwich |
| Abstract: | Studies for established market economies such as West Germany (Fritsch and Mueller, 2007), and Sweden (Andersson and Koster, 2011) have shown that regional start-up rates tend to show a relatively high level of persistence and path dependency over periods of 10-15 years. One main reason for this high level of persistence observed could be that the region-specific determinants of entrepreneurship also remain relatively constant over time. Another explanation could be the existence of a regional entrepreneurship culture. Such an entrepreneurial culture could maybe even outwear considerable ‚jumps‘ in the conditions of the economic environment such as wars and drastic changes of the political regime. We analyze the persistence of regional entrepreneurship in three different scenarios with different degrees of changes of the economic conditions. The basic idea is that if we should find that high levels of regional entrepreneurship do persist disruptive changes of the economic conditions, this may be regarded an indication for the presence of a regional entrepreneurship culture. - The first scenario that we present is regional entrepreneurship in West Germany in the 1984-2005 period, a time that was characterized by relatively stable conditions without any major jumps. - For the second scenario we extend the period of analysis to 80 years and compare regional entrepreneurship in West Germany between the years 1925 and 2005. This period was has been characterized by some considerable disruptions such as the World Economic Crisis of the late 1920s, the Nazi regime and the Second World War that ended with destruction and occupation of the country, and, finally, German re-unification. - The third scenario, East Germany in the time period 1925-2005, was characterized by even more shocks that have probably been even more severe than what has been experienced in the West. We find long-term persistence in all three scenarios what is particularly remarkable for the third setting, the East German regions. Those East German regions with a relatively high level of entrepreneurship in the year 1925 also show high levels of entrepreneurship 80 years later, in the year 2005. Our findings can be regarded a strong indication for the existence of a regional entrepreneurial culture and its beneficial effects for economic development. Keywords: Entrepreneurship, self-employment, new business formation, persistence, culture JEL classification: L26, R11, O11 References Andersson, Martin and Sjerdan Koster (2011): Sources of persistence in regional start-up rates—evidence from Sweden, Journal of Economic Geography, 11, 179-201. Fritsch, Michael and Pamela Mueller (2007): The Persistence of Regional New Business Formation-Activity over Time – Assessing the Potential of Policy Promotion Programs, Journal of Evolutionary Economics, 17, 299-315. |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa12p63&r=ent |
| By: | Haufler, Andreas; Norbäck, Pehr-Johan; Persson, Lars |
| Abstract: | Stimulating entrepreneurship is high on the policy agenda of many countries. We study the effects of tax policies on entrepreneurs’ choice of riskiness (quality) of an innovation project, and on their mode of commercializing the innovation (market entry versus sale). Limited loss offset provisions in the tax system induce entrepreneurs innovating for entry to choose projects with inefficiently little risk, whereas this imperfection does not arise when innovating for sale. Tax systems which systematically favor market entry of entrepreneurs can thus lead to welfare losses due to inefficient quality choices, despite leading to more competition in the product market. |
| Keywords: | business taxation; innovation; market entry |
| JEL: | H25 L13 M13 O31 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9157&r=ent |
| By: | Jarkko Harju; Tuomas Kosonen |
| Abstract: | Based on existing evidence, we know little about how the taxation of small business owners affects their economic activity. This paper studies the effect of two Finnish tax reforms, in 1997 and 1998, on the effort decisions of the owners of small businesses utilizing both theoretical model and empirical data. The reforms reduced the income tax rates of small business owners and applied only to unincorporated firms, leaving corporations out. We use a difference-in-differences strategy to estimate the causal impact of tax incentives on the economic activity of small businesses. The results imply that lighter taxation leads to an increase in the turnover of firms that we interpret as an increase in effort exerted by their owners. |
| JEL: | H22 H24 H25 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18442&r=ent |
| By: | Baltzopoulos, Apostolos (The Nordic Centre for Spatial Development); Braunerhjelm, Pontus (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Tikoudis, Ioannis (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology) |
| Abstract: | The extent and importance of spin-offs for industrial dynamics have been analysed in a number of previous studies, yet knowledge is surprisingly scarce about the determinants that trigger such entrepreneurial ventures. In the current analysis we use unique and detailed Swedish data to comprehensively explore how individual, firm, regional, and industry variables influence spin-offs during 1999-2005. In addition to the expected general positive impact of regional size and entrepreneurial culture, we find specific features for knowledge intensive manufacturing and service production on the propensity of employees to spin off a new venture. Moreover, we use an entropy measure to disentangle unrelated and related variety, and find that the former has a significantly negative impact while the latter a significantly positive effect on the propensity of the individual to start a spin-off. |
| Keywords: | Spin-offs; entrepreneurship; industries; regions |
| JEL: | D01 O12 O18 R10 |
| Date: | 2012–01–30 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0265&r=ent |
| By: | G. Guerra; R. Patuelli |
| 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 selfemployment. 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. |
| JEL: | C25 J62 M13 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:bol:bodewp:wp849&r=ent |
| By: | Amaresh K. Tiwari; Pierre Mohnen; Franz Palm; Sybrand Schim van der Loeff |
| Abstract: | Using a unique panel data of Dutch innovation and financial variables we empirically investigate how financing and innovation vary across firm characteristics. The study also tries to gauge the extent of market failure due to the presence of financing frictions. Our main findings can be summarized as follows. First, when firms face endogenous financial constraints, debt financing and innovation choices are not independent of firm characteristics such as age, size, and existing leverage. In the absence of financial constraints, however, firms, almost uniformly across firm characteristics, become less inclined – as compared to firms facing constraints - to engage in innovative activity by raising debt. Second, small, young, highly leveraged, and firms with lower collateralizable assets are more likely to be financially constrained. Third, large, young, and low leveraged firms are more likely to be innovators. Fourth, financial constraints adversely affect a firm’s R&D intensity. Fifth, smaller and younger firms are more R&D intensive. A new estimator, that combines the method of “Correlated Random Effects” and “Control Function” to account for the endogeneity of regressors in a structural equations model, is developed. <P>Nous utilisons une base de données de panel néerlandaise assez originale pour examiner comment les décisions d’innovation et de financement varient selon les caractéristiques des entreprises. Nous examinons en particulier dans quelle mesure il y a une faille de marché due aux besoins de financement de l’innovation. En résumé, nous aboutissons aux résultats suivants. Premièrement, les entreprises soumises à des contraintes financières font leurs choix de financement et d’innovation en fonction de leur âge, de leur taille et de leur degré d’endettement. Sans contraintes de financement, les enterprises sont moins portées à innover en s’endettant, quelles que soient leurs caractéristiques. Deuxièmement, ont tendance à être contraintes financièrement les enterprises jeunes, petites, avec un rapport dettes/fonds propres élevé et peu d’avoirs collatérables. Troisièmement, les entreprises jeunes, grandes et avec un faible rapport dettes/fonds propres ont plus de chances d’être innovantes. Quatrièmement, les contraintes de financement réduisent l’intensité de R-D. Cinquièmement, ce sont les entreprises petites et jeunes qui sont plus intenses en R-D. Pour estimer notre modèle, nous développons un nouvel estimateur qui combine les méthodes des effets aléatoires corrélés et des fonctions de contrôle pour tenir compte de l’endogénéité des régresseurs dans un modèle structurel d’équations simultanées. |
| Keywords: | Financial Constraints, Capital Structure, R&D, Innovation, Firm Dynamics, Market Failure, Panel Data, Correlated Random Effects, Control Function, Expected ´a Posteriori, financières, structure de capital, R-D, innovation, dynamique de firmes, failles de marché, données panel, effets aléatoires corrélés, fonctions de contrôle, attentes a posteriori. |
| JEL: | G30 O30 C30 |
| Date: | 2012–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2012s-24&r=ent |
| By: | Andreas P. Cornett; Nils Karl Soerensen |
| Abstract: | Innovation and entrepreneurship are key factors in current regional development initiatives, derived from the concepts of new economic growth theory. The aim of this paper is to combine an assessment of innovative and entrepreneurial performance with the spatial distribution and functional linkages of certain types of economic clusters. The hypothesis is that clustered regions with high entrepreneurial and innovative performance have higher growth than non- innovative/entrepreneurial regions or regions with a more scattered economic structure. The clustering and in some cases even the polarization of economic activities metropolitan regions can lead to excess growth, and contribute to a process of convergence between nations, but will also turn regional economic divergence back on the national economic development agenda. The purpose of this paper is to provide in deep information on these processes in an international and perspective based on European empirical evidence. The first part of the paper addresses the development and growth issue in a theoretical development policy perspective. The impacts of innovation (measured by innovation scoreboard data) and entrepreneurship (GEM data etc.) on regional growth are estimated individual and combined as well as dummies for various levels of industrial clustering (measured by location quotients and the change of LQ) are included. Within these groups we study the process of convergence by use of the traditional measures of convergence. The findings are compared with traditional geographical convergence results, enabling an analysis based both on traditional geographical adjacent regions, often characterized by a common institutional framework, and regions characterized by common features in economic performance terms. Based on the empirical results and the findings of the literature survey in the first part of the paper the final section provides an assessment of the overall trends in economic convergence and disparities and the drivers behind this process. |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa12p631&r=ent |
| By: | Eleonore Huang Vogel |
| Abstract: | Decision-making, incentives, environmental frameworks and support mechanism are often subject to entrepreneurship research striving to explain how and why academics engage in entrepreneurial activities. The focus is most often on the academics’ rather linear individual transformation from an idea owner to a new business entrepreneur.This paper proposes an alternative network based view of academic entrepreneurship drawing concepts from interdisciplinary theories. Entrepreneurship is described as: (1) integrated in formal and informal networks; (2) hindered or eased by these linkages; and (3) shaped by the opportunities (idea recognition, experience, finance etc.) within these networks. The academia produces new knowledge that through entrepreneurial activities transform into innovations in the market place. Academic entrepreneurship therefore naturally combines the perspectives of entrepreneurship and innovation. However, despite many common touching grounds these strands of research are rarely conceptually intertwined. Research on the role of the academia within the innovation process of knowledge-based economies highlight the meaning of inter-institutional links and give reason to assume that closer links between industry and the academia would benefit commercialization. However, little is known about the structure, strength and nature of these links. This paper has two purposes. 1) To examine the structure, strength and significance of networking to entrepreneurship with a deepened focus on opportunity recognition (commercial value) and exploitation in the perspective of academic entrepreneurship. 2) To develop a working hypothesis to be empirically tested with the aim to contribute towards theory building for these unanswered questions, for which it does not exist a cohesive normative, predictive, or explanatory theory. Method – Using an interdisciplinary theoretical framework a sample of academic entrepreneurs in the region of Fujian province in China is analyzed through data based on interviews. Paper contribution - This framing has potential for practical relevance and academic inquiry. It forces acknowledgement of the close connection between social and economic conditions for academic entrepreneurship and the role of networks for academic entrepreneurship. It also untangles a web of formal support systems and informal entrepreneurial networks. Conclusion - The process of the idea commercialized on the market may not be seen as a linear process, in which the academic owns the idea (identification of the commercial viable science) and becomes the entrepreneur by starting a company but rather as a dynamic process in which the origin of the idea may come from outside, indentified by members within the network of the academic and the appreciation of its commercial value, and the necessary resources (finance, entrepreneurial experience, re-innovation processes etc.) is added by yet others within the network. The presented concept describes academic entrepreneurial actions as non-isolated, non-deterministic, and dynamic co-creating through networks. |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa12p1091&r=ent |
| By: | William Dunkelberg (Department of Economics, Temple University); Carmen Moore (Department of Business Administration, Morgan State University); Jonathan Scott (Department of Finance, Temple University); William Stull (Department of Economics, Temple University) |
| Abstract: | This paper focuses on how entrepreneurial goals affect the resource allocation of new firm owners. It connects research in psychology and management that examines the core motivations of entrepreneurs with research in economics that models the behavior of owner-managers as utility-maximizing rather than profit-maximizing. We hypothesize that new owners with nonmonetary goals allocate their resources differently than do owners with monetary goals and that the differences are meaningful in size. To test these hypotheses, we estimate firm level equations based on economic theories of factor demand that show how input quantities depend on owner goals. Data come from a national survey of new U.S. business owners. We find owner goals have both a statistically and substantively significant effect on resource allocation for new firms. Owners with nonmonetary goals put in more of their own and family hours rather than hiring outside employees. Implications for research and policy are discussed. |
| Keywords: | Entrepreneurship, Small Business, New Firms, Owner Goals, Resource Allocation |
| JEL: | L26 M12 M14 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:tem:wpaper:1203&r=ent |
| By: | Franz Kronthaler; Katharina Becker; Kerstin Wagner |
| Abstract: | Start-up activities are considered to be important for regional economic development which varies considerably between regions. As new firm formation and growth is strongly influenced by regional conditions, we analyse the role of regional conditions and their impact on start-up activities. In particular, this study assumes that the combination of the determinants, which are considered to have an impact on firm formations rates, influences regional start-up activity. To test this assumption the paper uses a two-step procedure, employing cluster analysis combined with non-parametric testing. Firstly, homogenous types of regions with regard to their structural characteristics conducive for entrepreneurial activities are formed with the help of cluster analysis. Secondly, Kruskal-Wallis test and Mann-Whitney test are used to find out whether the different types of regions with a specific composition of factors perform equally in new firm formation. The analysis is based on the spatial level of Swiss ‘mobilité spatiale’ regions (MS-regions). MS-regions are functional units based on economic interaction and commuting movements. The research strategy makes it possible to discuss whether different regional combinations of factors lead to high or low similar start-up rates within regions. The results show firstly that regions with an overall high potential, due to their factor endowment, have in fact high start-up rates, whereas regions with a low potential have low start-up rates. Furthermore, the results show secondly that the combination of factor endowments seems to be important as well. Completely different regional combinations of factors conducive for entrepreneurial activity can lead to similar high or low start-up rates. Hence, not only single factors shape firm formation rates in regions. It is also the combination and interrelationship of the various parameters which can be important for different types of regions. The findings of this study may have implications for policy makers in that they have not only the opportunity to influence single factors in order to increase the dynamics of entrepreneurial activity in their region. They need to focus on the region specific structure. It also means that other regions cannot easily be used as a benchmark. For regional policy, each region has to incorporate its own specific combination of factors conducive for new venture creation. Keywords: Regional Economics, Entrepreneurship, Business Formation JEL classification: R11, L26, R58 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa12p90&r=ent |
| By: | Jose L. Gonzalez-Pernia; Iñaki Peña-Legazkue |
| Abstract: | The emergence of new ventures that from inception use resources and sell their goods and services in multiple foreign markets has challenged traditional theories explaining the internationalization of a firm as a stage process (Oviatt & McDougall, 1994). Different factors have been identified to explain this phenomenon, including individual-related factors (Andersson & Evangelista, 2006; Bloodgood, Sapienza, & Almeida, 1996; Harveston, Kedia, & Davis, 2000; Orser, Spence, Riding, & Carrington, 2010), and organization-related factors (Bloodgood, et al., 1996; Dhanaraj & Beamish, 2003; Hollenstein, 2005). However, no emphasis has been placed on the regional forces influencing the early international expansion activities carried out by some entrepreneurs and their young businesses. In this study, we analyze the extent to which differences in FDI and technological knowledge across regions affect the propensity of early-stage entrepreneurs to be export-oriented. Based on Spanish GEM data and other secondary sources for the period 2005-2009, we found that the exposure to higher flows of inward FDI at regional level significantly raises the probability of an early-stage entrepreneur to be export-oriented, while the exposure to higher flows of outward FDI or higher levels of accumulated knowledge at regional level has no impact. The results also show that the exporting behaviour of early-stage entrepreneurs is driven by individual and organization factors that have been analyzed by previous studies. Our findings on the antecedents of export-oriented entrepreneurs complement those of prior studies which have suggested that the exposure to international activities of other organisations located in the same environment influences the propensity of a new venture to export (De Clercq, et al., 2008; Fernhaber & Li, 2010; Lu, 2002). However, our paper adds to the extant literature on international entrepreneurship by analyzing the role of FDI at individual level, considering both foreign and domestic firms involved in international investment activities in the same region. Keywords: Export Orientation; Entrepreneurial Activity; FDI Spillovers; Knowledge Spillovers. JEL Codes: F23, M13, O33, R12 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa12p912&r=ent |
| By: | László Szerb; Raquel Ortega-Argilés; Zoltán Ãcs; Alicia Coduras |
| Abstract: | The purpose of this paper is to contribute to our understanding of regional economic development by constructing a regional entrepreneurship index that captures the essence of the contextual features of entrepreneurship and fills a gap in the measurement of economic and social development in the cases where high heterogeneity is found in the entrepreneurial climate between countries and regions. This paper builds on Acs and Szerb (2011) and aims to provide a regional application of the Global Entrepreneurship and Development Index (GEDI). Originally the GEDI has been developed to measure national level of entrepreneurship. The GEDI refers to the contextual feature of entrepreneurship by focusing on the twelve pillars of entrepreneurial attitudes, entrepreneurial action and entrepreneurial aspirations. The country level index construction integrates 31 variables, 16 from the GEM (Global Entrepreneurship Monitor data) adult population survey, and 15 from other data sources, into 14 pillars, three sub indexes and a ‘super index’. One of the most important finding of Acs and Szerb (2011) is that the relationship between entrepreneurship and economic development appears to be mildly S-shaped. The model has important implications for development policy. The regional application of the GEDI is relatively straightforward, since the GEM related individual variables are available in regional levels for a few countries, including Spain. The key element of the regional entrepreneurship index construction is to find regional level institutional data that are available also in the country level. Out of the 15 institutional variables we apply for the entrepreneurship index construction 10 are available in the NUTS-2 regional levels that is the same or very similar to the country level variables. Because of the lack of the remaining four pillars we used the Spanish country level variables. While the overall regional level entrepreneurship and development index for the Spanish regions are calculated as benchmarking the country level pillars the analysis focuses on comparing 17 Spanish autonomous regions. This paper provides tailor-made entrepreneurship policy suggestions for the different autonomous Spanish regions by showing the relatively weak and strong points of their entrepreneurial climate. For an optimum configuration of a public policy to improve entrepreneurship we suggest different levels of public policy as national, multi- and single levels depending on the deviation of a particular pillar from the best benchmarking value and on how many regions are affected by the weakness of a particular pillar. Key Words: Entrepreneurship, Regional Development, Regional Policy JEL: L26, R11, R58 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa12p781&r=ent |
| By: | Hans Westlund; Johan P. Larsson; Amy Olsson |
| Abstract: | This paper contains one of the first empirical attempts to investigate the influence of local Entrepreneurial Social Capital on startup propensity. We use a unique database including not only total startups, but data on startups divided in six branches to study the impact of Entrepreneurial social capital on startups per capita. Analyses are performed on all municipalities as well as by municipality type (urban or rural). Entrepreneurial social capital, measured by local firms’ assessment of local publics’ attitudes to entrepreneurship seem to exert a positive and significant influence on local startup rates in both urban and rural municipalities in Sweden. When startups are being divided in six branch groups, entrepreneurial social capital keeps its significance for all branches in rural areas, while it stays significant for two of the groups in urban areas. Thus, social capital seems to have a broader and more general impact on startup rates in rural areas. Keywords: Entrepreneurship, Startups, Entrepreneurial social capital |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa12p91&r=ent |
| By: | Reveiu Adriana |
| Abstract: | Regional clusters and entrepreneurship have become very popular subjects in economics, regional science, and economic geography. In the last decade, a large number of scientific papers investigate the empirical evidence for clusters, their definition, and their implications for economic policy. Also, a series of working tools for regional cluster analyses have been proposed. Entrepreneurial attitudes and activities interact and their characteristics are normally bound to the region. Local entrepreneurial attitudes and entrepreneurial activities can be the starting-point for the evolution of a regional cluster. There are lots of arguments for the hypothesis that existing regional clusters have positive impacts on entrepreneurial attitudes and entrepreneurial activities. But, exist only few analyses refering to the relationship between clusters attributes of a region and the entrepreneurial activities in the same region. From our knoledge, it is not such of analyses about Romania. This paper aims to identify regions with functional or potential industrial clusters, from Romania, and to analyse their impact on the entrepreneurial environment. Data about all the companies acting in Romania in 2011 is used to elaborate the spatial clusters in the most concentrated Romania industries. A second data set, collected as part of the Global Entrepreneurship Monitor (GEM), serves to assess the relationship between regional clusters and entrepreneurial activities and attitudes. GEM intends to measure the level of entrepreneurial activities and to identify the individual factors and the entrepreneurial framework conditions that may explain differences in the levels between the regions of Romania and the entire country.The paper tests the empirically proven hypothesis which stipulates that the existence of one or several industrial clusters in a region has a positive impact on the number of start-ups and attitudes in the same region. The results obtained from descriptive and regression analyses have shown that there is a positive relationship between the number of clusters and the number of employees in clusters in Romanian regions on the one hand and entrepreneurial activities and entrepreneurial attitudes like the assessment of good start-up opportunities on the other. |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa12p1075&r=ent |
| By: | Federico Pablo; Antonio GarcÃa-Tabuenca; MarÃa Teresa Gallo; Juan Luis Santos; Tomás Mancha |
| Abstract: | The location of new establishments is a major issue from the perspective of economic activity and the analysis of the territory. Although both its determinants and consequences are multiple and complex, most studies are focused on single factors or aggregate approaches. This paper presents an agent-based model (ABM) with the main objective to analyze, with high spatial accuracy, the effects of public policies on the behaviour and performance of firms. The starting point is the building, trough statistical matching techniques making use of microdata sources, of a database that replicates the attributes and location of all individuals and companies that are located in a specific spatial context. Then, individual behaviours are established for both companies and human beings who are interacting according to their preferences and endowments. Individuals are an essential part of the model as they operate as consumers, workers and entrepreneurs, conditioning the carrying out of firms, their entries and closures. In addition to these agents we include a raster of locations, built through with downscaling techniques, that includes for each cell the number of individuals, establishments or land use as well as other key variables such as distance to transport networks, land price or GDP generated. Patterns of mobility and consumption are identified with the matching of several sources of data and the building of relationships between agents. Furthermore, the current situation of different policies is displayed, in order to measure properly the changes later introduced to do simulations. Then we are able to forecast the growth of agglomeration economies and simulate the impact of changes in public policies on SMEs location and performance. A new contribution of this work is the inclusion of a complete modeling of entrepreneurial activity, from the generation of the idea to the decision of the location and the final implementation of the project. That is, it is possible a more realistic approach to the behaviour of Small and Medium Enterprises (SMEs) in which location decisions is related more to personal conditions of the employer that to business efficiency criteria. The model is implemented in MASON and the results are presented in stochastic terms thus enabling a better assessment of both policy outcomes and their risks. JEL: L25, L26, R12, R58 Keywords: Agent-based model, entrepreneurship, business location |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa12p551&r=ent |
| By: | Elsie Echeverri-Carroll; Sofia G. Ayala |
| Abstract: | Recent theories of economic development view learning processes associated with knowledge externalities as the engines of economic growth. As suggested by Marshall (1920), entrepreneurs congregate next to one another to learn from each other. However, cities may differ in the generation and transmission of entrepreneurial ideas and, therefore, both entrepreneurial externalities and economic growth vary across cities. This process may be conditioned by gender. Indeed, empirical evidence exists that the characteristics of business owners that influence knowledge externalities – such as access to research and development, level of education and experience, among others – differ by gender. In this paper, we examine the effect of gender-specific entrepreneurial externalities, measured by the spatial concentration of male and female entrepreneurs (separately) across cities, on urban employment growth between 1980 and 2007. This paper’s econometric model and choice of control variables follow the city growth literature, which exploits the availability of panel data for metropolitan areas by introducing area fixed effects in the urban growth equation and using start-of-period values to reduce the potential for simultaneity bias (reverse causality). |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa12p1161&r=ent |
| By: | Rolf Golombek and Arvid Raknerud (Statistics Norway) |
| Abstract: | While little attention has been paid to the role of profitability in the empirical literature on firm exit, we employ a detailed recently established database of Norwegian manufacturing firms to identify the extent to which profitability explains a firm's exit behavior. Some key characteristics of the data are: i) 25 percent of firms that exited experienced positive profits every year before exit, ii) there is no negative profitability shock immediately prior to exit, and iii) firms may continue production, even though they frequently experience negative profits. We use these data to estimate a theory-founded econometric model of exit, where the exit and investment decisions of firms are formulated as the solution to a discrete-continuous dynamic programming problem. In particular, the probability of exit depends on profitability, which is not directly observable to the econometrician. We estimate this model for six manufacturing industries and find that increased profitability lowers the probability of exit and that this effect is statistically significant in all industries. We show that the difference in annual exit probability between firms that exited during the observation period (1994–2009) and firms that did not exit is highly persistent over time, and there is no tendency for a sharp increase in the estimated exit probability just prior to exit. Hence, it is the cumulative effect of the higher risk of exit over several years, compared with the average firm, that causes firms to exit. |
| Keywords: | Exit; investments; entrepreneurship; continuous-discrete choice; monopolistic competition; manufacturing firms; policy simulation; ownership structure; wage raise. |
| JEL: | C33 C51 C61 C72 D21 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:706&r=ent |
| By: | CHRYSANTHI BALOMENOU; MARIANTHI MALIARI; DIMITRIS LAGOS |
| Abstract: | This paper is divided into two parts, one theoretical and one empirical and attempts to examine the interaction between bank branches, local entrepreneurship and development on rural and suburban areas at Regional Unity of Serres, Central Macedonia, Greece. More particularly, in the first part of our paper are presented loan providing funds for SMEs in Greece, the new law for local authorities named “Kallikratis†on Regional Unity of Serres, local demographic characteristics and the existing bank branches network on this area. Analyzing the data we conclude to the characterization of the region as rural and underdevelopment. At the second part are presented the results of our questionnaire-based research from 74 entrepreneurs in Regional Unity of Serres. It is noticeable that businessmen’s answers are similar to those deduced from the results of the researches that have been referred to in bibliography Finally we will end this presentation with the main conclusions providing that an extensive network of bank branches on rural and suburban areas support local entrepreneurship and contribute to local development. |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa12p801&r=ent |
| By: | Lasse Sigbjørn Stambøl |
| Abstract: | A growing body of evidence suggests that reallocation of jobs within and across firms and regions and from low to high-educated labour are essential in driving regional economic growth. Each year, many businesses expand and many others contract. New businesses constantly enter, while others gradually disappear. This paper covers analyses of regional employment change investigating the relationship between regional branch composition, firm size, job growth and job reallocation in regional labour markets. The focus are put on different elements of job dynamics, by the creation of new jobs and destruction of old jobs and how these processes develop by job expansion versus job losses within existing firms, and by new establishments versus job losses due to firm closures. Our indicators are drawn from firm-level databases that cover all firms with at least one employee for all regions and sectors of the economy. The indicators cover also the number of employees within each firm including detailed information of their level of education. Among questions to be answered are how branch-mix and firm size affect job growth generally and for high-qualified labour especially, and to what extent new jobs are created by new established firms versus expansions of jobs within existing firms. Tentative results suggest positive relationship between the regional level of branch-mix and job growth, between the level of branch-mix and firm size and thus also between job growth and firm size. The relationship between regional branch-mix and new establishments tend, however, to be negative. Furthermore, there are positive relationship between job growth both within existing firms and in new established firms and job decline within firms and by firm closures, indicating that reallocation of jobs are important for job growth. New jobs by new establishments clearly exceed the number of jobs lost by firm closures, while job losses within existing firms exceed the number of new jobs created by expansion within these firms. However, it is the creation of new jobs within existing firms that contributes most to the supply of new jobs. The results also indicate that reallocation from low to high-educated labour mostly take place in the job processes within existing firms, more than in job reallocation due to new establishments and firm closures. Beyond these main trends there are, however, detected strong regional variations. Keywords: Regional labour markets, job reallocation, labour mobilty. JEL codes: J 21 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa12p650&r=ent |
| By: | Ioannis Katsikis; Garyfallos Fragidis; Dimitrios Paschaloudis |
| Abstract: | Although neighboring countries and both members of the EU, Greece and Bulgaria have very different social and economic environments in which entrepreneurial activities take place. At the same time, there are strong entrepreneurial ties between private firms of the two countries, initiated by organizations how see those different environments as opportunities to further develop their business by operating across the borders. This fact has result to a large number of private and public firms, mainly from the Greek side, that have moved their operations in Bulgaria as well as to many Bulgarian citizens who commute to the Greek side looking for work. Although this phenomenon has been well descripted in the literature, the research on understanding the actual reasons is only minimal. In this paper, we map the entrepreneurial and investment activities between the two countries in order to better understand cross-border activities of the firms. In order to do so, we use quantitative data covering both entrepreneurial activities, such as joint ventures and the direct investments between the two countries in an effort to understand the direction, the spatial concentration and the sectoral dissemination of the entrepreneurial activities undertaken. We analyze data relevant to the existing cross border entrepreneurial activities and their orientation and both quantitative and qualitative information for the firms, joint ventures, public - private partnerships and other forms of formal collaborations. Our analysis provides interesting results for the specific organizations, the conditions and targets for which they choose to cross the borders. Furthermore, our research sheds light on the competences and the competitive advantages those firms try to gain. Based on those results, our paper concludes by providing insights on the regional and organizational strategies for the internationalization and the development of bilateral collaboration between the organizations of the two countries that could contribute positively in responding to the current economic crisis in Greece. Keywords: cross border cooperation, international entrepreneurship, Greece, Bulgaria JEL Codes: L26, F23, F21 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa12p779&r=ent |
| By: | Heike Delfmann |
| Abstract: | Several regions across the EU, including the Netherlands, face the challenges of population decline, which entails changing demographics and related social and economic implications. Social ties are disrupted by continuous out-migration, causing a decrease in support systems which may adversely affect the liveability of an area. This paper looks into the connection between population decline and composition, and the level of new firm formation, in order to describe and analyse the relation between these variables. Although it is clear that fewer people will eventually lead to fewer (new) firms, we assess whether this inherent negative relationship differs across different degrees of population change and across regional contexts. Population decline occurs in different types of regional contexts which could also lead to different consequences. In this study, we distinguish between urban and rural areas in order to assess whether different regional contexts lead to distinct outcomes. In order to establish the impact of population decline on entrepreneurship, the paper examines data on population density, size, growth and decline, together with firm dynamics in the years 2003 till 2009 retrieved from the LISA database. In general, the results show that population growth is indeed positively related to the occurrence of entrepreneurship. When we assess different levels of population decline, we find that the relationship between population change and entrepreneurship holds most strongly for declining regions. This suggests that it will become more difficult for regions in decline to maintain the same level of supply, affecting their autonomy and possibly the standard of living. Concerning the urban-rural dimension, urban regions will experience stronger impacts by population change. In conclusion, we find a clear distinction in the impact of the intensity of population change on new firm formation, particularly in the case of rural regions. Thus, the regional context and the severity of decline needs to be included in determining what kind of coping mechanism is needed when dealing with the consequences of decline. Key words: population decline, new firm formation, urban and rural regions |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa12p466&r=ent |
| By: | Randy A. Becker; Carl Pasurka, Jr.; Ronald J. Shadbegian |
| Abstract: | It remains an open question whether the impact of environmental regulations differs by the size of the business. Such differences might be expected because of statutory, enforcement, and/or compliance asymmetries. Here, we consider the net effect of these three asymmetries, by estimating the relationship between plant size and pollution abatement expenditures, using establishment-level data on U.S. manufacturers from the Census Bureau’s Pollution Abatement Costs and Expenditures (PACE) surveys of 1974-1982, 1984-1986, 1988-1994, 1999, and 2005, combined with data from the Annual Survey of Manufactures and Census of Manufactures. We model establishments’ PAOC intensity - that is, their pollution abatement operating costs per unit of economic activity - as a function of establishment size, industry, and year. Our results show that PAOC intensity increases with establishment size. We also find that larger firms spend more per unit of output than do smaller firms. |
| Keywords: | environmental regulation, costs, business size, U.S. manufacturing |
| JEL: | Q52 L51 L6 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:12-25&r=ent |
| By: | CRISTINA SERBANICA |
| Abstract: | In the modern knowledge economy, Higher Education Institutions are being required to operate more entrepreneurially, commercializing the results of their research and spinning out new, knowledge-based enterprises. However, the possibility to engage in entrepreneurial behaviours varies substantially between regions and countries. As a post-communist country, Romania faces numerous constraints in this respect. According to Erawatch Country Report (2010), technology transfer activities from universities to business firms are relatively limited, due to a low demand from industry and also relatively weak offer from universities, but many universities are currently actively involved in strengthening their technology transfer capacity. This paper explores different patterns of academic knowledge commercialization in 90 Romanian universities, using the data collected by the Romanian Ministry of Education, Research, Youth and Sports in 2011. In this purpose, we have used the discriminant analysis, due to its advantages in both synthesizing a set of variables and expressing the relationships between them. The discriminant variable by which we divided the universities in groups was the commercial (licensing) income generated by the 90 Romanian universities in 2010. The statistical observation has been carried out on a set of eight variables that were previously standardised using the Z-score technique and tested for normal distributions and homogeneity of variances. The test F for Wilks's Lambda was significant at 0.05 for four of our variables (FTE research staff, research expenditure, patent applications at EPO and new products) and had a Sig. smaller or equal to 0.1 for another four variables (patent applications in Romania, R&D grants with domestic private funding, number of partnerships with private companies and sponsorships). The first discriminate function accounting for 55,8 of between group variability revealed four significant predictors, of which research expenditure (,811*) was by far the strongest one. The other four predictors were grouped under the second canonical discriminate function. The cross validated classification showed that 58,9% of original grouped cases were correctly classified. Finally, we have grouped the universities by their region of origin and placed them in a 2x2 matrix that reflects their position in relation to the two discriminant functions. Policy implications aimed at improving academic knowledge commercialization at each region level are further advanced. Keywords: academic entrepreneurship, knowledge commercialization, discriminant analysis, regional patterns JEL codes: I2, O3, R58 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa12p478&r=ent |