nep-ent New Economics Papers
on Entrepreneurship
Issue of 2013‒04‒20
eighteen papers chosen by
Marcus Dejardin
Notre-Dame de la Paix University

  1. The Imprinting of Founders' Human Capital on Entrepreneurial Venture Growth: Evidence from New Technology-Based Firms By Luca Grilli; Paul H. Jensen; Samuele Murtinu
  3. Innovation, Reallocation and Growth By Daron Acemoglu; Ufuk Akcigit; Nicholas Bloom; William R. Kerr
  5. Determinants of Entrepreneurship in French Regions: The Role of Spatial Heterogeneity By Marie-Estelle Binet; François Facchini
  6. Entrepreneurship Programs in Developing Countries: A Meta Regression Analysis By Cho, Yoon Y.; Honorati, Maddalena
  7. How does the entrepreneurial orientation of scientists affect their scientific performance? Evidence from the Quadrant Model By Naohiro Shichijo; Silvia Rita Sedita; Yasunori Baba
  8. What Drives the Dynamics of Business Growth? By Albert Bravo-Biosca; Chiara Criscuolo; Carlo Menon
  9. Making it Work: The Mixed Embeddedness of Immigrant Entrepreneurs in New Zealand By Cain, Trudie; Spoonley, Paul
  10. Entrepreneurs’ education and different variable pay schemes in Italian firms By Damiani, Mirella; Ricci, Andrea
  11. Knowledge Networks and Their Impact on New and Small Firms in Local Economies: The Case Studies of the Autonomous Province of Trento and Magdeburg By Alessandra Proto; Simone Tani; Joerg Bühnemann; Olaf Gaus; Mathias Raith
  12. Entrepreneurship and Technology Choice with Limited Contract Enforcement By Burak Uras
  14. Export entrepreneurship and trade structure in Latin America during good and bad times By Fernandes, Ana M.; Lederman, Daniel; Gutierrez-Rocha, Mario
  15. Network! Network! Network! How global technology start-ups access modern business ecosystems By Tahvanainen, Antti-Jussi; Steinert, Martin
  16. State Intervention and the (Micro) Credit Market in Developed Countries: Loan Guarantee and Business Development Services By Renaud Bourlès; Anastasia Cozarenco
  17. Les PME dans les politiques de soutien à l’innovation en Chine THE POSITION OF SMES WITHIN THE INNOVATION POLICY IN CHINA By Zeting LIU
  18. La création de petites entreprises dans l’agglomération dunkerquois (Nord de France) : le cheminement difficile de la société salariale à la société entrepreneuriale BUSINESS CREATION IN DUNKIRK (NORTH OF FRANCE): THE LONG WAY FROM THE SALARIED SOCIETY TO THE ENTREPRENEURIAL SOCIETY By Sophie BOUTILLIER

  1. By: Luca Grilli (Department of Management, Economics, and Industrial Engineering, Politecnico di Milano); Paul H. Jensen (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne; Intellectual Property Research Institute of Australia, The University of Melbourne); Samuele Murtinu (Department of Management, Economics, and Industrial Engineering, Politecnico di Milano)
    Abstract: This paper tests the presence of an ‘entrepreneurial imprinting effect’ of founders’ human capital on entrepreneurial ventures’ performance. More specifically, we empirically explore the impact of entrepreneurs’ human capital on a firm’s sales growth performance by disentangling the effect of the stock of human capital possessed at foundation from the potential injections and losses of human capital due to exit of founders and/or addition of new owner-managers in the entrepreneurial team over time. Our analysis is based on a panel dataset composed of 338 Italian new technology-based firms (NTBFs) observed from 1995 (or since their foundation) to 2008 (or until their exit from the dataset). We consider the effects of several dimensions of entrepreneurial human capital on firm sales growth and estimate Gibrat law-type dynamic panel data models using OLS estimator and GMM-system estimator to control for endogeneity. Overall, our results point to a positive and significant presence of an ‘entrepreneurial imprinting effect’ exerted by founders’ specific work experience on venture growth which is robust to a series of controls.
    Keywords: Entrepreneurial ventures, imprinting effect, entrepreneurs’ human capital, firm growth, new technology-based firms
    JEL: L25 L26 O31
    Date: 2013–04
  2. By: Edward L. Glaeser; Sari Pekkala Kerr; William R. Kerr
    Abstract: Measures of entrepreneurship, such as average establishment size and the prevalence of start-ups, correlate strongly with employment growth across and within metropolitan areas, but the endogeneity of these measures bedevils interpretation. Chinitz (1961) hypothesized that coal mines near Pittsburgh led that city to specialization in industries, like steel, with significant scale economies and that those big firms led to a dearth of entrepreneurial human capital across several generations. We test this idea by looking at the spatial location of past mines across the United States: proximity to historical mining deposits is associated with bigger firms and fewer start-ups in the middle of the 20th century. We use mines as an instrument for our entrepreneurship measures and find a persistent link between entrepreneurship and city employment growth; this connection works primarily through lower employment growth of start- ups in cities that are closer to mines. These effects hold in cold and warm regions alike and in industries that are not directly related to mining, such as trade, finance and services. We use quantile instrumental variable regression techniques and identify mostly homogeneous effects throughout the conditional city growth distribution.
    Keywords: Entrepreneurship, Industrial Organization, Chinitz, Agglomeration, Clusters, Cities, Mines
    JEL: L0 L1 L2 L6 N5 N9 O1 O4 R0 R1
    Date: 2013–04
  3. By: Daron Acemoglu (Department of Economics, Massachusetts Institute of Technology); Ufuk Akcigit (Department of Economics, University of Pennsylvania); Nicholas Bloom; William R. Kerr (Entrepreneurial Management Unit, Harvard University)
    Abstract: We build a model of firm-level innovation, productivity growth and reallocation featuring endogenous entry and exit. A key feature is the selection between high- and low-type firms, which differ in terms of their innovative capacity. We estimate the parameters of the model using detailed US Census micro data on firm-level output, R&D and patenting. The model provides a good fit to the dynamics of firm entry and exit, output and R&D, and its implied elasticities are in the ballpark of a range of micro estimates. We find industrial policy subsidizing either the R&D or the continued operation of incumbents reduces growth and welfare. For example, a subsidy to incumbent R&D equivalent to 5% of GDP reduces welfare by about 1.5% because it deters entry of new high-type firms. 0n the contrary, substantial improvements (of the order of 5% improvement in welfare) are possible if the continued operation of incumbents is taxed while at the same time R&D by incumbents and new entrants is subsidized. This is because of a strong selection effect: R&D resources (skilled labor) are inefficiently used by low-type incumbent firms. Subsidies to incumbents encourage the survival and expansion of these firms at the expense of potential high-type entrants. We show that optimal policy encourages the exit of low-type firms and supports R&D by high-type incumbents and entry.
    Keywords: entry, growth, industrial policy, innovation, R&D, reallocation, selection
    JEL: E2 L1
    Date: 2013–04–13
  4. By: Rajshree Agarwal; Benjamin A. Campbell; April M. Franco; Martin Ganco
    Abstract: Our study examines the mediating effect of spin-out team characteristics on the relationship between founder quality and parent and spin-out performance. Since the ability to transfer or recreate complementary assets is a critical determinant of performance, we theorize and show that founders with greater ability impact both parent firm and spin-out performance by assembling teams that represent strong complementary human capital. Using linked employee-employer US Census data from the legal services industry, we find founding team size and tenure mediate the founder quality effect. Our findings have practical implications for both managers of existing firms and aspiring founders as it relates to their human resource strategies: the factor most salient to performance is not the individual quality per se, but the manner in which it impacts the transfer and spillover of complementary human capital.
    Date: 2013–04
  5. By: Marie-Estelle Binet (University of Rennes 1 - CREM UMR CNRS 6211, France); François Facchini (University of Paris-Sud, Faculty Jean Monnet (France))
    Abstract: This paper deals with the determinants of enterprise creation in the 22 French regions from 1994 to 2003. We then estimate a dynamic panel data model which allows spatial heterogeneity to be modelled and which is compared with a specification without spatial heterogeneity. The estimation results show that an appropriate consideration of spatial heterogeneity can lead to new insights. The results show: 1) that the Holcombe effect and the income effect have a statistically significant and positive impact for all regions; 2) that the age of the population and the size of the firms have the same negative effects for all regions with the exception of Ile-de-France; 3) that at the threshold of 10%, the refugee effect only concerns 10 regions out of 22; 4) that the effect of public R&D remains insignificant for 17 of the 22 regions, but becomes statistically significant in five regions and has a positive effect in three regions only, these being those which exhibit the highest per capita public R&D expenditure levels. Globally, Anselin's (1990) hypothesis, according to which the presence of spatial heterogeneity casts doubt upon the generalizability of theories in regional science, is thus in part confirmed.
    Keywords: Creation of enterprises, spatial heterogeneity, dynamic panel data, refugee effect, public R&D
    JEL: M13 O18 J21
    Date: 2013–04
  6. By: Cho, Yoon Y. (World Bank); Honorati, Maddalena (World Bank)
    Abstract: This paper provides a synthetic and systematic review on the effectiveness of various entrepreneurship programs in developing countries. We adopt a meta-regression analysis using 37 impact evaluation studies that were in the public domain by March 2012, and draw out several lessons on the design of the programs. We observe a wide variation in program effectiveness across different interventions depending on outcomes, types of beneficiaries, and country context. Overall, entrepreneurship programs have a positive and large impact for youth and on business knowledge and practice, but no immediate translation into business set-up and expansion or increased income. At a disaggregate level by outcome groups, providing a package of training and financing is more effective for labor activities. Additionally, financing support appears more effective for women and business training for existing entrepreneurs than other interventions to improve business performance.
    Keywords: meta regression analysis, entrepreneurship programs, microenterprise development, training, financing, counseling
    JEL: O12 O16 J24
    Date: 2013–04
  7. By: Naohiro Shichijo (Waseda University); Silvia Rita Sedita (University of Padova); Yasunori Baba (University of Tokyo)
    Abstract: Using Stokes's (1997) "quadrant model of scientific research", this paper deals with how the entrepreneurial orientation of scientists affects their scientific performance by considering its impact on scientific production (number of publications), scientific prestige (number of forward citations), and breadth of research activities (interdisciplinarity). The results of a quantitative analysis applied to a sample of 1,957 scientific papers published by 66 scientists active in advanced materials research in Japan found that (i) entrepreneurial scientists publish more papers than traditional scientists do, (ii) the papers published by Bohr scientists (traditional scientists with a stronger intention to fundamentality) demonstrate better citation performance than those published by Pasteur scientists (entrepreneurial scientists with a stronger intention to fundamentality) do, on average; (iii) if the focus is confined to high-impact papers, their prestige (i.e., forward citation counts) is favored by the authorship of Pasteur scientists; and (iv) the portfolio interdisciplinarity of papers authored by Pasteur scientists is higher (more diverse) than that of Bohr scientists.
    Date: 2013–02
  8. By: Albert Bravo-Biosca; Chiara Criscuolo; Carlo Menon
    Abstract: Differences in the dynamisms of economies are persistent. Notwithstanding the growing body of evidence documenting these large cross-country differences, our understanding of what drives them is still rather limited. This paper seeks to help close this gap. Using unique data for ten countries the analysis sheds light on the factors that shape the distribution of firm growth and on what role policies play in driving cross-country differences. The paper provides new evidence on the link of labour market regulation, bankruptcy legislation, financial market development and R&D support policies with growth dynamics. The study goes beyond looking at differences in average growth rates as it analyses changes in the whole distribution of firms.
    Date: 2013–04–04
  9. By: Cain, Trudie (Massey University); Spoonley, Paul (Massey University)
    Abstract: In seeking economic immigrants, especially those who are skilled, entrepreneurial and with capital to invest, a settler country such as New Zealand has assumed that national and city labour markets/economies will gain by adding to the human capital pool as well as creating new 'economic' activities of various sorts. Economic participation, both as labour but also as typically small business owners, often reflects the nature of mixed embeddedness (Kloosterman and Rath 2003) and especially the relational embeddedness (Portes, cited in, Vertovec 2009) of particular immigrant groups. This is most apparent in relation to social and economic networks, the deployment of human capital, immigrant engagement strategies and transnational activities. Using the concept of mixed embeddedness, this paper examines the strategies and outcomes for migrant entrepreneurs from the People's Republic of China, the Republic of Korea, India, South Africa and the United Kingdom, drawing upon a largely qualitative analysis of immigrant employers from these groups.
    Keywords: migration, relational embeddedness, structural embeddedness, mixed embeddedness, New Zealand, immigrant entrepreneurs
    JEL: J15 J24 J39
    Date: 2013–04
  10. By: Damiani, Mirella; Ricci, Andrea
    Abstract: In this paper, we investigate the influence of the education of entrepreneurs, which we hypothesise to be a signal of talent, on the adoption of variable pay (VP) schemes in the Italian economy. We estimate to what extent differences in the diffusion of VP between Italian firms reflect differences in the quality of entrepreneurs. Our estimates, which we obtained by taking both endogeneity and unobserved heterogeneity into account, validate hypotheses about the direct positive effects of entrepreneurs’ education on the adoption of VP schemes. Furthermore, we ascertain the role of entrepreneurs’ education by examining its influence on the choice between different types of VP bonuses at the individual, group, or establishment levels. Our results suggest that highly educated entrepreneurs are more likely to use individual or collective forms of VP schemes at the establishment level rather than team VP incentives.
    Keywords: Variable pay, education
    JEL: J33 J50
    Date: 2013–04–13
  11. By: Alessandra Proto; Simone Tani; Joerg Bühnemann; Olaf Gaus; Mathias Raith
    Abstract: New and small firms can be important engines of job creation and local development when they identify and exploit entrepreneurial opportunities. We live in an economy more and more characterised by open innovation methods, where new companies and SMEs are benefitting from innovations, technological and non technological available on the market or from other companies and organisations part of their networks. Knowledge networks, understood as a three-component construction of (i) knowledge generation, (ii) knowledge transfer, and (iii) knowledge application, can play a crucial role in boosting companies performance. As many OECD researches shows, there is often a major networking gap, however, between knowledge sources in universities and research organisations and industry exploitation in new spin-off enterprises and SMEs. The analysis of the actors of the knowledge networks and the way they behave and interact with other component inside and outside the networks is a fundamental support to local policy making in entrepreneurship and innovation. <p>The OECD LEED Programme in cooperation with the University of Trento has prepared this paper to analyse in deep the behaviour of knowledge networks in two specific local contexts: the Autonomous Province of Trento in Italy and the Magdeburg Province in Germany. <p>The aim of this research project is to analyse the relevance of knowledge networks to entrepreneurship and the growth of young and small firms, the role of the different components and their interplay for network effectiveness, impeding and favouring factors, and the role of public policy.
    Date: 2012–01–31
  12. By: Burak Uras (Tilburg University)
    Abstract: Cross-country data shows a strong positive correlation between the level of financial contract enforcement and macroeconomic development. This paper emphasizes the role of entrepreneurial investment technology choice in explaining this empirical observation. We develop a life-cycle model with limited financial contract enforcement, entrepreneurial heterogeneity (ability and financial pledgeability) and a discrete investment technology choice. In the model production processes can be undertaken using either a Short-Term or a Long-Term technology investment. Depending on the entrepreneurial ability, the long-term technology investment is more productive relative to the short-term investment, but the latter can be exploited to build collateral in the short-run. In equilibrium the level of contract enforcement and entrepreneurial characteristics endogenously determine (1) the investment size and (2) the investment technology choice at the firm level. Key results of the paper indicate that when financial contract enforcement is weak, the investment size and the intensity of long-term technology use of entrepreneurial firms are positively correlated with financial pledgeability. We calibrate the model to study its quantitative macroeconomic properties. Quantitative experiments illustrate sizeable positive effects of financial contract enforcement on aggregate output and aggregate long-term investment. Specifically, the counterfactual policy analysis shows that if financial contract enforcement in Turkey improves to the U.S. level, output rises by 13-15%; and more importantly for our analysis, we can identify that one third of this change is due to the increase in the rate of long-term investment.
    Date: 2012
  13. By: Liliana Sousa
    Abstract: I find evidence that human capital spillovers have positive effects on the proclivity of low human capital immigrants to self-employ. Human capital spillovers within an ethnic community can increase the self-employment propensity of its members by decreasing the costs associated with starting and running a business (especially, transaction costs and information costs). Immigrants who do not speak English and those with little formal education are more likely to be self-employed if they reside in an ethnic community boasting higher human capital. On the other hand, the educational attainment of co-ethnics does not appear to affect the self-employment choices of immigrants with a post-secondary education to become self-employed. Further analysis suggests that immigrants in communities with more human capital choose industries that are more capital-intensive. Overall, the results suggest that the communities in which immigrants reside influences their self-employment decisions. For low-skilled immigrants who face high costs to learning English and/or acquiring more education, these human capital spillovers may serve as an alternative resource of information and labor mobility.
    Date: 2013–04
  14. By: Fernandes, Ana M.; Lederman, Daniel; Gutierrez-Rocha, Mario
    Abstract: The authors use a new dataset on export transactions for a large set of Latin American and Caribbean and comparator countries to assess the extent of"export entrepreneurship"during periods of fast export growth (2005-2007) and depressed external demand (2008-2009). Export entrepreneurship is equated with the extensive margin of exports, namely the advent of new exporting firms, new export products, and new export market destinations. The main findings are: (1) annual exporter entry, exit, and survival rates in Latin America and the Caribbean are quite similar to what is observed in other countries, and entry rates across sectors are quite similar but survival rates appear to be highest in agriculture; (2) the relative size of entrants into export markets (relative to incumbents) tended to be lower for natural resource-abundant countries during 2005-2007, but less so during the crisis years of 2008-2009; (3) entry rates tend to be lower in sectors in which a country has revealed comparative advantage, however, exit rates and survival rates of new exporters are higher in those sectors; and (4) the low growth of exports during the global recession of 2008-2009 in Latin America and the Caribbean was due to lower growth in exports of incumbent firms'pre-existing products and destinations, while new products and destinations tended to attenuate the recession's effects. Overall, the data suggest that the Latin American and Caribbean region appears to be no less entrepreneurial in terms of the extensive margins of exports than comparator countries.
    Keywords: Currencies and Exchange Rates,Free Trade,Debt Markets,Export Competitiveness,Country Strategy&Performance
    Date: 2013–04–01
  15. By: Tahvanainen, Antti-Jussi; Steinert, Martin
    Abstract: to connect to critical stakeholders and, thereby, to integrate into foreign business ecosystems. Reverting to explorative, inductive methodology, the study contributes to the existing body of knowledge by approaching networking from a rare angle; networking as practice. The study examines (i) the precepts and principles that direct the start-ups’ networking efforts, (ii) the practices they employ to identify relevant partners and establish connections to them, (iii) the practices they make use of in the interface of newly established connections to sway and commit the respective partners to their cause and network, and finally (iv), the practices that offshore governmental agency nodes apply to help start-ups assimilate to foreign local ecosystems. We found that firms need to embrace and learn how to exploit serendipitous networking opportunities to gain access to stakeholders that purely ansoffian planning approaches could never uncover. The exploitation of serendipity necessitates flexibility with regard to the start-ups’ existing product or service concepts, strategies and business plans because in the serendipitous mode these are often re- and co-designed with newly encountered stakeholders. Many of the actual networking practices were found to have evolved together with the progress of other dominant megatrends such as the spread and acceptance of social and other digital media. Such progress seems to have endogenously affected some of the conventional cultural tenets of networking, helping to bypass hierarchical gatekeepers in organizations, for instance. In addition, the diffusion and acceptance of more content- and context-rich communication techniques such as social and mobile video, prototyping and story-telling have made pitching a proposal faster, more holistic, experiential and interactive. We further found that offshore governmental agency nodes can play a decisive role in accelerating and facilitating the integration of foreign newcomers into a local ecosystem. Important prerequisite for the capability to provide such services is a respected and established status within the ecosystem, a vast, cross-sectoral network, and professional employees with hands-on industrial experience in the respective ecosystem.
    Keywords: networking, practice, network access, entrepreneurship, ecosystem, globalization
    Date: 2013
  16. By: Renaud Bourlès (Ecole Centrale Marseille (Aix-Marseille School of Economics), CNRS & EHESS); Anastasia Cozarenco (Aix-Marseille University (Aix-Marseille School of Economics), CNRS & EHESS)
    Abstract: We analyze in this paper how various forms of State intervention can impact the microcredit market in developed countries. Using a simple model where entrepreneurs borrow without collateral, we study the effect of different policies on microfinance institutions' lending behavior. We first introduce state intervention through the loan guarantee and show that, not surprisingly, it increases the number of entrepreneurs receiving a loan. However, after modeling business development services provided by the microfinance institution, we show that the government loan guarantee can have a counterproductive effect by reducing the number of entrepreneurs benefiting from such services. We therefore analyze an alternative policy: the subsidization of business development services by the State. We then provide a condition under which - for fixed government expenditures - such subsidies are more effective (in terms of outreach) than loan guarantees.
    Keywords: microcredit, loan guarantee, business development services, microfinance institution.
    JEL: G14 G21 G38 D45 D82
    Date: 2013–04
  17. By: Zeting LIU (Laboratoire de Recherche sur l'Industrie et l'Innovation. ULCO)
    Abstract: Longtemps échappées à l’intention des pouvoirs publics, les PME chinoises sont aujourd’hui identifiées comme un enjeu important dans le Grand Bond en avant de l’innovation de la Chine. Si les études sur le système d’innovation en Chine et les grandes entreprises publiques sont abondantes, l’innovation des PME ainsi que les mesures publiques spécifiques qui leur ciblent sont toutefois relativement peu étudiées. Cette étude tente d’identifier la place des PME chinoises dans le système de recherche et productif depuis les réformes économiques et la transformation des institutions de recherche lancées en 1978 et de repositionner les PME dans les politiques d’innovation en Chine. En ce faisant, elle propose une nouvelle lecture de l’analyse de performance de l’innovation en Chine. After being ignored by the public authorities for a long time, the Chinese SMEs are nowadays identified as an important issue in China's Great Leap Forward of Innovation. While studies on the innovation system in China and large public enterprises are abundant, innovation by SMEs and the specific public measures targeting them are relatively little studied. This study attempts to identify the place of the Chinese SMEs in the research and productive system since the economic reforms and the transformation of research institutions in 1978 and to reposition the SME innovation policies in China. In this way, it proposes a new reading of the analysis of innovation performance in China.
    Keywords: system national d'innovation, PME, réforme institutionnelle, Chine
    JEL: O38 P2 O53
    Date: 2013–03
  18. By: Sophie BOUTILLIER (Laboratoire de Recherche sur l'Industrie et l'Innovation. ULCO)
    Abstract: L’objectif de cette étude est de présenter les grandes phases du développement de l’entrepreneuriat à Dunkerque depuis le 19e siècle. Depuis cette période, l’économie dunkerquoise s’est développée sur la grande industrie et l’emploi salarié. Au cours du temps, l’industrie s’est transformée mais elle est restée dominante et l’emploi salarié également. La crise économique des années 1970 a remis en cause cette évolution. Des mesures de politique publique ont été prises pour promouvoir la création d’entreprise. Cependant, le nombre de créations d’entreprises reste faible. On ne devient pas patron par décret ! Nos conclusions s’appuient principalement sur une enquête réalisée en 2011 sur 80 nouveaux entrepreneurs. The aim of this article is to present the large phases of the development of entrepreneurship in Dunkirk since the 19th century. Since this period, the development of the economy of Dunkirk has been based on big industrial enterprises and on salaried employment. The industrial activity changed all along the period, but big industry remained strong as well as salaried employment too. The economic crisis of 1970s stopped this evolution. Public policies are now oriented toward the promotion of new businesses. Nevertheless, the number of creation of new enterprises remains low. People cannot become entrepreneur by law! Our conclusions are based on a case study achieved in 2011 on the new entrepreneurs in the city of Dunkrik (North of France).
    Keywords: entrepreneuriat, industrialisation, politique publique d'innovation
    JEL: L2 O1 O3
    Date: 2013–02

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