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on Entrepreneurship |
| By: | Esther Duflo; Abhijit Banerjee; Rachel Glennerster; Cynthia G. Kinnan |
| Abstract: | This paper reports on the first randomized evaluation of the impact of introducing the standard microcredit group-based lending product in a new market. In 2005, half of 104 slums in Hyderabad, India were randomly selected for opening of a branch of a particular microfinance institution (Spandana) while the remainder were not, although other MFIs were free to enter those slums. Fifteen to 18 months after Spandana began lending in treated areas, households were 8.8 percentage points more likely to have a microcredit loan. They were no more likely to start any new business, although they were more likely to start several at once, and they invested more in their existing businesses. There was no effect on average monthly expenditure per capita. Expenditure on durable goods increased in treated areas, while expenditures on “temptation goods” declined. Three to four years after the initial expansion (after many of the control slums had started getting credit from Spandana and other MFIs ), the probability of borrowing from an MFI in treatment and comparison slums was the same, but on average households in treatment slums had been borrowing for longer and in larger amounts. Consumption was still no different in treatment areas, and the average business was still no more profitable, although we find an increase in profits at the top end. We found no changes in any of the development outcomes that are often believed to be affected by microfinance, including health, education, and women’s empowerment. The results of this study are largely consistent with those of four other evaluations of similar programs in different contexts. |
| JEL: | D21 G21 O16 |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18950&r=ent |
| By: | Bandiera, Oriana (London School of Economics); Burgess, Robin (London School of Economics); Das, Narayan (Bangladesh Rural Advancement Committee (BRAC)); Gulesci, Selim (Bocconi University); Rasul, Imran (University College London); Sulaiman, Munshi (Bangladesh Rural Advancement Committee (BRAC)) |
| Abstract: | The world's poorest people lack capital and skills and toil for others in occupations that others shun. Using a large-scale and long-term randomized control trial in Bangladesh this paper demonstrates that sizable transfers of assets and skills enable the poorest women to shift out of agricultural labor and into running small businesses. This shift, which persists and strengthens after assistance is withdrawn, leads to a 38% increase in earnings. Inculcating basic entrepreneurship, where severely disadvantaged women take on occupations which were the preserve of non-poor women, is shown to be a powerful means of transforming the economic lives of the poor. |
| Keywords: | asset transfers, capital constraints, vocational training, occupational choice, structural change, poverty |
| JEL: | O12 I30 D50 |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7386&r=ent |
| By: | Laura Rosendahl Huber (University of Amsterdam); Randolph Sloof (University of Amsterdam); Mirjam van Praag (University of Amsterdam) |
| Abstract: | The aim of this study is to analyze the effectiveness of early entrepreneurship education. To this end, we conduct a randomized field experiment to evaluate a leading entrepreneurship education program that is taught worldwide in the final grade of primary school. We focus on pupils' development of relevant skill sets for entrepreneurial activity, both cognitive and non-cognitive. The results indicate that cognitive entrepreneurial skills are unaffected by the program. However, the program has a robust positive effect on non-cognitive entrepreneurial skills. This is surprising since previous evaluations found zero or negative effects. Because these earlier studies all pertain to education for adolescents, our result tentatively suggests that non-cognitive entrepreneurial skills are best developed at an early age. |
| Keywords: | Skill formation, field experiment, entrepreneurship education, entrepreneurship |
| JEL: | L26 I21 J24 C93 |
| Date: | 2012–04–20 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:2012041&r=ent |
| By: | Sander Hoogendoorn (University of Amsterdam); Simon C. Parker (University of Western Ontario, Richard Ivey School of Business); Mirjam van Praag (University of Amsterdam) |
| Abstract: | This paper studies the impact of diversity in cognitive ability among members of a team on their performance. We conduct a large field experiment in which teams start up and manage real companies under identical circumstances. Exogenous variation in - otherwise random - team composition is imposed by assigning individuals to teams based on their measured cognitive abilities. The setting is one of business management practices in the longer run where tasks are diverse and involve complex decision-making. We propose a model in which greater ability dispersion generates greater knowledge for a team, but also increases the costs of monitoring necessitated by moral hazard. Consistent with the predictions of our model, we find that team performance as measured in terms of sales, profits and profits per share first increases, and then decreases, with ability dispersion. Teams with a moderate degree of ability dispersion also experience fewer dismissals due to few er shirking members in those teams. |
| Keywords: | Ability dispersion, team performance, field experiment, entrepreneurship, knowledge pooling, moral hazard |
| JEL: | C93 D83 J24 L25 L26 M13 M54 |
| Date: | 2012–11–29 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:2012130&r=ent |
| By: | Sander Hoogendoorn (University of Amsterdam); Mirjam van Praag (University of Amsterdam) |
| Abstract: | One of the most salient and relevant dimensions of team heterogeneity is ethnicity. We measure the causal impact of ethnic diversity on the performance of business teams using a randomized field experiment. We follow 550 students who set up 45 real companies as part of their curriculum in an international business program in the Netherlands. We exploit the fact that companies are set up in realistic though similar circumstances and that we, as outside researchers, had the unique opportunity to exogenously vary the ethnic composition of otherwise randomly composed teams. The student population consists of 55% students with a non-Dutch ethnicity from 53 different countries of origin. We find that a moderate level of ethnic diversity has no effect on team performance in terms of business outcomes (sales, profits and profits per share). However, if at least the majority of team members is ethnically diverse then more ethnic diversity has a positive impact on the performance of teams. In line with theoretical predictions, our data suggest that this positive effect could be related to the more diverse pool of relevant knowledge facilitating (mutual) learning within ethnically diverse teams. |
| Keywords: | Ethnic diversity, team performance, field experiment, entrepreneurship, (mutual) learning |
| JEL: | J15 L25 C93 L26 M13 D83 |
| Date: | 2012–07–13 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:2012068&r=ent |
| By: | Matthew Lindquist (SOFI Stockholm University); Joeri Sol (University of Amsterdam); Mirjam van Praag (University of Amsterdam) |
| Abstract: | Parental entrepreneurship is a strong, probably the strongest, determinant of own entrepreneurship. We explore the origins of this intergenerational association in entrepreneurship. In particular, we identify the separate effects of pre- and post-birth factors (nature and nurture), by using a unique dataset of Swedish adoptees. Its unique characteristic is that it not only includes data on occupational status for the adoptees and their adoptive parents, but also for their biological parents. Moreover, we use comparable data on entrepreneurship for a large, representative sample of the Swedish population. Based on the latter sample, and consistent with previous findings, we show that parental entrepreneurship increases the probability of children's entrepreneurship by about 60%. We further show that for adoptees, both biological and adoptive parents make significant contributions. These effects, however, are quite different in size. The effect of post-bir th factors (adoptive parents) is approximately twice as large as the effect of pre-birth factors (biological parents). The sum of these two effects for adopted children is almost identical to the intergenerational transmission of entrepreneurship for own-birth children. We explore several candidate explanations for this important post-birth effect and present suggestive evidence in favor of role modeling. |
| Keywords: | adoption, entrepreneurship, self-employment, intergenerational mobility, occupational choice, role model |
| JEL: | J24 J62 L26 |
| Date: | 2012–07–06 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:2012062&r=ent |
| By: | Bradley, Samantha R. (University of North Carolina at Greensboro, Department of Economics); Gicheva, Dora (University of North Carolina at Greensboro, Department of Economics); Hassell, Lydia (University of North Carolina at Greensboro, Department of Economics); Link, Albert N. (University of North Carolina at Greensboro, Department of Economics) |
| Abstract: | Our descriptive analysis of a random sample of businesses that received Phase II Small Business Innovation Research (SBIR) program awards shows that female-owned businesses are disadvantaged, compared to male-owned businesses, in their ability to attract alternative investment funding to commercialize their technology-based innovations. Differences in the probability of receiving such financial support are most evident in the West and Northeast Census region states. Respectively, in states in those regions female-owned businesses are 17 and 9 percentage points less likely to attract alternative investment funding. |
| Keywords: | Entrepreneurship; Innovation; Technology |
| JEL: | L26 O31 O32 |
| Date: | 2013–05–15 |
| URL: | http://d.repec.org/n?u=RePEc:ris:uncgec:2013_009&r=ent |
| By: | Lidia Mannarino; Marianna Succurro (Dipartimento di Scienze Economiche, Statistiche e Finanziarie, Università della Calabria) |
| Abstract: | The aim of the paper is to investigate the impact of financial structure on firms’ performance in Western Europe convergence regions. While large amount of evidence exists on the relation between financial development, firms’ survival and growth both cross-country and cross-industry, much less is known at the microeconomic level of the firm. In this context, the contribution of our research - which relies on accounting data collected from the Bureau van Dijk’s Amadeus database - is twofold. First, we make a microeconomic comparison across Western Europe convergence regions, where the percentage of small and medium enterprises is relatively higher than in more developed regions. Second, following the most recent literature in this field, our research takes into account several financial ratios instead of a commonly used one-dimensional definition of financial status. The empirical evidence shows that the financial strength is a key factor explaining firm survival in Western Europe convergence regions. Some differences arise from a deeper analysis of the financial ratios. While both the debt and the cash flow ratios, as well as profitability, are strongly significant in explaining firms’ survival in Western Europe convergence regions, structure and operational ratios are not important factors explaining firms’ survival. Additional differences arise when we consider the countries separately: while debt and cash flow ratios are significant for bank based economies, they are not significant for United Kingdom, which is characterized by a more developed financial market. This analysis would have interesting applications, given the potential impact of financial constraints on market selection mechanisms and, therefore, on market structure. |
| Keywords: | Financial Structure, Firm Survival |
| JEL: | D92 E22 G33 L1 |
| Date: | 2013–04 |
| URL: | http://d.repec.org/n?u=RePEc:clb:wpaper:201305&r=ent |