nep-ent New Economics Papers
on Entrepreneurship
Issue of 2013‒08‒05
seven papers chosen by
Marcus Dejardin
University of Namur and Universite' Catholique de Louvain

  1. Entrepreneurship and Economic Development: Theory, Evidence and Policy By Naudé, Wim
  2. Living Forever: Entrepreneurial Overconfidence at Older Ages By Rietveld, C.A.; Groenen, P.J.F.; Koellinger, Ph.D.; Loos, M.J.H.M. van der; Thurik, A.R.
  3. R&D and Credit Rationing in SMEs By Maria Luisa Mancusi; Andrea Vezzulli
  4. Creative Destruction with Credit Inflation By He, Qichun
  5. Urbanization and agglomeration benefits : gender differentiated impacts on enterprise creation in India's informal sector By Ghani, Ejaz; Kanbur, Ravi; O'Connell, Stephen D.
  6. The causal effect of venture capital backing on the underpricing of Italian IPOs By Pennacchio, Luca
  7. Vínculos interregionales en la economía colombiana del siglo XIX: Empresariado del Caribe en el interior del país By Mejía-Cubillos, Javier

  1. By: Naudé, Wim (Maastricht School of Management)
    Abstract: This paper provides an overview of the state of the art of the intersection of development economics and entrepreneurship. Given the relative neglect of entrepreneurship by development scholars it deals with (i) recent theoretical insights from the intersection of entrepreneurship and development studies; (ii) the empirical evidence on the relationship between entrepreneurship and development; and (iii) fresh insights for entrepreneurship policy for development that emerges from recent advanced in this area, including female entrepreneurship in developing countries.
    Keywords: entrepreneurship, development, small business, private sector development, innovation, business
    JEL: M13 O10 O17 O40
    Date: 2013–07
  2. By: Rietveld, C.A.; Groenen, P.J.F.; Koellinger, Ph.D.; Loos, M.J.H.M. van der; Thurik, A.R.
    Abstract: Overconfidence has been proposed as an explanation for excess market entry by entrepreneurs and low returns in entrepreneurial activities. However, establishing that entrepreneurs are more overconfident than non-entrepreneurs requires the use of representative population samples; in addition, econometric endogeneity issues in survey data must be addressed. To overcome these methodological challenges, we use a measure of overconfidence that employs self-reports of life expectancy. These self-reports are compared to actual life spans in a large sample of the US population. We show that entrepreneurs are indeed more overconfident than non-entrepreneurs. By using fixed-effects panel regression—and thus by exploiting the longitudinal nature of our data—we provide evidence that changes in entrepreneurial status are not associated with changes in subjective life expectancy. These two findings in combination offer evidence that overconfident individuals self- select into entrepreneurship.
    Keywords: entrepreneurship;selection;life expectancy;self-employment;overconfidence
    Date: 2013–07–23
  3. By: Maria Luisa Mancusi; Andrea Vezzulli
    Abstract: We study the effects of credit rationing on Research and Development (R&D) investment using survey and accounting data on a large representative sample of manufacturing small and medium size enterprises (SMEs). Our econometric model accounts for the endogeneity of our credit rationing indicator and employs an innovative theory based identification strategy. We find that credit rationing has a significantly negative effect on both the probability to set up R&D activities and on the level of R&D spending (conditioned on the R&D decision), but the overall estimated reduction in R&D spending is largely to be associated with the first effect.
    Keywords: R&D, credit rationing, Whited and Wu index, bivariate probit, IV Tobit
    JEL: G21 D82 O32 C35
    Date: 2013–07
  4. By: He, Qichun
    Abstract: We propose creative destruction as the channel for inflation to impact growth. The banks reap revenue from higher rates of credit growth, attracting more labor into banks and decreasing the profit of entrepreneurs. But when the revenue is achieved by issuing more credit to entrepreneurs, part of the revenue goes to entrepreneurs, attracting more resources into R&D. When banks retain a larger share of the revenue, the former effect dominates and credit inflation retards growth. When entrepreneurs get the larger share, the latter effect dominates and credit inflation increases growth. Empirical evidence from the U.S. and China is provided.
    Keywords: Creative Destruction; Credit Inflation; Credit Demand Function; Nash Bargaining
    JEL: E31 E51 G21 O31
    Date: 2013–07
  5. By: Ghani, Ejaz; Kanbur, Ravi; O'Connell, Stephen D.
    Abstract: This paper presents an exploration at the intersection of four important themes in the current development discourse: urbanization, agglomeration benefits, gender and informality. Focusing on the important policy objective of new enterprise creation in the informal sector, it asks and answers four specific questions on the impact of urbanization and gender. It finds that (i) the effect of market access to inputs, on creation of new enterprises in the informal sector, is greater in more urbanized areas; (ii) This"urbanization gradient"also exists separately for the creation of female owned enterprises and male owned enterprises; (iii) there is a differential impact of female specific market access compared to male specific market access, on female owned enterprise creation in the informal sector ; and (iv) gender specific market access to inputs matters equally in more or less urbanized areas. Among the policy implications of these findings are that (i) new enterprise creation by females can be encouraged by urbanization, but (ii) the effect can be stronger by improving female specific market access, especially to inputs. The analysis in this paper opens up a rich research agenda, including further investigation of the nature of input based versus output based perspectives on agglomeration benefits, and exploration of policy instruments that can improve female specific market access, which is shown to increase female owned enterprise creation.
    Keywords: Markets and Market Access,Housing&Human Habitats,Microfinance,Gender and Health,Debt Markets
    Date: 2013–08–01
  6. By: Pennacchio, Luca
    Abstract: This paper analyses the role of venture capitalists in Italian Initial Public Offerings (IPOs). Between 1999 and 2012 venture capital backed IPOs are on average less underpriced than non-venture backed IPOs. By using both a matching and a regression-based approach to account for the non-random distribution of venture financing across firms, I show that the underpricing difference is actually due to the causal effect of venture capital backing and that the raw comparison of the sample means underestimates such an effect. The result is consistent with the certification hypothesis, that is, certifying that the value of issuing firms reflects all relevant inside information, venture capital backing reduces the asymmetric information problem that arises in the IPO process.
    Keywords: Venture capital, IPOs, Certification Hypothesis, Underpricing
    JEL: G14 G24 G32
    Date: 2013–01
  7. By: Mejía-Cubillos, Javier
    Abstract: This paper analyzes, through case study, the activity of the Colombian Caribbean entrepreneurs in the inland country during the 19th century. It discusses the business of Amador family, Juan Bautista Mainero and Fergusson Noguera family. The aim is to highlight the importance of studying the interregional phenomena, evidencing the existence of national spheres for large business in the 19th century. Thus, it provides elements for a better understanding of the historical process of Colombian economic integration.
    Keywords: Market integration; Caribbean; Colombia; Entrepreneurship; 19th century
    JEL: N86 N96 O54
    Date: 2013–07

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