nep-ent New Economics Papers
on Entrepreneurship
Issue of 2013‒08‒23
nine papers chosen by
Marcus Dejardin
University of Namur and Universite' Catholique de Louvain

  1. House prices, home equity and entrepreneurships By Corradin, Stefano; Popov, Alexander
  2. Firms’ financing constraints: do perceptions match the actual situation? By Ferrando, Annalisa; Mulier, Klaas
  3. Does State Antitrust Enforcement Drive Establishment Exit? By Robert M. Feinberg; Thomas A. Husted; Florian Szucs
  4. The Financing and Growth of Firms in China and India: Evidence from Capital Markets By Sergio Schmukler; Tatiana Didier
  5. Corruption, Pricing of Public Services and Entrepreneurship in Economies with Leakage By Mukherjee, Vivekananda; Mitra, Siddhartha; Banerjee, Swapnendu
  6. The Role of International Trade in Employment Growth in Micro- and Small Enterprises: Evidence from Developing Asia By Krüger, Jens
  7. Household enterprises in Mozambique : key to poverty reduction but not on the development agenda ? By Fox, Louise; Sohnesen, Thomas Pave
  9. Betriebswirtschaftliche Elemente im Social Entrepreneurship By Vatanparast, Mir Farid

  1. By: Corradin, Stefano; Popov, Alexander
    Abstract: How does home ownership affect new business creation? We develop a model of career choice in the presence of liquidity constraints in which shocks to the value of real estate affect the propensity of potential entrepreneurs to borrow against the value of their property. Using a large US individual-level survey dataset over the 1996-2006 period, we show that a 10% increase in home equity raises the probability of transition into entrepreneurship by up to 14%. Our results persist when we use the topological elasticity of housing supply to generate variation in home equity that is orthogonal to entrepreneurial choice. JEL Classification: G21, L26
    Keywords: collateral channel, entrepreneurship, Home ownership
    Date: 2013–05
  2. By: Ferrando, Annalisa; Mulier, Klaas
    Abstract: This paper uses a non parametric matching procedure to match survey replies to balance sheet information. It draws on the SAFE survey on access to finance for a sample of 11886 firms in the euro area which are matched with their nearest neighbour in an extended dataset with balance sheet information on 2.3 million firms. We investigate the role of rm characteristics with respect to the experience of facing financing obstacles in the period 2009-2011. We distinguish between firms' perceived financing constraints and actual financing constraints. We find that more pro table firms are less likely to face actual financing constraints. Also firms with more working capital and lower leverage ratios are less likely to be actually financially constrained, however profitability measures seem to be more robust. Firms are more likely to perceive access to finance problematic when they have more debt with short term maturity. Finally, rm age, but not size, is important in explaining both the perceived and the actual financial constraints. JEL Classification: E22, G30, G10, O16, K40
    Keywords: financial constraints, SMEs, statistical matching of data, survey data
    Date: 2013–08
  3. By: Robert M. Feinberg; Thomas A. Husted; Florian Szucs
    Abstract: Previous work has shown that state-level antitrust enforcement activity may have impacts on entry and relocation behavior by U.S. firms. Significant state-level antitrust activity may be an indicator of a perceived adverse business environment and it is found to deter establishment entry, particularly for larger firms in the retail and wholesale sectors. An obvious question is whether establishment exit is affected in a symmetric way, or whether sunk costs of market entry may lead to a smaller impact in terms of the exit decisions. We first combine US Census establishment exit panel data with data for 1998-2006 on US state-level antitrust activity and other measures of state-level business activities that may affect establishment exit. We also consider establishment exit across different broad industry types -- manufacturing, retail and wholesale -- and several firm size categories. Local business cycle factors seem to be the primary driver of exit, though there is some evidence of political and antitrust determinants as well. In another approach, we examine firm-level exit decisions and the extent to which these respond to state antitrust enforcement, with some indication of antitrust enforcement effects here as well, especially in the wholesale and retail sectors. JEL classification:
    Date: 2013
  4. By: Sergio Schmukler (World Bank); Tatiana Didier (World Bank)
    Abstract: We study the extent to which firms from China and India use capital markets to obtain financing and grow. Using a unique data set on domestic and international capital raising activity and performance, we find that the expansion of financial market activity since the 1990s has been much more limited than the aggregate figures suggest. Relatively few firms raise capital and even fewer firms capture the bulk the financing. Moreover, firms that issue equity or bonds are different and behave differently from other publicly listed firms. Among other things, firms that raise capital are on average larger and grow faster. The differences between users and non-users exist before capital raisings, are associated with the probability of raising capital, and become more accentuated afterwards. The distribution of issuing firms shifts more over time than the distribution of those that do not issue, suggesting little convergence in firm size among listed firms.
    Date: 2013
  5. By: Mukherjee, Vivekananda; Mitra, Siddhartha; Banerjee, Swapnendu
    Abstract: The paper presents a theoretical model with bureaucratic corruption where bribe income can leak out of an economy. In such an economy given its perception about the extent of leakage the government sets the price of public services required for entrepreneurship by maximizing the welfare of the economy. We show that the corruption persists at the equilibrium. The government prices its services at a level higher than their unit cost of provision in high leakage economies. However, the price falls to unit cost level in more prosperous economies. We also find that the number of entrepreneurs starting business and the total income received as bribe are non-increasing functions of the prosperity level and the extent of leakage from the economy. The predictions of the model generate interesting policy implications: for example it clearly shows that in low prosperity economies the control of leakage may induce higher level of corruption, while the opposite is true in the high prosperity economies.
    Keywords: Corruption, Leakage, Entrepreneurship, Pricing of Public Services
    JEL: C72 D73 H57 O17
    Date: 2013–06
  6. By: Krüger, Jens (Asian Development Bank)
    Abstract: This paper examines the role of international trade in employment growth in micro- and small enterprises using a representative sample of manufacturing firms in six Southeast Asian countries. After controlling for firm and individual characteristics as well as country and sector dummies, participation in international trade plays a significant role in explaining this growth, boosting firm-level growth by 3% per year on average. The fact that firms start exporting quickly after their foundation suggests that reverse causality is not an issue for our estimates. However, biases arising from unobserved heterogeneity cannot be ruled out. Therefore, we exploit the fact that firms were exposed to unexpected variation in real exchange rates between 2005 and 2008 to investigate the causal relationship between trade and employment growth. The results are not conclusive, but they do not suggest that the relationship is driven by unobserved heterogeneity.
    Keywords: MSE graduation; trade; employment growth
    JEL: D22 O12
    Date: 2013–08–01
  7. By: Fox, Louise; Sohnesen, Thomas Pave
    Abstract: Household enterprises -- usually one-person-operated tiny informal enterprises -- are a rapidly growing source of employment in Sub-Saharan Africa, especially in lower-income countries. Household enterprises tend to operate with limited interest or support from governments. This is the case in Mozambique, where neither the poverty reduction strategy nor small and medium enterprise development policies include household enterprises. Using multiple household surveys, including a recent panel data set, this paper identifies the characteristics of the sector and its development during the period in which Mozambique experienced rapid economic growth. The analysis finds that household enterprises in Mozambique are associated with higher household consumption, lower rural poverty, as well as upward mobility, particularly for rural and poorly educated households. But if the Mozambican government wants to tap this potential, it will need a different strategy than one designed to support small and medium enterprises, because creation and survival in this sector seems to depend on a set of factors related to the human capital in the household and development in the location, not the soft business environment constraints, such as licensing and permitting and corruption, which are cited by larger business.
    Keywords: Access to Finance,Rural Poverty Reduction,Housing&Human Habitats,Regional Economic Development
    Date: 2013–08–01
  8. By: Zuzana Brixiová; Thierry Kangoye
    Abstract: Drawing on the 2007 and 2010 Swaziland Labor Force Surveys, this paper provides first systematic evidence on recent youth employment challenges in Swaziland, a small, land-locked, middle-income country with one of the highest youth unemployment rates in Africa. The paper first documents the various labor market disadvantages faced by the Swazi youth, such as high unemployment and discouragement, and how they changed from 2007 to 2010. A multinomial logit regression analysis is then carried out to analyze the socio-economic drivers of the unfavorable youth labor market outcomes on the supply side. Since many of the factors that can unlock the employment potential of the Swazi youth are on the demand side of the labor market, the paper examines the barriers to job creation and youth entrepreneurship. It concludes with experiences of other countries that could inform design of more effective interventions for youth employment in Swaziland.
    Keywords: youth employment and entrepreneurship, multivariate analysis, policies, Africa
    JEL: J11 J08 L26 O11
    Date: 2013–06–15
  9. By: Vatanparast, Mir Farid
    Abstract: [Einleitung ...] In diesem Beitrag soll anhand eines konkreten Projektes dargestellt werden, inwieweit soziale Projekte mit Hilfe von unternehmerischem Handeln in nachhaltig wirkende sozial ausgerichtete Unternehmen transformiert werden können. In diesem Kontext soll jedoch nicht eine 'Verwirtschaftlichung des sozialen Sektors' vorgenommen werden. Vielmehr steht beim Social Entrepreneurship immer und grundsätzlich die soziale und nicht die erwerbswirtschaftliche Zielsetzung im Fokus. Es soll jedoch die meist aus rein ideologisch-dogmatischen Gründen behauptete Antinomie zwischen 'sozialem Engagement' einerseits und 'unternehmerischem Handeln' andererseits nachhaltig aufgelöst werden. --
    Date: 2013

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