nep-ent New Economics Papers
on Entrepreneurship
Issue of 2013‒10‒02
thirteen papers chosen by
Marcus Dejardin
University of Namur and Universite' Catholique de Louvain

  1. Who says life is over after 55? Entrepreneurship and an aging population By Backman, Mikaela; Karlsson, Charlie
  2. Ready, set, go! Why are some regions entrepreneurial jump-starters? By Michael Wyrwich
  3. Industrial dynamics and clusters: a survey By Koen Frenken; Elena Cefis; Erik Stam
  4. Entrepreneurial Orientation and Network Ties: Innovative Performance of SMEs in an Emerging-Economy Manufacturing Cluster By Theresia Gunawan; Jojo Jacob; Geert Duysters
  5. Husbands and Wives. The powers and perils of participation in a microfinance cooperative for female entrepreneurs By Felix Meier zu Selhausen; Erik Stam
  6. Finance and Growth for Microenterprises: Evidence from Rural China By Beck, T.H.L.; Lu, L.; Yang, R.
  7. Are female entrepreneurs better payers than men? By Daniele Coin
  8. Female-Led Firms: Performance and Risk Attitudes By Parrotta, Pierpaolo; Smith, Nina
  9. Credit access for female firms: evidence from a survey on European SMEs By Maria Lucia Stefani; Valerio Vacca
  10. Financing Experimentation By Macchiavello, Rocco
  11. Finance and growth: Schumpeter might be wrong in our era. New evidence from Meta-analysis By Asongu Simplice
  12. Firms and gender: performance differentials between male and female firms By Domenico Depalo; Francesca Lotti
  13. Transmission Intergénérationelle de l’Entrepreneuriat et Performance des Unités de Production Informelles au Cameroun By Mboutchouang, Vincent De Paul; Kenneck, Joseph Massil; Mbenga Bindop, Kunz Modeste

  1. By: Backman, Mikaela (Centre for Entrepreneurship and Spatial Economics, Jönköping International Business School); Karlsson, Charlie (Centre of Excellence for Science and Innovation Studies (CESIS ), Jönköping International Business School)
    Abstract: Several studies confirm a positive inverted U-shaped relationship between age and entrepreneurship. This paper analyses if this statement is true also for Sweden. By focusing on those above the age of 50, this paper adds knowledge about how individuals close to their retirement act in terms of self-employment and to what extent they contribute as entrepreneurs to the overall society. First, it analyses at the regional level the propensity of older people to start firms with a focus on the relationship between different age cohorts and the rate of new firm formation. At the second stage, an individual perspective is taken where the probability to become self-employed is expected to increase as individuals be¬come older but at a decreasing rate. By decomposing the population in different age cohorts, it is possible to find differences in the probability of becoming self-employed. To increase and deepen the knowledge about the relationship between age and entrepreneurship this paper further adds to existing literature by separating regions into different categories along the urban-rural hierarchy. The results in this paper confirm that the rate of entrepreneurship first increases and then decreases with age. Individuals above both 55 and 64 have a positive influence on the rate of entrepreneurship at both the regional as well as the individual level. The impact is stronger in locations that are more rural.
    Keywords: Ageing; new firm formation; self-employment; age cohorts; micro data; urban-rural hierarchy
    JEL: L26 R12 R30
    Date: 2013–09–30
  2. By: Michael Wyrwich (School of Economics and Business Administration, Friedrich-Schiller-University Jena)
    Abstract: Previous research on market economies characterized by stable framework conditions shows that several regional factors determine start-up activity. Not much is known about what drives entrepreneurship in unstable environments characterized by significant institutional changes that affect the availability of entrepreneurial opportunities. To fill this gap, this paper focuses on post- communist regions in which start-up activity was basically nonexistent under socialism but significantly more in evidence after the institutional shock of introducing a market economy. It is argued and shown that the allocation of talent into productive entrepreneurship is higher in areas abundantly endowed with individuals who have a relatively high ability to detect viable entrepreneurial opportunities, as indicated by their qualification, and in regions home to a population that is characterized by a high alertness toward opportunities, as indicated by remnants of an entrepreneurial culture that pre- dates socialism. How institutional context affects entrepreneurship over the course of transition is reflected by the negative relationship between urbanization and entrepreneurship that presumably has to do with ill-devised socialist urban planning policies. The regional application of the theory on institutions and entrepreneurship outlined in this paper shows that an entrepreneurial rebound after an adverse large-scale shock accompanied by massive structural change and economic dislocation is most pronounced in areas with a strong human capital basis and a regional culture that favors entrepreneurship.
    Keywords: Entrepreneurship, regional knowledge, transition
    JEL: L26 R1 P25
    Date: 2013–09–19
  3. By: Koen Frenken; Elena Cefis; Erik Stam
    Abstract: We review the literature on clusters and their effects on entry, exit and growth of firms as well on the evolutionary dynamics underlying the process of cluster formation. Our extensive review shows that there is strong evidence that clusters promote entry, but little evidence that clusters enhance firm growth and firm survival. The emergence of clusters is best understood as an evolutionary process of capability transmission between parent firms and their spinoffs, rather than as an outcome of localisation economies that would increase the performance firms in clusters compared to firms outside clusters. From a number of open questions we distil various future research avenues stressing the importance of understanding firm heterogeneity and the exact mechanisms underlying localisation economies.
    Keywords: entry, exit, industrial cluster, localisation economies, product lifecycle, industry lifecycle, evolutionary economic geography, firm heterogeneity
    JEL: L10 L20 L26 R10
    Date: 2013–09
  4. By: Theresia Gunawan (Maastricht School of Management and Technical University of Eindhoven, the Netherlands); Jojo Jacob (United Nation University- Maastricht Economic and Social Research Institute on Innovation and Technology (UNU MERIT), the Netherlands); Geert Duysters (Tilburg University, the Netherlands)
    Abstract: This study investigates the role of intra-cluster ties, extra-cluster ties, and entrepreneurial orientation in shaping firms’ innovative performance. We conduct our analysis on a primary data set of 120 SMEs in the Cibaduyut footwear-manufacturing cluster, Indonesia. We find that extra-cluster ties mediate the relationship between proactiveness and innovative performance. A combination of high extra-cluster ties and risk taking exert a positive impact on innovative performance. Surprisingly, we find that risk taking negatively moderates the influence of intra-cluster ties on innovative performance. Overall, the findings of this study point to the synergistic effects of entrepreneurial orientation and extra-cluster ties on innovative performance.
    Date: 2013–08
  5. By: Felix Meier zu Selhausen; Erik Stam
    Abstract: This study on female entrepreneurs in Western Uganda provides empirical evidence on the socio-economic effects of participation in a microfinance cooperative of both the female entrepreneur and her husband. Participation by female entrepreneurs in a microfinance cooperative is not an unconditional blessing: even though it does deliver higher household incomes, it might also deteriorate the female's household decision-making power when her husband participates in the same self-help group of the microfinance cooperative. This offers new insights for development policy and for entrepreneurship scholars to study the bright and dark sides of microfinance.
    Keywords: microfinance, cooperatives, female entrepreneurship, coffee, Uganda
    JEL: J16 J54 L26 N27 O15 O16 Q13
    Date: 2013–09
  6. By: Beck, T.H.L.; Lu, L.; Yang, R. (Tilburg University, Center for Economic Research)
    Abstract: Abstract: Using a survey dataset of Chinese rural households, we find that access to external finance is positively associated with the decision to become entrepreneur, the initial investment for microenterprises and the use of external finance. Also, we find that the use of informal finance is positively associated with sales growth of microenterprises with employees, but not of self-employed. We do not find any significant relationship between the use of formal finance and firm growth. Our findings underline the importance of finance for entrepreneurship and microenterprise growth, and the role of informal finance in the absence of efficient formal financial institutions.
    Keywords: Finance;Entrepreneurship;Growth;China.
    JEL: L26 G21
    Date: 2013
  7. By: Daniele Coin (Bank of Italy)
    Abstract: In this article we test whether Italian female entrepreneurs are more reliable payers than men, by carrying out a survival analysis of micro enterprises that utilize a credit for the first time in the period January 2005 to December 2008, and monitoring the quality of their exposure until December 2010. The data were drawn from the Bank of Italy’s Central Credit Register, which provides information on the entire Italian population that has loans with the Italian banking system. We observed that female entrepreneurs are better payers than their male counterparts only because women tend to undertake activities in less risky sectors. Our analysis could also be considered as an indirect measure of whether female entrepreneurs experience discrimination when accessing the Italian credit market.
    Keywords: small business credit, lending discrimination
    JEL: G21 J71
    Date: 2013–06
  8. By: Parrotta, Pierpaolo (Aarhus School of Business); Smith, Nina (Aarhus University)
    Abstract: This paper investigates the relationship between gender of the CEO and composition of the board of directors (female chairman and share of women in the boardroom) and firm's risk attitudes measured as variability in four firm outcome variables (investments, profits, return to equity, and sales). Using a merged employer-employee panel sample of Danish companies with more than 50 employees, we find extensive evidence of a negative association between female CEO and firm's risk attitudes. This finding might be consistent with the theoretical assumption according to which women typically present a substantially higher risk aversion profile and put more effort in monitoring firm activities than men in the financial matter domains. A number of robustness checks corroborate and better explain our main findings.
    Keywords: firm performance, risk aversion, female CEO
    JEL: G34 J16 L25
    Date: 2013–09
  9. By: Maria Lucia Stefani (Bank of Italy); Valerio Vacca (Bank of Italy)
    Abstract: This paper uses ECB survey data to assess whether gender matters in the small firms’ financial structure and access to credit. Firms owned or managed by women (female firms) use smaller amounts and less heterogeneous sources of external finance than their male counterparts. According to statistical evidence, female firms have difficulty in accessing bank finance: on the demand side, they apply for bank loans less frequently, as they more often anticipate a rejection; on the supply side, they experience a higher rejection rate. Econometric analysis shows that these different patterns are largely explained by the characteristics (such as business size, age and sector of activity) that make female firms structurally different from those led by men, without leaving room for a significant gender effect. An additional contribution of this paper is to compare the major euro-area countries within a homogeneous framework: weak evidence of gender discrimination appears in the supply of bank loans in Germany, Italy and Spain, while some demand obstacles arise in France.
    Keywords: financial structure, banking, economics of gender, small business finance
    JEL: G32 G21 J16
    Date: 2013–06
  10. By: Macchiavello, Rocco (Department of Economics, University of Warwick)
    Abstract: Entrepreneurs must experiment to learn how good they are at a new activity. What happens when the experimentation is financed by a lender? Under common scenarios, i.e., when there is the opportunity to learn by "starting small" or when "no-compete" clauses cannot be enforced ex-post, we show that financing experi- mentation can become harder precisely when it is more profitable, i.e., for lower values of the known-arm and for more optimistic priors. Endogenous collateral requirements (like those frequently observed in micro-credit schemes) are shown to be part of the optimal contract. JEL classification: Experimentation ; Moral Hazard ; Adverse Selection ; Starting Small ; Competition JEL codes: D81 ; D86 ; G30
    Date: 2013
  11. By: Asongu Simplice (Yaoundé/Cameroun)
    Abstract: Purpose – In a meta-study on the finance-growth nexus, we have bridged the gap between Schumpeterian authors and sympathizers of a questionable finance-growth nexus. Design/methodology/approach – Over 20 fundamental characteristics that have influenced the debate over the last decades have been examined. The empirical evidence is based on 196 outcomes from 20 studies. We assess the degree of heterogeneity and identify causes of the observed differentiation. Findings – Our findings also show evidence of publication bias. Overall, a genuine effect exists between financial development and economic growth. Schumpeter’s thesis might be wrong in our era because of: endogeneity-based estimations, publication bias and, effects of financial activity. A historical justification has also been discussed. Originality/value – Very few meta-analysis studies have focused on the finance-growth nexus.
    Keywords: Meta analysis; Finance; Economic growth; Publication bias
    JEL: C1 C4 E0 O0
    Date: 2013–01–14
  12. By: Domenico Depalo (Bank of Italy); Francesca Lotti (Bank of Italy)
    Abstract: Many empirical analyses find that the performance of firms headed by women (female firms) varies with respect to those headed by men and that the greatest part of this gap is due to observable characteristics (i.e. gender) related to firms’ characteristics. In this paper we evaluate whether this finding also holds for Italy in terms of productivity and returns.The classification of firms by gender follows that prescribed in Law 215/92; for the purposes of this paper only partnerships and private and public corporations were considered, the sole legal forms for which balance sheets are available. Whilst male firms operate in almost all sectors, female firms tend to cluster in those areas where interpersonal relations are most important, namely the retail sector, restaurants, hotels etc.. In terms of performance, measured by profitability and productivity (and even when controlling by sector and company size), there do not appear to be any significant differences between male and female enterprises.
    Keywords: female entrepreneurship, gender economic differences
    JEL: J1 L11 L25
    Date: 2013–06
  13. By: Mboutchouang, Vincent De Paul; Kenneck, Joseph Massil; Mbenga Bindop, Kunz Modeste
    Abstract: This study aims to contribute to the debate on the determinants of the informal firms’ outcomes by focusing on the potential influence that the family background can have on informal business outcomes in Cameroon. Using data from the Survey on Employment and the Informal Sector (SESI 2) in Cameroun, this study shows that children of self-employed father and/or mother have a better value added, sales in some cases, than entrepreneur that parents does not have this status. This comparative advantage is strengthened when the transmission is between a father and his son or when the child, regardless of gender, is engaged in the same branch of activity as his parent(s). This transmission consists of the dissemination of a stock of human capital in the form of specific skills. Résumé Cette étude vise à contribuer au débat sur les résultats des entreprises du secteur informel en se focalisant sur l’éventuel influence que peut avoir l’environnement familial sur la performance d’une firme. A partir, des données de l’Enquête sur l’Emploi et le Secteur Informel au Cameroun (EESI 2), l’étude montre que les individus ayant eu un père et/ou une mère entrepreneurs réalisent une valeur ajoutée et des ventes, plus importantes que les entrepreneurs descendants de parents n’ayant pas ce statut. Cet avantage comparatif se renforce lorsque la transmission s’établit entre le père et son fils ou lorsque l’enfant, indépendamment du genre, s’engage à son compte propre dans la même branche d’activité que son père et/ou sa mère. Cette transmission consiste principalement à une diffusion d’un stock de capital humain sous forme de compétences spécifiques.
    Keywords: Intergenerational transmission, second-generation entrepreneur, informal firm, business outcomes
    JEL: J24 L26
    Date: 2013–02

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