nep-ent New Economics Papers
on Entrepreneurship
Issue of 2013‒10‒18
thirteen papers chosen by
Marcus Dejardin
University of Namur and Universite' Catholique de Louvain

  1. Muppets and Gazelles: Political and Methodological Biases in Entrepreneurship Research By Paul Nightingale; Alex Coad
  2. Are Public Research Spin-Offs More Innovative? By Stephan, Andreas
  3. Taxes and the choice of organizational form by entrepreneurs in Sweden By Edmark, Karin; Gordon, Roger
  4. The role of regulation on entry: evidence from the Italian provinces By Francesco Bripi
  5. Typology of the French regional development: revealing the refugee/Schumpeter effects in new-firms startups By Rafik Abdesselam; Jean Bonnet; Patricia Renou-Maissant
  6. Revisiting Italian Emigration Before the Great War: A Test of the Standard Economic Model By H. T. Tran; E. Santarelli
  7. U.S. Research Joint Ventures with International Partners By Allen, Stuart D.; Link, Albert N.
  8. Startups, Credit, and the Jobless Recovery By Immo Schott
  9. Scoping paper: Developing University Innovation Capacity: How can innovation policy effectively harness universities’ capability to promote high-growth technology businesses? By Einar Rasmussen; Paul Benneworth; Magnus Gulbrandsen
  10. Boosting Social Entrepreneurship and Social Enterprise Creation in the Republic of Serbia By Roger Spear; Mike Aiken; Antonella Noya; Emma Clarence
  11. Cultural Diversity, Cities and Innovation: firm Effects or City Effects? By Neil Lee
  12. Institutional Voids or Entry Barriers? Business Groups, Innovation and Market Development in Emerging Economies By Fulvio Castellacci
  13. Cycle économique et comportement entrepreneurial sur données régionales françaises By Mathilde Aubry; Jean Bonnet; Patricia Renou-Maissant

  1. By: Paul Nightingale (SPRU, University of Sussex, UK); Alex Coad (SPRU, University of Sussex, UK)
    Keywords: Entrepreneurship, Jon creation, Self-employment, New firm formation, Innovation
    JEL: L26 M13 J24
    Date: 2013–10–09
  2. By: Stephan, Andreas (Ratio & JIBBS)
    Abstract: The main purpose of this paper is to analyse whether research spin-offs, that is, spinoffs from either public research institutes or universities, have greater innovation capabilities than comparable knowledge-intensive firms created in other ways. Using a sample of about 2,800 firms from highly innovative sectors, propensity score matching is used to create a sample group of control firms that is comparable to the group of spin-offs. The paper provides evidence that the 121 research spin-offs investigated have more patent applications and more radical product innovations, on average, compared to similar firms. The results also show that research spin-offs’ superior innovation performance can be explained by their high level of research cooperation and by location factors. An urban region location and proximity to the parent institution are found to be conducive to innovation productivity. The paper also finds evidence that research spin-offs are more successful in attracting support from public innovation support programs in comparison to their peers.
    Keywords: Spin-Offs; Innovation Performance; Propensity Score Matching; Location Factors; Cooperation; Public R&D Subsidies
    JEL: M13 O18
    Date: 2013–10–08
  3. By: Edmark, Karin (Research Institute of Industrial Economics); Gordon, Roger (University of California)
    Abstract: This paper estimates the role of both tax and non-tax determinants in the choice in Sweden to be a closely-held corporation vs. a proprietorship, using individual data for 2004 to 2008 on owners of closely-held businesses. While lower-income individuals face relatively neutral incentives, higher income individuals face strong tax incentives to be corporate. The data suggest a relatively strong correlation between these tax incentives and the likelihood that a firm is corporate. Many conventional non-tax determinants are confirmed in the data as well.
    Keywords: self-employment; entrepreneurship; taxation of closely-held businesses; business organizational form
    JEL: G32 G38 H25
    Date: 2013–10–02
  4. By: Francesco Bripi (Bank of Italy)
    Abstract: This paper studies the effects of differences in local administrative burdens in Italy in the years preceding a major reform that sped up firm registration procedures. Combining regulatory data from a survey on Italian provinces before the reform (costs and time to start a business) with industry-level entry rates of limited liability firms, I explore the effects of regulatory barriers on entry across industries with different natural propensities to enter the market. Using different specifications the estimates show that lengthier and, to some extent, more costly procedures reduced the entry rate of limited liability firms in sectors with naturally high entry rates. These results also hold when I include measures of local financial development and of efficiency of bankruptcy procedures. Overall, the analysis confirms the view that administrative burdens on new start-ups matter for business creation.
    Keywords: entry regulation, entrepreneurship, doing business
    JEL: G18 G38 L51 M13
    Date: 2013–09
  5. By: Rafik Abdesselam (COACTIS, Université Lumière Lyon 2); Jean Bonnet (CREM-UMR CNRS 6211, Université de Caen Basse-Normandie, UFR SEG (Sciences Economiques et Gestion), Normandie Université, France); Patricia Renou-Maissant (CREM-UMR CNRS 6211, Université de Caen Basse-Normandie, UFR SEG (Sciences Economiques et Gestion), Normandie Université, France)
    Abstract: We study the relationships between unemployment rate and new-firm startups rate in France using a quarterly data basis over the 1993-2011 period. At the national level we identify that the refugee effect explains the dynamics of entrepreneurship in France over the period 2000-2011. New French firms are mostly set up for necessity motives. At the regional level data analysis methods allow to obtain different classes of regions that represent different type of developments. For each of these classes we are able to identify the existence of refugee/Schumpeter effects both in the short-run and in the long-run.
    Keywords: New firm formation, Business cycle, Schumpeter effect, refugee effect, data analysis methods, panel data
    JEL: L26 E32 R11 C23 C38
    Date: 2013–10
  6. By: H. T. Tran; E. Santarelli
    Abstract: This paper investigates the determinants of innovative activities and the innovation-performance relationship for the firm population in Vietnam in three consecutive stages: decision – investment – outcome. Cragg’s two-tiered dynamic type-2 Tobit model and instrumental variable GMM method are applied to control for the selectivity and endogeneity of R&D and innovation. After controlling for ownership types, industry and regional fixed-effects, key findings include: (i) R&D and innovation activities not only stimulate firms’ profitability and growth of sales, but also increase their survival propensity; (ii) private innovative firms significantly outperform their peers whereas the combination of young, small, and innovative characteristics in young innovative companies (YICs) does not bring the expected higher entrepreneurial performance as how it works in advanced countries; (iii) highly-leveraged firms, exporting firms, and diversified firms are more likely to be innovative than their counterparts, but the ability to transform innovative efforts into higher profitability and growth can only be witnessed among diversified firms; and (iv) firms being endowed with larger asset pool have more favorable conditions to engage in innovation activities, but do not necessarily produce superior performance relatively to their smaller counterparts. However, firm labor size is positively associated with both R&D intensity and entrepreneurial performance of firms. The dataset of population of existing firms (from 2000 to 2005) extracted from the annual enterprise survey conducted by Vietnam General Statistics Organization (GSO) is used for the empirical analysis.
    JEL: O32 O33 O53 L25
    Date: 2013–10
  7. By: Allen, Stuart D. (University of North Carolina at Greensboro, Department of Economics); Link, Albert N. (University of North Carolina at Greensboro, Department of Economics)
    Abstract: In the United States, as in most industrialized nations, aggregate technological advancement declined during the 1970s and early 1980s. The U.S. Congress was quick to respond to this down turn by passing a number of technology- and innovation-related initiatives, one of which was the National Cooperative Research Act (NCRA) of 1984. It has been argued that this policy response is an example of government acting as entrepreneur because the enabling legislation was both innovative and characterized by entrepreneurial risk. In this paper we examine empirically covariates with the trend in the formation of research joint ventures (RJVs) promulgated by the NCRA and with the probability that a RJV will have an international research partner. We find that RJV formations seem to increase in times when industrial investments in research and development (R&D) decrease, and we conclude that RJVs might thus be a substitute for internal R&D activity. We also find that the probability of a RJV having an international research partner increases as the membership size of the RJV increases. We conclude that as membership size increases, the ability of any one member to appropriate the collective research contributions from the other members, and thus gain a competitive advantage, decreases. Thus, the cost of including in the RJV an international partner, which we argue could represent a potential intellectual capital leakage, decreases.
    Keywords: Research joint venture; Strategic alliance; Technology; Innovation; Technological change; Entrepreneurship
    JEL: L26 L44 O33 O34 O38
    Date: 2013–10–04
  8. By: Immo Schott (EUI)
    Abstract: Abstract Job creation depends on a firm's age. Startups (firms of age zero) and young firms play a crucial role for job creation: they grow faster and create more net jobs than older incumbent firms. During the 2008-2009 recession the jobs created by those firms declined considerably, aversely affecting aggregate employment figures. While net job creation by existing firms is beginnig to recover, job creation by startups in 2010 was at its lowest point since 1983 and continues to be at historically low levels. This paper argues that the conditions on the credit market are linked to the 'jobless recovery' phenomenon. Especially young and small firms are still finding it difficult to obtain credit, limiting their growth prospects and job creation. The paper links regional conditions in the US housing market to state-level data on job creation by startups. I then estimate a search model augmented with heterogeneous firms, entry and exit, and financial frictions. This model is able to match key moments of the firm distribution and employment at the micro- and macrolevel. In the context of this model I analyze the effects of a 'credit crunch' and consider possible policies to boost job creation by startups.
    Date: 2013
  9. By: Einar Rasmussen (Bodø Graduate School of Business (HHB), University of Nordland); Paul Benneworth (Center for Higher Education Policy Studies (CHEPS) at the University of the Twente); Magnus Gulbrandsen (Centre for Technology, Innovation and Culture (TIK), University of Oslo)
    Abstract: Some universities and departments have been very successful in stimulating university spin-off firms (USOs). This has persuaded policy makers and university administrators to devote considerable resources to improve universities' capabilities to promote USOs, but with little tangible results. Related research has considered why some universities contributes more to business innovation than others, but whether the majority of universities can become innovation hotbeds remains an open question. This paper takes a novel interdisciplinary approach integrating insights from two separate literatures, academic entrepreneurship and university management. We start by taking the firm’s perspective and seek to understand the challenges faced by USOs and how universities can assist these firms in developing their entrepreneurial competencies. The structure and main purpose of universities are very different from that of new technology businesses and the transition from being an academic research activity to become a commercial business activity poses challenges both for the university and the USO. Much research on universities’ entrepreneurial capability focuses on ‘what’ universities can do to support USOs at the expense of ‘why’ universities’ might choose to promote USOs when they are under many intense competing demands from outside. We explore not only what universities can do to support USOs, but also how universities experience USOs’ support demands, and the circumstances under which universities can develop capability to promote USOs. We address the barriers that arise between universities and USOs and discuss mitigating factors which support the competencies of USOs whilst at the same time meet the different university stakeholders’ needs.
    Date: 2013–10
  10. By: Roger Spear; Mike Aiken; Antonella Noya; Emma Clarence
    Abstract: This report has been prepared as part of the OECD LEED Programme “Boosting Social Entrepreneurship and Social Enterprise Creation”. A team comprising members of the OECD LEED Secretariat and an external expert visited Serbia in February/March 2012 for a study visit to examine the role, both actual and potential, of social entrepreneurship, and the support which could be given to social enterprise to boost its potential performance. This report is based significantly on the preliminary report prepared by the local experts, the available statistics and on material gathered from the study visit, as well as research conducted both prior to, and after, the study visit.
    Date: 2013–10–11
  11. By: Neil Lee
    Abstract: Growing cultural diversity is seen as important for innovation. Research has focused on two potential mechanisms: a firm effect, with diversity at the firm level improving knowledge sourcing or ideas generation, and a city effect, where diverse cities helping firms innovate. This paper uses a dataset of over 2,000 UK SMEs to test between these two. Controlling for firm characteristics, city characteristics and firm and city diversity, there is strong evidence for the firm effect. Firms with a greater share of migrant owners or partners are more likely to introduce new products and processes. This effect has diminishing returns, suggesting that it is a 'diversity' effect rather than simply the benefits of migrant run firms. However, there is no relationship between the share of foreign workers in a local labour market and firm level innovation, nor do migrant-run firms in diverse cities appear particularly innovative. But urban context does matter and firms in London with more migrant owners and partners are more innovative than others.
    Keywords: Cultural diversity, innovation, cities, SMEs, migration
    JEL: J61 L21 M13 R23
    Date: 2013–10
  12. By: Fulvio Castellacci (Department of International Economics, Norwegian Institute of International Affairs (NUPI), Norway)
    Keywords: Business groups, innovation, institutional voids, entry barrieris, market development, emerging economics, Latin America
    Date: 2013–10–09
  13. By: Mathilde Aubry (EM Normandie, Métis Research Department); Jean Bonnet (CREM UMR CNRS 6211, Université de Caen Basse-Normandie, UFR SEG (Sciences Economiques et Gestion), Normandie Université, France); Patricia Renou-Maissant (CREM-UMR CNRS 6211, Université de Caen Basse-Normandie, UFR SEG (Sciences Economiques et Gestion), Normandie Université, France)
    Abstract: - In French: Dans cet article, nous étudions les liens existants entre les créations d'entreprises, le PIB et le taux de chômage en France à partir de données régionales sur la période 1993-2011. Les interactions sont analysées tant à court terme qu'à long terme sous une double dimension : régionale et nationale. Les fluctuations du PIB représentent un indicateur avancé des créations de nouvelles entreprises au niveau national mais cet effet disparaît au niveau régional. Les créations d'entreprises et le taux de chômage se sont révélés étroitement liés aussi bien à court terme qu'à long terme et ont permis de mettre en évidence la présence des effets refugee et Schumpeter. Dans la majorité des régions françaises l’effet refugee domine à court terme : une augmentation du taux de chômage se traduit par une augmentation du nombre des créations d’entreprises. En France les créations d’entreprises sont donc principalement impulsées par des motifs de nécessité. - In English: In this paper, we study the links between new-firm startups, growth domestic product (GDP) and unemployment rate in France using a quarterly data basis over the 1993-2011 period. Interactions are analyzed, in the short and long run, in two main dimensions: the regional and the national dimensions. Fluctuations in GDP are an early indicator of the new-firm startups at the national level but this effect disappears at the regional level. Unemployment rates and new-firm startups are closely linked and so in the short-run as well as in the long-run and show evidence of the presence of the refugee’s effect and the Schumpeter’s effect. In most of the regions, the refugee’s effect seems to be dominant: the increase of the unemployment rate leads to an increase in the entrepreneurial activity. In France new-firm startups are mainly driven by necessity motives.Creation-Date: 2013-10
    Keywords: Business cycle, “Entrepreneurship capital”, New firm formation, Schumpeter effect, Refugee effect
    JEL: L26 E32 R11

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