nep-ent New Economics Papers
on Entrepreneurship
Issue of 2014‒01‒10
five papers chosen by
Marcus Dejardin
University of Namur and Universite' Catholique de Louvain

  1. Twenty years of rural entrepreneurship: a bibliometric survey By Maria Lúcia Pato; Aurora A.C. Teixeira
  2. Entrepreneurship, Innovation and the Good Life: Reflections on Edmund Phelps’ Mass Flourishing By Henrekson, Magnus
  3. Does Bank Market Power Affect SME Financing Constraints? By Ryan, Robert M.; O'Toole, Conor; McCann, Fergal
  4. Do Small Businesses Still Prefer Community Banks? By Berger, Allen N.; Goulding, William; Rice, Tara
  5. Covariance structure analysis of innovation and ICT use among Japanese innovative SMEs By Idota, Hiroki; Bunno, Teruyuki; Tsuji, Masatsugu

  1. By: Maria Lúcia Pato (Faculdade de Economia, Universidade do Porto); Aurora A.C. Teixeira (CEF.UP, Faculdade de Economia, Universidade do Porto; INESC Porto; OBEGEF)
    Abstract: Entrepreneurship, in general, and rural entrepreneurship, in particular, has become a dynamic field of research in the last two decades. It seems therefore timely to present a quantitative survey of the literature in this area, aimed at identifying the most important sub-topics, contributors and their geographical distribution, major outlets, main empirical methodologies employed, as well as the most frequently studied countries. Based on 181 articles published in journals indexed in Scopus (until March 2013), we found that within the entrepreneurship literature, ‘rural entrepreneurship’ has been largely overlooked and has gradually lost momentum. Rural entrepreneurship is an essentially ‘European’ concern, whose most prolific authors are affiliated in institutions located in the UK and Spain. The most important outlets for this topic are Entrepreneurship and Regional Development, International Journal of Entrepreneurship and Small Businesses, and Journal of Rural Studies. The average quality of the research on rural entrepreneurship has risen, as reflected by the journals’ impact factor, implying that it has gained a measure of scientific visibility. More research on rural entrepreneurship is being published in economics and business-related journals, losing to some extent its initial multidisciplinary scope. In the field of rural entrepreneurship, ‘Organization-related characteristics’, ‘Policy measures’ and ‘Institutional frameworks and Governance’ have attracted considerable attention in recent years, being considered as ‘emergent’ topics of research. In contrast, ‘Theory building’ has not attracted much research over the period in analysis, which suggests that the theoretical body of rural entrepreneurship is still incipient, hindering the establishment of its boundaries and of a suitable research agenda. The absence of an axiomatic and theoretical corpus prevents the full use of causality and hypotheses testing methodologies and explains to some extent the predominance of more qualitative types of research. Empirical literature on rural entrepreneurship has mainly analyzed developed countries, most notably, the UK, USA, Spain, Finland and Greece. Given the potential rural entrepreneurship represents for less developed and underdeveloped countries, more research on the topic is an imperative.
    Keywords: entrepreneurship, rural, bibliometric analysis
    JEL: L26 R58 R11 C89
    Date: 2013–12
  2. By: Henrekson, Magnus (Research Institute of Industrial Economics (IFN))
    Abstract: Edmund Phelps, the 2006 Nobel Laureate in Economics, has written a thought-provoking and ambitious book: Mass Flourishing: How Grassroots Innovation Created Jobs, Challenge, and Change (Princeton University Press, 2013). The book is laudable for its emphasis on innovation, for its discussion of what constitutes a good life, and Phelps’ realization that true life satisfaction cannot be achieved through a mindless quest for money and the goods it can buy. But the overly glossy characterization of the period before WW II as opposed to the post-1980 period, the niggardly evaluation of the European economies, and the lack of empirical indicators actually showing that the rate of innovation has dropped are significant weaknesses. These objections are especially regrettable given the importance of the book´s main message: Creative entrepreneurship is not merely the key to economic growth, but to life satisfaction as well.
    Keywords: Innovation; Entrepreneurship; Modernism; Postmodernism; Values
    JEL: L26 M14 P47 Z13
    Date: 2014–01–02
  3. By: Ryan, Robert M.; O'Toole, Conor; McCann, Fergal
    Abstract: This paper examines the extent to which bank market power alleviates or magnifies SME credit constraints using a large panel dataset of more than 118,000 SMEs across 20 European countries over the period 2005-2008. To our knowledge, this is the first study to examine bank market power and SME credit constraints in an international, developed economy setting. Moreover, our study is the first to address a number of econometric considerations simultaneously, in particular by controlling for the availability of profitable investment opportunities using a structural Q model of investment. Our results strongly support the market power hypothesis, namely, that increased market power results in increased financing constraints for SMEs. Additionally, we find that the relationship exhibits heterogeneity across firm size and opacity in a manner that suggests that the true relationship between bank market power and financing constraints might not be fully explained by the existing theory. Finally, we find that the effect of bank market power on financing constraints increases in financial systems that are more bank dependent.
    Date: 2013–11
  4. By: Berger, Allen N. (Board of Governors of the Federal Reserve System (U.S.)); Goulding, William (Board of Governors of the Federal Reserve System (U.S.)); Rice, Tara (Board of Governors of the Federal Reserve System (U.S.))
    Abstract: We formulate and test hypotheses about the role of bank type – small versus large, single-market versus multimarket, and local versus nonlocal banks – in banking relationships. The conventional paradigm suggests that "community banks" – small, single market, local institutions – are better able to form strong relationships with informationally opaque small businesses, while "megabanks" – large, multimarket, nonlocal institutions – tend to serve more transparent firms. Using the 2003 Survey of Small Business Finance (SSBF), we conduct two sets of tests. First, we test for the type of bank serving as the "main" relationship bank for small businesses with different firm and owner characteristics. Second, we test for the strength of these main relationships by examining the probability of multiple relationships and relationship length as functions of main bank type and financial fragility, as well as firm and owner characteristics. The results are often not consistent with the conventional paradigm, perhaps because of changes in lending technologies and deregulation of the banking industry.
    Keywords: Banks; relationships; small business; government policy
    JEL: G21 G28 G34
    Date: 2013–12–01
  5. By: Idota, Hiroki; Bunno, Teruyuki; Tsuji, Masatsugu
    Abstract: One of the common features of innovative SMEs identified from our previous surveys and in-depth interviews is innovation capability accumulated inside the firm, which enables them to create new products which meet customer needs and to cooperate with the other firms. The factors that SMEs achieve innovation are complex, and the causal relationships between factors have not been sufficiently clarified yet. This paper attempts to clarify the innovation process using covariance structure analysis, in particular focusing on the role ICT. Seven hypotheses are demonstrated by two models. The results obtained are as follows: (i) top management's participation and employee's motivation in the innovation process promote the effect of introducing ICT; (ii) this effect of ICT use raises innovation capability; in particular ability to connect external linkages; (iii) ICT use, innovation capability and external linkages enhance innovation activity; and (iv) effect of ICT use and innovation capability promote innovation directly. Thus this paper identifies that the effect of introducing ICT promotes innovation, and it is indispensable for innovation in Japanese SMEs. --
    Keywords: ICT,Innovation,innovation capability,external linkages,covariance structure analysis
    Date: 2013

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