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on Entrepreneurship |
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Issue of 2014‒03‒01
seven papers chosen by Marcus Dejardin University of Namur and Universite' Catholique de Louvain |
| By: | Bengtsson, Ola (Lund University); Ekeblom, Daniel (Department of Economics) |
| Abstract: | Existing empirical evidence suggests that entrepreneurs are optimists, a finding researchers often interpret as evidence of a behavioral bias in entrepreneurial decision-making. We revisit this claim by analyzing an unusually large survey dataset (180,814 responses) that allows us to create a good measure of entrepreneurial optimism. Our measure is based on the individual’s beliefs about nationwide economic conditions, unlike measures that prevail in the literature of an individual’s beliefs about her personal future economic conditions. Beliefs about nationwide economic conditions form a good measure of optimism because they are completely uncorrelated with the individual’s own life or work situation (which is not optimism) and therefore do not respond to an individual’s objective situation, which may affect beliefs about her personal future economic conditions. Our data highlight the importance of measuring optimism correctly. About half of the survey respondents differ in their beliefs about nationwide and own conditions. In addition, our measure of optimism makes it possible to relate an individual’s beliefs to actual outcomes. We can thereby test, in a novel way, whether entrepreneurial optimism is a behavioral bias or not. We show that entrepreneurs have more favorable beliefs about nationwide conditions and then that these entrepreneurs’ beliefs are relatively good predictors of the future. We conclude from these two findings that entrepreneurs are less biased towards optimism than non-entrepreneurs are biased towards pessimism. Additional evidence pertaining to education, which arguably correlates positively with rational decision-making, supports this conclusion. We show that entrepreneurs are more educated and their beliefs about the future are more similar to educated peoples’ beliefs. In summary, our paper documents that entrepreneurial optimism is an important real-world phenomenon, yet, it may not be a behavioral bias that gives rise to irrational decision-making. |
| Keywords: | Entrepreneurship; Forecast; Optimism; Survey data |
| JEL: | C83 D84 E27 L26 |
| Date: | 2014–02–19 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:1008&r=ent |
| By: | Catia Batista (Nova University of Lisbon); Janis Umblijs (Ragnar Frisch Centre for Economic Research, Oslo, Norway) |
| Abstract: | Do more risk loving migrants opt for self-employment? This is a question especially relevant for policy makers designing selective immigration policies in countries of destination. In order to provide a rigorous answer to it, we use a novel vignette-adjusted measure of risk preferences in the domain of work to investigate the link between risk aversion and entrepreneurship in migrant communities. Using a representative household survey of the migrant population in the Greater Dublin Area, we find a significant negative relationship between risk aversion and entrepreneurship. In addition, our results show that the use of vignettes improves the significance of the results, as they correct for differential item functioning (where respondents interpret the self-evaluation scale in different ways) between entrepreneurs and non-entrepreneurs, and corrects for variation in the use of self-evaluation scales between migrants from different countries of origin. |
| Keywords: | Migration, Risk Aversion, Entrepreneurship |
| JEL: | F22 J01 J15 J61 L26 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:nor:wpaper:2014004&r=ent |
| By: | Nunziata, Luca (University of Padova); Rocco, Lorenzo (University of Padova) |
| Abstract: | Does Protestantism favour the market economy more than Catholicism does? We provide a novel quasi-experimental way to answer this question by comparing Protestant and Catholic minorities using Swiss census data from 1970 to 2000. Exploiting the strong adhesion of religious minorities to their confession's ethical principles and the historical determination of the geographical distribution of confessions across Swiss cantons, we find that Protestantism is associated with a significantly higher propensity for entrepreneurship. The estimated difference ranges between 2.3 and 4.4 percentage points. Our findings are robust to a number of robustness checks, including a placebo test. |
| Keywords: | entrepreneurship, self-employment, religion, culture, Protestantism, Catholicism, Switzerland |
| JEL: | Z12 J24 J21 Z13 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7976&r=ent |
| By: | Tindara Abbate; Fabrizio Cesaroni |
| Abstract: | Purpose: Academic spin-off firms are considered an important mechanism to transfer technological knowledge from university to industry, although they often show a low growth rate. One possible cause is the lack of proper marketing capabilities, since spin-off managers tend to reduce the role of marketing to the implementation of mere tactical activities. This study analyses whether spin-off firms adopt a market orientation and the effect it produces on firms' economic and innovation performance. Design/methodology/approach: The empirical analysis is based on both quantitative survey data and in-depth interviews, referring to a unique sample including Italian and Spanish spin-off companies. Findings: Results highlight that MKTOR and MARKOR measurement scales show different abilities to capture the implementation of market orientation by sampled firms. We find that the generation and dissemination of information on customers and competitors directly affect firms' ability to develop technological innovations and gain profits. Nevertheless, market orientation also constitutes a challenge to spin-offs, and may eventually generate inefficiencies when external technological conditions require firms to respond quickly to environmental stimuli. Practical implications: The findings of this study are relevant to academic spin-off managers who are responsible for adopting, implementing and maintaining market orientation strategies under different environmental conditions. Limitations: The characteristics of sample used for the quantitative analysis may limit the generalization of results. Originality/value: Even though the market orientation concept has been largely analyzed, no previous study has examined its application by academic spin-offs. By employing qualitative and quantitative analyses we provide novel insights in this respect. |
| Keywords: | Academic spin-off firms; market orientation; company performance , Market orientation , Company performance |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:cte:idrepe:id-14-01&r=ent |
| By: | Bulent Unel; Elias Dinopoulos |
| Abstract: | This study proposes a simple theory of trade with endogenous firm productivity, occupational choice, and income inequality. Individuals with different managerial talent choose to become self-employed entrepreneurs or workers. Entrepreneurs enhance firm productivity by investing in managerial capital. The model generates three income classes: low-income workers facing the prospect of unemployment; middle-income entrepreneurs managing domestic firms; and high-income entrepreneurs managing global firms. A reduction in per-unit trade costs raises productivity of global firms, reduces productivity of domestic firms, and worsens personal income distribution by generating labor-market polarization. A reduction in fixed exporting costs reduces productivity of every firm and has an ambiguous effect on personal income distribution. Trade-liberalization policies raise unemployment and improve welfare. |
| URL: | http://d.repec.org/n?u=RePEc:lsu:lsuwpp:2014-04&r=ent |
| By: | Ayadi, Rym; De Groen, Willem Pieter |
| Abstract: | The Arab Spring, which took root in Tunisia and Egypt in the beginning of 2011 and gradually spread to other countries in the southern Mediterranean, highlighted the importance of private-sector development, job creation, improved governance and a fairer distribution of economic opportunities. The developments led to domestic and international calls for the region’s governments to implement the needed reforms to enhance business and investment conditions, modernise their economies and support the development of enterprises. Central to these demands are calls to enhance the growth prospects of micro-, small- and medium-sized enterprises (MSMEs), which represent an overwhelming majority of the region’s economic activity. On the basis of interviews conducted among high-growth potential MSMEs in selected countries in the southern Mediterranean – Algeria, Egypt, Morocco and Tunisia – this report identifies and ranks key obstacles preventing MSMEs from reaching their high-growth potential and puts forward effective policy responses to reduce these obstacles. If implemented, the authors argue that these policies could unlock the MSMEs potential to contribute more to their economies. |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:eps:cepswp:8796&r=ent |
| By: | Ayadi, Rym; De Groen, Willem Pieter |
| Abstract: | The upheavals of the Arab Spring in the southern Mediterranean led to domestic and international demands on the governments in the region to implement reforms aimed at enhancing business and investment conditions especially for micro, small- and medium-sized enterprises (MSMEs), which carry out an overwhelming majority of the region’s economic activity. A comprehensive survey among some 600 high-growth potential MSMEs in Algeria, Egypt, Morocco and Tunisia identified and ranked the key obstacles impeding their high-growth potential. This Policy Brief summarises the main results and policy recommendations that can be drawn from this survey, which has been analysed in depth by Ayadi & De Groen (2014). |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:eps:cepswp:8798&r=ent |