nep-ent New Economics Papers
on Entrepreneurship
Issue of 2014‒03‒22
nine papers chosen by
Marcus Dejardin
University of Namur and Universite' Catholique de Louvain

  1. Why not all young firms invest in R&D By Audretsch, David B.; Segarra Blasco, Agustí, 1958-; Teruel, Mercedes
  2. Education and Self-employment Propensity By Klaesson, Johan; Larsson, Johan P
  3. Culturally Clustered or in the Cloud? Location of Internet Start-ups in Berlin By Kristoffer Moeller
  4. OPEN BUSINESS MODELS AND VENTURE CAPITAL FINANCE By Colombo, Massimo G.; Cumming, Douglas; Mohammadi, Ali; Rossi-Lamastra , Cristina; Wadhwa , Anu
  6. Competition and Specialization: Evidence from Venture Capital By Cabolis, Christos; Dai, Mian; Serfes, Konstantinos
  7. FIRM AGE AND SIZE IN THE LONGITUDINAL EMPLOYER-HOUSEHOLD DYNAMICS DATA By John Haltiwanger; Henry Hyatt; Erika McEntarfer; Liliana Sousa; Stephen Tibbets
  8. Gender, Innovation und Unternehmensentwicklung By Brink, Siegrun; Kriwoluzky, Silke; Bijedic, Teita; Ettl, Kerstin; Welter, Friederike
  9. L’entrepreneuriat en Algérie : quels enjeux pour quelles réalités ? By Widad Guechtouli; Manelle Guechtouli

  1. By: Audretsch, David B.; Segarra Blasco, Agustí, 1958-; Teruel, Mercedes
    Abstract: This article aims to analyze the different impact that some factors may exert on the probability that a small young firm invests intensively in R&D. Recently, an increasing amount of the literature makes reference to the vital role played by a small number of young firms in generating jobs and increasing efficiency levels. However, not all new firms invest in R&D. Departing from the definition of YICs (firms younger than 6 years old, fewer than 250 employees and with more than 15% of their revenues invested in R&D activities), and with an extensive sample of the Spanish Community Innovation Survey between 2004- 2010, we try to determine: i) those factors that cause firms to become YICs (innovative young small firms) or YNICs (moderately innovative young small firms); ii) what is the difference in the impact of those factors between YICs and YNICs. Our results show that factors such as initial innovation capacity and cooperation in R&D projects enhance the probability of becoming a YIC. Nevertheless, factors such as export potential and market uncertainty may influence the decision to invest moderately and become a YNIC. Keywords: Innovation, Policy, YICs. JEL Classifications: O31, D21
    Keywords: Empreses -- Innovacions tecnològiques, Innovacions tecnològiques -- Política governamental, Investigació, Conducta organitzacional, Empreses petites i mitjanes, Empreses -- Creació, 65 - Gestió i organització. Administració i direcció d'empreses. Publicitat. Relacions públiques. Mitjans de comunicació de masses,
    Date: 2014
  2. By: Klaesson, Johan (Centre for Entrepreneurship and Spatial Economics (CEnSE), Jönköping International Business School (JIBS) and Centre of Excellence in Science and Innovation Studies (CESIS)); Larsson, Johan P (Centre for Entrepreneurship and Spatial Economics (CEnSE), Jönköping International Business School (JIBS) and Centre of Excellence in Science and Innovation Studies (CESIS))
    Abstract: We examine the relationship between entrepreneurship and education length and field. Entrepreneurship and education are both used as policy vehicles for achieving employment and economic growth, regionally and nationally. If entrepreneurship in the form of new firms is the objective, then how will more education influence its achievability? We examine this question at the individual level using a full population data-set, and analyze the influence of education length and field on the propensity of leaving employment in 2007 for self-employment in 2008. The fields of education we investigate is: education, humanities and arts, social sciences, business and law and science. The effect of education on the probability of an individual turning from wage-employment into self-employment is positive overall, but differs considerably with respect to field of education on average and on the margin. The positive effects seem to almost exclusively come from the fields, science, social sciences and business and law. For the other fields the effect is essentially zero or even negative. In the empirics we control for a large set of variables controlling for individual, employer, and regional heterogeneity.
    Keywords: Self-employment; Entry; Human capital; Education; Industry; Region
    JEL: C21 L26 R10
    Date: 2014–03–12
  3. By: Kristoffer Moeller
    Abstract: Knowledge based firms like IT companies do neither have a capital- nor a land intensive production. They predominantly rely on qualified labour and increasingly depend on the location of its (potential) employees. This implies that it is more likely that firms follow workers rather than the other way around. Contributing to the literature of firm location and consumer cities I empirically test the amenity oriented firm location hypothesis. In particular I investigate whether Berlin internet start-up firms, representing a footloose knowledge-based service industry, locate in urban amenity-rich places. Identification builds on the sudden fall of the Berlin Wall. The intra-city analysis yields a significant impact of urban amenities on the location of internet start-up. A comparison with other service industries suggests that amenities are significant to the location choice of creative sectors whereas no effect can be observed for non-creative firms.
    Keywords: Firm location, urban amenities, consumer city, internet start-ups, entrepreneurs, Berlin
    JEL: R30 D22 L26
    Date: 2014–03
  4. By: Colombo, Massimo G. (Department of Management, Economics and Industrial Engineering, Politecnico di Milano); Cumming, Douglas (Schulich School of Business, York University); Mohammadi, Ali (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Rossi-Lamastra , Cristina (Department of Management, Economics and Industrial Engineering, Politecnico di Milano); Wadhwa , Anu (Ecole Polytechnique Fédérale de Lausanne - Management of Technology and Entrepreneurship Institute (MTEI))
    Abstract: Do entrepreneurial ventures that adopt an open business model obtain VC finance from higher quality VC investors in comparison with entrepreneurial ventures that adopt a closed business model? Are VC investments in open business model ventures are more likely to be syndicated and more frequently staged? In this paper we consider these questions on a sample of 6,555 VC investments in 514 software entrepreneurial ventures that received the first round of VC finance in the period 1994-2008. Of these ventures, 124 adopted an open business model based on open source software (OSS) and the remaining ventures adopted a closed business model based on the development and sale of proprietary software. Our findings indicate that OSS entrepreneurial ventures received funding from higher quality VC investors, with VC quality being measured by general experience, industry-specialization, IPO success, raised capital and connectedness in syndication network. Also, VC investments in OSS entrepreneurial ventures were more frequently staged. Conversely, we do not find any difference between OSS and proprietary software entrepreneurial ventures as number of VC participated in syndication.
    Keywords: Open Business Model; Entrepreneurial Venture; Open Source Software; Venture Capital; Uncertainty
    JEL: G24 L17 O31
    Date: 2014–03–12
  5. By: Mohammadi, Ali (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Shafizadeh, Mohammadmehdi (Management, Economics and Industrial Engineering, Politecnico di Milano); Johan, Sofia (Schulich School of Buisiness, York University.)
    Abstract: This paper investigates how early termination of venture capital (VC) investment in entrepreneurial ventures affect the ability of these young ventures into acquiring further resources necessary for survival and growth. We propose that young entrepreneurial ventures face a higher cost of external financing if existing investors stop investing in the next rounds of financing. Future investors, faced with great unobservable qualities of young companies and the uncertainty surrounding their financial prospect, rely on observable characteristics to appraise a company; The continuation of investment by existing investors confers a positive signal about the quality of young ventures and that young ventures, as endorsed by further commitment of capital, are more likely to perform better than otherwise comparable ventures that lack such escalated commitment.
    Keywords: Information Asymmetry; Signaling Theory; Venture Capital; Discontinued Investment
    JEL: D80 G24
    Date: 2014–03–12
  6. By: Cabolis, Christos (ALBA Graduate Business School); Dai, Mian (School of Economics LeBow College of Business Drexel University); Serfes, Konstantinos (School of Economics LeBow College of Business Drexel University)
    Abstract: Venture capital (VC) investments are characterized by stepwise infusion of capital to entrepreneurial (EN) companies in different development stages: early/seed, start-up, expansion and other stages. Stage specialization is crucial for the development and growth of the companies that receive VC funding, because each stage requires different skills and abilities on part of the VC firms. It is generally accepted in economics that more competition leads to more specialization. Does this hold in the VC market? To answer this question, we develop a market equilibrium model that captures many of the salient features of the VC market, such as two-sided heterogeneity, bilateral bargaining, endogenous matching and moral hazard. The theoretical model gives rise to two opposing effects on the incentives of VC firms to specialize as competition increases and hints to a non-monotonic relationship. Using panel data on VC investments in the U.S. between 1980 and 2006, we find robust empirical evidence of an inverse U-shape relationship between competition and stage specialization. Contrary to conventional wisdom, more competition (larger market) may discourage specialization.
    Keywords: Venture capital market; Stage specialization; Competition; Endogenous matching
    JEL: D21 L11 L14 L22
    Date: 2014–03–01
  7. By: John Haltiwanger; Henry Hyatt; Erika McEntarfer; Liliana Sousa; Stephen Tibbets
    Abstract: The Census Bureau’s Quarterly Workforce Dynamics (QWI) and OnTheMap now provide detailed workforce statistics by employer age and size. These data allow a first look at the demographics of workers at small and young businesses as well as detailed analysis of how hiring, turnover, job creation/destruction vary throughout a firm’s lifespan. Both the QWI and OnTheMap are tabulated from the Longitudinal Employer-Household Dynamics (LEHD) linked employer-employee data. Firm age and size information was added to the LEHD data through integration of Business Dynamics Statistics (BDS) microdata into the LEHD jobs frame. This paper describes how these two new firm characteristics were added to the microdata and how they are tabulated in QWI and OnTheMap
    Date: 2014–03
  8. By: Brink, Siegrun; Kriwoluzky, Silke; Bijedic, Teita; Ettl, Kerstin; Welter, Friederike
    Abstract: Forschungsarbeiten stellen immer wieder fest, dass Frauen im Allgemeinen und Unternehmerinnen im Besonderen weniger innovativ sind als ihre männlichen Pendants. Häufig wird dies auch in Verbindung mit einer schwächeren Unternehmensentwicklung weiblich geführter Unternehmen gebracht. Die vorliegende Studie zeigt, dass dieser Einschätzung ein vornehmlich technologisch geprägtes Innovationsverständnis und die Fokussierung auf Brachen, die von vorneherein als innovativ betrachtet werden, zugrunde liegen. Individuelle (berufliche) Präferenzen und das vorherrschende Bild des männlichen Innovators führen jedoch dazu, dass Frauen weniger innovativ im klassischen, technologischen Sinne sind. Hinzu kommt, dass die institutionellen Rahmenbedingungen eine Teilzeitarbeit auch von selbstständigen Frauen begünstigen. Unternehmen, die in Teilzeit betrieben werden, verfügen jedoch in der Regel über geringere Ressourcen. Die Risiken, die mit einer Innovationstätigkeit verbunden sind, stellen deshalb eine größere Herausforderung dar. -- In innovation research, there is a wide-spread notion that women in general and women entrepreneurs in particular are less innovative than their male counterparts. This is often associated with a weaker performance of women-led firms. Our study shows that this notion is based on a limited definition and examination of innovation. In empirical research as well as in innovation funding programs, innovation is considered to be technologically based and to take place in certain, innovative sectors. Due to the perceptions of women's role in society, however, women are less prone to operate in these sectors and to engage in this specific type of innovation. Moreover, the institutional framework sets incentives for (salaried as well as self-employed women to work part-time. But a firm that is being operated on a part-time basis might miss the resources necessary to bear the risks of innovative activities.
    Keywords: Gender,FuE/Innovation,Gründungen/Selbstständigkeit/Entrepreneurship Education,Unternehmensführung/Unternehmensentwicklung,Gender,R&D/Innovation,Startup,Entrepreneurship,firm performance
    JEL: O31 M13 L26
    Date: 2014
  9. By: Widad Guechtouli; Manelle Guechtouli
    Abstract: Notre article s’intéresse au concept d’entrepreneuriat et à la création d’entreprise en Algérie. Partant d’un constat de prise de conscience collective autour de ces concepts, notre étude questionne la réalité du terrain concernant d’une part, les initiatives mises en place par le gouvernement et d’autre part, les enjeux et difficultés (économiques, sociales et sociétales) qui peuvent les entraver.
    Keywords: entrepreneuriat, création d’entreprise, culture, barrières, Algérie.
    Date: 2014–02–25

This nep-ent issue is ©2014 by Marcus Dejardin. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.