nep-ent New Economics Papers
on Entrepreneurship
Issue of 2014‒08‒02
eight papers chosen by
Marcus Dejardin
Université de Namur

  1. Entry, Exit and Economic Growth: US Regional Evidence By Miguel Casares; Hashmat U. Khan
  2. The Significance of Business Exit for Future Entrepreneurial Activity By Albiol, Judit
  3. Regional determinants of firm entry in a developing country By Calá, Carla Daniela; Manjón Antolín, Miguel C.; Arauzo Carod, Josep Maria
  4. Capital Market Financing, Firm Growth, Firm Size Distribution By Tatiana Didier; Ross Levine; Sergio L. Schmukler
  5. Towards the societal system of innovation: The case of metropolitan areas in Europe By Turkeli S.; Wintjes R.J.M.
  6. The unequal effect of India's industrial liberalization on firms' decision to innovate: Do business conditions matter? By Bas M.; Paunov C.
  7. Mapping regional social enterprise ecosystems in India: Framework and indicators By Sonne L.
  8. La aparente revolución del emprendimiento en Chile. Una perspectiva espacial. By Miguel Atienza; Marcelo Lufin; Gianni Romani

  1. By: Miguel Casares (Universidad Pública de Navarra University); Hashmat U. Khan (Department of Economics, Carleton University)
    Abstract: Entry rates have a negative long-run effect on US regional growth, which contradicts innovation-based growth models. This puzzle is resolved when a model-consistent specification is estimated using per capita entry growth. Evidence supports the Schumpeterian hypothesis of a positive relationship between exit and economic growth.
    Keywords: Entry-exit rates; Per capita entry-exit growth; Economic growth
    JEL: O30 O40 O51
    Date: 2014–07–15
  2. By: Albiol, Judit
    Abstract: Purpose: The purpose of this paper is to analyse the impact of business exits on future dimensions of entrepreneurial activity at the macroeconomic level. Design/methodology/approach: This research uses the Global Entrepreneurship Monitor (GEM) data for 41 countries and the Generalized Method of Moments (GMM) to carry out the analysis. The paper differentiates the effect of the two components of total entrepreneurial activity, and the two motivations for it – opportunity and necessity entrepreneurship. Findings: The results presented here show a positive and significant effect of the coefficient associated with exits in all models. This means that the levels of entrepreneurial activity exceed business exits. The robustness of the models are tested, including other variables such as the fear of failure, the Gross Domestic Product, role models, entrepreneurial skills and the unemployment variables. The main hypothesis which stated that at national level business exits imply greater rates of opportunity-driven entrepreneurship is corroborated. Originality/value: One would expect that unemployment rates would imply higher levels of necessity entrepreneurship. However, results show that unemployment rates do in fact favour opportunity entrepreneurship levels. This could be due to those government policies that are aimed at promoting entrepreneurship through the capitalization of unemployment to be totally invested in a new start-up. To the best of our knowledge, this is the first panel data study to link previous exit rates to future dimensions of entrepreneurial activity. Keywords: Entrepreneurship, business exits, social values, industrial organization Paper type: Research paper
    Keywords: Emprenedoria, Èxit en els negocis, Empreses -- Aspectes socials, Organització industrial, 338 - Situació econòmica. Política econòmica. Gestió, control i planificació de l'economia. Producció. Serveis. Turisme. Preus, 65 - Gestió i organització. Administració i direcció d'empreses. Publicitat. Relacions públiques. Mitjans de comunicació de masses,
    Date: 2014
  3. By: Calá, Carla Daniela; Manjón Antolín, Miguel C.; Arauzo Carod, Josep Maria
    Abstract: We analyse the determinants of firm entry in developing countries using Argentina as an illustrative case. Our main finding is that although most of the regional determinants used in previous studies analysing developed countries are also relevant here, there is a need for additional explanatory variables that proxy for the specificities of developing economies (e.g., poverty, informal economy and idle capacity).We also find evidence of a core-periphery pattern in the spatial structure of entry that seems to be mostly driven by differences in agglomeration economies. Since regional policies aiming to attract new firms are largely based on evidence from developed countries, our results raise doubts about the usefulness of such policies when applied to developing economies. JEL classification: R12, R30, C33. Key words: Firm entry, Argentina, count data models.
    Keywords: Empreses -- Creació, Argentina -- Condicions econòmiques, Economia regional, Localització industrial, Països en vies de desenvolupament, Anàlisi de dades de panel, Sèries temporals -- Anàlisi, 332 - Economia regional i territorial. Economia del sòl i de la vivenda,
    Date: 2014
  4. By: Tatiana Didier; Ross Levine; Sergio L. Schmukler
    Abstract: Which firms issue equity and debt in domestic and international markets and what happens to their assets, sales, and number of employees? To answer these questions, we assemble a new dataset on firm-level capital raising activity during 1991-2011, which we match with firm attributes for 45,527 listed firms from 51 economies during 2003-2011. We find that only a few of the largest firms issue securities in the median country. Firms issuing bonds are even larger than those issuing equity. Moreover, issuers grow much faster than non-issuers, particularly (a) during the year of issuance, (b) among smaller and younger firms, and (c) in countries with market-based financial systems. Furthermore, the firm size distribution (FSD) of issuers behaves differently from that of non-issuers. Among issuers, smaller firms grow faster than larger ones, tightening their FSD; but among non-issuers, larger firms grow faster than smaller ones, widening their FSD.
    JEL: G15 G30 L25
    Date: 2014–07
  5. By: Turkeli S.; Wintjes R.J.M. (UNU-MERIT)
    Abstract: Innovation serves many purposes. In this paper we study new varieties of innovation and innovation policy which address societal challenges in the largest cities in Europe. These metropolitan areas consistently show resounding characteristics in terms of multiplicities of innovation, governance and societal challenges. They serve as living labs and lead-markets for solutions to societal challenges. The identified and analysed cases of social innovation initiatives in these metropolitan areas organize for new resourceful interactions between the demand for social innovations and the capacities to generate multi-domain solutions. It is the context dependencies of these cases of social innovation that open up diverse interest-based possibilities. In this daily life-world context a multiplicity of actors select local-interactive processes. The broad range of actors includes government research labs, public sector, creative and other service industries, social entrepreneurs, intrapreneurs, student platforms, and profession-linked open communities. Such interactions represent emerging transformative capabilities for addressing societal challenges, turning local-societal political/administrative; economic/ financial; technological/social solutions into multi-level regional, national, global opportunities, and a wider range of benefits. In metropolitan areas, these multi-domain and multi-level potentials are activated by organizing societal synergies between social participative creativity and economic innovative efficiency for any level. Existing concepts of innovation systems do not capture and explain these unique societal synergies, because they only focus on one specific type of innovation and one specific type of sectoral, technological, socio-technical, social or spatio-organizational national, regional system of innovation. It requires acknowledging that innovation and innovation systems are not only instrumental for economic benefits in a system-technocratic sense, but also for addressing societal challenges in a grassroots-communicative sense. Therefore we construct an overarching yet deepened concept the societal system of innovation, a theoretical-analytical framework based on empirical background. We do not add yet another type of innovation system, but acknowledge the overlaps and linkages between the existing types of innovation systems. The existing types are the special cases of the societal system of innovation with respect to the presence/absence of organizations, where organizational rules and interactional play between them. Over-embedded or lacking interactions among these special-case innovation systems cannot capture evolving contextuality life-world for innovation. This shortcoming provides a complementary policy rationale for being critical in the organization of widened interactions S2S, system-to-system; G2G, grassroots-to-grassroots and deepened contextuality S2G, systems-to-grassroots; and G2S, grassroots-to-systems under the concept, instruments, measurement/assessment of the societal system of innovation.
    Keywords: Technological Change; Research and Development; Intellectual Property Rights: General; Technological Change: Government Policy; Economywide Country Studies: Europe;
    JEL: O30 O38 O52
    Date: 2014
  6. By: Bas M.; Paunov C. (UNU-MERIT)
    Abstract: This paper examines the heterogeneous impact of industrial liberalization policy, the dismantling of the License Raj in India, on firms innovation performance. Our results show that larger and more productive firms in liberalized industries were more likely to take up RD while the smallest and least efficient firms were less likely to do so. We also show that this inequality of effects was strongest in economically less developed Indian states and where financial development and the knowledge base are weaker. This suggests business conditions shape heterogeneous impacts of liberalization policies to the advantage of initially larger and more efficient firms.
    Keywords: Firm Behavior: Empirical Analysis; Industrialization; Manufacturing and Service Industries; Choice of Technology; Industrial Policy; Innovation and Invention: Processes and Incentives;
    JEL: O25 O14 O31 D22
    Date: 2014
  7. By: Sonne L. (UNU-MERIT)
    Abstract: In this paper we briefly review social enterprise in the context of India before developing a conceptual framework highlighting the different components that make up a regional social enterprise ecosystem including entrepreneurs, financial and non-financial support, education and research, communication, collaboration and networks, government policy, and the local economy and context. Based on these, we discuss the availability of relevant data before developing a set of indicators for describing the components in different regional ecosystems across India. This paper is the first of a project documenting nine regional social enterprise ecosystems across India.
    Keywords: Formal and Informal Sectors; Shadow Economy; Institutional Arrangements; Technological Change: Choices and Consequences; Diffusion Processes;
    JEL: O17 O33
    Date: 2014
  8. By: Miguel Atienza (IDEAR - ORDHUM - Department of Economics, Universidad Católica del Norte - Chile); Marcelo Lufin (IDEAR - ORDHUM - Department of Economics, Universidad Católica del Norte - Chile); Gianni Romani (Departamento de Administración, CEMP, Universidad Católica del Norte - Chile)
    Abstract: The promotion of entrepreneurship has become one of the main policies of the Chilean development strategy in the last decade and has been considered as a means to improve local development. The government declared as a success the creation of 250,000 new firms in the last four years. This article uses an occupational definition of entrepreneurship to analyze the scope of this apparent revolution and its location patterns in 2009 and 2011 with information from the Socioeconomic Characterization Survey (CASEN). The results show that it is not appropriate to talk about an entrepreneurship revolution in Chile. Furthermore, the analysis of spatial patterns and entrepreneurship clusters reveals high heterogeneity among local areas according to the characteristics of their entrepreneurs. In this context, national entrepreneurship policies exclusively oriented to the increase in the number of firms could perpetuate spatial inequality.
    Keywords: entrepreneurship, location, regional and local development.
    Date: 2014–07

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