nep-ent New Economics Papers
on Entrepreneurship
Issue of 2014‒08‒20
eleven papers chosen by
Marcus Dejardin
Université de Namur

  1. Understanding Fear of Failure in Entrepreneurship: A Cognitive Process Framework By James Hayton; Gabriella Cacciotti; Andreas Giazitzoglu; J. Robert Mitchell; Chris Ainge
  2. Diversity and SMEs: Existing evidence and policy tensions By Sara Carter; Monder Ram; Trevor Jones; Kiran Trehan
  3. Entrepreneurial leadership, capabilities and growth: A review of existing evidence By Andy Lockett; James Hayton; Deniz Ucbasaran; Kevin Mole; Gerard P. Hodgkinson
  4. Firm dynamics and job creation in the UK: taking stock and developing new perspectives By Michael Anyadike-Danes; Mark Hart; Jun Du
  5. An Inquiry into the Determinants of Graduate Entrepreneurship in Hong Kong and Guangzhou (Mainland China) By Frank Bickenbach; Dirk Christian Dohse; Wan-Hsin Liu
  6. Agglomeration and Innovation By Gerald Carlino; William R. Kerr
  7. Fostering a Creative Economy to Drive Korean Growth By Randall S. Jones
  8. Governance, Firm Size and Innovative Capacity: Regional Empirical Evidence for Germany By Berlemann, Michael; Jahn, Vera
  9. Do Banks Price Discriminate Spatially? Evidence from Small Business Lending in Local Credit Markets By Andrea Bellucci; Alexander Borisov; Alberto Zazzaro
  10. Global Entrepreneurship Monitor The Netherlands 2012 By Jolanda Hessels; Brigitte Hoogendoorn; Peter van der Zwan; Nardo de Vries
  11. Entrepreneurship and innovation: the role played by graduates By Andrea Cammelli; Francesco Ferrante

  1. By: James Hayton (Warwick University Business School); Gabriella Cacciotti (Warwick University Business School); Andreas Giazitzoglu (Newcastle University); J. Robert Mitchell (Ivey Business School, Canada); Chris Ainge (Ivey Business School, Canada)
    Abstract: There is a broadly held assumption within the entrepreneurship literature that fear of failure is always and only an inhibitor of entrepreneurial behavior. However, anecdotal evidence and psychological theory suggest that this assumption is flawed. If fear stimulates greater striving in some cases or situations, then perhaps it can be a friend as much as a foe. The motivating value of fear may have consequences for the reactions, decisions, health and well-being of the entrepreneur. Unfortunately, a lack of rigorous conceptualization of the construct is a barrier to understanding such consequences. We present a grounded theoretic framework of the antecedents, moderators and consequences of fear of failure with significant implications for theory and future research.
    Keywords: entrepreneurship, fear of failure, psychology, motivation
    JEL: L26
    Date: 2013–05–03
  2. By: Sara Carter (University of Strathclyde); Monder Ram (CREME, Birmingham University); Trevor Jones (CREME, Birmingham University); Kiran Trehan (CREME, Birmingham University)
    Abstract: The purpose of this White Paper is to present an overarching review of the evidence that currently exists with regard to diversity and SMEs. It outlines longstanding concerns that entrepreneurial activities and ambitions are restricted to a narrow range of social groups, with others, in particular some ethnic minority groups and women, characterised as having both lesser interest in enterprise and lower levels of resources necessary to participate. Attempts to increase participation rates of under-represented groups have resulted in only modest changes. This White Paper introduces the key evidence relating to ethnic minority and women-led enterprises, explaining the context of each group, and summarising research evidence relating to their relative access to finance, markets and management. Research and policy within the field of diversity and SMEs is characterised by a number of tensions, relating to perceived or real discrimination; whether to promote a volume of new businesses or focus on high growth potential firms; whether specialist business support is more effective or desirable than mainstream provision; and whether there is evidence of market failure in the support provided to diverse enterprises.
    Keywords: entrepreneurship, women, ethnic minority, finance, markets, management
    JEL: G21 G28 L26
    Date: 2013–04–03
  3. By: Andy Lockett (Warwick University Business School); James Hayton (Warwick University Business School); Deniz Ucbasaran (Warwick University Business School); Kevin Mole (Warwick University Business School); Gerard P. Hodgkinson (Warwick University Business School)
    Abstract: Our knowledge of the factors influencing SME growth has increased dramatically over the last two decades. Scholars have pointed to factors influencing business growth intentions; yet we still have limited understanding of the context and conditions under which the leaders of SMEs view business growth as desirable and feasible. Leadership behaviours and management activities through interactions and complementarities among individuals, processes and structures create growth capabilities; moreover, existing evidence suggests a positive relationship between growth capabilities and growth; however, much less is known about the determinants of these capabilities. In this review we focus on entrepreneurial leadership and capabilities for growth. Our review highlights four concepts: leadership, dynamic firm capabilities, substantive capabilities and growth outcomes. We examine evidence for the processes, routines and resources underlying substantive growth capabilities. We review evidence relating managerial cognitions, motivations and decisions to invest in growth. We review what is known about the dynamic capabilities that support the sustained pursuit of new opportunities and highlight areas of consensus and contention.
    Keywords: capabilities, leadership, growth capabilities, dynamic capabilities, firm growth
    JEL: L26 M10 M13
    Date: 2013–04–02
  4. By: Michael Anyadike-Danes (Aston University Business School); Mark Hart (Aston University Business School); Jun Du (Aston University Business School)
    Abstract: WP6 A recurrent theme in the discussion of attempts to stimulate economic recovery in the UK is a recognition of the need to unlock the growth potential of the private sector. We survey some of the recent evidence on job creation and destruction built on the conventional accounting framework which leads to consider the particular contribution of ‘high growth firms’ (as defined by the OECD). Our argument is that neither job creation and destruction accounts nor the focus on high growth firms provide much insight into the key drivers of firm and job dynamics. A rather more informative approach can be built upon the ‘5 brutal facts’ of UK business demography: a) about 200 thousand firms are born each year, b) most new born firms are very small - 90% with less than five employees, c) after a decade more than 70% of new born firms are dead; d) the new born firms at birth have around one million jobs, those that survive a decade employ less than half a million, e) of those which survive a decade, around three quarters born with less than five employees, still have less than five employees. We knew already from the standard accounting by the job creation and destruction components that births and deaths of firms are responsible for a considerable amount of churn in the business population, but what the ‘brutal facts’ bring to the fore is that much of this churn is age-related. It provides a pointer to the dynamic underpinning to the evolution of the stock of firms in the economy over time: as each new ‘wave’ of firms is born, firms from earlier waves (younger rather than older) die away. Whilst this more thoroughly dynamic view has an obvious implication for policy – it cautions against expecting too much of policies which focus on promoting a greater volume of firm births. But before we can say more we need to be able to complement our appreciation of the implications of survival with a better understanding of growth. We will then be able to inform the design of a robust set of policy interventions.
    Keywords: job creation and destruction, firm births, firm post-entry performance
    JEL: L25 L26 M13
    Date: 2013–04–06
  5. By: Frank Bickenbach; Dirk Christian Dohse; Wan-Hsin Liu
    Abstract: Based on original survey data, this paper analyses and compares the role of personal traits and social capital in determining entrepreneurial intentions of students in Hong Kong and in Guangzhou (mainland China). The two cities are culturally closely related but differ strongly with respect to their formal institutions and the maturity of their business environment. Our findings suggest that the determinants of entrepreneurial intentions among students in Hong Kong very much resemble those found in Western economies, whereas the entrepreneurial mindsets of students in Guangzhou differ substantially from previous findings
    Keywords: entrepreneurial intention, self-employment preference, personal traits, social capital, China, Hong Kong
    JEL: M13 O15
    Date: 2014–07
  6. By: Gerald Carlino; William R. Kerr
    Abstract: This chapter reviews academic research on the connections between agglomeration and innovation. We first describe the conceptual distinctions between invention and innovation. We then describe how these factors are frequently measured in the data and some resulting empirical regularities. Innovative activity tends to be more concentrated than industrial activity, and we discuss important findings from the literature about why this is so. We highlight the traits of cities (e.g., size, industrial diversity) that theoretical and empirical work link to innovation, and we discuss factors that help sustain these features (e.g., the localization of entrepreneurial finance).
    JEL: J2 J6 L1 L2 L6 O3 O4 R1 R3
    Date: 2014–08
  7. By: Randall S. Jones
    Abstract: A creative economy requires innovation-friendly conditions. Korea’s innovation system should be improved by upgrading universities and expanding their role in business R&D, while increasing international collaboration in R&D from its current low level. The returns from Korea’s large investment in innovation should be enhanced by improving framework conditions – easing product market regulations, promoting international competition and enhancing labour market flexibility – to encourage the adoption of new technology. Venture businesses and start-ups should play a key role in commercialising innovation. To make venture investment a growth driver, it is important to expand the role of business angels, activate the merger-and-acquisition market and foster entrepreneurship. A creative economy also depends on making SMEs, which account for 87% of employment, more dynamic. SME policies should be streamlined and improved to promote market-based financing and reduce the negative effects of government funding programmes, which discourage the expansion of SMEs. The growth of small firms also depends on resolving labour market mismatches and taking full advantage of the opportunities afforded by the Internet. This Working Paper relates to the 2014 OECD Economic Survey of Korea ( Promouvoir une économie créatrice comme moteur de la croissance coréenne Une économie créatrice nécessite des conditions propices à l’innovation. Il conviendrait d’améliorer le système d’innovation en modernisant les universités et en renforçant leur rôle dans la R-D des entreprises, tout en multipliant les collaborations internationales, actuellement peu développées, dans ce domaine. Il conviendrait aussi d’améliorer le rendement des investissements massifs de la Corée dans l’innovation en instaurant un environnement plus favorable – en assouplissant la réglementation des marchés de produits, en favorisant la concurrence internationale et en conférant plus de flexibilité au marché du travail – afin d’encourager l’adoption de technologies nouvelles. Les entreprises à risque et les jeunes entreprises devraient jouer un rôle de premier plan dans la mise sur le marché de l’innovation. Pour que l’investissement en capital-risque soit vecteur de croissance, il est primordial de renforcer le rôle des investisseurs providentiels, de développer le marché des fusions-acquisitions et de favoriser l’entrepreneuriat. Une économie créatrice est aussi une économie qui dynamise le secteur des PME, lequel représente 87 % de l’emploi. Les politiques en faveur des PME doivent être rationnalisées et optimisées pour promouvoir les financements de marché et atténuer l’impact négatif des aides publiques, qui n’incitent pas les PME à se développer. Enfin, le développement des petites entreprises dépend aussi de la capacité à résoudre l'inadéquation de l'offre et de la demande sur le marché du travail et à tirer pleinement profit des opportunités offertes par Internet. Ce Document de travail se rapporte à l’Étude économique de l’OCDE de la Corée, 2014 (
    Keywords: product market regulation, R&D, entrepreneurship, start-ups, crowd-funding, innovation system, knowledge-based capital, mergers and acquisitions, business angels, creative economy, SMEs, chaebols, credit guarantees, venture capital investment, économie créative, système d'innovation, garanties de crédit, investissements en capital-risque, investisseurs providentiels, financement participatif, fusions et acquisitions, capitale de la connaissance, chaebols, PME, entrepreneuriat, R&D, jeunes entreprises, Corée, réglementation des marchés de produits
    JEL: L25 L26 M13 O31
    Date: 2014–07–24
  8. By: Berlemann, Michael (Helmut Schmidt University, Hamburg); Jahn, Vera (Helmut Schmidt University, Hamburg)
    Abstract: Successful innovation is a precondition for economic prosperity. While various potential determinants of innovative activity have been considered, little empirical evidence is yet available for the influence of firm governance issues. This paper aims at filling this gap in the literature by studying whether the relative importance of owner-managed small and medium sized enterprises has an effect on regional innovative capacity. We therefore combine patent data with data from the firm database of Creditreform, containing information on the governance structure of regional operating enterprises. Using a cross section of German NUTS-3-regions, we identify a significantly positive relation between the relative importance of owner-managed SMEs and innovative capacity. This finding is highly robust when controlling for spatial correlations.
    Keywords: innovation; owner-managed firms; SMEs; Germany
    JEL: C21 D23 O31
    Date: 2014–07–28
  9. By: Andrea Bellucci (University of Naples Federico II); Alexander Borisov (University of Cincinnati); Alberto Zazzaro (Polytechnic University of Marche, Money and Finance Research group (MoFiR, Ancona) and CASMEF (Rome))
    Abstract: In this paper we explore the effects of bank-borrower physical proximity on price and non-price aspects of small business lending in local credit markets. Along the price dimension, our analysis reveals that interest rates increase with bank-borrower distance and decrease with the distance between borrower and other competing banks. Along the quantity dimension, we observe that more distant borrowers are more likely to experience binding credit limits. We also show that the quantity effects of bank-borrower distance are concentrated among less transparent firms. Our findings are consistent with pricing based on marginal costs that reflect information-based factors, and are in contrast to the established paradigm, where banks adopt spatial discriminatory pricing rules when lending to small-sized enterprises.
    Keywords: Distance, Bank lending, Pricing, Interest rate, Credit availability.
    JEL: G21 G32 L11
    Date: 2013
  10. By: Jolanda Hessels; Brigitte Hoogendoorn; Peter van der Zwan; Nardo de Vries
    Abstract: De Global Entrepreneurship Monitor is het grootste onderzoek naar ondernemerschap over 69 landen. Nederland participeert in dit onderzoek sinds 2001. Voor het Nederlandse deel wordt het onderzoek uitgevoerd door Panteia/EIM. Onder ondernemers worden verstaan Nederlanders tussen de 18 en 64 jaar, die stappen aan het nemen zijn een bedrijf op te zetten of eigenaar en manager zijn van een bedrijf dat minder dan 3,5 jaar bestaat. �
    Date: 2013–11–27
  11. By: Andrea Cammelli (AlmaLaurea); Francesco Ferrante (University of Cassino, AlmaLaurea)
    Abstract: As is well-known, the ongoing crisis (ISTAT, 2013; CENSIS, 2013) "has eroded the capacity for resistance of families and businesses, created widespread social unease, caused expectations to fall sharply, and triggered a radical change of consumer behaviour” (CNEL, 2013). Against this backdrop, assessing the employment conditions of young people, especially those with higher educational attainment, is of paramount importance. Such an assessment is hindered by the many reforms of curricula undertaken in succession, which make it difficult to identify the effects of temporary and structural factors, thus impairing interpretation of results. These paper will anyway try to provide an overview of the situation, despite some difficulties and limitations: a thorough analysis of the various aspects and degree types under study, as well as for the definitions and method employed. An analysis of the main employment-related factors showed that graduates’ employment conditions further deteriorated over the last year. This was observed not only among recent graduates, whose employment outcomes tend to be poorer because of their small work experience, but also among their peers who graduated in less recent years. This paper present the main results of the 16th ALMALAUREA Report on graduates’ employment conditions, which has involved nearly 450,000 graduates from all the 64 Universities that are members of ALMALAUREA. The Survey refers to 220,000 post reform first and second level graduates interviewed at one year from graduation; all the 2010 second level graduates (more than 72,000) interviewed at 3 years from the achievement of the degree and all the 2008 second level graduates (more than 54,000) investigated at five years from the completion of their studies. Finally, two specific investigations, usually run by ALMALAUREA, have focused on the first-level graduates of 2010 and 2008 that did not continue their university studies (nearly 53,000 and more than 44,000), interviewed respectively at three and five years after graduation. In addition to the detailed analysis of the recent trends in the labor market, the survey deepened the following issues: the entrepreneurship of the Italian graduates in times of economic crisis, highlighting characteristics and propensities of those who decide to undertake entrepreneurial activities; the second level Italian graduates working abroad.
    Keywords: employment condition, graduates, university system, entrepreneurship, brain drain.
    Date: 2014–07

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