nep-ent New Economics Papers
on Entrepreneurship
Issue of 2014‒09‒29
six papers chosen by
Marcus Dejardin
Université de Namur

  1. Entrepreneurship Training, Risk Aversion and Other Personality Traits: Evidence from a Random Experiment By Fairlie, Robert
  2. The rise or the fall of the wall? Determinants of low entrepreneurship in East Germany By Kuehn, Zoe
  3. Regional dynamics and start-ups: Evidence from French departments in 2011 By Nadine Levratto; Denis Carré
  4. Boosting the Development of Efficient SMEs in the Netherlands By Rafał Kierzenkowski; Jochebed Kastaneer
  5. Job creation, firm creation, and de novo entry By Karen GEURTS; Johannes VAN BIESEBROECK
  6. The Kauffman Index of Entrepreneurial Activity: 1996-2013 By Fairlie, Robert

  1. By: Fairlie, Robert
    Abstract: A growing literature examines the relationship between personality traits and entrepreneurship, but no previous studies explore whether personality or psychological traits predispose individuals to benefit more from entrepreneurship training. To address selection issues, we use novel data from the largest-ever randomized control experiment providing entrepreneurship training in the United States. We find evidence indicating that individuals who are more risk tolerant benefit more from entrepreneurship training than less risk tolerant individuals. We find some limited evidence that individuals who have a preference for autonomy benefit more from entrepreneurship training in the short run, but we find no evidence of longer-term effects and no evidence of differential effects of entrepreneurship training for individuals who are more innovative.
    Keywords: Business, Education, Social and Behavioral Sciences, entrepreneurship, education, training, psychology, experiment
    Date: 2014–09–12
  2. By: Kuehn, Zoe (Departamento de Análisis Económico (Teoría e Historia Económica). Universidad Autónoma de Madrid.)
    Abstract: Between 1949 and 1989, communism restricted private entrepreneurship in East Germany, but even after reunification in 1990 entrepreneurship remained low compared to other transition economies. To quantify the determinants of low entrepreneurship in East Germany and its impact on economic outcomes, I set up a two-region model economy with occupational and migration choices. Individuals can become workers or entrepreneurs in East or West Germany. In line with German policy after reunification, in East Germany wages are fixed above labor productivity and there are capital subsidies. Managerial knowhow is a combination of innate talent and entrepreneurial parental background which only West Germans possess. Technological growth increases with the innate talent of entrepreneurs. Counter-factual experiments show that the missing tradition of entrepreneurship, while contributing to technological growth, accounts for almost 10 percentage points of the gap between East and West German GDP per capita. On the other hand, reunification (wage setting policy, migration possibilities, and subsidies) slowed down technological growth and increased the output gap by 7 percentage points.
    Keywords: Entrepreneurship; Growth; Allocation of Talent; Social Mobility; Transition
    JEL: E24 F15 J22
    Date: 2014–07
  3. By: Nadine Levratto; Denis Carré
    Abstract: This paper seeks to determine the exact role played by regional dynamics in the creation of companies. The notion that territorial dynamics influence entrepreneurial activity seems to be backed up, first of all, by the fact that it is at the regional level that the direct influence of the ecosystem of wealth and of material, human and organizational resources is strengthened through agglomeration effects. We empirically address this question considering the case of French departments in 2011. In order to take into account the role played by the neighbourhood and the resulting spatial dependence, we estimate the sensitivity of both the overall entry rate and the entry rate in the manufacturing industry using spatial econometric estimation techniques, an approach which enables us to control the effect of spatial autocorrelation. Our results show that the creation of companies highly depends on local factors and that the source of local dependence differs according to the entry rate used as an explained variable. Whereas a spatial lag applies at the overall level, the creation of companies in the manufacturing industry is more oriented by exogenous shocks so that a spatial error model is more appropriate.
    Keywords: entrepreneurship, entry rate, spatial dependence, French departments
    JEL: L26 R11 C21
    Date: 2014
  4. By: Rafał Kierzenkowski; Jochebed Kastaneer
    Abstract: Entrepreneurship is an important driver of economic growth, job creation and competitiveness. However, the small and medium-sized enterprises (SME) sector has been severely affected by the crisis, with access to bank finance being particularly difficult. Various government-sponsored schemes have been introduced to ease credit conditions. Developing alternatives to bank lending options for SME finance is important but will take time. Restructuring banks’ balance sheets is essential to step up bank lending to SMEs in the medium term. Beyond financing issues, boosting innovation would support productivity gains, and SME competitiveness and growth. Also, easing labour market regulation would further support SME development. A large share of small businesses consists of self-employed with no employees. The tax system should minimise distortions for the creation and expansion of businesses. Despite significant progress made in lowering barriers to entrepreneurship, there is scope to further reduce administrative burdens. This Working Paper relates to the 2014 OECD Economic Survey of the Netherlands ( Favoriser le développement de PME efficaces aux Pays-Bas L'entrepreneuriat est un vecteur important de croissance économique, de création d'emplois et de compétitivité. Néanmoins, le secteur des petites et moyennes entreprises (PME) a été durement touché par la crise, l'accès aux financements bancaires étant particulièrement difficile. Divers dispositifs ont été mis en place par les pouvoirs publics pour assouplir les conditions de crédit. Il est important que se développe une offre de financements alternatifs au crédit bancaire pour les PME, mais cela prendra du temps. La restructuration des bilans des banques est une condition essentielle de l'augmentation des crédits bancaires aux PME à moyen terme. Au-delà des problèmes de financement, des mesures favorisant l'innovation renforceraient les gains de productivité, ainsi que la croissance et la compétitivité des PME. Par ailleurs, un assouplissement de la réglementation du marché du travail contribuerait également au développement des PME. Une forte proportion des petites entreprises est constituée de travailleurs indépendants sans salariés. Il faudrait que le système d'imposition atténue les distorsions relatives à la création et au développement des entreprises. Malgré les progrès sensibles accomplis en termes de réduction des obstacles à l'entrepreneuriat, il est possible d'alléger encore les charges administratives. Ce Document de travail se rapporte à l’Étude économique de l’OCDE des Pays Bas, 2014 ( ).
    Keywords: finance, Netherlands, entrepreneurship, administrative burdens, taxation, self-employment, bank lending, banks, EPL, PMR, innovation, SMEs, travailleurs indépendants, EPL, innovation, Pays-Bas, entrepreneuriat, PME, PMR, finance, crédit bancaire, fiscalité, charges administratives
    JEL: G01 G21 G23 J08
    Date: 2014–08–28
  5. By: Karen GEURTS; Johannes VAN BIESEBROECK
    Abstract: Firm turnover and growth recorded in administrative data sets differ from underlying firm dynamics. By tracing the employment history of the workforce of new and disappearing administrative firm identifiers, we can accurately identify de novo entrants and true economic exits, even when firms change identifier, merge, or split-up. For a well-defined group of new firms entering the Belgian economy between 2004 and 2011, we find highly regular post-entry employment dynamics in spite of the volatile macroeconomic environment. Exit rates decrease with age and size. Surviving entrants record high employment growth that is monotonically decreasing with age in every size class. Most remarkably, we find that Gibrat’s law is violated for very young firms. Conditional on age, the relationship between employment growth and current size is strongly and robustly positive. This pattern is obscured, or even reversed, when administrative entrants and exits are taken at face value. De novo entrants’ contribution to job creation is relatively small and not very persistent, in particular for (the large majority of) new firms that enter with fewer than five employees.
    Date: 2014–08
  6. By: Fairlie, Robert
    Abstract: The Kauffman Index of Entrepreneurial Activity is a leading indicator of new business creation in the United States.  Capturing new business owners in their first month of significant business activity, this measure provides the earliest documentation of new business development across the country.  The percentage of the adult, non-business owner population that starts a business each month is measured using data from the Current Population Survey (CPS).The Index captures all types of business activity and is based on nationally-representative sample sizes of more than an half million observations each year. In addition to this overall rate of entrepreneurial activity, separate estimates for specific demographic groups, states, and select metropolitan statistical areas (MSAs) are presented.  The Index provides the only national measure of the rate of business creation by specific population groups.
    Keywords: Business, Social and Behavioral Sciences, entrepreneurship, business creation, self-employment
    Date: 2014–09–12

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