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on Entrepreneurship |
| By: | Andersson, Martin (CIRCLE, Lund University and Department of Industrial Economics, Blekinge Institute of Technology); Xiao, Jing (CIRCLE and Department of Economic History, Lund University) |
| Abstract: | We analyze the frequency and nature by which new firms are acquired by established businesses. Acquisitions are often considered to reflect a technology transfer process and to also constitute one way in which a “symbiosis” between new technology-based firms (NTBFs) and established businesses is realized. Using a micro-level dataset for Sweden in which we follow new entrants up to 18 years after entry, we show that acquisitions of recent start-ups are rare and restricted to a small group of entrants with defining characteristics. Estimates from competing risks models show that acquired start-ups, in particular by multinational enterprises (MNEs), stand out from entrants that either remain independent or exit by being much more likely to be spin-offs operating in high-tech sectors, having strong technological competence, and having weak internal financial resources. Our overall findings support the argument that acquisitions primarily concern NTBFs in market contexts where entry costs are large, access to finance is important and incumbents have high market power. |
| Keywords: | acquisitions; post-entry performance; market selection; start-ups; new technology-based firms (NTBFs); innovation; competing-risk model; Sweden |
| JEL: | G34 L22 L26 O32 O33 |
| Date: | 2014–10–03 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2014_019&r=ent |
| By: | Martin Koudstaal (University of Amsterdam); Randolph Sloof (University of Amsterdam, the Netherlands); Mirjam van Praag (Copenhagen Business School, Denmark) |
| Abstract: | Theory predicts that entrepreneurs have distinct attitudes towards risk and uncertainty, but empirical evidence is mixed. To better understand the unique behavioral characteristics of entrepreneurs and the causes of these mixed results, we perform a large ‘lab-in-the-field’ experiment comparing entrepreneurs to managers – a suitable comparison group – and employees (n = 2288). The results indicate that entrepreneurs perceive themselves as less risk averse than managers and employees, in line with common wisdom. However, when using experimental incentivized measures, the differences are subtler. Entrepreneurs are only found to be unique in their lower degree of loss aversion, and not in their risk or ambiguity aversion. This combination of results might be explained by our finding that perceived risk attitude is not only correlated to risk aversion but also to loss aversion. Overall, we therefore suggest using a broader definition of risk that captures this unique feature of entrepreneurs; their willingness to risk losses. |
| Keywords: | Entrepreneurs, managers, risk aversion, loss aversion, ambiguity aversion, lab-in- the field experiment |
| JEL: | L26 C93 D03 |
| Date: | 2014–10–17 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20140136&r=ent |
| By: | Elert, Niklas (Research Institute of Industrial Economics (IFN)); Hen, Magnus (Research Institute of Industrial Economics (IFN)) |
| Abstract: | In this paper, we argue that evasive entrepreneurship is an important source of innovation in the economy. Institutions may prevent or raise the cost of exploiting business opportunities, which can trigger evasive behavior because an entrepreneur may earn large rents by circumventing institutional impediments. Paradoxically, institutions may be less of a constraint for entrepreneurs than for other economic agents because entrepreneurs may be better able to evade them. Although evasive entrepreneurship can be both productive and unproductive/destructive, its dynamic character is more important because evasive entrepreneurship may be able to prevent economic development from being stifled by existing institutions during times of rapid economic change. Furthermore, if evasive entrepreneurship becomes sufficiently widespread and economically important, it may trigger a response from lawmakers and regulators, leading to institutional change with potentially important welfare implications. We illustrate this thesis by considering a number of real-word examples of evasive entrepreneurship. |
| Keywords: | Entrepreneurship; Innovation; Institutions; Regulation; Self-employment |
| JEL: | L50 M13 O31 P14 |
| Date: | 2014–10–22 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:1044&r=ent |
| By: | Martin Valdivia |
| Abstract: | With millions of women around the developing world thrown into self-employment but with low productivity, the question about how to increase the profitability and growth potential of their businesses is increasingly relevant for poverty reduction and gender equity. This study evaluates the impacts of a business development services program serving female microentrepreneurs in Lima using an experimental design, that included two treatment groups: One received only general training (GT), albeit more time-intense than previous studies, and delivered by experts, while the other received in addition technical assistance (TA). Results show the existence of room for efficiency gains and growth, as all treated showed increased sales revenues and self-reported adoption of recommended business practices, although timing differed. Those that received full treatment (GT+TA) were the only ones reporting increased sales 4-7 months after the end of the treatment, but GTonly treated were able to catch up about a year later. Low take up of the training may suggest some space to improve recruitment and delivery of good general business practices. |
| Keywords: | entrepreneurship, business training, gender equity |
| JEL: | C93 D1 D22 J24 O12 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:lvl:piercr:2014-04&r=ent |
| By: | Covi, Giovanni |
| Abstract: | The paper aims at investigating the possible trajectories of regional clusters (industrial districts or local systems) in order to depict feasible strategies to cope with globalization. First, same relevant stylized facts on the new structure of global market are presented in order to illustrate the new competitive framework the SME must face. Second, the concept of ‘complete productive process’ is introduced to characterize the special setting is necessary for the survival of the regional systems of SME. Said briefly, a local cluster needs to co-produce values, capabilities, institutions: its very identity. Since local systems are essentially ‘cognitive systems’, they need to go global not as single firm but as a system. To accomplish this difficult task they must resort to a collective and cooperative behaviour. The paper tries to fill this gap introducing the concept of ‘Collective Local Entrepreneurship’, a reference point, a device to whom anchor the strategic pragmatism necessary to regional clusters to cope with globalization. The renewal of the local ‘ecosystems’ within the international networks (at all different levels) appears to be a general objective. A strong public-private partnership emerges as a strategic commitment. In this perspective the paper tries to capture, as a conclusion, the potential dynamics of the four evolutionary trajectories, which the regional clusters are called upon to deal with. |
| Keywords: | Industrial clusters; innovation; knowledge; industrial policy; entrepreneurship. |
| JEL: | L22 L26 O25 O31 |
| Date: | 2014–01–31 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:59092&r=ent |
| By: | Yael V. Hochberg; Carlos J. Serrano; Rosemarie H. Ziedonis |
| Abstract: | The use of debt to finance risky entrepreneurial-firm projects is rife with informational and contracting problems. Nonetheless, we document widespread lending to startups in three innovation-intensive sectors and in early stages of development. At odds with claims that the secondary patent market is too illiquid to shape debt financing, we find that intensified patent trading increases the annual rate of startup lending, particularly for startups with more redeployable (less firm-specific) patent assets. Exploiting differences in venture capital (VC) fundraising cycles and a negative capital-supply shock in early 2000, we also find that the credibility of VC commitments to refinance and grow fledgling companies is vital for such lending. Our study illuminates friction-reducing mechanisms in the market for venture lending, a surprisingly active but opaque arena for innovation financing, and tests central tenets of contract theory. |
| Keywords: | Entrepreneurial Finance, Financial Intermediation, Market for Patents, Venture Capital, Venture Lending |
| JEL: | L14 L26 G24 O16 O3 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:1448&r=ent |
| By: | Quan Hoang Vuong |
| Abstract: | This short conference paper serves as a distillation of a keynote address delivered at the the Second National Conference on Management and Higher Education Trends & Strategies for Management & Administration hosted by Bangkok-based Stamford International University (Thailand) on November 1, 2014.Innovation is discussed as the heart of entrepreneurial processes occurring in today's capitalist economic systems, including transition economies like China and Vietnam, which underscores economic competitiveness of firms and economies. But the innovation effort and process also face dilemma of "entrepreneurial curse of innovation". Advantages and disadvantages are weighed for a more balanced view, especially in the context of outnumbering SMEs and given existence of pitfalls and traps along the innovation path of development. Toward the end, the value of the market is once again stressed amid the concern of subjective assumption and illusion about availability of market opportunities in the mind of innovators, which may contrast totally with the dismal outcome the actual market realities may show ex post. |
| Keywords: | innovation; emerging markets; capitalist economic system; entrepreneurial process |
| JEL: | L26 O32 P17 P23 |
| Date: | 2014–11–05 |
| URL: | http://d.repec.org/n?u=RePEc:sol:wpaper:2013/177171&r=ent |
| By: | Driouchi, Ahmed; Gamar, Alae |
| Abstract: | Abstract: This paper looks at the links between cultural variables, knowledge indices and entrepreneurship in Arab countries. It uses the Hofstede’s cultural dimensions and World Bank data to show how these variables are connected. The outputs from Arab countries are also compared to those from the Eastern European economies. The outcomes do clearly indicate the existence of links between cultural dimensions, access to knowledge and enterprise creation with of a gap between Arab and Eastern European Economies. The results show also that entrepreneurship is linked to cultural variables in Arab countries. This implies that further economic and social policies are needed to ensure the promotion of the culture of the knowledge economy and entrepreneurship in Arab countries. |
| Keywords: | Keywords: Hofstede dimensions, Knowledge economy, Entrepreneurship, Arab countries, Eastern Europe |
| JEL: | L2 O1 |
| Date: | 2014–09–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:58731&r=ent |