nep-ent New Economics Papers
on Entrepreneurship
Issue of 2014‒11‒22
eleven papers chosen by
Marcus Dejardin
Université de Namur

  1. Rise of the Startup City: The Changing Geography of the Venture Capital Financed Innovation By Florida, Richard; Mellander , Charlotta
  2. New Business Formation and the Productivity of Manufacturing Incumbents: Effects and Mechanisms By Michael Fritsch; Javier Changoluisa
  3. Immigrant entrepreneurship and the origin of bankers By Eliasson, Tove
  4. When arm’s length is too far. Relationship banking over the business cycle By Beck, Thorsten; Degryse, Hans; De Haas, Ralph; van Horen , Neeltje
  5. Post-shakeout Performance, Survivor Bias and the Meaning of Success By Ralitza Nikolaeva
  6. ADB-OECD Study on Enhancing Financial Accessibility for SMEs: Lessons from Recent Crises By Asian Development Bank (ADB); ; ;
  7. Does the Policy Lending of the Government Financial Institution Substitute for the Private Lending during the Period of the Credit Crunch? Evidence from loan level data in Japan By SEKINO Masahiro; WATANABE Wako
  8. The Student Entrepreneur – Going From Broke to Broke? By Kimle, Kevin; Artz, Georgeanne
  9. Venture Capital Networks and Investment Performance in China By Zhiyang Liu; Zhiqi Chen
  10. The development of capital market and its impact on providing alternative sources of business financing: Empirical analysis By Govori, Fadil
  11. Entreprenörskap bland forskare – hur viktigt är det egentligen? By Wennberg, Karl

  1. By: Florida, Richard (University of Toronto’s Rotman School of Management and Global Research Professor at NYU); Mellander , Charlotta (Prosperity Institute of Scandinavia, Jönköping International Business School (JIBS), & Centre of Excellence for Science and Innovation Studies (CESIS), Sweden.)
    Abstract: The prevailing geographic model for high-technology industrial organization has been the “nerdistan,” a sprawling, car-oriented suburb organized around office parks, of which Silicon Valley is the prototypical example. This seems to contradict a basic insight of urban theory, which associates dense urban centers with higher levels of innovation, entrepreneurship and creativity. Our research examines the geography of recent venture capital finance startups in the United States across metros and within a subset of them by neighborhood and finds compelling evidence that the model is changing. Venture capital investments are clustering in larger, denser urban centers with high levels of human capital, like San Francisco and Lower Manhattan, as well as in walkable suburbs. We suggest that the suburban model might have been an historical aberration, and that innovation, creativity, and entrepreneurship are realigning in the same urban centers that traditionally fostered them.
    Keywords: Venture capital; investments; start-ups; cities; suburbs
    JEL: G20 O31 R00
    Date: 2014–10–07
  2. By: Michael Fritsch (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Javier Changoluisa (School of Economics and Business Administration, Friedrich-Schiller-University Jena)
    Abstract: We analyze the effect of new business formation on the productivity of incumbent manufacturing establishments. We obtain robust empirical evidence of productivity improvements that are due to the emergence of new businesses in the same industry, that is, on the output market. This effect is spatially limited to the respective region. Regional competition from new businesses on the input market and cross-industry effects are not related to incumbents' productivity changes. The effect that new competition has on incumbents is moderated by an incumbent's distance from the technological frontier; incumbents close to the frontier exhibit a more pronounced positive reaction.
    Keywords: New business formation, productivity, incumbent firms
    JEL: L26 D20 O12
    Date: 2014–10–27
  3. By: Eliasson, Tove (IBF, Uppsala University)
    Abstract: Earlier research has shown that immigrant- and minority entrepreneurs have difficulties accessing capital through the formal financial markets. This essay studies what role immigrant employees within the local bank sector have for the probability of immigrants to run their own businesses. I use linked employer-employee data covering the whole Swedish labor market for the years 1987 to 2003 and utilize a nationwide refugee dispersal policy to get exogenous variation in the exposure to co-ethnic bank employees. Results suggest that there is a positive relation between co-ethnic bank employees and the probability of being self-employed. This effect is most pronounced for immigrants who arrived with low education, for males and for those residing in metropolitan regions. The effects are substantial and robust to a wide set of controls for labor market characteristics of the ethnic group at the local level. These results provides evidence of an ethnic component in the formal credit markets.
    Keywords: Self-employment; immigrant entrepreneurs; capital access; information asymmetry; minority representation
    JEL: G21 J71 M13
    Date: 2014–08–12
  4. By: Beck, Thorsten (BOFIT); Degryse, Hans (BOFIT); De Haas, Ralph (BOFIT); van Horen , Neeltje (BOFIT)
    Abstract: Using a novel way to identify relationship and transaction banks, we study how banks’ lending techniques affect funding to SMEs over the business cycle. For 21 countries we link the lending techniques that banks use in the direct vicinity of firms to these firms’ credit constraints at two contrasting points of the business cycle. We show that relationship lending alleviates credit constraints during a cyclical downturn but not during a boom period. The positive impact of relationship lending in an economic downturn is strongest for smaller and more opaque firms and in regions where the downturn is more severe.
    Keywords: relationship banking; credit constraints; business cycle
    JEL: F36 G21 L26 O12 O16
    Date: 2014–07–07
  5. By: Ralitza Nikolaeva
    Abstract: A new market poses many questions for potential entrants. Among the most pertinent ones are which factors contribute to firm’s survival. But whether the same factor is equally beneficial at the time of entry and at a later stage has been rarely addressed. Consequently, we explore the dynamism of firm-controlled survival determinants and their correspondence to sales drivers. Our contributions are twofold – exploring the time-varying effect of survival determinants and comparing them to sales determinants after a shakeout in the market. We demonstrate the dangers of generalizing about success factors without considering their dynamic nature or the firm’s strategic objectives.
    Keywords: dynamic effects, e-retailing, survivor bias
    JEL: M13
    Date: 2014–10–30
  6. By: Asian Development Bank (ADB); (Office of Regional Economic Integration, ADB); ;
    Abstract: The report takes a comparative look at ADB and OECD experiences, and aims to identify promising policy solutions for creating an SME base that is resilient to crisis, from a viewpoint of access to finance, and which can help drive growth and development.
    Keywords: Small and medium-sized enterprises, SME finance, Financial Inclusion, SME loans, SME equity markets, SME capital markets, SME access to finance, SME definition, SMEs in Asia and Pacific, Trade finance
    Date: 2014–04
  7. By: SEKINO Masahiro; WATANABE Wako
    Abstract: Using the data of individual loan contracts extended by the Japan Finance Corporation for Small and Medium Enterprise (JASME), which is one of the predecessor institutions of the Japan Finance Corporation (JFC) that aimed at lending to small and medium enterprises (SMEs), we examine whether the JASME's lending substituted for the reduced lending supply by private banks during the period of the credit crunch. We find that the JASME made larger loans to the firms whose main bank reduced more lending due to losses on their capital.
    Date: 2014–10
  8. By: Kimle, Kevin; Artz, Georgeanne
    Abstract: This case provides a view into a college student entrepreneur's assessment of an entrepreneurial opportunity versus a standard career pathway. �The case charts his course for exploring a new business venture and follows his analysis of prospective career opportunities.
    Keywords: student entrepreneur; case study
    Date: 2014–09–09
  9. By: Zhiyang Liu (Shanghai University of Finance and Economics); Zhiqi Chen (Department of Economics, Carleton University)
    Abstract: We investigate the relationship between venture capital (VC) networks and investment performance in China. Distinct features of China’s VC networks are captured in our econometric model through the inclusion of an index of network stability and a dummy variable that indicates a VC firm’s connections with the Chinese state. Our econometric analysis shows that a VC firm’s position in its network, its network stability and close connections with the state all contribute to its investment performance. Comparison with the findings in Hochberg et al. (2007) indicates that networks are more important for investment performance in China than in the US. Moreover, our analysis suggests that familiarity with local culture and customs and understanding of the idiosyncrasies of China’s markets and institutions are important for the success of a VC firm in China.
    Keywords: Venture capital; Networks; Investment performance; China
  10. By: Govori, Fadil
    Abstract: We survey 500 business firms about the initial capital and its adequacy for business startup, how much the banking system meets the needs of business firms for loans, need for new sources of financing, if businesses possess sufficient information regarding the capital market, whether the lack of capital market impacts the acces to finance, why financing with debt is not used by domestic businesses, and whether the issue of bonds will be used to finance businesses in the near future. The purpose of the study is to analyze the impact produced from the development of the capital market on providing alternative sources of business financing. Study hypotheses derive from the current reality and include casual links between study variables. Study covers the analysis of key variables determining the factors which bring out the impact produced from the development of the capital market on providing alternative sources of business financing. The research will involve both quantitative and qualitative approach. The hi-square test analysis has reported that for the observed statistics of the hi-square test, the null hypothesis - development of capital market will better meet the needs of businesses for alternative sources of funding, is proven, hence the hypothesis is valid, and the alternative hypothesis - although the capital market would develop, it will not affect the creation of new alternative sources of funding, is rejected.
    Keywords: Capital adequacy; Sources of financing; Bank loans; Capital market; Debt financing; Survey
    JEL: G20 G21 G30 G31 G32
    Date: 2014–08–17
  11. By: Wennberg, Karl (The Ratio institute and Stockholm School of Economics)
    Abstract: Denna artikel sammanfattar forskning om olika typer av kommersialiseringsmiljöer med bas i akademiska teorier och empiriska studier från Sverige. Målsättningen är att bidra till kritisk reflektion kring kommersialiseringsmiljöer och de policyåtgärder som myndigheter, universitet och andra aktörer kan göra för att förbättra kommersialiseringsmiljöer i sin närmiljö. Två tentativa slutsatser följer från forsknings-genomgången: För det första så indikerar litteraturgenomgången att ett ensidigt fokus på akademiska avknoppningar inte får betyda att vi glömmer bort vikten av andra och ofta bättre avknoppningar, främst dem från industrin. I den mån vi kan få industriella aktörer att delta i kommersialisering av forskningsresultat är detta sannolikt bättre än om forskare och myndigheter själva genomför kommersialiseringsförsök. För det andra påvisar litteratur-genomgången att kommersialiseringsmiljöer förekommer i många former och storleker och det är svårt att säga om de generellt leder till mer framgångsrika universitetsavknoppningar eller ej. Akademisk utbildning och forskning är viktiga för idéutveckling och resursstöd i entreprenörskap och kommersialisering av innovationer, men studenters entreprenörskap är sannolikt minst lika viktigt som entreprenörskap bland forskare.
    Keywords: Entrepreneurship
    JEL: L26
    Date: 2014–10–21

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