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on Entrepreneurship |
| By: | Koudstaal, Martin (University of Amsterdam); Sloof, Randolph (University of Amsterdam); van Praag, Mirjam C. (Copenhagen Business School) |
| 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 M13 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8577&r=ent |
| By: | Matthias Brachert; Walter Hyll; Mirko Titze |
| Abstract: | Empirical studies use the assumption of stability in individual risk attitudes when searching for a relationship between attitude to risk and the decision to become and survive as an entrepreneur. We show that risk attitudes do not remain stable but face endogenous adaption when starting a new business. This adaption is associated with entrepreneurial survival. The results show that entrepreneurs with low risk tolerance before entering self-employment and increased risk tolerance when self-employed have a higher probability of survival than similar entrepreneurs experiencing a decrease in the willingness to take risks. We find the opposite results for entrepreneurs who express a higher willingness to take risks before becoming self-employed: in this case, a decrease in tolerance of risk is correlated with an increasing survival probability. |
| Keywords: | Endogenous attitudes, Risk attitudes, Entrepreneurial survival, SOEP |
| JEL: | D03 D81 M13 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp701&r=ent |
| By: | Andrew T. Young; Matthew J. Higgins; Donald J. Lacombe; Briana Sell |
| Abstract: | Conventional wisdom suggests that small businesses are innovative engines of Schumpetarian growth. However, as small businesses, they are likely to face credit rationing in financial markets. If true then policies that promote lending to small businesses may yield substantial economy-wide returns. We examine the relationship between Small Business Administration (SBA) lending and local economic growth using a spatial econometric framework across a sample of 3,035 U.S. counties for the years 1980 to 2009. We find evidence that a county's SBA lending per capita is associated with direct negative effects on its income growth. We also find evidence of indirect negative effects on the growth rates of neighboring counties. Overall, a 10% increase in SBA loans per capita is associated with a cumulative decrease in income growth rates of about 2%. |
| JEL: | C31 E65 H25 O47 R11 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20543&r=ent |
| By: | Alessandra Colombelli (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS : UMR7321 - Université Nice Sophia Antipolis (UNS)); Jackie Krafft (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS : UMR7321 - Université Nice Sophia Antipolis (UNS)); Francesco Quatraro (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS : UMR7321 - Université Nice Sophia Antipolis (UNS)) |
| Abstract: | This article analyzes the contribution of high-growth firms (HGFs) to the process of knowledge creation. We articulate a demand-pull innovation framework in which knowledge creation is driven by sales growth, and knowledge stems from creative recombination. Building on the literature on HGFs and economic growth, we investigate whether "gazelles" follow patterns of knowledge creation dominated by exploration or exploitation strategies. We construct indicators for the structure of knowledge and identify firms' innovation strategies. The empirical results show that increasing growth rates are associated with exploration, supporting the idea that HGFs are key actors in the creation of new technological knowledge, and showing also that firms that achieve higher than average growth focus on exploration based on familiar technology. This suggests that exploration is less random than has been suggested. Our main result is that HGFs, especially gazelles, predominantly adopt exploration strategies that have the characteristics of organized search more often observed among firms following an exploitation strategy. |
| Date: | 2014–01–06 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-01070569&r=ent |
| By: | Saul Estrin; Ute Stephan; Suncica Vujic |
| Abstract: | Based upon unique survey data collected using respondent driven sampling methods, we investigate whether there is a gender pay gap among social entrepreneurs in the UK. We find that women as social entrepreneurs earn 29% less than their male colleagues, above the average UK gender pay gap of 19%. We estimate the adjusted pay gap to be about 23% after controlling for a range of demographic, human capital and job characteristics, as well as personal preferences and values. These differences are hard to explain by discrimination since these CEOs set their own pay. Income may not be the only aim in an entrepreneurial career, so we also look at job satisfaction to proxy for non-monetary returns. We find female social entrepreneurs to be more satisfied with their job as a CEO of a social enterprise than their male counterparts. This result holds even when we control for the salary generated through the social enterprise. Our results extend research in labour economics on the gender pay gap as well as entrepreneurship research on women's entrepreneurship to the novel context of social enterprise. It provides the first evidence for a "contented female social entrepreneur" paradox. |
| Keywords: | Social entrepreneur, gender pay gap, social enterprise, earnings, job satisfaction |
| JEL: | J28 J31 J71 L32 |
| Date: | 2014–11 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1313&r=ent |
| By: | Gonçalo Brás (Faculty of Economics, University of Coimbra, Portugal); Elias Soukiazis (Faculty of Economics, University of Coimbra and GEMF, Portugal) |
| Abstract: | Within the institutional theory of North (1990, 2005), the objective of this study is to analyse the impact of economic and institutional factors, formal and informal, in the entrepreneurial activity of nations, particularly in Total Entrepreneurial Activity (TEA). In order to evaluate the simultaneous influence of economic and institutional factors on the entrepreneurial activity, a multiple regression approach is used with cross-country data sets. The results show that TEA is negatively related to infrastructural capacity and political stability of a country, and positively related to government spending and freedom of expression and corporate associations (Voice & Accountability) at a country level. It is also tested the relationship between TEA and GDP per capita. Our results confirm a convex relationship between the two variables giving evidence that the entrepreneurial activity is mostly necessity driven rather than motivated by opportunity. |
| Keywords: | Entrepreneurship by necessity, Entrepreneurship by opportunity, Cross-country regression models, convexity hypothesis, threshold level. |
| JEL: | L26 M13 C31 |
| Date: | 2014–11 |
| URL: | http://d.repec.org/n?u=RePEc:gmf:wpaper:2014-22.&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. |
| JEL: | G24 L14 L26 O16 O3 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20587&r=ent |
| By: | Nagler, Paula (Maastricht University); Naudé, Wim (Maastricht University) |
| Abstract: | Although non-farm enterprises are ubiquitous in rural Sub-Saharan Africa, little is yet known about their productivity. In this paper we contribute to filling this gap by providing estimates of labor productivity in enterprises for Ethiopia, Malawi, Nigeria, and Uganda. Using the World Bank's LSMS-ISA database, we find that rural enterprises are on average less productive than those in urban areas, and that female-owned enterprises are less productive than male-owned enterprises. By estimating Heckman selection and panel data models, we find that education and access to credit are associated with higher labor productivity, while households that experience shocks operate less productive enterprises. Furthermore we provide evidence that enterprises that operate throughout the year are more productive. We conclude that gender, education, shocks, access to finance, and location matter for labor productivity in rural Africa, and that policy decisions tackling the shortcomings could significantly contribute to a better business environment and increased labor productivity. |
| Keywords: | entrepreneurship, informal sector, labor productivity, rural development, Sub-Saharan Africa |
| JEL: | J43 L26 M13 O13 O55 Q12 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8524&r=ent |
| By: | Calá, Carla Daniela; Manjón-Antolín, Miguel; 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. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:nmp:nuland:2034&r=ent |
| By: | Minarelli, Francesca; Raggi, Meri; Viaggi, Davide |
| Abstract: | The importance of networking as a way to enhance innovation has been pointed out in many scientific papers, in particular for SMEs. A great number of scientific studies clearly establish the significant role of SMEs in economic growth, promoting flexibility and innovation in an economy. The process of successfully engage in a network represents a key for enhancing competitiveness. In order to improve effectiveness of network is pivotal the achievement of a better understanding of SME behavior. The presented work aims to identify factors that characterize food SMEs entering in innovation networks by integrating findings from the literature review with a survey of food SMEs. |
| Keywords: | Network, food SMEs, innovation, Agribusiness, Food Consumption/Nutrition/Food Safety, Research Methods/ Statistical Methods, |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iefi13:164740&r=ent |
| By: | Srinuan, Chalita |
| Abstract: | The aim of this paper is to analyse the demand and use of Internet access by small and medium enterprises (SMEs) in Thailand. Given the huge importance of SMEs to a national economy such as Thailand, this paper dives into the data to understand the magnitude of the issue. Official 2010 Thai government statistics state there are 2.82 million SMEs with unregistered SMEs triple this size. This compares to a population figure of 66.79 million and an Internet user community of 36 million users. This study therefore set out to empirically examine by use of a bivariate probit model whether the variables of computer availability, business sector, SME size, organizational form or foreign shareholding has a systematic link to Internet access. After this, once Internet use was determined, to analyse and estimate specific usage. The impact of these factors varies from service to service (i.e. e-mail, searching, retrieving and interacting with governmental agencies or purchasing goods and services online). Implications suggest that SME Internet connectivity and subsidy should be considered by key policy makers while developing and implementing more robust infrastructure and better support which could stimulate the growth of Internet access and use. Along with fixed/land line technologies, wireless broadband technologies such as 3G/4G could be another alternative to solve the lack of fixed infrastructure and provide an opportunity for SME Internet services. This must also be combined with better education and support for the entrepreneurial SME owner/manager. |
| Keywords: | Internet access,Internet use,SMEs,Thailand |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:itse14:101440&r=ent |
| By: | Danz, David |
| Abstract: | The psychology literature provides ample evidence that people have difficulties taking the perspective of less-informed others. This paper presents a controlled experiment showing that this "curse of knowledge" can cause comparative overconfidence and overentry into competition. In a broader context, the results provide an explanation for the overconfidence of nascent entrepreneurs and the substantial rate of failure among new businesses. |
| Keywords: | curse of knowledge,hindsight bias,information projection,overconfidence,sorting,incentive schemes,competition,beliefs,experiments |
| JEL: | C91 D80 D82 D83 D84 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:wzbmbh:spii2014207&r=ent |
| By: | Lixin Tang |
| Abstract: | I study the implications of top income inequality for the gains from trade in a dynamic model. I argue that higher top income inequality among entrepreneurs can increase the gains from trade for workers. In the model, entrepreneurs face uninsurable idiosyncratic productivity risk, and thus save. Since the most productive entrepreneurs have the highest saving rate and are the ones that export, a reduction in trade costs increases their share of total prots and their savings, which leads to a large increase in the aggregate supply of capital. The welfare gains from trade for workers in the model are 6.4%, which are larger than in comparable benchmarks without top income inequality or capital accumulation. While the typical entrepreneur loses in consumption because of higher labor costs, aggregate consumption by entrepreneurs increases by 3.6%. Empirically, I find a strong relationship between trade openness and the national saving rate in a large sample of countries, consistent with the model. I find a much weaker relationship between trade openness and the investment rate. |
| JEL: | F1 F4 O1 O4 |
| Date: | 2014–11–06 |
| URL: | http://d.repec.org/n?u=RePEc:jmp:jm2014:pta581&r=ent |
| By: | Kühne, Bianka; Lefebvre, Virginie; Gellynck, Xavier |
| Abstract: | Knowledge exchange is a prerequisite for learning and consequently for innovation. Through open innovation, the innovating firms establish ties with other organizations, in order to innovate. At the baseline, open innovation is thus the exchange of knowledge through in- and out-flows of the knowledge at a company. Formal networks can provide access to other organizations and otherwise unavailable knowledge and resources and are seen as the locus of innovation. Four main categories of knowledge exchange can be distinguished: socialization, combination, articulation, and internalization. Within these categories, distinct but interdependent processes of knowledge exchange take place as described in the innovation production process (IPP) which consists of three main steps, knowledge accumulation, knowledge transformation, and knowledge exploitation (Roper et al., 2008). The objective of this paper is to explore how formal networks contribute to the categories of knowledge exchange and to each of the three steps of the IPP in order to conclude on how networks can facilitate open innovation among their members. Data are collected by means of three case-studies conducted in three Flemish formal networks which focus on enhancing the innovativeness and learning capabilities of micro, small and medium sized enterprises (SMEs). Our findings confirm the importance of networks in the process of knowledge exchange and innovation for SMEs in the food sector. The most important role of the networks is to create the appropriate environment according to the type of knowledge and the step(s) in the innovation production process focused on. Furthermore, it appears to be a very important task of the network to stimulate actively knowledge transformation into innovation outputs such as new or improved technology or product prototypes. Thereby, not only short-term effects should be aimed at, but also long-term effects e.g. for organizational innovation, should be taken into account. In conclusion, all three networks follow very different approaches in order to facilitate, stimulate and support knowledge exchange and innovation among their members. Based on the results, managerial as well as policy implications are posed towards network members, i.e. the SMEs, network coordinators and researchers. |
| Keywords: | knowledge exchange, learning, triple helix networks, SMEs, food industry, Agribusiness, Food Consumption/Nutrition/Food Safety, Research Methods/ Statistical Methods, |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iefi13:164742&r=ent |
| By: | Berger-Douce, Sandrine |
| Abstract: | Nowadays, sustainable management seems more likely to be a guarantee of competitiveness for companies, regardless of their size. Besides offering those strategic opportunities, sustainable management practices also play a significant role in gaining acceptance and legitimacy in the marketplace. Moreover, SMEs are continually researching ways to improve their performance. The relationship between sustainability and company performance has interested researchers for twenty years, even if the academic results are mostly focused on bigger companies. The purpose of this paper is to provide an understanding of how sustainable management practices help in achieving global performance for small and medium-sized enterprises (SMEs). The analysis of this case study shows how the transition from risk management to sustainable management allows an improvement in global company performance. Global performance considers social, environmental and societal issues in addition to economic performance. The first part of the paper looks at the relationship between sustainability and performance in the context of SMEs. The second part uses a French case study to illustrate how an industrial SME can implement sustainable management and translate this into improved performance. To resume, this paper illustrates that sustainable management can be a catalyst for innovation in industrial SMEs. |
| Keywords: | case study,(global) performance,sustainability,small and medium-sized enterprises (SMEs) |
| JEL: | M10 M14 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifmwps:0414&r=ent |
| By: | Kay, Rosemarie; Schneck, Stefan; Suprinovič, Olga |
| Abstract: | Trotz eines stetigen Anstiegs der Anzahl von selbstständigen Frauen in Deutschland hat sich der sogenannte Gender-Gap kaum verringert. Die vorlie-gende Studie untersucht auf Basis des Nationalen Bildungspanels (NEPS), ob bzw. inwieweit familienbedingte Erwerbsunterbrechungen, die aus theoretischer Sicht mit Humankapitalverlusten einhergehen, die geringere Gründungsneigung von Frauen erklären. Die Ergebnisse der Studie zeigen keinen eindeutigen (negativen) Zusammenhang zwischen familienbedingten Erwerbsunterbrechungen und dem Übergang in die Selbstständigkeit. Besteht bei solchen Erwerbsunterbrechungen keine Beschäftigungsgarantie, erhöhen sie sogar signifikant die Gründungswahrscheinlichkeit. |
| Abstract: | Despite a steady increase in the number of self-employed women, the so-called gender gap has hardly diminished. Based on the National Educational Panel Study (NEPS), the present study analyses if and to which extent, family-induced employment breaks - which from a theoretical perspective go along with a loss of human capital - explain women's lower start-up propensities. The results of the study do not show a clear (negative) relationship between family-induced employment breaks and the transition into self-employment. If employment breaks are not coupled with a (later) employment guarantee, they even significantly increase the start-up probability. |
| Keywords: | Gründungen,Selbstständige,Frauen,Gender-Gap,Humankapital,Start-ups,Self-employed,Women,Human Capital |
| JEL: | J16 J24 M13 M20 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifmmat:230&r=ent |
| By: | YASUDA Takehiko |
| Abstract: | The Japanese government has been offering meticulously designed policy measures to support small and medium enterprises (SMEs). This paper examines to what extent SMEs are actually aware of those measures based on findings from our original online survey, and attempts to identify and analyze the factors that determine the degree of policy penetration.<br />Our survey found that SMEs are, all in all, poorly informed about key SME policy measures implemented in the 2000s. It was also found that the degree of awareness—or policy penetration—differs depending on the attributes of each SME such as firm size and the type of management as well as on the type of policy measure.<br />Furthermore, this study considers the following two possible reasons for the low degree of policy penetration: 1) SMEs believe they do not need to be informed about government policies, and 2) SME managers do not have enough time to learn about government policies. An empirical analysis reveals that the latter is the primary factor for the low penetration rate.<br />These results point to the need for the government to consider ways to make policy information more readily accessible to SMEs rather than just printing and distributing more explanatory brochures. |
| Date: | 2014–11 |
| URL: | http://d.repec.org/n?u=RePEc:eti:rdpsjp:14049&r=ent |