nep-ent New Economics Papers
on Entrepreneurship
Issue of 2014‒12‒29
thirteen papers chosen by
Marcus Dejardin
Université de Namur

  1. Do Entrepreneurs Really Earn Less? By Sorgner, Alina; Fritsch, Michael; Kritikos, Alexander S.
  2. Do Women Earn Less Even as Social Entrepreneurs? By Estrin, Saul; Stephan, Ute; Vujić, Sunčica
  3. Demographics and Entrepreneurship By Edward Lazear; James Liang; Hui Wang
  4. Why are there so few female entrepreneurs? An examination of gender differences in entrepreneurship using Norwegian registry data By Arvid Raknerud; Marit Rønsen
  5. Taxation, Innovation, and Entrepreneurship By Hans Gersbach; Ulrich Schetter; Maik T. Schneider
  6. Entrepreneurial Saving Practices and Reinvestment : Theory and Evidence By Beck, T.H.L.; Pamuk, H.; Uras, R.B.
  7. Pragmatic entrepreneurs and institutionalized scholars? - On the path-dependent nature of entrepreneurship scholarship By Wennberg, Karl; Berglund, Henrik
  8. Skills and youth entrepreneurship in Africa: Analysis with evidence from Swaziland By Brixiova, Zuzana; Ncube, Mthuli; Bicaba, Zorobabel
  9. When Arm’s Length Is Too Far. Relationship Banking over the Business Cycle By Beck, Thorsten; de Haas, Ralph; Degryse, Hans; Van Horen, Neeltje
  10. The entrepreneurial performance of the Central and Eastern European regions By Balázs Páger
  11. The Market for Entrepreneurs: The Story of a Failure By José M. Menudo; José Mª O’Kean
  12. Comparative analysis of the implementation of Triple Helix Theory in Greece and Hungary and lessons learned from both cases´ By Chrysanthi Balomenou; Aniko Kalman; Konstantinos Kolovos
  13. Innovation and export in SMEs: the role of relationship banking. By Serena Frazzoni; Maria Luisa Mancusi; Zeno Rotondi; Maurizio Sobrero; Andrea Vezzulli

  1. By: Sorgner, Alina (University of Jena); Fritsch, Michael (University of Jena); Kritikos, Alexander S. (University of Potsdam, DIW Berlin)
    Abstract: Based on representative micro data for Germany, we compare the incomes of self-employed with those of wage workers. Our results show that the median self-employed entrepreneur with employees earns significantly more than the median salaried employee, while the median solo entrepreneur earns less. However, solo entrepreneurship pays for those with a university entrance degree but no further professional qualification as well as for those who were in the upper percentiles of the income distribution in their previous salaried job. Surprisingly, the variation in hourly incomes of solo entrepreneurs is higher than that of entrepreneurs with employees.
    Keywords: income, entrepreneurship, self-employment, start-ups, Germany
    JEL: L26 D22
    Date: 2014–11
  2. By: Estrin, Saul (London School of Economics); Stephan, Ute (Aston University); Vujić, Sunčica (University of Antwerp)
    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
  3. By: Edward Lazear (Stanford University); James Liang (Peking University); Hui Wang (Peking University)
    Abstract: Entrepreneurship requires creativity and business acumen. Creativity may decline with age, but business skills increase with experience in high level positions. Having too many older workers in society slows entrepreneurship. Not only are older workers less innovative, but more significant is that when older workers occupy key positions they block younger workers from acquiring business skills. A formal theoretical structure is presented and tested using the Global Entrepreneurship Monitor data. The results imply that a one-standard deviation decrease in the median age of a country increases the rate of new business formation by 2.5 percentage points, which is about forty percent of the mean rate. Furthermore, older societies have lower rates of entrepreneurship at every age.
    JEL: J11 L26 M51
    Date: 2014–09
  4. By: Arvid Raknerud; Marit Rønsen (Statistics Norway)
    Abstract: Women make up almost 50 percent of the employed population in Norway, but only about 25 percent of the entrepreneurs. Using registry data on the whole population we address gender differences in the propensity to become an entrepreneur. We do so by analysing transition from ordinary wage employment into entrepreneurship, defined as either sole proprietorship or owner- managed incorporated entrepreneurship. We focus on the impact of the family and household situation and show that children are no barrier to female entrepreneurship. This result holds also when we look at the establishment of an incorporated business, which represents a bigger investment decision than mere self-employment. Moreover, we find that gender differences with regard to the impact of family and household characteristics are generally smaller for incorporated entrepreneurship than for self-employment. For example, while there is a clear positive effect on women’s – but not men’s – propensity to become self-employed if the partner is highly educated, the impact of the partner’s education is ambiguous both for men and women in the case of incorporated entrepreneurship. The strongest predictor of entrepreneurship among the partner characteristics, both for men and women, is whether or not the partner is an entrepreneur. Although our results do not bring a clear answer to why there are so few female entrepreneurs in Norway, an important insight from our analyses is that the family and household situation can be ruled out as a major explanation.
    Keywords: : Entrepreneurship; gender; work and family; partner’s characteristics; probit regression; linked registry data
    JEL: L26 J13 J16 J22 C23
    Date: 2014–11
  5. By: Hans Gersbach (ETH Zurich, Switzerland); Ulrich Schetter (ETH Zurich, Switzerland); Maik T. Schneider (ETH Zurich, Switzerland)
    Abstract: We explore optimal and politically feasible growth policies in the form of basic research investments and taxation. Basic research is a public good that benefits innovating entrepreneurs, but its provision and financing also affect the entire economy -- in particular, occupational choices of potential entrepreneurs, wages, dividends, and aggregate output. We show that the impact of basic research on the general economy rationalizes a taxation pecking order to finance basic research. More specifically, in a society with desirably dense entrepreneurial activity, a large share of funds for basic research should be financed by labor taxation, while a minor share should be left to profit taxation. Such tax schemes will induce a significant proportion of agents to become entrepreneurs, thereby rationalizing substantial investments in basic research that fosters their innovation prospects. These entrepreneurial economies, however, may make a majority of workers worse off, giving rise to a conflict between efficiency and equality. We discuss ways of mitigating this conflict and thus strengthening the political support for growth policies.
    Keywords: Basic research; economic growth; entrepreneurship; income taxation; political economys;
    JEL: D72 H20 H40 O31 O38
    Date: 2014–12
  6. By: Beck, T.H.L. (Tilburg University, Center For Economic Research); Pamuk, H. (Tilburg University, Center For Economic Research); Uras, R.B. (Tilburg University, Center For Economic Research)
    Abstract: We use a novel enterprise survey from Tanzania to gauge the relationship between saving instruments and entrepreneurial reinvestment. While most informal savings practices do not imply a lower likelihood of entrepreneurial reinvestment when compared with formal savings practices, we find a significantly negative effect of saving within the household on the likelihood of reinvesting entrepreneurial profits. Our results are robust to an extensive list of robustness checks, including controlling for reverse causation and omitted variable biases. Our work contributes to the recent debate on the implications of different saving instruments in developing countries and expands the entrepreneurial financing constraints literature by focusing on internal rather than external fundings constraints.
    Keywords: Entrepreneurial finance; savings; reinvestment; financial inclusion
    JEL: D14 G21 O12 O16
    Date: 2014
  7. By: Wennberg, Karl (Ratio); Berglund, Henrik (Chalmers University of Technology)
    Abstract: Research surveys of the field of entrepreneurship suggest that the maturation and institutionalization of entrepreneurship as a research field brings about both new opportunities and constraints from established thoughts and practices. In this chapter we explore some commonly applied questions and methodological dogmas in the field. In doing so we argue that research in entrepreneurship is becoming increasingly institutionalized with regard to different issues: successively scholarship, research questions, areas/units of analysis, as well as research tools used. When draw upon insights from philosophy of science and research on discovery of research ideas to discuss whether we as researchers pose questions that help us better understand entrepreneurship, its role in society and the way it affects society. We conclude the chapter by using the philosophy of Pragmatism to discuss how Entrepreneurs are pragmatic agents that draw upon a multitude of skills, experiences, repertoires of themselves and of others to reach their goals. Perhaps entrepreneurship research could benefit from learning from such an approach?
    Keywords: Entrepreneurship; Methods; Philosophy of Science
    JEL: B29 L26
    Date: 2014–12–05
  8. By: Brixiova, Zuzana; Ncube, Mthuli; Bicaba, Zorobabel
    Abstract: The shortages of entrepreneurial skills have lowered search effectiveness of potential young entrepreneurs and the rate of youth start-ups. Our paper contributes to closing the gap in the entrepreneurship and development literature with a model of costly
    Keywords: youth entrepreneurship, model of skills and structural transformation, policies, Africa
    Date: 2014
  9. By: Beck, Thorsten; de Haas, Ralph; Degryse, Hans; Van Horen, Neeltje
    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: business cycle; credit constraints; relationship banking
    JEL: F36 G21 L26 O12 O16
    Date: 2014–06
  10. By: Balázs Páger
    Abstract: The theoretical concepts about entrepreneurship have changed since the last three decades. It has become one of the most crucial factors in the economic processes. These changes in the theories about entrepreneurships have been supported by the shift in the whole economic environment. If we look the comparison of the managed economy and the entrepreneurial economy (Audretsch and Thurik 2001), it can be seen clearly those shifts which contributed to become entrepreneurship an important factor in the economic development. Entrepreneurships are embedded in that socio-economic environment, where they continue their economic activity. The entrepreneurship is influenced by those negative and positive factors (for example other institutions and actors, connections, externalities) which can be attributed to regional factors. It can be assumed that the regional context of the institutional and individual factors has a crucial role in the entrepreneurial performance of a given territory. If the definition of entrepreneurship has been looked, it can be observed that entrepreneurship is a multi-dimensional concept. This multi-dimensional character would require a complex view and measure of entrepreneurship. The Global Entrepreneurship and Development Index (GEDI) is a measure of entrepreneurship based on a system view (Ãcs et al 2013). Its methodology has been applied for the regional measurement of entrepreneurial performance which is called Regional Entrepreneurship and Development Index (REDI) (Szerb et al 2014). The REDI components, so-called pillars, have two components, and consequently two types of variables reflecting to the parts of the individual and institutional context of entrepreneurship. This paper focuses on the entrepreneurial performance of Central and Eastern European (CEE) regions which have been measured by the REDI. The performances of the CEE countries are compared with other European regions and they have been analysed on their own as well. It can be observed that CEE regions have relatively poor entrepreneurial performance amongst the European regions. As the regions' performance were compared to one another it can be observed that there are some factors which are weak not only on the regional but on the national level as well. One of the most important characters in the CEE regions is the high difference between the capital city and the other regions. It could mean that the economic weight and the entrepreneurial performance of the non-capital regions are relatively small.
    Keywords: entrepreneurship; regional development; CEE regions;
    JEL: L26 O18
    Date: 2014–11
  11. By: José M. Menudo (Department of Economics, Universidad Pablo de Olavide); José Mª O’Kean (Department of Economics, Universidad Pablo de Olavide)
    Abstract: This work analyses the particular and repeated attempt to introduce the entrepreneur into economic activity through the market for entrepreneurs. We shall examine the few suggestions ? Richard Cantillon, Jean-Baptiste Say, Alfred Marshall and Frank Knight ? that propose it. The analysis of the writings of these authors enables us to draw relevant conclusions from their attempts to develop an economic theory of the entrepreneur from the perspective of the market for entrepreneurs.
    Keywords: History of Economic Thought, Entrepreneurship, Profit, Production and Organizations, Institutions and Growth.
    JEL: B1 M13 M53 D2 O43
    Date: 2014–10
  12. By: Chrysanthi Balomenou; Aniko Kalman; Konstantinos Kolovos
    Abstract: In the theoretical part of our paper focused on a) The role of the Knowledge / Universities as a leader of Technological change ? Knowledge transfer dynamics and its influence on Regional Development, b) the Entrepreneurship education: The role of the Entrepreneurial University, c) Knowledge Spillovers and regional Innovation System (RIS): empirical evidence of some European Regions, d) the current situation in Greek Higher Education, focusing on the New Educational Law and especially on the plan "Athena" of the Ministry of Education, for the restructure / reallocation of the Greek Universities and Technological Institutions e) The new Law for Research Technology and Innovation in Greece (Horizon 2020 program) c) The Hungarian case study. In the empirical part of our paper, we are studding the restructure / reallocation of the Greek Universities and Technological Institutions. Our research methodology, based on the data extracted from targeted questionnaires addressed both to Greek entrepreneurs and Greek universities ? Scientific Institutions, attempts to show on one hand how the Universities assess the business environment and their new role in the relevant new institutional framework and on the other hand how the Greek industries evaluate their cooperation with the universities sector and their new role in terms of supporting the local entrepreneurship, as well. The used method for analyzing the results is the one of SPSS (descriptive statistics, correlation ? convexity indicators). The main findings coming by the processing of the statistical data of our scientific research, reveal that in crisis period the universities can find a new source of funding by "advertising" their main mission, which is the diffusion of Knowledge, and especially, the innovative one that enterprises need, in order to succeed and to overcome the crisis bad effects. Thus, we can observe that the results of our empirical analysis are strongly related to the relevant literature presented in the theoretical part of our paper. Finally, considerable general conclusions, policy proposals and questions/ challenges for further research will be presented at the end of our study. Finally, we would like to draw your attention on the fact that during this period is taking palace an ongoing relevant research in Hungary and we are expecting the results in order to be able to make a comparative analysis and consequently the appropriate SWOT ANALYSIS.
    Keywords: Universities; Triple Helix Theory; Local Entrepreneurship; Endogenous regional growth; cross country cooperation ? collaboration in knowledge economy O30; 031; 0;32;O33; O38; R11; R58
    Date: 2014–11
  13. By: Serena Frazzoni; Maria Luisa Mancusi; Zeno Rotondi; Maurizio Sobrero; Andrea Vezzulli
    Abstract: This paper assesses the role of relationship lending in explaining simultaneously the innovation activity of Small and Medium Enterprises (SME), their probability to export (i.e. the extensive margin) and their share of exports on total sales conditional on exporting (i.e. the intensive margin). We adopt a measure of informational tightness based on the ratio of firm’s debt with its main bank to firm’s total assets. Our results show that the strength of the bank-firm relation has a positive impact on both SME’s probability to export and their export margins. This positive effect is only marginally mediated by the SME’s increased propensity to introduce product innovation. We further discuss the financial and non-financial channels through which the intensity of bank-firm relationship supports SMEs’ international activities.
    Keywords: margins of export, bank-firm relationships, innovation, localized knowledge spillovers.
    JEL: F10 G20 G21 O30
    Date: 2014–10

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