nep-ent New Economics Papers
on Entrepreneurship
Issue of 2015‒04‒02
eight papers chosen by
Marcus Dejardin
Université de Namur

  1. Are High-Growth Firms Overrepresented in High-Tech Industries? By Daunfeldt, Sven-Olof; Elert, Niklas; Johansson, Dan
  2. The Impact of Entrepreneurship Education in High School on Long-Term Entrepreneurial Performance By Elert, Niklas; Andersson, Fredrik; Wennberg, Karl
  3. A Matching Model of Endogenous Growth and Underground Firms By Lisi, Gaetano; Pugno, Maurizio
  4. The Impact of Entrepreneurial Risk Aversion on Wages in General Equilibrium By Ying Feng; James E. Rauch
  5. Barriers to innovation: can firm age help lower them? By Gabriele Pellegrino
  7. Role of institution, government to robust international entrepreneurial activities and economic growth: New Evidence By DOAA M. SALMAN
  8. Asset sources of competitive advantage of SMEs from high-tech sector in the region of Greater Poland By Malgorzata Gajowiak

  1. By: Daunfeldt, Sven-Olof (HUI Research); Elert, Niklas (Research Institute of Industrial Economics (IFN)); Johansson, Dan (HUI Research)
    Abstract: It is frequently argued that policymakers should target high-tech firms, i.e., firms with high R&D intensity, because such firms are considered more innovative and therefore potential fast-growers. This argument relies on the assumption that the association among high-tech status, innovativeness and growth is actually positive. We examine this assumption by studying the industry distribution of high-growth firms (HGFs) across all 4-digit NACE industries, using data covering all limited liability firms in Sweden during the period 1997–2008. The results of fractional logit regressions indicate that industries with high R&D intensity, ceteris paribus, can be expected to have a lower share of HGFs than can industries with lower R&D intensity. The findings cast doubt on the wisdom of targeting R&D industries or subsidizing R&D to promote firm growth. In contrast, we find that HGFs are overrepresented in knowledge-intensive service industries, i.e., service industries with a high share of human capital.
    Keywords: Entrepreneurship; Firm growth; Gazelles; High-growth firms; High-impact firms; Innovation; R&D
    JEL: L11 L25
    Date: 2015–03–25
  2. By: Elert, Niklas (Research Institute of Industrial Economics (IFN)); Andersson, Fredrik (Statistics Sweden); Wennberg, Karl (Stockholm School of Economics)
    Abstract: This paper studies the long-term impact of entrepreneurship education and training in high school on entrepreneurial entry, performance, and survival. Using propensity score matching, we compare three Swedish cohorts from Junior Achievement Company Program (JACP) alumni with a matched sample of similar individuals and follow these for up to 16 years after graduation. We find that while JACP participation increases the long-term probability of starting a firm as well as entrepreneurial incomes, there is no effect on firm survival.
    Keywords: Entrepreneurship Education; Quasi-experiment; Performance
    JEL: D22 L25 L26
    Date: 2015–03–26
  3. By: Lisi, Gaetano; Pugno, Maurizio
    Abstract: Economic growth and unemployment exhibit an ambiguous relationship – according to empirical studies. This ambiguity can be investigated by observing the role of the underground economy in shaping the productivity of firms. Indeed, unemployment may be absorbed by underground firms, which adopt backward technology, at the cost of reduced economic growth. Alternatively, unemployment diminishes because productivity grows by employing workers who prefer to become skilled, and thus not to work in underground firms. This paper develops these arguments by using a matching model with underground firms and heterogeneous entrepreneurial ability, and by assuming skill-driven growth. Economic growth thus becomes endogenous, and both the underground sector and unemployment become persistent. The main result is that, under conditions of strict monitoring of the regularity of firms, the underground economy is squeezed, unemployment is reduced, and growth is high, whereas in the case of lax monitoring, the underground economy expands, unemployment is absorbed, and growth is low.
    Keywords: unemployment, underground firms, entrepreneurship, endogenous growth, human capital, education, matching models.
    JEL: E26 J24 J64 L26
    Date: 2015–02–16
  4. By: Ying Feng; James E. Rauch
    Abstract: One of the leading theories of entrepreneurship is that less risk averse individuals become entrepreneurs and more risk averse individuals become their employees. Kihlstrom and Laffont (1979) formalized this insight in an elegant and widely taught general equilibrium model. However, their model has not been further developed. A reason may be that their main comparative static result, that an economy-wide increase in risk aversion lowers the equilibrium wage, appeared to require the assumption that all agents had identical risk aversion index, throwing out their motivating insight and indicating that the model is intractable. In this note we prove this comparative static result on risk aversion and wages in general equilibrium, retaining agent heterogeneity in risk aversion and the endogenous division of agents into less risk averse entrepreneurs and more risk averse workers, without adding any assumptions not already in the original paper. Besides the intrinsic value of the result, we hope to increase the usefulness of the Kihlstrom and Laffont (1979) model for other researchers and to facilitate improvement in its exposition for the many graduate courses in which it is taught.
    JEL: L26
    Date: 2015–03
  5. By: Gabriele Pellegrino (University of Sussex)
    Abstract: This paper examines how firm age can affect a firm’s perception of the obstacles (deterring vs. revealed) that hamper and delay innovation. Using a comprehensive panel of Spanish firms for the period 2004-2011, the empirical analysis conducted shows that distinct types of obstacle are perceived differently by firms of different ages. First, a clear-cut negative relationship is identified between firm age and a firm’s assessment of both the internal and external shortages of financial resources. Second, young firms seem to be less sensitive to the lack of qualified personnel when initiating an innovative project than when they are already engaged in such activities. By contrast, the attempts of mature firms to engage in innovation activity are significantly affected by the lack of qualified personnel. Finally, mature incumbents appear to attach greater importance to obstacles related to market structure and demand than is the case of firms with less experience.
    Keywords: Barriers to innovation, firm age, probit panel data model
    JEL: C23 O31 O32 O33
    Date: 2015
  6. By: Francesco Bogliacino; Iván González Gallo
    Abstract: In this article we test the main hypotheses of the behavioural theory of entrepreneurship, namely that risk preferences are reference-dependent, that entrepreneurs are not ambiguity-averse and that aspirations act as a reference point in the sense postulated by Prospect Theory. We use an experimental methodology to elicit risk preferences and we manipulate aspirations by means of a psychological priming technique to guarantee exogenous variation of the independent variable. We also assess the relationship between risk preferences and correlates at the firm and individual level. Although causality cannot be established, as expected the risk preferences are mainly related with individual characteristics. If we look at the relationship between biases and firm performance we see some effect of loss aversion in interaction with personality traits (locus of control) and level of risk propensity. Our experimental fieldwork has been conducted in Colombia.
    Keywords: Experiments, Prospect Theory, Aspirations, Entrepreneurship.
    JEL: C93 D81 L26 O54
    Date: 2015–03–20
  7. By: DOAA M. SALMAN (Faculty of Management Sciences Modern Sciences and Arts University (MSA), Egypt)
    Abstract: This paper contributes to the development of the field of international entrepreneurial activities by providing answers to the following questions. Is higher human development generates opportunities to entrepreneurial activities that yields economic growth? What is the effect of the level on economic development on the relationship between entrepreneurial activities and countries growth? Do economic policies generate opportunity that yields higher international entrepreneurial activities? The employed Generalized Method of Moments (GMM) estimation methodology is selected based on the long term dynamic of the entrepreneurial activities. Analysis is employed using panel data across two groups of countries based on their stage of development during the period 2004 - 2008. Empirical results provide a positive significant evidence for the role of human development to accelerate entrepreneurial activities and growth in innovative driven countries. The outcomes point towards the role of policies supporting entrepreneurial activities as a vital tool to accelerate development and growth via channels such as: better education levels, enhancing research and development, attractive taxes policies and stable monetary policy. This paper provides a comparative analysis of the empirical results and presents prospective explanations for the observed relationships between different groups of countries to study the dynamics of change with relative short time series.
    Keywords: International Entrepreneurial activities; Economic growth; Development
    JEL: C13 O47
    Date: 2015–03
  8. By: Malgorzata Gajowiak (Poznan University of Technology)
    Abstract: The article tackles the question of the ever growing importance of soft factors of production in the process of competitive advantage for contemporary enterprises. This condition has resulted of turbulent environment characterized by increasing competition, generalized uncertainty and information asymmetry. Based on the above assumption during 2013-2014 a research project was carried out on the role of intangible resources in the process of gaining advantage over competitors in high-tech companies from Greater Poland. The study was complete for the given population and was conducted using the CATI method. On the basis of responses to the questions in the survey, one can conclude that these companies implement modern management paradigm and its activities are based largely on soft resources which are impossible to be copied and on skills in the form of human capital, propensity for learning and the social capital of employees. The findings of the project can serve as a valuable clue for those companies which at the moment do not represent a prospective approach to achieving entrepreneurial categories in practice.
    Keywords: soft assets, competitive advantage, high-tech sector, innovations, SME’s
    JEL: O31 O32
    Date: 2015–03

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