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on Entrepreneurship |
| By: | Marcel Fafchamps; Simon Quinn |
| Abstract: | We gave US$1,000 cash prizes to winners of a business plan competition in Africa. The competition, entitled ‘Aspire’, was intended to attract young individuals aspiring to become entrepreneurs. Participants were ranked by committees of judges composed of established entrepreneurs. Each committee selected one winner among twelve candidates; that winner was awarded a prize of US$1,000 to spend at his or her discretion. Six months after the competition, we compare winners with the two runners-up in each committee: winners are about 33 percentage points more likely to be self-employed. We estimate an average effect on monthly profits of about US$150: an annual profit of 80% on initial investment. Our findings imply that access to start-up capital constitutes a sizable barrier to entry into entrepreneurship for the kind of young motivated individual most likely to succeed in business. |
| JEL: | L26 O12 O16 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21084&r=ent |
| By: | Erica Field; Seema Jayachandran; Rohini Pande; Natalia Rigol |
| Abstract: | Does the lack of peers contribute to the observed gender gap in entrepreneurial success, and is the constraint stronger for women facing more restrictive social norms? We offered two days of business counseling to a random sample of customers of India’s largest women’s bank. A random subsample was invited to attend with a friend. The intervention had a significant immediate impact on participants’ business activity, but only if they were trained in the presence of a friend. Four months later, those trained with a friend were more likely to have taken out business loans, were less likely to be housewives, and reported increased business activity and higher household income. The positive impacts of training with a friend were stronger among women from religious or caste groups with social norms that restrict female mobility. |
| JEL: | O0 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21093&r=ent |
| By: | Catalina Granda; Franz Hamann |
| Abstract: | The informal sector is an extensive phenomenon in developing countries. While some of its implications have drawn considerable attention in the literature, one relatively unexplored aspect has to do with the saving patterns of workers and firms and how these might influence aggregate savings and wealth inequality. This paper aims to fill that gap by examining both entrepreneurs' and workers' choices regarding whether to perform informally and regarding asset accumulation. Specifically, the paper builds an occupational choice model wherein saving is primarily motivated by precautionary considerations. The model features labor and capital market segmentation, and it is calibrated to replicate the saving rates, wealth inequality and composition of occupations across the formal and informal sectors of Colombia. Computational experiments additionally make it possible to analyze the effects of highly debated formalization policies on wealth redistribution and promotion of saving and entrepreneurship. Alternative frameworks are finally considered. |
| Keywords: | Income, Consumption & Saving, Wealth inequality, Informality, Wealth inequality, Saving, Occupational choice models |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:idb:brikps:88196&r=ent |
| By: | Welter, Friederike; Smallbone, David |
| Abstract: | The paper reviews the current discussion on institutional change and institutional entrepreneurship. Specifically, it focuses on institutional change agents, by which we mean individuals whose actions can be shown to have contributed to formal or informal institutional change, to the benefit of the wider economy or society as well as to themselves. It aims to explore their antecedents and behaviours, and the contingent factors contributing to institutional change, both intentionally and unintentionally. We find that the concept of institutional entrepreneurship does not provide an adequate conceptual underpinning for incorporating human agency into institutionalised theory. We therefore argue that a focus on institutional change agents may be more productive. Whilst institutional theory recognises the impact of institutions on entrepreneurs and individuals, this paper draws attention to the role of human agency for institutional change. Institutional change can happen intentionally and as an unintended by-product of entrepreneurial or organisational 'path-dependent' behaviour. The implication of this is that it is not only intentional behaviour which contributes to institutional change, but rather any entrepreneurial behaviour which implicitly or explicitly questions existing institutions. Thus, the paper adds to the current debate on institutional entrepreneurship. |
| Keywords: | institutional entrepreneurship,human agency,entrepreneurship context |
| JEL: | B52 D02 L26 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifmwps:0115&r=ent |
| By: | Eduardo Nakasone; Maximo Torero |
| Abstract: | This paper analyzes the impact of the Strengthening Women Entrepreneurship in Peru (SWEP) program. SWEP trained female micro entrepreneurs in business management practices (such as accounting and marketing). The training, which was provided in 4- to 5-hour sessions, used soap operas and practical exercises specifically designed for the program. A field experiment was conducted among a group of micro entrepreneurs based in two Peruvian cities (Lima and Piura) to investigate whether SWEP had a positive impact on its beneficiaries. The results show that the program positively affected the adoption of business practices taught by the program. In particular, those who received the training were 4 to 6 percentage points more likely to assign themselves a fixed salary (rather than taking cash from their businesses based on personal needs) and 6 to 11 percentage points more likely to keep better records of potential business contacts. Some positive impacts were found on the adoption of bookkeeping practices (4 to 6 percentage points), although this result is not significant across all of the specifications. Although these changes in adoption rates were large compared with their baseline levels, they were rather small in absolute terms. Therefore, the study did not find any impact on average business performance, household expenditures, or women's empowerment in the household. Qualitative information suggests that micro entrepreneurs were satisfied with the training, but considered that many of the practices taught by the program were difficult to follow because of time constraints. |
| Keywords: | Women, Workforce & Employment, Entrepreneurship, Microbusinesses & Microfinance, business practices, micro entrepreneur, business training, business performance, household outcomes, business training, entrepreneurship, women, peru |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:idb:brikps:87916&r=ent |
| By: | Ilaria Suffia |
| Abstract: | Firms’ survival and longevity have recently emerged as a new intriguing theme of business history, spreading from the initial studies on family business to all forms of business. In family business the transition to the next generation can represent a strong limit to survival, as it depends on three different longevity factors: the family members’ involvement and commitment, the preparation of an adequate succession planning and the presence of a competitive advantage. Temporal continuity has become an independent topic involving all types of business, with respect to size, ownership and sectorial diversity. The goal of the analysis was to identify the determinants of longevity. The present research moves along this second line of investigation, focusing on small-scale businesses and taking into consideration a case study. The small and medium-scale (SME) system examined is that of Sesto San Giovanni, one of the most important Italian Company-town during the 20th century, considered the ‘industrial district’ of Milan. The study first verifies the evolution of the local SMEs system, highlighting its development during the century. Having defined the context, the attention shifts to the temporal survival of local businesses and its determinants. Finally, the research includes the history of several enterprise experiences to illustrate the analysis’ results. |
| Keywords: | Economic History, Micro-Business History, Europe, 1913- |
| JEL: | N84 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:mib:wpaper:301&r=ent |
| 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); Ramrattan, R. |
| Abstract: | Using a novel enterprise survey from Kenya (FinAccess Business), we document a strong positive association between the use of mobile money as a method to pay suppliers and access to trade credit. We develop a dynamic general equilibrium model with heterogeneous entrepreneurs, imperfect credit markets and the risk of theft to account for this empirical pattern. Mobile money<br/>dominates at money as a medium of exchange in its capacity to avoid theft, but it comes with higher transaction costs. The interaction between risk of theft and limited access to trade credit generates demand for mobile money as a payment method with suppliers and the use of mobile money in turn raises the value of a credit relationship and hence the willingness to apply for trade credit. Calibrating the stationary equilibrium to match a set of moments that we observe in FinAccess Business and quantifying the importance of the endogenous interactions between mobile money and trade credit on entrepreneurial performance and macroeconomic development, wefind that the availability of the mobile money technology increases the macroeconomic output<br/>of the entrepreneurial sector by 0.33-0.47%. |
| Keywords: | money; trade-credit; m-pesa; allocations |
| JEL: | D14 G21 O12 O16 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:tiu:tiucen:3d35ab30-05ef-4a31-8710-f845325b8ce4&r=ent |
| By: | Herrmann, Johannes (Stockholm School of Economics); Hjertström, Alexander (Stockholm School of Economics); Avdeitchikova, Sofia (The Ratio institute) |
| Abstract: | Business angels are a vital source of capital for innovative startup firms. However, even of those startups that have the potential to fulfill angel investors’ expected return on investment, most are rejected during the angel’s investment decision process. Information asymmetry, risk and distrust in the relationship between the investor and the entrepreneur result in investment barriers. The concept of proximity has been proposed as a suitable conceptual foundation to understand how the relationship between angel and entrepreneur might hinder or benefit the investment decision. Particularly, researchers distinguish between functional (geographical) and relational dimensions of proximity. The purpose of this paper is to examine the influence of proximity on business angel investments. We do this based on data from 226 investment situations gathered in fall 2014 from 56 business angels and 87 entrepreneurs in Sweden and analyzed using a state-of-the-art Structural Equation Modelling technique. We find that the investment decision is partially determined by the functional proximity of investor and entrepreneur, when observed in isolation. Our results furthermore support conceptual studies in the field of business angels that have hypothesized a mediating effect of relational proximity in this relationship. Based on the empirical analysis in this study, we find this effect to be fully mediating. |
| Keywords: | Business angels; investment decision; functional proximity; relational proximity; structural equation modeling; mediation |
| JEL: | D81 M13 M21 O16 R12 |
| Date: | 2015–03–23 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ratioi:0253&r=ent |
| By: | Lukasz Siemieniuk (Uniwersytet w Bialymstoku) |
| Abstract: | The Academic Business Incubators are a significant investment in the development of academic entrepreneurship in Poland. They put the emphasis especially on local development. They are the driving force and a source of motivation to take up new challenges for young people. They allow ambitious people to combine their theoretical knowledge acquired during their studies with practical knowledge. Thanks to the Academic Entrepreneurship Incubators young people become professionals in their actions. Their acquired skills, knowledge, physical, moral and mental characteristics are an excellent basis for the development of their business.The aim of the paper is to discuss the essence of academic entrepreneurship and present issues of the Academic Business Incubators functioning as an institutional form of academic entrepreneurship development in Poland. |
| Keywords: | Business Incubators; academic entrepreneurship; Poland |
| JEL: | D01 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:pes:wpaper:2015:no97&r=ent |
| By: | Anna Siemionek (University of Gdansk); Ma³gorzata Siemionek (University of Warmia and Mazury in Olsztyn) |
| Abstract: | The purpose of this paper is to explore the implementation of a performance management system using the balanced scorecard (BSC) within Romanian small and medium sized enterprises (SME). This is a casebased methodological approach. This ensured that the issues were appraised in both an operational and a strategic context. The findings of this research are that balanced scorecards can be implemented within a SME context. However, the motivations for the adoption of the scorecard were both internal and external due to the heavily regulated nature of the organization. The paper analyses the application of the Balanced Scorecard (BSC) in Romanian Small and Medium enterprises (SMEs). Actions necessary for its implementation, obstacles and BSC development trends have been presented. |
| Keywords: | Balanced scorecard, strategy, performance management, SMEs, Romanian enterprises |
| JEL: | G30 M21 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:pes:wpaper:2015:no98&r=ent |