nep-ent New Economics Papers
on Entrepreneurship
Issue of 2015‒05‒02
eleven papers chosen by
Marcus Dejardin
Université de Namur

  1. The Rise of Female Entrepreneurs: New Evidence on Gender Differences in Liquidity Constraints By Sauer, Robert M.; Wilson, Tanya
  2. Is Self-employment a Way to Escape from Skill Mismatches? By Albiol Sanchez, Judit; Diaz-Serrano, Luis; Teruel, Graciela
  4. Age and productivity as determinants of firm survival over the product life cycle By Silviano Esteve Pérez; Fabio Pieri; Diego Rodriguez
  5. Does Labour Mobility Foster Innovation? Evidence from Sweden By Braunerhjelm, Pontus; Ding, Ding; Thulin, Per
  6. Is innovation activity persistent among small firms in developing countries? Evidence from Vietnam By Trinh, Long
  7. A study of technological capability among product based telecom start-ups in India: Role of knowledge, learning and bricolage By Aeron, Prageet; Jain, Rekha
  8. Investment Distortion by Collateral Requirements: Evidence from Japanese SMEs By OGURA Yoshiaki
  9. No Lending Relationships and Liquidity Management of Small Businesses during a Financial Shock By TSURUTA Daisuke
  10. Is Rationing in the Microfinance Sector Determined by the Microfinance Type? Evidence from Ghana By Diaz-Serrano, Luis; Sackey, Frank Gyimah
  11. Der Gründungszuschuss nach der Reform: Eine qualitative Implementationsstudie zur Umsetzung der Reform in den Agenturen By Bernhard, Stefan; Grüttner, Michael

  1. By: Sauer, Robert M. (Royal Holloway, University of London); Wilson, Tanya (Royal Holloway, University of London)
    Abstract: Small business activity and female entrepreneurship have become increasingly important features of the UK economy since the start of the Great Recession. In this paper, we re-examine the impact of liquidity constraints on new business formation in an instrumental variables framework, using a previously unexplored data set from the UK. The new results indicate that it is primarily single women that drive the well-established empirical relationship between personal wealth and business start-ups. Therefore, public policies specifically targeted at relieving the liquidity constraints of women could help further accelerate the rise of female entrepreneurship.
    Keywords: entrepreneurship, liquidity constraints
    JEL: J23 L26 M13
    Date: 2015–04
  2. By: Albiol Sanchez, Judit (Universitat Rovira i Virgili); Diaz-Serrano, Luis (Universitat Rovira i Virgili); Teruel, Graciela (National Council for the Evaluation of Social Development Policy (CONEVAL))
    Abstract: During the last two decades, skill mismatches have become one of the most important issues of policy concern in the EU (European Commission, 2008). Hence, the literature has stressed the necessity to reduce skill mismatches. We contribute to this literature by analyzing the impact of the transition from salaried employment to self-employment on self-reported skill mismatches. To do so, we resort to the European Community Household Panel (ECHP) covering the period 1994-2001. Using panel data, we track individuals over time and measure their self-reported skill mismatch before and after the transition. Our empirical findings indicate not only that the average self-employee is less likely to declare being skill-mismatched but also that those individuals who transit from salaried employment to self-employment reduce their probability of skill mismatches after the transition.
    Keywords: self-employment, skill mismatches, salaried employment
    JEL: L26 J24 B23
    Date: 2015–04
  3. By: Lilia Cavallari (University of Roma Tre)
    Abstract: This paper studies the implications of entry costs for business formation in a dynamic stochastic general equilibrium model with endogenous entry and exit. The paper first documents some facts about business formation in the US. Exit is more volatile than entry, both are more volatile than output and co-move over the cycle. Firms are less volatile than output and procyclical. Then, it shows that a model with entry and exit can replicate these facts fairly well. In addition it captures important features of the US business cycle, outperforming models with a fixed exit rate and a fixed number of firms. The performance of the model is sensitive to changes in the composition of entry costs.
    Keywords: entry costs, firm entry, firm exit, business cycle, business creation, business destruction
    JEL: E31 E32 E52
    Date: 2014
  4. By: Silviano Esteve Pérez (Department of Applied Economics II, Universitat de València); Fabio Pieri (Department of Applied Economics, Universitat de València); Diego Rodriguez (Department of Applied Economics II, Universidad Complutense de Madrid)
    Abstract: This paper contributes to fill the gap between the literature on the determinants of firm survival and the theoretical and empirical works on the product life cycle (PLC). Using a representative sample of Spanish manufacturing firms with ten or more employees over the period 1991-2010, we empirically analyze the role played by firm age and productivity on firm survival across three different phases of the PLC to which firms are allocated according to firm- and product-level haracteristics. Firm age results to be negatively and significantly correlated with hazard rates mostly in the ‘young’ phase of the PLC, pointing out the role of ‘learning processes’ in this phase, while firm productivity is associated with lower hazard rates only in the ‘old’ phase of the PLC when market competition is primarily efficiency-driven. Our results qualify the roles of age and productivity as determinants of firm survival.
    Keywords: Product life cycle; firm survival; Spanish manufacturing firms; discrete time survival methods
    JEL: C41 L10 L60
    Date: 2015–04
  5. By: Braunerhjelm, Pontus (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Ding, Ding (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Thulin, Per (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)
    Abstract: By utilising a Swedish unique, matched employer-employee dataset that has been pooled with firm-level patent application data, we provide new evidence that knowledge workers’ mobility has a positive and strongly significant impact on firm innovation output, as measured by firm patent applications. The effect is particularly strong for knowledge workers that have previously worked in a patenting firm (the learning-by-hiring effect), but firms losing a knowledge worker are also shown to benefit (the diaspora effect), albeit more weakly. Finally, the effect is more pronounced when the joining worker originates in another region.
    Keywords: Labour mobility; knowledge diffusion; innovation; social networks
    JEL: J24 O31 R23
    Date: 2015–04–24
  6. By: Trinh, Long
    Abstract: Using firm-level panel data collected in Vietnam bi-annually from 2005 to 2013, this paper examines whether innovation is persistent among small firms in Vietnam. The empirical results obtained from dynamic random effect probit and dynamic random effect ordered probit show that the innovation activity is persistent among these small firms. Our estimation results also show slightly different roles of human capital of firm’s owner and employees in innovation activities. While the owner’s human capital is associated with creating a new product, employees’ human capital is positively correlated with upgrading the existing products or production procedure. However, we do not find evidence on the roles of unobserved heterogeneity in explaining this persistence. Our results are consistent with results found in the literature for firms in developed economies.
    Keywords: Innovation, Persistence of Innovation, Unobserved heterogeneity, Dynamic Random Effect Probit Model, Dynamic Random Effect Ordered Probit Model, Small and Medium Enterprises, Vietnam
    JEL: C23 C25 L20 O31 O33
    Date: 2015–04–14
  7. By: Aeron, Prageet; Jain, Rekha
    Abstract: Present work explores the development of new products among telecom start-ups in India. This paper weaves together threads of literature including innovation, bricolage, learning and knowledge acquisition and technological capability. We employ a qualitative research method and works through the data collected from seven independent start-ups. Our work proposes a process model for the evolution of technological capability as a result of complex interplay between existing knowledge, bricolage, new knowledge acquisition, and combinative capabilities. Paper further identifies gap focused learning and market focused learning as the two dominant learning mechanisms and also develops a conceptualization for studying architecture among the telecom related firms.
    Keywords: New product development; Bricolage; Learning; Technological capability.
  8. By: OGURA Yoshiaki
    Abstract: We examine the significance of the distortionary effect of collateral requirements for investments in pledgeable assets by small and medium-sized enterprises (SMEs). The theory predicts that the binding collateral constraint causes over-investment if land prices are expected to go up steeply while it causes under-investment otherwise. Our structural estimation of the Euler equation under a collateral constraint using the dataset on Japanese SMEs in the 1980s, the period in which Japanese land prices were skyrocketing, shows that the collateral constraint was not binding on average, whereas the estimation using data on the 1990s, during which land prices went down precipitously, shows that the constraint was binding and caused under-investment in the 1990s. This result indicates that the distortion in resource allocation resulting from the binding collateral constraint was a significant cause of the subsequent prolonged economic slump.
    Date: 2015–04
  9. By: TSURUTA Daisuke
    Abstract: We investigate the determinants of the end of lending relationships with banks using small business data. We also investigate how small businesses without lending relationships financed credit demand during the global financial shock. First, we find that firms with high internal cash holdings, lower growth, and low working capital were more likely to end lending relationships with banks. Supply-side effects on the determinants of the end of relationships are insignificant. Second, when firms experienced credit demand during the financial shock, those with lending relationships increased bank borrowings while those without lending relationships reduced internal cash. However, if we examine cash-rich firms, both firms with and without relationships reduced cash holdings to finance working capital during the shock period. Third, firm performance (in terms of profitability) was neither lower nor higher for firms that did not have lending relationships with banks during the shock period.
    Date: 2015–04
  10. By: Diaz-Serrano, Luis (Universitat Rovira i Virgili); Sackey, Frank Gyimah (Universitat Rovira i Virgili)
    Abstract: This study sets out to examine the extent to which access to credit and credit rationing are influenced by the microfinance type based on the major factors determining micro, small and medium enterprises' access to credit from microfinance institutions in the era of financial liberalization. The data for the study were gleaned from fourteen microfinance institutions' credit and loan records consisting of borrowers and credit characteristics. Our results are puzzling and show that credit rationing is not influenced by the microfinance types but by the individual microfinance institutions.
    Keywords: microfinance, Ghana, credit rationing
    JEL: G21
    Date: 2015–04
  11. By: Bernhard, Stefan (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Grüttner, Michael (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "In this study we present insights from the practical implementation of a reform of the start-up subsidy for unemployment insurance recipients (Gründungszuschuss). New rules of allocation came into force at the turn of the year 2011 to 2012. Looking at the number of entrants not only reveals a massive drop as a result of the reform. The composition of the recipients of the Gründungszuschuss has changed as well. We investigate the processes underlying these observations both on the side of the employment offices and on the side of the entrepreneurs. It turns out that the priority of job placement before any other measure of active labour market policy codified in § 4 SGB III is crucial. Not only is the priority of placement a formal cause for the rejection of claims, but a well-founded argument in negotiations between caseworkers and clients regarding whether or not to make a formal claim. This function of discouragement reveals as central. This leads to an increase in start-ups without subsidies from the employment agencies as a proportion of all start-ups by unemployment insurance recipients. If measured against two central aims of the reform - savings and reduction of free-riding - we can draw an ambivalent conclusion. The reform enables a more flexible and case-oriented allocation of the Gründungszuschuss, but budget restrictions and the priority of placement tend to counteract these tendencies. While savings have been achieved, adverse effects on the consistency of the allocation of the start-up subsidy over time and on the local level as well as on the attractiveness of the Gründungszuschuss from the perspective of the unemployment insurance recipients need to be noted." (Author's abstract, IAB-Doku) ((en))
    Keywords: Gründungszuschuss, Wirkungsforschung, berufliche Reintegration, Arbeitsvermittler - Einstellungen, arbeitsmarktpolitische Maßnahme, Arbeitslose - Einstellungen
    Date: 2015–04–15

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