nep-ent New Economics Papers
on Entrepreneurship
Issue of 2015‒07‒04
seven papers chosen by
Marcus Dejardin
Université de Namur

  1. The Persistence of Regional Entrepreneurship - Are all types of Self-Employment Equally Important? By Michael Fritsch; Michael Wyrwich
  2. Institutional entrepreneurship in the emerging renewable energy field; incumbents versus new entrants By Smink; Joost Koch; Eva Niesten; Simona Negro; Marko Hekkert
  3. Aid and Growth Evidence from Firm-level Data By Ehrhart, Hélène; Chauvet, Lisa
  4. The Returns to Microenterprise Support Among the Ultra-Poor: A Field Experiment in Post-War Uganda By Christopher Blattman; Eric P. Green; Julian C. Jamison; M. Christian Lehmann; Jeannie Annan
  5. The impact of R&D subsidy on innovation: a study of New Zealand firms By Adam Jaffe; Trinh Le
  6. Optimal Fiscal Policy with Endogenous Product Variety By Chugh, Sanjay; Ghironi, Fabio

  1. By: Michael Fritsch (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Michael Wyrwich (School of Economics and Business Administration, Friedrich-Schiller-University Jena)
    Abstract: We explore the role of different types of self-employment for a persistence of the regional level of entrepreneurship over time. Our analysis for West German regions shows relatively strong effects for the historical self-employment rate in the non-agricultural sector, particularly in knowledge-intensive industries on current levels of new business formation. While self-employment by males shows a statistically significant relationship, the self-employment rate of females remains statistically insignificant. Also, no statistically significant effect can be found for the share of homeworkers that can be regarded a rather weak form of entrepreneurship.
    Keywords: Entrepreneurship, self-employment, new business formation, entrepreneurship culture, persistence
    JEL: L26 R11 O11
    Date: 2015–06–29
  2. By: Smink; Joost Koch; Eva Niesten; Simona Negro; Marko Hekkert
    Abstract: An underexplored issue in the institutional entrepreneurship (IE) literature is the difference between incumbents and new entrants in promoting institutional change for innovative technologies. We study the IE activities: cooperation, framing, and political tactics in the case of biomethane development in the Netherlands, during 2006-2012. While for decades biogas farmers have been unable to build a supporting institutional framework, incumbents recently arranged substantial government support. Our theoretical contribution lies in defining dimensions of the three core IE activities. We present empirical evidence that new entrants and incumbents employ all three activities, but in distinct ways. Thus, the incumbents’ IE activities lead to more substantial institutional change than new entrants’ activities. As a consequence, production shifts from electricity to gas and the scale of installations increases. We conclude that incumbents can accelerate institutional change, however their focus on large-scale installations makes it difficult for biogas farmers to contribute to biomethane production.
    Keywords: Sustainability transitions, Institutional entrepreneurship, renewable energy, incumbents, new entrants
    Date: 2015–06
  3. By: Ehrhart, Hélène; Chauvet, Lisa
    Abstract: This paper explores the impact of foreign aid on firms growth for a panel of 5,640 firms in 29 developing countries, 11 of which in Africa. Using the World Bank Enterprise Surveys data and controlling for fi rms fixed e ffects, we fi nd a positive impact of foreign aid on sales growth. This result is robust to various checks, notably to the instrumentation of aid. We then identify the main infrastructure obstacles to rms growth and examine whether foreign aid contributes to relaxing those constraints. We nd that electricity and transport are perceived as important constraints which tend to decrease the growth rate of fi rms, as well as the utilization of their productive capacity. Evidence on the impact of aid on infrastructure obstacles suggests that total aid and aid to the energy sector tend to decrease electricity obstacles. We also show that transport aid projects, geo-localized at the region level, tend to decrease the transport obstacles.
    Keywords: Foreign aid; Firms growth; Infrastructures constraints;
    JEL: F35 O16 O50
    Date: 2015–06
  4. By: Christopher Blattman; Eric P. Green; Julian C. Jamison; M. Christian Lehmann; Jeannie Annan
    Abstract: We show that extremely poor, war-affected women in northern Uganda have high returns to a package of $150 cash, five days of business skills training, and ongoing supervision. 16 months after grants, participants doubled their microenterprise ownership and incomes, mainly from petty trading. We also show these ultrapoor have too little social capital, but that group bonds, informal insurance, and cooperative activities could be induced and had positive returns. When the control group received cash and training 20 months later, we varied supervision, which represented half of the program costs. A year later, supervision increased business survival but not consumption.
    JEL: C93 D13 J24 O12
    Date: 2015–06
  5. By: Adam Jaffe (Motu Economic and Public Policy Research); Trinh Le (Motu Economic and Public Policy Research)
    Abstract: This paper examines the impact of government assistance through R&D grants on innovation output for firms in New Zealand. Using a large database that links administrative and tax data with survey data, we are able to control for large number of firm characteristics and thus minimise selection bias. We find that receipt of an R&D grant significantly increases the probability that a firm in the manufacturing and service sectors applies for a patent during 2005–2009, but no positive impact is found on the probability of applying for a trademark. Using only firms that participated in the Business Operation Survey, we find that receiving a grant almost doubles the probability that a firm introduces new goods and services to the world while its effects on process innovation and any product innovation are relatively much weaker. Moreover, there is little evidence that grant receipt has differential effects between small to medium (<50 employees) and larger firms. These findings are broadly in line with recent international evidence from Japan, Canada and Italy which found positive impacts of public R&D subsidy on patenting activity and the introduction of new products.
    Keywords: Industrial policy, innovation, R&D
    JEL: O31 O34 O38
    Date: 2015–05
  6. By: Chugh, Sanjay; Ghironi, Fabio
    Abstract: We study Ramsey-optimal fiscal policy in an economy in which product creation is the result of forward-looking investment decisions by firms. There are two main results. First, depending on the particular form of variety aggregation, firms' dividend payments may be either subsidized or taxed in the long run. This policy balances monopoly incentives for product creation with the welfare benefit of product variety. In the most empirically relevant form of variety aggregation, socially efficient outcomes entail a substantial tax on dividend income, removing the incentive for over-accumulation of capital, which takes the form of the stock of products. Similar intuitions determine the optimal setting of long-run producer entry subsidies. Second, optimal policy induces dramatically smaller, but efficient, fluctuations of both capital and labor markets than in a calibrated exogenous policy. Decentralization requires zero intertemporal distortions and constant static distortions over the cycle. The results relate to Ramsey theory, which we show by developing welfare-relevant concepts of efficiency that take into account product creation. The results on optimal entry subsidies provide guidance for the study of product market reforms in dynamic macro models.
    Keywords: Endogenous product variety; Optimal taxation; Producer entry; Wedge smoothing; Zero intertemporal distortions
    JEL: E20 E21 E22 E32 E62
    Date: 2015–06
    Abstract: Global Entrepreneurship and Development Index or the Global Entrepreneurship and Development Index (GEDI) In 2013 positioned Indonesia at ranked 76 of 118 countries. Compared with the ASEAN countries, the position are still far below Singapore (13), and still below Malaysia (57), Brunei Darussalam (58), Thailand (65). This fact shows that Indonesia has not been optimal in building its entrepreneurial yet. To enhance the development of entrepreneurship, the Indonesian government has launched a National Entrepreneurship Movement (GKN), with the aim to increase the number of Indonesia’s entrepreneurs, where now the number of entrepreneurs approximately 0.25% of the total population. In an effort to maintain and improve the position of entrepreneurship that has been achieved today, entrepreneurial practitioners should build sustainable entrepreneurship for creating a strong entrepreneurial competitiveness, sustainable and mutually supportive by involving the synergies of the various elements of society. With the creation of sustainable entrepreneurship, the competitiveness level can be realized nationally and globally. The sustainable entrepreneurship focuses on entrepreneurial skills to achieve the success through social and environmental change or social innovations. Entrepreneurship is not only generating economic success but also the entrepreneurs (sustainable entrepreneurs) should be able to manage the "triple bottom line" (company profitability, potential benefits to the environment, and potential benefits to the community) by balancing economic health, social equity and environmental sustainability through the entrepreneurial behaviors. Lately, a lot of scientific discussions concerning entrepreneurship theory and practice related to sustainable entrepreneurship in a goal-oriented society, ethics, economics, and ecology have bee done. Even some studies on sustainable entrepreneurship have been more developed compared with the business and environment studies, especially in matters of affecting changes in social practices and business environments. However, the question is "How do we understand the characteristics, motivation and factors driving sustainable ecopreneurs to innovate?" The next question is, "How can the implementation of sustainable entrepreneurship in Indonesia in order to be able to compete on a global level?". This paper aims to discuss the conceptual approach of sustainable entrepreneurship and to outline how sustainable entrepreneurs to innovate in bringing additional benefits for the community and the environment.
    Keywords: Keywords: sustainable entrepreneurship, competitiveness, social, global, environment.
    JEL: Q01
    Date: 2014–05–22

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