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on Entrepreneurship |
| By: | William R. Kerr; Martin Mandorff |
| Abstract: | We study the relationship between ethnicity, occupational choice, and entrepreneurship. Immigrant groups in the United States cluster in specific business sectors. For example, Koreans are 34 times more likely than other immigrants to operate dry cleaners, and Gujarati-speaking Indians are 108 times more likely to manage motels. We develop a model of social interactions where non-work relationships facilitate the acquisition of sector-specific skills. The resulting scale economies generate occupational stratification along ethnic lines, consistent with the reoccurring phenomenon of small, socially-isolated groups achieving considerable economic success via concentrated entrepreneurship. Empirical evidence from the United States supports our model's underlying mechanisms. |
| JEL: | D21 D22 D85 F22 J15 L14 L26 M13 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21597&r=all |
| By: | Braunerhjelm, Pontus (Centre of Excellence for Science and Innovation Studies (CESIS), Royal Institute of Technology (KTH), & Swedish Entrepreneurship Forum); Ding, Ding (Centre of Excellence for Science and Innovation Studies (CESIS), & Royal Institute of Technology (KTH)); Thulin, Per (Centre of Excellence for Science and Innovation Studies (CESIS), Royal Institute of Technology (KTH), & Swedish Entrepreneurship Forum) |
| Abstract: | According to the knowledge-based spillover theory of entrepreneurship (KSTE), entrepreneurship is positively associated with the knowledge endowment level. An increase in knowledge expands the opportunity set, which is then exploited by heterogeneous entrepreneurs. The objective of this paper is to empirically test the validity of the KSTE by employing a detailed database comprising more than 19 million observations for the period 2001–2008 at the level of individuals, firms and regions in Sweden. Knowledge is claimed to be partly embodied in labour, implying that an increase in labour mobility can be expected to influence knowledge endowment at the regional level. Our dependent variable is an individual who has remained in a region throughout the time period considered. Controlling for a number of other variables, inter-regional labour inflows and intra-regional mobility levels are shown to exert a strong positive effect on entrepreneurship. This contrasts with inter-regional outflows, which negatively affect entrepreneurial entry. Another noteworthy result is that the probability of exploiting an increased knowledge stock through entrepreneurship increases by 15 percentage points if the individual has previous experience in starting a firm. |
| Keywords: | Entrepreneurship; Knowledge-based spillover theory of entrepreneurship; Knowledge diffusion; Labour mobility |
| JEL: | J61 L26 O33 |
| Date: | 2015–09–28 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0422&r=all |
| By: | F.C. Stam |
| Abstract: | Regional policies for entrepreneurship are currently going through a transition from increasing the quantity of entrepreneurship to the quality of entrepreneurship. The next step will be the transition from entrepreneurship policy towards policy for an entrepreneurial economy. The entrepreneurial ecosystem approach has been heralded as a new framework accommodating these transitions. This approach starts with the entrepreneurial actor, but emphasizes the context of productive entrepreneurship. Entrepreneurship is not only the output of the system, entrepreneurs are important players themselves in creating the ecosystem and keeping it healthy. This research briefing reviews the entrepreneurial ecosystem literature, its shortcomings, and provides a novel synthesis. The entrepreneurial ecosystem approach speaks directly to practitioners, but its causal depth and evidence base is rather limited. This article provides a novel synthesis including a causal scheme of how the framework and systemic conditions of the ecosystem lead to particular entrepreneurial activities as output of the ecosystem and new value creation as outcome of the ecosystem. In addition it provides a framework for analyzing the interactions between the elements within the ecosystem. This offers a much more rigorous and relevant starting point for subsequent studies into entrepreneurial ecosystems and the regional policy implications of these. |
| Keywords: | Entrepreneurial ecosystems, entrepreneurship, regional policy, economic policy |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:use:tkiwps:1507&r=all |
| By: | K. Bruns; N.S. Bosma; M.W.J.L. Sanders; M.C. Schramm |
| Abstract: | In this paper we present an alternative empirical strategy that sheds light on the importance of institutional quality for regional economic growth. The fundamental problem in this type of research is that institutional quality cannot be measured directly. Existing proxies are typically highly correlated with and endogenous to our dependent variable. We therefore propose a method that is akin to growth accounting, where we refer to the unexplained residual of a production function as total factor productivity. First we run a standard growth regression, including the usual suspects, on 90 European NUTS-2 and 3 regions. The residual variation in regional growth then includes the effect of the fundamentally latent variable that is institutional quality. If this is the case, then variables for which we may assume the effect on growth is strongly moderated through institutional quality, should have a different marginal effect on residual growth at the aggregation levels at which institutions operate. Theory and preliminary empirical evidence suggests that the effect of entrepreneurial activity is strongly moderated by institutional quality. We can thus test the hypothesis that the marginal effect of entrepreneurship on growth differs across regions and countries in our data. We indeed establish that entrepreneurial activity has a positive effect on growth. That is, entrepreneurial activity helps explain the residual variance in our standard growth regressions. However, this effect is not significant when we control for unobserved country differences in a multilevel analysis. We find that most of the cross regional variation is due to between country variation in average entrepreneurial activity, and that there is no longer an effect at the within-country regional level. In a latent class analysis, however, we do not find statistically significant differences in the coefficient across (groups of) regions after controlling for country effects. That is, our data suggests that country level institutional quality is most important for the effect of entrepreneurial activity on growth. After controlling for those differences, regions do not cluster in different classes. This also suggests that the difference between for example rural and urban regions in our sample is not significant, as such regions do not cluster in different groups. Before we draw strong conclusions, however, we note that this may be due to the administrative nature of our regional classification. |
| Keywords: | Institutions, Entrepreneurship, Regional Growth, Multilevel Model, Latent Class Model |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:use:tkiwps:1502&r=all |
| By: | Beck, Thorsten; Pamuk, Haki; Ramrattan, Ravindra; Uras, Rasim Burak |
| 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 dominates fiat money as a medium of exchange in its capacity to avoid theft, but 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 Kenyan FinAcces enterprise survey data and quantifying the importance of the endogenous interactions between mobile money and trade credit on entrepreneurial performance and macroeconomic development, we find that the availability of the mobile money technology increases GDP by 0.33-0.47%. |
| Keywords: | Kenya; mobile money; small business finance; trade credit |
| JEL: | D14 G21 O12 O16 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:10848&r=all |
| By: | Eric Borchers (Creighton University); John Deskins (West Virginia University, College of Business and Economics); Amanda Ross (West Virginia University, College of Business and Economics) |
| Abstract: | The existing literature studying the relationship between small business activity and U.S. state tax policy has focused primarily on a few measures of small business. We expand this literature by estimating the effect of state tax policy on small businesses by using a broader measures of small business activity using a longitudinal dataset for the U.S. states. We also estimate the relationship between state tax policy and large business activity. Results provide evidence that state tax policy can influence small business firm, establishment, payroll, and employment growth in important ways but provide limited evidence that such policy significantly influences large business growth. |
| JEL: | H2 H7 R1 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:wvu:wpaper:15-13&r=all |
| By: | Peter Huber (Austrian Institute of Economic Research (WIFO)); Harald Oberhofer (Department of Economics, Vienna University of Economics and Business; Austrian Institute of Economic Research (WIFO)); Michael Pfaffermayr (University of Innsbruck; Austrian Institute of Economic Research (WIFO)) |
| Abstract: | This paper offers an empirical analysis of net job creation patterns at the firm level for the Austrian economy between 1993 and 2013 focusing on the impact of firm size and age. We propose a new estimation strategy based on a two-part model. This allows to identify the structural parameters of interest and to decompose behavioral differences between exiting and surviving firms. Our findings suggest that conditional on survival, young Austrian firms experience the largest net job creation rates. Differences in firm size are not able to explain variation in net job creation rates among the group of continuing enterprises. Job destruction induced by market exit, however, is largest among the young and small firms with this effect being even more pronounced during the times of the Great Recession. In order to formulate sensible policy recommendations, a separate treatment of continuing versus exiting firms as proposed by the new two-part model estimation approach seems crucial. |
| Keywords: | Net job creation, firm size, firm age, one-part versus two-part models, Austrian economy, Great Recession |
| JEL: | C18 C53 D22 E24 L25 L26 M13 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwwuw:wuwp205&r=all |
| By: | Maya Grigolia; Lasha Labadze; Pavol Minarik; Alena Zemplinerova; Marek Vokoun |
| Abstract: | This report has been prepared in the framework of the project “Transfer of know-how to small and mid-size businesses” of the International Visegrad Fund (IVF) and USAID. It summarizes the conditions of the SME sector (small and medium size enterprises) in Georgia, identifies the main problems in their development and provides recommendations for further interventions based on the Czech experience, existing literature and a survey implemented among SME stakeholders.Georgia generally receives favorable evaluations of its business environment. It ranks high in indices of economic freedom and is among the top countries with respect to ease of starting and doing business. On the other hand, the SME sector suffers from several problems. The most serious obstacle to SME development seems to be in the area of finance; access to finance is difficult for SMEs and the cost of credit is high. Human capital and innovations are among the weak points of Georgian SMEs as well.The different shortcomings of the environment and markets call for different interventions. The paper is roadmap of concrete activities – it contains a set of recommendations to support SMEs development drawn on three different sources: first, the theoretical foundations of entrepreneurship policy, second, the Czech experience and know-how in the SME sector, and finally, the ideas of local experts and stakeholders generated during interviews and workshops.Activities and recommendations have been divided into “generic,” which relate to a particular determinant of business environment and have an impact across industries and sectors such as access to financing, education, developing skills training, R&D, innovation, export strategy, start-ups, and those which are “sector-specific,” such as banking, health and agriculture. Political stability, the main problem in Georgia, is beyond the scope of possible interventions. |
| Keywords: | small businesses, competition, liberalization, innovation, venture capital, business financing, skills and education |
| JEL: | D04 F23 L26 L30 M13 O25 O00 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:sec:cnrepo:0123&r=all |
| By: | Fornaro, Paolo; Luomaranta, Henri |
| Abstract: | In this paper, we use monthly employment data of Finnish firms to examine the differences in the employment behavior between big and small enterprises. In particular, we investigate which size class of firms has been growing more, which one has been the driver of net job creation and finally which type of enterprise has been more procyclical. In line with previous literature, we utilize various definitions to include a firm inside the small or large category, and consider both one dataset including entry and exit and one including only long-lasting firms. We find that small firms have shown higher growth rates, on average, and that they have been the driver of employment creation. Finally, we find that large firms are more procyclical than small enterprises, especially during economic contractions. |
| Keywords: | Firm-level data, Large datasets, Employment statistics |
| JEL: | E24 E32 J63 L25 L26 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:66979&r=all |
| By: | Britta Boyd (Department of Border Region Studies, University of Southern Denmark); Simon Fietze (Department of Border Region Studies, University of Southern Denmark); Kristian Philipsen (Department of Entrepreneurship and Relationship Management, University of Southern Denmark) |
| Abstract: | The research field of entrepreneurship gets more and more important in Denmark. The Global Entrepreneurship Monitor (GEM) and recently the Global University Entrepreneurial Spirit Students’ Survey (GUESSS) were carried out to gain more insights about entrepreneurial intentions and activities in Denmark. The origins of GUESSS go back to 2003 when researchers at the Swiss Research Institute of Small Business and Entrepreneurship at the University of St. Gallen (KMU-HSG) started the survey. The study is conducted every two years to explore the entrepreneurial intent and activity of students as well as the entrepreneurship training and education provided by universities in 34 countries around the world. In the sixth data collection wave Demark participated for the first time in 2013. The results for the Danish sample are presented in this report. The main findings are that Danish students have a rather low entrepreneurial intention. Their career intentions seem to follow the international pattern of first being an employee and then later becoming a founder. The report suggest to improve entrepreneurial intention among Danish students by stimulating entrepreneurial education at universities considering specific offers and activities for the different groups of entrepreneurial students as well as for students who not have considered becoming a founder yet. |
| Keywords: | entrepreneurial intention, succession intention, GUESSS, Denmark |
| JEL: | I21 I23 I28 L26 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:sdn:wpaper:9&r=all |
| By: | Šárka Zapletalová (Department of Business Economics and Management, School of Business Administration, Silesian University) |
| Abstract: | Internationalization of entrepreneurial activities is not only a matter of large enterprises. Currently, the majority of SMEs is undergoing the process of internationalization. The purpose of this paper is to compare the internationalization process of Czech large enterprises and SMEs. The companies included in the study are those that have already undertaken internationalization activities and are incorporated in the Czech Republic. The findings of the comparison show that the company size affects only the speed of internationalization of Czech companies. The choice of geographical coverage and entry mode is not affected by company size. |
| Keywords: | Internationalization process, large enterprises, small and medium-sized enterprise (SME), Czech companies, entry modes, geographical sub-regions. |
| JEL: | F23 M16 |
| Date: | 2015–09–29 |
| URL: | http://d.repec.org/n?u=RePEc:opa:wpaper:0018&r=all |
| By: | Pankaj Kumar Gupta (Centre for Management Studies, JMI University); Sandeepa Kaur (Centre for Manangement Studies, JMI University, New Delhi) |
| Abstract: | Small and Medium Enterprises (SMEs) are playing more and more important role in world economic development. Indian SMEs have been on the forefront of the development path. However, Indian SMEs face a host of obstacles when they try to access credit market for their financing needs. Banks do not feel confident to extend loans to the business units whose track records are not apparently known to them, nor are they easily verifiable by the banks. On one side the government assigns a target of minimum threshold level of SME financing for banks and on the other side banks are reluctant to finance because of perception of higher probabilities of credit default. A specialized and effective enterprise credit rating mechanism is extremely important for these enterprises. In this paper we examine the major issues in the financing of SMEs in an Indian context and evaluate the flip side of the current rating mechanism. We also suggest a framework of financing these enterprises for respective sources of capital with comments on the role of the central bank in this regard. |
| Keywords: | SMEs, Enterprise Credit Rating, Credit Policy, Rating agencies, Credit Default |
| JEL: | E58 O23 H81 |
| URL: | http://d.repec.org/n?u=RePEc:sek:ibmpro:3005373&r=all |
| By: | Ugo Rizzo; Laura Ramaciotti; Christian Dalla Mutta |
| Abstract: | The phenomenon of academic spin-off in Italy grew considerably from early 2000s. While the processes of spin-off creation have been widely studied, also about the Italian context, our knowledge about the nature of scientists that creates these firms remains rather scarce. In particular there are no investigations on the characteristics of these scientists referred to Italy. This work aims at moving a first step toward filling this gap. More specifically we focus on two main aspects characterising the nature of these scientists: their scientific sector and their academic role. The analysis conducted here only seeks to offer a descriptive contribution about the nature of these scientists, and therefore it contributes to delineate the academic spin-off phenomenon in Italy. |
| Keywords: | academic spin-off; Italy; scientist; founder; scientific sector; academic role |
| JEL: | O30 L26 |
| Date: | 2015–09–21 |
| URL: | http://d.repec.org/n?u=RePEc:udf:wpaper:2015124&r=all |