nep-ent New Economics Papers
on Entrepreneurship
Issue of 2015‒11‒07
ten papers chosen by
Marcus Dejardin
Université de Namur

  1. Wealth, Tastes, and Entrepreneurial Choice By Erik G. Hurst; Benjamin W. Pugsley
  2. Grown-Up Business Cycles By Benjamin W. Pugsley; Aysegül Sahin
  3. Entrepreneurship Competence: An Overview of Existing Concepts, Policies and Initiatives – Final report By Ivana Komarkova; Dimitri Gagliardi; Johannes Conrads; Antonio Collado
  4. The Promise and Potential of Linked Employer-Employee Data for Entrepreneurship Research By Christopher Goetz; Henry Hyatt; Erika McEntarfer; Kristin Sandusky
  5. Do development projects link smallholdrs to markets? By Ebata, Ayako; Huttel, Silke
  6. Psychometrics as a Tool to Improve Screening and Access to Credit By Irani Arráiz; Miriam Bruhn; Rodolfo Stucchi
  7. Cost of Experimentation and the Evolution of Venture Capital By Michael Ewens; Ramana Nanda; Matthew Rhodes-Kropf
  8. Income Inequality and Asset Prices under Redistributive Taxation By Lubos Pastor; Pietro Veronesi
  9. Searching for new perspectives? Towards entrepreneurial orientation and the inclusion of the provider perspective in current information systems research By Köster, Antonia; Kaltenecker, Natalie; Hess, Thomas
  10. Corporate Venture Capital im Bankensektor: Eine Fallstudie By Maxin, Hannes

  1. By: Erik G. Hurst; Benjamin W. Pugsley
    Abstract: The nonpecuniary benefits of managing a small business are a first order consideration for many nascent entrepreneurs, yet the preference for business ownership is mostly ignored in models of entrepreneurship and occupational choice. In this paper, we study a population with varying entrepreneurial tastes and wealth in a simple general equilibrium model of occupational choice. This choice yields several important results: (1) entrepreneurship can be thought of as a normal good, generating wealth effects independent of any financing constraints; (2) nonpecuniary entrepreneurs select into small-scale firms; and (3) subsidies designed to stimulate more business entry can have regressive distributional effects. Despite abstracting from other important considerations such as risk, financing constraints, and innovation, we show that nonpecuniary compensation is particularly relevant in discussions of small businesses.
    Keywords: entrepreneurship, non-pecuniary benefits
    Date: 2015–10
  2. By: Benjamin W. Pugsley; Aysegül Sahin
    Abstract: We document two striking facts about U.S. firm dynamics and interpret their significance for employment dynamics. The first is the dramatic decline in firm entry and the second is the gradual shift of employment toward older firms since 1980. We show that despite these trends, the lifecycle dynamics of firms and their business cycle properties have remained virtually unchanged. Consequently, aging is the delayed effect of accumulating startup deficits. Together, the decline in the employment contribution of startups and the shift of employment toward more mature firms contributed to the emergence of jobless recoveries in the U.S. economy.
    Keywords: firm dynamics, employment dynamics, business cycles, entrepreneurship
    Date: 2015–10
  3. By: Ivana Komarkova (CARSA); Dimitri Gagliardi (Independent researcher); Johannes Conrads (CARSA); Antonio Collado (CARSA)
    Abstract: This report presents the state of the art on the topic of entrepreneurship competence identifying and comparing different theoretical and practical approaches from the academic and entrepreneurial world. It draws on an extensive literature review, an inventory of selected initiatives and in-depth case studies. The report looks at different definitions, frameworks, components and other elements of entrepreneurship as a competence, and reflects upon entrepreneurship education, teaching and assessment methods used for entrepreneurial learning. This report is the final output of the JRC-IPTS funded study 'Entrepreneurship Competence: An overview of existing concepts, policies and initiatives (OvEnt)'; it is part of the wider research agenda of JRC-IPTS on 'ICT for Learning and Skills' that aims to provide evidence on how skills and key competences that our digital society needs are acquired, certified and recognised.
    Keywords: Entrepreneurship Competence, Sense of initiative and entrepreneurship, Entrepreneurship education, Lifelong learning, key competences, reference framework, literature review, inventory, case studies
    JEL: I20 Z00 J24 J20 J29
    Date: 2015–10
  4. By: Christopher Goetz; Henry Hyatt; Erika McEntarfer; Kristin Sandusky
    Abstract: In this paper, we highlight the potential for linked employer-employee data to be used in entrepreneurship research, describing new data on business start-ups, their founders and early employees, and providing examples of how they can be used in entrepreneurship research. Linked employer-employee data provides a unique perspective on new business creation by combining information on the business, workforce, and individual. By combining data on both workers and firms, linked data can investigate many questions that owner-level or firm-level data cannot easily answer alone - such as composition of the workforce at start-ups and their role in explaining business dynamics, the flow of workers across new and established firms, and the employment paths of the business owners themselves.
    JEL: J21 L26
    Date: 2015–10
  5. By: Ebata, Ayako; Huttel, Silke
    Abstract: The objective of this paper is to understand the mechanisms by which development projects facilitate market linkage of smallholder farmers based on panel data from Nicaragua. We find that activities related to entrepreneurial practices have positive and statistically significant effect on commercialization. We also find that increased commercialization is positively correlated with total bean sales income, suggesting a positive indirect effect of the activities. Other activities demonstrate no positive and robust effect on commercialization while direct positive effects on sales income can be observed. This implies that market linkage of smallholder farmers require different sets of intervention tools than traditional farm technical assistance.
    Keywords: Central America, NGO project, Market linkage, International Relations/Trade, Marketing, O13, Q17, Q18,
    Date: 2015
  6. By: Irani Arráiz; Miriam Bruhn; Rodolfo Stucchi
    Abstract: This paper studies the use of psychometric tests, designed by the Entrepreneurial Finance Lab (EFL), as a tool to screen out high credit risk and potentially increase access to credit for small business owners in Peru. We use administrative data covering the period from June 2011 to April 2014 to compare debt accrual and repayment behavior patterns across entrepreneurs who were offered a loan based on the traditional credit-scoring method versus the EFL tool. We find that the psychometric test can lower the risk of the loan portfolio when used as a secondary screening mechanism for already banked entrepreneurs---i.e., those with a credit history. For unbanked entrepreneurs---i.e., those without a credit history---using the EFL tool can increase access to credit without increasing portfolio risk.
    Keywords: Credit, SME, Asymmetric information, Psychometric tests, Credit risk, Access to credit
    Date: 2015–10
  7. By: Michael Ewens (California Institute of Technology,); Ramana Nanda (Harvard Business School, Entrepreneurial Management Unit); Matthew Rhodes-Kropf (Harvard Business School, Entrepreneurial Management Unit)
    Abstract: We study adaptation by financial intermediaries as a response to technological change in the context venture-capital finance. Using a theoretical model and rich data, we are able to both document and provide a framework to understand the changes in the investment strategy of VCs in recent years - an increased prevalence of investors who "spray and pray" - providing a little funding and limited governance to an increased number of startups that they are more likely to abandon, but where early experiments significantly inform beliefs about the future potential of the venture. We also highlight how this adaptation by financial intermediaries has altered the trajectory of aggregate innovation away from complex technologies where initial experiments cost more towards those where information on future prospects is revealed quickly and cheaply.
    Keywords: Innovation, Venture Capital, Investing, Abandonment Option, Failure Tolerance
    JEL: G24 O31
    Date: 2015–02
  8. By: Lubos Pastor; Pietro Veronesi
    Abstract: We develop a simple general equilibrium model with heterogeneous agents, incomplete financial markets, and redistributive taxation. Agents differ in both skill and risk aversion. In equilibrium, agents become entrepreneurs if their skill is sufficiently high or risk aversion sufficiently low. Under heavier taxation, entrepreneurs are more skilled and less risk-averse, on average. Through these selection effects, the tax rate is positively related to aggregate productivity and negatively related to the expected stock market return. Both income inequality and the level of stock prices initially increase but eventually decrease with the tax rate. Investment risk, stock market participation, and skill heterogeneity all contribute to inequality. Cross-country empirical evidence largely supports the model's predictions.
    JEL: E24 G1 H2 J24 J31 J38
    Date: 2015–10
  9. By: Köster, Antonia; Kaltenecker, Natalie; Hess, Thomas
    Abstract: [Introduction ...] The remainder of this study is structured as follows: Section two provides the theoretical background and defines EO, the research objects, and research perspectives. In section three, we report on the procedures of our scientometric analysis. Results are presented in section four. In section five, we give a summary of our overall findings, discuss the results from our analysis and provide avenues for further research.
    Date: 2015
  10. By: Maxin, Hannes
    Abstract: Digitization of society has a strong effect on the banking sector. This circumstance is shown by the increasing success of young FinTech firms and the pressure to innovate for traditional banks. Therefore Commerzbank AG found an own corporate venture Capital firm (CVC firm), the Main Incubator GmbH, in March 2014. This CVC firm supports its parent company to cooperate with FinTech firms and to implement synergy potential for the own core business. In the research literature CVC activities are primarily assigned to the industrial and service sectors and not to the banking sector. Due to this fact Main Incubator is an unusual case, which is analyzed in a case study. The aim of this project is to show specific characteristics of a CVC firm of the banking sector.
    Keywords: Corporate venture capital, Banks, Case study, Principal-agent, FinTech firms
    JEL: G24 M13
    Date: 2015–10

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