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on Entrepreneurship |
| By: | Luigi Guiso; Luigi Pistaferri; Fabiano Schivardi |
| Abstract: | We document that individuals who grew up in areas with high density of firms are more likely, as adults, to become entrepreneurs, controlling for the density of firms in their current location. Conditional on becoming entrepreneurs, the same individuals are also more likely to be successful entrepreneurs, as measured by business income or firm productivity. Strikingly, firm density at entrepreneur’s young age is more important than current firm density for business performance. These results are not driven by better access to external finance or intergenerational occupation choices. They are instead consistent with entrepreneurial capabilities being at least partly learnable through social contacts. In keeping with this interpretation, we find that entrepreneurs who at the age of 18 lived in areas with a higher firm density tend to adopt better managerial practices (enhancing productivity) later in life. |
| JEL: | J24 M13 R11 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21775&r=ent |
| By: | Ryan A. Decker; John Haltiwanger; Ron S. Jarmin; Javier Miranda |
| Abstract: | The pace of business dynamism and entrepreneurship in the U.S. has declined over recent decades. We show that the character of that decline changed around 2000. Since 2000 the decline in dynamism and entrepreneurship has been accompanied by a decline in high-growth young firms. Prior research has shown that the sustained contribution of business startups to job creation stems from a relatively small fraction of high-growth young firms. The presence of these high-growth young firms contributes to a highly (positively) skewed firm growth rate distribution. In 1999, a firm at the 90th percentile of the employment growth rate distribution grew about 31 percent faster than the median firm. Moreover, the 90-50 differential was 16 percent larger than the 50-10 differential reflecting the positive skewness of the employment growth rate distribution. We show that the shape of the firm employment growth distribution changes substantially in the post-2000 period. By 2007, the 90-50 differential was only 4 percent larger than the 50-10, and it continued to exhibit a trend decline through 2011. The reflects a sharp drop in the 90th percentile of the growth rate distribution accounted for by the declining share of young firms and the declining propensity for young firms to be high-growth firms. |
| JEL: | E24 J63 L26 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21776&r=ent |
| By: | J. David Brown; John S. Earle; Yana Morgulis |
| Abstract: | Analyzing a list of all Small Business Administration (SBA) loans in 1991 to 2009 linked with annual information on all U.S. employers from 1976 to 2012, we apply detailed matching and regression methods to estimate the variation in SBA loan effects on job creation and firm survival across firm age and size groups. The number of jobs created per million dollars of loans generally increases with size and decreases in age. The results imply that fast-growing firms (“gazelles”) experience the greatest financial constraints to growth, while the growth of small, mature firms is least financially constrained. The estimated association between survival and loan amount is larger for younger and smaller firms facing the “valley of death”. |
| JEL: | H81 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21733&r=ent |
| By: | Quan Hoang Vuong; Nancy K. Napier; Thu Hang Do; Thu Trang Vuong |
| Abstract: | While much research has focused on entrepreneurship and creativity in developed economies, the notions of both topics are still embryonic in many emerging economies. This paper focuses on entrepreneurs in one such economy, Vietnam, to understand the perceptions of entrepreneurs about the role that innovation and creativity may play in their own entrepreneurial ventures and success. This is important because before reaping benefits from entrepreneurship, entrepreneurs need to decide when and on what conditions they start based on their calculations of required resources and predictions of likely outcomes. The research also sought to understand how "creativity," broadly applied ("innovation" and "creative performance") affects the ways that entrepreneurs think about and anticipate their own success and decisions. In essence, the study suggests that the higher the entrepreur’s creativity is, the more likely she or he is to start a new business and believe success will result. Future research could examine whether history, industry and geographic location matter in entrepreneurs’ perceptions as well as whether transition/emerging economies like Vietnam may have different views altogether about the two key concepts. |
| Keywords: | Creativity/innovation; entrepreneurship; economic conditions; emerging economy; Vietnam |
| JEL: | M13 O33 P21 P27 |
| Date: | 2015–12–21 |
| URL: | http://d.repec.org/n?u=RePEc:sol:wpaper:2013/222413&r=ent |
| By: | Tobias Ebert (Philipps-University of Marburg, Economic Geography and Location Analysis, Deutschhausstrasse 10, 35032 Marburg, Germany); Thomas Brenner (Philipps-University of Marburg, Economic Geography and Location Analysis, Deutschhausstrasse 10, 35032 Marburg, Germany); Udo Brixy (Institute of Employment Research (IAB), Nuremberg, Germany and Department of Geography, Ludwig-Maximilians University, Munich, Germany) |
| Abstract: | This paper provides evidence that the effect of agglomeration externalities on survival is moderated by the start-up’s innovative behavior. It is shown that localization externalities are prevalent particularly in non-high-tech environments and unfold a positive influence on survival for less innovative companies, while their highly innovative counterparts do not benefit or even suffer from spatial concentration. On the contrary, highly innovative high-tech start-ups benefit from a diverse economic structure which enhances their likelihood for survival by fostering the emergence of beneficial inter-industry spill-overs. |
| Keywords: | Firm survival, Innovation, Externalities |
| JEL: | D22 L26 O33 R11 |
| Date: | 2015–12–16 |
| URL: | http://d.repec.org/n?u=RePEc:pum:wpaper:2015-05&r=ent |
| By: | Josh Lerner; Antoinette Schoar; Stanislav Sokolinski; Karen Wilson |
| Abstract: | This paper examines investments made by 13 angel groups across 21 countries. We compare applicants just above and below the funding cut-off and find that these angel investors have a positive impact on the growth, performance, and survival of firms as well as their follow-on fundraising. The positive impact of angel financing is independent of the level of venture activity and entrepreneur friendliness in the country. But we find that the development stage and maturity of start ups that apply for angel funding (and those that are ultimately funded) is inversely correlated with the entrepreneurship friendliness of the country, which may reflect self-censoring by very early stage firms who do not expect to receive funding in these environments. |
| JEL: | G24 O31 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21808&r=ent |
| By: | Anissa Chaibi (IPAG Business School, Paris - GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis - CNRS - Centre National de la Recherche Scientifique); Adel Ben Youssef (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis - CNRS - Centre National de la Recherche Scientifique); Leila Peltier-Ben Aoun (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | This paper provides original empirical evidence on the causal links between e-skills, usage of Information and Communication Technologies (ICT) and firm's performance using a sample of Luxembourgian manufacturing and services firms. Firm performance is measured in terms of innovation (success of new projects settled). Our main findings are: (i) there's no relationship between the absorptive technology capacity of the firm (measured by ICT staff and Training) and the probability of the implementation of successful ICT projects, (ii) there is a positive effect of e-applications usage (ICT usage) on the probability of the implementation of successful new projects, and (iii) there is an asymmetric effect of usage of e-commerce and e-administration confirming findings of the recent literature |
| Keywords: | Innovative projects,Ordered models,Innovation,Usage of ICT,Depth of ICT adoption |
| Date: | 2015–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-01068225&r=ent |
| By: | Alberto Galasso; Mark Schankerman |
| Abstract: | This paper studies the causal impact of patents on subsequent innovation by the patent holder. The analysis is based on court invalidation of patents by the U.S. Court of Appeals for the Federal Circuit, and exploits the random allocation of judges to control for the endogeneity of the judicial decision. Patent invalidation leads to a 50 percent decrease in patenting by the patent holder, on average, but the impact depends critically on characteristics of the patentee and the competitive environment. The effect is entirely driven by small innovative firms in technology fields where they face many large incumbents. Invalidation of patents held by large firms does not change the intensity of their innovation but shifts the technological direction of their subsequent patenting. |
| JEL: | K41 L24 O31 O32 O34 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21769&r=ent |
| By: | Simplice Asongu (Yaoundé/Cameroun); Vanessa Tchamyou (Yaoundé/Cameroun) |
| Abstract: | Purpose - The paper assesses how entrepreneurship affects knowledge economy (KE) in Africa. Design/methodology/approach – Entrepreneurship is measured by indicators of starting, doing and ending business. The four dimensions of the World Bank’s index of KE are employed. Instrumental variable panel fixed effects are applied on a sampled of 53 African countries for the period 1996-2010. Findings –The following are some findings. First, creating an enabling environment for starting business can substantially boost most dimensions of KE. Second, doing business through mechanisms of trade globalisation has positive effects from sectors that are not ICT and High-tech oriented. Third, the time required to end business has negative effects on KE. Practical implications – Our findings confirm the narrative that the technology in African countries at the moment may be more imitative and adaptive for reverse-engineering in ICTs and high-tech products. Given the massive consumption of ICT and high-tech commodities in Africa, the continent has to start thinking of how to participate in the global value chain of producing what it consumes. Originality/value – This paper has a twofold motivation. First, given the ambitions of African countries of moving towards knowledge based economies, the line of inquiry is timely. Second, investigating the nexus may have substantial poverty mitigation and sustainable development implications. These entail inter alia: the development of technology with value-added services; enhancement of existing agricultural practices; promotion of conditions that are essential for competitiveness and adjustment of globalization challenges. |
| Keywords: | Entrepreneurship; Knowledge Economy; Development; Africa |
| JEL: | L59 O10 O30 O20 O55 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:agd:wpaper:15/044&r=ent |
| By: | De Marco, Filippo (Bocconi University); Wieladek, Tomasz (Bank of England) |
| Abstract: | We study the effect of changes to UK bank-specific capital requirements on small and medium-sized enterprises (SME) from 1999 to 2005. Following a 1% rise in capital requirements, SME asset growth (and investment) contracts by 3.5% to 6.9% (12%) in the first year of a new bank-firm relationship, but this effect declines over time. These results are robust to a number of different fixed effects specifications and measures of capital requirement changes that are orthogonal to balance sheet characteristics by construction. Banks with tight capital buffers are the most significant transmitters of this shock. Monetary policy only affects the asset growth of small bank borrowers, but has a similar impact on the same sectors as capital requirements. There is evidence that these instruments reinforce each other when tightened, but only for small banks. Firms that borrow from multiple banks and operate in sectors with alternative forms of finance are less (equally) affected by changes in capital requirements (monetary policy). |
| Keywords: | Capital requirements; firm-level data; SMEs; relationship lending; macroprudential and monetary policy |
| JEL: | G21 G28 |
| Date: | 2015–12–18 |
| URL: | http://d.repec.org/n?u=RePEc:boe:boeewp:0573&r=ent |
| By: | Jürgen Bierbaumer-Polly (WIFO); Werner Hölzl (WIFO) |
| Abstract: | We study the (macroeconomic) consistency of individual firm-level business tendency survey responses and take firm-level heterogeneity explicitly into account. Adding firm-level, industry- and region-specific structural characteristics allows controlling for additional microeconomic heterogeneity. The dataset we use are the business tendency survey micro data for Austrian manufacturing covering the time period 1996 to 2012. Our results show that firm-specific information embedded in the qualitative survey questions is relevant to understand aggregate business cycle dynamics. For example, the assessment of firms' order book levels, their current degree of capacity utilisation and their production expectations as well as obstacles in their production activities due to insufficient demand show evidence of a significant effect in explaining a firm's change in current production output. However, we do not find clear results with respect to firm size, nor do we find explanatory power of the industry affiliation of a firm and with respect to regional characteristics. We are able to identify heterogeneity in behaviour for cyclical up- and downswings as well as between large and small firms. |
| Keywords: | business cycle, business tendency surveys, firm-level expectations, ordered probit |
| Date: | 2016–12–16 |
| URL: | http://d.repec.org/n?u=RePEc:wfo:wpaper:y:2015:i:504&r=ent |
| By: | Gründler, Klaus |
| Abstract: | This paper investigates the causes of the "vanishing effect of finance" detected in recent studies. The results highlight that the negative effect of the financial system on growth is mainly driven by advanced economies, whereas finance is still beneficial for income increases in developing countries. The reason is that finance and growth are associated via a nonlinear relationship, which is due to a fundamental change in the transmission mechanism of finance across different levels of economic and financial development. In early stages of development, finance fosters entrepreneurship, education, and investment in physical capital. As the economies develop, this positive influence vanishes. The negative effect of finance is stronger in countries with sophisticated public education systems, low levels of income inequality, as well as low fertility rates, and in times with low factor productivity growth. |
| Keywords: | Economic Growth,Financial Sector,Panel Data |
| JEL: | F40 O16 O47 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:wuewwb:133&r=ent |