|
on Entrepreneurship |
| By: | Cumming, Douglas; Walz, Uwe; Werth, Jochen Christian |
| Abstract: | We investigate the career dynamics of high-tech entrepreneurs by analyzing the exit choice of entrepreneurs: to found another firm, to become dependently employed, or to act as a business angel. Our detailed data resting on the CrunchBase online database indicate that founders stick with entrepreneurship as a serial entrepreneur or as an angel investor only in cases where the founder (1) had experience either in founding other startups or working for a startup, (2) had a 'jack-of-all-trades' education, or (3) achieved substantial financial success upon a venture capital exit transaction. |
| Keywords: | entrepreneurship,entrepreneurial spawning,angel finance,venture capital,exit,systemically important financial institutions |
| JEL: | G24 G34 L26 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:safewp:122&r=ent |
| By: | Joan Farre-Mensa; Deepak Hegde; Alexander Ljungqvist |
| Abstract: | Motivated by concerns that the patent system is hindering innovation, particularly for small inventors, this study investigates the bright side of patents. We examine whether patents help startups grow and succeed using detailed micro data on all patent applications filed by startups at the U.S. Patent and Trademark Office (USPTO) since 2001 and approved or rejected before 2014. We leverage the fact that patent applications are assigned quasi-randomly to USPTO examiners and instrument for the probability that an application is approved with individual examiners’ historical approval rates. We find that patent approvals help startups create jobs, grow their sales, innovate, and reward their investors. Exogenous delays in the patent examination process significantly reduce firm growth, job creation, and innovation, even when a firm’s patent application is eventually approved. Our results suggest that patents act as a catalyst that sets startups on a growth path by facilitating their access to capital. Proposals for patent reform should consider these benefits of patents alongside their potential costs. |
| JEL: | D23 G24 L26 O34 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21959&r=ent |
| By: | Jean Cartelier (UP10 - Université Paris 10, Paris Ouest Nanterre La Défense) |
| Abstract: | The purpose of the paper is to o¤er a logical genesis of the di¤erenci- ation of agents in two classes: capitalist entrepreneurs and wage-earners. The model presented here does not follow the Classical (or Marxian) tra- dition (where the two opposed classes are the straight consequence of the concentration of the means of production in the hands of a limited fraction of people). It does not follow mainstream economists either (no di¤erence according to general competitive equilibrium or a di¤erence taken as given in labour economics in general). Models belonging to those traditions fail to reproduce a major stylised fact: wage-earners cannot be distinguished from entrepreneurs when they are in the market for ccommodities but they radically di¤er in the market for labouror in production (wage-earners do not produce for their own account but for that of entrepreneurs who get pro ts, not wages). Modern tentatives to deal with the di¤erenciation of agents (Mat- suyama for instance) explain it by a progressive di¤erenciation of the level of wealth up to a threshold which makes some agents able to accumulate and others not. We propose a di¤erent view based on the process of issuance of money. If a fraction of agents have not a direct access to that process they cannot act in the market for their own account. The alternatives they have are limited to autarky or to work for the account of those who have addi- tional alternatives due to their direct access to money (to be independent producers or entrepreneurs hiring wage-earners). The model makes explicit the necessary and su¢ cient conditions for the existence of an E-equilibrium in which co-exist heterogeneous agents (entrepreneurs and wage-earners) starting from a population homogeneous except for bank rationing. These reasonable conditions are: an e¢ cient monetary system, a su¢ cient gap between productivity of production in mass compared to other types and a possibility to induce wage-earners to work signi cantly more than they would as free producers. A non-Marxian notion of exploitation is suggested to conclude. |
| Date: | 2014–04–11 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-01285287&r=ent |
| By: | Eduard Braun (Abteilung für Volkswirtschaftslehre, Technische Universität Clausthal (Department of Economics, Technical University Clausthal)) |
| Abstract: | The enterprise is an historical phenomenon specific to capitalism. It is a fictional agent created by accounting and sanctioned by law. It is based on capital and its purpose is to yield monetary profit. Within the framework of the market economy, production is organized according to the decisions and actions of the aggregate of these artificially created agents. This paper demonstrates that the “entrepreneur” as used in economic theory is nothing but a personification of the enterprise. In the most renowned economic theories of entrepreneurship, the entrepreneurs are supposed to be in possession of the resources they employ. Yet the functions which these theories ascribe to the entrepreneurs implicitly presuppose that the latter not only possess resources, but that they actually own them. Without capital, which grants the power to obtain property rights in resources, entrepreneurs would not be able to bear the losses that come along with the entrepreneurial functions. The theories violate their own definitions by changing their object from a “pure” and property-less entrepreneur to a capital-owning agent. These theories can be reinterpreted, therefore, as applying not to the pure entrepreneur but to the capital-based enterprise. They then become theories of how and according to which principles enterprises organize the production process in capitalism. In contrast to the theoretical construct of the entrepreneur, enterprises are even present, though only implicitly, in neoclassical equilibrium analysis. They provide the setting of optimal decision making and therein constitute the tacit rationale of the notorious assumptions of complete foresight and perfect rationality. |
| Keywords: | Theory of the entrepreneur; Capitalist enterprises; Equilibrium |
| JEL: | D50 L26 P12 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:tuc:tucewp:0016&r=ent |
| By: | Ufuk Akcigit; Harun Alp; Michael Peters |
| Abstract: | Firm dynamics in poor countries show striking differences to those of rich countries. While few firms indeed experience growth as they age, most firms are simply stagnant in that they neither exit nor expand. We interpret this fact as a lack of selection, whereby producers with little growth potential survive because innovative entrepreneurs do not expand enough to force them out of the market. To explain these differences, we develop a theory whereby firms require managerial inputs for production and countries differ in their managerial delegation possibilities. If delegation of managerial tasks to outside managers is difficult in poor countries, entrepreneurs are forced to rely on their own time to supply managerial services. Improvements in the efficiency of delegation will raise the returns to growing large, induce innovative firms to expand, and thereby force stagnant entrepreneurs out of the market. We prove the existence and uniqueness of the dynamic equilibrium and show analytically how the degree of selection depends on some of the key structural parameters. To discipline the quantitative importance of this mechanism, we calibrate our model to micro data from the US and India. Differences in the efficiency of managerial delegation can explain an important fraction of the differences in plants' life-cycles. |
| JEL: | O31 O38 O40 |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21905&r=ent |
| By: | Hasan, Iftekhar; Kobeissi, Nada; Wang, Haizhi; Zhou, Mingming |
| Abstract: | This paper provides an empirical examination of the regional banking structures in China and their effects on entrepreneurial activity. Using a panel of 27 provinces and four directly controlled municipalities from 1997 through 2008, we find that the presence of large banking institutions negatively correlates with small business development in local markets and that this negative relation is driven mainly by participation of large banks in the short-term loan market. Rural banking institutions, in contrast, are found to promote regional entrepreneurial activity. Moreover, large state banks facilitate small business development in concentrated markets. When we interact measures of banking financing by state banks and rural banking institutions with a set of provincial level marketization indexes, we find that extensive marketization, factor market development, and sophistication of legal frameworks mitigate the negative effect of large state banks on small business development. In provinces with advanced market development, efficient factor markets, and favorable institutional settings, the positive effect of rural banking institutions on small business growth is even stronger. Finally, we present evidence that banks do a better job of promoting regional entrepreneurship when it occurs in conjunction with policies to foster innovation activity and assure protection of intellectual property rights. |
| Keywords: | banking structure, marketization, small business development, China |
| JEL: | G21 O16 P23 P25 |
| Date: | 2015–03–27 |
| URL: | http://d.repec.org/n?u=RePEc:bof:bofitp:urn:nbn:fi:bof-201504131154&r=ent |
| By: | McKenzie, David (World Bank); Woodruff, Christopher (University of Warwick) |
| Abstract: | Management has a large effect on the productivity of large firms. But does management matter in micro and small firms, where the majority of the labor force in developing countries works? We develop 26 questions that measure business practices in marketing, stock-keeping, record-keeping, and financial planning. These questions have been administered in surveys in Bangladesh, Chile, Ghana, Kenya, Mexico, Nigeria and Sri Lanka. We show that variation in business practices explains as much of the variation in outcomes – sales, profits and labor productivity and TFP – in microenterprises as in larger enterprises. Panel data from three countries indicate that better business practices predict higher survival rates and faster sales growth. The association of business practices with firm outcomes is robust to including numerous measures of the owner’s human capital. We find that owners with higher human capital, children of entrepreneurs, and firms with employees employ better business practices. |
| Keywords: | business practices; small enterprises; productivity; management JEL Classification: O12; L26; M20; O17; M53. |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:cge:wacage:265&r=ent |
| By: | Carlino, Gerald; Kerr, William R. |
| Abstract: | This paper reviews academic research on the connections between agglomeration and innovation. We first describe the conceptual distinctions between invention and innovation. We then discuss how these factors are frequently measured in the data and note some resulting empirical regularities. Innovative activity tends to be more concentrated than industrial activity, and we discuss important findings from the literature about why this is so. We highlight the traits of cities (e.g., size, industrial diversity) that theoretical and empirical work link to innovation, and we discuss factors that help sustain these features (e.g., the localization of entrepreneurial finance). |
| Keywords: | agglomeration, clusters, innovation, invention, entrepreneurship |
| JEL: | J2 J6 L1 L2 L6 O3 R1 R3 |
| Date: | 2015–12–10 |
| URL: | http://d.repec.org/n?u=RePEc:bof:bofrdp:urn:nbn:fi:bof-201512111472&r=ent |
| By: | Kerr, William R.; Nanda, Ramana |
| Abstract: | We review the recent literature on the financing of innovation, inclusive of large companies and new startups. This research strand has been very active over the past five years, generating important new findings, questioning some long-held beliefs, and creating its own puzzles. Our review outlines the growing body of work that documents a role for debt financing related to innovation. We highlight the new literature on learning and experimentation across multi-stage innovation projects and how this impacts optimal financing design. We further highlight the strong interaction between financing choices for innovation and changing external conditions, especially reduced experimentation costs. |
| Keywords: | finance, innovation, entrepreneurship, banks, venture capital, experimentation |
| JEL: | G21 G24 L26 M13 O31 O32 |
| Date: | 2015–12–11 |
| URL: | http://d.repec.org/n?u=RePEc:bof:bofrdp:urn:nbn:fi:bof-201512141480&r=ent |
| By: | Asian Development Bank (ADB); Asian Development Bank (ADB) (Sustainable Development and Climate Change Department, ADB); Asian Development Bank (ADB) (Sustainable Development and Climate Change Department, ADB); Asian Development Bank (ADB) |
| Abstract: | The Asia SME Finance Monitor 2014 is the knowledge sharing product on small and medium-sized enterprises (SMEs) in Asia and the Pacific, specially focusing on SME access to finance. This publication reviews various country aspects of SME finance covering the banking sector, nonbank sector, and capital markets. It is expected to support evidence-based policy making and regulations on SME finance in the region. |
| Keywords: | small and medium enterprise, SME, SME finance, micro SME, access to finance, inclusive finance, venture capital |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:asd:wpaper:rpt157575-2&r=ent |