nep-ent New Economics Papers
on Entrepreneurship
Issue of 2016‒05‒08
eighteen papers chosen by
Marcus Dejardin
Université de Namur

  1. Entrepreneurial Choices of Initial Human Capital Endowments and New Venture Success By Vera Rocha; Mirjam van Praag; Timothy B. Folta; Anabela Carneiro
  2. Historical Shocks and Persistence of Economic Activity: Evidence from a Unique Natural Experiment By Michael Fritsch; Alina Sorgner; Michael Wyrwich; Evguenii Zazdravnykh
  3. Policy instruments to improve MSMEs access to external financing in developing countries: A survey By Modeste Dayé; Romain Houssa; Paul Reding
  4. Finance and Demand for Skill : Evidence from Uganda By Beck, T.H.L.; Homanen, M.; Uras, Burak
  5. Financial Literacy and Self-employment By Aida Cumurovic; Walter Hyll
  6. “Innovation, heterogeneous firms, and the region” By Enrique López-Bazo; Elisabet Motellón
  7. Impacts of Self-efficacy on Perceived Feasibility and Entrepreneurial Intentions: Empirical Evidence from China By Peng, Yan-ling; Kong, Rong; Turvey, Calum G.
  8. How to Catch a Unicorn: An exploration of the universe of tech companies with high market capitalisation By Jean Paul Simon
  9. Entrepreneurial skills and wage employment By Aleksander Kucel; Montserrat Vilalta-Bufí
  10. Bank Capital Pressures, Loan Substitutability, and Nonfinancial Employment By Lee, Seung Jung; Stebunovs, Viktors
  11. The catch-22 of external validity in the context of constraints to firm growth By Gregory Fischer; Dean Karlan
  12. Peer-to-peer lending and financial innovation in the United Kingdom - Ulrich Atz and David Bholat By Atz, Ulrich; Bholat, David
  13. Barriers to Environmental Innovation in SMEs: Empirical Evidence from French Firms By Amandine Pinget; Rachel Bocquet; Caroline Mothe
  14. Banking Consolidation and Small Firm Financing for Research and Development By Chang, Andrew C.
  15. Global Entrepreneurship Monitor: reporte regional del Biobío 2014-2015 By Adriana Abarca Montero; Jorge Espinoza Benavides; Vesna Mandakovic; Patricio Rojas Quezada; Claudia Yáñez Valdés
  16. Integrating SMEs into Global Value Chains: Challenges and Policy Actions in Asia By Asian Development Bank (ADB); Asian Development Bank (ADB); Asian Development Bank (ADB); Asian Development Bank (ADB)
  17. Entrepreneurial University Culture: The Clash of Values And Resistance to Change By Gerasim A. Mkrtychyan
  18. Informations- und Datenquellen zu den Finanzierungsstrukturen mittelständischer Unternehmen By Pahnke, André

  1. By: Vera Rocha (Copenhagen Business School, Denmark); Mirjam van Praag (Copenhagen Business School, Denmark); Timothy B. Folta (University of Connecticut, United States); Anabela Carneiro (University of Porto, Portugal)
    Abstract: The founder (team)’s human capital is a vital determinant of future firm performance. This is a stylized fact. Less is known about the effect of the human capital of the initial workforce hired by the founder(s). We study the performance consequences of a founder’s choice of the initial workforce’s human capital (quantity and quality), besides the human capital of the founder(s). The analysis is based on matched employer-employee data and covers about 5,300 startups in manufacturing industries founded by individuals coming from employment between 1992 and 2007. We acknowledge that initial hiring decisions are endogenous and correlated with the human capital of the founders and the ownership structure of startups (single founder versus team of founders). Given the stickiness of initial choices, human capital decisions at entry turn out to be a close to irreversible matter with significant implications for post-entry survival and growth of the firm.
    Keywords: Human capital; entrepreneurship; startups; firm performance
    JEL: J24 L26 M13
    Date: 2016–04–22
  2. By: Michael Fritsch; Alina Sorgner; Michael Wyrwich; Evguenii Zazdravnykh
    Abstract: This paper investigates the persistence of entrepreneurship in the region of Kaliningrad between 1925 and 2010. During this time period the area experienced a number of extremely disruptive shocks including; devastation caused by World War II, a nearly complete replacement of the native German population by Soviets, and 45 years under an antientrepreneurial socialist economic regime followed by a shock-type transition to a market economy. Nevertheless, we find a surprisingly high level of persistence of industry-specific self-employment rates in the districts of the Kaliningrad region. Our analysis suggests that persistence of entrepreneurship is higher in regions with a history of successful entrepreneurship. That is, in regions where a specific industry was particularly efficient and entrepreneurial activity was especially pronounced.
    Keywords: Entrepreneurship, regional culture, persistence
    JEL: L26 N94 P25 P5
    Date: 2016–04
  3. By: Modeste Dayé (CRED, University of Namur); Romain Houssa (CRED, University of Namur); Paul Reding (CRED, University of Namur)
    Abstract: This paper presents the salient factors that characterize important aspects of firms’ access to external finance in developing countries. Cross-country data show that micro, small and medium-sized enterprises (MSMEs) face more external financing constraints in Low Income Countries than in their rich counterparts. To explain this fact we distinguish both demand and supply factors underlying external financing constraints. We then argue for a catalytic role that development cooperation can play in alleviating these constraints. We present an illustration based on the policy instruments that have been used by development cooperation. Our particular interest is to document how well the Belgium Development Cooperation support of MSMEs compares to that provided by four other European countries: France, Germany, The Netherlands, and Sweden. We conclude with a discussion on the critical policy issues as regards the effectiveness of these interventions.
    Keywords: MSME, external finance, DFI, information asymmetry
    JEL: G23 O16 Y10
    Date: 2015–06
  4. By: Beck, T.H.L. (Tilburg University, Center For Economic Research); Homanen, M.; Uras, Burak (Tilburg University, Center For Economic Research)
    Abstract: We explore the empirical interaction between firm growth, financing constraints and job creation. Using a novel small business survey from Uganda, we find that the extent to which small businesses expand skilled employment as their sales and profits increase depends significantly on access to external funding. The results are robust to the inclusion of various firm level controls, region and sector fixed effects. We address reverse causality concerns by providing empirical evidence using planned hiring regression specifications.
    Keywords: financial access; trained and experienced employment; uganda
    JEL: O15 O16 O55
    Date: 2016
  5. By: Aida Cumurovic; Walter Hyll
    Abstract: In this paper, we study the relationship between financial literacy and self-employment. We use established financial knowledge-based questions to measure financial literacy levels. The analysis shows a highly significant correlation between selfemployment and financial literacy scores. To investigate the impact of financial literacy on being self-employed, we apply instrumental variable techniques based on information on economic education before entering the labour market and education of parents. Our results reveal that financial literacy positively affects the probability of being self-employed. As financial literacy is acquirable, findings suggest that entrepreneurial activities may be raised via enhancing financial knowledge.
    Keywords: financial literacy, financial sophistication, self-employment
    JEL: A20 D03 J23 J24
    Date: 2016–03
  6. By: Enrique López-Bazo (AQR Research Group-IREA, University of Barcelona); Elisabet Motellón (AQR Research Group-IREA, University of Barcelona. Universitat Oberta de Catalunya)
    Abstract: This paper investigates the role of regional determinants on innovation performance controlling by the firm’s absorptive capacity and other sources of firm heterogeneity. The findings for a sample of firms in Spain support the hypothesis that regional determinants matter, though their role is subtler than the one frequently assumed. Rather than a direct influence on firm’s innovation, the regional context moderates the effect of internal determinants. In the case of product innovation the most important mechanism of interaction seems to be operating through cooperation in innovation, whereas for process innovation it seems to be through highly skilled labour.
    Keywords: product innovation, process innovation, firm, multilevel modelling, Spanish regions JEL classification: D21; O31; R10; R15
    Date: 2016–04
  7. By: Peng, Yan-ling; Kong, Rong; Turvey, Calum G.
    Abstract: This paper presents a structural equation model of entrepreneurial intentions as influenced by self-efficacy and perceived feasibility. In this paper self-efficacy refers to a kind of subjective perception and belief that the farmers complete the entrepreneurial activities on the basis of their capacity defined as entrepreneurial self-efficacy, which measured by five dimensions including resource acquisition, opportunity recognition, interpersonal relations, risk management, innovation management. The main findings are that most farmers appear to have a remarkable degree of entrepreneurial intentions; besides, self-efficacy has a significant and positive impact on farm households’ entrepreneurial intentions, and the effect is 0.669; furthermore, perceived feasibility of farmers play a significant role on entrepreneurial intentions; finally, the perceived feasibility of farmers has a partial mediating effect between entrepreneurial self-efficacy and the entrepreneurial intentions.
    Keywords: Agricultural and Food Policy,
    Date: 2015
  8. By: Jean Paul Simon
    Abstract: Technology companies with high market capitalisation (often called unicorns) have been receiving a lot of attention and media coverage recently. In general, unicorns are IT-centric (software mostly, but also hardware). They are often rather young global companies that match unsatisfied demand with supply through the production (which can easily be scaled up) of innovative and usually affordable services and products. These are usually part of the mobile internet wave, and rely on connectivity (high speed networks, mobile and fixed), new devices (smartphones, tablets, phablets…) and the opportunities these bring. They are grounded in network effects, and demand-side economies of scale and scope. They depend on a strong favourable business environment, developing organically and building on fast expanding markets (emerging economies, middle classes). They are Venture Capital-dependent and the competition for funding can generate impressive (i.e. inflated) valuations. These companies can be disruptive for other sectors and firms. This report aims to document the phenomenon by investigating a qualitative sample of 30 companies that have recently been valued above the one billion dollar threshold. It identifies some of their characteristics and the lessons to be learnt. The report has two parts: Part I contains the overall findings of the investigation and some suggestions for policy makers. Part II contains a detailed account of the case studies on which the investigation is based. They are published as separate documents
    Keywords: IT industry, technology, innovation, market capitalisation
    JEL: L00 L1 L2 L8 O3
    Date: 2016–04
  9. By: Aleksander Kucel (Universitat de Barcelona); Montserrat Vilalta-Bufí (Universitat de Barcelona)
    Abstract: Promotion of entrepreneurial skills among the population is often considered as an adequate policy to enhance job creation and economic growth. However, neither the definition of entrepreneurial skills, nor the costs and benefits of such a policy are clear. Our aim is to check whether the benefits of entrepreneurial skills extent beyond self-employment. We use a sample of higher education graduates from Spain, from the year 2000 interviewed in 2005 (REFLEX survey). We denote entrepreneurial skills as those competencies that enhance the likelihood of self-employment. Then we analyze whether they are rewarded in wage employment. We find that alertness to new opportunities, ability to mobilize others and knowledge of other fields are the competencies that enhance self-employment in Spain. Yet, these skills are not rewarded in a salaried job. Therefore, benefits of policies fostering entrepreneurial skills do not extend to wage employment in Spain.
    Keywords: entrepreneurial skills, wage returns, wage employment, self-employment, competencies
    JEL: J24 J31 J43
    Date: 2016
  10. By: Lee, Seung Jung; Stebunovs, Viktors
    Abstract: We exploit the cross-state, cross-time variation in bank tangible capital ratios-brought about by bank branch deregulation on a state-by-state basis-to identify the effects of bank capital pressures on employment and firm dynamics during two waves of changes in bank capital regulation. We show that stronger capital pressures temporarily slowed down growth in employment in industries that depend on external finance, retarding growth in the average size of firms rather than in the number of firms. Such effects were particularly strong for smaller firms that may not have had access to national capital and bank loan markets. Our findings indicate that a tightening of capital requirements may have significant real effects, in part because of the lack of substitutes for bank loans.
    Keywords: Bank capital ratios ; bank capital regulation ; loan substitutability ; employment ; firm dynamics
    JEL: G21 G28 G30 J20 L25
    Date: 2016–04
  11. By: Gregory Fischer; Dean Karlan
    Abstract: We document the presence of multiple and varied constraints to small and medium firm growth. This presents both a practical problem for business training programs and a challenge to academic economists trying to identify mechanisms though which these programs may affect outcomes. External validity needs theory. This pushes researchers to narrowly defined and highly selected sample frames, which limits the potential for clear, generalizable policy prescriptions. Ultimately, larger samples, multi-arm evaluations, process documentation, and narrowly-focused, theory-supported empirical work are all needed, but the complexity of the problem limits what we learn from any single study.
    JEL: J1
    Date: 2015–05
  12. By: Atz, Ulrich (Bank of England); Bholat, David (Bank of England)
    Abstract: Peer-to-peer (P2P) lending — direct lending between lenders and borrowers online outside traditional financial intermediaries like banks — first emerged in the United Kingdom and the world with the launch of Zopa in 2005. Our paper provides a quantitative analysis of nearly 14 million loan agreements. We lay bare the history of P2P lending from its beginning, showing the regional geography of P2P lending in the United Kingdom. We suggest that the history of P2P lending can shed light on financial innovation in general. We base our conclusions on four semi-structured interviews with the founders of the three most significant UK P2P platforms (Zopa, RateSetter, and Funding Circle).
    Keywords: Peer-to-peer lending; crowdfunding; innovation; fintech; big data
    JEL: G23 L26 O30
    Date: 2016–04–29
  13. By: Amandine Pinget (IREGE - Institut de Recherche en Gestion et en Economie - USMB [Université de Savoie] [Université de Chambéry] - Université Savoie Mont Blanc); Rachel Bocquet (IREGE - Institut de Recherche en Gestion et en Economie - USMB [Université de Savoie] [Université de Chambéry] - Université Savoie Mont Blanc); Caroline Mothe (IREGE - Institut de Recherche en Gestion et en Economie - USMB [Université de Savoie] [Université de Chambéry] - Université Savoie Mont Blanc)
    Abstract: Recent literature explores the determinants of environmental innovations (EI) but rarely addresses obstacles to these innovations. To our knowledge, no previous study accounts for antecedents of EI to explore the various perceived barriers to EI for small and medium-sized enterprises (SMEs). Noting the importance of SMEs in European economies, this article identifies the extent to which SMEs perceive barriers to environmental innovations, considering their type, number, and intensity. With a merged data set of 435 French SMEs, we investigate different perceptions of environmentally innovative SMEs, compared with those of technologically innovative SMEs and non-innovative ones, using a multiple treatment model that integrates the antecedents. We thereby analyze SME CEO's perceptions of barriers to EI. The barriers are not only more numerous but also more important for SMEs that engage in environmental innovation activity compared with those that have introduced only technological innovation or those that do not undertake any innovation activity.
    Keywords: SME,Multiple treatment model,CEO perceptions,Antecedents,Barriers,Environmental innovation
    Date: 2015
  14. By: Chang, Andrew C.
    Abstract: This paper examines the effect of increased market concentration of the banking industry caused by the Riegle-Neal Interstate Banking and Branching Efficiency Act (IBBEA) on the availability of finance for small firms engaged in research and development (R&D). I measure the financing decisions of these small firms using a balanced panel of Small Business Innovation Research (SBIR) applications. Using difference-in-differences, I find IBBEA decreased the supply of finance for small R&D firms. This effect is larger for late adopters of IBBEA, which tended to be states with stronger small banking sectors pre-IBBEA.
    Keywords: Banking Deregulation ; IBBEA ; Interstate Bank Branching Deregulation ; Market Concentration ; Research and Development ; Riegle-Neal ; Small Business Innovation Research
    JEL: G21 G28 G39 O30
    Date: 2016–04–08
  15. By: Adriana Abarca Montero; Jorge Espinoza Benavides; Vesna Mandakovic; Patricio Rojas Quezada; Claudia Yáñez Valdés (School of Business and Economics, Universidad del Desarrollo)
    Keywords: GEM, Entrepreneurship, Concepción (Chile)
    Date: 2016
  16. 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: Globalized production networks, or global value chains, provide an opportunity for small and medium-sized enterprises (SMEs) to upscale their business models and to grow across borders. This process can enhance SME competitiveness, create more jobs, and promote inclusive growth in developing Asia. The Asian Development Bank and the Asian Development Bank Institute recognize the importance of integrating SMEs into global value chains. To provide pathways for such integration, this study examines ways of encouraging participation in value chains, and explores policy solutions to address the financial and nonfinancial barriers faced by these enterprises.
    Keywords: small and medium enterprise; global value chains; sme finance; production networks; supply chain finance; trade finance; SME internationalization
    Date: 2015–10
  17. By: Gerasim A. Mkrtychyan (National Research University Higher School of Economics)
    Abstract: This paper introduces an original methodology for assessing the organizational culture of an entrepreneurial university. Methods for the assessment of values in research activity and of resistance to organizational change have been developed. The study of values and characteristics of resistance to change was conducted on the academic staff of the faculties of Economics and Management at the Nizhny Novgorod campus of the Higher School of Economics. It was found that the campus professors' academic orientation in research activity dominates their entrepreneurial orientation and that the strength of this influence differs amongst them, depending on their values. Additionally, greatest resistance in professors is caused by changes in human resources policy and management; this resistance is of moderate intensity and passive. The study confirms a positive relationship between the academic orientation of the "motivation" and "reward" values and the intensity of resistance to change in personnel policy and management.
    Keywords: entrepreneurial university, organizational culture, academic values, entrepreneurial values, resistance to change.
    JEL: M14
    Date: 2016
  18. By: Pahnke, André
    Abstract: Bei der Diskussion um die Finanzierung bzw. Eigenkapitalausstattung mittelständischer Unternehmen rücken gegenwärtig die Möglichkeiten zur Fremdkapitalaufnahme, neue Finanzierungsformen und damit die sich verändernden Rahmenbedingungen bei der Kreditvergabe an kleine und mittlere Unternehmen in den Vordergrund. Verschiedenste Institutionen veröffentlichen in diesem Zusammenhang, teilweise regelmäßig, entsprechende Studienergebnisse und Kennzahlen(-berichte). Der vorliegende Beitrag gibt daher einen kurzen Überblick über die Informations- und Datenquellen, die in den letzten Jahren häufig zur Erklärung des Finanzierungsverhaltens bzw. der Finanzierungsstrukturen mittelständischer Unternehmen herangezogen wurden.
    Abstract: The ongoing discussing on financing and the equity base of small and medium-sized enterprises (SMEs) in Germany increasingly focuses on potential sources of debt financing, new methods of funding, and thereby on the general framework for bank borrowings to SMEs. In this context, various institutions publish relevant studies, reports, and key figures - to some extent on a regular basis. Therefore, the present paper provides a short overview of information and data sources that have been used in recent years to describe and explain the financing behaviour and financial structures of German SMEs.
    Keywords: Daten,Finanzierung,Mittelstand,KMU,Data,Finance,SME
    JEL: C80 G32
    Date: 2016

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