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on Entrepreneurship |
| By: | Hashmat U. Khan (Department of Economics, Carleton University); Pythagoras Petratos (Saïd Business School, Oxford University) |
| Abstract: | We consider US Venture Capital (VC) activity as a measure of entrepreneurship and study its relationship with the business cycle. This measure addresses some biases in alternative measures such as self-employment and business ownership that have been considered in previous literature. Despite the well-known volatility in VC activity, it remains an important source of funding for entrepreneurs engaging in innovative business creation. We document key stylized facts for VC entry (seed and start-up stage) and VC exit (late stage) at the aggregate and sectoral level. VC entry is more strongly correlated and is contemporaneous with the business cycle while VC exit lags the cycle by two quarters. There is strong evidence for a bi-directional causality between entrepreneurship and economic activity. A positive shock to VC activity has a positive effect on real GDP. Our findings can help inform policies designed to support entrepreneurship. |
| Keywords: | Entrepreneurship, Venture Capital, Business Cycles |
| JEL: | E32 G24 L26 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:car:carecp:16-09&r=ent |
| By: | Astebro , Thomas B; Braguinsky , Serguey; Braunerhjelm , Pontus; Broström , Anders |
| Abstract: | Should society encourage scientists at universities to become entrepreneurs? Using data on U.S. university-employed scientists with a Ph.D. in STEM disciplines leaving their university to become entrepreneurs during 1993-2006 and similar data from Sweden we show evidence suggesting that owning your idea outright (the “Professor’s Privilege”) rather than sharing ownership with your university employer (the Bayh-Dole regime) is strongly positively associated with the rate of academic entrepreneurship but not with apparent economic gain for the entrepreneur. Further analysis show that in both countries there is too much entry into entrepreneurship, and selection from the bottom of the ability distribution among scientists. Targeted policies aimed at screening entrepreneurial decisions by younger, tenure-track academics may therefore produce more benefits for society than general incentives. |
| Keywords: | Academic entrepreneurship; economic incentives; Bayh-Dole; Professor’s Privilege |
| JEL: | J20 L26 N32 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:heccah:1118&r=ent |
| By: | Markussen, Simen (Ragnar Frisch Centre for Economic Research); Røed, Knut (Ragnar Frisch Centre for Economic Research) |
| Abstract: | In virtually all industrialized countries, women are underrepresented in entrepreneurship, and the gender gap exhibits a remarkable persistence. We examine one particular source of persistence, namely the prevalence of gendered networks and associated peer effects. We study how early career entrepreneurship is affected by existing entrepreneurship among neighbors, family members, and recent schoolmates. Based on an instrumental variables strategy, we identify strong peer effects. While men are more influenced by other men, women are more influenced by other women. We estimate that differences between male and female peer groups explain approximately half of the gender gap in early career entrepreneurship. |
| Keywords: | early career entrepreneurship, peer effects, gender gap, instrumental variables |
| JEL: | L26 M13 J16 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9984&r=ent |
| By: | Colombelli, Alessandra; Quatraro, Francesco (University of Turin) |
| Abstract: | There is wide consensus about the importance of green technologies for achieving superior economic and environmental performances. The literature on their determinants has neglected the creation of green start-ups as a channel to bring about green technologies in the market. Drawing upon the knowledge spillovers theory of entrepreneurship, we test the relevance of local knowledge stocks, distinguishing between clean and dirty stocks, for the creation of green start-ups. Moreover, the effects of the technological composition of local stocks is investigated, by focusing on technological variety, both related and unrelated, as well as on coherence. Consistently with recent literature, green start-ups are associated to higher levels of variety, pointing to the relevance of diverse and heterogeneous knowledge sources, but in related and complementary technological fields. |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:uto:labeco:201604&r=ent |
| By: | Astebro, Thomas B; Yong, Kevyn |
| Abstract: | We use creativity theory to analyze the effects of occupational job variety and industry variety on invention quality and entrepreneurial earnings. We test our ideas with survey data from 770 inventor-entrepreneurs who commercialized their own inventions. Results suggest that occupational and industry variety substitute for each other in positively affecting invention quality whereas a lack of industry variety is associated with greater entrepreneurial earnings. Results are consistent with the idea that high levels of both occupational and industry variety enables the generation and discovery of inventions, but these ideas are usually not technically feasible or financially viable. |
| Keywords: | Creativity; Prior Employment Variety; Jack-of-all-Trades; Invention Quality; Entrepreneurial Earnings |
| JEL: | L26 |
| Date: | 2015–12–31 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:heccah:1129&r=ent |
| By: | Markus Brueckner; Tomoo Kikuchi; George Vachadze |
| Abstract: | We study an overlapping generations model where ex-ante identical agents make an occupational choice under a borrowing constraint. Indivisible investment gives rise to entrepreneurial rents and does not allow everyone to become an entrepreneur. Competition forces entrepreneurs to save more than workers. The model predicts that growth in national income has a positive effect on domestic saving rates in poor countries but a negative effect in rich countries. Borrowing constraints increase domestic saving rates as well as the response of domestic saving to growth in income. These predictions are supported by empirical evidence based on panel data that covers 130 countries during 1960-2007. |
| Keywords: | overlapping generations, entrepreneurship, occupational choice, saving, borrowing constraints |
| JEL: | E2 O1 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:acb:cbeeco:2016-636&r=ent |
| By: | Priscila Ferreira (Universidade do Minho, NIMA); George Saridakis (SBRC, Kingston Business School, Kingston University) |
| Abstract: | We examine how the impact of the recent crises on firm performance, in terms of risk of shutdown, differed depending on firm size. We use a panel of linked employer-employee data covering the period 2002-2012 and investigate whether the effect of firm size varies over the business cycle and with the type of shock associated with two phases of economic contraction: the Financial Crisis and the Sovereign Debt Crisis. Our results show that smaller firms are more likely to shutdown than larger firms, with micro firms being nearly three times more likely to shutdown than large firms. However, within each size band, micro firms are found to experience at least similar rates of survival during the two crises, relative to large firms, to those observed in the pre-crisis period; while medium sized firms are found to be more vulnerable during the financial crisis period, but show more resilience during the sovereign debt crisis. Overall, however, the results suggest that during the sovereign debt crisis firms faced higher probability of closing than during the financial crisis. |
| Keywords: | firm survival, SMEs, financial crisis, sovereign debt crisis, Portugal |
| JEL: | C33 J21 L25 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:nim:nimawp:61/2016&r=ent |
| By: | Lokman, Azarahiah; Masih, Mansur |
| Abstract: | SMEs have been recognized as an important engine for driving economic growth and job creation both in developed and developing countries. However, there is concern that financial constraint is impeding growth in these SMEs. Bank is a major source of SME financing in most countries. In Malaysia, banks provide 90% of total financing to SMEs (SME Annual Report, 2014/15). Focusing on three aspects; the macroeconomic environment, demand for large enterprise loans and property prices, this study aims to find out the effect of these factors on banks’ willingness to lend to SMEs and which of these three is most influential. Using ARDL approach applied to Malaysian quarterly data for the period from 2003Q2 to 2015Q4, the study finds macroeconomic environment significantly influences banks’ willingness to lend to SMEs. Thus, policy makers have a tall order of creating and maintaining a healthy macroeconomic environment in an attempt to improve banks’ willingness to lend to SMEs. The finding that property prices also play a role in influencing banks’ willingness to lend to SMEs appears to suggest banks’ dependency on property as collateral for SME financing. Thus, policy makers should continue to develop and improve SME financing schemes that encourages banks’ participation in financing SMEs with potential but lacks collateral. |
| Keywords: | SME lending, SME financing, bank lending, ARDL |
| JEL: | C22 C58 G21 |
| Date: | 2016–06–19 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:72113&r=ent |
| By: | Geoffrey G. Jones (Harvard Business School, General Management Unit); Andrew Spadafora (Harvard Business School) |
| Abstract: | Between the 1970s and the 2000s Costa Rica became established as the world's leading ecotourism destination. This working paper suggests that although Costa Rica benefited from biodiversity and a pleasant climate, the country's preeminence in ecotourism requires more than a natural resource endowment explanation. The paper argues that the ecotourism industry was a co-creation of the public, private, and tertiary sectors. While the role of the government and conservation NGOs is acknowledged in the existing literature, this study draws attention to the critical role of small entrepreneurs. Making extensive use of oral history, the working paper demonstrates the role of tour companies in drawing affluent Western ecotourists to the country, and of the creators of ecolodges and other forms of accommodation in providing them with somewhere to stay. These entrepreneurs, many of them expatriate Americans, helped ensure that formally protected areas remained sustainable parks and reserves, by providing revenues, education in conservation to tourists, and community development and jobs. Clustering created positive externalities for new entrepreneurs to enter the industry, who could also learn from knowledge spillovers. There were downsides to the new industry, however. The creation of the national image of a natural paradise enabled many businesses which were not environmentally sustainable to free-ride on the green image. Even values-driven ecotourism entrepreneurs faced questions about their impact as they expanded the scale of their operations. While scaling was a sign of success and delivered many benefits to Costa Rica, there were distinct drawbacks from a sustainability perspective. |
| Keywords: | eco-tourism; Costa Rica; entrepreneurship; sustainability |
| JEL: | N56 N86 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:hbs:wpaper:16-136&r=ent |