nep-ent New Economics Papers
on Entrepreneurship
Issue of 2016‒07‒09
eight papers chosen by
Marcus Dejardin
Université de Namur

  1. Entrepreneurial Experimentation: A key function in Entrepreneurial Systems of Innovation By Lindholm-Dahlstrand, Asa; Andersson, Martin; Carlsson, Bo
  2. Growing by learning: firm-level evidence on the size-productivity nexus By Enrique Moral-Benito
  3. Post-reorganization survival: a semi-parametric and non-parametric analysis of firm characteristics By Lara Abdel Fattah; Sylvain Barthélémy; Nadine Levratto; Benjamin Trempont
  4. Does Internal and External Research and Development Affect Innovation of Small and Medium-Sized Enterprises? Evidence from India and Pakistan By Rehman, Naqeeb Ur
  5. The Impact of Finance on the Performance of Thai Manufacturing Small and Medium-Sized Enterprises By Amornkitvikai, Yot; Harvie, Charles
  6. Situation Analyses Business Transfer Ecosystem in France: Situation Analysis in 2015 By Erno Tornikoski; Christophe Bonnet; Bérangère Deschamps; Gilles Lecointre; Mickael Buffart
  7. North Africa - Working paper - The Role of Nascent Entrepreneurship in Driving Inclusive Economic Growth in North Africa By AfDB AfDB
  8. Policy instruments to improve MSMEs access to external financing in developing countries: A survey By Modeste Dayé; Romain Houssa; Paul Reding

  1. By: Lindholm-Dahlstrand, Asa (CIRCLE, Lund University); Andersson, Martin (CIRCLE, Lund University); Carlsson, Bo (CIRCLE, Lund University)
    Abstract: There is a need for a conceptual approach that, with reference to explicit micro-level mechanisms and processes of industrial dynamics, articulates the role and function of entrepreneurial experimentation in innovation systems. This paper develops the concept of ‘entrepreneurial systems of innovation’ to address this gap in the literature. We argue that entrepreneurial experimentation comprises both ‘technical’ and ‘market’ experimentation, and that entrepreneurship must be conceptualized in terms of its function in innovation systems rather than as an outcome. At the systems level, the central function of entrepreneurial experimentation is to foster creation, selection and scaling-up of innovations. Spinoffs and acquisitions are proposed as examples of micro-mechanisms that give rise to system-wide entrepreneurial experimentation. Interaction between established organizations and new innovative entrants, through spinoffs and acquisitions, is an important characteristic of vibrant entrepreneurial systems of innovation.
    Keywords: entrepreneurship; experimentation; innovation systems; new technology-based firms; entrepreneurial systems of innovation; scaling up; growth
    JEL: L22 L26 O31 O33
    Date: 2016–06–22
  2. By: Enrique Moral-Benito (Banco de España)
    Abstract: It is a well-known empirical regularity that small firms are less productive than large firms. However, does size cause productivity or vice versa? Using matching methods, I find that productivity shocks are followed by significant increases in size defined by employment. In contrast, size shocks are not followed by productivity gains at the firm level. This finding casts doubt on the conventional wisdom that aggregate productivity in Spain is driven by a firm size distribution biased towards small firms in comparison with other developed countries. According to my findings, low firm-level productivity might play a crucial role in shaping the Spanish firm size distribution.
    Keywords: firm-level data, productivity, size distribution
    JEL: L11 L25 D24
    Date: 2016–07
  3. By: Lara Abdel Fattah; Sylvain Barthélémy; Nadine Levratto; Benjamin Trempont
    Abstract: This paper aims at bringing evidence on firm survival after bankruptcy. Instead of considering survival as a binary variable we take into account the duration of the reorganization procedure. We follow a sample of French firms throughout their restructuring process and document factors influencing the reorganization outcome. Based on the existing theoretical and empirical literature on the link between firm ownership structure and performance, we particularly focus on the influence of firm affiliation to a business group and business groups’ characteristics. Using a Cox proportional hazards model and a Random Forests model, we find that firm structural and financial characteristics have a strong power to explain survival at different time horizons, however, very few of firm financial characteristics used previously for bankruptcy prediction are useful for predicting the final outcome of reorganization once a reorganization plan is voted. In addition, we show that firm ownership structure proxied by firm affiliation to a business group and business group characteristics has no significant influence on the outcome and duration of reorganization.
    Keywords: reorganization, bankruptcy, survival, business groups, Cox model, Random Forests.
    JEL: G33 K20 C14
    Date: 2016
  4. By: Rehman, Naqeeb Ur (Asian Development Bank Institute)
    Abstract: This study investigates the impact of internal and external research and development (R&D) on the innovation performance of small and medium-sized enterprises (SMEs) in India and Pakistan. Micro-level data was obtained for 3,492 Indian and 696 Pakistani SMEs from the World Bank’s Enterprise Survey, and bivariate probit estimation techniques were used. The results show that internal and external R&D positively affects product and process innovations. However, this effect is stronger for Indian SMEs. The negative relationship between firm size and innovation output implies that SMEs in both countries face resource constraints. Further, Indian SMEs are dominant in terms of undertaking internal R&D and generating product and process innovations relative to those in Pakistan. The complementary rel¬ationship between internal and external R&D has been examined for both countries. The study is unique in comparing Indian and Pakistani SMEs innovation activities using micro-level data. The results suggest that business managers can utilize a balanced combination of internal and external R&D to accelerate innovation output and increase absorptive capacity. Specifically, public support for innovation, such as R&D grants, subsidies, and tax credits, could encourage SMEs to undertake more radical innovations.
    Keywords: India; Pakistan; SME; R&D; innovation; technology; firm; product innovation; process innovation; external R&D; internal R&D; absorptive capacity; innovative capacity; public support; incentives; output; bank loans; subsidies; tax credit
    JEL: D22 L25 O31 O32
    Date: 2016–06–24
  5. By: Amornkitvikai, Yot (Asian Development Bank Institute); Harvie, Charles (Asian Development Bank Institute)
    Abstract: This study sheds light on small and medium-sized enterprise (SME) financing and its performance in Thailand. It elaborates on the key sources of finance existing for Thai manufacturing SMEs and their importance for SME performance as measured by technical efficiency, export performance, and technological innovation. This study also examines the key factors enhancing SME access to external finance. Our results confirm that retained earnings are crucial to increase SME technical efficiency, but loans from unlicensed moneylenders deteriorate their export performance. For external finance, government-owned specialized financial institutions (SFIs) play a leading role in enhancing SME technical efficiency and export performance, but the results from the survey reveal that few Thai manufacturing SMEs actively seek external finance from these institutions. Foreign commercial banks also help enhance SME technical efficiency. The results show that larger SMEs have superior performance as measured by export performance and technological innovation performance. The results also reveal that financial institutions in Thailand still rely on collateral-based lending and SME financial transparency through audited financial statements to reduce asymmetric information and adverse selection costs.
    Keywords: Thailand; manufacturing; SME; specialized financial institution; exports; export performance; technical efficiency; technology; innovation; market access; human resources; credit; financing; banks; business loans; collateral; interest rate
    JEL: D22 D24 G20 L25 L60
    Date: 2016–06–23
  6. By: Erno Tornikoski (MTS - Management Technologique et Strategique - Grenoble École de Management (GEM)); Christophe Bonnet (GDF - Gestion, Droit et Finance - Grenoble École de Management (GEM)); Bérangère Deschamps (UGA IAE - Institut d'Administration des Entreprises - Grenoble - UGA - Université Grenoble Alpes); Gilles Lecointre (Gilles Lecointre PME Conseils); Mickael Buffart (MTS - Management Technologique et Strategique - Grenoble École de Management (GEM))
    Abstract: This document reports the situational analysis of business transfer ecosystem in France as it stands in early 2015. In France there are no dedicated public datasets about ownership transfers. Ownership transfers can be deduced from different sources (e.g. Insee, Infogreffe, Diane, etc.), which result slightly different numbers about realized business transfers. Depending on the source, there are around 50 000 potential firms to be transferred each year in France (including all sizes, types, and industries). The French statistic organism (INSEE) does not count the creation of holding to the purpose of buying a target as transfers but as creations from scratch. Some of the key actors of the SME ownership transfer market carry out surveys about the ecosystem. For example, CNCFA and Epsilon Research survey the ownership transfer market each year since 2010. DG Tresor (governmental organization), Groupe BPCE (private bank), CRA (National association for SME transfers), and BPI France (a public investment bank) also publish reports and studies about ownerships transfers in France. The material for this report comes from these above secondary sources and interviews with some of the key actors in the SME ownership transfer market. The interviewed actors were AFIC (Association Français des Investisseurs pour la Croissance), CCI (Chamber of Commerce and Industry), CNCFA (Syndicat des Professionnels des Fusions et Acquisitions), CRA (Cédants et Repreneurs d’Affaires), CGPME (Confédération générale des petites et moyennes entreprises), and Reseau Entreprendre Isère. The interviews were carried out by the authors of this report. Each interview produced a mini-case about an actor in the SME markets. The mini-cases can be found from the appendixes of this report. To put the business transfers in its proper context, there were around 3.14 million firms (non-agricultural) in France in 2011, of which 243 were big, 5 000 mid-size, 138 000 SMEs, and 3 million micro-firms. On average there are 500-550 000 new entries (of which around 5% employ more than one person) and 50-60 000 exists each year in France.
    Keywords: business transfer ecosystem, France
    Date: 2015–05–27
  7. By: AfDB AfDB
    Date: 2016–06–23
  8. 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

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