nep-ent New Economics Papers
on Entrepreneurship
Issue of 2016‒11‒20
sixteen papers chosen by
Marcus Dejardin
Université de Namur

  1. Entrepreneurial Spillovers over Space and Time By Frank M. Fossen; Thorsten Martin
  2. New Business Formation and Incumbents' Perception of Competitive Pressure By Javier Changoluisa; Michael Fritsch
  3. Empowering the Vulnerable to Be Entrepreneurs: An Empirical Test on the Effectiveness of the Ghana Microfinance Policy 2006 By Diaz-Serrano, Luis; Sackey, Frank Gyimah
  4. From unemployment to self-employment: the role of entrepreneurship training By Marios Michaelides; Scott Davis
  5. Disentangling the processes of firm growth and R&D investment By Alexander Coad; Nicola Grassano
  6. R&D, Embodied Technological Change and Employment: Evidence from Italian Microdata By Barbieri, Laura; Piva, Mariacristina; Vivarelli, Marco
  7. Entrepreneurship in the Shadows: Wealth Constraints and Government Policy By Tumen, Semih
  8. A critical review of entrepreneurial ecosystems: towards a future research agenda By Yana Borissenko; Ron Boschma
  9. Mobile phones, Institutional Quality and Entrepreneurship in Sub-Saharan Africa By Simplice Asongu; Jacinta C. Nwachukwu
  10. Competitive Strategies: A New Perspective on the Internationalization of the Czech Enterprises By Šárka Zapletalová
  11. SPICE - Benchmark Case Analyse: Entrepreneurship Education an Hochschulen By Ebbers, Illona; Mikkelsen, Kirsten; Raschke, Claudia
  12. Selling out or going public? A real options signaling approach By Michi Nishihara
  13. Corruption, innovation and firm growth: Firm-level evidence from Egypt and Tunisia By Goedhuys, Micheline; Mohnen, Pierre; Taha, Tamer
  14. Fine artists' entrepreneurial business environment By Thom, Marco
  15. Improving access to finance: which schemes best support the emergence of high-growth innovative enterprises? A mapping, analysis and assessment of finance instruments in selected EU Member States By Robert Gampfer; Jessica Mitchell; Blagoy Stamenow; Jana Zifciakova; Koen Jonkers
  16. The smallholder development by remittances of migrants By Name, M.; Lebailly, Ph.

  1. By: Frank M. Fossen; Thorsten Martin
    Abstract: Entrepreneurship is a local and dynamic phenomenon. We jointly investigate spatial spillovers and time persistence of regional new business formation. Using panel data from all 402 German counties for 1996-2011, we estimate dynamic spatial panel models of business creation in the high-tech and manufacturing industries. We consider regions of different sizes and systematically search for the most suitable spatial weighting matrices. We find substantial spatial spillovers as well as time persistence of start-up activity, especially in the high-tech industry. This indicates that entrepreneurship is deeply rooted in regions and underlines the importance of local entrepreneurship culture for new business formation.
    Keywords: Entrepreneurship, new business formation, spatial spillovers, path dependency, persistence, spatial panel
    JEL: L26 C23 R12 O30
    Date: 2016
  2. By: Javier Changoluisa (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Michael Fritsch (School of Economics and Business Administration, Friedrich-Schiller-University Jena)
    Abstract: We investigate the relationship between new business formation and the level of competitive pressure perceived by manufacturing incumbent establishments. The perceived pressure of competition is stronger the higher the level of entries in the respective industry. This relationship holds not only for start-ups located in the same region of the incumbent, but also for start-ups across all regions of Germany. The productivity level of an incumbent moderates the extent of the perceived competitive pressure from start-ups. Highly productive incumbents are less threatened by new business formation. Such a moderating effect cannot be found for incumbent size and regional population density.
    Keywords: New business formation, competitive pressure, regional competition, incumbent firms, manufacturing industries
    JEL: L26 L60 D20 O12 R11
    Date: 2016–11–14
  3. By: Diaz-Serrano, Luis (Universitat Rovira i Virgili); Sackey, Frank Gyimah (Universitat Rovira i Virgili)
    Abstract: The study aims at testing the Ghana Microfinance Policy set up to support the vulnerable through access to credit. We resort to the Blinder-Oaxaca decomposition to determine if there is positive discrimination in favor of women and young entrepreneurs in the rationing behavior of the microfinance companies. This is what we should expect if the policy is effective. Our results show that even after controlling for a large number of borrower characteristics, microfinance type and credit worthiness variables, there is positive discrimination that favors female and young entrepreneurs as this discrimination is largely determined by the differential treatment these groups receive in respect of men and older borrowers from microfinance institutions. Our results show that the Government microfinance is the most severe in the rationing behavior towards the discriminating groups.
    Keywords: credit rationing, Ghana, microfinance, positive discrimination
    JEL: G21 J16
    Date: 2016–10
  4. By: Marios Michaelides; Scott Davis
    Abstract: This paper uses data from the Growing America Through Entrepreneurship (GATE) program to assess the effectiveness of providing self-employment training to unemployed workers during a period of moderate unemployment and during the Great Recession. Results show that self-employment training can significantly improve the short-term self-employment and overall employment rates of unemployed workers, with effects on self-employment persisting for long periods after program entry. Although it appears unlikely that self-employment training may improve self-employment earnings, there is evidence that some participants may achieve higher salary and total earnings when the labor market is relatively strong. Based on these findings, we conclude that self-employment training can potentially be an effective short-term reemployment strategy, regardless of the overall economic conditions, but it is unlikely to help unemployed workers improve their long-term employment and earnings outcomes.
    Keywords: Great Recession; Self-employment; Small business; Training; Unemployment; Program evaluation.
    JEL: J6 H4
    Date: 2016–11
  5. By: Alexander Coad (European Commission – JRC); Nicola Grassano (European Commission – JRC Innovation)
    Abstract: What are the secrets for stimulating R&D investment and job creation? This question is of central importance for the EU Innovation Union strategy. This policy brief applies a new econometric technique to the EU Industrial R&D Scoreboard data on the world's top R&D investors, to highlight the key role of sales growth (instead of profits growth) as the engine of R&D investment and job creation.
    Keywords: R&D investment, firm growth, SVAR, sales growth, industrial dynamics
    JEL: O33 O31 C10
    Date: 2016–11
  6. By: Barbieri, Laura (Università Cattolica di Piacenza); Piva, Mariacristina (Università Cattolica di Piacenza); Vivarelli, Marco (Università Cattolica del Sacro Cuore)
    Abstract: This paper explores the employment impact of innovation activity, taking into account both R&D expenditures and embodied technological change (ETC). We use a novel panel dataset covering 265 innovative Italian firms over the period 1998-2010. The main outcome from the proposed fixed effect estimations is a labor-friendly nature of total innovation expenditures; however, this positive effect is barely significant when the sole in-house R&D expenditures are considered and fades away when ETC is included as a proxy for innovation activities. Moreover, the positive employment impacts of innovation activities and R&D expenditures are totally due to firms operating in high-tech industries and large companies, while no job-creation due to technical change is detectable in traditional sectors and SMEs.
    Keywords: technology, innovation, R&D, embodied technological change, employment
    JEL: O31 O33
    Date: 2016–11
  7. By: Tumen, Semih (Central Bank of Turkey)
    Abstract: I develop a dynamic model of forward-looking entrepreneurs, who decide whether to operate in the formal economy or informal economy and choose how much to invest in their businesses, taking government policy as given. The government has access to two policy tools: taxes on formal business activity and enforcement (or policing) discouraging informality. The main focus of the paper is on transitional dynamics under different initial wealth levels. Whether an initially small business will be trapped in the informal economy and remain small forever or grow quickly and become a large formal business depends on tax and enforcement policies. High tax rates accompanied by loose enforcement – which is mostly the case in less-developed countries (LDCs) – induce tax avoidance, discourage investment in formal businesses, and drive the entrepreneurial activity toward the informal sector even though the initial wealth level is high. Lowering taxes on formal activity joined with strict enforcement can help reducing the magnitude of poverty traps in LDCs.
    Keywords: investment, government policy, informal economy, entrepreneurship, wealth constraints
    JEL: E21 E26 L26 O17
    Date: 2016–10
  8. By: Yana Borissenko; Ron Boschma
    Abstract: The Entrepreneurial Ecosystem (EE) literature has attracted much attention, especially in policy circles. However, the concept suffers from a number of shortcomings: (1) it lacks a clear analytical framework that makes explicit what is cause and what is effect in an entrepreneurial system; (2) while being a systemic concept, the EE has not yet fully exploited insights from network theory, and it is not always clear in what way the proposed elements are connected in an entrepreneurial system; (3) it remains a challenge what institutions (and at what spatial scale) impact on the structure and performance of EE; (4) studies have often focused on the EE in single regions or clusters, but lack a comparative and multi-scalar perspective; (5) the EE literature tends to provide a static framework taking a snapshot of EE without considering systematically their evolution over time. For each of these shortcomings, we make a number of suggestions to take up in future research on EE.
    Keywords: Entrepreneurial ecosystem, Entrepreneurial system, Networks, Entrepreneurship, Clusters
    JEL: L26 M21 O33
    Date: 2016–11
  9. By: Simplice Asongu (Yaoundé/Cameroun); Jacinta C. Nwachukwu (Coventry University, UK)
    Abstract: This study investigates the role of mobile phones in governance for doing business in Sub-Saharan Africa with data from the period 2000-2012 by employing the Generalised Method of Moments. Three broad concepts of governance are explored, namely: (i) political (comprising voice & accountability and political stability/no violence), (ii) economic (involving government effectiveness and regulation quality) and (iii) institutional (including corruption-control and rule of law). Ten dimensions of entrepreneurship are considered. Two main findings are established with respect to the net effects of the interaction between mobile phones and governance dynamics. They are (1) reduced cost of business start-up procedure, the time to build a warehouse and the time to resolve an insolvency; (2) increased start-up procedure to register a business; the time to enforce a contract; the time to register a property and time to prepare and pay taxes. Implications for theory and policy are discussed.
    Keywords: Entrepreneurship; Knowledge Economy; Development; Africa
    JEL: L59 L98 O10 O30 O55
    Date: 2016–11
  10. By: Šárka Zapletalová (Department of Business Economics and Management, School of Business Administration, Silesian University)
    Abstract: The entrance of an enterprise on the market itself allows for a significant business opportunity. The entrance and activities of entrepreneurial subjects on the international markets can be complicated owing to a number of factors that are given by the environment on one hand, and by the position and situation of the entrepreneurial subject itself on the other hand. The companies that decide to enter international entrepreneurship must be aware both of entrepreneurship opportunities and risks, which are inseparably connected with entrepreneurship. Entrepreneurial activities on international markets bring significant changes in strategy and strategic management of enterprise and are conditioned by them as well. This paper aims to investigate the competitive strategies of Czech companies on the international markets at the first foreign entrance. The paper is based on data collected in interviews with managers and founders of Czech enterprises. The companies included in the study are those that have already undertaken internationalization activities and are incorporated in the Czech Republic. Strategies of the Czech enterprises have been researched using the method of questioning: the main primary data collection instrument was a questionnaire-interview.
    Keywords: Czech enterprises, internationalization, international markets, Porter’s competitive strategy, strategy
    JEL: F23 M16
    Date: 2016–10–26
  11. By: Ebbers, Illona; Mikkelsen, Kirsten; Raschke, Claudia
    Abstract: [Vorbemerkung] Im Zuge des Projekts „SPICE – Student Programme for Innovation Culture and Entrepreneurship“ führte die Europa-Universität Flensburg eine Benchmarkanalyse durch, um die Wirkung des Projektes hinsichtlich der Etablierung des Themas Entrepreneurship Education (EE) im SPICE-Netzwerk zu prüfen bzw. zu evaluieren. Durch diese Analyse sollte des Weiteren geklärt werden, inwiefern dieses Netzwerk gegenüber anderen Einrichtungen an Hochschulen qualitativ einzuordnen ist. In diesem Sinne bestand die Aufgabe nun in der Erörterung jener Aspekte, die zu einer hochwertigen Verankerung einer Entrepreneurship Education in den hochschulischen Einrichtungen führen und wie ein hierfür notwendiges Netzwerk mögliche Defizite auffangen kann. In diesem Zusammenhang wurde folgendes Vorgehen gewählt. Zum einen wurde ein grenzübergreifender Vergleich zwischen Dänemark und Deutschland vorgenommen und zum anderen wurden große Hochschulen mit kleinen auf beiden Seiten der Grenze verglichen. In diesem Rahmen fand eine minimale Auswahl an Good-Practice Beispielen statt, die sich auf zwei große und zwei kleinere Hochschulen jeweils in Dänemark und Deutschland beschränkten. Zu den großen Universitäten zählen die Ludwig-Maximilian-Universität München (LMU) und die Aarhus Universität (AU), zu den kleinen Hochschulen die Hochschule für angewandte Wissenschaft und Kunst Hildesheim (HAWK) und die Syddansk Universitet (SDU) mit ihrem Campus in Kolding. Gewährleistet wurde durch dieses Vorgehen, dass alle relevanten zu vergleichenden Aspekte gebündelt werden konnten, ohne sich im Detail zu verlieren. Der Vergleich der Flensburger Hochschulen mit großen Universitäten sollte deutlich machen, welche Ressourcen für eine erfolgreiche Etablierung der Entrepreneurship Education an Hochschulen erfolgversprechend zu sein scheinen. Der Vergleich mit kleinen Hochschulen sollte den Stand der Flensburger Hochschulen auf gleicher Ebene verdeutlichen. Dass die Institution Hochschule als Vergleichsmaßstab diente, ist allein den spezifischen Rahmenbedingungen, welche staatliche Hochschulen aufweisen, geschuldet. Das am Ende der hier vorzustellenden Benchmarkanalyse nochmals beschriebene Projekt SPICE wird deutlich machen, dass eine Vernetzung mit hochschulnahen Institutionen, welche studentische Entrepreneurship Education unterstützen, mögliche ressourcenabhängige Defizite kleiner Hochschulen auffangen bzw. beseitigen können. Denn durch die abschließend dargestellte Vernetzung, wird deutlich, dass auch kleine Hochschulen mit strategischen Kooperationen dem Vergleich mit großen Hochschulen Stand halten können. Alle im Rahmen des Benchmarks erwähnten Informationen wurden über die Homepages der jeweiligen Hochschulen und Institutionen sowie durch Interviews mit entsprechenden Schlüsselpersonen generiert. Inhaltlich sind alle Cases von den Hochschulen und Institutionen zur Veröffentlichung freigegeben worden.
    Date: 2016
  12. By: Michi Nishihara (Graduate School of Economics, Osaka University)
    Abstract: We examine a dynamic model in which a firm chooses between selling out and going public under asymmetric information. We show that information asymmetry tends to change the firm fs policy from selling out to IPO. More precisely, a separating equilibrium can arise in which the good firm goes public while the bad firm follows the first-best sales policy because the good firm signals to market investors by doing an IPO. In order to separate itself from the bad firm, the good firm can choose an IPO timing that is earlier than the first-best IPO timing. This result is consistent with the empirical evidence that less profitable firms tend to sell out to a large firm rather than going public.
    Keywords: IPO; signaling; real options; asymmetric information; acquisition; earnout
    JEL: G31 G34 D82
    Date: 2016–11
  13. By: Goedhuys, Micheline (UNU‐MERIT); Mohnen, Pierre (UNU-MERIT, and Maastricht University); Taha, Tamer (UNU-MERIT)
    Abstract: Using recently collected firm-level data from Egypt and Tunisia, this paper explores the effect of institutional obstacles and corruption on the innovative behaviour of firms and their effect on firms' employment growth. We estimate the micro-level interactions between corruption and institutional obstacles and test the hypothesis that corruption 'greases the wheels' of firm performance when bureaucratic procedures are more severe and hampering innovation. Accounting for endogeneity and simultaneity, the paper uses a conditional recursive mixed-process model (CMP). The results show that corruption has a direct negative effect on the likelihood that a firm is an innovator, but a positive effect when interacted with institutional obstacles. This provides support for the hypothesis that corruption serves as a mechanism to bypass the bureaucratic obstacles related to obtaining the necessary business permits and licences for product innovation. These effects also resonate into firm growth, through their effect on product innovation.
    Keywords: Innovation, corruption, employment growth, Egypt, Tunisia
    JEL: L25 D73
    Date: 2016–10–11
  14. By: Thom, Marco
    Abstract: This paper aims to illustrate the working and business environment of professional fine artists and to identify the factors to successfully make a living in the arts as both market challenges and success factors have not yet been clearly identified in literature. The identification of artists' business environment and success factors could be particularly beneficial for practising fine artists, prospective fine art students, and higher education institutions (HEIs) in order to provide them with a deeper market insight and knowledge for an effective professional education and preparation. In order to achieve this aim, the paper is first focused on the literature to identify working fine artists' business environment including the different art market segments, entry barriers, and challenges. In a second step, interviews with professional fine artists were conducted as well as surveys distributed to lecturers and students in Fine Art at HEIs and to galleries to determine the challenges and success factors in the art market from their professional experience. The literature and survey findings clearly show that the art market is characterised by different segments of varying market attention and visibility, whose access is controlled by informal market barriers consisting of powerful networks. The vast majority of fine artists are practising in segments excluded from buyers' awareness.
    Abstract: Diese Paper hat das Ziel, das Arbeiten und die Geschäftsumgebung von professionellen Berufskünstlern zu illustrieren und die Faktoren zu identifizieren, um ein Leben im künstlerischen Bereich erfolgreich zu leben, weil sowohl Herausforderungen des Marktes als auch Erfolgsfaktoren noch nicht klar in der Literatur identifiziert worden sind. Die Identifizierung der Geschäftsumgebung und Erfolgsfaktoren von Künstlern kann besonders für zukünftige Studenten der bildenden Kunst und Hochschuleinrichtungen / Kunstakadiemien (HEI's), um sie dann mit einer tieferen Marktscharfsinnigkeit und Kenntnissen für eine wirksame Berufsausbildung zu versorgen. Um dieses Ziel zu erreichen, wird das Paper zunächst auf die Literatur eingehen, um die Arbeitsumgebung der Künstler, einschließlich der verschiedenen Kunstmarktsegmente, Zugangsbarrieren und Herausforderungen, zu identifizieren. Im zweiten Schritt wurden Interviews mit Berufskünstlern geführt sowie Umfragen an Dozenten und Studenten der bildenden Kunst an Hochschuleinrichtungen und Gallerien verteilt, um die Herausforderungen und Erfolgsfaktoren des Kunstmarktes von ihrer Berufserfahrung zu bestimmen. Die Ergebnisse der Literatur sowie den Umfragen, zeigen deutlich, dass der Kunstmarkt durch verschiedene Segmente der unterschiedlichen Marktaufmerksamkeit und Sichtbarkeit charakterisiert wird, deren Zugang von informellen Marktbarrieren kontrolliert wird, die aus starken Netzwerken bestehen. Die große Mehrheit von Künstlern üben ihren Beruf außerhalb des Bewusstseins des Käufers aus.
    Keywords: fine artists,success factors,business environment,art market segments,market barriers
    JEL: A22 A23
    Date: 2016
  15. By: Robert Gampfer (European Commission - JRC); Jessica Mitchell (European Commission - JRC); Blagoy Stamenow (European Commission - JRC); Jana Zifciakova (European Commission - JRC); Koen Jonkers (European Commission - JRC)
    Abstract: This Science for Policy Report describes national support instruments to improve access to finance for high-growth innovative enterprises and analyses available evidence for their effectiveness and economic impact on beneficiary companies. The analysis covers Germany, Finland, Lithuania, Poland and the United Kingdom.
    Keywords: SME, access to finance, financial instruments, policy evaluation, Germany, Poland, United Kingdom, Lithuania, Finland, venture capital, fund-of-funds, guarantee schemes
    Date: 2016–11
  16. By: Name, M.; Lebailly, Ph.
    Abstract: The following pages report the results of our survey conducted among (Malian, Senegalese and Mauritanian) Soninké migrants during the period of 14th to 4 December 2015, living in the social residences of the former home Pinel (first home of migrant workers in France). This survey had to aim to discuss the implementation and use of a new tool to transfer the money in order to reduce use of informal channels, to promote financial inclusion, to finance smallholding and to develop entrepreneurship in rural by granting of credits medium or long term via Microfinance Institutions (IMF).
    Keywords: Remittances, Smallholding, Rural entrepreneurship, Community/Rural/Urban Development, Industrial Organization,
    Date: 2016–09

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