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on Entrepreneurship |
| By: | Hofbauer, Florian; Fehr, Hans |
| Abstract: | This paper presents an overlapping generations model with occupational choice that allows for entrepreneurial exit, entry and investment decisions in the presence of idiosyncratic productivity risk and borrowing constraints. The model is applied to analyze the consequences of three pension reforms in Germany: A move towards a comprehensive paygo system, the introduction of flat benefits, and a funded pension system. Our simulation results indicate that pension systems directly affect occupational choice when households have a choice to avoid the implied tax burden. In addition, pension systems influence indirectly through changes in financial constraints and factor prices. Direct and indirect effects may neutralize each other and we are able to separate them quantitatively. We also document that the pension system might have opposite effects on different types of entrepreneurs. Quite surprisingly, some pension reforms increase labor input in the corporate sector and entrepreneurial activities at the same time. Finally, pension reforms have a strong impact on wealth inequality in our set up. Consequently, occupational choice and the pension system are strongly interrelated and more research is needed to understand this connection. |
| JEL: | C68 H55 J26 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc16:145714&r=ent |
| By: | Dimitrios Varvarigos; Nikolaos Kontogiannis |
| Abstract: | We offer a behavioural approach on the relation between growth and volatility, based on a monetary growth model where entrepreneurs borrow funds to invest in projects that produce capital goods. In addition to their varying pecuniary returns, different projects also vary with respect to the status they confer to the entrepreneurs who operate them. We show that social status promotes capital accumulation. We also show that, even when the status-induced increase of marginal utility is constant over time, the interaction between status and inflation is an additional source of transitional dynamics. When a social norm links this increase of marginal utility to past outcomes, however, the dynamics can generate endogenous cycles in the transition to the balanced growth path. |
| Keywords: | Social status, Norms, Economic growth, Cycles |
| JEL: | E32 O42 Z10 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:lec:leecon:17/05&r=ent |
| By: | Henry Sauermann |
| Abstract: | We examine whether startups attract employees with different pecuniary and non-pecuniary motives than small or large established firms. We then explore whether such differences in employee motives lead to differences in innovative performance across firm types. Using data on over 10,000 U.S. R&D employees, we find that startup employees place lower importance on job security and salary but greater importance on independence and responsibility. Startup employees have higher patent output than employees in small and large established firms, and this difference is partly mediated by employee motives – especially startup employees’ greater willingness to bear risk. We discuss implications for research as well as for managers and policy makers concerned with the supply of human capital to entrepreneurship and innovation. |
| JEL: | J24 O31 O32 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23099&r=ent |
| By: | Fei Qin |
| Abstract: | The Australian Innovation System Report 2015, the sixth in the series, explores innovation through the lens of innovative entrepreneurship. Using newly obtained data, it analyses how start-ups and younger businesses often behave differently and are more likely to report increases in employment, sales, profitability, productivity, product range and product innovation. |
| JEL: | N0 J50 L81 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:69375&r=ent |
| By: | Pellegrino, Gabriele (EPFL, Lausanne); Piva, Mariacristina (Università Cattolica del Sacro Cuore); Vivarelli, Marco (Università Cattolica del Sacro Cuore) |
| Abstract: | In this work, we test the employment impact of distinct types of innovative investments using a representative sample of Spanish manufacturing firms over the period 2002-2013. Our GMM-SYS estimates generate various results, which are partially in contrast with the extant literature. Indeed, estimations carried out on the entire sample do not provide statistically significant evidence of the expected labor-friendly nature of innovation. More in detail, neither R&D nor investment in innovative machineries and equipment (the so-called embodied technological change, ETC) turn out to have any significant employment effect. However, the job-creation impact of R&D expenditures becomes highly significant when the focus is limited to the high-tech firms. On the other hand – and interestingly – ETC exhibits its labor-saving nature when SMEs are singled out. |
| Keywords: | innovation, R&D, embodied technological change, employment, GMM-SYS |
| JEL: | O33 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10540&r=ent |
| By: | Martí Mestieri (Northwestern University); Johanna Schauer (Toulouse School of Economics); Robert Townsend (Massachusetts Institute of Technology) |
| Abstract: | Using household-level data from Mexico we document patterns among schooling, entrepreneurial decisions and household characteristics such as assets, talent of household members and age of the household head. Motivated by our findings, we develop a heterogeneous-agent, incomplete-markets, overlapping-generations dynasty model. Households jointly decide over their life cycle on (i) kids' human capital investments (schooling) and (ii) parents' entry, exit and investment into alternative entrepreneurial modes (subsistence and modern). With financial constraints all of these are co-determined. A calibrated version of our model can account for the broad correlation patterns uncovered in the data within and across generations, e.g., a non-monotonic relationship between educational choices and assets across occupations, growth in profits and employment for modern firms only, and dynastic persistence across generations in education and wealth. Endogenous human capital acquisition is a key driver of inequality and intergenerational persistence. Eliminating this channel would decrease the top 10% income share by 47%. Eliminating within-period borrowing constraints would increase average household expenditure by 7.1% and benefit the middle class, reducing top and bottom expenditure shares. It would also reduce by 28% the correlation between household assets and kids’ schooling levels. |
| Keywords: | human capital, Inequality, development, occupational choice, entrepreneurship, Mexico |
| JEL: | O15 O54 I24 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:hka:wpaper:2017-008&r=ent |
| By: | Kyle Herkenhoff (University of Minnesota); Gordon Phillips (Dartmouth College Tuck School of Business); Ethan Cohen-Cole (Econ One Research) |
| Abstract: | How does consumer credit access impact job flows, earnings, and entrepreneurship? To answer this question, we build a new administrative dataset which links individual employment and entrepreneur tax records to TransUnion credit reports, and we exploit the discrete increase in consumer credit access following bankruptcy flag removal. After flag removal, individuals flow into self-employment. New entrants earn more, borrow significantly using unsecured and secured consumer credit, and are more likely to become an employer business. In addition, after flag removal, non-employed and self-employed individuals are more likely to find unemployment-insured ``formal'' jobs at larger firms that pay greater wages. These estimates imply that firms believe previously bankrupt workers are 3.8% less productive than non-bankrupt workers, on average. These results suggest that consumer credit access matters for each stage of entrepreneurship and that credit-checks may be limiting formal sector employment opportunities. |
| Keywords: | credit access, entrepreneurship, bankruptcy |
| JEL: | K35 E50 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:hka:wpaper:2017-011&r=ent |
| By: | Sung-Eun Yu |
| Abstract: | I provide more evidence on the behavior of small and large firms, employing the Flow of Funds data, the QFR data and other sources. The empirical test to examine behavior of small and large firms is conducted in two ways: (1) by different episodes, tight monetary policy episodes and business cycles episodes and (2) by different time periods, Pre-1990 periods and Post-1990 periods. First, I find that a monetary shock and an NBER recession shock differently affect firms’ short-term financing behavior. During recent periods, after a contractionary monetary shock, large firms increase their short-term debt more than small firms, whereas after an NBER recession shock, large firms decrease most balance sheet variables (including short-term debt) more than small firms. These findings suggest that small firms are more credit-constrained after a monetary policy shock, whereas large firms are more credit-constrained after an NBER recession shock. Second, I find that, after a contractionary monetary shock, during earlier periods, large firms decrease their short-term debt less than small firms, whereas during recent periods, large firms increase more than small firms. Although these findings appear to be contradictory, they are consistent in that small firms have continued to be more credit-constrained than large firms after contractionary monetary policy?at the time when demand for loans increases. |
| Keywords: | monetary policy shock, business cycle shock, small firms, large firms JEL Classification: E32, E 51, E52 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:uta:papers:2017_05&r=ent |
| By: | Ugur, Mehmet |
| Abstract: | In this lecture, I review the theoretical origins of the empirical growth models. I begin with the Solow and AK models informed by neoclassical theory. I demonstrate that both models do not make an explicit distinction between capital accumulation and technological progress. They just lump together the physical and human capital. Then I discuss the Schumpeterian growth models with creative destruction and institutions (particularly democracy as a meta-institution). I demonstrate that the Schumpeterian models can address a wider range of questions – particularly those that cannot be addressed satisfactorily by neoclassical models. I conclude by arguing for innovations in growth modeling – particularly for innovations that involve explicit incorporation of product-market competition and non-linearities in the relationship between innovation and growth. |
| Keywords: | Endogenous growth; Capital accumulation; Technological progress; Growth models; Innovation |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:gpe:wpaper:14665&r=ent |