nep-ent New Economics Papers
on Entrepreneurship
Issue of 2017‒04‒30
ten papers chosen by
Marcus Dejardin
Université de Namur

  1. Sources of Knowledge Used by Entrepreneurial Firms in the European High-Tech Sector By Amoroso, Sara; Audretsch, David; Link, Albert
  2. Industry Growth through Spinoffs and Startups By OHYAMA Atsushi
  3. Entrepreneurship, risk perception and firm performance By M.A. Boermans; Daan Willebrands
  4. SME Policies as a Barrier to Growth of SMEs By TSURUTA Daisuke
  5. Entrepreneurship, institutions and skills in low-income countries By Zuzana Brixiová; Balázs Égert
  6. Welcome Home in a Crisis: Effects of Return Migration on the Non-Migrants’ Wages and Employment By Hausmann, Ricardo; Nedelkoska, Ljubica
  7. Inclusive innovation policies: Lessons from international case studies By Sandra Planes-Satorra; Caroline Paunov
  8. Innovation and willingness to export: Is there an effect of conscious self-selection? By Mohavedi, Mohammad; Shahbazi, Kiumars; Gaussens, Olivier
  9. A Theory of Crowdfunding By Strausz, Roland
  10. Place-Based Innovation Ecosystems: Espoo Innovation Garden and Aalto University (Finland) By Gabriel Rissola; Fernando Hervás; Milena Slavcheva; Koen Jonkers

  1. By: Amoroso, Sara (European Commission); Audretsch, David (Indiana University); Link, Albert (University of North Carolina at Greensboro, Department of Economics)
    Abstract: The purpose of this paper is to explore the relationship between an entrepreneur’s experience and education and his/her reliance on alternative sources of knowledge for exploring new business opportunities. The extant literature that is at the crossroads between sources of knowledge and the experiential and intellectual base of an entrepreneur (i.e., dimensions of his/her human capital) suggests that it is through experience and through education that an entrepreneur obtains knowledge. Using information on a sample of high-tech manufacturing firms across 10 European countries, we explore heterogeneities in the influence of experience, age, and education of the firm’s primary founder on the perceived importance of (i.e., use of) alternative sources of knowledge. We find that the association of these characteristics differs significantly across sources of knowledge, and across European regions. Education is positively related to the importance of knowledge from research institutes and internal know-how, while age is negatively related to the importance of research institutes and positively related to publications and conferences. On the one hand, in South/East European countries, the importance of internal know-how is positively associated with age and education, but negatively associated with experience. On the other hand, the characteristics of primary founders of North/West European firms are more linked to the importance of the participation to funded research programmes. This source of knowledge is related positively with age and education and negatively with experience.
    Keywords: Entrepreneurship; Knowledge; Experience; Education; Human Capital
    JEL: D83 J24 L26
    Date: 2017–04–25
  2. By: OHYAMA Atsushi
    Abstract: The literature on industry life cycle suggests that there is some underlying mechanism that generates differences in time for industries reaching their peaks. What causes variation in such peak times across industries? In this paper, I use the Japanese Census of Manufacture and investigate (i) whether creation and destruction of submarkets in an industry affect the length of positive net entry periods and subsequent entry rates, (ii) what type of firm is more likely to be actively engaged in a newly created or destructed submarket, and (iii) how reallocation of unrealized opportunities from incumbent firms to spinoff firms affects the entry process. This study reveals that the creation and destruction of a submarket allow an industry to continue attracting new entrants, that startup and spinoff firms are more likely to enter a newly created submarket than incumbent firms, and that new entry is encouraged when unrealized business opportunities are reallocated smoothly.
    Date: 2017–03
  3. By: M.A. Boermans; Daan Willebrands
    Abstract: Risk attitudes of entrepreneurs are well-established drivers of business performance. Most empirical studies in this field only take into account risk propensity, leaving out the complementary concept of risk perception. Using data on 611 entrepreneurs from Tanzania, we show that risk perception is positively associated with business performance. In addition, we classify the entrepreneurs in four different groups based on their risk profile. The results show that the worst performing entrepreneurs are those with low risk perception and high risk propensity.
    Keywords: risk attitude, risk perception, risk propensity, entrepreneurship, business performance, Africa
    Date: 2017–04
  4. By: TSURUTA Daisuke
    Abstract: We investigate whether firms have incentives to retain their positions as small and medium enterprises (SMEs) to benefit from various SME policies. Using small business data from Japan, we show that firms are less likely to increase their registered capital so that they can continue to satisfy the requirement that retains their position as SMEs under the SME Basic Act. In addition, we find that, after the relaxation of this SME requirement under the act, firms were more likely to increase their registered capital. When firms do not increase their registered capital in order to keep their SME status, firm growth is impeded.
    Date: 2017–03
  5. By: Zuzana Brixiová (SALDRU, University of Cape Town and Institute of Labor Economics (IZA)); Balázs Égert (OECD Economics Department; University of Paris X-Nanterre and CESifo)
    Abstract: This paper develops a model of costly firm creation in an economy with weak institutions, costly business environment as well as skill gaps where one of the equilibrium outcomes is a low-productivity trap. The paper tests the implications of the model using a cross-sectional dataset including about 100 countries. Both theoretical and empirical results suggest that to move the economy into a productive equilibrium, complementarity matters: reforms to improve the business environment tend to be more effective in creating productive firms when accompanied by narrowing skill gaps. Similarly, more conducive business regulations amplify the positive impact on firm creation of better education and reduced skill mismatches. To escape a low-productivity trap, policymakers should thus create a pro-business framework and a well-functioning education system.
    Keywords: Model of start-ups and strategic complements, institutions, education, low-income countries, threshold regression
    JEL: L26 J24 J48 O17
    Date: 2017
  6. By: Hausmann, Ricardo (Harvard University); Nedelkoska, Ljubica (Harvard University)
    Abstract: Albanian migrants in Greece were particularly affected by the Greek crisis, which spurred a wave of return migration that increased Albania's labor force by 5% between 2011 and 2014 alone. We study how this return migration affected the employment chances and earnings of Albanians who never migrated. We find positive effects on the wages of low-skilled non-migrants and overall positive effects on employment. The gains partially offset the sharp drop in remittances in the observed period. The employment gains are concentrated in the agricultural sector, where most return migrants engage in self-employment and entrepreneurship. Businesses run by return migrants seem to pull Albanians from non-participation, self employment and subsistence agriculture into commercial agriculture.
    JEL: J21 J23 J24 J31 J61
    Date: 2017–01
  7. By: Sandra Planes-Satorra (OECD); Caroline Paunov (OECD)
    Abstract: Innovation policies are central to growth agendas in most countries, but have figured much less prominently in strategies to promote social inclusion. In recent years, many countries have implemented “inclusive innovation policies”– a specific set of innovation policies that aim to boost the capacities and opportunities of disadvantaged individuals to engage in innovation activities, including research and entrepreneurship. Examples include the provision of grants to researchers from disadvantaged groups, the deployment of programmes to popularise science and technology, the provision of micro-credit to entrepreneurs and the provision of grants to firms locating their R&D activities in peripheral regions. This paper analyses the role that inclusive innovation policies can play in tackling social, industrial and territorial inclusiveness challenges by drawing on 33 detailed policy examples from 15 countries. The paper discusses why these policies should be a priority, explores the specific challenges that arise in their implementation and provides recommendations as to how the challenges can best be addressed.
    Date: 2017–04–25
  8. By: Mohavedi, Mohammad; Shahbazi, Kiumars; Gaussens, Olivier
    Abstract: This paper presents an analysis of the crucial relationship between innovation, productivity, and export in Small and Medium Enterprises (SMEs). The primary aims of this study are to evaluate the role of innovation in the premium export and test the hypothesis of firm conscious self-selection on willingness to export. To this end, the authors used their database of SMEs, obtained from the survey conducted in the IDEIS project, which provides highly pertinent information on innovation and export areas. Based on the aforementioned database, the authors evaluate apparent premium of exportation and innovation. In addition, they demonstrate the effectiveness of the export premium for high exportation firms that implement process and organization innovations. Finally, the authors analyse the effect of conscious self-selection from the export process that transforms an intention to export into the capacity to export in short term. The conscious self-selection to export is revealed by simultaneously endogeneizing productivity and innovation output based on recursive non-linear model.
    Keywords: export process,productivity,export premium,innovation premium
    JEL: C14 C35 D22 F12 O31
    Date: 2017
  9. By: Strausz, Roland (Humboldt University Berlin)
    Abstract: Crowdfunding provides innovation in enabling entrepreneurs to contract with consumers before investment. Under aggregate demand uncertainty, this improves screening for valuable projects. Entrepreneurial moral hazard and private cost information threatens this benefit. Crowdfunding\'s after-markets enable consumers to actively implement deferred payments and thereby manage moral hazard. Popular crowdfunding platforms offer schemes that allow consumers to do so through conditional pledging behavior. Efficiency is sustainable only if expected returns exceed an agency cost associated with the entrepreneurial incentive problems. By reducing demand uncertainty, crowdfunding promotes welfare and complements traditional entrepreneurial financing, which focuses on controlling moral hazard.
    Keywords: Crowdfunding; entrepreneurship; moral hazard; demand uncertainty;
    JEL: D82 G32 L11 M31
    Date: 2017–03–25
  10. By: Gabriel Rissola (European Commission – JRC); Fernando Hervás (European Commission - JRC); Milena Slavcheva (European Commission - JRC); Koen Jonkers (European Commission – JRC)
    Abstract: The present case study pursues to identify key success factors in Espoo innovation ecosystem, with a particular attention to the role of Aalto University, with a view to inform policies aimed at supporting the strengthening and emergence of existing and new place-based innovation ecosystems in other EU regions and cities, as well as of entrepreneurial universities. It starts by defining what a place-based innovation ecosystem is intended to be, and identifies a conceptual framework that can operationalise the study of concrete cases. The study continues with a presentation of the main local actors and pre-existing enabling factors, progressively moves to the catalysers that have made this innovation garden flourish (notably the reforms that enabled the emergence of Aalto University with its particular governance model) and finally analyses its Quadruple Helix collaboration model and the way the whole ecosystem is orchestrated.
    Keywords: place-based, territorial, urban, innovation ecosystem, smart specialisation, entrepreneurial university, quadruple helix, orchestration
    Date: 2017–04

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