nep-ent New Economics Papers
on Entrepreneurship
Issue of 2017‒08‒06
six papers chosen by
Marcus Dejardin
Université de Namur

  1. Partnership as Exeprimentation: Business Organization and Survival in Egypt, 1910-1949 By Cihan Artunc; Timothy Guinnane
  2. Innovation and location in German knowledge intensive business service firms By Brunow, Stephan; Hammer, Andrea; Mc Cann, Philip
  3. Corporate Income Tax, Legal Form of Organization, and Employment By Chen, Daphne; Qi, Shi; Schlagenhauf, Don E.
  4. Openness, ICT and Entrepreneurship in Sub-Saharan Africa By Simplice Asongu; Jacinta C. Nwachukwu
  5. Collaborative learning as a tool for social innovation By Matei, Ani; Tirziu, Andreea-Maria
  6. Relevance of Corporate Social Responsibility (CSR) for Latin American Entrepreneurs By Winfried Polte

  1. By: Cihan Artunc (University of Arizona); Timothy Guinnane (Economic Growth Center, Yale University)
    Abstract: The relationship between legal forms of firm organization and economic development remains poorly understood. Recent research disputes the view that the joint-stock corporation played a crucial role in historical economic development, but retains the view that the costless firm dissolution implicit in non-corporate forms is detrimental to investment. We demonstrate the benefits of costless dissolution in an environment where potential business partners are not fully-informed. Using a multi-armed bandit model, we show that an experimentation mechanism creates a spike in dissolution rates early in firms’ lives, as less productive matches break down and agents look for better matches. We test the model’s predictions using a novel firm-level dataset comprising more than 12,000 enterprises established in Egypt between 1910 and 1949. Most partnerships dissolved within two years; afterwards, the risk of dissolution dropped to a lower, steady level. Corporations had much more uniform and lower attrition rates. Companies made up of partners who had been in business before also had flatter dissolution rates, confirming the link between learning and the early break-up of partnerships. The partnership reflected a trade-off between committing to a partner and sorting into potentially better matches.
    Keywords: firm longevity, multi-armed bandits, business enterprise forms
    JEL: D21 D22 N15 O16 L26
    Date: 2017–05
  2. By: Brunow, Stephan (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Hammer, Andrea; Mc Cann, Philip
    Abstract: "Knowledge Intensive Business Services (KIBS) are widely perceived as being important drivers of technological progress and innovation. KIBS are generally understood as depending, driving and thriving on knowledge exchanges and therefore, geographical proximity to markets, customers and suppliers would be expected to be a critical factor in their performance. This paper investigates how the innovation performance and processes of KIBS firms are related to their distance from the nearest city and also to the size of the nearest city. For this purpose we make use of detailed firm level data and consider Germany as a research field. While most current evidence on this topic emerges from Canada, we complements and add to this existing literature on the geography of KIBS by examining these issues in the German spatial setting which largely conforms to a textbook type of spatial urban hierarchy. Our probit results indeed find that there are very strong distance decay and city size effects, and these also vary according to the innovation type." (Author's abstract, IAB-Doku) ((en))
    Keywords: Innovation, unternehmensbezogene Dienstleistungen, Wissensarbeit, regionale Faktoren, Stadt-Umland-Beziehungen
    JEL: D22 L84 O31 R12
    Date: 2017–07–24
  3. By: Chen, Daphne (Econ One Research); Qi, Shi (College of William and Mary); Schlagenhauf, Don E. (Federal Reserve Bank of St. Louis)
    Abstract: A dynamic stochastic occupational choice model with heterogeneous agents is developed to evaluate the impact of a corporate income tax reduction on employment. In this framework, the key margin is the endogenous entrepreneurial choice of the legal form of organization (LFO). A reduction in the corporate income tax burden encourages adoption of the C corporation legal form, which reduces capital constraints on firms. Improved capital re-allocation increases overall productive efficiency in the economy and therefore expands the labor market. Relative to the benchmark economy, a corporate income tax cut can reduce the non-employment rate by up to 7 percent.
    Keywords: Corporate Income Tax; Legal form of Organization; Employment
    JEL: E02 E24 E60 L22
    Date: 2017–07–31
  4. By: Simplice Asongu (Yaoundé/Cameroun); Jacinta C. Nwachukwu (Coventry University, UK)
    Abstract: This study has examined how information and communication technology (ICT) influences openness to improve the conditions of doing business in sub-Saharan Africa. The data is for the period 2000-2012. ICT is proxied with Internet and mobile phone penetration rates whereas openness is measured in terms of financial and trade globalisation. Ten indicators of doing business are used, namely: (i) cost of business start-up procedures; (ii) procedure to enforce a contract; (iii) start-up procedures to register a business; (iv) time required to build a warehouse; (v) time required to enforce a contract; (vi) time required to register a property; (vii) time required to start a business; (viii) time to export; (ix) time to prepare and pay taxes and (x) time to resolve an insolvency. The empirical evidence is based on Generalised Method of Moments with forward orthogonal deviations. While we find substantial evidence that ICT complements openness to improve conditions for entrepreneurship, the effects are contingent on the dynamics of openness, ICT and entrepreneurship. Theoretical and practical policy implications are discussed. The inquiry is based on two contemporary development concerns: the need for policy to leverage on the ICT penetration potential in the sub-region and the relevance of entrepreneurship in addressing associated issues of population growth such as unemployment.
    Keywords: Openness; ICT; Entrepreneurship; Africa
    JEL: F40 O38 O40 O55 P37
    Date: 2017–01
  5. By: Matei, Ani; Tirziu, Andreea-Maria
    Abstract: The innovative pedagogy is enhanced by learning and teaching or training programmes focused on social innovation and social entrepreneurship. In this context, the academic capacity building represents a fundamental element. This paper aims to present a framework of developmental traditions that have a great influence on collective learning in order to be used as a way to boost social innovation. It shows the literature that focuses on collaborative learning and how it can be used as an instrument to boost social innovation. The methodology used to carry out the research is both bibliographic – opting here to study the work of specialists in the field, authors from Romania and abroad, and empirical – thus the theoretical approach is supported through relevant case studies from the European context and conclusions. The present and future generations will make a difference in the society they live in, with the help of the academic learning and teaching courses, when more institutions oriented on education take into consideration this type of development process. The results of this paper will show that social media tools have an important role in this context, therefore educational institutions should build spaces adapted for community learning, by using platforms and fields to which students, local communities, different stakeholders, public and private organizations have access and through which they can have the possibility to organize meetings of common interest regarding the education issue. We have identified that although technology is a main element in all life’s activities, there should also be taken into consideration the capability and willingness of individuals and institutions to cooperate and innovate, not only by electronic means, but also through traditional ways of participating in the development process of a society.
    Keywords: Collaborative learning, social innovation, social entrepreneurship, education, digital era
    Date: 2017–07–03
  6. By: Winfried Polte (International Centre for Sustainable Development, Bonn-Rhein-Sieg University of Applied Sciences)
    Abstract: These times are very troubled ones. Not only do wars and political unrest seem to prevail in different regions of the world, but, corruption and fraud have reached an incredible dimension, too. It seems that societies have, to a large extent, lost values in which they had formerly believed in. These issues may be the background why at the moment Corporate Social Responsibility (CSR) as a voluntary commitment is discussed in public that intensively. However, one gets the impression that this rather often seems to be superficial. Therefore, it is time to do some in-depth research to identify whether there is real substance behind these discussions or not. Latin America is a big continent with a greater number of countries which are running through difficult times as to corruption and fraud. Consequently, the author studied the policy of the central employers association Consejo Empresarial de America Latina (CEAL) with respect to the role of CSR. On the basis of statements, news and results of studies being regularly published, conclusions were drawn to which extent social and environmental aspects, along the line of ISO 26000, are playing a relevant role. In order to avoid a too narrow view of the issue, a holistic approach concerning the general situation of Latin America has been selected using parameters such as economic growth, increase of population, poverty, inequality, and the global responsibility for environment. Furthermore, apart from the central organization CEAL, regional and national institutions with a specific mission for spreading and implementing CSR and two communal projects were analyzed as well. The conclusion of the paper is that there are some CSR ‘lighthouses’ but an urgent need exists to spread the idea of CSR more intensively across the continent. Corresponding recommendations about how to increase the relevance of CSR in Latin America are given at the end of the paper.
    Keywords: CSR; Corporate Social Responsibility; Entrepreneurship; Latin America
    JEL: M14
    Date: 2017–07

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