nep-ent New Economics Papers
on Entrepreneurship
Issue of 2017‒08‒13
eight papers chosen by
Marcus Dejardin
Université de Namur

  1. TV and Entrepreneurship By Viktor Slavtchev; Michael Wyrwich
  2. Ethnic diversity in start-ups and its impact on innovation By Brixy, Udo; Brunow, Stephan; D''Ambrosio, Anna
  3. The Role of Regional Context on Innovation Persistency of Firms By Tavassoli, Sam; Karlsson, Charlie
  4. Embracing an Entrepreneurial Ecosystem: An Analysis of the Governance of Research Joint Ventures By Audretsch, David; Link, Albert
  5. Job Creation and Destruction at the Levels of Intra-firm Sections, Firms, and Industries in Globalization: The case of Japanese manufacturing firms By ANDO Mitsuyo; KIMURA Fukunari
  6. To Support R&D or Linkages? Seeking a better policy mix for SME support By SUZUKI Jun
  7. Government Financing of R&D: A Mechanism Design Approach By Lach, Saul; Neeman, Zvika; Schankerman, Mark
  8. Creative and science oriented employees and firm innovation : a key for smarter cities? By Brunow, Stephan; Birkeneder, Antonia; Rodriguez-Pose, Andrés

  1. By: Viktor Slavtchev (Halle Institute for Economic Research (IWH)); Michael Wyrwich (FSU Jena)
    Abstract: Can TV influence the entrepreneurial decisions of individuals? To identify causal effects, we utilize a quasi-natural experiment, namely that during the division of Germany after WWI into the capitalistic West Germany and the socialistic East Germany, West TV was exogenously available only in some regions of the latter. Using regional and individual data, we show that, after the Reunification, entrepreneurship is higher among the residents of East German regions with West TV signal, indicating a direct effect of TV on the entrepreneurial mindset of exposed individuals. Moreover, we find second-order effects due to intergenerational transmission, which cause persistent differences.
    Keywords: Entrepreneurship, TV, Culture, Occupational choice, Institutions
    JEL: L26 J24 M13 P20 P30 O30 D02 D03 Z10
    Date: 2017–08–08
  2. By: Brixy, Udo (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Brunow, Stephan (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); D''Ambrosio, Anna
    Abstract: "The study analyses the impact of different ethnic compositions of start-ups in Germany on the innovativeness of the new businesses. We are able to distinguish between the ethnicity of the founders and that of the early employees following new results that demonstrate the importance of including all new firms' stakeholders for the firm's success. We make use of a measure introduced by Ruef (2002) and Ruef et al. (2003) which not only takes into account the number of different ethnicities involved, but also includes the unusualness of the ethnic compositions. Our results first reveal that foreigners are an important source of both entrepreneurs and employers. Second, we can show that only really rare combinations, of the founders and employees together, lead to more innovative businesses whereas the more common minorities are even found to have a negative impact on firms' innovativeness." (Author's abstract, IAB-Doku) ((en))
    JEL: J15 J21 L26 M13 M14
    Date: 2017–08–03
  3. By: Tavassoli, Sam (RMIT University); Karlsson, Charlie (KTH)
    Abstract: This paper analyses the role of regional context on innovation persistency of firms. Using five waves of the Community Innovation Survey in Sweden, we have traced firms’ innovative behaviour from 2002 to 2012, in terms of four Schumpeterian types of innovation: product, process, organizational, and marketing. Employing transition probability matrix and dynamic Probit model and controlling for an extensive set of firm-level characteristics, we find that certain regional characteristics matter for innovation persistency of firms. In particular, those firms located in regions with (i) thicker labour market or (ii) higher extent of knowledge spillover exhibit higher probability of being persistent innovators up to 14 percentage points. Such higher persistency is mostly pronounced for product innovators.
    Keywords: location; innovation; persistence; product innovations; process innovations; market innovations; organizational innovations; firms; Community Inno¬vation Survey
    JEL: D22 L20 O31 O32
    Date: 2017–08–06
  4. By: Audretsch, David (Indiana University); Link, Albert (University of North Carolina at Greensboro, Department of Economics)
    Abstract: In this paper, we examine how one important type of relationship, research joint ventures (RJVs), is governed within the context of an entrepreneurial ecosystem. Based on agency theory, we investigate the relationship between the governance structure of an RJV and the likelihood that the venture will embrace elements of its research-based ecosystem, that is, the likelihood that the RJV will invite a university to become a research member of the venture. Using data from the National Research Joint Venture Database, we find that when the governance structure of the RJV affords the organizer/leader and research director (the principal) the ability to exert control over the activities of the other members of the RJV (the agents), universities are less likely to be invited to participate as a research member.
    Keywords: Research Joint Venture; R&D; Technology; Entrepreneurship; Innovation; Agency Theory
    JEL: O21
    Date: 2017–08–05
  5. By: ANDO Mitsuyo; KIMURA Fukunari
    Abstract: This paper investigates globalizing activities of Japanese manufacturing firms and their domestic adjustments in terms of domestic employment since the 2000s. A unique feature of this paper is to apply the job creation (JC)/job destruction (JD) method to changes in domestic employment at three different stages, i.e., industry level, firm level, and intra-firm section level, with a distinction among three types of firms, namely, expanding multinational enterprises (MNEs), non-expanding MNEs, and local firms. The paper also examines domestic adjustments to import competition. Major findings include: (i) de-industrialization advances in the early 2000s, but the shrinkage of manufacturing industry is not observed after that, (ii) both gross job creation and gross job destruction at firm and intra-firm section levels are much larger than net changes in all periods, showing the restructuring dynamism, firm heterogeneity, and active adjustments within firms, (iii) gross changes are widely different among three periods at the industry level, (iv) small and medium enterprises (SMEs) actively contribute to net job creation (or less net job destruction), compared with large firms, (v) multinational SMEs that expand foreign operations enlarge domestic employment in total, intensify headquarters (HQ) services, and almost maintain or expand manufacturing activities, in all periods, unlike other types of SMEs, (vi) multinational large firms that expand foreign operations increase domestic employment in total as well as employment engaged in HQ services and manufacturing activities, compared with other types of large firms, except in the early 2000s when both the manufacturing industry as a whole and manufacturing activities significantly shrunk, and vii) negative effects of import competition on domestic employment seem to exist particularly in the early 2000s, but such a tendency is becoming weak, and rather globalizing corporate activities contribute to the expansion of domestic employment by extending complementary activities at home.
    Date: 2017–07
  6. By: SUZUKI Jun
    Abstract: The innovation policy mix is reported to be increasingly targeted and demand side-oriented in recent years. In this context, an important question for policy makers, scholars, and analysts in Japan as well as in other nations is how to provide policy support to small- and medium-sized enterprises (SMEs). In this study, the effects of the new generation of policy mix supporting SMEs by the Ministry of Economy, Trade and Industry (METI) in Japan, the Sapo-In program, has been analyzed using patent data from the viewpoint of the effectiveness of financial support to firms (research and development (R&D) subsidy) and the support to build linkages (soft support) on both the supply- and demand-side (matching, brokering, and consulting). The results suggest that soft support has wider impacts in terms of patenting and internal and external network formation while financial support has very limited effects. Based on these results combined with information from the report on the follow-up monitoring survey of Sapo-In projects conducted by METI, the possibility of a better policy mix is discussed.
    Date: 2017–07
  7. By: Lach, Saul; Neeman, Zvika; Schankerman, Mark
    Abstract: We study the design of a government loan program for risky R&D projects that generate positive externalities, undertaken by entrepreneurs in a competitive capital market environment. With adverse selection, the optimal contract requires a high interest rate but nearly zero co-financing by the entrepreneur. This contrasts sharply with observed policies, typified by a low interest rate and high co-finanacing requirement. When we add moral hazard (endogenous success), the optimal policy consists of a menu of at most two contracts, one with high interest/zero self-finanacing and a second with a lower interest but also a co-finanacing requirement. Calibrated simulations compare the optimal policy and observed program designs in terms of innovation and welfare.
    Keywords: additionality; entrepreneurship; government nance; innovation; mechanism design; R&D; start-ups
    JEL: D61 D82 O32 O38
    Date: 2017–08
  8. By: Brunow, Stephan (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Birkeneder, Antonia; Rodriguez-Pose, Andrés
    Abstract: "This paper examines the link between the endowment of creative and science based STEM - Science, Technology, Engineering and Mathematics - workers and the level of the firm and firm- and city-/regional-level innovation in Germany. It also looks into whether the presence of these two groups of workers has greater benefits for larger cities than smaller locations, thus justifying policies to attract these workers in order to make German cities 'smarter'. The empirical analysis is based on a probit estimation, covering 115,000 plant-level observations between 1998 and 2015. The results highlight that firms that employ creative and STEM workers are more innovative than those that do not. However, the positive connection of creative workers to innovation is limited to the boundaries of the firm, whereas that of STEM workers is as associated to the generation of considerable innovation spillovers. Hence, attracting STEM workers is more likely to end up making German cities smarter than focusing exclusively on creative workers." (Author's abstract, IAB-Doku) ((en))
    Date: 2017–08–02

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