nep-ent New Economics Papers
on Entrepreneurship
Issue of 2017‒09‒03
seven papers chosen by
Marcus Dejardin
Université de Namur

  1. The Role of Entrepreneurial Human Capital as a Driver of Endogenous Economic Growth By Isaac Ehrlich; Dunli Li; Zhiqiang Liu
  2. The experience matters: participation-related rewards increase the success chances of crowdfunding campaigns By Tobias Regner; Paolo Crosetto
  3. Returns to Islamic Microfinance: Evidence from a Randomized Experiment in Pakistan By Maazullah,; Bedi, Arjun S.
  4. Measuring the Spillovers of Venture Capital By Schnitzer, Monika; Watzinger, Martin
  5. The Fluidity of Inventor Networks By Michael Fritsch; Moritz Zoellner
  6. Institutional Seed Financing, Angel Financing, and Crowdfunding of Entrepreneurial Ventures: A Literature Review By Johannes Wallmeroth; Peter Wirtz; Alexander Groh
  7. Essays on Empirical Industrial Organization : Entry and Innovation By Fernandez Machado, Roxana

  1. By: Isaac Ehrlich; Dunli Li; Zhiqiang Liu
    Abstract: We model investment in entrepreneurial human capital (EHC) - the representative enterprise’s share of production capacity allocated to investment in innovative industrial and commercial knowledge – as a distinct channel through which firm-specific human capital drives endogenous growth. Our model suggests that institutional factors supporting free markets for goods and ideas, and higher educational attainments of entrepreneurs and workers, enhance endogenous economic growth by augmenting the efficiency of investment in EHC rather than exclusively by themselves. We test these implications using data from Global Entrepreneurship Monitor’s Adult Population Survey of 63 countries over 2002-2010 and find robust support for these hypotheses.
    JEL: L26 O31 O43
    Date: 2017–08
  2. By: Tobias Regner (Friedrich Schiller University of Jena); Paolo Crosetto (GAEL - Laboratoire d'Economie Appliquée de Grenoble - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - INRA - Institut National de la Recherche Agronomique - CNRS - Centre National de la Recherche Scientifique - UGA - Université Grenoble Alpes)
    Abstract: Crowdfunding recently emerged as an alternative funding channel for start-ups, creative artists and social endeavors. On specialized web platforms, project creators ask the crowd for support and provide in return a set of rewards, modulated according to the amount of support pledged. Our study investigates the role of self- and social-image enhancing rewards in determining project success. Using data from 346 projects hosted by Startnext, the biggest crowdfunding platform in Germany, we show that providing higher shares of reward levels that let pledgers participate in and experience the project is correlated with project success.
    Keywords: social-image,self-image,reward levels,identity,crowdfunding,entrepreneurial finance,donations
    Date: 2017–05
  3. By: Maazullah, (ISS, Erasmus University Rotterdam); Bedi, Arjun S. (ISS, Erasmus University Rotterdam)
    Abstract: The global microfinance movement is driven by the claim that once poor micro-entrepreneurs are provided access to capital, they will be able to generate high returns. The existing evidence on returns to capital is mixed and too limited to substantiate this claim. This paper reports on a field experiment conducted in Pakistan, in co-operation with Akhuwat microfinance, in which interest free loans were randomly provided to microenterprises. We find that treatment leads to a significant increase in working capital and in business profits. Using randomized treatment as an instrument for capital, we find average monthly returns to capital of 8.6 to 11.9 a month. These returns are substantially higher than the interest rates charged by microfinance institutions in Pakistan.
    Keywords: returns to capital, microfinance, microenterprises, randomized experiment, Akhuwat microfinance
    JEL: O17 O16 C93
    Date: 2017–08
  4. By: Schnitzer, Monika; Watzinger, Martin
    Abstract: We provide the first measurement of knowledge spillovers from venture capital-financed companies onto the patenting activities of other companies. On average, these spillovers are nine times larger than those generated by the R&D investment of established companies. Spillover effects are larger in complex product industries than in discrete product industries. Start-ups with experienced inventors holding a patent at the time of receiving the first round of investment produce the largest spillovers, indicating that venture capital fosters the commercialization of technologies. Methodologically, we contribute by developing a novel definition of the spillover pool, combining citation-based and technological proximity-based approaches.
    Keywords: innovation; Spillovers; venture capital
    JEL: G24 O3 O31 O32
    Date: 2017–08
  5. By: Michael Fritsch (FSU Jena); Moritz Zoellner (Friedrich Schiller University Jena, School of Economics and Business Administration)
    Abstract: We investigate the stability of cooperative relationships between inventors and consequences for the characteristics and patent productivity of the respective regional innovation systems (RIS). The empirical analysis is for nine German regions over a period of 15 years. We find a rather high level of 'fluidity', i.e., entry and exit of actors, as well as instability of their relationships over time. The aggregate characteristics of the regional networks are, however, quite robust even with high levels of micro-level fluidity. There are both significantly positive and negative relationships between micro-level fluidity and the performance of the respective RIS.
    Keywords: Innovation networks, R&D cooperation, division of innovative labor, patents
    JEL: O3 R1 D2 D8
    Date: 2017–08–29
  6. By: Johannes Wallmeroth (Centre de Recherche Magellan - Université Jean Moulin - Lyon III - Institut d'Administration des Entreprises (IAE) - Lyon, EMLYON Business School); Peter Wirtz (Centre de Recherche Magellan - Université Jean Moulin - Lyon III - Institut d'Administration des Entreprises (IAE) - Lyon); Alexander Groh (EMLYON Business School)
    Abstract: Institutional financing, angel financing, and crowdfunding have evolved and matured in the entrepreneurial finance market and their field of research has progressed with it. Congruent to this, however, comprehensive literature reviews on these topics remain scarce. Herein, we provide an overview of a vast body of literature, presenting the contemporary state of research and succinctly identifying its subcategories. Additionally, we provide insight into major research trends and research gaps using a theoretical framework. JEL Codes: G20 (General), G23 (Non-bank Financial Institutions, Institutional Investors), G24 (Venture Capital)
    Keywords: Equity Crowdfunding,Business Angel Networks,Crowdfunding,Business Angel,Seed Financing,Institutional Seed Financing,Venture Capital
    Date: 2017–05–26
  7. By: Fernandez Machado, Roxana (Tilburg University, School of Economics and Management)
    Abstract: The dissertation contains three essays on empirical industrial organization devoted to studying firms' strategic interaction in different settings. The first essay develops an entry model to address an important matter in the area of urban economics: the development of cities. In particular, it focuses on the food and beverage service industry in the Netherlands and investigates to what extent the presence of urban amenities produces positive spillovers on other amenities in the market. For the case of take-out places and bars, the findings show evidence of unidirectional spillover effects upon entry. The two policy experiments conducted show that taking into account this asymmetry is relevant for both new entrant firms and policy makers. The second essay analyzes the competitive dynamics of firms in the presence of first- mover advantages. Using data of the U.S. digital mobile markets, the study quantifies the advantage early movers have relative to later entrants. In particular, it measures the impact of competitors' entry on the profits of incumbents and entrants. The findings show an asymmetric competitive effect in favor of incumbents. Finally, the third essay focuses on innovation and firms’ patent portfolio choices. Patent portfolios have become an important tool for firms to compete and secure their position in the market. The essay focuses on the U.S. semiconductor industry and shows how firms of different sizes choose their technologies in relation to other firms. The main findings suggest that small- and medium-size firms replicate large firms' choices while ignoring the giants in the market. While giants' portfolios are positively related to their previous investments, they are overall independent of other types' choices
    Date: 2017

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