nep-ent New Economics Papers
on Entrepreneurship
Issue of 2017‒11‒26
five papers chosen by
Marcus Dejardin
Université de Namur

  1. Capitalists in the 21st Century By Owen Zidar; Eric Zwick; Danny Yagan; Matthew Smith
  2. Verifying High Quality: Entry for Sale By Norbäck, Pehr-Johan; Persson, Lars; Svensson, Roger
  3. The Intersection of the Fields of Entrepreneurship and Development Economics: A Review towards a New View By Hessels, Jolanda; Naudé, Wim
  4. Mode of Entry into Hybrid Entrepreneurship: New Venture Start-Up versus Business Takeover By Xi, Guoqian; Block, Jörn; Lasch, Frank; Robert, Frank; Thurik, Roy
  5. Entrepreneurship & Attention Deficit/Hyperactivity Disorder: A Large-Scale Study Involving the Clinical Condition of ADHD By Lerner, Dan; Verheul, Ingrid; Thurik, Roy

  1. By: Owen Zidar (University of Chicago); Eric Zwick (University of Chicago); Danny Yagan (University of California, Berkeley); Matthew Smith (US Dept of Treasury)
    Abstract: We study rising business income among top income households using a large sample of U.S. firms linked to their owners and workers from 1999-2015. We establish four findings. First, business income growth accounts for nearly all of the rise in top income inequality in the 21st century. Second, business income growth is broad-based across sectors and not concentrated among a few top firms. Third, top-owned firms earn higher profit margins than other firms, which is primarily due to diverging firm performance rather than reallocation of top ownership, risk, or disguised labor payments for tax minimization. Fourth, profits have increased most in firms that rely on high-skilled human capital, especially when deployed at the top of the organization. Our findings suggest that market-based forces play a leading role in generating not only labor income inequality, but also capital income inequality. These findings have implications for central issues in economics: the measurement and determinants of income inequality and the labor share, the dispersion in firm productivity, the returns to schooling, and taxation of top labor and capital income.
    Date: 2017
  2. By: Norbäck, Pehr-Johan (Research Institute of Industrial Economics (IFN)); Persson, Lars (Research Institute of Industrial Economics (IFN)); Svensson, Roger (Research Institute of Industrial Economics (IFN))
    Abstract: When and how do entrepreneurs sell their inventions? To address this issue, we develop an endogenous entry-sale asymmetric information oligopoly model. We show that lowquality inventions are sold directly or used for own entry. Inventors who sell post-entry use entry to credibly reveal information on quality. Incumbents are then willing to pay high prices for high-quality inventions to preempt rivals from obtaining them. Using Swedish data on patents granted to small firms and individuals, we find evidence that high-quality inventions are sold under preemptive bidding competition, post entry.
    Keywords: Acquisitions; Innovation; Start-ups; Ownership; Patents; Verification; Quality
    JEL: G24 L10 L20 M13 O30
    Date: 2017–10–30
  3. By: Hessels, Jolanda (Erasmus University Rotterdam); Naudé, Wim (Maastricht University)
    Abstract: Policy makers find it difficult to promote economic development through entrepreneurship and SMEs. In this paper we argue that this is because the positive impact of entrepreneurship is overestimated and its negative impact underestimated. It is moreover also because there is no unified scientific approach towards the role of entrepreneurship in economic development. The scholarly fields that have been interested in this, entrepreneurship economics and development economics, have been elaborated in isolation and only recently started to intersect. This growing intersection is however fragmented, ad hoc, not based on a unifying theoretical approach and suffering from lack of proper measurement. Better policy making will hence benefit from the extension and deepening of the intersection of these fields. We contribute in this regard by providing a conceptual basis for the eventual elaboration of such a unified theoretical approach. We do so by providing an up-to-date review of the intersection of the two scholarly fields, by noting the progress and gaps, by delineating the externalities associated with entrepreneurship in development, and by proposing a new synthesis definition of entrepreneurship.
    Keywords: entrepreneurship, development, growth, occupational choice
    JEL: F23 L26 L25 O38 O57
    Date: 2017–10
  4. By: Xi, Guoqian (University of Trier); Block, Jörn (University of Trier); Lasch, Frank (Montpellier Business School); Robert, Frank (Montpellier Business School); Thurik, Roy (Erasmus University Rotterdam)
    Abstract: Many entrepreneurs start their ventures while retaining jobs in wage employment; this phenomenon is called hybrid entrepreneurship. Little is known about the entry modes (new venture start-up vs. business takeover) of hybrid entrepreneurs. Our study aims to close this gap by investigating the path to hybrid entrepreneurship. Using a large sample of French hybrid entrepreneurs, we show that educational attainment and management experience are associated with new venture start-up, whereas being female, having worker experience, and having received social benefits are linked to business takeover. With these results, our study contributes to research on hybrid entrepreneurship and entrepreneurship entry modes. Moreover, it informs policy makers about the nature of hybrid entrepreneurship and contributes to the design of effective policies to promote business takeover, which is of high interest, given the growing number of businesses seeking outside successors.
    Keywords: hybrid entrepreneurship, entrepreneurship entry mode, business takeover, new venture
    JEL: L26
    Date: 2017–10
  5. By: Lerner, Dan (University of Deusto); Verheul, Ingrid (Erasmus University Rotterdam); Thurik, Roy (Erasmus University Rotterdam)
    Abstract: A growing conversation has emerged linking ostensibly dark or pathological individual-level characteristics to entrepreneurship. Attention Deficit/Hyperactivity Disorder (ADHD) emerged as a proof-of-concept phenomenon. Recent studies in entrepreneurship journals have made great strides – articulating the theoretical relevance of ADHD-type behavior in entrepreneurship, and suggesting a positive link consistent with narratives in the popular press. While the recent research has made important inroads, quantitative studies have yet to empirically examine ADHD in line with its theoretical roots and definition – as a full-blown clinical disorder. The present paper contributes by providing a theoretically-empirically aligned test of the connection between clinical ADHD and entrepreneurial intention as well as action.
    Keywords: nascent venturing, ADHD, attention deficit/hyperactivity disorder, entrepreneurial intentions, entrepreneurial action
    JEL: L26 I12
    Date: 2017–10

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