nep-ent New Economics Papers
on Entrepreneurship
Issue of 2018‒01‒01
sixteen papers chosen by
Marcus Dejardin
Université de Namur

  1. Decision Theory Application in Agricultural Entrepreneurship Promotion By Natalia Dobryagina
  2. From "state control" to "business lobbying": The institutional origin of private entrepreneurs' policy influence in China By Huang, Dongya; Chen, Minglu; Heberer, Thomas
  3. Entrepreneurship and human capital development in children By Kasper Brandt; Longinus Rutasitara; Onesmo Selejio; Neda Trifkovic
  4. Lowering barriers to entrepreneurship and promoting small business growth in South Africa By Christine Lewis; Boingotlo Gasealahwe
  5. Individual Tax Planning and Small Business Creation: Evidence on the Impact of Special Tax Regimes in Chile By Claudio Agostini; Eduardo Engel; Andrea Repetto; Damian Vergara
  6. Small Firms and Presumptive Tax Regimes in Chile: Tax Avoidance and Equity By Claudio Agostini
  7. Human Capital, Firm Capabilities, and Innovation By Ajay Bhaskarbhatla; Deepak Hegde; Thomas (T.L.P.R.) Peeters
  8. The employment consequences of SMEs’ credit constraints in the wake of the Great Recession By Cornille, David; Rycx, François; Tojerow, Ilan
  9. Business angels: Crucial elements of the European financial ecosystem By Pellens, Maikel; Licht, Georg
  10. Gibrat's Law and Quantile Regressions: an Application to Firm Growth By Distante, Roberta; Petrella, Ivan; Santoro, Emiliano
  11. Crowdfunding public goods: An experiment By Erik Ansink; Mark Koetse; Jetske Bouma; Dominic Hauck; Daan van Soest
  12. The experience matters. Participation-related rewards increase the success chances of crowdfunding campaigns By Regner, T.; Crosetto, P.
  13. Innovation and Productivity in the service sector of emerging and developing countries By Regis, Paulo José; Desmarchelier, Benoît
  14. Trademarks as an indicator of innovation: towards a fuller picture By Leonardo Costa Ribeiro; Ulisses dos Santos; Valbona Muzaka
  15. Governing innovation projects in firms: The role of competition between innovation projects and interdepartmental collaboration By Iferd, Younes; Schubert, Torben
  16. Kooperationen zwischen Startups und Mittelstand. Learn. Match. Partner. By Wrobel, Martin; Preiß, Karina; Schildhauer, Thomas

  1. By: Natalia Dobryagina (Department of Social Sciences and Economics - Sapienza University of Rome (Italy))
    Abstract: This study investigates opportunities of decision theory application in agricultural entreprenership promotion, it considers behavioral characteristics of entrepreneurs in the sphere of agriculture, identifies the common biases in potential entrepreneurs’ decision making process and suggests a number of decision theory approaches (including NUDGE instruments), applicable in debiasing entrepreneurial decisions as well as in motivating entrepreneurship in agriculture. The paper demonstrates the issue of limited attention to the differences between hereditary and non-hereditary entrepreneurs decision making process in agricultural policies. In order to investigate the effect of non-pecuniary instrument on potential entrepreneurs’ behaviour, a model of a policy effect on entrepreneurial decision was created and a new classification of entrepreneurial decision criteria was developed. The experiment was conducted in the University of Barcelona with 253 participants and has proven that the suggested non-pecuniary instrument of agricultural entrepreneurship promotion has significant positive effect on the attractiveness of the agricultural sphere of entrepreneurship. Experiment results has also demonstrated that non-pecuniary factors play greater role in decision making process of individuals, who are more attracted by the agricultural sphere of entrepreneurship.
    Keywords: Non-hereditary Entrepreneurship, Policy, Decision Theory, Agriculture, Bias.
    JEL: Q18 D91 L26
    Date: 2017–11
  2. By: Huang, Dongya; Chen, Minglu; Heberer, Thomas
    Abstract: Existing scholarship regards the collusion between the Chinese government and the private sector as 'informal' and a series of 'economic alliances', without considering the private sector's institutionalized participation in the process of government policy formulation. This article takes an alternative perspective and examines such institutionalized efforts in interest expression and policy promotion. In the authoritarian regime, state institutions that previously functioned to co-opt and corporatize the private sector have also become forums in which private entrepreneurs can have an impact on policy-making. This change results from the state's initiative in developing formal channels of participation based on the united front work remnant and interaction between 'state control' and the 'business lobby'. The shift from 'state control' to the 'business lobby' reveals a unique pathway for private interest to have an impact on public policy formulation.
    Keywords: business lobbying,All-China Federation of Industry and Commerce,business associations,Chinese Political Consultative Conference
    Date: 2017
  3. By: Kasper Brandt; Longinus Rutasitara; Onesmo Selejio; Neda Trifkovic
    Abstract: This paper explores the link between entrepreneurship and child human capital development. We specifically examine how operating a non-farm enterprise (NFE) as opposed to working in agriculture relates to child labour and schooling outcomes. Accounting for timeinvariant unobservable characteristics in an estimation with individual fixed effects, we find a negative correlation between NFE ownership and child labour, especially in households with relatively higher levels of consumption expenditure. We find differentiated impacts by child gender and the type of enterprise: a lower incidence of child labour for boys and NFEs without employees and a lower incidence of child labour for girls and NFEs that hire at least one employee. Fatherowned NFEs correlate negatively with child labour for boys, both at the extensive and at the intensive margin, and positively with a higher likelihood for school attendance for girls. Given these findings, it appears that household entrepreneurship may contribute to decreasing the severe child labour problem in Tanzania, but resolving the problem of low school attendance rates will require a different strategy.
    Date: 2017
  4. By: Christine Lewis; Boingotlo Gasealahwe
    Abstract: Lowering high levels of unemployment and inequality are amongst the largest challenges facing South Africa. More entrepreneurs and thriving small businesses would contribute to inclusive growth. Measures of entrepreneurial activity are lower in South Africa than in other emerging economies. Barriers to entrepreneurship include bureaucratic procedures and licensing, which are also an ongoing burden on small firms. Public procurement is being used to overcome the dominance of large incumbents, but so far its net effect on small firms is not clear. An education system that better equipped students with basic skills as well as entrepreneurial skills would grow the pipeline of entrepreneurs. New forms of financing are slowly emerging in a system that is dominated by banks. A better evidence base is crucial for more effective financial and non-financial support programmes to boost start-up rates and small firms’ growth.
    Keywords: business regulation,, entrepreneurial skills, entrepreneurship, micro and small business, small business taxation, South Africa
    JEL: H25 I25 K2 L26 O55
    Date: 2017–12–15
  5. By: Claudio Agostini (Escuela de Gobierno, Universidad Adolfo Ibáñez); Eduardo Engel; Andrea Repetto; Damian Vergara
    Date: 2017–10
  6. By: Claudio Agostini (Escuela de Gobierno, Universidad Adolfo Ibáñez)
    Date: 2016–04
  7. By: Ajay Bhaskarbhatla (Erasmus School of Economics, ERIM); Deepak Hegde (New York University); Thomas (T.L.P.R.) Peeters (Erasmus School of Economics, ERIM; Tinbergen Institute, The Netherlands)
    Abstract: Are differences in inventor productivity due to differences in inventors’ skills or differences in the capabilities of the firms they work for? We analyze a 37-year panel that tracks the patenting of U.S. inventors and find strong evidence for serial correlation in inventors’ productivity. We apply an econometric technique developed by Abowd, Kramarz, and Margolis (1999) to decompose the contributions of inventors’ human capital and firm capabilities for productivity. Our estimates suggest human capital is 4-5 times more important than firm capabilities for explaining the variance in inventor productivity. High human capital inventors work for firms that have (i) other high human capital inventors, (ii) superior financial performance, and (iii) weak firm-specific invention capabilities. On the margins, managers should emphasize selecting talent rather than training workers to enhance innovation performance.
    Keywords: Human Capital; Capabilities; Innovation; Matching; Competitive Advantage
    JEL: O30 O31 O32 J24
    Date: 2017–12–08
  8. By: Cornille, David; Rycx, François; Tojerow, Ilan
    Abstract: This article takes advantage of access to confidential matched bank-firm data relative to the Belgian economy to investigate how employment decisions of small- and medium-sized enterprises (SMEs) have been affected by credit constraints in the wake of the Great Recession. Variability in banks’ financial health is used as an exogenous determinant of firms’ access to credit. Estimates suggest that SMEs borrowing money from pre-crisis less healthy banks were significantly more likely to be affected by a credit constraint and, in turn, to adjust their labour input downwards than pre-crisis clients of more healthy banks. Yet, findings also indicate that employment consequences of credit shortages have been essentially detrimental for SMEs experiencing a negative demand shock or facing severe product market competition. Finally, results show that credit-constrained SMEs adjusted their workforce significantly more at the extensive margin than their non-constrained counterparts, but also that they relied more intensively on temporary layoff schemes. JEL Classification: D22, G01, G21, J21, J23
    Keywords: Belgium, credit constraints, employment, matched bank-firm data, Wage Dynamics Network (WDN)
    Date: 2017–12
  9. By: Pellens, Maikel; Licht, Georg
    Abstract: Europe faces a conundrum. Despite high levels of research investment and leading the market in many industries, disruptive and radical innovation typically does not come from European startups. One of the reasons for this is financial constraints: most innovative European start-ups do not manage to attract institutional funders or venture capitalists to invest in their growth, and hence do not fulfill their growth potential. Business angels, individual investors who support early-stage firms with capital and experience, are believed to be able to fill this gap in the funding landscape and thus help boost European innovation. However, relatively little is known about business angel activities in Europe. In this policy brief, we summarize recent research conducted at the Centre for European Economic Research (ZEW), highlight trends in the German and European business angel markets, and discuss implications for the design of policies aimed at fostering the development of markets for business angel investment.
    Date: 2017
  10. By: Distante, Roberta (University of Copenhagen); Petrella, Ivan (Warwick Business School and CEPR); Santoro, Emiliano (University of Copenhagen)
    Abstract: The nexus between firm growth, size and age in U.S. manufacturing is examined through the lens of quantile regression models. This methodology allows us to overcome serious shortcomings entailed by linear regression models employed by much of the existing literature, unveiling a number of important properties. Size pushes both low and high performing firms towards the median rate of growth, while age is never advantageous, and more so as firms are relatively small and grow faster. These findings support theoretical generalizations of Gibrat's law that allow size to affect the variance of the growth process, but not its mean.
    Keywords: firm growth ; size ; age ; conditional quantiles JEL Classification Numbers: D22 ; L11 ; C21 ;
    Date: 2017
  11. By: Erik Ansink (Tinbergen Institute, Vrije Universiteit Amsterdam); Mark Koetse (Institute for Environmental Studies, Vrije Universiteit Amsterdam); Jetske Bouma (Netherlands Environmental Assessment Agency (PBL) and Institute for Environmental Studies, Vrije Universiteit Amsterdam); Dominic Hauck (Institute for Environmental Studies, Vrije Universiteit Amsterdam); Daan van Soest (Department of Economics and CentER, Tilburg University)
    Abstract: We assess the impact of different crowdfunding designs on the success of crowdfunded public goods using a lab-in-the-field experiment. Our design treatments aim to increase the efficiency of crowdfunding campaigns by raising aggregate contributions and decreasing possible coordination problems that may occur when potential donors are faced with a multitude of projects seeking contributions. Amongst others, we explore the potential of seed money and the impact of the attraction effect. Using a four-day time window we implement our crowdfunding experiment using a web-based user interface with multiple threshold public goods, similar in style to conventional crowdfunding websites. We find that such alternative crowdfunding designs affect efficiency via improving coordination, and not so much via affecting total contributions. These results are confirmed in a follow-up framed field experiment with actual nature conservation projects.
    Keywords: Crowdfunding; lab-in-the-field experiment; threshold public goods; charitable giving; nature conservation
    JEL: C93 H41 L31 Q57
    Date: 2017–12–15
  12. By: Regner, T.; Crosetto, P.
    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.
    JEL: L26 D03 G32
    Date: 2017
  13. By: Regis, Paulo José (Division of Economics, Xi'an Jiaotong-Liverpool University); Desmarchelier, Benoît (Lille 1 University)
    Abstract: This paper conducts a large cross-country study of innovation decisions and its effect on the productivity of the firms in the service sectors in developing countries. A structural model relating innovation and productivity is fitted with data from 97 emerging and developing countries. We find that R&D generates gains in labor productivity as well as in terms of an aggregate measure of capital and total factor productivity. However, the introduction of new products does not seem to have relevant impact on productivity measures. From a policy perspective, we find that tax burden and difficulties to access credit are significant obstacles to innovation in services. Considering the positive relationship between service innovation and productivity, these obstacles should be on top of policy agenda in the countries under study. Finally, competition from the international market and from the informal sector are both fostering innovation in services.
    Keywords: innovation, productivity, services sector, developing countries
    JEL: L80 O31 O33 C34 O14
    Date: 2018–01–01
  14. By: Leonardo Costa Ribeiro (Instituto Nacional de Metrologia Qualidade e Tecnologia); Ulisses dos Santos (Universidade Federal de Minas Gerais); Valbona Muzaka (King’s College London)
    Abstract: Encouraged by the emergence of a new but still rather modest literature on the use of trademark data as a complementary indicator of innovation, this paper strengthen the case for such use by offering both qualitative and quantitative evidence in its support. Based on large trademark and patent databases built for this purpose, the paper makes the argument that changes in the economic profile of advanced economies, as well as changes in the global economy more broadly, necessitate the use of trademark data in order to gain a better understanding of innovation across all sectors of the economy.
    Keywords: Trademarks, Innovation, Non-Technological Innovation
    JEL: O31 O33
    Date: 2017–12
  15. By: Iferd, Younes; Schubert, Torben
    Abstract: The existing literature shows that interdepartmental collaboration within companies en-hances innovativeness due to easier access to and integration of knowledge spread over dispersed actors. As companies are well aware of these benefits they also use competi-tion between innovation projects to organize their innovation projects. Such competitive mechanisms have often been regarded as problematic because of their adverse effects on collaboration and knowledge sharing. At the same time, they have the power to expe-dite innovation processes. Based on German CIS data, we use a stochastic frontier ap-proach to show that competition across innovation projects tends to increase innovation efficiency for firms faced by predatory product market competition, while interdepartmental collaboration is efficiency increasing when competition is low. Furthermore, we were also able to show that with increasing innovation radicalness interdepartmental collaboration enhances the innovation process and that with increasing innovation incrementality com-petition across innovation projects becomes beneficial.
    Date: 2017
  16. By: Wrobel, Martin; Preiß, Karina; Schildhauer, Thomas
    Abstract: Die Zusammenarbeit von Startups und Mittelständlern verspricht Vorteile für beide Seiten und trägt darüber hinaus zur Sicherung der Innovationskraft in Deutschland bei. Es bestehen durchaus Gemeinsamkeiten, doch wenn ein traditioneller Mittelständler und ein junges Startups aufeinander treffen, prallen häufig zwei Welten aufeinander. Denn während Startups auf Disruption und offene Innovation setzen, sind Mittelständler häufig risikoavers und fokussieren sich eher auf geschlossene Innovationskonzepte. Wie können also mehr Kooperationen und Partnerschaften zwischen Startups und Mittelständlern entstehen? Wie kann der Kennenlern-, Matching- und Partner-Prozess systematisch ablaufen? Welche Herausforderungen gibt es und welche Kollaborationsmodelle sind für beide Seiten besonders geeignet? Eine kooperationsoffene Grundhaltung, gegenseitiges Verständnis sowie eine offene und transparente Kommunikation sind neben weiteren Punkten wichtige Faktoren damit es mit der Zusammenarbeit funktioniert. Um schnell herauszufinden ob man zueinander passt, sind ressourcenschonende und pragmatische Kooperationsformate wie Pilotprojekte vielversprechend. Mittelständler sollten die richtigen Strukturen schaffen, und mit ressourcenschonenden Formaten in die Zusammenarbeit starten. Für Startups ist es wiederum wichtig, sich einen “Champion” im Unternehmen zu suchen, und Belege für die Vorteilhaftigkeit der Kooperation zu liefern. Gegenseitiges Vertrauen, eine kooperationsoffene Grundhaltung und eine Win-Win-Strategie gehören zu den Grundvoraussetzungen für beide Seiten. Fehler müssen erlaubt sein, und transparente Kommunikation ist während aller Kooperationsphasen essentiell. Damit in Zukunft mehr Partnerschaften zwischen Startups und Mittelständlern entstehen können, spielen insbesondere Intermediäre eine wichtige Rolle. Die Ergebnisse der Studie basieren vorwiegend auf Workshops und Interviews mit über 70 ExpertInnen aus Startups, Mittelstand und Großkonzernen aus Deutschland und den USA.
    Keywords: startups,mid-sized companies,cooperation,collaboration,Germany,business model,innovation,disruption
    Date: 2017

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