nep-ent New Economics Papers
on Entrepreneurship
Issue of 2018‒04‒16
sixteen papers chosen by
Marcus Dejardin
Université de Namur

  1. The nature of firm growth By Pugsley, Benjamin W.; Sedlacek, Petr; Sterk, Vincent
  2. Innovation, Productivity Dispersion, and Productivity Growth By Lucia Foster; Cheryl Grim; John C. Haltiwanger; Zoltan Wolf
  3. Initial Coin Offerings and the Value of Crypto Tokens By Christian Catalini; Joshua S. Gans
  4. Eco-strategies and firm growth in European SMEs By Jové Llopis, Elisenda,; Segarra Blasco, Agustí, 1958-
  5. Self-employment on the way in a digital economy: A variety of shades of grey By Bögenhold, Dieter; Klinglmair, Robert; Kandutsch, Florian
  6. Innovation and Geographical Spillovers: New Approaches and Empirical Evidence By Segarra Blasco, Agustí, 1958-; Arauzo Carod, Josep Maria; Teruel, Mercedes
  7. To acquire or not to acquire: Mergers and Acquisitions in the Software Industry By Méndez Ortega, Carles,; Teruel, Mercedes
  8. Cessation of activity benefit of Spanish self-employed workers: a heterogeneous impact evaluation By Moral-Arce, Ignacio; Martín-Román, Javier; Martín-Román, Ángel L.
  9. Where New Creative Industries Locate? Evidence from French Departments By Arauzo Carod, Josep Maria; Coll Martínez, Eva; Turcu, Camelia
  10. A set of systemic design tools for the design of flourishing local fashion systems By Marion Real; Iban Lizarralde
  11. Bank credit and business financing By Morales Arenas, Diana
  12. How to facilitate social entrepreneurship for developing circular economy into territories? Feedbacks from systemic design methodology applied to the Nouvelle Aquitaine Region By Marion Real; Iban Lizarralde
  13. Sources of Dependence and Strategies to Innovate: Evidence from Video Game SMEs By Romain Gandia; Elodie Gardet
  14. Working Conditions as a Factor of Productivity in SMEs By Katarina Držajić; Frank Vega
  15. Entrepreneurship in Micro and Small Enterprises: Empirical Findings from Resurveys in Northeastern Areas of Delhi, India By BANERJI, Asit; GOTO, Jun; ISHIZAKI, Hironori; KUROSAKI, Takashi; LAL, Kaushalesh; PAUL, Shampa; SAWADA Yasuyuki; TSUDA, Shunsuke
  16. Structural Change in Firm Dynamics, Inter-firm Network, and Geography (Japanese) By OGURA Yoshiaki; SAITO Yukiko

  1. By: Pugsley, Benjamin W.; Sedlacek, Petr; Sterk, Vincent
    Abstract: Only half of all startups survive past the age of ve and surviving businesses grow at vastly di erent speeds. Using micro data on employment in the population of U.S. businesses, we estimate that the lion's share of these differences is driven by ex-ante heterogeneity across fi rms, rather than by ex-post shocks. We embed such heterogeneity in a fi rm dynamics model and study how ex-ante differences shape the distribution of fi rm size, "up-or-out" dynamics, and the associated gains in aggregate output. "Gazelles" - a small subset of startups with particularly high growth potential - emerge as key drivers of these outcomes. Analyzing changes in the distribution of ex-ante fi rm heterogeneity over time reveals that gazelles are driven towards extinction, creating substantial aggregate losses.
    Keywords: firm dynamics; startups; macroeconomics; big data
    JEL: E23 E24
    Date: 2017–11
  2. By: Lucia Foster; Cheryl Grim; John C. Haltiwanger; Zoltan Wolf
    Abstract: We examine whether underlying industry innovation dynamics are an important driver of the large dispersion in productivity across firms within narrowly defined sectors. Our hypothesis is that periods of rapid innovation are accompanied by high rates of entry, significant experimentation and, in turn, a high degree of productivity dispersion. Following this experimentation phase, successful innovators and adopters grow while unsuccessful innovators contract and exit yielding productivity growth. We examine the dynamic relationship between entry, productivity dispersion, and productivity growth using a new comprehensive firm-level dataset for the U.S. We find a surge of entry within an industry yields initially an increase in productivity dispersion and then after a significant lag an increase in productivity growth. These patterns are more pronounced for the High Tech sector where we expect there to be more innovative activities. These patterns change over time suggesting other forces are at work during the post-2000 slowdown in aggregate productivity.
    JEL: E24 L26 M13 O31
    Date: 2018–03
  3. By: Christian Catalini; Joshua S. Gans
    Abstract: This paper explores how entrepreneurs can use initial coin offerings — whereby they issue crypto tokens and commit to accept only those tokens as payment for future use of a digital platform — to fund venture start-up costs. We show that the ICO mechanism allows entrepreneurs to generate buyer competition for the token, which, in turn, reveals consumer value without the entrepreneurs having to know, ex ante, consumer willingness to pay. We find that venture returns are independent of any committed growth in the supply of tokens over time, but that initial funds raised are maximized by setting that growth to zero to encourage saving by early participants. Furthermore, by revealing key aspects of consumer demand, crypto tokens may increase entrepreneurial returns beyond what can be achieved through traditional equity financing. A lack of commitment in monetary policy can, however, undermine saving and, thus, the cost of using tokens to fund start-up costs is potential inflexibility in future capital raising. Crypto tokens can also facilitate coordination among stakeholders within digital ecosystems when network effects are present.
    JEL: E42 L12 L26
    Date: 2018–03
  4. By: Jové Llopis, Elisenda,; Segarra Blasco, Agustí, 1958-
    Abstract: This study investigates the effects of eco-strategies on firm performance in terms of sales growth in an extensive sample of 11,336 small and medium-sized enterprises (SMEs) located in 28 European countries. Our empirical results suggest that not all eco-strategies are positively related to better performance, at least not in the short term. We find that European companies using renewable energies, recycling or designing products that are easier to maintain, repair or reuse perform better. Those that aim to reduce water or energy pollution, however, seem to show a negative correlation to firm growth. Our results, also, indicate that high investment in eco-strategies improves firm growth, particularly in new members that joined the EU from 2004 onwards. Finally, we observe a U-shaped relationship between eco-strategies and firm growth, which indicates that a greater breadth of eco-strategies is associated with better firm performance. However, few European SMEs are able to either invest heavily or undertake multiple eco-strategies, thus leaving room for policy interventions. Keywords: eco-strategy, firm growth, Europe, SMEs
    Keywords: Empreses petites i mitjanes -- Aspectes ambientals -- Unió Europea, Països de la, Planificació estratègica -- Aspectes ambientals, Empreses -- Creixement, 33 - Economia, 65 - Gestió i organització. Administració i direcció d'empreses. Publicitat. Relacions públiques. Mitjans de comunicació de masses,
    Date: 2017
  5. By: Bögenhold, Dieter; Klinglmair, Robert; Kandutsch, Florian
    Abstract: The aim of this paperis to discuss self-employment in a historical perspective. A historiography of self-employment has to embed the observation into a broader frame-work of international relations and of economic and social developments. Related changes affect diverse institutions like labour markets, systems of education and further education, political organizations, the system of labour relations and, of course, the whole “social system of production” (Hollingsworth, 1998). Vice versa, these changes are also affected by different developments in the sphere of the social, technological and political organization of economy and society. Contemporary discourse about the nature of self-employment falls far too short, if it is not linked to an historical frame-work of thought, which gives contours to ideas and changing interpretations. Especially, the current type of “naive” admiration of self-employment, often in combination with normative upgrading in terms of entrepreneurship, must be advised to analyse and to think historically. At the same time, many present day self-employed “jobs” would have been standard employment contracts some ten years ago. In this respects current de-bates on precarization are also linked with debates on self-employment.
    Keywords: entrepreneurship, self-employment
    JEL: J01 J4 J49 Z1 Z13
    Date: 2018–02–28
  6. By: Segarra Blasco, Agustí, 1958-; Arauzo Carod, Josep Maria; Teruel, Mercedes
    Abstract: This special issue concerns the generation of knowledge and geographical spillovers, and it includes a selection of papers that cover existent research gaps with respect to the role of space in the promotion of knowledge spillovers and innovation. These papers analyse different typologies of innovation processes carried out in several geographical areas and highlight heterogeneities of these processes, after focusing on several determinants in innovation. Empirical results indicate the positive role of geographical spillovers and the importance of accurate matching among firms, in industry and with regard to regional characteristics, in order to ensure the generation of knowledge and innovation. Keywords: innovation, geography, spillovers. JEL Codes: O30, R10
    Keywords: Innovacions tecnològiques -- Direcció i administració, Economia regional, 332 - Economia regional i territorial. Economia del sòl i de la vivenda,
    Date: 2018
  7. By: Méndez Ortega, Carles,; Teruel, Mercedes
    Abstract: The aim of this paper is to analyse the impact of Mergers and Acquisitions on firm growth for Software firms located in Catalonia. We investigate firms which are targeting, or are themselves the target of an acquisition and we find that the impact on is heterogeneous; there appear to be positive and negative impacts on productivity and sales growth rate. This paper contributes to the understanding of the M&A process in this young industry characterised by an exponential growth and how such activity interacts with the growth and productivity of the firms involved. Keywords: Software industry, Mergers and acquisitions, firm growth, Catalonia. JEL Codes: D22, C33, L86, O30
    Keywords: Conducta organitzacional, Programari -- Indústria i comerç, Empreses -- Creixement -- Catalunya, 33 - Economia,
    Date: 2018
  8. By: Moral-Arce, Ignacio; Martín-Román, Javier; Martín-Román, Ángel L.
    Abstract: The goal of this paper is to evaluate the effects of a public policy implemented through the Spanish Social Security system: the Cessation of Activity Benefit (CAB) for self-employed workers. Making use of the Continuous Sample of Working Lives (MCVL) and by means of a Propensity Score Matching (PSM) methodology, our results show that, when we do not take into account heterogeneity in the treatment, self-employed workers receiving CAB experience non-employment spells between 22 and 33 logarithmic points longer than their not entitled counterparts. We also detect that this difference is not constant but depends on the likelihood of being treated. We believe that the two traditional problems that affect the insurance markets, consequence of the asymmetric information, adverse selection and moral hazard, are behind these results.
    Keywords: Self-employment, Impact Evaluation, Propensity Score Matching, Opportunistic Behavior
    JEL: D04 J08 J64 J65 K31
    Date: 2018–03–10
  9. By: Arauzo Carod, Josep Maria; Coll Martínez, Eva; Turcu, Camelia
    Abstract: This paper focuses on the creative industries and the role played by the existing spatial distribution and agglomeration economies of these activities in relation to their entry decisions. Our main statistical source is the Répertoire des entreprises et des établissements (REE) provided by INSEE, which has plant-level microdata on the location of new establishments between 2006 and 2013. We use Count Data Models to show that location determinants are quite similar in creative and non-creative industries and that specialisation in creative industries positively influences entry of all industries. Keywords: creative industries, firm location, industrial organisation, France
    Keywords: Localització industrial -- França, Organització industrial -- França, Indústries culturals -- França, Indústria del lleure -- França, 332 - Economia regional i territorial. Economia del sòl i de la vivenda,
    Date: 2018
  10. By: Marion Real (ESTIA Recherche - Ecole Supérieure des Technologies Industrielles Avancées (ESTIA)); Iban Lizarralde (ESTIA Recherche - Ecole Supérieure des Technologies Industrielles Avancées (ESTIA))
    Abstract: Our research is part of a new decentralized vision of the territories and takes part in the construction of new socio-technical models of circular economy, which seek to increase the environmental efficiency of processes, optimize the use of accessible resources and the autonomy of stakeholders in regional ecosystems. Our research focus on the study of intermediary objects of design present in collective entrepreneurial actions and seeks to develop new methods of animation promoting the design for emergence. More precisely, we analyze how to create more synergies between the new entrepreneurs of the territory, the existing industrial cluster and the political decision-makers by investigating three problematics: – What tools will enable actors to share a holistic and evolving vision of territorial metabolism? – How to prepare and animate organization/business modelling workshops for emergent third-places of open design and distributed production on the territory? (hubs, resource centers, fablabs, living lab…) – How to actively manage the flows and tensions present in the structure to accelerate the continuous creation of virtuous loops promoting a more circular economy? Our research is anchored in a research-action approach on the territory of Nouvelle Aquitaine. This resolutely inductive and empirical approach considers the field as a place for experimenting and confronting the concepts and tools imagined from the observations and situations experienced within this terrain. From an operational point of view, the research action is based on a collective action aimed to endeavor the development of activities around the valorization of used textiles and old clothing. It involves innovation clusters, the regional circular economy platform, sorting, upcycling and recycling centers, designers, seamstresses, brands and citizens of the territory.
    Keywords: Design for emergent,Social entrepreneurship and innovation,Systemic design,Fashion communities,Third-places,Intermediary object
    Date: 2017–10–18
  11. By: Morales Arenas, Diana (Tilburg University, School of Economics and Management)
    Abstract: This dissertation consists of three essays on empirical banking. They explore the bank lending granted to businesses. Chapter 1 explores the effect of less stringent collateral requirements on small firms’ employment growth. Not having to pledge collateral seems to have an effect on the growth strategy of very small firms leading to a more rapid increase of their workforce. Chapter 2 analyzes the access to long-term credit by firms following takeovers of many domestic banks by foreign banks. Overall, our findings suggest that a wholesale takeover of domestic banks by foreign banks has a widely-shared positive impact on loan rate, in the immediate post-takeover period, and on the loan amount, spread over time. Chapter 3 studies the impact of banking sector reforms on bank lending and trade credit among medium and large firms. A much stronger regulation, either loosening or tightening, seems to spur a bank lending complement, trade credit, among medium and large firms.
    Date: 2018
  12. By: Marion Real (ESTIA Recherche - Ecole Supérieure des Technologies Industrielles Avancées (ESTIA)); Iban Lizarralde (ESTIA Recherche - Ecole Supérieure des Technologies Industrielles Avancées (ESTIA))
    Date: 2017–06–21
  13. By: Romain Gandia (IREGE - Institut de Recherche en Gestion et en Economie - USMB [Université de Savoie] [Université de Chambéry] - Université Savoie Mont Blanc); Elodie Gardet (IREGE - Institut de Recherche en Gestion et en Economie - USMB [Université de Savoie] [Université de Chambéry] - Université Savoie Mont Blanc)
    Abstract: Recent studies call for reconsideration of the predictions of resource dependence theory, in light of contemporary industrial and economic environments. This study accordingly investigates the influence of dependence on the strategic choice to innovate by focusing on a rarely studied topic, namely, the sources of dependence. In studying small and medium-sized video game enterprises, this article provides empirical validation of dependence phenomena. These companies have limited resources, which inevitably creates dependence, exacerbated in innovative contexts because of the prevalence of negative effects, such as opportunism, abuse of power, limited innovation, or inequitable distributions of economic value. To deal with these negative effects, some enterprises use cooperation or integration strategies to try to minimize their dependence. The strategic choice then might be conditioned. The results of a comparative and qualitative study of five video game developers show that a lack of resources and skills is the primary source of dependence. In addition, a hierarchy of sources of dependence seems to guide the strategic choices of developers to innovate.
    Date: 2018
  14. By: Katarina Držajić; Frank Vega (Joysonic - Joysonic)
    Abstract: The theoretical framework by Diamond, Mortensen and Pissarides (Nobel Award in Economic Sciences, 2010) shows us how generous wages can determine the success in filling job vacancies. The empirical evidence is convincing: larger and more profitable enterprises pay higher wages. Nowadays, large leader companies are investing not only in paying efficient wages to prevent shirking, but also in the improvement of working conditions and even taking a rigorous analytical approach to etiquette. It is a common fact that small and medium-sized enterprises (SMEs) cannot compete in the same way with these high standards. However, recent examples have shown that a suitable work environment, techniques for reducing the stress factors, strategies to create workplaces with a more ethnical diversity and profound benefits for women, as well as the efforts in making the workers feel more liable to their jobs are possible in SMEs and have real benefits for their growth and productivity. At the same time, these approaches could be beneficial for developing countries in a large scale since SMEs play a major role in most of these economies. In this paper, we will conduct a study from the most popular current standards that the best companies promote and suggest some alternatives for SMEs in order to improve these factors.
    Keywords: SMEs,working conditions,jobs,investment,current standards
    Date: 2017–10–27
  15. By: BANERJI, Asit; GOTO, Jun; ISHIZAKI, Hironori; KUROSAKI, Takashi; LAL, Kaushalesh; PAUL, Shampa; SAWADA Yasuyuki; TSUDA, Shunsuke
    Abstract: To deepen our understanding of the urban informal sector and small enterprises in developing countries, we surveyed micro and small entrepreneurs in northeastern areas of Delhi, India. The baseline survey was conducted in November–December 2014, covering 506 sample entrepreneurs in both manufacturing and service sectors. Between June and August 2017, the endline survey was conducted to collect panel information on firm performance. As the demonetization policy in November 2016, in which high value banknotes were demonetized overnight, affected small and micro enterprises, specific questions on its impact were added in the endline survey. Between the two surveys, artefactual field experiments were also applied to the subsample to collect information on social, risk, and time preferences. In this paper, we present details of the resurveys implemented under this project and describe the key variables collected. Among 226 entrepreneurs who participated in the artefactual field experiments, many showed their tendency for present bias and high discount rates. On average, the participant entrepreneurs behaved in an altruistic manner, took substantial risk, and reduced their risk-taking when they were assigned the role of the leader. Out of 287 entrepreneurs who participated in the endline survey, 50% were unregistered with the government, implying that they were highly informal. During the period between baseline and endline surveys, innovations to expand the business were not very active, either. The majority of sample entrepreneurs were affected at least temporarily by the demonetization in 2016.
    JEL: O17 O14 L26
    Date: 2018–03
  16. By: OGURA Yoshiaki; SAITO Yukiko
    Abstract: This paper investigates how firm dynamics, such as firm growth and firm exit, are influenced in an unpreceded aging society using firm-level panel data for 10 years. We find that both firm age and executive age increase due to insufficient entry and exit rates and executive turnover, especially for firms in periphery regions, which prevents firm growth. Because executive age is positively related to firm exit rate, we expect that firm exit rate will increase in the future. Firm exit caused by the transaction partner's exit, i.e., chain of exit, occurs more frequently in periphery regions because low firm location density increases the search cost of new transaction partners. These results imply the necessity of policy depending on firm age stage and regions.
    Date: 2018–03

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