nep-ent New Economics Papers
on Entrepreneurship
Issue of 2018‒04‒30
fifteen papers chosen by
Marcus Dejardin
Université de Namur

  1. Effects of Immigration on Native Entrepreneurship in the U.S. By Bulent Unel
  2. Immigrant Entrepreneurship in America: Evidence from the Survey of Business Owners 2007 & 2012 By Sari Pekkala Kerr; William R. Kerr
  3. Firm Dynamics and Growth Measurement in France By Philippe Aghion, Antonin Bergeaud, Timo Boppart & Simon Bunel
  4. When Liability Becomes Potential: Intermediary Entrepreneurship in Dynamic Market Contexts By Tünde Cserpes
  5. The Impact of Management Practices on SME Performance By Forth, John; Bryson, Alex
  6. Amateurs Crowds & Professional Entrepreneurs as Platform Complementors By Kevin J. Boudreau
  7. How Do Regulations of Entry and Credit Access Relate to Industry Competition? International Evidence By Deniz O Igan; Ali Mirzaei; Tomoe Moore
  8. It's never too late: Funding dynamics and self pledges in reward-based crowdfunding By Crosetto, P.; Regner, T.
  9. Can less be more? Mentoring functions, learning goal orientation, and novice entrepreneurs’ self-efficacy By Etienne St-Jean; Miruna Radu-Lefebvre; Cynthia Mathieu
  10. Coordination Frictions in Venture Capital Syndicates By Ramana Nanda; Matthew Rhodes-Kropf
  11. Mark-ups in the digital era By Sara Calligaris; Chiara Criscuolo; Luca Marcolin
  12. The digital platform: a research agenda By de Reuver, Mark; Sørensen, Carsten; Basole, Rahul C.
  13. Firm Performance and Macro Forecast Accuracy By Mari Tanaka; Nicholas Bloom; Maiko Koga; Haruko Kato
  14. Non-refundable and co-financing instruments: Promoting export innovation among SMEs in the Republic of Korea By Lee, Joon-Ho; Lee, Alexander; Lee, April
  15. Regionale Gründungsumfelder am Beispiel ausgewählter Hot-Spots By Bijedić, Teita; Haase, Inga; Müller, Anna

  1. By: Bulent Unel
    Abstract: This paper investigates the causal impact of immigration on the likelihood of entry and exit of entrepreneurs among U.S.-born individuals. Using Current Population Survey data from the U.S. Census over the 2000-2016 period, I find that immigration had a negative effect on entry of native entrepreneurs, while having no impact on their exit. Exploring heterogeneity across individuals, I find that immigration had a negative and statistically significant effect on both entry and exit of female entrepreneurs, but has no effects on male entrepreneurs. Specifically, a 10-percent increase in the share of immigrants in the population lowers the entry and exit rates of female entrepreneurs by 10 percent and 5 percent, respectively, relative to the sample mean. Estimates imply that the net effect of immigration on female entrepreneurship is negative, but economically small.
    Date: 2018–01
  2. By: Sari Pekkala Kerr; William R. Kerr
    Abstract: We study immigrant entrepreneurship and firm ownership in 2007 and 2012 using the Survey of Business Owners (SBO). The survival and growth of immigrant-owned businesses over time relative to native-founded companies is evaluated by linking the 2007 SBO to the Longitudinal Business Database (LBD). We quantify the dependency of the United States as a whole, as well as individual states, on the contributions of immigrant entrepreneurs in terms of firm formation and job creation. We describe differences in the types of businesses started by immigrants and the quality of jobs created by their firms. First-generation immigrants create about 25% of new firms in the United States, but this share exceeds 40% in some states. In addition, Asian and Hispanic second-generation immigrants start about 6% of new firms. Immigrant-owned firms, on average, create fewer jobs than native-owned firms, but much of this is explained by the industry and geographic location of the firms. Immigrant-owned firms pay comparable wages, conditional on firm traits, to native-owned firms, but are less likely to offer benefits.
    JEL: F22 J15 J44 J61 L26 M13 O31 O32 O33 R12
    Date: 2018–04
  3. By: Philippe Aghion, Antonin Bergeaud, Timo Boppart & Simon Bunel
    Abstract: Statistical agencies typically impute inflation for disappearing products based on surviving products, which may result in overstated inflation and understated growth. This paper uses the theory and methodology developed by Aghion et al. (2017) to quantify in the case of France how much of productivity growth is missed by statistical offices because of this. Using the census of plants in France, we find that from 2004 to 2015, about 0.5 percentage point of real output growth per year is not taken into account, which is about the same as what was found in the U.S. While this result suggests that missing growth from creative destruction could structurally be the same in different countries, we show that they in fact hide different underlying establishment and firm's lifecycle dynamics in the two countries.
    Keywords: Growth, Price measurement, Firm dynamic, Lifecycle of plants
    JEL: O4
    Date: 2018
  4. By: Tünde Cserpes
    Abstract: This paper analyzes how entrepreneurs fare in an intermediary market segment when the segment is closely attached to a single supplier market. While focusing on two structural constraints, organizational structure and competitive pressure, I build off of the fact that in the past thirty years in the U.S. beer industry, as the number of beer producers (i.e. brewers) proliferated, their intermediaries (i.e. wholesalers) declined. Using establishment-level restricted-access economic microdata from the Longitudinal Business Database, I examine what happens with intermediaries when (some) producers start competing on product variety instead of competing on scale. Piecewise exponential survival models show that Stinchcombe’s ‘liability of newness’ principle can get suspended and certain newcomers have better survival chances than industry incumbents. I call this effect the potential of newness under which entrepreneurial establishments fare better if they are part of well-resourced multiunit firms. Furthermore, I show that these resource-rich entrepreneurs benefit from the potential of newness especially in areas with competition-laden history and where the industry experiences shakeouts. For market incumbents, the more competition-laden the history of the local market, the higher the hazards of current time establishment failure. For multiunit entrepreneurs, however, a more competition-laden history of the local market is associated with a decrease in the hazards of current time establishment failure. This paper highlights that market structure not only enables but sometimes traps already existing organizations and make them less adaptive to changing logics of competition. The results highlight how organizational factors and geography create inequalities among intermediary organizations.
  5. By: Forth, John (National Institute of Economic and Social Research (NIESR)); Bryson, Alex (University College London)
    Abstract: We examine the impact of management practices on firm performance among SMEs in Britain over the period 2011-2014, using a unique dataset which links survey data on management practices with firm performance data from the UK's official business register. We find that SMEs are less likely to use formal management practices than larger firms, but that such practices have demonstrable benefits for those who use them, helping firms to grow and increasing their productivity. The returns are most apparent for those SMEs that invest in human resource management practices, such as training and performance-related pay, and those that set formal performance targets.
    Keywords: SMEs, small and medium-sized enterprises, employment growth, high-growth firms, productivity, workplace closure, management practices, HRM, recession
    JEL: L25 L26 M12 M52 M53
    Date: 2018–03
  6. By: Kevin J. Boudreau
    Abstract: Platforms often have “crowds” of amateurs working on them as complementors, in other cases professional entrepreneurs—or both. What can a platform owner do to implement these outcomes? I document evidence on mobile app developers showing that just small, incremental changes in platform design—related to the bare minimum costs required to build an app and factors affecting non-pecuniary payoffs—can lead the “bottom-to-fall-out” of the market to amateurs. Where the bottom-falls-out, there is a flood of lowest-quality developers who nonetheless are long-lived on the platform and engage in relatively high development activity. I find no evidence that amateurs crowd-out development activity of top developers in this context. Moreover, the bottom-falling-out is associated with the generation of significantly greater numbers of highest-quality products. I discuss several interpretations.
    JEL: D04 E26 J4 L1 L8 O3
    Date: 2018–04
  7. By: Deniz O Igan; Ali Mirzaei; Tomoe Moore
    Abstract: We examine the extent to which regulations of entry and credit access are related to competition using data on 28 manufacturing sectors across 64 countries. A robust finding is that bureaucratic and costly entry regulations tend to hamper competition, as proxied by the price-cost margin, in the industries with a naturally high entry rate. Rigid entry regulations are also associated with a larger average firm size. Conversely, credit information registries are associated with lower price-cost margin and smaller average firm size in industries that rely heavily on external finance—consistent with access to finance exerting a positive effect on competition. These results suggest that incumbent firms are likely to enjoy the rent and market share arising from strict entry regulations, whereas regulations enhancing access to credit limit such benefits.
    Date: 2018–04–06
  8. By: Crosetto, P.; Regner, T.
    Abstract: Crowdfunding recently emerged as an alternative funding channel for entrepreneurs. We use pledge-level data from Startnext, the biggest German platform, to gain insights on funding dynamics and pledgers’ motivations. We find that the majority of projects that eventually succeed are not on a successful track at 75% of their funding period. These late successes are boosted by information cascades during the final 25% of the funding duration. We conclude – in contrast with earlier literature – that project success is only partially path-dependent. While early pledges do anticipate project success, a lack of them does not necessarily mean that projects will fail. Interviews and questionnaire responses indicate that projects’ communication efforts play a role in making severely under track projects succeed eventually. Moreover, our dataset uniquely allows us to quantify the extent of self funding. Self pledges account for about 10% of all initial pledges and 9% of all pledges that secure funding. Nonetheless, the late surges at severely under track projects are mostly driven by external funders. Furthermore, we find no evidence of subsequent herding triggered by self pledges.
    JEL: L26 D03 G32 O31
    Date: 2018
  9. By: Etienne St-Jean (UQTR - Université du Québec à Trois-Rivières); Miruna Radu-Lefebvre (Audencia Business School); Cynthia Mathieu (UQTR - Université du Québec à Trois-Rivières)
    Abstract: One of the main goals of entrepreneurial mentoring programs is to strengthen the mentees’ self-efficacy. However, the conditions in which entrepreneurial self-efficacy (ESE) is developed through mentoring are not yet fully explored. The purpose of this paper is to test the combined effects of mentee’s learning goal orientation (LGO) and perceived similarity with the mentor and demonstrates the role of these two variables in mentoring relationships. The current study is based on a sample of 360 novice Canadian entrepreneurs who completed an online questionnaire. The authors used a cross-sectional analysis as research design. Findings indicate that the development of ESE is optimal when mentees present low levels of LGO and perceive high similarities between their mentor and themselves. Mentees with high LGO decreased their level of ESE with more in-depth mentoring received. This study investigated a formal mentoring program with volunteer (unpaid) mentors. Generalization to informal mentoring relationships needs to be tested. The study shows that, in order to effectively develop self-efficacy in a mentoring situation, LGO should be taken into account. Mentors can be trained to modify mentees’ LGO to increase their impact on this mindset and mentees’ ESE. This is the first empirical study that demonstrates the effects of mentoring on ESE and reveals a triple moderating effect of LGO and perceived similarity in mentoring relationships.
    Keywords: Mentoring, Networks, Psychology, Learning goal orientation, Entrepreneurial self-efficacy, Perceived similarity
    Date: 2018–01–08
  10. By: Ramana Nanda; Matthew Rhodes-Kropf
    Abstract: An extensive literature on venture capital has studied asymmetric information and agency problems between investors and entrepreneurs, examining how separating entrepreneurs from the investor can create frictions that might inhibit the funding of good projects. It has largely abstracted away from the fact that a startup typically does not have just one investor, but several VCs that come together in a syndicate to finance a venture. In this chapter, we therefore argue for an expansion of the standard perspective to also include frictions within VC syndicates. Put differently, what are the frictions that arise from the fact that there is not just one investor for each venture, but several investors with different incentives, objectives and cash flow rights, who nevertheless need to collaborate to help make the venture a success? We outline the ways in which these coordination frictions manifest themselves, describe the underlying drivers and document several contractual solutions used by VCs to mitigate their effects. We believe that this broader perspective provides several promising avenues for future research.
    JEL: D8 G24
    Date: 2018–04
  11. By: Sara Calligaris (OECD); Chiara Criscuolo (OECD); Luca Marcolin (OECD)
    Abstract: This paper examines the evolution of firm mark-ups across 26 countries for the period 2001-14. It also discusses and investigates empirically how this can be related to the degree of digital transformation in sectors. Four main facts emerge: i) mark-ups are increasing over the period, on average across country; ii) this result is driven by firms at the top of the mark-up distribution, while the bottom half of the distribution exhibits a flat trend over time; (iii) mark-ups are higher in digital-intensive sectors than in less-digitally intensive sectors; (iv) mark-up differentials between digitally-intensive and less-digitally-intensive sectors have increased significantly over time.
    Keywords: Digitalization, Mark-Ups, Market Power, Technological Change
    JEL: D2 L1 L2 O33
    Date: 2018–04–25
  12. By: de Reuver, Mark; Sørensen, Carsten; Basole, Rahul C.
    Abstract: As digital platforms are transforming almost every industry today, they are slowly finding their way into the mainstream information systems (ISs) literature. Digital platforms are a challenging research object because of their distributed nature and intertwinement with institutions, markets and technologies. New research challenges arise as a result of the exponentially growing scale of platform innovation, the increasing complexity of platform architectures and the spread of digital platforms to many different industries. This paper develops a research agenda for digital platforms research in IS. We recommend researchers seek to (1) advance conceptual clarity by providing clear definitions that specify the unit of analysis, degree of digitality and the sociotechnical nature of digital platforms; (2) define the proper scoping of digital platform concepts by studying platforms on different architectural levels and in different industry settings; and (3) advance methodological rigour by employing embedded case studies, longitudinal studies, design research, data-driven modelling and visualisation techniques. Considering current developments in the business domain, we suggest six questions for further research: (1) Are platforms here to stay? (2) How should platforms be designed? (3) How do digital platforms transform industries? (4) How can data-driven approaches inform digital platforms research? (5) How should researchers develop theory for digital platforms? and (6) How do digital platforms affect everyday life?
    Keywords: digital platforms; digital infrastructures; digital ecosystems; digital innovation; research agenda
    JEL: J50
    Date: 2017–04–11
  13. By: Mari Tanaka (Hitotsubashi University, Graduate School of Economics); Nicholas Bloom (Stanford University, Department of Economics); Maiko Koga (Bank of Japan); Haruko Kato (Bank of Japan)
    Abstract: Ever since Keyenes' famous quote about animal spirits, there has been an interest in linking firms' expectations and actions. But the empirical evidence on this is scarce because of the lack of firm panel data on expectations and outcomes. In this paper, we combine a unique survey of Japanese firms' GDP forecasts with their accounting data for 27 years for over 1,000 large Japanese firms. We find four main results. First, we find that firms' GDP forecasts are positively and significantly associated with firms' input choices, such as investment and employment, and with firm's sales, even after controlling for year and firm fixed effects. These results are stronger for cyclical firms, suggesting a firm's input decision is particularly dependent on its manager's forecasts when its demand is more sensitive to the macro economy. Second, both optimistic and pessimistic forecast errors lower profitability because it is costly to have too much or too little capacity. Third, while over optimistic forecasts lower measured productivity, over pessimistic forecasts do not tend to have an impact on productivity. Finally, larger and more cyclical firms make more accurate forecasts, presumably reflecting the higher return from accurate forecasts. More productive, older, and bank owned firms also make more accurate forecasts, suggesting that forecasting ability is also linked to management ability, experience and governance. Collectively, this highlights the importance of firms' forecasting ability for micro and macro performance.
    Keywords: Forecast; investment; employment; productivity
    JEL: D22 D84
    Date: 2018–04–17
  14. By: Lee, Joon-Ho; Lee, Alexander; Lee, April
    Abstract: In the Republic of Korea, public export support programmes for small and medium-sized enterprises (SMEs) have played a significant role in the internationalization process of such firms. Multiple non-reimbursable and co-financing instruments that promote export innovation among SMEs have contributed to their export success which, alongside large firms, made the Republic of Korea the world’s fifth largest exporting country in 2015. This study summarizes these support programmes and some key factors in relation to their implementation, some of which may be useful for those responsible for formulating and implementing similar programmes in Latin America and the Caribbean. First, the authors highlight the continuity of these policies since the 1950s. Second, the Republic of Korea has a unique set-up of institutions supporting SMEs exports, including the Ministry of Small and Medium Enterprises and Startups, the Korea Trade-Investment Promotion Agency (KOTRA) and the Korea International Trade Association (KITA). Third, some new initiatives have been introduced recently to accelerate SME internationalization, including a voucher scheme, in which eligible SMEs can select specific types of support of their own choice. Fourth, many programmes focus on the integration of SMEs into global value chains, particularly in the case of suppliers of parts and components to large Korean firms.
    Date: 2018–04–13
  15. By: Bijedić, Teita; Haase, Inga; Müller, Anna
    Abstract: Im Rahmen der Studie werden Gründungsumfelder anhand von fünf ausgewählten Gründungs-Hotspots untersucht. Dabei zeigte sich, dass Hochschulen für die Regionen als Gründungsstandorte vielfältige Vorteile bieten, insbesondere wenn sie eng mit regionalen Akteuren des Gründungsgeschehens kooperieren. Die gründungsunterstützende Infrastruktur ist hinreichend vorhanden, doch besteht Bedarf einer stärkeren Bündelung der Maßnahmen sowie einer stärkeren Kooperation der regionalen Stakeholder. Insbesondere Kooperationen etablierter Unternehmen mit Start-ups können die Gründungsaktivität in einer Region fördern. Auch zieht die Attraktivität einer Region Fachkräfte wie Gründungswillige an. Dagegen werden infrastrukturelle Vorteile von Metropolregionen mit einer guten wirtschaftlichen Lage teils durch hohe Kosten sowie geringe Verfügbarkeit von Raum und qualifizierten Fachkräften reduziert.
    Keywords: Gründungen,Start-ups,Gründungsumfelder,Gründungs-Hotspots,Entrepreneurial ecosystems,Entrepreneurial regions,Hotspots
    JEL: M13
    Date: 2018

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