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on Entrepreneurship |
| By: | Pierre Azoulay; Benjamin F. Jones; J. Daniel Kim; Javier Miranda |
| Abstract: | Many observers, and many investors, believe that young people are especially likely to produce the most successful new firms. We use administrative data at the U.S. Census Bureau to study the ages of founders of growth-oriented start-ups in the past decade. Our primary finding is that successful entrepreneurs are middle-aged, not young. The mean founder age for the 1 in 1,000 fastest growing new ventures is 45.0. The findings are broadly similar when considering high-technology sectors, entrepreneurial hubs, and successful firm exits. Prior experience in the specific industry predicts much greater rates of entrepreneurial success. These findings strongly reject common hypotheses that emphasize youth as a key trait of successful entrepreneurs. |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:18-23&r=ent |
| By: | Michaël Lainé (OCRE - EDC Paris) |
| Abstract: | Investment expectations are highly subjective, and subjectivity is, inherently, diverse. We propose an analytical taxonomy of entrepreneurs with regard to investment expectations—of how diverse animal spirits are. We draw on past research so as to outline the relevant independent classification variables. Motivations, skills, management styles and affective traits comprise our four groups of classification variables. Based on a field study using a sample of 289 entrepreneurs and performing two different cluster analyses, we find 11 stable groups of entrepreneurs. We portray them as ideal types à la Weber. There may be major and minor memberships. Our 11 groups are the neoclassical manager, the builder, the administrator, the paternalistic manager, the hero, the mogul, the prophet, the craftsman, the inventor, the gambler, and the explorer. |
| Date: | 2016–08–17 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-01744745&r=ent |
| By: | Alexander Konon; Michael Fritsch; Alexander S. Kritikos |
| Abstract: | We analyze whether start-up rates in different industries systematically change with business cycle variables. Using a unique data set at the industry level, we mostly find correlations that are consistent with counter-cyclical influences of the business cycle on entries in both innovative and non-innovative industries. Entries into the largescale industries, including the innovative part of manufacturing, are only influenced by changes in the cyclical component of unemployment, while entries into small-scale industries, like knowledge intensive services, are mostly influenced by changes in the cyclical component of GDP. Thus, our analysis suggests that favorable conditions in terms of high GDP might not be germane for start-ups. Given that both innovative and non-innovative businesses react counter-cyclically in ‘regular’ recessions, business formation may have a stabilizing effect on the economy. |
| Keywords: | New business formation, entrepreneurship, business cycle, manufacturing, services, innovative industries |
| JEL: | E32 L16 L26 R11 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1732&r=ent |
| By: | Kenny Ching; Joshua S. Gans; Scott Stern |
| Abstract: | This paper considers the role of Rosenbergian uncertainty (i.e., economic uncertainties that arise after successful invention) in shaping appropriability for start-up innovators. Rather than assuming that the appropriability regime surrounding an innovation is exogenous, we focus on the endogenous choice entrepreneurs face between investing in ensuring control-based appropriability versus investing in the execution and operation of their fledgling businesses. Investment in execution allows entrepreneurs to advance more quickly than competitors, while control requires delays in commercialization. Control and execution are strategic substitutes as they represent alternative paths to earning future rents. Because the size and likelihood of these rents is uncertain, entrepreneurs may be unable to rank these alternative paths in advance, and so their endogenous choice will be grounded in factors such as individual preferences, capabilities, or coherence with their overall entrepreneurial strategy. A subtle consequence is that the appropriability regime ultimately governing an innovation will be the result of the endogenous choices of the entrepreneur rather than more traditional environmental factors. Motivated by notable historical examples such as the invention and commercialization of the telephone, we explore these ideas by considering the choice of appropriability regime among a sample of academic entrepreneurs: within a sample of ventures that could have been developed by either faculty or students (or both), we find that faculty-led ventures are much more closely associated with formal intellectual property, student-led ventures are more rapid in their commercialization activities, and, relative to faculty-led ventures, student-led ventures display a tradeoff between patenting and commercialization speed. |
| JEL: | O32 O34 |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24448&r=ent |
| By: | Arouri, Hassan; Ben Youssef, Adel; Quatraro, Francesco; Vivarelli, Marco |
| Abstract: | The aim of this paper is to investigate the growth dynamics of young small firms (in contrast with larger and older incumbents) in a developing country context, using a unique and comprehensive dataset of non-agricultural Tunisian companies. Our results suggest that significant differences between young and mature firms can be found as far as the drivers of their growth are concerned. The key finding being that - while consistently with the extant literature Gibrat’s law is overall rejected - the negative impact of the initial size is significantly larger for young than mature firms. This result has interesting policy implications: since smaller young firms are particularly conducive to employment generation, they can be considered good candidate for targeted accompanying policies addressed to sustain their post-entry growth. |
| Keywords: | firm’s growth,young firms,Gibrat’s law,Tunisia |
| JEL: | O12 L26 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:197&r=ent |
| By: | Arouri, Hassan (National Institute of Statistics, Tunisia); Ben Youssef, Adel (University of Nice Sophia-Antipolis, and GREDEG-CNRS); Quatraro, Francesco (University of Torino, and Collegio Carlo Alberto); Vivarelli, Marco (UNU-MERIT, and Universita’ Cattolica del Sacro Cuore, Milano) |
| Abstract: | The aim of this paper is to investigate the growth dynamics of young small firms (in contrast with larger and older incumbents) in a developing country context, using a unique and comprehensive dataset of non-agricultural Tunisian companies. Our results suggest that significant differences between young and mature firms can be found as far as the drivers of their growth are concerned. The key finding being that - while consistently with the extant literature Gibrat's law is overall rejected - the negative impact of the initial size is significantly larger for young than mature firms. This result has interesting policy implications: since smaller young firms are particularly conducive to employment generation, they can be considered good candidates for targeted accompanying policies addressed to sustain their post-entry growth. |
| Keywords: | firm's growth, young firms, Gibrat's law, Tunisia |
| JEL: | O12 L26 |
| Date: | 2018–04–06 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2018019&r=ent |
| By: | Gorodnichenko, Yuriy; Revoltella, Debora; Svejnar, Jan; Weiss, Christoph |
| Abstract: | Using a new survey, we show that the dispersion of marginal products across firms in the European Union is about twice as large as that in the United States. Reducing it to the US level would increase EU GDP by more than 30 percent. Alternatively, removing barriers between industries and countries would raise EU GDP by at least 25 percent. Firm characteristics, such as demographics, quality of inputs, utilization of resources, and dynamic adjustment of inputs, are predictors of the marginal products of capital and labor. We emphasize that some firm characteristics may reflect compensating differentials rather than constraints and the effect of constraints on the dispersion of marginal products may hence be smaller than has been assumed in the literature. We also show that cross-country differences in the dispersion of marginal products are more due to differences in how the business, institutional and policy environment translates firm characteristics into outcomes than to the differences in firm characteristics per se. |
| Keywords: | economic growth.; firm-specific factors; Marginal products; resource allocation |
| JEL: | D22 D24 O12 O47 O52 |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12821&r=ent |
| By: | Schindler, Dirk (Dept. of Accounting, Auditing and Law, Norwegian School of Economics) |
| Abstract: | How to incorporate hard-to-value assets into the wealth tax? We analyze the effect of an optimal wealth tax on risk-taking behavior and welfare when investors do not only have the standard portfolio choice with a well-diversified market portfolio, but can alternatively choose to invest all their wealth into a non-diversifiable, indivisible project. The latter is interpreted as entrepreneurial investment into a small, nonlisted firm for which the actual value is hard to measure and non-verifiable. For such firms, real-world wealth tax systems base the wealth tax on deterministic book values. We show that this tax treatment does not distort the choice of projects if the tax is set optimally with an imputed interest rate on book values, actually larger than the risk-free market rate of return. The market equilibrium and a proportional tax on the market portfolio will ensure an efficient risk allocation between private and public consumption and across projects. Failing to apply an imputed inflation of book values, instead, gives rise to an implicit subsidy on entrepreneurial activity and distorts investment. Our findings also have implications for taxation of hard-to-value assets under capital-gains and inheritance taxation. |
| Keywords: | Wealth taxation; portfolio choice; non-listed firms; risk diversification; hard-to-value assets |
| JEL: | D14 G11 H21 |
| Date: | 2018–04–27 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nhhfms:2018_005&r=ent |
| By: | Emin M. Dinlersoz; Nathan Goldschlag; Amanda Myers; Nikolas Zolas |
| Abstract: | This paper reports on the construction of a new dataset that combines data on trademark applications and registrations from the U.S. Patent and Trademark Office with data on firms from the U.S. Census Bureau. The resulting dataset allows tracking of various activity related to trademark use and protection over the life-cycle of firms, such as the first application for a trademark registration, the first use of a trademark, and the renewal, assignment, and cancellation of trademark registrations. Facts about firm-level trademark activity are documented, including the incidence and timing of trademark registration filings over the firm life-cycle and the connection between firm characteristics and trademark applications. We also explore the relation of trademark application filing to firm employment and revenue growth, and to firm innovative activity as measured by R&D and patents. |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:18-22&r=ent |
| By: | Allen, Franklin; Qian, Meijun; Xie, Jing |
| Abstract: | This paper offers a framework to understand informal financing based on mechanisms to deal with asymmetric information and enforcement. We find that constructive informal financing such as trade credits and family borrowing that relies on information advantages or an altruistic relationship is associated with good firm performance. Underground financing such as money lenders who use violence for enforcement is not. Constructive informal financing is prevalent in regions where access to bank loans is extensive, while its role in supporting firm growth decreases with bank loan availability. International comparisons show that China is not an outlier but rather average in using informal financing. |
| Keywords: | asymmetric information; Firm Growth; Informal financing; social collateral |
| JEL: | G21 G30 O16 O17 |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12863&r=ent |
| By: | Martin Backfisch (DHBW CAS) |
| Abstract: | Within the last decades, there have been many technological and regulatory changes in the pharmaceutical industry. Some of these developments facilitate the innovative activities of large firms, while others foster small firms. It is therefore surprising that the implications of these changes in the pharmaceutical industry have not often been studied empirically. We contribute to the question of firm size and innovativeness in the pharmaceutical industry in presenting a brief review of the literature on innovative activities with a focus on the relation of different firm sizes in the pharmaceutical industry and present own empirical findings. Our results with project data from a broad range of firms show that the innovative activities of small firms measured by the share of their projects on all research projects have been rising strongly between 1989 and 2010. Further, the share of small firms on new drugs has been constantly increasing in this period. On the other hand, project success rates are lowest for small firms, while the rate of projects already discontinued in the preclinical phase is highest for them. We discuss these results and find that the reasons behind these developments are crucial to understand the innovative performance of the industry within the last 20 years. |
| Keywords: | pharmaceutical R&D; drug development; success rates; firm size |
| JEL: | O32 L65 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:mar:magkse:201813&r=ent |
| By: | Bourreau, Marc; Sun, Yutec; Verboven, Frank |
| Abstract: | We study a major new entry in the French mobile telecommunications market, followed by the introduction of fighting brands by the three incumbent firms. Using an empirical oligopoly model with differentiated products, we show that the incumbents' launch of the fighting brands can be rationalized only as a breakdown of tacit collusion. In the absence of entry the incumbents successfully colluded on restricting their product variety to avoid cannibalization; the new entry of the low-end competition made such semi-collusion more difficult to sustain because of increased business stealing incentives. Consumers gained considerably from the added variety of the new entrant and the fighting brands, and to a lesser extent from the incumbents' price response to the entry. |
| Keywords: | Entry; fighting brand; Mobile telecommunications; product variety; semi-collusion |
| JEL: | L13 L96 |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12866&r=ent |
| By: | Clément Marinos (MARSOUIN - Môle Armoricain de Recherche sur la SOciété de l'information et des usages d'INternet - UR1 - Université de Rennes 1 - UBS - Université de Bretagne Sud - UBO - Université de Brest - Ecole Nationale de la Statistique et de Analyse de l'Information - Rennes - Institut Mines-Télécom [Paris] - UR2 - Université de Rennes 2 - UNIV-RENNES - Université de Rennes - UBL - Université Bretagne Loire - IMT Atlantique - IMT Atlantique Bretagne-Pays de la Loire, LEGO - Laboratoire d'Economie et de Gestion de l'Ouest - UBS - Université de Bretagne Sud - UBO - Université de Brest - Institut Mines-Télécom [Paris] - UBL - Université Bretagne Loire - IMT Atlantique - IMT Atlantique Bretagne-Pays de la Loire); Guy Baudelle (ESO - Espaces Géographiques et Sociétés - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UM - Le Mans Université - UA - Université d'Angers - UN - Université de Nantes - UR2 - Université de Rennes 2 - UNIV-RENNES - Université de Rennes - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | Les réseaux économiques collaboratifs, opportunité de développement des villes petites et moyennes. Une analyse en Bretagne Contexte Les réseaux économiques collaboratifs sont de plus en plus mobilisés par les entrepreneurs pour nouer des relations d'affaires et de confiance. Ces réseaux se développent dans tous les territoires, y compris hors métropole. Ils prennent la forme classique de clubs d'entreprises et celle, plus nouvelle, d'espaces collaboratifs de travail (i.e. coworking). Nombreuses sont désormais les villes moyennes et petites disposant d'un réseau d'entrepreneurs tandis que le nombre d'espaces de coworking, estimé à 600 en France 1 , a été multiplié par cinq entre 2012 et 2017. En tant que parties prenantes de l'écosystème local, ces deux types de structures participent au développement économique de leur territoire, notamment à travers les mises en relation d'acteurs privés et la circulation d'informations qu'ils génèrent. Problématique La communication abordera deux questions liées l'une à l'autre. La première interrogation porte sur la façon dont clubs d'entreprises et espaces collaboratifs de travail sont susceptibles de contribuer, chacun à leur manière, aux dynamiques économiques locales dans les villes petites et moyennes. Cette question renvoie aux modalités d'organisation de ces structures de mise en réseau. Existe-il un modèle de bonne gouvernance pour les uns et les autres (Ehlinger et al., 2015) ? Le second questionnement porte en conséquence sur le soutien des décideurs publics locaux en direction de ces structures économiques. L'austérité budgétaire conduit les collectivités territoriales (Gilles, 2012) à concevoir des leviers de développement innovants (Lévesques et al., 2005), moins coûteux et plus efficaces que les habituels programmes d'infrastructures ou les aides au tissu économique. Des incitations à la collaboration existent au niveau régional et national, notamment à travers les pôles de compétitivité, tandis que les politiques aux échelles infrarégionales restent embryonnaires, hésitantes et moins connues. Derrière les partenariats et les contractualisations qui émergent, on perçoit bien l'enjeu pour les territoires d'intégrer dans leur stratégie de développement les externalités positives liées à la collaboration entre acteurs à l'échelle (micro)locale. Ces deux questions renvoient donc aux liens entre acteurs publics (collectivités et agences de développement) et privés (clubs et espaces de travail collaboratif). La communication s'interrogera donc sur le rôle que pourrait (devrait ?) jouer l'action publique en faveur de ces services rendus aux dirigeants d'entreprises, aux entrepreneurs et aux travailleurs indépendants à partir de l'étude d'une trentaine de réseaux d'entrepreneurs et d'espaces collaboratifs localisés en Bretagne. Cadre théorique Le cadre d'analyse mobilise plusieurs champs complémentaires. Il fait principalement appel à la sociologie des réseaux appliquée à la sphère économique qui montre que l'encastrement des entrepreneurs dans des réseaux sociaux est nécessaire à leur succès (Granovetter, 2006 ; Krauss, 2009 ; Baudelle et al., 2017). La communication s'inscrit également dans une perspective proximiste (Torre, 2009 ; Bouba-Olga et Grossetti, 2008) appliquée en particulier à un contexte d'espaces à faible centralité. En effet, les réseaux dont il sera question opèrent des rapprochements entre entreprises et génèrent en ce sens de la proximité organisationnelle (Angeon, 2008). Enfin, l'économie de l'innovation sera mobilisée pour montrer que, d'un point de vue territorial, il s'agit de lieux à la croisée du global pipeline et du local buzz (Bathelt, 2011). A ce titre, ils assument un rôle d'interface entre écosystème local et économie globale en permettant à leurs membres d'acquérir des ressources au-delà de leurs sphères sociales et géographiques initiales. Cette approche micro-globale permet donc de montrer que ces réseaux constituent une opportunité pour des villes petites et moyennes considérées comme socialement et économiquement moins connectées que les métropoles. |
| Date: | 2018–03–22 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-01742303&r=ent |
| By: | IWAMOTO Koichi; INOUE Yusuke |
| Abstract: | This paper describes the results of a study group which I held in 2017 to look at the development of small and medium enterprises (SME) competitiveness using the Internet of Things (IoT) in 2016 and of related research. In Japan, it is rare to find complete IoT systems introduced in the production process of SMEs. The simple reason is that SME managers do not understand IoT, which can have two interpretations. The first one is the managers do not understand the complex technology. The second one is they do not understand the merits of the technology for their own companies. The study group adopted four SMEs as model cases, and fully conducted a trial and error process from the beginning of discussions to the introduction of IoT, which aims to have all SME managers consider this issue as their own matter. The discussions of the study group focused on the SMEs' production process in 2016, and focused on the production service companies in 2017. Also, some local governments will start support the introduction of IoT to SME in 2018 in the same manner. |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:eti:rpdpjp:18008&r=ent |