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on Entrepreneurship |
| By: | Eran Hoffmann (Stanford University) |
| Abstract: | This paper proposes a new theory of business cycles based on the idea that financial uncertainty shocks change the nature of innovation. When investors become more risk tolerant, they fund riskier startups with greater growth potential. As these ambitious startups grow, the initial shock propagates and generates a boom in output and employment. I develop a heterogeneous firm industry model of the US business sector with countercyclical risk premia and innovation by startups and existing firms. The quantitative implementation of the model jointly matches time series properties of stock returns and macroeconomic aggregates, as well as micro evidence on firm cohort growth over the cycle. |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed018:553&r=ent |
| By: | Barton H. Hamilton; Nicholas W. Papageorge; Nidhi Pande |
| Abstract: | We construct a structural model of entry into self-employment to evaluate the impact of policies supporting entrepreneurship. Previous work has recognized that workers may opt for self-employment due to the non-pecuniary benefits of running a business and not necessarily because they are good at it. Other literature has examined how socio-emotional skills, such as personality traits, affect selection into self-employment. We link these two lines of inquiry. The model we estimate captures three factors that affect selection into self-employment: credit constraints, relative earnings and preferences. We incorporate personality traits by allowing them to affect sector-specific earnings as well as preferences. The estimated model reveals that the personality traits that make entrepreneurship profitable are not always the same traits driving people to open a business. This has important consequences for entrepreneurship policies. For example, subsidies for small businesses do not attract talented-but-reluctant entrepreneurs, but instead attract individuals with personality traits associated with strong preferences for running a business and low-quality business ideas. |
| JEL: | J23 J24 J31 J32 |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25006&r=ent |
| By: | Veugelers, Reinhilde; Ferrando, Annalisa; Lekpek, Senad; Weiss, Christoph T. |
| Abstract: | Using large scale EIB Investment Survey evidence for 2016 covering 8,900 non-financial firms from all size and age classes across all sectors and all EU Member States, we identify different innovation profiles based on a firm's R&D investment and/or innovation activities. We find that "basic" firms - i.e. firms that do not engage in any type of R&D or innovation - are more common among young SMEs, while innovators - i.e. firms that do R&D and introduce new products, processes or services- are more often old and large firms. This hold particularly for "leading innovators", ie those introducing innovations new to the market. To further explore why young SMEs are not more active in innovation, we explore their access to finance. We confirm that young small leading innovators are the most likely to be credit constrained. Grants seem to at least partly addressing the external financing access problem for leading innovators, but not for young SMEs. |
| Keywords: | young small companies,innovation,access to finance |
| JEL: | G24 O31 O38 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:eibwps:201807&r=ent |
| By: | Meng Wei Chen (Indiana University at Bloomington, USA); Yu Chen (University of Graz, Austria); Zhen-Hua Wu (Nanjing University, China); Ningru Zhao (Nanjing Audit University, China) |
| Abstract: | We study how government intervention affects innovation and entrepreneurship, using a model in which two agents (e.g., one entrepreneur and one venture capitalist) engage in teamwork to launch a new business in which a moral hazard problem may persist for both parties. One feature of our model is that the government's financial support (grant) may have (positive) externalities on the teamwork of both parties, but is also constrained by budget costs. We compare two major forms of government intervention: indirect intervention and direct intervention. In the former, government intervention always raises the efforts of both parties and promotes social surplus (welfare). In the latter, government intervention may not always raise the efforts of both parties or promote social surplus relative to the case without government intervention. It may, however, deliver even higher social surplus than indirect financing when the government's share in the enterprise is dominant and its marginal contribution to the project is sufficiently high. |
| Keywords: | Government intervention; Double moral hazard; Direct financing; Indirect financing; Innovation, entrepreneurship |
| JEL: | G24 G32 G34 D80 D86 |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:grz:wpaper:2018-15&r=ent |
| By: | Berlinger, Edina |
| Abstract: | We investigate the effect of state subsidy on the behavior of entrepreneur and venture capitalist in a double moral hazard and fixed investment model under positive externalities. We infer that investment subsidy and success fee improve the incentives, ease credit rationing, hence boost private financing, which explains the popularity of hybrid venture capital systems. The main disadvantage of these systems is, however, that the entrepreneur is encouraged to minimize his/her own capital investment and to ask for the maximal state subsidy available. It may happen that public sources go to entrepreneurs capable to finance their projects privately, so state subsidies increase state deficit (and private profits) without any effects on public welfare leaving other important areas underfinanced. We also prove that state guarantee definitely creates perverse incentives, hence it is not recommended in our model. |
| Keywords: | innovation financing, venture capital, state subsidy, moral hazard |
| JEL: | D21 G38 H32 H50 O38 |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:cvh:coecwp:2018/02&r=ent |
| By: | Kindred, Ashley; Spaulding, Aslihan D.; Steffen, Richard W.; Ringer, Richard |
| Keywords: | Agribusiness, Institutional and Behavioral Economics, Community/Rural/Urban Development |
| Date: | 2017–06–26 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea17:258030&r=ent |
| By: | Katare, Bhagyashree; Ren, Lifeng; Marshall, Maria I. |
| Keywords: | Agribusiness, Industrial Organization, Agricultural and Food Policy |
| Date: | 2017–06–15 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea17:258103&r=ent |
| By: | Yngve Dahle; Martin Steinert; Anh Nguyen Duc; Roman Chizhevskiy |
| Abstract: | Startups is a popular phenomenon that has a significant impact on global economy growth, innovation and society development. However, there is still insufficient understanding about startups, particularly, how to start a new business in the relation to consequent performance. Toward this knowledge, we have performed an empirical study regarding the differences between a Resource and Competence View (Internal) vs Environment and Market View (External) when defining a Business. 701 entrepreneurs have reflected on their startups on nine classes of Resources (values, vision, personal objectives, employees and partners, buildings and rental contracts, cash and credit, patents, IPR's and brands, products and services and finally revenues and grants) and three elements of the Business Mission ("KeyContribution", "KeyMarket" and "Distinction"). It seems to be a tendency to favour the Internal View over the External View. This tendency is clearer in Stable Economies (Europe) than in Emerging Economies (South Africa). There seems to be a co-variation between the tendency to favour the Internal View and the tendency to focus on adding Resources. Finally, we found that an order-based analysis seems to explain the differences between the two views better than a number-based method. |
| Date: | 2018–08 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1809.01487&r=ent |
| By: | Borazon, Elaine, Q; Supangco, Vivien T. |
| Abstract: | This study aims to determine the effect of supply chain integration on the business performance and competitiveness of Philippine small and medium enterprises. A survey of 384 small and medium enterprises was done and structural equation modeling was used to test the hypothesis. Results show that internal integration strongly influences (p |
| Keywords: | Philippines, competitiveness, small and medium enterprises, SMEs, supply chain integration, business performance, structural equation modeling |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:phd:dpaper:dp_2018-13&r=ent |
| By: | Bautista, Mark Edison; Manzano, George |
| Abstract: | Within the framework of the Asia-Pacific Economic Cooperation (APEC) Boracay Action Agenda and the ASEAN Strategic Action Plan developed by its members to assist micro, small, and medium enterprises (MSMEs) to reach internationalization, the study examines the survivability of Philippines MSMEs' exports to select countries. The analysis is based on the survival analysis model of Besedeš and Prusa (2006a; 2006b) and Besedeš and Prusa (2008). Using the Kaplan Meier estimator model in both the MSME exports and the total trade data in documenting the survival rate of goods and duration of Philippine exported products, the study finds that most export relationships of the Philippines are brief, contrary to conventional trade theories which suggest that most trade relationships will be long-lived. Also, MSMEs, on average, account for a more significant number of export relations than large establishments. Furthermore, among MSMEs, it is the medium-sized firms that constitute the majority of export relations over different durations. |
| Keywords: | Philippines, micro, small, and medium enterprises, trade, MSMEs, survival analysis, duration, export survival, Philippine export |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:phd:dpaper:dp_2018-12&r=ent |