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on Entrepreneurship |
| By: | Thomas Brand; Marlène Isoré; Fabien Tripier |
| Abstract: | We develop a business cycle model where endogenous firm creation stems from two credit market frictions. First, entrepreneurs search for a lending relationship with a bank. Second, an optimal debt contract with monitoring is implemented. We analyze the interplay between both frictions, and embed it into an otherwise standard business cycle model, which we estimate with Bayesian techniques. We find that uncertainty shocks are a prime contributor to business cycle fluctuations in the US, not only for macro-financial aggregates but also for firm creation. Moreover, we point out that the credit search friction dampens the financial accelerator mechanism because default may imply the end of the lending relationship. |
| Keywords: | Uncertainty;Financial frictions;Search and matching;Business cycle;Firm creation;Firm dynamics |
| JEL: | D8 E3 E4 E5 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:cii:cepidt:2018-19&r=ent |
| By: | David B. Audretsch; Marian Hafenstein; Alexander S. Kritikos; Alexander Schiersch |
| Abstract: | A rich literature links knowledge inputs with innovative outputs. However, most of what is known is restricted to manufacturing. This paper analyzes whether the three aspects involving innovative activity - R&D; innovative output; and productivity - hold for knowledge intensive services. Combining the models of Crepon et al. (1998) and of Ackerberg et al. (2015), allows for causal interpretation of the relationship between innovation output and labor productivity. We find that knowledge intensive services benefit from innovation activities in the sense that these activities causally increase their labor productivity. Moreover, the firm size advantage found for manufacturing in previous studies nearly disappears for knowledge intensive services. |
| Keywords: | MSMEs, R&D, Service Sector, Innovation, Productivity, Entrepreneurship |
| JEL: | L25 L60 L80 O31 O33 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1774&r=ent |
| By: | Ding, Lei (Federal Reserve Bank of Philadelphia); Lee, Hyojung (Harvard University); Bostic, Raphael W. (fedreal reserve bank of Atlanta) |
| Abstract: | This study provides new evidence on the effectiveness of the Community Reinvestment Act (CRA) on small business lending by focusing on a sample of neighborhoods with changed CRA eligibility status across the country because of an exogenous policy shock in 2013. The results of difference-in-differences analysis provide consistent evidence that the CRA promotes small business lending, especially in terms of number of loan originations, in lower-income neighborhoods. The generally positive effects of the CRA are sensitive to the types of CRA treatment. Losing CRA eligibility status has a relatively larger effect on small business lending activities, while the effects of newly gaining CRA eligibility are less pronounced. The results are fairly robust when alternative sample periods and control groups are used. |
| Keywords: | Small Business; Credit; Community Reinvestment Act |
| JEL: | G21 G28 G32 |
| Date: | 2018–12–03 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedpwp:18-27&r=ent |
| By: | Knutsson, Polina (Department of Economics, Lund University) |
| Abstract: | Human capital features prominently in theoretical work on post-entry performance of new firms. Empirical analysis has, however, to a large extent overlooked the unobserved component of human capital focusing on years of education or labor market experience. This paper adds to the literature on worker characteristics and post-entry firm performance by putting the unobserved quality of workers in the center of analysis. I find strong evidence that new firms on average employ workers of lower unobserved quality relative to incumbent firms. Among new firms workers of higher unobserved quality are overrepresented in spin-offs and incorporated new firms. I further show that unobserved quality of workers is important for the post-entry performance of firms as it is a strong predictor of new firm survival. |
| Keywords: | Human capital; occupational choice; sorting; new firms |
| JEL: | J24 J60 M13 |
| Date: | 2018–11–29 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lunewp:2018_038&r=ent |
| By: | Javier Miranda; Nikolas Zolas |
| Abstract: | We link USPTO patent data to U.S. Census Bureau administrative records on individuals and firms. The combined dataset provides us with a directory of patenting household inventors as well as a time-series directory of self-employed businesses tied to household innovations. We describe the characteristics of household inventors by race, age, gender and U.S. origin, as well as the types of patented innovations pursued by these inventors. Business data allows us to highlight how patents shape the early life-cycle dynamics of nonemployer businesses. We find household innovators are disproportionately U.S. born, white and their age distribution has thicker tails relative to business innovators. Data shows there is a deficit of female and black inventors. Household inventors tend to work in consumer product areas compared to traditional business patents. While patented household innovations do not have the same impact of business innovations their uniqueness and impact remains surprisingly high. Back of the envelope calculations suggest patented household innovations granted between 2000 and 2011 might generate $5.0B in revenue (2000 dollars). |
| JEL: | O3 O31 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25259&r=ent |
| By: | Asriyan, Vladimir; Laeven, Luc; Martín, Alberto |
| Abstract: | We develop a new theory of information production during credit booms. In our model, entrepreneurs need credit to undertake investment projects, some of which enable them to divert resources towards private consumption. Lenders can protect themselves from such diversion in two ways: collateralization and costly screening, which generates durable information about projects. In equilibrium, the collateralization-screening mix depends on the value of aggregate collateral. High collateral values raise investment and economic activity, but they also raise collateralization at the expense of screening. This has important dynamic implications. During credit booms driven by high collateral values (e.g. real estate booms), the economy accumulates physical capital but depletes information about investment projects. As a result, collateral-driven booms end in deep crises and slow recoveries: when booms end, investment is constrained both by the lack of collateral and by the lack of information on existing investment projects, which takes time to rebuild. We provide new empirical evidence using US firm-level data in support of the model's main mechanism. |
| Keywords: | Collateral; Credit Booms; Crises; Information Production; Missallocation |
| JEL: | D80 E32 E44 G01 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13340&r=ent |
| By: | Clarise Mostert (North-West University) |
| Abstract: | Entrepreneurship plays a vital role in economic prosperity, and its promotion as a solution to unemployment has been highlighted as a high priority by the South African government. Currently, Higher Education Institutions in South Africa experience a constant need to produce more entrepreneurial graduates. In order to do so, these institutions have to foster and promote an entrepreneurial culture amongst students. However, the question can be asked: are universities doing enough to support and develop entrepreneurship? The purpose of this paper is to examine South African students? perceptions on the role of the university that they are currently enrolled at, in developing entrepreneurship. The results provide this university with valuable insights that may enable them to re-invent the entrepreneurship objectives of the university. |
| Keywords: | Students, perceptions, entrepreneurship development, South Africa, university |
| JEL: | L26 I23 I29 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:sek:iacpro:6709741&r=ent |