nep-ent New Economics Papers
on Entrepreneurship
Issue of 2019‒01‒07
thirteen papers chosen by
Marcus Dejardin
Université de Namur

  1. Selection into Entrepreneurship and Self-Employment By Ross Levine; Yona Rubinstein
  2. SMEs' responses to potentially disruptive innovations: Does strategic entrepreneurship provide an explanation? By Kay, Rosemarie; Nielen, Sebastian; Schröder, Christian
  3. Shattering the glass ceiling? How the institutional context mitigates the gender gap in entrepreneurship By Boudreaux, Christopher; Nikolaev, Boris
  4. The Creation and Evolution of Entrepreneurial Public Markets By Shai Bernstein; Abhishek Dev; Josh Lerner
  5. Firm Dynamics in South Africa By Mpho Tsebe; Veron Vukeya; Christine Lewis; Flavio Calvino; Chiara Criscuolo
  6. The Inverted-U Relationship between Credit Access and Productivity Growth By Philippe Aghion; Antonin Bergeaud; Gilbert Cette; Rémy Lecat; Hélène Maghin
  7. The effects of EU-funded guarantee instruments of the performance of small and medium enterprises: Evidence from France By Bertoni, Fabio; Colombo, Massimo G.; Quas, Anita
  8. Entrepreneurial Leadership: Approaches to Concept Definition and Main Research Directions By Karpinskaya, E.; Shirokova, G.
  9. Foreign Motivations: How International Exposure Shapes Firms' Entrepreneurial Orientation in Emerging Market By Wales, W.; Shirokova, G.; Bogatyreva, K.; Germain, R.
  10. Reservation Nonemployer and Employer Establishments: Data from U.S. Census Longitudinal Business Databases By Randall Akee; Elton Mykerezi; Richard M. Todd
  11. Relationship lending and SMEs’ funding costs over the cycle: why diversification of borrowing matters By Mikael Béatriz; Jérôme Coffinet; Théo Nicolas
  12. Profitability of Industries, Labour Market Flows, and Creative Destruction in Finnish Manufacturing By Maliranta, Mika; Määttänen, Niku
  13. Vers la compréhension de l’entrepreneur de demain : s’inspirer de l’entrepreneur dans les industries culturelles et créatives. By André Tira; Bérangère L. Szostak; André Tira

  1. By: Ross Levine; Yona Rubinstein
    Abstract: We study the effects of ability and liquidity constraints on entrepreneurship. We develop a three sector Roy model that differentiates between entrepreneurs and other self-employed to address puzzling gaps that have emerged between theory and evidence on entry into entrepreneurship. The model predicts—and the data confirm—that entrepreneurs are positively selected on highly-remunerated human capital, but other self-employed are negatively selected on those same abilities; entrepreneurs are positively selected on collateral, but other self-employed are not; and entrepreneurship is procyclical, but self-employment is countercyclical.
    JEL: E32 J24 L26
    Date: 2018–12
  2. By: Kay, Rosemarie; Nielen, Sebastian; Schröder, Christian
    Abstract: This study analyses how established SMEs respond to potentially disruptive inno-vations and business models in the course of increasing digitization. Drawing on the strategic entrepreneurship approach we argue that SMEs showing strategic entrepreneurial behaviour are more likely to respond to potentially disruptive innovations and business models proactively. We find that established SMEs recognizing disruptive innovations and business models as a business opportunity apply significantly more frequently strategic measures to exploit these opportunities. Observing and evaluating relevant new technologies and devel-opments is a key determinant of belonging to the group of SMEs demonstrating strategic en-trepreneurial behaviour. In our sample only a minority belongs to the group of proactive es-tablished SMEs.
    Keywords: SMEs,Strategic Entrepreneurship,Digitization,Disruptive Innovations,New Business Models
    JEL: L26 L21 M21
    Date: 2018
  3. By: Boudreaux, Christopher; Nikolaev, Boris
    Abstract: We examine how the institutional context affects the relationship between gender and opportunity entrepreneurship. To do this, we develop a multi-level model that connects feminist theory at the micro-level to institutional theory at the macro-level. It is hypothesized that the gender gap in opportunity entrepreneurship is more pronounced in low-quality institutional contexts and less pronounced in high-quality institutional contexts. Using data from the Global Entrepreneurship Monitor (GEM) and regulation data from the economic freedom of the world index (EFW), we test our predictions and find evidence in support of our model. Our findings suggest that, while there is a gender gap in entrepreneurship, these disparities are reduced as the quality of the institutional context improves.
    Keywords: female entrepreneurship, gender gaps, opportunity entrepreneurship, institutional context, regulation
    JEL: L26
    Date: 2018–11–18
  4. By: Shai Bernstein; Abhishek Dev; Josh Lerner
    Abstract: This paper explores the creation and evolution of new stock exchanges around the world geared towards entrepreneurial companies, known as second-tier exchanges. Using hand-collected novel data, we document the proliferation of these new stock exchanges that were created in a large number of countries, attracted a significant volume of global IPOs, were introduced fairly cyclically, and had lower listing requirements when compared to first-tier stock exchanges. We find that increases in demand for entrepreneurial capital—as proxied for by patenting, IPOs, and stock market valuations—led to a higher likelihood of the introduction of second-tier exchanges. We find no evidence that new second-tier exchanges diverted the existing flow of IPOs from established stock exchanges. Shareholder protection strongly predicted exchange success, even in countries with high levels of venture capital activity, patenting, and financial market development. Second-tier exchanges in countries with better shareholder protection allowed younger, less profitable, but faster-growing companies to raise more capital. These results highlight the importance of institutions in enabling the provision of entrepreneurial capital to young companies.
    JEL: G24 G38 L26
    Date: 2018–12
  5. By: Mpho Tsebe; Veron Vukeya; Christine Lewis; Flavio Calvino; Chiara Criscuolo
    Abstract: Until recently a lack of data meant that little was known about the distribution of firms and firm dynamics in South Africa. A new firm-level panel dataset based on tax data creates opportunities to better understand how firms enter, grow and exit. By using the OECD’s DynEmp framework, which was designed to create harmonised variables based on confidential firm-level data, this paper provides new insights about the dynamics of firms in South Africa and how these compare to other countries. One concerning finding is that the entry rate of formal sector firms was probably below the exit rate in recent years, which means that firms are growing older. The relatively low start-up rate compared to other countries together with the higher average firm size of entrants are consistent with the low rates of entrepreneurial activity and the presence of barriers to firm entry highlighted in the existing literature on the South African economy. As in other countries, young firms have disproportionately contributed to employment growth and remained net job creators even as GDP growth slowed. Nonetheless, large firms are particularly prominent in the South African economy, including as net job creators.
    Keywords: Employment dynamics, Firm demographics, Firm-level data, South Africa, Start-ups
    JEL: D22 L11 L26 O55
    Date: 2018–12–19
  6. By: Philippe Aghion; Antonin Bergeaud; Gilbert Cette; Rémy Lecat; Hélène Maghin
    Abstract: In this paper we identify two counteracting effects of credit access on productivity growth: on the one hand, better access to credit makes it easier for entrepreneurs to innovate; on the other hand, better credit access allows less efficient incumbent firms to remain longer on the market, thereby discouraging entry of new and potentially more efficient innovators. We first develop a simple model of firm dynamics and innovation-base growth with credit constraints, where the above two counteracting effects generate an inverted-U relationship between credit access and productivity growth. Then we test our theory on a comprehensive French manufacturing firm-level dataset. We first show evidence of an inverted-U relationship between credit constraints and productivity growth when we aggregate our data at sectoral level. We then move to firm-level analysis, and show that incumbent firms with easier access to credit experience higher productivity growth, but that they also experienced lower exit rates, particularly the least productive firms among them. To confirm our results, we exploit the 2012 Eurosystem's Additional Credit Claims (ACC) program as a quasi-experiment that generated exogenous extra supply of credits for a subset of incumbent firms.
    Keywords: inverted-u relationship, credit, eurosystem
    Date: 2018–12
  7. By: Bertoni, Fabio; Colombo, Massimo G.; Quas, Anita
    Abstract: This paper provides a policy-oriented summary of the econometric study commissioned by the European Court of Auditors, in the context of its audit of EU-funded loan guarantee instruments.2 The study assesses the real performance effects of EU-guaranteed loans to SMEs disbursed in France during the years 2002 to 2016. The study estimates the average treatment effect of guaranteed loans over a 10-year period around disbursement, using a combination of difference-in-difference estimation, coarsened exact matching and propensity score analysis. On average, French SMEs benefitting from EU-guaranteed loans experienced additional 9% asset growth, 7% sales growth, and 8% employment growth compared to the control group. The economic significance of the effect is typically stronger for smaller and younger firms. Beneficiary SMEs also experienced 5% lower default rates. The study also estimates the effects of guaranteed loans on SME productivity. Consistent with earlier works, the analysis finds a short-run dip in productivity, accompanied by a medium-run recovery and a long-run positive effect, signalling the presence of adjustment costs in the production function following loan-induced investments. The study concludes by discussing potential implications for policy makers and further research.
    Keywords: EIF,credit guarantees,credit constraints,real effects,small and medium-sized enterprises
    JEL: G2 H25 O16
    Date: 2018
  8. By: Karpinskaya, E.; Shirokova, G.
    Abstract: This article offers a literature analysis concerning the entrepreneurial leadership for determination of its current stage of conceptualization with an accent to the evolution of meanings and analysis of core directions of research. The entrepreneurial leadership is an emerging field of knowledge based on theoretical foundations of both leadership and entrepreneurship. Now it has moved far from its original understanding without any clear vision of the final destination, while literature analysis has revealed some features of the institutionalization and contextualization stages of its conceptual development. The article provides a map of the current stance of research and concludes with recommendation on future scientific development of the field.
    Keywords: entrepreneurial leadership, leadership in new venture, strategic entrepreneurship, approaches to definition, literature analysis,
    Date: 2018
  9. By: Wales, W.; Shirokova, G.; Bogatyreva, K.; Germain, R.
    Abstract: Since its emergence, entrepreneurial orientation (EO) has grown in prominence to represent a central concept in corporate entrepreneurship. Despite the importance of EO, in-sufficient attention has been devoted to EO in emerging markets and transitional economies. In this paper, we examine the international exposure of managers within an emerging market context as a driver of their firms’ EO formation as well other potentially impactful forces such as foreign competition growth in their domestic market and the level of involvement into in-ternational economic activity within the region where the firm operates. We explore the focal relationships using a sample of 769 manufacturing firms from Russia, a BRIC country that has received very little attention within the literature on corporate entrepreneurship in general and EO in particular. Our findings indicate importance of managerial international exposure and industry foreign competition growth in the process of EO formation. At the same time, the former is shown to be a context-specific EO driver. Implications are discussed.
    Keywords: entrepreneurial orientation, international exposure, regional involvement into international economic activity, Russia,
    Date: 2018
  10. By: Randall Akee; Elton Mykerezi; Richard M. Todd
    Abstract: The presence of businesses on American Indian reservations has been difficult to analyze due to limited data. Akee, Mykerezi, and Todd (AMT; 2017) geocoded confidential data from the U.S. Census Longitudinal Business Database to identify whether employer establishments were located on or off American Indian reservations and then compared federally recognized reservations and nearby county areas with respect to their per capita number of employers and jobs. We use their methods and the U.S. Census Integrated Longitudinal Business Database to develop parallel results for nonemployer establishments and for the combination of employer and nonemployer establishments. Similar to AMT’s findings, we find that reservations and nearby county areas have a similar sectoral distribution of nonemployer and nonemployer-plus-employer establishments, but reservations have significantly fewer of them in nearly all sectors, especially when the area population is below 15,000. By contrast to AMT, the average size of reservation nonemployer establishments, as measured by revenue (instead of the jobs measure AMT used for employers), is smaller than the size of nonemployers in nearby county areas, and this is true in most industries as well. The most significant exception is in the retail sector. Geographic and demographic factors, such as population density and per capita income, statistically account for only a small portion of these differences. However, when we assume that nonemployer establishments create the equivalent of one job and use combined employer-plus-nonemployer jobs to measure establishment size, the employer job numbers dominate and we parallel AMT’s finding that, due to large job counts in the Arts/Entertainment/Recreation and Public Administration sectors, reservations on average have slightly more jobs per resident than nearby county areas.
    Keywords: Entrepreneurship, American Indians, Rural Communities, Economic Development
    Date: 2018–12
  11. By: Mikael Béatriz; Jérôme Coffinet; Théo Nicolas
    Abstract: Using a unique panel design that enables to control for bank, firm, market and loan heterogeneities, we confirm that relationship lenders charge higher rates in good times and lower rates in bad times. However, we show that risky single-bank firms do not benefit from this insurance mechanism and are "held-up" by relationship lenders. Local bankcompetition and higher non-bank finance dependence alleviate this information-monopolistic behavior. Finally, long-term loans and small, non-trading-oriented and well capitalized banks drive the benefits of relationship lending.
    Keywords: relationship lending, financial crisis, interest rates, bank lending channel, SME, competition.
    JEL: D82 E32 E51 G01 G21
    Date: 2018
  12. By: Maliranta, Mika; Määttänen, Niku
    Abstract: Abstract An often-expressed concern is that new technologies related to e.g. automation and robotization accelerate job destruction and increase the capital income share. We use Finnish plant and firm level data to see whether these developments are taking place in Finland. We sort industries into four groups based on their technology level using an OECD industry classification. The capital share depends not just on technology but also on competition between firms. Competition influences the capital income share via two opposing mechanisms. On the one hand, competition for workers increases the wage level thereby decreasing the capital income share. On the other hand, competition accelerates the process of “creative destruction”, where the most productive and profitable firms expand while others downsize or exit the market altogether. This process works to increase capital income share. We find that there is a lot of creative destruction occurring in industries with a high level of technology. However, there is no clear trend in job creation or destruction rates in any of the four industry groups. The capital income share has not increased from mid 1990s to 2006 even in industries with a high technology level.
    Keywords: Creative destruction, Capital income share, Labour market flows
    JEL: E25
    Date: 2018–12–17
  13. By: André Tira; Bérangère L. Szostak; André Tira
    Abstract: Cet article a pour objectif de comprendre l’entrepreneur de demain en convoquant les travaux relatifs à l’entrepreneuriat culturel et créatif. Nous montrons, en référence aux dernières approches en entrepreneuriat s’appuyant sur la philosophie pragmatiste, qu’il importe de se concentrer sur l’agir créatif qui lie l’entrepreneur et son environnement. Puis, nous caractérisons l’environnement de cet agir en ICC, notamment l’existence d’un marché très concurrentiel, hautement incertain, et où les fins et les moyens sont imbriqués. Nous pointons dès lors des enjeux auxquels l’entrepreneur de demain est/sera confronté en l’occurrence l’existence (1) d’un écosystème valorisant sa créativité et (2) d’espaces économiques démocratiques créatifs.
    Keywords: entrepreneur, industries culturelles et créatives, agir créatif.
    JEL: L26 L89 Z19
    Date: 2018

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