nep-ent New Economics Papers
on Entrepreneurship
Issue of 2019‒01‒28
thirteen papers chosen by
Marcus Dejardin
Université de Namur

  1. Capitalists in the Twenty-First Century By Matthew Smith; Danny Yagan; Owen M. Zidar; Eric Zwick
  2. Who Creates Stable Jobs? Evidence from Brazil By Brummund, Peter; Connolly, Laura
  4. Behavioural perspectives on subsistence entrepreneurship in an emerging market By Rüschenpöhler, Julius
  5. The landscape of corporate venturing in Germany: Insights on corporate venture capitals and corporate accelerators By Haslanger, Patrick
  6. Factors affecting succession planning in Small and Medium Enterprises (SMEs) in Zimbabwe: a case study of Harare By NYONI, THABANI
  7. An analytical approach to crowdinvesting: The impact of marketing and idea stealing on the entrepreneur's decision making By Bethmann, Nicola; Frieden, Matthias
  8. The Micro Impact of Macroprudential Policies: Firm-Level Evidence By Meghana Ayyagari; Thorsten Beck; Maria Soledad Martinez Peria
  9. Corporate Income Taxation, Leverage at Entry, and the Growth of Entrepreneurial Companies By Da Rin, Marco; Di Giacomo, M.; Sembenelli, A.
  10. Post-Entry Performance of International New Ventures: The Mediating Role of Learning Orientation By Stephan Gerschewski; Yong Kyu Lew; Zaheer Khan; Byung Il Park
  11. European Small Business Finance Outlook: December 2018 By Kraemer-Eis, Helmut; Botsari, Antonia; Gvetadze, Salome; Lang, Frank; Torfs, Wouter
  12. The Effect of Responsive and Proactive Market Orientation on Product Innovation and Company Performance: A Case Study on MSMEs in the Culinary Field in D.I. Yogyakarta By Ichwan, A’bdul Fatach; Nursyamsiah, Siti
  13. Der Mittelstand und der deutsche Pragmatismus - ein Lösungsansatz für den Fall französischer KMU? By Petra Bleuel

  1. By: Matthew Smith; Danny Yagan; Owen M. Zidar; Eric Zwick
    Abstract: Have the idle rich replaced the working rich at the top of the U.S. income distribution? Using tax data linking 11 million firms to their owners, this paper finds that entrepreneurs who actively manage their firms are key for top income inequality. Most top income is non-wage income, a primary source of which is private business profit. These profits accrue to working-age owners of closely-held, mid-market firms in skill-intensive industries. Private business profit falls by three-quarters after owner retirement or premature death. Classifying three-quarters of private business profit as human capital income, we find that most top earners are working rich: they derive most of their income from human capital, not physical or financial capital. The human capital income of private business owners exceeds top wage income and top public equity income. Growth in private business profit is explained by both rising productivity and a rising share of value added accruing to owners.
    JEL: D31
    Date: 2019–01
  2. By: Brummund, Peter (University of Alabama); Connolly, Laura (University of Alabama)
    Abstract: Recent research shows that start-ups are important for job creation, but these firms are also inherently volatile. We use linked employer-employee data to examine the relative importance of firm age and firm size for job creation and destruction in Brazil. Firm age is a more important determinant of job creation in Brazil than firm size; young firms and start-ups create a relatively high number of jobs. However, young firms are also more likely to exit the market and have higher levels of employment volatility. We, therefore, condition the job creation analysis on job stability. Young firms and large firms create relatively more stable jobs in Brazil.
    Keywords: job creation, job stability, Brazilian labor market
    JEL: L25 J23 J63
    Date: 2018–11
  3. By: Giudo De Blasio; Maria De Paola; Vincenzo Scoppa; Samuele Poy (Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF, Università della Calabria)
    Abstract: This paper investigates the impact of risk attitudes on the decision to become an entrepreneur. In contrast to previous research, we handle endogeneity issues relying on an instrumental variables strategy considering as a source of exogenous variation in risk aversion the early exposure to a massive earthquake. Using several waves of the Bank of Italy Survey of Household Income and Wealth (SHIW), we find that individuals experimenting an earthquake become significantly more risk averse. Second-stage estimates show that risk aversion has a significant negative impact on the probability of becoming an entrepreneur.
    Keywords: Entrepreneurship, Risk Attitudes, Natural Disasters, Instrumental Variables
    JEL: D81 D91 L26 C36
    Date: 2019–01
  4. By: Rüschenpöhler, Julius (Tilburg University, School of Economics and Management)
    Abstract: This dissertation consists of four chapters devoted to work at the intersection of Development and Behavioural Economics. Chapter 1 provides a review of recent contributions to aspirations theory in the context of the literature on behavioural development economics. It discusses the promise of aspirations theory to usefully contribute to addressing the puzzle of low investment levels at high returns among households and microenterprises in developing countries. The three following chapters study the business practices and growth aspirations of microenterprises using data from a randomised controlled trial conducted among traditional retail businesses in Jakarta, Indonesia. Chapter 2 elicits local microenterprises’ business practices through qualitative interviews and a quantitative survey to disseminate best practices via professionally designed handbooks. It further documents the positive impact of two additional treatments to facilitate adoption among peers: a documentary of successful peers to foster social learning and personalised short-term implementation assistance through local laymen to encourage individual learning. Chapter 3 makes use of the panel structure of the control-group data. It shows that, in the absence of treatment, entrepreneurial aspirations predict forward-looking firm behaviour and performance, but that failures to aspire beyond the status quo and failures to imagine or plan for the entrepreneur’s ideal business are common. Chapter 4 uses the experimental data to directly test predictions from aspirations theory. It shows that exposure to aspirational role models can have differential effects on effort and performance depending on their distance to initial levels of aspirations and the inherent risk of seeing one’s aspirations frustrated.
    Date: 2019
  5. By: Haslanger, Patrick
    Abstract: This paper adds to the literature of external corporate venturing, especially corporate venture capitals (CVCs) and corporate accelerators (CAs) by providing an overview of the German corporate venturing market and by offering first intriguing findings based on a novel and unique hand-collected dataset. It presents insights regarding the set-up, organization and staffing of corporate venturing units, as well as characteristics of start-ups under management. This study distinguishes between the corporate venturing unit's mission, organization, governance and network as well as vehicle leads. Moreover, differences in the characteristics of start-ups supported by corporate venturing units are detected. This work offers unique insights on the German corporate venturing landscape and thereby serves as starting point for future and more elaborate research.
    Keywords: corporate venturing,entrepreneurship,corporate venture capital (CVC),corporate accelerator (CA),Germany
    JEL: G24 L26 M13 O3
    Date: 2019
    Abstract: Lack of proper succession planning is one of the major causes of SMEs closure or failure after the death or retirement of founder. Zimbabwean SMEs are not an exception. This study seeks to analyze factors affecting succession planning in SMEs in Zimbabwe. Employing the questionnaire as a data collection instrument and relying on heterogeneous sampling, the study; whose recommendations are 4-fold, basically found out that there is need for proper succession planning if Zimbabwean SMEs are to circumvent the problem of discontinuity after death or retirement of founder.
    Keywords: SMEs; Succession Planning; Zimbabwe
    JEL: L21 L26
    Date: 2019–01–03
  7. By: Bethmann, Nicola; Frieden, Matthias
    Abstract: In a game theoretical setting, this paper studies the entrepreneur's decision making by using a new financing opportunity referred to as crowdinvesting. In this model, the entrepreneur can collect money and advertise his innovative idea. However, crowdinvesting carries the risk of being copied by a potential competitor. Faced with this trade-off, the entrepreneur strategically diminishes his marketing activity under certain circumstances to remain the monopolist in the market. In the second part, we compare crowdinvesting with two alternative financing opportunities, banks and venture capital. We show that crowdinvesting, often mentioned as a financing instrument for drastic innovations, is generally not appropriate for these ideas because the danger of being copied is too high for the entrepreneur.
    Keywords: Crowdinvesting; equity crowdfunding; entrepreneurship; advertising; idea stealing
    JEL: D21 G32 L26 M13 O13
    Date: 2019–01
  8. By: Meghana Ayyagari; Thorsten Beck; Maria Soledad Martinez Peria
    Abstract: Combining balance sheet data on 900,000 firms from 48 countries with information on the adoption of macroprudential policies during 2003-2011, we find that these policies are associated with lower credit growth. These effects are especially significant for micro, small and medium enterprises (MSMEs) and young firms that, according to the literature, are more financially constrained and bank dependent. Among MSMEs and young firms, those with weaker balance sheets exhibit lower credit growth in conjunction with the adoption of macroprudential policies, suggesting that these policies can enhance financial stability. Finally, our results show that macroprudential policies have real effects, as they are associated with lower investment and sales growth.
    Keywords: Macroprudential policies and financial stability;Balance sheets;Public enterprises;financial development; macroprudential policies; firm financing
    Date: 2018–12–07
  9. By: Da Rin, Marco (Tilburg University, Center For Economic Research); Di Giacomo, M.; Sembenelli, A.
    Abstract: We study whether corporate income taxation affects the long-term growth of newly incorporated companies through its effect on their choice of leverage at entry. We first document the distribution of initial leverage, which is persistent over several years. We then find that a decrease in corporate income taxation leads to a sizeable decrease in leverage at entry. This effect on initial conditions has long-term effects: an inverted-U relationship exists between leverage at entry and long-term corporate growth, conditional on survival. These effects are economically sizeable, and stronger in countries with better creditor rights and more transparent financial transactions.
    Keywords: Corporate income taxation; capital structure; entrepreneurial finance; corporate growth
    JEL: G32 H25 L25 L26
    Date: 2018
  10. By: Stephan Gerschewski (Henley Business School, University of Reading); Yong Kyu Lew (Hankuk University of Foreign Studies, College of Business, South Korea); Zaheer Khan (University of Kent, Kent Business School, UK); Byung Il Park (Hankuk University of Foreign Studies, College of Business,South Korea)
    Abstract: This paper investigates the role of learning orientation in the post-entry performance of international new ventures (INVs) by examining the relationships of niche strategy, network resources, and learning orientation with the multi-dimensional post-entry performance of INVs. Based on the INV internationalisation literature, we develop and validate a conceptual model using a sample of 147 INVs from two relatively small and open economies from New Zealand and Australia. The results show that learning orientation of INVs positively mediates the relationship between niche orientation and network resources and INVs’ post-entry performance. Our study indicates that learning orientation may be an important capability through which INVs’ focused international business strategies and resources (e.g., niche orientation and network resources) may influence their multi-dimensional post-entry performance in terms of operational, financial and overall effectiveness measures. We draw key implications for research on INVs’ post-entry behaviour by explicating the role played by the firms’ learning capabilities, and how these capabilities may interact with their strategies and resources in enhancing the post-entry performance of INVs.
    Keywords: international new venture, learning orientation, niche orientation, network resources, post-entry performance
    JEL: M16
    Date: 2018–06
  11. By: Kraemer-Eis, Helmut; Botsari, Antonia; Gvetadze, Salome; Lang, Frank; Torfs, Wouter
    Abstract: This analysis provides an overview of the main markets relevant to the EIF. It starts by discussing the general market environment, then looks at the main aspects of equity finance and the guarantee and SME securitisation markets and, finally, it highlights important aspects of microfinance in Europe. A chapter on Fintech also complements the analysis. The EIF Working Papers are designed to make available to a wider readership selected topics and studies in relation to EIF's business. The Working Papers are edited by EIF's Research & Market Analysis and are typically authored or co-authored by EIF staff or are written in cooperation with EIF.
    Date: 2018
  12. By: Ichwan, A’bdul Fatach; Nursyamsiah, Siti
    Abstract: This study aims to determine the effect of Responsive and Proactive Market Orientation on Product Innovation and Company Performance. The population in this study is the Micro, Small, and Medium Enterprise (MSME) in the Culinary Division at D.I. Yogyakarta and use 200 respondents as a sample. By using convenience sampling technique, the researchers have the freedom to choose any culinary MSME found around D.I. Yogyakarta to be the respondent. Hypothesis testing using Structural Equation Model (SEM) analysis. The findings show that there is a positive influence of responsive market orientation on product innovation performance, proactive market orientation on product innovation performance, product innovation performance on the company's market performance, and the company's market performance on the company's financial performance. The findings of this study contribute to MSMEs that information about market orientation adopted by business actors or companies can affect the performance of new product innovations in the market to improve the company's market performance which then affects the company's financial performance.
    Keywords: responsive market orientation; proactive market orientation; product innovation; company performance
    JEL: A11 D13
    Date: 2019–01–05
  13. By: Petra Bleuel (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis - UCA - Université Côte d'Azur - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Die aktuelle Entwicklung der deutschen Wirtschaft ist das Ergebnis wirtschaftlicher und sozialer Entscheidungen die von mittelständischen Unternehmen und Großunternehmen getragen wird. Der Mittelstand wird nicht durch eine bestimmte Größe bestimmt, sondern durch ein unternehmerisches Konzept, das auf Werten, einer Geisteshaltung und einer spezifischen Governance des jeweiligen Unternehmens basiert ist, und sich in einem spezifischen Ökosystem entwickelt. Aufgrund dieser Besonderheiten erweist sich die Reproduktion dieses Modells als unmöglich. Die französischen Behörden könnten sich jedoch von bestimmten Elementen der Unterstützung der deutschen KMU inspirieren lassen.
    Abstract: The current performance of the German economy is the result of economic and social choices driven by the Mittelstand and large companies. The Mittelstand, cannot be determined by a specific size but by an entrepreneurial concept based on values, a state of mind and a specific company governance evolving in a specific ecosystem. Because of these peculiarities, the reproduction of this model is not possible. However, French authorities could draw inspiration from certain elements of support devoted to German SMEs.
    Abstract: Le Mittelstand et le pragmatisme allemand : un début de solution pour le cas des PME françaises ? Les performances actuelles de l'économie allemande sont la résultante de choix économiques et sociales portés par le Mittelstand et les grandes entreprises. Le Mittelstand, ne se détermine pas par une taille spécifique mais par un concept entrepreneurial fondé sur des valeurs, un état d'esprit et une gouvernance de l'entreprise particulière évoluant dans un écosystème spécifique. En raison de ces particularités, la reproduction de ce modèle s'avère impossible. Cependant, les autorités françaises pourraient s'inspirer de certains éléments de soutien consacré aux PME allemandes.
    Keywords: Soziale Marktwirtschaft,deutsches Ökosystem,KMU mittlere Unternehmen,mittelständische Unternehmen,staatliche Unterstützung,public support,German ecosystem,SME midsized firms,social market economy,économie de marché sociale,écosystème allemand,PME - ETI,Mittelstand,soutien public
    Date: 2020–06

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