nep-ent New Economics Papers
on Entrepreneurship
Issue of 2019‒03‒11
eleven papers chosen by
Marcus Dejardin
Université de Namur

  1. Entrepreneurship, Institutions, and Economic Growth: Does the Level of Development Matter? By Christopher J. Boudreaux
  2. The Interdependence of Hierarchical Institutions: Federal Regulation, Job Creation, and the Moderating Effect of State Economic Freedom By David S. Lucas; Christopher J. Boudreaux
  3. Entrepreneurs’ Attitudes Toward Risk in Micro and Small Enterprises: Evidence from Urban Ethiopia By Abdelkrim Araar; Yesuf Mohammednur Awel; Jonse Bane Boka; Hiywot Menker; Ajebush Shafi; Eleni Abraham Yitbarek; Mulatu Zerihun
  4. Place-based Innovation Ecosystems: Ljubljana start-up ecosystem and the Technology Park Ljubljana (Slovenia) By Maja Bucar; Gabriel Rissola
  5. Intellectual Property Protection Mechanisms and the Characteristics of Founding Teams By Sara Amoroso; Albert N. Link
  6. From Invention to Industry: The emergence of the 3D Printing Industry By Abeer Pervaiz
  7. Determinants of choice of credit sources by Eswatini SMEs: A focus on the Agriculture Sector By Dlamini, T.; Mohammed, M.
  8. Spatial drivers of firm entry in Iran By Cheratian, Iman; Goltabar, Saleh; Calá, Carla Daniela
  9. A comparative analysis between entrepreneurship education and entrepreneurial intentions amongst agricultural economics and animal production students at the University of Limpopo By Seanego, K.; Hlongwane, J.
  10. Bundling and exporting: evidence from German SMEs By Aquilante, Tommaso; Vendrell-Herrero, Ferran
  11. Comment développer l’auto-efficacité entrepreneuriale? Étude auprès d’étudiants universitaires By Etienne St-Jean; Cécile Fonrouge

  1. By: Christopher J. Boudreaux
    Abstract: Entrepreneurship is often touted for its ability to generate economic growth. Through the creative-destructive process, entrepreneurs are often able to innovate and outperform incumbent organizations, all of which is supposed to lead to higher employment and economic growth. Although some empirical evidence supports this logic, it has also been the subject of recent criticisms. Specifically, entrepreneurship does not lead to growth in developing countries; it only does in more developed countries with higher income levels. Using Global Entrepreneurship Monitor data for a panel of 83 countries from 2002 to 2014, we examine the contribution of entrepreneurship towards economic growth. Our evidence validates earlier studies findings but also exposes previously undiscovered findings. That is, we find that entrepreneurship encourages economic growth but not in developing countries. In addition, our evidence finds that the institutional environment of the country, as measured by GEM Entrepreneurial Framework Conditions, only contributes to economic growth in more developed countries but not in developing countries. These findings have important policy implications. Namely, our evidence contradicts policy proposals that suggest entrepreneurship and the adoption of pro-market institutions that support it to encourage economic growth in developing countries. Our evidence suggests these policy proposals will be unlikely to generate the economic growth desired.
    Date: 2019–03
  2. By: David S. Lucas; Christopher J. Boudreaux
    Abstract: Regulation is commonly viewed as a hindrance to entrepreneurship, but heterogeneity in the effects of regulation is rarely explored. We focus on regional variation in the effects of national-level regulations by developing a theory of hierarchical institutional interdependence. Using the political science theory of market-preserving federalism, we argue that regional economic freedom attenuates the negative influence of national regulation on net job creation. Using U.S. data, we find that regulation destroys jobs on net, but regional economic freedom moderates this effect. In regions with average economic freedom, a one percent increase in regulation results in 14 fewer jobs created on net. However, a standard deviation increase in economic freedom attenuates this relationship by four fewer jobs. Interestingly, this moderation accrues strictly to older firms; regulation usually harms young firm job creation, and economic freedom does not attenuate this relationship.
    Date: 2019–03
  3. By: Abdelkrim Araar; Yesuf Mohammednur Awel; Jonse Bane Boka; Hiywot Menker; Ajebush Shafi; Eleni Abraham Yitbarek; Mulatu Zerihun
    Abstract: The attitudes toward risk of women and men entrepreneurs in micro- and small enterprises (MSEs) are analyzed, and the factors that influence attitude toward risk of MSE owners are investigated. The empirical analysis first uses the moment-based approach proposed by Antle (1987) to estimate the risk preferences of men and women entrepreneurs. Second, a regression model is employed to understand the correlates of attitude toward risk and to decompose gender differences in risk aversion using the Oaxaca-Blinder technique. The results clearly indicate that MSE entrepreneurs are risk-averse with a relative risk premium of 1.5%. Women entrepreneurs are slightly more risk-averse than are men entrepreneurs. Regression estimates show that entrepreneurs’ attitude toward risk is significantly correlated with age and experience, marital status, education level, financial literacy, wealth, sector, and business type. The gender difference in risk aversion is significantly explained by the predictor variables while the unexplained component is insignificant. This suggests that gender differences in risk preference are the result of disparities in socioeconomic factors rather than of biology.
    Keywords: risk aversion, gender, micro- and small enterprises
    JEL: D14 J16 M21
    Date: 2019
  4. By: Maja Bucar; Gabriel Rissola (European Commission - JRC)
    Abstract: This case study focuses on Ljubljana/ Slovenia's start-up ecosystem and its main actors and orchestrators (or "innovation process entrepreneurs") like the Technology Park Ljubljana. While Slovenia has kept its place as a strong innovator (EIS, 2017), the only CEEC in this group, it lacks an effective governance structure for research and innovation and true collaboration between actors. Taking advice from more experienced countries and applying policy and funding instruments prescribed by the EU could have speeded up the process of developing a more advanced innovation system, but frequent changes of the instruments and the support provided to different stakeholders did not help. Against this background, one of the interesting phenomena that can be observed in Ljubljana’s start-up environment is a growth of various kinds of new initiatives, some bottom-up from entrepreneurial activity, others stimulated by public policy, but all aimed at providing stimulating support to start-ups, from co-working spaces, geek house, Hackathon, etc. All together they create a dynamic network, which spreads beyond Ljubljana’s Region across Slovenia, but also much wider across Western Balkans and to EU and USA. This network is developing in parallel, with or without the support of formal institutions and/or governmental support.
    Keywords: Place-based, innovation ecosystem, start-up, Technology Park, Ljubljana, quadruple helix
    Date: 2018–12
  5. By: Sara Amoroso (European Commission – JRC); Albert N. Link (Bryan School of Business and Economics University of North Carolina-Greensboro)
    Abstract: Intellectual property protection mechanisms (IPPMs) are critical to fostering innovation and their relevance has grown enormously with the increased trade in goods and services involving intellectual property. Scholars have investigated what factors facilitate or hinder the use of such IP protection strategies, identifying country, sector, and firm characteristics. However, the extant literature has overlooked the role of founding team characteristics on the choice of IPPMs. Using data from a large sample of European small and young entrepreneurial firms, we show that controlling for size, R&D intensity, and other firms and market effects, the founding team characteristics such as gender and education greatly influence the choice of IPPMs.
    Keywords: IP choice, patents, appropriability, entrepreneurship, knowledge intensive firms, gender, AEGIS survey
    JEL: M13 L26 O34
    Date: 2019–01
  6. By: Abeer Pervaiz (Free University of Bolzano‐Bozen, Faculty of Economics, Italy)
    Abstract: In organizational and management literature, the phenomenon of how industries emerge has either been investigated theoretically from an institutional perspective and empirically on already established industries. Few studies in entrepreneurship literature have also explored the emergence of industries but most of those credit the creation of an industry to the ‘hero entrepreneurs’, without regards to the existence of other actors. While useful, these studies give us a partial understanding to industry emergence. What remains undiscovered is the actual process that happens before the industry is even created. Social movements offer a broader perspective and some scholars have implemented the concept of social movements to understand industry emergence, but these studies are again restricted to established industries, specifically the wind industry. Given these limitations, this study, using an actor centric approach, tries to answer two questions: (1) how industries emerge? and (2) how social movement like processes can drive the creation of an industry? Drawing on the concept of social movements, this study contributes towards understanding the phenomenon of industry emergence from the pre-emergence phase where diverse actors, not necessarily entrepreneurs, are identified that form a collective action and help in the emergence of an industry. 3D printing industry was chosen as a single case study where the actors are the embedded unit of analysis. This study explores the narratives of a diverse set of 15 actors belonging to 3D printing industry from the beginning. A qualitative approach was adopted using the Gioia methodology for rich analysis. The findings show how a social movement composition of diverse actors, coupled with temporal engagement, form the foundation of a new industry thereby gradually leading to industry emergence.
    Keywords: Industry Emergence, Social Movements, Collective Action, Actor, Community, Qualitative, Entrepreneurship
    JEL: M1
    Date: 2019–02
  7. By: Dlamini, T.; Mohammed, M.
    Abstract: The purpose of this study is to identify the factors that influence choice of credit sources by SMEs in the agriculture sector. Understanding factors that determine farmers� choice of credit will help improve and prioritise financial services most frequently used by the SMEs, in order to improve local food production and contribute to the Gross Domestic Production (GDP). The study used FinScope 2016 Survey data entailing 3,024 Eswatini SMEs selected through the two stage stratified random sampling method. Out of these SMEs, 87 of them in the agriculture sector were able to access credit from the informal, semi-formal and formal service providers in 2016, hence this study focuses of them. The data was analysed using a multinomial logistic regression. The study finds that keeping financial records, capital size required to start a business, the size of business, age of the business owner, and interest rates are significant factors that influence choices of agriculture SME owners between informal, semi-formal, and formal credit providers. Entrepreneurs that do not keep records are more likely to use informal sources of credit. Therefore, there is a need to develop policies that should thrust interventions to informal sources of finance/credit such as stokvels and rotating and savings schemes (ROSCAs) and also a policy that will ensure that semi-formal financial institutions do not morph into pseudo formal institutions, that is, commercial banks.
    Keywords: Agriculture; access to finance; SMMEs; SMEs; credit choices; Eswatini JEL codes: Q140, Q180, R200; Agricultural Finance
    Date: 2018–09–25
  8. By: Cheratian, Iman; Goltabar, Saleh; Calá, Carla Daniela
    Abstract: Given the importance of entry promotion to prompt economic growth and promote structural transformation, this paper investigates the regional determinants of firm entry in the 30 Iranian regions, considering four different sizes -micro, small, medium and large- over 2000-2015. Using a new and unique database, we estimate panel non-spatial and spatial lag and error dependence models. We find that regional factors explain firm entry, but the impact is not homogeneous across firms of different size. We also find that most types of firms are influenced by the negative effect of economic sanctions during the sample period. Keywords: firm entry, ecological approach, spatial models, Iranian economy.
    Keywords: Dinámica Empresarial; Creación de Empresas; Distribución Espacial; Iran;
    Date: 2019–01
  9. By: Seanego, K.; Hlongwane, J.
    Abstract: The aim of the study was to analyse and compare the relationship between entrepreneurship education and entrepreneurial intentions amongst Agricultural Economics and Animal Production students at the University of Limpopo. The study used primary cross-sectional data which was obtained by means of a structured questionnaire from 25 final year students randomly selected from each class which made the sample size of the study 50. Drawing from the Theory of Planned Behaviour, descriptive statistics was used to process the data obtained from the entrepreneurial intention measurement instrument adopted from (Linan and Chen, 2009). Descriptive statistics revealed that the entrepreneurial intentions of Agricultural students at the University of Limpopo are high; the mean for the entrepreneurial intention scale of the BSc Agric (Agricultural Economics) students was 6.02 and BSc Agric (Animal Production) students was 6.42. The results reveal that agricultural students at the University of Limpopo have high entrepreneurial intentions regardless of the study program they are enrolled in. It is recommended that agricultural students need support in terms of business mentorship, funding and incubation to facilitate the materialization of the business ideas they intend to start.
    Keywords: Entrepreneurship education, Entrepreneurial intentions, Agricultural Students, University of Limpopo; Teaching/Communication/Extension/Profession
    Date: 2018–09–25
  10. By: Aquilante, Tommaso (Bank of England); Vendrell-Herrero, Ferran (University of Birmingham)
    Abstract: This paper studies the effect of bundling products and services on the export performance of firms. Using a unique sample, we document several facts about German small and medium enterprises (SMEs). First, bundling is a relatively rare activity, which is unevenly spread across sectors. Second, SMEs that bundle products and services are more productive than those selling products and services separately. Third, these firms tend to be more internationally oriented. While most of the existing literature focuses on large firms, we contribute to the literature by uncovering a robust positive relation between product-service bundling and exporting in SMEs. Importantly, the competitiveness-enhancing effect of bundling goes beyond manufacturing, affecting non-manufacturing firms also. To mitigate endogeneity concerns, we exploit the panel structure of the data and implement several (doubly robust) propensity score matching techniques.
    Keywords: Bundling; innovation; export; SMEs
    JEL: D22 F10 F14 F23 L80
    Date: 2019–03–01
  11. By: Etienne St-Jean (UQTR - Université du Québec à Trois-Rivières); Cécile Fonrouge (IRG - Institut de Recherche en Gestion - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12 - UPEM - Université Paris-Est Marne-la-Vallée)
    Date: 2019–02–07

This nep-ent issue is ©2019 by Marcus Dejardin. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.