nep-ent New Economics Papers
on Entrepreneurship
Issue of 2019‒04‒15
fifteen papers chosen by
Marcus Dejardin
Université de Namur

  1. Measuring Entrepreneurship: Do Established Metrics Capture High-Impact Schumpeterian Entrepreneurship? By Henrekson, Magnus; Sanandaji, Tino
  2. Who Founds? An Analysis of University and Corporate Startup Entrepreneurs Based on Danish Register Data By Kaiser, Ulrich; Kuhn, Johan Moritz
  3. Taxing Top Incomes in a World of Ideas By Charles I. Jones
  4. Growth Firms and Relationship Finance: A Capital Structure Approach By Inderst, Roman; Vladimirov, Vladimir
  5. Global innovation networks for Chinese high tech small and medium enterprises: the supportive role of highly skilled migrants and returnees By Lin, Jingyi; Plechero, Monica
  6. Teaching and Learning Schumpeter: A Dialogue Between Professor and Student By Dalton, John; Logan, Andrew
  7. FIRM OWNERSHIP AND GREEN PATENTS. DOES FAMILY INVOLVEMENT IN BUSINESS MATTER? By Francesco Aiello; Paola Cardamone; Lidia Mannarino; Valeria Pupo
  8. Networks, Start-Up Capital and Women's Entrepreneurial Performance in Africa: Evidence from Eswatini By Brixiova, Zuzana; Kangoye, Thierry
  9. Waiting for Godot: the Failure of SMEs in the Italian Manufacturing Industry to Grow By Primo AutoreAuthor-X-Name-First: MaurizioAuthor-X-Name-Last: BaussolaAuthor-Email: maurizio.baussola@unicatt.itAuthor-Workplace-Name: DISCE, Università CattolicaAuthor-Name: Secondo AutoreAuthor-X-Name-First: EleonoraAuthor-X-Name-Last: BartoloniAuthor-Email: bartolon@istat.itAuthor-Workplace-Name: ISTAT, Regional Office for Lombardy; Quarto Autore
  10. A value-based approach to business model innovation: Defining the elements of the concept By Arash Rezazadeh; Ana Carvalho
  11. Promoting Indigenous community economic development, entrepreneurship and SMEs in a rural context By Chris McDonald
  12. The Value of Online Banking to Small and Meduim-Sized Enterprises: Evidence From Firms Operating in The UAE From Trade Zones By Parvaneh Shahnoori; Glenn P. Jenkins
  14. Challenges of female entrepreneurship in Nigeria By Kenny S, Victoria
  15. L'INGENIERIE DU REBOND L'accompagnement des entrepreneurs post faillite By Gérard Desmaison

  1. By: Henrekson, Magnus (Research Institute of Industrial Economics (IFN)); Sanandaji, Tino (Institute for Economic and Business History Research (EHFF), Stockholm School of Economics)
    Abstract: Are quantitative measures driven by small business activity also valid proxies for high-impact Schumpeterian entrepreneurship? We compile four hand-collected measures of high-impact Schumpeterian entrepreneurship (VC-funded IPOs, self-made billionaire entrepreneurs, unicorn start-ups, and young top global firms founded by individual entrepreneurs) and six measures dominated by small business activity as well as institutional and economic variables for 64 countries. Factor analysis reveals that much of the variation is accounted for by two distinct factors: one relating to high-impact Schumpeterian entrepreneurship and the other relating to small business activity. Except for the World Bank measure of firm registration of limited liability companies quantity-based measures tend to be inappropriate proxies for high-impact Schumpeterian entrepreneurship.
    Keywords: illionaire entrepreneurs; High-impact entrepreneurship; Innovation; Institutions; Schumpeterian entrepreneurship; Self-employment
    JEL: L50 M13 O31 P14
    Date: 2019–04–03
  2. By: Kaiser, Ulrich (University of Zurich); Kuhn, Johan Moritz (EPAC)
    Abstract: We compare individuals presently employed either at an university or at a firm from a R&D intensive sector and analyze which of their personal-specific and employer-specific characteristics determine their choice of subsequently founding a startup. Our data set is unusually rich and combines the population of Danish employees with their present employers. We focus on persons who at least hold a Bachelor's degree in engineering, sciences and health and track them over the time period 2001-2012. We show that (i) there are overall little differences between the characteristics of university and corporate startup entrepreneurs, (ii) common factors triggering startup activity of both university and corporate employees are education, top management team membership, previous job mobility and being male, (iii) it is exclusively human capital-related characteristics that affect startup choice of university employees while (iv) the characteristics of the present workplace constitute major factors of entrepreneurial activity.
    Keywords: university startups, corporate startups, founder characteristics
    JEL: L26 I23 O31 O32
    Date: 2019–03
  3. By: Charles I. Jones
    Abstract: This paper considers the taxation of top incomes when the following conditions apply: (i) new ideas drive economic growth, (ii) the reward for creating a successful innovation is a top income, and (iii) innovation cannot be perfectly targeted by a separate research subsidy --- think about the business methods of Walmart, the creation of Uber, or the "idea" of These conditions lead to a new force affecting the optimal top tax rate: by slowing the creation of the new ideas that drive aggregate GDP, top income taxation reduces everyone's income, not just the income at the top. When the creation of ideas is the ultimate source of economic growth, this force sharply constrains both revenue-maximizing and welfare-maximizing top tax rates. For example, for extreme parameter values, maximizing the welfare of the middle class requires a negative top tax rate: the higher income that results from the subsidy to innovation more than makes up for the lost redistribution. More generally, the calibrated model suggests that incorporating ideas as a driver of economic growth cuts the optimal top marginal tax rate substantially relative to the basic Saez calculation.
    JEL: E0 H2 O4
    Date: 2019–04
  4. By: Inderst, Roman; Vladimirov, Vladimir
    Abstract: We analyze how relationship finance, such as venture capital and relationship lending, affects growth firm's capital structure choices. We show that relationship investors that obtain a strong bargaining position due to their privileged information about the firm, optimally cash in on their dominance by pushing it to finance follow-up investments with equity. The firm underinvests if its owner refuses to accept the associated dilution. However, this problem is mitigated if the firm's initial relationship financing involves high leverage or offers initial investors preferential treatment in liquidation. By contrast, if initial investors are unlikely to gain a dominant position, firms optimally lever up only in later rounds. Our implications for relationship and venture capital financing highlight that the degree of investor dominance is of key importance for growth firm's capital structure decisions.
    Keywords: dominant investors; equity financing; Financial contracting; Relationship Financing
    Date: 2019–04
  5. By: Lin, Jingyi (Lund University); Plechero, Monica (University of Florence)
    Abstract: Literature investigating highly skilled Chinese migrants has so far focused on their role as drivers of new entrepreneurship as well as innovation in firms and regions, although their role in supporting small and medium enterprises (SMEs) engagement in global innovation networks (GINs) is still underexplored. The participation in GINs is key for high tech SMEs, which rely on sophisticated knowledge but may not have the same absorptive capacity of large firms and multinational corporations. Based on primary data from a case study on 19 SMEs in the IT and new media industry in Beijing, this paper investigates the role of returnees and highly skilled migrants in supporting the engagement of Chinese high-tech SMEs in GINs. The results reveal the important role of those individuals in bringing SMEs in former international knowledge networks and establishing new linkages for sourcing key knowledge.
    Keywords: lobal innovation networks; GIN; knowledge sourcing; small and medium enterprises; SMEs; Beijing; China; highly skilled migrants; returnees; IT and new media industry
    JEL: F20 O30
    Date: 2019–04–04
  6. By: Dalton, John; Logan, Andrew
    Abstract: Joseph Schumpeter's contributions to economics, including theories about innovation and entrepreneurship, creative destruction, and the debate over capitalism versus socialism, all remain relevant today. There is evidence, however, that Schumpeter's ideas have long received less attention in the classroom than they deserve given the importance economists attach to them. This paper provides a description of a discussion-based course on Schumpeter. Using a dialogue between professor and student before, during, and after the course, we describe the structure of the course and specific details related to content. We also include a syllabus, sources for class materials, and a list of over forty discussion questions. The dialogue allows us to show the dynamic nature of a discussion-based class, something we think Schumpeter would approve.
    Keywords: Joseph Schumpeter; Innovation; Entrepreneurship; Creative Destruction; Education
    JEL: A2 O3 P0
    Date: 2019–04–11
  7. By: Francesco Aiello (Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF, Università della Calabria); Paola Cardamone (Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF, Università della Calabria); Lidia Mannarino (Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF, Università della Calabria); Valeria Pupo (Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF, Università della Calabria)
    Abstract: This paper investigates how family and non-family firms differ in terms of their capability to introduce environmental innovation, which is measured by green patents. The analysis is carried out using a large patenting data set related to the inventions produced by about 4200 Italian manufacturing firms over the period 2009–2017. The results show that family firms are less likely than non-family firms to implement innovations in green technologies. Moreover, the role played by the stock of knowledge and the environmental management system certification differs across firm type.
    Keywords: eco-innovation, green patent, family firms
    JEL: O31 C23 G34
    Date: 2019–03
  8. By: Brixiova, Zuzana (Technical University of Ostrava, Ostrava, Czech Republik); Kangoye, Thierry (African Development Bank)
    Abstract: This paper analyzes the role of networks in access of women entrepreneurs to start-up capital and firm performance in Eswatini, a country with one of the highest female unemployment rates in Africa. The paper first shows that higher initial capital is associated with better sales performance for both men and women entrepreneurs. Women entrepreneurs start their firms with smaller start-up capital than men and are more likely to fund it from their own sources, which reduces the size of their firm and sales level. However, women with higher education start their firms with more capital than their less educated counterparts. Moreover, women who receive support from professional networks have higher initial capital, while those trained in financial literacy more often access external funding sources, including through their networks.
    Keywords: networks, start-up capital, multivariate analysis, Africa
    JEL: L53 O12
    Date: 2019–03
  9. By: Primo AutoreAuthor-X-Name-First: MaurizioAuthor-X-Name-Last: BaussolaAuthor-Email: maurizio.baussola@unicatt.itAuthor-Workplace-Name: DISCE, Università CattolicaAuthor-Name: Secondo AutoreAuthor-X-Name-First: EleonoraAuthor-X-Name-Last: BartoloniAuthor-Email: bartolon@istat.itAuthor-Workplace-Name: ISTAT, Regional Office for Lombardy (DISCE, Università Cattolica); Quarto Autore (DISCE, Università Cattolica)
    Abstract: Abstract of the paper. We use a panel of Italian manufacturing firms for the period 2001-2014 to analyse the distribution of firm size, and then test for the validity of Gibrat’s law using unit root tests. Although Gibrat’s Law is rejected and the estimates suggest that small firms grow faster than larger ones, we do not observe a signifi- cant change in the average size of companies at the end of the period under investigation. Also, by using a long-run Transition Probability Matrix, we verify that the steady-state distribution of firm size remains stable. The higher propensity to grow shown by smaller firms is confined to the size class in which the firm is established. We further investigate the relationship between the rate of growth in a firm’s size conditional on specific firm and industry characteristics. Export intensity plays a signifi- cant role in affecting the size growth rate together with industry characteristics related to technological levels. Finally, we esti- mate the probability that a firm increases in size relative to the mean size prevailing in its own size class over a 14-year interval. This approach enables us to highlight those factors that affect this probability, thereby enabling us to underline how Gibrat’s Law tests, although important, require complementary analysis to ascertain whether a firm’s propensity to increase in size is a long run effect and thus a significant modification of the distri- bution of company size or only implies a marginal increase in size within a reference size class.
    Keywords: Gibrat’s Law, Lognormal distribution, firm size dis- tribution.
    JEL: L11 L2 L6
    Date: 2018–03
  10. By: Arash Rezazadeh (School of Economics and Management and NIPE, University of Minho); Ana Carvalho (University of Minho: School of Economics and Management and NIPE)
    Abstract: Business model innovation (BMI) has increasingly attracted attention by proposing the business model (BM) as a new unit of analysis in the study of innovation. However, the definition and dimensioning of the concept is still unclear. This paper thereby aims to identify a consistent set of interdependent BMI elements, aligning with a configurational approach. Taking a value-based perspective, we review the existing contributions to date and arrive at five elements of BMI, each focused on one facet of the company’s BM: (1) value creation innovation; (2) value proposition innovation; (3) value delivery innovation; (4) value capture innovation; and (5) value network innovation. This study contributes to the growing BMI literature by proposing a unique classification underpinned by a value-grounded theory of the firm. Furthermore, we describe how these five dimensions interact and explore its implications. Throughout, we illustrate our ideas with the examples of existing companies.
    Keywords: business model; business model innovation; value-based perspective; configurational approach
    JEL: O31 L10 L20 L26 M10
    Date: 2018
  11. By: Chris McDonald
    Abstract: This paper establishes an analytical framework for understanding and assessing Indigenous economic development and well-being in a place-based context. It identifies the importance of flexibility in geographic scale for organising policies for Indigenous communities, development objectives that reflect the self-determined and informed choices of Indigenous peoples, and implementing strategies for development based on the identification of local assets.
    Keywords: culture, Indigenous peoples, place, regional and rural development, sustainable development goals, well-being
    JEL: R58
    Date: 2019–04–10
  12. By: Parvaneh Shahnoori (Department of Economics, Eastern Mediterranean University, Mersin 10, Turkey and Payame Noor University, Bandar Abbas, Iran); Glenn P. Jenkins (Department of Economics, Queen's University, Kingston, Canada and Eastern Mediterranean University, North Cyprus)
    Abstract: This study estimates the willingness to pay of small and medium-sized enterprises (SMEs) for a business online banking services. The estimation utilizes a contingent valuation method employing data from 400 SMEs in the United Arab Emirates free zones. An interval regression model is used to identify company characteristics affecting WTP. The results indicate an average WTP for online banking of $518.50 per month. Firms engaging in international trade value these services at least 10% more than those with only domestic operations. Other variables that significantly affect WTP include number of employees and the transportation cost of using traditional branch banking.
    Keywords: contingent valuation method, interval regression model, willingness to pay, business online banking.
    JEL: C13 F10 G21
    Date: 2018–12
  13. By: amr a.bary, amr
    Abstract: The focus of this paper is the discussion of the competitiveness facing SMEs in the Egyptian business environment by examining the opportunities and supports from the banking sector, government and SME employers. The purpose of this paper is to review the experiences of group of countries that have benefited greatly from SME development and have been able to achieve high economic growth rates. On the other hand, presented the problems facing the Egyptian economy in order to achieve rapid growth rates at the level of small and medium enterprises and finally propose the strategies that can contribute effectively to the development of these projects. Therefore, in this study the importance of SMEs for developing countries is considered. First, the definition, strengths and weakness of SME's business are mentioned. In the second section, case studies from other countries for SMEs are considered. Then, the nature of business in the Egyptian economy is discussed. Finally, the results the questionnaire reflects the current situation and the conclusions were sets according to these results.
    Keywords: Small and Medium Enterprises (SMEs), Challenges, Competitiveness, SME Development
    JEL: O11
    Date: 2019–02–09
  14. By: Kenny S, Victoria
    Abstract: Governments and Academics tend to focus on encouraging entrepreneurship due to its role in job creation, innovation, importance to large businesses and a dynamic economy. Female entrepreneurs have been identified by organization for economic cooperation and development as a major force for innovation, job creation and economic growth. The role of entrepreneurship as a bedrock to achieve sustainable growth and development in Nigeria is paramount, therefore, this paper critically examines the challenges of female entrepreneurship so as to proffer plausible solutions to further encourage female entrepreneurship.
    Keywords: Innovation, Job Creation and Economic Growth
    JEL: M0
    Date: 2019–04–07
  15. By: Gérard Desmaison (ISEOR - Institut de Socio-économie des Entreprises et des ORganisations - Institut de socio-économie des entreprises et des organisations, UJML - Université Jean Moulin - Lyon III - Université de Lyon)
    Date: 2017–06–22

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