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on Entrepreneurship |
| By: | Francisco Queiró (Nova School of Business and Economics) |
| Abstract: | This paper shows that entrepreneurial human capital is a key driver of firm dynamics using administrative panel data on the universe of firms and workers in Portugal. Firms started by more educated entrepreneurs are larger at entry and exhibit higher growth throughout the life cycle. The differences are driven by productivity, are particularly strong in the upper tail of the distribution, and do not hold for more educated workers in general. In addition, they do not appear to be driven by omitted ability or selection. Combining these findings with cross-country data to calibrate a simple model of heterogeneous firms, I find that accounting for the effect of entrepreneurial human capital on firm-level productivity increases the fraction of cross-country income differences explained by human and physical capital from 40% to 65%-76%. |
| Keywords: | Entrepreneurship; Human Capital; Firm Dynamics; Productivity |
| JEL: | I2 L2 O4 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:mde:wpaper:0116&r=all |
| By: | Bernstein, Shai (Stanford University); Dev, Abhishek (Private Capital Research Institute); Lerner, Josh (Harvard Business School) |
| 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. |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:stabus:3759&r=all |
| By: | Rajeev K. Goel; Michael A. Nelson |
| Abstract: | Adding to the corruption-gender nexus, this paper contributes across several dimensions: (a) measurement of corruption by studying whether female managers and female owners of firms perceived corruption differently; (b) using survey information at the firm level; and (c) employing a large sample of more than 100 countries. Results show that both female managers and female owners perceived corruption to be lower relative to men. Furthermore, older firms perceived corruption to be a more server obstacle, while sole proprietorships generally had the opposite view. The advantages of piercing the glass ceiling were undermined in nations with severe gender inequality. |
| Keywords: | corruption perceptions, entrepreneurship, gender, managers, owners |
| JEL: | K40 L20 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7606&r=all |
| By: | Serhan Cevik; Fedor Miryugin |
| Abstract: | This paper investigates the impact of taxation on firm survival, using hazard models and a large-scale panel dataset on over 4 million nonfinancial firms from 21 countries over the period 1995–2015. We find ample evidence that a lower level of effective marginal tax rate improves firms’ survival chances. This result is not only statistically but also economically important and remains robust when we partition the sample into country subgroups. The effect of taxation on firms’ survival probability is found to exhibit a non-linear pattern and be stronger in developing countries than advanced economies. These findings have important policy implications for the design of corporate tax systems. The challenge is not simply reducing the statutory tax rate, but to level the playing field for all firms by rationalizing differentiated tax treatments across sectors, asset types and sources of financing. |
| Date: | 2019–04–19 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:19/78&r=all |
| By: | Nguyen, Hoai Thu Thi; Vu, Huong Van; Bartolacci, Francesca; Quang Tran, Tuyen |
| Abstract: | Using a sample of private manufacturing SMEs (small and medium-sized enterprises) in the period 2007-15, we analyze the effect of government support on firms’ financial performance in Vietnam. Contrary to many previous studies, we find that government support affects firms’ financial performance after controlling for heterogeneity, unobservable factors and dynamic endogeneity. The finding supports the viewpoint of institutional theory. Also, the study reveals that assistance measures, such as tax exemptions, soft loans and investment incentives to promote financial performance, are vital for the development of Vietnamese private SMEs. |
| Keywords: | Government support; innovation; firm financial performance; SMEs; Vietnam |
| JEL: | H7 H71 M2 M21 O3 |
| Date: | 2018–08–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:93599&r=all |
| By: | Engbom, Niklas (Federal Reserve Bank of Minneapolis) |
| Abstract: | I develop an idea flows theory of firm and worker dynamics in order to assess the consequences of population aging. Older people are less likely to attempt entrepreneurship and switch employers because they have found better jobs. Consequently, aging reduces entry and worker mobility through a composition effect. In equilibrium, the lower entry rate implies fewer new, better job opportunities for workers, while the better matched labor market dissuades job creation and entry. Aging accounts for a large share of substantial declines in firm and worker dynamics since the 1980s, primarily due to equilibrium forces. Cross-state evidence supports these predictions. |
| Keywords: | Demographics; Employment; Economic growth; Labor turnover; Entrepreneurial choice |
| JEL: | E24 J11 O40 |
| Date: | 2019–04–10 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedmwp:756&r=all |
| By: | OECD |
| Abstract: | This report examines the local entrepreneurship ecosystem of the Coventry and Warwickshire region in the United Kingdom and its capacity to promote productivity upgrading and industrial renewal. It forms part of the OECD’s work stream on local entrepreneurship ecosystems and emerging industries. This work examines how policy at the local level can promote innovative start-ups, innovative scale-ups and innovation in existing enterprises for entrepreneurship and industrial diversification. |
| Date: | 2019–05–03 |
| URL: | http://d.repec.org/n?u=RePEc:oec:cfeaaa:2019/04-en&r=all |
| By: | OECD |
| Abstract: | This report examines the local entrepreneurship ecosystem of the Malopolskie region in Poland and its capacity to promote productivity upgrading and industrial renewal. It forms part of the OECD’s work stream on local entrepreneurship ecosystems and emerging industries. |
| Date: | 2019–05–03 |
| URL: | http://d.repec.org/n?u=RePEc:oec:cfeaaa:2019/03-en&r=all |
| By: | Christopher Blattman; Stefan Dercon; Simon Franklin |
| Abstract: | We study two interventions for underemployed youth across five Ethiopian sites: a $300 grant to spur self-employment, and a job offer to an industrial firm. Despite significant impacts on occupational choice, income, and health in the first year, after five years we see nearly complete convergence across all groups and outcomes. Shortrun increases in productivity and earnings from the grant dissipate as recipients exit their micro-enterprises. Adverse effects of factory work on health found after one year also appear to be temporary. These results suggest that one-time and one-dimensional interventions may struggle to overcome barriers to wage- or self-employment. |
| JEL: | F16 J24 J81 O14 O17 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25788&r=all |
| By: | Haroon Bhorat; Zaakhir Asmal; Kezia Lilenstein; Kirsten van der Zee (University of Cape Town; Director) |
| Abstract: | Small, Medium and Micro Enterprises (SMMEs) have been identified as a key component to advancing inclusive growth and development in South Africa. This paper serves to present a snapshot of the current profile of SMMEs in South Africa as well as the key inhibitors of growth for SMMEs. We provide a comparative perspective of the role of SMMEs and entrepreneurship in South Africa, then profile the current landscape of SMMEs in South Africa, evaluating the characteristics of SMMEs across three dimensions: firm, owner and employee characteristics. Following this, we distinguish between formal and informal SMMEs in order to highlight the unique nature of informality in South Africa. This paper also evaluates the endogenous and exogenous impediments to growth faced by South African SMMEs. Endogenous challenges are internal to the firm while exogenous challenges are external to the firm. In summarising these findings, we present the major challenges inhibiting the growth of SMMEs in South Africa, taking into account firm heterogeneity in terms of both firm size and informality status. |
| Keywords: | SMMEs; South Africa; inclusive growth; development; entrepreneurship; informality |
| JEL: | E2 E26 J26 J4 O1 O4 O17 |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:ctw:wpaper:201802&r=all |
| By: | Diego Ubfal; Irani Arraiz; Diether Beuermann; Michael Frese; Alessandro Maffioli; Daniel Verch |
| Abstract: | A randomized control trial with 945 entrepreneurs in Jamaica shows positive shortterm impacts of soft-skills training on business outcomes. The effects are concentrated among men, and disappear twelve months after the training. We argue that the main channel is increased adoption of recommended business practices, exclusively observed in the short run. We see persistent effects on an incentivized behavioral measure of perseverance after setbacks, a focus of this training. We compare a course focused only on soft-skills to one that combines soft-skills training with traditional business training. The effects of the combined training are never statistically significant. Keywords: Business Training, entrepreneurship, soft skills JEL Codes: J24, L25, M13, O12 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:igi:igierp:645&r=all |
| By: | Timothy DeStefano; Richard Kneller; Jonathan Timmis |
| Abstract: | The arrival of the cloud has enabled a shift in the nature of ICT use, from investment in sunk capital to a pay-on-demand service that allows firms to rapidly scale up. This paper uses new firm-level data to examine the impact of cloud on firm growth in the UK, using zipcode-level instruments of the timing of high-speed fibre availability and expected speeds. We find cloud leads to the growth of young firms in terms of employment and productivity, but they become more concentrated in fewer plants. For older firms we find no scale or productivity growth, but instead disperse activity by closing plants and moving employment further from the headquarters. In addition, the plants that close tend to be those without access to fibre broadband. |
| Keywords: | firm growth; the cloud; ICT use; employment; productivity |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:not:notgep:2019-09&r=all |
| By: | Hoffmann, Mathias; Maslov, Egor; Sørensen, Bent E |
| Abstract: | Abstract Small businesses (SMEs) depend on banks for credit. We show that the severity of the Eurozone crisis was worse in countries that borrowed more from domestic banks (``domestic bank dependence'') compared with countries that borrowed more from international banks. Eurozone banking integration in the years 2000-2008 involved cross-border lending between banks while foreign banks' lending to the real sector stayed flat. Hence, SMEs remained dependent on domestic banks and were vulnerable to global banking sector shocks. We confirm, using a calibrated quantitative model, that domestic bank dependence makes sectors and countries with many SMEs vulnerable to global banking shocks. |
| Keywords: | Banking integration; domestic bank dependence; International Transmission; Small and medium enterprises; sme access to finance |
| JEL: | F30 F36 F40 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13691&r=all |
| By: | De Mel, Suresh; McKenzie, David J.; Woodruff, Christopher |
| Abstract: | Many microenterprises in developing countries have high returns to capital, but also face risky revenue streams. In principle, equity offers several advantages over debt when financing investments of this nature, but the use of equity in practice has been largely limited to investments in much larger firms. We develop a model contract to make self-liquidating, quasi-equity investments in microenterprises. Our contract has three key parameters that can be used to shift risk between the entrepreneur and the investor, resulting in a continuum of contracts ranging from a debt-like contract that shifts little risk from the entrepreneur to a pure revenue-sharing contract in which the investor absorbs much more of the risk. We discuss implementation choices, and then provide lessons from a proof-of-concept carried out by an investment partner, KGC Equity, which made nine investments averaging $3,800 in Sri Lankan microenterprises. This pilot demonstrates that our contract structure can work in practice, but also highlights the difficulties of micro-equity investments in an environment with weak contract enforcement. |
| Keywords: | alternative financing; Contract Enforcement In Transition; micro-equity; Microenterprises; Microfinance |
| JEL: | G21 O12 O16 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13698&r=all |