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on Entrepreneurship |
| By: | Poschke, Markus (McGill University) |
| Abstract: | Poor countries have low rates of wage employment and high rates of self-employment. This paper shows that they also have high rates of unemployment relative to wage employment, and that self-employment is particularly high where the unemployment-wage employment ratio is high. I interpret high unemployment-employment ratios as evidence of labor market frictions, and develop a simple heterogeneous-firm search and matching model with choice between job search and self-employment to analyze their effect. Quantitative analysis of the model, separately calibrated to eight countries, shows that variation in labor market frictions can explain almost the entire variation in not only unemployment, but also wage employment and self-employment across the calibration countries. The model generates joint variation in unemployment and self-employment accounting for at least a third of their relationship in the data. Labor market frictions reduce output not only by affecting employment, but also by pushing searchers into low-productivity own-account work. |
| Keywords: | entrepreneurship, occupational choice, labor market frictions, self-employment, unemployment, wage employment, firm size, productivity |
| JEL: | O40 L26 J64 J23 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12367&r=all |
| By: | Edward L. Glaeser; Naomi Hausman |
| Abstract: | American technological creativity is geographically concentrated in areas that are generally distant from the country’s most persistent pockets of joblessness. Could a more even spatial distribution of innovation reduce American joblessness? Could Federal policies disperse innovation without significant costs? If research funding is already maximizing knowledge production, then spatial reallocation of that funding will reduce America’s overall innovation unless that reallocation comes with greater spending. Without any spatial reallocation, the primarily inventive parts of innovation policy, such as N.I.H. grants, can potentially aid underperforming areas by targeting the problems of those areas, like widespread disability. The educational aspects of innovation policy, such as Pell Grants, work-study, vocational training, and Federal overhead reimbursement on grants, currently have multiple objective and could focus more on employability in distressed areas. Lifting the cap on H1B visas in poorer places could attract outside human capital to those places. Geographically targeted entrepreneurship policies, such as eliminating the barriers to new business formation near universities and in distressed places, could potentially enhance employment growth in those regions. Spatially targeted employment subsidies will increase the returns to labor-intensive innovation in depressed areas, but we know little about how much innovation will respond to such subsidies. |
| JEL: | O31 R11 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25913&r=all |
| By: | Antoni, Manfred; Koetter, Michael; Müller, Steffen; Sondershaus, Talina |
| Abstract: | Asset purchase programmes (APPs) may insulate banks from having to terminate relationships with unproductive customers. Using administrative plant and bank data, we test whether APPs impinge on industry dynamics in terms of plant entry and exit. Plants in Germany connected to banks with access to an APP are approximately 20% less likely to exit. In particular, unproductive plants connected to weak banks with APP access are less likely to close. Aggregate entry and exit rates in regional markets with high APP exposures are also lower. Thus, APPs seem to subdue Schumpeterian cleansing mechanisms, which may hamper factor reallocation and aggregate productivity growth. |
| Keywords: | plant exit,factor reallocation,asset purchase programmes |
| JEL: | E58 G21 G28 G33 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:iwhdps:122019&r=all |
| By: | KASHIWAGI Yuzuka |
| Abstract: | This paper examines the effect of capital subsidies after great disasters on the recovery of small- and medium-sized enterprises (SMEs) using propensity score matching estimations. Our estimates show that capital subsidies were effective for the recovery of performance for SMEs in the retail sector. However, in the manufacturing and other service sectors, we find no significant difference between the recovery of SMEs with and without the subsidy. Utilizing firm-level supply chain data, we further explore the mechanism behind the heterogeneity across sectors. Our results suggest that the heterogeneity comes from variations in the degree of private support across sectors rather than variations in supply chain disruption. |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:19029&r=all |
| By: | Dosi, Giovanni (Institute of Economics, Scuola Superiore Sant’Anna, Pisa); Piva, Mariacristina (Department of Economic Policy, Università Cattolica del Sacro Cuore, Piacenza); Virgillito, Maria Enrica (Department of Economic Policy, Università Cattolica del Sacro Cuore, Milano); Vivarelli, Marco (UNU-MERIT, Department of Economic Policy, Università Cattolica del Sacro Cuore, Milano, and IZA, Bonn) |
| Abstract: | This paper addresses, both theoretically and empirically, the sectoral patterns of job creation and job destruction in order to distinguish the alternative effects of embodied vs disembodied technological change operating into a vertically connected economy. Disembodied technological change turns out to positively affect employment dynamics in the "upstream'' sectors, while expansionary investment does so in the "downstream'' industries. Conversely, the replacement of obsolete capital vintages tends to exert a negative impact on labour demand, although this effect turns out to be statistically less robust. |
| Keywords: | Innovation, disembodied and capital-embodied technological change, employment, job-creation, job-destruction, sectoral interdependencies |
| JEL: | O14 O31 O33 |
| Date: | 2019–06–04 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2019020&r=all |
| By: | Boudreaux, Christopher; Caudill, Steven |
| Abstract: | This study questions the assumption that entrepreneurship unequivocally leads to economic growth. Using insights from institutional theory and development economics, we reevaluate entrepreneurship’s contribution towards economic growth. Our study uses Global Entrepreneurship Monitor (GEM) data for a panel of 83 countries from 2002 to 2014 and highlights several important findings. First, our evidence suggests that entrepreneurship encourages economic growth but not in developing countries. Second, we find that a country’s institutional environment—measured by GEM’s Entrepreneurial Framework Conditions (EFCs)—contributes to economic growth in more developed countries but not in developing countries. Lastly, we find that opportunity-motivated entrepreneurship encourages economic growth in developed countries, while necessity-motivated entrepreneurship discourages economic growth 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 will encourage economic growth in developing countries. Our evidence suggests these policy proposals are unlikely to generate the desired economic growth. |
| Keywords: | Entrepreneurship, Institutions, Economic Growth, Policy, Global Entrepreneurship Monitor, Developing Countries |
| JEL: | L26 L53 M13 O43 O47 |
| Date: | 2019–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:94244&r=all |
| By: | FUJII Daisuke; SAITO Yukiko |
| Abstract: | This paper examines how transaction relationships are correlated with firm performance focusing on differences between supplier and customer relationships. In theory, both suppliers and customers positively affect sales and profit but their channels are different. A supplier set affects a firm's productivity lowering its marginal cost of production whereas a customer set only expands the size without affecting productivity. We consider a simple model of production with intermediate inputs, and examine whether theoretical implications are consistent with empirical evidence by estimating panel regressions using Japanese inter-firm transaction network data. We find that sales elasticities of in- and out-degree are positive. In- and out-degrees exhibit complementarity on sales implying that the marginal benefit of having more suppliers increases with the number of customers, and vice versa. Also, the elasticity of in-degree increases with size while that of out-degree is constant. This is also consistent with the theory, which predicts a leveraged effect of lowering a marginal cost when the scale is large. |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:19032&r=all |
| By: | Ufuk Akcigit (University of Chicago); Emin Dinlersoz (Bureau of the Census); Jeremy Greenwood (University of Pennsylvania); Veronika Penciakova (Federal Reserve Bank of Atlanta) |
| Abstract: | Venture capital and growth are examined both empirically and theoretically. Empirically, VC-backed startups have higher early growth rates and patenting levels than non-VC-backed ones. Venture capitalists increase a startup's likelihood of reaching the right tails of the firm size and innovation distributions. Furthermore, outcomes are better for startups matched with more experienced venture capitalists. An endogenous growth model, where venture capitalists provide both expertise and financing for business startups, is constructed to match these facts. The presence of venture capital, the degree of assortative matching between startups and financiers, and the taxation of VC-backed startups matter significantly for growth. |
| Keywords: | assortative matching, endogenous growth, IPO, management, mergers and acquisitions, research and development, selection effects, startups, synergies, taxation, treatment effects, venture capital |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:eag:rereps:30&r=all |
| By: | Elert, Niklas (Research Institute of Industrial Economics (IFN)); Henrekson, Magnus (Research Institute of Industrial Economics (IFN)) |
| Abstract: | We are grateful for the comments to our article, and for the opportunity to respond to them. In our original contribution, we argued that the application of the EOE perspective could help make Austrian economics more concrete, relevant and persuasive, especially regarding policy prescriptions. At the heart of this perspective is the idea that entrepreneurship, when construed as the act of building an innovative firm, is an inherently collaborative activity. The comments have strengthened our conviction that the EOE perspective is of value for Austrian economics and been of great help in furthering our thinking on the matter. The comments have also helped us see how the perspective fits in with the broader tradition of Austrian economics. |
| Keywords: | Austrian economics; Entrepreneurship; Innovation; Institutions; Schumpeterian entrepreneurship; Spontaneous order |
| JEL: | B53 D20 G32 L23 L26 O33 |
| Date: | 2019–06–10 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:1285&r=all |
| By: | Azuara Herrera, Oliver; Azuero, Rodrigo; Bosch, Mariano; Torres, Jesica |
| Abstract: | Simplified tax regimes reduce both tax rates and compliance costs for small firms. On the one hand, these regimes increase the number of businesses formally registered and have the potential of also expanding the safety net when they subsidize the contributions to social security of workers in micro firms. On the other hand, they likely incentivize tax evasion due to the discontinuities in the tax schedule they introduce, and distort several micro-level margins, distortions which potentially accumulate into lower levels of aggregate productivity and GDP. In this paper, we exploit data from household surveys and administrative records for Peru, Brazil, and Mexico to examine the likely effects of special regimes on tax revenues, social protection, and resource misallocation. We find bunching of firms around the eligibility threshold of various tax regimes in Peru. This can be due to misreporting to tax authorities or to firms limiting their size to enjoy the benefits of the special tax regimes. In Brazil, we document how the introduction of a special tax regime benefiting the self-employed might have generated incentives for workers to register as entrepreneurs. Finally, in Mexico we find suggesting evidence showing how the introduction of a new special tax regime for small businesses in 2014 might have led to an increase in the number of employers contributing to the social security of their employees and in the number of self-employed making voluntary contributions to social protection. In all these instances we do not quantify exact causal effects, but we present instead descriptive evidence undoubtedly helpful to direct future research. |
| JEL: | L11 L51 J8 H26 H30 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:idb:brikps:9511&r=all |
| By: | Pureta, Igor; Pureta, Tanja |
| Abstract: | One of the most important roles of the government is to provide a positive entrepreneurial climate that allows clearly defined market conditions, thus attracting entrepreneurs (Vehovec, 2002). By focusing on the characteristics important for entrepreneurial growth, governments can develop policies and programs in a targeted manner to help entrepreneurs. In order to examine the entrepreneurial climate in the Republic of Croatia, the Entrepreneurial Climate Questionnaire was completed by 761 leaders from various Croatian companies. The three-factor structure of the entrepreneurial climate was obtained. The first factor, described as the strategic postulates of the country and their impact on the market (clarity of the vision of development and the vitality of the country systems that support it, such as science, education, legislation, financial strategy and justice), the respondents estimated as very unfavorable for successful business development in Croatia. The second factor, described as the behavior of the country on an operational level (public administration services), respondents rated somewhat more favorable than the first factor, though still far from optimal. The third factor, described as the country’s impact on competition, was also assessed by the respondents as unfavorable (primarily, they are dissatisfied with the high level of corruption, numerous public administrations demands, unregulated grey labor market and high prices of the financial services). Significant differences in estimates with respect to the form of ownership have been established, e.g. the state-owned companies estimated the entrepreneurial climate as the most favorable, private foreign companies as less favorable, and private domestic companies estimated it as the most unfavorable. At this point, it seems that the Republic of Croatia does not stimulate, instead, it is a major obstacle to the serious development of entrepreneurial climate and competitiveness. The results show that the situation could easily change with clear strategic guidelines and determination to make changes. |
| Keywords: | entrepreneurial climate, competitiveness, state strategies, public companies, private companies |
| JEL: | L26 |
| Date: | 2019–05–17 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:94147&r=all |
| By: | Marie-Christine Chalus-Sauvannet (Centre de Recherche Magellan - UJML - Université Jean Moulin - Lyon III - Université de Lyon - Institut d'Administration des Entreprises (IAE) - Lyon) |
| Date: | 2019–06–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-02121737&r=all |
| By: | Médine Zidani (DEFI - Département Droit, Economie et Finances - Institut Mines-Télécom [Paris] - IMT-BS - Institut Mines-Télécom Business School - TEM - Télécom Ecole de Management, LITEM - Laboratoire en Innovation, Technologies, Economie et Management - UEVE - Université d'Évry-Val-d'Essonne - IMT-BS - Institut Mines-Télécom Business School); Jean-Luc Moriceau (DEFI - Département Droit, Economie et Finances - Institut Mines-Télécom [Paris] - IMT-BS - Institut Mines-Télécom Business School - TEM - Télécom Ecole de Management, LITEM - Laboratoire en Innovation, Technologies, Economie et Management - UEVE - Université d'Évry-Val-d'Essonne - IMT-BS - Institut Mines-Télécom Business School) |
| Abstract: | L'entrepreneur est souvent campé comme une figure abstraite et héroïque. Mais on parle peu des aventures et des peines quotidiennes, des journées chargées et tendues, des affects ordinaires. Nous voulons ici présenter l'entrepreneur rap dans son milieu, et loin des images de la Sillicon Valley. Pour s'approcher de l'entrepreneuring, l'expérience et la pratique seront exposées à l'aide d'une série de portraits, tableaux ou fragments de la vie entrepreneuriale dans le rap, à partir desquels nous tirerons certains enseignements et propositions sur le sens de l'entrepreneuriat. L'entrepreneuriat ainsi se découvre comme une forme de vie qui engage et recouvre une grande partie d'une existence. Forme de vie à actualiser par chacun et à défendre. |
| Keywords: | Affects ordinaires,Méthode des portraits,Entrepreneuriat,Industrie du rap |
| Date: | 2019–06–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-02152450&r=all |