nep-ent New Economics Papers
on Entrepreneurship
Issue of 2019‒09‒02
eight papers chosen by
Marcus Dejardin
Université de Namur

  1. New venture investing trajectories: A large scale longitudinal study By Schulte, Reinhard
  2. Non-R&D, interactive learning and economic performance: Revisiting innovation in small and medium enterprises By Thomä, Jörg; Zimmermann, Volker
  3. Synergizing Ventures By Akcigit, Ufuk; Dinlersoz, Emin; Greenwood, Jeremy; Penciakova, Veronika
  5. Launch of a product and patents: evidence from the US cardiovascular pharmaceutical sector By Francesca Di Iorio; Maria Letizia Giorgietti
  6. Determinants of Expansion of Micro and Small Firms and State of Entrepreneurship in Pakistan By Idrees Khawaja; Nasir Iqbal
  7. Bend but don't break: a case study on the cultural entrepreneurial process in the publishing industry By Monica Calcagno; Rachele Cavara; Nunzia Coco

  1. By: Schulte, Reinhard
    Abstract: Investment trajectories of new enterprises are a largely neglected but important issue of new firms' business behavior. This paper debuts in showing robust evidence of new venture investment time patterns by using investment time series of 4.733 new businesses. Based on a fixed effects nonlinear panel regression approach, the study models the trajectory of new venture asset acquisition in the first years after market entry. The results unveil durations and levels of investment patterns. Showing a first investment peak at market entry and a second peak years later, an initial new venture investment cycle is bimodal. Its peak-to-peak duration yields approximately nine years on average. New venture investment can be staggered into three stages, namely an initial, a plateau, and a replacement and expansion stage.
    Keywords: new ventures,start-up,investment pattern,investment trajectory,fixed effects model,panel data
    JEL: D92 G31 L25 M13 M21
    Date: 2018
  2. By: Thomä, Jörg; Zimmermann, Volker
    Abstract: In the present paper, various groups of innovating German SMEs are empirically identified according to their use (or non-use) of in-house R&D, their reliance on external sources of knowledge, and the degree of internal interactive learning that they employ.In order to account for non-R&D innovation activities, we apply the STI/DUI concept as a theoretical starting point. This distinguishes between (1) the science, technology, innovation (STI) mode with its strong emphasis on formal processes of in-house R&D and (2) the doing, using, interacting (DUI) mode with its focus on experience-based knowledge and interactive learning. On this basis, the empirical results indicate that three groups associated with different modes of learning and innovation exist within the German SME sector: the supplier-dependent DUI group, the customer-oriented DUI group and the STI/DUI group. The corresponding findings confirm that SMEs innovate differently depending on the specificities of their knowledge environments. In order to evaluate this in terms of innovation policy, we examine how these learning modes among innovating SMEs relate to overall company performance. Our main observation is that each learning mode is likely to positively affect performance, at least to some degree. There isno differ-ence in economic performance between the three learning modes as long as non-high-growth SMEs are considered. Hence, in large parts of the SME sector, it is economically rational to choose a non-R&D-oriented mode of learning and innovation. The paper con-cludes with some policy implications of these findings.
    Keywords: Modes of learning,R&D,Non-R&D innovation,Interactive learning,SMEs
    JEL: M21 O32 O38
    Date: 2019
  3. By: Akcigit, Ufuk; Dinlersoz, Emin; Greenwood, Jeremy; Penciakova, Veronika
    Abstract: Venture capital (VC) and growth are examined both empirically and theoretically. Empirically, VC-backed startups have higher early growth rates and initial patent quality than non-VC-backed ones. VC-backing increases 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: Endogenous Growth; mergers and acquisitions; R&D; venture capital
    Date: 2019–08
  4. By: Klaesson, Johan (Centre of Entrepreneurship and Spatial Economics (CEnSE) at Jönköping International Business School (JIBS) & Centre of Excellence for Science and Innovation Studies (CESIS)); Johansson, Börje (Jönköping International Business School (JIBS) & Centre of Excellence for Science and Innovation Studies (CESIS))
    Abstract: During the period 2007-2016 in Sweden we can observe how the share of business (producer) services gradually increases as an aggregate phenomenon. The service categories are partitioned into ordinary (OBS), knowledge-intensive (KIBS), and very knowledge-intensive business services (VKIBS). The growth is faster in local and regional economies that have large demand potentials. Other sectors grow faster when located in places where the business-service supply potential is larger. We outline a theoretical framework where service suppliers locate their capacity in response to the size of the service-demand potential, whereas other sectors of the economy, locate and expand in response to the service-supply potentials, for each of the three service categories OBS-services, KIBS-services and VKIBS-services. These model alternatives are assessed in a series of dynamic econometric exercises. A major assumption is that business-service firms operate in a context of monopolistic competition, which means that when the capacity to supply and deliver business services increases, then the number of service varieties also increases, and thus adds to the multiplicity of varieties in local economies (municipalities) that have a large demand potential. In the model framework the service suppliers are selling innovation-relevant information to customer firms in a region, and thereby also unintentionally spread information and knowledge among firms in the region. In this way, business-service suppliers become knowledge providers and important actors in the relevant regional innovation system.
    Keywords: Random choice; business services; demand and supply potentials; co-evolution
    JEL: C23 L84 R11 R12 R30
    Date: 2019–06–01
  5. By: Francesca Di Iorio (Università di Napoli Federico II); Maria Letizia Giorgietti (Università di Milano)
    Abstract: Recent literature on the role of patents in shaping competition between incumbents and new entrants shows mixed evidence, as patents can discourage entry into markets but may also encourage potential entrants by increasing profitability from research and development. The increasing use of patents as strategic weapons motivates this investigation of the impact of innovation on competition. In a case study of US pharmaceutical cardiovascular submarkets over the period 1988-1998, we use a panel probit model to study the impact of a firm’s patents and rivals’ patents in the firm’s decision to launch new products. Our results show that the number of a firm’s lagged patents encourages the firm’s entry with new products, while rivals’ initial stock of patents discourages entry, but more recent patents promote entry by opening new technological opportunities.
    Keywords: Entry, Patents, Panel data, Probit model, Submarkets
    JEL: L11 L65 C11 C23 C25
    Date: 2019–02
  6. By: Idrees Khawaja (Air University, Islamabad); Nasir Iqbal (Pakistan Institute of Development Economics, Islamabad)
    Date: 2019
  7. By: Monica Calcagno (Dept. of Management, Università Ca' Foscari Venice); Rachele Cavara (Dept. of Management, Università Ca' Foscari Venice); Nunzia Coco (Dept. of Management, Università Ca' Foscari Venice)
    Abstract: Research on cultural industries has attracted considerable interest on cultural entrepreneurs as agents in complex interaction with multiple and evolving contexts. The study aims to capture the complexity and intensity of these relationships, exploring entrepreneurship as a journey driven by cultural and social dynamics on one side, and economic needs on the other. The investigation is an inductive inquiry carried out through an in-depth analysis of a single revelatory case in the publishing industry. Focusing on the relational process through which the entrepreneur and the context are co-created, the paper analyzes the entrepreneurial journey through the identification of three major stages: Divergence, Identity construction, and Institutionalization.
    Keywords: Cultural entrepreneurship, co-creation, narrative.
    JEL: Z11
    Date: 2019–03
  8. By: LAMIA SABOUR ALAOUI (Economics and Business, SETTAT University)
    Abstract: In Morocco the concept of corporate social responsibility has become present in academic research as in the business world. Each company must integrate in its strategy, the implementation of a societal responsibility approach to attract new national and international market. The big Moroccan companies are aware of the importance of this trend, but this notion is still new for Moroccan SME (Small and Medium Enterprise). The purpose of this article is to determine societal responsibility practices in Morocco and in SMEs (Small and Medium Enterprises) in the province of El Jadida in particular. SMEs (Small and Medium Enterprises) in this region have an important role in national industrial development. The first part is devoted to defending social responsibility in general and in Morocco in particular. Next, we identify the social responsibility practices that differentiate the Moroccan small and medium enterprise. For the third part we will present the research methodology and show the results obtained from the survey.
    Keywords: Corporate Social Responsibility, SME, Development, Moroccan companies, The province of El Jadida
    Date: 2019–07

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