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

  1. Text mining the entrepreneurship policy agenda in the EU: From naïveté into reality By Arenal, Alberto; Feijoo, Claudio; Moreno, Ana; Ramos, Sergio; Armuña, Cristina
  2. What Makes an Employer? By Marco Caliendo; Frank M. Fossen; Alexander S. Kritikos
  3. Synergizing Ventures By Akcigit, Ufuk; Dinlersoz, Emin M.; Greenwood, Jeremy; Penciakova, Veronika
  4. New Technology, Entrepreneurship and the Revival of Manufacturing in Africa: Opportunities for Youth and Women? By Wim Naudé
  5. Human Capital, Parent Size and the Destination Industry of Spinouts By Mariko Sakakibara; Natarajan Balasubramanian
  6. Evaluating SMEs Readiness to Transform to IoT-Based Business Models By Vitkauskaitė, Elena; Varaniūtė, Viktorija; Bouwman, Harry
  7. Disruptive Innovation by Heterogeneous Incumbents and Economic Growth: When do incumbents switch to new technology? By Ohki, Kazuyoshi
  8. Digital Infrastructure and Entrepreneurship: The Digital Era's Enabling Effect By Caceres-Diaz, Piero; Usero-Sanchez, María Belén; Montoro-Sanchez, Angeles
  9. Business opportunities in 5G mobile technology By Nyström, Anna-Greta; Gugenishvili, Ilia

  1. By: Arenal, Alberto; Feijoo, Claudio; Moreno, Ana; Ramos, Sergio; Armuña, Cristina
    Abstract: This paper analyses the learning curve in the emergence and development of an entrepreneurship policy in the European Union (EU) during the period 1990-2016 by identifying the key topics in the policy agenda-setting and their evolution over time within a corpus of 576 selected policy-making documents. To this end, the paper uses a combination of text mining techniques, cluster analysis and qualitative assessment, illustrating the possibilities of these tools to learn about the evolution of the policy cycle in a particular domain. The results from the analysis display three main stages, each of them with two sub stages. During the initial period, labelled (a) latent EU entrepreneurship policy, there were hardly any specific entrepreneurship policy initiatives and only some general enterprisefostering policies at the EU level which included, tangentially, SMEs and entrepreneurs, and lasted up to late 1990s. In the (b) emergent EU entrepreneurship policy stage, the initial steps of an entrepreneurship policy with a main focus on diagnosis of the entrepreneurial ecosystem and some measures of support - mainly to SMEs - can be traced from the late 1990s to the early 2010s. The third and last period to date is a (c) new normal for EU entrepreneurship policy, which is a more targeted stage aimed at promoting not only quantity but quality of business ventures; and is ongoing since the early 2010s. Overall, this paper provides a complete overview of the EU entrepreneurship policy evolution and concludes with a granular proposal for its evolution, identifying main themes and foundational concepts, establishing patterns, and finding temporal and contextual relations within the EU policy cycle.
    Keywords: Entrepreneurship policy,Policy cycle,Policy analysis,Cluster analysis,Text mining,EU policy
    JEL: L26
    Date: 2019
  2. By: Marco Caliendo; Frank M. Fossen; Alexander S. Kritikos
    Abstract: As the policy debate on entrepreneurship increasingly centers on firm growth in terms of job creation, it is important to better understand which variables influence the first hiring decision and which ones influence the subsequent survival as an employer. Using the German Socioeconomic Panel (SOEP), we analyze what role individual characteristics of entrepreneurs play in sustainable job creation. While human and social capital variables positively influence the hiring decision and the survival as an employer in the same direction, we show that none of the personality traits affect the two outcomes in the same way. Some traits are only relevant for survival as an employer but do not influence the hiring decision, other traits even unfold a revolving door effect, in the sense that employers tend to fail due to the same characteristics that positively influenced their hiring decision.
    Keywords: Employer, entrepreneurship, business venturing, recruitment, firm growth, employment growth, personality
    JEL: J22 J23 L26
    Date: 2019
  3. By: Akcigit, Ufuk (University of Chicago); Dinlersoz, Emin M. (U.S. Census Bureau); Greenwood, Jeremy (University of Pennsylvania); Penciakova, Veronika (Federal Reserve Bank of Atlanta)
    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: venture capital; assortative matching; endogenous growth; IPO; management; mergers and acquisitions; research and development; startups; synergies; taxation; patents
    JEL: E13 E22 G24 L26 O16 O31 O40
    Date: 2019–09–01
  4. By: Wim Naudé (Maastricht University; Professor)
    Abstract: The digitization of the economy and advances in smart materials are transforming the nature of manufacturing. This is often described as features of the “Fourth Industrial Revolution” or Industry 4.0. For African economies, not yet having industrialized, this is of great importance, especially given the challenge of youth job creation and the need for gender equality. A combination of Industry 4.0 technologies and a resurgence in tech-entrepreneurship will have four broad impacts on manufacturing in Africa (i) the sector will continue to grow significantly in terms of value added; (ii) net job creation will be positive; (iii) it will stimulate technological and complex skills development, as well as (iv) investment in supportive infrastructure. The opportunities that these impacts will have for youth and women are outlined in the following report. Youth and women stand to benefit because of the ability of manufacturing to provide quality, high-productivity jobs in urban areas, to stimulate the development of human capital, including gender equality, and to provide, through new technologies that “democratizes” production for small businesses, new opportunities for both male and female entrepreneurs. The author also identifies policy support measures, to help realize these outcomes.
    Keywords: Economic Complexity, Fourth Industrial Revolution, Technology, Employment, Women, Youth
    Date: 2019–05
  5. By: Mariko Sakakibara; Natarajan Balasubramanian
    Abstract: We study how spinout founders’ human capital and parent size relate to founders’ propensity to stay in the same industry as their parents or to go outside the industry. Individuals with high human capital face a higher performance penalty if they form spinouts outside the parent industry, but they also face greater deterrence from large parents if they stay in that industry. Using matched employer employee data on spinout founders and their coworkers, we find that individuals with higher human capital are less likely to form spinouts in distant industries than in the parent’s industry. Further, we find that as parent size increases, such individuals are less likely to form spinouts in the parent’s industry and more likely to form spinouts in distant industries.
    Keywords: Entrepreneurship, spinout, human capital, competition, industry-specific knowledge
    Date: 2019–10
  6. By: Vitkauskaitė, Elena; Varaniūtė, Viktorija; Bouwman, Harry
    Abstract: The connection of devices, as enabled by the Internet of Things (IoT), has a significant impact on business activities, processes, and performance. IoT is, therefore, gaining attention from practitioners and academia. The deployment of technological innovations is inseparable from changes in business activities, and therefore also affects business models (BMs) of both large corporations as well as small and medium-sized enterprises (SMEs). Both face challenges on transformations to their business models due to the use of IoT solutions, although these changes might be different for both. Extant literature on IoT-based business models mainly focuses on transformations in large companies. Since SMEs play an important role in the market's value creation, it is particularly important to understand SMEs business model transformations, caused by IoT. Research on this topic is limited and faces many theoretical and methodological challenges. Therefore, this paper proposes a mixed method approach to study SMEs readiness to transform business models as a result of implementing IoT solutions. Based on a systematic literature review, and a pilot study (by using a case of one SME in Lithuania), we developed a mixed method research design in which input-output relation between case studies for theory formulation as well as theory testing are proposed.
    Keywords: Internet of Things,Business Model,IoT,SME,mixed-method research
    Date: 2019
  7. By: Ohki, Kazuyoshi
    Abstract: In this paper, we construct a tractable endogenous growth model to examine heterogeneous incumbents' current technology-switching behavior. Then, we examine the effects of policies such as a subsidy for innovation by incumbents, a subsidy for innovation by entrants, and the extension of patent length. Our setting suggests interesting and counterintuitive results. High quality incumbents tend to be less likely to conduct innovation, which is inconsistent with Schumpeter's hypothesis. A subsidy for innovation by entrants decreases the average quality of differentiated goods. Moreover, it may decrease the growth rate of the economy if the positive spillover of innovation from average quality production is adequately large. Aggregate innovation can be small even when the population size is large if the barriers to entry are extremely high.
    Keywords: Economic Growth, R&D, Firm-Heterogeneity, Innovation by Incumbents, IPR Policy
    JEL: O31 O32 O33 O34 O41
    Date: 2019–10–31
  8. By: Caceres-Diaz, Piero; Usero-Sanchez, María Belén; Montoro-Sanchez, Angeles
    Abstract: Scholars have failed to give infrastructure due importance in entrepreneurship studies. Not too far from now, digital infrastructure has been recognized as the most conducive for entrepreneurial activity. Nevertheless, it has not been properly included in opportunitymotivated entrepreneurship (OE) studies, being OE the most propitious to economic growth. Accordingly, our research is the first one to focus on this link. By recognizing the importance of individuals' resources such as human, social, and financial capital for OE; an interaction model is considered. Using logistic regression analysis through a data set of 463,454 individuals from 37 countries (2011-2016), we validate this relationship and find it varies depending on the existing institutional system. Particularly, results suggest that fixed and mobile broadband fulfill distinct roles when relating to OE. Implications of this study may be of interest to policymakers.
    Keywords: Opportunity entrepreneurship,Broadband,External enablers
    JEL: L26 L96 H54
    Date: 2019
  9. By: Nyström, Anna-Greta; Gugenishvili, Ilia
    Abstract: The question of how actors perceive business opportunities has puzzled both researchers and practitioners for decades. In the era of artificial intelligence, machine learning, and the Internet of things, many actors of the technology-intensive industries question how to use new technology to create value, and how to monetize new service concepts. In this paper, we focus on the next mobile communications technology, 5G, as one of the potential value-creators for the future that holds business opportunities for its utilizers and deployers. The concept of business opportunities is strongly associated with research on entrepreneurship (cf. Carlsson et al., 2003). Entrepreneurial opportunities consist of a set of ideas, beliefs, and actions that enable the introduction of goods, services, raw materials, and organizing methods in the absence of current markets for them (Sarasvathy et al., 2003). The research stream of entrepreneurial opportunities (cf. Alvarez & Barney, 2007, 2010; Dimov, 2007, 2011; Eckhardt & Shane, 2003) can offer new insights into the development of opportunities in high technologyintensive fields, and especially as regards the development of 5G. Strategies for opportunity identification, exploitation, and value creation are vital in the 5G era, as non-ICT traditional business sectors begin to deploy wireless technologies (e.g., factories, automotive, etc.). Researchers expect that 5G will change the business models and business ecosystems; it will also better address the evolving needs of customers (cf. Kliks et al., 2018). Unlike already existing mobile communications systems, 5G allows integration of vertical industries, e.g., energy, media, health, factories, and the automotive industry (5G-PPP, 2016). Thus, specialized companies will be able to provide services and establish positions in the value chains and actor networks. This is a major transformation compared to an environment dominated by bilateral relationships between mobile operators and their customers...
    Date: 2019

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.