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on Entrepreneurship |
| By: | Sergeeva, Anastasia; Bhardwaj, Akhil (Tilburg University, Center For Economic Research); Dimov, D. |
| Abstract: | Conceptualizing entrepreneurship as problem-solving has shed light on how problems are solved through entrepreneurial ventures. This approach presupposes that problems objectively exist, an assumption that is valid for the world of Knightian risk, in which categorization is possible. In the current study, we adopt the ontological stance of Knightian uncertainty, in which a priori categories cannot be assumed, and therefore problems do not objectively exist. We posit that in the world of Knightian uncertainty entrepreneurs who perceive certain situations as unsatisfactory but remediable engage in problematization which yields problem statements. These problem statements are operationalized to form the basis of entrepreneurial action aimed at remedying dissatisfaction. We submit that to problematize, entrepreneurs engage in analogical abduction, which allows them to develop problem statements by treating target domains replete with Knightian uncertainty as if they were similar to familiar source domains. Such conjectures are selected based on the likeness of relevant attributes between the source and target domains, aid entrepreneurs in bounding uncertainty, and guide entrepreneurial action. Entrepreneurs adopt positive feedback of entrepreneurial action as a rule to guide future action under similar circumstances, while negative feedback leads them to recalibrate problem statements and modify further action. We illustrate this process using the empirical vignette of Starbucks. |
| Keywords: | Knightian uncertainty; problem solving; analogical abduction; entrepreneural reasoning |
| JEL: | D81 M10 M13 O39 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:tiu:tiucen:6cc5a40c-6f03-49e7-b3bc-12c27205524c&r=all |
| By: | Obschonka, Martin; Lee, Neil; Rodríguez-Pose, Andrés; Eichstaedt, johannes Christopher; Ebert, Tobias |
| Abstract: | There is increasing interest in the potential of artificial intelligence and Big Data (e.g., generated via social media) to help understand economic outcomes and processes. But can artificial intelligence models, solely based on publicly available Big Data (e.g., language patterns left on social media), reliably identify geographical differences in entrepreneurial personality/culture that are associated with entrepreneurial activity? Using a machine learning model processing 1.5 billion tweets by 5.25 million users, we estimate the Big Five personality traits and an entrepreneurial personality profile for 1,772 U.S. counties. We find that these Twitter-based personality estimates show substantial relationships to county-level entrepreneurship activity, accounting for 20% (entrepreneurial personality profile) and 32% (all Big Five trait as separate predictors in one model) of the variance in local entrepreneurship and are robust to the introduction in the model of conventional economic factors that affect entrepreneurship. We conclude that artificial intelligence methods, analysing publically available social media data, are indeed able to detect entrepreneurial patterns, by measuring territorial differences in entrepreneurial personality/culture that are valid markers of actual entrepreneurial behaviour. More importantly, such social media datasets and artificial intelligence methods are able to deliver similar (or even better) results than studies based on millions of personality tests (self-report studies). Our findings have a wide range of implications for research and practice concerned with entrepreneurial regions and eco-systems, and regional economic outcomes interacting with local culture. |
| Date: | 2018–05–24 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:c62tn&r=all |
| By: | Lambert, Thomas; Velardo, Tristan |
| Abstract: | Joseph Schumpeter’s writings on entrepreneurship and innovation have had a profound impact on economic theory and economic thought. Schumpeter initially saw the small entrepreneur as the source of innovation and economic growth within an economic system but later saw large corporations as the source of much innovation. Because large corporations, and in modern times many governments and universities as well, play such a large role in funding research and development and new innovations, much of the bank financing of innovation is done by smaller banks for small entrepreneurs and their ideas. Venture capitalists and self-financing are the other two major forms of small entrepreneur/small business financing. Meanwhile, the financial markets (stocks and bond markets) only indirectly play a role in funding the innovation of large corporations via changes in these firms’ stock prices. Changes in stock prices reflect an estimate of the large firms’ research and development efforts and their prospects for profitable, future innovation. Much corporate research and development is financed internally within the organization as an expense of doing business. Meanwhile, government and university funding through tax dollars and non-profit sources indirectly subsidize corporate innovation because governmental entities and universities take on risks that the private sector will often not tolerate. Yet, large corporations are often the beneficiaries of such governmental and university financing of research and development efforts. In today’s times, Schumpeter would be impressed with the success of large firms regarding innovation but probably would be disappointed about the marginalization of the small entrepreneurial firm and the banking system and their diminished roles in innovation. This paper summarizes Schumpeter’s views on how the banking system and financial markets could play a role in innovation and explains how a modern day monopoly capital system (Baran and Sweezy 1966) and its financial system have transformed entrepreneurship and innovation away from small business and innovation by the small entrepreneur. Baran, Paul A, and Paul M Sweezy. 1966. Monopoly Capital: An Essay on the American Economic and Social Order. New York: Monthly Review Press. |
| Keywords: | banking, innovation, small business, big business |
| JEL: | B26 B31 B51 |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:97742&r=all |
| By: | Cowling, Michael Leith (University of Melbourne); Wooden, Mark (Melbourne Institute of Applied Economic and Social Research) |
| Abstract: | This paper examines the extent to which solo self-employment serves as a vehicle for job creation. Using panel data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey, a dynamic multinomial logit model of transitions between labour market states is estimated. The empirical strategy closely follows that used in a previous study employing household data from Germany by Lechmann and Wunder (2017). Estimates of true cross-state dependence between solo self-employment and employership are obtained that are relatively small. Further, our results imply that the probability of a male remaining an employer just two years after transitioning out of solo self-employment is only 2% (and among women, it is virtually zero). The extent of both true cross-state dependence and true state dependence in employership is, however, much greater among individuals who have demonstrated a preference for self-employment in the past. This implies that pro-entrepreneurial policies that target more 'entrepreneurial' individuals will have more pronounced and long-term effects in stimulating job creation. |
| Keywords: | dynamic multinomial logit, HILDA Survey, solo self-employment, state dependence, stepping stones |
| JEL: | L26 |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12841&r=all |
| By: | Schlepphorst, Susanne; Kay, Rosemarie; Nielen, Sebastian |
| Abstract: | This paper questions the stereotypical image of migrant-led companies as being less successful than native-led businesses. While facing similar framework conditions, migrant-led businesses are supposed to differ from native-led businesses in terms of their social capital endowment. In its function, social capital helps to mobilise further resources in form of human and financial resources. Each form of capital can have an effect on business performance, both directly as well as indirectly through its influence on the business' innovativeness. That is, social, human and financial resources can enhance the development and exploitation of business ideas. To test these relationships we apply a mediation model. Using data of migrant- and non-migrant-led businesses, we indeed find slight differences in their social capital resource endowments. These differences, however, do not result in performance differences between migrant- and native-led businesses. |
| Keywords: | migrant entrepreneurship,social capital,performance,mediation model |
| JEL: | J15 L25 L26 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifmwps:0319&r=all |
| By: | Okamuro, Hiroyuki; Nishimura, Junichi |
| Abstract: | Regional innovation policies have been implemented in several countries. In Japan, the controlled decentralization of traditionally centralized innovation policy is ongoing. Thus, we can observe the multilevel policy mix of public R&D (research and development) subsidies by national, prefecture, and city governments. However, empirical studies on multilevel R&D support, using panel data and considering the municipality level, are scarce. Based on original survey data and on the financial data for manufacturing SMEs (small and medium sized enterprises), we estimate their TFP (total factor productivity) and we empirically investigate the effects of public R&D subsidies by national, prefecture, and city governments. We employ firm-level fixed effect panel estimation to control for the effects of any unobservable time-invariant factors. We find that, with a two year lag, city and prefecture subsidies show positive and significant effects on TFP, which also persisted after the subsidy period. However, multilevel subsidies, especially those involving city subsidies, additionally and persistently increase recipients’ TFP. These results suggest significant advantages for the multilevel policy mix, especially those involving the city subsidy. |
| Keywords: | R&D subsidy, local authority, multilevel policy mix, SMEs, policy evaluation |
| JEL: | H71 O38 R58 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:hit:ccesdp:70_v2&r=all |
| By: | Luísa Farinha; Sónia Félix; João A. C. Santos |
| Abstract: | We document that start-ups with more access to long-term bank loans and those with more available credit in their credit lines survive longer. These findings do not appear to be driven by bank selection. Start-ups (including those founded by entrepreneurs without a business track record) that access these funding sources, in particular long-term loans, right at the beginning of their lives - when it is arguably more dicult for banks to identify winners - survive longer. Further, our findings continue to hold when we control for unobserved heterogeneity in start-ups, and when we instrument for banks' lending decisions. In addition, our findings do not seem to be entirely driven by bank monitoring because we do not find that accessing short-term bank loans yields similar results. Our results suggest that reducing uncertainty about future access to bank funding helps start-ups survive longer, possibly because it offers them insurance against future shocks and/or affords them the opportunity to make investments that they would not consider otherwise. |
| JEL: | G21 G32 M13 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ptu:wpaper:w201919&r=all |
| By: | Wenhua Di; Nathaniel Pattison |
| Abstract: | Small business lending has historically been very local, but distances between small businesses and their lenders have steadily increased over the last forty years. This paper investigates a new lending strategy made possible by distant small business lending: industry specialization. Using data on all Small Business Administration 7(a) loans from 2001-2017, we document a substantial increase in remote, specialized small business lenders, i.e., lenders that originate many distant loans and concentrate these loans within a small number of industries. These lenders target low-risk industries and, consistent with expertise, experience better loan performance within these industries. We then examine whether this industry-specialized lending serves as a substitute or complement to traditional, geographically specialized lending. We exploit the staggered entry of a remote, specialized lender to estimate the impact of specialized lending on credit access. Entry significantly increases total lending, with no evidence of substitution away from other lenders. The results indicate that specialized lending can deepen credit markets by providing new loans to low-risk but underfinanced small businesses. |
| Keywords: | Small business lending; Banking competition; Specialization; Distance; Credit access; Technology; Fintech |
| JEL: | G21 G23 L11 |
| Date: | 2020–01–16 |
| URL: | http://d.repec.org/n?u=RePEc:fip:feddwp:87382&r=all |
| By: | Kashiwagi, Yuzuka (Waseda University) |
| 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. The estimates show that capital subsidies were effective for the recovery of the performance of SMEs in the retail sector. However, in manufacturing and other service sectors, it finds no significant difference between the recovery of SMEs with and without the subsidy. Utilizing firm-level supply chain data, it further explores the mechanism behind the heterogeneity across sectors. The results suggest that the heterogeneity comes from variations in the degree of private support across sectors rather than variations in supply chain disruption. |
| Keywords: | disasters; enterprise recovery; microeconomic impact of aid; supply chains |
| JEL: | L10 Q54 R10 |
| Date: | 2019–10–29 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbewp:0597&r=all |
| By: | Shalini Mitra |
| Abstract: | Why did the productivity slowdown in EU happen at a time of increasing financial market deregulation and generally easing credit conditions? The fact that productivity growth was declining at a time of rising credit is in contrast to the standard prediction of macroeconomic models which find a positive relation between credit and productivity growth. I argue in this paper that if the conventional channel though which such a productivity increase occurs - the reallocation of capital from less to more productive businesses - is impaired, then a decline in credit constraints has the opposite effect in the standard model and aggregate productivity declines. There is in fact ample evidence in the literature to support the impairment of capital reallocation in the EU during this period. |
| Keywords: | capital misallocation, financial constraints, heterogenous firms, productivity slowdown, aggregate productivity, EU |
| JEL: | D24 D5 D61 |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:liv:livedp:201812&r=all |
| By: | María BASTIDA (Universidad de Santiago de Compostela, Santiago de Compostela (Spain)); Ana OLVEIRA (Universidad de Santiago de Compostela, Santiago de Compostela (Spain)) |
| Abstract: | The number of organizations under the scope of Social Economy (SE) in Galicia (i.e., a Spanish autonomous community) has noticeably increased since 2005, particularly if we focus on cooperatives. This evolution has maintained even in the worst years of the economic crisis, differing from the behaviour that had other corporative models in the same period and region. The Eusumo Network seems have been critical for this development. This network is a public policy aimed to promote both cooperatives and SE. In its design, Eusumo’s main objective was to provide aid to set up new cooperative projects as a beneficial driver for employment; and also, to contribute to the consolidation of the existent companies in SE by improving their competitiveness. In this work it is argued that the Eusumo Network could be leading to raising a favourable ecosystem for Galician cooperatives, as well as other organizations in the SE sector, and that this effect could be munificent to the achievement of the Global Goals for Sustainable Development (SDG), especially those regarding quantitative and qualitative improvement of the employment (objectives number 8 and 9). To start with this argument, we provide a description of the relationship between SE and the SDG. Then, we continue to explain the Eusumo Network, by deeply explaining the model (namely, its aims and both managerial and financial processes). We also explore Eusumo’s role as a driver for the creation of organizations and provide a 360º assessment from stakeholders. Finally, we contribute some best practices to favour the dissemination of this tool among other contexts. The results of our work suggest that Eusumo has played a critical role in Galician’s micro-entrepreneurship. Taking into account the contextual reality of this autonomous community (high dispersion of population, hard aging, wide zones with depopulation, strong people’s concentration in urban zones, abandonment of the rural, for example-), our findings suggest a desirable improvement of the project. We are mindful that this tool can be beneficial on returning this trend. Besides, our results also shed light on an example of public policy that might contribute to the improvement of a favourable ecosystem to SE and, in turn, to the achievement of the SDGs in Galicia. |
| Keywords: | Social economy; Public politics; Employment; Eusumo Network; Entrepreneurship; Cohesion; Sustainable Development Goals – SDG |
| JEL: | E24 J18 J54 P13 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:crc:wpaper:1929&r=all |