nep-ent New Economics Papers
on Entrepreneurship
Issue of 2020‒03‒09
nine papers chosen by
Marcus Dejardin
Université de Namur

  1. Historical institutional differences and entrepreneurship: the case of socialist legacy in Vietnam By Christian Fisch; Michael Wyrwich; Thi Lanh Nguyen; Jörn H. Block
  2. The Italian startup act: A microeconometric program evaluation By Biancalani, Francesco; Czarnitzki, Dirk; Riccaboni, Massimo
  3. Small firms and patenting revisited By Athreye, Suma; Fassio, Claudio; Roper, Stephen
  4. Entry, Exit and Productivity: Evidence from French Manufacturing Firms. By Enrico De Monte
  5. Board Dynamics over the Startup Lifecycle By Ewens, Michael; Malenko, Nadya
  6. Microentrepreneurship in Developing Countries By Seema Jayachandran;
  7. Group?Based Cognitive Behavioral Therapy (CBT) Training Improves Mental Health of SME Entrepreneurs : Experimental Evidence from Conflict?Affected Areas of Pakistan By Saraf,Priyam; Rahman,Tasmia; Jamison,Julian C
  8. Full Esteem Ahead ? Mindset-Oriented Business Training in Ethiopia By Alibhai,Salman; Buehren,Niklas; Frese,Michael Dr.; Goldstein,Markus P.; Papineni,Sreelakshmi; Wolf,Kathrin
  9. Determinantes del emprendimiento en La Rioja (España) By de la Fuente, Ignacio

  1. By: Christian Fisch (University of Trier); Michael Wyrwich (University of Groningen, and FSU Jena); Thi Lanh Nguyen; Jörn H. Block (University of Trier)
    Abstract: We study the case of Vietnam to assess the long-lasting role of institutional and historical legacy on entrepreneurial outcomes. In particular, we investigate the detrimental effect of socialist institutions on entrepreneurship. Vietnam offers a unique quasi-experimental setting because the country was divided into the socialist North and the nonsocialist South for a relatively short period of two decades. After re-unification the South adopted the institutional framework conditions of the North. To assess the relationship between socialist history and entrepreneurship in this unique setting, we survey more than 3,000 North and South Vietnamese individuals more than four decades after the re-unification of the country. We find that North Vietnamese respondents have lower entrepreneurship intention, are less likely to select into entrepreneurship education programs, and are less willing to engage in business takeover. These patterns indicate the persistence of a long-lasting influence of historical differences in institutional framework conditions on entrepreneurship. The long-run effect of socialism on entrepreneurship is apparently deeper than previously discovered in the prominent case of Germany, where differences in institutional treatment lasted for much longer and ended more recently.
    Keywords: Socialism, Vietnam, entrepreneurship intention, entrepreneurship education, takeover vs. new venture startup
    JEL: D02 L26 M13 P30
    Date: 2020–02–17
  2. By: Biancalani, Francesco; Czarnitzki, Dirk; Riccaboni, Massimo
    Abstract: This paper analyses the impact of the Italian Startup Act which entered into force in December 2012. This public policy provides a unique bundle of benefits, such as tax incentives, public loan guarantees, and a more flexible labor law, for firms registered as "innovative startups" in Italy. This legislation has been implemented by the Italian government to increase innovativeness of small and young enterprises by facilitating improved access to (external) capital and (highskilled) labor. Consequently, the goal of our evaluation is to assess the impact of the policy on equity, debt and employment. Using various conditional difference-in-difference models, we find that the Italian startup policy has met its primary objectives. The econometric results strongly suggest that firms operating under this program are more successful in obtaining equity and debt capital and they also hire more employees because of the program participation.
    Keywords: start up,innovation policy,firm subsidies,small firms
    JEL: M13 O38
    Date: 2020
  3. By: Athreye, Suma (Essex Business School); Fassio, Claudio (CIRCLE, Lund University); Roper, Stephen (Warwick Business School)
    Abstract: In order to observe a patent application at the firm level two conditions need to be met: new products need to be of patentable quality, which depends both on the degree of novelty of innovations and on the total number (portfolio) of innovations; and the benefits of patents need to be higher than the costs of owning them. Analyzing the patent propensity of small and large UK firms using a novel innovation-level survey (the SIPU survey) linked to Community Innovation Survey data we find that when we consider the whole innovation portfolio smaller firms do patent less than larger firms. However, using data on individual innovations, we find that smaller firms are no less likely to patent any specific innovation than larger firms. We argue that size differences in the probability to patent relate primarily to the ‘portfolio effect’, i.e. larger firms generate more innovations than smaller firms and therefore are more likely to create one or more which are patentable. As for the decision to patent a patentable innovation, we find that cost barriers, more than issues of innovation quality or enforceability, deter small firms from patenting specific innovations. Measures to address the costs of patenting for smaller firms – perhaps by considering patents as eligible costs for R&D tax credits – and/or subsidizing SMEs’ participation in IP litigation schemes may both encourage patent use by smaller firms.
    Keywords: Patenting; SME; small firms; UK
    JEL: O32 O34 O38
    Date: 2020–02–26
  4. By: Enrico De Monte
    Abstract: This paper analyzes productivity dynamics based on French firm-level data covering nine key 2-digit industries for the period 1994 - 2016. I estimate firm-level productivity through the estimation of a translog production function and investigate the following main aspects: (i) aggregate productivity change with firm entry and exit by applying the Dynamic OlleyPakes Productivity Decomposition (DOPD), (ii) firms’ ability to improve productivity and productivity persistence, and (iii) productivity differences between different firm groups such as survivors, entrants and exitors as well as small, medium and big firms by applying the concept of stochastical dominance. My results show that aggregate productivity has increased for most the considered 2-digit industries and that in many cases surviving firms’ have contributed significantly to these positive improvements. Entering firms contribute in many cases positively to aggregate productivity while the contribution of exitors shows varying signs. Furthermore, I find that firms’ reveal a high degree of productivity persistence. Analysing productivity difference between firm groups the results suggest that the productivity distribution of surviving firms stochastically dominates the distribution of entering and exiting firms. Surprisingly, the results reveal that big firms do not stochastically dominate the productivity distribution of small firms.
    Keywords: production function estimation, productivity decomposition, technological change, productivity differences, firm entry and exit.
    JEL: C13 C14 D24 D30 L60 O47
    Date: 2020
  5. By: Ewens, Michael (California Institute of Technology); Malenko, Nadya
    Abstract: Venture capital (VC) backed firms face neither the governance requirements nor a major separation of ownership and control of their public peers. These differences suggest that independent directors could play a unique role on private firm boards. This paper explores the dynamics of VC-backed startup boards using new data on over 7,200 startups, along with board member entry, exit, and individual director characteristics. We document several new facts about board size, the allocation of control, and composition dynamics. At formation, a typical board has four members and is entrepreneur-controlled. Independent directors are found on the median board after the second financing event, when control over the board becomes shared, with independent directors holding the tie-breaking vote. These patterns are consistent with independent directors playing both a mediating and advising role over the startup lifecycle, and thus representing another potential source of value-add to entrepreneurial firm performance.
    Date: 2020–02–16
  6. By: Seema Jayachandran;
    Abstract: This article reviews the recent literature in economics on small-scale entrepreneurship (“microentrepreneurship”) in low-income countries. Major themes in the literature include the determinants and consequences of joining the formal sector; the impacts of access to credit and other financial services; the impacts of business training; barriers to hiring; and the distinction between self-employment by necessity and self-employment as a calling. The article devotes special attention to unique issues that arise with female entrepreneurship.
    JEL: L26 J16 J24
    Date: 2020
  7. By: Saraf,Priyam; Rahman,Tasmia; Jamison,Julian C
    Abstract: Mental health, well-being, and lasting economic outcomes are intimately connected. However, in geographies marked by fragility, conflict, and violence (FCV), entrepreneurs of small and medium size enterprises (SMEs) experience chronic stress and poor mental health on a regular basis. These issues can hamper performance and quality of life for the entrepreneurs, and can dampen the benefits of existing financial and business assistance programs. Few proven rigorous interventions are known. This study tests the hypothesis that a five-week group Cognitive Behavioral Therapy (CBT) training called Problem Management Plus for Entrepreneurs (PM E), in combination with financial assistance, could be more effective at reducing psychological stressors of SME entrepreneurs in FCV contexts than financial assistance alone. Meaningful and statistically significant improvements in mental health were achieved, with improvements persisting and increasing beyond the immediate post-intervention period. Based on analysis of pooled data across two follow-up rounds (at five weeks and three months post-intervention), entrepreneurs in the treatment group experienced statistically significant reduction in the intensity and prevalence of depression and anxiety symptoms (measured by the Patient Health Questionnaire Anxiety and Depression Scale) and higher levels of well-being (measured by the World Health Organization Well-Being Index) compared with the control group. The effect was marked for those experiencing mild/moderate levels of depression and anxiety, suggesting the clinical value of such low touch interventions. Overall, the study demonstrates that empirical research through Randomized Control Trials (RCTs) can be conducted in challenging, FCV settings through appropriate rapid training of local researchers and non-specialist providers (NSPs) at a low cost, yielding scalable programmatic and policy level lessons.
    Keywords: Mental Health,Health Care Services Industry,Educational Sciences,Marketing,Private Sector Economics,Private Sector Development Law
    Date: 2019–06–04
  8. By: Alibhai,Salman; Buehren,Niklas; Frese,Michael Dr.; Goldstein,Markus P.; Papineni,Sreelakshmi; Wolf,Kathrin
    Abstract: Is there a mindset gap holding women back in business? Can entrepreneurship training instill a set of attitudes, behaviors, and strategies that are thought to underpin success in business such as motivation, perseverance, and self-confidence? This study conducted two randomized controlled trials to evaluate the effect of mindset-oriented business trainings on the performance of women-owned micro and small enterprises in Ethiopia. The trainings were underpinned by psychology with a mission to foster self-esteem and entrepreneurial spirit. Despite a similar approach, however, the quality of delivery seemed to matter as impacts of the trainings on business performance were mixed. A key channel for an impact on profits is if the training can actually effectuate the mindset change, with only one training transferring higher levels of entrepreneurial self-efficacy, personal initiative, and entrepreneurial locus of control to the women, relative to a control group. The study finds suggestive evidence that psychological skills and mindset are better inspired by a trainer who previously owned a business themselves and therefore may have a better understanding of the entrepreneurs'specific challenges. The study concludes that psychological skills are important for women's business success, and these skills can indeed be transferred using training, assuming a shared identity match between trainer and student. Service delivery appears to be critical for inculcating these important skills.
    Keywords: Technology Innovation,Gender and Economic Policy,Technology Industry,Gender and Poverty,Economics and Gender,Gender and Economics,Private Sector Economics,Marketing,Private Sector Development Law,Labor Markets
    Date: 2019–06–17
  9. By: de la Fuente, Ignacio
    Abstract: Con motivo de la Gran Recesión los distintos gobiernos se vieron en la necesidad de promover el emprendimiento como una solución a los graves problemas de paro. En España, con un paro estructural muy elevado y profundamente cíclico, la Gran Recesión elevó sus niveles en gran medida, de modo que el emprendimiento jugó un papel importante en la política laboral del Gobierno. En este trabajo abordamos el estudio de los determinantes del emprendimiento en La Rioja, Comunidad Autónoma situada al Norte de España, y lo hacemos a través del estudio econométrico de microdatos correspondiente al año 2015 del GEM (Global Entrepreneurship Monitor) a través de los que estimaremos 9 regresiones lineales utilizando MCO. Tras presentar los resultados del estudio, se propondrán una serie de medidas de política económica.
    Keywords: emprender, emprendimiento, La Rioja, GEM data
    JEL: L26 R10
    Date: 2020–03–02

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