nep-ent New Economics Papers
on Entrepreneurship
Issue of 2020‒03‒23
seven papers chosen by
Marcus Dejardin
Université de Namur

  1. Does working at a start-up pay off? By Fackler, Daniel; Hölscher, Lisa; Schnabel, Claus; Weyh, Antje
  2. Business Regulations and Poverty By Djankov,Simeon; Georgieva,Dorina Peteva; Ramalho,Rita
  3. Natural Disasters, Firm Survival and Growth: Evidence from the Ise Bay Typhoon, Japan By Toshihiro Okubo; Eric Strobl
  4. Do Firms Exit the Formal Economy after a Minimum Wage Hike ? By Bossavie,Laurent Loic Yves; Acar,Aysenur; Makovec,Mattia
  5. Network-Based Hiring: Local Benefits; Global Costs By Arun G. Chandrasekhar; Melanie Morten; Alessandra Peter
  6. Empleo y emprendimiento en Bogotá By Cristina Fernández
  7. Bestimmungsfaktoren des regionalen Gründungsgeschehens - eine Machbarkeitsstudie By Bijedić, Teita; Butkowski, Olivier K.; Kay, Rosemarie; Suprinovič, Olga

  1. By: Fackler, Daniel; Hölscher, Lisa; Schnabel, Claus; Weyh, Antje
    Abstract: Using representative linked employer-employee data for Germany, this paper analyzes short- and long-run differences in labor market performance of workers joining start-ups instead of incumbent firms. Applying entropy balancing and following individuals over ten years, we find huge and long-lasting drawbacks from entering a start-up in terms of wages, yearly income, and (un)employment. These disadvantages hold for all groups of workers and types of start-ups analyzed. Although our analysis of different subsequent career paths highlights important heterogeneities, it does not reveal any strategy through which workers joining start-ups can catch up with the income of similar workers entering incumbent firms.
    Keywords: startups,young firms,wages,linked employer-employee data
    JEL: J31 J63 L26 M51
    Date: 2020
  2. By: Djankov,Simeon; Georgieva,Dorina Peteva; Ramalho,Rita
    Abstract: Using panel data for 189 economies from 2005 to 2013, this paper shows that business-friendly regulations are correlated with the poverty headcount at the country level. This association is significant using the World Bank's Doing Business indicators on getting credit and contract enforcement. The findings suggest that the conduit for poverty reduction is business creation, as a source of new jobs and a manifestation of thriving entrepreneurship.
    Keywords: Inequality,Legislation,Judicial System Reform,Legal Products,Regulatory Regimes,Social Policy,Legal Reform,Public Finance Decentralization and Poverty Reduction,Macro-Fiscal Policy,Economic Adjustment and Lending,Public Sector Economics,Health Care Services Industry,Law and Justice Institutions
    Date: 2019–03–01
  3. By: Toshihiro Okubo (Faculty of Economics, Keio University); Eric Strobl (Department of Economics, Bern University)
    Abstract: This paper investigates the damage impact of the 1959 Ise Bay Typhoon-the most destructive storm in Japanese history-on firm performance in Nagoya City. To this end, we combine firm-level data with a locally derived damage index measured in terms of the duration of storm surge-induced flooding. We find heterogeneous impacts of flood damage across firms and sectors. More specifically, older manufacturing firms tend to survive and, conditional on survival, longer time inundation moderated their employment and sales growth, but also promoted capital growth, suggesting investment in new machinery and facilities. In contrast, employment growth increased in the construction sector to satisfy the construction demand for rebuilding after the supertyphoon.
    Keywords: Typhoon, Flood, Firm survival, Firm growth, Nagoya city
    JEL: Q54 R10 R12 R14 D22 L25
    Date: 2020–02–25
  4. By: Bossavie,Laurent Loic Yves; Acar,Aysenur; Makovec,Mattia
    Abstract: This paper explores the effects of a large minimum wage hike on firm exits from the formal economy, and its associated impacts on employment and informality. It uses an exceptionally rich linked employer-employee dataset on the universe of formal firms and workers in a developing economy. Data on the full wage distribution in firms allows to precisely measure minimum wage exposure, and to estimate the causal effect of the hike in a difference-in-difference setting. The hike is found to significantly increase the destruction rate of formal firms. Effects are concentrated among small and low-productivity firms while exits of high-productivity firms are unaffected. The increase in firm exits is larger in industries with small profit margins, higher labor shares and stronger market competition. We also evidence negative effects on formal employment, which mainly originate from firm destruction rather than employment cuts in surviving firms. Corroborative evidence indicates that workers from exiting firms mostly transition into informal employment, instead of being jobless after the hike.
    Keywords: Labor Standards,Rural Labor Markets,Inequality,Public Sector Administrative and Civil Service Reform,Administrative&Civil Service Reform,Public Sector Administrative&Civil Service Reform,De Facto Governments,Democratic Government,Employment and Unemployment,Labor Markets
    Date: 2019–02–15
  5. By: Arun G. Chandrasekhar; Melanie Morten; Alessandra Peter
    Abstract: Entrepreneurs, particularly in the developing world, often hire from their networks: friends, family, and resulting referrals. Network hiring has two benefits, documented extensively in the empirical literature: entrepreneurs know more about the ability of their network (and indeed they are often positively selected), and network members may be less likely to engage in moral hazard. We study theoretically how network hiring affects the size and composition (i.e., whether to hire friends or strangers) of the firm. Our primary result is that network hiring, while locally beneficial, can be globally inefficient. Because of the existence of a network, entrepreneurs set inefficiently low wages, firms are weakly too small, rely too much on networks for hiring, and resulting welfare losses increase in the quality of the network. Further, if entrepreneurs are uncertain about the true quality of the external labor market, the economy may become stuck in an information poverty trap where forward-looking entrepreneurs or even entrepreneurs in a market with social learning never learn the correct distribution of stranger ability, exacerbating welfare losses. We show that the poverty trap can worsen when network referrals are of higher quality.
    JEL: D83 D86 J46 L14 O1
    Date: 2020–02
  6. By: Cristina Fernández
    Abstract: Con el fin de cumplir con los objetivos propuestos en esta investigación, el trabajo se estructura en cuatro secciones, la primera de las cuáles es esta introducción. La segunda sección analiza las tres amenazas mayores para el mercado laboral en Bogotá: la inactividad, el desempleo y la informalidad; estima cuáles son sus causas y sugiere políticas para controlarla. La tercera sección analiza en detalle las políticas de emprendimiento. La cuarta sección presenta las conclusiones.
    Keywords: Empleo, Emprendimiento, Mercado Laboral, Desempleo, Informalidad, Tasa de Participación Laboral, Bogotá, Employment, Entrepreneurship, Labor Market, Unemployment, Informality
    JEL: E24 E26 J21 J64
    Date: 2019–10–31
  7. By: Bijedić, Teita; Butkowski, Olivier K.; Kay, Rosemarie; Suprinovič, Olga
    Abstract: Angesichts regionaler Unterschiede im Gründungsgeschehen stellt sich die Frage nach ihren Ursachen, deren Beantwortung mit einigen Herausforderungen verbunden ist. Ziel der vorliegenden Machbarkeitsstudie ist daher zu prüfen, inwiefern diese Herausforderungen überwunden werden können. Es zeigt sich, dass das Konzept unternehmerischer Ökosysteme eine geeignete konzeptionelle Basis für die Untersuchung des regionalen Gründungsgeschehens sowie dessen Bestimmungsfaktoren darstellt und zugleich Orientierung für die Datenauswahl bietet. Eine Sondierung bestehender Datenquellen kommt zu dem Ergebnis, dass die bereits verfügbaren Daten wertvolle Erkenntnisse im Hinblick auf die Bestimmungsfaktoren des regionalen Gründungsgeschehens versprechen, dass jedoch auch noch erhebliche Lücken bestehen. Diese sollten sukzessive durch Datenrecherchen und eigene Datenerhebungen geschlossen werden. Im nächsten Schritt kann mit dem Aufbau der Regionaldatenbank begonnen werden, auf deren Basis auch ein regionales Gründungsbarometer entwickelt werden kann, das den aktuellen Stand des Gründungsgeschehens erfasst und Ansatzpunkte für Interventionen durch die Regional- und Wirtschaftspolitik liefert.
    Keywords: Gründungen,Gründungsökosysteme,Regionales Gründungsgeschehen,Start-ups,Entrepreneurial ecosystems,Entrepreneurial regions
    JEL: M13
    Date: 2020

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