nep-ent New Economics Papers
on Entrepreneurship
Issue of 2020‒04‒06
eighteen papers chosen by
Marcus Dejardin
Université de Namur

  1. The Value of Publicly Available, Textual and Non-textual Information for Startup Performance Prediction By Kaiser, Ulrich; Kuhn, Johan Moritz
  2. Do Elite Colleges Matter? The Impact of Elite College Attendance on Entrepreneurship Decisions and Career Dynamics By Naijia Guo; Charles Ka Yui Leung
  3. Does working at a start-up pay off? By Fackler, Daniel; Hölscher, Lisa; Schnabel, Claus; Weyh, Antje
  4. Can Direct Innovation Subsidies Relax SMEs' Credit Constraints? By Raphaël Chiappini; Samira Demaria; Benjamin Montmartin; Sophie Pommet
  5. Intrapreneurship and trust By Niklas Elert; F.C. Stam; Mikael Stenkula
  6. Demographics and the decline in firm entry: Lessons from a life-cycle model By Röhe, Oke; Stähler, Nikolai
  7. Entrepreneurial Ecosystems Elements By F.C. Stam
  8. Measure twice, cut once : entrepreneurial ecosystem metrics By J. Leendertse; M.T. Schrijvers; F.C. Stam
  9. User Innovation and Business Incubation By Carolin Eckinger; M.W.J.L. Sanders
  10. Heterogeneous effects of credit constraints on SMEs’ employment: Evidence from the European sovereign debt crisis By David Cornille; François Rycx; Ilan Tojerow
  11. Business model innovation in incubators: the role played by dynamic capabilities theory By Amandine Maus; Sylvie Sammut
  12. Banks' climate commitments and credit to brown industries: new evidence for France By Jean-Stéphane Mésonnier
  13. STI-DUI innovation modes and firm performance in the Indian capital goods industry: Do small firms differ from large ones? By Mathew, Nanditha; Paily, George
  14. The Effect Of Learning Outcomes In Entrepreneurship Education Programs Of Interest In Entrepreneurship By Sadewo, Yosua Damas
  15. Microfinance and intermediation scale: is still a childhood industry ? By Célestin Mayoukou
  16. Determinantes del emprendimiento en Cataluña: un análisis con datos GEM By Liarte Blasco, Cristian
  17. La actividad emprendedora: Análisis transversal en la Comunidad Foral de Navarra By Gascón Salillas, Patricia
  18. Entrepreneuriat et créativité : du détournement à la création de valeur By Jean-Luc Gaffard

  1. By: Kaiser, Ulrich (University of Zurich); Kuhn, Johan Moritz (EPAC)
    Abstract: Can publicly available, web-scraped data be used to identify promising business startups at an early stage? To answer this question, we use such textual and non-textual information about the names of Danish firms and their addresses as well as their business purpose statements (BPSs) supplemented by core accounting information along with founder and initial startup characteristics to forecast the performance of newly started enterprises over a five years' time horizon. The performance outcomes we consider are involuntary exit, above–average employment growth, a return on assets of above 20 percent, new patent applications and participation in an innovation subsidy program. Our first key finding is that our models predict startup performance with either high or very high accuracy with the exception of high returns on assets where predictive power remains poor. Our second key finding is that the data requirements for predicting performance outcomes with such accuracy are low. To forecast the two innovation-related performance outcomes well, we only need to include a set of variables derived from the BPS texts while an accurate prediction of startup survival and high employment growth needs the combination of (i) information derived from the names of the startups, (ii) data on elementary founder-related characteristics and (iii) either variables describing the initial characteristics of the startup (to predict startup survival) or business purpose statement information (to predict high employment growth). These sets of variables are easily obtainable since the underlying information is mandatory to report upon business registration. The substantial accuracy of our predictions for survival, employment growth, new patents and participation in innovation subsidy programs indicates ample scope for algorithmic scoring models as an additional pillar of funding and innovation support decisions.
    Keywords: startup, performance, prediction, text as data
    JEL: L26 C53
    Date: 2020–03
  2. By: Naijia Guo (Chinese University of Hong Kong); Charles Ka Yui Leung (City University of Hong Kong)
    Abstract: Elite college attendance significantly impact on subsequent entrepreneurship decisions and career dynamics. We find that an elite college degree is positively correlated with entrepreneurship (defined as owning an incorporated business) but not with other forms of self-employment. We develop an overlapping generations model that captures self-selection in education and career choices based on heterogeneous ability and family wealth endowments over the lifecycle. Our estimates show that (1) entrepreneurs and other self-employed individuals require different types of human capital and (2) elite colleges generate considerably more human capital gain than ordinary colleges, particularly for entrepreneurs. Distinguishing between elite and ordinary colleges improves our prediction of entrepreneurship decisions. Our simulation shows that moving elite college graduates to non-elite colleges significantly reduce their likelihood of becoming entrepreneurs, but not other self-employment. Overall, providing subsidies for elite colleges is more efficient than subsidizing their non-elite counterparts in encouraging entrepreneurship, improving intergenerational mobility and welfare.
    Keywords: entrepreneurship, elite college, intergenerational transfer
    JEL: I20 J24
    Date: 2020–03–30
  3. 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
  4. By: Raphaël Chiappini (Université de Bordeaux; LAREFI); Samira Demaria (Université Côte d'Azur, France; GREDEG CNRS); Benjamin Montmartin (SKEMA Business School; Université Côte d'Azur, France); Sophie Pommet (Université Côte d'Azur, France; GREDEG CNRS)
    Abstract: Credit constraints hamper the ability of SMEs to undertake innovative activities. Promoting access to external funding for SMEs represents therefore an important challenge for policymakers. This paper investigates whether innovation subsidies provided by the French public investment bank to SMEs have translated into better access to bank and other external financing through an indirect certification effect. We exploit a unique database covering the period 2000-2010 to construct a quasi-natural experiment and evaluate the causal impact of these subsidies on SMEs' financial constraints. If we find a significant improvement in the access to bank financing for subsidized firms, the effect is heterogeneous and mainly concentrated on small firms operating in high-tech sectors. Moreover, such public support does not seem to improve the access to other external sources of financing which can be explained by the low development risk-capital markets in France.
    Keywords: Credit constraints, innovation policy, certification effect, Mahalanobis distance matching, difference-in difference
    JEL: O33 O38
    Date: 2020–03
  5. By: Niklas Elert; F.C. Stam; Mikael Stenkula
    Abstract: Trust and entrepreneurship are seen as key ingredients of long term prosperity. However, it is not clear how these two are related. Part of the confusion can be traced back to the measurement of entrepreneurship, biased towards independent entrepreneurship (self-employed and new firms), and excluding entrepreneurship within established organizations. We shed new light on the relationship between trust and entrepreneurship, by proposing two mechanisms relating trust to entrepreneurship by employees, so-called intrapreneurship. We hypothesize that generalized trust influences the prevalence of intrapreneurship in an economy, and the allocation of entrepreneurial talents between independent entrepreneurship and intrapreneurship, through two mechanisms. First, generalized trust may substitute for complete contracts as a means of organizing labor in society, enabling a level of job autonomy in organizations necessary for intrapreneurship to flourish. Second, by way of its influence on the size and scope of the welfare state, generalized trust may increase the benefits of employment relative to self-employment, causing entrepreneurial individuals to elect to be intrapreneurs rather than independent entrepreneurs. Using a novel dataset, we find support for these hypotheses in a cross-country regression model covering the time period 2011–2017.
    Keywords: trust, intrapreneurship, entrepreneurship, institutions
    Date: 2019–06
  6. By: Röhe, Oke; Stähler, Nikolai
    Abstract: Since the mid-1970s, firm entry rates in the United States have declined significantly. This also holds for other OECD countries over the past years. At the same time, these economies experienced a gradual process of population aging. Applying a tractable life-cycle model with endogenous firm dynamics, we show that falling US firm entry rates can be explained by demographic transition. Specifically, our model simulations suggest that aging can account for up to one third of the observed decrease in US firm entry rates. In addition to the negative effects of a slowdown in working-age population growth on firm entry, our analysis points out that an increase in longevity may also be an important factor contributing to the decline in business dynamism, weighing on both firm entry and exit rates.
    Keywords: Life-Cycle model,Population aging,Business dynamism,Firm entry
    JEL: H25 L52 E20 E62 L10 O30
    Date: 2020
  7. By: F.C. Stam
    Abstract: There is growing interest in ecosystems as an approach for understanding the context of entrepreneurship at the macro level of an organizational community. It consists of all the interdependent actors and factors that enable and constrain entrepreneurship within a particular territory. Although growing in popularity, the entrepreneurial ecosystem concept remains loosely defined and measured. This paper shows the value of taking a systems view of the context of entrepreneurship: understanding entrepreneurial economies from a systems perspective. We use a systems framework for studying entrepreneurial ecosystems, develop a measurement instrument of its elements, and use this to compose an entrepreneurial ecosystem index to examine the quality of entrepreneurial ecosystems in the Netherlands. We find that the prevalence of high-growth firms in a region is strongly related to the quality of its entrepreneurial ecosystem. Strong interrelationships among the ecosystem elements reveal their interdependence.
    Keywords: entrepreneurial ecosystem elements, regional entrepreneurial ecosystems, entrepreneurial economy, entrepreneurship, high-growth firms, systems analysis
    Date: 2019–06
  8. By: J. Leendertse; M.T. Schrijvers; F.C. Stam
    Abstract: An entrepreneurial ecosystem comprises a set of interdependent actors and factors that are governed in such a way that they enable productive entrepreneurship within a particular territory. While the entrepreneurial ecosystem approach is useful to think about regional economies, it currently lacks full-fledged metrics to enable policy. In this paper, we bridge this gap by quantifying and qualifying regional economies using the entrepreneurial ecosystem approach. We operationalize ten elements of entrepreneurial ecosystems for 274 regions in the 28 countries of the European Union. The ecosystem elements show strong and positive correlations between them, confirming the systemic nature of entrepreneurial economies, and the need for a complex systems perspective. Our results show that formal institutions and physical infrastructure take a central position in the interdependence web, providing a first indication of these elements as fundamental conditions of entrepreneurial ecosystems. We then use the elements to calculate an index that measures the quality of entrepreneurial ecosystems. This index is robust and performs well in regressions to predict entrepreneurial output, which we measure using novel data on productive entrepreneurship
    Keywords: entrepreneurial ecosystem, regional dynamics, entrepreneurship, economic development, economic policy, entrepreneurship policy
    Date: 2020–02
  9. By: Carolin Eckinger; M.W.J.L. Sanders
    Abstract: This paper investigates user innovations in business incubation programs. User innovations are defined as innovations by users rather than suppliers of products, processes or services and have been identified as a potentially rich source of innovative ideas. Business incubators aim to help entrepreneurs find and develop ideas into viable businesses and have been shown to contribute to the success rate of start-ups. Current incubator acquisition strategies, however, are rather passive (founders need to apply) and selection into the incubation programs is geared towards attracting potentially profitable start-ups. User innovations often lack a dedicated founder team and the innovator typically has a lower ambition to build a venture and achieve profitability. In this paper we construct a measure based on existing literature to classify user innovations in a dataset of 296 start-ups that applied to one of two incubation programs between 2014 and 2017 in the Netherlands. Analysing this dataset, we found only 19 and find that incubator programs benefit user innovations as much as they do other ventures. Our data also suggests a negative self-selection bias of user innovations, shown by very few user innovations applying to incubation programs. At the same time only a few of the user innovations found have been selected for incubation, revealing an additional selection bias of incubator acquisition strategies towards user innovations
    Keywords: User Innovation, Business Incubation, Startups, Entrepreneurship
    Date: 2019–08
  10. By: David Cornille; François Rycx; Ilan Tojerow
    Abstract: This paper takes advantage of access to detailed matched bank-firm data to investigate whether and how employment decisions of SMEs have been affected by credit constraints during the European sovereign debt crisis. Variability in banks’ financial health following the 2008 crisis is used as an exogenous determinant of firms’ access to credit. Findings, relative to the Belgian economy, clearly highlight that credit matters. They show that SMEs borrowing money from pre-crisis financially less healthy banks were significantly more likely to be affected by a credit constraint and, in turn, to adjust their labour input downwards than pre-crisis clients of more healthy banks. These results are robust across types of loan applications that were denied credit, i.e. applications to finance working capital, debt or new investments. Yet, estimates also show that credit constraints have been essentially detrimental for employment among SMEs experiencing a negative demand shock or facing strong product market competition. In terms of human resources management, credit constraints are not only found to foster employment adjustment at the extensive margin but also to increase the use of temporary layoff allowances for economic reasons. This outcome supports the hypothesis that short-time compensation programmes contribute to save jobs during recessions.
    Keywords: Banks’ financial health; Credit constraints; Employment; European sovereign debt crisis; Short-time compensation programmes
    Date: 2019–04–01
  11. By: Amandine Maus (UM - Université de Montpellier, MRM - Montpellier Research in Management - UM1 - Université Montpellier 1 - UM3 - Université Paul-Valéry - Montpellier 3 - UM2 - Université Montpellier 2 - Sciences et Techniques - UPVD - Université de Perpignan Via Domitia - Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School - UM - Université de Montpellier, Labex Entreprendre - UM - Université de Montpellier); Sylvie Sammut (UM - Université de Montpellier, MRM - Montpellier Research in Management - UM1 - Université Montpellier 1 - UM3 - Université Paul-Valéry - Montpellier 3 - UM2 - Université Montpellier 2 - Sciences et Techniques - UPVD - Université de Perpignan Via Domitia - Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School - UM - Université de Montpellier, Labex Entreprendre - UM - Université de Montpellier)
    Abstract: This conceptual paper focuses on a review of the literature based on 61 articles. It shows the adjusted transferability of the business model tool resulting in the strategic guidance of public business incubators, particularly in terms of their search for new competitive advantage. By making use of dynamic capability theory, this study reveals that the entrepreneurial behavior of the public actors in business support has led them to rethink their business model. This model allows them to boost their performances in an industry that is becoming increasingly competitive thanks to the use of new opportunities. The originality of this research lies in its use of a tool traditionally devoted to businesses, the business model, for organizations for the most part financed through public funds, business incubators.
    Keywords: Business model,business incubators,dynamic capabilities
    Date: 2018–08–12
  12. By: Jean-Stéphane Mésonnier
    Abstract: In this paper, I investigate whether and how banks align green words with deeds in terms of credit allocation across more or less carbon-intensive industries in France. I use a rich dataset of bank credit exposures across some fifty industries and two size classes of borrowing firms for the main banking groups operating in France, which I merge with information on industries' greenhouse gas emission intensities and a score for banks' self-reported climate-related commitments over 2010-2017. I find evidence that higher levels of self-reported climate commitments by banks are associated with less lending to large corporates in the five brownest industries. However, lending to SMEs across more or less carbon-intensive industries remained unrelated to banks' commitments to green their business. Since SMEs are not required to report on their carbon emissions, while large firms are, these findings suggest that devising an appropriate carbon reporting framework for small firms is likely to enhance the decarbonization of bank lending.
    Keywords: : Green banks, Greenhouse Gas Emissions, Climate Change.
    JEL: G21 Q54
    Date: 2019
  13. By: Mathew, Nanditha (UNU-MERIT); Paily, George (Centre for Development Studies, Trivandrum)
    Abstract: This paper examines the effect of dfferent innovation strategies followed by small and large firms on their overall performance in the capital goods industry. Following the wider literature on national innovation systems, we categorise the innovation modes as formal Science, Technology and Innovation (STI) and informal learning by Doing, Using and Interacting (DUI) mode. We observe that, in the case of small firms the informal learning and experience based innovation mode is related to improved performance, while the formal STI mode does not have any effect. On the other hand, for large firms, both STI and DUI innovation modes are positively related to its sales growth. Our results indicate that building certain DUI capabilities may act as a pre-condition to enhance the strength of science and technology based innovation strategies.
    Keywords: STI, DUI, Modes of innovation, Capabilities accumulation, Corporate performance, capital goods industry, India
    JEL: O32 O33 L20
    Date: 2020–02–11
  14. By: Sadewo, Yosua Damas
    Abstract: This study aims to determine whether there is influence of learning outcomes in Entrepreneurship Education Program on entrepreneurship interests, so the results of research this can indicate whether the learning outcomes in the Entrepreneurship Education Program can be one of the factors of the growing interest in entrepreneurship. The research method used is quantitative method. The research was conducted in Shanti Bhuana Management High School, with the subject of research is a student of Shanti Bhuana High School of Management class of 2017 which amounted to 27 students. The test technique is used to retrieve learning result data on Entrepreneurship Education Program, while entrepreneurship interest data is taken by using questionnaire. The result of research shows that there is a significant influence between Entrepreneurship Education Program on entrepreneurship interest, the influence of 36,3%.
    Date: 2018–08–30
  15. By: Célestin Mayoukou (CREAM - Centre de Recherche en Economie Appliquée à la Mondialisation - UNIROUEN - Université de Rouen Normandie - NU - Normandie Université - IRIHS - Institut de Recherche Interdisciplinaire Homme et Société - UNIROUEN - Université de Rouen Normandie - NU - Normandie Université)
    Abstract: L'industrie de la microfinance connait depuis 30 ans une mutation perpétuelle. L'échelle de son intermédiation s'est progressivement élargie. Centrée à ses débuts sur des acteurs du secteur informel ; cette activité touche désormais une large clientèle englobant même des PME exportatrices. Son mode de refinancement s'étend désormais au marché international des capitaux, puisque des Fonds d'investissement et des Banques multinationales alimentent les IMF en capitaux. La digitalisation et les plateformes de crédits en ligne ont aussi fait leur entrée dans la microfinance. Cette industrie n'est plus désormais une industrie dans l'enfance Mots clés : Microfinance, intermédiation, industrie microfinancière. Code JL. G21, G23, F34 Abstract
    Abstract: Microfinance industry is changing progressively during this last thirty years. The depth of is intermediation is growing. Serving at the beginning of the informal customers ; he serves since several years yet, small and medium enterprise (SME). Multinational banks and international funds had also entering the microfinance industry by granting loans to microfinance institutions. The digital innovation had disrupted the sector who become adult. Key Words: Microfinance, intermediation, microfinance industry JL Code. G21, G23, F34.
    Keywords: Microfinance,intermediation,microfinance industry,industrie microfinancière
    Date: 2019–05–09
  16. By: Liarte Blasco, Cristian
    Abstract: In this work, the determinants of entrepreneurship in the Autónomos Community of Cataluña have been analyzed. Firstly, it defines what entrepreneurship is according to the GEM and presents the current situation of the labour market in Cataluña and how entrepreneurship is currently in this community. Then, the explanatory variables and the regression-dependent variables to be estimated from the GEM 2015 APS database are defined. The methodology used is then explained and the results obtained from running these regressions using the Minimal Ordinary Tables method are shown. Finally, conclusions are presented on the results obtained and government policies that could favour entrepreneurship in Cataluña are proposed.
    Keywords: Emprendimiento, Cataluña, TEA, GEM Data, Emprender
    JEL: L26 R10
    Date: 2020–03–31
  17. By: Gascón Salillas, Patricia
    Abstract: Resumen En este trabajo se realiza un estudio del emprendimiento dentro de la Comunidad Foral de Navarra. Para ello utiliza los datos de la base de datos Global Entrepreneur Monitor con el objetivo de realizar un análisis de los diferentes factores que afectan en el emprendimiento, y, si hay diferencias entre género o entre emprendedores por necesidad, por oportunidad o nuevos emprendedores. Los resultados establecen la gran importancia de la autopercepción de las habilidades para emprender y de las oportunidades futuras de negocio. Abstract This paper studies entrepreneurship in Navarra, Spain. For this aim, this work uses the data of the Global Entrepreneur Monitor to analyses different factors that affect entrepreneurship, and, if there are differences between gender or between necessity, opportunity or nascent entrepreneurs. Results establish the great importance of self-perception of skills to entrepreneur and future business opportunities.
    Keywords: emprendimiento, Comunidad Foral de Navarra, TEA
    JEL: L26 R10
    Date: 2020–03–31
  18. By: Jean-Luc Gaffard (OFCE Sciences-Po; Université Côte d'Azur; GREDEG CNRS; Institut Universitaire de France)
    Abstract: De la capacité de l'entrepreneur à concevoir une organisation apte à créer des canaux d'information suffisamment robustes dépend la nature des innovations effectuées, la façon dont sont exploitées les connaissances scientifiques et techniques, l'usage qui est fait de l'esprit créatif. C'est à cette aune qu'il convient de juger du comportement entrepreneurial, des rythmes imposés par la finance, de la façon dont sont allouées les ressources humaines. La réalité de la créativité réside dans le choix opéré entre recherche de rentes et innovations productives, entre une finance impatiente et une finance patiente, entre flexibilité et rigidité sur les marchés de travail. C'est un choix d'ordre organisationnel et institutionnel.
    Keywords: créativité, engagement, entrepreneuriat, innovation
    JEL: D21 D23 D47 J53 L26
    Date: 2020–03

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