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on Entrepreneurship |
| By: | Michael Fritsch (Friedrich Schiller University Jena, Germany); Martin Obschonka (Queensland University of Technology, Brisbane, Australia); Fabian Wahl (University of Hohenheim, Germany); Michael Wyrwich (University of Groningen, The Netherlands, and Friedrich Schiller University Jena, Germany) |
| Abstract: | We investigate whether the Roman presence in the southern part of Germany nearly 2,000 years ago had a deep imprinting effect with long run consequences on a broad spectrum of measures ranging from present-day personality profiles to a number of socioeconomic outcomes and why. Today's populations living in the former Roman part of Germany score indeed higher on certain personality traits, have higher life and health satisfaction, longer life expectancy, generate more inventions and behave in a more entrepreneurial way. These findings help explain that regions under Roman rule have higher present-day levels of economic development in terms of GDP per capita. The effects hold when controlling for other potential historical influences. When addressing potential channels of a long term effect of Roman rule the data indicates that the Roman road network plays an important role as a mechanism in the imprinting that is still perceptible today. |
| Keywords: | Romans, personality traits, culture, well-being, regional performance, Limes |
| JEL: | N9 O1 I31 |
| Date: | 2020–03–30 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2020-005&r=all |
| By: | Fackler, Daniel (IWH Halle); Hölscher, Lisa (Halle Institute for Economic Research); Schnabel, Claus (University of Erlangen-Nuremberg); Weyh, Antje (Institute for Employment Research (IAB), Nuremberg) |
| Abstract: | Using representative linked employer-employee data for Germany, this paper analyzes short- and long-run differences in labor market performance of workers joining startups 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: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13033&r=all |
| By: | Orrenius, Pia M. (Federal Reserve Bank of Dallas); Zavodny, Madeline (University of North Florida); Abraham, Alexander (Federal Reserve Bank of Dallas) |
| Abstract: | Immigration, like any positive labor supply shock, should increase the return to capital and spur business investment. These changes should have a positive impact on business creation and expansion, particularly in areas that receive large immigrant inflows. Despite this clear prediction, there is sparse empirical evidence on the effect of immigration on business dynamics. One reason may be data unavailability since public-access firm-level data are rare. This study examines the impact of immigration on business dynamics and employment by combining U.S. data on immigrant inflows from the Current Population Survey with data on business formation and survival and job creation and destruction from the National Establishment Time Series (NETS) database for the period 1997 to 2013. The results indicate that immigration increases the business growth rate by boosting business survival and raises employment by reducing job destruction. The effects are largely driven by less-educated immigrants. |
| Keywords: | immigration, business dynamics, firm entry, firm exit, job creation, job destruction |
| JEL: | J15 J61 L25 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13014&r=all |
| By: | Karlson, Nils (The Ratio Institute); Sandström, Christian (The Ratio Institute); Wennberg, Karl (The Ratio Institute) |
| Abstract: | This paper takes stock of recent suggestions that the state apparatus is a central and underappreciated actor in the generation, diffusion and exploitation of innovations enhancing growth and social welfare. We contrast such a view of “the entrepreneurial state” with theories and empirical evidence of the microeconomic processes of innovation in the modern economy which focus on well-functioning markets, free entry and competition among firms, and independent entrepreneurship as central mechanisms in the creation and dissemination of innovations. In doing so, we identify several deficiencies in the notion of an entrepreneurial state by showing that (i) there is weak empirical support in the many hundreds empirical studies and related meta analyses evaluating the effectiveness of active industrial and innovative policies, that (ii) these policies do not take account of the presence of information and incentive problems which together explain why attempts to address purported market failures often result in policy failures, and that (iii) the exclusive focus on knowledge creation through R&D and different forms of firm subsidies ignores the equally important mechanisms of knowledge dissemination and creation through commercial exploitation in markets. We discuss how a more theoretically well-founded focus on the state as investing in knowledge generation and securing the conditions of free and competitive markets will lead to a more innovative economy. |
| Keywords: | innovation policy; market failure; entrepreneurial state; incentive problem; rent seeking |
| JEL: | M13 O31 O38 O40 P16 |
| Date: | 2020–03–30 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ratioi:0331&r=all |
| By: | Gee Hee HONG; ITO Arata; SAITO Yukiko; Thi-Ngoc Anh NGUYEN |
| Abstract: | Smooth business succession is vital not only to the survival of a firm, but also to aggregate growth, employment and productivity in Japan. In this paper, we use a rich dataset of Japanese firms to document the changing patterns of firm exits in the context of the aging population and assess the economic costs of business succession issues. We find that the overall health of Japanese firms improved in recent years, with bankruptcy rate and the ratio of zombie firms both decreasing. However, the voluntary exit rate of firms, including profitable ones, has increased in recent years as elderly CEOs cannot find business successors. This has resulted in a deterioration of resource allocation and productivity at the aggregate level. Furthermore, voluntary exits have spillover effects through inter-firm networks and increase the likelihood of exits of connected firms, even when these connected firms are healthy. These findings underscore the importance of addressing business transition issues in a rapidly aging society. |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:eti:polidp:20003&r=all |
| By: | Kang, Kee-Youn; Jang, Inkee |
| Abstract: | We develop a dynamic model of debt contracts with adverse selection and belief updates. In the model, entrepreneurs borrow investment goods from lenders to run businesses whose returns depend on entrepreneurial productivity and common productivity. The entrepreneurial productivity is the entrepreneur's private information, and the lender constructs beliefs about the entrepreneur's productivity based on the entrepreneur's business operation history, common productivity history, and terms of the contract. The model provides insights on the dynamic and cross-sectional relation between firm age and credit risk, cyclical asymmetry of the business cycle, slow recovery after a crisis, and the constructive economic downturn. |
| Keywords: | Adverse selection, Bayesian learning, Debt contracts, Belief update |
| JEL: | C78 D82 E44 G0 |
| Date: | 2020–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:99071&r=all |
| By: | Neira, Julian; Singhania, Rish |
| Abstract: | How does corporate taxation affect the life cycle of firms? A change in profit-tax rates affects the life cycle of firms through wages and through firm selection. We quantify these effects by looking at the average size of young and mature US firms 30 years after the Reagan Tax Cuts. We disentangle the wage and the selection effects using a model of firm dynamics. We find that the wage effect of profit tax cuts is about six times stronger than the selection effect. A change in population growth affects average firm size by changing the composition of surviving firms. We find that the effect of declining population growth on average firm size is three times stronger for mature firms than for young firms. |
| Keywords: | Incidence; Corporate Taxation; Firm Lifecycle; Calibration |
| JEL: | E13 H22 H25 H32 L16 L26 |
| Date: | 2020–03–19 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:99359&r=all |
| By: | Iwasaki, Ichiro; Kim, Byung-Yeon |
| Abstract: | In this paper, we trace the survival status of more than 110,000 Russian firms from 2007–2015 and examine the relationship between legal forms of incorporation and firm survivability across industries and different periods of economic crisis and growth. Applying the Cox proportional hazards model, we find an optimal legal form that maximizes the probability of firm survival: closed joint-stock companies and those adopting limited liability survive longer than open joint-stock companies, partnerships, or cooperatives. This relationship is robust across periods of boom and recession and across industries. |
| Keywords: | Firm failure, legal form, Cox proportional hazards model, Russia |
| JEL: | D22 G01 G33 G34 P34 |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:hit:hitcei:2020-1&r=all |
| By: | Oyolola, Feyisayo; Otonne, Adewumi |
| Abstract: | This study examined entrepreneurship, capacity development and youth employment generation in 20 selected sub-Saharan African countries from 2005 to 2017. The study employed the fixed effect Panel estimator on the secondary annual data sourced for the study. Findings from the study can be considered in two categories. One, findings show that human capital development and institutional quality positively but insignificantly affect youth employment generation in the selected countries while macroeconomic instability is intuitively observed to exert a positively insignificant influence on youth employment generation. Two, findings also show that entrepreneurial activities and infrastructural development are important determinants of youth employment generation in the selected countries. The implication of these findings is that entrepreneurial activities and infrastructural development should be of concern to the government and policy makers as they are observed to be significant determinant of youth employment generation. Therefore, as a matter of policy implication/recommendation the government of these African Countries should ensure that the conclusion of this study is considered and implemented, increase expenditure on health and education in order to speed up human capital development, and make considerable effort to reduce the large informal sector by putting in place laws and rule that will ensure that the activities of the self-employed people are recognized and accounted for on a large scale. |
| Keywords: | Capacity Development, Entrepreneurship and Youth Employment Generatiom |
| JEL: | J0 |
| Date: | 2020–03–18 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:99156&r=all |
| By: | Brett Barkley; Mark E. Schweitzer |
| Abstract: | Online lending through fintech firms is a rapidly expanding segment of the financial market that is receiving much attention from investors and increasing scrutiny from regulators. Research is only beginning to assess how fintech firms’ entry is altering the choices and outcomes of small businesses that borrow from them. The Federal Reserve Small Business Credit Survey is a unique data source on the experiences of business owners with new and more traditional sources of credit. We find that the businesses using online lenders are not representative of small and medium-size enterprise in the US. Businesses borrowing online are younger, smaller, and less profitable. Through reaching borrowers less likely to be served by traditional lenders fintech lenders have substantially expanded the small business finance market. We apply treatment effects estimators to flexibly control for composition differences in the borrowers. After controlling for compositional differences between online and bank borrower, we find that loan application amounts are generally smaller with fintech lenders; businesses that receive fintech loans expect more revenue and employment growth than those receiving a bank loan; and businesses that borrow from banks are more satisfied than businesses that borrow online, which are still more satisfied than businesses who were denied credit. These results highlight issues that the financial industry and regulators should examine as fintech lending to small businesses continues to expand. |
| Keywords: | Small business lending; online alternative lenders; fintech; firm growth |
| JEL: | G21 G23 G28 C31 |
| Date: | 2020–04–03 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedcwq:87704&r=all |
| By: | Link, Albert (University of North Carolina at Greensboro, Department of Economics); Morris, Cody (University of North Carolina at Greensboro, Department of Economics); van Hasselt, Martijn (University of North Carolina at Greensboro, Department of Economics) |
| Abstract: | Entrepreneurial firms that rely on public research institutes, the third sector of R&D, are also firms that are more innovative in terms of introducing new or significantly improved goods or services to the market. This finding is based on an analysis of 4,004 knowledge-intensive entrepreneurial (KIE) firms located in ten European Union countries. We interpret our findings as suggestive evidence of the importance of policy makers continuing to support financially public research institutions. |
| Keywords: | Research institute; third sector of R&D; innovation; entrepreneurship; KIE firms; |
| JEL: | L26 O31 O32 O38 |
| Date: | 2020–04–07 |
| URL: | http://d.repec.org/n?u=RePEc:ris:uncgec:2020_002&r=all |
| By: | YAMORI Nobuyoshi; OGAWA Hikaru; YANAGIHARA Mitsuyoshi; HARIMAYA Kozo; TSUBUKU Masafumi; OZAKI Yasufumi; AIZAWA Tomoko; UMINO Shingo; ASAI Yoshihiro; HASHIMOTO Norihiro |
| Abstract: | Preparing for frequent natural disasters is necessary to increase the sustainability of small and medium-sized enterprises. The SME Strengthening Act, established in 2019, aims to promote BCP (Business Continuity Plan) formulation for small and medium-sized enterprises. As stipulated in the Act, regional financial institutions are expected to play an essential role in promoting cooperation among various organizations and institutions that support SMEs. On the other hand, regional financial institutions are making efforts to strengthen their ability to assess the business feasibility of SMEs, and they can provide BCP development support based on their close relationship with customers. However, sufficient research has not been conducted on the status of efforts to support BCP formulation by regional financial institutions. Therefore, in May 2019, our research team conducted a questionnaire survey of 7,000 branch managers of regional financial institutions and received responses from 2,623 individuals. The purpose of this paper is to introduce the primary findings. The main results were as follows. (1) Few financial institutions have a firm grasp of the status of BCP formulation at their client SMEs. (2) Few financial institutions have encouraged client SMEs to formulate BCPs. (3) Financial institutions are not aware of the credit guarantee program related to BCP and reconstruction support funds. (4) Financial institutions also poorly understand local governments' BCP support measures. On the other hand, (5) Efforts for the business feasibility assessments, in general, have progressed, and staff capabilities have improved. (6) Significant reforms have been made in the personnel evaluation system for that purpose. (7) There has also been some progress in collaboration with external institutions such as credit guarantee corporations, the Japan Finance Corporation, and tax accountants. The challenge now is how to incorporate the perspective of the need for business resilience against natural disasters, through efforts such as BCP formulation, into the above initiatives based on business feasibility assessments. |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:eti:rdpsjp:20002&r=all |
| By: | Walid Nakara (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); Karim Messeghem (UM1 - Université Montpellier 1); Andry Ramaroson (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) |
| Abstract: | La question de la pauvreté suscite un intérêt croissant en entrepreneuriat. L'entrepreneuriat est vu comme un moyen de lutter contre la pauvreté. La littérature s'est pourtant peu intéressée à l'innovation dans ce contexte. Quelles sont les conditions pour que les entrepreneurs pauvres parviennent à innover ? Cette recherche propose d'y répondre à travers une étude auprès de 3 783 entrepreneurs en situation de pauvreté en France. Les résultats montrent que le capital humain, la motivation d'opportunité, les ressources financières mobilisées favorisent l'innovation. Par ailleurs, un environnement moins concurrentiel et des relations privilégiées avec les fournisseurs sont liés à une plus forte probabilité d'innover. Ces résultats sont utiles pour concevoir des programmes d'accompagnement adaptés aux entrepreneurs pauvres. |
| Keywords: | Mots-clés: Entrepreneuriat,Pauvreté,Innovation produit et service,Accompagnement entrepreneurial,analyse multi-niveaux,Pays développés |
| Date: | 2019–06–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-02519418&r=all |