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on Entrepreneurship |
| By: | John Eric Humphries (Cowles Foundation, Yale University); Christopher Neilson (Department of Economics, Princeton University); Gabriel Ulyssea (Department of Economics, University of Oxford) |
| Abstract: | This note provides new evidence on how small business owners have been impacted by COVID-19, and how these effects have evolved since the passage of the CARES Act. As part of a broader and ongoing project, we collected survey data from more than 8,000 small business owners in the U.S. from March 28th, one day after the CARES Act was passed, through April 20th. The data include information on ï¬ rm size, layoffs, beliefs about the future prospects of their businesses, as well as awareness of existing government relief programs. We provide three main ï¬ ndings. First, by the time the CARES Act was passed, surveyed small business owners were already severely impacted by COVID-19-related disruptions: 60% had already laid off at least one worker. Second, business owners’ expectations about the future are negative and have deteriorated throughout our study period, with 37% of respondents in the ï¬ rst week reporting that they did not expect to recover within 2 years, growing to 46% by the last week. Third, the smallest businesses had the least awareness of government assistance programs, the slowest growth in awareness after the passage of the CARES Act, and never caught up with larger businesses. The last ï¬ nding indicates that small businesses may have missed out on initial Paycheck Protection Program funds because of low baseline awareness and differential access to information relative to larger ï¬ rms. |
| Keywords: | COVID-19, Small business, CARES Act |
| JEL: | J0 H0 H5 |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:2230&r=all |
| By: | Julien Salin; Nadine Levratto |
| Abstract: | Through a new eye on corporate finance theories of small firms and of business angel financing determinants, this paper reconsiders the impact of Business Angels on financial structure of backed firms using matching method and a unique individual dataset of French companies over the 2009-2015 period. It shows that the signal effect of Business angel investment, improving access to external finance from another investor is limited. This paper contributes to the corporate finance literature by investigating on the validity of principal corporate finance theories. It also brings insight to the understanding of value added of BA on backed firms. |
| Keywords: | Keywords: Business angels, Financial Structure, Informal venture capital, Matching techniques |
| JEL: | G24 L25 L26 M13 O16 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:drm:wpaper:2020-5&r=all |
| By: | Benassi, Chiara; Durazzi, Niccolo; Fortwengel, Johann |
| Abstract: | Why do skill formation systems put SMEs at greater disadvantage in some countries than others vis-à-vis large employers? By comparing vocational education and training (VET) institutions and their differential effect on firms of different sizes across three countries (UK, Italy, and Germany), we show that the design of VET has profound implications for shaping the ability of SMEs to use institutions as resources. In particular, quasi-market institutions in the UK amplify SMEs' disadvantage, while non-market coordinating institutions in Italy and Germany narrow the gap between SMEs and large employers. By unpacking the comparative disadvantage of SMEs, we offer important nuances to the argument that institutions help firms coordinate their business activities in different varieties of capitalism. |
| Keywords: | comparative political economy,firm size,small and medium-sized enterprises (SMEs),varieties of capitalism,vocational education and training (VET),Berufsbildung,kleine und mittlere Unternehmen (KMU),Spielarten des Kapitalismus,UnternehmensgröØe,Vergleichende Politische Ökonomie |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:mpifgd:204&r=all |
| By: | Welter, Friederike |
| Abstract: | Purpose: The paper aims to illustrate the main contributions of the context-gender discussion in entrepreneurship research and its main developments over time, in order to identify promising future research avenues. Design/Methodology/Approach: The paper builds on the author's extensive knowledge of the context-gender debate and on several recent overviews and reviews of the debate. It is written as essay, introducing its main themes through a personal reflection and complemented by a selective review of research on gendered contexts and women's entrepreneurship. Findings: The context-gender discussion has moved forward. In a first wave of context-gender studies, research contextualized gender, considering the impact of contexts on women's entrepreneurship. Nowadays, research studies how contexts are gendered and how they are constructed in gendered ways, through for example, words, images, cognitions, as well as how women entrepreneurs can impact on and enact their contexts. Originality/Value: This paper contributes novel insights into contextualizing gender and gendering contexts. It is unique in suggesting that a perspective on gendering contexts will allow to explore the diversity of entrepreneurship and further develop theories related to contexts and gender. |
| Keywords: | context,contextualizing gender,gendering contexts,contextual entrepreneurship |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifmwps:0120&r=all |
| By: | Brush, Candida G.; Greene, Patricia G.; Welter, Friederike |
| Abstract: | Purpose: The purpose of this article is to provide a brief history of the evolution of the Diana Project and the Diana International Research Conference. We examine the impact of the publications, conferences and research contributions; and consider key factors in the success of this collaborative research organization. We discuss the ongoing legacy, suggesting ways to extend this into the future. Design/Methodology/Approach: Historical narrative and citation analysis Findings: The Diana Project was founded by five women professors in 1999 to with the purpose of investigating women's access to growth capital. Following a series of academic articles, and numerous presentations, the first Diana International Conference was held in Stockholm, Sweden. At this convening, 20 scholars from 13 countries shared their knowledge of women's entrepreneurship, venture creation and growth, culminating in the first volume of the Diana Book Series. Since then, 14 international conferences have been held, resulting in 10 special issues of top academic journals, and 11 books. More than 600 scholars have attended or participate in Diana conferences or publications. [...] |
| Keywords: | gender,women's entrepreneurship,Diana Project,venture capital,collaborative research |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifmwps:0220&r=all |
| By: | Runst, Petrik; Thomä, Jörg |
| Abstract: | Previous research has established that certain personality traits represent predictors of start-up activity. We argue that similar cognitive processes that affect entrepreneurship also play a role in firm-level innovativeness. For example, open-ness to novelty can be regarded as a key component of entrepreneurial alertness in terms of both business creation and the generation of innovations within existing businesses. Based on a large survey of less R&D-intensive SMEs from Germany, we show that certain Big Five personality traits as well as certain personality prototypes of business owners are positively related to innovation activity. More importantly, this relationship depends on the mode of innovation, where companies operating under the DUI mode (Doing-Using-Interacting) seem to benefit in particular from certain owners' personality characteristics. In addition, we present evidence that complementarities between entrepreneurs' personality traits exist in terms of self-selection into the DUI mode. To explain our findings, we argue that the personali-ty characteristics of small business owners affect whether or not absorptive capacity can mediate between external knowledge and firm-level innovativeness. |
| Keywords: | Innovation,Modes of innovation,Absorptive capacity,Personality Traits,Big Five,SMEs |
| JEL: | L26 O31 O33 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifhwps:242019&r=all |
| By: | Pierluigi Murro (LUISS-Guido Carli University.); Tommaso Oliviero (University of Naples Federico II and CSEF); Alberto Zazzaro (University of Naples Federico II, CSEF and MoFiR) |
| Abstract: | Using firm-level survey information, we investigate whether relationship lending affects firms' employment decisions when they experience negative shocks on sales. We find that firms maintaining long-lasting relationships with their main bank show a significantly lower sensitivity of employment growth rate to shocks in sales. This result is robust to measurement issues and to an instrumental variable strategy, and is stronger for young, small, human-capital-intensive firms. Our findings indicate that relationship lending acts as an insurance for firms' employees against adverse sales fluctuations, especially for firms whose internal workforce is more valuable and is thus substitutable at larger costs. |
| Keywords: | employment, relationship banking, insurance |
| JEL: | G32 G38 H53 J65 |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:anc:wmofir:160&r=all |
| By: | Luigi Bocola; Guido Lorenzoni |
| Abstract: | Financial crises typically arise because firms and financial institutions choose balance sheets that expose them to aggregate risk. We propose a theory to explain these risk exposures. We study a financial accelerator model where entrepreneurs can issue state-contingent claims to consumers. Even though entrepreneurs could use these contingent claims to hedge negative shocks, we show that they tend not to do so. This is because it is costly to buy insurance against these shocks as consumers are also harmed by them. This effect is self-reinforcing, as the fact that entrepreneurs are unhedged amplifies the negative effects of shocks on consumers’ incomes. We show that this feedback can be quantitatively important and lead to inefficiently high risk exposure for entrepreneurs. |
| JEL: | E44 G01 G11 |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26985&r=all |
| By: | Peter J. Klenow; Huiyu Li |
| Abstract: | Recent work highlights a falling entry rate of new firms and a rising market share of large firms in the United States. To understand how these changing firm demographics have affected growth, we decompose productivity growth into the firms doing the innovating. We trace how much each firm innovates by the rate at which it opens and closes plants, the market share of those plants, and how fast its surviving plants grow. Using data on all nonfarm businesses from 1982–2013, we find that new and young firms (ages 0 to 5 years) account for almost one-half of growth – three times their share of employment. Large established firms contribute only one-tenth of growth despite representing one-fourth of employment. Older firms do explain most of the speedup and slowdown during the middle of our sample. Finally, most growth takes the form of incumbents improving their own products, as opposed to creative destruction or new varieties. |
| JEL: | O3 O4 O5 |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27015&r=all |
| By: | Luciano Lavecchia (Bank of Italy); Luigi Leva (Bank of Italy); David Loschiavo (Bank of Italy) |
| Abstract: | The Italian public guarantee scheme (Fondo di garanzia - FDG) is the main tool supporting SMEs’ access to credit. This work evaluates the impact of the regional laws limiting the FDG’s operations to loans guaranteed by mutual guarantee institutions. To this end, we exploit the regulations’ discontinuities that occurred in some Italian regions that have either abolished or introduced such a restriction. We study the effects of the regulation changes in a difference-in-differences setting where treated firms are located in regime switching regions and control firms are in neighbouring regions. We find that constraining access to the FDG’s publicly funded collateral to counter-guarantee schemes hampered SMEs’ access to finance overall. Removing the restriction increased both the number of firms with access to the FDG’s guarantees and the total size of the loans granted to treated SMEs of any size. Moreover, the relative cost of credit improved for treated firms. Conversely, the introduction of the restriction to counter-guarantees had mostly negative effects on the number, size and cost of loans granted to treated firms. |
| Keywords: | access to credit, public guarantees, mutual guarantee institutions |
| JEL: | H81 G21 |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:opques:qef_558_20&r=all |