nep-ent New Economics Papers
on Entrepreneurship
Issue of 2020‒05‒11
eleven papers chosen by
Marcus Dejardin
Université de Namur

  1. The Perceived Well-being and Health Costs of Exiting Self-Employment By Nikolova, Milena; Nikolaev, Boris; Popova, Olga
  2. Growing through Spinoffs. Corporate Governance, Entry, and Innovation By Maurizio Iacopetta; Raoul Minetti; Pierluigi Murro
  3. Exposure to Transit Migration, Public Attitudes and Entrepreneurship By Aksoy, Cevat Giray; Ajzenman, Nicolás; Guriev, Sergei
  4. Immigration Policy Levers for US Innovation and Startups By Sari Pekkala Kerr; William R. Kerr
  5. Feminist Ideologies at Work: Culture, Collectivism and Entrepreneurship among Poor Women in India By Punita Bhatt; Supriya Garikipati
  6. Liquidity support to small and medium-sized enterprises by the banking system at the time of Coronavirus By Maurizio Irrera; Giuseppe Antonio Policaro
  7. Going Revolutionary: The Impact of 4IR Technology Development on Firm Performance By Mario Benassi; Elena Grinza; Francesco Rentocchini; Laura Rondi
  8. Perceptions of University Entrepreneurship Support among Bulgarian Science and Engineering Students By Desislava Yordanova
  9. The growing digital divide in Europe and the United States By Rückert, Désirée; Veugelers, Reinhilde; Weiss, Christoph
  10. Kaizen: Strategischer Ansatz zur Etablierung eines kontinuierlichen Innovationsprozesses bei mittelständischen Unternehmen By Doberanzke, Volker
  11. Saving for Multiple Financial Needs: Evidence from Lockboxes and Mobile Money in Malawi By Shilpa Aggarwal; Valentina Brailovskaya; Jonathan Robinson

  1. By: Nikolova, Milena; Nikolaev, Boris; Popova, Olga
    Abstract: We explore how involuntary and voluntary exits from self-employment affect life and health satisfaction. To that end, we use rich longitudinal data from the German Socio-Economic Panel from 1985 to 2017 and a difference-in-differences estimation. Our findings suggest that while transitioning from self-employment to salaried employment (i.e., a voluntary self-employment exit) brings small improvements in health and life satisfaction, the negative psychological costs of business failure (i.e., switching from self-employment to unemployment) are substantial and exceed the costs of involuntarily losing a salaried job (i.e., switching from salaried employment to unemployment). Meanwhile, leaving self-employment has no consequences for selfreported physical health and behaviors such as smoking and drinking, implying that the costs of losing self-employment are largely psychological. Moreover, former business owners fail to adapt to an involuntary self-employment exit even two or more years after this traumatic event. Our findings imply that policies encouraging entrepreneurship should also carefully consider the costs of business failure.
    Keywords: entrepreneurship,self-employment,health,well-being,unemployment,job switches
    JEL: E24 I10 I31 J28 L26
    Date: 2020
  2. By: Maurizio Iacopetta (SKEMA Business School and OFCE Sciences Po); Raoul Minetti (Michigan State University); Pierluigi Murro (LUISS University)
    Abstract: New firms are often based on ideas that the founders developed while working for incumbent firms. We study the macroeconomic effects of spinoffs through a growth model of product variety expansion, driven by firm entry, and product innovation. Spinoffs stem from conflicts of interest between incumbent firms' shareholders and employees. The analysis suggests that incumbents invest more in product innovation when knowledge protection is stronger. An inverted-U shape relationship emerges, however, between the intensity of spinoff activities and the strength of the rule of law. A calibration experiment indicates that, with a good rule of law, loosening knowledge protection by 5\% reduces product innovation by one fifth in the short run and one seventh in the long run, but boosts the spinoff rate by one tenth and one sixth in the short and long run, respectively. Nevertheless, per capita income growth drops and welfare deteriorates. The trade-offs are broadly consistent with evidence from Italian firm.
    Keywords: Corporate governance, Endogenous growth, Spinoffs
    JEL: E44 O40 G30
    Date: 2020–04
  3. By: Aksoy, Cevat Giray; Ajzenman, Nicolás; Guriev, Sergei
    Abstract: Does exposure to mass migration affect economic behavior, attitudes and beliefs of natives in transit countries? In order to answer this question, we use a unique locality-level panel from the 2010 and 2016 rounds of the Life in Transition Survey and data on the main land routes taken by migrants in 18 European countries during the refugee crisis in 2015. To capture the exogenous variation in natives’ exposure to transit migration, we construct an instrument that is based on the distance of each locality to the optimal routes that minimize travelling time between the main origin and destination cities. We first show that the entrepreneurial activity of natives falls considerably in localities that are more exposed to mass transit migration, compared to those located further away. We then explore the mechanisms and find that our results are likely to be explained by a decrease in the willingness to take risks as well as in the confidence in institutions. We also document an increase in the anti-migrant sentiment while attitudes towards other minorities remained unchanged. We rule out the possibility of out-migration of natives or of trade-related shocks (potentially confounded with the mass-transit migration) affecting our results. Using locality-level luminosity data, we also rule out any effect driven by changes in economic activity. Finally, we find no statistically significant effects on other labor market outcomes, such as unemployment or labor force participation.
    Date: 2020–04–21
  4. By: Sari Pekkala Kerr; William R. Kerr
    Abstract: Immigrants account for about a quarter of US invention and entrepreneurship despite a policy environment that is not well suited for these purposes. This chapter reviews the US immigration policy environment that governs how skilled migrants move to America for employment-based purposes. We discuss points of strain in the current system and potential policy reforms that would likely increase the rate of innovation and the number of startups due to immigrants in the country. Key areas include adjustments to the allocation of permanent residency visas, adjustments to the H-1B visa program, and the creation of an immigrant startup visa.
    JEL: F22 F23 J15 J44 J61 L26 M13 O31 O32 O33
    Date: 2020–04
  5. By: Punita Bhatt; Supriya Garikipati
    Abstract: This paper explores the role of feminist ideologies in developing a culture of work and entrepreneurship among disadvantaged women. It draws on evidence from ‘Lijjat’, a women’s cooperative in India where poor women were able to initiate, develop and successfully operate a women’s only enterprise. Ideological influences exist both, at the individual level (motivation) and at the collective level (organisational practices). Pragmatist feminist ideologies are found to be particularly supportive of women’s collective ventures. Women use collectivist strategies to resist the patriarchal corralling of the business. Through an intersection of feminist ideologies at individual and collective levels we explore how women have successfully engaged in economic activity while influencing the structures of patriarchy around them. We extrapolate the influence of feminist ideology further by drawing implications for women’s work in patriarchal contexts.
    Keywords: women’s entrepreneurship, feminist ideologies, pragmatist feminist, collectivism, cooperative, Lijjat, India
    Date: 2020–04
  6. By: Maurizio Irrera (Department of Economics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino, Italy); Giuseppe Antonio Policaro (Department of Economics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino, Italy)
    Abstract: The paper analyzes the main provisions of D.L. no. 18 of 17 March 2020 regarding financial support to SMEs by the banking system.
    Keywords: liquidity support; SME; banking system
    JEL: K29
    Date: 2020–04
  7. By: Mario Benassi (Department of Economics, Management, and Quantitative Methods, University of Milan); Elena Grinza (Department of Management and Production Engineering, Politecnico di Torino); Francesco Rentocchini (Department of Economics, Management, and Quantitative Methods, University of Milan); Laura Rondi (Department of Management and Production Engineering, Politecnico di Torino)
    Abstract: Drawing on the knowledge-based view of the firm, we investigate whether firm performance is related to the accumulated stock of technological knowledge associated with the Fourth Industrial Revolution (4IR), and what contextual factors affect this relationship. We test our research questions on a longitudinal matched patent-firm data set on medium and large firms filing 4IR patents at the European Patent Office (EPO). Our results show a significant and economically relevant positive association between the development of 4IR technologies and firm productivity, but no relationship with its profitability, thereby suggesting that the returns from costly technological investments are slow to cash in. We also find that late entrants benefit more from the development of 4IR technological capabilities than early entrants and experience a substantial “boost effect”. We provide empirical support to an explanation of these findings in terms of the ability of late entrants to (i) manage the inherent complexity of the bundle of technologies comprising the 4IR and (ii) exploit profitable downstream applications of the 4IR.
    Keywords: Fourth Industrial Revolution (4IR); patenting; technology development; firm performance; longitudinal matched patent-firm data
    JEL: O33 D24 J24
    Date: 2020–07
  8. By: Desislava Yordanova (Sofia University “St. Kliment Ohridski”, Faculty of Economics and Business Administration)
    Abstract: The transformation of Bulgarian universities into entrepreneurial universities is a slow process. Bulgarian universities not only exhibit narrow understanding of the concept of innovative and entrepreneurial university, but also do not recognize entrepreneurship promotion as a strategic goal (OECD, 2014). The research objective of the present study is to explore the current efforts of Bulgarian universities to support student entrepreneurship by examining the perceptions of university entrepreneurship support among Bulgarian science and engineering students. Our empirical findings reveal that the studied Bulgarian universities provide little educational support, concept development support and business development support to their students. The paper provides practical implications of the findings and recommendations for future research.
    Keywords: university entrepreneurship support, student entrepreneurship, Bulgaria.
    JEL: M14 O3 L3
    Date: 2020–04
  9. By: Rückert, Désirée; Veugelers, Reinhilde; Weiss, Christoph
    Abstract: Using a new survey on digitalisation activities of firms in the EU and the US, we identify digitalisation profiles based on the current use of digital technologies and future investment plans in digitalisation. Our analysis confirms the trend toward digital polarisation and a growing digital divide in the corporate landscape with, on one side, many firms that are not digitally active, and on the other side, a substantial number of digitally active firms forging ahead. Old small firms, with less than 50 employees and more than 10 years old, are significantly more likely to be persistently digitally non-active. We show that these persistently non-digital firms are less likely to be innovative, increase employment or command higher mark-ups. These trends are likely to exacerbate the digital divide across firms in the EU and the US.
    Keywords: digital technology,investment,firm performance
    JEL: D22 E22 L25
    Date: 2020
  10. By: Doberanzke, Volker
    Abstract: Kaizen is the Japanese concept of management based on a philosophy of eternal change, which is to keep a continuous improvement process going. This article shows, that the Kaizen philosophy provides an appropriate strategic basis for establishing a continuous innovation process in medium-sized companies. The first chapter explains the basic characteristics of the concept of innovation and the importance of small and medium-sized companies and their ability to innovate. The second chapter outlines the Kaizen approach and its various paradigms and systems. The third chapter describes how a Kaizen-based, continuous innovation process can be implemented in medium-sized companies.
    Keywords: Kaizen,Innovation,Kontinuierliche Verbesserung,Mittelstand,Medium-sized Companies,Continuous Improvement
    JEL: M16 M20
    Date: 2020
  11. By: Shilpa Aggarwal; Valentina Brailovskaya; Jonathan Robinson
    Abstract: We test whether the provision of multiple labeled savings accounts affects savings and downstream outcomes in an experiment with 761 microentrepreneurs in urban Malawi. Treatment respondents received one or multiple savings accounts, in the form of lockboxes or mobile money. We find that while providing additional boxes increased savings by 40%, technical issues marred the efficacy of a second mobile money account. Both types of accounts had impacts on downstream outcomes, including farming decisions and credit extended to customers. We do not detect differential downstream effects by the number of accounts.
    JEL: D14 O12 O16
    Date: 2020–04

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