nep-ent New Economics Papers
on Entrepreneurship
Issue of 2020‒05‒18
eight papers chosen by
Marcus Dejardin
Université de Namur

  1. Pulling Effects in Migrant Entrepreneurship: Does Gender Matter? By Alessandra Colombelli; Elena Grinza; Valentina Meliciani; Mariacristina Rossi
  2. Credit Markets, Relationship Banking, and Firm Entry By Minetti, Raoul; Cao, Qingqing; Giordani, Paolo; Murro, Pierluigi
  3. Tenancy by the Entirety and the Value of Wealth Insurance for Entrepreneurs By Traczynski, Jeffrey
  4. Financial Distancing: How Venture Capital Follows the Economy Down and Curtails Innovation By Sabrina Howell; Josh Lerner; Ramana Nanda; Richard Townsend
  5. Determinants of small enterprise efficiency By Agnieszka Parkitna
  6. Internet in purchase processes of Polish SMEs By Ewa Pralat
  7. Trends and Patterns of Women’s Entrepreneurship in Egypt By Reham RIZK
  8. Sectorul Întreprinderilor Mici și Mijlocii în timpul crizei COVID-19. Cazul României By Antonescu, Daniela

  1. By: Alessandra Colombelli (DIGEP, Politecnico di Torino); Elena Grinza (LUISS University); Valentina Meliciani (Department of Management, University of Turin); Mariacristina Rossi (Collegio Carlo Alberto)
    Abstract: In this paper, we examine whether the existing stock of migrant firms induces more new firms of the same co-ethnic group in the same sector and province. We do so by analyzing the number of new firms created each year by country of origin, sector, and province, drawing on administrative data of the population of individual entrepreneurs observed over the period 2002-2013. We find support for a strong attractiveness (pulling) effect. We also find that this effect significantly differs by gender: female migrant entrepreneurs show lower reactiveness to the existing stock of firms compared to their male counterparts. We finally show that such gender differences are stronger for migrants coming from more gender-unequal countries. On the contrary, the degree of gender inequality in the region of destination does not matter.
    Keywords: Migrant entrepreneurship, pulling effect, gender differences, gender inequality, country of origin, region of destination
    JEL: L26 J15 J16
    Date: 2020–05
  2. By: Minetti, Raoul (Michigan State University, Department of Economics); Cao, Qingqing (Michigan State University, Department of Economics); Giordani, Paolo (Luiss University); Murro, Pierluigi (Luiss University)
    Abstract: Credit frequently flows to the business sector through information-intensive bank-firm relationships. This paper studies the impact of relationship banking on firm entry. Exploiting Italian data, we document that relationship-oriented local credit markets feature lower firm entry, larger size at entry, and relatively more spin-offs than de novo entrepreneurs' entries. Information spillovers from credit relationships to entrants contribute to these effects. A dynamic general equilibrium model calibrated to the Italian data can match the effects when information spillovers are allowed for. Relationship banks' information on incumbents is trans-ferable to incumbents' spin-offs but crowds out information acquisition on de novo entrants. The buildup of incumbents' business wealth during credit relationships can outweigh the aggregate output effect of reduced entry.
    Keywords: Credit Relationships; Firm Entry; Information Spillovers; Spin-offs
    JEL: E44 G21 O16
    Date: 2020–05–12
  3. By: Traczynski, Jeffrey (Federal Deposit Insurance Corporation)
    Abstract: This paper explores the willingness of entrepreneurs to pay for wealth insurance to protect personal assets in case of business failure and the impact of this strategy on small business operation decisions. I show that antidiscrimination laws allow married firm owners in half of U.S. states to choose between asset protection and having more collateral for business funding, allowing entrepreneurs to reveal their valuation for preserving personal assets at time of failure. I find that firm owners value asset protection offered by tenancy by the entirety laws at $900-$1000 per year. Firms receive smaller loans when entrepreneurs use this form of ownership to reduce the personal costs of firm failure, but show no differences in hiring patterns or spending on risky projects. This strategy of preparation in case of failure appears to affect small businesses through the funding channel.
    Keywords: personal bankruptcy, tenancy by the entirety, revealed preference, entrepreneurship
    JEL: K35 K36 L26 M13
    Date: 2020–04
  4. By: Sabrina Howell (New York University); Josh Lerner (Harvard Business School, Entrepreneurial Management Unit); Ramana Nanda (Harvard Business School, Entrepreneurial Management Unit); Richard Townsend (University of California, San Diego)
    Abstract: Although late-stage venture capital (VC) activity did not change dramatically in the first two months after the COVID-19 pandemic reached the U.S., early-stage VC activity declined by 38%. The particular sensitivity of early-stage VC investment to market conditions- which we show to be common across recessions spanning four decades from 1976 to 2017- raises questions about the pro-cyclicality of VC and its implications for innovation, especially in light of the common narrative that VC is relatively insulated from public markets. We find that the implications for innovation are not benign: innovation conducted by VC-backed firms in recessions is less highly cited, less original, less general, and less closely related to fundamental science. These effects are more pronounced for startups financed by early-stage venture funds. Given the important role that VC plays in financing breakthrough innovations in the economy, our findings have implications for the broader discussion on the nature of innovation across business cycles.
    Keywords: Venture Capital, Innovation, Patents, Business Cycles, Recessions
    JEL: G24 O31
    Date: 2020–05
  5. By: Agnieszka Parkitna
    Abstract: The theoretical bases for the efficiency of small enterprises, which are the substrate for building the model. It presents measures to assess the efficiency of these enterprises. The factors shaping the efficiency of small enterprises are distinguished and described, and an attempt is made to determine their typology and aggregation in various systems. Business objectives are presented as the overriding basis for building the efficiency of a small organisation. The issue of the economic efficiency of small enterprises is presented. The dilemmas concerning their growth and development were discussed, treating growth as a measure of manufacturing efficiency and development as a measure of effectiveness. The issue of efficiency management in a small enterprise is presented from the perspective of results, growth and development. This book contains detailed model solutions related to the adopted methodology of research on the efficiency of small enterprises. The book also contains the final conclusions of the study. As a whole, it is a statistical statement and model validation.
    Keywords: SME; Efficiency; Managament
    JEL: L11 G32 D24 D22 R32 Q1 M13 P42
    Date: 2020–07–10
  6. By: Ewa Pralat
    Abstract: The aim of this paper is to examine how small and medium-sized enterprises use Internet in their purchase processes. The available Internet tools included homepages of suppliers, company blogs, social networks, B2B e-commerce websites, B2B e-marketplaces, e-catalogues, e-requests, etc. The matter of the sources of information about suppliers was also raised. The author conducted a survey among 126 small and medium-sized enterprises from the Lower Silesia Region. It was aimed at learning their preferences as to how to use the Internet in the purchasing process, at evaluating the usage rate of individual solutions and at identifying the types of products bought via the Internet.
    Keywords: SME; Purchase process; Internet tool
    JEL: L25 L81 L86
    Date: 2020–05–06
  7. By: Reham RIZK
    Abstract: This paper conducts a detailed analysis of the trends and patterns of women’s role in household non-agricultural enterprises in Egypt. The paper uses the Egypt Labor Market Panel Survey (ELMPS) waves of 1998, 2006, 2012 and 2018. First, the paper examines whether households have enterprises and how this varies across female and male-headed households over time. Second, it investigates whether men and women own enterprises and how this differs by their characteristics. Third, it investigates the characteristics of women-owned enterprises vis-à-vis men. Finally, it examines the gendered patterns of participation in enterprises. The findings demonstrate that women are less likely to engage in or own non-agricultural enterprises than men. Although the trend in participation in enterprises has been declining for men, it has been flat for women. Women-owned enterprises are more likely to be informal, have less capital, and be home-based.
    Keywords: Égypte
    JEL: Q
    Date: 2020–02–25
  8. By: Antonescu, Daniela
    Abstract: The rapid evolution of the COVID-19 pandemic has posed challenges for both the medical system and the economic and social systems of EU Member States and the world. This crisis has affected thousands of lives and continues to put enormous pressure on economic systems. For these reasons, it is necessary to manage economic and social problems as soon as possible and to support / promote solutions to support the sectors affected by the pandemic crisis. In Romania, the crisis began to be felt in March, 2020, the SME sector being one of the most affected sectors. This study analyzes the effects of the COVID-19 crisis on the SME sector in Romania, trying to bring solutions and proposals for resistance and post-crisis recovery.
    Keywords: COVID-19, entrepreneurship, rezilience
    JEL: M10 M13 M2 M21
    Date: 2020–04–28

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