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on Entrepreneurship |
| By: | Colin Mason (University of Glasgow) |
| Abstract: | This paper has been prepared as a contribution to a larger on-going research activity on high growth innovative enterprises (HGEs) and scale up companies of the European Commission’s Joint Research Centre (JRC), led by the Unit for Finance, Innovation and Growth (B7). This broad activity has been analysing the sectoral and geographical variability of HGE demographics in the EU and the framework conditions affecting their development with an emphasis on financing and risk-financing in particular. In keeping with the JRC’s role of providing evidence and analysis to underpin EU policy, the work is conducted in close contact with a wide range of Commission policy DGs, and is designed to provide both EU-wide and member state specific input to the annual cycle of economic policy coordination in the EU known as the “European Semester†. In the context of the COVID-19 crisis and the policy response to the immediate and subsequent socio-economic fallout, the vulnerability of high-growth and potential high-growth enterprises is of huge concern particularly in view of the disproportionate contribution these enterprises can play in securing a sustainable exit from the crisis in the medium to long term. The importance of risk-capital for these firms means that it is vital to have a close-to-real-time means of monitoring the impacts of the crisis on venture capital markets in Europe and globally so that pertinent evidence can be provided also in close-to-real-time to those developing and implementing the policy response to the crisis. This paper represents a particularly timely contribution in this regard. |
| Keywords: | Covid-19 |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc120612&r=all |
| By: | Naudé, Wim |
| Abstract: | Entrepreneurship in advanced economies is in decline. This comes as a surprise: many scholars have anticipated an upsurge in entrepreneurship, and expected an "entrepreneurial economy" to replace the post-WW2 "managed" economy. Instead of the "entrepreneurial economy" what has come into being may perhaps better be labelled the "ossified economy." This paper starts by document the decline. It then critically presents the current explanations offered in the literature. While having merit, these explanations are proximate and supply-side oriented. Given these shortcomings, this paper contributes a new perspective: it argues that negative scale effects from rising complexity, as well as long-run changes in aggregate demand due to inequality and rising energy costs, are also responsible. Implications for entrepreneurship scholarship are drawn. |
| Keywords: | Entrepreneurship,start-ups,development,economic complexity,growth theory |
| JEL: | O47 O33 J24 E21 E25 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:539&r=all |
| By: | Nurmi, Satu; Vanhala, Juuso; Virén, Matti |
| Abstract: | We analyze the demographics of zombie firms and durations of zombie spells as well as their determinants, including an application on public subsidies using firm level population panel data from Finland. Firm-level analysis of firm demographics reveals that zombie-firms, as commonly defined in the literature, are often not truly distressed firms but rather companies with temporarily low revenues relative to interest payments. More importantly, we find that roughly a third of these firms are in fact growing companies and two thirds recover from the zombie status to become healthy firms. We also show that the increase of zombie firms over the past 15 years has mainly been driven by cyclical factors, as opposed to a secular trend. In our policy application on government subsidies to firms, estimation results strongly suggest that subsidy-receiving firms are less likely to die, regardless of the type of subsidy. However, with regard to recovery there is heterogeneity in the effects depending on the type of firm and the type of subsidy received. Thus, we do not find a robust positive association of subsidies with zombie recovery. |
| JEL: | D22 D24 G33 H25 L16 L25 O25 |
| Date: | 2020–05–14 |
| URL: | http://d.repec.org/n?u=RePEc:bof:bofrdp:2020_008&r=all |
| By: | Maurizio Iacopetta (Sciences Po-OFCE and SKEMA Business School); 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 53 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 firms. |
| Keywords: | Corporate Governance, Endogenous Growth, Spinoffs. |
| JEL: | E44 O40 G30 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:fce:doctra:2013&r=all |
| By: | Diemo Urbig (Schumpeter School of Business and Economics, University of Wuppertal); Werner Boente (Schumpeter School of Business and Economics, University of Wuppertal); Vivien D. Procher (Grenoble Ecole de Management, Univ Grenoble Alpes ComUE and RWI - Leibniz-Institut für Wirtschaftsforschung); Sandro Lombardo (Schumpeter School of Business and Economics, University of Wuppertal) |
| Abstract: | Referring to Isreal M. Kirzner (1973) and Joseph A. Schumpeter (1934), who emphasized the competitive nature of entrepreneurship, this study investigates whether potential and revealed entrepreneurs are more likely to seek competition than non-entrepreneurs. We provide a conceptual framework that links entrepreneurship to three facets of individual competitiveness drawn from economic, entrepreneurship, and psychological research: a desire to win, striving for personal development, and an enjoyment of competition. Following economic research linking competitive behavior in experiments to career choices, we conduct a lab-in-the-field study and demonstrate that entrepreneurs are more likely to enter competitions than non-entrepreneurs. Accounting for individual desires to win and mastery-related achievement motivations, our results indicate that entrepreneurs tend to enter competition for the sake of competition itself rather than for the prospect of winning it or personal development. Our results suggest that enjoyment of competition might be an additional factor driving entrepreneurs’ market entry decisions beyond well-known factors like overconfidence and risk taking. |
| Keywords: | Enjoyment of competition; Individual competitiveness; Entrepreneurship; Behavioral Economics; Lab-in-the-field experiment |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:bwu:schdps:sdp20001&r=all |
| By: | Welter, Friederike; Baker, Ted |
| Abstract: | This paper responds to Welter's (2011) call to pay more attention to the diversity of entrepreneurship in theorizing contexts by examining how places come to be understood as entrepreneurial. We draw briefly and selectively on ideas from a quirky set of disciplines, looking at how topics such as narratives and language, memories of the past, built environments and constellations of power among groups of people interact to shape the emergence and decline of "everyday entrepreneurship places". Our discussion illustrates some useful cues our research might draw on to challenge and improve theoretical understanding of place in entrepreneurship. |
| Keywords: | contextual entrepreneurship,context,entrepreneurial place,theorizing contexts,entrepreneurship |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifmwps:0320&r=all |
| By: | Martin LACKEUS (Chalmers University of Technology); Mats LUNDQVIST (Chalmers University of Technology); Karen WILLIAMS MIDDLETON (Chalmers University of Technology); Johan INDEN (Chalmers University of Technology) |
| Abstract: | Entrepreneurial employees that drive innovation and change have become a sheer necessity for many established organisations in public and private sector. This report gives a science-based overview of what entrepreneurial employees do, why such behaviours are needed and how any employee can become more entrepreneurial. Being entrepreneurial is not something magic, it is a discipline that can be learned by any employee in private and public sector. A simple explanatory “diamond†model is provided that guides employees, managers and policymakers. The report offers new clarity in an under-researched but important and promising area. What entrepreneurial employees do is that they exercise their deeply personal agency to create something novel of value for others. They learn experientially what value different creations have for others. Employees who do this over time develop their entrepreneurial competences. Why they do this is because it benefits their organisation and themselves. They contribute to overall efficiency, to future-proofing the organisation, and to building a more engaging organisational culture. In return, they get a more meaningful inner work life, higher autonomy, more recognition and a boosted career trajectory. How to become more entrepreneurial is described through four focus areas; agency, novelty, value for others and learning. Entrepreneurial employees raise their agency through dedication, courage and action-taking. They work with novelty through envisioning, claiming and organising the new. They create new value for others through empathic discussions and prototypes. Finally, they learn through analyzing, experimenting with and revising their value creation attempts. |
| Keywords: | entrepreneurship, lifelong learning, employability, employment, growth, innovation, human capital, future of work |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc117661&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 Oto 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. |
| Keywords: | firm demographics; productivity growth; innovation |
| Date: | 2020–04–10 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedfwp:87890&r=all |
| By: | Lohwasser, Todor S. |
| Abstract: | In this study, we perform a meta-analysis on existing research covering the relationship between a venture capitalist's involvement (VCI) and the performance (P) of funded firms. As research on this topic has been inconclusive, we aim to determine whether providers of venture capital (VC) only possess superior scouting capabilities or whether they can also provide additional value beyond the simple endowment of financial resources. Furthermore, we determine whether the nature of the institutions in the funded firms' home countries, in terms of institutional quality and financial market efficiency, is a critical factor in the VCI - P relationship. We argue that a venture capitalist's decision to actively engage in its portfolio firms and provide value beyond capital depends on the quality of formal institutions and the likelihood of achieving a successful exit. We test our arguments using a meta-analytical approach on a dataset of 984 effect sizes in 15 individual countries. Our results show that venture capitalists have advantages stemming from superior selection and guidance capabilities. In addition, our results confirm that higher quality of formal institutions and the efficiency of the financial market in the startups' home countries strengthen the VCI - P relationship. In essence, we help corroborate arguments from the resource-based view, which suggest that the success of a VCI depends on institutional factors. |
| JEL: | G2 G24 L25 M13 O43 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:umiodp:42020&r=all |
| By: | Joseph I. Uduji (University of Nigeria, Nsukka, Nigeria); Elda N. Okolo-Obasi (University of Nigeria, Nsukka, Nigeria); Simplice A. Asongu (Yaoundé, Cameroon) |
| Abstract: | The activities and violence of militants in the Niger Delta which saw the capacity for production of oil in Nigeria fall to an all-time low resulted in the federal government of Nigeria (FGN) announcing the Presidential Amnesty Programme in return for peace in the region. We examine how multinational oil companies’ (MOCs’) corporate social responsibility (CSR) impact on entrepreneurship development and job creation to absorb the youths. 1200 youths were sampled across the nine states of Niger Delta. Results from the use of estimated logit model reveal that GMoU interventions are prevalent in communities with greater ownership, creating room for better projects, sustainability and improved trust; yet the interventions failed to make significant impact on entrepreneurship development and job creation. Clearly, facilitating how youths get involved in skill acquisition and empowerment programmes would help them become entrepreneurs, improving their self-assurance that they can prosper outside militancy activities and violence. |
| Keywords: | Presidential amnesty programme, multinational oil companies, corporate social responsibility, youths and entrepreneurship development, Nigeria |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:agd:wpaper:20/026&r=all |
| By: | Andinet Woldemichael (Research Department, African Development Bank); Margaret Joldowski (Charles H. Dyson School of Applied Economics and Management, Cornell University) |
| Abstract: | In a competitive market, the constant “churning” of firms into and out of business boosts productivity, economic growth, and net job creation. Without competitive markets, however, firm exit, and the failures of firm entry could be due to obstacles other than competition and innovation. In African countries, incumbent firms and potential entrants face immense obstacles: a difficult political environment, burdensome business regulations, inadequate infrastructure, and limited access to finance. This report investigates the extent to which such obstacles hinder job creation in general and firm dynamism, particularly. Using World Bank Enterprise Survey (ES) panel data that covers 18 African countries, the report quantifies the number of jobs lost due to obstacles. It finds that a single obstacle reduces annual employment growth by 0.1–0.34 percentage point. Hence, by removing key business obstacles, Africa could boost new job creation and save many existing high-quality jobs. JEL Classification: D22; L11; L25; O43; J23 |
| Keywords: | Unemployment, labor demand, constraints, firm dynamism; doing business |
| Date: | 2019–12–31 |
| URL: | http://d.repec.org/n?u=RePEc:adb:adbwps:2454&r=all |
| By: | Hirofumi Uchida (Graduate School of Business Administration Kobe University); Kazuo Yamada (Faculty of Economics and Graduate School of Economics Nagasaki University); Alberto Zazzaro (Universita' degli Studi di Napoli Federico II) |
| Abstract: | In this paper, we examine whether family firms are more or less likely to foster management innovation, expanded incumbent business activities, or make advance to new business fields after CEO succession than non-family firms. Using data of 1,149 SMEs (small- and medium-sized enterprises) obtained from a corporate survey in Japan, we find that the new CEOs of family firms are not systematically less or more innovative than their counterparts in non-family firms. However, we also find that this zero effect of family ownership on innovation likelihood is the result of a negative impact of professional successors and a positive impact of heir successors. Finally, we show that access to intangible family assets increases the innovativeness of heir successors and decreases that of professional successors. |
| Keywords: | Innovation, Family Firm, Family Ownership, Succession |
| JEL: | L21 J12 Z13 G32 G21 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:anc:wmofir:161&r=all |