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on Entrepreneurship |
| By: | Tatiana Didier (World Bank); Ross Levine (University of California at Berkeley, NBER); Ruth Llovet Montanes (World Bank); Sergio L. Schmukler (World Bank) |
| Abstract: | This paper studies whether there is a connection between finance and growth at the firm level. It employs a new dataset of 150,165 equity and bond issuances around the world, matched with income and balance sheet data for 62,653 listed firms in 65 countries over 1990-2016. Three main patterns emerge from the analyses. First, firms that choose to issue in capital markets use the funds raised to grow by enhancing their productive capabilities, increasing their tangible and intangible capital and the number of employees. Growth accelerates as firms raise funds. Second, the faster growth is more pronounced among firms that are more likely to face tighter financing constraints, namely, small, young, and high-R&D firms. Third, capital market issuances are associated with faster growth among firms located in countries with more developed capital markets relative to banks. Capital markets are also comparatively effective at allowing financially constrained firms to raise capital. |
| Keywords: | bond markets, capital market development, capital raising, equity markets, financial structure, firm dynamics, firm financing, firm size |
| JEL: | F65 G10 G31 G32 L25 O10 O16 O40 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:anc:wmofir:166&r=all |
| By: | Can, Ege (University of Nevada, Reno); Fossen, Frank M. (University of Nevada, Reno) |
| Abstract: | The economic effects of non-compete agreements have received increasing attention from academics and policymakers. This paper investigates how non-compete policies affect different types of self-employment. We exploit policy reforms in Utah and Massachusetts in 2016 and 2018, which decreased the enforceability of non-compete covenants, as quasi-experiments. We separate self-employment into self-employment with incorporated businesses (as a proxy for entrepreneurship) and self-employment with unincorporated businesses. Using representative individual-level data from the American Community Survey and the Current Population Survey, we estimate the probability of being self-employed with these different types of businesses, as well as entry into self-employment, and how these probabilities changed due to the reforms. Our findings show that the decrease in the enforceability of non-compete agreements in the two states resulted in a higher rate of incorporated self-employment in these states. In contrast, there was no sizable effect on the rate of unincorporated self-employment. Our results imply that states can promote entrepreneurial activity by reducing the enforceability of non-compete agreements. |
| Keywords: | incorporated, non-compete agreements, entrepreneurship, unincorporated |
| JEL: | L26 O38 J23 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13414&r=all |
| By: | Naudé, Wim (RWTH Aachen University) |
| Abstract: | Entrepreneurship, as reflected in the start-up of new firms, the growth and market exit of existing firms, and the ow of venture capital, has been severely curtailed by the lockdown and social distancing measures taken by governments around the world in the fight against COVID-19. This paper, after documenting preliminary evidence on these declines, argues that there is a strong possibility that the unintended damage to entrepreneurship, innovation and growth could be persistent. This requires that short- term economic and business rescue packages be complimented by measures aimed at the longer-term, and that these be based on at least five principles. These 5 principles (5Ds) refer to decentralization, democratization, demand, distribution and demography. |
| Keywords: | entrepreneurship, innovation, COVID-19, public policy, economic growth, development |
| JEL: | I18 L26 L53 M13 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13436&r=all |
| By: | Franz Huber; Alan Ponce; Francesco Rentocchini; Thomas Wainwright |
| Abstract: | The provision of Open Data (OD) has been promoted by government s around the world with thehope of fuelling entrepreneurial use of the data for new products or process innovations. However, these benefits are still far from being fully understood and realised, and it remains unclear to what extent OD leads to systematic benefits for entrepreneurship. This paper aims to shed light to this open question by providing novel empirical evidence on the relationship between OD publishing and entrepreneurial outcomes at country-level. We draw upon a longitudinal dataset comprising90 countries observed over the period 2013-2016. We find a significant and positive association between OD adoption and entrepreneurship at the country-level. The results also show that OD adoption and entrepreneurship is strong in countries with high institutional quality. We argue that unless a country has quality institutions, publishing OD alone does not positively affect entrepreneurship for the digital economy. Publishing OD is not sufficient to improve entrepreneurship alone, so states need to move beyond a focus on OD initiatives and promotion, to focus on a broader set of policy initiatives that promote good governance. |
| Keywords: | open data; open government data; institutions; entrepreneurship; country-context; digital economy |
| JEL: | O33 O43 L26 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:sru:ssewps:2020-13&r=all |
| By: | Flavio Calvino (OECD Directorate for Science, Technology and Innovation); Daniele Giachini (Sant’Anna School of Advanced Studies); Mattia Guerini (Université Côte d'Azur, CNRS, GREDEG, France; Sant’Anna School of Advanced Studies; Sciences Po., OFCE) |
| Abstract: | We investigate upon the shape and the determinants of the age distribution of business firms. By employing a novel dataset covering the population of French businesses, we highlight that a geometric law provides a reasonable approximation for the age distribution. However, relevant systematic deviations and sectoral heterogeneity appear. We develop a stochastic model of firm dynamics to explain the mechanisms behind this evidence and relate them to business dynamism. Results reveal a long-term decline in entry rates and lower survival probabilities of young firms. Our findings bear important implications for aggregate outcomes, notably employment growth. |
| Keywords: | Firm demographics, age distribution, business dynamism |
| JEL: | L11 L22 M13 M21 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2020-36&r=all |
| By: | Farasat A.S. Bokhari (Centre for Competition Policy and School of Economics, University of East Anglia); Franco Mariuzzo (Centre for Competition Policy and School of Economics, University of East Anglia); Anna Rita Bennato (Centre for Competition Policy, University of East Anglia and Loughborough University) |
| Abstract: | New drug introductions are a key to growth for pharmaceutical firms. However not all innovations are the same and they may have differential effects that vary by firm size. We use quarterly sales data on UK pharmaceuticals in a dynamic panel model to estimate the impact of product (new drugs) and marketing (additional pack varieties) innovations within a therapeutic class on a firm's business unit growth. We find that product innovations lead to substantial growth in both the short and long run, whereas a new pack variety only produces short-term effects. The strategies are substitutes but the marginal effects are larger for product innovations relative to additional packs, and the effects are larger for smaller business units. Nonetheless, pack introductions offer a viable short-term growth strategy, especially for small and medium sized businesses. |
| Keywords: | Growth; Innovation; Size; Pharmaceuticals; Business unit |
| JEL: | L25 L65 O31 O32 |
| Date: | 2019–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:uea:ueaccp:2016_01v3&r=all |
| By: | Muraközy, Balázs (University of Liverpool); Telegdy, Álmos (Corvinus University of Budapest) |
| Abstract: | This paper investigates the effects of non-repayable enterprise grants financed from the European Union's Structural and Cohesion Funds on firm outcomes in Hungary using firm- and worker-level information on all rejected and successful grant applications between 2004-2014. In our model, after paying the fixed cost of applying, firms can purchase capital at a reduced marginal cost and they share the rent generated from the grant with their workers. In line with the model's predictions, larger than average, more productive and faster growing firms are more likely to apply for a grant. We combine panel regression methods with matching techniques to estimate the effect of grants by comparing successful and unsuccessful applicants' outcomes. Subsidized firms increase their employment, sales, capital-to-labor ratio and labor productivity, but not total factor productivity. The skill composition of workers is not affected by the grant but wages grow, especially for skilled workers. Firms winning multiple grans benefit more already from the first grant and successive grants have even larger effects. According to our simple calculations, each year's subsidy program created jobs in grant winning firms equivalent to 0.3-0.5 percent of total SME employment and contributed by 0.3-0.7 percentage points to aggregate SME productivity growth – with an annual cost often in excess of 1 percent of total SME value added. These results suggest that these grants promote firm growth, but do not lead firms to introduce new forms of production or upgrade technology. |
| Keywords: | enterprise grants, EU grants, worker effects, matched employer-employee data, Hungary |
| JEL: | H25 D22 O16 J21 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13410&r=all |
| By: | Antoaneta Roxana Surcel (Georgescu) (Valahia University of Târgovi?te) |
| Abstract: | Entrepreneurship manifests itself in economy in a variety of ways. The development of the entrepreneurial space among future employees is fundamental towards a healthy economic growth, as well as a compulsory condition for a durable local and regional development. Transversal competences such as creativity, initiative and entrepreneurial spirit help the future employee develop its critical and creative thinking, innovate in its own field of activity. They also lead to an increase in his productivity, flexibility, in his autonomy at the workplace. Moreover, these also aid the individual in managing a project in terms of personal competences and obtain the expected results. In broad terms, any future employee has to have access to entrepreneurial education through all types of education and training, disregarding their level. The current research represents the most important findings regarding identifying the key competences that support an entrepreneurial culture in the initial training period. The data obtained is the result of applying a survey on a representative sample of teachers in pre-university educational system in Dâmbovi?a county, teachers who carry out their activity in theoretical and vocational high schools. This has served to outline an overview on the role and the importance of entrepreneurial education in the initial training of future employees. |
| Keywords: | Key skills, Entrepreneurship education, Initial training, Organization, Human resources |
| JEL: | M53 J24 |
| URL: | http://d.repec.org/n?u=RePEc:sek:itepro:12113078&r=all |