nep-ent New Economics Papers
on Entrepreneurship
Issue of 2020‒12‒14
fifteen papers chosen by
Marcus Dejardin
Université de Namur

  1. Unemployment insurance for the self-employed: a way forward post-corona By Schoukens, Paul; Weber, Enzo
  2. The effect of unemployment insurance benefits on (self-)employment: Two sides of the same coin? By Camarero Garcia, Sebastian; Hansch, Michelle
  3. Data Science for Entrepreneurship Research : Studying Demand Dynamics for Entrepreneurial Skills in the Netherlands By Prüfer, Jens; Prüfer, Patricia
  4. Measure Twice, Cut Once. Entrepreneurial Ecosystem Metrics By Jip Leendertse; Mirella T. Schrijvers; Erik Stam; ;
  5. Why are Africa’s female entrepreneurs not playing the export game? Evidence from Ghana By Charles Ackah; Holger Goerg; Aoife Hanley; Cecília Hornok
  6. Industry 4.0 related innovation and firm growth By Behrens, Vanessa; Trunschke, Markus
  7. R&D restructuring during the Great Recession and young firms By María García-Vega
  8. Does FDI Promote Entrepreneurial Activities? A Meta-Analysis By Sanghyun Hong; W. Robert Reed; Bifei Tian; Tingting Wu; Gen Chen
  9. Cloud computing and firm growth By Timothy DeStefano; Richard Kneller; Jonathan Timmis
  10. Ten Meditations on (Public) Venture Capital – Revisited By Murray, Gordon
  11. Developing a sustainable financing model for SMEs during the organizational life cycle in Uganda By , AISDL
  12. Subgroup Analysis of Investment Constraints: Evidence from Ugandan Microenterprises By Helke Seitz
  13. Propensity Score Weighting with Mismeasured Covariates: An Application to Two Financial Literacy Interventions By Dong, Hao; Millimet, Daniel L.
  14. Distant but Close in Sight. Firm-level Evidence on French-German Productivity Gaps in Manufacturing By Thomas Grebel; Mauro Napoletano; Lionel Nesta
  15. Venture capital risk, start-ups and innovation: the syndication of venture capital investments recipe. By Jonathan Labbé

  1. By: Schoukens, Paul; Weber, Enzo (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "With the COVID-19 crisis as background, the underlying paper elaborates on setting up an unemployment insurance for self-employed. While a comprehensive approach would have clear advantages, it is crucial to adapt the rules of existing insurances for wage earners appropriately addressing the specific needs of self-employed. Therefore, we discuss key rules and conditions with regard to self-employed and derive conclusions on how unemployment insurance for them should be designed. In this, we investigate the key elements of such an insurance. When it comes to financing the unemployment scheme, we discuss how an income related contribution levied on the running income of the self-employed person could be organised. With regard to entitlement, we argue for a detailed conditioning and monitoring of the closing down of the business rather than focusing upon the involuntary character. Before the background of surging short-time work in the COVID-19 crisis, we reason that a short-time work parallel for self-employed is possible to organise in order to handle exceptional events but would have to be designed with sufficient restrictions. In order to avoid false incentives for excessive repeated use of unemployment benefits, we propose a certain experience rating that is less abrupt than existing re-eligibility criteria and thus still provides continuous protection. Regarding labour market availability, we recommend to balance swift labour market integration and productive matching of entrepreneurial persons into self-employment by criteria giving leeway to self-employed activities as far as possible, but over time also guaranteeing an effective labour market integration. For dealing with the combination of multiple jobs and activities, we provide some guiding principles how to organise an unemployment insurance including entitlement and contributions in an integrated manner around activities, based on total work-related income." (Author's abstract, IAB-Doku) ((en))
    JEL: J65 J21
    Date: 2020–10–21
  2. By: Camarero Garcia, Sebastian; Hansch, Michelle
    Abstract: Although a relevant share of firms is created out of unemployment and current active labor market policies in Europe often subsidize unemployed individuals to start their own businesses, little is known about the role of unemployment insurance (UI) generosity for self-employment. By using Spanish administrative data including so far inaccessible information on self-employment, we exploit a reform-driven exogenous cut in UI benefits to identify its causal effect on general employment and decompose it into the effects on self-employment and re-employment. Exploiting a discontinuity in the UI benefit schedule which changed as a result of the 2012 Spanish labor market reform, we estimate the causal reform effects on the extensive margin of (self-)employment and on unemployment duration. We find heterogeneous effects on the extensive margin: while the job-finding rate increases, the startup rate decreases. Over different time horizons, the negative effect on self- employment (35-50%) outweighs the positive effect on employment (5-33%). Therefore, omitting self-employment as a counterfactual outcome might lead to overestimate general employment effects. Our UI benefit duration elasticity estimates indicate that reduced UI benefits extend unemployment duration for individuals transitioning into self-employment but shorten unemployment for individuals finding re-employment. These results might be relevant for the (optimal) design of UI systems.
    Keywords: Social Insurance,Self-Employment,Spain,Unemployment Insurance
    JEL: H75 J64 J65 J68 L26
    Date: 2020
  3. By: Prüfer, Jens (Tilburg University, School of Economics and Management); Prüfer, Patricia (Tilburg University, School of Economics and Management)
    Date: 2019
  4. By: Jip Leendertse; Mirella T. Schrijvers; Erik Stam; ;
    Abstract: In spite of the popularity of the entrepreneurial ecosystem approach in science and policy, there is a scarcity of credible, accurate and comparable metrics of entrepreneurial ecosystems. This is a severe shortcoming for both scientific progress and successful policy. In this paper, we bridge this metrics gap. We use the entrepreneurial ecosystem approach to quantify and qualify regional economies. Entrepreneurial ecosystems consist of the actors and factors that enable entrepreneurship. We operationalize the elements and outputs of entrepreneurial ecosystems for 273 European regions. The ecosystem elements show strong and positive correlations between them, confirming the systemic nature of entrepreneurial economies, and the need for a complex systems perspective. Our analyses show that physical infrastructure, finance, formal institutions, and talent take a central position in the interdependence web, providing a first indication of these elements as fundamental conditions of entrepreneurial ecosystems. The measures of the elements are used to calculate an index to approximate the quality of entrepreneurial ecosystems. This index is robust and performs well in regressions to predict entrepreneurial output, which we measure with novel data on productive entrepreneurship. The entrepreneurial ecosystem approach and the metrics we present provide a lens for public policy to better diagnose, understand and improve entrepreneurial economies.
    Keywords: entrepreneurial ecosystem; regional dynamics; entrepreneurship; economic development; economic policy; entrepreneurship policy
    JEL: D2 E02 L26 M13 O43 P00 R1 R58
    Date: 2020–11
  5. By: Charles Ackah; Holger Goerg; Aoife Hanley; Cecília Hornok
    Abstract: We explore the export performance of Africa’s underperforming female entrepreneurs, using the Ghanaian ISSER-IGC panel, a comprehensive dataset of manufacturing firms for 2011–2015. Uniquely, the data provides information about the severity of key business constraints, across both male and female entrepreneurs. We find that females are less likely to export (and optimize their exporting) than their male peers. Although reduced access to finance seriously constrains the exports of female entrepreneurs, this limitation does not explain their relative inability to leverage value from exports. Consistent with related work, we find that certain social and cultural constraints, in particular constraints linked to bribes and security concerns, are more deeply felt by female entrepreneurs. This may hint at the exclusion of Africa’s females (voluntarily or involuntarily) from male-dominated networks or business practices.
    Keywords: female entrepreneurship; business constraints; productivity; exporting; Africa; Ghana
    Date: 2020
  6. By: Behrens, Vanessa; Trunschke, Markus
    Abstract: In this paper we explore the relationship between innovative firms that patent technology related to Industry 4.0 and their economic performance. By applying the new patent cartography developed by the EPO that identifies firm's 4.0 patents, this is one of the first large-scale, systematic studies on the impact of 4.0 technologies. Since 4.0 patents are more likely to be general purpose technologies, firms with 4.0 patents should be in a better position to increase their sales as 4.0 technology has on average a wider industrial applicability. Results of our Fixed Effects Least Squares regressions and Dynamic Panel Model suggest that 4.0 patent stock is positively associated to sales and that this effect is significantly larger than the effect of Non-4.0 patent stock. These effects are found to be decreasing with firm size.
    Keywords: Industry 4.0,Patents,Firm Performance,Sales Growth
    JEL: L25 O14 O33
    Date: 2020
  7. By: María García-Vega
    Abstract: In this paper, I provide evidence of automation and skill-upgrading of R&D for young firms during the Great Recession of the late 2000s (henceforth abbreviated as GR). Using a difference-in-difference approach and propensity score matching, for a panel of more than 12,000 Spanish firms from 2005 to 2014, I examine if the GR had an effect on the organization of R&D in young versus older firms. I find that young firms adjust their R&D employment during the GR. I show that young firms implemented three key compositional changes in their R&D policies during the GR as compared to older firms: a) they reduced their R&D employment by firing medium-skilled R&D workers; b) they hired high-skilled R&D workers; and c) they increased their capital investments for R&D. These changes in R&D policies suggest that during the GR, young firms substituted medium-skilled R&D workers by high-skilled workers and machines. These effects are mediated by the firms’ financial health.
    Keywords: Young firms; Great Recession; Firm performance; R&D; Innovation; Automation; skillupgrading; Job polarization.
    Date: 2020
  8. By: Sanghyun Hong (University of Canterbury); W. Robert Reed (University of Canterbury); Bifei Tian; Tingting Wu; Gen Chen
    Abstract: Researchers have long identified both FDI and entrepreneurship as potentially important determinants of economic development. Accordingly, a literature has grown to investigate whether FDI stimulates entrepreneurial activity in host countries. It is difficult to synthesize these empirical findings because many of the studies use different definitions of FDI and entrepreneurship, study different time periods and countries, and apply different estimation procedures to generate their results. In order to better understand this literature, we collect 728 estimates from 52 studies that estimate the relationship between FDI and entrepreneurial activity using country-level data. We use meta-analysis to address two questions: (1) What is the overall, mean effect of FDI on entrepreneurship?, and (2) What factors account for differences in estimated effects across studies? An innovation of our study is that it develops a nested testing framework to select among a number of competing meta-analytic models. It also extends the new Andrews-Kasy meta-analytic estimators to allow for explanatory variables. We find that the overall, mean effect of FDI on entrepreneurial activity is close to zero and statistically insignificant. While FDI and entrepreneurial activity may each play an important role in economic development, our results indicate that FDI does not generally stimulate entrepreneurship. This suggests that public policy efforts to encourage entrepreneurship through FDI are unlikely to be successful. All the files necessary to reproduce the results in this paper are available online at Harvard Dataverse.
    Keywords: Meta-analysis, FDI, Entrepreneurship
    JEL: L26 F21 C10
    Date: 2020–11–01
  9. By: Timothy DeStefano; Richard Kneller; Jonathan Timmis
    Abstract: Cloud computing enables a shift in the costs of ICT adoption from investment in fixed capital to pay-on-demand services allowing firms to scale and reorganize. Using new firm-level data we examine the impact of cloud on firm growth, using zip-code-level instruments of the timing of high-speed fiber availability and speeds. Cloud leads to the growth of employment and revenue for young firms, but they become concentrated in fewer establishments. For incumbents, we find smaller scale effects but dispersed activity through closing establishments and moving employment farther from the headquarters. Moreover, cloud adoption leads to worker relocation across establishments within firms.
    Keywords: firm growth; the cloud; ICT use; employment; productivity
    Date: 2020
  10. By: Murray, Gordon
    Abstract: This paper reflects on the policy formation process in the burgeoning area of government’s involvement venture capital finance (VC) over the two decades 2000-2020. It looks at both why and how government VC funds (GVC) have evolved. The increasingly common vehicle of ‘hybrid’ co-investment funds, which include both public and private VC investors managed by a jointly approved private fund manager, is analysed. The evolution and greater refinement of public intervention in VC markets over time is acknowledged while noting that significant operational challenges remain. There is some evidence that later iterations of GVC programmes have started to add net value which may imply a public-policy learning process. A fluctuating supply over time for venture capital finance, particularly at the earliest stages of firm formation and growth, suggests the benefits of well-designed and complementary government venture capital activity. The rubric of Ten Meditations is employed as a device to communicate both problem and prescription across the academic/policy maker divide. The paper is intended to be relevant to policy makers while grounded in robust academic research.
    Keywords: Venture Capital, Entrepreneurial Finance, Government Policy, Co-investment Funds
    JEL: G2 G24 G28
    Date: 2020–11–27
  11. By: , AISDL
    Abstract: World over, it is generally acceptable that Small and Medium Enterprises (SMEs) are the engines of growth for a number of economies contributing more than half of the economies employment opportunities while at the same time being sources of innovation. With generally that acceptable level of importance to different economies, it is important that these firms continuously prosper for the countries to reap the accompanying benefits. In order for these firms to prosper, there is need for conscious effort being placed on creating an environment that supports their growth and prosperity. It is from this understanding that this study set out to develop a sustainable financing model for Small and Medium Enterprises along the organizational life cycle.
    Date: 2019–09–05
  12. By: Helke Seitz
    Abstract: This study examines the effect of a soft commitment device in the form of a savings goal calendar on savings for small business owners in Kampala, Uganda. We run a randomized controlled trial (RCT) under which the treatment group receives a calendar designed to set savings goals and to make a plan to reach this goal. The control group is given a plain calendar. We find no average effect on savings, but show that present-biased individuals save more when given the calendar. Further examinations indicate that present-biased individuals are more likely to use the calendar, suggesting that, in line with theory, present-biased individuals have a demand.
    Keywords: Entrepreneurship, investment, credit constraints, savings constraints, managerial constraints
    JEL: D22 D25 O12 O16
    Date: 2020
  13. By: Dong, Hao (Southern Methodist University); Millimet, Daniel L. (Southern Methodist University)
    Abstract: Estimation of the causal effect of a binary treatment on outcomes often requires conditioning on covariates to address selection on observed variables. This is not straightforward when one or more of the covariates are measured with error. Here, we present a new semi-parametric estimator that addresses this issue. In particular, we focus on inverse propensity score weighting estimators when the propensity score is of an unknown functional form and some covariates are subject to classical measurement error. Our proposed solution involves deconvolution kernel estimators of the propensity score and the regression function weighted by a deconvolution kernel density estimator. Simulations and replication of a study examining the impact of two financial literacy interventions on the business practices of entrepreneurs show our estimator to be valuable to empirical researchers.
    Keywords: program evaluation, measurement error, propensity score, unconfoundedness, financial literacy
    JEL: C18 C21 G21 G53
    Date: 2020–11
  14. By: Thomas Grebel (Technische Universität Ilmenau, Germany); Mauro Napoletano (OFCE Sciences-Po; SKEMA Business School); Lionel Nesta (Université Côte d'Azur, France; GREDEG CNRS; OFCE, SciencesPo; SKEMA Business School)
    Abstract: We study the productivity level distributions of manufacturing firms in France and Germany, and how these distributions evolved across the Great Recession. We show the presence of a systematic productivity advantage of German firms over French ones in the decade 2003-2013, but the gap has narrowed down after the Great Recession. Convergence is explained by the better growth performance of French firms in the post-recession period, especially of those located in the top percentiles of the productivity distribution. We also highlight the role of sectoral growth, firm size and export intensity in explaining the above convergence. In contrast, the contribution of allocative efficiency was small.
    Keywords: International productivity gaps, productivity distributions, firm level comparisons
    JEL: L10 N10 D24
    Date: 2020–11
  15. By: Jonathan Labbé (CEREFIGE - Centre Européen de Recherche en Economie Financière et Gestion des Entreprises - UL - Université de Lorraine)
    Abstract: This study presents the effects of the syndication of venture capital investments, on start-ups innovation. For this purpose, we have built a database of 315 deals carried out in 96 companies over a ten-year period. This study attempts to characterize the importance of the role of resources and the competitive advantage they confer to companies. By using the level of research and development (R&D) expenditure and patent applications as a measure of innovation, we highlight several results. Using a dynamic panel approach, we observe that the use of syndication financing tends to "optimize" the effects on the innovation of start-ups.
    Abstract: Cet article présente les effets des financements par syndication mixte sur l'innovation des start-ups. Pour cela nous avons construit une base de données regroupant 315 financements réalisés dans 96 entreprises sur une période de dix années. Cette étude tente caractériser l'importance du rôle des ressources et de l'avantage compétitif qu'elles confèrent aux entreprises. En utilisant le niveau des dépenses de recherche et développement (R&D) et les dépôts de brevets comme mesure de l'innovation nous mettons en évidence plusieurs résultats. Grâce à une approche par panels dynamiques, nous observons que le recours au financement par syndication tend à « optimiser » les effets sur l'innovation des start-ups.
    Keywords: Governance,Start-ups,Start-ups Keywords: Venture capital,Gouvernance,Innovation,Syndication,Capital-Investissement
    Date: 2020–11–12

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