nep-ent New Economics Papers
on Entrepreneurship
Issue of 2021‒02‒01
nine papers chosen by
Marcus Dejardin
Université de Namur

  1. The Role of Nonemployers in Business Dynamism and Aggregate Productivity By Pedro Bento; Diego Restuccia
  2. Dependent self-employment across Europe: involuntariness, country's wealth and labor market institutions By Hernanz, Virginia; Carrasco, Raquel
  3. Contract Work at Older Ages By Katherine G. Abraham; Brad J. Hershbein; Susan N. Houseman
  4. Robots, AI, and Related Technologies: A Mapping of the New Knowledge Base By Enrico Santarelli; Jacopo Staccioli; Marco Vivarelli
  5. Institutions, Financial Development, and Small Business Survival: Evidence from European Emerging Markets By Iwasaki, Ichiro; Kočenda, Evžen; Shida, Yoshisada
  6. Turbulence in startups: Effect of COVID-19 lockdown on creation of new firms and its capital By Camino-Mogro, Segundo
  7. The UK's self-employed workers: who they are and what they need By Jack Blundell
  8. The Gender Gap Among Top Business Executives By Wolfgang Keller; Teresa Molina; William W. Olney
  9. Boosting SMEs’ internationalisation in Poland By Antoine Goujard; Pierre Guérin

  1. By: Pedro Bento; Diego Restuccia
    Abstract: The well-documented decline in business dynamism, measured in the literature by the net entry rate of employer firms, has been proposed as an explanation for the productivity growth slowdown in the United States. We assess the role of nonemployers, firms without paid employees, in business dynamism and aggregate productivity. Including nonemployers, the total number of firms has instead increased since the early 1980s, which in the context of a standard model of firm dynamics implies an average annual growth of aggregate productivity of 0.26%, one-quarter of the productivity growth in the data. Accounting for changes in the share of nonemployers and the firm size distribution over time, the increase in the total number of businesses implies an even higher productivity growth of 0.52% annually. The productivity growth slowdown is not due to changes in business dynamism.
    Keywords: nonemployers, employer firms, business dynamism, productivity, TFP.
    JEL: O4 O51 E1
    Date: 2021–01–19
  2. By: Hernanz, Virginia; Carrasco, Raquel
    Abstract: This paper investigates the degree of involuntariness in the entrepreneurial activity ofthe dependent solo self-employed, as well as the effect of the country's wealth and labormarket institutions. Using the unique information available in the 2017 European LaborForce Survey (EU-LFS) for 25 countries, we can properly identify the dependent soloself-employed and analyze to what extent they behave in accordance with anoccupational choice model when making their self-employment decision. For that, weaccount for the reasons why they enter into self-employment (voluntarily orinvoluntarily either out of necessity or requested by the former employer). The resultsindicate that involuntary self-employment, mostly due to being required by previousemployer, significantly increases the probability of being dependent solo versus nondependent self-employed. The wealthiest countries have a lower incidence of this groupof workers, mainly if they are involuntary self-employed. Moreover, labor marketinstitutions that decrease the flexibility of paid employment tend to increase theincidence of dependent solo self-employment. These results point to this group ofworkers being particularly vulnerable with the degree of vulnerability significantlyincreasing for those self-employed with a lesser degree of occupational choice.
    Keywords: Labor; Economic Conditions; Involuntariness; Dependent Solo Self-Employed
    JEL: L26 L24 J28 J08 J01
    Date: 2021–01–26
  3. By: Katherine G. Abraham (University of Maryland, IZA, and NBER); Brad J. Hershbein (W.E. Upjohn Institute for Employment Research); Susan N. Houseman (W.E. Upjohn Institute for Employment Research)
    Abstract: The share of workers who are self-employed rises markedly with age. Given policy concerns about inadequate retirement savings, especially among those with lower education, and the resulting interest in encouraging employment at older ages, it is important to understand the role that self-employment arrangements play in facilitating work among seniors. New data from a survey module fielded on a Gallup telephone survey distinguish independent contractor work from other self-employment and provide information on informal and online platform work. The Gallup data show that, especially after accounting for individuals who are miscoded as employees, self-employment is even more prevalent at older ages than suggested by existing data. Work as an independent contractor is the most common type of self-employment. Roughly one-quarter of independent contractors age 50 and older work for a former employer. At older ages, self-employment generally—and work as an independent contractor specifically—is more common among the highly educated, accounting for much of the difference in employment rates across education groups. We provide suggestive evidence that differences in opportunities for independent contractor work play an important role in the lower employment rates of less-educated older adults.
    Keywords: Contract work, independent contractor, self-employment, online platform, retirement, Gallup
    JEL: J14 J22 J26 J62 M55
    Date: 2020–03
  4. By: Enrico Santarelli (Department of Economics, University of Bologna – Department of Economics and Management, University of Luxembourg); Jacopo Staccioli (Dipartimento di Politica Economica, DISCE, Università Cattolica del Sacro Cuore – Institute of Economics, Scuola Superiore Sant’Anna, Pisa); Marco Vivarelli (Dipartimento di Politica Economica, DISCE, Università Cattolica del Sacro Cuore – UNU-MERIT, Maastricht, The Netherlands – IZA, Bonn, Germany)
    Abstract: Using the entire population of USPTO patent applications published between 2002 and 2019, and leveraging on both patent classification and semantic analysis, this papers aims to map the current knowledge base centred on robotics and AI technologies. These technologies will be investigated both as a whole and distinguishing core and related innovations, along a 4-level core-periphery architecture. Merging patent applications with the Orbis IP firm-level database will allow us to put forward a threefold analysis based on industry of activity, geographic location, and firm productivity. In a nutshell, results show that: (i) rather than representing a technological revolution, the new knowledge base is strictly linked to the previous technological paradigm; (ii) the new knowledge base is characterised by a considerable – but not impressively widespread – degree of pervasiveness; (iii) robotics and AI are strictly related, converging (particularly among the related technologies) and jointly shaping a new knowledge base that should be considered as a whole, rather than consisting of two separate GPTs; (iv) the U.S. technological leadership turns out to be confirmed.
    Keywords: Robotics, Artificial Intelligence, General Purpose Technology, Technological Paradigm, Industry 4.0, Patents full-text
    JEL: O33
    Date: 2021–01
  5. By: Iwasaki, Ichiro; Kočenda, Evžen; Shida, Yoshisada
    Abstract: In this paper, we traced the survival status of 94,401 small businesses in 17 European emerging markets from 2007–2017 and empirically examined the determinants of their survival, focusing on institutional quality and financial development. We found that institutional quality and the level of financial development impact the survival probability of the researched SMEs in statistically significant and economically meaningful ways. The evidence holds even when we control for a set of firm-level characteristics such as ownership structure, financial performance, firm size, and age. The findings are also uniform across industries and country groups and robust beyond the difference in assumption of hazard distribution, firm size, region, and time period.
    Keywords: small business, institutions, financial development, survival analysis, European emerging markets
    JEL: C14 D02 D22 G33 M21
    Date: 2021–01
  6. By: Camino-Mogro, Segundo
    Abstract: Business creation is an important measure of real economic activity because it shows the dynamics with which new firms are born, create jobs, move their capital, innovate and compete with old firms. In this sense, this paper analyzes the impact of the lockdown policies implemented to stop the spread of the COVID-19 on the creation of new formal firms in Ecuador. I use a regression discontinuity in time (RDiT) design jointly with official administrative real-time data, and find an overall large decrease in the creation of new formal firms (-73%) but also in the total amount of capital coming from the new formal firms (-40%). Additionally, my results suggest that the negative impacts of the COVID-19 lockdown on creation of new formal firms do not diminish over the time, in particular after one month and a half. Finally, I show that the March 16 lockdown measures help to explain only the observed changes in creation of new formal firms occurred the day after their announcement and not other changes that predate or follow these announcements. The main conclusion is that lockdown policies have a negative impact on firm creation, result that is of high policy relevance which can be a tool to design business attraction policies.
    Keywords: COVID-19; Lockdown; New firms; Regression Discontinuity; Ecuador
    JEL: G38 M13 M21
    Date: 2020–11–23
  7. By: Jack Blundell
    Abstract: One in seven people in the UK workforce is now in self-employment - but this is a very diverse community. Jack Blundell is developing a typology of self-employed workers, which can then be used to assess differences in how satisfied they are with their working lives and to identify vulnerable groups who may benefit from policy support.
    Keywords: self-employment,gig economy, worker characteristics
    Date: 2020–03
  8. By: Wolfgang Keller; Teresa Molina; William W. Olney
    Abstract: This paper examines gender differences among top business executives using a large executive-employer matched data set spanning the last quarter century. Female executives make up 6.2% of the sample and we find they exhibit more labor market churning – both higher entry and higher exit rates. Unconditionally, women earn 26% less than men, which decreases to 7.9% once executive characteristics, firm characteristics, and in particular job title are accounted for. The paper explores the extent to which firm-level temporal flexibility and corporate culture can explain these gender differences. Although we find that women tend to select into firms with temporal flexibility and a female-friendly corporate culture, there is no evidence that this sorting drives the gender pay gap. However, we do find evidence that corporate culture affects pay gaps within firms: the within-firm gender pay gap disappears entirely at female-friendly firms. Overall, while both corporate culture and flexibility affect the female share of employment, only corporate culture influences the gender pay gap.
    JEL: G30 J33 M14 M52
    Date: 2020–12
  9. By: Antoine Goujard; Pierre Guérin
    Abstract: The rapid internationalisation of the Polish economy has helped develop competitive export-led manufacturing and services sectors fostering robust growth and productivity performance. However, the benefits of this development have been unequal. Many small and medium-sized enterprises (SMEs), some regions and social groups have lagged behind. Poland’s integration into world trade has largely focussed on downstream activities of value chains and relatively labour-intensive products that incorporate little domestic value added. The coronavirus (COVID-19) crisis has put additional pressures on SMEs. A broad range of well-coordinated policies is required to boost SMEs’ internationalisation and their productivity, while easing labour reallocation during the ongoing recovery. Providing stronger support for training programmes in smaller firms and within small firms’ networks would help them upgrade the skills of their workforce, notably for their managers, and ease new technology adoption and internationalisation. Streamlining regulations on start-ups and limiting regulatory and tax barriers to firm expansion would raise firm entry and growth. Strengthening post-insolvency second chance policies for honest entrepreneurs would ease resource reallocation and the adaptation of SMEs to an uncertain and rapidly changing international environment. Improving transport and digital infrastructure would lower trade costs and raise productivity. Ensuring that innovation policies adapt to smaller firms would boost their innovativeness and ease their integration in national and international value chains.
    Keywords: Digitalisation, Global Value Chains (GVCs), Poland, Productivity, SMEs
    JEL: F1 F2 F6 L1 O3
    Date: 2021–01–27

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