nep-ent New Economics Papers
on Entrepreneurship
Issue of 2021‒02‒08
eight papers chosen by
Marcus Dejardin
Université de Namur

  1. Selection into entrepreneurship and self-employment By Ross Levine; Yona Rubinstein
  2. Investors Embrace Gender Diversity, Not Female CEOs: The Role of Gender in Startup Fundraising By Christopher Cassion; Yuhang Qian; Constant Bossou; Margareta Ackerman
  3. Revisiting the Entrepreneurial Commercialization of Academic Science: Evidence from “Twin” Discoveries By Matt Marx; David H. Hsu
  4. Using Enterprise Zones to Attract the Creative Class: Some Theoretical Issues By Batabyal, Amitrajeet; Yoo, Seung Jick
  5. Micro-foundations of small business internationalization: introduction to the Special Section By Johanna Vanderstraeten; Ellen Loots; Anais Hamelin; Arjen van Witteloostuijn
  6. Investigation of Institutional and Legislative Barriers and Drivers for Sustainable Transition Development of SMEs in Sri Lanka: A Literature Review By Rajapakshe, PSK; Jayasundara, JMSB; Prasanna, RPIR; Ekanayake, EMS; Naradda Gamage, Sisira Kumara; Abeyrathne, GAKNJ; Aravinda, MAKN; Bandara, KBTUK; Senarath, BTDN
  7. The Effect of leadership style and organizational culture on performance of small and medium enterprises in Jig-Jiga city: A Literature Review By Debebe, Regan
  8. No inventor is an island: social connectedness and the geography of knowledge flows in the US By Andreas Diemer; Tanner Regan

  1. By: Ross Levine; Yona Rubinstein
    Abstract: We study the effects of ability and liquidity constraints on entrepreneurship. We develop a three sector Roy model that differentiates between entrepreneurs and other self-employed to address puzzling gaps that have emerged between theory and evidence on entry into entrepreneurship. The model predicts—and the data confirm—that entrepreneurs are positively selected on highly-remunerated cognitive and non-cognitive human capital skills, but other self-employed are negatively selected on those same abilities; entrepreneurs are positively selected on collateral, but other self-employed are not; and entrepreneurship is procyclical, but self-employment is countercyclical.
    Keywords: entrepreneurship, human capital, occupational choice, corporate finance, business cycles
    JEL: L26 J24 G32 E32
    Date: 2020–10
  2. By: Christopher Cassion; Yuhang Qian; Constant Bossou; Margareta Ackerman
    Abstract: The allocation of venture capital is one of the primary factors determining who takes products to market, which startups succeed or fail, and as such who gets to participate in the shaping of our collective economy. While gender diversity contributes to startup success, most funding is allocated to male-only entrepreneurial teams. In the wake of COVID-19, 2020 is seeing a notable decline in funding to female and mixed-gender teams, giving raise to an urgent need to study and correct the longstanding gender bias in startup funding allocation. We conduct an in-depth data analysis of over 48,000 companies on Crunchbase, comparing funding allocation based on the gender composition of founding teams. Detailed findings across diverse industries and geographies are presented. Further, we construct machine learning models to predict whether startups will reach an equity round, revealing the surprising finding that the CEO's gender is the primary determining factor for attaining funding. Policy implications for this pressing issue are discussed.
    Date: 2021–01
  3. By: Matt Marx; David H. Hsu
    Abstract: Which factors shape the commercialization of academic scientific discoveries via startup formation? Prior literature has identified several contributing factors but does not address the fundamental problem that the commercial potential of a nascent discovery is generally unobserved, which potentially confounds inference. We construct a sample of approximately 20,000 “twin” scientific articles, which allows us to hold constant differences in the nature of the advance and more precisely examine characteristics that predict startup commercialization. In this framework, several commonly-accepted factors appear not to influence commercialization. However, we find that teams of academic scientists whose former collaborators include “star” serial entrepreneurs are much more likely to commercialize their own discoveries via startups, as are more interdisciplinary teams of scientists.
    JEL: L26
    Date: 2020–12
  4. By: Batabyal, Amitrajeet; Yoo, Seung Jick
    Abstract: We study decision-making by a regional authority (RA) that uses enterprise zones to attract members of the creative class---referred to as entrepreneurs---to its region. The enterprise zones provide a local public good (LPG) L to entrepreneurs who become members. First, we compute the utility maximizing number of entrepreneurs N to attract and the optimal provision level of the LPG. Second, if the LPG L is chosen optimally, then, given N, we determine an expression for the utility of an entrepreneur. Third, we calculate how much an entrepreneur would be willing to pay to become a member of an enterprise zone and then discuss the potential existence of an efficient and revenue-neutral equilibrium. Finally, we comment on some theoretical difficulties stemming from the twin facts that the number of enterprise zones created and the number of entrepreneurs attracted to these zones have to be integers.
    Keywords: Creative Class, Enterprise Zone, Entrepreneur, Local Public Good, Membership
    JEL: R11 R58
    Date: 2020–12–03
  5. By: Johanna Vanderstraeten (Universiteit Antwerpen [Antwerpen]); Ellen Loots (Erasmus University Rotterdam); Anais Hamelin (LARGE - Laboratoire de Recherche en Gestion et Economie - UNISTRA - Université de Strasbourg); Arjen van Witteloostuijn (Universiteit Antwerpen [Antwerpen])
    Abstract: Purpose: We introduce and summarize the selected papers of the Special Section on the "Micro-Foundations of Small Business Internationalization and briefly summarize the state-of-the-art of this literature stream. Design/methodology/approach: We briefly summarize the state-of-the-art of the literature regarding the micro-foundations of small business internationalization. Then, we summarize the selected papers of the Special Section, highlighting their main contributions. We end with suggesting future research avenues. Findings: We move beyond the usual suspects such as gender, education and experience to bring together internationalization studies that open up the individual lens to small business internationalization. To do so, we selected papers examining deeper-level behavioural and psychological constructs impacting the internationalization process, going from internationalization intention to internationalization behaviour and eventually leading to internationalization performance. Originality/value: We stress the importance of the entrepreneur as a person to better understand small business internationalization. We address the current lack of attention attributed to psychological and behavioural drivers (e.g. motives, attitudes, ambitions and aspirations) throughout the internationalization process, and we urge future researchers to further develop this research stream
    Keywords: Micro-foundation,Personality,Entrepreneur,Internationalization,SME,Small business,Cross Cultural & Strategic Management Small business,SMEs
    Date: 2020
  6. By: Rajapakshe, PSK; Jayasundara, JMSB; Prasanna, RPIR; Ekanayake, EMS; Naradda Gamage, Sisira Kumara; Abeyrathne, GAKNJ; Aravinda, MAKN; Bandara, KBTUK; Senarath, BTDN
    Abstract: It is well documented that Small and Medium Enterprises (SMEs) are recognized as the key to economic growth, innovations and market competition in both developed and developing countries. In Sri Lankan context SMEs play a noteworthy role in environmental, social and economic sustainability. This paper attempted to investigate institutional and legislative barriers and to explore the drivers affecting towards the sustainable transition development of Sri Lankan SMEs, through a systemic literature review. In this study researchers developed model framework for sustainable transition development of SMEs and filled the gap of literature interms of institutional and legislative barriers and drivers on SMEs sustainability. Findings of this study will provide directions for further invetigations on barriers and drivers for sustainable transition development of SMEs in an empirical context which certainly helpful to find out the case specific and unique divers and barriers for sustainability of SMEs.
    Keywords: Institutonal Barriers, Economic Growth, Sustainable Transition Development, Economic Sustainability, SMEs, Sri Lanka
    JEL: L10
    Date: 2020–12–30
  7. By: Debebe, Regan
    Abstract: This research study examined the relationship between, leadership styles, organizational culture and organizational performance. In other words, it looked at the effects of a leadership styles and organization’s culture uses on its overall performance. Therefore, the problem of this study is to determine whether leadership styles and Organizational culture affect Organizational Performance. The main objectives of this research are to assess whether leadership styles affect organizational performance and to assess whether organizational culture affects organizational performance. The research is a conceptual research. Explanatory Research Design is used in the study. And all data used in this research are obtained from secondary sources. That is, they are data from the findings of previous research works on leadership and culture on performance.
    Keywords: leadership style, organization culture, performance of small and medium enterprises
    JEL: M00
    Date: 2020–12–22
  8. By: Andreas Diemer; Tanner Regan
    Abstract: Do informal social ties connecting inventors across distant places promote knowledge flows between them? To measure informal ties, we use a new and direct index of social connectedness of regions based on aggregate Facebook friendships. We use a well-established identification strategy that relies on matching inventor citations with citations from examiners. Moreover, we isolate the specific effect of informal connections, above and beyond formal professional ties (co-inventor networks) and geographic proximity. We identify a significant and robust effect of informal ties on patent citation. Further, we find that the effect of geographic proximity on knowledge flows is entirely explained by informal social ties and professional networks. We also show that the effect of informal social ties on knowledge flows: has become increasingly important over the last two decades, is higher for older or `forgotten' patents, is more important for new entrepreneurs or `garage inventors', and is somewhat stronger across distant technology fields.
    Keywords: knowledge flows, diffusion, social connectedness, informal networks
    JEL: O33 R12 Z13
    Date: 2020–11

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