nep-ent New Economics Papers
on Entrepreneurship
Issue of 2021‒02‒15
nine papers chosen by
Marcus Dejardin
Université de Namur

  1. Selection into entrepreneurship and self-employment By Rubinstein, Yona; Levine, Ross
  2. The Organization of Innovation: Property Rights and the Outsourcing Decision By Thomas Jungbauer; Sean Nicholson; June Pan; Michael Waldman
  3. Informing Entrepreneurs: Public Corporate Disclosure and New Business Formation By Barrios, John M.; Choi, Jung Ho; Hochberg, Yael V.; Kim, Jinhwan; Liu, Miao
  4. Gender Match and the Gender Gap in Venture Capital Financing: Evidence from Shark Tank By Jetter, Michael; Stockley, Kieran
  5. Economic Assessment of the Igbo Entrepreneurship Model for Entrepreneurial Development in Nigeria: Evidence from Clusters in Anambra State By Chukwunonso Ekesiobi; Stephen K. Dimnwobi
  6. Habits of Mind for Entrepreneurship Education By Deon Van Tonder; Adri Du Toit
  7. Kirzner and Rothbard on an Austrian theory of entrepreneurship: the heirs of both Menger and Mises discuss action and the role of institutions By Gilles Campagnolo; Christel Vivel
  8. Value capture dynamics – opportunity-driven changes By Najda-Janoszka, Marta
  9. PESTEL Analysis of External Environment as a Success Factor of Startup Business By Ivana Marinovic Matovic

  1. By: Rubinstein, Yona; Levine, Ross
    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 highlyremunerated 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 selfemployed are not; and entrepreneurship is procyclical, but self-employment is countercyclical.
    Keywords: entrepreneurship; human capital; occupational choice; corporate finance; business cycles
    JEL: J24 G32 E32
    Date: 2020–10
  2. By: Thomas Jungbauer; Sean Nicholson; June Pan; Michael Waldman
    Abstract: Why do firms outsource research and development (R&D) for some products while conducting R&D in-house for similar ones? An innovating firm risks cannibalizing its existing products. The more profitable these products, the more the firm wants to limit cannibalization. We apply this logic to the organization of R&D by introducing a novel theoretical model in which developing in-house provides the firm more control over the new product’s location in product space. An empirical analysis of our testable predictions using pharmaceutical data concerning patents, patent expiration, and outsourcing at various stages of the R&D process supports our theoretical findings.
    JEL: D23 L24 L65 O32
    Date: 2021–01
  3. By: Barrios, John M. (Washington U in St Louis); Choi, Jung Ho (Stanford U); Hochberg, Yael V. (Rice U); Kim, Jinhwan (Stanford U); Liu, Miao (Boston College)
    Abstract: We examine the relationship between public firm disclosure and aggregate new business formation. Consistent with the notion that public company disclosures provide information spillovers that reduce the extent of uncertainty about new investment opportunities, we find that increased public firm presence is positively associated with new business formation in an industry. Furthermore, using plausibly exogenous information shocks generated by new IPOs in a geographic area, we find that post-IPO, new business registration in the public company's geographic area rise by 4 to 10%, consistent with soft information channels serving to reinforce hard information in public disclosures. New IPOs are associated with significant increases in Edgar downloading activity in the IPOs' geographic area, consistent with the notion that public firm disclosures are providing important investment opportunity information that facilitates new business formation.
    JEL: D80 D81 D83 L26 M41
    Date: 2020–11
  4. By: Jetter, Michael (University of Western Australia); Stockley, Kieran (University of Western Australia)
    Abstract: Although the gender gap in entrepreneurs' success rates to secure funding is staggering, we know little about its causes. This is because observing both sides of investor-entrepreneur interactions (especially for unsuccessful pitches) is difficult in reality, and the associated extraordinary stakes complicate appropriate simulations in the laboratory. Using comprehensive data of 4,893 interactions from the popular US television show Shark Tank, we test whether gender match with entrepreneurs can explain investors' likelihood to extend funding offers. We find female investors are 30% more likely to engage with female (rather than male) entrepreneurs, while no systematic gender preferences emerge for male investors. This result is exclusive to entrepreneurs in non-male-dominated product categories but disappears in male-dominated products. Estimates are robust to the inclusion of a comprehensive set of control variables (such as asking valuation, investor-, and season-fixed effects) and a range of alternative specifications. These findings from a field setting with large, real-life stakes provide empirical support for the industry representation hypothesis regarding the gender gap in venture capital funding. While results should be interpreted with caution, our findings suggest increased numbers of women in key venture capital positions could facilitate access to funds for female entrepreneurs. Nevertheless, our setting is not suited to fully explore associated efficiency considerations.
    Keywords: gender interaction effects, gender differences, venture capital financing, field data, high stakes bargaining
    JEL: D91 G11 G24 G41 J16
    Date: 2021–01
  5. By: Chukwunonso Ekesiobi (Anambra state, Nigeria); Stephen K. Dimnwobi (Anambra state, Nigeria)
    Abstract: Purpose – This study presents an economic investigation of the entrepreneurship practise of the Igbos of South-Eastern Nigeria. It is intended to deepen entrepreneurial development and employment generation in the country. This study also provides empirical support to situate the Igbo entrepreneurship model (IEM) among existing entrepreneurship literature, particularly for research in developing countries. Design/methodology/approach – The study adopts a quantitative approach to examine 1187 responses carefully drawn from the Onitsha and Nnewi business clusters in Anambra state. In addition to descriptive demonstrations, the Propensity Score Matching (PSM) technique is employed to estimate the effects of treatment on the treated by pairing treatment and control units with similar attributes on the propensity score and other likely covariates. Specifically, the PSM is used to perform a counterfactual analysis of the effect of the entrepreneurship model on business outcomes by examining participants and non-participants in the IEM. Findings – The key findings of the study indicate that entrepreneurs who participated in the IEM have higher business survival rate, business growth rate and access to trade and informal credit, while non-IEM entrepreneurs have better access to formal credit source than the IEM graduates. Research Limitations/Implications – Generalisation of results can be limited since the study is based on responses of samples drawn from two clusters (Onitsha and Nnewi) in Anambra State, South-East Nigeria. The clusters, though situated in Igbo land, are not the only Igbo business locations in the South-East region and the rest of the country. However, with the larger number of the respondents and synchronisation with existing literature in this subject area guarantee the robustness and applicability of the study findings. Originality/value – The novelty of this study rests on its pioneering attempt to empirically examine how the IEM can drive entrepreneurial development in Nigeria. We also distil lessons for evidenced-based replication of the model to provide a sustainable employment channel for the country. The study posits, among other things, that the IEM can be a veritable approach for enterprise development and youth employment in Nigeria.
    Keywords: Igbo Entrepreneurship Model, Business outcomes, Clusters, Nigeria
    Date: 2020–01
  6. By: Deon Van Tonder (North-West University, South Africa); Adri Du Toit (North-West University, South Africa)
    Abstract: Entrepreneurship education is vital to ameliorate the high youth unemployment rate in South Africa. As part of efforts to augment entrepreneurship education, purposeful teacher training is needed. Integral in this pursuit is the amendment and development of teachers’ entrepreneurial mindset. The concept of ‘mindset’ is, however, ambiguous, as literature uses this term interchangeably with concepts such as 21st century skills, soft skills, non-cognitive skills, or character strengths. When a new teacher training program for entrepreneurship education was being developed, it was necessary to investigate and analyze all these skills or characteristics, to ascertain which aspects should be included in the program to contribute to the entrepreneurial mindset that was envisioned for these teachers. An exploratory qualitative literature review was conducted from a constructivist point of view. Accessible literature on ‘entrepreneurship education’ and ‘entrepreneurial mindset’ was systematically and thematically analyzed to explore the contribution of various types of skills and characteristics to the construction of an entrepreneurial mindset, in preparation for entrepreneurship education. The findings revealed that several skills, characteristics and habits contribute to the development of positive entrepreneurial mindsets. These included several references to the ‘Habits of Mind’ proposed by Costa and Kallick (2008). Subsequent comprehensive analysis was conducted to explore the pertinence of the Habits of Mind for developing teachers’ entrepreneurial mindsets as part of their preparation to facilitate entrepreneurship education. A recommendation was made for the inclusion of all the Habits of Mind to contribute to fostering positive entrepreneurial mindsets as part of teacher training for entrepreneurship education.
    Keywords: 21st century skills, entrepreneurial mindset, entrepreneurship education, habits of mind, teacher training
    Date: 2020–10
  7. By: Gilles Campagnolo (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique); Christel Vivel (ESDES - École de management de Lyon - Université Catholique de Lyon)
    Abstract: This paper is the last part of a trilogy on the theory and history of entrepreneurship in Austrian school of economics. The triptych ends with contemporary members by comparing Israel Kirzner and Murray Rothbard. The migration of the Austrian school induced a new assessment of Austrian traits in a new setting. While we do not focus on the history of the Austrian school in America as such, we will stress how Kirzner focused his view of entrepreneurship on the concepts of alertness, discovery by opportunity and the equilibrating action of the entrepreneur – while Rothbard's contribution was more ideologically engaged.
    Keywords: methodology,institutions,Kirzner (Israel),Austrian School of Economics,entrepreneurship,Rothbard (Murray).
    Date: 2020–12
  8. By: Najda-Janoszka, Marta
    Abstract: The study addresses the gap in the research concerning the dynamics of the value capture process. The aim is to enhance the understanding of the dynamics of value appropriation by identifying those decision-making practices and strategic behaviours that are entrepreneurial in nature. The conceptual discussion is supported by the empirical research governed by a multiple case design. The longitudinal study generated valuable insights into the processual character of value appropriation, as well as into its variable, not always linear, occurrence with value creation. The collected data provide rich evidence of opportunity-driven changes in the value capture action lines.
    Keywords: entrepreneurial orientation, value capture, value appropriation, opportunity
    JEL: L14 L24 O33
    Date: 2020
  9. By: Ivana Marinovic Matovic (Addiko Bank AD, Belgrade, Serbia)
    Abstract: The objective of this paper is to present the purpose of PESTEL analysis as a critical factor for startup success. It proposes the use of PESTEL analysis as a tool to evaluate the business environment for startup organizations, with emphasis on the most common challenges faced by startups in conducting a PESTEL assessment. The main goal of the paper is to provide an overview of the situation, identify areas of importance for improvement, and define guidelines for startup business, with the aim of increasing competitiveness. Contribution of the paper is theoretical and empirical, in the specific context of PESTEL analysis for startup business.
    Keywords: PESTEL analysis, business environment, start-up, organisation, entrepreneurship
    Date: 2020–09

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