nep-ent New Economics Papers
on Entrepreneurship
Issue of 2021‒03‒01
nine papers chosen by
Marcus Dejardin
Université de Namur

  1. Venture Capitalists and COVID-19 By Paul Gompers; Will Gornall; Steven N. Kaplan; Ilya A. Strebulaev
  2. COVID-19: a crisis of the female self-employed By Graeber, Daniel; Kritikos, Alexander S.; Seebauer, Johannes
  3. Fencing Off Silicon Valley: Cross-Border Venture Capital and Technology Spillovers By Ufuk Akcigit; Sina T. Ates; Josh Lerner; Richard R. Townsend; Yulia Zhestkova
  4. Entrepreneurship, growth and productivity with bubbles By Lise Clain-Chamosset-Yvrard; Xavier Raurich; Thomas Seegmuller
  5. Experience versus youth: An exploratory study of the motivations of older entrepreneurs By Gillian Gray; Helen Lawton Smith
  6. Financing Innovation: A Complex Nexus of Risk & Reward By Dutta, Sourish
  7. Local entrepreneurship ecosystems and emerging industries: Case study of Cambridgeshire and Peterborough, United Kingdom By OECD
  8. Market study to understand job growth potential in SMEs in Nepal By Irwin, David; Ibrahim, Nada
  9. Digital infrastructure for the internationalization of small and medium-sized enterprises in the Republic of Korea By Lee, Jonhoo

  1. By: Paul Gompers (Harvard University - Harvard Business School; NBER); Will Gornall (University of British Columbia - Sauder School of Business); Steven N. Kaplan (University of Chicago - Booth School of Business; NBER); Ilya A. Strebulaev (Stanford University - Graduate School of Business; NBER)
    Abstract: We survey over one thousand institutional and corporate venture capitalists (VCs) on how the COVID-19 pandemic has affected their decisions and investments. Although individual funds and portfolio companies have been dramatically impacted, VCs expect aggregate returns to be largely unchanged because winners have offset losers. This suggests the primary impact of COVID-19 has been an increase in volatility and uncertainty. Consistent with that, VCs report initially delaying investment due to a difficulty evaluating deals and an expectation that future financings will offer investors more downside protections. We find only moderate evidence of disruption to VC capital flows, with investment expected to be down less than one-fifth, and only one-sixth of VCs reporting any pressure from limited partners to conserve capital. Despite the historical importance of in-person meetings, VCs do not report difficulty finding quality entrepreneurs. We also find little change in how VC allocate their time in the pandemic compared to before the pandemic. Finally, our outcome measures are not correlated with local COVID-19 impact.
    Keywords: Venture capital, entrepreneurship, COVID-19, coronavirus, pandemic
    JEL: G24
    Date: 2020
  2. By: Graeber, Daniel; Kritikos, Alexander S.; Seebauer, Johannes
    Abstract: We investigate how the economic consequences of the pandemic, and of the governmentmandated measures to contain its spread, affect the self-employed – particularly women – in Germany. For our analysis, we use representative, real-time survey data in which respondents were asked about their situation during the COVID-19 pandemic. Our findings indicate that among the self-employed, who generally face a higher likelihood of income losses due to COVID-19 than employees, women are 35% more likely to experience income losses than their male counterparts. Conversely, we do not find a comparable gender gap among employees. Our results further suggest that the gender gap among the self-employed is largely explained by the fact that women disproportionately work in industries that are more severely affected by the COVID-19 pandemic. Our analysis of potential mechanisms reveals that women are significantly more likely to be impacted by government-imposed restrictions, i.e. the regulation of opening hours. We conclude that future policy measures intending to mitigate the consequences of such shocks should account for this considerable variation in economic hardship.
    Keywords: Self-employed,COVID-19,income,gender,representative real-time survey data,decomposition methods
    JEL: J16 L26 J31 J71 I18
    Date: 2021
  3. By: Ufuk Akcigit (University of Chicago - Department of Economics; NBER; CEPR); Sina T. Ates (Federal Reserve Board of Governors); Josh Lerner (Harvard University - Harvard Business School; NBER); Richard R. Townsend (University of California at San Diego - Rady School of Management); Yulia Zhestkova (University of Chicago - Department of Economics)
    Abstract: The treatment of foreign investors has been a contentious topic in U.S. entrepreneurship policy in recent years. This paper examines foreign corporate investments in Silicon Valley from a theoretical and empirical perspective. We model a setting where such funding may allow U.S. entrepreneurs to pursue technologies that they could not otherwise, but may also lead to spillovers to the overseas firm providing the financing and the nation where it is based. We show that despite the benefits from such inbound investments for U.S. firms, it may be optimal for the U.S. government to raise their costs to deter investments. Using as comprehensive as possible a sample of investments by non-U.S. corporate investors in U.S. start-ups between 1976 and 2015, we find evidence consistent with the presence of knowledge spill-overs to foreign investors.
    Keywords: Innovation, foreign direct investment, corporate venture capital
    JEL: G24 O33 O34
    Date: 2020
  4. By: Lise Clain-Chamosset-Yvrard (Univ. Lyon, Université Lumière Lyon 2, GATE UMR 5824, F-69130 Ecully, France); Xavier Raurich (University of Barcelona, Department of Economics, Av. Diagonal 696, 08034 Barcelona (Spain)); Thomas Seegmuller (Aix-Marseille Univ, CNRS, AMSE, Marseille, France.)
    Abstract: Entrepreneurship, growth and total factor productivity are larger when there is a financial bubble. We explain these facts using a growth model with financial bubbles in which individuals face heterogeneous wages and returns on productive investment. The heterogeneity in the return of in- vestment separates individuals between savers and entrepreneurs. Savers buy financial assets, which are deposits or a financial bubble. Entrepreneurs incur in a start-up cost and borrow to invest in productive capital. The bubble provides liquidities to credit-constrained entrepreneurs. These liquidities increase investment and entrepreneurship when the start- up cost is large enough, which explains that growth and entrepreneurship can be larger with bubbles. Finally, productivity can be larger when the bubble further increases the investment of more productive entrepreneurs. This can occur when the return of investment is correlated with wages.
    Keywords: bubble, entrepreneurship, growth, productivity
    JEL: E22 E44 G12
    Date: 2021–02
  5. By: Gillian Gray (Centre for Innovation Management Research, Birkbeck, University of London, UK); Helen Lawton Smith (Department of Management, Birkbeck College, University of London)
    Date: 2020–08
  6. By: Dutta, Sourish
    Abstract: The crucial and growing role performed by different financial intermediaries such as venture capitalists and angel investors as well as more traditional intermediaries such as commercial banks in developing entrepreneurial or innovative firms and boosting product market innovations has led to great research interest in the economics of innovation and entrepreneurial finance. Besides this, there are some important factors or developments which have affected the entrepreneurial finance in general as well as its influence upon different entrepreneurial or innovative firms. Indeed, it is also true that the financial and ownership structures of the different entrepreneurial firms and the legal as well as the institutional environment, in which they operate, itself affects the product market innovations (Chemmanur and Fulghieri, 2014). Therefore, in this paper, I want to target a broad theme i.e. analysis of the mechanisms behind this scenario, especially, in the context of the Indian market system.
    Date: 2019–12–16
  7. By: OECD
    Abstract: This paper examines how local-level policies can strengthen entrepreneurship and innovation in the region of Cambridgeshire and Peterborough in the United Kingdom. It investigates the quality of the local entrepreneurship ecosystem for generating innovative start-ups and scale-ups and the regional conditions for generating positive industry transitions by supporting the strategic sectors of life sciences, information technologies, agri-tech and advanced manufacturing. Key areas of focus are on skills development, entrepreneurship development and knowledge exchange for local economic development. A number of policy recommendations are offered based on the analysis together with international inspiring policy practice examples.
    Keywords: entrepreneurship, industry transition, knowledge exchange, regional policy, skills
    JEL: J24 L52 L53 R58
    Date: 2021–02–02
  8. By: Irwin, David; Ibrahim, Nada
    Abstract: This report identifies and quantifies Nepal's key jobs challenges and the implications for future job creation, job quality and gender disparities. The diagnostic examines the slow pace of structural transformation, the existing distribution of jobs by work status, productivity level and worker characteristics, and the role of migration in absorbing excess labor supply. The analysis of private sector labor demand finds that most firms are micro-sized, and the pace of wage job creation – although increasing – is insufficient to absorb job seekers, especially women. A new SME survey conducted for this study concludes that small firms struggle to compete and access credit, and they lack the capacity to obtain the skills and other inputs necessary to increase their product quality, ultimately limiting their growth capacity. Nepal's business environment and labor regulations create further impediments to dynamic, job-creating economic growth. A set of policy recommendations is offered to mitigate labor demand and supply challenges to achieve better labor outcomes in Nepal.
    Keywords: entrepreneur; small and medium enterprise; Market Studies; market study; Micro, Small and Medium Enterprise; job growth; higher level of education; know how; sales revenue; use of technology; business support; high skilled labour; access to finance; full time equivalent; number of technologies; venture capital fund; reliance on foreign; high school education; job creation potential; business environment constraints; introducing new products; limited liability company; proportion of woman; parameter of interest; existing knowledge; tourism sector; market opportunity; economic census; agricultural product; rural business; retained earnings; value added; average employment; rural location; urban location; employment option; focus group; firm size; domestic demand; skilled labor; constituent assembly; total sample; other sectors; income supplement; industrial sector; daily wage; labour market; firm growth; microfinance institution; educated entrepreneur; Higher Education; postgraduate qualification; high employment; low risk; female entrepreneur; sole proprietorship; sampling frame; future research; new job; micro firms; Market Intelligence; trade mission; trade fair; financial readiness; financial packaging; networking event; seed capital; informant interviews; government representative; population profile; survey design; financial matter; sensitive topics; financial question; longer period; Food Services; company registration; population figures; new market; local development; employment opportunities; employment opportunity; rural setting; urban market; skilled people; solving problem; regression analysis; labour productivity; salaried employment; productivity increase; temporary worker; tourism business; quality improvement; passive attitude; business interest; external market; primary focus; international market; domestic consumer; international demand; in work; working capital; primary source; loan finance; additional saving; secure future; exporting firms; young people; Basic Education; piece rate; temporary labour; labour law; investment level; import product; food processor; foreign market; positive correlation; carpet manufacturer; international sale; tourism services; access market; Doing Business Reports; internal communication; stock control; Technical Training; production process; skilled operator; manufacturing technology; import tariff; market potential; modern world; business finance; entrepreneurship support; SME sector; overall assessment; research method; private consumption; considerable difference; innovative start-ups; labour intensive; investment finance; support for entrepreneur; affordable finance; investment climate; International Trade; outward migration; basic skill; unemployment rate; economic diversification; cultural elements; knowledge network; market failure; SME support; high-risk venture; industrial job; work force; industrial establishments; food processing
    Date: 2019–09–01
  9. By: Lee, Jonhoo
    Abstract: Small and medium-sized enterprises (SMEs) account for a significant share of the exports of the Republic of Korea, in large part thanks to the sophisticated digital support infrastructure available to these firms. This document analyses how the government implemented this infrastructure over the last decades in close coordination with the private sector. It also presents the prominent institutions and their digital SME export support instruments. Lastly, it identifies some future challenges and recommendations for Latin America and the Caribbean.
    Date: 2021–02–15

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