nep-ent New Economics Papers
on Entrepreneurship
Issue of 2021‒03‒29
eighteen papers chosen by
Marcus Dejardin
Université de Namur

  1. Do Elite Colleges Matter? The Impact on Entrepreneurship Decisions and Career Dynamics By Naijia Guo; Charles Ka Yui Leung
  2. Founding Teams and Startup Performance By Joonkyu Choi; Nathan Goldschlag; John C. Haltiwanger; J. Daniel Kim
  3. On Immigration and Native Entrepreneurship By Harriet Duleep; David A. Jaeger; Peter McHenry
  4. Remittances, Ethnic Diversity, and Entrepreneurship in Developing Countries By Isil R. Yavuz; Berrak Bahadir
  5. Design and Effectiveness of Start-up Subsidies: Evidence from a Policy Reform in Germany By Caliendo, Marco; Tübbicke, Stefan
  6. Urban Growth and its Aggreate Implications By Gilles Duranton; Diego Puga
  7. Testing the Differential Impact of COVID-19 on Self-Employed Women and Men in the United Kingdom By Reuschke, Darja; Henley, Andrew; Daniel, Elizabeth; Price, Victoria
  8. COVID-19 and SMEs: A 2021 "Time Bomb"? By Pierre-Olivier Gourinchas; Ṣebnem Kalemli-Özcan; Veronika Penciakova; Nick Sander
  9. Corporate Entrepreneurship Performance from an Attention-based View Perspective By Latasri Hazarika; M.K. Nandakumar
  10. Determinants of Corporate Entrepreneurship: A meta analysis By Latasri Hazarika; Sandeep Yadav; M.K. Nandakumar
  11. What are the key components of an entrepreneurial ecosystem in a developing economy? A longitudinal empirical study on technology business incubators in China By Xiangfei Yuan; Haijing Hao; Chenghua Guan; Alex Pentland
  12. Does the Legal Form Matter for Firm Performance in the MENA Region? By Ahmad, Issam Abdo; Fakih, Ali
  13. Scenario Planning and New Venture Creation By M.K. Nandakumar
  14. Modern risks of small businesses By A. R Baghirzade
  15. Towards a transformative Smart Specialisation Strategy: lessons from Catalonia, Bulgaria and Greece By MARINELLI Elisabetta; FERNÁNDEZ SIRERA Tatiana; PONTIKAKIS Dimitrios
  16. Exploring Recent Phenomena in Entrepreneurial Finance By Hackober, Christian
  17. L’économie informelle, une activité organisée « hors organisation » ? By Yvon Pesqueux
  18. Enquête sur les auto-entrepreneurs de la 'livraison instantanée' By Laetitia Dablanc; Anne Aguilera; Laurent Proulhac; Léa Wester; Nicolas Louvet; José Palomo Rivas

  1. By: Naijia Guo; Charles Ka Yui Leung
    Abstract: Elite college attendance significantly impacts students' entrepreneurship decisions and career dynamics. We find that an elite college degree is positively correlated with entrepreneurship (i.e., owning an incorporated business) but not with other self-employment forms. Our overlapping generations model captures self-selection in education and career choices based on heterogeneous ability and family wealth endowments over the life-cycle. Our estimates show that (1) entrepreneurs and other self-employed individuals require different types of human capital, and (2) elite colleges generate considerably more human capital gain than ordinary colleges, particularly for entrepreneurs. Distinguishing between elite and ordinary colleges improves our prediction of entrepreneurship decisions. Providing subsidies for elite colleges is more efficient than subsidizing their ordinary counterparts to encourage entrepreneurship, enhance intergenerational mobility, and enhance welfare. In contrast, although start-up subsidy increases entrepreneurship, it does not improve their performance, and it is inferior to education subsidy in generating efficiency, equality, and intergenerational mobility.
    Date: 2021–03
  2. By: Joonkyu Choi; Nathan Goldschlag; John C. Haltiwanger; J. Daniel Kim
    Abstract: We explore the role of founding teams in accounting for the post-entry dynamics of startups. While the entrepreneurship literature has largely focused on business founders, we broaden this view by considering founding teams as both the founders and early joiners. We investigate the idea that the success of a startup may derive from the organizational capital that is created at firm formation and is inalienable from the founding team itself. To test this hypothesis, we exploit premature deaths to identify the causal impact of losing a founding team member on startup performance. We find that the exogenous separation of a founding team member due to premature death has a persistently large, negative, and statistically significant impact on post-entry size, survival, and productivity of startups. Consistent with our organizational capital hypothesis, effects are stronger for firms with small founding teams and those operating in business-to-business (B2B) oriented sectors. Moreover, while we find that the loss of a founder has an especially large adverse effect, the loss of an early joiner nonetheless exhibits a significant negative effect, lending support to our inclusive definition of founding teams.
    JEL: J24 L23 L26
    Date: 2021–01
  3. By: Harriet Duleep (William & Mary, IZA, and GLO); David A. Jaeger (University of St. Andrews, CReAM, IZA, and CEPR); Peter McHenry (William & Mary and GLO)
    Abstract: We present a novel theory that immigrants facilitate innovation and entrepreneurship by being willing and able to invest in new skills. Immigrants whose human capital is not immediately transferable to the host country face lower opportunity costs of investing in new skills or methods and will be more exible in their human capital investments than observationally equivalent natives. Areas with large numbers of immigrants may therefore lead to more entrepreneurship and innovation, even among natives. We provide empirical evidence from the United States that is consistent with the theory's predictions.
    Keywords: immigration, innovation, entrepreneurship, human capital
    JEL: J15 J24 J39 J61 L26
    Date: 2021–03
  4. By: Isil R. Yavuz (Bryant University); Berrak Bahadir (Department of Economics, Florida International University)
    Abstract: This paper examines the moderating influence of home country ethnic diversity in the relationship between migrant remittances and new business creation in developing countries. By employing the theories of transaction cost, social network, social identity, and trust, we argue that ethnic diversity is negatively associated with new business creation; nevertheless, it strengthens the positive association between migrant remittances and new business creation in developing countries. We test our hypotheses on 64 developing countries over an 11-year period (2006-2016). This paper contributes to entrepreneurship literature by emphasizing the importance of home country ethnic diversity in channeling migrants’ remittances to new business creation in developing countries.
    Keywords: Migrant Remittances, New Business Creation, Ethnic Diversity, Developing Countries
    JEL: L26 M13 J15 F24
    Date: 2021–03
  5. By: Caliendo, Marco (University of Potsdam); Tübbicke, Stefan (Institute for Employment Research (IAB), Nuremberg)
    Abstract: While a growing body of literature finds positive impacts of Start-Up Subsidies (SUS) on labor market outcomes of participants, little is known about how the design of these programs shapes their effectiveness and hence how to improve policy. As experimental variation in program design is unavailable, we exploit the 2011 reform of the current German SUS program for the unemployed which strengthened case-workers' discretionary power, increased entry requirements and reduced monetary support. We estimate the impact of the reform on the program's effectiveness using samples of participants and non-participants from before and after the reform. To control for time-constant unobserved heterogeneity as well as differential selection patterns based on observable characteristics over time, we combine Difference-in-Differences with inverse probability weighting using covariate balancing propensity scores. Holding participants' observed characteristics as well as macroeconomic conditions constant, the results suggest that the reform was successful in raising employment effects on average. As these findings may be contaminated by changes in selection patterns based on unobserved characteristics, we assess our results using simulation-based sensitivity analyses and find that our estimates are highly robust to changes in unobserved characteristics. Hence, the reform most likely had a positive impact on the effectiveness of the program, suggesting that increasing entry requirements and reducing support increased the program's impacts while reducing the cost per participant.
    Keywords: start-up subsidies, institutions, policy reform, difference-in-differences
    JEL: J68 H43 L26
    Date: 2021–03
  6. By: Gilles Duranton (University of Pennsylvania); Diego Puga (CEMFI, Centro de Estudios Monetarios y Financieros)
    Abstract: We develop an urban growth model where human capital spillovers foster entrepreneurship and learning in heterogenous cities. Incumbent residents limit city expansion through planning regulations so that commuting and housing costs do not outweigh productivity gains. The model builds on strong microfoundations, matches key regularities at the city and economywide levels, and generates novel predictions for which we provide evidence. It can be quantified relying on few parameters, provides a basis to estimate the main ones, and remains transparent regarding its mechanisms. We examine various counterfactuals to assess quantitatively the effect of cities on economic growth and aggregate income.
    Keywords: Urban growth, agglomeration economies, urban costs, planning regulations, city size distributions.
    JEL: C52 R12 D24
    Date: 2020–06
  7. By: Reuschke, Darja (University of St. Andrews); Henley, Andrew (Cardiff University); Daniel, Elizabeth (The Open University); Price, Victoria (University of Southampton)
    Abstract: This paper investigates whether the female self-employed are more affected by the COVID-19 crisis than the male self-employed using longitudinal data four months following the first 'lockdown' in the UK. We specifically test the role of family/social, economic and psychological factors on gendered differential impact. We find that self-employment exits are not gendered but women are more likely to experience reductions in hours worked and earnings. This greater adverse impact on women's working hours and earnings is despite family responsibilities and home-schooling, industrial gender segregation and women's greater propensity to run a non-employing business and to work part-time. However, lower attitude to risk in women is associated with lower risk of reduction in earnings. Policy needs to look beyond business exits when considering crisis support for the self-employed.
    Keywords: entrepreneurship, self-employment, COVID-19, gender, labour supply
    JEL: J16 J22 L26
    Date: 2021–03
  8. By: Pierre-Olivier Gourinchas; Ṣebnem Kalemli-Özcan; Veronika Penciakova; Nick Sander
    Abstract: This paper assesses the prospects of a 2021 time bomb in SME failures triggered by the generous support policies enacted during the 2020 COVID-19 crisis. Policies implemented in 2020, on their own, do not create a 2021 “time-bomb” for SMEs. Rather, business failures and policy costs remain modest. By contrast, credit contraction poses a significant risk. Such a contraction would disproportionately impact firms that could survive COVID-19 in 2020 without any fiscal support. Even in that scenario, most business failures would not arise from excessively generous 2020 policies, but rather from the contraction of credit to the corporate sector.
    JEL: D2 E65 G33
    Date: 2021–01
  9. By: Latasri Hazarika (Indian Institute of Management Kozhikode); M.K. Nandakumar (Indian Institute of Management Kozhikode)
    Abstract: Leading organizations use corporate entrepreneurship as a key growth strategy. Many researchers have examined this phenomenon resulting in many publications in top tier journals. To understand the current state of the literature and to identify the key gaps, we did a comprehensive review of the papers on corporate entrepreneurship published in leading journals. We found that researchers by and large have used theoretical perspectives namely knowledge-based view, organizational theory, agency theory, entrepreneurial thinking, upper echelons theory, leadership theory, structural contingency, behavioral theory, network theory, and resource-based view to examine this phenomenon. Attention based view presents a theoretical model to understand the behavior of an organization from the attentional pattern of its decision makers and hence we found a need to examine corporate entrepreneurship from this perspective. Based on our assessment, we have identified some antecedents of corporate entrepreneurship and developed some propositions. We have presented a conceptual framework depicting the propositions we have developed.
    Keywords: Coorporate entrepreneurship, Growth strategy, Organizational theory
    Date: 2020–03
  10. By: Latasri Hazarika (Indian Institute of Management Kozhikode); Sandeep Yadav (Indian Institute of Management Kozhikode); M.K. Nandakumar (Indian Institute of Management Kozhikode)
    Abstract: Many scholars have enriched the corporate entrepreneurship literature by conducting empirical studies examining key research questions. There have been a few meta-analytic studies examining the impact of corporate entrepreneurship on organizational performance. However, ours is the first meta-analytic study conducting an integrative analysis of the determinants of corporate entrepreneurship. The current study therefore integrates the quantitative studies done to estimate the determinants of corporate entrepreneurship through a meta-analytic approach.We found that some meta factorslikemanagement support, environmental dynamism and reward system contributedsignificantly towards corporate entrepreneurship within established firms.
    Keywords: Coorporate entrepreneurship, Growth strategy, Organizational theory
    Date: 2020–03
  11. By: Xiangfei Yuan; Haijing Hao; Chenghua Guan; Alex Pentland
    Abstract: Since the 1980s, technology business incubators (TBIs), which focus on accelerating businesses through resource sharing, knowledge agglomeration, and technology innovation, have become a booming industry. As such, research on TBIs has gained international attention, most notably in the United States, Europe, Japan, and China. The present study proposes an entrepreneurial ecosystem framework with four key components, i.e., people, technology, capital, and infrastructure, to investigate which factors have an impact on the performance of TBIs. We also empirically examine this framework based on unique, three-year panel survey data from 857 national TBIs across China. We implemented factor analysis and panel regression models on dozens of variables from 857 national TBIs between 2015 and 2017 in all major cities in China and found that a number of factors associated with people, technology, capital, and infrastructure components have various statistically significant impacts on the performance of TBIs at either national model or regional models.
    Date: 2021–03
  12. By: Ahmad, Issam Abdo (Lebanese American University); Fakih, Ali (Lebanese American University)
    Abstract: This paper attempts to study the relationship between firm legal form and firm performance in the Middle East and North Africa Region (MENA) using the World Bank Enterprise Survey (WBES) database. Our analysis shows that open shareholding, closed shareholding, partnership, and limited partnership companies demonstrate an advantage in terms of annual sales and annual productivity growth rates over sole proprietorship firms, and that medium-sized and large-sized firms also demonstrate an advantage over small ones. Our analysis also shows that foreign ownership, exporting activities, the usage of the web in communication with clients and suppliers, and the presence of full-time workers positively affect firm performance. These findings are robust when running the analysis for firms with female participation in ownership. This paper provides directions for strategists targeting at improving the performance of firms.
    Keywords: legal form, firm performance, MENA region
    JEL: C10 G30 L25
    Date: 2021–03
  13. By: M.K. Nandakumar (Indian Institute of Management Kozhikode)
    Abstract: Scenario planning is a widely used technique in the strategic planning process. It can give critical inputs to the strategic planning process. Scenario planning is useful in gaining a good understanding of the opportunities and challenges which might emerge in the future. Hence it helps organizations to overcome uncertainties relating to their future to a large extent. Many risks characterize the new venture creation process. In this paper, I discuss the utility of scenario planning in helping start-ups to make crucial decisions during the business planning phase. First, I explain how scenario planning is conducted in organizations. Second, I discuss the critical elements of a business plan and explain the significant uncertainties faced by startups in this phase. Third, I discuss how scenario planning helps start-ups to overcome some of these uncertainties.
    Keywords: Scenario Planning, New Venture Creation, Business Plan
    Date: 2020–03
  14. By: A. R Baghirzade
    Abstract: An important area of anti-crisis public administration is the development of small businesses. They are an important part of the economy of developed and developing countries, provide employment for a significant part of the population and tax revenues to budgets, and contribute to increased competition and the development of entrepreneurial abilities of citizens. Therefore, the primary task of the state Federal and regional policy is to reduce administrative barriers and risks, time and resources spent on opening and developing small businesses, problems with small businesses ' access to Bank capital [8], etc. Despite the loud statements of officials, administrative barriers to the development of small businesses in trade and public catering are constantly increasing, including during the 2014-2016 crisis.
    Date: 2021–03
  15. By: MARINELLI Elisabetta; FERNÁNDEZ SIRERA Tatiana; PONTIKAKIS Dimitrios (European Commission - JRC)
    Abstract: There are increasing demands on our economies and societies for transformational change. The European Union (EU) and global actors such as the United Nations (UN) are giving increasing attention to social and environmental sustainability. This paper reflects on how Smart Specialisation Strategies (S3), and in particular the search for actionable policy pathways through the Entrepreneurial Discovery Process (EDP), need to evolve. To respond to the challenges ahead, S3 must also contribute to the transition towards more sustainable and inclusive pathways, in line with the European Green Deal’s objectives and the UN Sustainable Development Goals (SDGs). In this sense, we argue that we need a transformative Smart Specialisation, sustained by a transformative EDP. With this objective in mind, we begin by examining the current policy context and frame S3 in the broader EU agenda. We stress the importance of aligning S3 to the EU New Industrial Strategy and the European Green Deal, mustering momentum to address social and environmental challenges. We then introduce conceptual and policy frameworks which can support the development of a transformative EDP, namely Sustainability Transitions, Transformative Innovation Policy, and Responsible Research and Innovation. We then report on two pioneering policy experiences that -building on the above conceptual foundations and approaches- have attempted to imbue the S3 and EDP with transformative elements, namely the POINT (Projecting Opportunities for INdustrial Transition) Reviews by the Joint Research Centre and the Shared Agendas in Catalonia. We conclude with a discussion of some implications for the future of Smart Specialisation and highlighting the challenges ahead.
    Keywords: Entrepreneurial Discovery Process, New Industrial Strategy, European Green Deal, smart specialisation, lagging regions, Greece, Bulgaria, Catalonia
    Date: 2021–03
  16. By: Hackober, Christian
    Abstract: This dissertation consists of three essays that address important and very recent issues in the field of entrepreneurial finance. The first essay, examines the reasons that drive recently emerging multibillion-dollar valuation levels of so-called ‘unicorns’. The second essay, investigates the current status of collaborations between incumbent firms and ventures in order to cope with the ongoing digital transformation. Based on empirical findings, this dissertation develops a collaboration model between incumbents and ventures depending on the venture’s development stage. The third essay, draws from Initial Coin Offering (ICO) data to explore how early stage investors influence the outcomes of ICOs and the overall survival rate of blockchain technology-based firms. This dissertation contributes to the research on entrepreneurial finance and entrepreneurship and more specifically to the understanding on recent phenomena concerning the influence of investors’ characteristics on finance decisions and collaborations and subsequently their influence on ventures’ success. First, it is presented that being founded within a cluster region and in particular within the Silicon Valley area, increases significantly the chances for ventures to achieve ultra-high valuation levels. Furthermore, the results show empirically that a considerable share of ultra-high valuation levels is devoted to aggressive and inorganic growth strategies in order to gain large market shares rapidly and achieve a market-dominating role. Thereby, it is found that corporate investors play a decisive role for ventures to become successful. Second, this dissertation provides evidence from the German market that corporate investments are mainly driven by the ambition of incumbents to gain momentum within the digital transformation of existing business models. However, based on the empirical findings, the trend is identified that incumbents collaborate increasingly with more nascent ventures and apply non-equity-based approaches. Third, it is demonstrated that the beneficial influences of venture capital investors hold also in the context of the blockchain technology. Particularly, evidence is provided that the specialization and the reputation of investors has a positive influence on the success probability of blockchain technology-based firms. Thereby, it is show again the dispositive role of corporate investors. Each essay, discusses the theoretical and practical contributions and provides novel insights on recent phenomena in the area of entrepreneurial finance.
    Date: 2021
  17. By: Yvon Pesqueux (ESD - Équipe Sécurité & défense - CNAM - Conservatoire National des Arts et Métiers [CNAM])
    Abstract: Ce texte est organisé de la manière suivante. Après une introduction cherchant à caractériser ce dont il s'agit et des remarques préliminaires destinées à éviter les préjugés en faisant de l'économie informelle une question sérieuse, il abordera successivement : la question du contexte, celle du passage de l'informel à l'économie informelle, un focus sur « l'épistémé des pauvres », des réflexions sur l'économie informelle puis sur l'« entrepreneur informel » (caractéristiques socioéconomiques, caractéristiques sociodémographiques, la mobilisation de leur réseau social par les « entrepreneurs informels », les motivations des « entrepreneurs informels », au-delà d'entrepreneuriat de nécessité et d'opportunité : une explication par la une approche institutionnaliste, faut-il formaliser les activités informelles ? La formalisation de l'informel) vers une théorie de l'entrepreneuriat informel (la perspective structuraliste, la perspective néolibérale, la perspective poststructuraliste), une conclusion, un focus sur la « culture d'inclusion » ou la gestion de la diversité par le principe de reconnaissance des différences : le modèle de N. M. Pless & T. Maak et un focus sur des éléments du rapport du Conseil d'orientation pour l'emploi le travail dissimulé (février 2019). 1 C. Baxerres « Pourquoi un marché informel du médicaments dans les pays francophones d'Afrique ? » Revue Politique Africaine, n° 3, 2011
    Date: 2021–02–03
  18. By: Laetitia Dablanc (AME-SPLOTT - Systèmes Productifs, Logistique, Organisation des Transports et Travail - Université Gustave Eiffel); Anne Aguilera (LVMT - Laboratoire Ville, Mobilité, Transport - ENPC - École des Ponts ParisTech - Université Gustave Eiffel); Laurent Proulhac (LVMT - Laboratoire Ville, Mobilité, Transport - ENPC - École des Ponts ParisTech - Université Gustave Eiffel); Léa Wester (AMU - Aix Marseille Université); Nicolas Louvet (6T - Bureau de recherche - parent); José Palomo Rivas (Université Gustave Eiffel)
    Abstract: La livraison instantanée (UberEats, Deliveroo, Stuart...) se développe très rapidement. Ce rapport présente la troisième enquête sur les livreurs qui travaillent à Paris pour les plateformes de livraison, avec des résultats inédits sur leurs principales caractéristiques et celles de leurs activités.
    Date: 2020–01–01

This nep-ent issue is ©2021 by Marcus Dejardin. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.