nep-ent New Economics Papers
on Entrepreneurship
Issue of 2021‒04‒05
seven papers chosen by
Marcus Dejardin
Université de Namur

  1. Barriers to Black Entrepreneurship: Implications for Welfare and Aggregate Output over Time By Pedro Bento; Sunju Hwang
  2. Personal Characteristics and Intention for Entrepreneurship By Yalcintas, Murat; Iyigun, Oykü; Karabulut, Gokhan
  3. Insolvency Prospects Among Small-and-Medium-Sized Enterprises in Advanced Economies; Assessment and Policy Options By Federico J Diez; Romain A Duval; Jiayue Fan; José Garrido; Sebnem Kalemli-Ozcan; Chiara Maggi; Maria Soledad Martinez Peria; Nicola Pierri
  4. The Man Who Discovered Capitalism: A Documentary on Schumpeter for Use in the Classroom By Dalton, John; Logan, Andrew
  5. Elements for innovation in MSME and antitrust policies considering the challenges of the COVID-19 pandemic and economic recovery By Dini, Marco; Núñez, Georgina
  6. Does the Legal Form Matter for Firm Performance in the MENA Region? By Issam Abdo Ahmad; Ali Fakih
  7. Recipes for a Successful Exit for Clean- and Hard-tech Startups By , AISDL

  1. By: Pedro Bento (Texas A&M University, Department of Economics); Sunju Hwang (Texas A&M University, Department of Economics)
    Abstract: The number of black-owned businesses in the U.S. has increased dramatically since the 1980s, even compared to the number of non-black-owned businesses and the rise in black labor-market participation. In 1982 less than 4 percent of black labor-market participants owned businesses, compared to over 14 percent of other participants. By 2012 more than 16 percent of black participants owned businesses while the analogous rate for non-black participants increased to only 19 percent. This and other evidence suggest black entrepreneurs have faced significant barriers to starting and running businesses and these barriers have declined over time. We examine the impact of these trends on aggregate output and welfare. Interpreted through a model of entrepreneurship, declining barriers led to a 2 percent increase in black welfare, a 0.7 increase in output per worker, and a 0.7 decrease in the welfare of other labor-market participants. These impacts are in addition to any gains from declining labor-market barriers.
    Keywords: black, minority, distortions, entrepreneurship, business dynamism, misallocation, aggregate productivity, economic growth.
    JEL: E02 E1 J7 J15 O1 O4
    Date: 2021–03–24
  2. By: Yalcintas, Murat; Iyigun, Oykü; Karabulut, Gokhan
    Abstract: This study analyzes the relationship between entrepreneurship intention and personal characteristics and skills by using the surveys we conducted in Turkey on 1465 senior university students. We use a modified version of the Entrepreneurial Orientation (EO) scale and the Political Skills Inventory to measure some personal characteristics and skills. We also use the nine sub-dimensions of these two scales. Probit model and wavelet coherence analysis results show that proactivity, entrepreneurship, and networking sub-dimensions of the scales are related to entrepreneurship intention. We also find that gender, the number of siblings, the grade point average (GPA) of the students, their family's education level, the parent' ownership of an enterprise, and the number of non-governmental organizations (NGO) that they are a member of are also related to entrepreneurship intention. Results may be useful to understand and enhance entrepreneurship potential.
    Keywords: Entrepreneurship,Self-employment entry,Occupational choice
    JEL: C90 D63
    Date: 2021
  3. By: Federico J Diez; Romain A Duval; Jiayue Fan; José Garrido; Sebnem Kalemli-Ozcan; Chiara Maggi; Maria Soledad Martinez Peria; Nicola Pierri
    Abstract: The COVID-19 pandemic has increased insolvency risks, especially among small and medium enterprises (SMEs), which are vastly overrepresented in hard-hit sectors. Without government intervention, even firms that are viable a priori could end up being liquidated—particularly in sectors characterized by labor-intensive technologies, threatening both macroeconomic and social stability. This staff discussion note assesses the impact of the pandemic on SME insolvency risks and policy options to address them. It quantifies the impact of weaker aggregate demand, changes in sectoral consumption patterns, and lockdowns on firm balance sheets and estimates the impact of a range of policy options, for a large sample of SMEs in (mostly) advanced economies.
    Keywords: Corporate insolvency;Insolvency;Bankruptcy;Small and medium enterprises;Insolvency, Bankruptcy, “Quasi” Equity Injections, Small- and medium-size enterprises, COVID-19
    Date: 2021–04–02
  4. By: Dalton, John; Logan, Andrew
    Abstract: We describe how the 2016 documentary The Man Who Discovered Capitalism can be used in the classroom to provide an entry point to the life and economics of Joseph A. Schumpeter, whose work on innovation, entrepreneurship, and creative destruction remains relevant for students today. We summarize the key ideas conveyed in the documentary and offer four criticisms: its failure to capture the role of fin-de-siecle Vienna on Schumpeter's intellectual development, its incomplete understanding of Schumpeter's theory of innovation, its overstatement of Keynes's influence relative to Schumpeter, and the overly generous credit it gives to government for spurring innovation. We show how the documentary can be used in the classroom, complete with sample discussion questions grounded in the criticisms we identify. We argue The Man Who Discovered Capitalism is an effective teaching tool suitable for a variety of courses, including those on economic growth, intermediate macroeconomics, and the history of economic thought, among others.
    Keywords: Joseph Schumpeter; Innovation; Entrepreneurship; Creative Destruction; John Maynard Keynes; Education; Documentary
    JEL: A20 B31 O31 O33
    Date: 2021–01–30
  5. By: Dini, Marco; Núñez, Georgina
    Abstract: The coronavirus disease (COVID-19) pandemic has hit micro-, small and medium-sized enterprises (MSMEs) particularly hard. In this context, polices designed to stimulate their growth and to defend competition now play a key role in tackling the effects of the crisis and in the path to recovery. To respond to the new demands and needs resulting from this crisis, the institutions responsible for the design and implementation of these policies have had to face new challenges, rethink their approaches and quickly devise creative new methods of operation. This document summarizes the research conducted by the Economic Commission for Latin America and the Caribbean (ECLAC) on these issues. The lessons learned by public institutions show that there are various forms of innovation which, if economic actors were to leverage them, could result in a lasting improvement in the actions to support the productive sector.
    Date: 2021–03–22
  6. By: Issam Abdo Ahmad; Ali Fakih
    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: 2021–03–30
  7. By: , AISDL
    Abstract: This study demonstrates the combinations of multiple causal factors that formulate a startup’s strategy to successfully “exit”, namely “recipes for a successful exit,” in the clean- and hard-tech sector. We identify seven key causal factors (i.e., causal conditions) that impact startup success, including commercial readiness, investor interactions, favorable industry, non-financial support, straightforward development path, experienced team, and visibility to investors. We also investigate the combinations of selective causal conditions that can provide further synergetic impact. We conduct the fuzzy-set qualitative comparative analysis (fsQCA) on seven US clean and hard-tech startups that exited between 2005 and 2016. The successful companies all demonstrate distinctive characteristics based on three general categories (1) robust ecosystem; (2) heavy-lifting team; or (3) external opportunity. Across these three categories, commercial readiness and strong investor interactions are necessary conditions for all exit cases. But there are important differences that drive success in each category, such as the interaction with non-financial support (in the robust ecosystem case), experienced team (in the heavy-lifting team case), and favorable industry (in the external opportunity case). Our findings are meant to support entrepreneurs in reaching an exit by optimizing the given internal and external circumstances, and policymakers to build a robust ecosystem that can increase the success rate of the clean- and hardtech development.
    Date: 2021–01–18

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