nep-ent New Economics Papers
on Entrepreneurship
Issue of 2021‒04‒12
ten papers chosen by
Marcus Dejardin
Université de Namur

  1. Improved Framework Conditions for a More Entrepreneurial, Innovative and Sustainable EU By Elert, Niklas; Henrekson, Magnus
  2. Entrepreneurship in Cities By Tavassoli, Sam; Obchonka, Martin; Audretsch, David B.
  3. To Be or Not to Be: The Entrepreneur in Endogenous Growth Theory By Henrekson, Magnus; Johansson, Dan; Karlsson, Johan
  4. Rugged Entrepreneurs: The Geographic and Cultural Contours of New Business Formation By John M. Barrios; Yael Hochberg; Daniele Macciocchi
  5. The Role of Location on Complexity of Firms’ Innovation Outcome By Tavassoli, Sam; Karlsson, Charlie
  6. Relationship Between Health Insurance and Self-employment: A Systematic Review By Hossain, Md. Mobarak
  7. Regulation, Entrepreneurship, and Dynamism By Chambers, Dustin; Sherouse, Oliver; McLaughlin, Patrick
  8. Aspirations and Financial Decisions: Experimental Evidence from the Philippines By David McKenzie; Aakash Mohpal; Dean Yang
  9. Healthcare to the Home: Enabling Distributed Health Service Delivery by Removing Barriers to Entrepreneurial Exploration By Auerswald, Philip
  10. Small Business under the COVID-19 Crisis: Expected Short- and Medium-Run Effects of Anti-Contagion and Economic Policies By Kawaguchi, Kohei; Kodama, Naomi; Tanaka, Mari

  1. By: Elert, Niklas (Research Institute of Industrial Economics (IFN)); Henrekson, Magnus (Research Institute of Industrial Economics (IFN))
    Abstract: In the wake of the corona crisis, the European Union must regain lost ground and create more favorable conditions for inclusive and sustainable economic growth. The best way to achieve this goal is by increasing the Union’s innovativeness. This effort requires extensive and broad-based institutional reforms aimed at strengthening the incentives for entrepreneurship. Innovative entrepreneurship requires collaborations with numerous agents that provide those skills and resources that the entrepreneur is lacking: inventors, key personnel, demanding customers, and early and later-stage financiers. Based on this ecosystem perspective, we propose reforms in the following six broad areas: (i) the rule of law and property rights, ii) taxation, iii) savings and finance, iv) labor market regulations and social security, v) entry and exit barriers in product markets, and (vi) human capital for entrepreneurship. The reforms would likely strengthen Europe’s innovation capacity at a time when it is needed more than ever.
    Keywords: Entrepreneurship; European Union; Innovation; Institutions; Policy reform; Regulation; Self-employment
    JEL: L26 L50 M13 O38 O52 P14
    Date: 2021–03–25
  2. By: Tavassoli, Sam (RMIT University); Obchonka, Martin (Australian Center for Entrepreneurship Research); Audretsch, David B. (Indiana University)
    Abstract: Impactful, growth-oriented entrepreneurship is a major research and policy focus. Building on arguments put forward by Jane Jacobs more than 50 years ago, we propose that local knowledge spillovers in a city are enhanced by human agency in that city (e.g. local psychological openness). This effect is critically amplified by the catalyst function of a favorable structural city environment that not only connects these agentic people (via urban density), but also facilitates the production and flow of new knowledge for these connected agentic people (via a diverse industry mix). This three-way interaction effect was confirmed in our empirical investigation of quality entrepreneurship across the MSAs (cities) in the US, using a large-scale dataset of the psychological profiles of millions of people. Local openness shows a robust positive effect on the level of quality entrepreneurship. This effect is further strengthened by a favorable structural city environment (i.e. high density and diversity) by up to 35%. Reviving Jacobs’ people focus, the results indicate that the best performing cities in terms of knowledge spillovers and economic performance are those that are not only home to, and attract, agentic people, but also empower these people by means of a physical and industrial city landscape that enables them to act in more innovative and entrepreneurial ways, as envisioned by Jacobs. We discuss the policy implications of our findings and an agenda for future research.
    Keywords: Entrepreneurship; Cities; Jacobs externalities; Knowledge Spillovers; Diversity; Density; Personality traits; Openness; Geographical psychology
    JEL: D83 D91 L26 O18
    Date: 2021–03–30
  3. By: Henrekson, Magnus (Research Institute of Industrial Economics (IFN)); Johansson, Dan (Örebro University School of Business); Karlsson, Johan (Centre for Family Entrepreneurship and Ownership (CeFEO))
    Abstract: We examine the conceptualization of entrepreneurs in neo-Schumpeterian growth theory, which has reintroduced entrepreneurs into mainstream economics. Specifically, we analyze how neo-Schumpeterians relate to the contradiction between the entrepreneur-centered view of Schumpeter (1934) and the entrepreneurless framework of Schumpeter (1942), with the two frameworks entailing vastly different economic and policy implications. The analysis is based on a review of approximately 750 peer-reviewed articles over the period 1990–2018. The articles were identified using text mining methodology and supervised machine learning. The results show that the literature leans towards Schumpeter (1942); innovation returns are modeled as following an ex ante known probability distribution. By assuming that the outcomes of innovation activities are (probabilistically) deterministic, the Schumpeterian entrepreneur becomes redundant. In addition, the literature abstracts from genuine uncertainty, thus evading central issues regarding the economic function of the entrepreneur, especially with respect to disruptive innovations, ownership, and profits. To incorporate genuine uncertainty, the literature needs to adopt a broader conceptual foundation that goes beyond equilibrium modeling.
    Keywords: Creative destruction; Economic growth; Entrepreneur; Innovation; Judgment; Bibliometric analysis; Knightian uncertainty
    JEL: B40 O10 O30
    Date: 2021–03–29
  4. By: John M. Barrios; Yael Hochberg; Daniele Macciocchi
    Abstract: How do geographic and historical-cultural factors shape new business formation? Using novel data on new business registrations, we document that 75% of the variation in new business formation is explained by time-invariant county-level factors and examine the extent to which such variation is driven by historical, cultural, and geographic factors. Current-day new business formation is positively related to historical attributes that presage individualist culture: frontier experience and historical birthplace diversity, as well as the county’s topographical features. The relation holds when we exploit plausibly exogenous variation in frontier experience driven by shocks to the settlement process that arise from historical immigration flows. Our study points to the fundamental role of geographic and historical-cultural features, especially rugged individualism, in explaining contemporary new business formation in the U.S.
    JEL: L26 N3 N9 O1 O43
    Date: 2021–03
  5. By: Tavassoli, Sam (RMIT University); Karlsson, Charlie (Jönköping International Business School)
    Abstract: In this paper we analyze how the location of firms influences their innovation outcomes, particularly the complexity of the outcomes. Using three waves of the Community Innovation Survey in Sweden for a balanced panel of firms from 2006 to 2012, we identified a range of innovation outcome categories, i.e. simple and complex (low-, medium-, highly-complex) innovation outcomes. The backbone of such categorization is based on how firms introduce a combination of Schumpeterian types of innovations (i.e. process, product, marketing, and organizational). Then we consider three regional characteristics that may affect the innovation outcomes of firms, i.e. (i) qualified labor market thickness, (ii) knowledge-intensive services thickness, and (iii) knowledge spillovers extent. We find that regional characteristics do not affect firms’ innovation outcomes in terms of their degree of complexity ubiquitously. They are only positively associated with those firms that introduce the most complex innovation outcomes. For firms with less complex innovation outcomes, regional factors seem not to play a pivotal role. For these innovators, internal resources as well as formal collaboration with external partners have a significant role.
    Keywords: innovation outcome; location; agglomeration economies; knowledge spillovers; Community Innovation Survey
    JEL: D22 L20 O31 O32
    Date: 2021–03–30
  6. By: Hossain, Md. Mobarak
    Abstract: This paper performs a systematic review on whether there is a relationship between health insurance and self-employment. There are three types of findings available regarding this issue in the entrepreneurship literature. First, health insurance clearly plays a vital role when individuals choose to become self-employed. Second, there is some evidence of the effect of health insurance on entrepreneurial choices for some individuals with some demographic characteristics, like married women, students, people with disabilities, etc. Third, the evidence of relationship between health insurance and entrepreneurial choices is anecdotal.
    Keywords: health insurance, entrepreneurship, self-employment
    JEL: I11 I13 J48
    Date: 2021–01–28
  7. By: Chambers, Dustin; Sherouse, Oliver; McLaughlin, Patrick (Mercury Publication)
    Abstract: Abstract not available.
    Date: 2020–11–12
  8. By: David McKenzie; Aakash Mohpal; Dean Yang
    Abstract: A randomized experiment among poor entrepreneurs tested the impact of exogenously inducing higher financial aspirations. In theory, raising aspirations could have positive effects by inducing higher effort, but could also reduce effort if unmet aspirations lead to frustration. Treatment resulted in more ambitious savings goals, but nearly all individuals fell far short of reaching these goals. Two years later, treated individuals had not saved more, and actually had lower borrowing and business investments. Treatment also reduced belief in the amount of control over one’s life. Setting aspirations too high can lead to frustration, leading individuals to reduce their economic investments.
    JEL: D14 G53 O12
    Date: 2021–03
  9. By: Auerswald, Philip (Mercury Publication)
    Abstract: Abstract not available.
    Date: 2020–09–03
  10. By: Kawaguchi, Kohei; Kodama, Naomi; Tanaka, Mari
    Abstract: This study makes a causal inference on the effects of anti-contagion and economic policies on small business by conducting a survey on Japanese small business managers’ expectations about the pandemic, policies, and firm performance. We first find the business suspension request decreased targeted firms’ sales by 10 percentage points on top of the baseline 8 percentage points decline due to COVID-19. Second, using a discontinuity in the eligibility criteria, we find lump-sum subsidies improved firms’ prospects of survival by 19 percentage points. Third, the medium-run recovery of firms’ performance is expected to depend crucially on when infections would end, indicating that stringent anti-contagion policies could complement longer-run economic goals.
    Keywords: COVID-19, Causal inference, Manager’s expectation, Business performance, Subsidy, Small business, Regression Discontinuity Design, Randomized controlled trial, Difference-in-Difference, Pandemic, Infection, Anti-contagion policies, Lockdown, Survey
    JEL: D22 D80 D84 E17 E32 E66 I18 L50
    Date: 2020–11

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