nep-ent New Economics Papers
on Entrepreneurship
Issue of 2021‒05‒17
nine papers chosen by
Marcus Dejardin
Université de Namur

  1. Getting Schooled: The Role of Universities in Attracting Immigrant Entrepreneurs By Natee Amornsiripanitch; Paul A. Gompers; George Hu; Kaushik Vasudevan
  2. Inside the Regulatory Sandbox: Effects on Fintech Funding By Cornelli, Giulio; Doerr, Sebastian; Gambacorta, Leonardo; Merrouche, Ouarda
  3. Confidence is good; too much, not so much: Exploring the effects on reward-based crowdfunding success By Naomi Moy; Ho Fai Chan; Frank Mathmann; Markus Schaffner; Benno Torgler
  4. Marginal tax changes with risky investment By Raffaele Rossi
  5. All You Need Is Cash: Corporate Cash Holdings and Investment after the Global Financial Crisis By Andreas Joseph; Christiane Kneer; Neeltje van Horen
  6. Women Entrepreneurship in Rural India: A Study on Women of Gujarat By Janvi Pate; Anubha Sinha
  7. Entrepreneurship Education’s Influence on Learner’s Entrepreneurship Intention in South African Schools By Tshehla, Steven S.; Chodokufa, Kudakwashe; Costa, King
  9. Branding of Start-ups- Indian Experience By Omkumar Krishnan

  1. By: Natee Amornsiripanitch; Paul A. Gompers; George Hu; Kaushik Vasudevan
    Abstract: Immigrant founders of venture capital-backed companies have been critical to the entrepreneurial ecosystem. We document the channels through which immigrant founders find their way to the United States and how those channels have changed over time. Immigrants have been an important source of founders for venture capital-backed startups accounting for roughly 20% of all founders over the past 30 years. Immigrants coming to the United States for their education have been the primary source of founders with those coming after being educated abroad and then arriving for work decreasing in importance over time. The importance of undergraduate education as a channel for immigrant founders has increased over time. Immigrant founders coming for education are likely to start their companies in the state in which they were educated, especially states where they received their graduate education, leading to potentially large local economic benefits. The results of this paper have important policy implications for the supply of entrepreneurial talent and efforts to promote entrepreneurial ecosystems.
    JEL: G24 J0 J15 J24 L26
    Date: 2021–05
  2. By: Cornelli, Giulio; Doerr, Sebastian; Gambacorta, Leonardo; Merrouche, Ouarda
    Abstract: Policymakers around the world are adopting regulatory sandboxes as a tool for spurring innovation in the financial sector while keeping alert to emerging risks. Using unique data for the UK, this paper provides first evidence on the effectiveness of the world's first sandbox in improving fintechs' access to finance. Firms entering the sandbox see a significant increase of 15% in capital raised post-entry, relative to firms that did not enter; and their probability of raising capital increases by 50%. Our results suggest that the sandbox facilitates access to capital through two channels: reduced asymmetric information and reduced regulatory costs or uncertainty. Our results are similar when we exploit the staggered introduction of the sandbox and compare firms in earlier to those in later sandbox cohorts, and when we compare participating firms to a matched set of comparable firms that never enters the sandbox.
    Keywords: Fintech; regulatory sandbox; Startups; venture capital
    JEL: G32 G38 M13 O3
    Date: 2020–11
  3. By: Naomi Moy; Ho Fai Chan; Frank Mathmann; Markus Schaffner; Benno Torgler
    Abstract: Self-confidence has long been regarded as one of the key qualities in determining entrepreneurial success. In markets with uncertainty, like crowdfunding, entrepreneurial confidence is an important signal that lowers the information imbalance for potential investors. However, current literature on confidence is limited in three ways; first is the limited understanding of confidence in interpersonal interactions; second is the accurate measurement of confidence and thirdly, limited insight on whether an optimal level of confidence exists. We use two novel behavioral approaches to measure self and exhibited confidence and examine their relation to entrepreneurial success in reward-based crowdfunding. Derived from ex-ante information (i.e., before realization of success), our measurements for confidence allow us to draw causal inferences, allowing for contributions to confidence and displays of interpersonal emotion literature. By analyzing over 70,000 Kickstarter projects, we show an optimal level of entrepreneurial confidence exists in determining funding received, popularity, and likelihood of success.
    Keywords: Behavioral; crowdfunding; entrepreneur; exhibiting confidence; interpersonal confidence
    Date: 2021–05
  4. By: Raffaele Rossi (University of Manchester)
    Abstract: Using an estimated life-cycle model, we quantify the role of heterogeneity in wealth returns for the response of income to marginal tax changes. In our economy, agents who are sufficiently productive can obtain higher returns by choosing to be entrepreneurs. Return heterogeneity amplifies the responsiveness of total income to marginal tax changes along the entire income distribution with the top 1 percent displaying the highest elasticities. Return heterogeneity increases the incentives to invest for the richest, high-return entrepreneurs, thus amplifying their income responses to marginal tax changes. This reallocation of capital increases aggregate productivity, generating a larger boost in equilibrium wages. This in turn strengthens the income response of the bottom 90 percent, but nevertheless, their response is smaller than at the top.
    Keywords: risky investment, elasticity of taxable income, life-cycle, entrepreneurs, structural estimation
    JEL: E62 H21 H24
    Date: 2021–04
  5. By: Andreas Joseph; Christiane Kneer; Neeltje van Horen
    Abstract: Cash holdings at the onset of a financial crisis are a key determinant of investment by SMEs not only during the crisis but also during the recovery period. Cash-rich SMEs could maintain their capital stock during the global financial crisis, while cash-poor rivals reduced theirs. This gave cash-rich SMEs a competitive advantage during the recovery, resulting in a persistent and growing investment gap. The amplification effect was present for SMEs with both volatile and stable cash holdings and was particularly pronounced for younger and smaller firms. Competition dynamics and borrowing constraints seem to drive this amplification effect.
    Keywords: SMEs, investment, cash holdings, financial crisis, misallocation
    JEL: D22 E32 E44 G32
    Date: 2021
  6. By: Janvi Pate (Indian Institute of Management Kozhikode); Anubha Sinha (Indian Institute of Management Kozhikode)
    Abstract: Feminism as an ideology is associated with women’s rights and women’s movements across the world. The purpose of this paper is to clear the misconceptions about feminism in the third world countries by highlighting the major feminist movements in India. Firstly, it talks about the evolution of feminism in India and across the globe. It showcases the works of feminists like Mahatma Phule, Raja Ram Mohan Roy, Ishwarchandra Vidyasagar and talks about Brahminical feminism in India. It then draws attention to feminism after independence when ‘The Committee for the Status of Women in India’ was set up to review the status of women in the country. It also discusses different prominent movements which took place in India like the Shetkari movement, Chipko movement, Hindu Militant feminism, etc. and how some of those movements led to the enactment of new laws favoring women while how some proved negative for the cause of feminism. The paper concludes with an analysis on Indian feminism, for which different opportunities to overcome threats and weaknesses are discussed.
    Keywords: Feminism in India, evolution of feminism, movements in India, feminist ideology
    Date: 2021–03
  7. By: Tshehla, Steven S.; Chodokufa, Kudakwashe; Costa, King (Global Centre for Academic Research)
    Abstract: Youth unemployment remains a South African problem and a global concern. Entrepreneurial activity enables people to identify opportunities and start new business ventures helping in addressing Youth unemployment. This study focuses on assessing the influence of entrepreneurship education on the learners’ intention towards entrepreneurship careers in high schools. A quantitative study was conducted consisting of 240 grade 12 learners with entrepreneurship education from the three townships in the City of Tshwane namely Mamelodi, Atteridgeville and Soshanguve. A structured close-ended questionnaire was used to collect data. Data was analysed using descriptive and inferential statistics using SPSS software. Findings have proven a relationship between theoretical education and experiential learning with learners’ intention towards entrepreneurship, with experiential learning significantly influencing the development of entrepreneurship intention in learners. Hence, to improve effectiveness of entrepreneurship education in high school learners, there should be emphasis on experiential learning. Study further indicated that entrepreneurship as a subject has an influence on the choice of entrepreneurship as a career. It is for this reason that learners should interaction with business people globally in order to gain exposure to people who have succeeded by taking entrepreneurship as a career.
    Date: 2021–05–07
  8. By: Tshehla, Belinda; Costa, King (Global Centre for Academic Research)
    Abstract: South Africa, in general, is plagued by high unemployment, especially among the youth. The study explored the relationship between mentorship and successful youth entrepreneurship at Telkom, South Africa. The primary focus of the investigation was to establish whether mentorship could be the answer to unemployment and the declining youth entrepreneurship in the City of Tshwane. A qualitative research approach was applied in this study, using the Telkom mentorship programme as the sample. The sample consisted of mentors and youth mentees, obtained from the Telkom mentorship database. Data was collected using semi-structured, open-ended interviews. Data analysis was done using thematic analysis with Atlas Ti 8.0. The literature shows that mentoring has benefits for both mentors and entrepreneur mentees. It also shows that the government and private sector can play a key role in youth entrepreneur mentorship. The findings of the study have proven that mentorship yields positive results for youth entrepreneurs, which supports the literature in this study. The findings of the study yielded three themes, which were as follows: success factors for mentorship, inhibiting factors for mentorship, and influence of mentorship on successful youth entrepreneurship. In addressing the objectives of this study, the findings have proven that there is a relationship between mentorship and successful youth entrepreneurship. The recommendations made in this study include improvements in the mentorship programme for mentees and mentors, initiatives by government that include more mentorship programmes and better communication as well as providing funding for mentorship programmes. Further research, to establish the correlation between mentorship and successful entrepreneurship, is recommended.
    Date: 2021–05–09
  9. By: Omkumar Krishnan (Indian Institute of Management Kozhikode)
    Abstract: Branding as a strategic marketing tool has been well established and researchers have been continuously contributing to this domain and building models to develop a successful brand whether it is a company or a product. In this research work we are examining the branding initiatives by start-ups in the Indian Scenario. Earlier researchers concentrated more on the established companies and the brands which have been successfully launched. In the start-up eco system there are constraints due to the resources and the acceptability of branding in general at the nascent stage of a business. To address the research questions three case studies of established start-up brands and a survey of emerging start-ups will be conducted. Primary reasons cited are the founders focus on the innovation and the marketing activities being seen as a cost to the company. Despite the revenue constraints there are opportunities for these entrepreneurs to engage in branding initiatives beyond the basic logo designing aspect. One of the critical facet is the personal branding concepts which are essential for the founders to build upon and transfer to the venture. The challenges and opportunities in branding of Start-ups is appraised and we will attempt to develop a model for brand building for Start-ups in India
    Date: 2021–03

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