nep-ent New Economics Papers
on Entrepreneurship
Issue of 2021‒08‒23
eight papers chosen by
Marcus Dejardin
Université de Namur

  1. Economic Effects of the COVID-19 Pandemic on Entrepreneurship and Small Businesses By Maksim Belitski; Christina Guenther; Alexander S. Kritikos; Roy Thurik
  2. The contribution of business dynamics to productivity growth in the Netherlands By Daan Freeman; Leon Bettendorf; Harro van Heuvelen; Gerdien Meijerink
  3. Public Sector Entrepreneurship, Politics, and Innovation By Link, Albert; Gicheva, Dora
  4. The Productivity Puzzle in Business Services By Alexander S. Kritikos; Alexander Schiersch; Caroline Stiel
  5. The Impact of COVID-19 on Small Business Dynamics and Employment: Real-time Estimates With Homebase Data By André Kurmann; Étienne Lalé; Lien Ta
  6. Persuading Investors: A Video-Based Study By Allen Hu; Song Ma

  1. By: Maksim Belitski; Christina Guenther; Alexander S. Kritikos; Roy Thurik
    Abstract: The existential threat to small businesses, based on their crucial role in the economy, is behind the plethora of scholarly studies in 2020, the first year of the COVID-19 pandemic. Examining the 14 contributions of the special issue on the “Economic Effects of the COVID-19 Pandemic on Entrepreneurship and Small Businesses,” the paper comprises four parts: a systematic review of the literature on the effect on entrepreneurship and small businesses; a discussion of four literature strands based on this review; an overview of the contributions in this special issue; and some ideas for post-pandemic economic research.
    Keywords: Small businesses, entrepreneurs, COVID-19 pandemic, economic effects
    JEL: L26 J38 I18
    Date: 2021
  2. By: Daan Freeman (CPB Netherlands Bureau for Economic Policy Analysis); Leon Bettendorf (CPB Netherlands Bureau for Economic Policy Analysis); Harro van Heuvelen (CPB Netherlands Bureau for Economic Policy Analysis); Gerdien Meijerink (CPB Netherlands Bureau for Economic Policy Analysis)
    Abstract: This paper analyses the declining firm dynamism in the Netherlands, which may explain part of the slowdown in productivity growth. We use a rich microdata set including nearly all corporations in the Netherlands during 2006-2016, which enables us to evaluate the TFP growth contributions of exiting firms, start-ups and new firms resulting from mergers & acquisitions in different industries. We use a Melitz and Polanec (2015) decomposition to assess TFP growth contributions. We find that in service industries, start-ups, new firms created by M&As and exiting firms all contribute to overall TFP growth, in line with the creative destruction hypothesis. In manufacturing industries, TFP growth is driven mostly by incumbent firms. Here, entry and exit dynamics contribute relatively little or even negatively to TFP growth. In addition, young firms in the manufacturing industries tend to have higher TFP growth than older firms, while in service industries this is not the case. Finally, in general, relatively low productivity entrants are more likely to exit in the first five years after entry, which is in line with an `up-or-out' dynamic.
    JEL: F16 J31 R11
    Date: 2021–08
  3. By: Link, Albert (University of North Carolina at Greensboro, Department of Economics); Gicheva, Dora (University of North Carolina at Greensboro, Department of Economics)
    Abstract: We suggest that a political leader or a political administration can be described in terms of a public sector entrepreneurship framework. To illustrate, we define the actions of U.S. President Donald Trump’s Administration to refocus the emphasis of the Environmental Protection Agency (EPA) as an innovative public policy initiative. And, we explore empirically the social consequences of those actions in terms of changes in the number of STEM employees at the EPA and the number of attendant innovative scientific publications.
    Keywords: Public sector entrepreneurship; Environmental Protection Agency; Trump Administration; STEM employees; Scientific publications;
    JEL: H11 O38 Q51
    Date: 2021–08–11
  4. By: Alexander S. Kritikos; Alexander Schiersch; Caroline Stiel
    Abstract: In Germany, the productivity of professional services, a sector dominated by micro and small firms, declined by 40 percent between 1995 and 2014. This productivity decline also holds true for professional services in other European countries. Using a German firm-level dataset of 700,000 observations between 2003 and 2017, we analyze this largely uncovered phenomenon among professional services, the 4th largest sector in the EU15 business economy, which provide important intermediate services for the rest of the economy. We show that changes in the value chain explain about half of the decline and the increase in part-time employment is a further minor part of the decline. In contrast to expectations, the entry of micro and small firms, despite their lower productivity levels, is not responsible for the decline. We also cannot confirm the conjecture that weakening competition allows unproductive firms to remain in the market.
    Keywords: business services, labor productivity, productivity slowdown
    JEL: L84 O47 D24 L11
    Date: 2021
  5. By: André Kurmann; Étienne Lalé; Lien Ta
    Abstract: The COVID-19 pandemic has led to an explosion of research using real-time establishment-level data. One key challenge when working with this data is how to take into account the effects of business openings and closings. In this paper, we address this challenge by matching small business establishment records from Homebase with information on business activity from Google, Facebook, and Safegraph to distinguish business closings and openings from other sample exits and entry. We show that this distinction is critical to benchmark the data to pre-pandemic administrative records and estimate the effects of the pandemic on small business activity. We find four key results: (1) employment of small businesses in four of the hardest hit service sectors contracted more severely in the beginning of the pandemic than employment of larger businesses, but small businesses also rebounded more strongly and have on average recovered a higher share of job losses than larger businesses; (2) closings account for 70% of the initial decline in small business employment, but two thirds of closed businesses have reopened and the annual rate of closings is just slightly higher than prior to the pandemic; (3) new openings of small businesses constitute an important driver of the recovery but the annual rate of new openings is only about half the rate one year earlier (4) small business employment was affected less negatively in counties with early access to loans from the Paycheck Protection Program (PPP) and in counties where Federal Pandemic Unemployment Compensation (FPUC) was more generous relative to pre-pandemic earnings of likely recipients, with business closings accounting for a large part of these two effects. The results dispel the popular notion that small businesses continue to suffer more from the pandemic than larger businesses. At the same time, our analysis suggests that PPP and FPUC helped to signifocantly mitigate the negative effects of the pandemic for small businesses by, respectively, alleviating financial constraints and stimulating demand for local services. La pandémie de COVID-19 a donné lieu à une explosion des recherches utilisant des données en temps réel au niveau des établissements. L'un des principaux défis à relever lorsqu'on travaille avec ces données est de prendre en compte les effets des ouvertures et des fermetures d'entreprises. Dans cet article, nous relevons ce défi en faisant correspondre les enregistrements des établissements de petites entreprises de Homebase avec les informations sur l'activité commerciale de Google, Facebook et Safegraph afin de distinguer les fermetures et ouvertures d'entreprises des autres sorties et entrées de l'échantillon. Nous montrons que cette distinction est essentielle pour comparer les données aux dossiers administratifs pré-pandémie et estimer les effets de la pandémie sur l'activité des petites entreprises. Nous trouvons quatre résultats clés : (1) l'emploi des petites entreprises dans quatre des secteurs de services les plus durement touchés s'est contracté plus sévèrement au début de la pandémie que l'emploi des grandes entreprises, mais les petites entreprises ont également rebondi plus fortement et ont en moyenne récupéré une part plus importante des pertes d'emploi que les grandes entreprises ; (2) les fermetures représentent 70 % de la baisse initiale de l'emploi des petites entreprises, mais deux tiers des entreprises fermées ont rouvert et le taux annuel de fermetures est à peine plus élevé qu'avant la pandémie ; (3) les nouvelles ouvertures de petites entreprises constituent un moteur important de la reprise, mais le taux annuel de nouvelles ouvertures n'est que la moitié environ du taux enregistré un an plus tôt (4) l'emploi des petites entreprises a été moins affecté dans les comtés qui ont eu accès rapidement aux prêts du Programme de protection des salaires (PPP) et dans les comtés où l'indemnisation fédérale du chômage en cas de pandémie (FPUC) a été plus généreuse par rapport aux revenus des bénéficiaires probables avant la pandémie, les fermetures d'entreprises expliquant une grande partie de ces deux effets. Les résultats réfutent la notion populaire selon laquelle les petites entreprises continuent de souffrir davantage de la pandémie que les grandes entreprises. Dans le même temps, notre analyse suggère que le PPP et le FPUC ont contribué à atténuer de manière significative les effets négatifs de la pandémie pour les petites entreprises, respectivement en allégeant les contraintes financières et en stimulant la demande de services locaux.
    Keywords: Economics of small and medium enterprises,Labor turnover,Sampling bias,Matched data,COVID-19,Sector policies, Economie des petites et moyennes entreprises,Rotation de la main d’œuvre,Biais d’échantillonnage,Données appariées,COVID-19,Politiques sectorielles
    JEL: E01 E24 E32 E60
    Date: 2021–08–13
  6. By: Allen Hu; Song Ma
    Abstract: Persuasive communication functions not only through content but also delivery, e.g., facial expression, tone of voice, and diction. This paper examines the persuasiveness of delivery in start-up pitches. Using machine learning (ML) algorithms to process full pitch videos, we quantify persuasion in visual, vocal, and verbal dimensions. Positive (i.e., passionate, warm) pitches increase funding probability. Yet conditional on funding, high-positivity startups underperform. Women are more heavily judged on delivery when evaluating single-gender teams, but they are neglected when co-pitching with men in mixed-gender teams. Using an experiment, we show persuasion delivery works mainly through leading investors to form inaccurate beliefs.
    JEL: C55 D91 G24 G4 G41
    Date: 2021–07
  7. By: Zinsou Nakou (ESP - École Supérieure Polytechnique de Dakar - UCAD - Université Cheikh Anta Diop [Dakar, Sénégal]); Serge Francis Simen Nana (ESP - École Supérieure Polytechnique de Dakar - UCAD - Université Cheikh Anta Diop [Dakar, Sénégal])
    Abstract: The appropriation of corporate social responsibility (CSR) through the innovation of managers in small and medium-sized Beninese enterprises has been the subject of a thematic content analysis whose perspective is inspired by a qualitative methodology aimed at understanding. The data collected emanate from semi-structured interviews carried out on the basis of an interview guide drawn up and sent to a sample made up of 25 managers of 15 SMEs and working in various sectors of activity. The processing of this data was assisted by MAXQDA software and produced reliable results revealing a very close relationship between CSR and innovation. Likewise, taking CSR into account in process innovations focuses on finding solutions to reduce the environmental footprint. The results also revealed that the location of the SME derives the socio-economic context and the culture of the area which can in turn influence its behavior in terms of CSR. Also, the constraints that SMEs face are economic and technical, then digital helps interviewed managers to take into account the environmental aspect of CSR by playing the role of facilitator to document/quantify the aspects. CSR of innovation (means of monitoring).
    Abstract: L'appropriation de la responsabilité sociale des entreprises (RSE) par l'innovation des dirigeants dans les petites et moyennes entreprises béninoises a fait l'objet d'une analyse de contenu thématique dont la perspective s'inspire d'une méthodologie qualitative à visée compréhensive. Les données recueillies émanent d'entretiens semi-directifs réalisés sur la base d'un guide d'entretiens établi et adressé à un échantillon constitué de 25 dirigeants de 15 PME et exerçant dans des secteurs d'activités variés. Le traitement de ces données a été assisté par le logiciel MAXQDA et a produit des résultats fiables révélateurs d'une relation très étroite entre la RSE et l'innovation. De même, la prise en compte de la RSE dans les innovations de procédé porte sur la recherche de solutions pour réduire l'empreinte environnementale. Les résultats ont également révélé que de la localisation de la PME découlent le contexte socioéconomique et la culture du milieu qui peuvent à leur tour influencer son comportement en matière de RSE. Aussi, les contraintes auxquelles sont-elles confrontées les PME sont d'ordre économique et d'ordre technique puis le digital aide les dirigeants interviewés à prendre en compte le volet environnemental de la RSE en jouant un rôle de facilitateur pour documenter/quantifier les aspects RSE de l'innovation (moyen de monitoring).
    Keywords: managers,SMEs,thematic content analysis,CSR,analyse de contenu thématique,dirigeants,PME,innovation,RSE
    Date: 2020–03–12
  8. By: Laetitia Gohlou Diomandé (UICL - CERF - Centre, d’Etudes, de Recherche et de Formation Continue, Sup'management.); Cedric Yao (UICL - CERF - Centre, d’Etudes, de Recherche et de Formation Continue, Sup'management.)
    Abstract: The asymmetry of information, resulting from the agency theory, is an aspect that is much complained about by banks regarding SMEs in Africa; and is one of the main reasons for the lack of financing of which these SMEs are victims. The informal structure of the African SME is the main reason for this information asymmetry. Thus far, banks have been content to require African SMEs to adapt to their operations, such as having financial data that meets legal requirements, but this has only widened the gap between these two actors. This thesis proposes the modeling of an information system that is as well adapted to the constraints of banks as to those of the African SME, in order to promote the permanent sharing of information between these two actors. The modeled system would allow both banks to obtain qualitative and quantitative information on African SMEs and the latter to meet the requirements of banks to obtain the financing they need.
    Abstract: L'asymétrie d'information, issue de la théorie de l'agence est un aspect qui est beaucoup décrié par les banques concernant les PME en Afrique ; et est l'une des causes du manque de financement dont sont victimes ces PME. Le caractère informel de la PME Africaine est la principale cause de cette asymétrie d'informations. Jusqu'à présent les banques se sont contentées d'exiger des PME Africaines qu'elles s'adaptent à leur fonctionnement comme le fait de disposer de données financières répondant aux critères légaux, mais cela n'a fait que creuser un peu plus le fossé entre ces deux acteurs. Cet article propose la modélisation d'un système d'informations aussi bien adaptée aux contraintes des banques qu'à celles de la PME Africaine, afin de favoriser le partage permanent d'informations entre ces deux acteurs. Le système modélisé permettrait à la fois aux banques d'obtenir des informations qualitatives et quantitatives sur les PME Africaines et à ces dernières de répondre aux exigences des banques pour l'obtention des financements dont elles ont besoin.
    Keywords: SME,Bank,Social netork,Informal sector,Financing,Asymétrie of information,information system,Process modeling,Accounting software,système d’information,asymétrie d’information,financement,secteur informel,Banque,PME,modélisation de processus,réseau social,logiciel comptable
    Date: 2021–08–06

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