nep-ent New Economics Papers
on Entrepreneurship
Issue of 2021‒09‒27
eight papers chosen by
Marcus Dejardin
Université de Namur

  1. Intangibles and industry concentration: Supersize me By Matej Bajgar; Chiara Criscuolo; Jonathan Timmis
  2. Caste, Courts and Business By Chakraborty, Tanika; Mukherjee, Anirban; Saha, Sarani; Shukla, Divya
  3. Entrepreneurship and the Shadow (Informal) Economy By Akbal, Can
  4. Twenty years of job flows in an emerging country By Rodrigo Ceni; Gabriel Merlo
  5. Does Agri-Business/Small and Medium Enterprise Investment Scheme (AGSMEIS) Impact on Youth Entrepreneurship Development in sub-Saharan Africa? Evidence from Nigeria By Elda N. Okolo-Obasi; Joseph I. Uduji
  6. Assessing the mechanism of barriers towards green finance and public spending in small and medium enterprises from developed countries By Chien, Fengsheng; Ngo, Quang-Thanh; Hsu, Ching-Chi; Chau, Ka Yin; Iram, Robina
  7. She Innovates- Female owner and firm innovation in India By Shreya Biswas
  8. Characteristics of Firms in Botswana's Informal Economy By Tshepiso Gaetsewe

  1. By: Matej Bajgar (Center for Economic Research and Graduate Education - Economics Institute); Chiara Criscuolo (OECD); Jonathan Timmis (The World Bank)
    Abstract: This paper presents new evidence on the growing scale of big businesses in the United States, Japan, and Europe. It finds broad evidence of rising industry concentration across the majority of countries and sectors over the period 2002 to 2014. Rising concentration is strongly associated with intensive investment in intangibles, particularly innovative assets, software, and data. This relationship appears to be stronger in more globalised and digital-intensive industries. The results are consistent with intangibles disproportionately benefiting large firms and enabling them to scale up and increase market shares. We find nuanced implications of these new business models for competition – rising markups and reduced churning amongst the top firms, but falling industry prices.
    Keywords: Competition, Industry and entrepreneurship, Innovation
    JEL: E22 L1 L25
    Date: 2021–09–22
  2. By: Chakraborty, Tanika; Mukherjee, Anirban; Saha, Sarani; Shukla, Divya
    Abstract: We study the role of formal institutions of contract enforcement in facilitating investments in small and medium firms(MSME). In a framework where established entrepreneurs can enforce contracts informally using their network ties and hierarchical advantage, we argue that an efficient formal judiciary helps entrepreneurs without any ties to informal business networks, disproportionately more. We test our theoretical prediction using a novel administrative panel-data from Indian courts and the nationally representative MSME survey data. Empirically, we treat entrepreneurs from disadvantaged castes (SC-ST) as those without traditional business-network ties. We find that improvement in court quality has a disproportionately larger impact on the investment decisions of SC-ST entrepreneurs. On average, if the time taken for a court to clear all existing cases reduces by 1 year, the initial gap in the probability of investing, between SC-ST and other entrepreneurs, gets reduced by 0.6-0.7 percentage points.
    Keywords: Judiciary,Duration Index,MSME,Entrepreneurship
    JEL: K12 L26 O17
    Date: 2021
  3. By: Akbal, Can
    Abstract: In this paper, we investigate the empirical relationship between entrepreneurship and the shadow economy size. To this end, we use cross-country data and most-frequently-used measure of the entrepreneurial activity, i.e., Global Entrepreneurship Index (GEI), as well as its subindices, and calculate correlations of these indices with the size of the informal sector and its major determinants. Our analysis indicates that there are significant correlations between the variables involved.
    Keywords: Entrepreneurship, shadow economy, cross-country data
    JEL: E00 H00
    Date: 2021–09–20
  4. By: Rodrigo Ceni (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Gabriel Merlo (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía)
    Abstract: In a market economy, firms are continuously exposed to economic shocks that affect their performance and results. In response to these shocks, firms react by reallocating their productive factors, such as capital and labor, to more productive uses. We estimate the job flows over a twenty-year period in Uruguay, exploring firm and worker characteristics. We use panel data from social security administrative records that match employers and employees in formal firms between 1996 and 2015. Job flow levels and their cycles are consistent with international evidence. Entry and exit of firms from the market play an important role, explaining about 30% of the total number of jobs created and destroyed for the whole period with high heterogeneity across industries, firm age, and firm size. In particular, the smallest firms are not as relevant in explaining net growth as political and popular beliefs would suggest, and it is start-ups that have the main role in job creation in Uruguay. Despite representing only 5% of total employment, they created more than one-quarter of new jobs and maintained this role in a fully saturated regression. Among worker characteristics, we found no differences in job flows by gender, but female workers gain participation in the period; there are bigger flow rates among workers under 25 and workers in the first and third wage terciles.
    Keywords: job flows; employer employee match data; formal jobs; Uruguay
    JEL: J23 J63 L25
    Date: 2021–07
  5. By: Elda N. Okolo-Obasi (University of Nigeria, Nsukka, Nigeria); Joseph I. Uduji (University of Nigeria, Nsukka, Nigeria)
    Abstract: Purpose – The purpose of this paper is to critically examine the agri-business/small and medium investment schemes (AGSMEIS) in Nigeria. Its special focus is to investigate the impact of the AGSMEIS on youth entrepreneurship development in Nigeria. Design/methodology/approach – This paper adopts a survey research technique, aimed at gathering information from a representative sample of the population, as it is essentially cross-sectional, describing and interpreting the current situation. A total of 1,200 respondents were sampled across the six geopolitical zones of Nigeria. Findings – The results from the use of a combined propensity score matching (PSM) and logit model indicate that AGSMEIS initiative generates significance gains in empowering youths in enterprise development, and if enhanced will help many young people become entrepreneurs. Practical implications – This suggests that AGSMEIS initiative can facilitate youth’s access to credit and help them become owners of small and medium enterprises. Social implications – It implies that investing in young people for small and medium enterprises could bring Nigeria into the modern economy and lift sub-Saharan Africa out of poverty. Originality/value – This research adds to the literature on youth entrepreneurship development’s debate in developing countries. It concludes that targeting the young people in AGSMEIS should form the foundation of public policy for entrepreneurship, poverty alleviation, and economic development.
    Keywords: Agri-business/small and medium investment schemes (AGSMEIS), youth entrepreneurship development, sub-Saharan Africa
    Date: 2021–01
  6. By: Chien, Fengsheng; Ngo, Quang-Thanh; Hsu, Ching-Chi; Chau, Ka Yin; Iram, Robina
    Abstract: Due to their different abilities to improve financial growth and improve social development, small and medium enterprises (SMEs) have been referred to as the economy’s backbone. Small- and medium-sized enterprises are crucial for both high- and low-income nations’ financial development. Customers grow more conscious of their purchase choices, preferences, and environmental consequences. The financial opportunities for SMEs in the United Arab Emirates to use green innovation methods to address potential obstacles for increasing green goods, processes, and management are examined in this paper; as a result, it is critical to reduce clean technology adoption constraints in small- and medium-sized businesses. To identify significant hurdles, sub-barriers, and ways to overcome impediments to green innovation in the United Arab Emirates, we apply an integrated decision process. Following a detailed literature analysis and the assistance of twelve experts, six primary obstacles, twenty-five sub-obstacles, and strategies to reduce the barriers were identified. Primary and sub-barriers were assessed using the FAHP. The (FTOPSIS) approach was used to rank the strategies. Five SMEs in the United Arab Emirates are putting the suggested integrated decision model to the test. “Financial investment levels 0.646 to 11 percent growth level,” according to the FAHP, are the most significant hurdles to SMEs adopting green practices. This research demonstrated a considerable beneficial association between SMEs and financial development and funding in the United Arab Emirates. According to this study, using research methodologies to provide green innovation in SMEs is the best strategy to overcome green innovation and adoption hurdles in small and medium firms and increasing their economics.
    Keywords: SMEs; Barriers; Green innovation; Financial; FAHP; Financial development; United Arab Emirates
    JEL: E0
    Date: 2021–06–22
  7. By: Shreya Biswas
    Abstract: Using data from World Bank Enterprises Survey 2014, we find that having a female owner in India increases firm innovation probability using both input and output indicators of innovation. We account for possible endogeneity of female owner variable using a two stage instrumental variable probit model. We find that the positive effect of female owner variable is observed in the sub-samples of firms with more access to internal funding, young firms and firms located in regions with no or less crime This study highlights the need to promote female entrepreneurship as a potential channel for promoting firm innovation in India.
    Date: 2021–09
  8. By: Tshepiso Gaetsewe (Botswana Institute for Development Policy Analysis)
    Abstract: Botswana has a large informal economy which continues to grow at a rapid rate. The Government recognises the importance of the sector in reducing unemployment and poverty. However, not much is known about informal firms in order for Government to assist in their development. The objective of this paper is to empirically identify the characteristics of the firms in Botswana’s informal economy. A binary logistic regression model is used to model the characteristics of Botswana’s informal firms, and data employed came from the 2015/16 Botswana Multi-Topic Household Survey (BMTHS). Findings indicate that informal firms in Botswana are likely to be situated in rural areas, they operate in their own households, as sole proprietors. Results further depict that, firms that did not need a loan when starting up (because business needed little capital or business was inherited) are more likely to be informal, than businesses that used household savings or sold assets to start the business. Furthermore, it was also revealed that informal firms are less likely to have small businesses and institutions as the main buyer of their goods and services, as compared to individual buyers. The paper advocates for a policy that is tailor made for the informal sector, to address the specific challenges the sector faces. Government needs to boost the business environment in rural areas, to allow for growth of firms, and create more jobs. More initiatives should be geared towards the encouragement of partnerships, as this will help individuals pool resources and ideas for sustained growth in these firms.
    Keywords: Informal economy; Registration; Logistic regression; Botswana
    Date: 2020–03

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