nep-ent New Economics Papers
on Entrepreneurship
Issue of 2021‒10‒04
twelve papers chosen by
Marcus Dejardin
Université de Namur

  1. Collaborative Innovation Blocs and Mission-Oriented Innovation Policy: An Ecosystem Perspective By Elert, Niklas; Henrekson, Magnus
  2. Financing and advising early stage startups: The effect of angel investor subsidies By Berger, Marius; Gottschalk, Sandra
  3. Academic Freedom, Institutions and Productivity By Berggren, Niclas; Bjørnskov, Christian
  4. Big Loans to Small Businesses: Predicting Winners and Losers in an Entrepreneurial Lending Experiment By Gharad T. Bryan; Dean Karlan; Adam Osman
  5. Business Dynamism, Sectoral Reallocation and Productivity in a Pandemic By Guido Ascari; Andrea Colciago; Riccardo Silvestrini
  6. Macro-scaled Microcredit and Constraints on Household Business Development: Evidence from Northern Thailand By Archawa Paweenawat; Narapong Srivisal
  7. Intended and unintended effects of public incentives for innovation. Quasi-experimental evidence from Italy By Giovanni Mellace; Marco Ventura
  8. The impact of Covid-19 Pandemic on Romania’s business environment. By ANDREI, Dalina
  9. Bank Mergers, Acquirer Choice and Small Business Lending: Implications for Community Investment By Bernadette A. Minton; Alvaro G. Taboada; Rohan Williamson
  10. The Impact of Venture Capital Expenditures on Innovation in Europe By Leogrande, Angelo; Costantiello, Alberto; Laureti, Lucio
  11. Social Innovation and Entrepreneurship: Evolution and Principal Approaches. By Ilham Sayarh; Karim Bennis
  12. Entwicklung der Existenzgründungen in den Kreisen und kreisfreien Städten 2003-2019 By Suprinovič, Olga; Kranzusch, Peter; Nielen, Sebastian; Kay, Rosemarie

  1. By: Elert, Niklas (Research Institute of Industrial Economics (IFN)); Henrekson, Magnus (Research Institute of Industrial Economics (IFN))
    Abstract: Among contemporary economists, Mariana Mazzucato stands out for her emphasis on the importance of innovation to solve pressing challenges and achieve a greater quality of life. However, the type of mission-oriented innovation policies she promotes usually rely on an overly mechanical view of innovation and economic growth. We employ an ecosystem perspective to demonstrate that innovative entrepreneurship takes place in a collaborative innovation bloc consisting of a myriad of nodes. Entrepreneurs, inventors, early- and later-stage financiers, key personnel, and customers are all actors whose skills and abilities are necessary to realize an entrepreneurial project. When mission-oriented policies play a large role in an industry’s production or financing, connections between actors in the innovation bloc risk being severed, severely curtailing the scope for actors to play their requisite roles. Thus, there is a risk that such policies do more harm than good for innovation and economic growth.
    Keywords: Entrepreneurial ecosystems; Collaboration; Entrepreneurship policy; Institutions; Innovation policy
    JEL: D20 G32 L23 L26 O33 O38
    Date: 2021–09–22
  2. By: Berger, Marius; Gottschalk, Sandra
    Abstract: In recent years governments around the world have introduced policies to stimulate investments in early stage entrepreneurial companies, in particular investments by Angel investors. In this paper we study whether introducing subsidies to Angel investors has effects on startups' access to financial and managerial resources provided by Angel investors. Using data for a representative sample of entrepreneurial companies in Germany, we analyze the effect of the introduction of a major subsidy program for Angel investors in Germany. Having data before and after the introduction of the program allows us to use a difference-in-differences framework to examine the effect of the program on eligible companies. Our findings indicate that subsidies for Angel investors both increase the chances to receive financing from Angel investors (+36-67%), as well as the amount of financing received (+70-82%). In terms of managerial resources, we find no effects that are significantly different from zero. This result is in contrast to theoretical predictions suggesting negative effects of investment subsidies on the level of managerial support that companies receive. Exploring the mechanisms behind our results, we find that the policy stimulated entry by inexperienced investors, but also increased syndicate sizes of Angel investors in entrepreneurial companies.
    Keywords: Entrepreneurship Policy,Angel Investors,Venture Capital,Syndication
    JEL: G28 G24 M13 O38
    Date: 2021
  3. By: Berggren, Niclas (Research Institute of Industrial Economics (IFN)); Bjørnskov, Christian (Aarhus University, Denmark)
    Abstract: The issue of what explains differences in the wealth of nations is one of the most classic in economics. We propose de facto academic freedom as an explanatory variable. The main idea is that such freedom allows for the development of new useful knowledge through research unconstrained by powerholders in business and politics. Using a new global panel-data set, encompassing up to 127 countries over the period 1960–2015, we show that there is indeed a positive relationship between de facto academic freedom and both labor and total-factor productivity growth. However, this effect only appears as long as the quality of the legal system is sufficiently high. We suggest that this is because such institutional quality offers protection that stimulates entrepreneurs to make use of the new knowledge produced in academia in innovative activities, which in turn benefits productivity growth.
    Keywords: Institutions; Academic freedom; Freedom of speech; Productivity; Growth
    JEL: F13 H25 O31 O38 O43
    Date: 2021–09–21
  4. By: Gharad T. Bryan; Dean Karlan; Adam Osman
    Abstract: We experimentally study the impact of substantially larger enterprise loans, in collaboration with an Egyptian lender. Larger loans generate small average impacts, but machine learning using psychometric data reveals dramatic heterogeneity. Top-performers (i.e., those with the highest predicted treatment effects) substantially increase profits, whereas profits for poor-performers drop. The magnitude of this difference implies that an individual lender’s credit allocation choices matter for aggregate income. Evidence on two fronts suggests large loans would be misallocated: top-performers are predicted by loan officers to have higher default rates; and, top-performers grow less than others when given small loans, implying that allocating larger loans based on prior performance is not efficient. Our results have important implications for credit expansion policy and our understanding of entrepreneurial talent: on the former, the use of psychometric data to identify top-performers suggests a pathway towards better allocation that revolves around entrepreneurial type more than firm type; on the latter, the reversal of fortune for poor-performers, who do well with small loans but not large, indicates a type of entrepreneur that we call a “go-getter” who performs well when constrained but poorly when not.
    JEL: D22 D24 L26 M21 O12 O16
    Date: 2021–09
  5. By: Guido Ascari; Andrea Colciago; Riccardo Silvestrini
    Abstract: Asymmetric effects across sectors are the distinctive features of the Covid-19 shock. Business Formation Statistics in the United States show a reallocation of entry and exit opportunities across sectors in the initial phase of the pandemic. To explain these facts, we propose an Epidemiological-Industry Dynamic model with heterogeneous firms and endogenous firms dynamics. Our analysis suggests that the cleansing effect on business dynamism of the Covid-19 crisis, which typically characterizes recessions, is sector-specific. The framework can rationalize the dynamics of aggregate productivity during the crisis. Monetary policy and sticky wages are central ingredients to capture reallocation effects. Social distancing, by smoothing out cleansing in the social sector, slows down the reallocation process and prolongs the recession, but saves lives.
    Keywords: Covid-19; Productivity; Entry; Reallocation.
    JEL: E3 L16 I3
    Date: 2021–09
  6. By: Archawa Paweenawat (Bank of Thailand); Narapong Srivisal (Chulalongkorn University)
    Abstract: This paper studies impacts of One-Million-Baht Village Fund program on entrepreneurial activities of households in northern Thailand. In addition to being one of the largest-scaled microfinance programs to date, the implementation of the Village Fund program provides us with an exogenous variation in the availability of microcredit per household that can be used to form an instrumental variable. We apply our unique dataset, containing the instrument and a precise measure of the extent to which household businesses are financially constrained, to estimate Probit models that are subject to the problem of endogenous borrowing decisions. We find evidence for the positive impacts of the Village Fund program on relieving financial constraints faced by household businesses, but the impacts on business startup rates are not significant. Our findings offer policy implications on improving effectiveness of microfinance programs in promoting household businesses.
    Keywords: Entrepreneurship, Financial Constraints, Microfinance, Village Funds
    JEL: G21 G51 O16
    Date: 2021–09
  7. By: Giovanni Mellace; Marco Ventura
    Abstract: Italy introduced a policy to incentivize young innovative start-up firms in 2012. Using a regression discontinuity design (RDD) we estimate its causal effects on the firms' share of intangible assets, turnover, number of employees, and number of partners. Our results indicate that after two years the policy was effective in increasing the number of partners, but we do not find any significant effects on innovation, at least in the short run. We provide strong evidence that the new investors might have been attracted by the tax benefit but had little interest in innovation.
    Keywords: Policy evaluation; Regression discontinuity design; Incentives to innovations
    JEL: H32 L52 C21 O31
    Date: 2021–09
  8. By: ANDREI, Dalina
    Abstract: Our paper tries to have an image on companies in Romania through the official statistical data of the National Office of the Romanian Trade Register (ONRC) regarding the authorized individuals and legal entities active in Romania, then some more data and opinions vis-à-vis provided by National Institute of Statistics(INSSE) and finally several surveys conducted by consulting companies in the same area of studying. We’ll even attempt to ‘draw’ a kind of behavioural ‘portrait of Romanian business people’ to find then how much these subjects saw themselves affected by the current Covid-19 health crisis. Basically, this latest is supposed to have a major impact on the international business environment. More about what is here happening beyond company registrations, insolvencies and other company related events and legislation is needed. Existing descriptions in the press and literature need improvements either. We will equally take into account, in the text below, the responsibility of companies' shareholders face to: expectations, businesses financing options, difficulties and difficult periods facing solutions, plans and strategies for near future. The impact of some measures taken by government authorities to support the business and entrepreneurs will also be taken into account.
    Keywords: new companies formation, entrepreneurship,Covid19 economic impact, romanian business environment
    JEL: I14 I15 M1 M13 M2
    Date: 2021–01–10
  9. By: Bernadette A. Minton; Alvaro G. Taboada; Rohan Williamson
    Abstract: We examine the effects of bank merger and local market characteristics on local small business lending. Mergers involving small, in-state acquirers are positively associated with small business loan (SBL) originations in counties where target banks are located. Conversely, mergers involving large, out-of-state acquirers are associated with fewer SBL originations. The analysis suggests that the results are driven by acquirer’s choice of target. Small and in-state acquirers target banks that focus more on SBL and targets with strong relationships while large, out-of-state acquirers pursue better performing banks with stronger balance sheets and less focus on SBL. Results are particularly strong in counties with a large number of small firms. Post-merger activity supports banks expanding on their acquisition strategy decisions. The findings suggest that acquirer strategy is important for evaluating the impact of acquisitions on local community development and that one-size-fits-all policy solutions for bank mergers may not produce common local outcomes.
    JEL: G21 G34 O1
    Date: 2021–09
  10. By: Leogrande, Angelo; Costantiello, Alberto; Laureti, Lucio
    Abstract: We investigate the relationship between “Venture Capital Expenditures” and innovation in Europe. Data are collected from the European Innovation Scoreboard for 36 countries in the period 2010-2019. We perform Panel Data with Fixed Effects, Panel Data with Random Effects, Pooled OLS, WLS, Dynamic Panel. Results show that the level of Venture Capitalist Expenditure is positively associated to “Foreign Doctorate Students” and “Innovation Index” and negatively related to “Government Procurement of Advanced Technology Products”, “Innovators”, “Medium and High-Tech Products Exports”, “Public-Private Co-Publications”. In adjunct, cluster analysis is realized with the algorithm k-Means and the Silhouette coefficient, and we found the presence of four different clusters for the level of “Venture Capital Expenditures”. Finally, we propose a confrontation among 8 different algorithms of machine learning to predict the level of “Venture Capital Expenditures” and we find that the linear regression generates the best results in terms of minimization of MAE, MSE, RMSE.
    Keywords: Innovation and Invention: Processes and Incentives, Management of Technological Innovation and R&D, Technological Change: Choices and Consequences, Intellectual Property and Intellectual Capital, Open Innovation, Government Policy.
    JEL: O30 O31 O32 O33 O34 O38 O39
    Date: 2021–09–25
  11. By: Ilham Sayarh (FSJES-Fès - Faculté des Sciences Juridiques, Economiques et Sociales de Fès); Karim Bennis (FSJES-Fès - Faculté des Sciences Juridiques, Economiques et Sociales de Fès)
    Abstract: The expression "social innovation" has entered through the door of technological innovation in order to correct its imperfections. It is an effective solution to social needs neglected by public authorities. This article seeks to shed light on this concept, which can be considered as a lever to promote sustainable economic and social development, through a brief theoretical overview.
    Abstract: L'expression de « l'innovation sociale » est entrée par la porte la l'innovation technologique à fin de corriger ses imperfections. C'est une solution efficace à des besoins sociaux délaissé par les pouvoirs publics. Cet article cherche à mettre la lumière sur ce concept qui peut être considérer comme un levier pour promouvoir le développement économique et sociale durable, par un bref aperçu théorique.
    Keywords: government,technological innovation,development,social entrepreneurship,développement,pourvoirs publics,Innovation technologique,Innovation sociale,entrepreneuriat social
    Date: 2020–08–04
  12. By: Suprinovič, Olga; Kranzusch, Peter; Nielen, Sebastian; Kay, Rosemarie
    Abstract: Basierend auf der Gewerbeanzeigenstatistik untersuchen wir die Entwicklung des Existenzgründungsgeschehens in 401 Kreisen und kreisfreien Städten in Deutschland im Zeitraum 2003 bis 2019. Das Gründungsgeschehen der Kreise variiert erheblich während des gesamten Zeitraums. Am aktuellen Rand liegt die Gründungsintensität zwischen 23 und 127 Existenzgründungen je 10.000 Erwerbsfähige. Sie ist über den Gesamtzeitraum jährlich um 4,3 % gesunken, doch rund 40 % der Kreise haben sich besser als der Durchschnitt entwickelt. Fünf Kreise weisen sogar eine insgesamt positive Entwicklung auf. Die unterschiedlichen Entwicklungen führten zu teilweise erheblichen Verschiebungen in der Rangordnung der Kreise nach Gründungsintensität. Die Unterschiede im regionalen Gründungsgeschehen sind im betrachten Zeitraum keineswegs stabil.
    Keywords: Gründungen,Regionales Gründungsgeschehen,Deutschland,Start-ups,Regional start-up activity,Germany
    JEL: L26 O10 R11
    Date: 2021

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