nep-ent New Economics Papers
on Entrepreneurship
Issue of 2021‒11‒01
seven papers chosen by
Marcus Dejardin
Université de Namur

  1. The Importance of Capital in Closing the Entrepreneurial Gender Gap: A Longitudinal Study of Lottery Wins By Sarah Flèche; Anthony Lepinteur; Nattavudh Powdthavee
  2. Firm Entry and Exit and Aggregate Growth By Jose Asturias; Sewon Hur; Timothy J. Kehoe; Kim J. Ruhl
  3. Firm Dynamics and SOE Transformation During China's Economic Reform By Shijun Gu; Chengcheng Jia
  4. Tax Incentives to Appear Small: Evidence from Thai Firms and Corporate Groups By Chanont Banternghansa; Athiphat Muthitacharoen; Archawa Paweenawat; Krislert Samphantharak
  5. A Meta Path based SME Credit Risk Measuring Method By Marui Du; Zuoquan Zhang; Rui Zhang
  6. New evidence on State aid for firms in Italy By Giuseppe Albanese; Rosalia Greco; Luciano Lavecchia; Marco Manile
  7. Stimuler et pérenniser les investissements des jeunes dans l’agriculture et les systèmes alimentaires By Yannick Fiedler

  1. By: Sarah Flèche (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, CEP - LSE - Centre for Economic Performance - LSE - London School of Economics and Political Science); Anthony Lepinteur (Department of Behavioural and Cognitive Sciences); Nattavudh Powdthavee (WBS - Warwick Business School - University of Warwick [Coventry], IZA - Forschungsinstitut zur Zukunft der Arbeit - Institute of Labor Economics)
    Abstract: Would improving women's access to capital reduce the gender entrepreneurial gap? We study this issue by exploiting longitudinal data on lottery winners. Comparing between large to small winners, we find that an increase in lottery win in period t-1 significantly increases the likelihood of becoming self-employed in period t. This windfall effect is statistically the same in magnitude for men and women; the top 25% winners (an average win = £831.16) in year t-1 report a significant increase in the probability of self-employment in year t by approximately 2 percentage points, which is approximately 20-30% of the gender entrepreneurial gap. These results suggest that we can causally reduce the gender entrepreneurial gap by improving women's access to capital that might not be as readily available to the aspiring female entrepreneurs as it is to male entrepreneurs
    Keywords: lottery wins,self-employment,gender inequality,BHPS
    Date: 2021–06–15
  2. By: Jose Asturias; Sewon Hur; Timothy J. Kehoe; Kim J. Ruhl
    Abstract: Applying the Foster, Haltiwanger and Krizan (FHK) (2001) decomposition to plant-level manufacturing data from Chile and Korea, we find that the entry and exit of plants account for a larger fraction of aggregate productivity growth during periods of fast GDP growth. To analyze this relationship, we develop a model of firm entry and exit based on Hopenhayn (1992). When we introduce reforms that reduce entry costs or reduce barriers to technology adoption into a calibrated model, we find that the entry and exit terms in the FHK decomposition become more important as GDP grows rapidly, just as they do in the data from Chile and Korea.
    Keywords: Entry; Exit; Productivity; Entry costs; Barriers to technology adoption
    JEL: E22 O10 O38 O47
    Date: 2021–10–19
  3. By: Shijun Gu; Chengcheng Jia
    Abstract: We study China’s state-owned enterprises (SOE) reform with a focus on the corporatization of SOEs. We first empirically document that small SOEs are more likely to exit or become privatized, whereas big SOEs are more likely to be corporatized while remaining under state ownership. We then build a heterogeneous-firm model featuring financial frictions, endogenous entry and exit, and optimal firm-type choices. Our calibrated model suggests that in the long run, the SOE reform increases the aggregate output by facilitating resource reallocation to the private sector. Along the transition, the corporatization option leads to higher aggregate output than the privatization-only policy by giving a higher financing capacity to more productive incumbent SOEs.
    Keywords: firm dynamics; economic reform; Chinese economy
    JEL: E23 E44 O16 O41 O43
    Date: 2021–10–19
  4. By: Chanont Banternghansa; Athiphat Muthitacharoen; Archawa Paweenawat; Krislert Samphantharak
    Abstract: This paper studies the effects of SME tax incentives on firm behaviors. We use firm-level panel data of all registered firms in Thailand to analyze the effects of a large reduction in corporate income tax rates for SMEs in 2011. First, we find that firms responded strongly to the SME tax incentive as indicated by a sharp bunching of firms just below the threshold after the incentive was introduced. The responses were concentrated among firms with positive EBIT, implying a financial motive for firms to remain small. Second, the bunching was prominent for stand-alone firms, where we observe slower revenue growth for those below the threshold. Third, we do not observe bunching for corporate-group firms, but we find evidence of tax-motivated profit shifting among them instead, especially among firms in small groups with weak corporate governance. Our analysis suggests that transfer pricing was likely a primary channel. Finally, despite the unintended consequences, we find that the incentive significantly raised the probability of firm's survival and encouraged new firm registration, as the policy intended.
    Keywords: Bunching; Tax Incentives; Business Group; Corporate Tax; Size-dependent Policy; Tax Evasion
    JEL: F23 H25 H26 K34 M42
    Date: 2021–02
  5. By: Marui Du; Zuoquan Zhang; Rui Zhang
    Abstract: Nowadays small and medium-sized enterprises have become an essential part of the national economy. With the increasing number of such enterprises, how to evaluate their credit risk becomes a hot issue. Unlike big enterprises with massive data to analyze, it is hard to find enough information of small enterprises to assess their financial status. Limited by the lack of primary data, how to inference small enterprises' credit risk from secondary data, like information of their upstream, downstream, parent, and subsidiary enterprises attracts big attention from industry and academy. Targeting on accurately evaluating the credit risk of the small and medium-sized enterprise (SME), in this paper, we exploit the representative power of Information Network on various kinds of SME entities and SME relationships to solve the problem. A novel feature named meta path feature proposed to measure the credit risk, which makes us able to evaluate the financial status of SMEs from various perspectives. Experiments show that our method is effective to identify SMEs with credit risks.
    Date: 2021–10
  6. By: Giuseppe Albanese (Bank of Italy); Rosalia Greco (Bank of Italy); Luciano Lavecchia (Bank of Italy); Marco Manile (Bank of Italy)
    Abstract: The lack of detailed information on the firms profiting from incentives in Italy makes it very difficult to perform analyses of the characteristics of State aid in this country. To close this gap, this paper exploits a new database, the National State Aid Register, which provides detailed information on incentives falling within the perimeter of State aid in accordance with EU law. Our analysis for the years 2018-19 suggests that industrial policy in Italy is highly fragmented, with fewer resources utilized with respect to the European average. We also show that this aid has been primarily used for SMEs, and to a greater extent (as a ratio of turnover) for those in Southern Italy.
    Keywords: state aids, Registro nazionale degli aiuti di Stato, industrial policy, incentives
    JEL: O25 L52 H32
    Date: 2021–10
  7. By: Yannick Fiedler (CERI - Centre de recherches internationales - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Empowering young agri-entrepreneurs to invest in agriculture and food systems. Policy recommendations based on lessons learned from eleven African countries -- Measures that empower young agri-entrepreneurs should be a key component of a sustainable development-centred investment promotion strategy. The very realization of future generations' food security, the sustainable transformation of food systems and the combat against unemployment and distress migration all depend upon the successful implementation of strategies that make the agri-food sector more attractive for the youth. This, in turn, requires smart policy responses that will help young investors overcome the numerous barriers they face – access to finance, land, information and technical services, to name but the most crucial ones. Since 2017, FAO has provided support to African and South-East Asian countries in identifying key challenges for young agri-entrepreneurs and good practices through participatory capacity analyses and strategic planning processes which were carried out with, and for the youth. This report summarizes the main findings and lessons learned from FAO's work with eleven African countries – Côte d'Ivoire, Guinea Conakry, Malawi, Mali, Mauritania, Mozambique, Namibia, Senegal, South Africa, Tunisia and Uganda. It identifies key challenges and policy recommendations regarding youth's access to finance; land; technical services and information; as well as the engagement of youth in policy-making processes. The report also contains a set of five overall key policy recommendations for the empowerment of young agri-entrepreneurs.
    Abstract: Les mesures qui donnent des moyens d'action aux jeunes agroentrepreneurs devraient être un élément clé d'une stratégie de promotion des investissements axée sur le développement durable. La réalisation même de la sécurité alimentaire des générations futures, la transformation durable des systèmes alimentaires et la lutte contre le chômage et les migrations de détresse dépendent toutes de la mise en œuvre réussie de stratégies qui rendent le secteur agroalimentaire plus attrayant pour les jeunes. Cela nécessite à son tour des réponses politiques intelligentes qui aideront les jeunes investisseurs à surmonter les nombreux obstacles auxquels ils sont confrontés - accès au financement, aux terres, à l'information et aux services techniques, pour ne citer que les plus cruciaux. Depuis 2017, la FAO aide les pays d'Afrique et d'Asie du Sud-Est à identifier les principaux défis auxquels sont confrontés les jeunes entrepreneurs agricoles et les bonnes pratiques grâce à des analyses participatives des capacités et des processus de planification stratégique réalisés avec et pour les jeunes. Ce rapport résume les principales conclusions et leçons tirées du travail de la FAO avec onze pays africains - Afrique du Sud, Côte d'Ivoire, Guinée Conakry, Malawi, Mali, Mauritanie, Mozambique, Namibie, Ouganda, Sénégal et Tunisie. Il identifie les principaux défis et recommandations politiques concernant l'accès des jeunes au financement, à la terre, aux services techniques et à l'information, ainsi que l'engagement des jeunes dans les processus d'élaboration des politiques. Le rapport contient également une série de cinq recommandations politiques clés pour l'autonomisation des jeunes entrepreneurs agricoles.
    Keywords: agrifood sector,youth employment,entrepreneurs,support measures,empowerment,investment promotion,Africa
    Date: 2021–01–13

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