nep-ent New Economics Papers
on Entrepreneurship
Issue of 2021‒11‒22
four papers chosen by
Marcus Dejardin
Université de Namur

  1. Population Growth and Firm Dynamics By Michael Peters; Conor Walsh
  2. Cousins from overseas: the labour market impact of half a million Portuguese repatriates By Lara Bohnet; Susana Peralta; Joao Pereira dos Santos
  3. Invoice Currency Choice under Financial Constraints and Bargaining: Evidence from Japanese SMEs By GOTO Mizuki; HAYAKAWA Kazunobu; KOIBUCHI Satoshi; YOSHIMI Taiyo
  4. As long as you talk about me: The importance of family firm brands and the contingent role of family-firm identity By P. Rovelli; C. Benedetti; A. Fronzetti Colladon; A. De Massis

  1. By: Michael Peters; Conor Walsh
    Abstract: Population growth has declined markedly in almost all major economies since the 1970s. We argue this trend has important consequences for the process of firm dynamics and aggregate growth. We study a rich semi-endogenous growth model of firm dynamics, and show analytically that a decline in population growth reduces creative destruction, increases average firm size and concentration, raises market power and misallocation, and lowers aggregate growth in the long-run. We also show lower population growth has positive effects on the level of productivity, making the short-run welfare impacts ambiguous. In a quantitative application to the U.S, we find that the slowdown in population growth since the 1980s and the projected continuation of this trend accounts for a substantial share of the fall in the entry and exit rates and the increase in firm size. By contrast, the impact on markups is modest. The effect on aggregate growth is positive for around two decades, before turning negative thereafter.
    JEL: J11 L11 O3 O4 O44
    Date: 2021–10
  2. By: Lara Bohnet; Susana Peralta; Joao Pereira dos Santos
    Abstract: This paper uses detailed census data to investigate the labour market consequences of a large, exogenous, labour market shock, exploiting the unexpected inflow of repatriates to Portugal following the end of the Portuguese Colonial War in 1974. The labour supply shock entails a composition dimension, as the repatriates were more than twice as likely to have secondary or higher education. We take advantage of the fact that most of the repatriates were Portuguese born to build novel shift-share instrumental variables based on their region of birth. We explore the impact on regional labour force participation, unemployment, employment, and entrepreneurship, for both male and female natives. We find substantial gender differences in the effects, with females absorbing the bulk of the shock. Native workers are driven out of employment as employees, with a sizeable 15% decrease for males and 55% for females. Men compensate for this loss by moving to low quality self-employment, while women move to inactivity. Our results are robust to changing the instrumental variable, the geographical unit of analysis, and to various sample restrictions.
    Keywords: Immigration, labour market, labour supply, entrepreneurship, instrumental variable
    JEL: F22 J20 R23
    Date: 2021
  3. By: GOTO Mizuki; HAYAKAWA Kazunobu; KOIBUCHI Satoshi; YOSHIMI Taiyo
    Abstract: Recent empirical studies explore factors behind the currency invoicing pattern in exports of listed firms by using questionnaire surveys; however, there is insufficient evidence regarding small and medium-sized enterprises (SMEs). We conducted a questionnaire survey for 2,100 unlisted manufacturers engaged in exports during the 2010s and received responses from 300 firms. By constructing a database with invoice currency choice and trade partner by export destination, we empirically examine the determinants of invoice currency choice in export using the probit model estimation. We confirm that the major determinants of currency invoicing in existing research effectively work as determinants of currency invoicing by SMEs. After controlling for various determinants, we found that financial constraints play an important role in their invoice currency choice. The firms with deteriorated capital ratios and rapid sales growth depend more on the producer's currency invoicing. The results are confirmed through a robustness test using detailed financial data, showing that the firms with lower capital ratios, lower liquidity positions, and greater investment opportunities tend to use the producer's currency invoicing. These novel findings are consistent with the predictions from the theoretical research on the bargaining model of currency invoicing and corporate risk management for hedging.
    Date: 2021–10
  4. By: P. Rovelli; C. Benedetti; A. Fronzetti Colladon; A. De Massis
    Abstract: This study explores the role of external audiences in determining the importance of family firm brands and the relationship with firm performance. Drawing on text mining and social network analysis techniques, and considering the brand prevalence, diversity, and connectivity dimensions, we use the semantic brand score to measure the importance the media give to family firm brands. The analysis of a sample of 52,555 news articles published in 2017 about 63 Italian entrepreneurial families reveals that brand importance is positively associated with family firm revenues, and this relationship is stronger when there is identity match between the family and the firm. This study advances current literature by offering a rich and multifaceted perspective on how external audiences perceptions of the brand shape family firm performance.
    Date: 2021–10

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