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on Entrepreneurship |
| By: | Remy Guichardaz; Julien Pénin |
| Abstract: | The development of a dynamic model of endogenous economic change was a major challenge for Schumpeter throughout his academic career. With regard to this life-long objective, this work provides an explanation of why it was impossible for Schumpeter to offer a convincing endogenous theory of the emergence of novelty. We show that Schumpeter’s view of the apparition of pure novelty is centered around an individual and elitist dimension of entrepreneurship and an energetic and vitalist axiom of social change, which is by nature hardly compatible with endogenous evolution. Furthermore, our revisiting of the last writings of Schumpeter shows that, when it comes to the issue of the emergence of pure novelty, the impossibility persisted until his death. Contrary to the claim of some commentators, even the old Schumpeter remained stuck into an individualistic, elitist and energetic view of the generation of pure novelty. |
| Keywords: | Schumpeter; entrepreneur; economic evolution; endogenous change; innovation. |
| JEL: | B15 O3 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ulp:sbbeta:2021-41&r= |
| By: | Pedro Bento (Texas A&M University, Department of Economics) |
| Abstract: | The number of women-owned businesses in the U.S. has soared over the last several decades, even compared to the rise in female labor market participation. In 1982 less than 9 percent of working women owned businesses, compared to over 17 percent of men. By 2012 more than 18 percent of women owned businesses while the analogous rate for men only slightly increased to almost 20 percent. This and other evidence suggests that women have faced significant barriers to starting and running businesses and these barriers have been declining over time. I examine the impact of these trends on aggregate output and the welfare of women and men in the labor force. Interpreted through the lens of a model of entrepreneurship, observed trends imply substantial declines in several barriers facing female entrepreneurs. Together, these changes account for over 12 percent of observed growth in aggregate output and a 2 percent increase in workers' consumption-equivalent welfare since 1982. By 2012, lower barriers increased the welfare of female entrepreneurs by a dramatic 33 percent, while lowering the welfare of male entrepreneurs by 6 percent. These impacts are in addition to any gains to workers from declining labor-market barriers. |
| Keywords: | women, entrepreneurship, business dynamism, misallocation, aggregate productivity, economic growth. |
| JEL: | E02 E1 J7 O1 O4 |
| Date: | 2021–11–08 |
| URL: | http://d.repec.org/n?u=RePEc:txm:wpaper:20211108-001&r= |
| By: | Pedro Bento (Texas A&M University, Department of Economics); Sunju Hwang (Texas A&M University, Department of Economics) |
| Abstract: | The number of black-owned businesses in the U.S. has increased dramatically since the 1980s, even compared to the number of non-black-owned businesses and the rise in black labor-market participation. In 1982 less than 4 percent of black labor-market participants owned businesses, compared to over 14 percent of other participants. By 2012 more than 16 percent of black participants owned businesses while the analogous rate for non-black participants increased to only 19 percent. Combined with other evidence, this suggests black entrepreneurs have faced significant barriers to starting and running businesses and these barriers have declined over time. We examine the impact of these trends on aggregate output and welfare. Interpreted through a model of entrepreneurship, declining barriers from 1982 to 2012 led to a permanent 2 percent increase in (consumption-equivalent) black welfare, a 0.7 percent increase in output per worker (a small fraction of the observed 70 percent increase), and a 0.7 percent decrease in the welfare of other labor-market participants. These impacts are in addition to any gains from declining labor-market barriers. |
| Keywords: | black, minority, distortions, entrepreneurship, business dynamism, misallocation, aggregate productivity, economic growth. |
| JEL: | E02 E1 J7 J15 O1 O4 |
| Date: | 2021–11–08 |
| URL: | http://d.repec.org/n?u=RePEc:txm:wpaper:20211108-002&r= |
| By: | Jean-Christophe STATNIK (Université de Lille, Yncréa Lille); Thi-Le Giang VU (Université de Lille); Laurent WEILL (LaRGE Research Center, Université de Strasbourg) |
| Abstract: | There is evidence of a gender gap in access to finance. In this paper, we test the hypothesis that corruption discourages more female than male entrepreneurs from applying for credit. We use data on access to credit and corruption at the firm level for a large dataset of firms from 68 countries worldwide. We demonstrate that female entrepreneurs are more discouraged by corruption to ask for credit than male borrowers. We find evidence for two explanations for the gendered impact of corruption on borrower discouragement: women have less experience in management than men and as such can have less experience to deal with corruption, and gender inequality in society enhances the discouragement of female borrowers. Thus, our findings provide evidence that corruption enhances the gender gap in access to finance, enhancing gender inequality in participation in economic activity. |
| Keywords: | gender, access to credit, borrower discouragement, corruption. |
| JEL: | D73 G21 J16 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:lar:wpaper:2021-05&r= |
| By: | Dirk Czarnitzki; Marek Giebel |
| Abstract: | We utilize a new survey experiment to evaluate the existence and degree of financial constraints for R&D in the economy. The experiment does not only allow to deduct the presence of financial constraints, but also to evaluate their economic significance. Using data on German companies, we find that financial constraints for R&D exist but that their relevance might have been overestimated in the literature. Most R&D projects that have not been implemented because of financial constraints turn out to have low expected marginal rates of return. While this findings stands in some contrast to other studies, we also find several results that are in line with the literature: young firms are most constrained and the constraints occur at the intensive margin, i.e. our results do not suggest that non-innovative companies are deterred from innovation. Instead, highly innovative companies are restricted by the capital market. |
| Keywords: | Innovation, Financial Constraints, Survey Experiment |
| Date: | 2021–11–18 |
| URL: | http://d.repec.org/n?u=RePEc:ete:msiper:683800&r= |
| By: | Lichter, Andreas; Löffler, Max; Isphording, Ingo Eduard; Nguyen, Thu-Van; Poege, Felix; Siegloch, Sebastian |
| Abstract: | We study how profit taxation affects plants' R&D spending and innovation activities. Relying on geocoded survey panel data which approximately covers the universe of R&D-active plants in Germany, we exploit around 7,300 changes in the municipal business tax rate over the period 1987-2013 for identification. Applying event study models, we find a negative and statistically significant effect of an increase in profit taxation on plants' R&D spending with an implied long-run elasticity of 1.25. Reductions in R&D are particularly strong among more credit-constrained plants. In contrast, homogeneity of effects across the plant size distribution questions policy makers common practice to link targeted R&D tax incentives to plant size. We further find lagged negative effects on the (citation-weighted) number of filed patents. |
| Keywords: | corporate taxation,firms,R&D,innovation,patents |
| JEL: | H25 H32 O31 O32 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:21080&r= |
| By: | Wei Cui; Mengying Wei; Weisi Xie; Jing Xing |
| Abstract: | What do small firms do when given an income tax cut? We address this question by examining the consequences of a sharp reduction in the corporate income tax rate for small- and micro-profit enterprises (SMPE) in China based on confidential tax returns. Utilizing the gradual increases in the qualifying threshold for SMPEs during 2010-2016, we find that newly qualified SMPEs with positive taxable income increased investment, interest expense and productivity. SMPEs in taxable losses did not respond to the tax cut. The tax cut induced more SMPEs to register, especially those in financially constrained sectors. Despite these positive effects, firms’ fixed asset growth slows down when they get closer to the SMPE threshold. Our study contributes to understanding the effect of tax preferences for small businesses. |
| Keywords: | tax incentives, small firms, productivity, investment, firm entry |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9389&r= |
| By: | Batista, Catia (Nova School of Business and Economics); Sequeira, Sandra (London School of Economics); Vicente, Pedro C. (Universidade Nova de Lisboa) |
| Abstract: | We examine the impact of providing access to mobile savings accounts and improving financial management skills on the performance of female-led microenterprises in Mozambique. We find evidence that both interventions can improve business performance but the effects are highly heterogeneous. Combining both types of support is associated with a large increase in both short and long-term firm profits and in financial security for the microentrepreneur. This allowed female-headed microenterprises, particularly those with a higher baseline level of profits, to close the gender profit gap in performance and skills relative to their male counterparts. The main drivers of improved business performance are improved financial management practices (bookkeeping), an increase in accessible savings, and reduced transfers to friends and relatives. For female entrepreneurs with intermediate levels of profits at baseline, even just providing access to mobile money accounts can increase long-term profits and for the most disadvantaged microentrepreneurs it can at least in-crease levels of financial security. Uncovering this heterogeneity in impact within different types of female-led microenterprises can help improve the targeting of these interventions in the future. |
| Keywords: | microenterprise development, management, gender, mobile money, financial literacy, economic development |
| JEL: | O15 O16 G53 J16 |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14781&r= |
| By: | Burgelman, Robert A. (Stanford U); Sridharan, Amit (First Rays Venture Partners) |
| Abstract: | This paper presents a process model of corporate venture capital (CVC) based on field research of JetBlue Technology Ventures (JTV), the CVC unit of JetBlue Airways. We examine how the JTV subsidiary was designed and staffed to enable effective interaction with the company's internal innovation process to create enduring strategic value for JetBlue as well as for the startup companies involved in these interactions. We provide in-depth insight into the CVC process by identifying the interlocking strategic leadership activities at multiple levels of management (top-middle-operational) through which the CVC subsidiary works with VCs and startups, relates to JetBlue’s internal innovation process within different time horizons, and architects and develops a new partner ecosystem to help the company extend its capabilities. |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:stabus:3962&r= |
| By: | Mr. Yannick Timmer; Mr. Nicola Pierri; Toni Ahnert; Sebastian Doerr |
| Abstract: | This paper analyzes the importance of information technology (IT) in banking for entrepreneurship. To guide our empirical analysis, we build a parsimonious model of bank screening and lending that predicts that IT in banking can spur entrepreneurship by making it easier for startups to borrow against collateral. We provide empirical evidence that job creation by young firms is stronger in US counties that are more exposed to ITintensive banks. Consistent with a strengthened collateral lending channel for IT banks, entrepreneurship increases more in IT-exposed counties when house prices rise. In line with the model's implications, IT in banking increases startup activity without diminishing startup quality and it also weakens the importance of geographical distance between borrowers and lenders. These results suggest that banks' IT adoption can increase dynamism and productivity. |
| Keywords: | technology in banking, entrepreneurship, information technology, collateral, screening; banks' IT adoption; importance of information technology; IT in banking; startup activity; bank screening; Collateral; Self-employment; Employment; Job creation |
| Date: | 2021–08–06 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2021/214&r= |