nep-ent New Economics Papers
on Entrepreneurship
Issue of 2021‒12‒20
ten papers chosen by
Marcus Dejardin
Université de Namur

  1. Entrepreneurial Ecosystems and Regional Persistence of High Growth Firms: A 'Broken Clock' Critique By Coad, Alex; Srhoj, Stjepan
  2. A procedural perspective on academic spin-off creation: The changing relevance of academic and commercial logics By Uwe Cantner; Philip Doerr; Maximilian Goethner; Matthias Huegel; Martin Kalthaus
  3. Enhancing the impact of Italy’s start-up visa: What can be learnt from international practice? By OECD
  4. Being your own boss and bossing others: The moderating effect of managing others on work meaning and autonomy for the self-employed and employees By Nikolova, Milena; Nikolaev, Boris; Boudreaux, Christopher
  5. Small and Vulnerable: Small Firm Productivity in the Great Productivity Slowdown By Sophia Chen; Do Lee
  6. Access to finance employment growth and firm performance of South Asia firms By Bui, Anh Tuan; Pham, Linh Chi; Ta, Thi Khanh Van
  7. Can Business Grants Mitigate a Crisis? Evidence from Youth Entrepreneurs in Kenya during COVID-19 By Yanina Domenella; Julian C. Jamison; Abla Safir; Bilal Zia
  8. Financial And Legal Obstacles And Small And Medium Firm Performance: Evidence from Middle Income East Asian By Bui, Anh Tuan; Pham, Linh Chi; Ta, Thi Khanh Van
  9. Financial Inclusion and Small Enterprise Growth in Africa: Emerging Perspectives and Research Agenda By John Kuada
  10. Start-ups und Venture Capital in Deutschland: Bringt der Zukunftsfonds neue Schubkraft für die Gründerkultur? By Röhl, Klaus-Heiner

  1. By: Coad, Alex; Srhoj, Stjepan
    Abstract: The Entrepreneurial Ecosystems (EE) approach makes specific predictions regarding how EE inputs are converted into high-growth firms (HGFs) as an output. A simulation model draws out our hypothesis of regional persistence in HGF shares. Based on intuitions that EEs are persistent, we investigate whether regional HGF shares are persistent, using census data for 2 European countries taken separately (Croatia for 2004-2019, and Slovenia for 2008-2014). Overall, there is no clear persistence in regional HGF shares - regions with large HGF shares in one period are not necessarily likely to have large HGF shares in the following period. This is a puzzle for EE theory. In fact, there seems to be more persistence in industry-level HGF shares than for regional HGF shares. We formulate a 'broken clock' critique - just as a broken clock is correct twice a day, EE recommendations may sometimes be correct, but are fundamentally flawed as long as time-changing outcomes (HGF shares) are predicted using time-invariant variables (such as local universities, institutions and infrastructure).
    Keywords: High-Growth Firms,Persistence,Regional Persistence,Entrepreneurial Ecosystems,Clusters,Sectoral Systems of Innovation
    JEL: L25
    Date: 2021
  2. By: Uwe Cantner (Friedrich Schiller University Jena, and University of Southern Denmark); Philip Doerr (Friedrich Schiller University Jena); Maximilian Goethner (Friedrich Schiller University Jena, and IZA - Institute of Labor Economics, and University of Twente); Matthias Huegel (Friedrich Schiller University Jena); Martin Kalthaus (Friedrich Schiller University Jena)
    Abstract: We analyze the influence of two contradicting settings on the success in the academic spin-off creation process. Scientists, who are embedded in the academic setting, have to reach out and adapt to the logics of the commercial setting to successfully found their firm. However, along this process, many scientists fail because they cannot overcome the contradictions between these logics. We provide the first empirical evidence on the relevance of these two contradicting logics along the spin-off creation process. Based on a phase-based conceptualization of the spin-off process, we hypothesize a decreasing relevance of the academic setting and an increasing relevance of the commercial setting for successful transitions between the process phases. We test these relationships with a representative sample of German scientists using dominance analysis to determine the relative importance of the two settings. Our findings show a decreasing relative importance of the academic setting along the spin-off creation process, in line with our hypotheses. The relevance of the commercial setting initially increases before it decreases in the latest stage of the process, contrary to our hypothesis. Additionally, we find that the commercial setting is generally more important than the academic setting, especially in the beginning of the process. Our results provide a deepened understanding of the academic spin-off creation process and extend existing theories. Furthermore, they provides intervention points for policy along the spin-off creation process.
    Keywords: Academic Entrepreneurship, Transition Process, Phase Model, Dominance Analysis
    JEL: L26 O31 O33
    Date: 2021–12–09
  3. By: OECD
    Abstract: Italy’s start-up visa aims to make the national start-up ecosystem more easily accessible to foreign talent, rich with knowledge and skills, and more integrated into global markets. Government reports show that the programme has not yet achieved a critical scale. The analysis of similar initiatives in Chile, France, Ireland and Portugal identifies five gateways for attracting more foreign entrepreneurs, such as an effective policy outreach, smooth inter-institutional co-operation across the migratory process, and the provision of sound support services for a “soft landing” of entrepreneurs upon arrival. These takeaways may also inform new talent attraction policies targeting remote workers, an expanding group in the context of the ongoing COVID-19 pandemic.
    Keywords: capacity building, migrant entrepreneurship, start-up visa, talent attraction
    JEL: F20 J68 L26 M13 O38
    Date: 2021–12–14
  4. By: Nikolova, Milena; Nikolaev, Boris; Boudreaux, Christopher
    Abstract: We examine the moderating role of being a supervisor for meaning and autonomy of self-employed and employed workers. We rely on regression analysis applied after entropy balancing based on a nationally representative dataset of over 80,000 individuals in 30 European countries for 2005, 2010, and 2015. We find that being a self-employed supervisor is correlated with more work meaningfulness and autonomy compared with being a salaried supervisor working for an employer. Wage supervisors and self-employed supervisors experience similar stress levels and have similar earnings, though selfemployed supervisors work longer hours. Moreover, solo entrepreneurs experience slightly less work meaningfulness, but more autonomy compared with self-employed supervisors. This may be explained by the fact that solo entrepreneurs earn less but have less stress and shorter working hours than selfemployed supervisors.
    Keywords: self-employment,supervisors,autonomy,work meaningfulness
    JEL: I31 L26 M10
    Date: 2021
  5. By: Sophia Chen; Do Lee
    Abstract: We provide broad-based evidence of a firm size premium of total factor productivity (TFP) growth in Europe after the Global Financial Crisis. The TFP growth of smaller firms was more adversely affected and diverged from their larger counterparts after the crisis. The impact was progressively larger for medium, small, and micro firms relative to large firms. It was also disproportionally larger for firms with limited credit market access. Moreover, smaller firms were less likely to have access to safer banks: those that were better capitalized banks and with a presence in the credit default swap market. Horseraces suggest that firm size may be a more important and robust vulnerability indicator than balance sheet characteristics. Our results imply that the tightening of credit market conditions during the crisis, coupled with limited credit market access especially among micro, small, and medium firms, may have contributed to the large and persistent drop in aggregate TFP.
    Keywords: Credit constraint;Financial crisis;Firm size;Intangibles;Producvitity;SMEs;WP;TFP growth;creditor bank;size premium;credit market access;micro firm;vulnerability indicator
    Date: 2020–12–18
  6. By: Bui, Anh Tuan; Pham, Linh Chi; Ta, Thi Khanh Van
    Abstract: Using firm-level data on 11,000 companies across seven countries in South Asia, this paper explores the effects of access to finance on employment growth and performance at the firm level. The paper focuses on how the impact of financing obstacles varies across firm sizes. The results show that higher obstacles in access to finance reduces employment growth and performance for firms of all sizes, especially micro and small firms. We find significant differences between firms with less than 10 employees and small firm, which suggests that significant reforms are needed to drive micro firm growth to small and medium enterprises.
    Keywords: Access to finance obstacles,employment growth,Total factor of productivity
    JEL: J21 J41 M51
    Date: 2021
  7. By: Yanina Domenella (The World Bank); Julian C. Jamison (Department of Economics, University of Exeter); Abla Safir (The World Bank); Bilal Zia (The World Bank)
    Abstract: COVID-19 was a major shock to youth entrepreneurs and their businesses in Kenya. We study the causal impact of grants—worth two months of baseline business revenue—and business development services as potential mitigation measures. Using multiple rounds of phone surveys up to seven months from the start of the pandemic, the analysis finds that youth who are assigned business grants or a combination of grants and business development services are significantly more likely to maintain a business, earn more revenue and profits, retain employees, and report higher confidence and satisfaction with life. There are no corresponding effects of business development services alone, although the follow-up period is extremely short for training effects to materialize. These results suggest that cash infusion for young entrepreneurs in times of an aggregate shock can be instrumental in moderating its immediate harmful impacts.
    Keywords: youth entrepreneurship, business grants, business development services, business training, COVID-19, pandemic relief
    JEL: O12 O17 J16 L26 M20 M53
    Date: 2021–12–07
  8. By: Bui, Anh Tuan; Pham, Linh Chi; Ta, Thi Khanh Van
    Abstract: This paper explores the impact of financial and legal obstacles that affect small and medium enterprises (SMEs) in middle-income East Asian countries by utilizing the most recent and unique dataset from the World Bank Enterprise Surveys. We particularly assess whether and at what level the effects on SMEs differ from those on large firms; We also examine how financial and institutional development levels contribute to firm performance. Our findings provide important guidance for regulators, including the authorities of middle-income nations, who seek to facilitate SMEs' development.
    Keywords: Sales Growth,Employment Growth,Financial Obstacles,Legal Obstacles
    JEL: G38 G01 G00
    Date: 2021
  9. By: John Kuada (Aalborg, Denmark)
    Abstract: Purpose – The purposes of this paper are to review the streams of studies that link financial inclusion to small enterprise growth in Sub-Sahara Africa (SSA), to identify the research gaps they provide, and to prepare an agenda for future research in the field. Design/methodology/approach – The study employs systematic literature search method to identify relevant literature from journals. It then adopts a narrative approach for the review, highlighting the findings from the prior studies and gaps requiring research attention. Findings – The discussions reveal that there is a need for future studies that can unpack small enterprise growth determinants, identify growth-enabling entrepreneurial characteristics and examine the contextual variabilities that shape their effectiveness. Originality/value – There is currently no comprehensive/integrated review exploring the link between financial inclusion and small enterprise growth in SSA. This review therefore provides insights that contribute to the development of this stream of research.
    Keywords: Financial inclusion, entrepreneurship, small businesses, enterprise growth, Africa
    Date: 2021–01
  10. By: Röhl, Klaus-Heiner
    Abstract: Dieses Policy Paper zeigt die Entwicklung von Gründungen und Start-ups in Deutschland auf und stellt nach einem Blick auf die internationalen Venture-Capital-Märkte den Zukunftsfonds vor, mit dem die Bundesre-gierung die Start-up-Finanzierung auf eine neue Grundlage stellen möchte. Während die Anzahl der Grün-dungen in Deutschland seit Jahren rückläufig ist, hat sich in den Metropolregionen mit Berlin an der Spitze eine wachsende Start-up-Szene aus innovativen Gründungen und jungen Unternehmen etabliert. Dochdie Finanzierung von Start-ups stellt trotz diverser Programme zur Förderung von Wagniskapital noch immer eine Hürde dar; in den USA oder dem Vereinigten Königreich lassen sich Investitionen in Start-ups leichter realisieren als in Deutschland. Ein besonders Problem hierzulande ist die Finanzierung größerer Wachstums-schritte in den Jahren nach der Gründungsphase, da Start-ups in dieser 'Later-Stage'-Phase oft einen höhe-ren Kapitalbedarf aufweisen. Die Förderprogramme und inländischen Venture-Capital-Fonds sind jedoch meist auf die Vorgründungs-und unmittelbare Gründungsphase zugeschnitten. Die Politik hat dieses Prob-lem erkannt und adressiert es mit einem 'Zukunftsfonds', der innerhalb von zehn Jahren 10 Milliarden Euro öffentliche Mittel über diverse Einzelfonds bereitstellt. Durch die Mobilisierung und Einbeziehung privaten Kapitals soll das verfügbare Gesamtvolumen auf 30 Milliarden Euro angehoben werden; diese Mittel sollen durch die Konstruktion der Einzelfonds gerade auch größere Later-Stage-Finanzierungen ermöglichen. Ein weiteres Ziel ist die Langfristfinanzierung kapitalintensiver Hochtechnologie-Vorhaben, für die es bislang keine geeignete Fördermöglichkeit gab. Das Policy Paper schließt mit einer überwiegend positiven Bewertung des neuen Förderprogramms, das die neue Bundesregierung aus SPD, Grünen und FDP nach bisherigen Aus-sagen fortführen möchte, und weiterführenden Vorschlägen zur Stärkung des Gründungsstandorts, die steu-erliche und regulatorische Fragen betreffen.
    JEL: L26 M13 G38
    Date: 2021

This nep-ent issue is ©2021 by Marcus Dejardin. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.