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on Entrepreneurship |
| By: | Samuel Brien |
| Abstract: | This paper examines the effect of wealth concentration on firms’ market powerwhen firm entry is driven by entrepreneurs facing uninsurable idiosyncratic risks. Undergreater wealth concentration, households in the lower end of the wealth distribution aremore risk averse and less willing (or able) to bear the risk of entrepreneurial activities.This has implications for firm entry, competitiveness, and market power.I calibrate a Schumpeterian model of endogenous growth with heterogeneous riskaverse entrepreneurs competing to catch up with firms. This model is unique in thatboth household wealth distribution and a measure of firm markup are endogenouslydetermined on a balanced growth path. I find that a spread in the wealth distributiondecreases entrepreneurial firm creation, resulting in greater aggregate firm marketpower. This result is supported by time series evidence obtained from the estimationof a structural panel VAR with OECD data from eight countries. |
| Keywords: | Wealth inequality, market power, growth, Schumpeterian, endogenous growth, entrepreneur |
| JEL: | E22 E21 L12 O31 O33 |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:qed:wpaper:1476&r= |
| By: | Igor Fedotenkov; Anneleen Vandeplas |
| Abstract: | This paper studies the link between the demographic structure of populations and firm entry rates in the European Union. We find that firm entry rates have a hump-shaped relationship with human demography, with the 40-54 age group having the strongest positive impact on firm entry. Potential mechanisms through which this relationship may arise include labour market participation, demand and access to entrepreneurship (linked with experience and access to finance). Perhaps more surprisingly, firm entry again picks up with generations aged 80 and over expanding. This could relate to the fact that a larger 80+ age cohort reflects greater longevity, which in turn increases savings, reduces interest rates and therefore increases availability of external financing. When controlling for life expectancy and interest rates, the coefficient corresponding to the 80+ age cohort sharply declines and becomes insignificant. Based on the results of the analysis, we assess the implications of our results for firm entry rates by 2025 and 2030, using UN population projections. |
| Keywords: | Firm entry rates, demographic structure, longevity |
| JEL: | D22 J11 J15 L29 M13 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:lic:licosd:42821&r= |
| By: | Salomé Baslandze |
| Abstract: | This working paper reviews recent empirical evidence on large firms and nonproductive strategies that hinder creative destruction and reallocation. The focus is on three types of nonproductive strategies: political connections, nonproductive patenting, and anticompetitive acquisitions. Across different contexts using granular micro data sets, we overwhelmingly see that as firms gain market share, they increasingly rely on nonproductive strategies but reduce their productive, innovation-based strategies. I also discuss theoretical channels, aggregate implications, and potentials for some policies. |
| Keywords: | creative destruction; innovation; growth; patents; political connections; firm dynamics |
| JEL: | O3 O4 |
| Date: | 2021–09–30 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedawp:93478&r= |
| By: | Catherine Robinson; Christian Siegel; Sisi Liao |
| Abstract: | Does the successful deployment of digital technologies require complementary investment in skills? We conducted a pilot survey to investigate. The survey elicited information on whether the firm was adopting one of the three digital technologies of interest (AI, robotics, big data), provided in-house training, and whether they experienced any problems recruiting workers. We find evidence that new technologies require complementary skill investments and that firms deem both new technologies and training of their workforce important for productivity. While there is some heterogeneity across the type of technologies (Robotics, AI, Big Data) introduced, firms facing difficulties attracting workers with the right skills are more likely to run own training programmes. This might suggest that there is a skills gap that may be holding back productivity and economic growth. Overall, the findings from our pilot survey demonstrate firms's awareness of the need for skills to complement new technologies to realise the productivity benefits in full. |
| Keywords: | capital-skill complementarity; business performance; technology adoption |
| JEL: | J24 M53 O33 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:ukc:ukcedp:2114&r= |
| 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 (University of Luxembourg [Luxembourg]); Nattavudh Powdthavee (WBS - Warwick Business School - University of Warwick [Coventry]) |
| Abstract: | Can capital constraints explain why there are more male than female entrepreneurs in most societies? 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; a one percent increase in exogenous income increases the probability of female selfemployment by 0.6 percentage points, which is approximately 10% 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: | BHPS JEL codes: J16,lottery wins,self-employment,gender inequality,BHPS JEL Codes: J16,Gender inequality,J24,J21 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-03472910&r= |
| By: | Omang O. Messono (University of Douala, Douala, Cameroon); Simplice A. Asongu (Yaoundé, Cameroon) |
| Abstract: | This study examines the effects of the historical prevalence of infectious diseases on contemporary entrepreneurship. Previous studies reveal the persistence of the effects of historical diseases on innovation, through the channel of culture. Drawing on the epidemiological origin of institutions, we propose a framework which argues that the impact of infectious disease prevalence on contemporary entrepreneurship is mediated by property rights. The central hypothesis posits that a guarantee of property rights reduces the effect of past diseases on entrepreneurship. Using data from 125 countries, we find strong and robust evidence on the proposed hypothesis and other results. Property rights are higher in countries where the prevalence of diseases was low, which leads to good entrepreneurship scores. In contrast, countries with high disease prevalence did not have time to develop strong institutions to secure property rights. This explains their low level of entrepreneurship today. These results are robust to alternative methods and measures of property rights. Furthermore, our results also confirm the level of development, culture and the digitalization of economies as transmission channels between past diseases and the current level of entrepreneurship. |
| Keywords: | entrepreneurship; institutions; diseases; property rights |
| JEL: | I0 J24 I21 I31 |
| Date: | 2021–09 |
| URL: | http://d.repec.org/n?u=RePEc:exs:wpaper:21/096&r= |
| 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 |
| URL: | http://d.repec.org/n?u=RePEc:exs:wpaper:21/084&r= |