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on Entrepreneurship |
| By: | Andrea Bellucci (Università degli Studi dell’Insubria, European Commission, Joint Research Centre (JRC), and MoFiR); Alexander Borisov (Lindner College of Business, University of Cincinnati and MoFiR); Gianluca Gucciardi (European Commission, Joint Research Centre (JRC)); Alberto Zazzaro (University of Naples Federico II, CSEF and MoFiR.) |
| Abstract: | We examine possible reallocation effects generated by the COVID-19 outbreak by analyzing the patterns of venture capital (VC) investments around the globe. Using transaction-level data and exploiting the staggered nature of the spread of the virus, we document a shift in VC portfolios towards firms developing technologies relevant to an environment of social distancing and health pandemic concerns. A difference-in-differences analysis estimates significant increases in invested amount and number of deals in such areas. We show heterogenous effects related to the experience of VC investors, as well as their size and organizational form. |
| Keywords: | Venture Capital, Investment, COVID-19, Healthcare, Pandemic. |
| JEL: | G24 F21 D81 E22 E44 |
| Date: | 2022–02–16 |
| URL: | http://d.repec.org/n?u=RePEc:sef:csefwp:638&r= |
| By: | Engelberg, Joseph E.; Guzman, Jorge; Lu, Runjing (University of Alberta); Mullins, William (UC San Diego) |
| Abstract: | Republicans start more firms than Democrats. Using a sample of 40 million party-identified Americans between 2005 and 2017, we find that 6% of Republicans and 4% of Democrats become entrepreneurs. This partisan entrepreneurship gap is time-varying: Republicans increase their relative entrepreneurship during Republican administrations and decrease it during Democratic administrations, amounting to a partisan reallocation of 170,000 new firms over our 13 year sample. We find sharp changes in partisan entrepreneurship around the elections of President Obama and President Trump, and the strongest effects among the most politically active partisans: those that donate and vote. |
| Date: | 2021–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:qhs6j&r= |
| By: | Toni Ahnert; Sebastian Doerr; Nicola Pierri; Yannick Timmer |
| Abstract: | This paper analyzes the importance of information technology (IT) in banking for entrepreneurship. To guide our 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 then empirical show that job creation by young firms is stronger in US counties that are more exposed to IT-intensive banks. Consistent with a strengthened collateral lending channel, entrepreneurship increases by more in IT-exposed counties when house prices rise. In line with the model's implications, higher startup activity does not diminish startup quality. Instrumental variable regressions at the bank level further show that IT makes banks' credit supply more responsive to changes in local house prices, and weakens the importance of geographical distance between borrowers and lenders. These results suggest that banks' IT adoption can increase dynamism by improving startups' access to finance. |
| Keywords: | technology in banking, entrepreneurship, information technology, collateral, screening. |
| JEL: | G21 G14 E44 D82 D83 |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:bis:biswps:998&r= |
| By: | Ewens, Michael (California Institute of Technology); Farre-Mensa, Joan |
| Abstract: | The U.S. entrepreneurial finance market has changed dramatically over the last two decades. Entrepreneurs raising their first round of venture capital retain 30% more equity in their firm and are more likely to control their board of directors. Late-stage startups are raising larger amounts of capital in the private markets from a growing pool of traditional and new investors. These private market changes have coincided with a sharp decline in the number of firms going public—and when firms do go public, they are older and have raised more private capital. To understand these facts, we provide a systematic description of the differences between private and public firms. Next, we review several regulatory, technological, and competitive changes affecting both startups and investors that help explain how the trade-offs between going public and staying private have changed. We conclude by listing several open research questions. |
| Date: | 2021–11–07 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:9am4w&r= |
| By: | Natalia Vershinina (Audencia Business School); Allan Discua Cruz |
| Abstract: | In this paper we offer a scholarly reflection about the value of the ethnographic methods for studying migrant entrepreneurship, specifically through the lens of our own migration experiences. Our positionalities and subjectivities embedded in being migrants and researchers offer this opportunity for the in-depth reflection. Specifically, we examine what varieties of ethnographic research methods offer as well as what limitations these methods bring if adopted within migrant entrepreneurship research. We argue that specific ethnographic practice-based methods have the capacity to reveal the rich social context of migrant entrepreneurship, which can supplement the theoretical perspectives. We adopt two illustrations to highlight the relevance of ethnographic methodologies to studying migrant entrepreneurship. The contribution this study offers is in suggesting new methods that allow for fresh understanding of the complex narratives of migration dynamics to emerge. This study shows how narratives intertwine with migrants' stories of entrepreneurship and offers guidance for future research. |
| Keywords: | migrant entrepreneurship,autoethnography,ethnography,reflexivity,researcher positionality,context |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03275304&r= |
| By: | Ferreira, M.; Haber, T.; Rörig, C. |
| Abstract: | Using a unique dataset covering the universe of Portuguese firms and their credit situation we show that financially constrained firms are found across the entire firm size distribution, account for a larger total asset share compared to standard heterogeneous firms models, and exhibit a higher cyclical sensitivity, conditional on size. In light of these findings we reassess the importance of the firm distribution in shaping aggregate outcomes in the canonical model of heterogeneous firms with financial frictions. We augment the productivity process with ex-ante heterogeneity of firms, allowing us to match the distribution of constrained firms conditional on size. This, together with the fact that constrained firms have a higher capital elasticity, leads to up to four times larger aggregate fluctuations and capital misallocation. |
| Keywords: | Firm size, business cycle, financial accelerator |
| JEL: | E62 E22 E23 |
| Date: | 2021–11–03 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camjip:2110&r= |
| By: | Messono, Omang; Asongu, Simplice |
| 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 I23 I31 J24 |
| Date: | 2021–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:111842&r= |
| By: | Ashish Arora; Andrea Fosfuri; Thomas Roende |
| Abstract: | Startups in IT and life sciences appear to be flourishing. However, startups in other sectors, such as new materials, automation, and eco-innovations, which are often called "deep tech", seem to struggle. We argue that innovations with both technical and commercial challenges, typical of deep tech innovations, are especially disadvantaged in a startup-based innovation system. We develop an analytical model where startups are more efficient at solving technical challenges and incumbents are more efficient at solving commercial challenges. We find that the startup-based system works better for "specialized" innovations, where only one type of challenges is significant. Startups which face both technical and commercial challenges are disadvantaged because they capture a smaller fraction of the value they create. We discuss the implications for various public policies that have been proposed to encourage deep-tech. |
| JEL: | L26 O31 Q55 |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29654&r= |
| By: | Castellanza, Luca |
| Abstract: | Crises hamper entrepreneurship by eroding the entrepreneurs’ resource bases and causing psychological distress. Entrepreneurial resilience, the act of taking advantage of opportunities during adverse circumstances, requires using resources to counteract crisis-related disruptions. Building on these ideas, we develop theory as to how entrepreneurs operating in poverty settings, who are susceptible to instability and resource erosion, may behave resiliently when confronted with losses. Through a grounded-theoretical analysis of entrepreneurship in South-West Cameroon, we identify three behaviours local entrepreneurs enact in reaction to losses: non-resilience, urgency-driven resilience, and synergy-driven resilience. Then, we build theory as to how the mechanisms of resource erosion and psychological distress interact in determining post-crisis reactions. The study generates novel insights on the antecedents of entrepreneurial resilience with implications for theory and practice. |
| Date: | 2021–10–14 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:z36x2&r= |
| By: | Loganathan, Muralidharan (PrivateCircle); Subrahmanya, MH Bala |
| Abstract: | Technology commercialization from public research universities provide impetus to startups with know-how that have a potential to succeed in the market. We examine a network-based incubator, in an agricultural research university, that supports the development of startups. Our study explores networking and technology commercialization support utilized by the incubated startups. We examine the mechanisms of network formation in a university-based incubator and distinguish the entrepreneurial and university networks formed. From the study, we develop a set of propositions relating outcomes at the startup level with entrepreneurial affiliation, experience, institutional incentives considering the local contextual factors. Using these, we derive managerial and policy implications for the stakeholders looking at diffusion of university developed technologies. The study explores the black box of entrepreneurship support, and provides appropriate strategies to technology commercialization with agri-tech startups. The study has implications to universities that support entrepreneurship formally and informally. |
| Date: | 2022–01–25 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:rntkd&r= |
| By: | Khalid El-Awady |
| Abstract: | There is a massive underserved market for small business lending in the US with the Federal Reserve estimating over \$650B in unmet annual financing needs. Assessing the credit risk of a small business is key to making good decisions whether to lend and at what terms. Large corporations have a well-established credit assessment ecosystem, but small businesses suffer from limited publicly available data and few (if any) credit analysts who cover them closely. We explore the applicability of (DL-based) large corporate credit risk models to small business credit rating. |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2201.08276&r= |