nep-ent New Economics Papers
on Entrepreneurship
Issue of 2022‒04‒18
seventeen papers chosen by
Marcus Dejardin
Université de Namur

  1. In search of EU unicorns - What do we know about them? By Giuseppina Testa; Ramón Compañó; Ana Correia; Eva Rückert
  2. The importance of capital in closing the entrepreneurial gender gap: a longitudinal study of lottery wins By Fleche, Sarah; Lepinteur, Anthony; Powdthavee, Nattavudh
  3. Spatial impact of entrepreneurial zones: firm, city, and inter city evidence By Stojcic, Nebojsa; Pylak, Korneliusz; Jurlina Alibegovic, Dubravka
  4. Historical Prevalence of Infectious Diseases and Entrepreneurship: the Role of Institutions in 125 Countries By Omang O. Messono; Simplice A. Asongu
  5. China's Declining Business Dynamism By Diego A. Cerdeiro; Cian Ruane
  6. Effects of the Quality of Science and Innovation on Venture Finance: Evidence from University Spinoffs in Japan By FUKUGAWA Nobuya
  7. R&D expenditures and firm survival By Redha Fares; Amélie Guillin
  8. Funding female entrepreneurs in MENA countries (2013-2019): self-selection and discrimination By Imène Berguiga; Philippe Adair
  9. Opening up military innovation: causal effects of 'bottom-up' reforms to US defense research By Van Reenen, John; Howell, Sabrina T.; Rathje, Jason; Wong, Jun
  10. Technology entrepreneurship in Kazakhstan: the challenges of adaptation and re-start By Onajomo Akemu; Atanu Rakshit
  11. Women entrepreneurship in Kazakhstan and beyond By Leila Farraj; Aminanur Chaia; Shumaila Yousafzai
  12. Are SMEs Avoiding Compliance Costs? Evidence from VAT Reforms in Japan By Takafumi Suzuki; Takafumi Kawakubo
  13. Impact of COVID-19 Packages on MSME Financing in India By Muduli, Silu
  14. Employee Health and Firm Performance By Rettl, Daniel A.; Schandlbauer, Alexander; Trandafir, Mircea
  15. Renewal Through Industry Switching and Its Impacts on Productivity By Kuosmanen, Natalia; Kuosmanen, Timo; Ali-Yrkkö, Jyrki; Pajarinen, Mika
  16. Unternehmensdynamik in der Wissenswirtschaft in Deutschland 2020: Gründungen und Schließungen von Unternehmen, Gründungsdynamik in den Bundesländern, Internationaler Vergleich, Wagniskapital-Investitionen in Deutschland und im internationalen Vergleich By Bersch, Johannes; Berger, Marius; Füner, Lena
  17. ENTRE EMPLOI ATYPIQUE ET ENTREPRENEURIAT Le portage salarial comme « forme d'emploi de transition » ? By Jean-Yves Ottmann; Bernard Gazier; Dominique Mahut

  1. By: Giuseppina Testa (European Commission - JRC); Ramón Compañó (European Commission - JRC); Ana Correia; Eva Rückert
    Abstract: This paper provides insights into the geographical and sectorial distribution of EU unicorns. Using the Unicorn club data from Dealroom up to mid-2021, it explores where they are located, how old they are and how they reached unicorn status. The analysis takes the form of a comparative study of unicorns from the EU, the US and China. We compare the three locations in terms of the age of companies at which unicorn status is reached, the number of financing rounds and the overall amount of financing raised by the time unicorn status is attained. We also profile the top investors in European unicorns and their acquisition strategies. We then look at the unicorn founders in terms of gender, place of origin and educational background. Finally, we discuss the role of government intervention, in particular of the European Innovation Council, in supporting the development of fast-growing companies.
    Keywords: unicorn, startups, scaleups, venture capital, finance, innovation
    JEL: O32 O31 O25
    Date: 2022–02
  2. By: Fleche, Sarah; Lepinteur, Anthony; Powdthavee, Nattavudh
    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: gender inequality; self-employment; lottery wins; BHPS
    JEL: J16 J21 J24
    Date: 2021–04–19
  3. By: Stojcic, Nebojsa; Pylak, Korneliusz; Jurlina Alibegovic, Dubravka
    Abstract: We investigate the impact of a decade-long large public entrepreneurial infrastructure investment programme in an emerging European economy. Using a unique dataset, we examine the short-run firm, city and inter-city effects of entrepreneurial zones (EZs). EZs have a positive impact on business investment, sales and especially export revenues of firms located within them. Positive economic effects of EZs are limited on host and neighbouring towns and cities, decrease with distance and eventually become negative. This points to the localised nature of EZs effects and their potential for spatial redistribution and clustering of economic activity.
    Keywords: Entrepreneurial zones; spillover effects; firm performance; exports; economic incentives; emerging economies
    JEL: L26 O12 R38
    Date: 2022–01
  4. 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
  5. By: Diego A. Cerdeiro; Cian Ruane
    Abstract: After impressive growth in the 2000s, China's productivity has more recently stagnated. We use firm-level data to analyze productivity and firm dynamism trends from 2003 to 2018. We document six facts that together show a decline in China’s business dynamism. We show that (i) the revenue share of young firms has declined, (ii) the life-cycle growth of young firms relative to older incumbents has slowed, (iii) weaker life-cycle growth can be explained by slower productivity growth and weaker investment in intangibles, (iv) younger and smaller firms are more capital constrained than their older and larger counterparts, (v) the responsiveness of capital growth to the marginal product of capital has declined, and (vi) large productivity gaps between SOEs and private firms persist. We find that business dynamism is weaker in provinces where SOEs account for a larger share of the capital stock. Our results suggest that declining private business dynamism is an important factor in explaining China's sluggish TFP growth and that SOE reform could boost productivity growth indirectly by stimulating business dynamism.
    Keywords: China, total factor productivity, growth, business dynamism.; business dynamism; life-cycle growth; SOE reform; China's productivity; dynamism trend; Productivity; Public enterprises; Total factor productivity; Capital productivity; Aging
    Date: 2022–02–18
  6. By: FUKUGAWA Nobuya
    Abstract: University spinoffs build on strong science, which allows them to create radical innovation. Radical innovation entails uncertainty in entrepreneurial outcomes, necessitating the participation of individuals and organizations that bridge the gap between science and the market. Recognizing that the commercial success of university spinoffs hinges on the entrepreneurial ecosystems they are embedded in, this study establishes unbalanced panel data (2015-2020) to examine the relationships among the key factors in university spinoff ecosystems: scientific productivity of academic researchers associated with university spinoffs, radicalness of the innovation created by the university spinoff, and entrepreneurial intermediaries who bridge the gap between science and the market. Estimation results reveal that h5-index positively affects venture capital funding. The quality of innovation does not affect the probability of university spinoffs receiving venture financing, negating the scout function of entrepreneurial intermediaries. Venture capital financing positively affects sales growth of university spinoffs, corroborating the coach function of entrepreneurial intermediaries.
    Date: 2022–02
  7. By: Redha Fares; Amélie Guillin
    Date: 2022
  8. By: Imène Berguiga; Philippe Adair
    Date: 2022
  9. By: Van Reenen, John; Howell, Sabrina T.; Rathje, Jason; Wong, Jun
    Abstract: Organizations investing in R&D must decide whether to solicit specific technologies or allow innovators to suggest ideas. Using administrative data, we study the “Open” reform to U.S. Air Force R&D procurement, which invited firms to suggest any new potentially useful technology. The new program was run simultaneously with the traditional top-down “Conventional” program. Our regression discontinuity design offers the first causal evaluation of a defense R&D program. We document benefits from winning an Open award for VC funding, military technology, and innovation, and no benefits from Conventional, which instead fosters incumbency. The bottom-up approach appears to help explain Open’s success.
    Keywords: innovation; defense; R&D; procurement
    JEL: O31 O32 O38 H56 H57
    Date: 2021–04–13
  10. By: Onajomo Akemu; Atanu Rakshit
    Date: 2022
  11. By: Leila Farraj; Aminanur Chaia; Shumaila Yousafzai
    Date: 2022
  12. By: Takafumi Suzuki; Takafumi Kawakubo
    Abstract: This study disentangles the motives behind enterprises' responses to size-dependent tax regulations by exploiting value-added tax (VAT) reforms in Japan. Tax threshold and tax rate in Japan have changed over the past three decades since the introduction of VAT. We build on the model of Harju et al. (2019) to incorporate various tax reforms and conducted bunching estimation. By using a novel panel of Japanese Census of Manufacture covering the periods of VAT introduction and reforms, we find from the local estimates that the observed output response by enterprises is mainly caused by compliance costs rather than tax rates for small enterprises in Japan. The results suggest that the authorities are encouraged to ease compliance costs while enhancing tax revenue to improve the efficiency of tax design.
    Date: 2022–03
  13. By: Muduli, Silu
    Abstract: The small, micro, and medium enterprise (MSME) sector in India was severely affected during the COVID-19 pandemic. The Government of India and the Reserve Bank of India brought numerous policy measures to revive and provide external liquidity support to borrowers in the MSMEs sector. Credit growth picked up in the MSME sector following the introduction of the Emergency Credit Line Guarantee Scheme (ECLGS) scheme in May 2020, particularly of a loan of size less than 10 lakh. Initially, it benefited borrowers already having a relationship with the bank, later the benefit passed to new borrowers. On the usage of funds, nearly 45 per cent of these loans were used for clearing dues of vendors and 29 per cent to restart the business. On the performance of ECLGS loans, 88 per cent of loans are standard assets and 1.96 per cent are non-performing assets as of March 31, 2021.
    Keywords: COVID-19,MSMEs Relief packages,MSME financing
    JEL: G28 G32 H12
    Date: 2022
  14. By: Rettl, Daniel A. (University of Georgia); Schandlbauer, Alexander (University of Southern Denmark); Trandafir, Mircea (University of Southern Denmark)
    Abstract: When workers are in bad health, their productivity declines. We investigate whether the health of employees affects firm performance, taking advantage of the severity of the seasonal influenza seasons as a source of exogenous variation. We find that firms whose employees are particularly affected by influenza experience reductions in their return on assets and in net income. These results are not driven by firm-specific characteristics, as we find the same relationship between influenza severity and firm performance within firms, at the establishment level. We also document substantial heterogeneity in the effects, with small firms and labor-intensive firms driving our findings. This suggests that labor is an important driver of firm performance and that capital-intensive and larger firms are better able to shift resources in response to temporary shocks to their workforce. Back-of-the-envelope calculations suggest that smaller firms may be better off subsidizing vaccination programs for their employees.
    Keywords: seasonal influenza, health shock, firm performance
    JEL: L25 I12 G30 J31
    Date: 2022–03
  15. By: Kuosmanen, Natalia; Kuosmanen, Timo; Ali-Yrkkö, Jyrki; Pajarinen, Mika
    Abstract: Abstract Productivity growth in Finland has slowed down due to structural change. Firms are in a continuous process of renewal in a dynamic economy. In addition to firms’ entry and exit, the structure of business sector also renews internally. Some firms renew their product and service offerings to such an extent that they change industry. We find that industry switching by firms are surprisingly common in Finnish business sector. As many as a quarter of companies in the early 2000s that continue to operate in 2018 have switched industries. Similar to entry and exit, the renewal of products and service offerings is a part of structural change that can impact productivity growth of industries. Industry switching has both positive and negative contributions to aggregate productivity in different industries and periods. Gradual industry switching mainly has negative impact on productivity growth suggesting that the change of industry is a survival strategy. On the other hand, more radical industry changes generally have positive impacts on productivity. This result is particularly relevant to the Finnish innovation policy that aims to provide incentives for continuous renewal of companies. Much research has been done on barriers to startup establishment. However, industry switching is also a form of entry, and the barriers of product switching and how those could be lowered should be further explored.
    Keywords: Industry, Industry switching, Productivity, Renewal, Structural change
    JEL: D4 O47 D23
    Date: 2022–03–28
  16. By: Bersch, Johannes; Berger, Marius; Füner, Lena
    Abstract: In dieser Studie zum deutschen Innovationssystem berichtet das ZEW über die Unternehmensdynamik in der deutschen Wirtschaft, mit einem deutlichen Fokus auf die deutsche Wissenswirtschaft. Sie beinhaltet Informationen zum Gründungs- und Schließungsgeschehen 2020 in Deutschland, den einzelnen Bundesländern, sowie zum Vergleich mit der Unternehmensdynamik ausgewählter anderer Länder bis zum Jahr 2019. Zudem wird über die Entwicklung des Wagniskapitalmarktes in Deutschland und im internationalen Vergleich berichtet. Die Analysen zu den Gründungen und Schließungen für Deutschland erstrecken sich über den Zeitraum 2005-2020. Für den internationalen Vergleich stehen Daten für die Jahre 2008 bis 2019 zur Verfügung. Empirische Grundlage für die Analysen zu Deutschland ist das Mannheimer Unternehmenspanel des ZEW (MUP), die internationalen Vergleiche beruhen auf der strukturellen Unternehmensstatistik (Structural Business Statistics) von Eurostat. Die Untersuchungen zum Wagniskapitalmarkt stützen sich für Deutschland auf Transaktionsdaten der Zephyr M&A-Datenbank sowie der Majunke-Transaktionsdatenbank sowie für den internationalen Vergleich auf Verbandsdaten von Invest Europe.
    Date: 2022
  17. By: Jean-Yves Ottmann (Université Paris Dauphine-PSL - PSL - Université Paris sciences et lettres, DRM - Dauphine Recherches en Management - Université Paris Dauphine-PSL - PSL - Université Paris sciences et lettres - CNRS - Centre National de la Recherche Scientifique); Bernard Gazier (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Dominique Mahut (IRISSO - Institut de Recherche Interdisciplinaire en Sciences Sociales - INRA - Institut National de la Recherche Agronomique - Université Paris Dauphine-PSL - PSL - Université Paris sciences et lettres)
    Abstract: Le portage salarial est un statut qui questionne les nouvelles formes d'emploi. Cet article se propose de préciser son positionnement par la mise en évidence et l'analyse des différentes trajectoires possibles au sein de ce statut juridique. L'analyse longitudinale d'un échantillon de plus de 4800 individus identifie cinq trajectoires différentes et montre que le portage salarial est un statut juridique entre nouvelle forme d'emploi, salariat et entrepreneuriat classiques
    Date: 2021

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