nep-ent New Economics Papers
on Entrepreneurship
Issue of 2022‒05‒09
nine papers chosen by
Marcus Dejardin
Université de Namur

  1. The low productivity of European firms- how can policies enhance the allocation of resources? By Grégory Claeys; Marie Le Mouel; Giovanni Sgaravatti
  2. Survival Strategies under Sanctions: Firm-Level Evidence from Iran By Iman Cheratian; Saleh Goltabar; Mohammad Reza Farzanegan
  3. Promoting self-employment: Does it create more employment and business activity? By Gilbert Cette; Jimmy Lopez
  4. The Impact of Fintech Lending on Credit Access for U.S. Small Businesses By Giulio Cornelli; Jon Frost; Leonardo Gambacorta; Julapa Jagtiani
  5. Improving Entrepreneurs’ Digital Skills and Firms’ Digital Competencies through Business Apps Training: A Study of Small Firms By Drydakis, Nick
  6. Industries, Mega Firms, and Increasing Inequality By Haltiwanger, John C.; Hyatt, Henry R.; Spletzer, James R.
  7. Patent disputes as emerging barriers to technology entry? Empirical evidence from patent opposition By Arianna Martinelli; Julia Mazzei; Daniele Moschella
  8. Macroeconomic Effects of Collateral Requirements and Financial Shocks By Aicha Kharazi
  9. Die gesellschaftliche Wertschöpfung des Mittelstands By Schlepphorst, Susanne; Welter, Friederike; Holz, Michael

  1. By: Grégory Claeys; Marie Le Mouel; Giovanni Sgaravatti
    Abstract: This Working Paper is an output from the MICROPROD project, which received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement no. 822390. This paper summarises the most important policy lessons from the research undertaken in the MICROPROD project, work package 4, related to the allocation of the factors of production, with a special focus on the weak dynamism of European small and medium-sized enterprises...
    Date: 2022–04
  2. By: Iman Cheratian; Saleh Goltabar; Mohammad Reza Farzanegan
    Abstract: Given the importance of firm strategic management in time of crises, this study investigates Micro, Small, and Medium Enterprises (MSMEs) survival strategies during the international sanctions against Iran. Using data from a questionnaire of 486 firms between December 2019 to September 2020, we found that firm strategies in reducing research and development (R&D) expenditures, marketing costs, and fixed/overhead costs and investing in information technology (IT) are positively related to their survivability. Conversely, managerial decisions to “reduce production” and “staff pay cut/freeze” have negative and significant impacts on a firm’s ability to survive during sanctions. Moreover, micro firms are more resilient than their small and medium counterparts. The findings also confirm that age has a significant and positive impact on firm survival. Finally, the results show that having a business plan, access to finance and technology, owner education, export orientation, business networking and consulting services are the key drivers of withstanding the pressure from sanctions.
    Keywords: crisis, recession, sanction, survival strategies, firm, Iran
    JEL: F51 M13 L25 L26
    Date: 2022
  3. By: Gilbert Cette (NEOMA - Neoma Business School); Jimmy Lopez (DGEI-DEMS - Banque de France - Direction Générale des Etudes et des relations Internationales, Direction des Etudes Microéconomique et Structurelles , LEDi - Laboratoire d'Economie de Dijon [Dijon] - UB - Université de Bourgogne - UBFC - Université Bourgogne Franche-Comté [COMUE])
    Abstract: We assess the economic impact of reforms promoting self-employment in the three countries that have implemented such reforms since the early 2000s: the Netherlands, the United Kingdom and France. To that end, we use an unbalanced cross country-industry dataset of 4,226 observations, including 12 OECD countries and 20 market industries, over the 1995-2016 period. We first observe, using country-level data, that the share of self-employed workers in total employment is quite stable or declines over the period in all countries in our dataset, except in the three countries where large reforms promoting self-employment have been implemented, and only after these reforms. We econometrically confirm this impact on self-employment in our set of 20 industries and we find that, at the end of the period, the reforms may have increased the share of selfemployed workers in total employment by 5.5pp on average in the Netherlands, 2.5pp in the United Kingdom and 2pp in France. Then, we investigate the impact of reforms on total employment and value added using a difference-indifferences approach. In spite of a broad sensitivity analysis, we find no evidence that the reforms may have impacted either total employment or value-added. These results suggest that the reforms promoting self-employment may have raised the number of self-employed workers, but mostly through a substitution effect between the self-employed and employees, and not through a supply effect or a substitution effect with informal activities. This means that the reforms may have failed to achieve their main objectives.
    Keywords: self-employment,structural reforms,entrepreneurship
    Date: 2021–09
  4. By: Giulio Cornelli; Jon Frost; Leonardo Gambacorta; Julapa Jagtiani
    Abstract: Small business lending (SBL) plays an important role in funding productive investment and fostering local economic growth. Recently, nonbank lenders have gained market share in the SBL market in the United States, especially relative to community banks. Among nonbanks, fintech lenders have become particularly active, leveraging alternative data for their own internal credit scoring. We use proprietary loan-level data from two fintech SBL platforms (Funding Circle and LendingClub) to explore the characteristics of loans originated pre-pandemic (2016‒2019). Our results show that fintech SBL platforms lent more in zip codes with higher business bankruptcy filings and higher unemployment rates. Moreover, fintech platforms’ internal credit scores were able to predict future loan performance more accurately than the traditional approach to credit scoring. Using Y-14M loan-level bank data, we also compare fintech SBL with traditional bank business cards in terms of credit access and interest rates. Overall, fintech lenders have a potential to create a more inclusive financial system, allowing small businesses that were less likely to receive credit through traditional lenders to access credit and to do so at lower cost.
    Keywords: peer-to-peer (P2P) lending; marketplace lending; small business lending (SBL); Funding Circle; LendingClub; alternative data; credit access; credit scoring; fintech credit
    JEL: G18 G21 G28 L21
    Date: 2022–04–25
  5. By: Drydakis, Nick
    Abstract: The lack of awareness of digital services and outcomes is a concern in business environments since small firms need to improve their digital competencies. The present exploratory study investigated whether business apps training was associated with entrepreneurs' and firms' digital advancements. The business apps training was offered to migrant entrepreneurs running small firms in Athens (Greece) over three months, with data collected before and after the training. The analysis revealed that business apps training was positively associated with entrepreneurs' attitudes toward technology, willingness to change (relating to technology/skills/operations), and internet/digital skills, as well as increased use of business apps. Moreover, the training was positively associated with firms' digital competencies related to communication, networking, social media, customer relationship management, payments, accounting and finance, and project management operations. Furthermore, the business apps training was positively associated with migrant entrepreneurs' integration into Greek society. Given the increased number of migrants in Europe, factors that positively impact their entrepreneurship and integration merit consideration. The study provides researchers with a systematic method for evaluating the association between business app training and entrepreneurs' and firms' digital advancements.
    Keywords: Training,Entrepreneurs,Small Firms,Business Apps,Digital Skills,Digital Competencies,Artificial Intelligence,Integration
    JEL: M53 L26 O31 O33
    Date: 2022
  6. By: Haltiwanger, John C. (University of Maryland); Hyatt, Henry R. (U.S. Census Bureau); Spletzer, James R. (U.S. Census Bureau)
    Abstract: Most of the rise in overall earnings inequality is accounted for by rising between-industry dispersion from about ten percent of 4-digit NAICS industries. These thirty industries are in the tails of the earnings distribution, and are clustered especially in high-paying high-tech and low-paying retail sectors. The remaining ninety percent of industries contribute little to between-industry earnings inequality. The rise of employment in mega firms is concentrated in the thirty industries that dominate rising earnings inequality. Among these industries, earnings differentials for the mega firms relative to small firms decline in the low-paying industries but increase in the high-paying industries. We also find that increased sorting and segregation of workers across firms mainly occurs between industries rather than within industries.
    Keywords: inequality, firm size, industry, wage differentials, sorting, segregation, pay premium
    JEL: J31 J21
    Date: 2022–03
  7. By: Arianna Martinelli; Julia Mazzei; Daniele Moschella
    Abstract: The recent surge of patent disputes plays an important role in discouraging firms from entering new technology domains (TDs). Using a large-scale dataset combining data from the EPO-PATSTAT database and ORBIS-IP and containing patents applied at EPO between 2000 and 2015, we construct a new measure of litigiousness using patent opposition data. We find that the degree of litigiousness and the density of patent thickets negatively affect the likelihood of firms entering new TDs. Across technologies, the frequency of oppositions discourages firms mostly in high-tech industries. Across firms, the risk of opposition falls disproportionately on small rather than large firms. Finally, for large firms, we observe a sort of learning-by-being-opposed effect. This evidence suggests that litigiousness and hold-up potential discourage firms from entering new TDs, shaping Schumpeterian patterns of innovation characterized by a stable number of large-established firms and a lower degree of turbulence.
    Keywords: Patent opposition; Technological entry; Innovation Strategies.
    Date: 2022–05–02
  8. By: Aicha Kharazi (Free University of Bozen-Bolzano, Italy)
    Abstract: This article explores the implications of borrower's side collateral constraints have on the real economy. The novel element in this model relative to the industry standard model is that I model the entrepreneurs, which are crucial for investment, as collateral constrained. The model is estimated using Bayesian methods and can be employed to measure the role of collateral. Regarding the results, I document that collateral requirements are highly volatile during the period of 2007–2012, and I find that the effect of an increase in collateral requirements is highly significant. Interestingly, the model assigns an important role for collateral in the shock decomposition, and the contribution of financial shocks is much marked during the financial crisis and substantially shapes macroeconomic fluctuations.
    Keywords: Business Loan, Collateral, Financial Shocks.
    JEL: E32 E44 G21
    Date: 2022–04
  9. By: Schlepphorst, Susanne; Welter, Friederike; Holz, Michael
    Abstract: Diese Studie untersucht den gesellschaftlichen Beitrag des Mittelstands und wie er in einem Prozess gemeinschaftlicher gesellschaftlicher Wertschöpfung erbracht wird. Regionale Gemeinschaften nehmen je nach örtlicher Problemlage andere Aspekte des gesellschaftlichen Beitrags wahr. In wirtschaftlich schlecht aufgestellten Regionen wird er mit dem wirtschaftlichen Beitrag gleichgesetzt; in wirtschaftlich gut aufgestellt Regionen rückt der mittelbare Beitrag für die Region in das Bewusstsein. Ein erheblicher Teil des gesellschaftlichen Beitrags des Mittelstands geht aus dem Zusammenspiel mit anderen regionalen Akteuren hervor, mit veränderbaren Rollenverteilungen der Akteure. Voraussetzung für diese gemeinschaftliche gesellschaftliche Wertschöpfung sind die regionsinterne Vernetzung sowie eine gemeinsame regionale Identität, die sich in kollektiven Erzählungen zur Regionalentwicklung spiegelt. Der Austausch zwischen strukturschwachen, jetzt mittelstandsstarken Regionen und solchen im Strukturwandel gibt neue Impulse für die vielfältigen Rollen und Beiträge des Mittelstands.
    Keywords: Mittelstand,Gesellschaft,gesellschaftliche Wertschöpfung,gesellschaftlicher Beitrag,German Mittelstand,society,societal value creation,societal impact
    JEL: L21 L26 M14
    Date: 2022

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