nep-ent New Economics Papers
on Entrepreneurship
Issue of 2022‒05‒30
four papers chosen by
Marcus Dejardin
Université de Namur

  1. The evolution of owner-entrepreneurs’ taxation: five tax regimes over a 160-year period By Elert, Niklas; Johansson, Dan; Stenkula, Mikael; Wykman, Niklas
  2. Intensification or Diversification: Responses by Anti Health-Pass Entrepreneurs to French Government Announcements By Christophe Leveque; Haris Megzari
  3. Resilience in the Time of Covid-19: Lessons Learned from MENA SMEs By Zouheir EL-SAHLI; Mouyad ALSAMARA
  4. Riding Out the COVID-19 Storm: How Government Policies Affect SMEs in China By Joy Chen; Zijun Cheng; Robin Kaiji Gong; Jinlin Li

  1. By: Elert, Niklas (Research Institute of Industrial Economics (IFN)); Johansson, Dan (Örebro University School of Business); Stenkula, Mikael (Research Institute of Industrial Economics (IFN)); Wykman, Niklas (Örebro University School of Business)
    Abstract: The institutional literature suggests that long-term tax incentives are crucial for entrepreneurs, but studies on this topic are hampered by theoretical and empirical problems related to how to define and measure entrepreneurial income. We resolve these problems by drawing on a theoretical definition of the entrepreneur as an owner, which enables us to identify entrepreneurship empirically by means of investments made by active owners of closely held firms. Using detailed Swedish tax data, we analyze the tax incentives for such owner-entrepreneur investments from 1862 to 2018, thereby highlighting the evolution of a general institutional phenomenon through a long-run, in-depth, country-specific analysis. We calculate the annual marginal effective tax rate (METR) on capital income for investments, distinguishing between average- and top-income entrepreneurs, and between three sources of finance. We identify five tax regimes that indicate substantial differences in institutional quality over time according to the magnitude of the METR and METR differences between average- and top-income entrepreneurs and across sources of finance. Increased taxation of owner-entrepreneurs helps explain the absence of new large entrepreneurial firms in Sweden after World War II, while improved incentives can be associated with Sweden’s recent entrepreneurial renaissance.
    Keywords: high-impact entrepreneurship; institutional quality; arginal effective tax rates; tax regimes; tax reforms
    JEL: H21 H31 H32 L25 L26 N44
    Date: 2022–05–12
  2. By: Christophe Leveque (BSE - Bordeaux Sciences Economiques - UB - Université de Bordeaux - CNRS - Centre National de la Recherche Scientifique); Haris Megzari (BSE - Bordeaux Sciences Economiques - UB - Université de Bordeaux - CNRS - Centre National de la Recherche Scientifique)
    Abstract: We study the extent to which French entrepreneurs mobilized in an online collective action against the generalization of the health-pass policy in summer 2021. We document the dynamics of registrations on the website where entrepreneurs could claim they would not check the health-pass of their clients. We first note an over-representation of complementary and alternative medicine (CAM) practitioners among the mobilized people. We also suggest that professionals related to the touristic industry mobilized on the website. Second, we show that the government announcements led to an increase in the mobilization. However, they did not affect the diversity of the entrepreneurs joining the action. This lack of diversity may have restricted the pool of potential participants as well as limited the identification of the "public opinion" to the mobilization.
    Keywords: Covid-19,Collective actions,Protests,CAM,Health-pass,Anti-pass movements
    Date: 2022–03–30
  3. By: Zouheir EL-SAHLI; Mouyad ALSAMARA
    Abstract: We investigate the effects of the Covid-19 pandemic on small and medium-sized enterprises (SMEs) in four non-oil-exporting MENA countries (Jordan, Morocco, Tunisia, and Egypt). Using data from a recent enterprise survey, we highlight several new findings. MENA SMEs resorted to wage and work hours reductions more readily than layoffs in the wake of the pandemic. Within SMEs, larger firms are more resilient, recover faster, and adapt more often. On the sector level, the accommodation and food services sector is the worst affected in most outcomes. There is, however, clear recovery in Q2 (versus Q1) 2021 across sectors and countries. Furthermore, SMEs that switch to remote work are less likely to face closures, recover faster, and adapt more frequently, signaling higher resilience and adaptability. On the other hand, participation in government assistance programs does not improve firm outcomes, whereas firms that participate in international trade are more resilient and adaptable in the face of the shock. The results of the study carry very important policy implications to support SMEs in developing countries in time of extreme exogenous shocks.
    Keywords: Afrique
    JEL: Q
    Date: 2022–04–28
  4. By: Joy Chen (Cheung Kong Graduate School of Business); Zijun Cheng (National School of Development, Peking University); Robin Kaiji Gong (Department of Economics, Hong Kong University of Science and Technology); Jinlin Li (National School of Development, Peking University and Harvard Kennedy School)
    Abstract: Based on a nationally representative survey on SMEs in China, we study the impact of government policy interventions on SMEs during the COVID-19 pandemic. Our findings are three-fold. First, regional and local lock-down policies decrease SMEs' incidence of reopening and delay their expected reopening in the near future, likely by reducing consumer demand. Second, stabilization policies in the form of payment deferrals and exemptions significantly improve SMEs' cash flows and further stimulate their operational recovery. This effect is more pronounced for firms with larger shares of high-skilled employees. Last, financial support policies do not appear to be effective in alleviating SMEs' cash constraints or encouraging the reopening of small businesses, potentially due to difficulties in accessing policy-oriented loans and misallocation of credit. Our findings shed new light on the policy debates on supporting SMEs during the COVID-19 pandemic.
    Keywords: COVID-19, Policy, China, SME
    JEL: D22 H71 H81 L23
    Date: 2020–07

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