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

  1. Partisan Entrepreneurship By Joseph Engelberg; Jorge Guzman; Runjing Lu; William Mullins
  2. Fresh start policies and small business activity: evidence from a natural experiment By Marco Celentani; Miguel García-Posada; Fernando Gómez Pomar
  3. Were Small Businesses More Likely to Permanently Close in the Pandemic? By Fairlie, Robert W.; Fossen, Frank M.; Johnsen, Reid; Droboniku, Gentian
  4. Natural Disasters, Entrepreneurship Activity, and the Moderating Role of Country Governance By Christopher Boudreaux; Anand Jha; Monica Escaleras
  5. Local Information and Firm Expectations about Aggregates By Jonas Dovern; Lena Sophia Müller; Klaus Wohlrabe
  6. A resource-based analysis of strategic alliances between knowledge intermediaries in regional innovation and entrepreneurial ecosystems By Bäumle, Philipp; Bizer, Kilian
  7. Duration of Support and Financial Health of Business Support Structures in Burkina Faso, Cameroon, and Ghana: A Micro-Econometric Analysis By Jean C. Kouam; Simplice A. Asongu; Bin J. Meh; Robert Nantchouang; Fri L. Asanga; Denis Foretia

  1. By: Joseph Engelberg; Jorge Guzman; Runjing Lu; William Mullins
    Abstract: Republicans start more firms than Democrats. In 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.
    JEL: G41 G51 L26 M13
    Date: 2022–07
  2. By: Marco Celentani (Universidad Carlos III); Miguel García-Posada (Banco de España); Fernando Gómez Pomar (Universitat Pompeu Fabra)
    Abstract: There is no consensus in the academic literature on whether personal bankruptcy laws should be creditor-friendly or debtor-friendly in order to promote entrepreneurship and small business activity. This paper contributes to that literature by analyzing the effect of the introduction of a fresh start policy in Spain in 2015 on the performance of micro-firms as a natural experiment, using Spanish non-micro firms and Portuguese firms as control groups. We find that the reform substantially increased both the probability of filing for bankruptcy by Spanish micro-firms in financial distress (arguably to seek discharge of part of the firm owner’s debt) and the probability of these firms exiting the market, as the fresh start policy requires the liquidation of the debtor’s non-exempt assets. In addition, the reform increased investment and turnover in micro-firms but had no effect on their employment. Finally, the reform also promoted the creation of new micro-firms, especially those involved in innovation activities and in sectors with high productivity.
    Keywords: personal bankruptcy, fresh start, micro-firms, entrepreneurship
    JEL: K35 G33 L25 L26
    Date: 2022–03
  3. By: Fairlie, Robert W. (University of California, Santa Cruz); Fossen, Frank M. (University of Nevada, Reno); Johnsen, Reid (California Department of Tax and Finance Administration); Droboniku, Gentian (California Department of Tax and Finance Administration)
    Abstract: Previous estimates indicate that COVID-19 led to a large drop in the number of operating businesses operating early in the pandemic, but surprisingly little is known on whether these shutdowns turned into permanent closures and whether small businesses were disproportionately hit. This paper provides the first analysis of permanent business closures using confidential administrative firm-level panel data covering the universe of businesses filing sales taxes from the California Department of Tax and Fee Administration. We find large increases in closures rates in the first two quarters of 2020, but a strong reversal of this trend in the third quarter of 2020. The increase in closures rates in the first two quarters of the pandemic was substantially larger for small businesses than large businesses, but the rebound in the third quarter was also larger. The disproportionate closing of small businesses led to a sharp concentration of market share among larger businesses as indicated by the Herfindahl-Hirschman Index with only a partial reversal after the initial increase. The findings highlight the fragility of small businesses during a large adverse shock and the consequences for the competitiveness of markets.
    Keywords: small business, entrepreneurship, survival, closures, self-employment, COVID-19, coronavirus, pandemic, shelter-in-place restrictions, social distancing restrictions
    JEL: L26 H25 I18
    Date: 2022–07
  4. By: Christopher Boudreaux; Anand Jha; Monica Escaleras
    Abstract: The purpose of this paper is to investigate if a country quality of governance moderates the effect of natural disasters on startup activity within that country. We test our hypotheses using a panel of 95 countries from 2006 to 2016. Our findings suggest that natural disasters discourage startup activity in countries that have low quality governance but encourage startup activity in countries that have high quality governance. Moreover, our estimates reveal that natural disasters effects on startup activity persist for the short term (1-3 years) but not the long term. Our findings provide new insights into how natural disasters affect entrepreneurship activity and highlight the importance of country governance during these events.
    Date: 2022–07
  5. By: Jonas Dovern; Lena Sophia Müller; Klaus Wohlrabe
    Abstract: Using new survey data on quantitative growth expectations of firms in Germany, we show that firms resort to local information when forming expectations about aggregate growth. Firms extrapolate from the economic situation in their county, industry growth and their individual business situation. The effect is particularly strong for small firms and explains part of the high expectation dispersion across firms. Furthermore, we show that growth expectations are correlated with employment and investment decisions of firms, highlighting that differences in expectations do indeed seem to lead to differences in actual firm decisions. Our results confirm predictions of theoretical models with rational inattention.
    Keywords: GDP expectations, expectation heterogeneity, disagreement, rational inattention, ifo business tendency survey
    JEL: D84 E20 E32
    Date: 2022
  6. By: Bäumle, Philipp; Bizer, Kilian
    Abstract: Notwithstanding a recent upsurge in interest in knowledge intermediaries and their roles in innovation and entrepreneurial ecosystems, we know little about the interplay between the activities of academia driven intermediaries and their publicly financed counterparts. Building upon a combination of principles derived from the resource based theory and the entrepreneurial ecosystems literature, this paper investigates the potentials of cooperation between different knowledge intermediaries. Therefore, we analyze the alignment of financial, knowledge, market and network resources in politically funded regional alliances between university internal and university external intermediaries by the means of a qualitative approach. We find that while knowledge intermediaries can benefit from access to additional ecosystem specific resources, the urge to improve the own position within the ecosystem hampers the will for cooperation and can lead to non performing resource alignments. This paper contributes to current scholarly discussions by suggesting and testing a theoretical foundation for analyzing the cooperative behavior of knowledge intermediaries in innovation and entrepreneurial ecosystems.
    Keywords: resource-based view,strategic alliances,knowledge intermediaries,innovation and entrepreneurial ecosystems,qualitative case study
    JEL: I29 O31 O39
    Date: 2022
  7. By: Jean C. Kouam (Yaoundé, Cameroon); Simplice A. Asongu (Yaoundé, Cameroon); Bin J. Meh (Yaoundé, Cameroon); Robert Nantchouang (Yaoundé, Cameroon); Fri L. Asanga (Yaoundé, Cameroon); Denis Foretia (Yaoundé, Cameroon)
    Abstract: Access to finance is perceived as one of the major problems facing businesses in Sub-Saharan Africa, as well as the structures that support them in their development. This paper aims to measure the probability that a support structure with given characteristics, specific services to entrepreneurs and some technical capacities will face large-scale financial problems. We estimate a multinomial logistic model using a pool of disaggregated data collected by the Nkafu Policy Institute in a survey of 79 business support structures in Burkina Faso, Cameroon and Ghana in 2021. Our results show that the financial health of a business support structure is not fundamentally dependent on the duration of support, but rather on other factors related to the quality of services offered to entrepreneurs.
    Keywords: Duration of support; Financial Health of Businesses; Sub-Saharan Africa, Multinomial logit model
    JEL: C13 C25 M20 O10 O30 O55
    Date: 2022–01

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