nep-ent New Economics Papers
on Entrepreneurship
Issue of 2022‒09‒12
seven papers chosen by
Marcus Dejardin
Université de Namur

  1. Minimum wages and the rise in solo self-employment By Ganserer, Angelika; Gregory, Terry; Zierahn, Ulrich
  2. Small Firm Growth and the VAT Threshold : Evidence for the UK By Liu, Li; Lockwood, Ben; Tam. Eddy
  3. Making the case for entrepreneur's starting age as a relevant variable for economic growth By Ricardo Figueiredo Belchior; Bernardo Melo Pimentel
  4. Measuring Small Business Dynamics and Employment with Private-Sector Real-Time Data By André Kurmann; Ãtienne Lalé; Lien Ta
  5. Work from Home Arrangements and Organizational Performance in Italian SMEs: Evidence from the COVID-19 Pandemic By Abrardi, Laura; Grinza, Elena; Manello, Alessandro; Porta, Flavio
  6. Observing preservations in apparent ruptures with a design approach: Scale-up of deeptech start-ups as an exploratory phase By Louise Taupin; Pascal Le Masson; Blanche Segrestin
  7. A Synthetic Indicator of the Quality of Support for Businesses in Burkina-Faso, Cameroon, and Ghana By Jean C. Kouam; Simplice A. Asongu; Bin J. Meh; Robert Nantchouang; Fri L. Asanga; Denis Foretia

  1. By: Ganserer, Angelika; Gregory, Terry; Zierahn, Ulrich
    Abstract: Solo self-employment is on the rise despite less favorable working conditions compared to traditional jobs. We show that the introduction of minimum wages in German industries led to an increase in the share of solo self-employment by up to 8.5 percentage points. We explain our findings within a substitution-scale model that predicts a decline in demand and earnings perspectives for high-skilled dependent workers, whenever the negative scale effect (overall decline in industry employment) dominates the positive substitution effect (shift towards high-skilled workers). Such situations can occur during an economic downturn in combination with a strong and rising minimum wage bite.
    Keywords: minimum wages,solo self-employment,synthetic control method
    JEL: J21 J31 J38 J08
    Date: 2022
  2. By: Liu, Li (International Monetary Fund); Lockwood, Ben (University of Warwick); Tam. Eddy (King's College london)
    Abstract: This paper studies the effect of the VAT threshold on firm growth in the UK, using exogenous variation over time in the threshold, combined with turnover bin fixed effects, for identification. We find robust evidence that annual growth in turnover slows by about 1 percentage point when firm turnover gets close to the threshold, and weaker evidence of higher growth when the threshold is passed. Growth in firm costs shows a similar pattern, indicating that the response to the threshold is likely to be a real response rather than an evasion response. Firms that habitually register even when their turnover is below the VAT threshold (voluntary registered firms) have growth that is unaffected by the threshold, whereas firms that select into the Flat-Rate Scheme have a less pronounced slowdown response than other firms. Similar patterns of turnover and cost growth around the threshold are also observed for non-incorporated businesses. Finally, simulation results clarify the relative contribution of "noncrossers" ( firms who eventually register for VAT) and "non-crossers" (those who permanently stay below the threshold) in explaining our empirical findings. JEL Classification: H22 ; H25 ; H26
    Keywords: VAT ; size-based threshold ; firm growth
    Date: 2022
  3. By: Ricardo Figueiredo Belchior (ISEG - ISEG-Lisbon School of Economics and Management - ULISBOA - Universidade de Lisboa = University of Lisbon); Bernardo Melo Pimentel (Forward College, NOVA SBE - NOVA - School of Business and Economics - NOVA - Universidade Nova de Lisboa = NOVA University Lisbon, ISEG - ISEG-Lisbon School of Economics and Management - ULISBOA - Universidade de Lisboa = University of Lisbon)
    Keywords: Entrepreneurship,Starting age,Economic growth
    Date: 2022–08–05
  4. By: André Kurmann; Ãtienne Lalé; Lien Ta
    Abstract: The COVID-19 pandemic has led to an explosion of research using private-sector datasets to measure business dynamics and employment in real-time. Yet questions remain about the representativeness of these datasets and how to distinguish business openings and closings from sample churn – i.e., sample entry of already operating businesses and sample exits of businesses that continue operating. This paper proposes new methods to address these issues and applies them to the case of Homebase, a real-time dataset of mostly small service-sector sector businesses that has been used extensively in the literature to study the effects of the pandemic. We match the Homebase establishment records with information on business activity from Safegraph, Google, and Facebook to assess the representativeness of the data and to estimate the probability of business closings and openings among sample exits and entries. We then exploit the high frequency / geographic detail of the data to study whether small service-sector businesses have been hit harder by the pandemic than larger firms, and the extent to which the Paycheck Protection Program (PPP) helped small businesses keep their workforce employed. We find that our real-time estimates of small business dynamics and employment during the pandemic are remarkably representative and closely fit population counterparts from administrative data that have recently become available. Distinguishing business closings and openings from sample churn is critical for these results. We also find that while employment by small businesses contracted more severely in the beginning of the pandemic than employment of larger businesses, it also recovered more strongly thereafter. In turn, our estimates suggests that the rapid rollout of PPP loans significantly mitigated the negative employment effects of the pandemic. Business closings and openings are a key driver for both results, thus underlining the importance of properly correcting for sample churn. La pandémie de COVID-19 a conduit à une explosion de la recherche utilisant des ensembles de données du secteur privé pour mesurer la dynamique des entreprises et l'emploi en temps réel. Plusieurs questions restent posées quant à la représentativité de ces ensembles de données et à la manière de distinguer les créations et les fermetures d'entreprises du roulement de l'échantillon - c'est-à-dire l'entrée dans l'échantillon d'entreprises déjà en activité et la sortie de l'échantillon d'entreprises qui continuent à fonctionner. Cet article propose de nouvelles méthodes pour résoudre ces problèmes et les applique au cas de Homebase, un ensemble de données en temps réel composé principalement de petites entreprises du secteur des services qui a été largement utilisé dans la littérature pour étudier les effets de la pandémie. Nous apparions les établissements présents dans les données de Homebase avec des informations sur l'activité commerciale provenant de Safegraph, Google et Facebook afin d'évaluer la représentativité des données et d'estimer la probabilité de fermetures et de créations d'entreprises parmi les sorties et les entrées de l'échantillon. Nous exploitons ensuite la haute fréquence et le détail géographique des données pour étudier si les petites entreprises du secteur des services ont été plus durement touchées par la pandémie que les grandes entreprises, et analyser les effets du programme de prêts d’urgence (Paycheck Protection Program, PPP) sur la survie et l’emploi des petites entreprises. Nous constatons que nos estimations en temps réel de la dynamique et de l'emploi des petites entreprises pendant la pandémie sont remarquablement représentatives et correspondent étroitement aux résultats obtenus à partir de données administratives qui sont devenues disponibles récemment. La distinction entre les fermetures et les créations d'entreprises et le renouvellement de l'échantillon est essentielle pour ces résultats. Nous constatons également que si l'emploi des petites entreprises s'est contracté plus fortement au début de la pandémie que celui des grandes entreprises, il s'est également rétabli plus rapidement par la suite. Par ailleurs, nos estimations suggèrent que le déploiement rapide des prêts du PPP a considérablement atténué les effets négatifs de la pandémie sur l'emploi. Les fermetures et créations d'entreprises sont un facteur clé pour ces deux résultats, soulignant ainsi l'importance de corriger correctement le taux de rotation de l'échantillon.
    Keywords: Economics of small and medium enterprises,Labor turnover,Sampling bias, Matched data,COVID-19,Sector policies, Economie des petites et moyennes entreprises,Rotation de la main dâÅuvre,Biais dâéchantillonnage,Données appariées,COVID-19,Politiques sectorielles
    Date: 2022–08–24
  5. By: Abrardi, Laura; Grinza, Elena; Manello, Alessandro; Porta, Flavio
    Abstract: We use survey data on Italian small- and medium-sized enterprises (SMEs) collected during the COVID-19 pandemic to explore the relationship between the adoption of work from home (WFH) practices and organizational performance. In so doing, we investigate the possible underlying mechanisms, including measures of labor productivity and workers’ concentration and motivation, the level of absenteeism, the organization of work through management by objectives (MBO), and the presence of coordination and communication costs. We obtain several results. First, we find a significantly enhanced capability of firms that adopted WFH during the pandemic to sustain the overall organizational performance, particularly when such work practice is used intensively. Second, increased labor productivity and workers’ concentration and motivation, decreased absenteeism, and a substantial rise in the adoption of MBO seem to be the main drivers behind the detected benefits related to WFH. Third, when WFH is used at medium levels of intensity, it is associated with augmented coordi- nation and communication costs, which nonetheless do not appear to overcome the benefits associated with WFH.
    Keywords: Work from home (WFH), teleworking, agile working, smart working, organizational performance, labor productivity, management by objectives (MBO), COVID-19, small- and medium-sized enterprises (SMEs), survey data.
    JEL: D23 D24 M54
    Date: 2022
  6. By: Louise Taupin (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - Université Paris sciences et lettres - CNRS - Centre National de la Recherche Scientifique); Pascal Le Masson (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - Université Paris sciences et lettres - CNRS - Centre National de la Recherche Scientifique); Blanche Segrestin (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - Université Paris sciences et lettres - CNRS - Centre National de la Recherche Scientifique)
    Abstract: In this paper, we argue that imperfections in entrepreneurial process may also be a question of point of view. Scale-up is openly acknowledged as a difficult phase of development, even more so when it comes to deeptech start-ups for which development mechanisms are not yet fully understood. We challenge the definition of a deeptech scale-up as simple replication of a validated business model. We conducted an intervention-research in two deeptech start-ups. Firstly, the study of their scale-up strategy highlights the continuity of explorations. Secondly, we use a design approach to carry out explorations from the constituted creative heritage.
    Date: 2022–07–07
  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: This paper proposes a synthetic indicator of the quality of support for companies as well as identifies the factors that can contribute towards improving the quality of such support in three countries (i.e., Burkina-Faso, Cameroon, and Ghana). The approach used to construct this synthetic indicator builds on the works of Benzécri (1973) and Asselin (2002), who use static mechanics and apply techniques of factor analysis. A principal component analysis is performed on the data collected from 80 business support structures in the sampled countries. Afterconstructing the indicators, correlates are provided on how the constructed indicators are linked to the objectives of sustainable development. Our results are robust after controlling for variables relating to the general characteristics of the support structure. The findings are consistent with the thesis that taking sustainable development objectives into account in business support practices would significantly improve business performance in sampled countries and, by extension, in sub-Saharan Africa. The originality of the study stems from the fact that it considers specific SDGs (SDG4, SDG5, SDG8, and SDG9) and assesses their contribution to improving the quality of support for companies, a research area that has not been investigated hitherto by the extant literature. Implications for all stakeholders in the entrepreneurial ecosystem are discussed.
    Keywords: Synthetic indicator; Quality of support; Businesses; Sub-Saharan Africa
    JEL: C30 M20 O10 O30 O55
    Date: 2022–01

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