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on Entrepreneurship |
| By: | Ufuk Akcigit (University of Chicago); Salomé Baslandze (Federal Reserve Bank of Atlanta); Francesca Lotti (Bank of Italy) |
| Abstract: | How do political connections affect firm dynamics, innovation, and creative destruction? We extend a Schumpeterian growth model with political connections that help firms ease their bureaucratic and regulatory burden. The model highlights how political connections influence an economy's business dynamism and innovation, and generate a number of implications guiding our empirical analysis. We construct a new large-scale dataset, for the period 1993-2014, on the universe of firms, workers, and politicians, supplemented by corporate financial statements, patent and election data, so as to define connected firms as those employing local politicians. We identify a leadership paradox: market leaders are much more likely to be politically connected, but much less likely to innovate. Political connections relate to a higher rate of survival, as well as growth in employment and revenues, but not in productivity. This result was also confirmed using the regression discontinuity design. At the aggregate level, gains from political connections do not offset losses stemming from lower reallocation and growth. |
| Keywords: | firm dynamics, innovation, political connections, creative destruction, productivity |
| JEL: | O3 O4 D7 |
| Date: | 2022–07 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_1376_22&r= |
| By: | Abhijit Banerjee; Greg Fischer; Dean Karlan; Matt Lowe; Benjamin N. Roth |
| Abstract: | What accounts for the ubiquity of small vendors operating side-by-side in the urban centers of developing countries? Why don’t competitive forces drive some vendors out of the market? We ran an experiment in Kolkata vegetable markets in which we induced (via subsidizing) some vendors to sell additional produce. The vendors earned higher profits, even when excluding the value of the subsidy. Nevertheless, after the subsidies ended vendors largely stopped selling the additional produce. Our results are consistent with collusion and inertial business practices suppressing competition and efficient market exit. |
| JEL: | D22 |
| Date: | 2022–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30360&r= |
| By: | Kurmann, Andre (Drexel University); Lalé, Etienne (University of Québec at Montréal); Ta, Lien (Drexel University) |
| 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. |
| Keywords: | small business activity, sample turnover versus business openings/closings, matching records, COVID-19, Paycheck Protection Program |
| JEL: | E01 E24 E32 E60 |
| Date: | 2022–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15515&r= |
| By: | Otrachshenko, Vladimir (Justus Liebig University, Giessen); Popova, Olga (Leibniz Institute for East and Southeast European Studies (IOS)); Nikolova, Milena (University of Groningen); Tyurina, Elena |
| Abstract: | We theoretically and empirically examine how acquiring new skills and increased financial worries influenced entrepreneurship entry and exit intentions during the pandemic. To that end, we analyze primary survey data we collected in the aftermath of the COVID-19's first wave in Russia, which has had one of the highest COVID-19 infection rates globally. Our results show that acquiring new skills during the pandemic helps maintain an existing business and encourages start-ups in sectors other than information technology (IT). For IT start-ups, having previous experience matters more than new skills. While the pandemic-driven financial worries are associated with business closure intentions, they also inspire new business start-ups, highlighting the creative destruction power of the pandemic. Furthermore, preferences for formal employment and remote work also matter for entrepreneurial intentions. Our findings enhance the understanding of entrepreneurship formation and closure in a time of adversity and suggest that implementing entrepreneurship training and upskilling policies during the pandemic can be an important policy tool for innovative small business development. |
| Keywords: | business entry, information technology (IT), business closure, COVID-19, entrepreneurship intentions, self-employment, Russia |
| JEL: | E24 J24 L26 P20 |
| Date: | 2022–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15526&r= |
| By: | Silvia Appelt; Matej Bajgar; Chiara Criscuolo; Fernando Galindo-Rueda |
| Abstract: | This report presents new insights on trends in business R&D performance and funding, drawing on the micro-aggregated R&D and tax relief statistics collected for 21 OECD countries as part of the OECD microBeRD project. Micro-aggregated statistics provide an important input for policy analysis, highlighting important variations in business R&D performance and funding across industries and different types of firms that are hard to uncover based on aggregate R&D and tax relief statistics. They shed light on country and industry specific trends in the concentration of R&D activity, business R&D dynamics, the structure of R&D performance among different types of firms and the way that they fund their R&D activities. Such evidence can be relevant in assessing the contribution of different types of firms (e.g. young firms, foreign-controlled affiliates) and individuals (e.g. female R&D staff, doctorate holders) to research and development in the business sector and designing business R&D support policies. |
| Keywords: | additionality, government support, impacts, research and development, tax incentives |
| JEL: | O38 H25 L25 |
| Date: | 2022–09–16 |
| URL: | http://d.repec.org/n?u=RePEc:oec:stiaaa:2022/04-en&r= |
| By: | Leogrande, Angelo; Costantiello, Alberto; Laureti, Lucio |
| Abstract: | In this article we investigate the determinants of “New Doctorate Graduates” in Europe. We use data from the EIS-European Innovation Scoreboard of the European Commission for 36 countries in the period 2010-2019 with Pooled OLS, Dynamic Panel, WLS, Panel Data with Fixed Effects and Panel Data with Random Effects. We found that “New Doctorate Graduates” is positively associated, among others, with “Human Resources” and “Government Procurement of Advanced Technology Products” and negatively, associated among others, with “Total Entrepreneurial Activity” and “Innovation Index”. We apply a clusterization with k-Means algorithm either with the Silhouette Coefficient either with the Elbow Method and we found that in both cases the optimal number of clusters is three. Furthermore, we use the Network Analysis with the Distance of Manhattan, and we find the presence of seven network structures. Finally, we propose a confrontation among ten machine learning algorithms to predict the value of “New Doctorate Graduates” either with Original Data-OD either with Augmented Data-AD. Results show that SGD-Stochastic Gradient Descendent is the best predictor for OD while Linear Regression performs better for AD. |
| Keywords: | Innovation, and Invention: Processes and Incentives; Management of Technological Innovation and R&D; Diffusion Processes; Open Innovation. |
| JEL: | O3 O30 O32 |
| Date: | 2022–09–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:114452&r= |
| By: | Martin Hiti; Claire Kramer; Asani Sarkar |
| Abstract: | Recent research has linked climate change and socioeconomic inequality (see here, here, and here). But what are the effects of climate change on small businesses, particularly those owned by people of color, which tend to be more resource-constrained and less resilient? In a series of two posts, we use the Federal Reserve’s Small Business Credit Survey (SBCS) to document small businesses’ experiences with natural disasters and how these experiences differ based on the race and ethnicity of business owners. This first post shows that small firms owned by people of color sustain losses from natural disasters at a disproportionately higher rate than other small businesses, and that these losses make up a larger portion of their total revenues. In the second post, we explore the ability of small firms to reopen and to obtain disaster relief funding in the aftermath of climate events. |
| Keywords: | climate risk; small business; minority-owned business; disaster relief; inequality; Sandy; credit |
| JEL: | D63 G21 |
| Date: | 2022–09–06 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednls:94729&r= |
| By: | Martin Hiti; Claire Kramer; Asani Sarkar |
| Abstract: | The first post of this series found that small businesses owned by people of color are particularly vulnerable to natural disasters. In this post, we focus on the aftermath of disasters, and examine disparities in the ability of firms to reopen their businesses and access disaster relief. Our results indicate that Black-owned firms are more likely to remain closed for longer periods and face greater difficulties in obtaining the immediate relief needed to cope with a natural disaster. |
| Keywords: | climate risk; small business; minority-owners; disaster relief; credit; Sandy; inequality |
| JEL: | D63 G21 |
| Date: | 2022–09–06 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednls:94733&r= |
| By: | Thirarut Worapishet (Kasetsart University) |
| Abstract: | This research was conducted to combine elements of the scattered entrepreneurial marketing (EM) concepts. The EM concepts of various researchers from the secondary sources appeared in the SSCI database since 1988 were reviewed. Seven papers selected by convenient sampling method were found. Concepts were analyzed by deductive coding, thematic analysis. Finally, there were 9 common dimensions of EM concept including innovation, niche marketing, promoting by word-of-mouth, networking, using available resources, setting affordable loss, taking opportunities, proactiveness and customer relationship at personal level. Under innovation dimension, there were four codes including creating new product form intuitive feel, innovation in every part, continuous initiative and customer centric to create value. Under niche marketing, there were two codes including positioning based on niche group then targeting later and niche in product, price, place, promotion with the support of e-technology. Under networking, there were five codes including sharing resources among network, co-create opportunities as teamwork from network connections, networking help create innovation, Informal research by listening to customers / connection and all stakeholders and knowledge sharing among network. |
| Keywords: | Entrepreneurial marketing, Deductive coding, Thematic analysis, Entrepreneur, Entrepreneurship, Entrepreneurial marketing code frame |
| JEL: | L26 M00 M31 |
| Date: | 2022–07 |
| URL: | http://d.repec.org/n?u=RePEc:sek:iefpro:12915570&r= |
| By: | YAMORI Nobuyoshi; NAGATA Kunikazu; KONDO Kazumine; OKUDA Masayuki |
| Abstract: | This paper examines whether the startup support provided by regional financial institutions contribute to startups in the region and which initiatives of regional financial institutions are effective in supporting startups, using the questionnaire information from two surveys. The analysis based on the 2020 startup firm questionnaire indicates that in the prefectures where firms have high opinions of regional financial institutions' support, more startup firms are founded, and the startup rate increases. Banks that are more highly motivated to support startups also have higher firms’ ratings for their capacity for lending without collateral or guarantees and evaluating business potential. The analysis comparing the 2020 startup firm questionnaire with the 2017 RIETI branch manager questionnaire shows that in prefectures where banks rely too heavily on collateral and guarantees, the assessments of banks’ loans and non-financing capacity decrease. Banks that are highly motivated to support startups make lending decisions based more on the management’s qualifications and motivations, and the evolution of business potential is vital in supporting startups. |
| Date: | 2022–09 |
| URL: | http://d.repec.org/n?u=RePEc:eti:rdpsjp:22033&r= |