nep-ent New Economics Papers
on Entrepreneurship
Issue of 2022‒12‒19
eight papers chosen by
Marcus Dejardin
Université de Namur

  1. Entrepreneurship through Employee Mobility, Innovation, and Growth By Salomé Baslandze
  2. COVID-19 and the resilience of European firms: The influence of pre-crisis productivity, digitalisation and growth performance By Teruel, Mercedes; Amaral-Garcia, Sofia; Bauer, Péter; Coad, Alexander; Domnick, Clemens; Harasztosi, Péter; Pál, Rozália
  3. T20 Indonesia 2022 Policy Brief: Global Value Chain Inclusivity And Digital Entrepreneurship By Erkko Autio; Mohamad D. Revindo; Yothin Jinjarak; Éva Komlósi; Donghyun Park; Cynthia Petalcorin; Dandy Rafitrandi; Yoshua Caesar Justinus; Willem Smit; László Szerb; Shu Tian; Mónika Tiszberger
  4. An Examination of the Informational Value of Self-Reported Innovation Questions By Zheng Tian; Timothy R. Wojan; Stephan J. Goetz
  5. Exploring factors contributing to creativity performance among entrepreneurs using the Bayesian Mindsponge Framework By Vuong, Quan-Hoang; Le, Tam-Tri; Zhang, Tao; La, Viet-Phuong; Quang-Loc, Nguyen; Hoang, Giang; Nguyen, Minh-Hoang
  6. Risky Business: Venture Capital, Pivoting and Scaling By Norbäck, Pehr-Johan; Persson, Lars; Tåg, Joacim
  7. Evaluating COVID-19’s Impact on Firm Performance in the CAREC Region Using Night-Time Light Data: Azerbaijan, Georgia, Kazakhstan, and Mongolia By Karymshakov, Kamalbek; Azhgaliyeva, Dina; Mishra, Ranjeeta; Aseinov, Dastan
  8. Relationship between Innovation and Corporate Performance in Japanese SMEs by Two-stage Panel Data Analysis: Focusing on the Joint Effect of ICT and R&D By Matsuzaki, Taisuke; Shigeno, Hidenori; Taher, Sheikh Abu; Tsuji, Masatsugu

  1. By: Salomé Baslandze
    Abstract: Firm-level productivity differences are big and largely ascribed to ex-ante heterogeneity in the entrepreneurs’ growth potential at birth. Where do these ex-ante differences come from, and what can the policy do to encourage the entry of high-growth entrepreneurs? I study empirically and by means of a quantitative growth model the spinout firms: the firms founded by former employees of the incumbent firms. By focusing on innovating spinouts identified through the inventor mobility in the patent data, I document that spinout entrants significantly outperform regular entrants throughout their life. Firms with a bigger technological lead spawn more successful spinouts. Building on these observations, I build a structural model of innovation and firm dynamics, where firm heterogeneity arises from endogenous decisions of innovation workers to become entrepreneurs and create spinouts. The spinout dynamics affect productivity growth through four main channels: direct entry, incumbents’ disincentive effect, knowledge diffusion, and the firm composition channel. Growth decompositions show that accounting for spinout dynamics is quantitatively important for our understanding of the growth process. I analyze the role of noncompete laws affecting employee entrepreneurship for aggregate innovation and growth.
    Keywords: innovation; spinouts; entrepreneurship; noncompete laws; firm dynamics
    JEL: O30 O43
    Date: 2022–09–26
  2. By: Teruel, Mercedes; Amaral-Garcia, Sofia; Bauer, Péter; Coad, Alexander; Domnick, Clemens; Harasztosi, Péter; Pál, Rozália
    Abstract: We analyse how the COVID-19 crisis impacted firms' employment levels and digitalisation efforts differently depending on their pre-crisis productivity, digitalisation and growth performance. We match the EIB Investment Survey with firm-level financial statements from the ORBIS database for 27 EU Member States and the United Kingdom. Following the sales decline during the crisis, we show that: (1) Higher productivity firms are less prone to reduce the number of employees both in the short and in the long term; (2) High-growth enterprises are also less prone to reduce the number of employees in the long term; (3) Firms in highly digitalised sectors are less likely to reduce the number of employees; (4) Firms are more likely to increase their use of digital technologies, especially those that were already more digitalised before the crisis.
    Keywords: HGE,labour productivity,digitalisation,COVID-19,Mercedes Teruel,Sofia Amaral-Garcia,Peter Bauer,Alex Coad,Clemens Domnick,Péter Harasztosi,Rozália Pál
    JEL: L22 O47
    Date: 2022
  3. By: Erkko Autio (Imperial College); Mohamad D. Revindo (Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI)); Yothin Jinjarak (Asian Development Bank); Éva Komlósi (Faculty of Business and Economics, University of Pécs); Donghyun Park (Asian Development Bank); Cynthia Petalcorin (Asian Development Bank); Dandy Rafitrandi (Centre for Strategic and International Studies/CSIS); Yoshua Caesar Justinus (Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI)); Willem Smit (Asia School of Business, Fulbright University Vietnam); László Szerb (Faculty of Business and Economics, University of Pécs); Shu Tian (Asian Development Bank); Mónika Tiszberger (Faculty of Business and Economics, University of Pécs)
    Abstract: The speed of digitalisation is accelerating, but not everywhere at the same pace. Widening digital divides, between and within countries, may disproportionally harm local small and medium sized enterprises (SMEs) in digitally lagging host markets. Without proper policies, these actors, important for their local economies, could be denied access, dismissed from or downgraded in their participation in digitalised global value chains (GVCs). This policy brief reviews the literature and analyses entrepreneur-level, national-level and international trade-dyadic data to provide 11 evidence-based policy recommendations aimed at enhancing GVC inclusivity through (1) supra-national level alignment, (2) country-level policy adjustments and (3) firm-level interventions to stimulate digital entrepreneurship among SMEs.
    Keywords: gvc — t20 — global value chain — digital entrepreneurship — smes — small and medium sized enterprises
    Date: 2022–01
  4. By: Zheng Tian; Timothy R. Wojan; Stephan J. Goetz
    Abstract: Self-reported innovation measures provide an alternative means for examining the economic performance of firms or regions. While European researchers have been exploiting the data from the Community Innovation Survey for over two decades, uptake of US innovation data has been much slower. This paper uses a restricted innovation survey designed to differentiate incremental innovators from more far-ranging innovators and compares it to responses in the Annual Survey of Entrepreneurs (ASE) and the Business R&D and Innovation Survey (BRDIS) to examine the informational value of these positive innovation measures. The analysis begins by examining the association between the incremental innovation measure in the Rural Establishment Innovation Survey (REIS) and a measure of the inter-industry buying and selling complexity. A parallel analysis using BRDIS and ASE reveals such an association may vary among surveys, providing additional insight on the informational value of various innovation profiles available in self-reported innovation surveys.
    Keywords: Self-reported innovation, substantive and incremental innovation, latent innovation measure, logistic regression
    JEL: O00 O30
    Date: 2022–10
  5. By: Vuong, Quan-Hoang; Le, Tam-Tri; Zhang, Tao; La, Viet-Phuong; Quang-Loc, Nguyen; Hoang, Giang; Nguyen, Minh-Hoang
    Abstract: Creativity is a crucial aspect of entrepreneurship. However, research on the information-processing mechanism of creativity in relation to entrepreneurship is still very limited. To explore factors contributing to creativity performance among entrepreneurs in terms of information processing, we applied the Bayesian Mindsponge Framework. We used the Serendipity-Mindsponge-3D (SM3D) knowledge management theory to construct models and conducted Bayesian analysis on the most comprehensive and well-designed dataset of 3071 Vietnamese entrepreneurs up to date. We found that entrepreneurs who give more time to their startup attempts are likely to have lower levels of creativity. Both factors of higher levels of knowledge within one’s discipline and better connections to out-of-discipline knowledge are positively associated with more creativity. While the effect of openmindedness on the relationship between within-discipline knowledge and creativity is unclear, openmindedness was found to have a positive moderating effect on the association between out-of-discipline knowledge and creativity. These findings support entrepreneurs in understanding the information processing mechanisms behind creativity for creating more effective knowledge management strategies.
    Date: 2022–11–16
  6. By: Norbäck, Pehr-Johan (Research Institute of Industrial Economics (IFN)); Persson, Lars (Research Institute of Industrial Economics (IFN)); Tåg, Joacim (Research Institute of Industrial Economics (IFN))
    Abstract: The creation and scaling of startups are associated with risk-taking and different types of owners treat these risks differently. We show how an active venture capital (VC) market affects risk-taking in research and scaling decisions of startups. VC-backed startups will choose more high-risk, high-reward research and scaling strategies than independent startups. The reason is temporary ownership and the compensation structures used in the VC industry. These create ”exit costs” for VC-backed startups that imply that riskier strategies pay off. We also show that the presence of an active VC market may induce startups to take more risks initially since VC firms can help startups pivot in case of failure.
    Keywords: Entrepreneurship; Pivoting; Scaling; Venture capital
    JEL: G24 L25 M13
    Date: 2022–11–18
  7. By: Karymshakov, Kamalbek (Asian Development Bank Institute); Azhgaliyeva, Dina (Asian Development Bank Institute); Mishra, Ranjeeta (Asian Development Bank Institute); Aseinov, Dastan (Asian Development Bank Institute)
    Abstract: We examine economic activity measured with firm performance indicators using the changes in intensity of night-time light in four Central Asia Regional Economic Cooperation economies: Azerbaijan, Georgia, Kazakhstan, and Mongolia. The empirical analysis is based on the World Bank Enterprise Survey data for 2019 and a follow-up survey conducted during the coronavirus disease (COVID-19) pandemic. The enterprise survey dataset was enhanced with data on night-time light intensity from Google Earth and the strictness of “lockdown-style” policies. Using the probit regression model, we investigate the impact of COVID-19 on firm performance and night-time light in CAREC countries. Firm performance is measured using four variables: decrease in sales, demand, export share, and working hours. Our results show that, as the night-time light increases, the likelihood of performance deterioration is reduced. Larger firms are more likely to maintain their performance than smaller firms. The sales in the manufacturing, clothing, and services sectors are more likely to decline than those in the food sector. Accordingly, the results point to a significant decline in the performance of firms operating in the service sector compared with those in the food sector during the pandemic.
    Keywords: Central Asia; COVID-19; big data; firm performance; gender; SMEs
    JEL: C13 C25 C55 L25
    Date: 2022–07
  8. By: Matsuzaki, Taisuke; Shigeno, Hidenori; Taher, Sheikh Abu; Tsuji, Masatsugu
    Abstract: The innovation theory tends to focus on innovation capabilities and estimate how these promote innovation. However, the final aim of innovation is not innovation itself but enhancing profits or sales. To complete the innovation theory, it is required to show whether innovation achieved contributes to improve in business performances. A further focus of this paper is on the role of ICT and R&D in the innovation process. ICT plays a vital role in absorbing information from outside the firm, while R&D is essential for assimilating obtained information with existing resources to create something novel. This paper focus on the joint effect of these two factors. The estimation is based on the twostage provit IV panel model and authors' own data of 2012 and 2017. The dependent variables are innovation in the first equation and sales in the second. The results obtained show that (i) Innovation enhances sales; (ii) R&D is significant for innovation; (iii) ICT is not significant for neither of equations; and (iv) the cross term of R&D and ICT is significant for innovation, implying ICT is an enabler of innovation. This is a novel result of the paper.
    Keywords: Open innovation,instrumental variable,mediation,cross term,enabler
    Date: 2022

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