nep-ent New Economics Papers
on Entrepreneurship
Issue of 2023‒01‒02
six papers chosen by
Marcus Dejardin
Université de Namur

  1. Too Cold to Venture There? January Temperature and Immigrant Self-Employment across the United States By Lee, Jun Yeong; Winters, John V.
  2. Criminal Justice Involvement, Self-employment, and Barriers in Recent Public Policy By Keith Finlay; Michael Mueller-Smith; Brittany Street
  3. Does the Small Business Programme Benefit Self-Employed Workers? Evidence from Nicaragua By Hee-Seung Yang; Booyuel Kim; Rony Rodriguez-Ramirez
  4. Covid-19 pandemic, state aid and firm productivity By Bighelli, Tommaso; Lalinsky, Tibor; Vanhala, Juuso
  5. The social cost of playing by the rules in the credit market By Distefano, Rosaria
  6. Die Förderung nachhaltiger Finanzierung durch die EU - Auswirkungen auf den Mittelstand By Löher, Jonas; Rieger-Fels, Markus; Nielen, Sebastian; Schröder, Christian

  1. By: Lee, Jun Yeong; Winters, John V.
    Abstract: Immigrant entrepreneurs are critical to regional and national economies. Immigrants in the USA have higher self-employment rates than natives, and immigrants have made outsized contributions as founders of numerous highly successful firms. However, we document that immigrant self-employment rates vary considerably across areas of the USA. Our main measure is the percentage of immigrant workers in an area who are self-employed; i.e., the self-employment rate for the foreign-born. Areas with colder winter temperatures have especially low self-employment rates among their immigrant populations compared to other areas of the USA. This relationship holds for numerous sub-samples of immigrants and is not driven by any particular group. The relationship persists after controlling for numerous individual and local area characteristics. Immigrant entrepreneurs appear to be especially forward-looking and responsive to warmer January temperature as a locational amenity. The results have important implications about the location choices of immigrant entrepreneurs.
    Date: 2021–12–13
  2. By: Keith Finlay (U.S. Census Bureau, Washington, D.C.); Michael Mueller-Smith (Department of Economics, University of Michigan); Brittany Street (Department of Economics, University of Missouri)
    Abstract: This study provides the first empirical evidence on the extent of self-employment within the U.S. justice-involved population. Using linked tax return and Criminal Justice Administrative Records System data, we find that 28 percent of individuals with criminal records are self-employed. Justice-involved individuals are 22 percent more likely to rely solely on selfemployment. The Paycheck Protection Program, passed to support small business during the COVID-19 pandemic, initially disqualified those with a broad range of criminal histories. We find that close to three percent of recent sole-proprietors had observable PPP disqualifying events based on initial eligibility criteria, with a disparate impact on Black and Hispanic business owners.
    Keywords: self-employment, criminal histories, federal support programs, Paycheck Protection Program, COVID-19
    JEL: H81 J24 K42
    Date: 2022–12
  3. By: Hee-Seung Yang (Yonsei University); Booyuel Kim (Seoul National University); Rony Rodriguez-Ramirez (Yonsei University)
    Abstract: Business and skills training programmes have been a popular social policy intervention to improve the performance of self-employment in developing countries. We study the Small Business of the Family Economy programme, a government business training programme designed to assist Nicaraguan self-employed workers. Using data from three rounds of the Nicaragua Living Standards Measurement Survey, we employ a difference-in-differences strategy to exploit variation in eligibility for the programme across time and economic activity. Our estimates indicate that the programme does not increase self-employed workers’ income overall. However, we find heterogeneous treatment effects for female self-employed workers with low educational attainment, which could be explained by increased working months and having a second job.
    Keywords: self-employment, small business, business training, difference-in-differences, propensity score matching, Nicaragua.
    JEL: J24 O12 L26 M53
    Date: 2022–11
  4. By: Bighelli, Tommaso; Lalinsky, Tibor; Vanhala, Juuso
    Abstract: We study the consequences of the COVID-19 pandemic on productivity by matching firm performance outcomes with corresponding firm-level information on government support. Our cross-country evidence for five EU countries shows that the pandemic led to a significant short-term decline in productivity predominantly driven by the within-firm growth component. A thorough comparative analysis of the distribution of employment and overall direct subsidies, considering separately also relative firm-level support and the probability of being supported, reveals several common characteristics. In general, the pandemic support was distributed rather efficiently, i.e. towards "deserving" firms and only marginally towards "zombie" and non-viable firms. However, government subsidies appear to have had a limited effect on aggregate productivity developments.
    Keywords: Covid-19,productivity,firm-level data,government support,employment subsidies,cross-country analysis
    JEL: D22 H25 J38 L29
    Date: 2022
  5. By: Distefano, Rosaria
    Abstract: We present a model of the credit market under imperfect information, with a lender and many would-be entrepreneurs who need external funding for their projects. Some borrowers may have the incentive to divert part of the loan received to other, illegal or non-contractible, uses. We first show that the equilibrium is more likely to be efficient when there is a high proportion of potential diverters. Another result is that, if diversion output is included in the social well-being function, equilibrium welfare can be higher than under symmetric information. When there is inefficiency, a regulatory intervention can be welfare improving but, the cost and desirability of the policy depend on whether the proceeds from diversion are classified as a contribution to social welfare or not.
    Keywords: loan diversion; entrepreneurial financing; imperfect information; policy intervention.
    JEL: D82 E44 E50
    Date: 2022–02–04
  6. By: Löher, Jonas; Rieger-Fels, Markus; Nielen, Sebastian; Schröder, Christian
    Abstract: Die EU-Kommission möchte mit unterschiedlichen regulatorischen Maßnahmen privates Kapital für die Nachhaltigkeitstransformation der Wirtschaft mobilisieren. Ziel der Studie ist es, die Auswirkungen dieser regulatorischen Entwicklung auf die mittelständische Wirtschaft zu untersuchen. Neben den direkten Folgen wie z.B. neue Berichtspflichten werden die indirekten Folgen für mittelständische Unternehmen wie beispielsweise neue Informationsbedarfe von Kunden und Finanzpartnern untersucht.
    Keywords: EU Taxonomie,Nachhaltige Finanzierung,Mittelstand,KMU,EU Taxonomy,Sustainable Finance,Mittelstand,owner-managed firms,SME
    JEL: D04 G38 Q58
    Date: 2022

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