nep-ent New Economics Papers
on Entrepreneurship
Issue of 2023‒01‒23
seven papers chosen by
Marcus Dejardin
Université de Namur

  1. Self-Efficacy and Entrepreneurial Performance of Start-Ups By Marco Caliendo; Alexander Kritikos; Daniel Rodriguez; Claudia Stier
  2. R&D and Regional Competitiveness: A Study of Global Entrepreneurial Firms By Link, Albert; Sardar, Rashedur
  3. The Role of Location in the Emergence of Crowdfunding By Miglo, Anton
  4. Firm Cyclicality and Financial Frictions By Alex Clymo; Filip Rozsypal
  5. Theories of Financing for Entrepreneurial Firms: A Review By Miglo, Anton
  6. On the determinants of corporate default in the EU-27: Evidence from a large sample of companies By FATICA Serena; OLIVIERO Tommaso; RANCAN Michela
  7. La brecha de género en el emprendimiento y la cultura emprendedora: Evidencia con Google Trends By Gutiérrez, Antonio

  1. By: Marco Caliendo (University of Potsdam, IZA, DIW, IAB); Alexander Kritikos (DIW Berlin, University of Potsdam, IZA, IAB); Daniel Rodriguez (University of Potsdam); Claudia Stier (University of Potsdam)
    Abstract: Self-efficacy reflects the self-belief that one can persistently perform difficult and novel tasks while coping with adversity. As such beliefs reflect how individuals behave, think, and act, they are key for successful entrepreneurial activities. While existing literature mainly analyzes the influence of the task-related construct of entrepreneurial self-efficacy, we take a different perspective and investigate, based on a representative sample of 1, 405 German business founders, how the personality characteristic of generalized self-efficacy influences start-up performance as measured by a broad set of business outcomes up to 19 months after business creation. Outcomes include start-up survival and entrepreneurial income, as well as growth-oriented outcomes such as job creation and innovation. We find statistically significant and economically important positive effects of high scores of self-efficacy on start-up survival and entrepreneurial income, which become even stronger when focusing on the growth-oriented outcome of innovation. Furthermore, we observe that generalized self-efficacy is similarly distributed between female and male business founders, with effects being partly stronger for female entrepreneurs. Our findings are important for policy instruments that are meant to support firm growth by facilitating the design of more target-oriented offers for training, coaching, and entrepreneurial incubators.
    Keywords: entrepreneurship, firm performance, general self-efficacy, survival, job creation, innovation
    JEL: L26 M13 D91
    Date: 2023–01
  2. By: Link, Albert (University of North Carolina at Greensboro, Department of Economics); Sardar, Rashedur (University of North Carolina at Greensboro, Department of Economics)
    Abstract: We quantify, using data from the World Bank’s Enterprise Surveys and the World Economic Forum’s Global Competitiveness Index, the empirical relationship between global competitiveness and R&D investment activity as well as the independent relationship between global competitiveness and R&D investments across geographic regions of economic development. We also explore alternative measures of the effectiveness of R&D investments. Our findings suggest that R&D investments are a possible policy target variable in high-income regions for policy makers to consider for increasing firms’ global competitiveness.
    Keywords: R&D; global competitiveness; entrepreneurship; regional growth; program management;
    JEL: H11 L26 O32 O38
    Date: 2023–01–04
  3. By: Miglo, Anton
    Abstract: Crowdfunding is an innovative and fastly growing way of financing for entrepreneurial firms. England is the leading country in crowdfunding. Yet no research exists that compare different cities of UK with regard to the conditions of crowdfunding emergence. In this article we shed some light on this question. We have found that cities with better access to ultrafast broadband among households and cities with greater number of people with higher education have significantly better results in crowdfunding. Further we find that entrepreneurs in these cities select lower crowdfunding targets and are more likely to publish a spotlight about their ideas suggesting that entrepreneurs in these cities understand the importance of imperfect information and signalling (direct and indirect) in crowdfunding. We also discuss these findings in light of crowdfunding theories.
    Keywords: crowdfunding, reward-based crowdfunding, crowdfunding in technology sector, digital entrepreneurship, information asymmetry, signalling, factors of crowdfunding success, campaign target
    JEL: G32 L26 M21
    Date: 2022
  4. By: Alex Clymo (University of Essex); Filip Rozsypal (Danmarks Nationalbank; Centre for Macroeconomics (CFM))
    Abstract: Using administrative micro data we document how firms’ sensitivities to business cycles differ by size and age. Among the youngest firms, small firms are more cyclical than large, but the reverse is true among older firms. The differences in cyclicality are large: “young and small firms” are nearly twice as cyclical as large firms, who respond one-and-half to one to the aggregate business cycle. In contrast, “old and small” firms are almost acyclical on average. High leverage firms are more cyclical than low leverage firms which—when combined with the age-profiles and cyclicalities of financial variables—suggests that financial frictions are likely to explain the excess cyclicality of “young and small” firms, but not of large firms. Augmenting a dynamic heterogeneous-firm model with heterogeneous returns-to-scale and entrant wealth allows it to replicate these findings, and implies that financial policies targeted at young firms become less effective in stimulating aggregate output while the opposite is true for direct labor subsidies.
    Keywords: firm age, firm size, cyclicality, financial frictions
    Date: 2022–05
  5. By: Miglo, Anton
    Abstract: This article provides an overview of literature related to capital structure theories for entrepreneurial firms. It identifies gaps and controversial areas in existing literature and also discusses potential directions for future research. Credit rationing, signalling by risk-bearing, the learning market demand idea, and the flexibility theory of capital structure are consistent with many patterns of financing of entrepreneurial firms. Credit rationing is the dominant area of research. Several directions have emerged that need answers such as for example which channel of credit rationing represents its main driving force. More empirical research is expected in signalling by risk-bearing. More theoretical and empirical research is expected regarding learning market demand and flexibility ideas. Pecking-order theory and trade-off theory play a significant role in large corporations but not so much in SMEs. More research is required investigating modified versions of each theory.
    Keywords: entrepreneurial finance, small business financing, capital structure, credit rationing, signalling by risk-bearing, flexibility theory, learning market demand
    JEL: G30 G32 L26 M13 M21
    Date: 2022
  6. By: FATICA Serena (European Commission - JRC); OLIVIERO Tommaso; RANCAN Michela
    Abstract: We analyze a large sample of companies operating in the EU-27 in the period 2007-2018 to gain new insights on the determinants of corporate defaults. The sample includes micro, small, medium and large enterprises, both active and defaulting. We document significant differences in the drivers of insolvency across firm size categories. Micro and small firms are significantly more vulnerable to sectoral shocks and to disruptions along the supply chain than larger companies. Instead, the default probability for all firms is significantly larger when companies experience in the previous year negative end-of-the year equity, that is a measure of prolonged financial distress. By exploiting institutional differences in judicial efficiency among EU-27 countries, we find financial distress is more likely to predict default in jurisdictions with more efficient insolvency procedures. Finally, we derive potential implications of our findings, especially with regard to the recent crises hitting European firms and the harmonisation of national insolvency regimes in the EU-27 towards most efficient legal practices, as foreseen under the Capital Markets Union Action Plan.
    Keywords: bankruptcy, financial distress, SMEs, EU-27, judicial efficiency
    Date: 2022–12
  7. By: Gutiérrez, Antonio
    Abstract: This paper empirically analyses the entrepreneurship gender gap and geographic variations of the entrepreneurship culture in the United States. To do so, we use Google search engine queries. First, we construct a composite index using factor analysis on searches related to entrepreneurship. Second, we explored the degree of local sexism that exists across the United States. Therefore, we use a simple index that represents sexist queries made on the search engine. The results indicate a positive and statistically significant correlation between the composite index and the number of companies based in each market area. The local sexism index fails to explain the gender gap in entrepreneurship. Conversely, it is intra-household decisions and the proportion of individuals in each age group that show statistically significant correlations with the entrepreneurship gender gap.
    Keywords: entrepreneurship; gender gap; entrepreneurship culture; Google Trends; Big Data
    JEL: J16 J71 L26 O51
    Date: 2023–01

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