nep-ent New Economics Papers
on Entrepreneurship
Issue of 2023‒02‒06
eight papers chosen by
Marcus Dejardin
Université de Namur

  1. Self-Efficacy and Entrepreneurial Performance of Start-Ups By Caliendo, Marco; Kritikos, Alexander S.; Rodriguez, Daniel; Stier, Claudia
  2. Gender Diversity in Ownership and Firm Innovativeness in Emerging Markets. The Mediating Roles of R&D Investments and External Capital By Vartuhi Tonoyan; Christopher Boudreaux
  3. Gender Specific Distortions, Entrepreneurship and Misallocation By Ranasinghe, Ashantha
  4. The Role of Firm Dynamics in the Green Transition: Carbon Productivity Decomposition in Finnish Manufacturing By Kuosmanen, Natalia; Maczulskij, Terhi
  5. The role of the financial sector and governance in promoting formal entrepreneurship in the mena region By Rania S. Moaaz
  6. Does VC Investor Type Matter? Determinants and effects of VC backing for new firms in Japan By KATO Masatoshi; Nicolas LEGENDRE; YOSHIDA Hiroki
  7. The importance of access to knowledge for technological progress in the Industrial Revolution By Erik Hornung; Julius Koschnick; Francesco Cinnirella
  8. Oil & Gas Induced Economic Fluctuations and Self-Employment By Bulent Unel; Gregory B. Upton Jr.

  1. By: Caliendo, Marco (University of Potsdam); Kritikos, Alexander S. (DIW Berlin); Rodriguez, Daniel (University of Potsdam); Stier, Claudia (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 growthoriented 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: Vartuhi Tonoyan; Christopher Boudreaux
    Abstract: Despite recent evidence linking gender diversity in the firm with firm innovativeness, we know little about the underlying mechanisms. Building on and extending the Upper Echelon and entrepreneurship literature, we address two lingering questions: why and how does gender diversity in firm ownership affect firm innovativeness? We use survey data collected from 7, 848 owner-managers of SMEs across 29 emerging markets to test our hypotheses. Our findings demonstrate that firms with higher gender diversity in ownership are more likely to invest in R&D and rely upon a breadth of external capital, with such differentials explaining sizeable proportions of the higher likelihood of overall firm innovativeness, product and process, as well as organizational and marketing innovations exhibited by their firms. Our findings are robust to corrections for alternative measurement of focal variables, sensitivity to outliers and subsamples, and endogenous self-selection concerns.
    Date: 2023–01
  3. By: Ranasinghe, Ashantha (University of Alberta, Department of Economics)
    Abstract: Women account for a small share of all business owners and a small share of the market in India's manufacturing sector. To account for these patterns, I estimate the extent of gender-specific distortions to operating a business using firm-level data. Feeding these estimates that differ across gender into a standard framework of heterogeneous producers replicates key features of the firm size distribution, on aggregate and across gender. While women face high entry barriers into entrepreneurship, they have modest impacts on female market shares. Accounting for the distribution of distortions, instead of its average, provides a more accurate view of the differential barriers to production women face and their quantitative relevance. Policies that promote female entrepreneurship are effective, yet have only marginal impacts on aggregate productivity. These findings are not unique to India, and apply across a broader set of countries.
    Keywords: gender; entrepreneurship; misallocation; productivity; micro data.
    JEL: J16 O10 O40 O50
    Date: 2023–01–12
  4. By: Kuosmanen, Natalia (ETLA - The Research Institute of the Finnish Economy); Maczulskij, Terhi (ETLA - The Research Institute of the Finnish Economy)
    Abstract: This paper explores the importance of firm dynamics, including entry and exit and the allocation of carbon emissions across firms, on the green transition. Using the 2000–2019 firm-level register data on greenhouse gas emissions matched with the Financial Statement data in the Finnish manufacturing sector, we examine the sources of carbon-productivity growth and assess the relative contributions of structural change and firm dynamics. We find that continuing firms were the main drivers of carbon productivity growth whereas the contribution of entering and exiting firms was negative. In addition, the allocation of emissions across firms appeared to be inefficient, with a negative impact on carbon productivity growth over the study period. Our analysis also revealed a positive relationship between labor-intensive firms and carbon productivity, but firms with a larger market share tended to be less productive in terms of carbon use.
    Keywords: carbon productivity, decomposition analysis, firm dynamics, firm-level data, manufacturing sector
    JEL: D24 L60 Q54
    Date: 2023–01
  5. By: Rania S. Moaaz (Al-Ahram Canadian University)
    Abstract: Formal entrepreneurship is a worldwide phenomenon that has not received enough attention from scholars in the Middle East and North Africa (MENA) economies. This study investigates the impact of governance quality and financial development on formal entrepreneurship in nine MENA economies. The study uses a panel data analysis via a twostage least squares (2SLS) estimation for the period 2010-18, as well as a principal component analysis to generate a composite governance index that captures all six dimensions of the governance indicators. The study concludes that governance and financial development have a positive and statistically significant impact on formal entrepreneurship. However, other statistically significant explanatory variables were found to negatively impact our dependent variable in MENA economies, which proves that the development of formal entrepreneurship is a multi-dimensional process that involves institutional quality, sound macroeconomic policies, adequate infrastructure, a stable currency regime, and a fair judicial system, among other factors.
    Date: 2022–12–20
  6. By: KATO Masatoshi; Nicolas LEGENDRE; YOSHIDA Hiroki
    Abstract: This study examines venture capital (VC) backing among new firms in Japan, exploring how the determinants and effects of VC backing vary depending on the VC investor type. We estimate the determinants of VC backing and find that new firms receiving investments from independent VCs tend to be larger, younger, and more innovative than non-VC-backed firms. However, the factors affecting investments from corporate, finance-affiliated, and government-funded VCs significantly differ from those affecting independent VCs. To explore the effect of VC backing, we construct a matched sample using propensity score matching. Furthermore, we estimate the average treatment effect of receiving VC investments to clarify whether new VC-backed firms achieve superior growth and innovation performance. The results indicate that investments from independent VC firms enhance the performance of new firms. However, we find no significant effect on new firm performance for other VC investor types.
    Date: 2022–12
  7. By: Erik Hornung (University of Cologne); Julius Koschnick (London School of Economics); Francesco Cinnirella (University of Bergamo)
    Abstract: Sustained technological progress was at the heart of the Industrial Revolution. This column argues that access to knowledge was crucial for innovation and technological diffusion during this period. Inventors and entrepreneurs needed access to useful knowledge to generate new ideas and continue innovating. Such access was provided by the ‘economic societies’ – associations of individuals interested in improving the local economy. These societies became drivers of knowledge diffusion and innovation.
    Date: 2022–12
  8. By: Bulent Unel; Gregory B. Upton Jr.
    Abstract: We investigate effects of plausibly exogenous variation in the value of oil and natural gas production in local economies on self-employment in the United States. We find that self-employment is procyclical, i.e. self-employment increases during a business cycle expansion and is reduced during a contraction. This effect comes entirely from unincorporated self-employed workers (in lieu of incorporated self-employment). We also find that self-employment explains an economically meaningful share of the employment adjustment; point estimates suggest that approximately 8 to 9 percent of the employment adjustment comes from unincorporated self-employed individuals - a group that makes up about 6 percent of total employment.
    Date: 2021–11

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