nep-ent New Economics Papers
on Entrepreneurship
Issue of 2023‒07‒17
eleven papers chosen by
Marcus Dejardin
Université de Namur

  1. War and Entrepreneurship: A Synthetic Control Study of the Russia-Ukraine Conflict By David B. Audretsch; Paul P. Momtaz; Hanna Motuzenko; Silvio Vismara
  2. Intuit QuickBooks Small Business Index: A New Employment Series for the US, Canada, and the UK By Ufuk Akcigit; Raman Chhina; Seyit Cilasun; Javier Miranda; Eren Ocakverdi; Nicolas Serrano-Velarde
  3. Entry Barriers and Growth: The Role of Endogenous Market Structure By Helu Jiang; Yu Zheng; Lijun Zhu
  4. Corporate taxes, productivity, and business dynamism By Andrea Colciago; Vivien Lewis; Branka Matyska
  5. Mapping Innovation Support Programmes for Micro, Small and Medium Enterprise Development: Findings from Nepal By Dikshya Singh; Paras Kharel
  6. Gender, Entrepreneurship and Coping with the COVID-19 Pandemic: The Case of GoFood Merchants in Indonesia By Elhan-Kayalar, Yesim; Sawada, Yasuyuki; van der Meulen Rodgers, Yana
  7. Unregistered Firms, Financial Access and Innovation By Sam Z. Njinyah; Simplice A. Asongu
  8. Entrepreneurship Development, Innovation and Township Economy in South Africa By Ziyane, Barbara; Arogundade, Sodiq; Osei-Assibey, Kwame
  9. Do micro-enterprises ask for local support measures? Evidence after the COVID-19 pandemic By Alessio Tomelleri; Anna Gloria Billé
  10. Unequal Transition: The Widening Wealth Gap amidst China’s Rapid Growth By Yangtian Jiang; Yu Zheng; Lijun Zhu
  11. The Influence of Financial Intelligence and Literacy on MSME Financial Resilience in the Jambangan Culinary Tourism Center, Surabaya By Estianingtyas, Farah; Jofanka, Alinda Dwi; Sa’diyah, Shofiatus; Pandin, Maria Yovita R

  1. By: David B. Audretsch; Paul P. Momtaz; Hanna Motuzenko; Silvio Vismara
    Abstract: Entrepreneurs are often situated in extreme environments characterized by violent conflict. Yet, war is largely a blind spot in entrepreneurship scholarship. As a first step to closing this gap, we offer a well-identified synthetic control study of entrepreneurial dynamics in the Russo-Ukrainian war. Relative to the synthetic counterfactual, Ukraine’s number of self-employed dropped by 20%, and the number of Ukrainian SMEs temporarily dropped by 14% but recovered within five years of the start of the conflict. In contrast, Russia had lost more than 1.4 million SMEs (42%) five years into the conflict. The disappearance of entrepreneurs is driven by both fewer new SMEs created and more existing SME closures. To pave the way for systematic scholarship on “war and entrepreneurship, ” our study proposes a conceptual framework integrating conflict into the theory of entrepreneurial choice and suggests numerous avenues for future research.
    Keywords: entrepreneurship, war, Russia-Ukraine conflict
    JEL: D74 L26 N44 O17
    Date: 2023
  2. By: Ufuk Akcigit (University of Chicago); Raman Chhina (University of Chicago); Seyit Cilasun (TED University); Javier Miranda (Halle Institute for Economic Research, and Friedrich-Schiller University Jena); Eren Ocakverdi (Independent Researcher); Nicolas Serrano-Velarde (Bocconi University)
    Abstract: Small and young businesses are essential for job creation, innovation, and economic growth. Even most of the superstar firms start their business life small and then grow over time. Small firms have less internal resources, which makes them more fragile and sensitive to macroeconomic conditions. This suggests the need for frequent and real-time monitoring of the small business sector’s health. Previously this was difficult due to a lack of appropriate data. This paper fills this important gap by developing a new Intuit QuickBooks Small Business Index that focuses on the smallest of small businesses with at most 9 workers in the US and the UK and at most 19 workers in Canada. The Index aggregates a sample of anonymous QuickBooks Online Payroll subscriber data (QBO Payroll sample) from 333, 000 businesses in the US, 66, 000 in Canada, and 25, 000 in the UK. After comparing the QBO Payroll sample data to the official statistics, we remove the seasonal components and use a Flexible Least Squares method to calibrate the QBO Payroll sample data against official statistics. Finally, we use the estimated model and the QBO Payroll sample data to generate a near real-time index of economic activity. We show that the estimated model performs well both in-sample and out-of-sample. Additionally, we use this analysis for different regions and industries.
    Keywords: Small Businesses, Employment, Index, Entrepreneurship, Job Creation, Turnover
    JEL: J23 J63
    Date: 2023–06–23
  3. By: Helu Jiang (Institute for Advanced Research, Shanghai University of Finance and Economics. 111 Wuchuan Road, Shanghai, China, 200433.); Yu Zheng (Queen Mary University of London and CEPR); Lijun Zhu (Peking University)
    Abstract: We use China’s growth experience as a laboratory to study how reductions in entry barrier contribute to economic growth by inducing a more competitive market structure. The removal of entry restrictions on private firms in the late 1990s and early 2000s made the Chinese economy more competitive and dynamic, propelling the growth acceleration from the early 1990s to late 2000s. We develop a model of endogenous productivity and market structure with heterogeneous firms and frictional entry and calibrate it to Chinese manufacturing from 2004-7. We show about 25% of the productivity growth in 2004-7 is contributed by the reduction of entry barriers during the reforms in the previous decade. While close to 40% of the gain in growth comes from entry bringing about younger firms with higher growth potential, over 60% of the gain in growth comes from entry enforcing tighter market competition which strengthens all active firms’ incentive to grow. We also provide suggestive evidence that this mechanism may be at play in a wider economic context.
    Keywords: Entry Barriers; Firm Dynamics; Market Structure; Endogenous Growth
    JEL: D22 D43 O11 O30 O47
    Date: 2023–06–23
  4. By: Andrea Colciago; Vivien Lewis; Branka Matyska
    Abstract: We identify the effects of corporate income tax shocks on key US macroeconomic aggregates. In response to a corporate income tax cut, we find that: (i) labor productivity increases; (ii) entry increases with delay; (iii) exit increases; (iv) total labor increases by more than production labor. To rationalize these empirical findings, we build a New Keynesian model with idiosyncratic firm productivity, and entry and exit. Our model features productivity gains due to selection and cleansing along the entry and exit margins. Models with homogeneous firms fail to account for the selection and cleansing process and produce counterfactual results.
    Keywords: corporate taxation; productivity; firm entry and exit
    JEL: E62 E32 H25
    Date: 2023–06
  5. By: Dikshya Singh (South Asia Watch on Trade, Economics and Environment); Paras Kharel (South Asia Watch on Trade, Economics and Environment)
    Abstract: Challenges facing micro, small and medium enterprises (MSMEs) have led to a proliferation of innovation support programmes in Nepal. This study examines the innovation support landscape in Nepal, describing existing policies and major innovation support programmes for MSMEs, presenting stakeholders’ views on the same, examining the availability of credible empirical evidence on the effectiveness of these policies and programmes, and identifying whether and to what extent they take into account equit , diversity and inclusion considerations. The study has a special focus on the support available to growthoriented startups and export promotion.
    Keywords: innovation, entrepreneurship, market development, private sector, government policies, SMEs, support programs, stakeholder mapping, key informant interviews, and literature review.
    Date: 2023–06
  6. By: Elhan-Kayalar, Yesim (Asian Development Bank Institute); Sawada, Yasuyuki (Asian Development Bank Institute); van der Meulen Rodgers, Yana (Asian Development Bank Institute)
    Abstract: We examine business performance and crisis mitigation strategies among micro-, small-, and medium-sized enterprises (MSMEs) in Indonesia during the COVID-19 pandemic. We utilize a new primary data set based on administrative records, survey data, and follow-up interviews with merchants using the digital application GoFood, an on-demand cooked food delivery service. Three empirical findings emerge: First, the overall employment size of women-owned businesses shrank more than men-owned businesses after the pandemic outbreak; second, women were more likely than men to cut personal expenditures and use government assistance as crisis mitigation strategies; and third, competition increased sharply as new merchants entered the platform, with service areas of both incumbents and entrants shrinking over time. These results have implications for policies on women’s entrepreneurship, the uptake of business development services, and financing programs for MSMEs.
    Keywords: women; e-commerce; COVID-19; digitalization; MSMEs
    JEL: J16 J21 L11 O12
    Date: 2022–12
  7. By: Sam Z. Njinyah (Manchester Metropolitan University, UK); Simplice A. Asongu (Yaoundé, Cameroon)
    Abstract: The purpose of this paper was to examine the relationship between a firm starting operation informally and its future innovation and whether this relation is moderated by institutional support (having access to finance from financial institutions to run their business).Data from the World Bank Enterprise Survey on 30 Eastern European and Central Asian countries were analysed using probit regression analysis. The findings show that there is a positive significant relationship between firms that start operation informally and the firm’s innovation and that such effect persists overtime. The study found that this relationship is stronger if the firms can gain access to finance to expand their business activities. Finally, the results show that such a relationship is based on the type of innovation being pursued by the firm. By examining the moderation effect of access to finance on starting a business informally, the study provides an alternative explanation to policymakers on how to deal with informal firms to benefit from their contribution to growth.
    Keywords: Informality/unregistered firms, innovation, institutions, Eastern European and Central Asian countries
    Date: 2023–01
  8. By: Ziyane, Barbara; Arogundade, Sodiq; Osei-Assibey, Kwame
    Abstract: South Africa still grapples with high unemployment, poverty, economic exclusion, and inequality nearly three decades after apartheid ended. Available statistics suggest the presence of hydra-headed issues of poverty, inequality, and unemployment in townships and informal settlements in the country. One primary tool acknowledged by many stakeholders towards addressing these issues is the development of small, medium, and micro-sized enterprises (SMMEs) through entrepreneurship development. Thus, this study assesses the socio-economic impact of the eKasiLab programme in the Gauteng province, South Africa. In achieving this objective, a combination of qualitative (semi-structured key informant interviews) and quantitive (Propensity Score Matching (PSM) and textual analysis) approaches were adopted. Results from the analysis show that the ekasiLab programme has significantly improved the entrepreneurship development of beneficiaries – treated/control group, despite notable challenges. The impact could be observed in business growth, productivity improvement, job creation and welfare improvement of the control group.
    Keywords: small, medium, and micro-sized enterprises, eKasiLab programme, township economy, innovation, propensity score matching, textual analysis, South Africa.
    JEL: M20 O3 O40
    Date: 2023–05–11
  9. By: Alessio Tomelleri; Anna Gloria Billé
    Abstract: Government subsidies have been one of the main policy instruments used to deal with the economic effects of the COVID-19 pandemic. This study investigated the impact of spatial dependence on the take-up rate of local government subsidies in 2020. It focused on a specific sub-population of firms hit particularly hard by the pandemic: micro-enterprises. Since microdata on this type of firm is rare, we focused on a representative survey of local firms in Trentino, a province in the north of Italy. The sample is linked with administrative balance sheet data up to 2019, providing a wide range of covariates to control for the characteristics of eligible enterprises that did and did not apply for COVID-19 aid. The methodology focused on using a spatial probit model that properly provides local direct, indirect and total marginal effects to investigate the spatial heterogeneity of revenues with respect to the probability of receiving a provincial subsidy.
    Keywords: Public Subsidies, Take-up, Micro-enterprise, Spatial probit, Spatial dependence, COVID-19
    JEL: H25 H71 L25 D22 D25 L20
    Date: 2023–07
  10. By: Yangtian Jiang (Institute of New Structural Economics, Peking University, Beijing, China.); Yu Zheng (School of Economics and Finance, Queen Mary University of Lon-don. Mile End Road, E1 4NS London, UK.); Lijun Zhu (Institute of New Structural Economics, Peking University, Beijing, China.)
    Abstract: We propose a quantitative theory of wealth creation and distribution during China’s transitional growth from the early 1990s, when barriers to setting up private businesses, trading housing, and migrating from rural to urban areas are struck down. In response to the changing economic environment, a small entrepreneurial class emerges and accumulates substantial wealth, whereas the majority working class, partly due to limited investment available from an underdeveloped financial sector, uses housing as the main vehicle of wealth accumulation over the course of a long-time housing boom. Our heterogeneous-agent dynamic equilibrium framework determines growth and equity jointly. We show a reasonably calibrated version of the model matches the rise in urban China’s wealth inequality since 1995 almost exactly. We further quantify the relative contribution of different reform measures to the rising inequality and discuss the welfare implications taking into account possible growth-equity trade-offs.
    Keywords: Wealth inequality, Capital accumulation, Entrepreneurship, Housing, Migration
    JEL: E21 O11 O16 O18
  11. By: Estianingtyas, Farah; Jofanka, Alinda Dwi; Sa’diyah, Shofiatus; Pandin, Maria Yovita R
    Abstract: The purpose of this study was to determine the effect of intelligence and financial literacy on the financial resilience of Micro, Small and Medium Enterprises in the Jambangan Culinary Tourism Center, Surabaya. This research was conducted on the type of business, namely in the culinary or trading business sector with a sample size of 30 micro, small and medium enterprises. In this study using a quantitative approach method. This study uses multiple linear regression techniques for hypothesis analysis. The results of the study show that intelligence and financial literacy have a high impact of 57, 1% on the financial resilience of Micro, Small and Medium Enterprises in the Jambangan Culinary Tourism Center, Surabaya.
    Date: 2023–06–15

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