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on Entrepreneurship |
| By: | Ankur Chavda; Joshua S. Gans; Scott Stern |
| Abstract: | How should theory-based entrepreneurs search for strategies to implement their ideas? The theory-based view of strategy posits that decision-makers hold theories about their environment premised on beliefs that should be actively tested. This causal framework, which underlies the theory-based view, also has implications for entrepreneurial search: the process by which entrepreneurs uncover strategies to implement their ideas. In this paper, we develop a Bayesian model where entrepreneurs update their beliefs as they conduct entrepreneurial search. We find several optimal behaviors for theory-based entrepreneurs such as reverting to a previous strategy after finding a relatively poor strategy and continuing to search after finding a relatively good strategy, which are missing when entrepreneurs lack such a theory-based approach. As these predictions align with examples of successful entrepreneurs, our findings both provide a method to empirically identify skilled entrepreneurs and demonstrate the usefulness of applying the theory-based view to entrepreneurial behavior more generally. |
| JEL: | D81 D83 O32 |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:32318&r=ent |
| By: | Congregado, Emilio (University of Huelva); Fossen, Frank M. (University of Nevada, Reno); Rubino, Nicola (University of Rome Tor Vergata); Troncoso, David (University of Seville) |
| Abstract: | The dynamics of startup activity are crucial for job creation, innovation, and a competitive economy. Does regional firm formation exhibit hysteresis, such that shocks, including those induced by temporary policy interventions, have permanent effects? Due to the pronounced heterogeneity among new entrepreneurs, it is important to distinguish between those pulled by opportunity and those pushed by necessity. This distinction allows evaluating the long-term effects of policies aimed at stimulating opportunity entrepreneurship versus active labor-market policies supporting self-employment as a way out of unemployment. Based on 84 waves of quarterly microdata from the Spanish Labor Force Survey, we create time series of new opportunity and new necessity entrepreneurship for the 17 Spanish regions. To test whether exogenous shocks have long-run effects on firm formation, we apply a battery of panel data and time series unit root tests accounting for deterministic breaks. We also present results for the different Spanish regions and industrial sectors. We find that hysteresis is more widespread in new opportunity than in new necessity entrepreneurship, implying that shocks and temporary policies are more likely to shift opportunity than necessity entrepreneurship in the long run. Moreover, we document that the global Financial Crisis of 2008 changed the technology of firm formation out of opportunity, but not out of necessity. Our analysis opens the door to further research on the long-term effectiveness of a regional and sectoral policy mix of entrepreneurship promotion and active labor market policies. |
| Keywords: | self-employment, opportunity entrepreneurship, necessity entrepreneurship, firm formation, hysteresis, stationarity, regions |
| JEL: | C32 E23 J24 L26 M13 |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16930&r=ent |
| By: | Autio , Erkko (Imperial College Business School); Park, Donghyun (Asian Development Bank) |
| Abstract: | This paper explores economy- and regional-level determinants of the productivity potential of new entrepreneurial firms using data from Asian Development Bank regional members. Results show that new entrepreneurial firms constitute a highly heterogeneous group in terms of their productivity potential and that this potential is shaped by the economy’s national system of entrepreneurship. This system consists of both economy level institutional conditions, as well as the resource and knowledge dynamics that operate at the level of regional entrepreneurial ecosystems. Economy-level institutional conditions shape the productivity potential of the economy’s population of new entrepreneurial firms through their effect on who chooses to become an entrepreneur and what strategic goals the resulting new firms decide and are able to pursue. The regional level entrepreneurial dynamics condition the extent to which new entrepreneurial ventures are able to realize this potential through business model innovation. This recognition is important because it suggests that to be effective, an economy’s entrepreneurship policy framework needs to address both economy-level institutional conditions as well as regional-level entrepreneurial ecosystem dynamics. The two require different policy approaches and pose distinctive challenges. |
| Keywords: | digital entrepreneurship; productivity; entrepreneurial policy; new firms |
| JEL: | L26 M13 O30 O38 |
| Date: | 2024–04–22 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbewp:0721&r=ent |
| By: | Ryan A. Decker; John Haltiwanger |
| Abstract: | The COVID-19 pandemic and its aftermath have featured a surge in business entry (Decker and Haltiwanger 2024). A natural question is whether the elevated entry seen in recent years will have positive implications for aggregate productivity growth given the historically important role of business entry for productivity dynamics (Decker et al. 2014, Alon et al. 2018). |
| Date: | 2024–04–19 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfn:2024-04-19-1&r=ent |
| By: | Benjamin Collier; Sabrina T. Howell; Lea Rendell |
| Abstract: | Does emergency credit prevent long-term financial distress? We study the causal effects of government-provided recovery loans to small businesses following natural disasters. The rapid financial injection might enable viable firms to survive and grow or might hobble precarious firms with more risk and interest obligations. We show that the loans reduce exit and bankruptcy, increase employment and revenue, unlock private credit, and reduce delinquency. These effects, especially the crowding-in of private credit, appear to reflect resolving uncertainty about repair. We do not find capital reallocation away from neighboring firms and see some evidence of positive spillovers on local entry. |
| Keywords: | Financing frictions, natural disasters, climate change adaptation, entrepreneurship, government credit |
| JEL: | G21 G32 H81 Q54 R33 |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:24-20&r=ent |
| By: | Oikawa , Keita (Economic Research Institute for ASEAN and East Asia); Iwasaki , Fusanori (Economic Research Institute for ASEAN and East Asia); Sawada, Yasuyuki (University of Tokyo); Shinozaki, Shigehiro (Asian Development Bank) |
| Abstract: | The coronavirus disease (COVID-19) pandemic disrupted businesses, economies, and societies worldwide. This study employs unique data from Indonesia to investigate whether and how digitalization of micro, small, and medium-sized enterprises (MSMEs) helped them weather the adverse shocks from the pandemic and resulting lockdowns. The main empirical result is that, in the pandemic’s early phases, digitalized MSMEs disproportionately encountered negative effects on their business outcomes. The seemingly harmful elements of digitalization disappeared during later stages. Moreover, COVID-19 restrictions initially had a “positive” impact on the business environment. This is counterintuitive. But when considering the panic buying at the onset of restrictions and large share held by the essential sector in our dataset, particularly the wholesale and retail sectors, the positive impact from the restrictions is not unreasonable. These findings suggest that the digital transformation had not yet been stably established among MSMEs by the start of the pandemic. Our findings provide critical implications for industrial and competition policies related to MSMEs during the COVID-19 recovery process. |
| Keywords: | digitalization; digital financial services; access to finance; SME development; SME policy; Indonesia |
| JEL: | D22 G20 L20 L50 |
| Date: | 2024–05–02 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbewp:0725&r=ent |
| By: | Sandrine Le Pontois (UJM - Université Jean Monnet - Saint-Étienne, COACTIS - COnception de l'ACTIon en Situation - UL2 - Université Lumière - Lyon 2 - UJM - Université Jean Monnet - Saint-Étienne, IUT Roanne - Institut Universitaire de Technologie [Roanne] - UJM - Université Jean Monnet - Saint-Étienne); Foliard Stéphane (UJM - Université Jean Monnet - Saint-Étienne, COACTIS - COnception de l'ACTIon en Situation - UL2 - Université Lumière - Lyon 2 - UJM - Université Jean Monnet - Saint-Étienne, IUT Roanne - Institut Universitaire de Technologie [Roanne] - UJM - Université Jean Monnet - Saint-Étienne) |
| Abstract: | Before becoming seasoned scholars, novice entrepreneurship researchers begin with a doctoral journey to learn how to do relevant research. This chapter explores how to combine coherence and effectiveness in entrepreneurship doctoral article-based dissertation. To understand the rise of the article-based dissertation in entrepreneurship, the authors look back at its origins (massification of scientific production, standardization and professionalization of the doctoral path) and then identify the major issues and challenges of the doctoral pathway for doctoral students, supervisors and research laboratories in a competitive international context. Based on an integrative literature review, this chapter highlights the reasons why the article-based thesis can be is a ‘good' answer to these issues and challenges by analyzing the semantic fields around ‘paper/article-based thesis' and what educational science research tells about ‘paper-based writing' versus ‘monograph'. Finally, the authors suggest to both PhD candidates and supervisors key issues, guidelines including a canva (ABPhD2 Canva, license Creative Commons CC-BY-NC-ND) and avenues for reflection to ensure the coherence and effectiveness on an article-based PhD dissertation in entrepreneurship. |
| Keywords: | article-based dissertation, entrepreneurship scholarship, doctoral pathway, ABPhD2 Canva, PhD students, PhD supervisors |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04534044&r=ent |