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on Entrepreneurship |
| By: | Joaquin Garcia-Cabo; Rocio Madera |
| Abstract: | This paper documents the role of unemployment and earnings risk in reconciling evidence in payoff differentials between self-employment and paid-employment. Using Spanish administrative data, we characterize the distribution and dynamics of earnings and document lower and less dispersed earnings in self-employment. We consider alternative hypotheses and highlight the role of lower unemployment risk in self-employment. We decompose earnings risk dynamics by estimating a life-cycle earnings process. Indeed, the self-employed experience lower returns but also face lower volatility and persistence of shocks throughout their life-cycle. Our results challenge the conventional view that self-employment necessarily entails higher risk and highlight that accounting for differences in labor earnings risk is important to reconcile the payoff differentials between self-employment and paid-employment. |
| Keywords: | self-employment, segmented labor markets, earnings risk, income process |
| JEL: | J24 J31 J41 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11136&r= |
| By: | Vega-Redondo, Fernando; Pin, Paolo; Ubfal, Diego; Benedetti, Priscilla; Domínguez, Magdalena; Rubera, Gaia; Hovy, Dirk; Fornaciari, Tommaso |
| Abstract: | Can peer interaction foster entrepreneurship in large-scale environments? This paper addresses the question empirically and theoretically. Empirically, we tested the effects of peer interaction on the number and quality of business plans submitted in a Pan-African RCT including 5, 000 entrepreneurs. Thetreatment provided the possibility of interaction in different interaction settings (face-to-face or virtual, peers being of the same or diverse nationalities). We find that, while estimated network effects are almost always strong, the treatment effect is not so and displays a non-monotone trade-off between diversity and interaction "bandwidth." We develop a model that sheds light on this behavior by differentiating between constructive and disruptive interaction. It is also qualitatively supported by our experimental evidence |
| Keywords: | Social Networks; Peer Effects; Entrepreneurship; Innovation; Semantic analysis |
| Date: | 2024–06–06 |
| URL: | https://d.repec.org/n?u=RePEc:cte:werepe:43954&r= |
| By: | Merdinger-Rumpler Caroline (HuManis Research Center, Université de Strasbourg); Paulus Odile (LaRGE Research Center, Université de Strasbourg); Bourachnikova Olga (Strasbourg Team Academy) |
| Abstract: | Investigating the nature of relations entrepreneurs have with their network stakeholders, this empirical research is based upon a specific context of student-entrepreneurs engaged in a three-years entrepreneurial team-action learning programme. The social life theory of Ingold (2017) allowed us to enlighten the nature of those relations through characteristics like the various intensities ranging from weak to strong, the type of perception student-entrepreneurs have of the stakeholder (from resource, person to support or key player), their openness to uncertainty and the transformative potential at both the inner person or the entrepreneurial project levels. Ultimately, we propose a tetratype model of relations that opens a new perspective in entrepreneurial network. |
| Keywords: | Entrepreneurship, Network, Ingold’s social life theory, Relationship model. |
| JEL: | M13 A30 I26 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:lar:wpaper:2024-05&r= |
| By: | Nivala, Annika |
| Keywords: | Business subsidies, Wage subsidies, Firm behavior, Labor demand, Entrepreneurship, Small Business, Business taxation and regulation, H25, H32, J23, J38, M51, fi=Elinkeinopolitiikka|sv=Näringspolitik|en=Industrial and economic policy|, fi=Työmarkkinat|sv=Arbetsmarknad|en=Labour markets|, |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:fer:wpaper:166&r= |
| By: | Maideu-Morera, Gerard |
| Abstract: | I study a dynamic cash flow diversion model between a risk neutral lender and a risk averse entrepreneur who has persistent private information about the firm’s productivity. In the optimal contract, the firm’s size is always distorted downwards and its distortions inherit the autoregressive properties of the type process. The entrepreneur’s compensation is smoothed and decoupled from the firm size dynamics. These results contrast those of equivalent models with risk neutrality. I use numerical simulations to study a quasi-implementation with simpler contracts, which highlights that this class of models is unable to generate realistic firm size and equity share dynamics simultaneously. |
| Keywords: | Firm dynamics; financing constraints; recursive contracts;persistent private information |
| JEL: | D82 G32 L14 |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:129337&r= |
| By: | Likun Cao; Ziwen Chen; James Evans |
| Abstract: | Modularity is critical for the emergence and evolution of complex social, natural, and technological systems robust to exploratory failure. We consider this in the context of emerging business organizations, which can be understood as complex systems. We build a theory of organizational emergence as higher-order, modular recombination wherein successful start-ups assemble novel combinations of successful modular components, rather than engage in the lower-order combination of disparate, singular components. Lower-order combinations are critical for long-term socio-economic transformation, but manifest diffuse benefits requiring support as public goods. Higher-order combinations facilitate rapid experimentation and attract private funding. We evaluate this with U.S. venture-funded start-ups over 45 years using company descriptions. We build a dynamic semantic space with word embedding models constructed from evolving business discourse, which allow us to measure the modularity of and distance between new venture components. Using event history models, we demonstrate how ventures more likely achieve successful IPOs and high-priced acquisitions when they combine diverse modules of clustered components. We demonstrate how higher-order combination enables venture success by accelerating firm development and diversifying investment, and we reflect on its implications for social innovation. |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2405.15042&r= |
| By: | Bernadette Minton; Alvaro G. Taboada; Rohan Williamson |
| Abstract: | Our research examines the impact of dwindling community bank numbers on community investment and economic development. Initially, we confirm the vital role of community banks’ small business lending in local development. Contrary to popular belief, we find that a decrease in community banks positively affects community investment, through small business loan (SBL) originations. Key factors include the local presence of other community banks and the continuity of the consolidating bank's presence. Interestingly, the effect remains neutral in underserved or distressed counties and diminishes when a large bank acquires a community bank without maintaining a local presence. Post-consolidation, community banks emerge larger and more robust, capable of issuing larger SBLs, while larger banks and Fintech firms contribute by providing smaller SBLs. Overall, our findings reinforce the critical contribution of community banks to local development, suggesting that a reduction in their numbers leads to a stronger, more stable banking infrastructure in the small business lending landscape. |
| JEL: | G2 G20 G21 G28 |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32521&r= |
| By: | Roberto Blanco (BANCO DE ESPAÑA); Sergio Mayordomo (BANCO DE ESPAÑA) |
| Abstract: | After the outbreak of the COVID-19 pandemic, the economic authorities in many countries took steps to support firms’ liquidity and solvency. This article analyses the effects of two such measures implemented by the Spanish authorities: the public guarantee schemes and direct aid. The results show that public guarantees were essential in enabling many companies to cover their main liquidity needs. In particular, this scheme was especially useful for SMEs and for companies operating in the sectors hit more severely by the health crisis, although it did not significantly alleviate the increased funding needs of companies without prior credit relationships. For its part, direct aid appears to have contributed to a very moderate reduction in the business solvency problems generated by the COVID-19 crisis, since only a small part of the aid was allocated to those companies that needed solvency support. |
| Keywords: | business solvency, liquidity needs, public aid, COVID-19 crisis, bank credit |
| JEL: | G21 G28 G30 G33 H81 |
| Date: | 2023–10 |
| URL: | http://d.repec.org/n?u=RePEc:bde:opaper:2317e&r= |