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on Entrepreneurship |
| By: | Brown, Alexander |
| Abstract: | China is creating an “accelerator state” through a multi-layered system to identify and fast track the growth of high-tech SMEs in strategic sectors. Certified high-tech SMEs enjoy unique advantages, most notably privileged access to public and private financing. In this policy brief, MERICS analyst Alexander Brown offers an analysis of the “Little Giants” program—a central feature of the accelerator state— that proves that selected firms are indeed benefiting from enhanced financing. The study also reveals flaws in its selection process. The implications for foreign actors are significant. The accelerator state aims to replace imports in key value chains, which poses a direct challenge to foreign firms. The blurred lines between state support and market forces in the scheme also make it more difficult for foreign governments to track distortionary practices and enforce fair competition. |
| Keywords: | Social and Behavioral Sciences, china, accelerator state, robotics |
| Date: | 2024–04–29 |
| URL: | https://d.repec.org/n?u=RePEc:cdl:globco:qt4kx613b2&r= |
| By: | Fossen, Frank M. (University of Nevada, Reno); McLemore, Trevor (University of Nevada, Reno); Sorgner, Alina (John Cabot University) |
| Abstract: | This survey reviews emerging but fast-growing literature on impacts of artificial intelligence (AI) on entrepreneurship, providing a resource for researchers in entrepreneurship and neighboring disciplines. We begin with a review of definitions of AI and show that ambiguity and broadness of definitions adopted in empirical studies may result in obscured evidence on impacts of AI on en-trepreneurship. Against this background, we present and discuss existing theory and evidence on how AI technologies affect entrepreneurial opportunities and decision-making under uncertainty, the adoption of AI technologies by startups, entry barriers, and the performance of entrepreneurial businesses. We add an original empirical analysis of survey data from the German Socio-economic Panel revealing that entrepreneurs, particularly those with employees, are aware of and use AI technologies significantly more frequently than paid employees. Next, we discuss how AI may affect entrepreneurship indirectly through impacting local and sectoral labor markets. The reviewed evidence suggests that AI technologies that are designed to automate jobs are likely to result in a higher level of necessity entrepreneurship in a region, whereas AI technologies that transform jobs without necessarily displacing human workers increase the level of opportunity entrepreneurship. More generally, AI impacts regional entrepreneurship ecosystems (EE) in multiple ways by altering the importance of existing EE elements and processes, creating new ones, and potentially reducing the role of geography for entrepreneurship. Lastly, we address the question of how regulation of AI may affect the entrepreneurship landscape by focusing on the case of the European Union that has pioneered data protection and AI legislation. We conclude our survey by discussing implications for entrepreneurship research and policy. |
| Keywords: | artificial intelligence, machine learning, entrepreneurship, AI startups, digital entrepreneurship, opportunity, innovation, entrepreneurship ecosystem, digital entrepreneurship ecosystem, AI regulation |
| JEL: | J24 L26 O30 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17055&r= |
| By: | Elisa Rodepeter; Christoph Gschnaidtner; Hanna Hottenrott |
| Abstract: | Big Data (BD) is becoming widely available and manageable. This raises the question of whether Big Data Analytics (BDA) in companies leads to better decision-making and hence performance. Based on a large, representative set of start-ups in Germany, we study the adoption of BDA among small and young ventures and analyze its economic effects using various short- and longer-term performance measures. We investigate the effect of adopting BDA on the new ventures’ cost structure, sales, profits, survival rate, growth, and their probability of receiving Venture Capital (VC) financing while taking into account fac- tors that drive BDA adoption. Our findings, however, show that using BDA does not lead to an immediate competitive advantage in terms of the classical short-term performance measures. BDA adoption is rather associated with greater sales/profit uncertainty, higher (personnel) costs, and a higher probability of failure. Yet, the increased risk of adopt- ing BDA is compensated by a prospect of higher long-term performance conditional on survival. BDA-adopting start-ups perform better than comparable ones when considering longer-term performance measures such as their growth and their ability to secure VC. |
| Keywords: | Big data, Innovation, Productivity, Start-ups, Survival, Venture capital |
| Date: | 2024–02 |
| URL: | https://d.repec.org/n?u=RePEc:bav:wpaper:232_rodepeter_et_al&r= |
| By: | Diegmann, André (IWH Halle); Pohlan, Laura (Institute for Employment Research (IAB), Nuremberg); Weber, Andrea (Central European University) |
| Abstract: | We study how connections to German federal parliamentarians affect firm dynamics by constructing a novel dataset to measure connections between politicians and the universe of firms. To identify the causal effect of access to political power, we exploit (i) new appointments to the company leadership team and (ii) discontinuities around the marginal seat of party election lists. Our results reveal that connections lead to reductions in firm exits, gradual increases in employment growth without improvements in productivity. The economic effects are mediated by better credit ratings while access to subsidies or procurement contracts are documented to be of lower importance. |
| Keywords: | politicians, firm performance, identification, political connections |
| JEL: | O43 L25 D72 |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17031&r= |
| By: | Ondřej Dvouletý (Department of Entrepreneurship, Faculty of Business Administration, Prague University of Economics and Business.); Ivana Svobodová (Department of Entrepreneurship, Faculty of Business Administration, Prague University of Economics and Business.); Nina Bočková (Department of Entrepreneurship, Faculty of Business Administration, Prague University of Economics and Business.); Jarmila Duháček Šebestová (Department of Business Economics and Management, School of Business Administration, Silesian University in Opava.) |
| Abstract: | This article aims to understand better a specific group of first-time entrepreneurs starting a business at the age of 40 years and older (associated in the literature with the term "third age" or "silver age"), often experiencing career shocks or feeling a need to change their working lives and habits. The research explores the situation in the small, open Central European economy – the Czech Republic. It is based on extensive business register data covering the years 2010–2023, allowing first-time entrepreneurs within this age group to be captured. These individual-level data, combined with information from other sources, created a dataset of 178, 388 first-time entrepreneurs aged 40+ by the time of starting their business. These were used to study their characteristics and to analyse factors shaping their business survival. We found that, on average, 12, 857 individuals aged 40+ join entrepreneurship for the first time annually; their characteristics differ in terms of age, gender, sectoral orientation, region of doing business, and education. The results from the Cox-Hazard survival analysis support the importance of these factors, highlighting, for example, that females had higher chances of closing their business activity, and the likelihood of closing the business increases with age. This article uniquely addresses the population of third-age entrepreneurs in a specific country context. Becoming an entrepreneur at the third age might be an opportunity to change working habits, leave employment, and enhance work-life balance through an entrepreneurial career pathway. This is important, especially in the context of population ageing and increased life length expectancy, allowing individuals to stay economically active longer. |
| Keywords: | Entrepreneurship, First-time Entrepreneur, Third Age, Silver Age, 40+ population, Czech Republic, SDG 8: Decent Work and Economic Growth. |
| JEL: | L26 J16 J14 |
| Date: | 2024–06–13 |
| URL: | https://d.repec.org/n?u=RePEc:opa:wpaper:0076&r= |
| By: | J. David Brown; Matthew Denes; Ran Duchin; John Hackney |
| Abstract: | Industry size standards that determine eligibility for small business subsidies have vastly increased over the past decade. We exploit quasi-random variation in the implementation of size standard increases to study the effects on small firms, subsidy allocation, and industry outcomes using Census Bureau microdata. Following size standard increases, revenues decline for an industry’s smallest firms, and they are less likely to survive. We link these effects to a reallocation of government procurement contracts from smaller to larger firms. Consequently, industries become more concentrated and growth declines. These findings highlight the broad economic effects of changing eligibility for small business subsidies. |
| Keywords: | government subsidies, small firms, procurement |
| JEL: | E24 G38 H25 H57 L25 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:cen:wpaper:24-28&r= |
| By: | OECD |
| Abstract: | A small group of small and medium-sized enterprises (SMEs) that grow fast over a short period of time, i.e., scalers, make an outsized contribution to job creation and economic growth. This paper provides a portrait of scalers in the Italian region of Trentino-Alto Adige/Südtirol, and its two autonomous provinces: Trentino and Bolzano-Bozen. The region hosts and attracts a dynamic population of scalers. Around one in nine SMEs in Trentino-Alto Adige/Südtirol is an employment scaler, and more than one in six is a turnover scaler. However, the contribution of the fastest-growing scalers is lower than in the rest of Centre and North Italy, which is in part due to the sectoral specialisation of scalers in the region. |
| Keywords: | business growth, High growth firms, mobile firms, regional business environment, SMEs |
| JEL: | M1 R1 L25 |
| Date: | 2024–06–21 |
| URL: | https://d.repec.org/n?u=RePEc:oec:cfeaaa:2024/06-en&r= |
| By: | Philipp Krug; Dominika Langenmayr |
| Abstract: | In many OECD countries, family firms face lower or no succession taxes if they fulfill continuation requirements. We study the effects of such preferential treat- ment in a two-generation model. Preferential treatment of continued firms leads to more entrepreneurship and higher wages, as entrepreneurs invest more as they value passing on a larger firm. However, more low-ability heirs continue the firm, leading to efficiency losses. In the presence of financial frictions, richer (but less able) heirs may invest more than buyers from outside. |
| Keywords: | Inheritance taxation, family firms, preferential tax treatment, estate taxation |
| Date: | 2024–04 |
| URL: | https://d.repec.org/n?u=RePEc:bav:wpaper:233_krug_langenmayr&r= |
| By: | Elert, Niklas (Institute of Retail Economics (HFI)); Henrekson, Magnus (Research Institute of Industrial Economics (IFN)) |
| Abstract: | Many countries have implemented quasi-markets to enhance entrepreneurship and innovation in welfare service provision. However, the benefits have generally been limited; this can also be observed in Sweden, a country which stands out for its extensive use of quasi-markets. Based on the Swedish experience, we contend that quasi-markets can unlock their innovation potential only under a suitable institutional framework. By analyzing the development of quasi-markets in schools and eldercare nursing homes, we demonstrate that competition and profit incentives, though crucial, are insufficient catalysts for innovation in quasi-market contexts. Such markets demand a set of supporting institutions of an epistemic nature. These institutions should enable users to make knowledgeable choices and motivate entrepreneurial providers to compete and innovate in ways that align with user preferences. |
| Keywords: | Entrepreneurship; Innovation; Innovation Policy; Marketized care; Merit goods; Quasi-markets; Welfare services |
| JEL: | H42 H44 H75 I22 I28 L88 O31 |
| Date: | 2024–05–06 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:iuiwop:1489&r= |
| By: | Andrea Bellucci (Universita' degli Studi dell'Insubria and Mo.Fi.R.); Alexander Borisov (Lindner College of Business, University of Cincinnati and MoFiR); Gianluca Gucciardi (Department of Economics, Management and Statistics, University of Milano-Bicocca and MoFiR); Alberto Zazzaro (University of Naples Federico II, CSEF and MoFiR) |
| Abstract: | Technological advancements and globalization of venture capital (VC) point to a diminishing role of direct face-to-face (F2F) interactions between VCs and entrepreneurs seeking funding. We show that ability to conduct such interactions remains an important factor for segments of the VC market, and especially for its internationalization. Using a sample of VC deals around the world, and the staggered implementation of travel restrictions across countries in response to the spread of Covid-19 in 2020, we find that investment by foreign VCs in a country drops after it halts inbound travel. Our analysis of possible channels suggests that information asymmetry between contracting parties is the main driver of the importance of F2F, while technological constraints on the transmission of information and cultural differences are less significant. |
| Keywords: | Face-to-Face Interaction, Investments, Venture Capital |
| JEL: | G24 F21 D81 E22 E44 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:anc:wmofir:185&r= |
| By: | Dobbelaere, Sabien (Vrije Universiteit Amsterdam); König, Michael D. (Vrije Universiteit Amsterdam); Spescha, Andrin (ETH Zurich); Wörter, Martin (ETH Zurich) |
| Abstract: | The fraction of R&D active firms decreased in Switzerland but increased in the Netherlands from 2000-2016. This paper examines reasons for this divergence and its impact on productivity growth. Our micro-data reveal R&D concentration among high-productivity firms in Switzerland. Innovation support sustains firms' R&D activities in both countries. Our structural growth model identifies the impact of innovation, imitation and R&D costs on firms' R&D decisions. R&D costs gained importance in Switzerland but not in the Netherlands, explaining the diverging R&D trends. Yet, counterfactual analyses show that policies should prioritize enhancing innovation and imitation success over cost reduction to boost productivity growth. |
| Keywords: | R&D, innovation, imitation, R&D costs, policy, productivity growth, traveling wave |
| JEL: | E61 E65 D22 O31 O47 O52 |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17026&r= |
| By: | Raquel Ortega-Argilés (The University of Manchester, The Productivity Institute); Pei-Yu Yuan (The Productivity Institute) |
| Keywords: | Research collaborations, Public support for R&D and innovation, UK, levelling-up, regional development |
| JEL: | O30 O40 R50 |
| Date: | 2024–04 |
| URL: | https://d.repec.org/n?u=RePEc:anj:wpaper:046&r= |
| By: | Eichhorst, Werner (IZA); Füner, Lena (ZEW); Gottschalk, Sandra (ZEW Mannheim); Rinne, Ulf (IZA) |
| Abstract: | Forschungsbericht im Auftrag des Bundesministeriums für Arbeit und Soziales (16 Seiten) |
| Date: | 2024–06–18 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izarrs:143&r= |