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on Entrepreneurship |
| By: | Christoph Koenig (DEF, University of Rome "Tor Vergata"); Letizia Borgomeo (Research Department, Intesa Sanpaolo); Martina Miotto (DEM, University of Padova) |
| Abstract: | We study the impact of a government subsidy program in Italy targeted at R&D-intensive projects presented by high-tech startups in 2009. Using the score assigned by the scientific commission to each project, we employ a Regression Discontinuity Design to study how the subsidy affected successful firms’ innovation activity and performance over more than 10 years. We show that the subsidy led to substantial increases in intangible assets and had a lasting positive effect on various dimensions of firm performance. Innovation as measured by patents did not respond to the subsidy. |
| Keywords: | R&D subsidies, High-tech startups, Innovation policy, Firm performance |
| JEL: | D22 G38 L52 O31 O34 O38 |
| Date: | 2024–10–31 |
| URL: | https://d.repec.org/n?u=RePEc:rtv:ceisrp:585 |
| By: | Adela Luque; Vitaliy Novik |
| Abstract: | Nonemployers, businesses without employees, account for most businesses in the U.S. yet are poorly understood. We use restricted administrative and survey data to describe nonemployer dynamics, overall performance, and performance by demographic group. We find that eventual outcome – migration to employer status, continuing as a nonemployer, or exit – is closely related to receipt growth. We provide estimates of employment creation by firms that began as nonemployers and become employers (migrants), estimating that relative to all firms born in 1996, nonemployer migrants accounted for 3-17% of all net jobs in the seventh year after startup. Moreover, we find that migrants’ employment creation declined by 54% for the cohorts born between 1996 to 2014. Our results are consistent with increased adjustment frictions in recent periods, and suggest accessibility to transformative entrepreneurship for everyday Americans has declined. |
| Keywords: | nonemployers, business owner demographics, nonemployer transition to employer, business dynamism, startups, entrepreneurship |
| JEL: | L21 L25 L26 D22 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:cen:wpaper:24-61 |
| By: | Ramana Nanda (Harvard Business School) |
| Abstract: | At the heart of entrepreneurial finance lies a persuasion challenge: regardless of the strength of an entrepreneur’s belief in the potential of their idea, they typically need to convince investors to provide the financial capital required for its commercialization. How should entrepreneurs approach this challenge in order to maximize the chance of raising the required external finance? Why does it appear harder to persuade venture capital investors to finance startups in certain industries and regions and in certain periods of time? Are there systematic frictions preventing entrepreneurs from effectively persuading investors in certain settings and if so, what can be done to reduce them? In this chapter, I discuss answers to these and other questions through a conceptual framework in which investors update their beliefs about a startup’s prospects through a sequence of investments over time. |
| URL: | https://d.repec.org/n?u=RePEc:hbs:wpaper:25-020 |
| By: | Dario Pellegrino (Structural Economic Analysis Directorate, Economic History Division, Bank of Italy, Rome) |
| Abstract: | This paper studies the evolution of business dynamism in Italy (1903-1971), as measured by the share of investments made by new firms (a share which is arguably inversely related to barriers to entry). For this analysis, I reconstructed a series of tangible investments in the manufacturing sector based on joint-stock firm-level data. The analysis shows that until the late 1920s overall capital accumulation was largely driven by young firms. A substantial discontinuity emerged after the Great Depression, however, and was to last throughout the decades of the 'economic miracle' (1948-1973), with investments originating mostly from established firms. The paper presents and discusses suggestive evidence for two institutional explanations which could account for the latter finding. First, the demise of universal banking, associated with the 1926-1936 banking reform, may have constrained the external financing capacity of new firms. Second, a persistent reduction in product market competition resulted from the collusive practices which the Fascist government promoted during the 1930s. |
| Keywords: | manufacturing investments, business dynamism, barriers to entry, industrialization, collusion in Fascist Italy, banking reform |
| JEL: | N24 N64 O14 L43 L60 |
| Date: | 2023–10 |
| URL: | https://d.repec.org/n?u=RePEc:bdi:workqs:qse_53 |
| By: | Timothy Wojan |
| Abstract: | The Annual Business Survey (ABS) as the replacement for the Survey of Business Owners (SBO) serves as the principal data source for investigating business ownership of minorities, women, and immigrants. As a combination of SBO, the innovation questions formerly collected in the Business R&D and Innovation Survey (BRDIS), and an R&D module for microbusinesses with fewer than 10 employees, ABS opens new research opportunities investigating how ownership demographics are associated with innovation. One critical issue that ABS is uniquely able to investigate is the role that diversity among ownership teams plays in facilitating innovation or intermediate innovation outcomes in R&D-performing microbusinesses. Earlier research using ABS identified both demographic and disciplinary diversity as strong correlates to new-to-market innovation. This research investigates the extent to which the various forms of diversity also impact tangible innovation related intermediate outcomes such as the awarding of patents or securing venture capital financing for R&D. The other major difference with the earlier work is the focus on R&D-performing microbusinesses that are an essential input to radical innovation through the division of innovative labor. Evidence that disciplinary and/or demographic diversity affect the likelihood of receiving a patent or securing venture capital financing by small, high-tech start-ups may have implications for higher education, affirmative action, and immigration policy. |
| Keywords: | Split-sample, false discovery, self-reported innovation, women and minority owned business, hypothesis testing |
| JEL: | O3 J15 J16 C12 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:cen:wpaper:24-62 |
| By: | Toni Ahnert; Sebastian Doerr; Nicola Pierri; Yannick Timmer |
| Abstract: | We study the importance of information technology (IT) in banking for entrepreneurship. Guided by a parsimonious model, we establish that job creation by young firms is stronger in US counties more exposed to banks with greater IT adoption. We present evidence consistent with banks’ IT adoption spurring entrepreneurship through a collateral channel: entrepreneurship increases by more in IT-exposed counties when house prices rise. Further analysis suggests that IT improves banks’ ability to determine collateral values, in particular when collateral appraisal is more complex. IT also reduces the time and cost of disbursing collateralized loans. |
| Keywords: | technology in banking, entrepreneurship, information technology, collateral, screening |
| JEL: | D82 G21 L26 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11284 |
| By: | Farzana MUNSHI (Brac University, Dhaka, Bangladesh); Ahsan SENAN (Brac University, Dhaka, Banglades); K.M. Arefin KAMAL (Brac University, Dhaka, Banglades) |
| Abstract: | Agriculture and cottage, micro, small, and medium-sized enterprises (CMSMEs) – the two critically important sectors for pro-poor and inclusive growth in Bangladesh – were severely affected by the coronavirus disease (COVID-19) pandemic and the subsequent lockdowns. Supply chains were interrupted, jobs were lost, and businesses were closed. This study identifies the major challenges faced by these two sectors and develops intervention strategies to promote them in the post-pandemic period. This is done through an extensive review of relevant literature, discussions with sector experts, and a survey. Based on the research findings, we recommend some policy interventions, such as greater digitisation and the development of uninterrupted cold-chain infrastructure across the country. We also recommend more supportive policies to scale up start-ups that offer solutions to at least one of the major challenges faced by these two sectors. |
| Keywords: | Agriculture, SMEs, start-ups, Bangladesh, COVID-19 |
| JEL: | Q10 L10 M13 R11 I1 |
| Date: | 2024–07–03 |
| URL: | https://d.repec.org/n?u=RePEc:era:wpaper:dp-2024-20 |
| By: | Anqi Chen |
| Abstract: | Our 2023 Small Business Retirement Survey looks at why some small firms offer a retirement savings plan and others do not. Factors that affect whether small firms offer a plan include firm size, wages, and industry, as well as beliefs on whether it will help attract workers. The main barriers to offering a plan are concerns about the stability/size of the firm and the perceived costs of a plan. Concerns about costs are driven by misperceptions; many firms are unaware of lower-cost options for employers and tax credits. The results also suggest that state auto-IRA programs are more likely to encourage than discourage firms from offering their own plan. |
| Date: | 2024–03 |
| URL: | https://d.repec.org/n?u=RePEc:crr:issbrf:ib2024-07 |