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on Entrepreneurship |
| By: | Estrin, Saul; Herrmann, Andrea; Levesque, Moren; Mickiewicz, Tomasz; Sanders, Mark |
| Abstract: | We present a Schumpeterian growth model with new venture creation, under uncertainty, which explains the tradeoff between speed-to-breakeven, revenue-at-breakeven and relates this to the level of innovation. We then explore the tradeoffs between these outcomes empirically in a unique sample of 331 information and communication technology (ICT) ventures using a multi-input, multi-output stochastic frontier model. We estimate the contribution of financial capital and labor input to the outcomes and the tradeoffs between them, as well as address heterogeneity across ventures. We find that more innovative (and therefore more uncertain) ventures have lower speed-to-breakeven and/or lower revenue-at-breakeven. Moreover, for all innovativeness levels, new ventures face a tradeoff between speed-to-breakeven and revenue-at-breakeven. Our results suggest that it is the availability of proprietary resources (founder equity and labor) that helps ventures overcome bottlenecks in the innovation process, and we propose a line of research to explain the (large) unexplained variation in venture creation efficiency. |
| Keywords: | entrepreneurship; innovation; new venture creation; proprietary resources; stochastic frontier analysis; schumpeterian growth model |
| JEL: | O31 L29 |
| Date: | 2024–11–15 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:126789 |
| By: | Sefa Awaworyi Churchill (RMIT University); Simon Chang (University of Western Australia); Russell Smyth (Monash University); Trong-Anh Trinh (Monash University) |
| Abstract: | This paper extends prior theory linking present-day sex ratios to present-day propensity for entrepreneurship among men backward in time to explore the long-run gender origins of entrepreneurship. We argue that present-day propensity for entrepreneurship among men will be higher in neighbourhoods which had historically high sex ratios. We propose that high sex ratios generate attitudes and behaviours that imprint into cultural norms about gender roles and that vertical transmission within families create hysteresis in the evolution of these gender norms. To empirically test the theory, we employ the transport of convicts to the British colonies of New South Wales and Van Diemen’s Land in the eighteenth and nineteenth centuries as a natural experiment to examine the long-run effect of gender norms on entrepreneurship in present-day Australia. We use a representative longitudinal dataset for the Australian population that provides information on the neighbourhood in which the participant lives, which we merge with data on the sex ratio in historical counties from the mid-nineteenth century. We find that men who live in neighbourhoods which had high historical sex ratios have a higher propensity for entrepreneurship. We present evidence consistent with the vertical transmission of gender norms within families being the likely mechanism. Arguments for policies to promote female entrepreneurship are typically couched in terms of gender norms representing a barrier to more women starting their own business. We present evidence consistent with gender norms contributing to gender differences in rates of entrepreneurship by being a spur for higher male entrepreneurship rather than a barrier to female entrepreneurship. |
| Keywords: | gender norms, sex ratios, entrepreneurship, Australia |
| JEL: | I31 J21 J22 N37 O10 Z13 Z18 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:mhe:chemon:2025-06 |
| By: | Ubfal, Diego Javier |
| Abstract: | Innovative women entrepreneurs can be agents of change and offer novel solutions to global challenges. However, they face multiple barriers to growing their businesses. This paper reviews the literature on strategies to support women entrepreneurs in improving their business outcomes. It focuses on interventions designed to address four areas of constraints that influence their decisions and can impact their business performance: gaps in human capital, access to finance, access to technology and markets, and contextual factors such as legal and regulatory constraints, social norms, access to care, and gender-based violence. The review concludes that evidence of modest average treatment effects and heterogeneity in treatment effects across various interventions suggest the need for more precise targeting. The multiple constraints faced by women entrepreneurs necessitates testing different packages of interventions. Moreover, the successful implementation and adoption of proposed solutions require consideration of the contextual constraints that differentially affect women-led businesses. While the review highlights several interventions that show promise in supporting women entrepreneurs, significant gaps remain in the evidence concerning the most effective strategies. |
| Date: | 2024–04–02 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10744 |
| By: | Seula Kim |
| Abstract: | This paper investigates how worker beliefs and job prospects impact the wages and growth of young firms, as well as the aggregate economy. Building a heterogeneous-firm directed search model where workers gradually learn about firm types, I find that learning generates endogenous wage differentials for young firms. High-performing young firms must pay higher wages than equally high-performing old firms, while low-performing young firms offer lower wages than equally low-performing old firms. Reduced uncertainty or labor market frictions lower the wage differentials, thereby enhancing young firm dynamics and aggregate productivity. The results are consistent with U.S. administrative employee-employer matched data. |
| Keywords: | wage differentials, firm dynamics, learning, search frictions, uncertainty |
| JEL: | E20 E24 J31 J41 J64 L25 L26 M13 M52 M55 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:cen:wpaper:25-09 |
| By: | Jeffery Piao; K. Philip Wang; Diana L. Weng |
| Abstract: | Utilizing confidential microdata from the Census Bureau’s new technology survey (technology module of the Annual Business Survey), we shed light on U.S. banks’ use of artificial intelligence (AI) and its effect on their small business lending. We find that the percentage of banks using AI increases from 14% in 2017 to 43% in 2019. Linking banks’ AI use to their small business lending, we find that banks with greater AI usage lend significantly more to distant borrowers, about whom they have less soft information. Using an instrumental variable based on banks’ proximity to AI vendors, we show that AI’s effect is likely causal. In contrast, we do not find similar effects for cloud systems, other types of software, or hardware surveyed by Census, highlighting AI’s uniqueness. Moreover, AI’s effect on distant lending is more pronounced in poorer areas and areas with less bank presence. Last, we find that banks with greater AI usage experience lower default rates among distant borrowers and charge these borrowers lower interest rates, suggesting that AI helps banks identify creditworthy borrowers at loan origination. Overall, our evidence suggests that AI helps banks reduce information asymmetry with borrowers, thereby enabling them to extend credit over greater distances. |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:cen:wpaper:25-07 |
| By: | Patino Pena, Fausto Andres; Ferro, Esteban |
| Abstract: | This paper examines the role of firm dynamics in aggregate total factor productivity, job flows, and wage inequality in Ecuador. Utilizing a comprehensive employer-employee dataset, the paper documents firm dynamics and job flow patterns that are consistent with the presence of market distortions. Also, the paper identifies factor misallocation as the main contributor to Ecuador's total factor productivity deceleration. Given these trends, the paper explores allocative inefficiency drivers through firm- and industry-level regressions. Firms in the top productivity quintile face distortive non-wage labor costs that are 3.7 times higher than the bottom quintile, after controlling for firm size and age. The findings also provide evidence of credit misallocation across firms. Additionally, industries with higher job mobility, credit access, and competition and lower non-wage labor costs, minimum wage incidence, and zombie firms demonstrate higher allocative efficiency. Moreover, worker-level regressions indicate that misallocation drivers explain up to 41 percent of wage inequality, with non-wage labor costs and product market frictions as distortions driving this inequality. |
| Date: | 2024–03–27 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10739 |
| By: | Julian Caballero; Sebastian Doerr; Aaron Mehrotra; Fabrizio Zampolli |
| Abstract: | Small and medium-sized enterprises (SMEs) in emerging market economies struggle to access credit, partly due to firms' short financial histories and lack of collateral. The rise of big tech and fintech lenders that make better use of data and digital innovation could reduce the need for collateral and improve SMEs' access to credit. However, big tech and fintech lending so far constitutes only a small share of the total. Digital innovation by itself may not be enough to substantially improve SME lending without further progress in overcoming more deep-seated obstacles. |
| Date: | 2025–02–27 |
| URL: | https://d.repec.org/n?u=RePEc:bis:bisblt:99 |
| By: | Casimiro, June Ann J.; Romualdo, Karenina B.; Santiago, Via Shane R. |
| Abstract: | This study investigates the innovation strategies of cultural micro, small, and medium enterprises (MSMEs) in Northern and Central Luzon, Philippines, operating within the domain of traditional cultural expressions, particularly traditional crafts and culinary crafts. These enterprises play a dual role in preserving cultural heritage and contributing to local economic development. As cultural and creative industries (CCIs) gain increasing recognition for their economic and social contributions, cultural MSMEs in developing regions face unique challenges. Through a qualitative case study approach involving nine MSMEs, the research explores innovations in products, processes, and business models. It also examines the motivations driving these innovations, barriers encountered, and opportunities for enhancing sustainability and competitiveness. Findings reveal that cultural entrepreneurs innovate to ensure economic viability, preserve cultural heritage, empower communities, and leave a lasting legacy. Their strategies respond to evolving consumer preferences, seek to expand market reach, and aim to modernize operations while maintaining the authenticity of their cultural products. However, challenges such as succession planning, diminishing artisanal skills, and limited access to financial resources constrain their capacity to scale, adopt new technologies, and remain competitive in both local and global markets. The study identifies key innovation strategies, including product and process diversification, technology integration, strategic marketing, and stakeholder collaboration. Many MSMEs adopt hybrid production models, blending traditional craftsmanship with mechanized processes to enhance efficiency without undermining cultural value. Partnerships with government agencies, universities, and private entities emerge as critical to fostering innovation ecosystems that support cultural entrepreneurship. Despite these efforts, significant barriers persist. The declining interest of younger generations in traditional crafts threatens the continuity of artisanal skills, compounded by the absence of formal training programs. Limited financial resources further hinder growth and modernization, restricting the ability of MSMEs to compete effectively. To address these challenges, the study advocates for a collaborative approach involving policymakers, industry stakeholders, and consumers to create an enabling environment for innovation and sustainability. Such a framework must include targeted support for skills development, financial accessibility, and market expansion. This research emphasizes the essential role of cultural MSMEs within the traditional cultural expressions domain and their contribution to the broader CCI ecosystem. It offers actionable insights for addressing structural barriers and leveraging opportunities to enhance the resilience and competitiveness of these enterprises. By empowering cultural MSMEs, the Philippines can preserve its rich cultural heritage while fostering economic growth and social development. Comments on this paper are welcome within 60 days from the date of posting. Email publications@pids.gov.ph. |
| Keywords: | entrepreneurship;MSMEs;culture;creative industries;innovation;strategy;cultural entrepreneurship;cultural and creative industries;CCI |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:phd:dpaper:dp_2024-48 |
| By: | Jérémy Tantely Ranjatoelina (ONG Dry Forest); Manovosoa Finaritra (IST-T - Institut Superieur de Technologie D'antananarivo) |
| Abstract: | Bush-taxi is an institution in Africa. In Madagasikara, it is the main way of transportation between different localities for the majority of the population. Before 2013, the industry was fragmented between a multitude of cooperatives which differentiated each other very little, particularly in terms of business model. In 2013, the industry was disrupted by the entry of Cotisse Transport company on the market. This new entrant burst on the industry with an innovative business model. This research seeks to answer the question "How to enter an existing market with an innovative business model?" After an exploration of business model innovation literature in entrepreneurial context and of the few existing references about bush-taxis in Madagascar, this qualitative, exploratory and abductive research highlights the classic business model of bush-taxi cooperatives before 2013, as well as the Cotisse Transport one. It discusses the entry of a new entrant on an existing market with an innovative business model and the implications of the implementation of such a business model innovation. |
| Abstract: | Le taxi-brousse est une institution en Afrique. À Madagasikara, c'est le principal moyen de transport entre les différentes localités pour la majorité de la population. Avant 2013, l'industrie était fragmentée entre une multitude de coopératives très peu différenciées les unes des autres, en particulier en matière de business model. En 2013, l'industrie a été bouleversée par l'entrée sur le marché de l'entreprise Cotisse Transport. Ce nouvel entrant a fait irruption dans l'industrie avec un business model innovant. Cette recherche cherche à répondre à la question "Comment entrer sur un marché existant avec un business model innovant ?". Après une exploration de la littérature sur l'innovation de business model en contexte entrepreneurial et des quelques références existantes sur l'industrie du taxi-brousse à Madagasikara, cette recherche qualitative, exploratoire et abductive met en lumière le business model classique des coopératives de taxi-brousse avant 2013, ainsi que celui de Cotisse Transport. Elle discute l'entrée d'un nouvel entrant sur un marché existant avec un business model innovant, et les implications de la mise en œuvre de cette innovation par le business model. |
| Keywords: | Business model, Innovation, Bush taxi, Case study, Madagascar, Business model innovation, Base of the Pyramid BoP, Business model / modèle d’affaires, Taxi-brousse, étude de cas, Business model innovant, Innovation - modèles d'entreprise, Base de la Pyramide BOP |
| Date: | 2025–01–21 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04905570 |
| By: | Alhorr, Layane |
| Abstract: | Social norms and childcare responsibilities often constrain women's mobility and work. This paper investigates the promise of digitalization in unlocking the growth of home-based businesses, an economic lifeline for women in developing countries. To do so, Jordanian female entrepreneurs were offered access to virtual storefronts through Facebook business pages, as well as access to an online digital marketing training created in collaboration with local social media influencers. After six months of hands-on support, treated women had higher business survival, weekly revenue, and attracted more online clients. Machine learning heterogeneity analysis reveals that higher business performance and limitations on the owner's ability to leave her house at baseline are particularly predictive of effects. Together, results suggest that when constraints to technology adoption are lifted, digitalization can unlock windows of opportunity to talented female entrepreneurs, especially those mobility-constrained among them. |
| Date: | 2024–06–13 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10803 |
| By: | Gutierrez, Eylla Laire M.; Rueda, Diana |
| Abstract: | For years, women’s involvement in entrepreneurial activities has been widely advocated as part of economic development agendas. This is evidenced by numerous initiatives, projects, and roadmaps that promote women's integration into economic activities through entrepreneurship. Underpinning these efforts is the assumption that women's active participation in economic activities leads to improved well-being and empowerment. While this is an essential step toward improving women’s conditions, the realities are more complex. Beyond the economic contributions of such entrepreneurial activities, other facets—such as psychological, social, and political dimensions—also need to be considered. This study primarily addresses the question: “How does women’s engagement in micro-enterprising facilitate their own and their communities’ human flourishing and empowerment?” More specifically, it examines the critical role of sari-sari stores in the socio-economic landscape of the Philippines, with a particular focus on their contributions to community development and women's flourishing and empowerment. While sari-sari store owners often face financial constraints, this research highlights a significant relationship between micro-entrepreneurship, human flourishing, and empowerment. Through the analysis of the Flourishing Index, Secured Flourishing Index measures, and the Empowerment Model, the findings reveal that women sari-sari store owners exhibit high levels of well-being, empowerment, optimism, and resilience, despite limited economic prosperity. The study further explores how sari-sari stores serve not only as micro-retail enterprises but also as platforms for fostering individual and social well-being. The owners demonstrate psychological and social empowerment through the ownership of sari-sari stores, while economic and political empowerment is still a work in progress. The results suggest that women, through the ownership of sari-sari stores, achieve individual well-being while also extending that well-being to their communities. Thus, this study offers a nuanced perspective on the significance of sari-sari stores, not just for the economic development of communities but also for the individual and social well-being of their women owners. Comments on this paper are welcome within 60 days from the date of posting. Email publications@pids.gov.ph. |
| Keywords: | microentrepreneurship;female leadership;women empowerment;human flourishing |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:phd:dpaper:dp_2024-50 |
| By: | Owoo, Nkechi Srodah; Amankwah, Akuffo; Castaing, Pauline; Palacios-Lopez, Amparo |
| Abstract: | The informal sector contributes significantly to the total output and employment of low-income countries. While women-owned businesses feature strongly in these informal environments, they are generally characterized by low productivity. This paper explores how household business performance may be influenced by owners’ personality traits and their attitudes toward gender roles. Using multi-topic household survey data collected in two regions of Ghana, the results show that among female business owners, being organized is an important determinant of business success, while among male business owners, power motivation and tenacity are important factors. However, increasing traditionalism tends to dampen the effects of these personality traits for both genders. Other factors that are positively correlated with women-owned business performance include business registration, separating expenses for home and business purposes, ownership of a business bank account, use of social media, as well as urban location of the business. For men-owned businesses, the results show that those that are located in traditional markets, have bank accounts, and use literate employees in their operations tend to perform better. The findings imply that policies that aim to boost women-owned business performance need to consider the main barriers, especially attitudes toward gender roles, that may determine how businesses operate in these settings. The results also suggest the importance of soft skills to boost business performance among men- and women-owned businesses. |
| Date: | 2024–06–13 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10804 |
| By: | Komatsu, Hitomi |
| Abstract: | Governments often use simplified business tax systems, such as presumptive tax regimes, to register and tax small and microenterprises. Despite concerns about how such regimes could disproportionately affect female-owned and low-revenue entrepreneurs, there is a lack of empirical analysis examining the tax burden. The presumptive tax in Ethiopia has a complex assessment system, where the tax liabilities are determined according to the activity type and turnover (99 activities and 19 turnover bands), and some activities do not have a tax-free threshold. This paper uses two rounds of data in the Ethiopian Socioeconomic Surveys and the tax code to analyze the equity and gender implications of the presumptive tax on small and microenterprises by imputing the effective tax rates. There are three key findings. First, the effective tax rates are higher for businesses in the lowest quartile at 4.3 percent of turnover compared to 1.5 percent for businesses in the highest quartile, using the most recent survey, resulting in a regressive system. Second, male-owned businesses tend to operate in sectors without a tax-free threshold and are more likely than female-owned businesses to face higher tax rates. Third, the effective tax rates are high for businesses in food and beverage services, which is female-dominated, and for transit services, which is male-dominated, due to the lack of a tax-free threshold for these sectors. The study finds that an alternative presumptive tax system with a single tax rate on turnover and an exemption for all low-revenue businesses would be simpler for tax assessment and more progressive. |
| Date: | 2024–02–20 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10707 |
| By: | Vargas Da Cruz, Marcio Jose; Pereira Lopez, Mariana De La Paz; Salgado Chavez, Edgar |
| Abstract: | This paper investigates the relationship between disruptive technologies and access to finance for digital tech firms in Africa. Through textual analysis of data from Crunchbase and Pitchbook, the study explores how firms across different age cohorts incorporate disruptive technologies into their offerings in e-commerce, fintech, and information technology services. The findings reveal three key insights for African digital tech startups. First, African startups are less likely to incorporate disruptive technologies into their offerings compared to other regions, except for mobile payments. Second, incorporating these technologies is associated with more funding, but this link is weaker in Africa than in other regions. These results hold when excluding mobile payments and addressing potential endogeneity using instrumental variables. Third, firms that do incorporate disruptive technologies tend to secure funding earlier, with lower initial amounts, but are more likely to succeed in terms of exit or valuation growth than their peers. |
| Date: | 2023–12–07 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10633 |
| By: | Miller, Amisha; Lall, Saurabh A.; Goldstein, Markus P.; Montalvao Machado, Joao H. C. |
| Abstract: | Female innovators raise fewer resources from investors, even when their ventures are similar to those of all-male teams. Efforts to mitigate the disparities have typically focused on changing how founders seek investment. However, the causes of gender disparities are systemic: in uncertain contexts, evaluators value women’s competence or leadership potential lower than men’s, and investors inquire more about risks when facing female founders than males. What is the effect of investment organizations’ evaluation practices on gender disparities in funding innovation This paper examines a two-stage global field experiment with investors making 1, 871 investment decisions on early-stage startups, which resulted in $320, 000 invested in 16 startups. The experiment changed an organization’s evaluation framework to systematize investor inquiry across all ventures by including prompts about (1) risk and reward and (2) progress during the evaluation period. This caused treated investors to (1) assess startups more consistently and (2) assess startup competence more dynamically than control investors. It eliminated, even reversed, the gender gap in investment outcomes. These results have implications for organizations making decisions in uncertain contexts, and those aiming to reduce gender disparities. |
| Date: | 2023–12–04 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10625 |
| By: | Mohammad Amin; Gomez Caceres, Norma Janeth |
| Abstract: | Women often face more hurdles than men in obtaining finance. This is especially so when credit supply is limited and financial markets are less developed. As a result, owners of firms may prefer men over women as top managers of their firms, widening the gender gap in top manager positions. This paper tests this idea using firm-level survey data for small and medium-size formal manufacturing enterprises in 47 developing countries. The results confirm a positive relationship between credit supply and the likelihood of having a woman versus a man as the top manager. This positive relationship is much stronger in industries that are more dependent on external sources of finance for technological reasons. It is also stronger in countries with poor coverage by credit bureaus and low competition between banks, which is consistent with “statistical” and “taste-based” discrimination against women borrowers. The main result is robust to several endogeneity checks, sample alterations, and alternative measures of credit supply and financial development. |
| Date: | 2024–02–26 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10711 |
| By: | Ambel, Alemayehu A.; Woldeyes, Firew Bekele |
| Abstract: | This study investigates gender disparities in the tax burden in Addis Ababa, Ethiopia, using data on 2, 320 taxpayers for 2011 and 2012. A quantile regression analysis is employed to control for firm characteristics such as sector, size, and age. The results show that women-owned businesses are more likely to operate in low-profit sectors and report lower sales and tax liabilities than men-owned businesses. However, women-owned businesses pay as much as men-owned businesses in taxes, suggesting that they are subject to a higher effective tax rate. This, in turn, may lead to women-owned businesses exiting the tax net at a higher rate. These findings suggest that gender disparities in tax compliance are not simply due to differences in firm characteristics but may also be due to biases in tax declaration and enforcement processes. |
| Date: | 2024–02–27 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10712 |
| By: | Brüggemann, Anke; Grewenig, Elisabeth; Rode, Johannes; Schwartz, Michael |
| Abstract: | The business sector in Germany increased climate-positive investment by 5% in real terms to EUR 85 billion in 2023. These are the findings of the 2024 KfW Climate Barometer. This growth was driven by large enterprises. They expanded their climate investments again considerably on the previous year (+19% in real terms). At the same time, the generally higher price level, rising financing costs and the economic slowdown have put the brakes on SMEs’ investment. Climate investment activity by SMEs decreased by 10% overall on an inflation-adjusted basis last year. Even in challenging times, many enterprises continue to have climate action on their agenda, with 51% having taken climate action into account in their business strategy. Eighty per cent of large enterprises and 24% of larger SMEs aspire to become climate neutral. |
| Date: | 2024–11–26 |
| URL: | https://d.repec.org/n?u=RePEc:dar:wpaper:153182 |