|
on Entrepreneurship |
| By: | Francesco Zanetti; Jesús Fernández-Villaverde; Yang Yu |
| Abstract: | Defensive hiring of researchers by incumbent firms with monopsony power reduces creative destruction. This mechanism helps explain the simultaneous rise in R&D spending and decline in TFP growth in the US economy over recent decades. We develop a simple model highlighting the critical role of the inelastic supply of research labor in enabling this effect. Empirical evidence confirms that the research labor supply in the US is indeed inelastic and supports other model predictions: incumbent R&D spending is negatively correlated with creative destruction and sectoral TFP growth while extending incumbents lifespan. All these effects are amplified when ideas are harder to find. An extended version of the model quantifies these mechanisms implications for productivity, innovation, and policy. |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:cnn:wpaper:25-016e |
| By: | Breyer-Mayländer, Thomas; Zerres, Christopher |
| Abstract: | In the following, eight exemplary paradoxes for entrepreneurs are briefly presented on the basis of a literature review. This is followed by a case analysis based on the information, advice and training services offered by a German university, to examine which university-related services and formats support the handling of paradoxes for founders and startup teams. The focus is on the perspective of the founders. |
| Keywords: | Entrepreneurship |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ouwpmm:323587 |
| By: | Brixiova Schwidrowski, Zuzana (United Nations Economic Commission for Africa (UNECA)); Elbeshbishi, Amal Nagah (United Nations Economic Commission for Africa (UNECA)); Zhao, Jiaxin (United Nations Economic Commission for Africa (UNECA)) |
| Abstract: | Skills gaps, a lack of funding, and social norms continue to keep women and youth in North Africa from engaging in productive entrepreneurship. Using cross-national data and regional indicators from the World Bank and the Global Entrepreneurship Monitor, this analysis shows how such barriers reinforce each other, leading to the structural exclusion of women and youth. For example, only 1.2% of Egyptian women are business owners, and young people in Tunisia have a significantly lower chance than adults of obtaining business loans. The report estimates that if gender gaps in networks and skills are addressed, up to 7 million more female entrepreneurs could be established in North Africa. Progress requires targeted education, the use of inclusive finance tools, and shifts in public opinion. When supported by policies, the entrepreneurship of women and young people can boost resilience and create job-rich growth. |
| Keywords: | entrepreneurship, North Africa, gender and youth economic empowerment, financial inclusion, skills development, social norms |
| JEL: | L26 J16 J18 O17 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izapps:pp217 |
| By: | Torben Klarl; Alexander S. Kritikos; Knarik Poghosyan |
| Abstract: | While Equity Crowdfunding (ECF) platforms are a virtual space for raising funds, geography remains relevant. To determine how location matters for entrepreneurs using equity crowdfunding (ECF), we analyze the spatial distribution of successful ECF campaigns and the spatial relationship between ECF campaigns and traditional investors, such as banks and venture capitalists (VCs). Using data from the two leading German platforms – Companisto and Seedmacht – we employ spatial eigenvalue filtering and negative binomial estimations. In addition, we introduce an event study based on the implementation of the Small Investor Protection Act in Germany allowing us to obtain causal evidence. Our combined analysis reveals a significant geographic concentration of successful ECF campaigns in some, but not all, dense areas. ECF campaigns tend to cluster in dense areas with VC activity, while they are less prevalent in dense areas with high banking activity, and are rarely found in rural areas. Thus, rather than closing the so-called regional funding gap, our results suggest that, from a spatial perspective, ECF fills the gap when firms in dense areas seek external financing below the minimum equity threshold offered by VCs and when there are few banks offering loans. |
| Keywords: | Crowdfunding, Finance Geography, Entrepreneurial Finance, Venture Capital (VC) Proximity |
| JEL: | G30 L26 M13 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:diw:diwwpp:dp2134 |
| By: | Daisuke TSURUTA |
| Abstract: | We investigate the differences in firm performance between non-defaulting firms and firms that have defaulted on their bank loan, and factors that determine these differences, using small business data. Many previous studies investigate the determinants of loan payment defaults by small businesses. However, few papers investigate small business activities and performance after they default. Using firm-level data from Japan, we show that bank borrowings, return on assets (ROA), and sales growth are all lower after such defaults. These negative effects last approximately 10 years after default if the firm survives, suggesting that the constraints associated with a default have negative effects on firm performance for extended periods. In addition, firms with weak financial statements before the default are unlikely to survive, but those that survive enjoy a high ROA. Next, asset growth, ROA, sales growth, younger management, and the existence of a successor have positive effects on firm survival after a default. These imply that real factors are important for firm survival after a default. Lastly, additional credit and reduction of interest payments have positive effects on sales growth after a default, but negative effects on ROA. This suggests that financial support from banks has a limited effect on the survival of defaulting small businesses. |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:eti:dpaper:25066 |
| By: | Yoshiki Ando; Emin Dinlersoz; Jeremy Greenwood; Ruben Piazzesi |
| Abstract: | How do advanced technology adoption and venture capital (VC) funding impact employment and growth? An analysis of data from the US Census Bureau suggests that while both advanced technology use and VC funding matter on their own for firm outcomes, their joint presence is most strongly correlated with higher employment levels. VC presence is linked with a high increase in employment, though primarily among a limited subset of firms. In contrast, technology adoption is associated with a smaller rise in employment, yet it influences a considerably larger number of firms. A model of startups is created, focusing on decisions to use advanced technology and seek VC funding. The model is compared with firm-level data on employment, advanced technology use, and VC investment. Several thought experiments are conducted using the model. Some experiments assess the importance of advanced technology and VC in the economy. Others examine the reallocation effects across firms with different technology choices and funding sources in response to shifts in taxes and subsidies. |
| Keywords: | Advanced technology, banks, capital gains taxation, corporate income taxation, difference-in-difference analysis, employment, firm-level data, reallocation effects, startups, subsidies, synergy, venture capital, technology adoption, U.S. Census data |
| JEL: | E13 G24 O30 O40 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:cen:wpaper:25-49 |
| By: | Koenigsmarck, Markus |
| Abstract: | Sustainability is a paradigm permeating all aspects of business, including financial performance. Startups as innovation drivers are of particular interest in this context. However, our knowledge of how sustainability and performance are connected is limited for startups compared to large corporations. This doctoral dissertation addresses related research gaps with three empirical studies at the intersection of corporate finance and corporate sustainability. The first study examines the relationship between startup sustainability signaling and financing success. The results provide the first large-scale empirical evidence for a U-shaped connection between startup sustainability and funding success: those that signal the most and the least raise the most venture capital. Sustainability signaling is, therefore, not exclusively positive or negative for startups but rather part of their strategic differentiation. The second study explores how investors and startups select each other based on sustainability preferences, how investors influence the sustainability efforts of their startup investments, and the consequences for startup valuation. It provides empirical evidence that startups and investors prefer partners with a similar view on sustainability. As a result, investors are willing to pay a premium for an investment in a similar-minded firm. Moreover, it shows that startup sustainability communication increases after a green investor joins as an investor, while there is no change after a brown investor does so. Overall, the study contributes to a more nuanced understanding of treatment and selection mechanisms between investors and startups. The last study delves into how the maturity of a startup’s business model influences the founding team’s exit options. It identifies that startups pioneering a new business model are the least likely to perform an initial public offering. However, they are also the most likely to exit via an acquisition. This study contributes to a more nuanced understanding of how firstmoving and business models affect founder’s exit prospects. |
| Date: | 2025–07–25 |
| URL: | https://d.repec.org/n?u=RePEc:dar:wpaper:156012 |
| By: | Josh Lerner; Markus Lithell; Gordon M. Phillips |
| Abstract: | Impact investors claim to distinguish themselves from traditional venture capital and growth equity investors by also pursuing environmental, social, and governance (ESG) objectives. Whether they successfully do so in practice is unclear. We use confidential Census Bureau microdata to assess worker outcomes across portfolio companies. Impact investors are more likely than other private equity firms to fund businesses in economically disadvantaged areas, and the performance of these companies lags behind those held by traditional private investors. We show that post-funding impact-backed firms are more likely to hire minorities, unskilled workers, and individuals with lower historical earnings, perhaps reflecting the higher representation of minorities in top positions. They also allocate wage increases more favorably to minorities and rank-and-file workers than VC-backed firms. Our results are consistent with impact investors and their portfolio companies acting according to non-pecuniary social goals and thus are not consistent with mere window dressing or cosmetic changes. |
| Keywords: | ESG, private equity, venture capital, wages |
| JEL: | G20 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:cen:wpaper:25-30 |
| By: | Manolov, Mladen; Berrones-Flemmig, Claudia Nelly |
| Abstract: | Given the European Union's commitments of achieving net zero by 2050 and advocating Environmental, Social, and Corporate Governance (ESG) targets, ESG is having an increasingly larger impact on businesses (Alamillos & De Mariz, 2022). Various studies have concluded that if a company has a high ESG score, it typically borrows at a cheaper rate, receives more favorable credit terms and conditions, has higher valuation, achieves better financial performance, as well as other benefits relating to its access to finance (Jang et al., 2020; Srivastava et al., 2022; Albuquerque et al., 2019; Friede et al. 2015). The same studies focus, however, predominantly on large companies in developed economies. On the other hand, the issue of the financing gap in Small and Medium-Sized Enterprises (SMEs) is experienced globally and especially in developing economies (World Bank, 2019; PwC, 2021). Given the positive impact of ESG on companies access to finance as found in existing literature and the presence of the SME finance gap in developing economies, this research investigates the impact of ESG practices on Small and Medium-Sized Enterprises access to finance in the context of Bulgaria. An overview of current and planned ESG-related European Union regulations impacting SMEs is provided. With a focus on Bulgarian SMEs, a total of 27 experts in the fields of banking, venture capital, angel investing, SME ownership or management, and ESG consulting were interviewed. This study adds to the limited body of research pertaining to the impact of ESG on SMEs financing in a developing economy setting. The research concluded that Bulgarian SMEs engaged in ESG have better debt and equity financing terms, more opportunities and dedicated channels for receiving financing, as well as benefits adding to their competitiveness, such as better access to international supply chains, reduced firm risk, tax exemptions, ability to attract and retain top talent, and higher potential for top line growth, among others. |
| Keywords: | ESG, SME access to finance, sustainable finance, SME financing gap, ESG in developing economies |
| JEL: | M Q |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:iubhbm:323240 |
| By: | Omar R. Malik |
| Abstract: | Using data from the U.S. Census Bureaus Business Trends and Outlook Survey (BTOS), I examine the adoption of AI among US firms at national, state, industry, and firm size levels. I find that adoption remains overall low (only around 7% of firms currently use AI), but is on a steady upward trajectory with a rising share of firms planning to implement AI. Adoption rates vary significantly across regions and sectors: some states are emerging as early adopters, while others lag, and knowledge-intensive industries (such as information technology and professional services) along with larger firms show higher openness to AI adoption compared to sectors like construction or small businesses. In general, these trends indicate that a quiet revolution in AI adoption is underway; a gradual but expanding diffusion of AI across the economy with important implications for future productivity and policy. |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2505.14721 |
| By: | Akcigit, Ufuk; Kilic, Furkan; Lall, Somik; Shpak, Solomiya |
| Abstract: | As Ukraine emerges from the devastation of war, it faces a historic opportunity to engineer its own Wirtschaftswunder—a productivity-driven economic transformation akin to post-war West Germany. While investment-led growth may offer quick wins, it is efficiency, innovation, and institutional reform that will determine Ukraine’s long-term economic trajectory. Drawing on rich micro-level firm data spanning 25 years, this paper uncovers deep structural distortions that have suppressed creative destruction and productivity in Ukraine. It finds that business dynamism is on the decline, alongside rising market concentration among incumbent businesses, including low productivity state owned enterprises. To inform priorities for reviving business dynamism, this study develops a model of creative destruction drawing on Acemoglu et al. (2018) and Akcigit et al. (2021). The quantitative assessment highlights that policies that discipline entrenched incumbents are the bedrock for reviving business dynamism and engineer Ukraine’s Wirtschaftswunder. Policies targeting specific types of firms have limited efficacy when incumbents run wild. |
| Date: | 2025–07–28 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:11174 |
| By: | Mishra, Sarmistha; Sahoo, Dukhabandhu; Mohapatra, Souryabrata |
| Abstract: | Purpose The study aims to explore the enablers and barriers to the adoption of Circular Economy (CE) practices in Micro, Small and Medium Enterprises (MSMEs) and examine how these factors differ between developed and developing countries. Methodology The research utilises a Systematic Literature Review (SLR) methodology to identify key enablers and barriers to CE adoption in MSMEs. The SLR process involved a detailed search and analysis of relevant academic articles from the Scopus and Web of Science databases, following the PRISMA guidelines to ensure transparency. Findings The study identifies 19 enablers and 16 barriers to CE adoption in MSMEs. Technological upgrades are the key factor helping MSMEs successfully implement CE practices, while financial constraints are the main challenge they face, according to studies from both developed and developing countries. Originality This research contributes to the existing body of literature by not only identifying the primary factors that either support or impede the implementation of CE by MSMEs but also by classifying them according to developed and developing countries to provide policymakers and MSME stakeholders with valuable insights on enhancing the implementation of CE in both countries by taking into account the particular barriers and enablers faced by each group individually. |
| Keywords: | Circular economy; MSMEs; Enablers and barriers; Systematic literature review |
| JEL: | L26 Q56 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:124196 |
| By: | Victor (Xucheng); CHEN |
| Abstract: | This study investigates the relationship between innovation activities and firm-level productivity among early-stage high-tech startups in China. Using a proprietary dataset encompassing patent records, R&D expenditures, capital valuation, and firm performance from 2020 to 2024, we examine whether and how innovation, measured by patents and R&D input, translates into economic output. Contrary to established literature, we find that patent output does not significantly contribute to either income or profit among the sampled firms. Further investigation reveals that patents may primarily serve a signaling function to external investors and policymakers, rather than reflecting true innovative productivity. In contrast, R&D expenditure shows a consistent and positive association with firm performance. Through mechanism analysis, we explore three channels (organizational environment, employee quality, and policy-driven incentives) to explain the impact of R&D, identifying capital inflow and valuation as key drivers of R&D investment. Finally, heterogeneity analysis indicates that the effects of R&D are more pronounced in sub-industries such as smart terminals and digital creativity, and for firms based in Shenzhen. Our findings challenge the prevailing assumption that patent output is a universal indicator of innovation success and underscore the context-dependent nature of innovation-performance linkages in emerging markets. |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2507.18227 |
| By: | Breyer-Mayländer, Thomas; Zerres, Christopher |
| Abstract: | "Grüne Wirtschaft" beschreibt ein Konzept, bei dem die unterschiedlichen Akteure der Wirtschaft ihre Spielräume nutzen, um den Erwartungen im Hinblick auf die Nachhaltigkeitsziele der Vereinten Nationen. Bei der Umsetzung sind die Akteure auf institutioneller und personeller Ebene ausschlaggebend. |
| Keywords: | Entrepreneurship, Grüne Wirtschaft, Lebensmitteleinzelhandel, Marketing |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ouwpmm:323588 |