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on Entrepreneurship |
| By: | Luca Fontanelli; Mauro Napoletano; Angelo Secchi |
| Abstract: | We revisit the size-volatility relationship in firm growth using administrative data on French manufacturing firms. Departing from the log-log linear decay commonly reported by other studies, we find a two-regime pattern: volatility declines steeply with size for small firms, but flattens for larger ones. We relate this new fact to the presence of resources misallocation as captured by imperfect correlation between size and productivity at the firm level. To explain the nexus between these two facts, we develop a stochastic model where firms face a number of risky business opportunities for which they compete. Two key features characterize this competition process. First, larger firms are more intensively exposed to competition dynamics. Second, firms with higher productivity are more likely to see business opportunities turning into positive, rather than negative, growth episodes. We analytically show that only when the correlation between firm size and productivity is lower than 1 the model is able to reproduce the volatility scaling we observed in the data. Simulations suggest that finite sample approximations of our asymptotic result are satisfactory in a reasonable portion of the parameter space. We conclude showing that in France industries populated by firms with higher correlation between size and productivity are associated with steeper average size-volatility decays consistent with the model's main prediction. Our findings suggest that the existence of resources misallocation, shaping the size-volatility relation, affects the relevance of the granularity channel in explaining aggregate fluctuations (Gabaix, 2011). |
| Keywords: | volatility scaling, granularity, resource allocation |
| Date: | 2025–09–02 |
| URL: | https://d.repec.org/n?u=RePEc:ssa:lemwps:2025/27 |
| By: | Feizi, Farhad |
| Abstract: | Are democracy and entrepreneurship inextricably linked? This recurring question has received contradictory responses, but the literature still lacks in-depth analyses and theorizations on it. The present work examines an extreme case of the coexistence between entrepreneurship and authoritarianism and adopts two profound theories in development studies to explain the mechanism and origin of this symbiosis and justify why such an inextricable link does not exist, at least universally. Studying the success pathway of Iran’s triumphed startups (i.e., unicorns) with the theoretical lens of durable inequality and limited and open access orders, this work has revealed that Iran’s unicorns have navigated two checkpoints, namely connection and collaboration, with the extant political system. Accordingly, the success pathway beneath Iran’s entrepreneurial ecosystem (EE) is identified as an inequality-producing process, called opportunity hoarding, for its cause and as its ultimate effect, the country’s social arrangement, the basic limited access order, is proposed. |
| Date: | 2025–08–17 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:syrn7_v1 |
| By: | Anna Malessan |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:tep:teppwp:wp25-07 |
| By: | Manabu Furuta (Graduate School of Economics, Kobe University) |
| Abstract: | This study evaluates the effectiveness of government financial support for small and medium-sized enterprises (SMEs) in Japan during the COVID-19 pandemic. The Japanese government implemented various programs to support SMEs facing financial distress, leading to a notable decline in bankruptcies. We find that SMEs with strong ties to main banks and exporters were more likely to receive support, while subsidiaries or affiliates of large corporations were less likely to benefit. Although prior studies suggest that such policies may encourage "zombie" firms, our analysis shows that in the manufacturing sector, financial assistance fostered investment. JEL Classification: D22; D25; L52 |
| Keywords: | SMEs; COVID-19; Financial Support; PSM-DID |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:koe:wpaper:2518 |
| By: | Torben Klarl (University of Bremen, Indiana University Bloomington); Alexander S. Kritikos (DIW Berlin, University of Potsdam, GLO Essen, CEPA); Knarik Poghosyan (DIW Berlin) |
| 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: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:pot:cepadp:91 |
| By: | Feizi, Farhad; Testa, Francesco |
| Abstract: | Growing studies are challenging the overgeneralization of entrepreneurial discourse as a reason for turning it into an empty label. Merged with its manufactured global popularity, they underscore the ideological-political services that such an elastic, in content, and popular, in form, notion can offer to its powerful adopters. Exploring how far this elasticity can go to be utilized by a political leader with anti-American ideology, and why, unlike his counterparts, he embraces entrepreneurial discourse, the present work studies the narrative of entrepreneurship in the words of Iran’s Supreme Leader and its discursive reflection in different media and attempts to theorize it by the logic of international relations. The study reveals six aspects of his politicized conception of entrepreneurship, and the extent to which written and visual media have amplified each. Moreover, it proposes that liberal mimicry can theorize his adoption of entrepreneurial discourse in form while strategically customizing its content. |
| Date: | 2025–08–17 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:7y3am_v1 |
| By: | Billington, Stephen D. (Ulster University Business School, Ulster University); Colvin, Christopher L. (Queen’s Business School, Queen’s University Belfast); Coyle, Christopher (Queen’s Business School, Queen’s University Belfast) |
| Abstract: | We examine how the design of the patent system shapes firms’ access to finance. We exploit a UK reform that introduced substantive examination into the patent application process, improving the quality of information available to investors about the value of firms’ innovation. Using a newly compiled dataset of officially listed corporations, we find that firms with examined patents increased their borrowing, reflecting improved access to capital markets, which translated into firm growth. Our results highlight how patent examination can function as a screening mechanism that reduces information asymmetry, strengthens the signalling value of patents, and mitigates financial barriers to innovation. |
| Keywords: | firm finance, debt, innovation, patents, patent examination, signalling. JEL Classification: G32, N23, N43, O16, O31, O34 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:cge:wacage:767 |
| By: | Sarah Xue Dong; Agung Satyadini; Mathias Sinning |
| Abstract: | Tax compliance among small businesses remains low in developing countries, yet little is known about how regional context shapes the effectiveness of enforcement strategies. Both theory and evidence suggest an ambiguous relationship between compliance and geographic proximity to tax offices. We study this issue using a large-scale natural field experiment with Indonesia's tax authority involving 12, 000 micro, small, and medium enterprises (MSMEs). Businesses were randomly assigned to receive deterrence, information, or public goods letters, or no message. All letters improved compliance, with deterrence messages producing the largest gains - substantially increasing filing rates and raising monthly tax payments. Each dollar spent on deterrence letters generated about US$30 in additional revenue over the course of a year. We observe high compliance among non-treated MSMEs near metropolitan tax offices and find that enforcement messages successfully raise compliance in non-metropolitan regions to comparable levels. However, targeting already compliant MSMEs near metropolitan tax offices backfires, underscoring the need for geographically tailored tax administration strategies. These results provide novel experimental evidence on the relation between geographic proximity and the effectiveness of tax enforcement, helping to reconcile mixed findings in the tax compliance literature. |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2509.02328 |
| By: | Minford, Patrick (Cardiff Business School); Zhu, Zheyi (Cardiff Metropolitian University) |
| Abstract: | This paper builds on Yang et al (2021) which analysed the e¤ect of wealth inequality on UK economic growth in recent decades with a heterogeneous-agent growth model where agents can enhance individual productivity growth by undertaking entrepreneurship. In this supplementary note we examine whether ease of planning and infrastructure spending also contribute to productivity growth, as argued by some policymakers. The model is estimated and tested by indirect inference. The original model was not rejected in its match to the data behavioutr. We find the enhanced model contributes no improvement of the match. The model with only planning and infrastructure is strongly rejected. |
| Keywords: | Heterogeneous-agent Model, Entrepreneurship, Growth, Inequality, Indirect Inference, planning, infrastructure |
| JEL: | E10 O30 O40 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:cdf:wpaper:2025/13 |