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on Entrepreneurship |
| By: | Haufe, Mathilde; Hottenrott, Hanna; Rodepeter, Elisa; Schoonjans, Eline |
| Abstract: | Entrepreneurship is essential for innovation and economic growth. Newly founded companies contribute to innovation and technology diffusion and increase pressure on incumbent firms to innovate. In Germany, migrant entrepreneurs play an increasingly important role in the entrepreneurial landscape. Their integration into this ecosystem is not only essential for fostering inclusive economic growth, but migrant founders also display a comparatively higher propensity for innovation. Based on data and insights from the IAB/ZEW Start-up Panel, this policy brief highlights the characteristics of and challenges for migrant entrepreneurs to understand how future policy frameworks could be designed to make better use of their potential. We find that while young migrant-founded firms are often opportunity-driven, have high growth ambitions, and are innovative, they are constrained in their access to external capital and have to rely more frequently on their founders' and their families' resources. These findings suggest that frictions in financing young firms hamper migrant entrepreneurship in Germany and that there is room to address these constraints through targeted policies facilitating access to support programmes and bank financing. |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:zewpbs:336902 |
| By: | Richard N. Langlois (University of Connecticut) |
| Abstract: | I hope to accomplish two things in this paper. First, I will examine my early engagement with Schumpeter and my work analyzing his ideas. This will include (1) my efforts to challenge the notion that Schumpeter somehow changed his views on entrepreneurship and (2) my reconstruction of his perspective on managerialism and my interpretation of what he truly meant by the “obsolescence of the entrepreneur.” Second, I will consider Schumpeter as a Public Choice theorist, reflecting on his contributions to that field in the context of today’s contested populist political environment, contrasting his approach with that of the Virginia School of Public Choice. |
| JEL: | B25 B31 D71 D83 P1 P3 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:uct:uconnp:2026-01 |
| By: | Wim Naudé (RWTH Aachen University & University of Coimbra, CeBER) |
| Abstract: | This paper provides a non-technical and selective explanation of the theory of innovation and economic growth, in light of the 2025 Bank of Sweden Prize in Memory of Alfred Nobel, awarded to Joel Mokyr, Philippe Aghion, and Peter Howitt. Their body of scholarship is critically evaluated, and the useful, less useful, and most problematic aspects are highlighted. The verdict is that it is largely a collection of anthropocentric stories of innovation and growth. It avoids spelling out why sustained growth is desirable, it reduces innovation’s ultimate goal to the pursuit of economic growth, it is based on a deep-seated notion of human exceptionalism, and it promotes directed technical change - based on the assumption that all resources are fungible and can be substituted - as a way to sustain economic growth without causing environmental destruction. Their analysis of growth is useful for highlighting the importance of scientific knowledge, for showing that creative destruction can be more destructive than creative, and that economic growth will only be sustained under very special conditions. However, the failure to satisfactorily address energy in innovation and growth remains a glaring gap in modern economic growth theory. For economics to become more useful, it would require becoming an Earth Systems Science based on biocentric holism. |
| Keywords: | Innovation, economic growth, technology, sustainability, energy |
| JEL: | O31 O33 J11 J24 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:gmf:papers:2026-03 |
| By: | Pau Roldan-Blanco; Tom Schmitz; Christian Fons-Rosen |
| Abstract: | Innovative startups are frequently acquired by large incumbents. Such acquisitions have recently come under scrutiny, as policymakers suspect that incumbents might acquire startups just to "kill" their ideas. However, acquisitions also provide an incentive for startup creation, and have ambiguous effects on incumbents' own innovation. This paper assesses the net effect of these forces. To do so, we build an endogenous growth model with heterogeneous multi-product firms and startup acquisitions, and calibrate its parameters to match micro-level evidence from the United States. Our calibrated model implies that taxes on startup acquisitions lower the startup rate, but increase incumbent innovation as well as the implementation rate of startup ideas. Banning killer acquisitions, a policy that appears desirable in partial equilibrium, yields virtually no welfare gains in general equilibrium. The optimal policy instead imposes high taxes on startup acquisitions (reducing their frequency by more than half) and raises consumption-equivalent welfare by 0.48%. |
| Keywords: | acquisitions, firm dynamics, innovation, Productivity Growth |
| JEL: | O30 O41 E22 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:bge:wpaper:1560 |
| By: | Rai, Sabhya |
| Abstract: | Accumulated entrepreneurial experience, as a form of human capital, plays a critical role in shaping current venture revenue. Building on insights from entrepreneurship and human capital theory, the study establishes a causal inverted U-shaped relationship between prior entrepreneurial experience and current revenue. By providing an observable measure of financial performance, the analysis helps investors identify ventures whose co-founders fall within an optimal experience range to maximize financial and strategic returns, and guides entrepreneurs in assembling founding teams with experience profiles that enhance revenue and investment prospects. To address endogeneity, it employs Caetano et al.'s (2023) control function approach, leveraging 'bunching' at zero average venture experience to isolate the effect from potential confounders. The findings reveal that in ventures with three co-founders (the most common team size), each additional prior venture increases current revenue by approximately 10%, up to a combined average of 13 prior ventures across the founding team. Beyond this threshold, additional experience yields diminishing returns on performance. |
| Keywords: | Human capital, venture performance, bunching |
| JEL: | J24 M13 C21 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1711 |
| By: | Haotian Deng; Sam Desiere; Bart Cockx; Gert Bijnens (-) |
| Abstract: | This paper studies how employment subsidies for start-ups shape their performance. We exploit an unexpected policy reform in Belgium that permanently exempted start-ups hiring their first employee from payroll taxes for that employee. Using firm-level administrative data and a regression-discontinuity-in-time design, we find that subsidized post-reform startups employed fewer workers and generated lower output, value added, and profits compared to pre-reform start-ups. However, post-reform start-ups were more likely to survive as employers. These effects emerged within the first year after hiring and remained stable over a medium horizon of three years. Our findings indicate a compositional shift: the subsidy primarily induced low-productivity firms to enter the market. As most firms nowadays are nonemployers, our results meaningfully generalize the theoretical implications of standard neoclassical entrepreneurship models (employee–employer margin) and fill the important gap of the nonemployer–employer margin. |
| Keywords: | entrepreneurship, start-up, employment subsidy, tax reduction, labor demand, small firms |
| JEL: | H25 J23 J24 J38 L25 L26 M51 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:rug:rugwps:26/1135 |
| By: | Achraf Khallouli (University of La Manouba); Rim Mouelhi (University of La Manouba) |
| Abstract: | The objective of this study is to investigate the impact of intrinsic characteristics of startups, mainly, founders' characteristics (such as education, professional experience, and network) and business-related characteristics (such as product category and industry), on their performance. The study uses data from a portfolio of 51 startups belonging to a Tunisian Venture Capital firm to analyze the aforementioned impact. Performance is measured by revenue, raised funds, survival, and the firm's team assessment. The study deploys Multiple Linear Regression, Binary Logistic Regression, and Proportional Odds Logistic Regression to analyze the data. The findings contribute to the development of a framework for evidence-based investment decisions within the Venture Capital industry. The results highlight the importance of factors such as the quality of the university attended by founders, the repeat entrepreneur status, and the founder’s being full-time on the startup in predicting performance. |
| Date: | 2025–12–10 |
| URL: | https://d.repec.org/n?u=RePEc:erg:wpaper:1812 |
| By: | Ayoki, Milton |
| Abstract: | This paper examines the opportunities and challenges facing Micro, Small, and Medium Enterprises (MSMEs) engaged in informal cross-border trade (ICBT) at three strategic border locations: Cyanika (Rwanda-Uganda), Mpondwe (DRC-Uganda), and Vvura (DRC-Uganda). Using primary data from stakeholder consultations and secondary data from official trade statistics, we analyze trade flows, operating models, and the unique constraints confronting women traders, who constitute over 70% of the informal trading population. The study reveals that Mpondwe and Vvura collectively account for 33.2% of Uganda's informal export revenue ($188.6 million in 2023), with fish, agricultural products, and manufactured goods dominating trade flows. While the Simplified Trade Regime (STR) and One-Stop Border Posts (OSBPs) have improved formalization rates, significant challenges persist including customs compliance burdens, inadequate infrastructure, regulatory inconsistencies, and gender-based vulnerabilities. Our empirical analysis employs a structural gravity model to estimate trade facilitation effects, demonstrating that behind-the-border costs reduce trade volumes by 23-35%. We find that women traders face disproportionate barriers including sexual harassment, limited access to market information, and inadequate childcare facilities. The paper concludes with targeted policy recommendations for gender-responsive trade facilitation, including mobile testing laboratories, digital trade platforms, and strengthened cross-border trader associations. |
| Keywords: | Informal Cross-Border Trade, MSMEs, Gender, Trade Facilitation, East African Community, Gravity Model |
| JEL: | F14 F15 J16 L26 O17 O55 |
| Date: | 2025–12–12 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:127325 |
| By: | Hasan Murat ErtuÄŸrul (Anadolu University); Ömer Tugsal Doruk (Adana Alparslan TürkeÅŸ Science and Technology University); Ömer Faruk Tekdogan (University of Ankara) |
| Abstract: | This study investigates the impact of the informal sector on firm performance for over 10.000 nonfinancial firms operating in the 8 MENA countries covering 1997-2020 periods. Using a Panel Dynamic Generalized Method of Moments (GMM), we find that the effect of the informal sector on firm performance is negative. These estimates seem strong according to robustness check. We also do the analysis for SMEs and non-SMEs and find that SMEs are more sensitive to the informal sector. In terms of its findings, the study sheds new light on the MENA region by analyzing the relationship between informal economy and firm performance in a highly heterogeneous manner. |
| Date: | 2025–12–17 |
| URL: | https://d.repec.org/n?u=RePEc:erg:wpaper:1814 |