|
on Entrepreneurship |
| By: | Henrekson, Magnus (Research Institute of Industrial Economics) |
| Abstract: | This paper analyzes Sweden’s entrepreneurial performance from an institutional and evolutionary perspective, using the concept of the collaborative innovation bloc. It argues that economic development is driven not by entrepreneurial entry per se, but by the capacity of institutional arrangements to channel entrepreneurial effort into large-scale, productivity-enhancing activities. Sweden provides an instructive case: despite strong performance in innovation and start-up formation, the economy performs less well in turning young firms into globally competitive enterprises. The analysis emphasizes the complementarity between entrepreneurs and key actors - investors, skilled employees, and competent customers - and the role of institutional incentives in coordinating their interaction over time. While past reforms have improved conditions for entry, remaining distortions in taxation, labor market regulation, and capital allocation may bias outcomes toward early exit rather than sustained growth. |
| Keywords: | collaborative innovation bloc, entrepreneurial ecosystem, entrepreneurship policy, scale-up policy, innovative entrepreneurship |
| JEL: | H50 I28 L26 O31 P16 R38 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18664 |
| By: | Enrico Miglino (Bank of Italy); Giacomo Roma (Bank of Italy) |
| Abstract: | Regulation often relies on size thresholds to determine the applicable legal and tax regime. Using data on the universe of Italian firms, this paper estimates the costs of firm growth by measuring the extent to which firms bunch just below such thresholds in order to avoid more burdensome rules. We first identify all the rules, defined in terms of revenues, assets and employment, which generate bunching. We then embed the estimated bunching in a profit maximization model and estimate a behavioural elasticity specific to each underlying variable, leveraging directly observable costs to calibrate the model. Finally, we combine the estimated elasticities with the observed bunching at each threshold to quantify the costs of all regulations. The largest costs, relative to the average value added for firms located near the threshold, are associated with the loss of a flat-tax regime for the self-employed, followed by the loss of simplified bookkeeping and quarterly VAT settlement, the mandatory appointment of a board of statutory auditors, and the increase in worker protection in the event of dismissal. |
| Keywords: | regulatory costs, firm growth, size thresholds, bunching |
| JEL: | D22 L51 H25 H32 K22 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:bdi:opques:qef_1018_26 |
| By: | María Florencia Gabrielli (Universidad del Desarrollo); Marcos Vergara (Universidad del Desarrollo) |
| Abstract: | We study the impact of risk aversion and cash flow risk on the allocation of equity shares between entrepreneurs and venture capitalists in a setting characterized by double-sided moral hazard. Cash flows are simultaneously influenced by both price risk and background risk. We evaluate the main results of the model through simulation exercises that highlight the parameters that influence the dynamics of optimal equity share in project cash ows, such as the entrepreneur's risk aversion relative to the VC's and other partner attributes like the productivity and efficiency of their respective efforts. We carried out the analysis under different risk and effort complementarity scenarios. We find that the productivity and efficiency of partners' efforts are dominated by their risk aversion, and that the slope of the effect of these traits on the optimal equity share trajectory is modi ed by risk parameters and effort complementarity. |
| Keywords: | Risk aversion, risk, equity share, financial contracting |
| JEL: | D81 D86 L26 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:aoz:wpaper:398 |
| By: | Lai, Ching-Chong; Lai, Ting-Wei; Yu, Po-yang |
| Abstract: | Existing studies on Schumpeterian growth theory unanimously specify new entrants’ creative destruction behavior in an ad hoc manner. However, this specification fails to reflect the fact that the replacement of incumbents by new entrants is essentially an optimal decision-making process. To overcome this deficiency, this paper develops a Schumpeterian growth model in which creative destruction arises endogenously from the optimal decision-making of entrant R&D firms, rather than being imposed in an ad hoc manner. The model is then used to examine how R&D-related policies—including patent protection and corporate profit taxation—as well as entry sunk costs affect entrants’ creative-destruction behavior, economic growth, and social welfare. Our theoretical analysis shows that a higher corporate profit tax rate or a higher marginal entry cost reduces the mass of potential new entrants, the optimal probability of creative destruction, and the balanced growth rate, whereas stronger patent protection raises these macroeconomic variables. In addition, our numerical welfare analysis finds that the magnitude of the marginal market entry cost plays a crucial role in determining the optimal levels of patent protection and corporate profit taxation. |
| Keywords: | R&D policies, Creative destruction, Economic growth, Social welfare |
| JEL: | L11 O31 O41 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:128983 |
| By: | Arvind Ashta |
| Abstract: | While existing research documents barriers facing informal entrepreneurs, it treats these largely as independent constraints. This paper reconceptualizes informality as a self-reinforcing system—a vicious circle where the conditions created by informal status make escape progressively more difficult. Extending Nurkse's (1952) macro-level vicious circle of poverty to the micro level of individual entrepreneurs, this conceptual framework identifies three interlocking feedback loops: financial exclusion (lack of documentation prevents credit access, which prevents formalization), human capital traps (informal work depletes resources needed for skill acquisition), and legitimacy deficits (informal status generates exclusion from formal networks and markets). Drawing on resource-based theory and institutional economics, the framework explains why informal entrepreneurs remain informal despite documented disadvantages—a persistence puzzle existing research cannot adequately address. Three lock-in mechanisms operate simultaneously: the documentation paradox (need credit to formalize, need formalization to access credit), threshold traps (fixed formalization costs exceed variable informal earnings), and capability constraints (lacking bridging social capital to navigate bureaucracy). The framework reveals why piecemeal interventions fail: addressing single barriers leaves other feedback loops active. This reconceptualization has direct policy implications, requiring simultaneous, coordinated interventions across five pillars: tailored finance access, education and training, institutional simplification, social network strengthening, and digital empowerment. Breaking these feedback loops addresses not only resource constraints but also legitimacy deficits, enabling transitions from informality that foster social mobility, gender equity, and sustainable development. This framework-building exercise provides foundations for future empirical validation and guides design of multi-actor interventions for disrupting persistent informality in emerging economies. |
| Keywords: | Informality; Entrepreneurship; Emerging Economies; Vicious Circle; Feedback Loops; Legitimacy; Financial Inclusion; Institutional Theory; Policy Framework; Sustainable Development |
| JEL: | L26 O12 O17 O35 J16 |
| Date: | 2026–06–05 |
| URL: | https://d.repec.org/n?u=RePEc:sol:wpaper:2013/408007 |
| By: | Alvarez, Lourdes; Bullón, Angel |
| Abstract: | Innovation is a fundamental driver of productivity, playing a pivotal role in fostering market dynamism. This study examines firm-level data from Peru, analyzing innovation activities in small and large enterprises across the manufacturing and services sectors. Employing a rigorous methodological framework—including Fligner–Policello tests, matching techniques, and unconditional quantile treatment effects—the analysis reveals that innovation significantly increases sales growth in large manufacturing firms and service-sector SMEs, while no immediate effects on productivity are detected. Regarding firm longevity, significant impacts are observed exclusively among large manufacturers. These findings indicate that, in contrast to sales, productivity gains from innovation may require a longer horizon to emerge. |
| Keywords: | Business innovation, Sales growth, Labor productivity, Firm longevity, SMEs, Manufacturing and Services. |
| JEL: | L1 O31 |
| Date: | 2025–11–19 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:129105 |
| By: | Ali, Amjad; Iram, Wafaria; Alam, Mehboob |
| Abstract: | This study examines the dynamic relationships between financial globalization, entrepreneurship development, and economic growth across 18 Asian nations from 2013 to 2024. The results reveal that financial globalization significantly enhances entrepreneurial activity primarily by improving access to capital, fostering a better regulatory environment, and increasing financial literacy. Furthermore, entrepreneurship is found to be an effective driver of GDP growth, especially when accompanied by technology adoption, workforce skills development, flexibility, and infrastructure investment. While the study highlights the general positive impact of financial globalization and entrepreneurship, it also acknowledges variations due to institutional weaknesses and uneven market competition among countries. The findings offer nuanced insight into how globalization, supported by strong institutions and targeted policy interventions, can promote sustainable development. Based on empirical analysis, this research provides practical guidance for policymakers seeking to design inclusive growth strategies based on global financial integration and to foster robust entrepreneurship ecosystems. |
| Keywords: | Financial Globalization, Entrepreneurship Development, Economic Growth |
| JEL: | G2 O4 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:128750 |
| By: | Jongwon Shin (Korea Institute for Industrial Economics and Trade) |
| Abstract: | South Korea’s shared growth policy emerged as a response to structural imbalances between large firms and small and medium-sized enterprises (SMEs) embedded in the country’s industrialization model. While the policy initially aimed to correct unfair trade practices and mitigate economic polarization, its early implementation was overly paternalistic, characterized by heavy-handed government interventions.<p> Today, digital transformation driven by artificial intelligence (AI), economic security, supply chain restructuring, and expanding ESG requirements demand a fundamental shift in policy toward an ecosystem-based cooperation model to strengthen innovation, build resilience, and enhance sustainable competitiveness across the country’s industrial ecosystem. |
| Keywords: | small and medium-sized enterprises; SMEs; SME policy; large enterprises; chaebol; fair competition; competition policy; fair trade; antitrust policy |
| JEL: | D22 D30 D43 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ris:kieter:022846 |
| By: | Kyriakos Andreou; Andreas Fousteris; Sotirios Kokas; Alexandros Kontonikas; Emmanouil Pyrgiotakis |
| Abstract: | This paper examines the prevalence, dynamics, and failure risk of zombie firms in Greece during the post-crisis and post-Covid period, using firm-level Orbis data over the period 2015–2023. Building on the composite zombie classifica?on introduced in PwC (2015), which does not rely mechanically on interest coverage ra?os and is well suited to the Greek corporate environment, we document four main findings. First, the share of zombie firms declined substan?ally over the recovery period, despite a temporary increase during the Covid-19 episode. Second, zombifica?on is predominantly transitory: most zombie firms recover, while a non-negligible frac?on remains persistently weak or exits the market. Third, using a Cox propor?onal hazards model, we show that zombie status is associated with a hazard of firm failure approximately 2.7 ?mes higher, even a?er controlling for standard firm-level characteris?cs. Fourth, we document pronounced heterogeneity across firm size, with zombie incidence and failure risk par?cularly elevated among micro firms. The results highlight zombifica?on as a dis?nct firm state associated with materially higher failure risk. |
| Keywords: | Greek non-financial corpora?ons, zombies, survival, Cox model |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:hel:greese:216 |
| By: | Brink, Siegrun; Icks, Annette; Kranzusch, Peter; Nielen, Sebastian |
| Abstract: | Für mittelständische Unternehmen bleibt die Sicherung der Innovations- und Wettbewerbsfähigkeit eine zentrale Zukunftsaufgabe - insbesondere mit Blick auf die Steigerung der Arbeitsproduktivität. Zu diesem Ergebnis kommt die aktuelle Experten- und Expertinnenbefragung zur Zukunft des Mittelstand 2026, die bereits zum vierten Mal durchgeführt und erstmals durch den Einsatz von KI unterstützt wurde. Daneben gewinnen nach Ansicht der Expertinnen und Experten der Bürokratieabbau sowie der Fachkräftemangel an Bedeutung. Letzteres verschärft sich insbesondere infolge des demografischen Wandels sowie steigender Anforderungen an digitale Kompetenzen. Dies stellt nicht nur Unternehmen, sondern insbesondere die Wirtschaftspolitik vor erhebliche Herausforderungen. Digitalisierung und KI wirken als übergreifende Querschnittsthemen mit erheblichen Potenzialen für Innovation und Produktivität, sind jedoch zu gleich mit wachsenden Risiken etwa im Bereich IT-Sicherheit verbunden. |
| Abstract: | For the German Mittelstand, securing innovation capacity and competitiveness remains the central future challenge - particularly regarding increasing labor productivity. This is a key finding of the current expert survey on the future of the German Mittelstand 2026, which was conducted for the fourth time and, for the first time, supported by AI. In addition to this core challenge, reducing bureaucracy - now explicitly defined as a standalone issue for the first time - and the shortage of skilled workers are gaining importance. The latter is intensifying due to demographic change and rising demand for digital skills. This development poses significant challenges not only for firms but also for economic policy. Digitalization and AI act as crosscutting issues with significant potential for innovation and productivity, but they also come with risks, especially in IT security. |
| Keywords: | Mittelstand, Mittelstandsforschung, Mittelstandspolitik, KMU-Politik, German Mittelstand, Entrepreneurship Research, Mittelstand policy, SME policy |
| JEL: | L20 L26 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifmmat:341422 |