|
on Entrepreneurship |
| By: | Beine, Michel; Peri, Giovanni; Raux, Morgan |
| Abstract: | This paper estimates the causal effect of international student enrollment in US Master's programs on start-up creation in the United States over the period 1999–2019. Using university-cohort data linked to administrative enrollment records and comprehensive start-up data, we exploit two complementary sources of plausibly exogenous variation in international enrollment: tuition changes and pre-2004 enrollment networks. We find that higher international enrollment significantly increases start-up formation within five years of graduation. A substantial share of this effect operates through spillovers to US-born graduates educated alongside international students. These indirect effects suggest that prior estimates understate the contribution of international students to entrepreneurial activity in the US. |
| JEL: | F22 I23 M13 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21356 |
| By: | Acabbi, Edoardo Maria; Alati, Andrea; Mazzone, Luca; Morazzoni, Marta |
| Abstract: | This paper studies how entrepreneurs sort into founding teams and how team composition shapes the equilibrium distribution of firms. We develop a theory of career choice and team formation in which skill complementarities make team entrepreneurship attractive for agents with unbalanced skill profiles, while talent similarity makes teaming preferable to other outside options. Using matched employer-employee and balance-sheet data from Portugal, we show that teams combining similar talent with diverse specializations create larger, more productive, and longer-lived firms. We also document a bias in meetings toward similarly-skilled founders and calibrate the model to match this evidence. Meeting bias lowers average wages and output by 12% and 13% respectively by distributing activity towards a higher number of less productive firms, while search frictions per se reduce wages and aggregate output by 15% and 13% respectively by preventing highly diverse but specialized individuals from forming successful teams. |
| JEL: | L26 J24 L25 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21393 |
| By: | Elert, Niklas (Institute of Retail Economics (HFI)); Henrekson, Magnus (Research Institute of Industrial Economics (IFN)) |
| Abstract: | To bolster entrepreneurship and innovation in welfare service provision, numerous countries have established quasi-markets. Yet, the actual benefits from these reforms have often been modest. We posit that quasi-markets can realize their potential only within the appropriate institutional framework, which highlights the need for studies in the field of institutional economics that identify how best to regulate quasi-markets so that they deliver in line with these expectations. While competition and the presence of for-profit actors are necessary conditions for quasi-market improvements, they alone are insufficient. We illustrate this point by showing how the three leading entrepreneurship conceptions—Knightian, Kirznerian, and Schumpeterian—risk falling short of their potential in typical quasi-market setups. Most importantly, we identify the need for a set of complementary institutions that are epistemic in nature. Such reforms should help bolster (Knightian, Kirznerian, and Schumpeterian) quasi-market entrepreneurship and help users construct the requisite knowledge to make informed choices. |
| Keywords: | Entrepreneurship; Innovation; Marketized care; Quasi-markets; Welfare services |
| JEL: | H42 H44 H75 I22 I28 L88 O31 |
| Date: | 2026–06–15 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:iuiwop:1562 |
| By: | Leogrande, Angelo; Di Molfetta, Mauro; Nortarnicola, Valeria; Trotta, Maria Giovanna |
| Abstract: | Voluntary certification policies — which let firms self-nominate for innovative or privileged status — increasingly channel fiscal, financial, and regulatory support, yet evaluating them is deceptively hard: certified firms may outperform because certification works, or simply because firms apply when already rising. We show that voluntary certification can certify winners precisely because rational firms time entry to moments of transitory expansion: the measured premium largely reflects when firms participate, not what participation does. We formalise this as anticipatory take-up: because the benefits are most valuable while a firm scales, forward-looking firms register at the crest of a growth run-up. The mechanism yields three predictions — a cross-sectional premium, a premium that largely predates certification, and entry driven by recent growth, not profitability. We test them in the Italian innovative-SME regime, linking panel data for roughly 2, 900 certified and 1, 200 non-certified SMEs to each firm's registration date and sector, and treating performance as a six-dimensional vector. Certified firms grow far faster than balanced peers yet are financially less solid, especially when smaller and capital-intensive. Once registration timing is exploited through event-study and staggered difference-in-differences designs, the premium proves largely selection: about 81 per cent of the revenue advantage predates registration, and the residual merely continues a pre-existing trend. A hazard model confirms it — entry rises with recent growth and smaller size, not profitability. The paper reframes the evaluation of voluntary certification from average effects to observable dynamic selection: such schemes mark firms already on distinctive trajectories rather than create them. The lesson generalises — robustness to omitted variables is not robustness to selection on trends, and cross-sectional evaluations mislead unless they exploit the timing of take-up. |
| Date: | 2026–06–19 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:t4rxy_v1 |
| By: | Murillo Campello; Guilherme Junqueira |
| Abstract: | Do tax subsidies prompt investors to take on risk? We address this question by looking at investors' responses to changes to the Qualified Small Business Stock (QSBS) program, which reduces capital gains taxes on startup investing. We do so under a framework in which some startup investors — venture capitalists (VCs) — combine outside funding with incentive-based compensation, while others invest their own funds. Using bunching, triple-differences, and matching designs that exploit industry eligibility, investment vintage, and holding-period requirements, we analyze data from 158 thousand investor–firm pairings over two decades. We identify strategic investment timing, with subsidies prompting bunching at tax-eligible holding-period thresholds. Most notably, when and where tax subsidies apply, VCs shift their project selection toward riskier ventures: they invest more in pre-commercial stage startups, become more likely to provide startups with their initial capital, and invest more in startups with pre-existing debt, while becoming less likely to co-syndicate their investments. Tax-subsidized VC-backed ventures show higher failure rates, but on the flip side, attain higher valuations at exit and are more likely to reach "unicorn status." None of these patterns are observed for comparable non-VC investors in startups exposed to the same tax subsidies. Our tests further show that tax incentives lead to reallocation toward more innovative industries, yielding more impactful patents. Our study is the first to show that tax policy can shift entrepreneurial financing toward riskier, more innovative, and valuable startups. |
| Keywords: | tax policy, venture capital, risk-taking, entrepreneurial financing, innovation |
| JEL: | G24 G23 H25 O31 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12776 |
| By: | Paolo Castelnovo (University of Insubria and Fondazione Eni Enrico Mattei); Cinzia Lombardo (PTSCLAS); Valentina Morretta (University of Milan) |
| Abstract: | This paper evaluates the effectiveness of a public policy intervention introduced by the Italian government to support the economic valorization of patents held by small and medium-sized enterprises (SMEs). Using original survey data collected in 2025, the analysis compares firms that benefited from the measure during the 2020-2021 calls with a control group of comparable non beneficiary firms. The study examines patenting behavior, strategies for patent valorization, perceived obstacles, and innovation-related outcomes beyond traditional financial indicators. The results show that the measure effectively increases patenting activity and supports technological maturation, particularly for smaller, younger, and more resource-constrained firms, without crowding out private investment. Rather than directly boosting short-term financial performance, the measure acts as an enabling instrument by strengthening internal capabilities, know-how, and innovation processes, helping firms bridge the gap between invention and market readiness. While impacts on internationalization and market-based patent valorization remain limited, the intervention represents an effective component of a broader SME-oriented innovation policy mix. |
| Keywords: | Patents, Patents valorization, Public Policy, Business performance |
| JEL: | O30 O31 O34 O38 L38 P14 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:fem:femwpa:2026.18 |
| By: | Guichardaz Remy; Pénin Julien |
| Abstract: | In Capitalism, Socialism and Democracy, Schumpeter famously predicts the likely replacement of capitalism by socialism and claims that a socialist economy could be perfectly workable. While most commentators have interpreted the book as a neutral or even favorable assessment of socialism’s feasibility, a few of them have noted the ironic tone that pervades parts of the book. Yet, the implications of this irony for Schumpeter’s assessment of socialism remain largely unexplored. This article argues that Schumpeter’s apparent defense of socialism is best understood as a sustained ironic demonstration designed to expose the limits of socialist planning rather than to endorse its superiority over capitalism. Drawing on concepts that lie at the heart of Schumpeter’s theoretical framework, notably the distinction between growth and development, the opposition between perfect competition and plausible capitalism, and the central role of the entrepreneur in the emergence of novelty, we show that Schumpeter could not consistently maintain that a socialist economy would be capable of reproducing the developmental performance of capitalism. Behind an explicit but mostly ironic claim asserting the viability of socialism, CSD provides in fact a demonstration that socialism cannot match capitalism’s ability to generate the stream of discontinuous innovations that constitute economic development. |
| Keywords: | Schumpeter, entrepreneur, capitalism, socialism, development, growth |
| JEL: | B15 B25 O3 P3 P5 P41 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ulp:sbbeta:2026-19 |
| By: | Li Li |
| Abstract: | Since the 1980s, the entry and exit rates of firms have declined significantly worldwide, including in Canada and the United States, signalling a reduction in business dynamism. This paper builds on a study by MacDonald (2014) by extending the analysis of Canadian entry and exit trends from 1983 to 2012 up to 2021 and comparing these results with those from the United States. While Canadian entry and exit rates previously declined more sharply than those in the United States, this decline largely ceased in the late 2010s, with rates approaching levels similar to their U.S. counterparts. The Canadian declines are not attributable to sectoral shifts but rather affect all sectors. This paper further finds that sector-specific increases in industrial concentration do not appear to explain the decline in Canadian entry and exit rates. |
| Keywords: | long-run evolution, business entry and exit, rates |
| JEL: | J23 M21 |
| Date: | 2025–09–24 |
| URL: | https://d.repec.org/n?u=RePEc:stc:stcp8e:202500900001e |
| By: | Minford, Patrick (Cardiff University, UK and CEPR); Zhu, Zheyi (Cardiff Metropolitan University) |
| Abstract: | This paper builds on Yang et al. (2021). This analysed the effect on UK economic growth of wealth inequality and tax or regulative disincentives to entrepreneurs, over recent decades with a heterogeneous-agent growth model where agents can enhance individual productivity growth by undertaking entrepreneurship. In this further note we update the study with the latest data and also examine how far recent policies have contributed to the collapse in UK growth since 2008. The model is estimated and tested by indirect inference, with data updated to 2024. The model explains the UK rise in growth after the 1970s and its recent collapse in terms of changing disincentives to entrepreneurs. |
| Keywords: | Heterogeneous-agent Model; Entrepreneurship; Growth; Inequality; Indirect Inference; planning; infrastructure |
| JEL: | E10 O30 O40 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:cdf:wpaper:2026/6 |
| By: | Badola, Shivani (Institute for Studies in Industrial Development); Mukherjee, Sacchidananda (National Institute of Public Finance and Policy) |
| Abstract: | Credit constraints often hinder investment in unincorporated enterprises, limiting innovation and overall performance, including reduced productivity and output, and slower growth. In this paper, we assess credit constraints on unincorporated enterprises using NSSO’s unit-level data from the Annual Survey of Unincorporated Enterprises 2022-23. Identifying the factors and determinants of credit constraints is crucial for informing policy recommendations. Based on sources of outstanding loans and survey responses, we classify enterprises into three categories: fully constrained, partially constrained, and not constrained. We find that manufacturing enterprises face more credit constraints than those engaged in trading and services. Furthermore, the study indicates that female entrepreneurs and those belonging to SC/ST or OBC castes face comparatively greater credit constraints than others. Other factors, such as region (rural vs. urban), size (annual turnover and asset value), GST registration status, price-cost margin, etc., are strong determinants of credit constraints or access to credit. |
| Keywords: | Unincorporated Enterprises ; Credit Constraints ; Manufacturing ; Multinomial logit model ; India |
| JEL: | C35 E51 G20 L60 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:npf:wpaper:26/449 |
| By: | Anabela Santos; Francesco Molica |
| Abstract: | Using novel data from the Survey on Access to Finance of Enterprises, whose wave conducted in the last quarter of 2025 introduced a dedicated module on AI adoption, and an Inverse Probability Weighted Regression Adjustment approach, we assess the conditional effect of artificial intelligence (AI) use by Small and Medium-sized Enterprises across twelve EU countries on the likelihood of employment growth. We find that AI adoption is associated with a positive conditional effect on the probability of employment growth, with no significant effect on the likelihood of employment decline, consistent with complementarity dominating substitution at the current stage of diffusionin Europe. Such employment gains scale with the depth of AI integration, and firms reporting significant AI use exhibit conditional effects twice as large as infrequent users, suggesting that the returns to AI depend on operational embeddedness rather than adoption per se. The estimated conditional effects are also strongly heterogeneous. Positive responses are concentrated among small and medium firms and in the services sector, while micro firms show no significant effect, and the construction sector is the only segment associated with an elevated risk of workforce contraction. Institutional context also matters decisively. Employment-enhancing effects are significantly larger in countries with stronger innovation ecosystems, more flexible labour markets, higher governance quality, and more decentralised political systems. These findings carry direct policy implications, promoting AI adoption without supporting deep integration, targeting micro enterprises, and accounting for national institutional capacity is unlikely to maximise the labour market gains from AI diffusion across Europe. |
| Keywords: | Employment growth; Small and Medium Enterprises; European Union |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:ict:wpaper:2013/407834 |
| By: | Chahreddine Abbes; Amélie Lafrance-Cooke; Nicholas Johnston |
| Abstract: | By focusing on exits, their characteristics, patenting behaviour and the possible reasons behind exits, the paper provides a first attempt to answer the following question: What is the role of patents in firms’ exit strategies? While most exits can be the direct result of small and medium-sized enterprises’ failure to compete in a private market for various reasons, when exits involve intellectual property (IP), the situation may require thorough analysis because IP may play a double role. It can be a valuable asset to attract investors, and secure financing, therefore improving firms’ odds of survival and delaying exit (patent survival effect). On the other hand, IP can also be a very attractive asset for incumbents to acquire, accelerating exit from the market through mergers and acquisitions (patent trigger effect). Using data from Statistics Canada’s Canadian Patent Research Database and National Accounts Longitudinal Microdata File, this paper provides a detailed analysis of the role played by patents in the context of exits. The paper finds that firms that patent are more likely to be larger, to perform research and development, export their products, and be alive seven years after entry relative to businesses that do not patent. Furthermore, while the patent survival effect is estimated at a statistically significant 4.5%, the trigger effect was positive but not significant when regressing a fully specified model. |
| Keywords: | property, firms, patents |
| JEL: | J23 M21 |
| Date: | 2025–06–25 |
| URL: | https://d.repec.org/n?u=RePEc:stc:stcp8e:202500600005e |
| By: | Alex Amiotte Suchet (IDHES - Institutions et Dynamiques Historiques de l'Économie et de la Société - UP1 - Université Paris 1 Panthéon-Sorbonne - UP8 - Université Paris 8 - UPN - Université Paris Nanterre - UEVE - Université d'Évry-Val-d'Essonne - CNRS - Centre National de la Recherche Scientifique - ENS Paris Saclay - Ecole Normale Supérieure Paris-Saclay) |
| Abstract: | Contemporary economic policies have become increasingly reliant on lending and guarantee instruments managed by public banks. Does this trend signal a return of the state, or rather the financialisation of public action? This article explores the long- term institutional transformations of public SME financing in France, analysing the evolving roles of finance, businesses and the state. Drawing on historical institutionalism and the political economy of financialisation, it examines both the creation and the gradual financialisation of the institutional arrangement governing public SME financing. Based on extensive sources – 108 archive boxes, additional historical materials, and ten semi-structured interviews – the study traces the emergence of a financialised institutional arrangement that has underpinned French economic policy since the late 1990s. Initially centred on public guarantees developed in the interwar period, the introduction of public loans in the 1980s produced a fragile arrangement that ultimately facilitated financialisation through the integration of financial devices and actors. This periodisation based on valuation powers helps to explain the recent conjunction of renewed public intervention and the consolidation of financialisation dynamics. |
| Abstract: | Les politiques économiques contemporaines s'appuient de plus en plus sur des instruments de crédit et de garantie gérés par les banques publiques. Cette tendance marque-t-elle un retour de l'État ou plutôt la financiarisation des politiques publiques ? Cet article explore le changement institutionnel de long terme du financement public des PME en France, en analysant l'évolution des rôles respectifs de la finance, des entreprises et de l'État. Avec l'institutionnalisme historique et l'économie politique de la financiarisation, il étudie à la fois la création et la financiarisation progressive de l'arrangement institutionnel régissant le financement public des PME. S'appuyant sur des sources historiques – 108 boîtes d'archives, des documents historiques supplémentaires et dix entretiens semi-structurés –, l'enquête retrace l'émergence d'un dispositif institutionnel financiarisé qui sous-tend la politique économique française depuis la fin des années 1990. Initialement centré sur les garanties publiques mises en place pendant l'entre-deux-guerres, l'introduction des prêts publics dans les années 1980 a donné naissance à un arrangement fragile qui a finalement facilité la financiarisation par l'intégration de dispositifs et d'acteurs financiers. Cette périodisation fondée sur les pouvoirs de valorisation permet d'expliquer la conjonction récente entre une intervention publique renouvelée et la consolidation des dynamiques de financiarisation. |
| Keywords: | financialisation, institutional change, institutional arrangement, public financing, public banks |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05330715 |