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on Entrepreneurship |
| By: | Yuichi FURUKAWA (Chuo University and RIETI); Tat-kei LAI (IESEG School of Management, Univ. Lille, CNRS, UMR 9221 - LEM - Lille Economie Management); Sumiko NIWA (Wakayama University) |
| Abstract: | This study offers a monetary growth theory that can explain the declining business dynamism observed over the past few decades in some developed countries by developing a new R&D-based growth model; the main departure from existing models is the introduction of an entry cost after innovation and an endogenous survival investment that is subject to a cash-in-advance constraint. Due to this, in our model, the entry/exit rates and firm age distribution are all endogenous. The core finding is that, theoretically, the nature of business dynamism at the macro level essentially depends on nominal factors. Specifically, lower inflation leads to declining business dynamism, characterized by lower entry and exit rates and a maturity bias in the firm age distribution, if the entry cost is sufficiently high. Empirically, we also find supportive evidence that, among a set of European countries, firm entry/exit rates are positively associated with nominal interest rates and inflation rates. Then, calibrating the model to the E.U. economy, we verify that lower inflation leads to declining business dynamism under empirically plausible values of entry, exit, and inflation rates. |
| Keywords: | Cash-in-advance constraint, inflation, firm dynamics, R&D-based growth |
| JEL: | E40 O31 O34 O41 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:ies:wpaper:e202602 |
| By: | Edoardo M Accabi (University of Mannheim); Andrea Alati (Bank of England); Luca Mazzone (University of Montreal); Marta Morazzoni (University College London and CEPR) |
| Abstract: | This paper studies how entrepreneurs sort into founding teams and how team composition shapes the firm distribution. 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 career 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; yet founders with dissimilar skills are less likely to start firms together. We calibrate the model to reproduce these patterns and use it to quantify the cost of imperfect founder matching. Counterfactuals show that reducing founders’ biased exposure reallocates activity from low-productivity solo firms toward more productive teams. An optimal-assignment benchmark reveals that even unbiased random search leaves substantial gains unrealized because high-surplus matches fail to form. |
| Keywords: | Entrepreneurship;sorting;search frictions. |
| JEL: | L26 J24 L25 |
| Date: | 2026–10–09 |
| URL: | https://d.repec.org/n?u=RePEc:boe:boeewp:023785 |
| By: | Tarikua Erda |
| Abstract: | Disasters devastate economies, yet productivity can improve in their wake. Why? Using confidential plant-level microdata from the US Census Bureau and an event study design, I trace the creative destruction process that follows large federally declared floods. Exits are concentrated among the least productive plants, whose used machines are then acquired by high-productivity entrants. Survivors upgrade their machinery as they rebuild and see productivity gains. Federal disaster spending facilitates this process by expanding financing access for nimble young and small firms that disproportionately fuel productive reallocation. Without it, financing constraints stifle creative destruction and productivity declines. Ultimately, the relative income gains from federal disaster assistance generate tax revenues far exceeding the policy's upfront cost, making it both efficiency-enhancing and fiscally sound. My findings reveal a novel allocative efficiency channel through which government spending supports post-disaster recovery, with critical implications for a warming world. |
| Keywords: | Natural Disasters; Disaster Aid; Firm Dynamics; Creative Destruction; Allocative Efficiency |
| JEL: | Q54 H84 R11 L26 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:cen:wpaper:26-52 |
| By: | Ethan Barnaby Kapstein; Javier Ospital; Guntram Wolff |
| Date: | 2026–07–01 |
| URL: | https://d.repec.org/n?u=RePEc:ulb:ulbeco:2013/414180 |
| By: | Castro, Carolina; Chiarella, Cristina; Laajaj, Rachid; Martinez-Gonzalez, Eduard F.; Restrepo, Juan |
| Abstract: | Implemented between 2012 and 2023 across 203 post-conflict municipalities in Colombia, the TOP-El Campo Emprende project aimed to strengthen rural livelihoods through a comprehensive, integrated approach. The project focused on promoting enterprise development by building the capacities of local productive organizations, fostering entrepreneurship, and providing technical assistance. The project also sought to enhance rural financial inclusion by offering financial education, savings incentives, and youth-targeted financial innovations to reduce economic vulnerability. This impact assessment of the project was conducted using a Regression Discontinuity Design (RDD) to estimate causal effects. The analysis is based on household survey data collected across 47 municipalities between June and July 2023. |
| Keywords: | Community/Rural/Urban Development |
| Date: | 2025–07–02 |
| URL: | https://d.repec.org/n?u=RePEc:ags:unadia:413160 |
| By: | Federico Esposito; Saverio Simonelli |
| Abstract: | We show that natural disasters generate persistent declines in U.S. county employment and net job creation. We then examine whether emergency credit can mitigate these effects. Linking the universe of SBA disaster-loan applications to Census Bureau records, we exploit a credit-score screening rule introduced in 2016 and implement a fuzzy regression discontinuity design around the score cutoff. Firms just above the threshold are substantially more likely to receive government-backed loans, and approval increases employment relative to declined applicants, with effects persisting over subsequent years. The adjustment operates primarily through lower job destruction, while reduced firm exit and stronger job creation also contribute. Overall, SBA lending preserved an estimated 9.8% of the jobs that would otherwise have been lost in disaster-affected counties. |
| Keywords: | Natural disasters; disaster lending; small business finance; employment; job flows; firm exit; regression discontinuity |
| JEL: | Q54 G21 J21 J63 R11 |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:cen:wpaper:26-58 |
| By: | Ivan D Hernandez; Rodrigo Alvarez; Catalina Blanco; Andrés Carvajal |
| Abstract: | This paper presents a theoretical framework and a set of instruments for the encouragement of the emergence of a formal market for financing of new technology-based firms (NTBFs). The characterization attempts to determine particular attributes of this demand by doing a qualitative study of demand agents in Colombia and by doing a comparative study of NTBFs in other countries. Imperfections and distortions of the demand are found, giving a wider vision for the emergence of formal finance market for NTBFs. |
| Keywords: | New technology;based firms (NTBFs); public policy; entrepreneurship; technological change |
| JEL: | O25 L26 L38 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:col:000176:023703 |