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on Entrepreneurship |
| By: | Colonnelli, Emanuele; Cruz, Marcio; Pereira-López, Mariana; Porzio, Tommaso; Zhao, Chun |
| Abstract: | We build new data on startups in Africa to study which types of financing these firms demand, how financing is allocated in practice, and the implications for startup creation and the composition of the sector. We combine a continent-wide founder survey, an incentive-compatible experiment estimating financing preferences, and venture capital (VC) deal records matched to founders’ education and work histories. We find that startups strongly prefer equity over debt, but equity is supplied mainly by foreign investors and flows disproportionately to foreign-connected founders. About 80 percent of VC deals involve a foreign investor, and more than 60 percent of funded founders have studied or worked outside Africa. A simple accounting framework shows that this foreignness reflects three main forces: scarce local equity capital, a thin pool of local entrepreneurs able to access startup finance, and frictions limiting local entrepreneurs’ access to foreign investors. Together, these forces reduce startup creation and tilt the sector toward foreign investors and foreign-connected founders. |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21579 |
| By: | Hajime TADOKORO; Yuji HONJO |
| Abstract: | This study explores why Japan has produced relatively few unicorns compared with other advanced and emerging economies, despite strong entrepreneurial potential and abundant savings. It argues that the underdevelopment of Japan’s private equity markets constitutes a key structural bottleneck. We examine institutional causes and policy directions aimed at strengthening private equity markets and supporting high-growth firms. Drawing on experiences from the United States, the European Union, the United Kingdom, China, and the Republic of Korea, we conduct a comparative institutional analysis of core mechanisms for market-based equity financing: small public offerings, equity crowdfunding (ECF), and private placements, as well as secondary trading. Our analysis identifies structural regulatory constraints that raise entry barriers for issuers and limit investor participation in Japan. Based on these findings, we identify institutional issues that are currently lacking, including simplified disclosure frameworks, higher and tiered thresholds for small public offerings, flexible regimes for ECF, modernized rules for private placements and secondary trading, and the expansion of the scope of qualified investors, as well as digitized capital-raising processes. These measures would lower entry barriers, broaden investment opportunities, and improve risk capital allocation, while maintaining market-based investor protection. By fostering vibrant private equity markets, Japan can mobilize idle capital, stimulate entrepreneurship, and enhance competitiveness, thereby supporting innovation-driven economic growth and increasing the likelihood of more unicorns emerging. This study underscores the central role of institutional design in shaping entrepreneurial finance and offers policy-relevant insights for economies seeking to transition toward innovation-driven growth supported by vibrant private equity markets. |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:eti:dpaper:26051 |
| By: | Alvarez, Lourdes; Broncano, Marlon |
| Abstract: | This study investigates the impact of factoring—implemented through electronic negotiable invoices—on the growth and performance of firms in Peru between 2015 and 2023. Using administrative panel data and a quasi-experimental design based on the difference-indifferences (DiD) method, the analysis compares firms that adopted this financial instrument with those that did not. The findings reveal that factoring adoption significantly increased firm survival rates. In the short term, it also enhanced access to credit, although this effect gradually diminished over time. The results on sales and employment show a heterogeneous pattern: while some firms experienced initial adverse effects, those that consistently utilized factoring reported sustained improvements. These findings contribute to the understanding of alternative financing mechanisms in developing economies and their role in fostering firm resilience and long-term development. The paper provides empirical evidence to inform financial policy and support instruments for micro, small, and medium-sized enterprises (MSMEs) in Peru. |
| Keywords: | factoring; electronic invoices; access to credit; firm survival; SME development |
| JEL: | G2 G3 |
| Date: | 2025–10–16 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:129106 |
| By: | Kuosmanen, Natalia; Kuosmanen, Timo; Maczulskij, Terhi |
| Abstract: | Abstract A substantial share of firm entry and exit observed in register-based data reflects mergers, acquisitions, spin-offs, and other forms of corporate restructuring, instead of genuinely new firms or firm closures. This distinction is important for productivity decompositions, which typically interpret market entry and exit as manifestations of the Schumpeterian creative destruction. Using linked register-based data on Finnish manufacturing firms and employees for the period 2010–2022, we identify restructuring events through clustered worker flows, and incorporate this classification into a structural productivity decomposition framework. The results show that firms involved in restructuring events exhibit significantly higher productivity levels than genuinely entering or exiting firms. Nevertheless, the contribution of restructuring-related entry and exit to aggregate productivity growth remains modest, whereas genuine creative destruction by newly established firms and closing down make a larger positive contribution to productivity growth. Firms undertaking acquisitions exhibit a temporary decline in labor productivity around the time of acquisition, followed by a gradual recovery. These findings highlight the need to distinguish restructuring events from genuine market entry and exit when analyzing productivity dynamics. |
| Keywords: | Labor productivity, Mergers and acquisitions, Corporate restructuring, Worker flows, Productivity decomposition |
| JEL: | D24 L25 L60 O47 |
| Date: | 2026–06–18 |
| URL: | https://d.repec.org/n?u=RePEc:rif:wpaper:142 |
| By: | Bassirou Gueye |
| Abstract: | Indigenous-owned businesses are a growing and important component of Canada’s economic landscape. These businesses not only contribute to entrepreneurship and community development but also serve as important sources of employment for Indigenous people. Understanding the extent to which Indigenous-owned businesses employ Indigenous workers is important for assessing labour market inclusion, economic self-determination and the role of Indigenous entrepreneurship in supporting equitable growth. This study represents a novel contribution to the evidence base. Statistics Canada first helped close a critical data gap by developing a framework to identify Indigenous business owners and Indigenous-owned businesses (Gueye et al., 2022; Gueye, 2024). Building on that foundation, the present analysis extends the work to fill another gap, providing data on Indigenous employment within Indigenous-owned businesses. While the Labour Force Survey and the Census of Population contain information on Indigenous employees, they do not offer a breakdown by ownership characteristics of businesses. By linking ownership and employment data, this study provides new insights into how Indigenous-owned businesses contribute to Indigenous employment and income outcomes. |
| Keywords: | indigenous employment, income, Indigenous-owned businesses, comparative analysis |
| JEL: | J23 M21 |
| Date: | 2026–01–28 |
| URL: | https://d.repec.org/n?u=RePEc:stc:stcp8e:202600100002e |
| By: | Naoyuki Yoshino (Keio University); Farhad Taghizadeh-Hesary (Tokai University Research Institute for Environment and Sustainability); Shigehiro Shinozaki (Asian Development Bank) |
| Abstract: | As in many Asian economies, Malaysia’s micro, small, and medium-sized enterprises (MSMEs) account for the vast majority of firms and large shares of economic output and employment. Their significant carbon footprint makes them pivotal for achieving carbon neutrality. In bank-dominated financial systems such as Malaysia’s, credit guarantees help facilitate lending to MSMEs. This paper proposes a way to both ease MSME access to finance and incentivize decarbonization and sustainability. It develops a risk-based and sustainability-adjusted credit guarantee pricing framework that integrates an MSME’s financial health, environmental footprint, and the macroeconomic conditions it faces. Using financial data from 2, 000 Malaysian MSMEs, principal component analysis is used to construct a financial health index, followed by K-means clustering to classify firms by risk. A countercyclical pricing model produces a firm‑level credit guarantee fee ranging from 1.08% for the healthiest firms during a recession to 2.58% for the riskiest firms during economic expansion. Firm-level sustainability survey data are used to build a composite performance score which reduces guarantee fees by an average of 0.13 percentage points, with a reduction up to 0.23 percentage points for top-performing firms. |
| Keywords: | optimal credit guarantee;sustainability;access to finance;SME finance;Malaysia |
| JEL: | D22 G20 L20 L50 |
| Date: | 2026–06–17 |
| URL: | https://d.repec.org/n?u=RePEc:ris:adbewp:022917 |
| By: | OECD |
| Abstract: | This paper evaluates the Small Credit Fund (Fondo Piccolo Credito), a regional financial instrument introduced by the Lazio Region (Italy) to address credit market gaps faced by micro and small enterprises. Using administrative data for 2017–2023 and a difference in differences approach, the evaluation finds strong financial additionality: subsidised loans increased long term debt without crowding out other financing. The programme improved firm survival and supported higher investment, particularly among smaller and more financially constrained firms. Short term declines in profitability and credit ratings highlight temporary trade offs during the investment and repayment phase. The paper concludes with recommendations to refine programme design, targeting and monitoring, with lessons for similar instruments across OECD countries. |
| Keywords: | credit constraints, Italy, Lazio, policy evaluation, regional development, Small business finance |
| JEL: | G21 G28 H81 L26 O16 |
| Date: | 2026–06–15 |
| URL: | https://d.repec.org/n?u=RePEc:oec:cfeaaa:2026/08-en |
| By: | Wulong Gu; Josip Lesica |
| Abstract: | This paper examines the role of firm size in the widening labour productivity gap between Canada and the United States since 2000. Canada’s business-sector labour productivity level declined from 83% of the U.S. level in 2002 to 73% in 2019. The gap is partly explained by Canada’s higher share of small firms and their greater productivity disadvantage relative to large firms. In 2019, these two factors accounted for 60% of the 27-percentage-point productivity gap, with the remainder 40% attributable to the generally lower productivity of Canadian firms. From 2002 to 2019, both small and large Canadian firms experienced slower productivity growth than their U.S. counterparts. Large firms contributed more to the widening of the Canada–U.S. labour productivity level gap for the period from 2002 to 2019 because of significantly slower labour productivity growth among Canada’s large firms. Shift-share analysis shows that the relative weak performance of large firms accounted for 0.45 percentage points of the 0.71-point Canada–U.S. productivity growth gap, while small firms accounted for 0.16 points. The remaining 0.14 percentage points of the Canada–U.S. labour productivity growth gap were attributable to the negative effect of hours shifting toward small firms with lower labour productivity levels in Canada. The findings highlight the need to boost productivity across firm sizes. Improving small firms’ access to markets, financing, innovation and managerial capacity and enabling large firms to catch up to global productivity frontiers will be critical to narrowing the Canada–U.S. productivity gap. |
| Keywords: | role of firm size, labour productivity gap |
| JEL: | J23 M21 |
| Date: | 2025–12–22 |
| URL: | https://d.repec.org/n?u=RePEc:stc:stcp8e:202501200002e |
| By: | Anthony Savagar; Yannis Galanakis |
| Abstract: | We introduce a novel real-time dataset, Companies House Real-Time (CHRT), that captures daily firm creation and dissolution activity for the full population of UK-registered companies. CHRT provides a timely measure of business formation, becoming available months before official business demography statistics. We show that incorporation activity leads taxable business births and contains forward-looking information about employment and output growth. Consistent with this, a structural vector autoregression (SVAR) indicates that positive shocks to firm entry generate persistent increases in employment and output. |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2606.01307 |
| By: | Enriques, Luca; Nigro, Casimiro A.; Tröger, Tobias |
| Abstract: | European debates on competitiveness increasingly treat corporate law as a lever to help innovative firms scale. The European Commission's Proposal for a new "28th regime" seeks to introduce an optional, EU-wide corporate legal form designed, inter alia, to facilitate the cross-border scaling of innovative firms. A central instrument of the Proposal is the use of model articles of association to be adopted through future implementing acts. This Article argues that, while standardised articles may ease incorporation and lower drafting costs for ordinary unlisted firms, they fall short for VC-backed companies-the very cases that motivated the initiative. Building on prior work on venture capital contracting under mandatory corporate law, we identify four shortcomings. First, the architecture is incomplete: the Proposal omits a model shareholder agreement, even though effective VC contracting depends on the interaction between articles of association and shareholder arrangements. Second, the drafting process is overly generalist and unlikely to yield genuinely VC-specific templates. Third, the Proposal's fairness-oriented logic risks producing terms that clash with the asymmetric, statecontingent structures typical of VC deals. Fourth, the legal protection offered by the template is limited, focusing on formation-stage effects while leaving subsequent judicial intervention unconstrained. We propose four adjustments: introduce a model shareholders' agreement; create a dedicated VC drafting track; abandon fairness as the organising principle for VC templates; and provide a robust safe harbour covering both ex ante design and ex post enforcement. |
| Keywords: | 28th Regime, Entrepreneurship, EU Company Law, EU Inc., Innovation, Private Ordering, Startups, Venture Capital |
| JEL: | G38 K22 L26 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:safewp:341394 |
| By: | Alam, Afroza; Diegmann, André |
| Abstract: | This paper provides new causal evidence on how patent allowances affect firms and their employees based on quasi-random assignment of patent applications to examiners. Exploiting employer-employee records with newly linked German firm data and web-scraped patent documents, we show that patent-induced shocks reduce firm exit, improve productivity, and increase wages, with rent-sharing elasticities between 0.10 and 0.21. Wage gains are broadly observed across occupational tasks, with high heterogeneity: managers benefit disproportionately in publicly traded firms, whereas broader wage increases accrue to workers in non-traded firms. Our findings highlight the role of institutional features and firm organization in shaping how rents are shared. |
| Keywords: | firm performance, innovation, rent sharing, worker compensation |
| JEL: | D22 J31 O31 O34 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:iwhdps:341391 |
| By: | Schlömer-Laufen, Nadine; Butkowski, Olivier K.; Schneck, Stefan |
| Abstract: | Unternehmen tragen zum Wohlergehen von Regionen bei. Was passiert aber, wenn Unternehmen geschlossen werden? Ziel dieser Studie ist es, Ausmaß, bestimmende Faktoren und Folgen von Unternehmensaustritten auf regionaler Ebene zu analysieren. Dabei zeigen wir, dass sich Unternehmensaustritte eher in städtischen Regionen mit regem Gründungsgeschehen häufen. Ebenso verdeutlichen unsere Analysen, dass sich Austritte nicht zwangsläufig negativ auf die regionale Entwicklung auswirken, insbesondere dann nicht, wenn die Region zugleich durch ein reges regionales Gründungsgeschehen geprägt ist. |
| Keywords: | business closures, spatial planning regions, start-up activity, Unternehmensausstritte, Raumordnungsregionen, Gründungsgeschehen |
| JEL: | G33 O10 L26 R11 M13 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifmduf:341624 |