nep-sbm New Economics Papers
on Small Business Management
Issue of 2018‒11‒19
twenty-six papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Firm R&D Investment and Export Market Exposure By Bettina Peters; Mark J. Roberts; Van Anh Vuong
  2. Global Connectedness and Local Innovation in Industrial Clusters By Ekaterina Turkina; Ari Van Assche
  3. Product market regulation, business churning and productivity: Evidence from the European Union countries By Robert Anderton; Barbara Jarmulska; Benedetta Di Lupidio
  4. Resilience and effectuation for a successful business takeover By Aude D’andria; Ines Gabarret; Benjamin Vedel
  5. Leverage over the Life Cycle and Implications for Firm Growth and Shock Responsiveness By Emin Dinlersoz; Sebnem Kalemli-Ozcan; Henry Hyatt; Veronika Penciakova
  6. The effects of innovation on the decisions of exporting and/or importing in SMEs: empirical evidence in the case of Spain. By Alfonso Expósito; Juan A. Sanchis-Llopis
  7. Barriers to Entry and Regional Economic Growth in China By Loren Brandt; Gueorgui Kambourov; Kjetil Storesletten
  8. Expanding to online platform business models for grocery retailers ? Insights from case studies By Sarah Ranjana Güsken
  9. Technological Trajectories and FDI: Top Bananas and Underdogs By Santos, Eleonora; Khan, Shahed
  10. Position and development of small and medium enterprises in European countries By Mária Jano?ková; Katarína ?ulková; Adriana Csikósová
  11. The role of farmers innovative behavior and social responsibility practices in technology adoption in apple and blueberry farmers in the Central Region of Chile. By Engler, A.; Rodriguez, M.F.; Cofr, G.
  12. Creative Class Competition and Innovation in the Absence of Patent Protection By Batabyal, Amitrajeet
  13. L'innovation responsable ou comment des « utopies rationnelles » peuvent générer un changement sociétal ? By Joel Ntsonde; Franck Aggeri
  15. Internationalization paths of fruit export companies from emerging economies: Are they regionally or globally oriented? By Losilla, L.; Engler, A.; Otter, V.
  16. Crowdinvesting in entrepreneurial projects: Disentangling patterns of investor behavior By Maximilian Goethner; Sebastian Luettig; Tobias Regner
  17. R&D Intensive Corporations and the Job Market: The Danish Case By Nicola Grassano; Alexander Coad; Jacob Holm; Christian Ostergaard; Bram Timmermans; Antonio Vezzani
  18. Size, Internationalization and University Rankings: Evaluating Times Higher Education (THE) Data for Japan By McAleer, M.J.; Nakamura, T.; Watkins, C.
  19. Differential effects of internal and external distances on trade flows: The case of Pakistan By Salamat Ali; Richard Kneller; Chris Milner
  20. A General Equilibrium Theory of Occupational Choice under Optimistic Beliefs about Entrepreneurial Ability By Dell’Era, Michele; Opromolla, Luca David; Santos-Pinto,
  21. Migrant STEM Entrepreneurs By Christopher F. Baum; Linda Dastory; Hans Lööf; Andreas Stephan
  22. Entrepreneurship and ageing: Exploring an economic geography perspective By Heike Mayer, Birgit Leick
  23. Toolkit for Impact Evaluation of Public Credit Guarantee Schemes for SMEs By World Bank Group
  24. Does Entrepreneurial Orientation Matter in Entrepreneurial Intention, Effectual Behavior, and Entrepreneurial Outcomes of Japanese SMEs? By Yamamoto, Satoshi; Kan, Viktoriya
  25. Markups Dispersion and Firm Entry: Evidence from Ethiopia By Kaku Attah Damoah; Giorgia Giovannetti; Marco Sanfilippo
  26. Exporting and firm performance: Evidence from India. By Gupta, Apoorva; Patnaik, Ila; Shah, Ajay

  1. By: Bettina Peters; Mark J. Roberts; Van Anh Vuong
    Abstract: In this article we study differences in the returns to R&D investment between firms that sell in international markets and firms that only sell in the domestic market. We use German firm-level data from the high-tech manufacturing sector to estimate a dynamic structural model of a firm's decision to invest in R&D and use it to measure the difference in expected long-run benefit from R&D investment for exporting and domestic firms. The results show that R&D investment leads to a higher rate of product and process innovation among exporting firms and these innovations have a larger impact on productivity improvement in export market sales. As a result, exporting firms have a higher payoff from R&D investment, invest in R&D more frequently than firms that only sell in the domestic market, and, subsequently, have higher rates of productivity growth. The endogenous investment in R&D is an important mechanism that leads to a divergence in the long-run performance of firms that differ in their export market exposure. Simulating the introduction of trade tariffs we find a substantial reduction in firms' productivity growth and incentive to invest in R&D.
    JEL: F14 L25 O3
    Date: 2018–11
  2. By: Ekaterina Turkina; Ari Van Assche
    Abstract: In today’s knowledge economy, clusters are a key driver of a country’s competitiveness. Yet a cluster’s technological base is now more than ever influenced by constituent firms’ actions to tap into distant knowledge sources. Drawing on a social network perspective, and distinguishing between horizontal versus vertical organization-based linkages, we explore the effects of a cluster’s connectedness to foreign locations on its innovation performance. We show that improvements in horizontal and vertical connectedness both stimulate a cluster’s innovation performance, but that their relative effects vary across cluster types. Innovation in knowledge-intensive clusters disproportionately benefits from enhancements in their constituent firms’ horizontal connectedness to foreign knowledge hotspots. Innovation in labor-intensive clusters mostly gains from stronger vertical connections by their firms to central value chain players abroad. We discuss the implications of our findings for research on global knowledge sourcing and cluster upgrading.
    Keywords: Cluster,Knowledge Sourcing,Connectedness,Network Analysis,Patent,
    Date: 2018–04–23
  3. By: Robert Anderton; Barbara Jarmulska; Benedetta Di Lupidio
    Abstract: This paper empirically investigates the effects of product market regulation on business churning (i.e. entry and exit of firms) and their impacts on productivity, using annual data for the period 2000-2014 across individual EU countries and sectors. The paper hypothesises that product market reforms, which reduce entry barriers and increase the degree of competition, can allow new firms to enter the market and compete vis-à-vis incumbent firms. The higher competitive pressures can push competitive incumbent firms to innovate while other less productive and inefficient firms may exit. These possible mechanisms can result in improvements to the average industry-level productivity. By using business demography data (i.e, business churning) at the industry and firm size level, we perform a panel data analysis across European countries and sectors to evaluate the effect of product market regulation on firm churning and their impacts on productivity. In particular, we differentiate between micro (less than 10 employees) and other firms given the substantial degree of heterogeneity among these two size classes both in terms of business churning and productivity growth. The paper finds that reducing product market regulation increases business dynamism (i.e. increases the churn rate) by facilitating firms’ entry and exit which, in turn, boosts sectoral total factor productivity.
    Keywords: product market regulation; business churning; productivity; EU
    Date: 2018
  4. By: Aude D’andria (UEVE - Université d'Évry-Val-d'Essonne); Ines Gabarret (EDC Paris); Benjamin Vedel (LEM - Lille - Economie et Management - UCL - Université catholique de Lille - Université de Lille - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Purpose: This study explores how resilience can support entrepreneurs in uncertain environments. The study's objective is to show how different dimensions of resilience (emotional/cognitive) are dynamically connected to different logics of actions (causation/effectuation) allowing the development of a successful entrepreneurial project. Methodology: The study is based on a qualitative analysis of a blog written by an entrepreneur during the first seventeen months of a search, negotiation, and financing process for a company takeover. Findings: The results highlight that in high uncertainty, strong entrepreneurial resilience and shift of logics of action can contribute to the success of a business takeover. This study identifies forms of resilience during the business takeover process that helped the entrepreneur overcome adversity and succeed. Moreover, these forms of resilience seem to be related to effectual and causal logics. Practical implications: This study could help future entrepreneurs succeed in the creation or takeover of an organization by improving knowledge of the relationship between resilience and logics of actions. Originality: This study proposes a different approach to the study of entrepreneurial resilience by analysing it in relation with the logics of action (causation/effectuation). Moreover, the study offers a modern methodological approach by using an internet blog as a data source.
    Keywords: Entrepreneurial resilience,business takeover,effectuation,small and medium-sized enterprises
    Date: 2018–05–14
  5. By: Emin Dinlersoz; Sebnem Kalemli-Ozcan; Henry Hyatt; Veronika Penciakova
    Abstract: We study the leverage of U.S. firms over their life-cycle and implications for firm growth and responses to shocks. We use a new dataset that matches private firms’ balance sheets to U.S. Census Bureau’s Longitudinal Business Database (LBD) for the period 2005–2012. A number of stylized facts emerge. First, firm size and leverage are strongly positively correlated for private firms, both in the cross section of firms and over time for a given firm. For public firms, there is a weak negative relation between leverage and size. Second, young private firms borrow more, but firm age has no relation to public firms’ leverage. Third, while private firms switch from debt to equity financing as they age, public firms slightly reduce equity financing as they age. Building on this “normal times” benchmark and using the “Great Recession” as a shock to financial conditions, we show that, for private firms, firm size can serve as a good predictor of financial constraints. During the Great Recession, leverage declines for private firms, but not for public firms. We also provide evidence that private firms’ growth is positively related to leverage, as they finance their growth during normal times with short-term borrowing, whereas the relationship between leverage and firm growth is negative for public firms. These results suggest that public firms are not financially constrained during normal times or during crisis, but private firms are.
    JEL: E23 G32
    Date: 2018–11
  6. By: Alfonso Expósito (Department of Economic Analysis and Political Economy, University of Seville, Calle San Fernando 4, 41004 Sevilla (Spain).); Juan A. Sanchis-Llopis (Department of Economic Structure, University of Valencia, Avda. dels Tarongers s/n, 46022 Valencia (Spain).)
    Abstract: This paper analyses the involvement of small firms in international trade activities by identifying the comprehensive impact of innovation. Specifically, we study how innovation introduced by these firms determines entrepreneurial decision-making process regarding whether to engage in exporting and/or importing. Moreover, we account for several innovation outputs (product, process, and organisational/managerial innovation) when estimating the potentially interrelated decisions of whether to export and/or import. Results confirm the simultaneity of firms’ exporting and importing decisions and consequently these two decisions should be estimated together when analysing the influence incurred by the introduction of alternative types of innovation on said decisions. Furthermore, findings show complementarity between types of innovation to be relevant in explaining export and import decisions made by SMEs. Specifically, cumulative effects as a result of combining product and process innovation, as well of product, process and organisational innovation, are highly significant in explaining export decisions, while in the case of imports, the combination of product and organisational innovation is shown to be significant. These findings lead to major policy and managerial implications regarding the promotion of SMEs’ participation in international trade flows through alternative innovation strategies.
    Keywords: innovation, exporting, importing, SME
    JEL: F14 O30 L20 M21
    Date: 2018–10
  7. By: Loren Brandt; Gueorgui Kambourov; Kjetil Storesletten
    Abstract: The non-state manufacturing sector has been the engine of China's economic transformation. Up through the mid-1990s, the sector exhibited large regional differences; between 1995 and 2004 we observe rapid convergence in terms of productivity, wages, and new firm start-up rates. To analyze the drivers of this behavior, we construct a Hopenhayn (1992) model that incorporates location-specific capital wedges, output wedges, and a novel entry barrier. Using Chinese Industry Census data we estimate these wedges and examine their role in explaining differences in performance across prefectures and over time. Entry barriers turn out to be the salient factor explaining performance differences. We investigate the empirical covariates of these entry barriers and find that barriers are causally related to the size of the state sector. Thus, the downsizing of the state sector after 1997 may be important in explaining the regional convergence and manufacturing growth after 1995.
    Keywords: Chinese economic growth; SOEs; fi rm entry; entry barriers; capital wedges; output wedges; SOE reform
    JEL: O11 O14 O16 O40 O53 P25 R13 D22 D24 E24
    Date: 2018–11–07
  8. By: Sarah Ranjana Güsken (Institute for Management Cybernetics at RWTH Aachen)
    Abstract: This paper examines the requirements of German, owner managed grocery retailers when expanding their business model by including online platforms to their distribution channels. Fourteen guided interviews with German grocery retailers were conducted, focusing on the status quo of their business models as well as their individual needs when it comes to online distribution. The contribution with this paper are twofold. First, we provide practical insights from real case studies in the way business models from small and medium enterprises in grocery retailing are structured. Second, we point out technological and non-technological requirements when small grocery retailers try to change their business model concerning to the engagement in online platforms. The paper finishes with suggestions on opportunities how to address these requirements.
    Keywords: Business Model Innovation, Business Models, Platform Models, Case Study, Retail, Grocery Retail, Retailer Requirements, Online Grocery Retail
    JEL: O32 O33 O52
    Date: 2018–10
  9. By: Santos, Eleonora; Khan, Shahed
    Abstract: Previous empirical evidence searching for externalities from Foreign Direct investment in Portugal showed mixed results. Using a new database containing 5,045 Portuguese manufacturing firms grouped by technological trajectories, we investigate the occurrence and magnitude of externalities from FDI in 1995-2007. We find both positive and negative externalities in scale-intensive and supplier-dominated industries. The magnitude of externalities is higher in the current period than in lagged periods. Because positive externalities outweigh the negative externalities, on the whole a 1% increase in foreign presence (measured by turnover) increases the Total Factor Productivity of domestic firms by 0.42 percentage points. Thus, the Investment Promoting Agency should capture foreign projects in those technological groups.
    Keywords: Technological Trajectories, Multinational Corporations, Productivity.
    JEL: F23 L60 O32
    Date: 2018
  10. By: Mária Jano?ková (Technical university of Ko?ice); Katarína ?ulková (Technical university of Ko?ice); Adriana Csikósová (Technical university of Ko?ice)
    Abstract: SMEs have irreplaceable task not only in macro-economic ? in area of working posts creation, contribution to the flexibility of market mechanism or its contribution to the value added creation, but they are profitable also at the micro-economic level. The goal of the contribution is to search position and development of such enterprises in the frame of chosen European countries and how they contribute to economic growth and competitive environment. During the analysis we considered SME Policy Index. Overall position and development had been analyzed by chosen indexes, mainly index of economic freedom, global competition index, doing business index and corruption perception index. The results speak about increasing trend of SMEs in EU, creating employment possibilities, with limitation of barriers to make business in individual countries.
    Keywords: Business environment, Europe, Global markets, Post-communist countries, Small and medium enterprises.
    JEL: L26 M29
    Date: 2018–10
  11. By: Engler, A.; Rodriguez, M.F.; Cofr, G.
    Abstract: For the Chilean economy, the blueberry and apple sector have an important role regarding production and employment. To remain competitive in the export supply chain, farmers require to adjust to more efficient and productive systems. One important way to increase agricultural productivity is through the introduction of improved agricultural technologies and management systems. In particular, the study focuses on how levels of innovation, measured by complexity and investments requirements of the adopted technologies, relates to innovative behavior and complying with social responsibility practices, as two indicators of the farmer's behavior towards innovation. A typology of farmers with different technological levels was constructed based on multivariate techniques, according to the adoption of seven technologies. Findings showed three clusters: cluster I of high technology farms (32.2%), cluster II of farms with complex and low-cost technologies (27%), and cluster III of farms with low technology (40.68%). Within the cluster, it was identified that cluster I, farmers have a positive attitude toward innovation and the highest SR implementation rates. The farmers from cluster I were similar from cluster II in structural variables, but they significantly differ in innovative behavior attitudes. Cluster III, significantly differ with cluster I in structural variables, behavioral variables, and SR practices. The results showed the heterogeneity among farmers and the complexity of the adoption decision-making process shading lights on policy design to enhance innovation, research and technology transfer among farmers Acknowledgement :
    Keywords: Crop Production/Industries
    Date: 2018–07
  12. By: Batabyal, Amitrajeet
    Abstract: Recently, Batabyal and Yoo (2018) have analyzed Schumpeterian competition in a region that is creative a la Richard Florida and where the creative class is made up of existing and candidate entrepreneurs. These researchers assume that an existing entrepreneur has a fully enforced patent on the inputs or machines that he has produced. We dispense with this assumption and study a scenario in which there is no patent protection for the representative existing entrepreneur (REE). This REE can undertake two possible types of innovation at the same cost. The first (second) type of innovation is general (specific) and hence can (cannot) be copied by the so called candidate entrepreneurs. In this setting, we perform two tasks. First, we show that although the REE will never undertake the general innovation, he may undertake the specific innovation. Second, we point out that even though the general innovation is not undertaken, the value to the creative region from the general innovation exceeds that from the specific innovation.
    Keywords: Creative Class, General Innovation, Patent, Specific Innovation
    JEL: O31 R11
    Date: 2018–03–19
  13. By: Joel Ntsonde (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - PSL Research University - CNRS - Centre National de la Recherche Scientifique); Franck Aggeri (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - PSL Research University - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Dans la littérature des sciences de gestion, les chercheurs qui ont travaillé sur le concept d'innovation responsable se sont surtout concentrés, soit sur les problématiques de gestion des risques et des externalités négatives de l'innovation (Owen et al., 2013, Stilgoe et al., 2013), soit sur les méthodes qui peuvent permettre aux entreprises d'aligner leur stratégie d'innovation par rapport à des enjeux sociétaux (Ingham, 2011). En revanche, peu de travaux se sont intéressés aux processus de performation (Callon, 2017) de l'innovation responsable, c'est-à-dire, aux processus et mécanismes par lesquels une innovation responsable peut faire advenir la réalité qu'elle désigne. En mobilisant le concept « d'utopie rationnelle » (Aggeri, 2017, Metzger, 2001), notre article cherche à identifier les mécanismes à partir desquels une innovation responsable peut émerger, se pérenniser et devenir performative en matérialisant la vision et les discours qui la sous-tendent. A partir d'une étude qualitative de cinq projets d'innovation responsable destinés à lutter contre le gaspillage alimentaire en Ile de France, nous proposons un modèle théorique permettant de conceptualiser l'innovation responsable comme la résultante d'une dynamique d'action collective reposant sur des utopies rationnelles qui se structurent autour de deux processus : un processus cognitif et un processus organisationnel. A travers ce modèle, nous montrons également qu'une innovation responsable ainsi produite peut réciproquement contribuer à renforcer les utopies rationnelles qui la sous-tendent.
    Keywords: innovation responsable,utopie rationnelle,performativité,changement sociétal,gaspillage alimentaire,économie circulaire
    Date: 2018–10–17
  14. By: Ines Gabarret (EDC Paris); Benjamin Vedel (LEM - Lille - Economie et Management - UCL - Université catholique de Lille - Université de Lille - CNRS - Centre National de la Recherche Scientifique); Julien Decaillon
    Abstract: Social entrepreneurship is a relatively new object of research and, despite the growing interest it generates in the literature, there is a diversity of definitions and approaches. The objective of this paper is to contribute to the understanding of the motivation of social entrepreneurs by applying the push and pull approach. We study the entrepreneurial motivation of 8 social entrepreneurs. Findings suggest that social entrepreneurs are motivated by a combination of both push and pull factors and drivers of motivation are not only at an individual level (personal needs) but also at a social level through the recognition of social needs.
    Keywords: Entrepreneurship,Social entrepreneurs,Motivation,Push,Pull
    Date: 2017
  15. By: Losilla, L.; Engler, A.; Otter, V.
    Abstract: There is a continuing debate regarding firms internationalization pathways and the approaches used for firm categorization, resulting in controversial identification of the degree of firms globalization. The aim of this paper is to establish a framework to examine the changes in the internationalization strategies of agricultural export companies from emerging economies over time. Thereby seeking to identify conceptual and empirical differences in what is known of export firms acting in non-agricultural sectors in industrialized countries. The matrix of multi-nationality developed by Aggarwal et al. (2011) is extended and tested to classify 233 Chilean fresh fruit exporters according to their internationalization strategies. A longitudinal analysis is conducted over a seven-year period (2009-2015) to explore the dynamics on that internationalization process. Most firms are transregionally (65.12%) and globally oriented (16.06%), mainly following a linear internationalization path in terms of number of markets but acting more as born-global firms in terms of psychic distance. This study provides a more inclusive and nuanced framework than those used in previous studies to classify the level of firms internationalization. It also contributes to existing literature by studying companies from the agricultural sector in Chile longitudinally, as a prime example of emerging economies from Latin America. Acknowledgement : The authors acknowledge the support of the German Academic Exchange Service (DAAD) and the University of Costa Rica on doing this research.
    Keywords: International Relations/Trade
    Date: 2018–07
  16. By: Maximilian Goethner (FSU Jena); Sebastian Luettig (FSU Jena); Tobias Regner (FSU Jena)
    Abstract: Crowdinvesting emerged recently as an alternative way of funding for start-up projects. Our dataset consists of all pledges made at Companisto, one of the largest crowdinvesting platforms in Europe. Using cluster analysis based on individual investment histories, we find that crowdinvestors differ in their investment strategies and motivations. We can distinguish three types of crowdinvestors that vary in their response to project quality signals of entrepreneurs, project-related information reducing the degree of uncertainty and social influence by fellow investors: Casual Investors, Crowd Enthusiasts, and Sophisticated Investors. We conclude that crowdinvestors are anything but a homogeneous group. Instead, they are motivated by different factors and respond to different signals when making investment decisions.
    Keywords: Crowdinvesting, Entrepreneurial finance, New ventures, Cluster analysis, Social influence, Signaling
    JEL: G23 L26
    Date: 2018–11–07
  17. By: Nicola Grassano (European Commission - JRC); Alexander Coad (Pontificia Universidad Católica del Perú); Jacob Holm (Aalborg University); Christian Ostergaard (Aalborg University); Bram Timmermans (Norwegian School of Economics); Antonio Vezzani (European Commission - JRC)
    Abstract: In this brief we take the case of Denmark to analyse the role big R&D investing companies' play in job polarisation, focusing on a recent JRC report (Holm et al., 2017) studying skills, innovation and reorganization of labour
    Keywords: R&D Scoreboard companies, job polarisation, Denmark case
    Date: 2018–10
  18. By: McAleer, M.J.; Nakamura, T.; Watkins, C.
    Abstract: International and domestic rankings of academics, academic departments, faculties, schools and colleges, institutions of higher learning, states, regions and countries, are of academic and practical interest and importance to students, parents, academics, and private and public institutions. International and domestic rankings are typically based on arbitrary methodologies and criteria. Evaluating how the rankings might be sensitive to different factors, as well as forecasting how they might change over time, requires a statistical analysis of the factors that affect the rankings. Accurate data on rankings and the associated factors is essential for a valid statistical analysis. In this respect, the Times Higher Education (THE) World University Rankings is one of the three leading and most influential annual sources of international university rankings. Using recently released data for a single country, namely Japan, the paper evaluates the effects of size (specifically, the number of Full-Time Equivalent (FTE) students, or FTE(Size)) and internationalization (specifically, the percentage of international students, or IntStud) on academic rankings using THE data for 2017 and 2018 on 258 national, public (that is, prefectural or city), and private universities. The results show that both size and internationalization are statistically significant in explaining rankings for all universities, as well as separately for private and non-private (that is, national and public) universities, in Japan for each of 2017 and 2018.
    Keywords: International and domestic rankings, Size, Internationalization, National, public, and private universities, Changes over time
    JEL: C18 C81 I23 Y1
    Date: 2018–09–01
  19. By: Salamat Ali; Richard Kneller; Chris Milner
    Abstract: This paper examines the differential effects of domestic and international transportation distances on exports by Pakistan firms. It uses novel data on exports at the transaction-level and on the location of firms within the country, ports of entry/exit and modes of shipment over time. The study exploits a shift in the US security policy and IV estimation to circumvent the potential endogeneity of manufacturing location choice. The paper finds that access to trade-processing facilities is a key limiting factor to exports. On average, the marginal trade-restricting effect of domestic distance to port of exit is larger than that of international distance to ports of entry in export markets. Both elements of distance have negative effects on the intensive margin of firms’ exports and positive effects on extensive margins, albeit with absolutely larger effects due to domestic than international distance.
    Keywords: trade costs; domestic distance; structural gravity; trade margins; Pakistan
    Date: 2018
  20. By: Dell’Era, Michele; Opromolla, Luca David; Santos-Pinto,
    Abstract: This paper studies the impact of optimism on occupational choice using a general equilibrium framework. The model shows that optimism has four main qualitative effects: it leads to a misallocation of talent, drives up input prices, raises the number of entrepreneurs, and makes entrepreneurs worse off. We calibrate the model to match U.S. manufacturing data. This allows us to make quantitative predictions regarding the impact of optimism on occupational choice, input prices, the returns to entrepreneurship, and output. The calibration shows that optimism can explain the empirical puzzle of the low mean returns to entrepreneurship compared to average wages.
    Keywords: entrepreneurship; General Equilibrium; Optimism
    JEL: D50 H21 J24 L26
    Date: 2018–10
  21. By: Christopher F. Baum (Boston College; DIW Berlin; CESIS, KTH Royal Institute of Technology); Linda Dastory (CESIS, KTH Royal Institute of Technology); Hans Lööf (CESIS, KTH Royal Institute of Technology); Andreas Stephan (Jönköping International Business School; DIW Berlin)
    Abstract: STEM workers are considered to be key drivers for economic growth in the developed world. Migrant workers play an increasing role in the supply of this occupational category. We study the universe of STEM workers in the Swedish economy over the period 2003-2015 and find that migrants are less likely to form their own business, but those who are entrepreneurs earn income at least as large as that of their native-born counterparts. While the income differential for labor migrants may be partially explained by self-selection, the estimated effect is not significantly different between natives and refugee migrants.
    Keywords: STEM, migration, entrepreneurship, income, panel data
    JEL: F22 L26 J44 J61 O14
    Date: 2018–10–23
  22. By: Heike Mayer, Birgit Leick
    Abstract: The traditional understanding of entrepreneurship is biased towards certain population groups and specific locations. Yet the literature points to a much more diverse perspective on entrepreneurship and regional development. In this paper, we argue that regional characteristics such as the extent to which a region faces demographic change (population growth or decline, population ageing, emigration of youth, etc.) may exert a strong influence both on the individual propensity to start a business and the aggregate numbers of entrepreneurial activities. In addition, demographic change also influences the types of businesses or business models found in different regional contexts. With this idea in mind, we argue that the opportunities and challenges that are associated with old age entrepreneurship depend strongly on the regional context. We place old age entrepreneurship into a regional context and illustrate the ways in which opportunities and constraints arise from such a context and, in particular, from demographic change occurring in different regional types.
    Keywords: Entrepreneurship, Ageing, Silver Economy, Regional Development
    Date: 2018–11
  23. By: World Bank Group
    Keywords: Finance and Financial Sector Development - Access to Finance Finance and Financial Sector Development - Debt Markets Finance and Financial Sector Development - Finance and Development Finance and Financial Sector Development - Financial Sector and Social Assistance Private Sector Development - Small and Medium Size Enterprises
    Date: 2018–09
  24. By: Yamamoto, Satoshi; Kan, Viktoriya
    Keywords: Entrepreneurial Orientation, Entrepreneurial Intention, Effectual Behavior, Japanese Small and Medium-sized Enterprises
    Date: 2018–10
  25. By: Kaku Attah Damoah; Giorgia Giovannetti; Marco Sanfilippo
    Abstract: This paper examines if and to what extent micro-level distortions affect structural transformation in a developing country by creating entry barriers. We show that while average price-cost margin trigger firm entry, a large dispersion of markups deters new firms from entering the market, thereby disrupting the process of new enterprise creation. We exploit information from the Ethiopian annual census of manufacturing establishments to estimate markups and then dispersion at sector and location-sector wide levels. Results show that higher markups dispersion significantly reduces entry rate into a market even in presence of expected positive average markups. Extension of our framework shows that market distortions caused by markup dispersion are related to a statistically significant drop in aggregate TFP and employment growth. Policies fostering competition on the other hand can reduce entry barriers created by market distortions.
    Keywords: Firm Entry, Markup Dispersion, African Manufacturing, Ethiopia
    JEL: D22 L22 O14 O25
    Date: 2018
  26. By: Gupta, Apoorva (University of Nottingham); Patnaik, Ila (National Institute of Public Finance and Policy); Shah, Ajay (National Institute of Public Finance and Policy)
    Abstract: The positive correlation between firm productivity and export status is well established. This correlation can arise from multiple alternative casual models. We investigate these relationships, harnessing the transition of several firms from serving the domestic market to exporting, in a dataset of Indian firms from 1989 to 2015. Each firm which made the transition is matched against a control which did not. The transitions take place across many years, thus permitting a matched event study in firm outcomes. We find there is self-selection of more productive firms into exporting. Firms that make the transition become bigger, but there is little evidence of learning by exporting, of improvements in productivity right after exporting commences. However, there is evidence of mprovement in productivity of export starters a couple of years before they begin to export.
    JEL: F43 L1 D24
    Date: 2018–11

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