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on Small Business Management |
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Issue of 2024–11–25
twenty-one papers chosen by João Carlos Correia Leitão, Universidade da Beira Interior |
| By: | Lars Hornuf; Matthias Mattusch |
| Abstract: | Fintech startups have set out to revolutionize the financial world. However, little is known about how successful and innovative these firms actually are. This paper investigates firm failure, funding success, and innovation capacity using a hand-collected dataset of 892 German fintechs founded between 2000 and 2021. We find that founders with a business degree and entrepreneurial experience have a better chance of obtaining funding, while founder teams with science, technology, engineering, or mathematics backgrounds file more patents. Early third-party endorsements and foreign partnerships substantially increase firm survival. We also establish the following stylized facts: (1) fintechs focusing on business-to-business models and which position themselves as technical providers prove to be more effective; and (2) fintechs competing in segments traditionally reserved for banks are generally less successful and less innovative. These results have important implications for the early-stage success management of fintech firms and the investment decisions of venture capital funds and government startup programs. |
| Keywords: | Fintech industry, firm funding, firm failure, innovation capacity |
| JEL: | G24 M13 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11301 |
| By: | Marius Berger; Antoine Dechezleprêtre; Milenko Fadic |
| Abstract: | Government Venture Capital (GovVC) has emerged as a policy tool to complement private venture capital (Private VC) by funding innovation-driven firms that might not attract traditional VC investment. This study analyses GovVC's role in OECD Member countries using comprehensive data on entrepreneurial firms, investors, and patents, with GovVC entities identified through surveys of ministry experts. The analysis shows that GovVC-funded firms are typically riskier than Private VC funded ones and generally demonstrate lower performance in securing follow-on funding and innovation output. However, when GovVCs partner with Private VC investors, these performance gaps diminish significantly. In co-investment scenarios, firms show comparable innovation and exit performance to those funded solely by Private VC. The findings indicate that GovVC can effectively direct capital to overlooked firms, particularly when working in partnership with private investors. |
| Keywords: | Entrepreneurship, Government Policy, Innovation, Venture Capital |
| JEL: | G24 O38 O31 |
| Date: | 2024–11–12 |
| URL: | https://d.repec.org/n?u=RePEc:oec:stiaaa:2024/10-en |
| By: | Pascale Bueno Merino (EMLV - École de management Léonard de Vinci); Marie-Hélène Duchemin (UNIROUEN - Université de Rouen Normandie - NU - Normandie Université) |
| Abstract: | This article explores the contribution of psychological entrepreneurial support, based on same-gender group mentoring, to the strengthening of female entrepreneurial intention in the specific context of a women-only incubator. In other words, it examines the combined effect of gender-based differentiation and group dynamics on the process of incubating women entrepreneurs. Indeed, according to the literature on female entrepreneurship, women entrepreneurs are faced with specific challenges that influence their entrepreneurial intention such as a lack of self-confidence, caused by gender stereotypes, and conflict between family life and entrepreneurial career. More precisely, our research aims to determine how psychological entrepreneurial support is implemented in the incubation process to overcome these specific challenges, and the mechanisms for strengthening female entrepreneurial intention analyzed at both intrapersonal and interpersonal levels. Thanks to a qualitative methodology, our findings suggest that psychological entrepreneurial support delivered via same-gender group mentoring, at the beginning of the incubation process, reinforces female entrepreneurial intention, thanks to a mechanism of external approval and a process of deconstruction of gender stereotypes about female entrepreneurship. Role modeling provided by same-gender group mentoring facilitates the identity work of women entrepreneurs in search of entrepreneurial legitimacy and enables them to overcome various psychological barriers related to a lack of self-confidence or pressure stemming from the family environment. We discuss the implications of our findings on related research into business incubators and the design of mentoring programs adapted to the needs of women entrepreneurs. |
| Keywords: | Female entrepreneurship Women-only incubator Psychological entrepreneurial support Entrepreneurial intention Same-gender group mentoring, Female entrepreneurship, Women-only incubator, Psychological entrepreneurial support, Entrepreneurial intention, Same-gender group mentoring |
| Date: | 2022–12–15 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04722239 |
| By: | Paolo Carioli; Dirk Czarnitzki; Christian Rammer |
| Abstract: | We investigate the effects of different channels of industry-science collaboration on new product sales at the firm-level and whether government subsidies for collaboration make a difference. We distinguish four collaboration channels: joint R&D, consulting/contract research, IP licensing, human resource transfer. Employing firm-level panel data from the German Community Innovation Survey and a conditional difference-in-differences methodology, we find a positive effect of industry-science collaboration on product innovation success only for joint R&D, but not for the other three channels. The positive effect is limited to subsidized collaboration. Our results suggest that government subsidies are required to bring firms and public science into forms of collaboration that are effective in producing higher innovation output. |
| Keywords: | Industry-science collaboration, transfer channels, product innovation, treatment effects analysis |
| Date: | 2024–10–23 |
| URL: | https://d.repec.org/n?u=RePEc:ete:ecoomp:751257 |
| By: | Grillitsch, Markus (CIRCLE, Lund University); Asheim, Björn (University of Stavanger) |
| Abstract: | The chapter discusses the theoretical reorientation in economic geography over the last twenty years from a focus on structures, represented by regional innovation systems, to addressing the role of human agency in regional economic development, and reflects on what the two approaches can contribute to achieving sustainable regional restructuring. We are doing this by focusing on two articles – published in 2002 and 2022 - representing the two approaches. The 2002 article discusses the role of place-specific, local resources and external knowledge in strengthening the competitiveness and innovativeness of firms and regions. This perspective is still relevant in analyses and designs of regional innovation policies. However, a realisation of the shortcomings of a structural approach to explaining the variations of regional development outcomes in different types of regions, has led to a more explicit focus on the importance of change agency in regional change processes, as articulated in the 2022 article. |
| Keywords: | Regional innovation systems; human change agency; regional restructuring; sustainability challenges; local and global; innovation policy |
| JEL: | O30 R10 |
| Date: | 2024–10–30 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:lucirc:2024_013 |
| By: | Gwenaëlle Prigent (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (1965 - 2019) - CNRS - Centre National de la Recherche Scientifique - UniCA - Université Côte d'Azur, UniCA - Université Côte d'Azur) |
| Abstract: | This article examines the impact of crises on cultural and creative entrepreneurs (CCEs) and their entrepreneurial ecosystem. Through a qualitative study based on semi-structured interviews (n=21), we explore the reactions of CCEs to crises, as well as the evolution of their ecosystem. Entrepreneurs in this field face specific injunctions during crises, requiring a deep understanding to support them effectively. In this perspective, this research aims to answer the following questions: How do CCEs react to crises? To what extent does the entrepreneurial ecosystem evolve in response to the injunctions induced by crises? The results reveal a diversity of reactions from entrepreneurs, ranging from opportunism to conviction, including wait-and-see attitudes, in the face of challenges posed by crises such as the COVID-19 crisis and the climate crisis. These reactions reflect various strategies to address challenges while exploring the opportunities presented by crises. In conclusion, this article contributes to a better understanding of the dynamics of cultural and creative entrepreneurship in a context of constant change, offering perspectives for the development of policies and support programs adapted to the specific needs of these entrepreneurs. |
| Abstract: | Cet article examine l'impact des crises sur les entrepreneurs culturels et créatifs (ECC) et leur écosystème entrepreneurial. À travers une étude qualitative basée sur des entretiens semi-directifs (n=21), nous explorons les réactions des ECC face aux crises, ainsi que l'évolution de leur écosystème. Les entrepreneurs de ce domaine sont confrontés à des injonctions spécifiques en période de crise, nécessitant une compréhension approfondie pour les soutenir efficacement. Dans cette perspective, cette recherche propose de répondre à la problématique suivante : Comment les ECC réagissent aux crises ? Dans quelle mesure l'écosystème entrepreneurial évolue en réponse aux injonctions induites par les crises ? Les résultats révèlent une diversité de réactions des entrepreneurs, allant de l'opportunisme à la conviction en passant par l'attentisme, face aux défis posés par les crises telles que la crise du COVID-19 et la crise climatique. Ces réactions reflètent des stratégies variées pour faire face aux défis tout en explorant les opportunités offertes par les crises. En conclusion, cet article contribue à une meilleure compréhension des dynamiques de l'entrepreneuriat culturel et créatif dans un contexte de changement constant, offrant des perspectives pour le développement de politiques et de programmes de soutien adaptés aux besoins spécifiques de ces entrepreneurs. |
| Keywords: | Entrepreneur culturel et créatif, écosystème entrepreneurial, Crises |
| Date: | 2024–10–22 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04752724 |
| By: | Hunt, Jennifer (Rutgers University); Cockburn, Iain (Boston University); Bessen, James (Boston University) |
| Abstract: | Using our own data on Artificial Intelligence publications merged with Burning Glass vacancy data for 2007-2019, we investigate whether online vacancies for jobs requiring AI skills grow more slowly in U.S. locations farther from pre-2007 AI innovation hotspots. We find that a commuting zone which is an additional 200km (125 miles) from the closest AI hotspot has 17% lower growth in AI jobs' share of vacancies. This is driven by distance from AI papers rather than AI patents. Distance reduces growth in AI research jobs as well as in jobs adapting AI to new industries, as evidenced by strong effects for computer and mathematical researchers, developers of software applications, and the finance and insurance industry. 20% of the effect is explained by the presence of state borders between some commuting zones and their closest hotspot. This could reflect state borders impeding migration and thus flows of tacit knowledge. Distance does not capture difficulty of in-person or remote collaboration nor knowledge and personnel flows within multi-establishment firms hiring in computer occupations. |
| Keywords: | Artificial Intelligence, technology adoption and diffusion |
| JEL: | O33 R12 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17325 |
| By: | Fafaliou, Irene; Konstantios, Dimitrios; Giaka, Maria; Polemis, Michael |
| Abstract: | The relationship between innovation and corporate sustainability constitutes a long-lasting debate among policymakers and researchers. Despite the significant contributions to this field, extant literature does not provide clear answers. This can be attributed to the fact that prior studies do not incorporate the various aspects of innovation to measure their impact on sustainability performance. This study aims to cover this gap in the emerging literature by using a unique micro-level panel dataset consisting of many firms scattered across the US states over the period 2007-2016. Our findings reveal that the basic mechanism for achieving corporate sustainability is through the innovation channel. We also argue that the quantity and value of innovation enhance the sustainability level, whereas these effects are strengthened in times of recession. The empirical results survive robustness checks under alternative innovation measures and different econometric techniques dealing with endogeneity and reverse causality |
| Keywords: | Innovation; Sustainability; Patents; Trademarks; SMEs |
| JEL: | L2 O31 O34 |
| Date: | 2024–11–01 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:122576 |
| By: | Kauhanen, Antti; DeVaro, Jed |
| Abstract: | Abstract This brief examines the economic impacts of skilled immigration on firms, innovation, and labour markets. Research shows that skilled immigration generally has positive effects on firm performance, productivity, and innovation. Immigrant inventors play a crucial role in innovation, with evidence showing they produce a disproportionate share of patents and have positive spillover effects on native collaborators. Contrary to common fears, most studies find that skilled immigration does not negatively impact native workers’ wages or employment on average. In fact, it can benefit natives with complementary skills. The availability of skilled immigrant labour also influences firms’ location decisions, with restrictions on immigration leading to increased offshoring of jobs. While the fiscal impacts of immigration are debated, traditional accounting methods suggest a positive fiscal impact for highly educated immigrants. However, these estimates often fail to account for indirect effects like productivity gains and innovation. Overall, the evidence indicates that skilled immigration is a valuable tool for addressing productivity challenges and innovation needs, particularly in countries facing declining working-age populations. |
| Keywords: | Productivity, Innovations |
| JEL: | J61 J31 D24 |
| Date: | 2024–10–28 |
| URL: | https://d.repec.org/n?u=RePEc:rif:briefs:141 |
| By: | Khaoula EL AARAJ (Université Hassan 1er [Settat]); Karam Said (Université Hassan 1er [Settat]); Saddek Kamal (Université Hassan 1er [Settat]) |
| Abstract: | Female entrepreneurship has noticeably become a key driver in economic development both locally and globally. Due to its economic and social positive impact, researchers consider female entrepreneurship as a promising solution to the current economic crisis. As a result, incorporating women into economic development has become essential, leading to heightened interest among scholars around the world in the field of women entrepreneurs. The provided article draws on a comprehensive literature review of 36 studies selected from a corpus of 157 articles, sourced from databases like Scopus, JSTOR, and Clarivate Analytics. Our research explores various theories related to female entrepreneurship, offering an in-depth analysis of the key factors influencing women's entrepreneurial journeys. The diverse perspectives examined highlight the central role that motivations, challenges, strategies, as well as social and economic dynamics, play in shaping the trajectories of female entrepreneurship. Based on these insights, the article proposes strategic avenues and recommendations aimed at creating a more favourable environment to strengthen the success and inclusion of women in economic development. |
| Abstract: | Aujourd'hui, l'entrepreneuriat féminin joue un rôle crucial dans le développement économique. Les bénéfices économiques et sociaux de l'entrepreneuriat féminin sont très positifs pour l'économie mondiale. Certains chercheurs affirment que l'entrepreneuriat féminin pourrait devenir l'une des solutions à la crise économique actuelle. Pour ces raisons, l'intégration des femmes dans le développement économique est devenue une nécessité. Cela explique l'intérêt croissant manifesté par de nombreux chercheurs dans le monde pour les femmes entrepreneures. Cet article s'appuie sur une revue de littérature portant sur 36 articles sélectionnés parmi un corpus de 157 études, issus de bases de données telles que Scopus, Jstor et Clarivate Analytics, afin d'explorer les théories relatives à l'entrepreneuriat féminin. Les perspectives variées examinées dans cette revue permettent une analyse approfondie des facteurs influençant l'entrepreneuriat féminin. On peut en conclure que les motivations, les défis, les stratégies adoptées ainsi que les dynamiques sociales et économiques jouent un rôle central dans la trajectoire des femmes entrepreneures. À partir de cela, des pistes stratégiques et des recommandations peuvent être proposées dans le but de créer un environnement favorable pour renforcer le succès entrepreneurial des femmes et soutenir leur inclusion dans le développement économique. |
| Keywords: | Female entrepreneurship, Entrepreneurial success, Determinants, Theoretical analysis, Entrepreneuriat féminin, Succès entrepreneurial, Déterminants, Analyse théorique |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04738935 |
| By: | Chavda, Ankur (HEC Paris); Gans, Joshua S. (University of Toronto); Stern, Scott (Massachusetts Institute of Technology) |
| Abstract: | How should theory-based entrepreneurs search for strategies to implement their ideas? The theory-based view of strategy posits that decision-makers hold theories about their environment premised on beliefs that should be actively tested. This causal framework, which underlies the theory-based view, also has implications for entrepreneurial search: the process by which entrepreneurs uncover strategies to implement their ideas. In this paper, we develop a Bayesian model where entrepreneurs update their beliefs as they conduct entrepreneurial search. We find several optimal behaviors for theory-based entrepreneurs such as reverting to a previous strategy after finding a relatively poor strategy and continuing to search after finding a relatively good strategy, which are missing when entrepreneurs lack such a theory-based approach. As these predictions align with examples of successful entrepreneurs, our findings both provide a method to empirically identify skilled entrepreneurs and demonstrate the usefulness of applying the theory-based view to entrepreneurial behavior more generally. |
| Keywords: | entrepreneurial search; theory-based view; stopping rule; Knightian uncertainty |
| JEL: | D81 D83 O32 |
| Date: | 2024–02–13 |
| URL: | https://d.repec.org/n?u=RePEc:ebg:heccah:1505 |
| By: | Donni Fajar Anugrah (Bank Indonesia); Aryo Sasongko (Bank Indonesia); Wahyoe Soedarmono (Sampoerna University); Andi Tiara Putri Marasanti (Bank Indonesia) |
| Abstract: | The foundation of a strong and resilient economy can be done through implementing accelerated policy in various economic sectors to keep the growth trends positive and sustainable. Thus, one of the things that can promote sustainable growth is conducting a comprehensive study about the related topic. Using literature survey method, this study aims to serve a comprehensive literature review from internal Bank Indonesia, and to identify research gaps between studies to help further research. This study mainly discusses and analyses 123 research conducted by Bank Indonesia from 1993 to 2022. These prior findings explained that Indonesia’s economic growth has consistently been promoted by capital, labour, and innovation. Both human capital and research and development (R&D) also positively boost economic growth. Furthermore, Bank Indonesia has also conducted extensive research about growth diagnostic and growth strategy. To complete the findings, this study also included previous research about macroeconomic modelling arranged by Bank Indonesia. |
| Keywords: | Economic Growth, Macroeconomic Model, Literature Survey |
| JEL: | O40 O42 O47 |
| Date: | 2023 |
| URL: | https://d.repec.org/n?u=RePEc:idn:wpaper:wp082023 |
| By: | Andres, Pia |
| Abstract: | Low cost solar energy is key to enabling the transition away from fossil fuels. Despite this, the European Union followed the United States’ example in imposing anti-dumping tariffs on solar panel imports from China in 2013, arguing that Chinese panels were unfairly subsidised and harmed its domestic industry. This paper examines the effects of Chinese import competition on firm-level innovation in solar photovoltaic technology by European firms using a sample of 10, 137 firms in 15 EU countries over the period 1999–2020. I show that firms which were exposed to higher import competition innovated more if they had a relatively small existing stock of innovation, but less if their historical knowledge stock fell within the top 10th percentile of firms in the sample. This suggests that newer firms were more able to respond to increased competition by innovating, while firms with a large historical stock of innovation may have been locked into old technological paradigms. As firms with a smaller knowledge stock tended to innovate more overall, trade with China appears to have been beneficial in encouraging innovation among the most innovative firms. However, I also find evidence that import competition increased the probability of exit among firms in the sample. |
| JEL: | R14 J01 |
| Date: | 2024–10–07 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:125249 |
| By: | Bojicic-Dzelilovic, Vesna; Kostovicova, Denisa; Causevic, Fikret |
| Abstract: | Establishing economic collaboration between previously antagonistic groups during post-conflict business recovery advances peacebuilding by nurturing intergroup ties. However, we have a limited understanding of how post-conflict intergroup economic collaboration develops and how it is sustained. We address these gaps from the perspective of peace-positive entrepreneurship. Specifically, an ecosystem approach that we apply directs analysis to dynamic entrepreneurial action in the local context. To examine the role of intergroup interactions in decision-making of entrepreneurs in post-conflict business recovery and in response to the economic disruption caused by the COVID-19 pandemic, we conducted fieldwork on two micro-economies in Bosnia and Herzegovina. Our findings demonstrate that entrepreneurs’ engagement across ethnic lines was a main facet of resource mobilisation strategies that enabled them to (re)establish and develop market presence post-conflict. Likewise, intergroup economic collaboration was a lynchpin of entrepreneurs’ effective response to the COVID-19 economic shock. This path-dependent analysis of entrepreneurial action shows that intergroup economic collaboration is not simply a side-effect of post-conflict business recovery and development. Rather, intergroup economic collaboration also needs to be actively pursued by entrepreneurs attuned to the local context. Intergroup economic collaboration can be instrumental in business (re)engagement in the post-conflict economy, generating wider benefits to peacebuilding. |
| Keywords: | entrepreneurship; interethnic relations; political economy; peacebuilding; Bosnia and Herzegovina |
| JEL: | J1 |
| Date: | 2024–10–09 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:125561 |
| By: | Bartram, Sohnke M. (U of Warwick); Brown, Gregory W. (U of North Carolina at Chapel Hill); Stulz, Rene M. (Ohio State U and ECGI) |
| Abstract: | Average idiosyncratic volatility and firm idiosyncratic volatility increase with the number of listed firms. Average industry idiosyncratic volatility increases with the number of listed firms in the industry. We explain the relation between idiosyncratic volatility and the number of listed firms through Schumpeterian creative destruction. We show that Schumpeterian creative destruction increases as the number of listed firms increases. However, there is no consistent evidence of an incremental effect of the number of non-listed firms on idiosyncratic volatility either in the aggregate or at the industry level, suggesting that listed firms play a unique role in the dynamism of the economy. |
| JEL: | G10 G11 G12 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:ecl:ohidic:2024-09 |
| By: | Lakemann, Tabea; Beber, Bernd; Lay, Jann; Priebe, Jan |
| Abstract: | In many developing countries, micro, small, and medium enterprises (MSMEs) employ more people than any other type of firm, so identifying ways to raise productivity, improve employment conditions, and formalize labor in these settings is of prime policy importance. However, due to the small number of workers per firm and the possibly long results chain linking management to employment, few MSME-targeted interventions and evaluations address job-related outcomes directly. We do so in a randomized controlled trial (RCT) of a support program for MSMEs in Côte d'Ivoire that included financial management and human resources (HR) components. Six and 18 months after the end of the program, we find muted impacts on business practices, access to finance, and firm performance. On the employment side we find positive and significant impacts on job quality, driven by the share of employees receiving at least the minimum wage and the share with written contracts. We find no significant effect on the number of staff. Taken together, our results underscore the difficulty of boosting firm performance and creating jobs with a low-intensity intervention on the one hand, and the feasibility and importance of improvements in employment quality in MSMEs in developing countries on the other. |
| Keywords: | Côte d'Ivoire, MSME support, employment quality, firm performance, randomized controlled trial |
| JEL: | O12 L26 M10 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:gigawp:305255 |
| By: | Antonio Minniti (Department of Economics, University of Bologna); Klaus Prettner (Department of Economics, Vienna University of Economics and Business); Francesco Venturini (Department of Economics, University of Urbino) |
| Abstract: | We study how the development of Artificial Intelligence (AI) influences the distribution of income between capital and labor and how this, in turn, exacerbates geographic income inequality. To investigate this issue, we first build a theoretical framework and then analyze data from European regions dating back to 2000. We find that for every doubling of regional AI innovation, there is a 0.7% to 1.6% decline in the labor share, which may have decreased by between 0.20 and 0.46 percentage points from a mean of 52% due solely to AI. This new technology is particularly detrimental to high-skill and medium-skill labor. The impact on income distribution is driven by worsening wage and employment conditions for high-skill labor, and by wage compression for medium- and low-skill labor. The effect of AI is not driven by other factors affecting regional development in Europe, nor by the concentration process in the AI market. |
| Keywords: | Artificial Intelligence, patenting, labor share, European regions |
| JEL: | O31 O32 O34 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:wiw:wiwwuw:wuwp369 |
| By: | Maria Giovanna Brandano (Gran Sasso Science Institute); Giulia Urso (Gran Sasso Science Institute) |
| Abstract: | Cultural and Creative Industries (CCIs) have been variously seen as a stimulus for urban and regional development. Interestingly, in the U.K. and other EU countries, they have been one of the few sectors that have weathered the storm of the 2008 Great Recession. Starting from the curiosity that these premises arise given the paucity of studies on the Italian CCIs, we analyze the resilience of the sector in the face of that economic shock to ascertain whether this was the case also in Italy. We use data from the Aida-Bureau van Dijk database on more than 181, 000 enterprises for the period 2010-2018. The number of employees and that of cultural and creative enterprises is gathered for 18 Nace Rev.2 sectors, to disentangle the contribution of each sub-sector to the growth of the industry. Information is available at the firm level, but we use it at NUTS-3 one. Using a System Generalized Method of Moments (GMM-SYS) approach, and controlling for some socioeconomic characteristics, we examine the determinants of the CCIs growth in the post-shock period, ultimately contributing to the still under-explored debate on the resilience of the sector in Italy also accounting for macro-regional and peripherality effects. |
| Keywords: | CCIs; Resilience; Great Recession; Italy; Dynamic panel |
| JEL: | L8 R12 C33 |
| Date: | 2022–11 |
| URL: | https://d.repec.org/n?u=RePEc:ahy:wpaper:wp34 |
| By: | Paul Heidhues; Mats Köster; Botond Kőszegi; Botond Köszegi |
| Abstract: | We develop a theory of digital ecosystems built on the premise that a multi-market firm can steer users it has in one market toward its products in other markets. Due to this “cross-market leverage, ” a leader in an “access-point” market (where users begin their online journeys) derives a high value from offering services in connected markets (where users continue their journeys), and can thus make profitable takeovers. Indeed, because the firm has the outside option of acquiring, and steering users toward, its target’s competitor, it can take over the target at a discount. In contrast, other firms have no or smaller incentives for takeovers, explaining why ecosystems grow out of market leaders at access points. Conversely, cross-market leverage also implies that once an ecosystem has grown, it has an increased value of controlling access points, so it may go to great lengths to dominate these markets. Our theory suggests that ecosystems have mixed implications for consumer welfare. Under plausible assumptions, a to-be ecosystem takes over market leaders, and this consolidation of good services across markets benefits consumers in the short run. But an ecosystem’s takeovers and dominance of access points lower incentives for entry and innovation, and lower the efficiency of access-point markets with superior alternatives. Hence, the long-run welfare implications of ecosystems are often negative. |
| Keywords: | digital ecosystems, takeover, contestability, entry, envelopment, default effects, steering |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11332 |
| By: | Elin Colmsjoe (Department of Economics, University of Copenhagen) |
| Abstract: | This study explores how intergenerational inter vivos transfers influence the longrun wealth accumulation of individuals by supporting investments in housing and private business wealth early in the life cycle. A unique Danish policy setting allows me to identify untaxed wealth transfers channeled through housing market entries. Utilizing plausibly exogenous variation in transfer amounts, I find that transfers lead to significant growth in housing wealth, increased business ownership, and higher firm revenues among recipients over the subsequent ten years. The effects are underpinned by greater credit access and lower interest rates stemming from parents’ financial support. Benefits of transfers are more pronounced at younger ages, indicating that their timing in the life cycle matters to lifelong wealth building. |
| Keywords: | Intergenerational transmission; wealth; inter vivos transfers; entrepreneurship; Credit |
| JEL: | C14 D11 C78 |
| Date: | 2024–08–15 |
| URL: | https://d.repec.org/n?u=RePEc:kud:kucebi:2402 |
| By: | Davydova, Daria (Ecole Polytechnique Federale de Lausanne); Fahlenbrach, Rudiger (Ecole Polytechnique Federale de Lausanne and ECGI); Sanz, Leandro (Ohio State U); Stulz, Rene M. (Ohio State U and ECGI) |
| Abstract: | Unicorns are startups that choose to stay private even though they are large enough to go public. We propose an efficiency explanation for their existence. Startups relying highly on organization capital are more vulnerable to expropriation of their organization capital if they go public before their position is sufficiently secure. Our main empirical findings are that shocks to the fragility of organization capital decrease the IPO likelihood, unicorn status enables startups to stay private longer by giving them access to new sources of capital, and unicorns and their industries have higher organization capital intensity than other startups. |
| JEL: | G24 G32 G34 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:ecl:ohidic:2024-10 |