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on Entrepreneurship |
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Issue of 2005‒11‒12
thirteen papers chosen by Marcus Dejardin Facultés Universitaires Notre-Dame de la Paix |
| By: | Nykvist, Jenny (Department of Economics) |
| Abstract: | Do potential entrepreneurs face liquidity constraints? Or to put it differently, does a person have to be wealthy to start a new business? This question has been discussed in a large literature that has documented a positive relationship between initial wealth and entrepreneurship. However, in a recent paper Hurst and Lusardi (2004) use higher order of polynomials in wealth and find that there is no relationship between household initial wealth and the probability of starting an own business throughout most of the wealth distribution in the United States. In this paper we examine this relationship using similar methods on Swedish data. The data set used is LINDA, a register-based longitudinal data set for Sweden. The relationship is estimated using probit models with different specifications of wealth. However, the result that wealth is not important for new entrepreneurs cannot be replicated. Instead, the main finding of the paper is that the relationship between wealth and transition into entrepreneurship is positive but diminishing for the major part of the wealth distribution. Moreover, the relationship between wealth and entrepreneurship gets stronger as the models get less restricted with respect to wealth. Our result leads us to the conclusion that liquidity constraints do play a significant role when determining transition into entrepreneurship in Sweden. |
| Keywords: | Liquidity constraints; wealth; entrepreneurship; starting capital; business ownership |
| JEL: | D31 J23 J24 M13 |
| Date: | 2005–09–10 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:uunewp:2005_021&r=ent |
| By: | William R. Latham (Department of Economics,University of Delaware); Christian Le Bas |
| Abstract: | A growing body empirical literature deals with persistence in innovation. However, there is neither a survey of the development and status of the field nor a clear statement of a theory of persistence which includes a formal model of the dynamics of firm persistence. This paper fills these gaps by first providing a survey of previous studies of persistence, then presenting a theory, based on the evolutionary approach, to explain the choice of firms to innovate persistently, sporadically or not at all, and finally describing a formal model which shows some striking results corroborated by recent empirical evidence. |
| Keywords: | Persistence, Innovation, Evolutionary |
| JEL: | O31 B52 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:dlw:wpaper:05-14&r=ent |
| By: | Cumming,D.; Johan,S. (TILEC (Tilburg Law and Economics Center)) |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubtil:200503&r=ent |
| By: | McCahery,J.A.; Vermeulen,E.P.M. (TILEC (Tilburg Law and Economics Center)) |
| Date: | 2004 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubtil:200424&r=ent |
| By: | Juhan Teder (School of Economics and Business Administration, Tallinn University of Technology); Urve Venesaar (School of Economics and Business Administration, Tallinn University of Technology) |
| Abstract: | The research is based on the empirical survey conducted among the members of Estonian Association of SMEs. The study involved goal setting, development and implementation of strategies, competitive advantages striven for, orientation toward growth, and factors hindering enterprises’ development. As a result, characteristics of strategic management in enterprises with different levels of growth orientation (expanding, stable and declining enterprises) as well as those depending on other enterprise’s characteristics (e.g., coincidence of managers and owners; age and size of enterprises, etc) were proposed. The analysis showed the existence of clear relationship between the coincidence of owners and managers and existence of formalised plans, whereby company growth leads to the increasing difference of coincidence of owners and managers and therefore increases the role of strategic plans in the enterprises. Measures taken for strategy formation (e.g. managers’ role, cooperation) are supporting factors for positive implementation performance of the intended strategy in expanding firms. The analysis of the factors hindering company growth indicates an increasing need for managers’ training in the area of strategic management. National entrepreneurship policy should, in addition to supporting start-up enterprises, pay more attention to supporting the implementation of company growth potential by help of relevant measures. |
| Keywords: | SME, strategic management; strategy implementation, coincidence of managers and owners, growth orientation, growth barriers, entrepreneurship policy. |
| JEL: | L25 M21 O21 O38 |
| URL: | http://d.repec.org/n?u=RePEc:ttu:wpaper:tutwpe05/126&r=ent |
| By: | Goedhuys, Micheline (United Nations University, Institute for New Technologies) |
| Abstract: | Using a unique firm level data set on learning and product innovation in Tanzanian manufacturing and commercial farming, this paper sheds light on the various sources of firm learning, investment and collaboration and their relative importance for product innovation. The results indicate that larger and foreign owned firms invest significantly more in human and physical capital than do local micro, small and medium sized firms, and they are better connected to the internet. Their ways of upgrading technology also reveals a better financial endowment. Small and medium sized firms on the other hand report to collaborate more intensively with other local firms on product development, marketing and on the input market and upgrade technology through in-house activities, imitation and cooperation with suppliers and universities. By doing so, they are able to offset the scale disadvantages they face in competing for the market information and inputs – new machinery and specialised labour - necessary for product innovation in imperfect markets. |
| Keywords: | learning, innovation, technological change, competitiveness, multinational corporations, MNEs, small and medium enterprises, SMEs, investment, Tanzania |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:unuint:200507&r=ent |
| By: | Barbara M. Roberts; Steve Thompson |
| Abstract: | This paper explores the impact of turnover and restructuring on labour productivity in the Polish economy over the period 1988-1993. Changes in aggregate productivity are decomposed into elements corresponding to productivity growth among survivors, market share growth by survivors and the contributions of entering and exiting firms. The traditional entry and exit effects begin to work as transition to a market economy progresses. However, initial productivity improvements are due to changes to market shares of the existing firms following the break-up of large enterprises. Regression analysis shows that changes in the firm-level productivity are affected by restructuring and a more competitive economic environment. |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:lec:leecon:05/27&r=ent |
| By: | Falilou Fall (EUREQua) |
| Abstract: | The purpose of this paper is to demonstrate that inherited humain capital is a powerful vector of inequality formation and persistence, irrespective of its links with financial wealth endowment. This paper argues that the agents who inherit a low level of human capital bear a greater utility cost in their educational investment and that there are different profiles of returns on human capital within the economy. These two arguments are sufficient to generate an endogenous formation of workers' and entrepreneurs' groups and a continuum of steady states with inequality. Allowing for self-employment in the model generates the possibility of equality at equilibrium in addition to the inequality equilibrium with the emergence of a middle class. |
| Keywords: | Endogenous inequality, human capital, occupational choice, education. |
| JEL: | J24 J62 J31 D33 |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:mse:wpsorb:v05059&r=ent |
| By: | Erik Hurst; Arthur Kennickell; Annamaria Lusardi; Francisco Torralba |
| Abstract: | In this paper, we show the pivotal role business owners play in estimating the importance of the precautionary saving motive. Since business owners hold larger amounts of wealth than other households for non-precautionary reasons and also face highly volatile income, they induce a correlation between wealth and income risk regardless of whether or not a precautionary saving motive exists. Using data from the Panel Study of Income Dynamics in the 1980s and the 1990s, we show that among both business owners and non-business owners, the size of precautionary savings with respect to labor income risk is modest and accounts for less than ten percent of total household wealth. However, pooling together the two groups leads to an artificially high estimate of the importance of precautionary savings. New data from the Survey of Consumer Finances further confirms that precautionary savings account for less than ten percent of total wealth for both business owners and non-business owners. Thus, while a precautionary saving motive exists and affects all households, it does not give rise to high amounts of wealth in the economy, particularly among those households who face the most volatile stream of income. |
| JEL: | E2 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11731&r=ent |
| By: | Ting Zhu (Carnegie Mellon University); Vishal Singh (Carnegie Mellon University); Anthony J. Dukes (School of Economics and Management, University of Aarhus) |
| Abstract: | This paper analyzes the competition between two spatially differentiated multi-product retailers who encounter entry from a dominant discount retailer. Our primary objective is to determine how entry affects the pricing and relative profits of the incumbent stores and the role played by the location of the entrant. The new entrant has partial overlap in product assortment with the incumbents and is assumed to have lower procurement costs for the common goods. Consumers are heterogeneous in their location, economic status (shopping costs and valuations), as well as purchase basket or the types of products demanded. Results show that in the post entry equilibrium, the prices for the products not offered by the discounter are higher than the pre entry prices. More interestingly, contrary to the conventional wisdom we find that the store that is closer to the new entrant is better off compared to the incumbent located further away. The intuition for these results is that the discounter with its low price draws away the poor consumers – the price sensitive segment – out of the market for the items it carries. This in turn softens price competition between the incumbents for these items. Furthermore, the new entrant’s unique product offering attracts more consumers to visit the location it occupies, which introduces positive demand externalities to the neighboring retailer, leading to an increase in sales for the non-competing products. We provide empirical evidence for our results and discuss implications for retailers facing competition from large discount stores. |
| Keywords: | entry; retail competition; agglomeration |
| JEL: | L13 L81 M31 |
| Date: | 2005–05 |
| URL: | http://d.repec.org/n?u=RePEc:kud:kuieci:2005-05&r=ent |
| By: | Brink,R. van den; Ruys,P.H.M. (TILEC (Tilburg Law and Economics Center)) |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubtil:200522&r=ent |
| By: | Boone,J. (TILEC (Tilburg Law and Economics Center)) |
| Keywords: | competition;measurement;profit;firms |
| JEL: | D43 L13 |
| Date: | 2004 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubtil:200404&r=ent |
| By: | Boone,J.; Damme,E. van (TILEC (Tilburg Law and Economics Center)) |
| Date: | 2004 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubtil:200418&r=ent |