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on Entrepreneurship |
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Issue of 2006‒05‒06
six papers chosen by Marcus Dejardin Facultes Universitaires Notre-Dame de la Paix |
| By: | Hernandez-Canovas, Gines (Vrije Universiteit Amsterdam, Faculteit der Economische Wetenschappen en Econometrie (Free University Amsterdam, Faculty of Economics Sciences, Business Administration and Economitrics); Koeter-Kant, Johanna |
| Abstract: | We examine the influence of cross country differences on debt maturity for small and medium size enterprises (SMEs) using a sample of 3366 SMEs from 19 European countries. We analyze a country's legal environment, institutional environment, banking structure and economic situation while controlling for firm specific characteristic. We find that SMEs in countries with high property rights that protect their creditors or enforce existing laws are more likely to obtain long-term debt. We also show evidence that banks seem to rely more on the legal, economic, and institutional determinants when determining the length of a loan agreement for micro firms than when granting loans to medium size firms. |
| Keywords: | Debt maturity; Small business lending; Banks; Legal system |
| JEL: | G21 G30 G32 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:vuarem:2006-9&r=ent |
| By: | Albanesi, Stefania |
| Abstract: | This paper studies optimal taxation of entrepreneurial capital and financial assets in economies with private information. Returns to entrepreneurial capital are risky and depend on entrepreneurs’ effort, which is not observed. The presence of idiosyncratic risk in capital returns implies that constrained-efficient allocations display an intertemporal wedge on entrepreneurial capital that can be positive or negative. The properties of optimal marginal taxes on entrepreneurial capital depend on the sign of this wedge. If the wedge is positive, the marginal capital tax should be decreasing in capital returns, while the opposite is true when the wedge is negative. The optimal tax system equalizes after tax returns on all assets, thus reducing the variance of capital returns after tax relative to other assets. If entrepreneurs are allowed to sell shares of their capital to outside investors, returns to externally owned capital are subject to double taxation at the level of the entrepreneur and at the level of the outside investors. Even if entrepreneurs can purchase private insurance against their idiosyncratic risk, optimal asset taxes are essential to implement the constrained-efficient allocation if entrepreneurial portfolios are private information. |
| Keywords: | entrepreneurial capital; optimal taxation; private information |
| JEL: | E6 H2 |
| Date: | 2006–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:5647&r=ent |
| By: | Shen, Yang-Pin (Yuan Ze University); Wei, Peihwang P. (University of New Orleans) |
| Abstract: | In this study, we examine the determinants of firms’ IPO decisions in Taiwan, for the sample period of 1989 to 2000. The regulations in Taiwan permit us to identify firms that met IPO requirements but chose not to go public. The unique regulatory environment allows a clear comparison of firms that choose IPOs and those that do not. With the exception of Pagano, Panetta and Zingales (1998), we are not aware of any similar study. Their paper examines the IPO market in Italy, and there seem to be considerable differences between that market and Taiwan market. Indeed, we find strong evidence that IPOs are not motivated by financing needs or constraints while they do. Some of our results are nevertheless consistent with theirs -- in particular, we find that larger and profitable firms are more likely to list equity. Our other findings also provide support for, though not overwhelmingly, information asymmetry, listing costs, liquidity, owners’ diversification desire, and market timing as factors influencing IPO decisions. Finally, we present evidence strongly consistent with venture capital providing certification to firm credibility. |
| Keywords: | Initial public offering (IPO), Venture capital, Taiwan stock market |
| JEL: | G32 G15 G24 |
| Date: | 2006–01 |
| URL: | http://d.repec.org/n?u=RePEc:uno:wpaper:2005-07&r=ent |
| By: | Peter Doeringer (Institute for Economic Development, Boston University); Christine Evans-Klock (International Labor Organization); David Terkla (University of Massachusetts, Boston) |
| Abstract: | National data and case studies are used to test the importance of management practices, particularly high performance practices, on the location decisions of new manufacturing plants. We find that plants with high performance management cultures rely on different criteria when making their location decisions, and also weigh standard location criteria differently, than those plants that are managed in more traditional ways. Omitting management culture from studies of business location may, therefore, result in biased estimates of the importance of various traditional location factors. By more accurately specifying location models for manufacturing plants with high performance management cultures, we are able to offer new insights for regional development policy. |
| Keywords: | Management Practices and Firm Location |
| JEL: | R3 R58 |
| URL: | http://d.repec.org/n?u=RePEc:bos:iedwpr:dp-125&r=ent |
| By: | Cristina Barbot (CETE, Faculdade de Economia, Universidade do Porto) |
| Abstract: | Low cost carriers (LCCs) have recently proved that they can develop aggressive behaviour towards the threat of new entrants. This paper analyses the theoretical conditions under which a low cost carrier can deter or accommodate entry by means of product proliferation, using the example of Easyjet on the London-Grenoble route. Theoretical conclusions show that they can only deter entry if they launch a service with a quality that is superior to the entrant’s and to their own previous one. Otherwise, they accommodate entry by improving their old product, when they face the entry of a full service carrier (FSC), or by launching a new service, if they are caught in the middle of a FSC and another LCC. Empirical findings about competition in the same route in monopoly, duopoly and oligopoly with three firms show that price competition depends on the existence and nature of rivals, and on the level of demand. |
| Keywords: | low cost carriers, entry, accommodation |
| JEL: | L93 L13 |
| Date: | 2006–01 |
| URL: | http://d.repec.org/n?u=RePEc:por:cetedp:0602&r=ent |
| By: | Debruyne, M. |
| Abstract: | This paper adds addresses the interaction between competitive dynamics and market evolution. Specifically, it focuses on the development of the market of a new product, in terms of customer adoption as well as competitive entry. The objective of this paper is to develop a model for the growth stage of a new market that addresses the supplier and customer diffusion process and the interaction between them. The contribution of our approach is threefold: (i) the development of a competitor diffusion model, (ii) the combination of a competitor diffusion model with a customer diffusion model, recognizing the interplay between competitive entry and market-level diffusion, and (iii) the recognition that competitive entry effects in the diffusion model are endogenous, resulting from the entry decisions of firms. |
| Date: | 2006–04–20 |
| URL: | http://d.repec.org/n?u=RePEc:vlg:vlgwps:2006-09&r=ent |