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on Entrepreneurship |
| By: | Audretsch, David B; Bönte, Werner; Tamvada, Jagannadha Pawan |
| Abstract: | While considerable concern has emerged about the impact of religion on economic development, little is actually known about how religion impacts the decision making of individuals. This paper examines the influence of religion on the decision for people to become an entrepreneur. Based on a large-scale data set of nearly ninety thousand workers in India, this paper finds that religion shapes the entrepreneurial decision. In particular, some religions, such as Islam and Christianity, are found to be conducive to entrepreneurship, while others, such as Hinduism, inhibit entrepreneurship. In addition, the caste system is found to influence the propensity to become an entrepreneur. Individuals belonging to a backward caste exhibit a lower propensity to become an entrepreneur. Thus, the empirical evidence suggests that both religion and the tradition of the caste system influence entrepreneurship, suggesting a link between religion and economic behaviour. |
| Keywords: | caste-system; entrepreneurship; India; religion |
| JEL: | L26 Z12 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6378&r=ent |
| By: | Zoltan J. Acs (George Mason University); David Audretsch (Indiana University and Max Planck Institute of Economics, Jena); Ronnie J. Phillips (Kauffman Foundation and Colorado State University); Sameeksha Desai (George Mason University) |
| Abstract: | What differentiates American capitalism from all other forms of industrial capitalism is a historical focus on both the creation of wealth (entrepreneurship) and the reconstitution of wealth (philanthropy). Philanthropy has been part of the implicit American social contract that continuously nurtures and revitalizes economic prosperity. Much of the new wealth created historically has been given back to the community to build many of the great social institutions that have paved the way for future economic growth. This entrepreneurship-philanthropy nexus has not been fully explored by either economists or the general public. The purpose of this paper is to suggest that American philanthropists-particularly those who have made their own fortunes-create foundations that, in turn, contribute to greater and more widespread economic prosperity through knowledge creation. Analyzing philanthropy sheds light on our current understanding of how economic development has occurred, as well as the roots of American economic domi- nance. |
| Keywords: | entrepreneurship, philanthropy, capitalism, knowledge |
| JEL: | D64 M13 M14 |
| Date: | 2007–07–02 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2007-025&r=ent |
| By: | Nandram, Sharda; Samsom, Karel (Nyenrode Business Universiteit) |
| Abstract: | Responding to criticism of the trait approach in studying entrepreneurship, a process and context oriented methodology was applied using the Critical Incident Technique (CIT) in predicting success and failure. The actions of entrepreneurs were subsequently translated into (1) dynamic traits with a subdivision in attitudes, sentiments and ergs; (2) abilities and (3) temperaments. The CIT blends qualitative and quantitative approaches in the study of entrepreneurial behaviour. A material difference among incidents appeared in the various life cycle phases investigated. The researchers further found that specific questions combined with using the CIT generated more differentiated outcomes than the use of general questions. |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:nijrep:2007-04&r=ent |
| By: | David B. Audretsch (Max Planck Institute of Economics, Jena, Germany; Indiana University, USA); Max Keilbach (Max Planck Institute of Economics, Jena, Germany) |
| Abstract: | Whereas initially physical capital and later, knowledge capital were viewed as crucial for growth, more recently a very different factor, entrepreneurship capital, has emerged as a driving force of economic growth. In this paper, we define a region's capacity to create new firms start-ups as the region's entrepreneurship capital. We then investigate the local embeddedness of this variable and which variables have an impact on this variable. Using data for Germany, we find that knowledge-based entrepreneurship capital is driven by local levels of knowledge creation and the acceptance of new ideas, indicating that local knowledge flows play an important role. Low-tech entrepreneurship capital is rather increased by regional unemployment and driven by direct incentives such as subsidies. All three measures are locally clustered, indicating that indeed, entrepreneurship capital is a phenomenon that is driven by local culture, and is therefore locally bounded. |
| Keywords: | Entrepreneurship capital, Local Clusters, Knowledge Spillovers, Spatial Econometrics |
| JEL: | L60 O30 G30 |
| Date: | 2007–07–02 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2007-029&r=ent |
| By: | László Szerb (University of Pécs, Hungary); Siri Terjesen (Brisbane Graduate School of Business, Australia; Max Planck Institute of Economics, Germany); Gábor Rappai (University of Pécs, Hungary) |
| Abstract: | This study explores individual and country-level environmental drivers of informal "seed" investment. We examine four types of informal investors based on business ownership experience (or no such experience) and close family relationship with investee (or no such relationship): "classic love money", "outsider", "kin owner" and "classic business angel" investors. At the environmental level, we are interested in the role of economic development, income tax policies, start-up costs, pro-enterrise government programmes, availability of debt financing, entrepreneurship education and culture. Using Global Entrepreneurship Monitor data from telephone interiews with 257,793 individuals in 31 countries, including 5,960 informal investors, we report drivers for the four types of seed investment. Descriptive statistics are consistent with prior research: informal investors are likely to be older males who work full-time, earn high incomes, perceive start-up opportunities in the environment, and believe that they have the skills to start their own businesses. At the environmental level, we find that countries with higher percentages of informal investors are significantly likely to have higher levels of economic development, higher business start-up costs, higher levels of entrepreneurship education, lower income taxes and lower power distance. Other environmental effects on the four populations of informal investors are reported and discussed, as well as implications for practice, policy and future research. |
| Keywords: | informal investment, individual drivers, environmental drivers, entrepreneurial careers, business ownership, new venture financing |
| Date: | 2007–07–02 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2007-030&r=ent |
| By: | Zoltan J. Acs (George Mason University; Max Planck Institute of Economics, Jena, Germany); Monika I. Megyesi (University of Baltimore) |
| Abstract: | Creativity is changing the way cities approach economic development and formulate policy. Creative metropolises base their economic development strategies, at least partly, on building communities attractive to the creative class worker. While there are countless examples of high-tech regions transforming into creative economies, traditionally industrial cities have received much less attention in this regard. This research draws on Baltimore to assess the potential of transforming a traditionally industrial region into a creative economy. It analyses Baltimore's performance on dimensions of talent, tolerance, technology, and territory both as a stand-alone metropolitan area and in comparison to similar industrial metropolises. Using data from the US Census Bureau and research on creativity measures, this case study concludes that Baltimore has the opportunity to capitalize on the creative economy because of its openness to diversity, established technology base, and appealing territorial amenities. An important consideration in the transformation towards a creative economy is Baltimore's geographic proximity and access to the largest reservoir of creative talent in the US: Washington, DC. |
| Keywords: | creativity, creative class, creativity index, creative cities, talent, technology, tolerance, territory, bohemian index, gay index, old industrial cities, Baltimore, economic development, economic growth, entrepreneurship |
| JEL: | D64 M13 M14 |
| Date: | 2007–07–02 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2007-024&r=ent |
| By: | Federico S. Mandelman; Gabriel V. Montes Rojas |
| Abstract: | Should a central bank accommodate energy price shocks? Should the central bank use core inflation or headline inflation with the volatile energy component in its Taylor rule? To answer these questions, we build a dynamic stochastic general equilibrium model with energy use, durable goods, and nominal rigidities to study the effects of an energy price shock and its impact on the macroeconomy when the central bank follows a Taylor rule. We then study how the economy performs under alternative parameterizations of the rule with different weights on headline and core inflation after an increase in the energy price. Our simulation results indicate that a central bank using core inflation in its Taylor rule does better than one using headline inflation because the output drop is less severe. In general, we show that the lower the weight on energy price inflation in the Taylor rule, the impact of an energy price increase on gross domestic product and inflation is also lower. |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedawp:2007-15&r=ent |
| By: | Nils Braakmann (Institute of Economics, Leuphana University of Lüneburg) |
| Abstract: | This paper uses data from the German Socio-Economic Panel of the years 2000 to 2005 to study the earnings differential between self- and dependent employed German men. Constructing a counterfactual earnings distribution for the self-employed German dependant employment and using quantile regression decompositions we find that the earnings differential over the distribution cannot be explained by differences in endowments. Furthermore, low-earning self-employed could earn more in dependent employment. Finally, the observed earnings advantage for the self-employed at the top of the earnings distribution os not associated with higher returns to observable variables. |
| Keywords: | self-employment, earnings differential, quantile regression decomposition, Machado/Mata decomposition |
| JEL: | J31 L26 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:lue:wpaper:55&r=ent |
| By: | Robert DeYoung; W. Scott Frame; Dennis Glennon; Daniel P. McMillen; Peter J. Nigro |
| Abstract: | We study recent changes in the geographic distances between small businesses and their bank lenders using a large random sample of loans guaranteed by the Small Business Administration. Consistent with extant research, we find that small borrower-lender distances generally increased between 1984 and 2001, with a rapid acceleration in distance beginning in the late 1990s. We also document a new phenomenon: a fundamental reordering of borrower-lender distance by the borrowers’ neighborhood income and race characteristics. Historically, borrower-lender distance tended to be shorter than average for historically underserved (for example, low-income and minority) areas, but by 2000 borrowers in these areas tended to be farther away from their lenders on average. This structural change is coincident in time with the adoption of credit scoring models that rely on automated lending processes and quantitative information, and we find indirect evidence consistent with this link. Our findings suggest that there has been increased entry into local markets for small business loans, and this development should help allay fears that movement toward automated lending processes will reduce small businesses’ access to credit in already underserved markets. |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedawp:2007-11&r=ent |
| By: | Joshua S. Gans; David H. Hsu; Scott Stern |
| Abstract: | This paper considers the impact of the intellectual property (IP) system on the timing of cooperation/licensing by start-up technology entrepreneurs. If the market for technology licenses is efficient, the timing of licensing is independent of whether IP has already been granted. In contrast, the need to disclosure complementary (yet unprotected) knowledge, asymmetric information, or search costs may retard efficient technology transfer. In these cases, reductions in uncertainty surrounding the scope and extent of IP rights may facilitate trade in the market for ideas. We employ a dataset combining information about cooperative licensing and the timing of patent allowances (the administrative event when patent rights are clarified). While pre-allowance licensing does occur, the hazard rate for achieving a cooperative licensing agreement significantly increases after patent allowance. Moreover, the impact of the patent system depends on the strategic and institutional environment in which firms operate. Patent allowance seems to play a particularly important role for technologies with longer technology lifecycles or that lack alternative mechanisms such as copyright, reputation, or brokers. The findings suggest that imperfections in the market for ideas may be important, and that formal IP rights may facilitate gains from technological trade. |
| JEL: | L24 L26 O32 O34 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13234&r=ent |
| By: | Siri Terjesen (Brisbane Graduate School of Business, Australia; Max Planck Institute of Economics, Germany) |
| Abstract: | This case follows Sethu Sethunarayanan, Director of the non-profit Center for the Development of Disadvantaged People (CDDP), which is dedicated to the improvement of the Irula tribe in rural villages of southeast India. The Irulas specialize in catching rats, an activity which provides the bulk of their income and food. Following a routine visit to a local village, Sethu recognized an opportunity for a "better rat trap" to aid the Irula rat catchers. With feedback from rat catchers, Sethu developed an innovative new trap. His innovation won the prestigious Global Development Marketplace award from the World Bank which provided the funding necessary to commercialize the new technology. The venture’s implementation involved site visits to identify beneficiaries, health checks and treatment, preparatory workshops, factory establishment, factory training, production, women's micro-credit collectives, distribution and project evaluation. The case focuses on the relationship between human capital and technological entrepreneurship, considering the knowledge and skills required to commercialize technology for the rural poor and the positive impact on this greatly disadvantaged population. |
| Keywords: | Human Capital, India, Innovation, Irula, Social Entrepreneurship, Technological Entrepreneurship, World Bank |
| Date: | 2007–07–05 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2007-031&r=ent |