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on Entrepreneurship |
| By: | Hugo Erken (Ministry of Economic Affairs, Erasmus University Rotterdam); Piet Donselaar (Ministry of Economic Affairs); Roy Thurik (Erasmus University Rotterdam; Max Planck Institute of Economics; EIM Business and Policy Research) |
| Abstract: | Total factor productivity of twenty OECD countries for a recent period (1971-2002) is explained using six different models based on the established literature. Traditionally, entrepreneurship is not dealt with in these models. In the present paper it is shown that - when this variable is added - in all models there is a significant influence of entrepreneurship while the remaining effects mainly stay the same. Entrepreneurship is measured as the business ownership rate (number of business owners per workforce) corrected for the level of economic development (GDP per capita). |
| Keywords: | Total factor productivity, research and development, entrepreneurship, OECD |
| JEL: | E20 L26 M13 O10 O30 O40 O50 |
| Date: | 2008–03–14 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2008-019&r=ent |
| By: | Jagannadha Pawan Tamvada (Max Planck Institute of Economics, Jena) |
| Abstract: | Entrepreneurship literature (Parker 2004) has rarely considered spatial location as a micro-determinant of occupational choice, although there are compelling reasons to posit that spatial location influences economic behavior. Using Bayesian semiparametric methodologies and geoadditive techniques, we examine spatial location as a micro-determinant of self-employment choice of Indians, in addition to standard determinants such as age, gender and education. The empirical analysis suggests the presence of spatial occupational neighborhoods and a clear north-south divide in self-employment choice in India when individuals of agricultural and nonagricultural sectors are considered together; however, such spatial patterns are less pronounced when individuals in nonagriculture alone are considered in the analysis. These residual spatial patterns are found to be inversely related to the per-capita GDP of the region. The results further suggest nonlinear relationships between age, wealth and the probability of self-employment. |
| Keywords: | Entrepreneurship, Self-employment, Developing Countries, Bayesian Semiparametric Methods, Geoadditive Models |
| JEL: | J24 J43 J44 L26 |
| Date: | 2008–03–20 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2008-026&r=ent |
| By: | Elisabete Gomes Santana Félix (Universidade de Évora,Departamento de Gestão); Cesaltina Pires (Universidade de Évora,Departamento de Gestão); Mohamed Azzim Gulamhussenb (Instituto Superior de Ciências do Trabalho e da Empresa,Departamento de Finanças e Contabilidade) |
| Abstract: | This article analyzes the exit decision in the European venture capital market, studying when to exit and how it interacts with the exit form. The paper emphasizes the impact of asymmetric information on the divestment decision. Our model considers the impact of haracteristics of the venture capital investor, characteristics of the investment and contracting variables on the exit decision. Our results show that venture capitalists associated with .nancial institutions have quicker exits, a result which is stronger for trade-sales exits. In addition, our results highlight the importance of the contracting variables on the exit decision. An unexpected but interesting result is that the presence in the board of directors leads to longer investment duration. |
| Keywords: | Asymmetric information, venture capital, trade sales, IPO, write-offs, exit decision, competing risks model |
| JEL: | C24 G24 G32 G38 K22 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:cfe:wpcefa:2008_01&r=ent |
| By: | David Chambers |
| Abstract: | Was the London Stock Exchange (LSE) little more than a Dickensian den of speculation, or did it make a contribution to industrial development in Interwar Britain? The interwar stock market laboured under problems of weak disclosure, inadequate investor protection and ineffective underwriting. New manufacturing industries were the most vulnerable to resulting asymmetric information problems. Drawing on a new database of IPOs on the London Stock Exchange between 1919 and 1938, I conclude that new manufacturing firms were finance-constrained. Consistent with the Rajan-Zingales financial dependence hypothesis, this result reflects the weak interwar institutional environment. The disastrous IPO survival rates of the late 1920s provide further evidence of this weak environment. Yet, when issue activity rebounded strongly in the following decade, a dramatic improvement in survival ensued, due, in part, to the efforts of the LSE. This was an early example of the "light touch" regulatory approach for which London has subsequently become renowned. |
| Keywords: | IPOs, Survival, Regulation, Investment |
| JEL: | G3 G24 N2 L26 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:377&r=ent |
| By: | Bottazzi, L.; Da Rin, M.; Hellmann, T. (Tilburg University, Center for Economic Research) |
| Abstract: | We develop a theory and empirical test of how the legal system affects the relationship between venture capitalists and entrepreneurs. The theory uses a double moral hazard framework to show how optimal contracts and investor actions depend on the quality of the legal system. The empirical evidence is based on a sample of European venture capital deals. The main results are that with better legal protection, investors give more non-contractible support and demand more downside protection. These predictions are supported by the empirical analysis. Using a new empirical approach of comparing two sets of fixed-effect regressions, we also find that the investor?s legal system is more important than that of the company in determining investor behavior. |
| Keywords: | Financial Intermediation;Law and Finance;Corporate Governance;Venture Capital |
| JEL: | G20 G30 G24 K22 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:200830&r=ent |
| By: | Zoltan Acs (George Mason University; Max Planck Institute of Economics, Jena); Lawrence A. Plummer (Clemson University); Ryan Sutter (George Mason University) |
| Abstract: | A new model of economic growth introduces the knowledge filter between new generic knowledge and economically-useful knowledge. It identifies both the formation of new ventures and the absorptive capacity of incumbent firms as the mechanisms that penetrate the knowledge filter. Recent empirical work has shown that new firms are more proficient at penetrating the knowledge filter than are incumbent firms; however, the analysis has only examined expanding economies and has relied on purely cross-sectional regression methodologies. This study explores the role of new and incumbent firms in penetrating the knowledge filter utilizing recent developments in spatial panel estimation techniques to provide a more robust set of findings. The results suggest that new firms are more proficient at penetrating the knowledge filter in declining and growing regions alike. |
| Keywords: | Entrepreneurship, Knowledge, Regional Growth, Endogenous Growth |
| JEL: | L26 O1 O18 O3 R1 |
| Date: | 2008–03–14 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2008-018&r=ent |
| By: | Diemo Urbig (Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy) |
| Abstract: | Self-efficacy, which can be defined as optimism about one's own ability to exercise required actions, has received a lot of attention in research on entrepreneurs' and managers' decision making. This attention led to the development of corresponding measurement instruments. However, there is no equivalent measure of the more general personal optimism that jointly captures on equivalent bases abilities and other sources of uncertainty, which one might be more or less optimistic about. I develop a measurement instrument of four dimensions of personal optimism: ability optimism (self- efficacy), rivalry optimism (being better than others), chance optimism (being a lucky devil or fearing of bad-luck), and social support optimism (others help and support me and are trustworthy). Correlations between subscales are intuitive and backed by theory. I replicate corresponding results from previous studies that used different measures, e.g. life-orientation (LOT-R), self-efficacy (NGSE), and social optimism at the societal level from the POSO scale. This new personal optimism measurement instrument is very much like the life-orientation test (LOT-R), but it provides more insights regarding the structure of optimism. Whenever self-efficacy or control beliefs are of interest, the ARCS or ACS scales should be used to control for complementary world beliefs. I also illustrate the special role of one item in NGSE, which in contrast to all other NGSE items refers to a comparative instead of an absolute judgment. |
| Keywords: | personal optimism, social optimism, chance optimism, self-efficacy |
| Date: | 2008–03–14 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2008-020&r=ent |
| By: | Robert W. Fairlie; Christopher Woodruff |
| Abstract: | Although business ownership has implications for income inequality, wealth accumulation and job creation, surprisingly little research explores why Mexican-Americans are less likely to start businesses and why the businesses that they start are less successful on average than non-Latino whites. We conduct a comprehensive analysis of Mexican-American entrepreneurship using microdata from the 2000 U.S. Census, the matched and unmatched March and Outgoing Rotation Group Files of the Current Population Survey from 1994 to 2004, and the Legalized Population Survey (LPS). We find that low levels of education and wealth explain the entire gap between Mexican immigrants and non-Latino whites in business formation rates. Nearly the entire gap in business income for Mexican immigrants is explained by low levels of education and limited English language ability. Using the natural experiment created by the Immigration Reform and Control Act (IRCA), we find that legal status represents an additional barrier for Mexican immigrants. A conservative estimate suggests that the lack of legal status reduces business ownership rates by roughly seven-tenths of a percentage point for both men and women. Human and financial capital deficiencies are found to limit business ownership and business success among second and third-generation Mexican-Americans, but to a lesser extent. These findings have implications for the debates over the selection of immigrants and the assimilation of Mexican-Americans in the U.S. economy. |
| Keywords: | Mexican-Americans, entrepreneurship, self-employment |
| JEL: | J15 |
| Date: | 2008–03 |
| URL: | http://d.repec.org/n?u=RePEc:auu:dpaper:575&r=ent |
| By: | Kristina von Rhein (Friedrich-Schiller-University Jena, Graduate School "Human Behaviour in Social and Economic Change", Department of Economics) |
| Abstract: | The theory predicts that spinoffs of successful parents are more successful than others. The success of the parents can be measured in two ways, either in terms of their survival duration or concerning their innovative activity. In this paper, the survival chances of spinoffs in the German automobile industry regarding the success of their parents will be investigated. Therefore it is differentiated between spinoffs of old parents and spinoffs of innovative parents. The results of the Cox regressions show that spinoffs of old parents have better survival chances than those of innovative parents. |
| Keywords: | firm survival, spinoffs, heritage, automobile industry |
| JEL: | L10 L62 O33 C41 |
| Date: | 2008–03–19 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2008-025&r=ent |
| By: | Prashanth Mahagaonkar (Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group) |
| Abstract: | This paper provides a firm-level empirical analysis on the ways in which corruption affects innovative activity. Particularly with respect to the African continent that is striving to reconcile with instability and poverty, this issue seems to be of utmost importance. Using a newly available dataset on African firms, it is shown that corruption has a negative effect on product innovation and organisational innovation. Corruption does not affect process innovation while it facilitates marketing innovation. |
| Keywords: | Corruption, Developing Economies, Product Innovation, Process Innovation, Organisational Innovation, marketing Innovation, Taxation |
| JEL: | D73 O14 O31 H11 H25 |
| Date: | 2008–03–14 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2008-017&r=ent |