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on Entrepreneurship |
| By: | André van Stel; Mickey Folkeringa; Sierdjan Koster |
| Abstract: | We investigate the impact of start-up rates on a measure of competition among incumbent firms called mobility. Interactions between new and incumbent firms play an important role in the process of economic growth. While recent literature suggests that competition among incumbent firms is caused by (lagged) start-up rates, this relation has not yet been tested using a direct measure of competition among incumbent firms. In the present paper we estimate a regression model, at the region-sector level for the Netherlands, where the mobility rate is explained by (lagged) startup rates and control variables. Using data for 40 regions and five sectors over the period 1993-2006 we find that the impact of start-ups on mobility varies by sector. In particular, we find a strong positive relation between start-up rates and mobility rates for industry sectors (manufacturing and construction) but a much smaller effect for services sectors. These results suggest there are differences in the types of entry between sectors and in the roles start-ups play in different sectors. |
| Date: | 2009–03–03 |
| URL: | http://d.repec.org/n?u=RePEc:eim:papers:h200905&r=ent |
| By: | V. LEWIS |
| Abstract: | Business cycle models with sticky prices and endogenous firm entry make novel predictions on the transmission of shocks through the extensive margin of investment. I test some of these predictions using a vector autoregression with model-based sign restrictions. I find a positive and significant response of firm entry to expansionary shocks to productivity, aggregate spending, monetary policy and entry costs. The estimated response to a monetary expansion does not support the monetary policy transmission mechanism proposed by the model. Insofar as firm startups require labour services, wage stickiness is needed to make the signs of the model responses consistent with the estimated ones. The shapes of the empirical responses suggest that congestion effects in entry make it harder for new .firms to survive when the number of startups rises. |
| Keywords: | firm entry, business cycles, VAR |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:rug:rugwps:08/539&r=ent |
| By: | M. KNOCKAERT; B. CLARYSSE; M. WRIGHT; A. LOCKETT |
| Abstract: | In this paper, we study which VC firm and investment manager related factors drive the VC’s attitude towards academic spin-out investing by taking an agency and human capital perspective. In order to do so, we use a unique hand-collected dataset involving 68 investment managers working at early stage VCs in Europe who were interviewed and provided us with information on the fund characteristics and their human capital. First, the results show that academic spin-out investors work to a large extent at publicly funded VCs that often engage in a very hands-on type of postinvestment behaviour. Second, the results show that human capital is associated with the willingness of the investment manager to invest in academic spin-outs. Investment managers that had worked in an academic environment and thus have similar human capital compared to the academic founders were more inclined to invest in academic spin-outs. Other specific human capital, such as technical education, and general human capital were not found to be associated with the investment manager’s interest in academic spin-out investing, except for the amount of entrepreneurial experience that negatively affected the attitude towards academic spin-outs. |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:rug:rugwps:08/537&r=ent |
| By: | André van Stel; Roy Thurik; Dennis Fok; Andrew Burke |
| Abstract: | The relation between profits and the number of firms in a market is one of the essential topics in the field of industrial organization. Usually, the relation is modeled in an error-correction framework where profits and/or the number of firms respond to out-of-equilibrium situations. In an out-of-equilibrium situation one or both of these variables deviate from some long-term sustainable level. These models predict that in situations of equilibrium, the number of firms does not change and hence, entry equals exit. Moreover, in equilibrium entry and exit are expected to be equal to zero. These predictions are at odds with real life observations showing that entry and exit levels are significantly positive in all markets of substantial size. Moreover, entry and exitlevels often differ drastically. In this paper we develop a new model for the relation between profit levels and the number of firms by specifying not only an equation for the equilibrium level of profits in a market but also equations for the equilibrium levels of entry and exit. In our empirical application we show that our entry and exit equations satisfy usual error-correction conditions. We also find that a one-time positive shock to entry or profits has a small but permanent positive effect on both the number of firms and total industry profits. |
| Date: | 2009–03–03 |
| URL: | http://d.repec.org/n?u=RePEc:eim:papers:h200907&r=ent |
| By: | Daisuke Oyama; Yasuhiro Sato; Takatoshi Tabuchi; Jacques-François Thisse |
| Abstract: | This paper investigates the impacts of progressive trade openness, technological externalities, and heterogeneity of individuals on the formation of entrepreneurship in a two-country occupation choice model. We show that trade opening gives rise to a non-monotonic process of international specialization, in which the share of entrepreneurial firms in the large (small) country first increases (decreases) and then decreases (increases), with the global economy exhibiting first de-industrialization and then re-industrialization. When countries have the same size, we also show that strong technological externalities make the symmetric equilibrium unstable, generating equilibrium multiplicity, while sufficient heterogeneity of individuals leads to the stability and uniqueness of the symmetric equilibrium. |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:pse:psecon:2009-08&r=ent |
| By: | Martin Shubik |
| Date: | 2009–02–27 |
| URL: | http://d.repec.org/n?u=RePEc:cla:levarc:814577000000000151&r=ent |
| By: | Lederman, Daniel |
| Abstract: | It is so widely recognized that innovation is a key driver of economic growth that it is cliché to say so. This article studies product innovation by firms with data from 68 countries, covering more than 25,000 firms in eight manufacturing sectors. The author assesses the predictions of inter-disciplinary research on innovation by firms. The econometric evidence suggests that globalization and local knowledge increase the likelihood that firms will introduce new products. By contrast, domestic regulatory impediments to competition are not robustly correlated with product innovation. |
| Keywords: | E-Business,Innovation,Microfinance,Education for Development (superceded),Statistical&Mathematical Sciences |
| Date: | 2009–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4840&r=ent |
| By: | Jan Bena |
| Abstract: | Using a dynamic model of a step-by-step innovation race between financially constrained firms, I study how financial constraints affect innovation activity. The novel theoretical results derive from an analysis of the interaction between the incentive effect of competition on innovation and the effect competition has on the degree of credit rationing. I find that the negative effect of financial constraints on firm- and aggregate-level R&D investment is most pronounced at both high and low levels of competition. These predictions are supported by empirical evidence: The competition-innovation relationship has an inverted-U shape in less financially developed systems relative to the benchmark pattern observed in countries with highly developed financial systems. Innovation-enhancing policies implemented through competition reforms ought to be complemented by promoting financial development. |
| Keywords: | Innovation, R&D, Competition, Financial constraints, Credit rationing. |
| JEL: | G15 G31 L13 O31 |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:cer:papers:wp377&r=ent |