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on Entrepreneurship |
| By: | Uwe Cantner (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Michael Stützer (School of Economics and Business Administration, Friedrich-Schiller-University Jena) |
| Abstract: | This paper examines the use of social capital in the venture creation process. We compare solo entrepreneurs (n=182) and new venture teams (n=274) from a random sample of start-ups in innovative industries and test social capital use and its effects on firm performance. Our results reveal that solo entrepreneurs and new venture teams do not differ in their degree of use of social capital. However, there are differences in the determinants of social capital use in both groups. We find that weak ties assist solo entrepreneurs and have positive significant effects on new venture performance. For team start- ups, we find no direct effect of social capital. However, further tests indicate for teams that human capital variety positively moderates the effect of social capital on performance. |
| Keywords: | Entrepreneurship, Nascent entrepreneurship, Social capital, Start-up teams, Entrepreneurial learning |
| JEL: | M13 L25 L26 D83 |
| Date: | 2010–02–24 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2010-012&r=ent |
| By: | Michaelides, Marios; Benus, Jacob |
| Abstract: | In 2002, the U.S. Department of Labor and the Small Business Administration implemented Project GATE, an experimental demonstration program designed to provide free self-employment assistance to individuals interested in starting their own business. This paper uses data from Project GATE to examine the efficacy of public self-employment training programs in the modern U.S. economy. Our analyses show that GATE led to significant improvements in the post-training outcomes of treatment group participants who were unemployed at the time of application. Particularly, GATE had a significant positive impact on new business starts and sustainability for unemployed participants five years after random assignment. For those who were unemployed at random assignment, GATE also led to higher employment likelihood and higher total earnings five years after random assignment. GATE had no impact, however, for participants who were employed, self-employed, or out of the labor force at the time of application. |
| Keywords: | self-employment; small business; unemployment; workforce development; SEA; Project GATE |
| JEL: | H4 J6 L2 |
| Date: | 2010–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:20880&r=ent |
| By: | Michaelides, Marios |
| Abstract: | This paper uses data from Project GATE to examine the efficacy of offering free self-employment assistance to unemployed individuals interested in self-employment, overall and by race. We also examine the effect of participants’ self-employment background, finances, and personal circumstances on their self-employment outcomes. We find that Project GATE led to significant gains in the outcomes of unemployed participants, particularly for black participants. Our analyses also show that significant portions of the race disparities in self-employment outcomes among unemployed participants are attributed to race differences in access to financing. The policy implications of our findings are discussed. |
| Keywords: | self-employment; small business; unemployment; workforce development; SEA; Project GATE |
| JEL: | H4 J6 L2 |
| Date: | 2010–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:20884&r=ent |
| By: | Hall, Bronwyn H. (UNU-MERIT, Maastricht University, Institute of Fiscal Studies, University of California-Berkeley, and NBER); Lerner, Josh (Harvard Business School, and NBER) |
| Abstract: | Evidence on the "funding gap" for investment innovation is surveyed. The focus is on financial market reasons for underinvestment that exist even when externality-induced underinvestment is absent. We conclude that while small and new innovative firms experience high costs of capital that are only partly mitigated by the presence of venture capital, the evidence for high costs of R&D capital for large firms is mixed. Neverthless, large established firms do appear to prefer internal funds for financing such investments and they manage their cash flow to ensure this. Evidence shows that there are limits to venture capital as a solution to the funding gap, especially in countries where public equity markets for VC exit are not highly developed. We conclude by suggesting areas for further research. |
| Keywords: | innovation, R&D, financing, liquidity constraints, venture capital, cash flow |
| JEL: | G24 G32 O32 O38 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:unumer:2010012&r=ent |
| By: | Andreas Freytag (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Sebastian von Engelhardt (School of Economics and Business Administration, Friedrich-Schiller-University Jena) |
| Abstract: | The paper analyzes the impact of institutional and cultural factors on a remarkable economic activity: the production of so-called open source software (OSS). OSS is marked by free access to the software and its source code. Copyright-based OSS licenses permit users to use, change, improve and redistribute the software, which is designed and developed in a public, collaborative manner. OSS seems to be an example of a 'private provision of a public good'. While the supply-side microeconomics of OSS (individual characteristics of OSS developers, role of firms etc.) are well explored, it is not known which institutional and cultural factors explain different OSS activities across countries. For this reason, we perform a cross-country study analyzing how the number of OSS developers per inhabitants and the level of OSS activity of a country depend on institutional and cultural factors. Our findings are that a culture characterized by individualism/self-determination, abundance of social capital interpreted as interpersonal trust, an optimistic view of scientific progress, a low degree of regulation as well as good protection of intellectual property rights is favoring OSS activities. Our study thus contributes to the understanding of the role of cultural and nstitutional factors in general as well as in particular with respect to OSS. Additionally, it improves the understanding of the supply-side of OSS. |
| Keywords: | Open Source, Culture, Institutions, Social Capital, Trust, Regulation, Entrepreneurial Spirit, Individualism, Intellectual Property Rights |
| JEL: | B52 L17 L86 O34 Z13 Z19 |
| Date: | 2010–02–24 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2010-010&r=ent |
| By: | Túlio A. Cravo (Dept of Economics, Loughborough University); Adrian Gourlay (Dept of Economics, Loughborough University); Bettina Becker (Dept of Economics, Loughborough University) |
| Abstract: | This paper examines the relationship between the Small and Medium Enterprise (SME) sector and economic growth for an annual panel of Brazilian states for the period 1985-2004. We investigate the importance of the relative size of the SME sector measured by the share of the SME employment in total formal employment and the level of human capital in SMEs measured by the average years of schooling of SME employees. The empirical results indicate that the relative importance of SMEs is negatively correlated with economic growth, a result that is consistent with previous studies examining developing countries. In addition, our results also show that human capital embodied in SMEs may be more important for economic growth than the relative size of the SME sector. |
| Keywords: | Firm size, market structure, economic growth, human capital. |
| JEL: | O1 O15 L1 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:lbo:lbowps:2010_01&r=ent |
| By: | Schertler , Andrea; Tykvová, Tereza |
| Abstract: | The change in the business model of venture capitalists from investing locally towards investing across borders started to intensify in the late 1990s. According to a dataset of European and North-American countries, we find that countries with higher expected growth and higher lagged stock market returns receive larger net cross-border venture capital inflows. Thus, portfolio companies located in high-growth and high-return countries receive more venture capital from foreign venture capitalists than these countries’ venture capitalists invest in foreign portfolio companies. Also, countries with lower stock market capitalizations as well as those with poor tax and legal environments for venture capital intermediation exhibit larger net cross-border inflows. These findings offer important insights for policy makers since cross-border venture capital inflows partly compensate for potential limits in the domestic venture capital supply. -- |
| Keywords: | Venture Capital,Internationalization,Net Cross-Border Inflows,Economic Determinants |
| JEL: | F21 G24 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:10001&r=ent |