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on Entrepreneurship |
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Issue of 2014‒02‒21
five papers chosen by Marcus Dejardin University of Namur and Universite' Catholique de Louvain |
| By: | Dirk Oberschachtsiek (Leuphana University Lueneburg, Germany) |
| Abstract: | In this paper, we study the intertemporal relations within two phases of the venture creation process based on data from administrative data sources. By distinguishing a pre- and post-period, we address two major issues: (1) we identify which factors make people wait to start a venture, and (2) we investigate the outcome of waiting on business longevity. Using survival modeling techniques, we find support for the hypothesis that regional economic conditions have a significant but complex effect on the delay of entries. Furthermore, we find that waiting is initially beneficial for self-employment duration but that this effect is not beneficial for longer periods of waiting. |
| Keywords: | waiting time periods, self-employment, duration model, survival |
| JEL: | M13 C41 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:lue:wpaper:293&r=ent |
| By: | Klapper, Leora; Love, Inessa; Randall, Douglas |
| Abstract: | This paper uses new panel data on the number of new firm registrations in 109 countries during 2002-2012 to study the relationship between entrepreneurship and economic growth. The data show strong evidence of a pro-cyclical pattern in entrepreneurship. An examination of heterogeneous relationships between new firm registration and the business cycle finds that higher levels of financial development and better business environments are associated with stronger pro-cyclicality of entrepreneurship both across countries and within countries over time. The results are robust to various measures of business regulation, such as the cost and time of starting a new firm and closing an insolvent firm. These findings suggest that fostering an efficient regulatory environment for the financial and private sector is important for encouraging a speedier recovery in the formation of new firms during economic expansions and aiding the efficient wind-down of insolvent firms during economic slowdowns. |
| Keywords: | Environmental Economics&Policies,Business in Development,Business Environment,Competitiveness and Competition Policy,E-Business |
| Date: | 2014–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6775&r=ent |
| By: | Neuberger, Doris; Räthke-Döppner, Solvig |
| Abstract: | To sustain growth in an aging economy, it is important to ease the financing of small firms by bank loans. Using bank internal data of small business loans in Germany, we examine the determinants of loan rates in the period 1995-2010. Beyond characteristics of the firm, the loan contract, and the lending relationship, demographic aspects matter. However, collateral and relationship lending play a larger role in loan pricing than the entrepreneur's age. Banks do not seem to discriminate older borrowers by higher loan rates. We rather find statistical discrimination of younger borrowers because of their lower wealth. Single entrepreneurs obtain cheaper loans than married ones. Firms in peripheral regions with low population density are disadvantaged by higher loan rates compared to those in agglomerated regions. -- |
| Keywords: | small business finance,savings banks,relationship lending,aging,demographic change |
| JEL: | D14 E43 G21 J14 L26 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:roswps:134&r=ent |
| By: | Camilla Jensen; Itzhak Goldberg |
| Abstract: | The objective of the PICK-ME (Policy Incentives for Creation of Knowledge – Methods and Evidence) research project is to provide theoretical and empirical perspectives on innovation which give a greater role to the demand-side aspect of innovation. The main question is how can policy make enterprises more willing to innovate? This task is fulfilled by identifying what we consider the central or most salient aspect of a demand-side innovation-driven economy, which is the small and entrepreneurial yet fast growing and innovative firm. We use the term ?Gazelle? to signify this type of firm throughout the paper. The main concern of policy-makers should therefore be how to support Gazelle type of firms through various policies. The effectiveness of different policy instruments are considered. For example, venture capitalism is in the paper identified as an important modern institution that renders exactly the type of coordination necessary to bring about an innovation system more orientated towards the demand side. This is because experienced entrepreneurs with superior skills in terms of judging the marketability of new innovations step in as financiers. Other factor market bottlenecks on the skills side must be targeted through education policies that fosters centers of excellence. R&D incentives are also considered as a separate instrument but more a question for future research since there is no evidence available on R&D incentives as a Gazelle type of policy. Spatial policies to foster more innovation have been popular in the past. But we conclude that whereas the literature often finds that new knowledge is developed in communities of physically proximate firms, there is no overshadowing evidence showing that spatial policies in particular had any impact on generating more of the Gazelle type of firms. |
| Keywords: | Innovation, demand-side driven policies, Gazelles, bottlenecks in factor markets, venture capitalism, ontology of knowledge, education systems, clusters |
| JEL: | B52 B53 D78 D83 G24 M13 N94 O3 O43 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:sec:cnstan:0468&r=ent |
| By: | Katja Bringmann; Ann Verhetsel; Thomas Vanoutrive; Jo Reynaerts |
| Abstract: | The existing literature on cluster embeddedness largely neglects the impact of finance on the development of firm?s network linkages. This is striking in so far that particularly venture capital is often referred to as ?smart money? providing firms not only with funds but also with network contacts. Thus, in this paper, we intend to quantitatively assess the impact of venture capitalists on start-ups? embeddedness. Embeddedness generally occurs along three dimensions namely the societal, the network and the territorial one. Societal embeddedness refers to the cultural environment economic actions take place in. Network embeddedness representing the structure and nature of relations an organization is maintaining and territorial embeddedness implying the degree of spatial anchoring of a firm in a specific geographical area. It is assumed that for firms and regions there are several advantages arising from deep network and, respectively, territorial embeddedness: Among others, they include local knowledge spillovers which promote innovative thinking and, subsequently, strengthen firms? global competitiveness and thereby fueling regional economic growth. In addition, particularly territorial embeddedness is reckoned as shielding to some extent against firm relocation that is widely regarded as hampering regional development. Due to the riskiness of their business, insufficient hard assets, and an unforeseeable rate of return, innovative startups are generally unable to get capitalized by more conventional sources of money i.e. bank lending and therefore often return to venture capital. Besides providing incumbent innovative firms with funds, venture capitalists, reverting to their vast sectoral knowledge and personal contacts, are frequently facilitating the entry of startups into existing personal and industry networks. Generally, it is anticipated that those network contacts are densest in the immediate neighbourhood of the investor. Summing up, given its ?social? character, it is hypothesized that venture capital is an important driver of start-ups? embeddedness that is nevertheless spatially constraint. In order to answer to what extent venture capital impacts portfolio firms? territorial and network embeddedness and whether the geographical location of the venture capitalist has an effect on start-ups? local anchoring, we conduct an empirical analysis using data on venture capital flows. By reviewing cluster embeddedness from a financial geographic perspective, this analysis complements the literature that hitherto has largely neglected the role of venture capital in this respect. |
| Keywords: | Venture capital; Industrial Cluster; Embeddedness; Social Networks |
| JEL: | R12 G24 |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa13p298&r=ent |