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on Entrepreneurship |
| By: | Johan Hombert; Antoinette Schoar; David Sraer; David Thesmar |
| Abstract: | We study a large-scale French reform that provided generous downside insurance for unemployed individuals starting a business. We study whether this reform affects the composition of people who are drawn into entrepreneurship. New firms started in response to the reform are, on average, smaller, but have similar growth expectations and education levels compared to start-ups before the reform. They are also as likely to survive or to hire. In aggregate, the effect of the reform on employment is largely offset by large crowd-out effects. However, because new firms are more productive, the reform has the impact of raising aggregate productivity. These results suggest that the dispersion of entrepreneurial abilities is small in the data, so that the facilitation of entry leads to sizable Schumpeterian dynamics at the firm-level. |
| JEL: | G3 H25 J65 |
| Date: | 2014–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20717&r=ent |
| By: | Klaesson, Johan (Jönköping International Business School (JIBS) & Centre of Excellence for Science and Innovation Studies (CESIS)); Klaesson, Charlie (Jönköping International Business School (JIBS) & Centre of Excellence for Science and Innovation Studies (CESIS)) |
| Abstract: | Abstract: Many phenomena in the economy are influenced by geography. The size of new firm start-ups vary in many dimensions, among them industry and geography. The purpose of this paper is to explore the determinants of the geographical distribution of the size of new firms. Re¬gional size itself can be expected to influence the size of the new firm. Given that there are fixed costs present in the new firms small and low-density regions will demand a larger size of the new firm. The reason for this is that in small regions the firm may not be able to find customers nearby, but need to sell its produce over some distance. This means that the firm must house capacities to do so and this increases the fixed cost component and hence forces the firm to produce a larger amount of the output. Another possible reason can be found in the availability of producer services. In small regions, the number of producer services is more limited and, hence, force the firms to produce some of these services in-house. Gener¬ally, the overall diversity found in small regions is smaller compared to large re-gions. This means that the variation in goods and services available in the market will be smaller, once again forcing the new firm to do more things within the firm. In addition, it is ex¬pected that there is a relationship between entry rate and the size of the entrants. |
| Keywords: | Entry; Start-up size; Market Potential; Region; Industry; Sweden |
| JEL: | C21 L11 M13 R11 R12 |
| Date: | 2014–11–26 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0384&r=ent |
| By: | Claudia Alvarez; José Ernesto Amorós; David Urbano (School of Business and Economics, Universidad del Desarrollo) |
| Abstract: | This paper uses an institutional approach to examine the effect of regulations on entrepreneurial activity, comparing developed and developing countries. Through an unbalanced panel data set of 49 countries over the period 2001-2010 and using a combination of international databases we find a positive influence of government spending and entrepreneurship legislation on entrepreneurial activity. It was also found that regulations may have different impacts on entrepreneurship according to the country’s economic development. Thus, in developed economies unemployment legislation is positively related to entrepreneurship, while this relationship is negative in other cases. This paper offers new insights both from a conceptual perspective (advancing theory concerning the factors that influence entrepreneurial activity) and a practical viewpoint (for the design of government policies to foster entrepreneurship). |
| Keywords: | Entrepreneurship, entrepreneurial activity, regulations, institutional economics, developed and developing economies, GEM. |
| JEL: | L26 D02 E02 |
| Date: | 2014–11 |
| URL: | http://d.repec.org/n?u=RePEc:dsr:pastwp:02&r=ent |
| By: | Heike Delfmann; Sierdjan Koster |
| Abstract: | New firm formation is often highly prioritized by local governments, particularly for regions that are declining. Entrepreneurship can play an important role in keeping declining regions vital through job creation. Yet, the way in which new firm formation exerts its influence on employment growth is not yet evident. Are start-ups in those areas equally productive in influencing employment change as they are in growing regions? Although there is a large and growing body of research on new firm formation and employment, there is still a knowledge gap concerning the impact of the context on the effect of new firm formation. Previously the focus has been on growth. New firm formation can contribute direct and indirectly to regional employment. The indirect effects are thought to have a larger impact on the long term, and indirect effects are not per sé positively related to employment growth. Focusing on the regional context, we investigate whether the relationship differs depending decline or growth, and by the degree of urbanization, to determine both long and short term employment effects. In order to establish the impact of new firm formation on employment rates, the paper examines panel data of firm dynamics and employment growth retrieved from the LISA database covering the whole of the Netherlands on a municipality level (418 regions) between 1996-2010. This data is complemented with data on population density, size, growth and decline from the Statistic Netherlands. |
| Keywords: | Employment growth; population decline; new firm formation; urban and rural regions; direct and indirect effects; |
| JEL: | M13 R11 O18 |
| Date: | 2014–11 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa14p1133&r=ent |
| By: | Lee, Neil; Rodriguez-Pose, Andres |
| Abstract: | Creative cities are seen as important sites for the generation of new ideas, products and processes. Yet, beyond case studies of a few high-profile cities, there is little empirical evidence on the link between local creative industries concentration and innovation. This paper addresses this gap with an analysis of around 1,300 UK SMEs. The results suggest that firms in local economies with high shares of creative industries employment are significantly more likely to introduce entirely new products and processes than firms elsewhere, but not innovations which are simply new to the firm. This effect is not exclusive to creative industries firms and seems to be largely due to firms in medium sized, rather than large, cities. The results imply that creative cities may have functional specialisations in new content creation and so firms are more innovative in them. |
| Keywords: | cities; creative cities; creative industries; creativity; innovation |
| JEL: | O31 O38 R11 R58 |
| Date: | 2014–11 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:10263&r=ent |
| By: | Yoshino, Naoyuki (Asian Development Bank Institute); Taghizadeh-Hesary, Farhad (Asian Development Bank Institute) |
| Abstract: | In Asia, small and medium-sized enterprises (SMEs) account for a major share of employment and dominate the economy. Asian economies are often characterized as having bank-dominated financial systems and underdeveloped capital markets, in particular venture capital markets. Hence, looking for new methods of financing for SMEs is crucial. Hometown investment trust funds (HIT) are a new form of financial intermediation that has now been adopted as a national strategy in Japan. In this paper, we explain the importance of SMEs in Asia and describe about HITs. We then provide a scheme for the credit rating of SMEs by employing two statistical analysis techniques, principal components analysis and cluster analysis, and applying various financial variables to 1,363 SMEs in Asia. Adoption of this comprehensive and efficient method would enable banks to group SME customers based on financial health, adjust interest rates on loans, and set lending ceilings for each group. Moreover, this method is applicable to HITs around the world. |
| Keywords: | smes; credit risk; hometown investment trust funds; venture capital markets; asian capital markets |
| JEL: | G21 G24 G28 |
| Date: | 2014–12–03 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0505&r=ent |
| By: | Ludo Visschers (Universidad Carlos III, Madrid and University of Edinburgh); Ana Millan (Universidad Carlos III de Madrid); Matthias Kredler (Universidad Carlos III Madrid) |
| Abstract: | In this paper, we study the flows between self-employment, unemployment and paid employment, and how these vary over the business cycle. First, we document these flows in the data, paying particular attention to previous labor market outcomes for workers entering self-employment, and subsequent labor market outcomes for those leaving self-employment, and how these are affected by cyclical conditions. Second, we construct a two-ladder equilibrium model of a frictional labor market capturing these flows: workers search both on and off the job, and receive business ideas while in any of the three states: self-, paid employment and unemployment. We study this model in an environment with aggregate shocks, which affect both the productivity of matches in the paid-employment sector, and the profitability of ideas for the self-employed. Third, we (plan to) calibrate to see how well it can quantitatively account for observed patterns over the business cycle. These allow us to have a notion of entry into self- employment by "opportunity" (highly profitable ideas), and "necessity" (lack of alternatives in paid employment), and how these vary over the business cycle, and to quantify "prosperity pull" of self-employment in good times, and "recession push" in bad times. Finally, we plan to study the impact of labor market policies on self-employment, and on unemployment, taking into account the option to enter self-employment. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed014:597&r=ent |