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on Entrepreneurship |
| By: | Canidio, Andrea; Legros, Patrick |
| Abstract: | The task assignment that maximizes present expected output is not necessarily the most informative about an agent's comparative advantage at different tasks. Entrepreneurs are free to choose their task assignment-workers in firms are not. When labor market frictions are low, any surplus generated by a more informative task as- signment is captured by the worker, and firms maximize present expected output in their task assignment. Hence, agents may choose entrepreneurship to learn their comparative advantage. The opposite holds when labor market frictions are large. The model establishes a causal relation between the degree of labor market frictions, the value of entrepreneurial failures, the level of entrepreneurial activity, the degree of firms' short-termism, and the rate of within-firm talent discovery. The theoretical correlations between these variables are consistent with the evidence available for the US and continental Europe. |
| Keywords: | career concerns.; entrepreneurial failures; entrepreneurship; learning; organizational choice; task allocation |
| JEL: | D83 J24 J62 L26 M13 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11295&r=ent |
| By: | Rocha, Vera (Copenhagen Business School); van Praag, Mirjam C. (Copenhagen Business School); Folta, Timothy B. (University of Connecticut); Carneiro, Anabela (University of Porto) |
| Abstract: | The founder (team)'s human capital is a vital determinant of future firm performance. This is a stylized fact. Less is known about the effect of the human capital of the initial workforce hired by the founder(s). We study the performance consequences of a founder's choice of the initial workforce's human capital (quantity and quality), besides the human capital of the founder(s). The analysis is based on matched employer-employee data and covers about 5,300 startups in manufacturing industries founded by individuals coming from employment between 1992 and 2007. We acknowledge that initial hiring decisions are endogenous and correlated with the human capital of the founders and the ownership structure of startups (single founder versus team of founders). Given the stickiness of initial choices, human capital decisions at entry turn out to be a close to irreversible matter with significant implications for post-entry survival and growth of the firm. |
| Keywords: | human capital, entrepreneurship, startups, firm performance |
| JEL: | J24 L26 M13 |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9919&r=ent |
| By: | Xi, Guoqian (University of Trier); Block, Jörn (University of Trier); Lasch, Frank (Montpellier Business School); Robert, Frank (Montpellier Business School); Thurik, Roy (Erasmus University Rotterdam) |
| Abstract: | Our paper investigates how the type of work experience gained from prior paid employment influences the path to entrepreneurship. We distinguish between two distinct entrepreneurship entry modes: business takeover and new venture start-up. Using a large and rich French data set, we find that small firm experience increases the likelihood for business takeover, whereas management and same sector experience both increase the likelihood for new ventures. Our findings are relevant for policymakers aiming to improve the business transfer process. |
| Keywords: | entrepreneurship entry mode, business takeover, new venture start-up, work experience |
| JEL: | L26 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9949&r=ent |
| By: | Michael Fritsch (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Michael Wyrwich (School of Economics and Business Administration, Friedrich-Schiller-University Jena) |
| Abstract: | This paper summarizes the role of entrepreneurship in the East German transformation process that followed the breakdown of the socialist regime and subsequent unification with West Germany. The main aim of this exercise is to derive conclusions and recommendations for a potential unification of the Korean Peninsula. We demonstrate that the formation of new businesses played a significant role, while efforts to adapt formerly state-owned firms were much less successful. In East Germany, newly emerging firms created the major share of employment opportunities, while incumbent socialist firms shed vast amounts of labor or disappeared completely. The main implication for a potential unification of the Korean Peninsula is that policy should have a special focus on entrepreneurship. In particular, it should try to utilize and strengthen the entrepreneurial abilities of the North Korean population and to create favorable conditions for the emergence of prospering new businesses. |
| Keywords: | Entrepreneurship, transformation, East Germany, Korea |
| JEL: | P27 L26 P31 N14 O10 O43 O57 |
| Date: | 2016–05–10 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2016-008&r=ent |
| By: | Molina, Jose Alberto; Velilla, Jorge; Ortega, Raquel |
| Abstract: | This paper analyzes the role of innovation, and other socio-demographic variables, in the entrepreneurial activity in the OECD. We use the index from the GEM 2014 Global Individual Level database, which contains international micro-data for individuals. Our pooled and cross-country results show that young male individuals tend to entrepreneur more than their counterparts. Innovation is also positive strongly related to entrepreneurship. Furthermore, making use of unbiased estimates based on relatively novel and underused techniques we give strong robustness to this result. We find that family and well-being variables follow a mixed relationship with entrepreneurship. Skills, transmission by meeting and opportunities also play an important role. |
| Keywords: | Entrepreneurship, TEA, OECD. |
| JEL: | C21 L26 O31 |
| Date: | 2016–05–25 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:71592&r=ent |
| By: | Hasan, Iftekhar; Kobeissi, Nada; Wang, Haizhi; Zhou, Mingming |
| Abstract: | This paper provides an empirical examination of the regional banking structures in China and their effects on entrepreneurial activity. Using a panel of 27 provinces and four directly controlled municipalities from 1997 through 2008, we find that the presence of large banking institutions negatively correlates with small business development in local markets and that this negative relation is driven mainly by participation of large banks in the short-term loan market. Rural banking institutions, in contrast, are found to promote regional entrepreneurial activity. Moreover, large state banks facilitate small business development in concentrated markets. When we interact measures of banking financing by state banks and rural banking institutions with a set of provincial level marketization indexes, we find that extensive marketization, factor market development, and sophistication of legal frameworks mitigate the negative effect of large state banks on small business development. In provinces with advanced market development, efficient factor markets, and favorable institutional settings, the positive effect of rural banking institutions on small business growth is even stronger. Finally, we present evidence that banks do a better job of promoting regional entrepreneurship when it occurs in conjunction with policies to foster innovation activity and assure protection of intellectual property rights. |
| Keywords: | banking structure, marketization, small business development, China |
| JEL: | G21 O16 P23 P25 |
| Date: | 2015–03–27 |
| URL: | http://d.repec.org/n?u=RePEc:bof:bofitp:2015_011&r=ent |
| By: | Katchova, Ani; Ahearn, Mary |
| Abstract: | This study considers the issue of the transition and growth of new farmers into U.S. agriculture, by examining land ownership and leasing trends. Our approach is to characterize the entire distribution by farmer age and farmer experience rather than using young versus old and beginning versus established farmer categories. We also use a linked-farms longitudinal approach instead of a repeated cross-sectional approach to show trends over time in farmland expansion and contraction. Differences in farm size are more pronounced based on farmer experience than farmer age, as farms operated by older beginning farmers tend to be smaller and do not tend to grow over time. We find that it is mostly young farmers as opposed to all beginning farmers that rapidly expand their farm operations after entering agriculture. Our findings inform policy makers about the strategies that young and beginning farmers use to start their businesses and expand over time and suggest more effective approaches for targeting loan programs to young and beginning farmers. |
| Keywords: | farmland ownership, farmland leasing, beginning farmers, young farmers., Farm Management, Land Economics/Use, Q12, Q15, Q18, |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae15:211839&r=ent |
| By: | Riccardo Leoncini (University of Bologna (Italy); Freiburg Institute for Advanced Studies (FRIAS), University of Freiburg (Germany); IRCrES-CNR (Italy)); Alberto Marzucchi (Catholic University of Milan (Italy)); Sandro Montresor (Kore University of Enna (Italy)); Francesco Rentocchini (Southampton Business School, University of Southampton (UK)); Ugo Rizzo (University of Ferrara (Italy)) |
| Abstract: | This paper investigates the relationships between green/non-green technologies and firm growth. By combining the literature on eco-innovations with industrial organisation and entrepreneurial studies, this relationship is investigated by considering its dependence on the pace at which firms grow and the moderating role of age. Based on a sample of 5498 manufacturing firms in Italy for the period of 2000-2008, we estimate longitudinal fixed effects quantile models in which age is set to moderate the effects of green and non-green patents on employment growth. The results indicate a positive role of green technologies in growth greater than the effect of non-green technologies. This result is valid with the exception of struggling and rapidly growing firms: the relevance of moderately growing firms thus emerges in contrast to the more celebrated “elite of superstar” growing companies. Age plays a moderating role in the growth effects of green technologies. Not completely inconsistent with the extant literature, this moderation effect is positive, indicating the importance of firm experience in benefiting from green technologies in terms of growth, possibly relative to the complexity of their management. |
| Keywords: | green technology; firm growth; age; quantile fixed effects |
| JEL: | L26 O33 Q55 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:srt:wpaper:0616&r=ent |
| By: | Ulisses L. Morais (Faculty of Economics of the University of Coimbra, Portugal); Adelino M. G. Fortunato (Center for Business and Economics Research of the University of Coimbra, Portugal); Ernesto J. F. Costa (Department of Informatics Engineering of the University of Coimbra, Portugal) |
| Abstract: | The possibility that the existence of New-Issues Markets (NIM) could promote, through a behavioral response of potential entrants, a greater market concentration on economic sectors is the object of the present work. We analyze in what conditions do entrepreneurs choose to abandon their plans of entering some industry in order to invest in securities of companies in that same industry. To engage this matter an agent-based model, named Utility Load, was developed and simulated in NetLogo platform, where the entrepreneurs rely on a hybrid heuristic among Prospect Theory and Random Walk Model of perceptual decision-making to choose between starting a firm, assembling a portfolio or doing neither by postponing their decision. We arrive at the conclusion that a lengthy investment horizon or high bonds’ coupon, by offering greater prospective gains, attracts the vast majority of potential entrants to the NIM, which has a nefarious effect on the sector’s structure by increasing its concentration – measured by the Herfindahl-Hirschman Index. Moreover, the model indicates that a more bounded rationale is welfare increasing whilst allowing firms to continuously issue new debt to the public diminishes welfare. The results narrow the scope of reality to be emulated in experimental works and open the door for future empirical researches on this matter by making them more attainable. |
| Keywords: | Agent-Based Model, Barriers to Entry, Entrepreneurship, New-Issues Markets, Market Concentration. JEL Classification: C63, D81, L26 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:gmf:wpaper:2016-07.&r=ent |
| By: | Castellani, Davide (University of Reading); Piva, Mariacristina (Università Cattolica del Sacro Cuore); Schubert, Torben (Lund University); Vivarelli, Marco (Università Cattolica del Sacro Cuore) |
| Abstract: | Using data on the US and EU top R&D spenders from 2004 until 2012, this paper investigates the sources of the US/EU productivity gap. We find robust evidence that US firms have a higher capacity to translate R&D into productivity gains (especially in the high-tech industries), and this contributes to explaining the higher productivity of US firms. Conversely, EU firms are more likely to achieve productivity gains through capital-embodied technological change at least in medium and low-tech sectors. Our results also show that the US/EU productivity gap has worsened during the crisis period, as the EU companies have been more affected by the economic crisis in their capacity to translate R&D investments into productivity. Based on these findings, we make a case for a learning-based and selective R&D funding, which – instead of purely aiming at stimulating higher R&D expenditures – works on improving the firms' capabilities to transform R&D into productivity gains. |
| Keywords: | R&D, productivity, economic crisis, US, EU |
| JEL: | O33 O51 O52 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9937&r=ent |
| By: | Molina, Jose Alberto; Velilla, Jorge |
| Abstract: | This project analyzes specifically how innovation and technological aspects influence the entrepreneurial activity around the world and in Spain. Recent international microdata GEM Global Individual (2014) are applied using a novel econometric methodology based on the Machine Learning techniques for selecting variables based on their predictive ability. Our results, both for Spain and internationally, support the importance of innovation as a critical component of the enterprise, characterizing in this way an "entrepreneurship by innovative vocation" in the sense that the fundamental reason that motivates entrepreneurship is the desire to deliver new services, products or technologies. |
| Keywords: | Enprepreneurship, Innovation, Machine Learning, GEM Data |
| JEL: | D22 J21 |
| Date: | 2016–05–19 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:71471&r=ent |