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on Entrepreneurship |
| By: | Michael Fritsch (Friedrich Schiller University Jena and Halle Institute for Economic Research (IWH), Germany); Michael Wyrwich (University of Groningen, The Netherlands and Friedrich Schiller University Jena, Germany) |
| Abstract: | We review and discuss research on the development of regional entrepreneurship over time. A particular focus is on the long-term persistence of regional levels of entrepreneurship, its explanation, and its meaning for economic development. What is the state of empirical research in this field, and what can explain the empirical findings? How are long-term trends of entrepreneurial activity linked to regional performance in terms of employment, gross domestic product (GDP), and innovative activity? Based on our assessments we derive conclusions for theory, policy implications, and avenues for further research. |
| Keywords: | Entrepreneurship, self-employment, regional growth, entrepreneurial culture, historical analysis |
| JEL: | L26 M13 O1 O33 R11 |
| Date: | 2022–09–16 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2022-010&r= |
| By: | Giulio Bottazzi; Taewon Kang; Federico Tamagni |
| Abstract: | We propose a new methodology to assess the degree of persistence in firm growth, based on Conditional Quantile Transition Probability Matrices (CQTPMs) and well-known indexes of intra-distributional mobility. Improving upon previous studies, the method allows for exact statistical inference about TPMs properties, at the same time controlling for spurious sources of persistence due to confounding factors such as firm size, and sector-, country- and time-effects. We apply our methodology to study manufacturing firms in the UK and four major European economies over the period 2010-2017. The findings reveal that, despite we reject the null of fully independent firm growth process, growth patterns display considerable turbulence and large bouncing effects. We also document that productivity, openness to trade, and business dynamism are the primary sources of firm growth persistence across sectors. Our approach is flexible and suitable to wide applicability in firm empirics, beyond firm growth studies, as a tool to examine persistence in other dimensions of firm performance. |
| Keywords: | Firm growth persistence; Transition probability matrices; Mobility indexes; Non-parametric statistics. |
| Date: | 2022–09–23 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2022/27&r= |
| By: | Matthew J. Lindquist; Theodor Vladasel |
| Abstract: | Entrepreneurship is often hailed as a path to upward intergenerational mobility, but few studies have explicitly tested this belief. We study intergenerational income rank mobility among entrepreneurs and employees in Sweden using high-quality measures of lifetime income for 215,000 father-son pairs. Incorporated entrepreneurs are more upwardly mobile than wage earners; this result is driven by selection and not by the causal impact of entrepreneurship on upward intergenerational mobility. By contrast, unincorporated entrepreneurs are more downwardly mobile, a result explained by selection, income underreporting, and lower returns to skills and education. |
| Keywords: | entrepreneurship, incorporation, intergenerational mobility, lifetime income, upward mobility |
| JEL: | L26 J24 J62 |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:1351&r= |
| By: | Miguel A. Ferreira; Joao Pereira dos Santos; Ines Venancio |
| Abstract: | We study the role of property taxes on entrepreneurial activity using a quasi-natural experiment, which unexpectedly reduced the upper bound of the Portuguese property tax rate for urban properties in 2008. Using a diffrence-in-differences approach, we nd that treated municipalities (i.e., municipalities that had a property tax rate above the new upper bound) experienced higher entry rates in the manufacturing sector vis-a-vis control municipalities (i.e., municipalities that had a property tax rate at or below the new upper bound). Taking advantage of rm-level data, we show that start-ups created as a response to the decrease in property taxes in treated municipalities use more debt, invest more, and are more likely to survive. |
| Keywords: | Entrepreneurship, Property taxes, Savings, Portugal |
| JEL: | L26 H20 R30 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:unl:unlfep:wp643&r= |
| By: | Jessica Birkholz |
| Abstract: | It is of key importance to identify innovative business ideas in an early stage, so that funding resources can be adequately allocated according to their economic potential. Traditional indicators do not reliably discriminate business ideas with high degree of innovativeness and high incorporation chances from those with low degree of innovativeness and low incorporation prospects. Therefore, this paper examines the content of business idea descriptions to improve the estimations of the incorporation probability. The paper aims to answer two questions: 1) Are there differences in topic prevalence in innovative and non-innovative business ideas?, and 2) How does the composition of topics related to a business idea influence its incorporation probability? Structural topic modeling and classification tree analysis are applied on business idea descriptions from a competition in Bremen, Germany, from 2003 until 2019. The results show that business idea descriptions are a rich source of information to identify both innovative ideas and those with higher incorporation prospects. |
| Keywords: | Innovative entrepreneurship, business idea, machine learning, incorporation |
| JEL: | O30 L26 O38 |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:atv:wpaper:2109&r= |
| By: | Craig McIntosh; Andrew Zeitlin |
| Abstract: | We present results of an experiment benchmarking a workforce training program against cash transfers for underemployed young adults in Rwanda. 3.5 years after treatment, the training program enhances productive time use and asset investment, while the cash transfers drive productive assets, livestock values, savings, and subjective well-being. Both interventions have powerful effects on entrepreneurship. But while labor, sales, and profits all go up, the implied wage rate in these businesses is low. Our results suggest that credit is a major barrier to self-employment, but deeper reforms may be required to enable entrepreneurship to provide a transformative pathway out of poverty. |
| Date: | 2022–09 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2209.08574&r= |
| By: | Jessica Birkholz; Jarina Kühn |
| Abstract: | We examine the explicit business model preferences and implicit mental representations of entrepreneurship in the early phase of the crisis. We find that the crisis comes with adaptations in both. During crisis, society is open for new business models, even though people increasingly rely on established economic actors instead of opening up towards newly founded firms. We conclude that the early and sudden impact of the crisis influences the entrepreneurial culture onwards and therefore potentially future entrepreneurial activities. |
| Keywords: | Crisis, entrepreneurship, business models, mental representation |
| JEL: | D83 D84 D87 D91 L26 |
| Date: | 2021–07 |
| URL: | http://d.repec.org/n?u=RePEc:atv:wpaper:2105&r= |
| By: | Julian di Giovanni; Manuel García-Santana; Priit Jeenas; Enrique Moral-Benito; Josep Pijoan-Mas |
| Abstract: | We provide a framework to study how different allocation systems of public procurement contracts affect firm dynamics and long-run macroeconomic outcomes. We start by using a newly created panel dataset of administrative data that merges Spanish credit register loan data, quasi-census firm-level data, and public procurement projects to study firm selection into procurement and the effects of procurement on credit growth and firm growth. We show evidence consistent with the hypotheses that there is selection of large firms into procurement, that procurement contracts provide useful collateral for firms -more so than sales to the private sector- and that procurement contracts facilitate firm growth beyond the contract duration. We next build a model of firm dynamics with both asset-based and earnings-based borrowing constraints and a government that buys goods and services from private sector firms. We use the calibrated model to quantify the long-run macroeconomic consequences of alternative procurement allocation systems. We find that granting procurement contracts to small firms, either by directly targeting them or by slicing large contracts into smaller ones, helps these firms grow and overcome financial constraints in the long run. However, we also find that reducing the average size of contracts |or making it less likely for large firms to access them| removes saving incentives for large firms, whose negative effects on capital accumulation can overcome the expansionary consequences for small firms and hence generate a drop in aggregate output. |
| Keywords: | Government procurement, financial frictions, capital accumulation, aggregate productivity |
| JEL: | E22 E23 E62 G32 |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:1321&r= |
| By: | Thomä, Jörg |
| Abstract: | Regarding the spatial impact of digitalization, the concern is often expressed that rural areas and the companies located there are disadvantaged by a digital divide compared to urban regions. Against this background, this paper explores the role of the urban/rural location of a small firm in the use of digital communication and information technologies (ICT). With the help of a cluster analysis approach, different modes of digitalization in the German small enterprise sector are identified. According to this, four groups of small firms can be distinguished in accordance to the maturity level concept of digital transformation: non-digital firms, digital beginners, platform-oriented firms and digital manufacturers. From a spatial perspective, it can be seen that the members of the platform-oriented group are relatively often located in urban regions, whereas the digital manufacturers are relatively often found in rural areas. These findings are interpreted as an indication that small firms at least partially consciously assign themselves to one of these digitalization modes, depending on which business model is most effective in the respective (urban or rural) business environment. By contrast, whether a small firm has not yet done anything in terms of digitalization or is only at the beginning of the digital transformation process does not significantly depend on the location of the company. The paper concludes with implications for policy and research. |
| Keywords: | Digitalization,Rural regions,Digital divide,Urban-rural typology,SMEs |
| JEL: | D22 O33 R11 R12 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifhwps:372022&r= |