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on Entrepreneurship |
| By: | Hammarstedt, Mats (Linnaeus University); Skedinger, Per (Research Institute of Industrial Economics (IFN)) |
| Abstract: | We examine immigrant self-employment in Sweden during 2011–2021 – a turbulent decade with a large influx of refugees into the country and the outbreak of the global COVID-19 pandemic. Four outcome variables are investigated: the probability of self-employment, the probability of entry into and exit from this state and earnings of the self-employed. This is done for different cohorts of immigrants from Africa and Asia and for different types of businesses, unincorporated and incorporated firms. We find that immigrants have lower business earnings and higher exit rates from self-employment than natives, which is in line with previous research. It also turns out that the period in which the immigrants arrived to Sweden and the type of business they are engaged in have important implications for outcomes. In most cases, outcomes are more favorable for the earliest of the three cohorts we study, those who came to Sweden up to the turn of the millennium, and less so for the latest arrivals during the turbulent decade. Moreover, immigrants in incorporated self-employment who arrived during 2011–2021 fared less badly, relative to earlier cohorts, in terms of business earnings than their counterparts in unincorporated businesses, while results concerning exits from self-employment are mixed in this respect. |
| Keywords: | Self-employment; Immigrants; COVID-19; Refugee crisis |
| JEL: | J15 J24 J71 |
| Date: | 2024–06–27 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:iuiwop:1497&r= |
| By: | A K M Zakaria (Department of Business Economics and Management, School of Business Administration, Silesian University) |
| Abstract: | Marketing and Customer Relationship Management (CRM) are leading departments within an organization, contributing significantly to achieving industrial success. In the microfinance industry, CRM plays a crucial role in building customer trust and understanding their needs better. When serving refugee entrepreneurs, microfinance organizations face additional challenges due to diverse languages and cultures. However, they also have substantial opportunities to expand their business among refugee entrepreneurs. The aim of this working paper is to highlight the importance of CRM in the microfinance industry when serving refugee entrepreneurs in Europe. The study will analyse the challenges and opportunities of microfinance institutions (MFIs) in caring to this specific customer segment. The findings will assist microfinance institutes' marketing and CRM departments in satisfying refugee customers and achieving organizational objectives. |
| Keywords: | CRM, refugee entrepreneurs, CRM on microfinance, MFIs, marketing |
| JEL: | L26 L31 M31 |
| Date: | 2023–07–06 |
| URL: | https://d.repec.org/n?u=RePEc:opa:wpaper:0075&r= |
| By: | Fatih Guvenen; Gueorgui Kambourov; Burhan Kuruscu; Sergio Ocampo-Diaz |
| Abstract: | When is a wealth tax preferable to a capital income tax? When is the opposite true? More generally, can capital taxation be structured to improve productivity, incentivize innovation, and ultimately increase welfare? We study these questions theoretically in an infinite-horizon model with entrepreneurs and workers, in which entrepreneurial firms differ in their productivity and are subject to collateral constraints. The stationary equilibrium features heterogeneous returns and misallocation of capital. We show that increasing the wealth tax increases aggregate productivity. The gains result from the “use-it-or-lose-it” effect of wealth taxes when returns are heterogeneous, which causes a reallocation of capital from entrepreneurs with low productivity to those with high productivity. Furthermore, if the capital income tax is adjusted to balance the government's budget, aggregate capital, output, and wages also increase. We then study the welfare maximizing combination of wealth and capital income taxes and show that the optimal mix shifts towards a higher wealth tax and a lower capital income tax as the capital intensity of production increases. For a range of plausible parameter values, the optimal wealth tax is positive, whereas the capital income tax can be positive or negative (a subsidy). We then endogenize the entrepreneurial productivity distribution by introducing either ex ante innovation or entrepreneurial effort in production and show that this strengthens our results: by allowing entrepreneurs to keep more of the upside relative to a capital income tax, a wealth tax incentivizes more innovation and entrepreneurial effort, leading to larger increases in productivity, output, and welfare. |
| JEL: | E21 E25 E60 H21 H24 J31 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32585&r= |
| By: | Diegmann, André; Pohlan, Laura; Weber, Andrea |
| Abstract: | We study how connections to German federal parliamentarians affect firm dynamics by constructing a novel dataset to measure connections between politicians and the universe of firms. To identify the causal effect of access to political power, we exploit (i) new appointments to the company leadership team and (ii) discontinuities around the marginal seat of party election lists. Our results reveal that connections lead to reductions in firm exits, gradual increases in employment growth without improvements in productivity. The economic effects are mediated by better credit ratings while access to subsidies or procurement contracts are documented to be of lower importance. |
| Keywords: | Politicians, Firm Performance, Identification, Political Connections |
| JEL: | O43 L25 D72 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:zewdip:300014&r= |
| By: | Lee, Neil; Ni, Metta; Boey, Augustin |
| Abstract: | The Singaporean state has played a crucial role in the country’s economic development. This led to concerns that a state-steered economy would be unable to develop fast-changing, disruptive sectors that are reliant on individual entrepreneurship, such as digital technology. Yet Singapore has become a world leader in the scaling of digital technology firms. In this paper, we consider how this happened. We show that advances in ICT opened a window of locational opportunity in digital tech, which was spotted by Singaporean policymakers open to experimentation. A distinctive ‘Singapore model’ developed to take advantage of this opportunity, exploiting Singapore’s geographical position, open economy, and business environment but combining this with active state intervention. To address coordination problems in the creation of an entrepreneurial ecosystem, Singaporean policymakers worked through a process we term ‘network coordination’ across the whole of government. While overall rates of entrepreneurship remain low, the country has been successful at scaling firms in the digital technology sector. These primarily focused on consumer applications and non-Singaporean markets, but there has been little development in frontier ‘deep tech’. |
| Keywords: | digital technology; Singapore; developmental states; industrial policy; entrepreneurial ecosystems |
| JEL: | R14 J01 L81 |
| Date: | 2024–06–14 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:123885&r= |
| By: | Luduvice, André Victor D.; Martinez, Tomás R.; Sollaci, Alexandre B. |
| Abstract: | This paper studies the effects of the minimum wage on the life cycle of firms. We first build a tractable model where heterogeneous firms have labor market power, invest in innovation, and choose formal or informal sectors. The model predicts that a minimum wage hike not only shrinks young and low-productivity firms but also lowers incentives to innovate, resulting in lower life cycle growth. We then test the predictions of the model using Brazilian administrative and census data leveraging the variation in exposure across establishments and municipalities to the large increase in the minimum wage between 1999 and 2010. At the establishment level, an increase in the minimum wage: i) decreases the growth rates of small and young establishments and ii) increases the growth rates of old and large establishments. When analyzing exposed municipalities, we observe an increase in the earnings of workers in both the formal and informal sectors, as well as informal employment. Our findings suggest that the minimum wage is a possible explanation for the decline in the importance of young establishments and business dynamism in Brazil. |
| Keywords: | Monopsony;Business Dynamism;Firm Heterogeneity;Minimum Wage;Informality |
| JEL: | J38 J42 E24 E26 L25 |
| Date: | 2024–03 |
| URL: | https://d.repec.org/n?u=RePEc:idb:brikps:13444&r= |
| By: | Annika Nivala (VATT Institute for Economic Research) |
| Abstract: | Finland had a large regional wage subsidy for hiring the first employee in 2007–2011. In this paper, I show that the take-up of the subsidy was very low: only 2% firms that became employers used the subsidy. The subsidy was restricted to hiring a full-time employee, which reduced the take-up. However, even among full-time employers the take-up rate was only 6%. Hence, a large majority of firms left thousands of euros on the table by not using the subsidy. Based on the descriptive evidence, the low take-up seems to be explained by low awareness in addition to costs of using the subsidy. Using a regional difference-in-differences identification strategy, I estimate the effect of the subsidy on the probability of becoming an employer and other firm outcomes. As a consequence of the low take-up, the estimated effect is zero. |
| Keywords: | Business subsidies, Wage subsidies, Firm behavior, Labor demand, Entrepreneurship, Small Business |
| JEL: | H25 H32 J23 J38 M51 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:fit:wpaper:23&r= |
| By: | Fatica, Serena (European Commission); Grammatikopoulou, Ionna (European Commission); Hirschbuehl, Dominik (European Commission); La Notte, Alessandra (European Commission); Pisani, Domenico (European Commission) |
| Abstract: | Nature-related financial risks have emerged as critical concerns for policymakers and financial actors. Central to this issue are ecosystem services, which play an integral role in various production processes but may be interrupted due to nature degradation. This article delves into the vulnerability of European SMEs by combining firm-level exposures to ecosystem service dependencies with regional information on the relative abundance of ecosystem services provisioning and the risk of natural hazards. Focusing on long-term debt positions to gauge financial stability implications, the results reveal moderate nature risks for European SMEs at the current stance but also highlight a possible concentration of risks and a need to further refine the use of available indicators. |
| Keywords: | ecosystem services, natural capital, nature degradation, physical risks, environmental risks, ENCORE, risk management, SMEs |
| JEL: | G21 G38 Q5 |
| Date: | 2024–03 |
| URL: | https://d.repec.org/n?u=RePEc:jrs:wpaper:202403&r= |
| By: | Eslava, Marcela; Meléndez, Marcela; Ulyssea, Gabriel; Urdaneta, Nicolás; Flores, Ignacio |
| Abstract: | The relationship between firms and inequality has been a focus of recent attention globally. This chapter summarizes basic facts about this relationship for Latin America. Unlike advanced economies where superstar firm growth has prompted concerns over disproportionate income growth at the top, the facts we summarize illustrate that the main concern for Latin America is the extreme prevalence of tiny businesses whose workers and owners tend to populate the bottom income segments. The empirical likelihood that these businesses improve their productivity and grow to hire more workers and pay better wages is also very low. The region displays a deficit of employment generation in SMEs, by contrast to both microbusinesses (including self-employment) and large corporations. While the former tend to remunerate both workers and owners with very low incomes, the latter pay high wages but also exhibit low labor shares. |
| Keywords: | Inequality;Business Development;Latin America;Labor Force and Employment |
| JEL: | E02 J21 O54 |
| Date: | 2024–04 |
| URL: | https://d.repec.org/n?u=RePEc:idb:brikps:13480&r= |
| By: | Bustos, Emil (Research Institute of Industrial Economics (IFN)); Engist, Oliver (Department of Economics) |
| Abstract: | We study how financing constraints affect the cash holdings of small and medium-sized enterprises. There has been little empirical work on this topic, even though these firms often face financial constraints. We contribute by using detailed data on credit ratings in Sweden as a measure of financial constraints. We then use panel regressions and a regression-discontinuity analysis to estimate the relationship between access to credit and cash holdings. Our analysis finds no causal effect of credit ratings on cash holdings. |
| Keywords: | Financial Constraints; Cash; Private Firm; Credit Score |
| JEL: | D22 D25 G32 |
| Date: | 2024–06–25 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:iuiwop:1493&r= |
| By: | Rozi Kumari (Guru Gobind Singh Indraprastha University); Rupayan Pal (Indira Gandhi Institute of Development Research) |
| Abstract: | Level playing field for women to participate in decision making and leadership positions is key to progress of a nation. Analysing widely used nationally representative datasets from the World Bank Enterprise Survey (WBES), we document that women ownership and participation in top management of registered private firms in India has drastically decreased, from low to a very meagre level, during the period from 2014 to 2022, despite sustained GDP growth and launch of several government programs to promote entrepreneurship. The pattern of decline is consistent across sectors (manufacturing and services) and size-groups (small, medium, and large) of firms, barring some variations. This is true regardless of the measure of women ownership considered and is not due to entry and exit of firms. |
| Keywords: | Firm ownership, Women, Private registered firms, Decision rights, Leadership, Entrepreneur |
| JEL: | O10 G32 J54 L26 B54 |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:ind:igiwpp:2024-008&r= |
| By: | Alessandro Bitetto (University of Pavia); Paola Cerchiello (University of Pavia) |
| Abstract: | Initial Coin Offerings (ICOs) have emerged as a novel way of start-up funding based on blockchain technology and this paper aims to explain the nexus between ICOs business purposes and underpricing, i.e. when the price of the offered token is lower than the one traded on the market. In particular, we focus on the impact of the Environmental, Social and Governance (ESG) pillars on the ICOs' underpricing. Therefore, we built up a wide and comprehensive dataset comprising $\sim8000$ ICOs spanning from 2015 through 2023, containing both technical and financial information. Moreover, we assessed an ESG score using AI-based textual analysis performed over the whitepapers. The main results show that a higher ESG orientation leads to less underpricing, especially in the early trading days. Our findings may represent a useful support to an enhanced and reliable decision-making process. |
| Keywords: | Initial coin offering (ICO), ESG, Text analysis, Underpricing. |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:pav:demwpp:demwp0221&r= |
| By: | Butzin, Anna; Rabadjieva, Maria; Flögel, Franz; Meyer, Kerstin |
| Abstract: | Die Internationalisierung von Gründungsökosystemen kann Startups den Zugang zu neuen Märkten und Fachkräften erleichtern. Die Fachliteratur fordert dazu ein umfassendes Verständnis der internationalen Einbettung von Gründungsökosystemen, welches neben dem Agieren auf internationalen Märkten auch unterstützende Aktivitäten von Intermediären, Vernetzungstätigkeiten und Auslandserfahrungen von Gründerinnen und Gründern berücksichtigt. Im Rahmen des Förderprogramms Horizont Europa werden solche Internationalisierungsbestrebungen von der europäischen Kommission aktiv gefördert. Das EU-geförderte Projekt Ecosys4you stellt ein gutes Beispiel dar, wie die Internationalisierung von drei Gründungsökosystemen - Ruhrgebiet in Deutschland, Varna in Bulgarien und Slowenien - durch Vernetzung, Kooperation und Einbindung von Studierenden als aktive Ökosystemakteure gelingen kann. |
| Keywords: | Gründungsökosysteme, Internationalisierung, EU-Horizon Programm, Studie-rende, Entrepreneurship-Education |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:iatfor:299134&r= |