Degree of Doctor in Human Resources Management and Development / JEL Classification System: L260 Entrepreneurship; M130 New Firms; Startups; The research project underlying this thesis focuses on three main aspects of entrepreneurship. First, we focus on opportunity recognition as the point of departure for entrepreneurial thinking and entrepreneurial activity. Secondly, we propose that basic perceptive cognitive structures (such as prototypes) are fundamental to recognize opportunities at early stages of development of the entrepreneurial mindset. Third, we focus on cognitive and learning aspects of opportunity recognition with individuals in higher education. To explore these topics, the present thesis is divided in two parts. Part I focuses on the theoretical and empirical development of the topic on business opportunity prototype for opportunity recognition and includes three studies. Study 1 provides a systematic literature review of prototypes in entrepreneurship research. A theoretical model based on this analysis is presented and empirically tested on the remaining studies of the thesis. Study 2 explores the role of the context of business opportunity recognition on the identification of its prototypical features. Study 3 proposes a simplified business opportunity prototype to describe how individuals with no entrepreneurial experience perceive business opportunities from early stages of the entrepreneurial mindset. Part II focuses on the training and learning aspects of cognitive structures regarding opportunity recognition and includes one empirical study. Study 4 focuses on the effect of cognitive training and experiential learning on the development and accuracy of the business opportunity prototype. Moreover...
This study uses data from the 2005 Albania Living Standards Measurement Study survey to assess the impact of past migration experience of Albanian households on non-farm business ownership through instrumental variables regression techniques. Considering the differences in earning potentials and opportunities for skill acquisition in different destination countries, we differentiate the impact of past household migration experience by main migrant destinations. The study also explores the heterogeneity of impact based on the timing of migration. The empirical results indicate that past household migration experience exerts a positive impact on the probability of owning a non-farm business. While one additional year in Greece increases the probability of household business ownership by roughly 6 percent, a similar experience in Italy or farther destinations raises the probability by over 25 percent. Although past household migration experience for the period of 1990-2000 is positively associated with the likelihood of owning a household enterprise, a similar association does not exist for the period of 2001-2004.
In developing and transition economies, microlending has become an effective instrument for providing micro businesses with the necessary financial resources to launch operations. In industrialized countries, with their highly developed banking systems, however, there has been ongoing debate on the question of whether an uncovered demand for microlending services exists. The present pilot study explores customer preferences for microlending products in Germany. Among the interviewed business owners, 15% reported revolving funding needs and an interest in microloans. We find that potential recipients of microloan products are retail business owners, foreign business owners, and persons who had previously received private loans. Furthermore, financial products should feature rapid access to short-term loans.
Empirical evidence shows that entrepreneurs hold a large fraction of wealth, have higher saving rates than workers, and face substantial uninsurable entrepreneurial and investment risks. This paper constructs a heterogeneous-agent general equilibrium model with uninsurable entrepreneurial risk and capital-market imperfections to explore the implications of uninsurable entrepreneurial risk for wealth distribution and aggregate activity in an incomplete market economy. It is shown that entrepreneurial risk can substantially affect both the wealth distribution and the macroeconomy.
This paper revisits the empirical relationship between the probability of transition to entrepreneurship and wealth. Given that wealth is correlated with both education and age, these observable characteristics cannot be treated as independent covariates in the estimation. Thus, I document the differences in the transition probability profile across age and education groups. The main result of this paper is that the estimated probability of transition to entrepreneurship is hump-shaped in wealth across cohorts defined by age and education. Therefore, the aggregate profile estimated by Hurst and Lusardi (J Polit Econ 112(2):319-347, 2004) is not representative at the micro level. In addition, this paper provides facts that evidence important differences between entrepreneurs and workers, as well as among entrepreneurs, across education and age.
This study investigates the determinants of firm size. Data was collected in face-to-face structured-questionnaire interviews of 1314 firm founders from 14 counties in Argentina. Quantile regression was used as a more suitable methodology to measure the determinants of firm size. Our results show that the main sets of explanatory variables related to founder characteristics (age, experience, education, and vocation) provide a full explanation of firm size. We have also found evidence that a high degree strategic planning and a better competitive position are positively related to firm size as well. Finally, environmental factors were less representative.
We report on a field experiment providing random grants to microenterprise owners. The grants generated large profit increases for male owners but not for female owners. We show that the gender gap does not simply mask differences in ability, risk aversion, entrepreneurial attitudes, or differences in reporting behavior, but there is some evidence that the gender gap is larger in female-dominated industries. The data are not consistent with a unitary household model, and imply an inefficiency of resource allocation within households. We show evidence that this inefficiency is reduced in more cooperative households.
We examine new self-employment entry and its viability in Bosnia and Herzegovina, using a rich household survey for the years 2001-2004. We find that wealthier households are more likely to engage in viable self-employment and create employment suggesting an important role for financing constraints. Specifically, although having an existing bank relationship is not significantly related to the entry decision, it is positively related to the survival for new entrepreneurs and their employment creation. We also find a non-linear relationship between remittances and entry in that individuals not receiving remittances are more likely to enter self-employment; but, if they do receive them, the likelihood of starting a business increases in the fraction of wealth received from domestic remittances. Finally, people working in the informal sector are more likely to become viable entrepreneurs, particularly those provided with loans from micro-credit organizations. These findings support the perception of the informal sector as an incubator for formal self-employment in the early years of transition.
We present new data on effective corporate income tax rates in 85 countries in 2004. The data come from a survey, conducted jointly with PricewaterhouseCoopers, of all taxes imposed on "the same" standardized mid-size domestic firm. In a cross-section of countries, our estimates of the effective corporate tax rate have a large adverse impact on aggregate investment, FDI, and entrepreneurial activity. Corporate tax rates are correlated with investment in manufacturing but not services, as well as with the size of the informal economy. The results are robust to the inclusion of many controls.
Using firm-level data from Mexico, this paper investigates the firm characteristics associated with participation in credit markets, access to training, tax payments, and membership in business associations. We find that firms which participate in these institutions exhibit significantly higher profits. Moreover, firms that borrow from formal or informal sources and those that pay taxes are significantly more likely to stay in business but firms that received credit exhibit lower rates of income growth. These results persist when firm characteristics that are arguably correlated with unobserved entrepreneurial ability are controlled for. Our findings suggest that the significant within-country differences in firm productivity observed in developing economies are due in part to market and government failures that limit the ability of micro-firms to reach their optimal sizes.
In this paper, we compare two datasets designed to measure entrepreneurship: The Global Entrepreneurship Monitor (GEM) dataset and the World Bank Group Entrepreneurship Survey (WBGES) dataset. We find a number of important differences when the data are compared. First, GEM data tend to report significantly higher levels of early stage entrepreneurship in developing economies than do the World Bank business entry data, while the World Bank business entry data tend to be higher than GEM data for developed countries. Second, we find that the magnitude of the difference between the datasets across countries is related to the local institutional and environmental conditions for entrepreneurs, after controlling for levels of economic development. Our findings suggest that entrepreneurs in developed countries have greater ease and incentives to incorporate, both for the benefits of greater access to formal financing and labor contracts, as well as for tax and other purposes not directly related to business activities.
In the economic development literature, cultural diversity (for example, ethnolinguistic fractionalization) has been shown to have a negative impact on economic outcomes in many underdeveloped countries. We hypothesize that the impact of diversity on economic performance depends on the quality of a country's institutions. Under bad institutions diversity leads to conflict and expropriation, while under good institutions diversity leads to economic progress. A culturally diverse society or interaction among different cultures encourages exchange of, and competition between ideas and different world views. Under good institutions, this amalgamation of ideas and views leads to greater entrepreneurial initiatives. We show that higher levels of cultural diversity increase the rate of entrepreneurship in the presence of good institutions using evidence from the USA.
n financial markets with asymmetric information about mean returns, borrowers with different default risks may pay the same rate of interest. If they do, the marginal borrower will have a high-risk, negative-value project. Under some conditions, technological change that increases each entrepreneur's output will attract a new set of negative-value projects. This adverse selection process will erode the ability rents of the inframarginal borrowers. I present an example in which it destroys the market. The results imply that a boom in a sector can lead to a crisis if institutional change to solve the screening problem does not occur.