entrepreneurship

The report strongly supports the notion that self-funding and informal investment are critical to an entrepreneurial society. About 99.9 percent of nascent entrepreneurs launch new ventures without formal venture capital or business angel investments, the report states. Entrepreneurs themselves provide 65.8 percent of the start-up capital while others, mainly informal investors, provide the remaining 34.2 percent. New to this years report is analysis demonstrating a relationship between Total Entrepreneurship Activity and per capita Gross Domestic Product

The paper uses a state of the art three-stage technique to identify the characteristics of the self-employed immigrant and native men in Germany and to understand their underlying drive into self-employment. Employing data from the German Socioeconomic Panel 2000 release we find that self-employment is not significantly affected by exposure to Germany or by human capital.

This paper uses survey data from the 15 EU Member States and the U.S. to establish the effect of demographic and other variables on latent and actual entrepreneurship. The most striking result is the lack of explanatory power of the perception of lack of available financial support in the latent entrepreneurship equation.

According to the author, economies that are associated with scale and scope are important driving forces in the expansion and deepening of coordination within firms. At the same time it is found that this inside or organizational type of coordination has been taken over to a large extent by managers who act as administrators and intrapreneurs. So the evidence points to the conclusion that scale and scope limit the role of traditional entrepreneurs in both these functions.

The paper investigates the relationship between bank interest rate margins and collateral for loans issued to new ventures. Results indicate that while provision of collateral initially reduces bank exposure to risk, that beyond a point the positive risk-wealth association gives rise to greater risk taking propensity among entrepreneurs and ultimately higher interest rates.

Using a survey of 4,553 entrepreneurs in 51 slums in Rio de Janeiro, the paper uses mean and quantile regression estimates to shows the effects of the type of initial capital, credit constraints, and human capital factors on entrepreneurs performance. The main findings are that entrepreneurs that were able to self-finance their business start-up presented earnings 16 percent greater than entrepreneurs that had to borrow their initial capital.

The paper discusses a two sector neoclassical overlapping generations
economy with intermediate and final goods in the spirit of Romer. The author finds that expected profits of monopolists do not vanish in equilibrium and that the level of economic performance is inefficiently low due to the presence of risk.

The paper investigates the effects of monopolistic competition on entrepreneurial risk taking in a general equilibrium model. Comparative static results show that too many firms remain in the market for an increase in the degree of risk aversion, thereby mutually deteriorating profit opportunities.

Using data from the Surveys of Consumer Finances, the author constructs a proxy for wealth based on the household’s home equity wealth at the time of the entrepreneurial decision. The results provide further evidence that the relationship between wealth and entering
entrepreneurship is only significant for high-wealth households and that liquidity constraints do not appear to bind for the majority of new entrepreneurs.

To what extent is the performance of a small business venture, once started, affected by capital constraints at the time of inception and by the business founder?s investment in human capital? The authors attempt to answer this question taking into account the potential endogeneity of human and financial capital, and also possible interdependence between these variables.