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60
Determinants of vertical integration: financial development and contracting costs.” The
- Journal of Finance
, 2009
"... We study the determinants of vertical integration in a new data set of over 750,000 firms from 93 countries. We present a number of theoretical predictions on the inter-actions between financial development, contracting costs, and the extent of vertical integration. Consistent with these predictions ..."
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Cited by 36 (0 self)
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We study the determinants of vertical integration in a new data set of over 750,000 firms from 93 countries. We present a number of theoretical predictions on the inter-actions between financial development, contracting costs, and the extent of vertical integration. Consistent with these predictions, contracting costs and financial devel-opment by themselves appear to have no effect on vertical integration. However, we find greater vertical integration in countries that have both greater contracting costs and greater financial development. We also show that countries with greater contract-ing costs are more vertically integrated in more capital-intensive industries. CASUAL EMPIRICISM SUGGESTS THE PRESENCE OF SIGNIFICANT differences in the orga-nization of production across countries. For example, firms are often thought to be larger and more vertically integrated in less developed countries. Khanna and Palepu (1997, 2000) provide evidence consistent with this view and suggest that this is because market and contractual relationships are more costly in less developed countries. Nevertheless, there has not been a systematic analysis of
Explaining International Differences in Entrepreneurship: The Role of Individual Characteristics and Regulatory Constraints
, 2008
"... We use a micro dataset that collects information across individuals, countries, and time to investigate the determinants of entrepreneurial activity in thirty-seven developed and developing nations. We focus both on individual characteristics and on countries ’ regulatory differences. We show that i ..."
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Cited by 35 (1 self)
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We use a micro dataset that collects information across individuals, countries, and time to investigate the determinants of entrepreneurial activity in thirty-seven developed and developing nations. We focus both on individual characteristics and on countries ’ regulatory differences. We show that individual characteristics, such as gender, age, and status in the workforce are important determinants of entrepreneurship, and we also highlight the relevance of social networks, self-assessed skills, and attitudes toward risk. Moreover, we find that regulation plays a critical role, particularly for those individuals who become entrepreneurs to pursue a business opportunity. The individual characteristics that are impacted most by regulation are those measuring working status, social network, business skills, and attitudes toward risk. 1
Business Environment and Firm Entry: Evidence from International Data. Working Paper 10380
, 2004
"... Abstract: Using a comprehensive database of firms in Western and Eastern Europe, we study how the business environment in a country drives the creation of new firms. Our focus is on regulations governing entry. We find entry regulations hamper entry, especially in industries that naturally should ha ..."
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Cited by 22 (4 self)
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Abstract: Using a comprehensive database of firms in Western and Eastern Europe, we study how the business environment in a country drives the creation of new firms. Our focus is on regulations governing entry. We find entry regulations hamper entry, especially in industries that naturally should have high entry. Also, value added per employee in naturally “high entry ” industries grows more slowly in countries with onerous regulations on entry. Interestingly, regulatory entry barriers have no adverse effect on entry in corrupt countries, only in less corrupt ones. Taken together, the evidence suggests bureaucratic entry regulations are neither benign nor welfare improving. However, not all regulations inhibit entry. In particular, regulations that enhance the enforcement of intellectual property rights or those that lead to a better developed financial sector do lead to greater entry in industries that do more R&D or industries that need more external finance.
The Oxford Handbook of Entrepreneurship
- 2006 Proceedings of the 5th WSEAS International Conference on Economy and Management Transformation (Volume II) ISSN: 1792-5983 476 ISBN
"... This chapter focuses on institutional obstacles to entrepreneurship. An entrepreneur carries out a highly complicated composite act. She needs intelligence to collect and digest information about business opportunities. She needs foresight about the possibilities new technologies and other developme ..."
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Cited by 17 (0 self)
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This chapter focuses on institutional obstacles to entrepreneurship. An entrepreneur carries out a highly complicated composite act. She needs intelligence to collect and digest information about business opportunities. She needs foresight about the possibilities new technologies and other developments create. She needs judgment and leadership skills to found a company and guide its growth. She needs communication skills to enthuse financiers to back her vision. The number of active entrepreneurs therefore depends on how many individuals possess these skills. But skills are not endowments. Individuals decide to develop those skills that advance their well being and to forego developing those that do not. The prospects of a career as an entrepreneur depend on the economic environment, which can be facilitative or detrimental. A multitude of factors determine this environment: rules and regulations, the quality of government, the availability of education, and the ambient culture. Many of these factors fall under the heading of institutions, by which we mean the constraints on behavior imposed by the state or societal norms that shape economic interactions. This is the
The social dimensions of entrepreneurship
- Oxford Handbook of Entrepreneurship
, 2006
"... Schumpeter’s canonical depiction of the entrepreneur as an agent of social and economic change implies that entrepreneurs are especially sensitive to the social environment. We use an organizing framework based on institutional economics, in combination with lessons from cross-cultural psychology, t ..."
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Cited by 16 (1 self)
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Schumpeter’s canonical depiction of the entrepreneur as an agent of social and economic change implies that entrepreneurs are especially sensitive to the social environment. We use an organizing framework based on institutional economics, in combination with lessons from cross-cultural psychology, to consider the social dimensions of entrepreneurship. The level and modes of entrepreneurial activity are affected by the surrounding culture and by legal rules. Entrepreneurs may partially overcome institutional deficiencies by relying on social networks that facilitate reputational bonding as a means for resource-sharing.
Entrepreneurship as a non-profit-seeking activity
, 2006
"... Abstract: It is typically assumed that people engage in entrepreneurship because there are profits to be made. In contrast to this view, this paper argues that entrepreneurship is more adequately characterized as a non-profit-seeking activity. Evidence from a broad range of authors and academic fiel ..."
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Cited by 13 (0 self)
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Abstract: It is typically assumed that people engage in entrepreneurship because there are profits to be made. In contrast to this view, this paper argues that entrepreneurship is more adequately characterized as a non-profit-seeking activity. Evidence from a broad range of authors and academic fields is discussed showing that entrepreneurship does quite generally not pay in monetary terms. Being an entrepreneur seems to be rather rewarding because it entails substantial non-monetary benefits, like greater autonomy, broader skill utilization, and the possibility to pursue one’s own ideas. It is shown how incorporating these non-monetary benefits into economic models of entrepreneurship can lead to a better understanding of the phenomenon.
Do Entry Regulations Deter Entrepreneurship and Job Creation? Evidence from Recent Reforms in Portugal,” NBER Working Paper 16473
, 2010
"... We evaluate the consequences of a recent regulatory reform in Portugal, which substantially reduced the cost of firm entry. Our analysis uses matched employer-employee data, which provide unusually rich information on the characteristics of founders and employees associated with new firms before and ..."
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Cited by 12 (0 self)
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We evaluate the consequences of a recent regulatory reform in Portugal, which substantially reduced the cost of firm entry. Our analysis uses matched employer-employee data, which provide unusually rich information on the characteristics of founders and employees associated with new firms before and after the reform. We find that the short-term consequences of the reform were as one would pre-dict with a standard economic model of entrepreneurship: The reform resulted in increased firm formation and employment, but mostly among marginal firms that would have been most readily deterred by existing heavy entry regulations. These marginal firms were typically small, owned by relatively poorly-educated entrepreneurs, and operating in low-tech sectors (agriculture, construction, and retail trade). In comparison to firms that entered in the absence of the reform, these marginal firms were less likely to survive their first two years. Government regulation of firm entry can serve to protect insider interests and hold back entrepreneurship. Many scholars have thus argued that burdensome firm entry regulation
Being independent raises happiness at work
- Swedish Economic Policy Review
, 2004
"... Self-employed people are substantially more satisfied with their work than the employed. We document this relationship for a large number of countries and investigate why the self-employed are happier with their jobs. The results indicate that differences in material outcomes, like higher pay or a l ..."
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Cited by 11 (1 self)
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Self-employed people are substantially more satisfied with their work than the employed. We document this relationship for a large number of countries and investigate why the self-employed are happier with their jobs. The results indicate that differences in material outcomes, like higher pay or a lower number of working hours, as well as potential differences in personality cannot account for the observed job satisfaction differences. Rather, the higher job satisfaction among the self-employed can be directly attributed to the greater independence and autonomy they enjoy. “Being your own boss ” seems to provide non-pecuniary benefits from work that point to the existence of “procedural utility”: autonomy is valued beyond outcomes as a good decision-making procedure. Implications of the results for economic theory and economic policy are discussed.
Where does regulation hurt? Evidence from new businesses across countries
, 2008
"... We use two micro datasets that collect harmonized data across countries to investigate the effects of regulation on new businesses. We are able to distinguish between two types of entrepreneurs: those who start a business to pursue a business opportunity and those who could not find better work. Irr ..."
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Cited by 8 (0 self)
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We use two micro datasets that collect harmonized data across countries to investigate the effects of regulation on new businesses. We are able to distinguish between two types of entrepreneurs: those who start a business to pursue a business opportunity and those who could not find better work. Irrespective of the measure of regulation we use, we always find a detrimental effect of regulation on new businesses. While women are overall less likely to start new businesses, in more regulated countries women are pulled into entrepreneurship but not to pursue a business opportunity, only because they could not find better work. Moreover, regulation dampens the effects of self-assessed business skills and social networks. In more regulated economies, those with better business skills and those who know other entrepreneurs are less likely to become entrepreneurs to purse a business opportunity. Tighter regulation also exacerbates fear of failure, further discouraging business start-up. All our estimates point to a negative effect of regulation. 1
Regulatory barriers and entry in developing economies, CEDI Working Paper 06-02, Brunel University. Our findings indicate some clear benefits for developing countries from the option of informal status, in contrast to the views of, e.g., Loayza
, 1994
"... We model entry by entrepreneurs into new markets in developing economies with regulatory barriers in the form of licence fees and bureaucratic delay. Because laissez faire leads to ‘excessive ’ entry, a licence fee can increase welfare by discouraging entry. However, in the presence of a licence fee ..."
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Cited by 6 (4 self)
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We model entry by entrepreneurs into new markets in developing economies with regulatory barriers in the form of licence fees and bureaucratic delay. Because laissez faire leads to ‘excessive ’ entry, a licence fee can increase welfare by discouraging entry. However, in the presence of a licence fee, bureaucratic delay creates a strategic opportunity, which can result in both greater entry by first movers and a higher steady-state number of firms. Delay also leads to speculation, with entrepreneurs taking out licences to obtain the option of immediate entry if they later observe the industry to be profitable enough.
