Enrico Santarelli

Bio: Enrico Santarelli is an academic researcher from University of Bologna. The author has contributed to research in topics: Entrepreneurship & Population. The author has an hindex of 35, co-authored 131 publications receiving 5040 citations. Previous affiliations of Enrico Santarelli include Maastricht University & University of Sussex.

Entrepreneurship and the process of firms’ entry, survival and growth

Abstract: This survey article aims at critically discussing the recent literature on firm formation and survival and the growth of new-born firms. The basic purpose is to single out the microeconomic entrepreneurial foundations of industrial dynamics (entry and exit) and to characterise the founder’s ex-ante features in terms of likely ex-post business performance. The main conclusion is that entry of new firms is heterogeneous with innovative entrepreneurs being found together with passive followers, over-optimist gamblers and even escapees from unemployment. Since founders are heterogeneous and may make “entry mistakes,” policy incentives should be highly selective, favouring nascent entrepreneurs endowed with progressive motivation and promising predictors of better business performance. This would lead to the least distortion in the post-entry market selection of efficient entrepreneurs.

Gibrat's Law: are the services different?

Abstract: Several noted surveys on intra-industry dynamics have reached the conclusion from a large body of evidence that Gibrat's Law does not hold. However, almost all of these studies have been based on manufacturing or large scale services such as banking and insurance industries. There are compelling reasons to doubt whether these findings hold for small scale services such as the hospitality industries. In this paper we examine whether the basic tenet underlying Gibrat's Law– that growth rates are independent of firm size – can be rejected for the services as it has been for manufacturing. Based on a large sample of Dutch firms in the hospitality industries the evidence suggests that in most cases growth rates are independent of firm size. Validation of Gibrat's Law in some sub-sectors of the small scale services suggests that the dynamics of industrial organization for services may not simply mirror that for manufacturing. The present paper includes a survey of nearly 60 empirical studies on firm growth rates.

Does Gibrat's Law hold among young, small firms?

Abstract: According to Gibrat's Law of Proportionate Effect, the growth rate of a given firm is independent of its size at the beginning of the examined period. Aimed at extending this line of investigation, the present paper uses quantile regression techniques to test whether Gibrat's Law holds for new entrants in a given industry: that is for new small firms in the early stage of their life cycle. The main finding is that for some selected industries in Italian manufacturing Gibrat's Law fails to hold in the years immediately following start-up, when smaller firms have to rush in order to achieve a size large enough to enhance their likelihood of survival. Conversely, in subsequent years the patterns of growth of new smaller firms do not differ significantly from those of larger entrants, and the Law therefore cannot be rejected.

Economic growth and income inequality

Abstract: We investigate whether income inequality affects subsequent growth in a cross-country sample for 1965-90, using the models of Barro (1997), Bleaney and Nishiyama (2002) and Sachs and Warner (1997), with negative results. We then investigate the evolution of income inequality over the same period and its correlation with growth. The dominating feature is inequality convergence across countries. This convergence has been significantly faster amongst developed countries. Growth does not appear to influence the evolution of inequality over time. Outline

The Economic Institutions of Capitalism

Abstract: The 2008 crash has left all the established economic doctrines - equilibrium models, real business cycles, disequilibria models - in disarray. Part of the problem is due to Smith’s "veil of ignorance": individuals unknowingly pursue society’s interest and, as a result, have no clue as to the macroeconomic effects of their actions: witness the Keynes and Leontief multipliers, the concept of value added, fiat money, Engel’s law and technical progress, to name but a few of the macrofoundations of microeconomics. A good viewpoint to take bearings anew lies in comparing the post-Great Depression institutions with those emerging from Thatcher and Reagan’s economic policies: deregulation, exogenous vs. endoge- nous money, shadow banking vs. Volcker’s Rule. Very simply, the banks, whose lending determined deposits after Roosevelt, and were a public service became private enterprises whose deposits determine lending. These underlay the great moderation preceding 2006, and the subsequent crash.

The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields (Chinese Translation)

Abstract: What makes organizations so similar? We contend that the engine of rationalization and bureaucratization has moved from the competitive marketplace to the state and the professions. Once a set of organizations emerges as a field, a paradox arises: rational actors make their organizations increasingly similar as they try to change them. We describe three isomorphic processes-coercive, mimetic, and normative—leading to this outcome. We then specify hypotheses about the impact of resource centralization and dependency, goal ambiguity and technical uncertainty, and professionalization and structuration on isomorphic change. Finally, we suggest implications for theories of organizations and social change.

R&D cooperation and spillovers: Some empirical evidence from Belgium

Abstract: Successful innovation depends on the development and integration of new knowledge in the innovation process. Part of this knowledge will reach the firm from external sources. Several authors have documented the existence of these external information flows and have commented on their importance for decisions at the firm level (Adam B. Jaffe, 1986; Jeffrey I. Bernstein and M. Ishaq Nadiri, 1988) and ultimately for economic growth (Paul M. Romer, 1990; Gene M. Grossman and Elhanan Helpman, 1991; Zvi Griliches, 1992). One challenge facing this literature has been the measurement of these information flows or “spillovers” between firms and gauging their effect on different innovation management decisions by the firm. While assessing spillovers, it is important to distinguish between incoming spillovers, which affect the rate of innovation of the firm, and appropriability, which affects the ability of the firm to appropriate the returns from innovation. The information sources for incoming spillovers are usually situated in the public domain, and their usefulness to the firm depend on the firm’s ability to create information flows from this public pool of knowledge. But firms also attempt to appropriate the benefits of their innovations by controlling the information flows out of the company into the pool of publicly available information. The relevance of distinguishing between incoming spillovers and appropriability is revealed when we use these measures to analyze their impact on the decision of firms to engage in cooperative RD Morton I. Kamien et al., 1992; Raymond De Bondt, 1997). On the other hand, imperfect appropriability increases the incentive of firms to free ride on each other’s RD Katrien Kesteloot and Veugelers, 1995) and encourages free-riding on the RD Veugelers: Katholieke Universiteit Leuven and CEPR, Naamsestraat 69, 3000 Leuven, Belgium (e-mail: Reinhilde.Veugelers@econ.kuleuven.ac.be). The authors would especially like to thank an anonymous referee, as well as Raymond De Bondt, Paul Geroski, Mort Kamien, Steve Martin, Marno Verbeek, Gary Charness, James Costain, and Harry Bowen, for very helpful comments. We also thank the seminar participants at the London Business School, IESE Business School, Universidad Carlos III, Universitat Autonoma de Barcelona, Universidad de Zaragoza, Universidad Publica de Navarra, the Universite Libre de Bruxelles, and Paris I and Paris XII, and the participants in ASSET (Bologna), LASEM (Cancun), and EARIE (Turin). The DWTC and IWT generously provided the data for this research. Cassiman acknowledges support from BEC2000-1026 and CIRIT 1997SGR00138, and Veugelers from CNRS, Enjeux Economiques de l’Innovation, and NFWO (G.0131.98). The paper was to a large extent written while Cassiman was assistant professor at the Universitat Pompeu Fabra in Barcelona and Veugelers was visiting the Universitat Autonoma de Barcelona and MIT [Sloan School (ICRMOT)].