Showing papers in "Journal of Entrepreneurship and Public Policy in 2014"
TL;DR: In this paper, an empirical survey was conducted with 331 individuals who had started-up or owned/managed an enterprise and revealed that the rationales for entrepreneurs operating in the informal economy markedly differ according to whether they are wholly or partially informal entrepreneurs operating temporarily or permanently.
Abstract: Purpose – Although it has been recognised that many entrepreneurs operate in the informal economy, little is so far known about their reasons for doing so. The purpose of this paper is to begin to unravel entrepreneurs’ rationales for trading in the informal economy in order to consider what policy measures need to be adopted to facilitate their formalisation. Design/methodology/approach – To do this, the results of an empirical survey are reported conducted in Ukraine during 2006/2007 with 331 individuals who had started-up or owned/managed an enterprise. Findings – Revealing that the rationales for entrepreneurs operating in the informal economy markedly differ according to whether they are wholly or partially informal entrepreneurs operating temporarily or permanently in the informal economy, the result is a call for a move beyond a “one-size-fits-all” policy approach and towards a variegated public policy approach whereby policy measures are tailored to tackling the different types of informal entrepr...
39 citations
TL;DR: In this paper, a cross-national analysis of American, Asian, and European areas identifying factors affecting their different rate of spin-off activity was performed, and the impact of these factors in various regions of the U.S. was analyzed.
Abstract: Purpose – Existing work documents the role that institutional setting plays in the process of spin-off creation. However, despite decades of studies, scholars have not clearly explained why some regions are more involved in spin-off activity than others. Drawing from institutional theory, the purpose of this paper is to compare different institutional settings identifying factors affecting the general environment capability to support spin-off activity of a specific region. Design/methodology/approach – The authors utilize a cross-national analysis of American, Asian, and European areas identifying factors affecting their different rate of spin-off activity. This study contributes to the policy debate concerning entrepreneurship and how best to spur spin-off activities. Findings – In this paper, the authors identify the general and specific factors that explain the cross-national diversity in spin-off creation. The authors then perform an analysis of the impact of these factors in various regions of the U...
23 citations
TL;DR: In this article, the authors used Heckman's two-stage sample selection model to predict the effect of contact and interactions with entrepreneurial support programs on start-up outcomes while taking into account the entrepreneur's self-selection into obtaining support from these programs.
Abstract: Purpose – The purpose of this paper is to examine if and how entrepreneurial assistance programs, through guided preparation, affect start-up success. Design/methodology/approach –This study uses Heckman's two-stage sample selection model to predict the effect of contact and interactions with entrepreneurial support programs on start-up outcomes while taking into account the entrepreneur's self-selection into obtaining support from these programs. Findings – The results indicate that, after controlling for individual characteristics, activities undertaken during the start-up process, organizational characteristics and external factors, guided preparation contributes to a greater likelihood of achieving positive start-up outcome. This finding holds even after controlling for the entrepreneur's self-selection into contacting and using outside assistance. Research limitations/implications – Results suggest that self-selection bias remains a concern when studying the impact of assistance programs on start-up ...
19 citations
TL;DR: In this article, the authors identify the obstacles encountered by current and potential entrepreneurs and explore the areas associated with starting and running a business in which entrepreneurs find difficulties, and explore which entrepreneurs experience most difficulties.
Abstract: Purpose – The purpose of this paper is to identify the obstacles encountered by current and potential entrepreneurs. The authors explore the areas associated with starting and running a business in which entrepreneurs find difficulties. Furthermore, the authors explore which entrepreneurs experience most difficulties. What issues do entrepreneurs in different sectors need help with? What issues do entrepreneurs with different current positions in the labor market need help with? Design/methodology/approach – The authors use a unique database that includes information regarding the questions that entrepreneurs ask when they call a government helpline established to provide information about how to start and run a business. The database consists of more than 30,000 observations during the period from 2005 to 2009. Findings – The results indicate that aside from general questions and concerns, taxes, laws and permits are the issues with which entrepreneurs most frequently need help. The authors do not find a...
15 citations
TL;DR: In this article, the conditions of entrepreneurship in transition and post-conflict societies, using Bosnia and Herzegovina (BH) more specifically, inter alia, it has helped in the development of the country.
Abstract: Purpose – The purpose of this paper is to examine the conditions of entrepreneurship in transition and post-conflict societies, using Bosnia and Herzegovina (BH more specifically, inter alia, it has helped und...
14 citations
14 citations
TL;DR: In this article, the authors investigate contingency factors on the emergence of university spin-off firms and identify a high degree of heterogeneity in the qualification of University Technology Transfer Offices (UTTO) staff and the existence of an entrepreneurship support programme as important antecedents of spinoff formation.
Abstract: Purpose – The purpose of this paper is to investigate contingency factors on the emergence of university spin-off firms. The institutional and organisational factors the paper explores comprise the transfer potential of the university, the strategy and characteristics of the University Technology Transfer Organisations and specific support for spin-off formation. Design/methodology/approach – Based on a unique data set, this cross-sectional study analyses the population of 54 higher education institutions in Germany. At this, 31.4 per cent of the German universities with technology transfer activities participated in this study. Findings – The research identifies a high degree of heterogeneity in the qualification of University Technology Transfer Offices (UTTO) staff and the existence of an entrepreneurship support programme as important antecedents of spin-off formation. In addition, the results reveal that pursuing different or multiple transfer strategies will not be detrimental to the establishment o...
14 citations
TL;DR: In this article, the authors examined the effect of immigrant and ethnic enclaves on the success of entrepreneurial ventures as measured by firm profits and viability and found a statistically significant negative effect of immigrants' representation in an area on firm profitability.
Abstract: Purpose – The purpose of this paper is to examine the effect of immigrant and ethnic enclaves on the success of entrepreneurial ventures as measured by firm profits and viability. Design/methodology/approach – Data on entrepreneurs and their new firms were provided by the Kauffman Foundation and covered the years 2004-2008. These firm-level data were linked to Census 2000 Summary Files at the ZIP Code level and were used to empirically investigate the effect of enclaves. Findings – The paper found a statistically significant negative effect of immigrant representation in an area on firm profitability. This effect operated on native, rather than immigrant, firm owners, which suggested that native-owned firms locating in immigrant enclaves may experience difficulty assimilating the benefits that enclaves offer. Practical implications – Cultural connections within local communities play a key role in the success of new businesses. Potential firms should recognize the importance of these connections when maki...
11 citations
TL;DR: In this article, the authors estimate the effect of the combined (Federal and state) estate, inheritance, and gift (EIG) tax burden per decedent on the number of firms in the USA.
Abstract: Purpose – The purpose of this paper is to estimate the effect of the combined (Federal and state) estate, inheritance, and gift (EIG) tax burden per decedent on the number of firms in the USA. Design/methodology/approach – Estimates are based on a longitudinal panel of 50 American states from 1988 to 2006. Findings – The paper finds that the growth in the EIG tax burden per decedent significantly reduces the growth in the number of firms, especially small firms. The higher dissolution rate among small firms can be attributed to the asymmetric liquidity effect, which limits the ability of small business owners to raise the funds needed to pay the estate tax without liquidating their estates. Practical implications – The estimates suggest that the reductions in EIG taxes, brought about by the passage of 2001 EGTRRA, have lead to a higher growth in the number of firms, ceteris paribus. Social implications – As of this writing, the future of the Federal estate tax looks uncertain. Policymakers should note tha...
8 citations
TL;DR: In this article, the authors modify a predator-prey theoretical framework of copyright piracy to account for the impact of intermediary platforms on the consumption of original works and illegal copies, and they show that an increase in the number of legal alternative platforms available to consumers of digital music results in an unambiguous increase in their consumption of legitimate music and a decrease in their unauthorized copies.
Abstract: Purpose
– The purpose of this paper is to examine the role of intermediary platforms, such as Pandora and Spotify, in reducing piracy of digital music.
Design/methodology/approach
– The authors modify a predator-prey theoretical framework of copyright piracy to account for the impact of intermediary platforms on the consumption of original works and illegal copies.
Findings
– The theory shows that an increase in the number of legal alternative platforms available to consumers of digital music results in an unambiguous increase in the consumption of legitimate music and an unambiguous decrease in the consumption of unauthorized copies.
Practical implications
– The results suggest that policies to encourage entrepreneurship by intermediary platforms in the music industry serve as a complement to other policies currently being employed to combat piracy of digital music.
Originality/value
– The paper is the first of its kind to analyze the important role of intermediary platforms in reducing piracy of digital music while encouraging innovation by artists. Historically, entrepreneurship in this field has been controversial, given the gray areas surrounding what is and is not copyright infringement in the ever-evolving digital age. This paper highlights that once copyright laws are clearly defined, business growth in this area can be a highly effective solution to the piracy problem.
7 citations
TL;DR: In this article, the effects of state income tax reciprocity agreements on several measures of small business activity were explored, and the results indicated that reciprocity agreement appeared to have reduced the tax-rate sensitivity of entrepreneurial activity, which may lead to more small business and entrepreneurial activity in states with more active agreements, other factors constant.
Abstract: Purpose – Small businesses play a vital role in job creation and economic growth, and previous studies have noted that higher state tax rates may reduce entrepreneurial activity, growth, and hiring. The paper aims to discuss this issue. Design/methodology/approach – In this paper, the authors use a 1989-2005 panel of state-level data to explore the effects of state income tax reciprocity agreements on several measures of small business activity. Since a reciprocity agreement exempts non-resident income from a state's personal income tax base, it has the potential to reduce barriers to entrepreneurial activity and lower tax compliance costs. Findings – The results indicate that reciprocity agreements appear to have reduced the tax-rate sensitivity of entrepreneurial activity, which may lead to more small business and entrepreneurial activity in states with more active agreements, other factors constant. This suggests that personal income tax reciprocity agreements may be a credible policy tool to expand sm...
TL;DR: In this paper, the authors consider how public policy rules and norms embedded in the operation and financing of firms and nonprofits may affect the choice of one or the other for nesting a social enterprise while reducing the risk of failure due to an initial bad choice.
Abstract: Purpose – The purpose of this paper is to consider how public policy rules and norms embedded in the operation and financing of firms and nonprofits may affect the choice of one or the other for nesting a social enterprise while reducing the risk of failure due to an initial bad choice. Design/methodology/approach – The paper is conceptual and literature based. It identifies and evaluates factors in public policy that are embedded in the rules and norms of operating and financing firms and nonprofits that could materially affect the choice of a nesting place of a social enterprise. It treats the choice as a two-stage process: whether firm or nonprofit and what type of firm or what type of nonprofit. Findings – The choice of a structural form for nesting a social enterprise is dependent upon the public policies embedded in each form that affect the probability of venture success and entrepreneurial remorse. Research limitations/implications – This paper suggests that public policy norms and rules are deser...
TL;DR: In this paper, the authors provide an overview of the development of the SME sector in Australia, concentrating on a number of key areas: small business definitions and numbers; the role of government; the emergence of key industry groups; and the evolution of education, training and research services.
Abstract: Purpose – The purpose of this paper is to provide an overview of the development of the SME sector in Australia, concentrating on a number of key areas: small business definitions and numbers; the role of government; the emergence of key industry groups; and the evolution of education, training and research services. Design/methodology/approach – The study is a result of extensive literature reviews, desk research and the recollections of various participants in the field. Findings – There have been major changes to the Australian small business sector over the last 40 years. In 1983-1984 there were an estimated 550,000 small firms, and by 2010 this had grown to almost two million. Government involvement in, and support for, SMEs was virtually non-existent before 1970. Following the delivery of the Wiltshire report (1971), however, both state and federal governments responded by developing specialist advisory services, funding programmes and other support tools. Virtually non-existent before the 1970s, se...
TL;DR: In this article, the authors examined the long-run impact of federal government healthcare subsidies on the level of entrepreneurship as measured by self-employment and found that there is a consistent effect that has appeared over time where federal healthcare subsidies have disproportionately benefitted larger firms, contributing to the decline in the rate of selfemployment, within-firm innovation, and factor mobility.
Abstract: Purpose – The purpose of this paper is to examine the long-run impact of federal government healthcare subsidies on the level of entrepreneurship as measured by self-employment. Design/methodology/approach – Using annual healthcare and employment data from 1948 through 1999, the paper empirically examines the relationship between the growth in employer-provided healthcare and the rate of self-employment as a share of the non-agriculture, civilian labor force. Findings – The regression results imply that there is a consistent effect that has appeared over time – where federal healthcare subsidies have disproportionately benefitted larger firms, contributing to the decline in the rate of self-employment, within-firm innovation, and factor mobility over time. Research limitations/implications – The research in this study is limited by the examination of self-employment only and a constant institutional structure across all states, only varying across time for the entire USA. In addition, an empirical study l...
TL;DR: In this article, the authors used a 12-year panel of tax returns for Schedule C sole proprietors to empirically examine whether more generous depreciation policies influence small business activity at the extensive margin.
Abstract: Purpose – When a small business purchases a capital asset, its cost for tax purposes is spread over the useful life of the asset through the process of depreciation. It has become common in the USA for policy makers to enhance depreciation rules in an effort to increase business investment in a less-costly manner than across-the-board marginal tax rate cuts. Indeed, short-term depreciation policies are often billed by policy makers as a way to save America's small businesses. However, little is known about the actual effects of depreciation policies on small business activity. This paper aims to discuss these issues. Design/methodology/approach – In this initial attempt to test the political claims regarding the importance of depreciation rules, the paper uses a 12-year panel of tax returns for Schedule C sole proprietors to empirically examine whether more generous depreciation policies influence small business activity at the extensive margin. Specifically, the paper estimates a series of multivariate m...
TL;DR: In this article, the authors show that the self-employed enjoy large earnings premia that are reflected in their consumption, and they employ previous findings about entrepreneurial saving behavior to show, via quintile regression analysis, consumption rewards to entrepreneurship and compare those rewards to income.
Abstract: Purpose – Recent findings by Hamilton (Journal of Political Economy, 2000) suggest that the self-employed do not receive a monetary premium for the risk and uncertainty associated with business ownership. The purpose of this paper is to show that income underreporting by entrepreneurs can explain the lack of evidence for monetary premia. Using a large national data set (Panel Study of Income Dynamics (PSID)), the author first document evidences of underreporting, and then proceed to make alternative comparisons using measures of consumption. The author finds that the self-employed enjoy large earnings premia that are reflected in their consumption. Design/methodology/approach – Using PSID the author creates and analyzes a household level data set comparing monetary rewards of self-employment to those of wage work. The author employs previous findings about entrepreneurial saving behavior to show, via quintile regression analysis, consumption rewards to entrepreneurship, and compare those rewards to income...
TL;DR: In this article, the authors investigate whether public corruption influences entrepreneurial activity in the USA and find that new business venturing should be related to the expected corruption level, and they find that entrepreneurs launch more businesses in states with higher predicted corruption.
Abstract: Purpose – The purpose of this paper is to investigate whether public corruption influences entrepreneurial activity in the USA. Because the true underlying level of corruption is inherently unobservable, it cannot be factored into business venturing decisions. The authors hypothesize, therefore, that new business venturing should be related to the expected corruption level. Design/methodology/approach – The authors follow Cordis (2009) to calculate the expected rate of public corruption given observed levels of public corruption. The authors embed the expected level of corruption in a relatively standard model of business venturing, which the authors estimate using a cross section of the US states covering the period of 1986-2009. Findings – Using a relatively standard model of business venturing that accounts for variation in predicted corruption levels, the authors find that entrepreneurs launch more businesses in states with higher predicted corruption. Originality/value – To the knowledge, no one has ...