Economic Entrepreneurship, Startups and Their Effects on Local Development: The Case of Sweden

The current empirical entrepreneurship literature mainly shows a positive correlation between entrepreneurship (measured as the number of startups) and economic growth. However, the mechanisms by which entrepreneurship exerts its positive influence are not obvious. The net result of startups on employment or GDP can be negative, at least in the short run, since efficient, new companies may lead to closures of less efficient ones. Based on an assumption that economic entrepreneurship in the form of startups creates unobserved supply side effects on the firm level (Fritsch & Mueller 2004) and entrepreneurial social capital on community level (Westlund & Bolton 2003) this paper studies the connections between startups and local development at the municipal level in Sweden between 2000 and 2008. We use a unique database including not only total startups, but data on startups divided in six branches to study the impact of entrepreneurship on population and employment growth. Analyses are performed on all municipalities as well as by municipality type and by growth rate.

What influences the speed of prototyping? An empirical investigation of twenty software startups

It is essential for startups to quickly experiment business ideas by building tangible prototypes and collecting user feedback on them. As prototyping is an inevitable part of learning for early stage software startups, how fast startups can learn depends on how fast they can prototype. Despite of the importance, there is a lack of research about prototyping in software startups. In this study, we aimed at understanding what are factors influencing different types of prototyping activities. We conducted a multiple case study on twenty European software startups. The results are two folds, firstly we propose a prototype-centric learning model in early stage software startups. Secondly, we identify factors occur as barriers but also facilitators for prototyping in early stage software startups. The factors are grouped into (1) artifacts, (2) team competence, (3) collaboration, (4) customer and (5) process dimensions. To speed up a startups progress at the early stage, it is important to incorporate the learning objective into a well-defined collaborative approach of prototypingComment: This is the author's version of the work. Copyright owner's version can be accessed at doi.org/10.1007/978-3-319-57633-6_2, XP2017, Cologne, German

How redeployable are patent assets? Evidence from failed startups

Entrepreneurial firms are important sources of patented inventions. Yet little is known about what happens to patents "released" to the market when startups fail. This study provides a first look at the frequency and speed with which patents originating from failed startups are redeployed to new owners, and whether the value of patents is tied to the original venture and team. The evidence is based on 1,766 U.S. patents issued to 285 venture capital-backed startups that disband between 1988 and 2008 in three innovation-intensive sectors: medical devices, semiconductors, and software. At odds with the view that the resale market for patented inventions is illiquid, we find that most patents from these startups are sold, are sold quickly, and remain "alive" through renewal fee payment long after the startups are shuttered. The patents tend to be purchased by other operating companies in the same sector, and retain value beyond the original venture and team. We do find, however, that the patents and people sometimes move jointly to a new organization following the dissolution of the original venture, and explore the conditions under which such co-movement is more likely. The study provides new evidence on a phenomenon-of active markets for buying and selling patents-underexplored in the strategy literature and consequential for both entrepreneurial and established firms.Accepted manuscrip

Patent collateral, investor commitment, and the market for venture lending

This paper investigates the market for lending to technology startups (i.e., venture lending) and examines two mechanisms that may facilitate trade within it: (1) the ‘salability’ of patent collateral; and (2) the credible commitment of existing equity investors. We find that intensified trading in the secondary patent market is strongly related to the annual rate of startup lending, particularly for startups with more redeployable patent assets. Moreover, we show that the credibility of venture capitalist commitments to reinvest in their startups’ next round of financing can be critical for startup debt provision. Utilizing the crash of 2000 as a severe and unexpected capital supply shock for VCs, we show that lenders continue to finance startups with recently funded investors better able to credibly commit to refinance their portfolio companies, but withdraw from otherwise-promising projects that may have needed their funds the most. The findings are consistent with predictions of incomplete contracting and financial intermediation theory.Accepted manuscrip

Female-owned innovative startups in Italy: status quo and implications

The aim of the paper is to provide an overview of the current literature of this business phenomenon with regard to gender studies and to point out what is substantially happening and what has happened in the Italian economic context. The main research questions were RQ1: How is the phenomenon of female Startups treated from a scientific point of view? RQ2: Which is the Italian situation of this phenomenon? The methodology used is both qualitative and explorative. A bidirectional analysis has been carried out for this purpose. In order to expand the first research question (RQ1), an analysis was carried out of the articles in the EBSCO database on the topic of female startups. In order to expand the second question (RQ2), an analysis was carried out on the data concerning the phenomenon of female startups, using the register of companies held at the Chambers of Commerce which were territorially competent. Our research, carried out within the Italian economic context, demonstrates how the phenomenon of Woman Startups (WSU), even if it is widely expanding, is inherent in all the typical elements of female entrepreneurship, as reported in the literature by gender scholars. The main factors that emerge for the WSU are the small size and the undercapitalization in the startup phase. This work contributes to the expansion of studies on the topic of startups in the context of gender and can be useful to the social context, new entrepreneurs, and practitioners of the sector

Strategies, Uncertainty and Performance of Small Business Startups

Personal strategies of owners/founders of small business startups are related to performance and to environmental uncertainty. This is done using a longitudinal data set of some 50 Dutch startups. The results suggest a dynamic process between strategy and performance.A discrimination is made between four strategies (reactive, critical point, complete planning and opportunistic). The role of uncertainty is discussed. The dynamic process is embedded in the PERSUADE model.entrepreneurship;strategy;uncertainty;performance;small business startups

Job Creation, Worker Churning, and Wages at Young Businesses

Prior research has established the important role of startups and fast-growing young businesses in job creation and employment growth in the U.S. economy (Haltiwanger, Jarmin, and Miranda, (2010)). New firms and young businesses account for about 70 percent of gross job creation and disproportionately contribute to net job creation. The experimentation and dynamism of startups and young businesses also contribute to productivity growth (see, e.g., Haltiwanger (2012)). While the contribution to job creation and productivity is increasingly well understood, relatively little is known about the characteristics of the jobs generated by startups and young businesses. We use newly released data from the QWI using the firm size and firm age measures developed from the Business Dynamics Statistics (BDS) to shed light on characteristics of jobs at young businesses. We focus on three key characteristics of jobs -- job creation, the churning of workers, and earnings per worker

THE EFFECTS OF LOCAL TAXES AND SPENDING ON BUSINESS STARTUPS

This paper examines the effects of local taxes and government spending on new business startups in 8,576 Maine city-industries between 1993 and 1994. Empirical findings indicate that local property tax rates have a negative effect on the number of startups, whereas spending on education and total local government spending on public services have a positive effect on new business activity.Community/Rural/Urban Development,

Effects of Regional Human Capital Structure on Business Entry: A Comparison of Independent Startups and New Subsidiaries in Different Industries

This paper aims to investigate the regional determinants of entry with special attention to the effects of regional human capital, using prefecture-level data from Japan. On the basis of some recent studies in the field, we investigate the effects of several regional factors on business entry, distinguishing between independent startups and new subsidiaries of existing firms on the one hand, and comparing different sectors on the other. Using pooled regional data at the prefecture level for our periods between 1996 and 2006, we estimate the impact of various regional factors, including human capital structure, on the number of independent startups and new subsidiaries for each industry sector, simultaneously. Estimation results demonstrate considerable differences between independent startups and subsidiaries as well as among different industry sectors with regard to the impact of regional human capital structure on business entry. First, the entry of independent startups in the manufacturing sector is positively related with regional human capital. Second, in contrast to our hypothesis, we found a positive relationship between regional human capital structure and the entry of new subsidiaries in the service sector. Third, the regional human capital structure is more important for regional entrepreneurship in more technology-intensive (high-tech) service industries. Considering the possible implications, we suggest that the regional policy to activate business startups should focus more on the differences between encouraging local entrepreneurship and attracting new subsidiaries, and recognize that these differences may vary even within the service sector, depending on what type of human capital is required.entry, region, independent startup, subsidiary, entrepreneurial human capital