Patenting Behaviour and Employment Growth in German Start-up Firms: A Panel Data Analysis

The effect of innovations on employment at the firm level is theoretically ambiguous. The present paper analyses this relationship using panel data on German start-up firms as well as German patent data. It employs different indicators of patenting activity. By applying fixed-effects and first-differencing panel data methods it is shown that patenting activity has a positive effect on employment growth that is typically most pronounced in the second year after application. The effect seems to diminish with firm age. Patenting firms do not generally exhibit higher growth rates than their non-patenting counterparts; instead, growth performance depends on their patenting activity over time. --employment growth,patents,Gibrat´s law,dynamic panel data models

Aus der Not geboren? Besondere Merkmale und Determinanten von Gründungen aus der Arbeitslosigkeit

In dieser Studie werden Gründungen aus Arbeitslosigkeit der Jahre 2003 und 2004 inklusive der seit Anfang 2003 geförderten Ich-AGs auf repräsentativer empirischer Basis analysiert. Es zeigt sich, dass Gründungen aus Arbeitslosigkeit im Durchschnitt kleiner sind als andere Gründungen und relativ häufig in wenig kapitalintensiven Branchen mit geringen Markteintrittsbarrieren erfolgen. Vormals arbeitslose Gründer unterscheiden sich kaum von anderen Gründern hinsichtlich Alter und Bildungsniveau, verfügen jedoch über ein weitaus niedrigeres Haushaltseinkommen. Die relativ geringe Größe von Gründungen aus Arbeitslosigkeit ist aber nicht allein durch finanzielle Restriktionen zu erklären. Vielmehr entscheiden sich Arbeitslose oft eher notgedrungen für die Selbständigkeit als aus Überzeugung vom Erfolg ihrer Geschäftsidee und sind daher bestrebt, das Investitionsrisiko möglichst gering zu halten. --Gründungen aus Arbeitslosigkeit,Ich-AG,Existenzgründungszuschuss,Überbrückungsgeld,Beschäftigung

Aus der Not geboren? – Besondere Merkmale und Determinanten von Gründungen aus der Arbeitslosigkeit

In dieser Studie werden Gründungen aus Arbeitslosigkeit der Jahre 2003 und 2004 inklusive der seit Anfang 2003 geförderten Ich-AGs auf repräsentativer empirischer Basis analysiert. Es zeigt sich, dass Gründungen aus Arbeitslosigkeit im Durchschnitt kleiner sind als andere Gründungen und relativ häufig in wenig kapitalintensiven Branchen mit geringen Markteintrittsbarrieren erfolgen. Vormals arbeitslose Gründer unterscheiden sich kaum von anderen Gründern hinsichtlich Alter und Bildungsniveau, verfügen jedoch über ein weitaus niedrigeres Haushaltseinkommen. Die relativ geringe Größe von Gründungen aus Arbeitslosigkeit ist aber nicht allein durch finanzielle Restriktionen zu erklären. Vielmehr entscheiden sich Arbeitslose oft eher notgedrungen für die Selbständigkeit als aus Überzeugung vom Erfolg ihrer Geschäftsidee und sind daher bestrebt, das Investitionsrisiko möglichst gering zu halten

Gründerinnen auf dem Vormarsch? : Die Entwicklung der Beteiligung von Frauen am Gründungsgeschehen

Die Zahl der Frauen, die sich selbständig machen, sowie deren Anteil an allen Eintritten in die Selbständigkeit haben laut Mikrozensus seit Beginn der neunziger Jahre stark zugenommen. Die Zunahme beschränkt sich jedoch weitgehend auf selbständige Tätigkeiten, die ohne Beschäftigte und oft nur in Teilzeit ausgeübt werden. Laut Mannheimer Unternehmenspanel (MUP), das einen relativ eng abgegrenzten Unternehmensbegriff verwendet, geht der Anteil der Gründungen von Frauen seit 2003 zurück. Die seit Ende der neunziger Jahre tendenziell rückläufige Entwicklung der Gründungszahlen macht sich bei Gründungen von Frauen noch stärker bemerkbar als bei Gründungen von Männern. Die „Qualität“ der Gründungen von Frauen hat sich nur wenig verbessert. Es ist den Gründerinnen lediglich ansatzweise gelungen, vermehrt in wachstumsträchtige, männerdominierte Sektoren vorzudringen. Die Angleichung, die zwischen den Gründungen von Männern und Frauen bei Beschäftigungsgröße, Beschäftigungswachstum und Überleben zu beobachten ist, beruht hauptsächlich auf Verschlechterungen dieser Erfolgsgrößen bei den Gründungen von Männern

Gender differences in business success of German start-up firms

Many studies found that women-owned firms underperform when comparing performance indicators at an aggregate level. The performance gap might be attributed to gender differences in personal and firm characteristics affecting performance. However, previous studies were not able to entirely explain female underperformance in this way. There are two theoretical perspectives on the causes of female underperformance. Liberal feminist theory suggests that women lack access to relevant resources like education and business experience or financial capital. Social feminist theory suggests that women have different attitudes and values and, consequently, adopt a different approach to business. This paper shall contribute to a better understanding of the causes of female underperformance using performance indicators related to size, growth and profitability. We analyze whether gender differences in observable characteristics like education, experience, team size, entrepreneurial motivation and industry choice explain differences in performance and how large the impact is. We use data from the KfW/ZEW Start-Up Panel and track the performance of about 4,700 German start-up firms over up to four years after foundation. Sales, two measures of employment growth, and return on sales are used as performance indicators. We find that female-founded firms perform worse for all indicators. At the same time, there are significant gender differences in many of the characteristics observed. Compared to male entrepreneurs, female entrepreneurs have a lower level of formal education, less professional experience, are part of smaller start-up teams, are more often driven by necessity, and are overrepresented in the retail and service industries and in lower-tech industries in general. These differences can explain parts of female entrepreneurial underperformance, but their contribution to the performance gap depends largely on the performance indicator considered. Our results do not provide clear evidence for either liberal or social feminist theory. As to liberal feminist theory, we find that gender differences in founders’ resources (human capital, business partners) partly explain the performance gaps in growth and sales. But there is also evidence that the profitability gap becomes even larger when accounting for gender differences in specific resources like the number of team partners and entrepreneurial experience. As to social feminist theory, the gap in profitability itself speaks against the theory’s implication that female entrepreneurs are as efficient managers as male entrepreneurs. We do not find evidence for gender differences in profit orientation but find that female entrepreneurs are less growth-oriented. Unfortunately, we lack information on the time resources available to male and female entrepreneurs. Thus we are unable to test the hypothesis that female entrepreneurs underperform because they are more strained by domestic responsibilities. Moreover, we lack information on personal traits like risk attitude and self-efficacy which may also affect entrepreneurial performance

Gender differences in business success of German start-up firms

--start-ups,performance,gender,female entrepreneurship

Patenting Behaviour and Employment Growth in German Start-up Firms : A Panel Data Analysis

The effect of innovations on employment at the firm level is theoretically ambiguous. The present paper analyses this relationship using panel data on German start-up firms as well as German patent data. It employs different indicators of patenting activity. By applying fixed-effects and first-differencing panel data methods it is shown that patenting activity has a positive effect on employment growth that is typically most pronounced in the second year after application. The effect seems to diminish with firm age. Patenting firms do not generally exhibit higher growth rates than their non-patenting counterparts; instead, growth performance depends on their patenting activity over time

Founder's human capital, entry strategies and start-up size

This paper analyzes empirically the determinants of new born firms' initial size. As survival prospects of young firms tend to be linked to a firm's start-up size, a better understanding of the factors influencing start-up size is crucial. Most of the rare literature on initial firm size focuses on industry characteristics. We contribute to the understanding of the determinants of initial firm size by analyzing firm specific factors such as founders' human capital composition and entry strategies. We find that in addition to industry effects start-up size is considerably influenced by the human capital of firm founders. We distinguish between generic and specific human capital. Generic human capital refers to the general knowledge acquired through formal education and professional experience and usually coincides with a higher personal wealth. Specific human capital comprises competences that can be directly applied to the entrepreneurial job. For generic human capital we find that having a university degree has a positive influence on start-up size. The same applies for general working experience proxied by the founder's age. For the specific human capital components we find that successful entrepreneurial experience and managerial experience gained in dependent employment support a higher start-up size. Altogether, specific human capital tends to have a larger impact on initial size than generic human capital. Entry strategies are expected to have a crucial influence on start-up size, because objectives of market entry largely determine the resources a firm requires. We distinguish between different types of entry strategies. On the one hand, we look at entry strategies based on innovation. We measure innovation by a variable which indicates if a firm carries out continuous R&D. On the other hand, entry is classified according to the main motive of the founders for firm formation. We conclude that different motives are accompanied by diverse entry strategies. The four main groups of entry strategies are independency entrepreneurship, opportunity entrepreneurship, spin-out entrepreneurship and necessity entrepreneurship. The results indicate that firms conducting R&D continuously start larger than others when measuring initial employment in full-time equivalents. We do not observe a significant effect on start-up size measured in head counts. This suggests that R&D tasks are mostly carried out by fulltime employees and to a lesser extent by persons working part-time for the firm. Further, firms with entry strategies based on the exploitation of new market opportunities as well as spin-out entrepreneurship exhibit a higher initial size while start-ups established from necessity appear to start at a smaller scale. --firm start-up size,human capital,firm foundation

Founder's human capital, entry strategies and start-up size

This paper analyzes empirically the determinants of new born firms' initial size. As survival prospects of young firms tend to be linked to a firm's start-up size, a better understanding of the factors influencing start-up size is crucial. Most of the rare literature on initial firm size focuses on industry characteristics. We contribute to the understanding of the determinants of initial firm size by analyzing firm specific factors such as founders' human capital composition and entry strategies. We find that in addition to industry effects start-up size is considerably influenced by the human capital of firm founders. We distinguish between generic and specific human capital. Generic human capital refers to the general knowledge acquired through formal education and professional experience and usually coincides with a higher personal wealth. Specific human capital comprises competences that can be directly applied to the entrepreneurial job. For generic human capital we find that having a university degree has a positive influence on start-up size. The same applies for general working experience proxied by the founder's age. For the specific human capital components we find that successful entrepreneurial experience and managerial experience gained in dependent employment support a higher start-up size. Altogether, specific human capital tends to have a larger impact on initial size than generic human capital. Entry strategies are expected to have a crucial influence on start-up size, because objectives of market entry largely determine the resources a firm requires. We distinguish between different types of entry strategies. On the one hand, we look at entry strategies based on innovation. We measure innovation by a variable which indicates if a firm carries out continuous R&D. On the other hand, entry is classified according to the main motive of the founders for firm formation. We conclude that different motives are accompanied by diverse entry strategies. The four main groups of entry strategies are independency entrepreneurship, opportunity entrepreneurship, spin-out entrepreneurship and necessity entrepreneurship. The results indicate that firms conducting R&D continuously start larger than others when measuring initial employment in full-time equivalents. We do not observe a significant effect on start-up size measured in head counts. This suggests that R&D tasks are mostly carried out by fulltime employees and to a lesser extent by persons working part-time for the firm. Further, firms with entry strategies based on the exploitation of new market opportunities as well as spin-out entrepreneurship exhibit a higher initial size while start-ups established from necessity appear to start at a smaller scale

Job machine, think tank, or both : what makes corporate spinoffs different?

One way through which knowledge and technology transfer can take place is through the foundation of new firms by former employees of incumbent private firms. In this paper, we examine whether knowledge transferred from the incumbent causally affect employment growth and postentry innovation activities of the new firm. We focus on start-ups for which a new idea (a new product, technology, production process or management concept), which the founder developed during her work as an employee, was essential for setting up the new business. These firms are denoted corporate spinoffs. Using data from German start-ups founded in the period from 2005 to 2008, we apply nearest neighbour propensity score matching. We find that corporate spinoffs outperform other start-ups founded by former employees of incumbent private firms that are not based on an essential idea in terms of post-entry innovation activities. However, we cannot show that corporate spinoffs benefit from the transferred idea in terms of employment growth. We conclude that a transferred idea is primarily an input factor and a stimulus for subsequent post-entry innovation activities of corporate spinoffs