60 research outputs found

    Entrepreneurial Creativity and Growth

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    The concept of creativity is multidimensional, helping to take advantage of entrepreneurial opportunities and favoring in this way economic growth. Next to this basic argument of neoclassical theory, which ignores the role of entrepreneurship in growth, the present chapter states that entrepreneurship should be included as a contributing factor of growth. Through this key argument, this chapter attempts to clarify the importance of creativity to entrepreneurial activity, concentrating on the factors that influence entrepreneurial creativity that in turn lead to economic growth, as well as to capture the way in which entrepreneurial creativity is affected by this procedure. These factors are knowledge and education, the management of disrupting technologies, spill-over creativity, the role of cultural background and personal characteristics of individuals, the motives and incentives of individuals, the existence of—and access to—resources, and the institutions that delineate the environment of action of the entrepreneur

    Medium term effects of culture, transactions and institutions on opportunity entrepreneurship

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    Cultural evolution is a long-term endogenous process which is revealed in society's cultural traits and it is embodied in institutional characteristics (property rights protection, rule of law, etc.) and transaction characteristics (risk levels, time required for start-ups, corruption levels, literacy levels, etc.). In the short- and medium-term, culture, institutions and transactions are exogenous for the economic and societal system. The paper aims to explore the roles of cultural, transaction and institution characteristics in the determination of opportunity entrepreneurship, at the medium-term. A series of variables is used to express these roles, which are analysed with a principal component analysis and a regression analysis. As expected, the conclusions confirm that the cultural traits both positively and negatively affect opportunity entrepreneurship depending on the particular traits combination. Moreover, the effect of enhanced transaction characteristics and economic institutions is conducive to opportunity entrepreneurship. Performing a sensitivity analysis, we construct a hypothetical, more opportunity entrepreneurship-oriented world by postulating pro-entrepreneurship cultural traits. In this "new world", because cultural traits are no longer an issue, they present "entrepreneurial maturity"; the important factors in promoting opportunity entrepreneurship are transaction and economic institution characteristics

    On the pro-competitive effects of passive partial backward ownership

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    We consider a vertically related market in which an upstream monopolist supplier trades, via interim observable two-part tariff contracts, with two differentiated goods' downstream Cournot competitors. We show that passive partial backward ownership (PPBO) may be pro-competitive and welfare enhancing. PPBO exacerbates the upstream's commitment problem and yields lower wholesale prices, and higher industry output, consumers surplus, and welfare than in the absence of PPBO.Petrakis acknowledges financial support from “UC3M-Santander Chairs of Excellence

    The ambiguous competitive effects of passive partial forward integration

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    In a two-tier industry with an upstream monopolist supplier and downstream competition with differentiated goods, we show that passive partial forward integration (PPFI) has ambiguous effects on competition and welfare. When vertical trading is conducted via linear tariffs, PPFI is pro-competitive and welfare-increasing. While under two-part tariffs, it is anti-competitive and welfare-decreasing. These hold irrespectively of the degree of product differentiation, the observability or secrecy of contract terms, the mode of downstream competition, and the distribution of bargaining power between firms

    Knowledge and Culture on Entrepreneurship

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    The paper contributes to the interpretation of entrepreneurship based on the effect of knowledge and the cultural background. Entrepreneurship is defined as both the self-employment and the entry density rates, comparing the two models. The present paper uses a series of variables to express these effects, which are analysed with a principal component analysis and a regression analysis. The results confirm that cultural background strongly affects both entrepreneurship rates. Knowledge creation does not affect entrepreneurship rates, as its impact on entrepreneurship is long-lasting (it could reach more or less 10 years) and not a short-term one. Simultaneously, knowledge impact affects negatively the self-employment rates and positively the entry density rates in the economies. Furthermore, performing a sensitivity analysis on knowledge and cultural background, the conclusions confirm that cultural background has a strong interpretive role in both entrepreneurship rates. Moreover, under the new prevailing conditions the creation of knowledge and the impact of knowledge have a negative effect on self-employment, while the effect of knowledge impact is strengthened in the cases where we increase knowledge and it is weakened where we decrease the knowledge variables

    Why Coevolution of Culture and Institutions Matters for Economic Development and Growth?

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    Theoretical considerations that choose to make reference to the institutional and cultural considerations presuppose that these are in an optimal form. However, this is not the case in the real world. This chapter argues that the coevolution requirements of institutional and culture change are critical for economic outcomes. When institutions and culture coevolve in an optimal pattern, economic development and growth are facilitated. In contrast, when institutions and culture deviate from the optimal pace of coevolution, incompatible alterations of institutions and culture may end up causing an inability of the policy designers to implement the required changes in institutions and/or cultural behaviors. The result can be a series of failing attempts to implement a modernized progrowth framework of institutional settings and cultural behaviors. Using a dataset of 80 countries for the period 1981–2019, the analysis concludes that institutions and culture are complements—and not substitutes—in terms of their role in economic development, as when both sizes are strong it leads to higher levels of GDP per capita. When either or both of them are at a weak level, economic development is much lower

    The Effects of Cultural Background and Knowledge Creation on Self-Employment and Entry Density Rates

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    Abstract: This paper contributes to the interpretation of entrepreneurship based on the effect of knowledge and cultural background. Entrepreneurship is defined as both the self-employment and the entry density rates, comparing the two models. The present paper uses a series of variables to express these effects, which are analyzed with a principal component analysis and a regression analysis. The results confirm that cultural background strongly affects both entrepreneurship rates. Knowledge creation does not affect entrepreneurship rates, as its impact on entrepreneurship is long-lasting (it could reach more or less 10 years) and not a short-term one. Simultaneously, knowledge impact affects negatively the self-employment rates and positively the entry density rates in the economies. Furthermore, performing a sensitivity analysis on knowledge and cultural background, the conclusions confirm that cultural background has a strong interpretive role in both entrepreneurship rates. Moreover, under the new prevailing conditions the creation of knowledge and the impact of knowledge have a negative effect on self-employment, while the effect of knowledge impact is strengthened in the cases where we increase knowledge and it is weakened where we decrease the knowledge variables. JEL Classifications: D83; L26; Z1

    Wages and Higher Education Participation

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    The paper develops a model for the screening mechanism for higher education, within an adverse selection framework. Specifically it examines the effect of wage earned by high school graduates on higher education participation. The model pinpoints a positive relation between the “high school” wage and the number of candidates entered in higher education with positive influences on the quality of selection mechanism. An empirical examination is conducted, using U.S. data, in order to investigate the validity of our analytical results
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