Export Orientation among New Ventures and Economic Growth

While it is generally acknowledged that entrepreneurship as well as export activity may both be important strategies for achieving national economic growth, it has remained unclear how export activity among new ventures is related to economic growth. This paper investigates whether the presence of export-oriented entrepreneurs is a more important determinant of economic growth than entrepreneurial activity in general. We focus on the national or macro-level and use data from the Global Entrepreneurship Monitor for a sample of 36 countries. An important advantage of using the macro-level is that indirect effects of exporting entrepreneurs that reach further than the performance of these firms themselves (e.g. spillovers) are captured in the analysis. To our knowledge, no attempt has been made thus far to link international activity of early-stage ventures to macro-economic out-comes. Our results suggest that export-oriented entrepreneurship is indeed more important for achieving high economic growth rates than entrepreneurial activity in general. This suggests that international activity by small and new firms strongly contributes to higher levels of competition and, consequently, to the emergence of highly dynamic economies and higher levels of economic growth.Entrepreneurship;Economic growth;Export;Global Entrepreneurship Monitor

Entrepreneurial Diversity and Economic Growth

Most studies investigating the relationship between entrepreneurship and economic growth treat entrepreneurs as a homogeneous group. This study investigates the impact of entrepreneurial diversity on national economic growth. Using data for 36 countries participating in the Global Entrepreneurship Monitor we investigate whether the impact on growth depends on socio-demographic diversity in entrepreneurship (in terms of age, education and gender). We find that in less developed countries older and higher educated entrepreneurs are particularly important for stimulating economic growth, while for developed countries younger entrepreneurs are more important. Accordingly, policy should aim at stimulating particular groups of entrepreneurs, rather than just the number of entrepreneurs.entrepreneurship;diversity;economic development

The Impact of New Firm Formation on Regional Development in the Netherlands

This paper examines the relationship between new firm formation and regional employment change in the Netherlands. Using a new regional data base for the period 1988-2002, we examine the time lags involved in the relationship. We also investigate whether the relationship differs by time period, by sector and by degree of urbanization. We find that the maximum effect of new businesses on regional development is reached after about six years. Our results also suggest that the overall employment impact of new-firm startups is positive but that the immediate employment effects may be small in the Netherlands. Furthermore, we find that the relation between new businesses and regional development has been stable during the period under investigation, that the employment impact of new firms is strongest in manufacturing industries and that the employment impact of new firms is stronger in areas with a higher degree of urbanization.Entrepreneurship;Regional Development;Startups;the Netherlands

The Effect of Business Regulations on Nascent and Young Business Entrepreneurship

We examine the relationship, across 39 countries, between regulation and entrepreneurship using a new two-equation model. We find the minimum capital requirement required to start a business lowers entrepreneurship rates across countries, as do labour market regulations. However the administrative considerations of starting a business – such as the time, the cost, or the number of procedures required – are unrelated to the formation rate of either nascent or young businesses. Given the explicit link made by Djankov et al. (2002) between the speed and ease with which businesses may be established in a country and its economic performance – and the enthusiasm with which this link has been grasped by European Union policy makers – our findings imply this link needs reconsidering.Global Entrepreneurship Monitor;Nascent Entrepreneurship;Business Regulations;World Bank Doing Business;Young Businesses

Knowledge Spillovers and Entrepreneurs’ Export Orientation

We draw on knowledge spillover literature to suggest that a country’s level of foreign direct investment (FDI) and international trade may influence the export orientation of its entrepreneurs, which in turn may relate to the country’s total level of entrepreneurial activity. Macro-level data from 34 countries during 2002–2005 indicate that a country’s outward FDI, export, and import positively affect entrepreneurs’ export orientation, but these effects differ in how fast they manifest themselves. Furthermore, the extent to which a country’s entrepreneurs engage in export-oriented activities affects the subsequent emergence of new businesses. These findings have important implications for research and practice.Export orientation;Knowledge spillovers;Country-level entrepreneurship

Uncertainty Avoidance and the Rate of Business Ownership Across 21 OECD Countries, 1976-2004

Persistent differences in the level of business ownership across countries have attracted the attention of scientific as well as political debate. Cultural as well as economic influences are assumed to play a role. This paper deals with the influence of cultural attitudes towards uncertainty on the rate of business ownership across 21 OECD countries. First, the concepts of uncertainty and risk are elaborated, as well as their relevance for entrepreneurship. An occupational choice model is introduced to underpin our reasoning at the macro-level. Second, regression analysis using pooled macro data for 1976, 1990 and 2004 and controlling for several economic variables, yields evidence that uncertainty avoidance is positively correlated with the prevalence of business ownership. According to our model, a restrictive climate of large organizations in high uncertainty avoidance countries pushes individuals striving for autonomy towards self-employment. Regressions for these three years separately show that in 2004, this positive correlation is no longer found, indicating that a compensating pull of entrepreneurship in countries with low uncertainty avoidance may have gained momentum in recent years. Third, an interaction term between uncertainty avoidance and GDP per capita in the pooled panel regressions shows that the historical negative relationship between GDP per capita and the level of business ownership is substantially weaker for countries with lower uncertainty avoidance. This suggests that rising opportunity costs of self-employment play a less important role in this cultural environment, or are being compensated by increasing entrepreneurial opportunities.Entrepreneurship;Business Ownership;Comparative Analysis of Economies;Cross Country Study;Cultural Economics;Uncertainty Avoidance

Knowledge Spillovers and Economic Growth

The importance of knowledge spillovers for achieving innovation and economic growth is widely recognized. It is not straightforward which type of spillovers is most effective: intra-sectoral spillovers or inter-sectoral spillovers. We investigate this controversy using a model of regional growth. The model also deals with the impact of local competition on innovation and growth. The model is estimated using sectoral data for 40 Dutch regions in the period 1987-1995. We find that local competition is important particularly for economic growth in industry sectors (manufacturing and construction), while diversity, a proxy for inter-sectoral spillovers, is important particularly for growth in service sectors. We find no effect for specialization (a proxy for intra-sectoral spillovers)

The Impact of New Firm Formation on Regional Development in the Netherlands

This paper examines the relationship between new firm formation and regional employment change in the Netherlands. Using a new regional data base for the period 1988-2002, we examine the time lags involved in the relationship. We also investigate whether the relationship differs by time period, by sector and by degree of urbanization. We find that the maximum effect of new businesses on regional development is reached after about six years. Our results also suggest that the overall employment impact of new-firm startups is positive but that the immediate employment effects may be small in the Netherlands. Furthermore, we find that the relation between new businesses and regional development has been stable during the period under investigation, that the employment impact of new firms is strongest in manufacturing industries and that the employment impact of new firms is stronger in areas with a higher degree of urbanization

Export Orientation among New Ventures and Economic Growth

While it is generally acknowledged that entrepreneurship as well as export activity may both be important strategies for achieving national economic growth, it has remained unclear how export activity among new ventures is related to economic growth. This paper investigates whether the presence of export-oriented entrepreneurs is a more important determinant of economic growth than entrepreneurial activity in general. We focus on the national or macro-level and use data from the Global Entrepreneurship Monitor for a sample of 36 countries. An important advantage of using the macro-level is that indirect effects of exporting entrepreneurs that reach further than the performance of these firms themselves (e.g. spillovers) are captured in the analysis. To our knowledge, no attempt has been made thus far to link international activity of early-stage ventures to macro-economic out-comes. Our results suggest that export-oriented entrepreneurship is indeed more important for achieving high economic growth rates than entrepreneurial activity in general. This suggests that international activity by small and new firms strongly contributes to higher levels of competition and, consequently, to the emergence of highly dynamic economies and higher levels of economic growth

The Relationship between Firm Births and Job Creation

This paper examines the relationship between firm births and job creation in Great Britain. We use a new data set for 60 British regions, covering the whole of Great Britain, between 1980 and 1998. The central theme of the paper is that, with the exception of a recent paper by Audretsch and Fritsch for Germany, the relationship between new-firm startups and employment growth has previously been examined either with no time-lag or with only a short period lag. The current paper examines short-run as well as long-run relationships and provides results for Great Britain similar to those for Germany. We find that the short-run employment impact of new-firm startups in British regions has been bigger in the 1990s compared to the 1980s. Concerning long-run effects, we find that the employment impact of new-firm startups is strongest after about five years, but the effect disappears after a decade