Do Start-Ups Pay Less?

The authors analyze Danish registry data from 1991 to 2006 to determine how firm age and firm size influence wages. Unadjusted statistics suggest that smaller firms paid less than larger firms paid, and that firm age had little or no bearing on wages. After adjusting for differences in the characteristics of employees hired by these firms, however, they observe both firm age and firm size effects. Larger firms paid more than did smaller firms for observationally equivalent individuals but, contrary to conventional wisdom, younger firms paid more than older firms. The size effect, however, dominates the age effect. Thus, although the typical start-up — being both young and small — paid less than a more established employer, the largest start-ups paid a wage premium

Identification of Marketing Capabilities: A study on Indian product based B2B Telecom start-ups

New technology based start-ups play a very important role in developing the economy of a country. In India telecom sector has seen unprecedented growth over the decade and this has led to emergence of several telecom related start-ups. However, product based B2Bstart-ups are still rare and they have to undergo several challenges to stay afloat. Surprisingly not much research work has been undertaken in identifying capabilities among early stage start-ups although the early phase represents a very crucial phase for product based firms and in determines the success or failure for start-ups. Present study explores the inherent marketing capabilities that enable commercialization among such early stage start-ups by adopting a multiple case based inductive methodology with Indian telecom start-ups as our context. We have identified market orientation, positioning and segmentation, selling and after sales services as components of marketing capability of such start-ups. We also identify several idiosyncrasies among telecom start-ups vis-�-vis established firms in the sector. Fina lly we make a case for policy level intervention to promote telecom start-ups in the Indian context.

How Does Personal Bankruptcy Law Affect Start-ups?

We analyze the effect of changes in U.S. state personal exemptions on the financing structure and performance of a representative sample of start-ups. An increase in the amount of borrower’s personal wealth protected in bankruptcy reduces the availability of bank credit to all start-ups. Owners of unlimited liability businesses, who benefit from the increase in wealth insurance, offset the reduction in bank credit by investing more money in the firm. We find no such response for start-ups whose entrepreneurs’ personal wealth is already protected by limited liability. Consequently, corporations experience lower growth rates and higher failure rates, while proprietorships performance is not negatively affected.Debtor protection;bankruptcy;start-ups;credit availability;agency problems

Entrepreneurship and innovation

This report provides an overview of recent facts and figures on start-ups in the Netherlands, techno start-ups in particular and the overall link between entrepreneurship and innovation.

Comparing Successful and Less Successful New Innovative Businesses

This contribution offers a conceptual framework for the analysis of innovative business start-ups. This framework mainly draws on transaction cost theory. On basis of a broad empirical study of 52 hightech business start-ups in Germany the fruitfulness of the transaction cost approach with respect to research on innovation is demonstrated. Transaction cost theory gives valuable hints for the interpretation of the personal role of the entrepreneur as well as for the economic evaluation of the entrepreneurial idea. Special importance refers to the results on the organization of market transactions as a decisive determinant of economic success of innovative business start-ups

Determinants of Growth of Start-ups in the Netherlands

The dynamics and growth of firms are considered to be important for enhancing economic growth. Organizations can benefit from growth in many ways, including greater efficiency through economies of scale, increased power, the ability to withstand environmental change, increased profit and increased prestige for organizational members.It is important to obtain a better grip on the growth development of start-ups. The aim of this study is to map the development of start-ups in terms of employment growth and, in addition, to understand: what are the determinants of growth of start-ups?

Financing Start-ups: Advising vs. Competing

High-tech start-ups get external finance and guidance mostly from venture capitalists and/or business angels. We identify a simultaneous double moral hazard for the management style of entrepreneurs and the decision to advise the firm for financiers. We embed this relationship into the financial competition where strategic choices are equity shares, liquidation rights and quality of advising. We show that the financier holds all liquidation rights, that more competition weakly decreases the financier's equity share. Surprisingly, the response in advising quality is non-monotone. In a regime of soft competition, the financier owns the start-up and more competition weakens advising quality. In a regime of acute competition, more competition improves advising quality and lowers the financier's equity share in the start-up. Hence, advising and equity, are substitutes at the industry level once competition effects are taken into account.Start-ups, Contract Design, Equity, Oligopoly Competition

Growth determinants of start-ups in Eastern Germany: a comparison between innovative and non-innovative firms

This empirical analysis deals with the determinants of growth and the explanation of variations in the growth between innovative and non-innovative start-ups. Based on theoretical models explaining the growth of firms, hypotheses on potential determinants are formulated. The regression results indicate strong correlations between the growth rate on the one side and firmspecific, founder-specific as well as external factors on the other side. These factors influence the growth rates of innovative and non-innovative young firms in different ways. It becomes obvious that large and mature firms have smaller growth rates than small and young innovative as well as non-innovative firms. Moreover, other firm-specific characteristics like legal form and formal links to other firms from Western industrialised countries have an impact on the development of start-ups. With respect to founder-specific characteristics, positive effects can be derived from the human capital of the founder(s). This holds especially for technological disciplines whereas business knowledge plays a minor role. In addition to firm and founder characteristics, locationspecific factors controlling for agglomeration effects and the industry structure in the Eastern German counties have an impact on growth. Comparing annual growth rates of start-ups, innovative start-ups grow on average faster than non-innovative start-ups. --New Technology-based Firms,Employment Growth,Determinants of Growth

Does R&D-infrastructure attract high-tech start-ups?

Our research, based on the ZEW-Foundation Panel East, examines whether high-tech start-ups are mainly founded in scientific and infrastructural well suited regions or not. Estimation results on the level of postcode areas confirm the hypothesis that specific human capital, knowledge spillovers at higher-education institutions are more important for founding a firm in one of the high-tech sectors compared with the effects of other publicly financed institutions. The existence of large companies in the manufacturing sector has a considerable effect for start-up activities in this region in general. Moreover, high-tech start-ups are more concentrated within or near technology and foundation centres. --High Technology Industries,Eastern Germany,Start-ups,entrepreneurs