Headlines 2016

International conference on entrepreneurship research

2016-06-19


June 18–19, 2016, the Institute for Research of Industrial Economics (IFN), in cooperation with the Centre for Economic Policy Research (CEPR), organized the Third CEPR European Workshop on Entrepreneurship Economics in Stockholm, Sweden. Researchers from all over the world attended the conference to discuss topics concerning entrepreneurship.

This year’s workshop paid special attention to issues with policy relevance. The participants  discussed:

  • incentives promoting entrepreneurship and evaluation of incentives programs,
  • entrepreneurship and institutions,
  • financing entrepreneurship (venture capital/business angels),
  • experimentation and entrepreneurship,
  • job creation and entrepreneurship,
  • entrepreneurship in the theory of firms, and
  • entrepreneurship from an industrial organizational perspective.

Entrepreneurs and Innovation

Entrepreneurs are considered, by many economists, to be a fundamental driver of economic growth. Entrepreneurs are not only innovators in their own right, they often contribute to making the innovations of others successful. However, the degree to which entrepreneurs are able to innovate is directly related to how they are able to protect their innovations from appropriation. A number of researchers attending the workshop have looked at the importance of effective patent protection. For instance, Patrick Gaulé (CERGE-EI) presented work in which he finds that patent protection has a substantial impact on success rates for entrepreneurs in certain industries but not in others. Further, Pooyan Khashabi (LMU, in a joint work with Ali Mohammadi, KTH & CESIS) discussed conditions under which misappropriation by corporate venture capital (CVC) has made startups reluctant to share technological information with CVC investors. Both these studies highlight the efficacy of patent protection and the ways in which entrepreneurs protect their work.

Determinants of Entrepreneurship

Given the importance of the entrepreneur for economic growth, policy makers worldwide have been looking at ways to boost growth through programs aimed at fostering entrepreneurial activity.

However, if entrepreneurs are born rather than made, such programs may fail. Theodor Vladasel  (Copenhagen Business School) presented a study in which he, together with Matthew J. Lindquist (Stockholm University), Joeri Sol (University of Amsterdam) and Mirjam van Praag (Copenhagen Business School) find that a large share of the variance in entrepreneurial outcomes is explained by factors that are shared by siblings. These findings suggest that entrepreneurs are in fact born with some traits necessary for becoming a successful entrepreneur, but acquire others. To the degree that entrepreneurship is acquired during an individual’s life, it is important to understand which institutions contribute to their creation.  

Francesca Malillo (Katholieke Universiteit Leuven) presented a study jointly written with Virgilio Failla (University of Munich) and Toke Reichstein (Copenhagen Business School) asking whether workplace competition can be a driving force for entrepreneurship and finds that high tournament environments encourage employees to become entrepreneurs.

Constraints to Entrepreneurship

Often, entrepreneurs rely on their own financial assets as well as outside capital to start and run businesses. Depending on how easily the entrepreneur can obtain financing may affect how successful entrepreneurs are and how well they are able to cope with economic setbacks, both in their firms and private lives.  Tobin Hanspal (Copenhagen Business School) presented research which suggests that losses to entrepreneurial wealth have a substantial impact on firm survival probability. This suggests that entrepreneurs play a significant role in providing short term liquid capital into their businesses. Additionally, Spyridon Lagaras (University of Illinois) found that a reduction in funding from crisis-affected banks leads to a decrease in innovation output, suggesting that having close relationships with banks help entrepreneurs obtain capital for innovation.  

Text: Nikita Koptyug

 

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