Varieties of entrepreneurship: exploring the institutional foundations of different entrepreneurship types through ‘Varieties-of-Capitalism’ arguments

While entrepreneurship researchers agree that institutions ‘matter’ for entrepreneurship, they also have a rather encompassing understanding of institutions as almost any external factor that influences entrepreneurship. Ultimately, this literature thus comes up with a long list of institutional factors that may explain entrepreneurial differences between countries. But which institutions are most influential? How do these institutions relate to different types of entrepreneurship? And to what extent are institutions complementary to each other in the way they sustain different entrepreneurship types? The literature on ‘Varieties-of-Capitalism’ (VoC) offers a parsimonious theoretical framework to address these questions. Based on the VoC literature, we theoretically derive a consistent set of institutional indicators that can explain differences in entrepreneurship types between countries. Based on principal component and cluster analyses, we illustrate how 21 Western developed economies cluster around four distinct institutional settings. Furthermore, we use simple OLS regressions to show how these institutional constellations are related to different types of entrepreneurship. We conclude that four different ‘Varieties of Entrepreneurship’ can be identified across the Western world. The main implication of our findings is that a ‘perfect’ institutional constellation, equally facilitating different types of entrepreneurship, does not exist. Policy-makers seeking to stimulate entrepreneurship are thus faced with the trade-off of targeting policy reforms to that entrepreneurship type they intend to promote—at the expense of other types of entrepreneurship and the broader societal consequences such reforms will have.     

THE WAGE IMPACT OF TEACHERS UNIONS: A META‐ANALYSIS

The literature examining the impact of teachers unions on education is very large and diverse. We meta‐analyze the literature on the wage impacts of teachers unions to try to draw out general findings, the importance of empirical model specification, and samples. A key finding of this study is that the average wage impact estimated by the included papers is modest, around 2%–4.5%. Our findings also suggest that the quality of an empirical strategy significantly affects the size of the estimated impact. We find that teachers union wage impacts have varied over time. The largest impacts appear to be following the rapid expansion of teacher unionism in the 1970s. Finally, we gain new insight into the goals of teachers unions by using the increased statistical power of meta‐analytic techniques to show that unions increase the wages of new teachers and not just senior teachers. (JEL J51, I21, I30)     

Taxation of firms with unknown mobility

We analyze optimal business tax policy when some firms are able to escape taxation by moving abroad. In contrast to the existing literature, we assume that the true number of mobile firms is ex ante unknown. While the government may learn from the firms' location responses to past tax rate changes, firms may anticipate this and adjust their choices accordingly. We find that incomplete information on mobility substantially affects the properties and the implications of equilibrium policy choices. First, the government may find it optimal to set a tax rate that triggers partial firm migration but full revelation of the true number of mobile firms. Second, we show that, if the firms' outside option is attractive (i.e., relocation cost and foreign tax rates are low), expected tax rates and expected firm migration are higher if the degree of mobility is unknown. Third, there is a positive value of learning, i.e., commitment on future tax rates cannot increase the government's expected revenue. However, if the government can commit to a rule‐based learning mechanism, i.e., credibly tie its future tax policy to present policy outcomes, it may obtain a Pareto improvement.     

Use of the THERMOCOOL SMARTTOUCH catheter for ablation of atrial fibrillation: the relationship between hospital procedure volume,re-admissions,and economic outcomes

Objective: The purpose of this study was to examine the relationship between hospital volume of prior THERMOCOOL SMARTTOUCH catheter use and health and economic outcomes among hospitalized patients with atrial fibrillation (AF) undergoing ablation using this device.

Materials and methods: Patients aged ≥18 years with a primary diagnosis of AF undergoing ablation treatment using the THERMOCOOL SMARTTOUCH catheter between January 2014 and June 2016 were identified from the Premier hospital database with the first date of such a procedure being defined as the index date. Hospital volume of prior THERMOCOOL SMARTTOUCH catheter use was determined during the 12-month pre-index period, and was classified into five groups: no volume (0), low volume (1–50), mid volume (51–100), high volume (101–150), and very high volume (≥151). Outcomes, including length of stay (LOS; for inpatient procedure only), hospital costs (total, hospital pharmacy, supply), and all-cause re-admission were evaluated. A generalized estimating equation (GEE) with exchangeable correlation structure was used to examine the impact of hospital volume on LOS, hospital costs, and re-admissions controlling for hospital clustering and other covariates.

Results: The study population included 640 hospitalized AF patients. The adjusted mean LOS was significantly shorter in very high-volume hospitals than hospitals with no volume (mean LOS 2.30 vs 4.33 days; p?=?.0377). As volume increased, the mean adjusted supply cost tended to decrease, although these changes emerged as non-significant. The 12-month all-cause re-admission was significantly lower among patients undergoing ablation in low (Odds ratio [OR]?=?0.27; confidence interval [CI]?=?0.08–0.85) and mid (OR?=?0.12; CI?=?0.02–0.61) volume hospitals compared to hospitals with no volume.

Limitations: Study results may not be generalizable to all US hospitals.

Conclusions: Among AF patients undergoing ablation, increased hospital volume of prior THERMOCOOL SMARTTOUCH catheter use was associated with shorter LOS and a lower likelihood of all-cause re-admission.     

Microeconomic mechanisms behind export spillovers from FDI: evidence from Bulgaria

This paper studies how the presence of multinational enterprises affects the export performance of Bulgarian manufacturing firms—export spillovers from FDI. Using export data at the firm/product/destination level for the period 2004–2006, it finds positive forward spillover on export value and quantity, related to quality upgrading. Conversely, it finds negative (or insignificant) backward and horizontal spillover on export flows, related to quality downgrading. When aggregating data at the firm level and considering that a firm can operate in several sectors, the paper shows that the presence of foreign input suppliers allows domestic firms to export additional varieties of lower quality and upgrade the average quality of existing varieties, whereas the presence of foreign customers generates the opposite effect.     

What Are Boards For? Evidence from Closely Held Firms in Colombia

Using a large survey database on the corporate governance practices of privately held Colombian firms, we investigate why firms have boards, and how that choice and the balance of power among the board, controlling shareholders, and minority shareholders affect the trade‐offs between control, liquidity, and growth and, ultimately, firm performance. We find that the probability of having a board increases with the number of shareholders and in family firms. When the preferences of controlling and minority shareholders diverge, as with respect to capital structure and dividend policy, boards support controlling shareholders’ decisions, thereby exacerbating the agency conflict between the two groups of shareholders.     

The influence of corporate social responsibility on investment efficiency and innovation

We examine two important channels through which corporate social responsibility (CSR) affects firm value: investment efficiency and innovation. We find that firms with higher CSR performance invest more efficiently: these firms are less prone to invest in negative net present value (NPV) projects (overinvestment) and less prone to forego positive NPV projects (underinvestment). We also find that firms with higher CSR performance generate more patents and patent citations. Mediation analysis indicates that firms with higher CSR performance are more profitable and valuable, consequences partially attributable to efficient investments and innovation. These results, robust to alternate model specifications, lend support to enlightened stakeholder theory.