Entrepreneurship and competitiveness dynamics in Latin America

This study analyses the relationship between entrepreneurial dynamics and the level of competitiveness in Latin American countries. Based on a stage of economic development model, we demonstrate that Latin American countries under the model followed different paths related to competitiveness. These different paths can explain the effect of specific competitiveness conditions on entrepreneurial dynamics in Latin America.

Innovation of entrepreneurial firms

An empirical test is provided of the effect of the degree of obsolescence on the effect of firm size and monopoly profits on a firm's ability to innovate. Recent theory suggests that innovation depends on firm size and monopoly profits only if the firm conducts product improvement as well as new product innovation. This is due to the allocation of limited entrepreneurial attention between improving current products and innovating new products. Current products are subject to obsolescence and innovation requires technological opportunities. The firm conducts product improvement as well as new product innovation only if the degree of obsolescence is sufficiently low relative to the level of technological opportunity. This theory provides an explanation for previously unexplained empirical observations. We find preliminary support for the hypothesis that product improvement reduces the positive effect of firm size on new product innovation and sufficient product improvement may reverse the negative effect of monopoly profits on new product innovations. In addition, product improvement reduces the positive effect of technological opportunity on new product innovation.     

Patents, knowledge spillovers, and entrepreneurship

We develop an endogenous-growth model in which we distinguish between inventors and innovators. This distinction implies that stronger protection of intellectual property rights has an inverted U-shaped effect on economic growth. Intellectual property rights protection attributes part of the rents of commercial exploitation to the inventor that would otherwise accrue to the entrepreneur. Stronger patent protection will therefore increase the incentive to do research and development (R&D) and generate new knowledge. This new knowledge has a positive effect on entrepreneurship, innovation, and growth. However, after some point, further strengthening of patent protection will reduce the returns to entrepreneurship sufficiently to reduce the overall growth rate.     

Editors' introduction

Small Business Economics -     

Entrepreneurship,institutional economics,and economic growth: an ecosystem perspective

We analyze conceptually and in an empirical counterpart the relationship between economic growth, factor inputs, institutions, and entrepreneurship. In particular, we investigate whether entrepreneurship and institutions, in combination in an ecosystem, can be viewed as a “missing link” in an aggregate production function analysis of cross-country differences in economic growth. To do this, we build on the concept of National Systems of Entrepreneurship (NSE) as resource allocation systems that combine institutions and human agency into an interdependent system of complementarities. We explore the empirical relevance of these ideas using data from a representative global survey and institutional sources for 46 countries over the period 2002–2011. We find support for the role of the entrepreneurial ecosystem in economic growth.     

The effect of decoupling on marginal agricultural systems: Implications for farm incomes,land use and upland ecology

In many parts of Europe, decades of production subsidies led to the steady intensification of agriculture in marginal areas. The recent decoupling of subsidies from production decisions means that the future of farming in these areas is uncertain. For example, in the uplands of the United Kingdom, an area important both for biodiversity conservation and ecosystem service provision, hill farmers steadily increased stocking densities in response to headage payments but must now reconfigure farm businesses to account for the shift to the Single Farm Payment scheme. We examined hill farming in the Peak District National Park as a case study into the future of marginal agriculture after decoupling. We surveyed 44 farm businesses and from this identified six representative farm types based on enterprise mix and land holdings. We developed linear programming models of production decisions for each farm type to examine the impacts of policy changes, comparing the effects of decoupling with and without agri-environment and hill farm support, and evaluating the effects of removal of the Single Farm Payment. The main effects of decoupling are to reduce stocking rates, and to change the mix of livestock activities. Agri-environmental schemes mediate the income losses from decoupling, and farmers are predicted to maximise take up of new Environmental Stewardship programmes, which have both positive and negative feedback effects on livestock numbers. Finally, removal of the Single Farm Payment leads to negative net farm incomes, and some land abandonment. These changes have important implications for ongoing debates about how ecological service flows can be maintained from upland areas, and how marginal upland farming communities can be sustained.     

The lineages of the entrepreneurial ecosystem approach

In its most abstract sense, an ecosystem is a biotic community, encompassing its physical environment, and all the interactions possible in the complex of living and nonliving components. Economics has always been about systems that explain differential output and outcomes. However, economics has generally ignored the role of entrepreneurship in economic systems, just as entrepreneurship studies have largely overlooked the role of systems in explaining the prevalence and performance of entrepreneurship. The entrepreneurial ecosystem approach has the promise to correct these shortcomings. Its two dominant lineages are the regional development literature and the strategy literature. Both lineages share common roots in ecological systems thinking, providing fresh insights into the interdependence of actors in a particular community to create new value. But studies of both regional development and strategic management have largely ignored the role of entrepreneurs in new value creation. In this paper, we will outline contributions to the entrepreneurial ecosystem approach and conclude with a promising new line of research to our understanding of the emergence, growth, and context of start-ups that have achieved great impact by developing new platforms.     

Does Generation Matter to Entrepreneurship? Four Generations of Entrepreneurs

This study for the first time addresses generation effects on eight entrepreneur types across four U.S. generations: Traditionalists, Boomers, Gen‐Xers, and Millennials. It adopts hierarchical age‐period‐cohort (HAPC) models using multilevel mixed‐effects logistic regression models with random period effect controls and the same‐age comparison between two neighboring generations. The empirical study relies on monthly Current Population Survey data across 11 years (2006–2016). When controlling for age, period, path dependency, seasonality, and other demographic and socioeconomic factors, no generational differences are identified for workers' entrepreneur propensity, mirroring entrepreneurs' misfits; for entrepreneur‐type propensities, limited generation differences are identified: the odds for Gen‐Xers to be novice (vs. non‐novice) entrepreneurs are 10% higher than Boomers for the ages of 44 and 51; the odds for Boomers to be opportunity (vs. necessity) entrepreneurs are 2.3 times higher than Traditionalists for the ages 63–70. The limited generational difference is consistent with prior literature using HAPC.