Posts categorized under Entrepreneurship

Cash holdings in start-ups and founder sociodemographic characteristics

June 7, 2022
This study examines the determinants of excess cash holdings for Portuguese non-financial start-ups established between 2006 and 2009, paying particular attention to the role of founder sociodemographic and educational characteristics. Cash is one of the most vital assets of a firm. Cash management is extremely crucial for new ventures as they often struggle to survive with very low levels of income and revenues during the first years. Moreover, start-up information is opaque to investors during their earliest years and assets are often intangible and knowledge based.

Wage inequality and entrepreneurship in regional labour markets

May 19, 2022
Entrepreneurship has been recognized as an important driver of innovation and economic growth. For that reason, policymakers seek to attract knowledge-based and high-tech entrepreneurial activities into their cities and regions. To achieve this objective, increasing attention has been paid to people engaged in ‘creative’ professions, i.e., those occupations where knowledge is created, transformed, or used in innovative ways. By attracting creative professions, policymakers expect to contribute to better economic performance.

Entrepreneurship and industry clusters

May 12, 2022
The clustering of successful firms within small geographical areas is a feature of many industries that is usually attributed to the greater availability of economically valuable information and a specialized workforce. However, it is regularly observed that entrepreneurs locate their firms in their home region rather than being attracted by agglomerations. This paper reconciles these views by arguing that industry clusters can emerge because employees of incumbent firms often leave to create their own successful firms (usually called “spinoffs” or “spinouts”).

Serial entrepreneurs and the macroeconomy

November 8, 2021
Business dynamism has long been recognized as a key driver of aggregate outcomes, with startups and young firms playing a particularly important role. Seemingly small changes to the numbers and growth potential of startups may leave large and persistent footprints on the aggregate economy. In this paper, the authors argue that entrepreneurs themselves are key determinants of firm performance. Using Quadros de Pessoal, the paper defines serial entrepreneurship as the simultaneous ownership of multiple businesses.

Side benefits of promoting entrepreneurship

March 30, 2021
Are there societal side benefits to encouraging entrepreneurship? This study answers this question by looking at the effects of a policy promoting new firm creation on crime levels within municipalities. Between 2005 and 2009, the Portuguese government gradually introduced a deregulation reform (“Empresa na Hora”) in 144 out of 308 municipalities. In the municipalities targeted by this reform, the costs of establishing a firm declined drastically: it took just one hour and about 300 euros to become an “entrepreneur”.

Reducing corporate taxes triggers high-quality entrepreneurship

February 13, 2020
This paper investigates the impact of corporate taxes on entrepreneurial activity using a quasi-natural experiment in Portugal. Before 2001, the corporate tax rate levied on start-ups in Portugal was 34%. The “Portuguese Tax Benefits for Inland Regions” (Benefícios Fiscais à Interioridade) implemented in 2001 reduced the corporate tax rate to 25% for all start-ups located in inland regions. After 2004, the tax rate was further reduced to 15%, and after 2007 it was reduced to 10%.