Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

Creative destruction and productivity: entrepreneurship by type, sector and sequence

Creative destruction and productivity: entrepreneurship by type, sector and sequence Purpose – Schumpeter claimed the entrepreneur to be instrumental for creative destruction and industrial dynamics. Entrepreneurial entry serves to transform and revitalize industries, thereby enhancing their competitiveness. The purpose of this paper is to investigate if entry of new firms influences productivity amongst incumbent firms, and the extent to which altered productivity can be attributed sector and time specific effects. Design/methodology/approach – Implementing a unique dataset the paper estimates a firm‐level production function in which the productivity of incumbent firms is modeled as a function of firm attributes and regional entrepreneurship activity. Findings – The analysis finds support for positive productivity effects of entrepreneurship on incumbent firms, albeit the effect varies over time, what the authors refer to as a “delayed entry effect”. An immediate negative influence on productivity is followed by a positive effect several years after the initial entry. Moreover, the productivity of incumbent firms in services sectors appears to be more responsive to regional entrepreneurship, as compared to the productivity of manufacturing firms. Originality/value – The paper employs a firm‐level production function approach allowing for time lags of the effect of entrepreneurship. The unique data implemented allow the authors to identify genuinely new ventures as compared to those associated with reorganizations of existing businesses, thereby overcoming much of data deficiencies in previous studies. In addition, data are distributed on Swedish functional labor market regions. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Enterpreneurship and Public Policy Emerald Publishing

Creative destruction and productivity: entrepreneurship by type, sector and sequence

Download PDF
22 pages

Loading next page...
 
/lp/emerald-publishing/creative-destruction-and-productivity-entrepreneurship-by-type-sector-S5BW0NZPuU

References (113)

Publisher
Emerald Publishing
Copyright
Copyright © 2012 Emerald Group Publishing Limited. All rights reserved.
ISSN
2045-2101
DOI
10.1108/20452101211261417
Publisher site
See Article on Publisher Site

Abstract

Purpose – Schumpeter claimed the entrepreneur to be instrumental for creative destruction and industrial dynamics. Entrepreneurial entry serves to transform and revitalize industries, thereby enhancing their competitiveness. The purpose of this paper is to investigate if entry of new firms influences productivity amongst incumbent firms, and the extent to which altered productivity can be attributed sector and time specific effects. Design/methodology/approach – Implementing a unique dataset the paper estimates a firm‐level production function in which the productivity of incumbent firms is modeled as a function of firm attributes and regional entrepreneurship activity. Findings – The analysis finds support for positive productivity effects of entrepreneurship on incumbent firms, albeit the effect varies over time, what the authors refer to as a “delayed entry effect”. An immediate negative influence on productivity is followed by a positive effect several years after the initial entry. Moreover, the productivity of incumbent firms in services sectors appears to be more responsive to regional entrepreneurship, as compared to the productivity of manufacturing firms. Originality/value – The paper employs a firm‐level production function approach allowing for time lags of the effect of entrepreneurship. The unique data implemented allow the authors to identify genuinely new ventures as compared to those associated with reorganizations of existing businesses, thereby overcoming much of data deficiencies in previous studies. In addition, data are distributed on Swedish functional labor market regions.

Journal

Journal of Enterpreneurship and Public Policy – Emerald Publishing

Published: Oct 5, 2012

Keywords: Entrepreneurship; Entry; Business turbulence; Incumbent firms; Productivity; Region; Business dynamics; Entrepreneurialism; Productivity rate; Sweden

There are no references for this article.