I) Profil, contexte, environnement
II) Comportement réel (sur le marché) et financier (politique d’endettement) ont une influence sur la survie de la nouvelle entreprise.
III) Un modèle qui explique à la fois la création et la survie de l’entreprise : la valorisation du capital humain de l’entrepreneur
Étude à partir de la base Sine (Système d’informations sur les nouvelles entreprises) Environ 30000 représentant 90000 créations-reprises. Base de données très riche…
1
Les facteurs de succès des jeunes entreprises Françaises
2
Variables relatives à la firme
I) Profil, contexte, environnement
3
Variables relatives à l’entrepreneur
I) Profil, contexte, environnement
4
L’ intensité entrepreneurialeL’ intensité entrepreneuriale
I) Profil, contexte, environnement
5
L’ intensité entrepreneurialeL’ intensité entrepreneuriale
I) Profil, contexte, environnement
6
L’ intensité entrepreneurialeL’ intensité entrepreneuriale
I) Profil, contexte, environnement
7
Première étude descriptive : 3 thèmes retenus :ABDESSELAM R., BONNET J. et N. LE PAPE (2004), "An Explanation of the
Life Span of New French Firms", Small Business Economics, 23: 237-254.
-Le profil de l’entrepreneur (car bien souvent identification entrepreneur-entreprise) âge, statut professionnel, occupation préalable, niveau de formation, nationalité
-le contexte de la création/reprise :
informationnel et technique The informational and technical context deals with the behaviour of
the entrepreneur before the setting-up of his new firm when he wastrying to get new skills and looking for information about the jobitself. It is identified by five variables: obtaining advice, attendingspecific training programmes, carrying out specific surveys orstudies, making contacts with potential customers, and gettingskills during previous occupation.
I) Profil, contexte, environnement
8
Economic context
The economic context sums up a set of variables linked to the size of the firm, its production and its geographical location (branch of industry, geographical location, size of the firm at the date of creation, subcontracting and number of customers ).
Financial context
The financial context takes into account four variables: asking for bank loans, obtaining bank loans, being granted public financial aid and the amount of money that was invested into the project.
The insertion in the entrepreneurial networks
is made up of five variables: the presence of relatives or close relations in these networks, the present exercise of an entrepreneurial function in another structure, the specific relations with customers, the specific relations with suppliers -which facilitate the setting-up of the firm- and the motivations of the entrepreneur
9
Le profil de l’entrepreneurLe profil de l’entrepreneur
10
Le contexte de la créationLe contexte de la création
11
Le contexte de la créationLe contexte de la création
12
L‘entourage entrepreneurialL‘entourage entrepreneurial
13
“Debt, Aggressiveness and young french firms’survival: an empiricalinvestigation”, Jean Bonnet, Amel Gharbi and Nicolas Le Pape, ConferenceESEM, 58th European Meeting of the Econometric Society Stockholm, August20-24, 2003
*A côté des “Founding conditions” de la création d’entreprises, il fauts’intéresser au comportement courant de l’entrepreneur
*Current behavior during the first years of life: a mix of financialbehavior of the firm and real behavior of the firm on its market.
Le comportement réel de l’entreprise représente les efforts que faitl’entreprise pour gagner des parts de marché,
Le comportement financier représente l’intensité du recours à la dette dela part de l’entreprise dans sa stratégie de financement.
Comportement réel (sur le marché) et financier (politique
d’endettement) ont une influence sur la survie de la nouvelle entreprise.
14
Theoretical indetermination on the linkage debt/aggressiveness
Brander and Lewis (1986) : debt = commitment value towards an aggressive production strategy
Opposite result : debt=conciliatory product market strategy :
-Brander and Lewis (1988) (bankruptcy costs)
-Glazer (1994) (long term debt contract)
-Showalter (1995) (mode of competition -price versus quantity-)
Need of empirical tests : impact of financial structure on firm behavior risky debt contract :
Firm survival ?
15
Real behaviour of the firm ≈ Aggressiveness or competitive dynamism
Current behavior
or competitive
environment
Financial behaviour of the firm ≈ financing decisions (or financing mode)
16
Theoretical background in the explanation of the current behavior
Capital structure aggressiveness (competition) : linkages :
I.O. : how to explain a relation between capital structure and product market behaviour ?
Brander and Lewis (1986), Poitevin (1989) or Showalter (1995) :
capital structure = commitment device
- Debt induces aggressiveness :
Brander and Lewis (1986) : debt = commitment value towards an aggressive production strategy
Hypotheses :
-owner-manager with a limited wealth ( debt choice)
-limited liability status ( bounded in losses)
17
Two-stage game =
• First stage (=strategic), the firm chooses a debt level
• Second stage (= competitive), the firm produces (considering as given the level of the debt to be reimbursed).
Operating income (R(.)) is uncertain = demand uncertainty demand to the firm (a: hazard on the demand distributed on the support )
Risky debt contract exhibits a specific state of the world which separates the states of bankruptcy from the states of solvency
Level of the debt to be reimbursed at the end of the period = D.
a
0;h
18
0 â h
states of
bankruptcy states of solvency
support of repartition
of the uncertainty
(R<D) (R>D)
19
Solvability
Bankruptcy
Owner
manager
creditor
R-D
D
R
0Owner
manager
creditor
20
Owner-manager protected by the limited liability:
If R>D : he receives (R –D)
If R< D : he receives 0 (limited liability protection)
Consequence : reimbursement function :
Creditor (bank) :
If R>D : the bank receives : D
If R<D : the bank receives : R (residual claimant in case of bankruptcy)
Consequence : reimbursement function :
.
}0;max{ DRVE
};min{ DRVD
21
The owner-manager opt for a strategy which is susceptible
of generating a high value of the residual profit
Owner
manager
R(a)
Debt induces risk taking strategies
(≈ Jensen et Meckling, 1976) :
)ˆ(aRD
22
Creditor
R(a)
D
)ˆ(aRD
23
Objective function of a leveraged firm :
= Max E[R-D\ R>D]
Objective function of a non leveraged firm :
= Max E[R]
adaf Da,.,qRVEMax
h
a
adafa,.,qRVEMax
h
0
24
If strategy = choice of a level of production the amount produced by the firm is such that :
Then :
Debt induces agressive strategy
Context : Cournot competition + demand uncertainty
D more risk loving q
Debt = strategic value
0adaf q
a,.q,R0
qVE
h
a
D
0dD
dq
25
q2
q1
-Brander and Lewis
(1986)
-duopoly settingR.F. (1)
R.F. (2)
D1
26
2 main reasons : because of the willingness to take risks. Why ? Entrepreneurial optimism → de Meza and Southey (1996)
Weaker bankruptcy costs → reputation cost, social cost...
because an aggressive price policy is a way to obtain additional liquidities → stronger financial constraints (credit cost and credit rationing are higher). Why ? costs of the banking control are higher with small
projects.
insufficient information and guarantees → risk of moral hazard (Jensen et Meckling, 1976) = aggressiveness
What is the impact of the interaction (debt/aggressiveness) on the duration of the
new firm ?
Why does the Debt make the firm more aggressive in the case of new firms ?
27
Still running firms in 1997 and which had been set-up or taken over during 1994 : 43 507.
Qualitative information on real and financial behaviour
interaction
Situation of firms in 1999 (still running or closed down between 1997/1999)
survival
The data basis
28
Financial decisions ≈ intensity in resorting to debt
*Financing sources of investments :
- only "Equity capital“ instruments (reserves, private resources, increase in equity…)
- only "Debt" instruments (bank loans, leasing…)
- Mixed
*Management of cash requirement :
- only "Equity capital“ instruments
- only "Debt" instruments
- Mixed
29
30
5 classes of the « intensity of reorting to debt » :
Intensity in resorting to debt Classes
The firm never resort to debtD1 : minimal intensity in
resorting to debt
The firm resort to debt only for its
cash requirement
D2 : weak intensity in
resorting to debt
The firm finances its investments
both through equity capital and debt
D3 : medium intensity in
resorting to debt
The firm always resort to debt to
finance its investments
D4 : high intensity in
resorting to debt
The firm always resort to debt to
finance its investments and its cash
requirement
D5 : maximal intensity in
resorting to debt
31
Real decisions ≈ aggressiveness of the firm
Questions Modalities of replyAggressiveness
index
What has been your global
approach towards your firm
over the last two years?
Increasing the activity 1
Maintaining the activity
at its level0
Attempting to safeguard
the activity0
Have you made advertising
efforts over the last two
years?
Yes 1
No 0
Have you made efforts to
prospect new clients over the
last two years?
Yes 1
No 0
Have you made any effort on
your prices over the last two
years?
Yes 1
No 0
Have you been
subcontracting work (to other
firms) over the last two
years?
Yes 1
No 0
32
Global index representative of the firm's aggressiveness = [0;5] scale
Interaction debt/agressiveness : a stratification in sub-populations
Chi-2 test : aggressive firms = indexes 3, 4; 5
Descriptive statistics
33
Investment decision
Firms which
invested
Firms which did not
invest
SubsidiariesIndependent
firms
Unlimited
liabilityLimited
liability
Capital structure
Legal status
Debt
aggressiveness
34
10,00%
15,00%
20,00%
25,00%
30,00%
35,00%
40,00%
45,00%
D
0
D
1
D
2
D
3
D
4
D
5
Classes of the intensity of resorting to debt
Pro
po
rtio
n o
f ag
ressiv
e f
irm
s *
Still living firms Closed down firms
Average proportion
of agressive firms in
the population
25,45 %
Comparison of the proportion of aggressive firms according
to the decision to invest and to the classes of intensity of
resorting to debt
35
Main results :
1. The proportion of aggressive firms is higher for the firms which did invest.
2. For the population which did invest, the greater proportion of aggressive firms is obtained in the class D3. Explanation : aggressiveness if firms have access to the widest financing range (equity and debt).
3. A decreasing proportion of aggressive firms is observed between D3 and D5. Possible explanation could be that aggressiveness (lower prices, advertising efforts) could induce a large risk of bankruptcy for these firms.
36
20,00%
25,00%
30,00%
35,00%
40,00%
45,00%
D
1
D
2
D
3
D
4
D
5
Classes of the intensity of resorting to debt
Pro
po
rtio
n o
f a
gre
ss
ive
fir
ms
Independent firms Subsidiaries
Average proportion
of agressive firms in
the population :
28,88 %
Comparison of the proportions of aggressive firms
according to the ownership’s structure
37
Results :
1.globally the shape of the curve is identical to the one of the previous figure : U inverted curve.
2.subsidiaries are on the whole more aggressive that independent firms
Explanation : financial support subsidiaries can obtain from the parent company aggressiveness.
38
10,00%
15,00%
20,00%
25,00%
30,00%
35,00%
40,00%
45,00%
50,00%
D
1
D
2
D
3
D
4
D
5Classes of the intensity of resorting to debt
Pro
po
rtio
n o
f ag
ressiv
e f
irm
s
Limited liabilities Unlimited liabilities
Average proportion of
agressive firms in the
population :
28,34 %
Comparison of the proportions of aggressive firms
according to the legal structure of independent firms
39
Results :
1.whatever the intensity of resorting to debt, limited liability firms have a proportion of aggressive firms significantly greater than unlimited liability firms. In line with Brander and Lewis.
2.nevertheless, for firms under limited liability, from the D3 class that the proportion of aggressive firms decreases with the intensity of resorting to debt.
Explanation : the owner exposes his private capital, even under limited liability status, if private guarantees or securities are demanded for access to bank credit.
40
Survival analysis -Cox's model-
Variables
Firms which did not
invest
Firms which did invest
Risk ratio:
exp()
(Pr>2) Risk ratio:
exp()
(Pr>2)
AGRESS.3
AGRESS.2
AGRESS.1
LIM. LIABILITY
UNLIM. LIABILITY
SUBSIDIARY
INDEP. FIRM
IMP. COMPETITION
OTHER
COMPETITION
-2LogL
LR statistic
Number of firms
Percent Censored
1,558***
Ref
1,535***
1,332***
Ref
0,576***
Ref
1,043
Ref
22003.022
379,616***
9832
87.53
(0.0051)
(<0.0001)
(<0.0001)
(0.0041)
(0.765)
(<0.0001)
1.014
Ref
1.296***
1.065
Ref
1.010
Ref
1.248***
Ref
56544.813
645.068***
30503
90.88
(0.8438)
(<0.0001
)
(0.1748)
(0.9285)
(0.0064)
(<0.0001
)
41
Results :1. For the population which did not invest, the harmful effect
of a too low or a too high aggressiveness appears. Explanations :-A too low aggressiveness can expose the firm to the risk of
seeing its customers turn away to its competitors (no effort on prices or no advertising efforts, no effort to contact customers).
- A too high aggressiveness generates costs which weakens the firm.
2. The limited liability increases the risk of exit on the sole population of the firm which did not invest.
Explanation : when the firm invest some personal assets of the entrepreneur are used as collateral if the investment is debt financed.
42
Duration model : Cox model (1972)
Event : exit by cessation of activity between 1997 and 1999.
Question : impact of aggressiveness and debt on survival ?
43
Aggressiveness
Survival of the
firm
Debt choice
3 sub-populations :
*Low aggressive firms
*Medium aggressive firms
*High aggressive firms
Theoretical
background
44
Firms which did invest (number of firms, 30503, percent censored, 90,88)
Variables Level of Aggressiveness
Low Medium High
DEBT5
DEBT4
DEBT3
DEBT2
DEBT1
LIM. LIABILITY
UNLIM. LIABILITY
SUBSIDIARY
INDEP. FIRM
IMP. COMPETITION
OTHER
COMPETITION
-2LogL
LR statistic
Percent Censored
0.985 (0.8721)
1.080 (0.4911)
Réf
1.362***(0.0039)
0.472***(<.0001)
1.188**(0.0163)
Réf
1.434**(0.0301)
Réf
0.957 (0.7371)
Réf
21519.479
543,0***
89.99
1.054 (0.5210)
0.960 (0.7030)
Réf
1.594***(<.0001)
0.615***(<.0001)
1.087 (0.2029)
Réf
0.955 (0.7634)
1.169 (0.2076)
Réf
25709.131
432.4***
91.62
0.843 (0.3813)
0.548**(0.0402)
Réf
0.904 (0.6322)
0.088***
(<.0001)
0.523***(<.000
1)
Réf
N.S.
Réf
1.522*(0.0836)
Réf
3416.386
385.5265***
90.11
Survival analysis -Cox's model-
45
Results :
1. Whatever the level of aggressiveness, the minimal intensity of resorting to debt has a positive effect on firm survival.
2. Generally, an increasing in debt resort does not imply an increasing risk of cessation of activity.
3. Firms which have a weak intensity propensity to indebtedness exit more when firms have a low or a medium aggressiveness.
Explanation : a large proportion of these enterprises are financially constrained. A low intensity of resort to debt ≈ sign of their financial fragility.
4. Limited liability has a negative impact for low aggressive firms with but a positive impact for high aggressive firms.
46
DEM. AND REFUSAL
DEM. AND OBTAINED
NO DEMAND
MAN
WOMAN
AGE <25
35 < AGE < 45
AGE >45
25 < AGE < 35
NO EXP. AND DIPLOMA
EXP. AND NO DIPLOMA
EXP. AND DIPLOMA
NO EXP. AND NO DIPLOMA
UNEMPLOYED
NONE WORK. POP.
WORK. POP.
NEW IDEA
OPPORTUNITY
WI. EMPLOY
ENT. EXAMPLE
TASTE ENTREP.
-2 Log L
LR statistic
1,182 (0,2237)
0,65*** (<0,0001)
Ref
1,086 (0,2301)
Ref
0,98 (0,8759)
1,026 (0,7338)
1,545*** (<0,0001)
Ref
0,85 (0,1025)
0,746*** (0,0002)
0,662*** (<0,0001)
Ref
1,389*** (0,0002)
1,312*** (0,0062)
Ref
1,361*** (0,0018)
0,799*** (0,0031)
0,779** (0,0142)
1,134 (0,3832)
Ref
21519.479
547,0***
1,51*** (0,0006)
0,893*(0,0999)
Ref
0,975 (0,6974)
Ref
1,083 (0,5033)
1,194*** (0,0079)
1,199** (0,0163)
Ref
1,149 (0,1122)
0,728*** (<0,0001)
0,831** (0,0226)
Ref
1,93*** (<0,0001)
1,133 (0,2472)
Ref
1,739*** (<0,0001)
1,056 (0,4485)
0,917 (0,3912)
1,881*** (<0,0001)
Ref
25709.131
432.4261***
1,506 (0,0843)
0,658** (0,0253)
Ref
1,314 (0,1102)
Ref
1,12 (0,6827)
1,334* (0,0861)
0,881 (0,541)
Ref
0,383***(0,0002)
0,895 (0,5233)
0,528***(0,0028)
Ref
1,541** (0,0336)
1,119 (0,6707)
Ref
0,553** (0,0178)
1,337 (0,1174)
1,1162 (0,4988)
0,123** (0,0403)
Ref
3416.386
385.5265***
Variables Level of Aggressiveness
Low Medium High
47
Result : the variable “Human Capital” :
-for low and medium aggressive firms, the experience is more important that the diploma in terms of survival the acquired human capital that is important.
-for high aggressive firms : the diploma is more important for the survival that the experience it is the initial human capital which have the beneficial effect.
48
Troisième étude Un modèle de choix occupationnel : la valorisation du capital humain
BONNET J., LE PAPE N. and R. RENAULT, 2005, “Inferring the Unobserved
Human Capital of Entrepreneurs”, colloque de l’International Industrial Organization
Conference (IIOC), Atlanta (USA), 8 et 9 Avril.
49
Traditional determinants of Entrepreneurship Risk aversion
Self-employment involves some specific risky rewards that may not be captured while holding a wage position, (Khilstrom and Laffont 1979).
A connection could be made with some psychological characteristics of individuals,Shapero (1975).
50
Wealth A set of theoretical articles show that new
entrepreneurs are financially constrained(Jaffee et Russell (1976), Stiglitz et Weiss (1981).
Empirical findings: with Evans et Leighton (1989) and Georgellis et
Wall (1998) on german data lead to the results that net wealth increases the probability to set up a new firm.
Yet financial capital could be correlated with unobservable factors such as Managerial Skills or more generally Human Capital.
Empirical findings: Introduction of an exogenous financial event: inheritance, donations, lottery gains Lindh et Ohlsson (1996), Blanchflower et Oswald (1998)
51
Managerial skills
- The existing theoretical literature on entrepreneurship usually assumes that it requires some specific human capital, the managerial ability, which may not be sold in the labor market (see Lucas, 1978, Jovanovic, 1982, Evans and Jovanovic, 1989, Fonseca et al., 2001).
- Lazear (2005) argues that the choice between becoming an entrepreneur and staying in a salaried position is driven by the distribution of skills.
Limits of these theories :
Risk aversion: prime for wage earners which benefits to less risk-adverse individuals
Wealth: two extremes in the cumulated distribution of wealth (Hurst and Lusardi, 2004)
Managerial abilities: (appreciated abilities) may be valued in the firm.
52
53
1) Parmi les nouveau entrepreneurs, une proportion importante
provient de la population au chômage.
2) La décision de créer une entreprise est la plupart du temps
associée avec la décision de créer son propre emploi (becoming
self-employed). En France environ 80% des nouvelles
entreprises n’ont pas de salariés au départ.
Faits stylisés:
Entrepreneurship investments are riskier and have returns
comparable to those on financial markets (Moskovitz and Vising-
Jorgensen, 2002)
The decision to start a business is most of the time associated
with a decision to become self-employed.
Decision to become an entrepreneur comes mainly from occupational choice perspective.
Trade off between being in a salaried position and becoming self-employed. (expected payoffs)
The choice regards Human Capital Valuation.
Our objective : to explore entrepreneurship in relationship with imperfections in the labour market.
54
55
Valuation of human capital and Entrepreneurship: a reinterpretation of the pull and push effects
Two main effects :
A pull effect: Entrepreneurship as a response to opportunities –alertness Kirzner (1979,1985) - and market interstices due to growth (gap fillers and input completers capacities) (Leibenstein, 1968).
We can add another unconstrained motive: innovative motive not rewarded as a salaried man.
A push effect : Entrepreneurship as a response to a low opportunity cost, unemployed people (Evans and Leighton, 1989).
There exist also another constrained motive: the human capital depreciation.
56
Pull effect
In the case of the pull effect, the actual human capital of the individual is higher
than the observed level of his human capital
Observed
Human CapitalUnobserved or not
rewarded Human Capital
Total
Human
Capital
Positive
link with
duration
of the
firm
Proportion of Human Capital not rewarded
incentive to set up a firm
57
58
59
Labor market rigidities and informationasymmetry: the worker can not attain his preferred job.He is unemployed or he works in a wrong branch ofactivity. This implies that earnings are less than could beexpected regarding the observed human capital of theindividual (from a static point of view). From a dynamicpoint of view, Entrepreneurship becomes a mean to avoidthe depreciation of his human capital (push and pulleffects).
Incentives concerns: the worker is not rewarded atthe height of his human capital even if he is employed inhis good branch of activity (pull effect).
Our explanation: Entrepreneurship as a Response to
Imperfections in the Labor Market
60
*SINE 94/97 Survey of French firms
founded in Jan.1994 with survival data over
48 months.
*Extracted subsample of firms with French
male entrepreneurs (start-up)
age 30-50.
61
L’importance de l’occupation préalable et de l’expérience acquise dans le même secteur d’activité
62
Observed human Capital is not always a goodpredictor of the survival of the firm.
Evidence gives rise to a new question, the questionof the possibility of unobserved Human Capitalthat could complete the explanatory frameworkthat is proposed by the current Human Capitalliterature
.Furthermore there is a need for a theory thatcould explain, for that point of view,simultaneously the setting-up and the survival ofthe new firms.
.
63
Theoretical Model of Entrepreneurial Choice
The Actual Human Capital of an individual is Low or High
is the average probability to a high level of actual human capital for
employers. random variable which distribution depends on K:
We denote by the probability to a high human capital given the observed human capital of the individual (level of education, experience).
Revision process from employers that may have more information (interviews, tests) than the observed level of human capital.
KKE
HLK ,
K
64
We are interested here in the two extreme cases :
1) The employers observe perfectly the actual human capital of the individual.
2) The employers do not observe the actual human capital of the entrepreneur anymore than the econometrician does.
65
2 states i, before the setting-up of the firm , 1 employed in the good branch of activity, 0 unemployed or employed in the wrong branch of activity.
When his initial state is 0, the agent’s human capital depreciates. This depreciation is correctly taken into account by future employers, so that future wages will be negatively affected. Thus, this depreciation of actual human capital also affects future employers' beliefs and future earnings.
Let be the expected benefits from staying in state i.
))(( KiW
)0()0( and 0101 WWWW
negative bemay and 001 ''' WWW
)1,0( i
66
An agent in state i with actual human capital K willstart a new business if:
random variable with c.d.f. F and density f,satisfies the increasing hazard rate condition.
The entrepreneurial choice happens with theprobability
)()( LvHv
)()(KiWKv
))())(((1),( KvWFKP Kii
67
The probability of a high human capital given that a firm has been created (Bayes’law):
),()1(),(),(
)(,LPHP
HPii
iie
Characterization of the distribution of posterior distribution of human capital conditional on :
– Observed human capital (µ)– Initial state (i)– Choice of self-employment (P)
68
Exemple numérique
)(
)()/(
CP
CPCP
)(
)(*)/()/(
CP
PCPCP
Bayes’law:
Si =1/3 1- = 2/3
Probabilité d’avoir un haut capital humain sachant
que la firme a été créée =1/2.
Elle est supérieure à 1/3 qui est la proportion
d’individus çà haut niveau de capital humain dans
la population totale. Le fait de créer constitue
toujours un bon signal.
5/1)/( HPk 10/1)/( LPk
69
Proposition 1. With perfectly informed employers,
for all
for sufficiently high
Proposition 2. With strong information asymmetries, for all
for sufficiently low
)()( 1,0, ee
0,1, '' ee
)()( 2,1, ee
0,1, '' ee
70
71
72
Simulation
73
74
75
Assumption: A better posterior on Human Capital (actual)
translates into an improved survival of the firm.
The model with information asymmetry is relevant regarding the
data.
Three testable implications for entrepreneurship:
The posterior on Human Capital is more favourable for the state 1.
The impact of education on actual human capital depends on the labor
market imperfections (previous occupation and information asymmetry).
For the state 0 an improved prior (e.g. more education) does not always
imply a better posterior on actual human capital.
In contradiction with Bates (1990) : positive impact of the level of
education (observed human capital) on the survival of the new firm.
76
Empirical analysis
*SINE 94/97 Survey of French firms
founded in Jan.1994 with survival data over
48 months.
*Extracted subsample of firms with French
male entrepreneurs (start-up)
age 30-50.
77
A priori le capital humain et la survie de l’entreprise sont liées positivement(Bates, 1990).
• Qu’est ce que c’est que le KH ?
• Combinaison d’un niveau d’instruction et d’uneexpérience professionnelle
1) Comportement courant de l’Entreprise (HK from
experience/ HK from education)
2) Occupation préalable de l’entrerpreneur (KH observé/ HK inobservé)
3) Psychological characteristics (Entrepreneurial HK )
78
Plus control variables to take into account the heterogeneity of the
population
79
80
Proportional Hazard Model Relevance of Labour Market Imperfections as an issue
for Entrepreneurship is to check if Observed Human capital is always a good predictor of the duration of the new firm.
Duration analysis COX (1972) the probability of cessation of activity is expressed by
In the Cox model, the baseline hazard is not specified
Rank and not value enter in the determination of the coefficients
Robustness
)(0 th
)exp()(); ( 0 ii xthxth
81
Estimated with Maximum Partial Likelihood
The population concerned in the denominator has not ceased its activity before ti. Yet
the terms corresponding to censor information are effectively excluded from the
denominator because ai=0 for those cases.
1) Estimations run over four subgroups:
– Employed same sector
– employed different sector
– unemployed for less than one year
– unemployed for more than one year
2)Unobserved heterogeneity that is correlated with observed human
capital should lead to different ’ s across groups for education and
experience.
ia
n
ij
n
j
ij
i
xY
xPL
1
1
)exp(
)exp(
where ijijijij ttYttY if 0 and ; if 1 .
82
Estimated with maximum partial likelihood methods without modeling
unobserved heterogeneity. Table 4
83
Control variables on the global population. Table 5
84
Shared frailty model
Estimation assigns a random effect to 12 subgroups (previous
occupation x level of education x experience)
Assumption : all individuals in a subgroup share the same random
effect.
Where : i : observation and j : subgroup
• Heterogeneity is assumed to have a Gamma distribution: mean
0 and variance (intergroup)
• Estimates for realizations of frailties for different subgroups are
consistent with previous results
)() /( j ijjij thth
j
85
)log( jj
0 LR Chibar2(8)=258,61is rejectedH0:
86
Conclusion Actual Human Capital Valuation and labour market
rigidities could be a way to explain Entrepreneurship,
maybe in a broader approach than the alternative
theories.
2 main dimensions of these imperfections
Rigidities Which may prevent from finding a job or a new job.
Related to national characteristics on the labor market
may be relaxed by public policies
Information asymmetries Not specific to any country
difficult to eliminate by a public policy
87
Labor market rigidities induce self-employment for
unemployed or mismatched people. Some of these
individuals set up their business because of a
restrained choice or a low opportunity cost.
Labor market rigidities may also prevent
entrepreneurship for unobserved human capital
motives (innovative motive)
Conclusion