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Full-Text Articles in Social and Behavioral Sciences
Start-Up Firms And Corporate Culture: Evidence From Advertised Corporate Culture, Jungho Lee
Start-Up Firms And Corporate Culture: Evidence From Advertised Corporate Culture, Jungho Lee
Research Collection School Of Economics
I document advertised corporate culture among start-up firms from an online job board. Two corporate-culture types emerge, one that concerns the well-being of em- ployees (worker-centered culture) and another that emphasizes other values, such as cus- tomers, firms, and markets (firm-centered culture). The worker-centered culture attracts 20% more applications than the other culture type. Firms advertising the worker-centered culture exploit worker preference by paying 5% lower salaries than measurably similar jobs. Using a standard model of business creation, I show financially constrained start- ups are incentivized to advocate popular culture, even though doing so is not optimal without financial constraints.
Estimating The Benefits And Costs Of Forming Business Partnerships, Jungho Lee
Estimating The Benefits And Costs Of Forming Business Partnerships, Jungho Lee
Research Collection School Of Economics
I estimate a matching model of business‐partnership formation to quantify the relative importance of productivity gains, financing gains, and the coordination failure of effort provision (moral hazard) among partners. Productivity gains account for 61% of the gain from the observed partnerships. For partners in the first quartile of the wealth distribution, however, financing accounts for 93% of the gain. The cost of moral hazard corresponds to 42% of the entire gain from partnerships. A loan policy specifically targeting partnerships is less effective in improving welfare than a conventional loan policy that provides loans to individual entrepreneurs.
Tax Uncertainty And Business Activity, Jungho Lee, Jianhuan Xu
Tax Uncertainty And Business Activity, Jungho Lee, Jianhuan Xu
Research Collection School Of Economics
We investigate the extent to which uncertainties about tax policies affect business activities. We develop a statewide tax-uncertainty measure (TU measure) and show that it captures state corporate tax uncertainty. By comparing adjacent counties across state borders, we show that increasing tax uncertainty by one standard deviation (a 30% increase in the TU measure) leads to a 0.17% point per-year decrease in the growth rate of establishments over two years. The result holds after conducting a variety of robustness checks and is not likely to be driven by general state-policy uncertainties.
Entrepreneurship, College, And Credit: The Golden Triangle, Roberto M. Samaniego, Juliana Yu Sun
Entrepreneurship, College, And Credit: The Golden Triangle, Roberto M. Samaniego, Juliana Yu Sun
Research Collection School Of Economics
We develop a model to evaluate the aggregate impact of college finance in an environment with entrepreneurship. The calibrated model captures the stylized fact that entrepreneurs with college are more common and more profitable in the United States. The calibration indicates this is mainly because higher labor earnings allow college‐educated agents to ameliorate credit constraints if and when they eventually become entrepreneurs. Changes in financing constraints on entrepreneurs can thus affect college attendance, and changes in financing constraints on college can affect entrepreneurship rates as well.
On The Relationship Between Household Wealth And Entrepreneurship, Jungho Lee
On The Relationship Between Household Wealth And Entrepreneurship, Jungho Lee
Research Collection School Of Economics
Motivated by a substantial number of startup owners with negative household net worth, I present a model that incorporates credit borrowing into Evans and Jovanovic [1989]. The estimated model generates no relationship between household wealth and the propensity for business entry. Ignoring credit borrowing for potential business owners substantially overstates the efficiency loss from financial constraints in business entry. However, the efficiency loss in investments by the entrants is large even if credit borrowing is allowed. Individuals who start a business once credit borrowing is available are those whose business ideas are of a high-enough quality to compensate high financing …
Finance And Social Responsibility In The Informal Economy: Institutional Voids, Globalization And Microfinance Institutions, Hao Liang, Chris Marquis, Sunny Li Sun
Finance And Social Responsibility In The Informal Economy: Institutional Voids, Globalization And Microfinance Institutions, Hao Liang, Chris Marquis, Sunny Li Sun
Research Collection Lee Kong Chian School Of Business
We examine how different types of country-level globalization and the industry structure of microfinance institutions (MFIs) affect organization-level microcredit interest rates which crucially affect the poor's entrepreneurial opportunities. We develop an opportunity structure perspective that argues that MFI interest rates can be reduced by egalitarian-based social globalization but increased by neoliberal-based economic globalization. Moreover, stronger presence of nonprofit organizations in the microfinance industry lowers interest rates. Furthermore, these three forces can moderate the relationship between MFIs' outreach to the poor and average interest rate. Analyses of 2,559 MFI observations across 74 countries from 2002 - 2012 largely support our hypotheses.