Gross, net, and new job creation by entrepreneurs


Journal of Business Venturing Insights

novembre 2017, vol. 8, pp.64-70

Départements : Economie et Sciences de la décision, GREGHEC (CNRS)

Mots clés : EntrepreneurshipJob creationIncorporationOccupational choiceSelf-employmentSole proprietorship

Using a dataset with over 24 million year-employment observations and the universe of more than 230,000 entries into entrepreneurship in one economy we analyze the gross (including the founders), net (excluding the founders), and new (jobs to the former unemployed or those outside the labor force) job creation by entrepreneurs two and six years after start-up. These novel measures of job creation show that the average entrepreneur does not create any jobs for any other than him/her-self, and typically arrives from having another job. Thus, short term job creation by entrepreneurs involves a reshuffling of jobs from older to new firms rather than creating new jobs

Health Cost Risk: A Potential Solution to the Annuity Puzzle


Economic Journal

aout 2017, vol. 127, n°603, pp.1598–1625

Départements : Finance, GREGHEC (CNRS)

Mots clés : Life-cycle portfolio choice;retirement;post-retirement investment

We find that health cost risk lowers optimal annuity demand at retirement. If medical expenses can be sizeable early in retirement, full annuitisation at retirement is no longer optimal because agents do not have enough time to build a liquid wealth buffer. Furthermore, large deviations from optimal annuitisation levels lead to small utility differences. Our results suggest that health cost risk can explain a large proportion of empirically observed annuity choices. Finally, allowing additional annuitisation after retirement results in welfare gains of at most 2.5% when facing health cost risk, and negligible gains without this risk

Heterogeneous social motives and interactions: The three predictable paths of capability development: Heterogeneity in capability development paths


Strategic Management Journal

septembre 2017, vol. 38, n°9, pp.1755-1773

Départements : Stratégie et Politique d’Entreprise, GREGHEC (CNRS)

Mots clés : deliberate capability development; motiva-tional microfoundations; social interactions; businessprocess performance; multilevel

Research summary: Limited attention has been paid to the crucial role of individuals' motivation and social interactions in capability development. Building on literature in social psychology and behavioral economics that links heterogeneity in individual social motives to social interactions, we explain how the variation, selection, and retention processes underlying a group's deliberate capability development are affected by the composition of the group in terms of individuals' social motives in interplay with the organizational-level motivational levers designed by managers. Our multilevel theoretical model suggests that individual-level heterogeneity leads to the development of capabilities along different paths. For practice, this implies that, according to the composition of the group in terms of social motives, capabilities are more or less technically and evolutionary adequate and a source of business process performance.Managerial summary:We propose that when a group of employees engages in developing one of the firm's capabilities, capability development will follow a different path according to what motivates most of the employees composing the group. We identify and discuss three paths. Two of these paths (convergence and congruence) can help improve business process performance in a stable environment, the third one (open-ended) in a dynamic environment. Our work invites managers to not only think in terms of more or less capability development, but also in terms of capability development path(s): the path(s) in which groups in the firm are currently engaged and the one(s) that are desirable given the firm's objectives and the nature of the environment(s) the firm faces in deploying its business processes

Housing Collateral and Entrepreneurship


The Journal of Finance

février 2017, vol. 72, n°1, pp.99-132

Départements : Finance

We show that collateral constraints restrict firm entry and postentry growth, using French administrative data and cross-sectional variation in local house-price appreciation as shocks to collateral values. We control for local demand shocks by comparing treated homeowners to controls in the same region that do not experience collateral shocks: renters and homeowners with an outstanding mortgage, who (in France) cannot take out a second mortgage. In both comparisons, an increase in collateral value leads to a higher probability of becoming an entrepreneur. Conditional on entry, treated entrepreneurs use more debt, start larger firms, and remain larger in the long run.

Incorporating hidden costs of annoying ads in display auctions


International Journal of Research in Marketing

septembre 2017, vol. 34, n°3, pp.622-640

Départements : Marketing, GREGHEC (CNRS)

Mots clés : Online advertising, Pricing, Mechanism design

Media publisher platforms often face an effectiveness-nuisance tradeoff: more annoying ads can be more effective for some advertisers because of their ability to attract attention, but after attracting viewers’ attention, their nuisance to viewers can decrease engagement with the platform over time. With the rise of mobile technology and ad blockers, many platforms are becoming increasingly concerned about how to improve monetization through digital ads while improving viewer experience.We study an online ad auction mechanism that incorporates a charge for ad impact on user experience as a criterion for ad selection and pricing. Like a Pigovian tax, the charge causes advertisers to internalize the hidden cost of foregone future platform revenue due to ad impact on user experience. Over time, the mechanism provides an incentive for advertisers to develop ads that are effective while offering viewers a more pleasant experience. We show that adopting the mechanism can simultaneously benefit the publisher, advertisers, and viewers, even in the short term.Incorporating a charge for ad impact can increase expected advertiser profits if enough advertisers compete. A stronger effectiveness-nuisance tradeoff, meaning that ad effectiveness is more strongly associated with negative impact on user experience, increases the amount of competition required for the mechanism to benefit advertisers. The findings suggest that the mechanism can benefit the marketplace for ad slots that consistently attract many advertisers

Inventory allocation models for a two-stage, twoproduct, capacitated supplier and retailer problem with random demand


International Journal of Production Economics

mai 2017, vol. 187, pp.168-181

Départements : GREGHEC (CNRS)

Mots clés : supply chain management, inventory management, capacity allocation, heuristic methods

The objective of this research is to develop an optimal inventory allocation methodology for a supply chain consisting of a capacitated retailer with limited shelf space, and two unreliable capacitated suppliers in an uncertain environment. We develop conceptual and analytical models that provide allocation preferences between shelf-space and warehouse in both deterministic and stochastic demand cases, and develop managerial insights based on them. For each case, we provide both a closed-form solution and a heuristic method, and illustrate the bounds on the optimal solution. Further, we show that the cost function is L-convex in some cases. Finally, we prove that the expected profit decreases as the variance of demand increases

Investor Horizon and the Life Cycle of Innovative Firms: Evidence from Venture Capital


Management Science

septembre 2017, vol. 63, n°9, pp.3021-3043

Départements : Finance

Mots clés : finance; innovation; venture capital; entrepreneurship; investor horizon

This paper studies whether and how the contractual horizon of venture capital funds affects their investments in innovative firms. I find that funds with a longer remaining horizon select younger companies at an earlier stage of their development, which grow their patent stock significantly more than companies financed by funds with a shorter horizon. The sensitivity of investment decisions to horizon is stronger among experienced venture capital firms, who allocate investments across a larger number of fund vintages. Finally, I find that the interaction of funds’ fixed horizon with their option-like compensation structure affects their investment decisions: when early performance has been high, fund managers target less innovative companies. These findings shed light on the drivers of venture capital investment decisions and on their implications for the type of companies that receive venture capital financing

Italy’s Gentle Revolution: The New Law on Same-Sex Partnerships


The Digest - National Italian American Bar Association (NIABA) Law Journal

2017, vol. 25, pp.1-31

Départements : Droit et fiscalité, GREGHEC (CNRS)

Mots clés : Italy; Constitutional Law; Human Rights; LGBT Rights

This Article comments the genesis and the content of the Italian law on civil partnerships between people of the same sex, enacted in May, 2016, and eventually entered into operation, together with a bunch of administrative regulations, in early 2017. As the last country of Western Europe to adopt such a law, the Italian law recognises civil partnerships for same-sex couples but presents several flaws in terms of equality and nondiscrimination based on sexual orientation

James Elliott Construction: a "new(ish) approach" to judicial review of standardisation


European Law Review

décembre 2017, vol. 42, n°6, pp.882-893

Départements : Droit et fiscalité, GREGHEC (CNRS)

Mots clés : Construction materials; EU law; Justiciability; Technical standards

This article analyses the decision of the Court of Justice of the European Union in the James Elliot Construction case delivered on 27 October 2016. In its decision, the Court has for the first time affirmed its jurisdiction to interpret harmonised technical standards on a preliminary reference. In this contribution, we argue that the decision marks an important breakthrough in the evolution of EU law by recognising harmonised technical standards as part of Union law. This opening offers new possibilities for litigating technical standards and assuring the centrality of the rule of law in the achievement of the internal market. The article concludes by analysing the implications of the decision in relation to the Meroni doctrine, the potential conflicts between the principle of free access to the acts of the Union and the protection of intellectual property, and the impact that greater litigation over harmonised technical standards may have on the caseload of the Court

L'Europe doit s'attaquer de front au défi anthro-politique


Revue d'Économie Financière

2017, vol. 1, n°125, pp.39-52