Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/81447
Authors: 
Färnstrand Damsgaard, Erika
Norbäck, Pehr-Johan
Persson, Lars
Vasconcelos, Helder
Year of Publication: 
2012
Series/Report no.: 
IFN Working Paper 926
Abstract: 
Entrepreneurs face higher commercialization costs than incumbents. We show that this implies that entrepreneurs will choose more risky projects than incumbents, aiming to reduce their high expected marginal commercialization cost. However, entrepreneurs may select too safe projects from a social point of view, since they do not internalize the business stealing effect. We also show that commercialization support induces entrepreneurship but may lead to mediocre entrepreneurship by inducing entrepreneurs to choose less risky projects, whereas R&D support encourages entrepreneurship without affecting the type of entrepreneurship. Using Swedish patent citation data, we find empirical support for predictions of the model.
Subjects: 
Entrepreneurship
Innovation
Start-ups
Ownership
Breakthrough
Quality
JEL: 
G24
L10
L20
M13
O30
Document Type: 
Working Paper

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