# **Notes**

Francesco Quatraro is affiliated with GREDEG, CNRS et Université de Nice Sophia Antipolis, Nice, France, and with BRICK, Collegio Carlo Alberto, Torino. Marco Vivarelli is affiliated with Università Cattolica del Sacro Cuore, Milano and Piacenza, Italy, SPRU, University of Sussex, and Institute for the Study of Labour (IZA), Bonn. Correspondence can be addressed to Prof. Marco Vivarelli, Facoltà di Economia Università Cattolica, Via Emilia Parmense 84, 29122 Piacenza; _<u>marco.vivarelli@unicatt.it</u>_ <u>.</u> 1 The identification of necessity entrepreneurs is a non-trivial task. In the recent literature, the distinction between necessity- and opportunity-driven entrepreneurs is established by using the Global Entrepreneurship ‐ Monitor (GEM) data. The GEM measures ‘necessity driven’ entrepreneurship by including the question ‘Are ‐ you involved in this start up [this firm] to take advantage of a business opportunity or because you have no better choices of work?’ (Naudé, Amoros, and Cristi 2011). In more general terms, empirical studies single out ‘necessity entrepreneurs’ either as those who come from unemployment status or as those who answer ad-hoc questionnaires revealing that they are pushed into ‘entrepreneurship’ by a concern about future career developments or by the fear of becoming unemployed (see also Section 4.6).

2The authors used a sample of 22 countries (14 European, six Latin American, the US and Canada) and found that the correlation between entry and exit rates across industries in 1990 was positive and significant in the vast majority of cases (Bartelsman, Haltinwanger, and Scarpetta 2004, 21, Table 6).

3 Aterido, Hallward-Driemeier, and Pagés (2009, 10), using evidence from the World Bank Enterprise Surveys, show that 42 percent of firms declare that they have paid bribes, with an average amount paid of 1.5 percent of sales.

4Aterido, Hallward-Driemeier, and Pagés (2009) provide a slightly different picture, showing that the effect of corruption on growth is different across different size classes. In particular, corruption seems to have no effect on medium-sized firms and some negative effects on small firms, whereas it may help micro firms grow. This phenomenon can be explained by the fact that often, very small firms in DCs do not comply with all prescriptions of business regulation, and they stay persistently in the informal sector. Paying bribes may therefore be less costly than compliance (see also Vial and Hanoteau 2010).

5The authors, using data from the World Bank Investment Climate Survey covering 947 manufacturing SMEs in 11 Sub-Saharan countries, show that firms with their own transport facilities and their own websites exhibit higher growth rates, measured in terms of employment creation.

6 In the conventional approach, entrepreneurship is generally measured as the number of new firms relative to the size of the existing population of businesses in a given industry. In contrast, if the individual ‘push factors’ are fully considered, new firms must be related to the labor force (for further discussion, see Santarelli, Carree, and Verheul 2009; Vivarelli 2007).

7 However, as clarified by the authors, these results, in contrast to previous studies, may be due to the peculiarities of the Italian manufacturing sample used, which is dominated by micro-firms well below the minimum efficient scale. In this context, which is characterized by a limited size variability, the positive impact of a larger scale might have been underestimated.

8 Gibrat (1931), proposed that firm growth is predominantly a random process. This amounts to say that firm growth is independent of firm size.

9 Moreover, recent literature has shown that firms’ age may play a crucial role in shaping the relationship between size and firms’ growth. In particular, Haltiwanger, Jarmin, and Miranda (2013), using data from the Census Bureau’s Business Dynamics Statistics and Longitudinal Business Database, show that once one controls for firm age, the negative relationship between size and growth either disappears or reverses the sign due to the large share of exit among the smallest firms. As far as age is concerned, young firms are found to grow more rapidly than mature ones. From this perspective, start-ups are likely to play a key role in the job creation process. However, Haltiwanger, Jarmin, and Miranda (2013) do not focus on start-ups; most of their firms are established incumbents (for an analysis of the link between age and firm’s performance, see Coad, Segarra, and Teruel 2013).

10 Consistent econometric outcomes in studies devoted to DCs can also be found in the studies by Mead and Liedholm (1998), Gunning and Mengistae (2001), Bigsten and Söderbom (2006), and Coad and Tamvada (2012).

> 11 For instance, Sørensen and Phillips (2011) argue that work experience in the prior firm shapes both the entrepreneur's competence and his/her commitment to the entrepreneurial role. However, although the competence and information inherited from the mother firm provide an initial advantage, parental influence may generate inertia and resistance to change unless the new company is able to create a unique competitive identity (see Ferriani, Garnsey, and Lorenzoni 2012).

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