Essays on Economics of Entrepreneurship

This dissertation examines three important issues. The first issue is about the human capital investment and entrepreneurship as a career choice. The standard human capital theory shows that firms (employees) never invest in general (firm-specific) human capital of the employee as they do not extract any return from it. However, when entrepreneurship is introduced as a career option for an innovative employee, both firm’s and employee’s human capital investments change. Employee starts investing in his firm-specific human capital to increase the probability to innovate (and to become an entrepreneur). However, the firm uses general human capital investment to reduce the risk of employee’s departure. The second issue is regarding the factors motivating entry regulations reforms and the possible nonlinear effects of entry regulation reforms. The current literature and the policy recommendations assume that these reforms have linear effects on entrepreneurship. Nevertheless, the anecdotal evidence shows that the outcomes of such reforms vary greatly from country to country. To investigate this issue, I collect a sample data on entry regulations and firm creation from World Bank. The empirical analysis indicates that the effect of entry regulation reforms depends on the pre-reform level of bureaucracy in the country. More specifically, while low-bureaucracy countries benefit from entry regulation reforms, high-bureaucracy countries do not benefit. Moreover, the probability of making a reform increases if the country has reformist neighbors, cumbersome entry regulations, high unemployment rate, or low corruption level. The last issue is related to the individual and joint effects of bureaucracy and corruption on different types of entrepreneurs. The current literature investigates these effects only on unified measures of entrepreneurship. However, entrepreneurs are very different in many senses. To address this issue, I collect the necessity-based and opportunity-based entrepreneurship data from Global Entrepreneurship Monitor. The empirical analysis yield two important results: First, bureaucracy has a direct negative (positive) effect on necessity-based (opportunity-based) entrepreneurs. Second, corruption mitigates the effect of bureaucracy for both groups of entrepreneurs. All three chapters offer useful insights and important implications to academics and policymakers.

Digging Deeper than Platinum: South Africa's Participation in an Emergent Fuel Cell Industry

South’s Africa’s position as global platinum supplier provides a unique opportunity for an emergent fuel cell industry. The innovative technology’s reliance on platinum has sparked interest in the mining sector, promoting the clean energy-producing devices in their own operations. This research focuses upon contemporary structures of racial oppression within the industry, to analyse how these dynamics influence the development and implementation of innovative technology. It also challenges the sustainability discourse associated with fuel cell technology in South Africa. The study follows a qualitative research approach, incorporating a political ecology focus to highlight the politicized nature of these interactions. The methodology incorporates a literature review, key informant interviews, fieldwork observations and document analysis. Findings indicate that the implementation of fuel cell technology in South Africa’s platinum mines will disproportionately burden historically disadvantaged South Africans, with the lack in technical knowledge-base considered a major challenge. Additionally, it was found that sustainability claims surrounding fuel cell technology are largely based on environmental characteristics. This has resulted in an oversimplification and a depoliticised account of the impacts of the technology. This study looked critically at the convergence of history and innovation, placing emphasis on context, power relations and knowledge to provide a more holistic account of the research problem. Opportunities exist for making a meaningful and viable contribution towards development and sustainability by means of investing in a South African fuel cell industry. The challenge will be in deliberately seeking pathways which address the more complex components of sustainability, benefitting all stakeholders and paying particular attention to the historical, political and social contexts from which the technology emerges. It is this particular context which allows for a questioning and perhaps even a re-evaluation of the sustainability narratives broadly applied to fuel cell technology.