SME and Entrepreneurshiprelated Statistics For discussion: Entrepreneurship Policy Indicators for Ba - PowerPoint PPT Presentation

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Title: SME and Entrepreneurshiprelated Statistics For discussion: Entrepreneurship Policy Indicators for Ba


1
SME and Entrepreneurship-related StatisticsFor
discussionEntrepreneurship Policy Indicators
for Bankruptcy Legislation Draft Final
ReportCFE/SME(2006)3
  • Morten Larsen
  • Seconded to the OECD,
  • SME and Entrepreneurship Division of the Centre
    for Entrepreneurship, SMEs and Local Development
    (CFE)
  • National Agency for Enterprise and Construction
  • FORA, Centre for Economic and Business Research

2
Background
  • 23rd session policy indicator project agreed on
    by delegates
  • Three main themes chosen by Steering Group
  • Bankruptcy
  • Entrepreneurship Education (will be presented at
    27th session)
  • Taxation
  • Questionnaires developed with the OECD
    Secretariat (SME and Entrepreneurship Division)
  • 24th session questionnaires discussed
  • Questionnaires sent out and answered by national
    policy experts
  • 25th session preliminary findings discussed
  • 26th session Draft final report on bankruptcy
    legislation presented (26 countries)

3
Why did we undertake the project?
  • Entrepreneurship is an important driver of growth
    in the knowledge based economy
  • Bankruptcy legislation seems to be one among many
    factors affecting entrepreneurial activity
  • Many countries are in the process of making their
    bankruptcy legislation more entrepreneurship
    friendly
  • But the guidelines for reform are limited
  • Objective To gather information on national
    specific regulation and government programmes
    (policy indicators) related to bankruptcy
  • Identify range
  • Situate countries

4
The impact of bankruptcy legislation on
entrepreneurial activity
  • 2 main theoretical arguments are put forward in
    the literature
  • Ex ante incentives for risk taking
  • The rational entrepreneur will consider costs and
    benefits of going into business gt
  • Tough bankruptcy legislation may affect the
    willingness of marginal entrepreneurs to enter
    the marketplace
  • Ex post financial rehabilitation
  • Limited chances of financial rehabilitation will
    affect the ability of entrepreneurs to return to
    the marketplace
  • Limited pool of potential entrepreneurs
  • Additional argument Entrepreneurs learn from
    their mistakes

5
Findings from literature review
  • Support for ex ante argument
  • Severity of insolvency law seems to have an
    impact on start up rate (Armour and Cumming,
    2005, Fan and White, 2001)
  • Some support for ex post argument
  • No financial rehabilitation reduces ability to
    start again
  • Limited evidence for claim that entrepreneurs
    perform better the second time
  • More research would be useful

6
Findings from empirical research
  • Wide variation in bankruptcy legislation across
    countries
  • Early warning
  • Out-of-court settlements
  • Reorganisation
  • Liquidation
  • Discharge

7
Early Warning Systems
8
Out-Court-Settlements
9
Reorganisation Plan
10
Priority of national authorities
11

12
Findings from empirical research
  • The spectrum of bankruptcy legislation is very
    wide
  • Outcome also seem very different
  • Little evaluation and research in most countries
  • Little knowledge of effect of bankruptcy
    legislation

13
Conclusions and policy implications
  • Bankruptcy procedures reflect a country's
    institutional structure and legal tradition and
    there is a class of procedures that satisfy the
    main criteria of efficiency (Hart, 1999)
  • If little variation existed it is likely that
    policy learning would be limited
  • However, wide variation suggest that countries
    can learn from each other and that improvements
    are possible
  • It is likely that bankruptcy legislation is not
    efficient in all countries
  • A national evaluation culture would be beneficial
    - National evaluations of efficiency of
    bankruptcy legislation and government programmes
  • No country specific policy recommendations in the
    working paper
  • On the basis of the policy indicators countries
    can identify alternative approaches to bankruptcy
    and relevant countries for analyses and
    comparison

14
Ways to improve our understanding of the effect
bankruptcy legislation?
  • Conduct peer reviews examine in more detail the
    policy frameworks and highlight new areas and
    directions in individual countries
  • Construct International comparable indicators
  • Link indicators to various measures of
    entrepreneurship

15
Deadline for comments
  • Deadline for written comments
  • Tuesday 18 April 2006
  • To
  • Morten Larsen, mrl_at_ebst.dk
  • Brynn Deprey, brynn.DEPREY_at_oecd.org

16
Entrepreneurship Education economy survey
  • 20 countries has answered
  • Austria, Belgium, Canada, Czech Rep., Denmark,
    Finland, France, Germany, Hungary, Ireland,
    Japan, Korea, Mexico, Netherlands, New Zealand,
    Norway, Poland, Spain, Sweden, Turkey
  • The Secretariat would kindly encourage the
    countries who have not already replied to forward
    their responses to
  • Morten Larsen, mrl_at_ebst.dk
  • Brynn Deprey, brynn.deprey_at_oecd.org

17
Entrepreneurship education university survey
  • Almost 250 answers received
  • 8. March Countries requested to sent reminder
    out
  • Those who have not already done so are kindly
    requested to do so
  • Draft final reports will be prepared for next
    session of WPSME
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