Strategic Policy Making
33 important questions on Strategic Policy Making
How can public policy impact upon strategic behaviour of individuals/entrepreneurs and businesses? (2)
- Create favourable general conditions
- Stable political and economic environment
- Provide direct support
- Money
- Education
- Training
- Advice
What does direct support promote? (2)
- Entry
- Support individuals to become entrepreneur/ self-employed
- Performance
- Support entrepreneurs or business to grow or export
What are 4 things that relate to the market failure approach?
- Monopoly/ Barriers to entry and exit
- Information imperfections
- Externalities
- Public goods and services
Justification for public policy
- Higher grades + faster learning
- Never study anything twice
- 100% sure, 100% understanding
What 3 policy areas do you have for general conditions?
- Macro-economic policy
- Business regulations
- Competition policy
What is the aim of macro-economic policy?
What are 2 tools for macro-economic policy
- Fiscal policy
- Government expenditure, infrastructure
- Taxation, may have an impact upon demand or on profits and hence on entry and performance
- Monetary policy
- Interest rates
- Inflation control
What are 2 macro-economic conditions and entrepreneurship?
- Stable macro-economic environment may impact upon entry/ whether individuals become entrepreneur (self-employed)
- Román, Congregado and Millán (2013) investigate this looking specifically at the unemployed
What are the 2 macro-economic policy hypotheses for how business cycle/ unemployment rate relate to entry into entrepreneurship/ self-employment?
- Prosperity-pull (switch to employer)
- Recession-push (switch to own-account work)
What is the 'prosperity-pull' hypothesis and to who does it apply?
- Will mainly apply to entry as employer (from unemployment)
What is the 'recession-push' hypothesis and to who does it apply?
- Will mainly apply to entry as own-account worker (from unemployment)
What is the aim for business regulations?
What are 3 examples of regulations for starting/ running a business?
- Start-up regulations
- Trading across borders
- Labor regulations
What is 'start-up' regulations?
What is 'trading across borders'?
What is 'labor regulations'?
What is the Román, Congregado and Millán hypothesis and conclusion for business regulations?
- EPL may affect entry into self-employment (entrepreneurship)
- Increases in EPL in low/ flexible EPL regimes reduce likelihood for the unemployed to become self-employment
How does EPL relate to self-employment?
- Flexible (low EPL)
- Strictness (+)
- Self-employment (-)
- Strict (high EPL)
- Strictness (+)
- Self-employment (+)
What is the assumption for competition policy?
What are 2 specific policies in competition policy?
- Prevention of abuse of market power in product markets
- Limit price increases
What 3 functions does business support policy have?
- Access and provision of finance
- Advice and assistance
- Promotion of technology and innovation
What is the justification for 'access and provision of finance'?
- Special loans
What is the justification for 'advice and assistance'?
- Consult
What is the justification for 'promotion of technology and innovation'?
- Information imperfections
- R&D funding
- Externalities
- Technology transfer
What is the aim of Active Labor Market Policies (ALMP)?
What kind of start-up incentives relate to the Active Labor Market Policies (ALMP)?
- Women
- Young minorities
- Ethnic minorities
What is the justification for the start-up incentives related to the Active Labor Market Policies (ALMP)? (2)
- Information imperfections
- Externalities
What is the Román, Congregado and Millán hypothesis and conclusion for Active Labor Market Policies (ALMP)? (3)
- Relation between start-up incentives and entry into self-employment/ entrepreneurship
- Start-up incentives (+), then self-employment (from unemployment) mainly to own-account work (+)
- Start-up incentives only encourage switch from unemployment to own-account work
What is the aim for entrepreneurship education?
What is the justification for entrepreneurship education and training?
What are 4 critiques for entrepreneurship education?
- Entrepreneurship can not be taught
- Lack of practical relevance
- Stimulates wrong people to start
- Difficult to evaluate
What 3 things are evaluated for impact on the program of 'The effect of early entrepreneurship education: evidence from a field experiment' by Rosendahl Huber (2014)
- Non-cognitive skills
- Cognitive skills
- What an entrepreneur does and what it entails to have a business
- Entrepreneurial intentions
What impact does entrepreneurial intentions have on the program? (2)
- Direct negative effect of program on entrepreneurial intentions if any
- However: there might be an indirect positive effect of program on entrepreneurial intentions through non-cognitive skills
How can there be an indirect positive effect of program on entrepreneurial intentions through non-cognitive skills? (2)
- Program, non-cognitive skills, entrepreneurial intentions
- Some support that entrepreneurship education at a young age could be relevant
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