7/20/2009 12:40:49 PM By
E.J. Reedy
7/12/2009 6:37:00 AM By
E.J. Reedy
Charles Ou, an expert in small business finance for the Office of Advocacy at the Small Business Administration, is retiring this month and as a tribute Advocacy has published an in-depth look at small business financing. Read the report.
6/1/2009 1:20:00 PM By
E.J. Reedy
From Interesting Bearing Notes, an email newletter from the World Bank with a smattering of interesting updates and opportunities to disseminate information:
Former IBN editor Thorsten Beck and our own Asli Demirguc-Kunt have recently updated and expanded the Financial Development and Structure Database, which provides statistics on the size, activity, efficiency and stability of banks, nonbanks, equity markets, and bond markets across countries and through time. Newly added indicators include measures of banking structure and financial globalization. In their paper “Financial institutions and markets across countries and over time - data and analysis,” which introduces the revised data base, they also use the data to analyze financial system trends across the globe. Thorsten and Asli find that financial systems have deepened over the past decades along many dimensions. However, this is only true in high-income countries. Similarly, cross-border lending and bond issues have increased, but again only among high-income countries. Low and lower-middle income countries, on the other hand, have benefitted from higher remittance flows. Although the data ends in 2007, thus preventing the authors from fully capturing the recent global financial crisis, they clearly see the boom period leading up to the crisis reflected in the data. Banks’ net interest margins decreased, pushing banks to diversify income sources, while profitability increased. At the same time, the z-score, a measure of stability, decreased and hit a historic low in 2007.
More information at http://go.worldbank.org/DV96ZAS8R0.
4/29/2009 6:50:00 AM By
E.J. Reedy
The World Bank recently completed what looked to be an interesting event on "Measurement, Promotion and Impact of Access to Financial Services." There are several interesting papers, including one looking at experimental survey work in Ghana by Cull and Scott that examines the types of financial questions one might need to ask the head of a household rather than each individual in the household to get an accurate picture of financial services used, as well as looking at issues of asking about specific products used rather than companies. Household surveys can play an important part in entrepreneurship research, particularly for those looking at the self-employed, but then ironically, also for those looking at the very successful entrepreneurs or angel investors.
One additional takeaway of the event was the need for more accurate and comparable data across countries, not just at the time of crisis, but in an ongoing manner. This is a similar problem we see in developed economies and will be addressing at an upcoming OECD event.
3/16/2009 5:34:00 AM By
E.J. Reedy
Thursday and Friday of last week, we sponsored a workshop with the Federal Reserve Bank of Cleveland. I was not able to attend, but the topic was one of great interest to everyone now - entrepreneurial finance. While the final proceedings from the event will come out in a special issue of Journal of Money, Credit and Banking sometime next year, working paper versions of all presentations are available on the Federal Reserve Bank of Cleveland's website.
3/3/2009 11:13:00 AM By
E.J. Reedy
I just came across a recent paper from the World Bank which takes on the general issue of how someone wanting to look at assets might think about disentangling gender from such an examination. I thought this was a really interesting topic and something I know that many struggle with in studying business ownership and wealth creation. Many businesses are co-owned by spouses, and how does one disentagle the asset effects of this? I am not totally sure, but I like the fact that this paper tries to draw out lessons from some field work that might apply more broadly to others interested in this topic.
Ownership and control over assets such as land and housing provide direct and indirect benefits to individuals and households, including a secure place to live, the means of a livelihood, protection during emergencies, and collateral for credit that can be used for investment or consumption. Unfortunately, few studies - either at the micro or macro levels- examine the gender dimensions of asset ownership. This paper sets out a framework for researchers who are interested in collecting data on individual level asset ownership and analyzing the gender asset gap. It reviews best practices in existing surveys with respect to data collection on assets at both the household and individual levels, and shows how various questions on individually owned assets can be incorporated with a minimum of effort and cost into existing multi-topic household surveys, using examples of three Living Standard Measurement Study surveys: the 1998-99 Ghana survey, the 2000 Guatemala survey, and the 1997-98 Vietnam survey questionnaires. The analysis shows that it is feasible to add a minimal set of questions to enable calculation of the gender asset gap. Adding a series of extra questions will permit a more satisfactory and nuanced analysis of asset acquisition, use, disposition, and valuation - information that is critical for policies promoting gender equality, poverty reduction, and economic growth.
This is probably most applicable to those studying microfinance
2/21/2009 7:50:00 AM By
E.J. Reedy
The Small Business Administration (SBA), Office of Advocacy, does a nice job of organizing and displaying data on their website about small businesses in the United States. In addition, annually the SBA produces a summary report to the president on the small business economy. This year, they've included a series of data tables which many will find useful, in the appendix.
- Business Counts, 1985-2007
- Business Turnover, 1985-2007
- Macroeconomic Indicators, 1995-2007
- Number of Businesses by State, 2005-2007
- Business Turnover by State, 2006-2007
- Private Firms, Establishments, Employment, Annual Payroll, and Receipts, 1988-2006
- Employer Firms and Employment by Firm Size and State, 2005
- Non Employer and Employer Firms and Employment by Firm Size and Industry, 2005 and 2006
- Employer Firm Births and Deaths by Employment Size of Firm, 1990-2005
- Job Generation and Destruction by Type of Change and Employment Size of Firm, 1990-2005
- Opening and Closing Establishments, 1992-2007
- Quarterly Net Job Change by Firm Size, 1992-2007
- Characteristics of Self-Employed Individuals, 1995-2006
- Characteristics of Employees by Firm Size, 1995 and 2006
- Bank Lending Information by Size of Firm, 1991-2007
I've included a screen shot here of one data element I am sure will get very big notice when data is available for 2008, "Bank Lending Information by Size of Firm." Right now, it only covers through 2007.
In addition to the data tables in the report, there is a long chapter based on the Panel Study on Entrepreneurial Dynamics program of work.
2/7/2009 1:20:00 AM By
E.J. Reedy
Yesterday I was at a closed meeting of experts at Eurostat, the European Union's statistical offices, on a newly approved "flexible module" for their structural business statistics. Lost already? Basicly, this means that Eurostat has been approved to perform a survey in 2010 on the theme of "access to capital". Read the official approval and legal mandate.
Eurostat has been planning and considering this new project for more than a year and has taken a lot of inspiration from our work with the Kauffman Firm Survey. Unbeknownst to them, the world would change a lot from when they conceptualized the project to the year of 2010, when they are now legally mandated to complete their work. While much about this project is still up in the air and to be written, I came away with some distinct impressions.
- Problems. When Eurostat began thinking of such a project, they were most interested in looking at start-up financing. Mostly, what sorts of capital were start-ups trying to get but couldn't and how might that related to growth and high-growth? Eurostat went into the meeting of experts proposing to ask questions about start-up financing in 2003/4 in 2010, more than six years later. In the Kauffman Firm Survey, we have intentionally only asked about the prior year of financing activities for our young firms. This is because entrepreneurs (and most people) have great difficulty recalling things that happened in the distant past. Hence, after considering their concept and getting expert feedback at this meeting, Eurostat's initial purpose for their "Access to Finance" survey was thrown into doubt.
- Opportunities. But just as entrepreneurs are always seeing opportunity and not roadblocks, by the end of our expert meeting the survey had been recast slightly to achieve what I think has incredible possibility. Combining the financial crisis of late 2008 and now 2009 with Eurostat's mandated survey populations and survey time periods means that Eurostat is now on course to do a survey of small businesses, high-growth companies, and gazelles on the topic of finance and finance constraints in 2010. They won't be able to look at everything they wanted, but the experts seemed confident that accurate and relevant information can be gathered on 2007 financing habits of the firm, 2009 financing habits, and 2009 attempted financing.
This is a project we will continue to follow in the coming years. I expect that there will be a proliferation of surveys on small business finance, but we can only hope that all of the projects look for opportunities to learn and complement each other.
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Developing better data is part of Kauffman's long-term strategy for advancing better research and policy on entrepreneurship and innovation. Data Maven is place you can connect with new data developments, provide us feedback on possible new projects, and contribute to the community seeking to improve entrepreneurship and innovation measurement.
E.J. Reedy is a manager in Research and Policy at the Kauffman Foundation. Learn more ...
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