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on Small Business Management |
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Issue of 2010‒03‒06
seven papers chosen by Joao Carlos Correia Leitao University of Beira Interior and Technical University of Lisbon |
| By: | Uwe Cantner (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Michael Stützer (School of Economics and Business Administration, Friedrich-Schiller-University Jena) |
| Abstract: | This paper examines the use of social capital in the venture creation process. We compare solo entrepreneurs (n=182) and new venture teams (n=274) from a random sample of start-ups in innovative industries and test social capital use and its effects on firm performance. Our results reveal that solo entrepreneurs and new venture teams do not differ in their degree of use of social capital. However, there are differences in the determinants of social capital use in both groups. We find that weak ties assist solo entrepreneurs and have positive significant effects on new venture performance. For team start- ups, we find no direct effect of social capital. However, further tests indicate for teams that human capital variety positively moderates the effect of social capital on performance. |
| Keywords: | Entrepreneurship, Nascent entrepreneurship, Social capital, Start-up teams, Entrepreneurial learning |
| JEL: | M13 L25 L26 D83 |
| Date: | 2010–02–24 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2010-012&r=sbm |
| By: | Hall, Bronwyn H. (UNU-MERIT, Maastricht University, Institute of Fiscal Studies, University of California-Berkeley, and NBER); Lerner, Josh (Harvard Business School, and NBER) |
| Abstract: | Evidence on the "funding gap" for investment innovation is surveyed. The focus is on financial market reasons for underinvestment that exist even when externality-induced underinvestment is absent. We conclude that while small and new innovative firms experience high costs of capital that are only partly mitigated by the presence of venture capital, the evidence for high costs of R&D capital for large firms is mixed. Neverthless, large established firms do appear to prefer internal funds for financing such investments and they manage their cash flow to ensure this. Evidence shows that there are limits to venture capital as a solution to the funding gap, especially in countries where public equity markets for VC exit are not highly developed. We conclude by suggesting areas for further research. |
| Keywords: | innovation, R&D, financing, liquidity constraints, venture capital, cash flow |
| JEL: | G24 G32 O32 O38 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:unumer:2010012&r=sbm |
| By: | William R. Kerr; William F. Lincoln |
| Abstract: | This study evaluates the impact of high-skilled immigrants on US technology formation. We use reduced-form specifications that exploit large changes in the H-1B visa program. Higher H-1B admissions increase immigrant science and engineering (SE) employment and patenting by inventors with Indian and Chinese names in cities and firms dependent upon the program relative to their peers. Most specifications find limited effects for native SE employment or patenting. We are able to rule out displacement effects, and small crowding-in effects may exist. Total SE employment and invention increases with higher admissions primarily through direct contributions of immigrants. |
| JEL: | F15 F22 J44 J61 O31 |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:15768&r=sbm |
| By: | Andreas Freytag (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Sebastian von Engelhardt (School of Economics and Business Administration, Friedrich-Schiller-University Jena) |
| Abstract: | The paper analyzes the impact of institutional and cultural factors on a remarkable economic activity: the production of so-called open source software (OSS). OSS is marked by free access to the software and its source code. Copyright-based OSS licenses permit users to use, change, improve and redistribute the software, which is designed and developed in a public, collaborative manner. OSS seems to be an example of a 'private provision of a public good'. While the supply-side microeconomics of OSS (individual characteristics of OSS developers, role of firms etc.) are well explored, it is not known which institutional and cultural factors explain different OSS activities across countries. For this reason, we perform a cross-country study analyzing how the number of OSS developers per inhabitants and the level of OSS activity of a country depend on institutional and cultural factors. Our findings are that a culture characterized by individualism/self-determination, abundance of social capital interpreted as interpersonal trust, an optimistic view of scientific progress, a low degree of regulation as well as good protection of intellectual property rights is favoring OSS activities. Our study thus contributes to the understanding of the role of cultural and nstitutional factors in general as well as in particular with respect to OSS. Additionally, it improves the understanding of the supply-side of OSS. |
| Keywords: | Open Source, Culture, Institutions, Social Capital, Trust, Regulation, Entrepreneurial Spirit, Individualism, Intellectual Property Rights |
| JEL: | B52 L17 L86 O34 Z13 Z19 |
| Date: | 2010–02–24 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2010-010&r=sbm |
| By: | Jaan Masso; Tõnu Roolaht; Urmas Varblane |
| Abstract: | A growing literature is trying to analyse the productivity gap between domestic and foreign firms with differences in innovation indicators. In our paper we analyse the relationship between inward and outward FDI at either company or industry level and the innovation behaviour of companies in Estonia. We use company-level data from three waves of the Community Innovation Surveys, which are combined with financial data from the Estonian Business Register and FDI data from the balance of payments statistics. For the analysis we apply a structural model involving equations on innovation expenditure, innovation outcome and productivity, and also innovation accounting and propensity score matching approaches. Our results show that the higher innovation output of foreign owned companies vanishes after various company characteristics are controlled for, but there were significant differences in innovation inputs such as the higher use of knowledge sourcing and the lower importance of various impeding factors. Outward investment has a positive influence on innovativeness among both domestic and foreign owned companies. |
| Keywords: | innovation, internationalisation, foreign direct investments, catching-up countries |
| JEL: | F10 F23 O30 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:mtk:febawb:67&r=sbm |
| By: | Túlio A. Cravo (Dept of Economics, Loughborough University); Adrian Gourlay (Dept of Economics, Loughborough University); Bettina Becker (Dept of Economics, Loughborough University) |
| Abstract: | This paper examines the relationship between the Small and Medium Enterprise (SME) sector and economic growth for an annual panel of Brazilian states for the period 1985-2004. We investigate the importance of the relative size of the SME sector measured by the share of the SME employment in total formal employment and the level of human capital in SMEs measured by the average years of schooling of SME employees. The empirical results indicate that the relative importance of SMEs is negatively correlated with economic growth, a result that is consistent with previous studies examining developing countries. In addition, our results also show that human capital embodied in SMEs may be more important for economic growth than the relative size of the SME sector. |
| Keywords: | Firm size, market structure, economic growth, human capital. |
| JEL: | O1 O15 L1 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:lbo:lbowps:2010_01&r=sbm |
| By: | Hall, Bronwyn H. (UNU-MERIT, Maastricht University, Institute of Fiscal Studies, University of California-Berkeley, and NBER) |
| Abstract: | Two court decisions in the 1990s are widely viewed as having opened the door to a flood of business method and financial patents at the US Patent and Trademark Office, and to have also impacted other patent offices around the world. A number of scholars, both legal and economic, have critiqued both the quality of these patents and the decisions themselves. This paper reviews the history of business method and financial patents briefly and then explores what economists know about the relationship between the patent system and innovation, in order to draw some tentative conclusions about their likely impact. It concludes by finding some consensus in the literature about the problems associated with this particular expansion of patentable subject matter, highlighting the remaining areas of disagreement, and reviewing the various policy recommendations. |
| Keywords: | intellectual property, State Street, software, internet, business methods, patents, innovation |
| JEL: | G28 K2 L86 O34 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:unumer:2010010&r=sbm |