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on Small Business Management |
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Issue of 2010‒11‒13
eleven papers chosen by Joao Carlos Correia Leitao University of Beira Interior and Technical University of Lisbon |
| By: | Lööf, Hans (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Johansson, Börje (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology) |
| Abstract: | Firms display persistent differences as regards both internal and external characteristics, and these differences correspond to asymmetries in the performance of firms with regard to productivity level and growth as well as innovativeness. This paper focuses on one internal characteristic and one external factor by distinguishing between firms with persistent R&D efforts and other firms and firms located in a metropolitan region versus firms with other locations. Applying Swedish data on individual firms and their location, the paper shows that firms that follow a strategy with persistent R&D efforts have a distinctly higher level of productivity across all types of location. In addition, the productivity level of firms with persistent R&D is augmented in a significant way when such firms have a metropolitan location and, in particular, a location in a metropolitan city |
| Keywords: | R&D; innovation-strategy; productivity; metropolitan; externalities |
| JEL: | C23 O31 O32 |
| Date: | 2010–11–04 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0242&r=sbm |
| By: | Santiago-Rodriguez, Fernando (International Development Research Centre, UNU-MERIT); Dutrenit, Gabriela (UAM-Xochimilco) |
| Abstract: | Interactive learning, particularly between firms and public research organizations (PRO), nurtures the dynamics of systems of innovation. Limited interaction contributes to explain poor performance in R&D and ultimately, in innovation by developing countries. But why this is so? Based on evidence from the pharmaceutical industry in Mexico, this paper identifies some determinants of PRO-industry interaction for pharmaceutical R&D. Particular attention is granted to factors hindering such interactions; arguably the barriers differ throughout the diverse stages of the R&D process. The paper decomposes the Research and Development processes, thus it is possible to identify determinants to interactions in each of those instances. Drug development is further split in two stages: clinical research and drug manufacturing. The analysis indicates that macroeconomic and business environments, firms' strategies, ethical considerations, incentives and perceptions of PRO-industry interaction among the agents in the system, support/hinder interactivity in pharmaceutical R&D. |
| Keywords: | Public research organizations, pharmaceutical industry, university-industry collaboration, pharmaceuticals, R&D, Mexico |
| JEL: | O31 O54 L65 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:unumer:2010053&r=sbm |
| By: | Kuhne, Bianka; Gellynck, Xavier; Weaver, R.D. |
| Abstract: | In the New Economy, the network is considered as more important than the firm itself. In this paper the focus is on chain networks which include vertical networks among chain members, horizontal networks with peers, and networking with third parties. Networks have an important role in the diffusion and adoption of innovations, thus they are the locus of innovation. While previous research focused on the firm, we contribute to the understanding of innovations in chain networks, i.e. we investigate the innovation capacity in vertical networks and how networking with peers and third parties is influencing the innovation capacity of the vertical network. We propose that there is a positive relationship between the network connections the direct chain partners have with peers and third parties and the innovation capacity of the vertical network. Data were collected from 90 direct agrifood chains in the traditional food sector. Cluster analysis suggested three clusters of chains corresponding to three distinct levels of innovation capacity: low, medium and high. Via descriptive analysis and binary logistic regression the influence of networking with peers and third parties on the innovation capacity of the vertical network was investigated. Our results confirm our proposition. However, we found that the chain partners are either horizontally or vertically networking for innovation. Nevertheless, more networking within the chain and with peers and third parties is linked to higher levels of innovation capacity. Consequently, our study adds to the research in the field of the New Economy by deepening the understanding of how innovation capacity is developed in vertical networks. We can confirm that the network is very important for the development and implementation of innovations and that the innovation capacity of one firm is linked to the innovation capacity of its chain partners. For future research we propose to investigate the link between networking for innovation and types of innovation which can be achieved. Further, future research should explore further inter-organizational links in the chain network and explore wider networks than the direct chain. |
| Keywords: | SMEs, chain networks, traditional food products, Agribusiness, Agricultural and Food Policy, Community/Rural/Urban Development, Food Consumption/Nutrition/Food Safety, Labor and Human Capital, |
| Date: | 2010–10–27 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaa116:95050&r=sbm |
| By: | Czarnitzki, Dirk; Wastyn, Annelies |
| Abstract: | Export is an important factor to improve growth and welfare especially for industrialized small, open economies such as Belgium. Policy may be interested in key variables that can influence export. This paper finds evidence for the importance of R&D for export activities using Belgian firm-level data. To control for reverse causality, R&D-subsidy variables are used to instrument R&D. The results show that R&D policies may indirectly help to increase the export performance of the economy. Due to the exceptionally high openness of Belgium, two subsamples of firms are considered, domestic firms and multinational firms. We observe positive effects of R&D on export for both domestic and MNEs. Once we instrument R&D because of its potential endogeneity, however, it turns out that the effect of R&D on exports is larger for domestic firms than for multinational companies. -- |
| Keywords: | Export,R&D,Multinational enterprises,Innovation Policy |
| JEL: | F23 O33 O38 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:10071&r=sbm |
| By: | Sharif, Naubahar (Division of Social Science, The Hong Kong University of Science and Technology); Huang, Can (UNU-MERIT, Maastricht University) |
| Abstract: | Based on a survey adapted from the Fourth European Community Innovation Survey (CIS-4), this study finds that, in the changing manufacturing environment of Guangdong province in China, Hong Kong-owned businesses that generate a higher share in new product sales as a percentage of total sales or engage in R&D or collaborative innovation activities in China are more likely to survive and remain in Guangdong. The study fills a gap in the literature by investigating the effects of innovation on the survival and relocation of Hong Kong-owned manufacturing firms in Guangdong. The results support policy initiatives that strengthen collaborative ties among key innovation system actors. |
| Keywords: | Innovation, Survival, Relocation, Community Innovation Survey, Asia, China |
| JEL: | D21 L25 L52 O31 R11 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:unumer:2010052&r=sbm |
| By: | Iraj Hashi; Nebojsa Stojcic |
| Abstract: | The impact of innovation on firm performance has been a matter of significant interest to economists and policy makers for decades. Although innovation is generally regarded as a means of improving the competitiveness of firms and their performance on domestic and foreign markets, this relationship has not been supported unambiguously by empirical work. Innovative activities of firms influence their performance not necessarily directly but through the production of useful innovations and increased productivity. Therefore, in recent years, the relationship between innovation and firm performance has been modelled by a multistage approach. However, the findings from existing studies differ in many respects which suggests that there is the need for further research. In this paper we employ firm level data from the fourth Community Innovation Survey (CIS4), covering some 90,000 firms in 16 West and East European countries in order to assess the drivers of the innovation process in two different institutional settings, a number of mature market economies of Western Europe and a number of advanced transition economies from Central and Eastern Europe. A four-equation model, originating in the work of Crepon et al., (1998), has been used to link the innovation decision of firms to their performance through the impact of innovation input on innovation output and the innovation output on productivity and better performance. Our findings confirm the positive relationship between innovation activities and productivity at the firm level and provide further evidence on the relationship between size and innovation activities. |
| Keywords: | innovation, firm performance, multi-stage model, Community Innovation Survey 4 |
| JEL: | O31 L25 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:sec:cnstan:0410&r=sbm |
| By: | Baghana, Rufin (Ministère des Finances, Québec) |
| Abstract: | This paper analyses empirically the impacts of public R&D grants on private R&D investments and on the productivity growth of the manufacturing firms in a context where fiscal incentives are present. Using the conditional semiparametric differenceindifferences estimator on longitudinal data from Quebec we show that firms that use public grants for R&D in conjunction with tax credits for R&D perform better in terms of R&D input additionality than firms that use only tax credits for R&D. We then use a production function to assess the effectiveness of public R&D grants in the productivity growth of firms. We find that for each additional dollar of public R&D grant, output increases by 0.134 dollars. We conclude that the additional return of direct subsidies is positive but lower than the return on the R&D financed by own funds or R&D tax credits. |
| Keywords: | R&D, Public subsidies, Quebec, Productivity, Difference-in-differences |
| JEL: | H25 O32 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:unumer:2010055&r=sbm |
| By: | Geir H. Bjertnæs, Tom-Reiel Heggedal and Karl Jacobsen (Statistics Norway) |
| Abstract: | We analyze how knowledge spillovers influence the optimal timing of R&D policy. Using numerical simulations we find that optimal subsidies to R&D may be rising over time even when the returns to knowledge is decreasing. The optimal time profile of the subsidies is determined by the elasticity of scale in the R&D production function, which again depends on both the returns to knowledge and the returns to labor. |
| Keywords: | Innovation policy; R&D; Technological spillovers |
| JEL: | O32 O38 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:635&r=sbm |
| By: | Hank Lim; Fukunari Kimura |
| Abstract: | Production networks and the regional division of labor have been established in East Asia resulting in massive vertical intra-industry trade in parts and components within the region. This phenomenon is known as cross-border production sharing or the fragmentation of production processes into many stages across different countries. New development strategies claim that participation in international production and distribution networks is the key to accelerating economic development in the era of globalization. This process suggests that vertical input-output linkages between local firms and multinational corporations are the most powerful channels to accelerate technology transfers and spillovers. [ADBI Working Paper 231] |
| Keywords: | Production, regional, East Asia, development, economic, vertical, spillovers |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:3113&r=sbm |
| By: | Christian Helmers |
| Abstract: | This paper investigates the effect of market entry of new firms on incumbent firms'innovative activity measured as patent applications. The basic assumption is that the effect ofentry varies by geographical distance between entrants and incumbents due to the presence oflocalized unobserved spillovers. In order to avoid endogeneity problems commonlyassociated with the timing of entry and entrants' location choice, I analyze entry induced bythe establishment of university business incubators, which are usefully exogenous in time andspace. The results show that entry has a statistically and economically significantly positivestrategic effect on incumbent patenting which is attenuated by the geographical distancebetween entrant and incumbent. |
| Keywords: | Patents, market entry, incubators, spillover |
| JEL: | L22 L26 O34 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1002&r=sbm |
| By: | Loderer, Claudio; Waelchli, Urs |
| Abstract: | As firms grow older, their profitability seems to decline. We first document this phenomenon and show that it is very robust. Then we offer two non-exclusive explanations of why firms may age. First, corporate aging could reflect a cementation of organizational rigidities over time. Consistent with that, costs rise, growth slows, assets become obsolete, and investment and R&D activities decline. Second, older age could advance the diffusion of rent-seeking behavior inside the firm. This hypothesis is supported by the poorer governance, larger boards, and higher CEO pay we observe in older firms. Overall, firms seem to face a real senescence problem. |
| Keywords: | firm age; organizational rigidities; rent-seeking; firm life cycle; corporate governance; firm performance |
| JEL: | L20 G30 |
| Date: | 2010–04–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:26450&r=sbm |