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on Small Business Management |
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Issue of 2011‒02‒26
twelve papers chosen by Joao Carlos Correia Leitao University of Beira Interior and Technical University of Lisbon |
| By: | Michael Fritsch (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Alexandra Schroeter (School of Economics and Business Administration, Friedrich-Schiller-University Jena) |
| Abstract: | This paper investigates the impact of new firms' quality on the magnitude of their employment effects. Our results clearly show that the quality of start-ups, measured by their affiliation with sectors and innovative industries, strongly influences the direct and the overall employment contribution of new firms. In particular, start-ups in manufacturing industries generate larger direct and overall growth effects than those in services. Moreover, new businesses in innovative manufacturing and in knowledge-intensive service industries make a larger direct contribution to employment than start-ups affiliated with other industries. We also find a relatively strong overall effect of new business formation in knowledge-intensive service industries. However, the impact of start-ups in innovative manufacturing industries on overall regional employment growth is not statistically significant, which may be mainly due to their rather small share in all start-ups and because they impact more on firms and employment in other regions than do start-ups in non-innovative manufacturing. Finally, we discuss the implications for entrepreneurship policy that can be derived from our findings. |
| Keywords: | Entrepreneurship, new business formation, innovative industries, regional development, entrepreneurship policy |
| JEL: | L26 M13 O1 O18 R11 |
| Date: | 2011–02–15 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2011-001&r=sbm |
| By: | Jaan Masso; Priit Vahter |
| Abstract: | The emerging literature on the characteristics of innovation processes in the service sector has paid relatively little attention to the links between innovation and productivity. In this paper we investigate how the innovation-productivity relationship differs across various sub-branches of the service sector. For the analysis we use the CDM structural model consisting of equations for innovation expenditures, innovation output, productivity and exports. We use data from the community innovation surveys for Estonia. We show that innovation is associated with increased productivity in the service sector. The results indicate surprisingly that the effect of innovation on productivity is stronger in the less knowledge-intensive service sectors, despite the lower frequency of innovative activities and the results of earlier literature. Non-technological innovation only plays a positive role in some specifications, despite its expected importance especially among the service firms. An additional positive channel of the effects of innovation on productivity may function through increased exports. |
| Keywords: | innovation, services, productivity |
| JEL: | O31 O33 L80 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:mtk:febawb:80&r=sbm |
| By: | Aminata SISSOKO (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)) |
| Abstract: | This paper attempts to provide a new insight into the relationship between R&D subsidies and firm-level productivity. The empirical analysis evaluates the productivity of firms involved in a European program of public R&D grants called Eureka. The findings suggest that the Eureka firms on average experience productivity gains towards the end of the 3-years grant period. However, the average increase in productivity hides substantial firm heterogeneity. Namely it hides that low productive firms gain more from an R&D subsidy than high productive firms. The empirical analysis is conducted by using propensity score matching and a difference-in-differences estimation method to control for potential endogeneity issues. |
| Keywords: | R&D subsidies, Collaborative Research, Total Factors Productivity and Firm Heterogeneity |
| Date: | 2011–01–28 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvir:2011002&r=sbm |
| By: | Dirk Engel (University of Applied Science Stralsund; RWI); Timo Mitze (RWI; Ruhr University Bochum); Roberto Patuelli (University of Lugano; The Rimini Centre for Economic Analysis (RCEA)); Janina Reinkowski (ifo Munich) |
| Abstract: | In this paper, we evaluate the R&D enhancing effects of two large public grant schemes aiming at encouraging the performance of firms organized in clusters. These are Germany's well known BioRegio and BioProfile contests for which we compare the research performance of winning regions in contrast with non-winning and non-participating comparison regions. We apply Difference-in-Difference estimation techniques in a generalized linear model framework, which allows to control for different initial regional conditions in the biotechnology related R&D activity. Our econometric findings support the view that winners generally outperform non-winning participants during the treatment period, thus indicating that exclusive funding as well as the stimulating effect of being a "winner" seems to work in the short-term. In contrast, no indirect impacts stemming from a potential mobilizing effect of the contest approaches have been detected. Also, we find only limited evidence for long-term effects of public R&D grants in the post-treatment period. The results of our analysis remain stable if we additionally augment the model to account for the particular role of spatial dependence in the R&D outcome variables. |
| Keywords: | Biotechnology, R&D Policies, Cluster, Diff-in-Diff Estimation |
| JEL: | O38 R38 C23 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:lug:wpaper:1105&r=sbm |
| By: | Martina Battisti; Hiroyuki Okamuro |
| Abstract: | Exit is an important part of the entrepreneurial lifecycle. In contrast to numerous previous studies on entry, however, little attention has been paid to entrepreneurial exit, and much less on exit modes thus far. Using a recent original survey data on small business owners in New Zealand, where a large majority of them prefer selling their firms when they exit, we empirically investigate the determinants of intended entrepreneurial exit modes: selling out, succession, or closure. Estimation results of multinomial logit analysis suggest that the intention to sell the business is significantly affected by the size and performance of the firm, the involvement of family and how the owner entered the business. Moreover, we find that the intention to liquidate the business is significantly affected by the size and performance of the firm and partly by family involvement in the business. |
| Keywords: | entrepreneurial exit, liquidation, small and medium enterprise (SME), New Zealand |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:hst:ghsdps:gd10-151&r=sbm |
| By: | Rune Dahl Fitjar (International Research Institute of Stavanger); Andrés Rodríguez-Pose (IMDEA Social Sciences Institute) |
| Abstract: | The geographical sources of innovation of firms have been hotly debated. While the traditional view is that physical proximity within city-regions is key for the innovative capacity of firms, the literature on 'global pipelines' has been stressing the importance of establishing communication channels to the outside world. This paper uses a specifically tailored survey of the level of innovation of 1604 firms of more than 10 employees located in the five largest Norwegian city-regions (Oslo, Bergen, Stavanger, Trondheim, and Kristiansand) in order to determine a) the geographical dimension of the sources of innovation and b) the factors behind the propensity to innovate in Norwegian firms. The results stress that while interaction with a multitude of partners within Norwegian city-regions or with other national partners has a negligible effect on firm innovation, those firms with a greater diversity of international partners tend to innovate more and introduce more radical innovations. The results also highlight that the roots of this greater innovative capacity lie in a combination of firm – size of firms, share of foreign ownership, and sector – and cultural – the level of open-mindedness of managers – characteristics. |
| Keywords: | Innovation; radical innovation; interaction; pipelines; partnerships; firms; city-regions; Norway |
| Date: | 2011–02–15 |
| URL: | http://d.repec.org/n?u=RePEc:imd:wpaper:wp2011-05&r=sbm |
| By: | Carmen Cabello Medina (Department of Business Administration, Universidad Pablo de Olavide); Antonio Carmona Lavado (Department of Business Administration, Universidad Pablo de Olavide); Gloria Cuevas Rodríguez (Department of Business Administration, Universidad Pablo de Olavide); Ana Pérez-Luño (Department of Business Administration, Universidad Pablo de Olavide) |
| Abstract: | This paper differentiates “best innovative companies” from “worst innovative companies” and it takes into account three separate bodies of literature— intellectual capital, knowledge-based view, and innovation literatures. Based on a sample of 181 firms which belong to manufacturing and services industries, our findings show that best innovative performers companies (considering both financial and non-financial dimensions of innovation success) present systematically higher scores for all dimensions of intellectual capital: human, organizational and social capital) than worst innovation performers. Knowledge exchange and combination seems to be characteristic of most successful innovators, but no differences in systemic, tacit, complex and not observable knowledge have been found for these companies. Finally, regarding radicalness, firms with more innovation success provide new products or services that incorporates a new technology and new customer benefits (uniqueness), while firms with less innovation success laughs new products or services which are unfamiliar or difficult to understand by customers. |
| Keywords: | Mobile-shopping |
| Date: | 2011–01 |
| URL: | http://d.repec.org/n?u=RePEc:pab:wpbsad:11.01&r=sbm |
| By: | Martijn J. Smit (VU University Amsterdam); Maria A. Abreu (University of Groningen, University of Cambridge); Henri L.F. de Groot (VU University) |
| Abstract: | This paper employs firm-level data to analyze the relative importance of firm characteristics and agglomeration externalities in explaining variation in innovation rates across firms. More specifically, we combine micro-data and census data to estimate the probability that a firm will introduce a goods, service or process innovation. We consider internal firm-level characteristics as well as externalities, using information on the regional production structure to test for Marshall-Arrow-Romer, Porter and Jacobs effects. Our results show that most firm-specific variables are highly statistically significant, whereas agglomeration variables are only significant for a few specific sectors, and even then only for some types of innovation. |
| Keywords: | innovation; absorptive capacity; agglomeration externalities; Community Innovation Survey; micro-data; firm behavior |
| JEL: | L20 O30 R11 |
| Date: | 2010–06–21 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20100060&r=sbm |
| By: | Laura de Dominicis (European Commission, Seville); Raymond J.G.M. Florax (Purdue University, W. Lafayette, and VU University Amsterdam); Henri L.F. de Groot (VU University Amsterdam) |
| Abstract: | Finding proper policy instruments to promote productivity growth features prominently on the Lisbon agenda and is central in many national as well as European policy debates. In view of the increased mobility of high-skilled workers in Europe, ongoing globalization and increased interregional and international co-operation, location patterns of innovative activity may be subject to drastic changes. A proper understanding of location patterns of innovative outputs can enhance the effectiveness and efficiency of national and European innovation policies. Building on the literature on the knowledge production function the aim of this paper is to explain the observed differences in the production of innovative output across European regions. Our main research question is whether geographical proximity and social capital are important vehicles of knowledge transmission for the production of innovative output in Europe. Several other variables are used to control for structural differences across European regions. We find support for the hypothesis that both social capital and geographical proximity are important factors in explaining the differences in the production of innovative output across European regions. |
| Keywords: | innovation; knowledge production function; social capital; spatial econometrics; European regions |
| JEL: | C21 I23 O18 O31 |
| Date: | 2011–01–13 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20110009&r=sbm |
| By: | Francesco Bogliacino (European Commission); Mario Pianta (Department of Economics, Università di Urbino "Carlo Bo") |
| Abstract: | The links between three interconnected elements of the Schumpeterian sources of economic change are explored, conceptually and empirically, in this paper: the commitment of industries to invest profits in cumulative R&D efforts; the ability of industries’ R&D to lead to successful innovations; the impact of new products and processes on high entrepreneurial profits. We consider the nature and variety of innovative efforts – distinguishing in particular between strategies of technological and cost competiveness – and we introduce the role of demand in pulling technological change and supporting profits. We develop a simultaneous three-equation model and we test it at industry level – for 38 manufacturing and service sectors – on eight European countries over two time periods from 1994 to 2006. The results show that the model effectively accounts for the dynamics of European industries and highlights the interconnections between the different factors contributing to growth. |
| Keywords: | R&D, Innovation, Profits, Demand, System Three Stages Least Squares. |
| JEL: | L6 L8 O31 O33 O52 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:urb:wpaper:11_01&r=sbm |
| By: | Rajshree Agarwal; Benjamin Campbell; April M. Franco; Martin Ganco |
| Abstract: | Focusing on entrepreneurial ventures created by employees leaving a firm, our study examines the differential impact of knowledge transfer and knowledge spillovers on both parent and spin-out performance. While extant research often uses knowledge transfer and spillover interchangeably, our study distinguishes between the two based on the “rivalness” of the relevant knowledge. We theorize that both knowledge transfer (proxied by the size of the exiting employee team) and knowledge spillovers (proxied by the experience of the exiting employee team) will aid spin-out performance. However, knowledge transfer, being more rival, will have a greater adverse impact than knowledge spillovers on parent firm performance. Using U.S. Census Bureau linked employee-employer data from the legal services industry, we find support for our hypotheses. Our study thus contributes to extant literature by highlighting a key dimension of knowledge — rivalness — and the differential competitive dynamics effect of resources with varying degrees of rivalness. |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:11-06&r=sbm |
| By: | Judith Lammers (University of Amsterdam); Daan Willebrands (SEO Economic Research); Joop Hartog (University of Amsterdam) |
| Abstract: | This paper analyses the effect of risk attitudes of firm owners on profits among micro and small enterprises (MSEs) in Lagos, Nigeria. Higher risk perceptions are shown to have a significant positive effect on profits, whereas risk propensity has a negative or no effect. Education, age, being male, and firm size are all positively related to profit, while young firms earn lower profits. Overall, the results suggest that being aware and dealing cautiously with risk leads to higher profitability. |
| Keywords: | entrepreneurship; risk perception; risk behavior; profit; MSEs |
| JEL: | D12 L25 L26 |
| Date: | 2010–05–19 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20100053&r=sbm |