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on Small Business Management |
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Issue of 2011‒03‒26
five papers chosen by Joao Carlos Correia Leitao University of Beira Interior and Technical University of Lisbon |
| By: | Peters, Bettina; Schmiele, Anja |
| Abstract: | The internationalisation of corporate R&D opens up the chances to participate in international knowledge sharing. This increasingly motivates firms to accelerate the pace and extent of their international R&D activities in order to enhance innovativeness and consequently competitiveness and profitability. Such business ventures, however, might be associated with huge organizational costs as well as risks of outgoing knowledge spillovers. In this paper we empirically address the question whether international R&D activities boost profitability. We employ a large data set of about 1300 firms from the German Community Innovation Survey (CIS). The empirical results demonstrate that R&D location matters for profitability. Firms with both domestic and foreign R&D activities make significantly higher profits than all other firms, including those that carry out solely domestic R&D. We furthermore ascertain that the degree of R&D internationalisation affects profitability. Our findings suggest that medium decentralised firms which innovate in two or three foreign countries outperform firms with centralized or highly decentralized international R&D strategies. Notwithstanding, decentralized firms achieve a higher firm performance than firms that solely conduct R&D activities in their home country. -- |
| Keywords: | R&D,Innovation,Internationalisation,Firm performance,Profit |
| JEL: | O32 F23 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:11002&r=sbm |
| By: | Chiara Pederzoli; Grid Thoma; Costanza Torricelli |
| Abstract: | Financial constraints are particularly severe for R&D projects of SMEs, which cannot generally rely on equity markets and, in the EU, on a sufficiently developed VC industry. If innovative SMEs have to depend on banks to finance their R&D projects, it is particularly important to develop models able to estimate their probability of default (PD) in consideration of their peculiar features. Based on the signaling value of some innovative assets, the purpose of this paper is to show the importance to include them into models which have proved to be successful for SMEs. To this end, we take a logit model and test it on a unique dataset of innovative SMEs (based on PATSTAT database, EPO BULLETIN and AMADEUS) to estimate a two-year PD with default years 2006-2008. In the regression analysis the innovation-related variables are two in order to account for R&D productivity at the level of the firm and to consider the value of the inventive output. Our analyses first address measurement issues concerning innovation-related variable and then show that, while the accounting variables and the patent value are always significant with the expected sign, the patent number per se reduces the PD only in the presence of an appropriate equity level. |
| Keywords: | innovative SMEs; default probability; patent value |
| JEL: | G21 G32 C25 O31 O34 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:mod:wcefin:11031&r=sbm |
| By: | Aradhna Aggarwal (Research Institute for Economics and Business Administration, Kobe University and the Department of Business Economics, University of Delhi, New Delhi 110021 INDIA); Takahiro Sato (Research Institute for Economics and Business Administration, Kobe University) |
| Abstract: | This paper examines the effects of firms‟ dynamics on industry level productivity growth in India during the period 2000-01 to 2005-06 using plant level panel data of 22 manufacturing industries. The empirical analysis is based on decomposition techniques of aggregate productivity growth. The analysis is confined to large sector plants. Results suggest that the contribution of entry of new plants to aggregate productivity growth is positive in most industries. While newly established plants have rather small entry effect, small plants that grow and enter the large size class have substantial effects on industry level productivity growth. In low tech matured industries entry effects are supported by the productivity growth of the continuing firms. In medium tech industries entry effects are modest; productivity growth of the continuing firms is supported by reallocation effects. In high tech industries all the three effects seem to reinforce productivity growth. |
| JEL: | O14 O33 O53 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:kob:dpaper:dp2011-07&r=sbm |
| By: | Richard Harris; John Moffat |
| Abstract: | This study considers the determinants of whether a firm exports, undertakes R&D and/or innovates, and, in particular, the contemporaneous links between these variables using three waves of the UK Community Innovation Survey (CIS). Where appropriate, an instrumental variables procedure is employed to overcome problems of endogeneity. The results show that in both manufacturing and services, being involved in exporting increased the probability that an establishment was engaged in spending on R&D. Spending on R&D in manufacturing had a much larger impact on the probability of exporting which implies that spending on R&D was not simply to boost the probability of producing new goods and services, but also to improve the establishment's knowledge assets which would in turn help it break down barriers to international markets. In non-manufacturing, spending on R&D increased the probability of innovating but had no significant impact on whether the establishment exported; rather, innovating increased the probability of exporting. Exporting had no direct impact on whether innovation occurred in either sector. Given the key role of R&D, innovation and exporting in determining productivity, it is important that government understands these complex interactions between R&D, innovation and exporting and takes advantage of them when devising and implementing productivity-enhancing policies at the micro-level. |
| Keywords: | R&D, innovation, exporting, endogeneity |
| JEL: | C35 O32 R11 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:cep:sercdp:0073&r=sbm |
| By: | Kurt Geppert; Anne Neumann |
| Abstract: | We use a large micro-dataset to assess the importance of intangible capital - organisation, R&D and ICT capital - for the economic performance of establishments and regions in Germany. In 2003 self-produced intangible capital accounted for more than one fifth of the total capital stock of estab-lishments. More than half of the intangible capital is R&D capital. This high proportion is mainly due to a relatively strong and research-intensive manufacturing sector in Germany. At the regional level, we find descriptive evidence for a positive relationship between intangible capital and the economic performance of regions. This is true both for the level of economic activities and for growth. The results of cross-sectional regressions for the years from 1999 to 2003 indicate that dou-bling the intangible capital intensity of establishments increases the average wage levels by one percent. Regarding the regional economic environment of establishments, we find that the substan-tial net advantages of agglomeration have more to do with broad knowledge and diversity than with regional clustering and specialisation. Separate regressions for the wage levels of non-intangible workers show very similar results. These workers can share the rents of the activities of intangible workers. Thus, intangible capital generates positive externalities not only at the regional level, but also at the level of establishments. |
| Keywords: | Firm productivity, intangible capital, agglomeration, local spillovers |
| JEL: | J24 M40 O33 R30 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1112&r=sbm |