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on Small Business Management |
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Issue of 2013‒12‒29
thirteen papers chosen by Joao Carlos Correia Leitao Universidade da Beira Interior and Universidade de Lisboa |
| By: | Tavassoli, Sam (Industrial Economics, Blekinge Institute of Technology, Karlskrona, Sweden and CIRCLE, Lund University, Sweden) |
| Abstract: | This paper analyzes how the influence of firm-level innovation determinants varies over the industry life cycle. Two sets of determinants are distinguished: (1) determinants of a firm’s innovation propensity, i.e. the likelihood of being innovative and (2) determinants of its innovation intensity, i.e. innovation sales. By combining the literature emphasizing firms’ internal resources (micro level) with the research strand on the role of the industry context (meso-level), the paper develops hypotheses about the relative importance of firm-level innovation determinants over the industry life cycle. Estimation of a firm-level model of innovation in Sweden, while acknowledging the stage of the life cycle of the industry a firms belongs to, shows that the importance of the determinants of innovation propensity and intensity are not equal over the stages of an industry’s life cycle |
| Keywords: | Determinants of innovation; innovation intensity; innovation propensity; Industry Life Cycle (ILC); Community Innovation Survey (CIS4) |
| JEL: | F14 O31 O33 |
| Date: | 2013–12–18 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2013_042&r=sbm |
| By: | Wojciech Szewczyk; Juraj Stancik; Martin Aarøe Christensen (European Commission – JRC - IPTS) |
| Abstract: | The formulation of a macroeconomic model applied to the analysis of EU Research and Development (R&D) funding strategies in Information and Communication Technology (ICT) under the PREDICT 2 project stipulates a specification of the transmission mechanism of R&D funding policy on firms' R&D expenditures. To enlighten the understanding of ICT firms' investment decisions, the effect of various firm characteristics on firms' R&D activities is analysed on a representative sample of ICT sector firms in 16 EU member countries. The analysis covers two aspects of the firms' R&D activity. Firstly, R&D engagement characterising those firms which undertake in-house R&D projects on a continuous basis, and secondly, R&D expenditure measured as the firms' in-house expenditure on R&D projects per employee. The report finds that reception of public funding is positively related to ICT firms' R&D activity. The relation between public funding and firms' R&D activity is found to depend on funding sources. The results also show that national and international diffusion of knowledge through firms' cooperation with other enterprises and through international trade plays an important role for firms R&D activity. Finally, the results suggest that substantial differences exist in firms' R&D activity across countries and sectors. |
| Keywords: | ICT industry, Research and Development, Europe 2020, Digital Agenda for Europe |
| JEL: | C31 O31 |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc85346&r=sbm |
| By: | Navaretti , Giorgio Barba (Department of Economics, Management and Quantitative Methods, University of Milan, Italy); Castellani , Davide (Department of Economics, Finance and Statistics, University of Perugia, Centro Studi Luca d'Agliano, Milan, Italy Halle Institute for Economic Research (IWH), Halle, Germany CIRCLE, Lund University, Sweden); Pieri , Fabio (Depto. de Economia Aplicada II (Estructura Economica), Universitat de Valencia, Spain) |
| Abstract: | This paper provides new insights on the dependence of firm growth on age along the entire distribution of (positive and negative) growth rates, and conditional on survival. Using data from the EFIGE survey, and adopting a quantile regression approach, we uncover evidence for a sample of French, Italian and Spanish manufacturing firms with more than 10 employees in the period from 2001 to 2008. After controlling for several firms’ characteristics, country and sector specificities we find that: (i) young firms grow faster than old firms, especially in the highest growth quantiles; (ii) young firms face the same probability of declining than their older counterparts; (iii) results are robust to the inclusion of other firms’ characteristics such as labor productivity, capital intensity, and the financial structure; (iv) high growth is associated with younger CEOs and other attributes which capture the attitude of the firm toward growth and change. The effect of age on firm growth is rather similar across countries. |
| Keywords: | firm growth; age; quantile regression |
| JEL: | L21 L25 L26 L60 |
| Date: | 2013–12–18 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2013_041&r=sbm |
| By: | Tavassoli, Sam (Industrial Economics, Blekinge Institute of Technology, Karlskrona, Sweden and CIRCLE, Lund University, Sweden) |
| Abstract: | This paper analyzes the role of innovation on the export behavior of firms. Using two waves of Swedish CIS data merged with register data on firm-specific characteristics, I estimate the influence of the innovation output of a firm on its export propensity and intensity, respectively. I find that the innovation output of firms (measured as sales due to innovative products) has a positive and significant effect on export behavior of firms. The results also show that it is indeed innovation output, rather than innovation input (innovative efforts), that matters for export behavior of firms. Specifically, innovation output leads to increase in later export propensity and intensity of firms. Moreover, there is also strong association of productivity and ownership structure of firms with export propensity and intensity of firms. The results are robust when unobserved timeinvariant heterogeneity of firm and also potential endogeneity of innovation-export are taken into accounted. |
| Keywords: | Innovation output; innovation input; export propensity; export intensity |
| JEL: | F14 O31 O33 |
| Date: | 2013–12–18 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2013_038&r=sbm |
| By: | Hottenrott, Hanna; Rexhäuser, Sascha |
| Abstract: | Significant policy effort is devoted to stimulate the development, adoption and diffusion of environmentally- friendly technology. Sceptics worry about the effects of regulation-induced environmental technology on firms' competitiveness. Since innovation is a crucial productivity driver, a potential crowding out of inventive efforts could increase the cost of mitigating environmental damage. Using matching techniques, we study the short-term effects of regulation-induced environmental technology on non-green innovative activities for a sample of firms in Germany. We find indeed some evidence for a crowding out of the firms' in-house R&D. The estimated treatment effect is larger for firms that are likely to face financing constraints. However, we do not find negative effects on the number of ongoing R&D projects, investments in innovation-related fixed assets or on the outcome of innovation projects. Likewise, for firms with subsidy-backed environmental innovations no crowding out is found. -- |
| Keywords: | Environmental Policy,Regulation,R&D,Technological Change,Innovation,Crowding Out |
| JEL: | O32 O33 Q55 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:dicedp:128&r=sbm |
| By: | METAXAS, THEODORE; KALLIORAS, DIMITRIS |
| Abstract: | The paper investigates the importance of territorial characteristics/assets (i.e. agglomeration economies, urban infrastructure, factors of labor and cost, development policies, qualitative factors, inter alia) on small- and medium-sized firms’ competitiveness. The analysis uses primary data from 374 small- and medium-sized firms located in Bari (Italy), Varna (Bulgaria) and Thessaloniki (Greece). These firms operate in the sectors of industry, commerce and services. Through the use of exploratory factor analysis and econometric analysis, the importance of particular factors for the competitiveness of firms has been analyzed, coming out in valuable conclusions not only for the firms and the areas considered but also for firms and areas with similar characteristics. |
| Keywords: | firms’ competitiveness, territorial characteristics/assets, exploratory factor analysis, econometric analysis |
| JEL: | O18 R11 R50 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:52446&r=sbm |
| By: | Werner, Arndt; Schröder, Christian; Mohr, Benjamin |
| Abstract: | Familienunternehmen sind genau so innovativ wie Nicht-Familienunternehmen. Systematische Unterschiede gibt es jedoch in Hinblick auf die Innovationstreiber: Ein solcher ist die Unternehmensgröße. So hat sich gezeigt, dass kleinere Familienunternehmen verhältnismäßig große Innovationsvorteile aufweisen. Die Studie liefert auch Hinweise dafür, dass insbesondere ältere Familienunternehmen eine höhere Anzahl von FuE-Kooperationen eingehen. Zudem verkleinern Familienunternehmen seltener ihren Personalbestand. Dies wirkt sich ebenfalls positiv auf ihr Innovationsverhalten aus. Allerdings gibt es auch Faktoren, die das Innovationsverhalten von Familienunternehmen negativ beeinflussen: So zeigt sich, dass die Innovationsneigung in der Gründergeneration am höchsten ist, aber mit jeder nachfolgenden Generation signifikant abnimmt - zum Teil unter das Niveau von Nicht-Familienunternehmen. -- Prior findings are inconclusive concerning the innovation activities of family SMEs when compared to non-family counterparts. This study overcomes these shortcomings by analyzing specific determinants influencing the innovation output of family SMEs. Using data of 1.870 SMEs located in Germany, we argue that the main characteristic of family SMEs is the unity of ownership and leadership when compared their non-family counterparts. Deriving a set of hypotheses from this assumption, we find that local embeddedness, long-term orientation and effective corporate governance structures positively affect the ability to generate product and process innovations family firms. We can show, for example, that older family firms conduct more research and development activities with partners due to emergent regional networks. We also find that the innovation output continuously falls from generation to generation. |
| Keywords: | Familienunternehmen,FuE/Innovation,Innovation,R&D,family firm |
| JEL: | O32 L26 L29 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifmmat:225&r=sbm |
| By: | Baier , Elisabeth (PTV Group AG, Germany); Rammer , Christian (ZEW, Germany); Schubert , Torben (CIRCLE, Lund University, Sweden and Fraunhofer Institute for Systems and Innovation Research, Germany) |
| Abstract: | We analyze the effects of captive off-shoring of innovation activities on the firms’ ability to adapt its organizational structures. Basing our arguments on complexity theory, we use three consecutive waves of the German part of the Community Innovation Survey to test our hypotheses. We find an inverted u-shape of innovation off-shoring on the effectiveness of organizational adaptability, implying an optimal threshold value of innovation off-shoring. This value is 11% for the share of off-shored R&D, 15% for downstream innovation activities such as local market adaptation, and 34% for design activities. We also analyze several contingency variables. In particular we show that the costs of innovation off-shoring in terms of reduced organizational adaptability are exacerbated by a strong focus on R&D and a strong embeddedness in on-shore networks. Smaller firms find it easier to deal with the management complexity induced by geographical dispersion of innovation activities because of their greater flexibility. |
| Keywords: | Internationalization; Off-Shoring; Innovation; R&D; Organizational Adaptation; Organizational Adaptability |
| JEL: | L23 L25 M16 O32 |
| Date: | 2013–12–20 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2013_044&r=sbm |
| By: | Lafrance, Amelie |
| Abstract: | The topic of firm size and performance continues to spark the interest of researchers and policy-makers. Small and medium-sized enterprises receive much of the attention, as they have the potential to grow significantly. However, compared with their larger counterparts, these firms are more likely to fail and are therefore riskier. Is risk important in explaining differences in profitability across firm size classes? This study uses a longitudinal firm-level dataset to examine determinants of profitability by firm size, with an emphasis on risk, or the volatility in rates of return. It builds on previous research that found firms with 10 to 20 employees tend to be the most profitable. |
| Keywords: | Business performance and ownership, Small and medium-sized businesses |
| Date: | 2013–12–19 |
| URL: | http://d.repec.org/n?u=RePEc:stc:stcp5e:2013087e&r=sbm |
| By: | Baldwin, John R. Liu, Huju Wang, Weimin |
| Abstract: | This paper describes the patterns of firm entry and exit across provinces in Canada, the relationship of these patterns to differences in industrial structure and the response of firm entry and exit to changes in the economic environment. Firm entry and exit play an important role in shaping industrial structure and dynamics. Although entry and exit are ubiquitous, new firms are often associated with new ideas and the provision of innovative goods and services that enhance competition and force incumbents to become more innovative and efficient. Studies have shown the considerable role played by entry and exit in resource reallocation and productivity improvement. |
| Keywords: | Business performance and ownership, Entry, exit, mergers and growth |
| Date: | 2013–12–10 |
| URL: | http://d.repec.org/n?u=RePEc:stc:stcp1e:2013030e&r=sbm |
| By: | Rachel Bocquet (IREGE - Institut de Recherche en Gestion et en Economie - Université de Savoie); Christian Le Bas (GATE - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - Ecole Normale Supérieure Lettres et Sciences Humaines); Caroline Mothe (IREGE - Institut de Recherche en Gestion et en Economie - Université de Savoie); Nicolas Poussing (CEPS/INSTEAD - Centre d'Etudes de Populations, de Pauvreté et de Politiques Socio-Economiques / International Networks for Studies in Technology, Environment, Alternatives, Development - Centre d'Etudes de Populations, de Pauvreté et de Politiques Socio-Economiques / International Networks for Studies in Technology, Environment, Alternatives, Development) |
| Abstract: | This paper explores the relationship between corporate social responsibility (CSR) and innovation from a firm strategic perspective. Matching Community Innovation Survey data with specific data collected about the CSR behaviour of Luxembourg firms, the authors identify two types of firms (strategic versus responsive) that differ in the intensity of their CSR adoption. A bivariate probit model, estimated to explain the different types of technological innovations (product and/or process), shows that firms with strategic CSR profiles are more likely to innovate in both products and processes. In contrast, adopting responsive CSR practices significantly alters firms' innovation, such that CSR may create barriers to innovation. These results have implications for theory and offer managerial recommendations for firms designing their innovation strategies. |
| Keywords: | Corporate social responsibility; Innovation; Product; Process;Strategic profiles |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-00918528&r=sbm |
| By: | Cantner, Uwe; Michael, Stuetzer |
| Abstract: | A central development within the management literature has been the growth of nascent entrepreneur research analysing on--going venture start-up efforts and/or firms in gestation over time (Davidsson, 2006). New ventures have an important effect on economic development. They are credited for the transfer of innovations into the market (Schumpeter, 1934; Acs and Plummer; 2005) and creating regional employment (e.g. Fritsch and Mueller, 2004). Central questions in nascent entrepreneurship research concern the characteristics of the venture creation process and the factors affecting performance of these firms (for an overview see Davidsson, 2006). Among other factors considered in the literature, the social embeddedness of the entrepreneur has been found to play a pivotal role (Davidsson and Honig, 2003). Social capital enables entrepreneurs to access resources (Florin et al., 2003) or novel information (Uzzi, 1997) in order to create opportunities (Baker and Nelson, 2005). During the venture creation process, most firms suffer from substantial resource constraints (Shepherd et al., 2000) and use their personal networks as a means to access resources and information far below market price (Elfring and Hulsink, 2003). However, a sizeable gap exists in the burgeoning social capital literature on the subject of team start--ups. A most prominent finding is that team start--ups are more successful than solo start--ups (e.g. Lechler, 2001). One of the offered explanations is that entrepreneurs can combine their abilities and financial capital in a team, giving them an advantage above solo entrepreneurs (e.g. Gartner, 1985; Stam and Schutjens, 2006). Sometimes explicitly (e.g. Colombo and Grilli, 2005; Stam and Schutjens, 2006) but more often implicitly (e.g. Davidsson and Honig, 2003; van Gelderen et al., 2005), the same argument is applied to the usage of social capital, i.e. that the social capital from individual team members is combined to provide an advantage for teams over solo entrepreneurs. As yet, to our knowledge, no study has explicitly analysed whether, compared to solo entrepreneurs, more social capital is found within teams and whether this leads to their better performance. In this chapter, we approach these two questions and empirically explore the use of social capital of solo entrepreneurs and entrepreneurial teams during the venture creation process. In doing so, we refine the empirical concept of social capital in that we do not look at its mere existence but focus on its use in terms of concrete support (e.g. advice on the business plan, marketing, or research and development - R&D) for the entrepreneurs. We address two major research questions. The first concerns the differential use of social capital. Do solo entrepreneurs rely more often on social capital than new venture teams, or is it the other way around? How do both types of start--ups use social capital? More precisely, we investigate the relationship between social capital and other characteristics of the new venture and its founders (e.g. human capital). The second research question then turns to the effect of social capital on subsequent new venture performance. Appropriate hypotheses in this study are tested using a dataset of 456 start--ups in innovative industries in the German state of Thuringia. The reminder of this chapter is organized as follows. In Section 2, we review the theory and previous research on social capital in order to generate six testable hypotheses. In Section 3, we describe the dataset and the methods employed to measure the use of social capital. We then present (Section 4) the results of our analysis. The chapter concludes in Section 5, where we interpret and discuss the results and draw some conclusions. |
| Keywords: | Social capital, human capital, new businesses |
| JEL: | M13 |
| Date: | 2103 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:52482&r=sbm |
| By: | Hombert, Johan; Schoar, Antoinette; Sraer, David Alexandre; Thesmar, David |
| Abstract: | We investigate how a large-scale French reform to reduce the risk from small business creation for unemployed workers, affects the composition of people who are drawn into entrepreneurship. New firms started in response to the reform are, on average, smaller, but have similar growth expectations and education levels compared to start-ups before the reform. They are also as likely to survive or to hire. However, there are large crowd-out effects: Employment in incumbent firms decreases by a similar magnitude as the number of new jobs created in start-ups. These results point to the importance of Schumpeterian dynamics when facilitating entry. |
| Keywords: | Entrepreneurship; Unemployment insurance; Crowding out |
| JEL: | G00 |
| Date: | 2013–07–09 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:heccah:1020&r=sbm |