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on Small Business Management |
| By: | Masatoshi Kato (School of Economics, Kwansei Gakuin University) |
| Abstract: | This study explores internal research and development (R&D) and external knowledge acquisition of firms during the start-up period, using panel data from original questionnaire surveys conducted in Japan. In particular, the study highlights the role of entrepreneurial human capital in the adoption of internal R&D and external knowledge acquisition strategies (licensing-in and joint R&D). Based on estimates of a bivariate probit model, the analysis provides evidence that firms managed by entrepreneurs with a high level of human capital are more likely to engage both in internal R&D and external knowledge acquisition. More specifically, while generic human capital, such as educational attainment, plays a significant role in explaining internal R&D, specific human capital, such as prior work experience in a related field or innovation experience, tends to have a prominent in uence on external knowledge acquisition. As a supplementary analysis, the effectiveness of internal R&D and external knowledge acquisition strategies is assessed by examining the link with innovation outcomes (product innovations and patent applications). The results suggest that the two innovation strategies have positive effects on innovation outcomes. |
| Keywords: | Start-up, entrepreneur, internal R&D, external knowledge acquisition, generic human capital, specific human capital |
| JEL: | M13 L26 O32 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:kgu:wpaper:145&r=sbm |
| By: | Chen, Zhao (Fudan University, China); Fang, Tony (Memorial University of Newfoundland) |
| Abstract: | The rapid growth and high levels of internationalization by Chinese firms, raise a natural interest in the study of the factors which have led the notable international presence of Chinese firms. To contribute to this effort, we use data from the 2008-10 survey of China's High-tech firms, conducted by the Chinese Ministry of Science and Technology, to estimate the determinants of Chinese firm outward FDI (OFDI). In our analysis, the primary independent variables include high-tech intensity, human capital acquisition, and institutional factors. We have also controlled for various firm characteristics such as firm age, total value of fixed assets, and firm ownership. Estimation from our fixed-effects model uncovers a number interesting patterns in OFDI outcomes. Most notable, among the significant determinants of OFDI, the number of Chinese returnees employed by a firm seems to be more important than tax reduction policies. Further, the effects of the Chinese returnees have a stronger effect on non state-controlled firms than they do for state-controlled firms. This finding is intuitive, since the Chinese returnees who were trained in the West have an understanding of product markets, labour markets, financial markets, language and business culture, and trade laws in both China and the West. Their unique skill sets and knowledge appear to serve as an important catalysts in the growth of OFDI and internationalization by Chinese firms. |
| Keywords: | OFDI, Chinese firm internationalization, panel data |
| JEL: | F21 M16 F23 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10045&r=sbm |
| By: | Silvia Appelt; Fernando Galindo-Rueda |
| Abstract: | This paper presents the findings of a recent OECD project on the measurement of the link between public procurement and innovation that is intended to contribute to the review and implementation of the OECD measurement frameworks for R&D and innovation. The report highlights what concepts, definitions and measurement approaches can be used, with currently available data or suitably adapted sources, to produce policy-relevant indicators on the use of innovation procurement and carry out empirical analyses on the impact of public procurement on R&D, innovation and broader economic outcomes. Exploiting recent R&D and innovation survey data and administrative procurement records, it provides novel multi-country evidence on the incidence of public procurement of innovation. An exploratory analysis based on procurement, company account, R&D, patent and trademark data helps showcase the use of combined micro-data sources for analytical applications and points out important links between firm-level procurement activity, R&D and economic performance. |
| Keywords: | R&D, statistics, measurement, innovation, public procurement |
| Date: | 2016–07–07 |
| URL: | http://d.repec.org/n?u=RePEc:oec:stiaaa:2016/3-en&r=sbm |
| By: | Lidia Mannarino; Valeria Pupo; Fernanda Ricotta (Dipartimento di Economia, Statistica e Finanza, Università della Calabria) |
| Abstract: | The main aim of this research is to investigate the influence the institutional environment has on the difference in performance between Italian family firms run by a family member and firms run by a professional manager. By using total factor productivity (TFP) as a measure of performance, we find that family-run firms are less productive than firms run by outside managers when institutional quality is high, but that the results are less obvious when institutional quality is low. The difference in performance is not significant, but by using the level of corruption as a measure of institutional quality, older family firms are found to be more productive than firms run by outside managers. |
| Keywords: | Family firms, TFP, Institutions |
| JEL: | G34 D24 O43 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:clb:wpaper:201605&r=sbm |
| By: | Raoul Minetti; Pierluigi Murro; Zeno Rotondi; Susan Chun Zhu |
| Abstract: | Using a unique sample of small and medium-sized Italian firms, we investigate the effect of financial constraints on firms participation in domestic and international supply chains. We find that firms more exposed to bank credit rationing and with weaker relationships with banks are more likely to participate in supply chains to overcome liquidity shortages. This benefit of supply chains is especially strong when firms forge ties with international trading partners and when they establish long-term relationships with large suppliers. To control for possible endogeneity of firms access to credit, we construct instruments capturing exogenous shocks to the structure of the Italian local banking markets. |
| Keywords: | Credit, Global Value Chains, nternationalization |
| JEL: | F10 G20 L23 |
| Date: | 2016–07–12 |
| URL: | http://d.repec.org/n?u=RePEc:sve:wpaper:mise-4&r=sbm |
| By: | El-Sahli, Zouheir (Department of Economics, Lund University); Gullstrand, Joakim (Department of Economics, Lund University); Olofsdotter, Karin (Department of Economics, Lund University) |
| Abstract: | Using Swedish firm-level data on all firms and their affiliates abroad, we investigate what observable firm and country characteristics affect the size of affiliate firms in a particular destination. We employ the richness of the data to investigate the importance of destination country factors in explaining firm outward FDI activities and distinguish between the factors that affect such activities in manufacturing versus services firms as well as vertical versus horizontal investments. Our results lend support to existing theories of multinational activity, including observable differences between vertical and horizontal manufacturing firms, as well as between services and manufacturing FDI firms. |
| Keywords: | outward FDI; globalization; FDI destination; heterogeneous firms |
| JEL: | F10 F20 |
| Date: | 2016–07–04 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lunewp:2016_016&r=sbm |
| By: | Nuno Campos Pereira (Católica Porto Business School, Universidade Católica Portuguesa); Nuno Araújo (CATIM - Centro de Apoio Tecnológico à Indústria Metalomecânica); Leonardo Costa (Católica Porto Business School and CEGE, Universidade Católica Portuguesa) |
| Abstract: | We developed a Counting Multidimensional Innovation Index (MII) framework for measuring and benchmarking innovation of Small and Medium Enterprises (SMEs), groups of SMEs, industries, regions, and countries. The methodology behind the MII is similar to the methodology behind the United Nations Multidimensional Poverty Index and follows the innovation definitions stipulated by the OECD Oslo Manual, covering dimensions and partial indicators suggested by this Manual and/or adapted from the Innovation Union Scoreboard (IUS) and from the Global Innovation Index (GII). To illustrate the MII framework, a survey was conducted among SMEs of the metalworking industry in Portugal. |
| Keywords: | Innovation, SME, Multidimensional Innovation Index, Portuguese Metal working Industry |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:cap:wpaper:012016&r=sbm |
| By: | Malamud, Semyon; Zucchi, Francesca |
| Abstract: | We study optimal liquidity management, innovation, and production decisions for a continuum of firms facing financing frictions and the threat of creative destruction. We show that financing constraints lead firms to decrease production but may spur investment in innovation (R&D). We characterize which firms should substitute production for innovation in the face of constraints and thus display a "gambling" type of behavior. We embed our firm dynamics into a model of endogenous growth and show that financing frictions have offsetting effects on economic growth. JEL Classification: D21, G31, G32, G35, L11 |
| Keywords: | cash management, endogenous growth, financial constraints, innovation |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20161919&r=sbm |
| By: | Marco Di Cintio, Marco Di Cintio; Sucharita Ghosh, Sucharita Ghosh; Emanuele Grassi, Emanuele Grassi |
| Abstract: | This paper studies firms’ decisions to export and invest in R&D and their effects on employment growth and labor flows for a sample of Italian SMEs operating in the manufacturing industry. After accounting for the under-reporting of R&D in SMEs, our quantile regressions reveal that (i) R&D is associated with higher employment growth rates, higher hiring rates and lower separation rates; (ii) R&D-induced exports are negatively related to employment growth and accessions and positively related to separations; and (iii) pure exports are not a driver of employment growth and labor flows. |
| Keywords: | Exports, R&D, Firm Growth, Quantile Regression, Research Methods/ Statistical Methods, J63, M51, O31, F14, |
| Date: | 2016–07–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:feemet:240750&r=sbm |
| By: | Tsvetkova, Alexandra |
| Abstract: | This paper tests the effect of diversity, creativity and localized competition on firm formation in US computer and electronic product manufacturing within the knowledge spillover theory of entrepreneurship (KSTE) framework. Fixed effects instrumental variable estimation results support the KSTE contention of a positive relationship between knowledge and entrepreneurship. Industrial diversity and diversity of knowledge tend to promote endogenous firm entry, whereas evidence on other factors is mixed. This points to sensitivity of conclusions in the KSTE literature to regional and industrial environments and calls for caution in interpreting and generalizing findings obtained in various settings. |
| Keywords: | innovation, entrepreneurship, firm formation, knowledge spillover theory of entrepreneurship, computer and electronic product manufacturing |
| JEL: | O1 O3 R1 R11 |
| Date: | 2016–04–19 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:72349&r=sbm |
| By: | Judith Fessehaie; Zavareh Rustomjee; Lauralyn Kaziboni |
| Abstract: | This paper explores the linkages between the national systems of innovation of Botswana, South Africa, Zambia, and Zimbabwe and their respective mineral extraction and mineral processing value chains, including input industries. Our analysis reveals four individual national systems of innovation, with different outcomes in terms of engineering skills development, technical vocational education and training, research and development, innovation capabilities, and competitiveness of the domestic engineering consultancy services. These national systems of innovation are tentatively interconnected as an embryonic regional system of innovation, including institutional relationships, cross-border investment flows, flows of mining-related goods and services, and intra-Southern African Development Community flows of students, lecturers, technicians, and engineers. Notwithstanding important dynamics related to skills development and competence building happening across borders, more collaborative and synergistic initiatives between government, industry, and teaching and research institutions are required to shape a more balanced and coherent regional systems of innovation. |
| Keywords: | national system of innovation, linkage development, human capital and industrialization, southern Africa, resource-based industrialization, Southern African Development Community |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2016-084&r=sbm |
| By: | Iwasaki, Ichiro; Maurel, Mathilde; Meunier, Bogdan |
| Abstract: | In this paper, we aim to empirically analyze the determinants of firm entry and exit in Russia using a regional-level panel data for the years of 2008-2014, with special emphasis on institutional failures and the politico-economic impact of external crises. We found that these two elements exhibit statistically significant and economically meaningful effects both on the creation and destruction of Russian firms, controlling for potentially explanatory factors. Our empirical results also suggest that the process of firm entry and exit is manifold across Russian regions due to their heterogeneity. Nevertheless, a surprisingly robust estimate of the world oil price (irrespective of the difference in target regions) suggests a possible high exposure of each Russian region to a global crisis. This comes from the importance of oil trade with the world and, accordingly, the ongoing crisis may bring a harmful influence to regeneration of Russian businesses. |
| Keywords: | firm entry, firm exit, institutions, economic integration, crisis, Russia |
| JEL: | D22 F15 G01 P31 P33 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:hit:rrcwps:59&r=sbm |
| By: | Oriana Bandiera; Luigi Guiso; Andrea Prat; Raffaella Sadun |
| Abstract: | We exploit a unique combination of administrative sources and survey data to study the match between firms and managers. The data includes manager characteristics, such as risk aversion and talent; firm characteristics, such as ownership; detailed measures of managerial practices relative to incentives, dismissals and promotions; and measurable outcomes, for the firm and for the manager. A parsimonious model of matching and incentive provision generates an array of implications that can be tested with our data. Our contribution is twofold. We disentangle the role of risk-aversion and talent in de-termining how firms select and motivate managers. In particular, risk-averse managers are matched with firms whose compensation scheme depends less on performance. We also show that empirical findings linking governance, incentives, and performance that are typically observed in isolation, can instead be interpreted within a simple unified matching framework. |
| JEL: | N0 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:57271&r=sbm |
| By: | Bayo-Moriones, Alberto (University of Navarra); Galdon-Sanchez, Jose Enrique (Universidad Pública de Navarra); Martinez-de-Morentin, Sara (Universidad Pública de Navarra) |
| Abstract: | In this study, we address the relationship between performance appraisal and competitive strategy, as well as the impact of this relationship on firm performance. The results indicate that the adoption of developmental performance appraisal and the use of administrative performance appraisal are higher among firms that pursue differentiation strategies compared to those competing on costs. Regarding firm performance, the interaction between a developmental appraisal system and a quality strategy displays higher return on equity and sales per employee. Those firms that combine a focus on innovation with administrative performance appraisal also enjoy higher performance. Finally, when the firm competes on the basis of cost reduction, the use of administrative appraisal increases the sales per employee. |
| Keywords: | performance appraisal, competitive strategy, firm performance, developmental appraisal, administrative appraisal |
| JEL: | M12 M52 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10041&r=sbm |
| By: | GUIMARÃES BARBOSA, EVALDO |
| Abstract: | This article reports results from an empirical search for the determinants of the very small firms’ survival prospects. Research in the area seems to be excessively concentrated in new firms and fails to include measures related to the investment policies and market strategies of the small firms. Making use of information from balance sheets and perceptual data collected through a survey of a small sample of incumbent small manufacturing enterprises of the traditional sectors in Brazil, the Cox proportional hazard model, new variables and new and unconventional model specifications, the study achieves striking results. The many identified determinants of the small businesses’ hazard rates concern the financing, working capital and production technology policies, the matching of investment and financing maturities, the market strategies, the characteristics of the entrepreneur, business risk, profitability and the economic climate. Results are suggestive that the small manufacturing enterprises’ viability is highly dependent on keeping under control the elements of the running of the businesses whose judicious administration is advocated by the management science. Whether the successful choices are conscious or the corresponding enterprises are selected in the way predicted by the organizational ecology approach remains unsettled. |
| Keywords: | Small firms; Business survival determinants; Business strategies; Cox regression |
| JEL: | L25 M1 M13 |
| Date: | 2016–06–30 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:72304&r=sbm |
| By: | Quang-Hoi Vu; Thu Trang Vuong; Quan-Hoang Vuong |
| Abstract: | The notions of entrepreneurship and creativity in developed economies, despite having gained attention among researchers, remain embryonic in numerous emerging economies. Being focused on entrepreneurs in a typical transitional and emerging market economy, Vietnam, this paper aims to empirically explore the influence that past entrepreneurial efforts may exert on the perceptions of entrepreneurs about their own creativity performance. The study also seeks to understand how entrepreneurs social networks contribute to perceived creativity capacity by entrepreneurs who participate in those societies. The empirical research results suggest that entrepreneurs with business experience and active networking engagement are more likely to believe in their own creativity. This knowledge and insights in turn offer some implications for addressing the lack of radical creativity among Vietnamese entrepreneurs. |
| Keywords: | Creativity/innovation; entrepreneurship; emerging economy; Vietnam |
| JEL: | M13 O33 P21 P27 |
| Date: | 2016–07–08 |
| URL: | http://d.repec.org/n?u=RePEc:sol:wpaper:2013/233156&r=sbm |
| By: | Henrekson, Magnus (Research Institute of Industrial Economics (IFN)); Stenkula, Mikael (Research Institute of Industrial Economics (IFN)) |
| Abstract: | The surplus that is created in a successful entrepreneurial venture is much higher than the profit corresponding to the risk-adjusted market rate of return. The part of the surplus that exceeds this level may be enoted “entrepreneurial rent.” Such rents normally disappear in the long run but so-called isolating mechanisms ensure that these rents persist in the short or medium run. Entrepreneurial rents arise when successful entrepreneurship is exercised and entrepreneurial firms create and successfully commercialize something new and unique. The presence of and search for entrepreneurial rents is a prerequisite for the innovations and structural change required to generate economic growth. High ex post compensation for successful entrepreneurship cannot be taxed harshly without affecting entrepreneurs’ willingness to supply effort. |
| Keywords: | Entrepreneurship; Economic rent; Entrepreneurial rent; Innovation; Imitation |
| JEL: | D51 J30 L26 O31 |
| Date: | 2016–06–16 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:1128&r=sbm |
| By: | Bartz, Wiebke (Centre for Development Finance, Frankfurt School of Finance and Management); Mohnen, Pierre (UNU‐MERIT, Maastricht University); Schweiger, Helena (European Bank for Reconstruction and Development) |
| Abstract: | In this paper, we compare the impacts of management practices and innovation on productivity, using data from a unique firm-level survey covering 30 mostly developing countries in Eastern Europe and Central Asia in the period 2011-2014. We adapt the well-established three-stage model by linking productivity to innovation activities and management practices. Results suggest that both returns to innovation and returns to management practices are important drivers of productivity in developing economies. However, productivity in lower-income economies is affected to a larger extent by management practices than by innovation while the opposite holds in higher-income economies. These results imply that firms operating in less favourable business environments can reap large productivity gains by improving the quality of management practices, before engaging in innovation through imitating and adapting foreign technologies. |
| Keywords: | innovation, management practices, productivity, developing countries |
| JEL: | M21 O12 O32 |
| Date: | 2016–06–16 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2016034&r=sbm |
| By: | Massimiliano Vatiero (Institute of Law (IDUSI), and Institute of Economics (IdEP), Facoltà di Economia, Università della Svizzera italiana, Svizzera) |
| Abstract: | The Swiss economy represents an exception to the legal origin theory (e.g., Roe (2006)). Although Switzerland is a country belonging to the civil law family, many of its public companies have diffused corporate ownership, as do those in common law countries. This paper maintains that the Swiss exception relies on the complementarity between corporate ownership and policies addressing employment protection and innovation. The Swiss case presents two lessons: first, the current corporate governance is the result of a long and composite path in which politics plays a pivotal role; second, the institutional differences and similarities across countries, which one would try to explain along with the legal origin theory, can derive diversely from additional politics-based accounts, such as those referring to policies on employment protection and innovation. |
| Keywords: | corporate governance and ownership, innovation, employment protection, institutional complementarity, Swiss economy |
| JEL: | G30 J50 P16 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:lug:wpidep:1606&r=sbm |
| By: | Amador, João; Nagengast, Arne J. |
| Abstract: | We show that credit supply shocks have a strong impact on firm-level as well as aggregate investment by applying the methodology developed by Amiti and Weinstein (2013) to a rich dataset of matched bank-firm loans in the Portuguese economy for the period 2005 to 2013. We argue that their decomposition framework can also be used in the presence of small firms with only one banking relationship as long as they account for only a small share of the total loan volume of their banks. The growth rate of individual loans in our dataset is decomposed into bank, firm, industry and common shocks. Adverse bank shocks are found to impair firm-level investment in all firms in our sample, but in particular for small firms and those with no access to alternative financing sources. For the economy as a whole, granular shocks in the banking system account for around 20-40% of aggregate investment dynamics. |
| Keywords: | Banks,Credit Dynamics,Investment,Firm-level data,Portuguese Economy |
| JEL: | E32 E44 G21 G32 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:bubdps:202016&r=sbm |
| By: | Jürgen Kruse (University of Cologne); Heike Wetzel (University of Kassel) |
| Abstract: | This article empirically analyzes supply-side and demand-side factors expected to affect innovation in clean coal technologies. Patent data from 93 national and international patent offices is used to construct new firm-level panel data on 3,648 clean coal innovators over the time period 1978 to 2009. The results indicate that on the supply-side a firm’s history in clean coal patenting and overall propensity to patent positively affects clean coal innovation. On the demand-side we find strong evidence that environmental regulation of emissions, that is, CO2, NOX and SO2, induces innovation in both efficiency improving combustion and after pollution control technologies. |
| Keywords: | clean coal technologies, innovation, patents, technological change |
| JEL: | C33 O31 Q40 Q55 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:mar:magkse:201615&r=sbm |
| By: | Sari Pekkala Kerr; William R. Kerr |
| Abstract: | We examine immigrant entrepreneurship and the survival and growth of immigrant-founded businesses over time relative to native-founded companies. Our work quantifies immigrant contributions to new firm creation in a wide variety of fields and using multiple definitions. While significant research effort has gone into understanding the economic impact of immigration into the United States, comprehensive data for quantifying immigrant entrepreneurship are difficult to assemble. We combine several restricted-access U.S. Census Bureau data sets to create a unique longitudinal data platform that covers 1992-2008 and many states. We describe differences in the types of businesses initially formed by immigrants and their medium-term growth patterns. We also consider the relationship of these outcomes to the immigrants' age at arrival to the United States. |
| JEL: | F22 J15 J44 J61 L26 M13 O31 O32 O33 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22385&r=sbm |
| By: | d'Agostino, Giorgio; Scarlato, Margherita |
| Abstract: | This paper provides an empirical analysis of the linkages between the quality of government institutions and economic growth in the European context, highlighting innovation as the intermediate variable that drives this interplay. We use a standard non-scale R&D-based growth model as a theoretical framework and estimate the balanced growth path of per capita GDP for a sample of European countries and the transitional dynamic after a technological shock. Empirical analysis confirms the importance of technology as an instrument for increasing economic growth and suggests that inclusive institutions strongly affect this impact across the European countries. The magnitude of the effect is high: inclusive institutions redouble the effect of a technological shock on the growth rate of per capita GDP. This result suggests that innovation policies should carefully take into account the institutional setting of the contexts in which they are implemented in order to be effective. |
| Keywords: | Innovation, Economic growth, Institutions |
| JEL: | O30 O41 O43 |
| Date: | 2016–07–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:72427&r=sbm |