|
on Small Business Management |
|
Issue of 2018‒06‒18
twenty papers chosen by João Carlos Correia Leitão Universidade da Beira Interior |
| By: | Konon, Alexander (DIW Berlin); Fritsch, Michael (University of Jena); Kritikos, Alexander S. (DIW Berlin) |
| Abstract: | We analyze whether start-up rates in different industries systematically change with business cycle variables. Using a unique data set at the industry level, we mostly find correlations that are consistent with counter-cyclical influences of the business cycle on entries in both innovative and non-innovative industries. Entries into the large-scale industries, including the innovative part of manufacturing, are only influenced by changes in the cyclical component of unemployment, while entries into small-scale industries, like knowledge intensive services, are mostly influenced by changes in the cyclical component of GDP. Thus, our analysis suggests that favorable conditions in terms of high GDP might not be germane for start-ups. Given that both innovative and non-innovative businesses react counter-cyclically in 'regular' recessions, business formation may have a stabilizing effect on the economy. |
| Keywords: | new business formation, entrepreneurship, business cycle, manufacturing, services, innovative industries |
| JEL: | E32 L16 L26 R11 |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11501&r=sbm |
| By: | Juan A. Mañez (Department of Applied Economics II (Economic Structure) and ERI-CES, University of Valencia, Spain); Rafael Moner Colonques (Department of Economic Analysis and ERI-CES, University of Valencia, Spain); Juan A. Sanchis (Department of Economic Structure, University of Valencia, Avda. dels Tarongers s/n, 46022 Valencia (Spain).); Jose J. Sempere-Monerris (Department of Economic Analysis and ERI-CES, University of Valencia, Spain and CORE, UCL, Louvain-la-Neuve, Belgium) |
| Abstract: | This paper explores the links between firms R&D investment decisions, and firms decisions on how much to sell at home and abroad in a heterogeneous-firm international oligopoly. The model provides analytical results that yield four testable hypotheses, which are empirically checked with data from the Spanish Survey on Business Strategies (ESEE) for the period 1992-2013. Our results confirm that exporters invest in R&D four times more than non-exporters in relative terms (Hypothesis H1). Our estimates confirm that past R&D intensity has a positive and significantly different effect on domestic and export outputs by exporters and that the effect on the rate of growth of exports is larger (H2). Econometric evidence suggests a positive and significant effect of appropriability on domestic sales, while a positive but non-significant effect on exports; thus partially confirming hypothesis H3. Finally, R&D efficiency measured as the propensity to obtain a patent or utility model is found to have a positive and significant effect on the rate of growth of exports, which confirms H4. |
| Keywords: | International oligopoly, R&D, exports, knowledge spillovers. |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:eec:wpaper:1807&r=sbm |
| By: | Dachs, Bernhard; Drach, Andreas |
| Abstract: | Die F&E-Ausgaben österreichischer Unternehmen haben sich seit 2002 mehr als verdoppelt. Eine Analyse auf Basis von Firmendaten zeigt, dass für diesen Anstieg vor allem große, etablierte Firmen und nur zu einem geringen Teil neue Unternehmen verantwortlich waren. 62% der F&E-Ausgaben des Jahres 2013 stammen von Unternehmen, die bereits im Jahr 2002 Forschung & Entwicklung betrieben haben. Die Wahrscheinlichkeit, dass kleine F&E-Betreiber in die Gruppe der großen, forschungsintensiven Player aufsteigen, ist sehr gering. Diese Beobachtung weist auf institutionelle Hemmnisse im österreichischen Innovationssystem hin, die kleine Firmen möglicherweise davon abhalten, sich zu R&D Leaders zu entwickeln. The R&D expenditures of the Austrian business sector have more than doubled since 2002. Our analysis shows that this increase is mainly due to large incumbent firms. Only a fraction of the additional funds for R&D can be attributed to the growth of new firms. 62% of all R&D expenditures in 2013 can be related to firms which already did R&D in 2002. The probability that a small R&D intensive firms becomes one of the large R&D players is very low. Our observation points to structural obstacles in the Austrian innovation system that may hamper small firms to evolve into R&D leaders. |
| Keywords: | research and development; Austria; structural change |
| JEL: | O32 O33 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:87000&r=sbm |
| By: | Anyadike-Danes, Michael (Aston Business School and Enterprise Research Centre, UK); Bjuggren, Carl Magnus (Research Institute of Industrial Economics (IFN)); Dumont, Michel (Federal Planning Bureau and Ghent University, Belgium); Gottschalk, Sandra (ZEW, Germany); Hölzl, Werner (Austrian Institute of Economic Research (WIFO), Austria); Johansson, Dan (Orebro University and HUI Research, Sweden); Maliranta, Mika (ETLA and University of Jyväskylä, Finland); Myrann, Anja (Ragnar Frisch Centre for Economic Research, Norway); Nielsen, Kristian (Aalborg University, Denmark); Zheng, Guanyu (Productivity Commission, New Zealand) |
| Abstract: | The basic principle governing the development of the accounting framework is the choice of appropriate comparators. Firstly, when measuring contributions to job creation, we should focus on just job creating firms, otherwise we are summing over contributions from firms with positive, zero, and negative job creation numbers. Secondly, because we know growth depends in part on size, the ’natural’ comparison for HGFs is with job creation by similar-sized firms which simply did not grow as fast as HGFs. However, we also show how the measurement framework can be further extended to include, for example, a consistent measure of the contribution of small job creating firms. On the empirical side, we find that the HGF share of job creation by large job creating firms varies across countries by a factor of two, from around one third to two thirds. A relatively small proportion of this cross-country variation is accounted for by variations in the influence of HGFs on job creation. On average HGFs generated between three or four times as many jobs as large non-HGF job creating firms, but this ratio is relatively similar across countries. The bulk of the cross-country variation in HGF contribution to job creation is accounted for by the relative abundance (or rarity) of HGFs. Moreover, we also show that the measurement of abundance depends upon the choice of measurement framework: the ’winner’ of a cross-national HGF |
| Keywords: | High-growth firms; Firm growth; Job creation |
| JEL: | D22 E24 L11 L25 L26 M13 |
| Date: | 2018–05–23 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:1216&r=sbm |
| By: | Dewit, Gerda (National University of Ireland, Maynooth); Görg, Holger (Kiel Institute for the World Economy); Temouri, Yama (Aston University) |
| Abstract: | We examine the determinants of the decision to relocate activities abroad for firms located in OECD countries. We argue that particular firm-specific features play a crucial role for the link between employment protection and relocation. Stricter employment protection laws over time in the current production location discourage firms' relocation abroad. While larger, more productive firms and firms with higher labour intensities have, ceteris paribus, higher propensities to relocate, they also face higher exit barriers if the country from which they consider relocating has strict employment protection laws. Our predictions are supported empirically, using firm level panel data for 28 OECD countries over the period 1997-2007. |
| Keywords: | employment protection, relocation, multinational enterprises |
| JEL: | F23 L23 J88 |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11500&r=sbm |
| By: | Hvide, Hans K. (University of Bergen); Oyer, Paul (Stanford University) |
| Abstract: | We document three new facts about entrepreneurship. First, a majority of male entrepreneurs start a firm in the same or a closely related industry as their fathers' industry of employment. Second, this tendency is correlated with intelligence: higher-IQ entrepreneurs are less likely to follow their fathers. Third, an entrepreneur that starts a firm in the same 5-digit industry as where his father was employed tends to outperform entrepreneurs in the same industry whose fathers did not work in that industry. We consider various explanations for these facts and conclude that "dinner table human capital", where children obtain industry knowledge through their parents, is an important factor behind what type of firm is started and how well it performs. |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:stabus:repec:ecl:stabus:3658&r=sbm |
| By: | Giuseppina Testa (European Commission - JRC); Katarzyna Szkuta (European Commission - JRC) |
| Abstract: | This policy report explores the role of R&D grant schemes in supporting young innovative firms with growth potential. This issue is important because it is associated to the ways in which the innovativeness and growth of a myriad of young innovative firms with growth potential can be effectively be supported by policy. We have used primary literature from Science direct and Scopus databases which we have organised and conducted between March and June 2017 and policy evaluations. It contributes to the current political debate in Europe on new sources and forms of R&I funding to enhance EU level support for young innovative companies with growth potential. |
| Keywords: | R&D grant, impact, evaluation, young innovative companies, growth potential |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc109879&r=sbm |
| By: | Dolores Añón Higón (Department of Economic Structure, University of Valencia, Avda. dels Tarongers s/n, 46022 Valencia (Spain).); Juan A. Mañez (Department of Economic Structure, University of Valencia, Avda. dels Tarongers s/n, 46022 Valencia (Spain).); María E. Rochina-Barrachina (Department of Economic Structure, University of Valencia, Avda. dels Tarongers s/n, 46022 Valencia (Spain).); Amparo Sanchis (Department of Economic Structure, University of Valencia, Avda. dels Tarongers s/n, 46022 Valencia (Spain).); Juan A. Sanchis (Department of Economic Structure, University of Valencia, Avda. dels Tarongers s/n, 46022 Valencia (Spain).) |
| Abstract: | In this article we characterize Total Factor Productivity (TFP) frontier firms at the industry level within the European Union during the period 2003-2014, and explore the determinants of the firms’ distance to the frontier. We find that larger, more capital-intensive, and more labour skilled firms are closer to the productivity frontier. In contrast, older firms are further away from the frontier. In addition, we obtain that a number of countries' economic and institutional factors, such as tertiary education, trade openness, R&D stock, easiness in getting credit and governance quality, affect positively the catching up of laggards towards the productivity frontier. We also examine the moderating effect of the Great Recession as well as the effect of productivity improvements at the frontier. |
| Keywords: | TFP, frontier firms, laggard firms, Great Recession, European Union countries |
| JEL: | F43 O47 O52 |
| Date: | 2018–06 |
| URL: | http://d.repec.org/n?u=RePEc:eec:wpaper:1806&r=sbm |
| By: | Giuseppe Berlingieri (OECD); Sara Calligaris (OECD); Chiara Criscuolo (OECD) |
| Abstract: | The literature has established two robust stylised facts: (i) the existence of a firm size-wage premium; and (ii) a positive relationship between firm size and productivity. However, the existing evidence is mainly based on manufacturing data only. With manufacturing nowadays accounting for a small share of the economy, whether productivity, size, and wages are closely linked, and how tight this link is across sectors, is still an open question. Using a unique micro-aggregated dataset covering the whole economy in 17 countries over 1994-2012, this paper compares these relationships across sectors. While the size-wage and size-productivity premia are significantly weaker in market services compared to manufacturing, the link between wages and productivity is stronger. The combination of these results suggests that, in a service economy the “size-wage premium” becomes more a “productivity-wage premium”. These results have first-order policy implications for both workers and firms. |
| Keywords: | Productivity, Size-Premium, Wages |
| JEL: | D2 E2 J3 |
| Date: | 2018–06–12 |
| URL: | http://d.repec.org/n?u=RePEc:oec:stiaaa:2018/13-en&r=sbm |
| By: | Antonelli, Cristiano (University of Turin) |
| Abstract: | The notion of endogenous innovation as the outcome of the creative response of firms to out-of-equilibrium conditions is the cornerstone of the new evolutionary complexity. This essay explores the role of the reactivity of firms to out-of-equilibrium conditions and of knowledge governance in assessing the chances that creative responses actually take place as an alternative to adaptive responses. It implements a systemic frame able to show that: i) the levels of reactivity of firms enhance the research efforts of rims that try and cope with out of equilibrium conditions; ii) the actual rates of introduction of innovations and increase of total factor productivity are contingent upon the quality of knowledge governance, and iii) out-of-equilibrium conditions, as well as the amount of knowledge externalities are the endogenous outcome of the creative response. |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:uto:labeco:201710&r=sbm |
| By: | Antonelli, Cristiano (University of Turin) |
| Abstract: | This paper accommodates the new understanding of the limited exhaustibility of knowledge into the Schumpeterian frame of the creative response to articulate a comprehensive model of Schumpeterian growth. The limited exhaustibility of knowledge and its transient appropriability favor the accumulation of a stock of quasi-public knowledge. The increasing stock of quasi-public knowledge together with appropriate knowledge governance conditions account for the secular decline of knowledge costs and the increase of diachronic and pecuniary knowledge externalities. Because of its limited exhaustibility and the consequent cumulability, knowledge is an endogenous endowment that accounts for growth. Unexpected out-of-equilibrium conditions in product and factor markets stir the response of firms. The availability of knowledge externalities accounts for the rate of innovation as they help making the reaction creative so as to enable the introduction of innovations. The search for technological congruence and the secular decline of the cost of technological knowledge accounts for its knowledge intensive direction as it induces the introduction of biased technological changes that augment the output elasticity of knowledge as an input. The limited exhaustibility of knowledge accounts for the secular trend towards the knowledge economy. |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:uto:labeco:201709&r=sbm |
| By: | Montresor, Sandro; Quatraro, Francesco (University of Turin) |
| Abstract: | This paper investigates the move of regions towards sustainable growth through their specialisation in new green technologies. In particular, we analyse the role that smart specialisation strategies (S3) can have in this respect by addressing two research questions. First of all, we investigate whether the environmental diversification of regional technologies is, according to the S3 logic, driven by their “relatedness” to existing knowledge of green and non-green nature. Second, we analyse the role of the Key Enabling Technologies (KETs) that S3 policies recommend regions to prioritise, not only in fostering the adoption of environmental technologies, but also in affecting its dependence on the pre-existing knowledge-base. Combining regional patent and economic data for a 34-year panel (1980-2013) of 180 European regions, we find that the relatedness to the existing technological-base of the region actually makes the acquisition of a new green-tech specialisation more probable. This holds true with respect to both the green and non-green extant knowledge, pointing to a regional diversification that also benefits from the “hybridisation” of non-environmental technologies. The latter however requires a higher degree of relatedness than a “pure” green branching process. Regional KETs also help the transition towards sustainable technologies. What is more, they negatively moderate the green impact of the relatedness to pre-existing technologies, of both green and non-green nature, and thus attenuate the boundaries the latter could pose to regions in their environmental specialisation. These results confirm that S3 policies can actually boost the intertwining of a smart and sustainable kind of growth, and that the KETs inclusion within S3 can amplify the virtuous interaction between these two objectives. |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:uto:labeco:201804&r=sbm |
| By: | Persson, Lars (Research Institute of Industrial Economics (IFN)); Seiler, Thomas (Stockholm School of Economics) |
| Abstract: | We provide empirical evidence that uncertainty (rather than risk) and optimism are distinctive characteristics of high-impact entrepreneurial firms (recently listed firms) relative to old, incumbent firms. Based on this evidence, we construct an entrepreneurial entry predation model with uncertainty. We show that entrepreneurial optimism can mitigate problems associated with strong incumbents' attempts to protect markets using predatory threats. Entrepreneurial optimism can also create a strategic advantage for entrepreneurs since incumbents may react by being less aggressive in product market interactions, which will benefit not only the profitability of the entrepreneur's venture but also consumers via lower prices |
| Keywords: | Uncertainty; Optimism; Entrepreneurial firms; Predation; Positive externalities; Automatic textual analysis |
| JEL: | L20 L26 M20 O30 |
| Date: | 2018–05–28 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:1218&r=sbm |
| By: | Laura Alfaro; Alejandro Cuñat; Harald Fadinger; Yanping Liu |
| Abstract: | We evaluate manufacturing firms' responses to changes in the real exchange rate (RER) using detailed firm-level data for a large set of countries for the period 2001-2010. We uncover the following stylized facts: In export-oriented emerging Asia, real depreciations are associated with faster growth of firm-level TFP, higher sales and cash-flow, and higher probabilities to engage in R&D and to export. We find negative effects for firms in other emerging economies, which are relatively more import dependent, and no significant effects for firms in industrialized economies. Motivated by these facts, we build a dynamic model in which real depreciations raise the cost of importing intermediates, affect demand, borrowing-constraints and the profitability of engaging in innovation (R&D). We decompose the effects of RER changes on productivity growth across regions into these channels. We estimate the model and quantitatively evaluate the different mechanisms by providing counterfactual simulations of temporary RER movements and conduct several robustness analyses. Effects on physical TFP growth, while different across regions, are non-linear and asymmetric. |
| JEL: | F0 O0 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24633&r=sbm |
| By: | Rani Jeanne Dang (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS - Centre National de la Recherche Scientifique - UNS - Université Nice Sophia Antipolis - UCA - Université Côte d'Azur) |
| Abstract: | The aim of this paper is to build, discuss and enrich a framework to examine the knowledge recombination process from an industry to another with the specific case of " Comte de Grasse Whisky ". The " Comte de Grasse Whisky " is a company that has set up an artisanal distillery in Provence (Grasse), South of France to develop a range of high-end spirits which production process derive from the well-known fragrance industry and savoir-faire of Grasse. The development of the Premium Whisky new market niche is a result of exaptation from the fragrance industry-in which numerous innovations are developed in the distillery process-to the spirits industry, in which only automating of the production has been observed. In order to operationalize this exaptation process, we mobilise the literature in knowledge management and innovation studies. Combining prior research on appropriate codification degree, exaptation and innovation through tradition, we develop a theoretical framework aimed at operationalizing the exaptation process, and identify the underlying challenges in this reinterpretation of knowledge. |
| Keywords: | knowledge recombination,exaptation,fragrance and spirits,search process,codification |
| Date: | 2018–05–22 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-01795037&r=sbm |
| By: | Ebert, Tobias; Eichstaedt, Johannes C.; Lee, Neil; Obschonka, Martin; Rodríguez-Pose, Andrés |
| Abstract: | There is increasing interest in the potential of artificial intelligence and Big Data (e.g., generated via social media) to help understand economic outcomes and processes. But can artificial intelligence models, solely based on publicly available Big Data (e.g., language patterns left on social media), reliably identify geographical differences in entrepreneurial personality/culture that are associated with entrepreneurial activity? Using a machine learning model processing 1.5 billion tweets by 5.25 million users, we estimate the Big Five personality traits and an entrepreneurial personality profile for 1,772 U.S. counties. We find that these Twitter-based personality estimates show substantial relationships to county-level entrepreneurship activity, accounting for 24% (entrepreneurial personality profile) and 32% (all Big Five trait as separate predictors in one model) of the variance in local entrepreneurship and are robust to the introduction in the model of conventional economic factors that affect entrepreneurship. We conclude that artificial intelligence methods, analysing publically available social media data, are indeed able to detect entrepreneurial patterns, by measuring territorial differences in entrepreneurial personality/culture that are valid markers of actual entrepreneurial behaviour. More importantly, such social media datasets and artificial intelligence methods are able to deliver similar (or even better) results than studies based on millions of personality tests (selfreport studies). Our findings have a wide range of implications for research and practice concerned with entrepreneurial regions and eco-systems, and regional economic outcomes interacting with local culture. |
| Keywords: | artificial intelligence; Big Data; Big Five; Counties; entrepreneurship; personality; psychological traits; social media; Twitter; U.S. |
| JEL: | L26 R11 R12 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12949&r=sbm |
| By: | Howell, Anthony (Asian Development Bank Institute) |
| Abstract: | We adopt a structural framework to study the process of indigenous innovation and its impact on firm performance in the People’s Republic of China (PRC). In our analysis we use a rich source of panel data comprising almost 70,000 private Chinese firms operating in the PRC from 2004 to 2007. Relying on a structural innovation framework, we estimate the effects of technological learning during each phase of the structural model: (i) the firm’s decision to innovate, (ii) the innovation effort, (iii) the innovation throughput, and (iv) the firm performance. We show that in the early stages of innovation, Chinese firms fail to incorporate learning spillovers into their innovation effort, even when considering their absorptive capacity. Conversely, we found that in the later stages of innovation, learning spillovers positively increase firms’ innovation output as well as their performance, especially for firms with high absorptive capacity. |
| Keywords: | innovation; firm performance; learning; agglomeration; institutions; People’s Republic of China |
| JEL: | O30 |
| Date: | 2018–02–08 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0805&r=sbm |
| By: | Oxana Babecka Kucharcukova; Renata Pasalicova |
| Abstract: | This project investigates the effect of financial constraints and monetary policy on firms' investment behaviour using Czech firm-level data. The empirical specification is based on the dynamic neoclassical investment model, which explains investment by sales and cash flow. In addition, it includes financial constraints and other factors. We differentiate firms according to their size and type of economic activity. We find that indebtedness and availability of liquidity have significant effects on investment. In the post-crisis period firms obtained less additional credit due to greater riskiness and tended to accumulate more liquidity. Expectations about future GDP growth and business sentiment are positively related to investment. At the same time, we observe considerable heterogeneity of the results across sectors. The impact of the short-term real interest rate is highly significant for firms of all sizes and in all important sectors of the Czech economy, reflecting monetary policy effectiveness. |
| Keywords: | Financial constraints, firms, indebtedness, investment, liquidity, monetary policy |
| JEL: | D22 E5 E22 G3 G32 |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:cnb:wpaper:2017/16&r=sbm |
| By: | Chan, Jin; Mohd Hashim, Intan Hashima; Khoo, Suet Leng; Lean, Hooi Hooi; Piterou, Athena |
| Abstract: | George Town World Heritage Site in Penang, Malaysia is well-endowed with creative and cultural resources, and has recently witnessed a rise in relevant activities. This study examines how 'innovation culture' is inculcated and embedded within two local organisations with distinct approaches to innovation. We adapted the measurements of entrepreneurship orientation constructs (innovativeness, risk-taking, pro-activeness), and conducted semi-structured interviews and archival study on the organisations and their networks. We documented the linkages in their value chains to understand the resulting social networks and whether such network fosters the incubation of an innovation cluster for the local creative and cultural sectors. |
| Keywords: | Innovativeness; World Heritage; Social Network; Cluster; Ecosystem |
| Date: | 2018–01–15 |
| URL: | http://d.repec.org/n?u=RePEc:gpe:wpaper:19989&r=sbm |
| By: | Kimberly Bayard; Emin M. Dinlersoz; Timothy Dunne; John Haltiwanger; Javier Miranda; John J. Stevens |
| Abstract: | New businesses play an important role in overall economic activity. They account for a sizable share of job creation, and they provide a key source of innovation that contributes to overall productivity growth. |
| Date: | 2018–03–07 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfn:2018-03-07&r=sbm |