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on Small Business Management |
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Issue of 2019‒05‒13
twelve papers chosen by João Carlos Correia Leitão Universidade da Beira Interior |
| By: | Vanino, Enrico; Roper, Stephen; Becker, Bettina |
| Abstract: | UK Research Councils (UKRCs) spend around £3bn pa supporting R&D and innovation. We provide a comprehensive assessment of these grants on the performance of participating UK firms, using data on all projects funded by UKRCs over the 2004–2016 period and applying a propensity score matching approach. We exploit the richness of the data available in the Gateway to Research database by investigating the heterogeneous effect of these projects across several novel directions which have not been explored before. We find a positive effect on the employment and turnover growth of participating firms, both in the short and in the medium term. Exploring impacts across different types of firms we find stronger performance impacts for firms in R&D intensive industries and for smaller and less productive firms. We also consider how impacts vary depending on the characteristics of the funded research projects in terms of partners characteristics, receipt of other research grants and grant value. Finally, we focus on the different sources of grants, analysing in particular the evolution in the funding strategy of Innovate UK. Our results have implications for the extent and targeting of future Research Council funding both in the UK and elsewhere. |
| Keywords: | innovation; public support; R&D; Research Council; UK |
| JEL: | O30 O57 |
| Date: | 2019–04–10 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:100717&r=all |
| By: | Ganau, Roberto; Rodríguez-Pose, Andrés |
| Abstract: | We investigate the extent to which regional institutional quality shapes firm labour productivity in western Europe, using a sample of manufacturing firms from Austria, Belgium, France, Germany, Italy, Portugal and Spain, observed over the period 2009-2014. The results indicate that regional institutional quality positively affects firms' labour productivity and that government effectiveness is the most important institutional determinant of productivity levels. However, how institutions shape labour productivity depends on the type of firm considered. Smaller, less capital endowed and high-tech sectors are three of the types of firms whose productivity is most favourably affected by good and effective institutions at the regional level. |
| Keywords: | Cross-Country Analysis; labour productivity; Manufacturing firms; Regional Institutions; Western Europe |
| JEL: | C23 D24 H41 R12 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13703&r=all |
| By: | Chieu Trinh; Nguyen Tam |
| Abstract: | Slack resources are usually identified as an endogenous motivation for firms’ innovation. Still, it is crucial to assess the importance of slack in supporting innovation, especially in different institutional contexts.Therefore, the paper investigates the relationship by exploring a longitudinal dataset of 15,589 observations from about 2,500 surveyed manufacturing small and medium enterprises (SMEs) in Viet Nam. The analysis reveals that slack resources promote innovation in different ways.While the financial slack harms the efforts of introducing innovation, the presence of human resource slack encourages firms to engage more in innovation activities resulting in the introduction of new products or business processes.We further found that for firms located in a more favourable business environment the impact of human resource slack on innovation is less pronounced whereas the negative impact of financial slack is lessened. The above results enrich the current literature on the relationship between slack and innovation within an institutional context in emerging economies. |
| Keywords: | Slack,SMEs,Stewardship theory,Institutional economics,Behavioural Theory,Innovation,Institutional economics theory |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2018-78&r=all |
| By: | Lota Dabio Tamini; Aristide B. Valéa |
| Abstract: | Canadian small and medium-sized firms face two major challenges, namely, that of innovation in supporting their growth and improving their competitiveness and that of access to international markets. The objective of this study is to analyze the impact of research and Development (R&D) investment on the export performance of Canadian agri-food companies and on that of related sectors, namely, the textile and clothing sector and the manufacture of leather goods and similar products. We used impact assessment methods to analyze the effects of firms' innovation activities on their export performance. First, we analyzed explanatory factors for R&D expenses; second, we analyzed the impact of R&D on extensive (market access) and intensive (trade value) margins of trade. In doing so, we used Statistics Canada's National Accounts Longitudinal Microdata File (NALMF) for 2010 to 2015, which is coupled with the Trade by Exporter Characteristics (TEC) database. The size of firms and their support from the Canadian government affect their propensity to invest in R&D, the value of R&D expenses and their intensity, as measured from the ratio of R&D to sales of goods and services. Overall, our results show that investment in R&D has a positive impact on the export performance of agri-food SMEs. Les petites et moyennes entreprises (PME) canadiennes font face à deux grands enjeux soit celui de l’innovation afin notamment de soutenir leur croissance et améliorer leur compétitivité et celui de l’accès aux marchés internationaux. Le présent projet de recherche a pour objectif d’analyser l’impact des investissements en recherche et développement (R&D) sur les performances à l’exportation des entreprises agroalimentaires canadiennes et de celles de secteurs connexes soit les industries du textile et des vêtements et de la fabrication de produits du cuir et produits analogues. Les méthodes d’évaluation d’impact seront utilisées pour analyser les effets des activités d’innovation des entreprises sur leurs performances à l’exportation. Dans un premier temps, les facteurs explicatifs des investissements en R&D sont analysé. Puis nous analysons les effets des investissements en R&D sur les marges extensive (accès aux marchés) et intensive (valeur du commerce). Nous utilisons le Fichier de micro données longitudinales des comptes nationaux (NALMF) de Statistique Canada pour la période de 2010 à 2015 qui est couplé au fichier du programme de Commerce selon les caractéristiques des exportateurs (TEC). La taille des entreprises et l’appui du gouvernement canadien sont déterminants dans la probabilité d’investir dans la R&D ainsi que le montant de ces investissements et son intensité mesurée par le ratio du montant investit sur les ventes totales de biens et services des PME agroalimentaires. |
| Keywords: | Research and development,Agri-food,Small and medium-sized firm,Extensive margin of international trade,Intensive margin of international trade, Recherche et développement,Agroalimentaire,Petites et moyennes entreprises,Marge extensive du commerce international,Marge intensive du commerce international |
| JEL: | F14 Q16 Q17 |
| Date: | 2019–05–03 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2019s-09&r=all |
| By: | Rammer, Christian; Spielkamp, Alfred |
| Abstract: | Hidden Champions (HCs) are firms unknown to the wider public, but global leaders in the niche markets they serve. This paper looks at distinctive features of these firms, focusing on their dynamic capabilities. Employing a unique data base on German firms, we identify a representative sample of German HCs. Based on a matching technique, we examine differences to other firms in terms of the firms' processes, position, and path. We find that HCs' competitive strategy rests on technology leadership and customisation. HCs are more open in their knowledge management, but without compromising control over the new product development process. HCs do not invest more into innovation, but achieve higher innovation success. The higher efficiency can be linked to their superior technological capabilities and to higher investment in human capital and HR management practices that mobilise the creative potential of their employees. |
| Keywords: | Hidden Champions,Germany,Competitive Strategy,Knowledge Management,Innovation,Dynamic Firm Capabilities |
| JEL: | L21 L25 M10 M21 O31 O32 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:19012&r=all |
| By: | Steenkamp Andre; Schaffer Mark; Flowerday Wayde; Goddard John |
| Abstract: | Improvements in productivity are necessary to effectively increase economic growth in the long term. The literature emphasizes a positive correlation between firm-level innovation and productivity gains. It is unsurprising, then, that policy makers and researchers widely acknowledge that innovation is one of the major drivers of productivity growth, and is therefore of critical importance to the competitiveness and growth of firms. Research and development (R&D) expenditure is used extensively as a proxy for innovation in the literature.Here, we use a production function approach to estimate the return to R&D in South African manufacturing firms for the period 2009–2014 using South African firm-level data. We find that the return to R&D in South African manufacturing firms is high compared to OECD countries. This analysis has been undertaken several times for OECD countries, but far less frequently for non-OECD countries. These findings therefore are not just novel for South Africa, but for the development economics literature more generally, and raise important insights for innovation policy in South Africa. |
| Keywords: | Productivity |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2018-42&r=all |
| By: | Demenet Axel; Hoang Quynh |
| Abstract: | Is the lack of ‘managerial capital’, alongside human and financial capital, a constraint on the growth of firms in developing countries? The evidence on this is still mixed, especially among small and medium enterprises.This paper uses a panel of Vietnamese small and medium enterprises to investigate this question. We build a multidimensional measure of managerial capital, combining both practices and attitudes, and link it with consistent estimates of firm-level productivity and mark-up. Even though bias may still affect the estimation of the overall influence of managerial capital on productivity, we show that there is a positive and significant association.Changes in management practices allow firms to be more efficient. Furthermore, we compare this association by firm size, and show that managerial capital is arguably as important for micro and small firms as it is for medium firms. Finally, it appears that the indicators related to ‘entrepreneurial attitudes’ play a more important role than elementary business skills. |
| Keywords: | Small and medium enterprises,Informal sector (Economics),Entrepreneurship |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2018-69&r=all |
| By: | Ketterer, Tobias; Rodríguez-Pose, Andrés |
| Abstract: | In this paper we assess whether both the levels and the degree of change in government quality influence regional economic performance in the European Union (EU) and, in particular, in its lagging regions. The results of the econometric analysis, covering 249 NUTS2 regions for the period between 1999 and 2013, suggest that: a) government quality matters for regional growth; b) relative improvements in quality of government are a powerful driver of development; c) one-size-fits-all policies for lagging regions are not the solution; d) government quality improvements are essential for low growth regions; and e) in low income regions basic endowment shortages are still the main barrier to development. In particular, low growth regions in Southern Europe stand to benefit the most from improvements in government quality, while in low income regions of Central and Eastern Europe, investments in the traditional drivers of growth remain the main factors behind successful economic trajectories. |
| Keywords: | Economic Growth; EU; Government quality; Institutional Change; regions |
| JEL: | R11 R50 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13712&r=all |
| By: | Le Son |
| Abstract: | The identification of potential innovation efforts plays an important role in evaluating the innovation process. The innovation efforts of firms in developing countries might be different to those of Western enterprises.This paper evaluates innovation processes in developing countries, especially the relationship between innovation efforts and outcomes. Instead of capturing only investment in research and development as in Western firms, the innovation efforts of firms in developing countries include investments in in-house research and development, technology acquisition, and other informal innovation activities.This research develops a mechanism to capture all innovation efforts based on firms’ characteristics, market features, and business environment. A predicted value of innovation investment is created which is intended to capture observed and latent innovation efforts.The results show that predicted innovation investment triggers innovation outcomes (jointly, product and process innovation outcomes) in the context of Vietnamese small- and medium-sized enterprises. |
| Keywords: | Small and medium enterprises,Developing countries,Innovation |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp-2019-7&r=all |
| By: | Newman Carol; O’Toole Conor; Kinghan Christina |
| Abstract: | In this paper, we explore the relationship between firm growth, access to finance, and the efficiency of capital allocation in Viet Nam over the period 2005–2015. Using data from the UNU-WIDER Viet Nam SME survey, we test whether firms with higher marginal returns to capital are more or less likely to get access to financing. This is a key test of how efficiently the financial system is functioning.We also test whether credit supply constraints are hindering capital allocation by limiting the investment and employment activities of firms with the highest marginal return on capital. A number of findings emerge. We find that high return investors, with the greatest marginal return on capital, have a lower likelihood of having formal finance (loans outstanding with formal credit institutions).We find evidence that rejected credit applications are limiting investment activity but not employment, particularly for firms with higher investment efficiency. This suggests a link between firm growth and a suboptimal allocation of credit. |
| Keywords: | Access to credit,Investment and access to finance,SME |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2018-67&r=all |
| By: | Santarelli Enrico; Tran Hien |
| Abstract: | The aim of this paper is to find which of two theories of capital structure—trade-off theory or pecking order theory—best explains the capital structure decision of non-state firms during the post-transition process in Viet Nam. We also investigate the effect of human capital, institutional quality, and their interaction on the capital structure decision. For empirical evidence, we use a unique database provided by the CIEM-DANIDA project covering around 2,000 micro, small, and medium-sized enterprises in Viet Nam for each year from 2003 to 2014. We estimate our empirical models by employing the System Generalized Method of Moments estimator.Our findings suggest that the capital structure of Vietnamese firms is a balance between the trade-off theory and the pecking order theory. On one hand, accessing formal debts is extremely tough for young and non-state firms; they bootstrap themselves out of financial constraints by stretching and making the most of their internal resources and assets. On the other hand, those with access to formal sources take advantage of leverage tools from using formal loans to exploit the tax benefits against the costs of financial distress.Other noteworthy findings include: (i) profitability and debt tax shields are no longer significantly important when entrepreneurs adopt informal debt financing; (ii) high-quality institutions with transparent and fair credit rationing rules will enable firms to reduce their reliance on debt financing; and (iii) while human capital encourages entrepreneurs to obtain more loans, its interaction with institutional quality deters debt financing and favours other financial sources. |
| Keywords: | Pecking order theory,Trade-off theory,Capital Structure,Debts,Institutional quality,Human capital |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2018-66&r=all |
| By: | Neha Soni; Enakshi Khular Sharma; Narotam Singh; Amita Kapoor |
| Abstract: | The fast pace of artificial intelligence (AI) and automation is propelling strategists to reshape their business models. This is fostering the integration of AI in the business processes but the consequences of this adoption are underexplored and need attention. This paper focuses on the overall impact of AI on businesses - from research, innovation, market deployment to future shifts in business models. To access this overall impact, we design a three-dimensional research model, based upon the Neo-Schumpeterian economics and its three forces viz. innovation, knowledge, and entrepreneurship. The first dimension deals with research and innovation in AI. In the second dimension, we explore the influence of AI on the global market and the strategic objectives of the businesses and finally, the third dimension examines how AI is shaping business contexts. Additionally, the paper explores AI implications on actors and its dark sides. |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1905.02092&r=all |