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on Small Business Management |
| By: | Bandara, KBTUK; Jayasundara, JMSB; Naradda Gamage, Sisira Kumara; Ekanayake, EMS; Rajapackshe, PSK; Abeyrathne, GAKNJ; Prasanna, RPIR |
| Abstract: | Small and Medium Enterprises (SMEs) are renowned as the engine of economic development in both developed and developing regions in the era of economic globalization. However, the existing knowledge in the field outlines numerous factors that hinder SMEs’ growth and survival and lead to business failures in terms of bankruptcy and liquidation. In such a context, Entrepreneurial Marketing (EM) is one of the critical determinants of growth and survival of the SME sector since their marketing approaches do not fit with established traditional marketing theories. Successful SMEs can acquire a competitive advantage on their unique benefit of “smallness,” often under limited resource conditions and uncertain market circumstances. Hence, this paper aims to review the literature on EM and its impact on the performance of SMEs, particularly in developed and developing regions. Accordingly, the review identified a range of EM dimensions that directly affect SME performance in developed and developing regions. The study also identified many other variables have a causal effect on the relationship between EM and SME performance, including external environment, internal venture environment, and venture approach to marketing. Finally, the study provides practical implications for practitioners and theoretical implications for researchers as an array of progressive areas for future endeavors. |
| Keywords: | Entrepreneurial Marketing, Marketing, Small and Medium Enterprises, SME Performance |
| JEL: | M2 M31 |
| Date: | 2020–11–25 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:104341&r=all |
| By: | Enrico Santarelli; Jacopo Staccioli; Marco Vivarelli |
| Abstract: | Using the entire population of USPTO patent applications published between 2002 and 2019, and leveraging on both patent classification and semantic analysis, this papers aims to map the current knowledge base centred on robotics and AI technologies. These technologies will be investigated both as a whole and distinguishing core and related innovations, along a 4-level core-periphery architecture. Merging patent applications with the Orbis IP firm-level database will allow us to put forward a threefold analysis based on industry of activity, geographic location, and firm productivity. In a nutshell, results show that: (i) rather than representing a technological revolution, the new knowledge base is strictly linked to the previous technological paradigm; (ii) the new knowledge base is characterised by a considerable - but not impressively widespread - degree of pervasiveness; (iii) robotics and AI are strictly related, converging (particularly among the related technologies) and jointly shaping a new knowledge base that should be considered as a whole, rather than consisting of two separate GPTs; (iv) the U.S. technological leadership turns out to be confirmed. |
| Keywords: | Robotics; Artificial Intelligence; General Purpose Technology; Technological Paradigm; Industry 4.0; Patents full-text. |
| Date: | 2021–01–11 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2021/01&r=all |
| By: | Matej Bule (Croatian National Bank); Andrijana Cudina (Croatian National Bank) |
| Abstract: | This paper analyses the structure of foreign direct equity investments in Croatia and econometrically tests the existence of a foreign ownership premium among Croatian non-financial corporations. With the use of a novel dataset generated by the merger of two firm-level databases, it is found that in the 2002-2017 period foreign equity investments in non-financial corporations were relatively modest and that the motivation of most of the investments was to expand into the local market (market-seeking FDI), and only partly to increase the efficiency of the investor's business group. As for the mode of entry, most investments were greenfield projects, although brownfield investments were also significant, reflecting the large scale privatization of state-owned enterprises. However, it is found that the industry structure of investments was unfavourable as only a smaller part went into tradable sectors and high-tech industries. Compared to domestically-owned companies, regression analysis has firmly established the existence of an organizational, technological and financial premium of foreign ownership among Croatian non-financial corporations, which differs depending on the size of the company, industrial and regional affiliations, business orientation on local or foreign markets, type of foreign ownership, mode of entry, as well as the origin of the foreign investor. Actually, the foreign ownership premium is higher in small and medium-sized enterprises and those that are oriented towards the local market, and when the concentration of foreign ownership is higher. Also, the premium is higher when the foreign investor originates from a more developed country. |
| Keywords: | foreign direct equity investments, foreign ownership premium |
| JEL: | F21 F23 L20 C21 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:hnb:wpaper:58&r=all |
| By: | Thomas Grebel (TU - Ilmenau University of Technology [Germany]); Mauro Napoletano (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (... - 2019) - COMUE UCA - COMUE Université Côte d'Azur (2015 - 2019) - CNRS - Centre National de la Recherche Scientifique - UCA - Université Côte d'Azur, OFCE - Observatoire français des conjonctures économiques - Sciences Po - Sciences Po, SKEMA Business School, SSSUP - Scuola Universitaria Superiore Sant'Anna [Pisa]); Lionel Nesta (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (... - 2019) - COMUE UCA - COMUE Université Côte d'Azur (2015 - 2019) - CNRS - Centre National de la Recherche Scientifique - UCA - Université Côte d'Azur, OFCE - Observatoire français des conjonctures économiques - Sciences Po - Sciences Po) |
| Abstract: | We study the productivity level distributions of manufacturing firms in France and Germany, and how these distributions evolved across the Great Recession. We show the presence of a systematic productivity advantage of German firms over French ones in the decade 2003-2013, but the gap has narrowed down after the Great Recession. Convergence is explained by the better growth performance of French firms in the post-recession period, especially of those located in the top percentiles of the productivity distribution. We also highlight the role of sectoral growth, firm size and export intensity in explaining the above convergence. In contrast, the contribution of allocative efficiency was small. |
| Keywords: | International productivity gaps,productivity distributions,firm level comparisons. JEL classification: L10,N10,D24 |
| Date: | 2020–09–13 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-03049459&r=all |
| By: | Bottasso, Anna; Conti, Maurizio; Robbiano, Simone; Santagata, Marta |
| Abstract: | In this study we leverage on the ancient Roman roads network as a source of exogenous variation in order to identify the causal effect of the modern highways network on innovation using Italian NUTS-3 regional data. Our results suggest that a 10 percent increase in the highways stock in a region causes an increase in the number of patents of about 2-3 percent over a five years period. We document that this positive effect on innovation might in part be explained by a reduction in travel costs that foster collaborations between inventors living in different regions. We also find that the innovation enhancing effect of highways declines over time, possibly because of the introduction of ICT, or the increasing congestion over the Italian network. Finally, we find also evidence of important heterogeneous treatment effects associated to region population density and we cannot rule out the existence of negative spillovers across regions, suggesting possible reorganization of innovative activity across space. |
| Keywords: | transport infrastructure; innovation; regional growth; policy evaluation |
| JEL: | L91 O33 O47 R11 R41 |
| Date: | 2020–12–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:104735&r=all |
| By: | Coad, Alex (Waseda Business School); Daunfeldt, Sven-Olov (Institute of Retail Economics); Halvarsson, Daniel (The Ratio Institute) |
| Abstract: | In the race to the South Pole, Roald Amundsen’s expedition covered an equal distance each day, irrespective of weather conditions, while Scott’s pace was erratic. Amundsen won the race and returned without loss of life, while Scott and his men died. We investigate how firms’ sales growth deviate from the long-run average growth path. Our baseline results suggest that growth path volatility is associated with higher growth of sales and profits, but is also associated with higher exit rates. This is driven by firms with negative growth rates. For positive-growth firms, volatility is negatively associated with both sales growth and survival. |
| Keywords: | Firm dynamics; Sales growth; Firm exit; Growth paths; Scale-up; Post-entry growth |
| JEL: | D22 L25 L26 |
| Date: | 2020–12–25 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ratioi:0344&r=all |
| By: | Etienne Capron (GRANEM - Groupe de Recherche Angevin en Economie et Management - UA - Université d'Angers - AGROCAMPUS OUEST - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - Institut National de l'Horticulture et du Paysage); Dominique Sagot-Duvauroux (GRANEM - Groupe de Recherche Angevin en Economie et Management - UA - Université d'Angers - AGROCAMPUS OUEST - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - Institut National de l'Horticulture et du Paysage); Raphaël Suire (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - IEMN-IAE Nantes - Institut d'Économie et de Management de Nantes - Institut d'Administration des Entreprises - Nantes - UN - Université de Nantes - IUML - FR 3473 Institut universitaire Mer et Littoral - UBS - Université de Bretagne Sud - UM - Le Mans Université - UA - Université d'Angers - CNRS - Centre National de la Recherche Scientifique - IFREMER - Institut Français de Recherche pour l'Exploitation de la Mer - UN - Université de Nantes - ECN - École Centrale de Nantes) |
| Abstract: | This article aims to study the role of places and events in the structuring of a community of innovation whose practice is at the crossroads of art and tech - videomapping. Based on an exploratory case study, we observe the relationships between the different actors who form subgroups, sharing a common interest in a techno-creative practice - but whose collective innovation dynamic is only in its beginnings. We also document the usage of places and events in their intermediation role for these subgroups. This reveals preferential circulations - patterns of moves among a set of focal locations in the city for a community – and the crucial role of these locations in creative communities emergence. |
| Keywords: | techno-creative innovation,places,knowledge,network analysis |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-02617101&r=all |
| By: | Adil Outla (UAE - Université Abdelmalek Essaâdi); Koraich Almahdi (UAE - Université Abdelmalek Essaâdi); Moustapha Hamzaoui (UAE - Université Abdelmalek Essaâdi) |
| Abstract: | Drawing on the literature on business dynamics, entrepreneurship and the spatial determinants of firms' creation, this study use Exploratory spatial data analysis and spatial panel data to test the spatial patterns and dynamics of cooperatives growth in Morocco. The results confirm the existence of spatial concentration of cooperatives, a global spatial autocorrelation and local spatial autocorrelation with different spatial typologies. The results also show that the main positive spatial determinants for cooperatives growth are the existence of cooperatives culture, the males' unemployment rate, and the density of population. However, there are also negative spatial determinants on the growth and dynamics of cooperatives. These include coops density, firm's density, male activity, Business turnover, population growth, Higher education, primary education, and urbanization. |
| Keywords: | Co-operatives growth,spatial determinants,spatial distribution,social entrepreneurship |
| Date: | 2020–12–28 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03089872&r=all |
| By: | World Bank |
| Keywords: | Private Sector Development - Small and Medium Size Enterprises Science and Technology Development - Innovation Public Sector Development - Public Sector Economics Public Sector Development - Public Investment Mangement |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:33550&r=all |
| By: | Natia Mosiashvili; Jon Pareliussen |
| Abstract: | With a newly constructed firm-level dataset combining various survey- and registry data from Statistics Estonia, this paper sheds new light on the labour productivity premium from adopting digital technologies and boosting digital skill use. The productivity premium is decomposed into a direct effect benefitting the firms actually increasing their digital intensity, and an indirect effect of belonging to a sector with high digital intensity. The firm-level productivity premium of being an adopting firm is consistently positive and sizeable across different digital technologies and measures of skill intensity. The evidence also suggests positive spill-over effects in manufacturing sectors and sectors with a high routine task content and thus a high automation potential. |
| Keywords: | Digitalisation, productivity, skills, training |
| JEL: | D24 E22 J24 M53 O33 |
| Date: | 2020–12–16 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1638-en&r=all |
| By: | Fossen, Frank M. (University of Nevada, Reno); König, Johannes (DIW Berlin); Schröder, Carsten (DIW Berlin) |
| Abstract: | We present first evidence how individual risk preferences shape entrepreneurial investment among the very wealthy using novel survey data from the top of the wealth distribution, which have been added to the 2019 German Socio-economic Panel Study. The data include private wealth balance sheets, in particular the value of own private business assets, and a standard measure of risk tolerance. We find that wealthy individuals are more likely to be entrepreneurs and invest a larger share of their wealth in their own businesses when they are more willing to take risks. These associations are stronger among wealthy than among less wealthy individuals. The results imply that policies affecting the riskiness of income and wealth, such as tax policy and bankruptcy law, affect risky investment decisions at the top of the wealth distribution in ways strongly determined by individual risk tolerance. Since the wealthy dominate aggregate risky investment, their risk preferences must be taken into account for theory development, empirical analysis, and policy evaluations. |
| Keywords: | wealth, entrepreneurship, risk, portfolio choice |
| JEL: | J22 J23 L26 D14 |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13951&r=all |
| By: | Martino Pelli; Jeanne Tschopp; Natalia Bezmaternykh; Kodjovi M. Eklou |
| Abstract: | This paper examines the response of firms to capital destruction, using a new measure of firm exposure to tropical storms as a negative exogenous shock on firms’ capital stock. Drawing on a panel of Indian manufacturing firms between 1995 and 2006, we establish that, depending on their strength, storms destroy up to 75.3% of the fixed assets of the median firm (in terms of its productivity and industry performance). We quantify the response of firm sales within and across industries and find effects akin to Schumpeterian creative destruction, where surviving firms build back better. Within an industry, the sales of less productive firms decrease disproportionately more, while across industries capital destruction leads to a shift in sales towards more performing industries. This build-back better effect is driven by firms active in multiple industries and, to a large extent, by shifts in the firm-level production mix within a firm’s active set of industries. Finally, while there is no evidence that firms adjust by investing in new industry lines, firms tend to abandon production in industries that exhibit lower comparative advantage. |
| Keywords: | Comparative advantage;Total factor productivity;Capital productivity;Natural disasters;Productivity;WP,ISIC firm,single-establishment firm,tropical storm |
| Date: | 2020–09–25 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2020/203&r=all |
| By: | Masahiro Endoh (Faculty of Business and Commerce, Keio University) |
| Abstract: | Empirical studies have demonstrated that both firms' exports and imports increase their productivity, although it may have different upstream effects on domestic firms. This study revisits the propagation of trade effects through interfirm transactions by improving the methods of previous empirical analyses in three ways. First, it uses stricter criteria for sampling firms in order to estimate the effects without bias from other international transactions. Second, it deals with the indirect impact of trade shocks on various indices of upstream suppliers, such as the possibility of closure, the number of workers, and productivity. Third, it employs a one-to-one propensity score matching combined with a difference-in-differences approach, a method that controls both buyers' and sellers' characteristics. Results show that there is no systematic trade effect on upstream seller firms, and that most of the trade impacts on business performance variables of seller firms are statistically insignificant. One possible reason is that firms that increase their exports or imports do not sufficiently change their purchase of material and intermediate goods from domestic non-associated firms, a supposition that is supported by the empirical analysis. The result suggests that the economic impact of firms' international trade on upstream suppliers is more nuanced than just a substitute or complement between international and domestic trades. |
| Keywords: | Buyer-seller network, Closure, Employment, Exports, Imports |
| JEL: | F14 F61 L14 |
| Date: | 2020–09–23 |
| URL: | http://d.repec.org/n?u=RePEc:keo:dpaper:2020-016&r=all |
| By: | V A Hajivassiliou; Frédérique Savignac; Frédérique Savignac |
| Abstract: | We develop novel methods for establishing coherency conditions in Static and Dynamic Limited Dependent Variables (LDV) Models. We propose estimation strategies based on Conditional Maximum Likelihood Estimation for simultaneous LDV models without imposing recursivity. Monte-Carlo experiments confirm substantive Mean-Squared-Error improvements of our approach over other estimators. We analyse the impact of financing constraints on innovation: ceteris paribus, a firm facing binding finance constraints is substantially less likely to undertake innovation, while the probability that a firm encounters a binding finance constraint more than doubles if the firm is innovative. A strong role for state dependence in dynamic versions of our models is also established. |
| Keywords: | Financing Constraints, Innovation, Dynamic Limited Dependent Variable Models, Joint Bivariate Probit Model, Econometric Coherency Conditions, State Dependence |
| JEL: | C51 C52 C15 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:cep:stiecm:606&r=all |
| By: | Jessica Battisto; Claire Kramer; Scott Lieberman |
| Abstract: | This third article examines small businesses’ access to financial services in low- and moderate-income communities. |
| Date: | 2019–11 |
| URL: | http://d.repec.org/n?u=RePEc:fip:g00003:89165&r=all |
| By: | Jorge Nogueira de Paiva Britto (Universidade Federal Fluminense); Leonardo Costa Ribeiro (Cedeplar/UFMG); Eduardo da Motta e Albuquerque (Cedeplar/UFMG) |
| Abstract: | This paper revisits the pioneers of innovation systems in the 1980s to evaluate their perception of international forces tensioning national boundaries of those systems. The development of multinational enterprises and consequent changes in their operation beyond national borders is discussed, looking at the formation of a network of international knowledge flows. Those changes are connected to the internationalization of science and consequent formation of another network of international knowledge flows. Both networks, one firm-led and the other university-led, are pushed by the revolutions in information and communication technologies. The combination, overlapping and intertwinement of those two networks of international knowledge flows constitute a new layer in innovation systems - an emergent global innovation system. This new layer rearranges the roles of regional, sectoral and national innovation systems. |
| Keywords: | innovation systems, international knowledge flows, layers of innovation systems |
| JEL: | O30 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdp:texdis:td628&r=all |
| By: | Dogan, Mesut; Kevser, Mustafa |
| Abstract: | Purpose: The purpose of this research is to reveal the effect of firms' intellectual capital on financial performance. Firms invest in intangible assets as well as tangible assets in order to gain competitive advantage (Atan ve Tuncer, 2019). Within the scope of intangible fixed assets, the most investment is made to intellectual capital. Intellectual capital has three basic dimensions: human capital, structural capital and customer capital (Soylu, 2020). In the 21st century, where technology changes and develops very rapidly, companies create added value by using their intellectual capital and turn the added value into profit. In this respect, intellectual capital is knowledge that can turn into profit (Çetin, 2005). Methodology: The intellectual capital levels of companies operating in the Borsa Istanbul Industrial Index were measured by the Intellectual Value Added Coefficient (VAIC) method for the period of 2015-2019. The relationship between the obtained coefficient and financial performance indicators, return on assets ratio (ROA), return on equity (ROE) and Tobin's Q ratio, was analyzed by panel data method. Findings: According to the results of the research, there is a statistically significant and positive relationship between the intellectual capital coefficient and profitability rates and Tobin's Q ratio. Conclusion- The results obtained show the positive effect of intellectual capital on firm performance. Companies can focus on intellectual capital investments and increase their productivity for sustainable financial performance. |
| Keywords: | Intellectual capital,ROA,ROE,Tobin’s Q,intellectual value added coefficient |
| JEL: | C61 E22 G30 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esconf:228516&r=all |
| By: | Barbara J. Lipman; PJ Tabit; Charlene D. van Dijk |
| Abstract: | This issue of Consumer & Community Context focuses on small businesses’ access to capital. |
| Date: | 2019–11 |
| URL: | http://d.repec.org/n?u=RePEc:fip:g00003:89157&r=all |
| By: | Sebnem Kalemli-Ozcan; Pierre-Olivier Gourinchas; Veronika Penciakova; Nick Sander |
| Abstract: | We estimate the impact of the COVID-19 crisis on business failures among small and medium size enterprises (SMEs) in seventeen countries using a large representative firm-level database. We use a simple model of firm cost-minimization and measure each firm’s liquidity shortfall during and after COVID-19. Our framework allows for a rich combination of sectoral and aggregate supply, productivity, and demand shocks. We estimate a large increase in the failure rate of SMEs under COVID-19 of nearly 9 percentage points, ab-sent government support. Accommodation & Food Services, Arts, Entertainment & Recreation, Education, and Other Services are among the most affected sectors. The jobs at risk due to COVID-19 related SME business failures represent 3.1 percent of private sector employment. Despite the large impact on business failures and employment, we estimate only moderate effects on the financial sector: the share of Non Performing Loans on bank balance sheets would increase by up to 11 percentage points, representing 0.3 percent of banks’ assets and resulting in a 0.75 percentage point decline in the common equity Tier-1 capital ratio. We evaluate the cost and effectiveness of various policy interventions. The fiscal cost of an intervention that narrowly targets at risk firms can be modest (0.54% of GDP). However, at a similar level of effectiveness, non-targeted subsidies can be substantially more expensive (1.82% of GDP). Our results have important implications for the severity of the COVID-19 recession, the design of policies, and the speed of the recovery. |
| Keywords: | COVID-19 ;Labor;Supply shocks;Labor supply;Wages;WP,bankruptcy rate,cash flow,wage bill,employment decision,ghost firm |
| Date: | 2020–09–25 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2020/207&r=all |
| By: | Barbara J. Lipman; Ann Marie Wiersch |
| Abstract: | This first article describes what small business owners encounter when searching for financing on the websites of online lenders. |
| Date: | 2019–11 |
| URL: | http://d.repec.org/n?u=RePEc:fip:g00003:89158&r=all |
| By: | Cécile Ayerbe (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (... - 2019) - COMUE UCA - COMUE Université Côte d'Azur (2015 - 2019) - CNRS - Centre National de la Recherche Scientifique - UCA - Université Côte d'Azur); Sandra Dubouloz (IREGE - Institut de Recherche en Gestion et en Economie - USMB [Université de Savoie] [Université de Chambéry] - Université Savoie Mont Blanc); Sophie Mignon (MRM - Montpellier Research in Management - UPVM - Université Paul-Valéry - Montpellier 3 - UM2 - Université Montpellier 2 - Sciences et Techniques - UPVD - Université de Perpignan Via Domitia - UM1 - Université Montpellier 1 - Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School - UM - Université de Montpellier); Marc Robert (MRM - Montpellier Research in Management - UPVM - Université Paul-Valéry - Montpellier 3 - UM2 - Université Montpellier 2 - Sciences et Techniques - UPVD - Université de Perpignan Via Domitia - UM1 - Université Montpellier 1 - Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School - UM - Université de Montpellier) |
| Abstract: | This paper shows the full relevance of having a closerdialogue between the literatures on OI and MI thanis currently the case.Some encouraging and extremely interesting results have been reportedby MI research using the OI paradigm, and research on the organizationallevel of OI which echoes the MI literature. In particular, the literature on MI has examined the role of knowledge, experience and external agents in an outside-in perspective. The areas covered byMIresearch call for integration of the OI paradigm into the fieldof MI, to give ‘Open Management innovation'. In parallel, the literature on OI has called for reflection on organizationaldesign, structures, managerial practices in general and HR management in particular in order to manageopenness. However, the links highlighted remain weak, and the number of studies is low. Also, the summary proposedhere has shown their limitations and the need for replication or further investigation. Closer connections or a dialogue between the two fields of innovation management appears to be more than relevant and appropriate for their mutual enrichment. This studyhas identified promising and necessary research perspectives. More systematic discussions between these two communities could extend their respective boundaries and pave the wayfor a more integrative approach. This would give us an understanding of theconditions in which OI and MI respectively lead to other types of innovations, and what those types are, and in return how they feed and reinvent themselves in a recursive loop process. |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-02985953&r=all |
| By: | Olena Havrylchyk (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, Labex ReFi - UP1 - Université Panthéon-Sorbonne); Aref Mahdavi-Ardekani (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | This paper explores the short_term impact of borrowing via lending_based crowdfunding on performance and health of small and medium enterprises (SMEs) in France. We find that firms borrowing from lending-based crowdfunding platforms are more dynamic (higher asset growth and higher profitability) and innovative, but they have lower leverage, less cash, higher funding costs and less tangible assets that could be pledged as as collateral. To account for this selection bias, we construct three control groups by using Propensity Score Matching, Mahalanobis Distance Matching and Coarsened Exact Matching methods and then run difference-in-difference regressions. We find that borrowing via lending-based crowdfunding platforms increases SMEs' leverage and interest rate burden in the short-term, but these impacts disappear after two years. We observe asset growth during the year of borrowing, but no impact on sales growth, investment, employment or profitability. |
| Keywords: | lending-based crowdfunding,firm financing,firm performance,informational asymmetry |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-02994903&r=all |
| By: | Oladipo, Oluwasheyi S. (State University of New York at Old Westbury); Platt, Katarzyna (State University of New York at Old Westbury); Shim, Hyoung Suk (CUNY - College of Staten Island) |
| Abstract: | Female entrepreneurship has been regarded as inferior to its male equivalent in terms of performance. Literature on gender differences in entrepreneurship focus mostly on showing the differences, but not much literature discusses where the differences come from, and how to mitigate them. This paper empirically examines the joint effect of female ownership and being home-based on owners' managerial performance. We estimate the average treatment effect of female-owned and homebased firms on return on assets (ROA) using the 2007 Survey of Business Owners (SBO) micro data. From the main estimation result, the marginal effects of female ownership and home-based business are both negative. The estimated ROA gains of female ownership and home-based business are about -37.20% and -67.17%, respectively. In contrast, we find that the joint effect of female ownership and home-based business is about 39.53% ROA gain. Our finding suggests that female-owned firms can outperform under the appropriate supporting conditions, such as if they are able to remove travel time and costs by establishing their businesses at home. |
| Keywords: | firm performance, female owners |
| JEL: | L25 L26 J16 |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13981&r=all |
| By: | CREHAN Patrick |
| Abstract: | The European Commission provides a definition of the SME intended to create a level playing field across Europe for businesses applying for grants or other assistance intended only for SMEs. This definition has been in force since January 1, 2005. Without going into too much technical detail, the definition consists of the following three rules, namely that the — The company has less than 250 employees, — That either its turnover is less than €50M or its balance sheet is less than €43M, — That these numbers are computed based on weighted totals from the company and related entities, depending on whether the company is considered to be "autonomous", "partnered" or "linked." This definition was challenged by the EVCA in 2009 and by Business Europe 2017. Both made the point that the definition as it stands is unfair to VC-backed enterprise on the basis that some VC-backed start-ups risked exclusion from SME support programs because the SME definition would consider them "linked to" or "partnered with" giant financial actors, unfairly inflating their size and pushing them beyond the threshold of eligibility for SME programs. Access to SME programs by VC backed enterprise is not the only issue at stake for a possible revision of the definition of the SME. It is possible that other issues may arise in the aftermath of the pandemic, and as an unintended consequence of efforts to support business and employment in the coming years. So, now is a good time to look into this in more detail to see if there is a need to revise the definition of the SME in Europe, or if it is advisable to create exceptions for the treatment of VC-backed enterprise in order to avoid their unfair treatment or exclusion from important sources of SME support. In its letter of 2009, the EVCA referred to the case of Italy, suggesting that this would provide a better model for the case of VC-backed enterprise. Although the letter did not go further in specifying what was good about the Italian definition, this provide an interesting place to start to explore the scope for a possible revision. The Italian definition, still in use today, considers a business to be medium sized if its turnover is less than €355M and if it employs less than 500 people. This is very different from that employed by the EU and begs the question as to how one might decide the… — Criteria to use, how many and in what combination — Thresholds that mark the boundary between small, medium, and large enterprise — Related entities to be considered a part of the company in order to determine its "true" size A search of the literature reveals that there are at least 50 different definitions of small business in application around the world. Although the literature is not extensive, it does refer to the principles at work, the criteria applied, various debates about the relevance of different criteria as well as the role of models for SME growth in all of these debates. One of the most important criteria is "industry policy." The most comprehensive information was obtained in the case of the US. This was pieced together mainly from a careful reading of documents available on or referred to from the website of the Small Business Administration (SBA). In this was it was possible to put together a comprehensive picture of how small business size standards are determined in the US, their origin in government procurement programs going back to the 1920s and their evolution up until today. The original motivation for small business size standards in the US was a need to rationalize programs for small set-aside, that reserved up to 23% of all federal procurement for the small business sector. They are revised once a decade and size standards revised in 2009 were updated once again in 2019. The size standards for small business set-aside vary from sector to sector and are adjusted between major revision based on indexes such as the rate of inflation or worker productivity. In the 2019 revision… — Size standards for 532 sectors are based only on the number of employees. The upper limits ranging from 100 to 1,500 depending on the sector. — Size standards for 505 sectors are based on turnover alone. The upper limits for these ranging from $1M to $41.5M depending on the sector. — A small number of sectors have size standards based on their total assets, with the upper limit being $600M. The main criteria applied for access to the SBIR small business research and innovation programs, intended to encourage the participation of small business in federally funded research programs is that they employ no more than 500 people. It is interesting to note that the US federal government provides a "right of rebuttal" to companies that feel they have been wrongly excluded from small business programs. The rules relating to autonomy, ownership and control are quite different from those employed in the EU, but no less complex or difficult to apply. The issue of access to small business programs by VC- or PE-backed enterprise has also been a subject of debate. It has been a subject of great controversy in the context of the PPP program intended to help business affected by the pandemic. Since 2012, federal agencies have been given the possibility to extend the definition of small business to companies that are majority owned by VC or PE funds, on the basis of the so called "section 5107 authority." The choice has been left up to the individual agencies to decide if they will adopt this new rule or not. Not all have done so. Many are unsure if it is necessary or right. Nevertheless, this facility has been evaluated and so far, there has been no adverse impact on research or competition, and it looks set to continue in future. There was no complex arithmetic behind the legislation. It was based simply on a belief that it would encourage innovative science based small business to seek support from the VC- or PE- sector, without fear of being excluded from sources of research funding reserved for small business. The most recent evolution on this front, has been the granting access by VC- and PE-backed enterprise to the Pay-check Protection Program (PPP), at least a part of which was managed by the SBA. Recently released data has been examined by industry analysts and journalists. Key observations include… — Almost 10,000 VC- and PE-backed companies (9,657) received PPP loan support — They received $14.3B of the approximately $500B distributed — 4,800 PE- and VC-backed recipients had raised funding rounds in 2018 to 2020 — 2,267 of those raised funding in 2019 — 3 of the top 5 investors whose portfolio companies applied for help were start-up accelerators such as Techstars and Y Combinator To conclude: — The idea of a single definition for all of the EU and for all policy purposes, though understandable, may be too ambitious and risks depriving fast growing small business in Europe from resources which may help them succeed, especially in the context of dramatic shocks to both business and consumers due to the pandemic. — In particular the rules for ownership and control are too complex and should be revised. Perhaps with a view to carving out exceptions to the general rule, for cases where it is clearly in the public interest. This requires a clear understanding of what public interest is at stake in this case. — There is considerable variation in the way small business is identified around the world, in terms of the criteria used, in terms of the thresholds applied and in terms of what other entities to include in order to determine the "true" size of the enterprise. — It may be useful to go back to basics and argue ab-initio as to what the definition should be, in order to achieve explicit policy goals, and to avoid unintended consequences which are clearly identified in advance and against which proposed definitions can be tested. With a view to clarifying issues of public interest, these are referred to in the main text and further elaborated upon in a series of annexes intended to clarify the role of VC in the growth of small business, the difference between VC and PE, the complex web of relationships that characterize the LP-GP-PC universe, the challenges they face now and those they may face in the future. |
| Keywords: | SME definition, VC-backed SMEs, financial constraints |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc123296&r=all |