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on Small Business Management |
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Issue of 2024‒01‒01
sixteen papers chosen by |
| By: | Alfonso Expósito ((University of Málaga, Spain). ORCID number: 0000-0002-9248-4879); Juan A. Amparo Sanchis-Llopis ((University of Valencia and ERICES, Spain). ORCID number: 0000-0002-0872-7859); Juan A. Juan A. Sanchis-Llopis ((University of Valencia and ERICES, Spain). ORCID number: 0000-0001-9664-4668) |
| Abstract: | This study explores whether there are significant differences between female- and male-led businesses in terms of the performance results they obtain from innovating. We use a sample of 1, 376 Spanish small and medium enterprises (SMEs) to analyze the impact of entrepreneur gender on business performance considering the mediating effect of innovations, that is, the possibility that gender indirectly influences business performance by affecting the introduction of innovations. Using econometric techniques, we estimate discrete choice models to explore the relationship among gender, innovations and business’ performance. Our analysis is multidimensional in that we consider two types of performance indicators, financial and operational, and three types of innovations: product, process and organisational innovations. Our empirical findings show that, after controlling for other entrepreneurial and business characteristics, menled SMEs are more likely to obtain better performance from their innovations, and in particular, from their higher propensity to introduce process innovations, as compared to women-led SMEs. We extend existing empirical literature in the gender and entrepreneur research fields regarding the role of entrepreneur gender in the innovation-performance relationship, and contribute to the understanding of the role of gender in SMEs performance. Our study suggests the need to incorporate a gender perspective in those policies dealing with enhancing SMEs innovativeness and performance. |
| Keywords: | Gender of entrepreneur; small and medium-enterprises; innovations; financial performance; operational performance; bivariate probit model. |
| JEL: | C35 J16 F14 M21 |
| Date: | 2023–10 |
| URL: | http://d.repec.org/n?u=RePEc:eec:wpaper:2308&r=sbm |
| By: | Laatsit, Mart (CIRCLE, Lund University); Lindholm-Dahlstrand, Åsa (CIRCLE, Lund University); Nilsson, Magnus (CIRCLE, Lund University) |
| Abstract: | A new generation of innovation policies has placed renewed attention on understanding the innovation processes taking place on and affecting the system level. On one hand, there is a growing demand for policy instruments addressing the need for system change. On the other hand, there is still a lack of understanding of how innovation policy instruments contribute to a system-level impact. We address this gap by taking a programme perspective and proposing an analytical framework for assessing three types of effects: first-order, second-order, and system-level. Our approach is inspired by the functions of technological innovation system literature (TIS). We apply the analytical framework to the analysis of an innovative entrepreneurship instrument, the Swedish Innovation Agency VINNOVA’s Innovative SME programme. We find that the public support programmes contributed significantly to SMEs’ ability to influence system functions. Based on the findings, we argue that the analysis of innovation policy programmes should move beyond a narrow assessment of direct effects and consider more the second-order and system-level effects. |
| Keywords: | innovation policy; Sweden; public funding |
| JEL: | O33 O38 |
| Date: | 2023–11–28 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2023_012&r=sbm |
| By: | Josh Lerner; Jinlin Li; Tong Liu |
| Abstract: | This paper studies how investing in venture capital (VC) affects the entrepreneurial outcomes of individual limited partners (LPs). Using comprehensive administrative data on entrepreneurial activities and VC fundraising and investments in China, we first document that individual LPs, on average, contribute about 50% of the capital of each fund in which they participate, and over 50% of them are entrepreneurs. We then exploit an identification strategy by comparing the entrepreneurial outcomes of individual LPs in funds that eventually launched with those in funds that failed to launch. The fraction of committed capital from corporate LPs in industries that subsequently encounter poor returns is used as an instrument for funds’ launch failures. We find that after investing in a successfully launched VC fund, individual LPs create significantly more ventures than do LPs in funds which failed to launch. These new ventures tend to be high-tech firms and file more patents than do the LPs’ prior ventures. We find evidence consistent with venture investments being a channel through which individual LPs learn. |
| JEL: | D83 G23 G24 L25 L26 |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31897&r=sbm |
| By: | Janssen, Matthijs (Utrecht University); Wanzenböck, Iris (Utrecht University); Fünfschilling, Lea (CIRCLE, Lund University); Pontinakis, Dimitris (Joint Research Centre, Seville, European Commission) |
| Abstract: | There has been great interest in the rationales for transformative innovation policies (TIP), including those following a mission-oriented logic. However, few studies have investigated how public administration can effectively implement TIP. To study this, we first identify from existing literature four TIP governance tasks (creating legitimacy and leadership, coordination across levels/instruments/actors, reflexivity, resolving conflicts) and three distinct governance modes (administrative-, network-, system-oriented). In a comparative study, we then ask how the different governance modes shape the implementation of the TIP governance tasks, including the opportunities and boundaries related to a specific mode. Empirical insights are obtained from seven regional and national policy programmes across Europe with an ambition to promote system-wide transformation. Our analysis highlights similarities and differences between transformative policy designs, and identifies challenges related to implementing the TIP tasks within certain modes. The findings serve to inform and inspire the further uptake of transformative and mission-oriented innovation policies. |
| Keywords: | innovation policy; societal challenges; governance; public administration; transitions |
| JEL: | O32 O33 O38 |
| Date: | 2023–11–29 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2023_013&r=sbm |
| By: | Keraga, Mezid N. (Addis Ababa University); Stephan, Andreas (Linnaeus University) |
| Abstract: | This paper provides novel evidence on the question of whether innovation expands or reduces employment using firm-level data from the World Bank Enterprise Survey (ES) for six African economies. The results of the difference-in-differences estimations combined with propensity score matching confirm that both product and process innovations significantly expand job opportunities in Africa. In addition, the findings show significant intra-industry innovation spillover effects on employment. In sum, this study supports the view that innovation enhances employment in the analyzed African economies. |
| Keywords: | Innovation; Employment; Sub-Saharan; Spillover effects; DID; Matching approach |
| JEL: | J20 O30 |
| Date: | 2023–11–30 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0494&r=sbm |
| By: | OECD |
| Abstract: | In the context of the green transition, universities have much to offer in joint green innovation projects with business, government and citizens. As hubs of diverse expertise, universities are uniquely placed to build interdisciplinary teams and bridge gaps between society and industry. Their regional ties also enable them to engage with the local ecosystem. This paper draws from ten international case studies of university partnerships with industry and society in green mobility, green energy and green products, services and processes. The comparative evidence gathered from interviews with representatives from these initiatives examines universities’ practices for green co-creation. Additionally, the paper outlines policy recommendations crucial to supporting these initiatives, essential for the global success of sustainable development efforts. |
| Keywords: | civil society, co-creation, Green transition, Industry-science linkages, Innovation, Innovation policy, STI policy, universities |
| JEL: | O30 O36 O38 |
| Date: | 2023–12–04 |
| URL: | http://d.repec.org/n?u=RePEc:oec:stiaac:163-en&r=sbm |
| By: | Mircea Epure; Victor Martin-Sanchez; Sebastian Aparicio; David Urbano |
| Abstract: | We argue that the positive relationship between pro-market institutions and entrepreneurial growth aspirations is dampened for individuals with general human capital (higher education), but augmented for those with specific human capital (experience in the marketplace). However, during a crisis, the differential effect of pro-market institutions on growth aspirations manifests only for entrepreneurs with specific human capital, with stronger effects than in good economic times. We run our empirical analysis on a dataset of individual- and country-level characteristics during 2005– 2020, thus exploiting variation from the Global Financial Crisis and the Covid-19 pandemic. We confirm our predictions and show stronger results for early stage (compared to nascent) entrepreneurs, and potential complementarities between human capital types. Altogether, our work paves the way to institutional adaptive policymaking. |
| Keywords: | pro-market institutions, human capital, growth aspirations, entrepreneurship, crisis |
| JEL: | L26 M13 I25 J24 K2 |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:1414&r=sbm |
| By: | Ylhäinen, Ilkka; Pajarinen, Mika |
| Abstract: | Abstract We examined mergers and acquisitions in the service sector and the effects of the transition to foreign ownership. We analyzed firm-level data encompassing 1, 243 service sector acquisitions that occurred from 2009–2018. The most foreign acquisitions occurred in the health and social services, business services, and trade; the largest shares were noted in health and social services, IT services, and communication. Larger firms with lower levels of cash flow and firms characterized by a growth-resource imbalance were most likely to be the targets of foreign acquisitions. After an acquisition, the target company’s equity ratio and profit before taxes decreased; however, effects on growth and employment remained limited. |
| Keywords: | Mergers and acquisitions, Service sector, Foreign ownership, Foreign company |
| JEL: | F23 F61 G34 L80 |
| Date: | 2023–11–30 |
| URL: | http://d.repec.org/n?u=RePEc:rif:report:143&r=sbm |
| By: | Gulnara Nolan (Reserve Bank of Australia); Jonathan Hambur (Reserve Bank of Australia); Philip Vermeulen (University of Canterbury, New Zealand) |
| Abstract: | We provide new evidence on the effect of monetary policy on investment in Australia using firm-level data. We find that contractionary monetary policy makes firms less likely to invest and lowers the amount they invest if they do so. The effects are similar for young and old firms, indicating that the decline in the number of young firms in Australia over time is unlikely to have weakened the effect of monetary policy. The effects are also broadly similar for smaller and larger firms. This suggests that evidence that some, particularly large, firms have sticky hurdle rates does not mean that they do not respond to monetary policy. It also suggests that overseas findings that expansionary monetary policy lessens competition by supporting the largest firms likely do not apply to Australia. We find evidence that financially constrained firms, and sectors that are more dependent on external finance, are more responsive to monetary policy, highlighting the important role of cash flow and financing constraints in the transmission of monetary policy. Finally, we find evidence that monetary policy affects firms' actual and expected investment contemporaneously, suggesting that expectations are reactive and will tend to lag over the cycle. |
| Keywords: | investment; monetary policy; financial constraints |
| JEL: | E22 E52 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:rba:rbardp:rdp2023-09&r=sbm |
| By: | Subash Sasidharan (Indian Institute of Technology (IIT), Madras); Shandre Thangavelu (Jeffrey Cheah Institute of Southeast Asia, Sunway University and Institute for International Trade, University of Adelaide) |
| Abstract: | Industrial agglomeration is an important component to create efficiency and externalities for industrial growth and competitiveness for the Indian economy. In this paper, we examine the spatial location of Indian firms and industry agglomeration at district and township level for the Indian economy. Particularly, we examine the impact of urban amenities in driving the industrial agglomeration in the Indian economy using firm-level data. We carefully control for township-level urban amenities, as well as firm level characteristics in affecting the industry agglomeration. As opposed to previous stateand district-level studies, we examine the impact of urban amenities at a more disaggregated township level for 2011. The study also examines the impact of urban amenities on manufacturing, as well as the services sector. The empirical analysis findings indicate a positive correlation between town-level disparities in industry agglomeration and various amenities, including education, healthcare, energy, transportation, finance, and cultural resources. These results remain consistent when considering alternative measures of agglomeration and conducting sub-sample analyses. |
| Keywords: | Industrial Agglomeration; Urban Amenities |
| JEL: | F15 O15 |
| Date: | 2023–09–13 |
| URL: | http://d.repec.org/n?u=RePEc:era:wpaper:dp-2023-14&r=sbm |
| By: | Ansari, Dawud; Werenfels, Isabelle |
| Abstract: | Across public sectors in the Arab world, international consultancy firms already play a pivotal role and are further expanding their operations. Among other projects, consultancies have (co-)designed such high-profile strategies as Saudi Arabia's "Vision 2030" and Morocco's "Green Agenda". Currently, they are stepping up their activities in national energy and climate strategies. Their operations involve almost no local public participation, which diminishes the legitimacy and quality of the policies crafted and undermines local development. Besides the ramifications for the Arab world, the consultancies' work in that region also affects German and European interests, even when it is commissioned by European actors or international organizations. If negative impacts are to be avoided, greater awareness and more transparency about the consultancies' activities are needed. Moreover, it is crucial to scrutinise whether, when and to what extent it is expedient to commission international consultancy firms. |
| Keywords: | international consultancy firms, “, , Vision 2030”, (Saudi Arabia), “, , Green Agenda”, (Morocco, ), Morocco, Jordan, Egypt, Gulf states, McKinsey |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:swpcom:279944&r=sbm |
| By: | Brandt, Loren; Van Biesebroeck, Johannes; Wang, Luhang; Zhang, Yifan |
| Abstract: | China's manufacturing sector has been a key source of the economy's dynamism. Analysis after 2007 however is hampered by problems in the key data source for empirical analysis, the National Bureau of Statistics' (NBS) annual survey of industrial firms. Issues include missing information on value added and intermediate inputs, and concerns of over-reporting. The annual survey of firms conducted by China's State Taxation Administration (STA) provides a reliable, alternative source of firm-level data for years from 2007 to 2013. Since the sample is not representative and the precise sampling scheme is not known, the data cannot be used directly to draw inferences on China's manufacturing sector. By comparing the joint distribution of key variables for which both surveys provide reasonably reliable information, we recover the sampling scheme of the STA survey and use it to simulate samples for 2007 to 2013 that are comparable to the NBS sample in earlier years. Our estimates reveal a marked slowdown in revenue-based total factor productivity growth that cuts across all industries, ownership types, and regions. The loss of dynamism in the private sector, and the reduced contribution of firm entry to aggregate productivity growth are especially prominent. |
| Keywords: | TFP, Industrial development, Economic growth |
| JEL: | D24 O14 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:bofitp:280407&r=sbm |
| By: | Guido Franco; Mauricio Hitschfeld; Álvaro Pina; Damien Puy |
| Abstract: | Using data on more than 150.000 non-financial companies operating in both manufacturing and services sectors around the world, we analyse the drivers of firm performance throughout the whole COVID cycle (until end 2021). We highlight three key results. First, if anything, larger and older firms did worse than smaller and younger ones in terms of revenues and investment spending, both during COVID-19 and the subsequent recovery. Even in sectors that were under scrutiny from a competition standpoint, such as technology and healthcare, larger firms did not systematically over-perform. Second, ex-ante financial strength attenuated the effects of the shock on revenues during the COVID cycle. Third, there is some evidence of debt overhang: firms that entered the crisis with a higher leverage ratio invested less than others, including on R&D, both in 2020 and in 2021, while firms that became more debt-burdened during the pandemic tended to record weaker investment spending during the recovery. These insights shed light on market power, competition, and more generally on the performance of the corporate sector since the start of COVID-19 pandemic. |
| Keywords: | competition, corporate sector, COVID-19, debt overhang, financial fragility, firm performance, firm size, investment, market power |
| JEL: | D25 G01 G32 L25 |
| Date: | 2023–12–12 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1779-en&r=sbm |
| By: | CAPPELLANO Francesco; MARQUES SANTOS Anabela (European Commission - JRC); DOTTI Nicola Francesco |
| Abstract: | This paper provides quantitative evidence on the geography of regional readiness to tackle climate change using data from France, Germany, Italy, Poland, and Spain. Following Cappellano et al. (2022), we estimate a composite indicator that reports the situation of regions in these countries between 2009 and 2020 regarding the directionality of their Science and Technological Innovation and policy priorities to fight climate change. Using regression analysis, we assess the relationship between such directionality and the degree of risk of disasters (coastal floods, river floods, and landslides) they face in the short, medium, and long-term as a result of climate change effects. Results shows a positive relationship between estimated risk projection and climate change preparedness. However, a more in-depth analysis demonstrates the complexity of such geographical “problem-solution convergence”. Indeed, more developed regions are the ones that appear more ready to tackle climate change effects compared with transition and less developed regions. |
| Keywords: | Climate Change; Innovation; Public Policy; Regional Economics; Europe |
| Date: | 2023–10 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:termod:202310&r=sbm |
| By: | Xinyi CAO; Norio SAWABE |
| Abstract: | This study investigates the application of Relative Performance Evaluation (RPE) theory on forced CEO turnover decisions in the context of Chinese listed firms. Using CEO dismissal data spanning from 2009 to 2019, we observe a negative correlation between industry peer performance and the likelihood of forced CEO turnover, which contradicts the assumption of RPE theory. Furthermore, we emphasize the significance of considering Non-Financial Performance Measures (NFPMs) in CEO turnover research. Our research reveals that the extent of excess employment is negatively associated with the probability of forced CEO dismissal, and it also affects how a firm responds to peer performance. Specifically, when firms exhibit high social performance, proxied by excess employment, they tend not to lay off more CEOs due to industry downturns. This study offers a potential explanation for Jenter and Kanaan (2015)’s puzzle of why firms terminate more CEOs when their industry experiences a recession. We argue that prior literature, which predominantly focuses on the relationship between financial performance and CEO turnover, may be incomplete. It is imperative to also account for the impact of NFPMs. |
| Keywords: | Consistency, Relative performance evaluation, excess employment, forced CEO turnover, Chinese listed firms |
| JEL: | G32 M21 M41 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:kue:epaper:e-23-006&r=sbm |
| By: | Kouam, H; Mua, K |
| Abstract: | This theory presents the theory of innovation in the attainment of economic sciences. It equally reviews economic literature and investigates innovation from different economic models. It first begins with the analysis of views on classical economics, including Adam Smith and David Ricardo. This is followed by discussions on theory in innovation today, as handled in the knowledge-based economy. Analyzing the achievements in economic thought outlines that innovation's importance and relevance has grown over the last decade. |
| Keywords: | Innovation, Economic Growth, Progress, Economic Models |
| JEL: | O11 O31 O33 O34 O4 O40 |
| Date: | 2023–02–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:118020&r=sbm |