nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2014‒08‒09
thirty-two papers chosen by
João José de Matos Ferreira
Universidade da Beira Interior

  1. Knowledge context, learning and innovation: an integrating framework By Stephen Roper; James H. Love; Ying Zhou
  2. Theoretical Perspectives on Localised Knowledge Spillovers and Agglomeration By Leppälä, Samuli
  3. The legacy of public subsidies for innovation: input, output and behavioural additionality effects By Stephen Roper; Nola Hewitt-Dundas
  4. Unpacking open innovation: Absorptive capacity, exploratory and exploitative openness and the growth of entrepreneurial biopharmaceutical firms By Stephen Roper; Helen Xia
  5. Looking beyond the R&D effects on innovation: The contribution of non-R&D activities to total factor productivity growth in the EU By Lopez-Rodriguez, Jesus; Martinez, Diego
  6. Developing alliance formation process capabilities: replication, adaptation and flexibility in creating research and development consortia By James Hayton; Paul Olk
  7. Scale effects in workplace innovations By Jan de Kok; Sophie Doove; Peter Oeij; Karolus Kraan
  8. The relationship between international networking and firm performance in British SMEs By Rana Tadvji; Azhdar Karami
  9. ICT and R&D as inputs or efficiency determinants? Analysing the manufacturing Italian firms over the 2007-2009 By Bonanno, Graziella
  10. Why don’t Poor Countries do R&D? By Edwin Goñi; William F. Maloney
  11. Managing Constraints and Removing Obstacles to Knowledge Management By Chatterjee, Sidharta
  12. Innovation as Growth Policy: the challenge for Europe By Mariana Mazzucato; Carlota Perez
  13. Human Knowledge and a Commonsensical Measure of Human Capital: A Proposal By Amavilah, Voxi Heinrich
  14. The Emperical Scope of User Innovation By Jeroen de Jong
  15. Open Innovation Effects of Patent Applications: An empirical study of inkjet technology patents (Japanese) By KINUKAWA Shinya
  16. Scientific Sources of Corporate Inventions in Japan: Evidence from an inventor survey (Japanese) By NAGAOKA Sadao; YAMAUCHI Isamu
  17. What drives environmental practices of SMEs? By Brigitte Hoogendoorn; Peter van der Zwan; Daniela Guerra
  18. Entrepreneurship as Experimentation By William R. Kerr; Ramana Nanda; Matthew Rhodes-Kropf
  19. A consistent set of multilateral productivity approach-based indicators of price competitiveness By Fischer, Christoph; Hossfeld, Oliver
  20. Exit from Exporting: Does Engagement in Transnational Networks Matter? By Díaz-Mora, Carmen; Córcoles, David; Gandoy, Rosario
  21. Fixed Export Costs and Export Behavior By Luis Castro; Ben Li; Keith Maskus; Yiqing Xie
  22. Regionalism, end markets and ownership matter: Shifting dynamics in the apparel export industry in Sub Saharan Africa By Morris, Mike; Staritz, Cornelia; Plank, Leonhard
  23. Firm-Level Evidence for the Language Investment Effect on SME Exporters By Foreman-Peck, James; Zhou, Peng
  24. Is there an entrepreneurial culture? A review of empirical research By James Hayton; Gabriella Cacciotti
  25. Supporting sustained growth among SMEs – policy models and guidelines By Stephen Roper; Mark Hart
  26. The effect of spatial mobility and other factors on academic productivity : some evidence from a set of highly productive economists By Pedro Albarrán; Raquel Carrasco; Javier Ruiz-Castillo
  27. Size, Age and the Growth of Firms: New Evidence from Quantile Regressions By Roberta Distante; Ivan Petrella; Emiliano Santoro
  28. Why Are Black-Owned Businesses Less Successful than White-Owned Businesses?  The Role of Families, Inheritances, and Business Human Capital By Fairlie, Robert
  29. Industrial development and growth in Nigeria: Lessons and challenges By Chete, L. N.; Adeoti, J. O.; Adeyinka, F. M.; Ogundele, O.
  30. Education and Cross-Country Productivity Differences By Alok Kumar; Brianne Kober
  31. Institutions and Economic Growth in the MENA Countries: An Empirical Investigation by Using Panel data model By Becherair, Amrane
  32. Effective Corporate Taxation, Tax Incidence and Tax Reforms: Evidence from OECD Countries By Salvador Barrios; Gaetan Nicodeme; Antonio Jesus Sanchez Fuentes

  1. By: Stephen Roper (Warwick University Business School); James H. Love (Aston University Business School); Ying Zhou (Aston University Business School)
    Abstract: In this paper we develop a framework to identify those elements of firms’ knowledge context which are important for innovation, and the mechanisms through which that knowledge impacts on firms’ innovation performance. We make four main contributions to the existing literature. First, our characterisation of knowledge context provides the basis for a more specific identification of which elements of firms’ knowledge environment are important for innovation, discriminating between spatial, industrial and network influences. Second, we reflect the role of innovation ambition in shaping firms’ knowledge search strategies. Third, we differentiate between firms’ interactive and non-interactive knowledge search activities and recognise that these may be complemented by unanticipated and serendipitous knowledge spillovers. Finally, we introduce the notion of encoding capacity to reflect firms’ internal ability to assimilate and apply external knowledge. Our framework provides an integrating mechanism for existing empirical studies, suggests a number of new research directions related to the determinants of innovation performance and the heterogeneity of innovation outcomes.
    Keywords: Knowledge, innovation, spatial, industry, learning
    Date: 2014–06–01
  2. By: Leppälä, Samuli (Cardiff Business School)
    Abstract: There is substantial empirical evidence that innovation is geographically concentrated. Unlike what is generally assumed, however, it is not clear that localised knowledge spillovers provide a theoretically valid explanation for this. Studying spillovers of cost-reducing technology between Cournot oligopolists we show that 1) localised knowledge spillovers of any level do encourage agglomeration, but 2) whether this leads to higher levels of effective R&D depends on the type and level of knowledge spillovers, the number of firms, and the industry's R&D efficiency.
    Keywords: knowledge spillovers; agglomeration economies; innovation; location
    JEL: O33 R32 L13
    Date: 2014–07
  3. By: Stephen Roper (Warwick University Business School); Nola Hewitt-Dundas (Queen's University Belfast)
    Abstract: In many countries significant amounts of public funding are devoted to supporting firms’ R&D and innovation projects. Here, using panel data on the innovation activities of Irish manufacturing firms we examine the legacy effects of public subsidies for new product development and R&D. We examine five alternative mechanisms through which such effects may occur: input additionality, output additionality, and congenital, inter-organisational and experiential behavioural additionality. Tests suggest contrasting legacy effects with R&D subsidies generating legacy output additionality effects while new product development subsidies have legacy congenital and inter-organisational behavioural additionality effects. Our results have implications for innovation policy design and evaluation.
    Keywords: innovation policy, additionality, evaluation, Ireland
    JEL: O32 L1 O38 Q34 L26
    Date: 2014–07–01
  4. By: Stephen Roper (Warwick University Business School); Helen Xia (Loughborough University)
    Abstract: In this paper we explore the relationship between two key aspects of open innovation in small firms – absorptive capacity and external relationships – and their effects on growth in the US and European biopharmaceutical sectors. Results from an international sample of 349 biopharmaceutical firms surveyed in the US, UK, France and Germany suggest that realized absorptive capacity plays an important role in determining firms’ growth. In terms of the interaction between firms’ absorptive capacity and external relationships, we find that engagement with exploratory relationships depends strongly on the continuity of R&D, while participation in exploitative relationships is more conditional on firms’ realized absorptive capacity.
    Keywords: alliances, absorptive capacity, bio-technology, US, Europe
    JEL: O31 L25 L65
    Date: 2014–05–02
  5. By: Lopez-Rodriguez, Jesus; Martinez, Diego
    Abstract: Although non-R&D innovation activities account for a significant portion of innovation efforts carried out across very heterogeneous economies in Europe, how to incorporate them in to economic models is not always straightforward. For instance, the traditional macro approach to estimating the determinants of total factor productivity (TFP) does not handle them well. To counter these problems, this paper proposes applying an augmented macro-theoretical model to estimate the determinants of TFP by jointly considering the effects of R&D and the impact of non-R&D innovation activities on the productivity levels of firms. Estimations from a model of a sample of EU-26 countries covering the period 2004-2008 show that the distinction between R&D and non-R&D effects is significant for a number of different issues. First, the results show a sizeable impact on TFP growth, as the impact of R&D is twice that of non-R&D. Second, absorptive capacity is only linked to R&D endowments. And third, the two types of endowments cannot strictly been seen as complementary, at least for the case of countries with high R&D intensities or high non-R&D intensities.
    Keywords: TFP; R&D; non-R&D expenditures; EU countries
    JEL: O0 O3 O4
    Date: 2014–06
  6. By: James Hayton (University of Warwick Business School); Paul Olk (Daniels College of Business, University of Denver)
    Abstract: Our study draws from learning theory and path dependence research to hypothesize how companies build the capability for managing strategic alliance formation processes. Specifically, we focus on firms’ patterns of R&D consortia formation processes in the United States. Prior research identified two different consortium formation processes: emergent and engineered processes. This study explores the sequences of these processes for 1063 companies entering into alliances with 737 US-based consortia between 1984-2005, resulting in 3767 independent consortium joining events. Our results suggest that companies build alliance formation capabilities through a combination of replication, adaptability and flexibility. In showing these results, our study contributes to the alliance capability literature, the alliance formation process literature and research into organizational learning and path dependence.
    Keywords: alliance capability, formation process, R&D consortia, organizational learning, path dependence
    Date: 2013–11–02
  7. By: Jan de Kok; Sophie Doove; Peter Oeij; Karolus Kraan
    Abstract: Workplace innovation can be defined as the implementation of new and combined interventions in work organisation, HRM and supportive technologies, and strategies to improve performance of organisations and quality of jobs. Previous research confirms the presence of a positive relationship between workplace innovation and firm performance. Within this study we are interested in the scale effects in workplace innovation. Does firm size moderate the relationship between workplace innovation and organisational performance?
    Date: 2014–04–03
  8. By: Rana Tadvji (Bangor University, UK); Azhdar Karami (Bangor University, UK)
    Abstract: The main objective of this paper is to investigate the effecto of international networking on the performance of British small and medium sized enterprises (SME). The international networking capabilities have been recognized as a vital element of growth and survival. In tnis research data has been collected using online questionnaries and mail survey for a sample of 118 SMEs operating in manufacturing, service providing and R&D sectors in the UK. The research hypotheses have been tested by applying the Structural Equation Model (SEM) methodology. The Lisrel software was used to test and analyse the relationship among variables. The collected data has been analysed using SEM. The data analysis illustates a positive and significant relationship between international networking activities of the SMEs and their performance. Learning, synergy of combined resources and knowledge sharing all were positively associated with profitability and to a lesser extent on sales growth.
    Keywords: International networking, performance, SME, UK
    Date: 2014–07
  9. By: Bonanno, Graziella
    Abstract: Are Information and Communication Technology (ICT) and Research & Development (R&D) inputs or efficiency determinants? This is the topic of the paper which is developed by analysing a sample of 2691 Italian manufacturing firms over the period 2007-2009. The empirical setting is based on a production function estimated through the Stochastic Frontier (SF) approach. ICT and R&D are used once as inputs, once as efficiency determinants (Coelli et al., 1999). Results show that the rates of return of ICT and R&D investments are high (0.08 for ICT and 0.04 for R&D) when they enter into the model only as inputs. We also documented that ICT and R&D contribute positively to explain the efficiency scores.
    Keywords: ICT, R&D, Stochastic Frontier Approach, efficiency
    JEL: D22 D24 L69 O39
    Date: 2014–07–29
  10. By: Edwin Goñi; William F. Maloney
    Abstract: Using a global panel on research and development (R&D) expenditures, this paper documents that on average poor countries do far less R&D than rich as a share of GDP. This is arguably counter intuitive since the gains from doing the R&D required for technological catch up are thought to be very high and Griffith et al. (2oo4) have documented that in the OECD returns increase dramatically with distance from the frontier. Exploiting recent advances in instrumental variables in a varying coefficient context we find than the rates of return follow an inverted U: they rise with distance to the frontier and then fall thereafter, potentially turning negative for the poorest countries. The findings are consistent with the importance of factors complementary to R&D, such as education, the quality of scientific infrastructure and the overall functioning of the national innovation system, and the quality of the private sector, which become increasingly weak with distance from the frontier and the absence of which can offset the catch up effect. China’s and India’s explosive growth in R&D investment trajectories in spite of expected low returns may be justified by their importing the complementary factors in the form of multinational corporations who do most of the patentable research.
    Keywords: R&D, Technology Adoption, Development, Complementarities, Instrumental Variable Varying Coefficient Models.
    JEL: O1 O32 O33 O4
    Date: 2014–06–19
  11. By: Chatterjee, Sidharta
    Abstract: Practice of knowledge management is often characterized by obstacles to creation, distribution, and transfer of knowledge from specific groups of settings. Obstacles or constraints to attempts to constitute knowledge as an organizational resource have been previously dealt within the context of organizational learning perspectives; however, there still remain barriers toward making learning available and all-pervasive throughout organizations. This is often as a result of two important factors; i) bureaucratic and hierarchical forms of organization, and ii) owing to the situated and tacit character of knowledge. This paper is a result of theoretical exploration aimed toward addressing these core issues, and proposes solutions to manage constraints and remove obstacles to knowledge management, as well as means to codify the tacit character of knowledge. The research offers a view that although it is reasonable to value knowledge in financial or economic terms, it is also important to consider the problems which make it difficult to extract and transfer knowledge within specific organizational settings. Addressing the issue of rising competitive pressure for innovation, this paper proposes several solutions to enable lateral flows of knowledge-sharing by overcoming the factors that affect acquisition of, and creation and distribution of knowledge across fluid social boundaries.
    Keywords: Knowledge management, tacit knowledge, organizational learning , constraints to KM
    JEL: M10
    Date: 2014–08–06
  12. By: Mariana Mazzucato (SPRU, University of Sussex, UK); Carlota Perez (SPRU, University of Sussex, UK; London School of Economics, UK; Nurkse Institute, Estonia)
    Keywords: Growth policy, innovation, green growth, inclusive growth, technological revolutions, role of government, mission-oriented investments, value creation, definancialisation, respecialisation
    Date: 2014–07
  13. By: Amavilah, Voxi Heinrich
    Abstract: Existing literature demonstrates clearly that knowledge is the sum of common knowledge and uncommon knowledge. Common knowledge is mostly inherited and it may or may not have scientific bases. Uncommon knowledge is mainly a product of the motions of science and technology. Scientific and technological motions depend on human capital, so that world knowledge is human capital by implication. From here analysis is not so unusual as the concept of human capital is not new. Through out history people have been interested in valuing human life. What prevented rapid progress in the beginning was inhibitions to likening humans to machines. As soon as economists overcame their inhibitions, human capital theory developed quickly along the familiar logistic curve, picking up speed after Mincer devised a practical formula for it. However, the Mincerian equation formalized a misconception in three ways. First, it based human capital only on labor, thereby overstating the production role and disregarding the importance of human capital in innovation and knowledge creation. Second, it measured human capital as an area, ignoring common language and understanding that as knowledge human capital is at least 3D “solid”, with depth, width, and the time over and in which it accumulates. Finally, it neglected key interactions between the quantity and quality indicators of human capital. These misconceptions are what this paper tries to shed light upon by proposing a commonsensical measure of human capital as a volume. Analysis finds that disregarding interactions our commonsensical measure of human capital is larger than conventional Mincerian measures of human capital. Taking interactions into account, it is possible for our measure to be larger, smaller, or equal to conventional measures.
    Keywords: 3D human capital, Mincerian human capital, scientific knowledge, technological knowledge, common knowledge, wide knowledge, deep knowledge, solid knowledge, intimate knowledge, acquired knowledge, inherited knowledge
    JEL: D83 I29 J24 O15 Z00
    Date: 2014–07–30
  14. By: Jeroen de Jong
    Abstract: Until seven years ago, user innovation studies focused on specific cases or industries, leaving room for criticism that the phenomenon is marginal. This chapter summarizes and discusses the empirical work concerned with the scope of user innovation in broader samples. A first finding is that user innovation is widespread. The share of firms developing and/or modifying processes for in-house use is generally about 15 to 20 percent, while amongst consumers four to six percent innovated to satisfy personal needs in the past three years. This corresponds with millions of innovating businesses and consumers across the globe. For firms, user innovation indicators measure process-related innovation activities which remain partly invisible in official surveys, while user innovation by individual consumers is not at all present in the official statistics. A second finding is that user innovation is more open than traditional, producer-oriented innovation. Especially innovating consumers do not patent their knowledge, and 10 to 30 percent of them even shares their knowledge freely with other users and/or adopting businesses. Finally, it appears that users’ innovations can be useful to other economic actors. Diffusion mechanisms include free revealing to other users, new venture creation, and adoption by commercial producers. Overall, the empirical studies suggest that user innovation indicators should be part of the official innovation metrics.
    Date: 2014–05–22
  15. By: KINUKAWA Shinya
    Abstract: Firms apply for patents not only to obtain the right to exclude but also to prevent their rivals from obtaining patents of competing technologies. Patent applications for the latter purpose are usually called "defensive applications," which have caused the low appraisal rate of Japanese patents. However, since every patent application is published after 18 months from the application date, the defensive applications can be information sources of new technologies for firms that are not directly competing against the applicants, and the external effects of the defensive applications on different technological fields may be growing in the open innovation era. This paper examines such external effects in the field of inkjet technology using patent citation data, and confirms that even patent applications without examination requests had the effects. Moreover, this paper examines the effects of two patent policy changes on firms' patent applications: the temporary decrease in the novelty standard in the 1990s and the shortening of the examination request period since the 2000s. The regression results show that the former and the latter increased and decreased the number of patent applications, respectively.
    Date: 2014–07
  16. By: NAGAOKA Sadao; YAMAUCHI Isamu
    Abstract: We conducted an inventor survey to examine the contribution of science to corporate inventions. The survey results show that for about one-quarter of the inventions, scientific knowledge embodied in literature, equipment, or research materials in the last 15 years was essential to conceive or implement research and development (R&D). If it were not for the collaboration with universities, 3% of the R&D projects would not have been implemented. In total, for two-thirds of the inventions, scientific knowledge contributed to implementing and accelerating R&D. These results indicate the importance of scientific knowledge as a public good to promote corporate inventions. We also found that about 70% of the scientific knowledge source of Japanese inventions was generated in Japan: the suppliers of scientific sources were located domestically. If the scientific sources are cited in the patent document, they are more likely to be cited at where the prior art is described rather than where the invention is described. Moreover, the results show that only 15% of the inventions with important scientific sources cite such important literature in the patent document, and only 16% of the inventions citing non patent literature actually cite the important scientific sources. This result means that the patent citation is an incomplete and noisy index to trace the knowledge flow.
    Date: 2014–07
  17. By: Brigitte Hoogendoorn; Peter van der Zwan; Daniela Guerra
    Abstract: The objective of this paper is to develop a better understanding of how and why small and medium-sized enterprises (SMEs) engage in environmental practices. Two types of environmental practices are distinguished: practices related to production processes (greening processes) and practices related to products and services (greening product and service offerings). Despite a growing literature on socially responsible behavior of large firms, the role of SMEs remains underexposed. This neglect of SMEs is not justified because of the substantial impact of SMEs on the economy and the natural environment. By using unique data for almost 9,000 SMEs across 12 sectors in 38 countries, we study the influences of firm, sector and country characteristics on SMEs’ environmental behavior. Our results suggest that different characteristics have dissimilar influences on both types of environmental practices such as the type of customers served and the stringency of environmental legislation at the country level. Moreover, the dominant idea that small firms are reluctant to invest in environmental practices is clearly more nuanced: size indeed matters however only when greening processes are concerned.
    Date: 2014–05–07
  18. By: William R. Kerr; Ramana Nanda; Matthew Rhodes-Kropf
    Abstract: Entrepreneurship research is on the rise but many questions about its fundamental nature still exist. We argue that entrepreneurship is about experimentation: the probabilities of success are low, extremely skewed and unknowable until an investment is made. At a macro level experimentation by new firms underlies the Schumpeterian notion of creative destruction. However, at a micro level investment and continuation decisions are not always made in a competitive Darwinian contest. Instead, a few investors make decisions that are impacted by incentive, agency and coordination problems, often before a new idea even has a chance to compete in a market. We contend that costs and constraints on the ability to experiment alter the type of organizational form surrounding innovation and influence when innovation is more likely to occur. These factors not only govern how much experimentation is undertaken in the economy, but also the trajectory of experimentation, with potentially very deep economic consequences.
    JEL: G24 L26 O32
    Date: 2014–07
  19. By: Fischer, Christoph; Hossfeld, Oliver
    Abstract: We propose a novel, multilaterally consistent productivity approach-based indicator to assess the international price competitiveness of 57 industrialized and emerging economies. It is designed to be a useful assessment tool for monetary policy authorities and, thereby, differs from previously proposed indicators, which are hardly applicable on a day-to-day basis. Special attention has been paid to an appropriate selection of price and productivity data in levels as opposed to indices, and to the treatment of country fixed effects when interpreting currency misalignments. The discussion of the results focuses on the larger economies of the sample. At the current juncture, and in contrast to the prevailing view, we find US price competitiveness to be above and China's price competitiveness to be below its derived benchmark. --
    Keywords: equilibrium exchange rates,productivity approach,price competitiveness,panel cointegration
    JEL: F31 C23
    Date: 2014
  20. By: Díaz-Mora, Carmen; Córcoles, David; Gandoy, Rosario
    Abstract: The aim of this paper is to investigate whether the probability of ceasing exports is lower for firms that are integrated in transnational production chains, once other firm characteristics are controlled for. On the basis of the estimation of a random-effects probit model with panel data, we find that the superior characteristics of firms involved in global networks (in terms of productivity, foreign ownership and skilled labor) explain their greater resistance to losing their status as exporters. However, for small firms, even when these distinctive features are controlled for, integration in international networks plays an important role in continuing to export. Thus, it seems that small firms which participate in networks have an added advantage which enables them to confront the uncertainty of foreign markets in better conditions and translates to a lower likelihood that they will stop exporting.
    Keywords: Probability of ceasing to export, firms' characteristics, integration in global value networks.
    JEL: F14 L14
    Date: 2014–07
  21. By: Luis Castro (Universidad Privada Boliviana, LaPaz, Boliviana); Ben Li (Boston College); Keith Maskus (University of Colorado at Boulder); Yiqing Xie (Fudan University, Shanghai, China)
    Abstract: This paper provides a direct test of how fixed export costs and productivity jointly determine firm-level export behavior. Using Chilean data, we construct indices of fixed export costs for each industry-region-year triplet and match them to domestic firms. Our empirical results show that firms facing higher fixed export costs are less likely to export, while those with higher productivity export more. These outcomes are the foundation of the widely-used sorting mechanism in trade models with firm heterogeneity. A particularly novel finding is that high-productivity nonexporters face greater fixed export costs than low-productivity exporters. We also find that the substitution between fixed export costs and productivity in determining export decisions is weaker for firms with higher productivity. Finally, both larger fixed export costs and greater within-triplet productivity dispersion raise the export volume of the average exporter.
    Keywords: Sorting, firm heterogeneity, fixed export costs
    JEL: F10 F12 F14
    Date: 2014–07–19
  22. By: Morris, Mike; Staritz, Cornelia; Plank, Leonhard
    Abstract: This paper shows the importance of ownership, end markets and regionalism within the global value chain (GVC) conceptual framework. This is done through unpacking the development trajectories of the major Sub Saharan African (SSA) apparel export industries (Mauritius, Madagascar, Kenya, Lesotho, Swaziland) against the backdrop of global and regional trade regime changes and the manner in which different supplier firms react to these opportunities and/or constraints. These trajectories demonstrate the emergence of a new regionalism centred around investment and differentiated end markets. Ownership characteristics of supplier firms shape the ability to shift between different end markets and respond to lead firm requirements; and the level of their local and regional embeddedness impacts on different forms of upgrading. More locally and regionally embedded firms in these SSA countries have been able to shift with uneven success to new, and in particular regional, markets. In contrast, Asian-owned transnational producers remain focused on the US market with limited market opportunities and upgrading potential. Different types of ownership and embeddedness dynamics are therefore important to explain the co-evolution of highly differentiated value chain dynamics creating a variety of apparel industrialization trajectories in the apparel export industry in SSA. --
    Keywords: global value chains,apparel,upgrading,ownership,Sub Saharan Africa,global value chains,apparel,upgrading,ownership,Sub Saharan Africa
    Date: 2014
  23. By: Foreman-Peck, James (Cardiff Business School); Zhou, Peng (Cardiff Business School)
    Abstract: Both analysis of international trade and the knowledge resource theory of the firm imply that language skills should play a vital role in exporting. This may be apparent to large multinationals with sites in many different linguistic locations, but we show it is less obvious to smaller companies. With data on the language used by each of a large sample of European small and medium sized enterprises in their export markets we test and estimate the effects of language assets on language performance in export markets and on export sales. Controlling for the possibility that language skills may be acquired by exporting, we find a very substantial export return to linguistic expertise, indicative of unexploited gains from investment in languages. There is also evidence of greater under-investment in language skills in English-speaking Europe, which we show can be a prediction of Konya’s (2006) trade model.
    Keywords: Internationalisation; language skills; SMEs
    JEL: D22 F13 H52 R42
    Date: 2014–06
  24. By: James Hayton (Warwick University Business School); Gabriella Cacciotti (Warwick University Business School)
    Abstract: The literature on the association between cultural values and entrepreneurial beliefs, motives and behaviours has grown significantly over the last decade. Through its influence on beliefs, motives and behaviours, culture can magnify or mitigate the impact of institutional and economic conditions upon entrepreneurial activity. Understanding the impact of national culture, alone and in interaction with other contextual factors, is important for refining our knowledge of how entrepreneurs think and act. We present a review of the literature with the goal of distilling the major findings, points of consensus and points of disagreement, as well as identify major gaps. Research has advanced significantly with respect to examining complex interactions among cultural, economic and institutional factors. As a result, a more complex and nuanced view of culture’s consequences is slowly emerging. However, work that connects culture to individual motives, beliefs and values has not built significantly upon earlier work on entrepreneurial cognition. Evidence for the mediating processes linking culture and behaviour remains sparse and inconsistent, often dogged by methodological challenges. Our review suggests that we can be less confident, rather than more, in the existence of a single entrepreneurial culture. We conclude with suggestions for future research.
    Keywords: entrepreneurship, culture, national culture, cultural values, entrepreneurial activity, entrepreneurial cognition
    Date: 2014–02–01
  25. By: Stephen Roper (Warwick University Business School); Mark Hart (Aston University Business School)
    Abstract: Among SMEs high growth is often episodic and not sustained. How can we best support SMEs to achieve sustained growth? In this paper we review a number of international support measures designed to give SMEs the capabilities and resources to sustain fast growth. Policy guidelines emerge suggesting the need for partnership, for regionalised delivery and the potential value of holistic supports for sustained growth. Support measures are of three main types: Systemic measures which focus on informational or strategic market failures; Holistic approaches – which combine business development and leadership development; Functional or thematic approaches – which focus more narrowly on financial support, on management and leadership development or technology adoption or use. Reviewing these schemes suggests seven design or implementation guidelines for measures aiming to support sustained growth. These relate both to the effective targeting of growth support measures as well as ensuring that schemes are both effective and efficient.
    Keywords: SME, small business, sustained growth, policy
    JEL: L53 L78
    Date: 2013–09–01
  26. By: Pedro Albarrán; Raquel Carrasco; Javier Ruiz-Castillo
    Abstract: This paper analyzes a sample of economists from two sources: faculty members working in2007 in a selection of the 81 top Economics departments in the world, and Fellows of the Econometric Society active at that date but working elsewhere in other institutions. Productivity is measured in terms of a quality index that weights the publications of each individual in four journal equivalent classes. Consider the partition of any set into the following three groups: those who study and work in the same country (stayers), those who study the Ph.D. abroad but come back to the country where they obtained a first degree (brain circulation), and those who complete their education at home but move abroad after the Ph.D., plus those who leave their country to study the Ph.D. and remain abroad in 2007 (two different forms of brain drain). From the point of view of a country or a geographical area, there are three types of movers: brain circulation, brain drain,and migrants constituting a brain gain for the country or the geographical area in question. We investigate the following four issues. (1) and (2). Controlling for demographic and career variables,we study the productivity of movers versus stayers for the individuals working in 2007 in the U.S. or in the EU. (3) The potential deleterious effect of academic in breeding practices on researchers' productivity. (4) The existence of productivity differences among economists from different countries.
    Date: 2014–07
  27. By: Roberta Distante (Fondazione Eni Enrico Mattei, Milan, Italy); Ivan Petrella (University of London, UK); Emiliano Santoro (Catholic University of Milan, Italy and University of Copenhagen, Denmark)
    Abstract: The nexus between firm growth, size and age in U.S. manufacturing is examined through the lens of quantile regression models. A number of interesting features are unveiled that linear frameworks could not detect. Size pushes both low and high performing firms towards the median rate of growth, while age is never advantageous, and more so as firms grow faster.
    Keywords: Firm Growth, Size, Age, Conditional Quantile
    JEL: C14 L1
    Date: 2014–07
  28. By: Fairlie, Robert
    Abstract: Using confidential microdata from the Characteristics of Business Owners, we examine why African-American owned businesses lag substantially behind white-owned businesses in sales, profits, employment, and survival.  Black business owners are much less likely than white owners to have had a self-employed family member owner prior to starting their business and are less likely to have worked in that family member's business.  Using a nonlinear decomposition technique, we find that the lack of prior work experience in a family business among black business owners, perhaps by limiting their acquisition of general and specific business human capital, negatively affects black business outcomes.
    Keywords: Business, entrepreneurship, black business, human capital, business human capital, inequality, race
    Date: 2014–08–06
  29. By: Chete, L. N.; Adeoti, J. O.; Adeyinka, F. M.; Ogundele, O.
    Abstract: The structure of the Nigerian economy is typical of an underdeveloped country. The primary sector, in particular, the oil and gas sector, dominates the gross domestic product accounting for over 95 per cent of export earnings and about 85 per cent of gove
    Keywords: growth, industrial policy, manufacturing, productivity
    Date: 2014
  30. By: Alok Kumar (Department of Economics, University of Victoria); Brianne Kober
    Abstract: In this paper, we study the effects of education on the total factor productivity (TFP) of a large number of countries. We estimate TFP using a variant of augmented Solow growth model in which health capital is one of the factors of production. We find that quantity of education significantly and positively affects TFP. This result is in contrast to the findings of the previous literature, that suggest that either the quantity of education does not matter for growth (e.g. Benhabib and Spiegel 1994, Caselli et al. 1996) or only the quality of education matters for growth (e.g. Hanushek and Kimko 2000). We also find that TFP differences explain about 1/3rd of per-capita real income differences across countries. This estimate is substantially lower than the existing estimates (e.g. Klenow and Rogriguez-Clare 1997, Hall and Jones 1999) which suggest that TFP differences are the dominant source of per-capita real income differences across countries.
    Keywords: Augmented Solow Growth Model, TFP, Quantity and Quality of Education, Health
    JEL: F43 E23 N10 N30 O47
    Date: 2014–07–25
  31. By: Becherair, Amrane
    Abstract: This paper will investigate the impact of institution on economic growth rates in MENA nations, Using panel data model over the period 1995-2012. Within the framework of the neoclassical growth model, this study integrates a broad set of institutional variables such. Security of property rights, governance, political freedom and size of government are the indicators used in the study, facilitating identification of the most important institutions that account for the observed variations in economic growth rates among nations. We find that, The sign and significance of all of the variables are qualitatively similar to the results obtained by MRW (1992). We also find The human capital is highly significant at 99% with initial income and Investment Share in MENA countries. The Results indicate that the dummy variable for oil exporters is positive and significant, indicating that other things being equal, oil exporters would be expected to have higher economic growth rates in MENA Countries. Basic OLS results, as well as a variety of additional evidence, suggest that (a) security of property rights, is the most significant institutions that explain the variations in economic growth rates, (b) The significant and negative sign on the government consumption, indicating that smaller governments are "better" in MENA countries.
    Keywords: MENA Countries – Economic Growth – Institutions- Panel Data Model
    JEL: C23 C87 O4 O43 O53 O55
    Date: 2014–08–03
  32. By: Salvador Barrios (Joint Research Center of the European Commission); Gaetan Nicodeme (European Commission); Antonio Jesus Sanchez Fuentes (Universidad Complutense Madrid)
    Abstract: The present study provides estimates of the Effective Marginal Tax Rates (EMTRs) for a sample of 17 OECD countries and 11 manufacturing sectors in a single framework encompassing capital, labour and energy taxes. Our cross-country/cross-sector approach allows us comparing the incentives provided by the tax systems and gauging the effects of tax changes taking explicitly into account the possible substitution between factors as well as their tax incidence. Our results suggest that the OECD tax systems provide different incentives for manufacturing activity across countries and that tax systems are relatively neutral with respect to the sectoral composition of manufacturing activities. The impact of potential tax increases on firms´ activity is found to be most attenuated when shifted towards consumers and/or employees rather than energy consumption and/or capital investors. These results are robust to alternative hypotheses regarding the tax incidence parameters, elasticity of substitution between factors and mark-up on final prices. In addition, policy strategies favouring tax increases on energy consumption and lowering taxes on labour can substantially reduce the EMTRs and thus yield substantial efficiency gains for firms. These reforms should in some instances be ambitious enough to produce desired effects on firms’ EMTRs, however.
    Keywords: Taxation; Tax incidence; Effective Taxation
    JEL: H20 H22 H24 H25
    Date: 2014–07

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