nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2023‒05‒22
five papers chosen by
João José de Matos Ferreira
Universidade da Beira Interior

  1. The Creation and Diffusion of Knowledge: Evidence from the Jet Age By Stefan Pauly; Fernando Stipanicic
  2. Entrepreneurial Resilience and Growth of Small and Medium Enterprises in Port Harcourt By Ogbumgbada, Oluchi Vincent
  3. Korean Venture Firms' Sources of Capital By Ahn, Sohyun
  4. Industrial dynamics throughout the ICT innovation cycle: The rise and decline of business dynamism in Portugal during 1986-2018 By Ernesto Nieto-Carrillo; Carlos Carreira; Paulino Teixeira
  5. The impact of public support for innovation on SME performance and efficiency By Raphaël CHIAPPINI; Sophie POMET

  1. By: Stefan Pauly (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique); Fernando Stipanicic (UC Berkeley - University of California [Berkeley] - UC - University of California)
    Abstract: Click here for the latest version This paper provides new causal evidence of the impact of air travel time on the creation and diffusion of knowledge. We exploit the beginning of the Jet Age as a quasi-natural experiment. We digitize airlines' historical flight schedules and construct a novel data set of the flight network in the United States. Between 1951 and 1966, travel time between locations more than 2, 000 km apart decreased on average by 41%. The reduction in travel time explains 33% of the increase in knowledge diffusion as measured by patent citations. The increase in knowledge diffusion further caused an increase in the creation of new knowledge. The results provide evidence that jet airplanes led to innovation convergence across locations and contributed to the shift in innovation activity towards the South and the West of the United States.
    Date: 2022–10–21
  2. By: Ogbumgbada, Oluchi Vincent
    Abstract: This work examined the relationship between entrepreneurial resilience and growth of small and medium enterprises in Port Harcourt. Objectives of the study were to examine how dimensions of entrepreneurial resilience such as proactiveness and resourcefulness enhance measures of growth in terms of sales growth and business expansion. The survey research design was adopted. The target population for this study comprised of 316 owners and employees of some selected SMEs in Port Harcourt, Rivers State. The sample size of 175 respondents was determined by using Krejcie and Morgan sample size determination table. Data were collected through primary (questionnaire) and secondary (textbooks, journal articles and internet). A structured questionnaire designed in four point likert rating scale format was adopted for the collection of data. Out of 175 questionnaires administered, the researcher was able to retrieve 152 copies. Spearman Ranking (r) was used for the test of hypotheses via SPSS Version 23.0. The findings revealed that there is a significant relationship between entrepreneurial resilience (proactiveness and resourcefulness) and growth (sales growth and business expansion) of small and medium enterprises in Port Harcourt. The study concluded that entrepreneurial resilience has a favourable outcome on growth of small and medium enterprises in Port Harcourt as it reveals that entrepreneur’s proactiveness and resourcefulness are veritable resilient components to combat with adversity internal and external the business, as it promotes effective sales growth and business expansion. The study recommended amongst other things that management of small and medium enterprises in Port Harcourt should create new fits between demand and supply towards identifying new opportunities in line with perceived disruption and delving into it to enhance effective operations and sales growth as the turbulence emerge; Creating a good social network is a source to acquire resources in times of difficulty. Thus, entrepreneurs should improve their social network base as they will help during perilous times by directly or indirectly providing resources for entrepreneurs thereby improving their business expansion.
    Date: 2023–04–12
  3. By: Ahn, Sohyun (Korea Institute for Industrial Economics and Trade)
    Abstract: Financing decisions are some of the most important decisions firms make. Many scholars have focused on studying the mechanism behind these decisions, and comparing the outcomes of different sources of capital. Studies have found that firms’ financial decisions interact with other business decisions, such as investment decisions. Moreover, different sources of capital affect other players in the market differently, through which firms’ financing decisions affect the overall structure of the economy. This article examines the relationship between financing and other firm characteristics to shed light on firms’ strategies and performance in Korea. Korean venture firms’ unique characteristics may affect their business strategies and performance. In this article, I analyze the characteristic of venture firms by focusing on their financing decisions. Specifically, I categorize and define venture firms by the sources of capital utilized and compare their characteristics and performance using survey data from 2021. Keywords: venture firms, venture capital, venture financing, small and medium-sized enterprises, SMEs, capital financing, financing decisions, equity financing, debt financing, imperfect information, imformation asymmetry, angel investment, Korea, innovation policy
    Keywords: venture firms; venture capital; venture financing; small and medium-sized enterprises; SMEs; capital financing; financing decisions; equity financing; debt financing; imperfect information; imformation asymmetry; angel investment; Korea; innovation policy
    JEL: D81 D83 L25 O30 O31 O38 R11 R12
    Date: 2023–04–30
  4. By: Ernesto Nieto-Carrillo (University of Coimbra, Centre for Business and Economics Research, CeBER and Faculty of Economics); Carlos Carreira (Univ of Coimbra, CeBER, Faculty of Economics); Paulino Teixeira (niversity of Coimbra, Centre for Business and Economics Research, CeBER and Faculty of Economics)
    Abstract: Increasing evidence shows that business dynamism has weakened in most developed economies. However, except for the US literature, most previous research has only portrayed the new century’s changes in firm dynamics. Instead, we focus on a longer period, 1986-2018, assembling an extensive longitudinal database with a time-consistent industry classification covering the population of Portuguese firmsin the manufacturing and service sectors. The BaiPerron estimate for unknown break dates in time series indicates two structural changes in industrial dynamics, one in its ascending wave (1993) and another in the declining phase (2003). Accordingly, our (HP) estimated trends show that, after an initial period of intense creative destruction, firm dynamics have become less turbulent since 2003, with lower entry, declined job reallocation, and decreased growth rates. Furthermore, survival and counterfactual firm-level regressions suggest that an otherwise-equal post-2003 start-up faced a significantly higher exit hazard than its pre-1993 counterpart (i.e., without any structural change). As a result, new and young companies have seen their share in aggregate employment and net job creation decline, notwithstanding the increasingly higher performance of young, high-growth firms. Lower labour and firm turnover suggest a weakened contribution of reallocation to productivity growth. On the other hand, decreased entry and the higher exit hazard have likely undermined the disruptive potential of transformative entrepreneurship
    Keywords: Firm dynamics; Entry; High-growth firms; Resource reallocation; Survival.
    Date: 2023–04
  5. By: Raphaël CHIAPPINI; Sophie POMET
    Abstract: This article examines the impact of two types of financial support for innovation granted by French public institutions to French SMEs on a set of firm performance measures. Using an original database that provides information on repayable advances and subsidies obtained by 5, 448 French SMEs over the period 2010-2016, we evaluate the effectiveness of such financial support using a quasi-experimental design. Our findings indicate that both repayable advances and subsidies significantly improve targeted SMEs’ turnover, level of intangible assets and total employment at one year and three years after support is granted. The impact on firm-level TFP is only positive and significant after three years, while being negative in the very short run. Our results also provide evidence that the combination of both instruments for a given innovation project within a year does not entail significantly higher effects. A heterogeneous analysis reveals that the impact of financial support instruments for innovation is significantly higher for young, micro and small firms. Furthermore, our analysis shows that innovation support benefits more to firms located in the Paris region than in other regions and this tends to exacerbate regional inequalities. Finally, our findings indicate that the transformation of Oséo into Bpifrance in December 2012 has led to an increase in the effectiveness of the innovation policy.
    Keywords: Innovation policy, firm performance, policy evaluation, Mahalanobis distance matching, difference-in-difference.
    JEL: O33 O38 C14 C21
    Date: 2023

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