nep-sbm New Economics Papers
on Small Business Management
Issue of 2009‒08‒16
23 papers chosen by
Joao Carlos Correia Leitao
Technical University of Lisbon

  1. Innovative Sales, R&D and Total Innovation Expenditures: Panel Evidence on their Dynamics By Wladimir Raymond; Pierre Mohnen; Franz Palm; Sybrand Schim van der Loeff
  2. Entrepreneurship and the Business Cycle By P.D. Koellinger; A.R. Thurik
  3. Entrepreneurship of young migrants across Mediterranean borders By L. Mengoni
  4. The Effects of Entrepreneurship Education By Weber, Richard; Graevenitz, Georg von; Harhoff, Dietmar
  5. The role of entrepreneurial culture and human capital in innovation By Isabel Pizarro; Juan C.Real; M.Dolores de la Rosa
  6. National Innovation System and the Emergence of Indian Information and Software Technology Multinationals By Jaya Prakash Pradhan
  7. Statistical Analysis of the Country Selection for Italian SMEs By Luciana Dalla Valle; Giovanna Nicolini
  8. Innovation Behaviour At Farm Level â Selection And Identification By Sauer, Johannes; Zilberman, David
  9. Credit Constraints, Entrepreneurial Talent, and Economic Development By Bianchi, Milo
  10. Determinants of Energy Intensity: A Preliminary Investigation of Indian Manufacturing By Sahu, Santosh; Narayanan, K
  11. Why Do Some Firms Undertake R&D Whereas Others Do Not? By Richard Harris; Mary Trainor
  12. What policies do we need for Southern Italy? The role of national and regional policies in the last decade By Luigi Cannari; Marco Magnani; Guido pellegrini
  13. Computerization, accounting transparency and competitiveness of public administration: a regional analysis By Carlo Maria Arpaia; Raffaele Doronzo; Paquale Ferro
  14. The Behavioral Equivalence of Organizational Culture By Indu Rao
  15. Spillover and Backward Linkage Effects of FDI: Empirical Evidence for the UK By Richard Harris
  16. .Rushing in where Angels Fear to Tread?.: The Early Internationalization of Indigenous Chinese Firms By Naude, Wim
  17. Does ICT Investment Spur or Hamper Offshoring? Empirical Evidence from Microdata By Luigi Benfratello; Tiziano Razzolini; Alessandro Sembenelli
  18. On the Real Effects of Private Equity Investment: Evidence from New Business Creation. By Alexander Popov; Peter Roosenboom
  19. Multinational firms and job tasks By Katariina Nilsson Hakkala; Fredrik Heyman; Fredrik Sjöholm
  20. What Determines the Attractiveness of the European Union to the Location of R&D Multinational Firms? By Siedschlag, Iulia; Smith, Donal; Turcu, Camelia; Zhang, Xiaoheng
  21. Productivity Performance in Canada, 1961 to 2008: An Update on Long-term Trends By Baldwin, John R.; Gu, Wulong
  22. Employment and Wage Adjustments at Firms under Distress in Japan: An analysis based upon a survey By ARIGA Kenn; KAMBAYASHI Ryo
  23. Productivity and the Determinants of Efficiency in Irish Agriculture (1996-2006) By Carroll, J.; Greene, S.; OâDonoghue, C.; Newman, C.; Thorne, F.

  1. By: Wladimir Raymond; Pierre Mohnen; Franz Palm; Sybrand Schim van der Loeff
    Abstract: This paper studies the dynamic relationship between input and output of innovation in Dutch manufacturing using an unbalanced panel of enterprise data from five waves of the Community Innovation Survey during 1994-2004. We estimate by maximum likelihood a dynamic panel data bivariate tobit with double-index sample selection accounting for individual effects. We find persistence of innovation input and innovation output, a lag effect of the former on the latter and a feedback effect of the latter on the former. The lag effect remains significant in the high-tech sector even after four years. Firm and industry effects are also important. <P>Dans cette étude nous estimons une fonction de production de l’innovation dynamique sur base des données de panel de cinq vagues d’enquêtes d’innovation communautaires (CIS) aux Pays-Bas couvrant la période 1994 à 2004. Nous estimons par maximum de vraisemblance un modèle tobit bivarié avec une double sélection et prise en compte des effets individuels. Nous trouvons une persistence dans l’innovation tant au niveau de l’intrant que de l’extrant et des effets de retard croisés entre les deux. Les retards perdurent au-delà de 4 ans dans le secteur high-tech. Les effets individuels et les effets particuliers aux industries sont également significatifs.
    Keywords: innovation production function, panel data, CIS data, bivariate dynamic tobit, Netherlands, fonction de production de l’innovation, données de panel, tobit bivarié dynamique, Pays-Bas
    JEL: C33 C34 O31
    Date: 2009–08–01
  2. By: P.D. Koellinger (Erasmus School of Economics, Erasmus University Rotterdam); A.R. Thurik (Erasmus School of Economics, Erasmus Universiteit Rotterdam)
    Abstract: We study the cyclical pattern of entrepreneurial activity. Results across 22 OECD countries for the period 1972-2007 show that entrepreneurial activity is a leading indicator of the business cycle in a Granger-causality sense. This contradicts existing theoretical hypotheses which predict that entrepreneurship is pro-cyclical or not cyclical. We discuss possible causes and implications of this finding.
    Keywords: Entrepreneurship; business cycle
    JEL: L26 E32
    Date: 2009–06–30
  3. By: L. Mengoni
    Date: 2009–08
  4. By: Weber, Richard; Graevenitz, Georg von; Harhoff, Dietmar
    Abstract: Entrepreneurship education ranks highly on policy agendas in Europe and the US, but little research is available to assess its impacts. In this context it is of primary importance to understand whether entrepreneurship education raises intentions to be entrepreneurial generally or whether it helps students determine how well suited they are for entrepreneurship. We develop a theoretical model of Bayesian learning in which entrepreneurship education generates signals which help students to evaluate their own aptitude for entrepreneurial tasks. We derive predictions from the model and test them using data from a compulsory entrepreneurship course at a German university. Using survey responses from 189 students ex ante and ex post, we find that entrepreneurial propensity declined somewhat in spite of generally good evaluations of the class. Our tests of Bayesian updating provide support for the notion that students receive valuable signals and learn about their own type in the entrepreneurship course.
    Keywords: entrepreneurship; entrepreneurship education; Bayes’ Rule; learning; signals
    JEL: D83 J24 L26 M13
    Date: 2009–08–08
  5. By: Isabel Pizarro (Department of Business Administration, Universidad Pablo de Olavide); Juan C.Real (Department of Business Administration, Universidad Pablo de Olavide); M.Dolores de la Rosa (Department of Business Administration, Universidad Pablo de Olavide)
    Abstract: The objective of the present study is to analyze the role played by the entrepreneurial culture of the organization and the value and uniqueness of employees’ knowledge (human capital) in generating innovation. This research has been conducted with a sample of companies in the most innovative sectors of Spanish industry, applying the Partial Least Squares (PLS) technique. The results demonstrate significant relationships between innovation and the two dimensions of the human capital .We have also found that entrepreneurial culture acts as a moderating variable between human capital and innovation, in the way that employees of high value generate more innovation in the presence of this type of culture.
    Keywords: Innovation; human capital; entrepreneurial culture
    Date: 2009–06
  6. By: Jaya Prakash Pradhan
    Abstract: This study analyzes the factors leading to the emergence of these Indian IST firms as multinationals in the global market. Applying the theoretical framework of national innovation system (NIS), the study establishes that origin of Indian IST multinationals are critically linked to the overall policy environment and strategic government intervention in skill formation, development of supporting institutions, proactive role of Indian households in undertaking human capital investment and providing risk taking entrepreneurs , and also to the firm-level business strategies.
    Keywords: multinational, national innovation system (NIS), Indian, IST firms, economy, global market,
    Date: 2009
  7. By: Luciana Dalla Valle (University of Milan); Giovanna Nicolini (University of Milan)
    Abstract: When the choice of one firm's internationalisation regards the establishment of a subsidiary in a foreign country, then internationalization is a very complex process involving many variables. Some of these variables concern the internal organization of the firm - as for example its economic status, growth politics and managerial abilities. Other variables instead are external and lie basically in the characteristicss of the country the firm chooses to open its subsidiary. The internationalization processes, which have mainly drawn researchers' interest, are about large firms; while the internationalization of SMEs (with less than 500 employees), has been less investigated so far. Moreover, the internationalization of SMEs is more hazardous, because these companies are less supported by the governmental authority, so the choice of the country where to open a new subsidiary represents a key element for the success of the firm. The aim of this paper is twofold. On the one hand, we will examine the features of the foreign countries in which Italian SMEs formerly established subsidiaries; on the other hand, we will investigated the consequences of SMEs internationalisation through their economic performance. Through the joint analysis of two variable sets (about countries and about firms) and through the statistical method we are going to implement in the following (hierarchical mixed logit model), we will be able to describe both the most signicant characteristics of the firms that already opened subsidiaries abroad and the characteristics of the country where the opening took place. Our first step will be selecting the variables for the two datasets, while the second step will be choosing the most suitable model for our purposes. The analysis concerns about 400 firms that started an internationalisation process before 2004.
    Keywords: Internationalisation, Cluster analysis, Bayesian mixed logit model,
    Date: 2008–12–03
  8. By: Sauer, Johannes; Zilberman, David
    Abstract: Using a squential logit model and a mixed-effects logistic regression approach this empirical study investigates factors for the adoption of automatic milking technology (AMS) at the farm level accounting for problems of sequential sample selection and behaviour identification. The results suggest the importance of the farmerâs risk perception, significant effects of peer-group behaviour, and a positive impact of previous innovation experiences.
    Keywords: Innovation, Dairy Farming, Sample Selection, Mixed-Effects Modelling., Marketing, D21, Q12, C5,
    Date: 2009–04–01
  9. By: Bianchi, Milo
    Abstract: In this paper, we formalize the view that economic development requires high rates of productive entrepreneurship, and this requires an efficient matching between entrepreneurial talent and production echnologies. We first explore the role of financial development in promoting such efficient allocation of talent, which results in higher production, job creation and social mobility. We then show how different levels of financial development may endogenously arise in a setting in which financial constraints depend on individual incentives to misbehave, these incentives depend on how many jobs are available, and this in turn depends on the level of financial development. Such complementarity between labour market and financial marketdevelopment may generate highly divergent development paths even for countries with very similar initial
    Keywords: credit constraints; allocation of entrepreneurial talent; productive and unproductive entrepreneurs; economic development
    Date: 2009
  10. By: Sahu, Santosh; Narayanan, K
    Abstract: The demand for energy, particularly for commercial energy, has been growing rapidly with the growth of the economy, changes in the demographic structure, rising urbanization, socio-economic development. In this context the energy intensity is one of the key factors which impact the projections of future energy demand. The Indian manufacturing sector is among the largest consumer of commercial energy compared to the other industries in India. Energy consumption per unit of production in the manufacturing of steel, aluminum, cement, paper, textile, etc. is much higher in India, in comparison to other developing countries. The purpose of this study is to understand the factors that influence industrial energy intensity in Indian manufacturing. The analysis undertaken in this paper find a positive relationship between energy intensity and firm size and an inverted U’ shaped relationship between energy intensity and size of the firm. The analysis shows that the foreign owned firms are less energy intensive compared to the domestic firms. Capital intensive firms as well as firms spending more on repair and maintenance are found to be more energy intensive. Further the results shows that expenditure on the research and development contribute to reduce firm level energy intensity and there is a sizable difference between highly energy intensive firm and less energy intensive firms.
    Keywords: Energy Intensity, Commercial Energy Consumption, Indian Manufacturing Industries
    JEL: B23 Q4
    Date: 2009–04–16
  11. By: Richard Harris; Mary Trainor
    Abstract: Data for the UK show Northern Ireland remains at the bottom of the productivity leaguetable, and that its R&D performance is consistently amongst the lowest across the UKregions. This paper analyses the data from a survey of some 250 matched firms operating inNorthern Ireland (approximately half undertaking R&D and half not), in order to provide amore detailed analysis of attitudes to undertaking R&D in the Province. We consider a rangeof factors that determine whether R&D takes place (such as absorptive capacity, marketorientation, business objectives, and competitive advantages). Conditional on whether R&Doccurs, the analysis then looks at, firstly, the determinants of the R&D capital stock andintensity; before concentrating on those firms who undertook no R&D and analysing whichfactors might make them likely to engage in such activities in the future. Policy conclusionsare then drawn as to what might be done to boost both the amount of R&D undertaken andthe number of firms engaged in R&D in the Province.
    Keywords: R&D, regional policy, matching
    JEL: D24 H32 O18 O32
    Date: 2009–04
  12. By: Luigi Cannari (Banca d'Italia); Marco Magnani (Banca d'Italia); Guido pellegrini
    Abstract: In this paper we examine the Italian regional policies launched in the second half of the 1990s and aimed at promoting the development of Southern Italy. Ten years on, the goals have not been reached, either in terms of social and economic development, or of the performance of firms receiving government aid. In evaluating the discrepancy between targets and results we argue that the failure of regional policies is a facet of the more general failure of Italian economic policies in the last fifteen years, clearly witnessed by the stagnation of growth and productivity both in the North and Centre and in the South. Two main aspects are highlighted: the effectiveness of regional policies has been affected by national legal rules that have had different effects across regions and have usually allowed a lower quality of public expenditure in the South; the effectiveness of regional policies has been diminished also by attributing importance to regional governments as control centres of public intervention.
    Keywords: regional policies, regional development, cohesion
    JEL: R58
    Date: 2009–07
  13. By: Carlo Maria Arpaia (Banca d'Italia); Raffaele Doronzo (Banca d'Italia); Paquale Ferro (Banca d'Italia)
    Abstract: The aim of this work is to provide information of use in evaluating Italian local public entities from two angles: 1) computerization and supply of web-services; 2) “accounting transparency†and use of accounting information for internal control and benchmarking. The analysis is based on data gathered periodically by the Bank of Italy. In order to give a broader view of the quality of Italian public administration, the outcome of the analysis is compared with the Formez research on business activity policies, employment policies and territorial competitiveness policies. The computerization index shows a better performance by northern regions. The “accounting transparency†index, based on SIOPE data, instead reveals that geographical location is not a crucial determinant of the performance gap between Italian regions.
    Keywords: Public administration, competitiveness, computerization, Mezzogiorno
    JEL: H11 R58
    Date: 2009–07
  14. By: Indu Rao
    Abstract: This paper presents findings from an extensive review of literature on organizational cultural (OC) and highlights the relevance of OC with respect to individual, organizational, intra-organizational, industry and external environment related variables. This paper presents a behavioral perspective on OC and contributes to its emerging dynamic aspect. A behavioral model of OC is suggested and propositions are drawn to explain the dynamics involved.
    Keywords: anthropology, sociology, organizational culture, OC, intr-organizational, industry, external environment, variables, behavioral model, model, organization, literature,
    Date: 2009
  15. By: Richard Harris
    Abstract: Recent work (including that of the author) on the impact of FDI has been based on microlevel(i.e. firms, establishments or plants) data, since this allows much greater control whenexamining such issues as whether FDI plants are more productive or innovative; whetherthere are spillovers to indigenous plants from FDI; and whether foreign-owned plants canfacilitate the building-up of clusters. The traditional approach (which is still prevalent in theliterature) considers whether those industries and/or regions with the greatest concentrationsof FDI experience higher productivity, growth, spillovers, clustering affects, but suchanalysis does not tackle the issue of cause-and-effect and therefore amounts to little morethan observing correlations between the growth of FDI in an industry/region and the overallgrowth of the industry/region. If FDI plants are attracted to co-locate with better performingindustries and/or 'regions' (to benefit from potential spillovers themselves), then this does notamount to FDI necessarily being the source of greater economic benefits. Thus the purpose ofthis review paper is to report on the empirical evidence for the UK (recent and historical)specifically related to: (i) FDI plants - are they 'better' (i.e. have higher productivity, or moreinnovative, etc)? And predicated on whether FDI is better: (ii) are there spillovers from FDI?Lastly, (iii) are clusters established around FDI plants? The limitations of this evidence-baseare discussed and, together with the results reported in the literature, resulting in some keyresearch questions that need to be addressed in future empirical work, especially at the spatiallevel in the UK.
    Keywords: Multinational firms, FDI, spillovers
    JEL: F2 L1
    Date: 2009–03
  16. By: Naude, Wim
    Abstract: In this paper I empirically investigate the early international entrepreneurship of indigenous Chinese firms using data on 3,948 firms surveyed by the World Bank in 2002-03. I find important differences in the extent and motivation of early internationalization between indigenous and foreign-invested Chinese firms. Despite having started with internationalization relatively more recently than most foreign-invested firms, and despite having much less least foreign experience (only 1.3 years, on average, versus nine years) than foreign-invested firms, indigenous firms who internationalize early were found to perform better than foreign-invested firms. They may be .rushing in. to international markets, but so far this seems to be paying off quite
    Keywords: international entrepreneurship, international new ventures, exports, China
    Date: 2009
  17. By: Luigi Benfratello (University of Turin and Ceris-CNR); Tiziano Razzolini (University of Siena); Alessandro Sembenelli (University of Turin and Collegio Carlo Alberto)
    Abstract: In this paper we provide empirical evidence on the effect of ICT investment on the propensity to offshore for a large sample of Italian manufacturing firms. Contrary to previous literature focussing on the service sector, after taking into account the endogeneity of ICT investment in the offshoring decision equation we find a negative and significant effect of ICT on the propensity to offshore some stages of the production process. Furthermore this effect turns out not to depend on the type of ICT investment and applies both to hardware and software/telecommunication expenditures. A potential explanation for our finding is that ICT investments in manufacturing increase the complementarity of production processes within the firm, thereby reducing the incentive to offshore. Our results seem therefore to suggest that negative exogenous shocks to ICT prices–possibly induced by targeted policy programs aimed at the diffusion of ICT technologies–do not favor offshoring of manufacturing activities.
    Keywords: ICT Investment, Offshoring, Maximum Likelihood System Estimation
    JEL: C34 C35 F20 L23
    Date: 2009–07–31
  18. By: Alexander Popov (European Central Bank, Kaiserstrasse 29, D-60311 Frankfurt am Main, Germany.); Peter Roosenboom (Department of Finance, Rotterdam School of Management (RSM), Erasmus University Rotterdam, Burgemeester Oudlaan 50, NL 3062PA Rotterdam, The Netherlands.)
    Abstract: Using a comprehensive database of European firms, we study how private equity affects the rate of firm entry. We find that private equity investment benefits new business incorporation, especially in industries with naturally higher entry rates and R&D intensity. A two standard deviation increase in private equity investment explains as much as 5.5% of the variation in entry between high-entry and low-entry industries. We address endogeneity by exploiting data on laws that regulate private equity investments by pension funds. Our results hold when we correct for barriers to entry, general access to credit, protection of intellectual property, and labor regulations. JEL Classification: G24, L26, M13.
    Keywords: private equity, venture capital, firm entry.
    Date: 2009–08
  19. By: Katariina Nilsson Hakkala; Fredrik Heyman; Fredrik Sjöholm
    Abstract: We analyze the impact of multinational and foreign ownership on the demand for job tasks and educational skills. By using Swedish matched employer-employee data, we find that both foreign and domestic multinational firms have high shares of non-routine tasks and tasks requiring personal interaction. Moreover, acquisitions of local firms by multinationals increase the relative demand for non-routine and interactive job tasks in the targeted firms. The differences in the demand for job tasks are only partly explained by firm characteristics. Dividing employees by education instead of job tasks does not result in the same effects on relative labor demand, which shows that task measures do indeed capture a new labor market aspect.
    Keywords: FDI, Cross-Border Acquisitions, Multinational Enterprises, Foreign Ownership, Job Tasks, Labor Demand, Skill Groups
    JEL: F16 F23 J23 F21
    Date: 2009–07–22
  20. By: Siedschlag, Iulia (ESRI); Smith, Donal (ESRI); Turcu, Camelia (CRIEF, University of Poitiers); Zhang, Xiaoheng (ESRI)
    Abstract: We analyse 446 location decisions of foreign affiliates in the R&D sector incorporated in the European Union over 1999-2006. Our results suggest that on average, the location probability increases with the size of demand, agglomeration economies, low production cost, R&D intensity, flexibility of labour markets, access to skilled labour and information technology infrastructure. Our evidence suggests that after controlling for the R&D intensity of regions, European Union?s regional policy and country level tax differences have had no significant effects in fostering the attractiveness of regions to R&D foreign investment. We find evidence of geographical structures relevant for the location choice of R&D multinational firms across the European Union. Further, we find that European investors have responded differently to location characteristics in comparison to North American investors.
    Date: 2009–07
  21. By: Baldwin, John R.; Gu, Wulong
    Abstract: Baldwin and Gu (2008) provide an overview of the productivity program at Statistics Canada and a brief description of Canada's productivity performance. This paper provides an update of Canada's productivity performance in more recent years and analyses the sources of weak productivity performance in Canada since 2000.
    Keywords: Economic accounts, Productivity accounts
    Date: 2009–08–04
  22. By: ARIGA Kenn; KAMBAYASHI Ryo
    Abstract: We use the result from a survey of Japanese firms in manufacturing and services to investigate the choice of wage and employment adjustments when they needed to reduce substantially the total labor cost. Our regression analysis indicates that the large size reduction favors the layoffs of core employees, whereas base wage cuts are more likely if firms do not feel immediate pressures from the external labor market or strong competition in the product market. We also find some evidence that the concerns over adverse selection or demoralizing effects of wage cuts are real. Firms do try to avoid using base wage cuts if they consider these factors more important.
    Date: 2009–08
  23. By: Carroll, J.; Greene, S.; OâDonoghue, C.; Newman, C.; Thorne, F.
    Abstract: The competitiveness and productivity of Irish agriculture has been at the forefront of debate in recent times given successive and impending changes to agricultural policy. This paper examines the trend in total factor productivity in Irish agriculture over the recent past and explores the effects of specific variables on relative efficiency levels. The findings of this research have shown that productivity growth was highest in the Cattle Rearing sector followed by the Dairy, Cattle Finishing, Sheep and Cereals sectors during the period 1996 to 2006. The research has also shown that efficiency levels are, in general, positively correlated with extension use soil quality, the overall size of the farm, the level of intensification and the level of specialisation. The use of artificial insemination was also positively correlated with efficiency in the Dairy sector
    Keywords: Production Economics,
    Date: 2009–04–01

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