nep-sbm New Economics Papers
on Small Business Management
Issue of 2009‒10‒03
twelve papers chosen by
Joao Carlos Correia Leitao
Polytechnic Institute of Portalegre and Technical University of Lisbon

  1. Ambitious entrepreneurship, high-growth firms and macroeconomic growth By André van Stel; Roy Thurik; Erik Stam; Chantal Hartog
  2. Entrepreneurship, Evolution and Geography By Erik Stam
  3. Do risk attitudes differ within the group of entrepreneurs? By Block, Joern; Sandner, Philipp; Spiegel, Frank
  4. Comparing Apples with....Apples : how to make (more) sense of subjective rankings of constraints to business By Hallward-Driemeier, Mary; Aterido, Reyes
  5. Innovation and Knowledge Links in Metropolitan Regions - The Case of Vienna By Franz Tödtling; Michaela Trippl
  6. Recovery Rates and Macroeconomic Conditions: The Role of Loan Covenants By Zhang, Zhipeng
  7. Technological Progress and Productivity in the Quinoa Sector By Juan Cristóbal Birbuet; Carlos Gustavo Machicado
  8. Critical Factors of Women Entrepreneurship Development in Rural Bangladesh By Faraha Nawaz
  9. Understanding Productivity Levels, Dispersion and Growth in the Leather Shoe Industry: Effects of Size and Informality By Juan Cristóbal Birbuet; Carlos Gustavo Machicado
  10. Mapping the Evolution of "Clusters": A Meta-analysis By Mario A. Maggioni; T. Erika Uberti; Francesca Gambarotto
  11. Evolutionary economic geography and its implications for regional innovation policy By Ron Boschma
  12. Cultural Diversity and Economic Performance: Evidence from European Regions By Giovanni Prarolo; Elena Bellini; Gianmarco I.P. Ottaviano; Dino Pinelli

  1. By: André van Stel; Roy Thurik; Erik Stam; Chantal Hartog
    Abstract: We estimate the impact of ambitious entrepreneurship (entrepreneurs expecting to grow their firm) and high-growth firms (firms that have actually realized high growth rates) on subsequent macroeconomic growth for a sample of countries participating in the Global Entrepreneurship Monitor between 2002-2005. We find that ambitious entrepreneurship has a positive impact on macroeconomic growth. This effect is stronger than that of entrepreneurship in general. Surprisingly, this effect of ambitious entrepreneurship is stronger in low-income countries than in high-income countries. Established high-growth firms do not seem to drive macroeconomic growth.  
    Date: 2009–09–25
  2. By: Erik Stam
    Abstract: This chapter is an inquiry into the role of entrepreneurship in evolutionary economic geography. The focus is on how and why entrepreneurship is a distinctly spatially uneven process. We will start with a discussion on the role of entrepreneurship in the theory of economic evolution. Next, we will review the empirical literature on the geography of entrepreneurship. The chapter concludes with a discussion of a future agenda for the study of entrepreneurship within evolutionary economic geography.
    Keywords: entrepreneurship, evolution, geography
    JEL: R0 M13 R11
    Date: 2009–09
  3. By: Block, Joern; Sandner, Philipp; Spiegel, Frank
    Abstract: The notion of risk and entrepreneurship has been widely discussed in the entrepreneurship literature. Starting a business involves risk and requires a risk-taking attitude. Most studies have com-pared entrepreneurs with non-entrepreneurs such as managers or bankers. So far, little research exists on the risk attitudes of different types of entrepreneurs. This study aims to fill this gap. Our particular focus is on the entrepreneurs’ motivations to start their business. The results show that opportunity entrepreneurs are more willing to take risks than necessity entrepreneurs. In addition, entrepreneurs who are motivated by creativity are more risk-tolerant than other entrepreneurs. The study contributes to the literature about risk attitudes of entrepreneurs and to the literature about necessity and opportunity entrepreneurship.
    Keywords: Entrepreneurship; Self-employment; Risk attitude; Necessity entrepreneurship; Creativity entrepreneurship
    JEL: L26 M13 J23
    Date: 2009–09–29
  4. By: Hallward-Driemeier, Mary; Aterido, Reyes
    Abstract: The use of expert or qualitative surveys to rank countries’ business investment conditions is widespread. However, within the economic literature there are concerns about measurement error and endogeneity based on characteristics of the respondents, raising questions about how well the data reflect the underlying reality they are trying to measure. This paper examines these concerns using data from 79,000 firms in 105 countries. The findings show that first, qualitative rankings correlate well with quantitative measures of the business environment, using both quantitative measures from within the survey and from external sources. Second, there are systematic variations in perceptions based on firm characteristics - focusing in particular on size and growth performance. However, it is not that an optimistic view of the business environment is simply the expression of a firm’s own performance. Rather, firm size and performance affect the relative importance of certain constraints, particularly in areas such as finance, time with officials/inspectors, corruption, and access to reliable electricity. The results also show that much of the variation in subjective responses by firm types is largely due to differences in the objective conditions across firm types. There is little evidence that size and performance have non-linear effects in how constraining a given objective condition is reported to be. Overall, concerns about endogeneity remain in using business environment indicators to explain firm performance, but this stems primarily from the fact that who you are and how well you are doing can affect the conditions you face rather than whether the indicator used is qualitative or quantitative.
    Keywords: Microfinance,E-Business,Transport Economics Policy&Planning,Debt Markets,Access to Finance
    Date: 2009–09–01
  5. By: Franz Tödtling; Michaela Trippl
    Date: 2009
  6. By: Zhang, Zhipeng
    Abstract: For U.S. firms from 1988 to 2007, firms with stricter loan covenants had higher firm-level default recovery rates. Covenants were stricter, moreover, when set during downturns in the business cycle. This implies a negative dependence of recovery rates on lagged macroeconomic conditions. That is, bank loan contracts established in economic recessions have tight covenants, leading later to higher recovery rates. My empirical evidence suggests that private creditors have significant influence on firms' bankruptcy decisions through the channel of covenants in debt contracts.
    Keywords: Recovery rate; Bankruptcy; Loan covenant; Creditor control; Business cycle
    JEL: E32 G32 G33 G21
    Date: 2009–09–02
  7. By: Juan Cristóbal Birbuet (Centre for the Promotion of Sustainable Technologies (CPTS)); Carlos Gustavo Machicado (Institute for Advanced Development Studies)
    Abstract: The main objective of this case study is to analyze the effect that a significant technological innovation in quinoa processing has had on the productivity of companies devoted to this activity and the impact of such an innovation on the growth and organization of the quinoa cluster in Bolivia, and its possible effects on the future. The study will explain how the boost engendered by technological innovation in quinoa processing has triggered a series of events that have allowed the establishment of an ambitious development program. The sector’s main companies and producer associations are part of this program, which is called the “Quinoa Alliance.” The program has become a unique opportunity for agro-industrial development in the Bolivian Altiplano, so far characterized by subsistence agriculture.
    Keywords: Quinoa, saponin, unit operation, specific consumption, productivity
    JEL: D24 L1 L6
    Date: 2009–08
  8. By: Faraha Nawaz (Department of Public Administration, Rajshahi University)
    Abstract: The paper aims to analyze the critical factors of women entrepreneurship development in rural Bangladesh. The analysis is based on recent theoretical ideas that have been supported by empirical research findings. The paper depicts an analytical framework based on institutional theory, which focuses on three kinds of factors: regulative, normative, and cognitive. Regulative factors refer to different rules and regulations of the Government that facilitate women entrepreneurship development in rural Bangladesh. Normative and cognitive factors include norms, rules, regulation, and values of society. Based on the analysis of these factors, the paper provides many significant policy implications on how to improve women entrepreneurship development in rural Bangladesh.
    Keywords: Bangladesh, women, entrepreneuship, development
    Date: 2009–05
  9. By: Juan Cristóbal Birbuet (Centre for the Promotion of Sustainable Technologies (CPTS)); Carlos Gustavo Machicado (Institute for Advanced Development Studies)
    Abstract: In this case study performed on the industrial sub-sector of manufacture of leather shoes in Bolivia, we use the Hsieh and Klenow model (2008) to determine the differences between productivity of larger and formal companies and productivity of smaller and informal companies. Our results reveal that there are not many differences in terms of productivity among these types of companies. We think that informality is indeed the most important factor that contributes to this phenomenon. Apparently, the decrease in costs associated with informality compensates to some extend the economies of scale of formal companies with bigger dimensions and better technology. A notable fact in the shoe manufacturing industry is that it had experienced an atomization process in the last years. This trend is the consequence of a progressive creation of many small informal companies instead of the consolidation of this industry in medium and large formal companies. In a way, informality has contributed to this process. First, because it allows the survival of less productive companies that if they were not informal, they would have to bear costs that would not allow them to continue in business. Second, because informality creates strong incentives for employees to start their own business. In the other hand, many costs associated to formality discourage legally operating companies to employ more people, raise capital and growth.
    Keywords: Productivity, Informality, Bolivia
    JEL: D24 L1 L6
    Date: 2009–08
  10. By: Mario A. Maggioni (Catholic University); T. Erika Uberti (Catholic University); Francesca Gambarotto (University of Padova)
    Abstract: This paper presents a meta-analysis of the “cluster literature” contained in scientific journals from 1969 to 2007. Thanks to an original database we study the evolution of a stream of literature which focuses on a research object which is both a theoretical puzzle and an empirical widespread evidence. We identify different growth stages, from take-off to development and maturity. We test the existence of a life-cycle within the authorships and we discover the existence of a substitutability relation between different collaborative behaviours. We study the relationships between a “spatial” and an “industrial” approach within the textual corpus of cluster literature and we show the existence of a “predatory” interaction. We detect the relevance of clustering behaviours in the location of authors working on clusters and in measuring the influence of geographical distance in co-authorship. We measure the extent of a convergence process of the vocabulary of scientists working on clusters.
    Keywords: Cluster, Life-Cycle, Cluster Literature, Textual Analysis, Agglomeration, Co-Authorship
    JEL: O18 R12 Z13 B41
    Date: 2009–09
  11. By: Ron Boschma
    Abstract: Related variety is important to regional growth because it induces knowledge transfer between complementary sectors at the regional level. This is accomplished through three mechanisms: spinoff dynamics, labor mobility and network formation. They transfer knowledge across related sectors, which contributes to industrial renewal and economic branching in regions. Since these mechanisms of knowledge transfer are basically taking place at the regional level, and because they make regions move into new growth paths while building on their existing assets, regional innovation policy should encourage spinoff activity, labor mobility and network formation. Doing so, policy builds on region-specific assets that provides opportunities but also sets limits to what can be achieved by policy. Public intervention should neither apply Ôone-size-fits-allÕ approaches nor adopt Ôpicking-the- winnerÕ strategies, but should aim to connect complementary sectors and exploit related variety as a source of regional diversification.
    Keywords: related variety, evolutionary economic geography, regional innovation systems, regional growth
    JEL: R0 R1 R12
    Date: 2009–09
  12. By: Giovanni Prarolo (Università di Bologna); Elena Bellini (FEEM); Gianmarco I.P. Ottaviano (University of Bologna, FEEM and CEPR); Dino Pinelli (FEEM)
    Abstract: We investigate the relationship between diversity and productivity in Europe using an original dataset covering the NUTS 3 regions of 12 countries of the EU15 (Austria, Belgium, Denmark, France, former Western Germany, Ireland, Italy, the Netherlands, Portugal, Spain, Sweden and the United Kingdom). In so doing, we follow the empirical methodology developed by Ottaviano and Peri (2006a) in the case of US cities. The main idea is that, as cultural diversity may affect both production and consumption through positive or negative externalities, the joint estimation of price and income equations is needed to identify the dominant effect. Based on this methodology, we find that diversity is positively correlated with productivity. Moreover, we find evidence that causation runs from the former to the latter. These results for EU regions are broadly consistent with those found by Ottaviano and Peri for US cities.
    Keywords: Cultural Diversity, Economic Performance, Productivity, Europe
    JEL: O5 O11 O57 R5 R58
    Date: 2009–08

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