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

  1. Approaching the Agora - Determinants of Scientists' Intentions to Purse Academic Entrepreneurship By Maximilian Goethner; Martin Obschonka; Rainer K. Silbereisen; Uwe Cantner
  2. Better Means More: Property Rights and High-Growth Aspiration Entrepreneurship By Estrin, Saul; Korosteleva, Julia; Mickiewicz, Tomasz
  3. Employment growth in newly established firms: is there evidence for academic entrepreneur's human capital depreciation? By Müller, Kathrin
  4. Product and Process Innovation and the Decision to Export: Firm-level Evidence for Belgium By Ilke Van Beveren; Hylke Vandenbussche
  5. Beyond Technological Diversification: The Impact of Employee Diversity on Innovation By Christian R. Østergaard; Bram Timmermans; Kari Kristinsson
  6. The Black Box of Business Dynamics By María Callejón; Vicente Ortún
  7. Localised Spillovers and Knowledge Flows: A Study on the Effects of Proximity and Labour Mobility on Plant Performance By Rikard H. Eriksson
  8. Does Excellence in Academic Research Attract Foreign R&D? By Rene Belderbos; Bart Leten; Shinya Suzuki
  9. The Icelandic Economy: a victim of the financial crisis or simply inefficient? By Oh, Dong-Hyun; Lööf, Hans; Heshmati, Almas
  10. Foreign acquisition, plant survival, and employment growth By Bandick, Roger; Görg, Holger
  11. Internal Finance and Patents - evidence from firm-level data By Martinsson, Gustav; Lööf, Hans
  12. The evolution of the literature on entrepreneurship. Uncovering some under researched themes By Cristina Santos; Aurora A.C. Teixeira
  13. The antecedents and innovation consequences of organizational search: empirical evidence for Spain By Abel Lucena
  14. Does social software support service innovation? By Meyer, Jenny
  15. A Multi-industry Model of Growth with Financing Constraints By Anna Ilyina; Roberto M. Samaniego

  1. By: Maximilian Goethner (Friedrich Schiller University Jena, Department of Economics, DFG RTG 1411 "The Economics of Innovative Change"); Martin Obschonka (Friedrich Schiller University Jena, Department of Developmental Psychology); Rainer K. Silbereisen (Friedrich Schiller University Jena, Department of Developmental Psychology); Uwe Cantner (Friedrich Schiller University Jena, Department of Economics, DFG RTG 1411 "The Economics of Innovative Change")
    Abstract: This study investigates predictors of scientists' intentions to commercialize their research through business founding. Analyzing a cross-sectional sample of 496 German scientists, we develop and test an intentions-based model of academic entrepreneurship combining personal and contextual factors. Empirical results demonstrate that intentions to start a science-based new venture are shaped by some personal characteristics (i.e., personal attitudes toward research commercialization, entrepreneurial control-beliefs, entrepreneurial self-identity, and prior entrepreneurial experience). Moreover, we find that the research context itself - i.e., normative influences of academic workplace peers - does not show a strong direct effect on entrepreneurial intentions. Moderator analyses deliver that peers have an influence primarily by person-context interactions via scientists' sense of identification with these peers. A mediation analysis further indicates that gender-related differences in entrepreneurial control-beliefs might help explain the widely-observed low proportion of female scientist-entrepreneurs.
    Keywords: Academic entrepreneurship, Entrepreneurial intentions, Entrepreneurial scientist, University-industry technology transfer, Theory of planned behavior, Gender
    JEL: L26 O33 O38 I23
    Date: 2009–10–02
  2. By: Estrin, Saul (London School of Economics); Korosteleva, Julia (University College London); Mickiewicz, Tomasz (University College London)
    Abstract: This paper contrasts the determinants of entrepreneurial entry and high-growth aspiration entrepreneurship. Using the Global Entrepreneurship Monitor (GEM) surveys for 42 countries over the period 1998-2005, we analyse how institutional environment and entrepreneurial characteristics affect individual decisions to become entrepreneurs and aspirations to set up high-growth ventures. We find that institutions exert different effects on entrepreneurial entry and on the individual choice to launch high-growth aspiration projects. In particular, a strong property rights system is important for high-growth aspiration entrepreneurship, but has less pronounced effects for entrepreneurial entry. The availability of finance and the fiscal burden matter for both.
    Keywords: entrepreneurship, high-growth aspiration entrepreneurship, start-ups, property rights
    JEL: D23 D84 G21 J23 J24 K11 L26 P51
    Date: 2009–09
  3. By: Müller, Kathrin
    Abstract: Human capital is known to be one of the most important predictors of a person's earnings. With regard to entrepreneurial success, founders' human capital is an important determinant of firm's employment growth as well. This paper investigates if the depreciation of a founder's academic knowledge affects a start-up's employment growth. The depreciation of academic knowledge is investigated by quantifying the effect of the time period which elapses after the founder has left university until the start-up is founded on firm's employment growth. Using quantile regressions, human capital depreciation is found to be of crucial importance for both ordinary academic start-ups and academic spin-offs, the founders of the latter suffering even more from human capital depreciation.
    Keywords: Human capital depreciation,employment growth,academic entrepreneurship
    JEL: J23 J24 L25 L26
    Date: 2009
  4. By: Ilke Van Beveren; Hylke Vandenbussche
    Abstract: Using data from the Community Innovation Survey for Belgium in two consecutive periods, this paper explores the relationship between firm-level innovation activities and the propensity to start exporting. To measure innovation, we include indicators of both innovative effort (R&D activities) as well as innovative output (product and process innovation). Our results suggest that the combination of product and process innovation, rather than either of the two in isolation, increases a firm¡¯s probability to enter the export market. After controlling for potential endogeneity of the innovation activities, only firms with a sufficiently high probability to start exporting engage in product and process innovation prior to their entry on the export market, pointing to the importance of self-selection into innovation.
    Keywords: Exports, Product innovation, Process innovation, Self-selection, Firm heterogeneity
    JEL: D24 F14 L25 O31 O33
    Date: 2009
  5. By: Christian R. Østergaard; Bram Timmermans; Kari Kristinsson
    Abstract: This paper investigates the effect of employee diversity in terms of gender, age, ethnicity and education on the firm’s likelihood of introducing an innovation. The analysis draws on data from a recent innovation survey. This data is merged with a linked employer-employee dataset that allow us to identify the employee composition of each firm. We test the hypothesis that employee diversity is associated with better innovative performance. The econometric analysis reveals positive, negative and non-significant effects of the different employee characteristics on the likelihood of introducing an innovation.
    Keywords: Diversity, Innovation, Education, Gender, Cultural Backgrund
    JEL: A
    Date: 2009
  6. By: María Callejón (Facultat d'Economia i Empresa, Avda. Diagonal 690, 08034 Barcelona, Spain); Vicente Ortún (Department of Economics and Business, Universitat Pompeu Fabra, Barcelona, Spain)
    Abstract: Research in business dynamics has been advancing rapidly in the last years but the translation of the new knowledge to industrial policy design is slow. One striking aspect in the policy area is that although research and analysis do not identify the existence of an specific optimal rate of business creation and business exit, governments everywhere have adopted business start-up support programs with the implicit principle that the more the better. The purpose of this article is to contribute to understand the implications of the available research for policy design. Economic analysis has identified firm heterogeneity as being the most salient characteristic of industrial dynamics, and so a better knowledge of the different types of entrepreneur, their behavior and their specific contribution to innovation and growth would enable us to see into the ‘black box’ of business dynamics and improve the design of appropriate public policies. The empirical analysis performed here shows that not all new business have the same impact on relevant economic variables, and that self-employment is of quite a different economic nature to that of firms with employees. It is argued that public programs should not promote indiscriminate entry but rather give priority to able entrants with survival capacities. Survival of entrants is positively related to their size at birth. Innovation and investment improve the likelihood of survival of new manufacturing start-ups. Investment in R&D increases the risk of failure in new firms, although it improves the competitiveness of incumbents.
    Keywords: Industrial dynamics, industrial policy, creative destruction, business demography.
    JEL: D21 L16 L52 M13 O25
    Date: 2009–09
  7. By: Rikard H. Eriksson
    Abstract: This paper aims to shed some light on the influence of geographical proximity on both intra- and inter-industry spillovers by elaborating on the geographical dimension of both localised spillovers and inter-firm knowledge flows. By means of a unique longitudinal micro-database with information on all plants and employees in Sweden, both plant-specific agglomeration measurements and labour markets at various distances from each of the 8,313 plants in the sample were created. OLS-regressions were run to account for what type of co-located activities that is most beneficial to productivity growth of plants between 2001 and 2003; how different types of knowledge flows – in and out from the plant – affect performance, and finally; how geographical proximity influences the effects of both localised spillovers and knowledge flows. The empirical results indicate that it is not possible to establish whether either intra- or inter-industry spillovers are most beneficial unless the geographical dimension is considered. This is because neither too much nor too little proximity (measured as both geographical and cognitive proximity) between co-located activities is likely to produce significant localised spillovers. This seems also to be the case when assessing more directly the impacts of inter-plant knowledge flows via labour mobility – only knowledge flows that are complementary to the existing knowledge base of plants, and neither characterised by too much nor too little geographical proximity, affect plant performance positively. Concerning the outflows of skills, the results indicate that it is less harmful for the dispatching plant if the former employee remains within the local milieu as compared to leaving for a job in another part of the economy.
    Keywords: Agglomerations; Knowledge Spillovers; Labour Mobility; Plant Performance; Geographical Pro
    JEL: R11 Q12 O18
    Date: 2009
  8. By: Rene Belderbos; Bart Leten; Shinya Suzuki
    Abstract: We examine the role of host countries' academic research strengths in global R&D location decisions by multinational firms. While we expect that a firm's propensity to perform R&D in a host country increases with the strength of local academic research, firms are expected to be heterogeneously positioned to benefit from academic research strengths due to differences in the capacity to absorb and utilize scientific knowledge. We find support for these conjectures in an analysis of foreign R&D activities in 40 host countries and 30 technology fields by 176 leading European, US and Japanese firms during the periods 1995-1998 and 1999-2002. Controlling for a wide range of host country factors, the number of relevant ISI publications by scientists based in the host country has a substantial positive impact on the propensity to conduct foreign R&D. The effect of academic research is significantly larger for firms with a stronger science orientation in R&D - as indicated by citations to scientific literature in prior patents. For host countries with a strong relevant science base, this greater responsiveness of science oriented firms more than offsets a generally greater inclination to concentrate R&D at home. The findings appear robust across a variety of specifications.
    Keywords: R&D internationalization, Knowledge sourcing, Absorptive capacity, Industry-science links
    Date: 2009–08
  9. By: Oh, Dong-Hyun (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Lööf, Hans (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Heshmati, Almas (Seoul National University, Seoul, Korea)
    Abstract: Iceland, one of the smallest European economies, was hit severely by the 2008-financial crisis. This paper uses a firm-level Community Innovation Survey (CIS) data set to consider the economy in the period preceding the collapse of its financial system. We examine the linkage between the crisis and innovativeness from the perspective of technical efficiency by means of the Data Envelopment Analysis of 204 randomly selected firms. The results suggest that a substantial fraction of the Icelandic firms can be classified as non-efficient in their production process. The production scale of many manufacturing firms is too small to be considered technically efficient, while services firms typically use excessive resources in their production process. A remarkably weak performance in transforming R&D and labor efforts into successful innovations is observed. Based on the empirical results, suitable policy implications are suggested to remedy the inoptimal production structure and help economic recovery.
    Keywords: Technical efficiency; R&D; Innovation; Productivity; Manufacturing; Services; Iceland
    JEL: C67 D24 D57 L25 L60 L80
    Date: 2009–09–28
  10. By: Bandick, Roger (Department of Economics, Aarhus School of Business); Görg, Holger (Kiel Institute for the World Economy)
    Abstract: This paper analyses the effect of foreign acquisition on survival probability and employment growth of target plant using data on Swedish manufacturing plants during the period 1993- 2002. An improvement over previous studies is that we take into account firm level heterogeneity by separating the targeted plants into those within Swedish MNEs, Swedish exporting non-MNEs, and purely domestic firms before foreign takeover. The results, controlling for possible endogeneity of the acquisition dummy using an IV and propensity score matching approach suggest that acquisition by foreign owners increases the lifetime of the acquired plants only if the plant was an exporter. The effect differs depending on whether the acquisition is horizontal or vertical. We also find robust positive employment growth effects only for exporters, and only if the takeover is vertical, not horizontal
    Keywords: Acquisitions; plant survival; employment growth; multinational enterprises
    JEL: F23 L23
    Date: 2009–09–29
  11. By: Martinsson, Gustav (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Lööf, Hans (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)
    Abstract: We find that internal finance resources at the firm-level, measured by cash flow, play a non-trivial role for the number of patent applications, even after controlling for the standard variables of a patent study. The results are based on estimating panel count-data models on a sample of 2,700 Swedish manufacturing firms, with observations from the period 1997-2005. The cash-flow effect is larger during the aftermath of the bursting IT-bubble and for firms that are more likely to be financially constrained. Our results suggest that some firms reduce or stop applying for patents during periods of declining economic activity.
    Keywords: Financing constraints; Innovation; Corporate ownership; Intellectual property rights; Firm level panel data
    JEL: G32 O31 O34
    Date: 2009–09–28
  12. By: Cristina Santos (Faculdade de Economia, Universidade do Porto); Aurora A.C. Teixeira (CEF.UP,Faculdade de Economia, Universidade do Porto; INESC Porto)
    Abstract: Recently bibliometrics techniques are being widely used to complement traditional qualitative reviews of the literature in given scientific areas. The majority of these reviews are based in large databases of articles published in ISI indexed journals, overlooking the richness of studies that are being published in key handbooks and books. This is particularly true in the case of entrepreneurship field. In the present paper we provide a survey of the literature based on an in-depth analysis of major handbooks, books and scientific journals in the field, identifying its major topics, their evolution across time and the current trends. From this exercise, we found that entrepreneurship education emerges as a recent theme with most of the papers in the area focusing on entrepreneurial universities, productivity of technology transfer offices, new firm creation and the environmental context. The largest part of these studies analyse US universities or universities from highly developed European countries, such as Germany, Sweden and United Kingdom. The review of the literature performed highlights that the theme of (higher education) students’ entrepreneurial intents is under researched. Furthermore, it uncovers that the (potential) link between university entrepreneurial models and the propensity of students for new venture creation is likely to constitute an interesting and challenging path for future research.
    Keywords: entrepreneurship, bibliometrics; universities
    Date: 2009–09
  13. By: Abel Lucena (CREB and Department of Business Administration, University of the Balearic Islands, Spain)
    Abstract: This paper examines the antecedents and innovation consequences of the methods firms adopt in organizing their search strategies. From a theoretical perspective, organizational search is described using a typology that shows how firms implement exploration and exploitation search activities that span their organizational boundaries. This typology includes three models of implementation: ambidextrous, specialized, and diversified implementation. From an empirical perspective, the paper examines the performance consequences when applying these models, and compares their capacity to produce complementarities. Additionally, since firms’ choices in matters of organizational search are viewed as endogenous variables, the paper examines the drivers affecting them and identifies the importance of firms’ absorptive capacity and diversified technological opportunities in determining these choices. The empirical design of the paper draws on new data for manufacturing firms in Spain, surveyed between 2003 and 2006.
    Keywords: exploration-exploitation search, absorptive capacity, technological opportunities, complementarities, firm performance.
    JEL: D21 L21 O32
    Date: 2009–10
  14. By: Meyer, Jenny
    Abstract: Recent Internet technologies and web-based applications, such as social software, are being increasingly applied in firms. Social software can be employed for knowledge management and for external communication enabling access to internal and external knowledge. Knowledge in turn constitutes one of the main inputs to service innovation. Hence, social software has the potential to support service innovation. Using data from 505 German Information- and Communication Technology (ICT) and knowledge-intensive service firms, this is the first paper which empirically analyses the question whether the use of social software applications triggers innovation. Thereby, it refers to a knowledge production function in which social software use constitutes the knowledge sourcing activity. The results reveal that there is a positive relationship between social software and service innovation. Since this result is robust when controlling for former innovative activities and the previous propensity to adopt new technologies and to change processes, the analysis suggests that the causality runs from social software to innovation.
    Keywords: Social software,web 2.0,service innovation,knowledge management
    JEL: O31 O33 M10
    Date: 2009
  15. By: Anna Ilyina; Roberto M. Samaniego
    Abstract: This paper develops a multi-industry growth model in which firms require external funds to conduct productivity-enhancing R&D. The cost of research is industry-specific. The tightness of financing constraints depends on the level of financial development and on industry characteristics. Over time, a financially constrained economy may converge to the growth path of a frictionless economy, so long as an industry with the fastest expanding technological frontier does not permanently fall behind due to low R&D. The model’s industry dynamics map into a differences-in-differences regression, in which industry growth depends on the interaction between financial development and industry level R&D intensity.
    Keywords: Economic growth , Economic models , External financing , External sector , Industrial sector , Production , Productivity ,
    Date: 2009–06–01

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