nep-sbm New Economics Papers
on Small Business Management
Issue of 2009‒10‒17
thirteen papers chosen by
Joao Carlos Correia Leitao
Polytechnic Institute of Portalegre and Technical University of Lisbon

  1. Who Leaves, Where to, and Why Worrry? Employee Mobility, Employee Entrepreneurship, and Effects on Source Firm Performance By Benjamin Campbell; Martin Ganco; April Franco; Rajshree Agarwal
  2. Selection and Serial Entrepreneurs By Jing Chen
  3. Entrepreneurship and Growth: Evidence from China By Hongbin Li; Zheyu Yang; Xianguo Yao; Junsen Zhang
  4. Entrepreneurship and Japanese Industrialization in Historical Perspective By John Tang
  5. Global pipelines or global buzz? : a micro-level approach towards the knowledge-based view of clusters By Bahlmann, M.D.; Huysman, M.H.; Elfring, T.
  6. Sincronia e distanza nel ciclo economico delle regioni italiane By Andrea Brasili; Cristina Brasili
  7. Proximity and the Evolution of Collaboration Networks: Evidence from R&D Projects within the GNSS Industry By Pierre-Alexandre Balland
  8. Network and Border Effects: Where Do Foreign Multinationals Locate in Germany? By Julia Spies
  9. Improving SMEs' guidance within public innovation supports By Jean-Claude Boldrini; Emmanuel Chené; Nathalie Schieb-Bienfait
  10. Strategies of Italian firms in Romania. Evidence from selected case studies By Tattara, Giuseppe; Constantin, Florentina; De Giusti, Giovanna
  11. Immigration-Trade Links: the Impact of Recent Immigration on Portuguese Trade By Horácio C. Faustino; João Peixoto
  12. Total Factor Productivity of Korean Manufacturing Industries: Comparison of Competing Models with Firm-Level Data By Oh, Donghyun; Heshmati, Almas; Lööf, Hans
  13. Innovating in the periphery: Firms, values, and innovation in Southwest Norway By Rune Dahl Fitjar; Andrés Rodríguez-Pose

  1. By: Benjamin Campbell; Martin Ganco; April Franco; Rajshree Agarwal
    Abstract: We theorize that differences in human assets’ ability to generate value are linked to exit decisions and their effects on firm performance. Using linked employee-employer data from the U.S. Census Bureau on legal services, we find that employees with higher earnings are less likely to leave relative to employees with lower earnings, but if they do leave, they are more likely to move to a spin-out instead of an incumbent firm. Employee entrepreneurship has a larger adverse impact on source firm performance than moves to established firms, even controlling for observable employee quality. Findings suggest that the transfer of human capital, complementary assets, and opportunities all affect mobility decisions and their impact on source firms.
    Date: 2009–09
  2. By: Jing Chen (Department of Economics, Florida International University)
    Abstract: This paper develops and tests a model that explains entry into serial entrepreneurship and the performance of serial entrepreneurs as the result of selection on innate ability. The model supposes that agents establish businesses with imperfect information about their entrepreneurial ability and the profitability of business ideas. Agents continually observe signals with which they update their beliefs, and this process eventually determines their next business choice. Selection on ability induces a positive correlation between entrepreneurial experience (measured by previous business earnings and founding experience) and serial business formation, as well as its subsequent performance. The predictions in the model are tested using panel data from the NLSY79. The analysis permits a distinction to be made between selection on innate ability and learning by doing.
    Keywords: Serial entrepreneurs, selection, ability, entrepreneurial experience, learning by doing.
    JEL: J21 J24 J62 M13
    Date: 2009–09
  3. By: Hongbin Li; Zheyu Yang; Xianguo Yao; Junsen Zhang
    Abstract: This paper examines the impact of entrepreneurship on economic growth by using a panel data set of 29 provinces in China over 20 years. Two indicators of entrepreneurship are defined and introduced into the traditional growth regression framework that is estimated using the system generalized method of moments. We also use the ratio of staff and workers of state-owned enterprises and per capita sown land area as the instrumental variables to identify the causal effect of entrepreneurship on economic growth. Our results suggest that entrepreneurship has a significant positive effect on economic growth and this finding is robust even after we control for other demographic and institutional variables. Our study provides some evidence that may be used as a basis for evaluating the effect of China’s policy on private business which has been increasingly relaxed since the late 1970s.
    JEL: L26 O53 O53
    Date: 2009–10
  4. By: John Tang
    Abstract: Studies of entrepreneurship in nineteenth century Japan typically focus on the activities of leading industrialists who founded large, family-owned conglomerates known as zaibatsu. These individuals do not conform well with the archetypal Schumpeterian entrepreneur, but this discrepancy may be more an issue of context than behavior. However, due to a lack of documentation for smaller independent firms, it is difficult to make this comparison. To broaden the scope of analysis, I use data drawn from corporate genealogies, which provide a more complete cross-section of entrepreneurial activity. This dataset of firm entry during the Meiji Period (1868-1912) covers a wide range of industries, allowing me to analyze aspects of Japan's early industrialization that heretofore have relied on anecdotal or case evidence. I also propose a game-theoretic model of entry appropriate for entrepreneurs in late developing economies that exploit the qualitative nature of these data.
    Keywords: Meiji Japan, entrepreneurship, entry model, industrialization, late development,technology adoption, zaibatsu
    JEL: N85 O14 O33
    Date: 2009–09
  5. By: Bahlmann, M.D. (Vrije Universiteit Amsterdam, Faculteit der Economische Wetenschappen en Econometrie (Free University Amsterdam, Faculty of Economics Sciences, Business Administration and Economitrics); Huysman, M.H.; Elfring, T.
    Abstract: Recent theorizing in cluster literature emphasizes the importance of inter-cluster knowledge linkages in addition to local knowledge dynamics, enabling new and innovative ideas to flow from one cluster to the other. This paper contributes to this topic by studying inter-cluster knowledge linkages at an individual level of analysis, making use of qualitative social network measures. Central to this case is the Amsterdam New Media-cluster, with a special focus on entrepreneurs engaging in lively inter-cluster exchange of knowledge and debate, resulting in the exchange of new visions and ideas across cluster boundaries. The proposed distinction between local buzz and global pipelines is complemented by adding a third category of inter-local knowledge exchange: global buzz.
    Keywords: pipelines; global/ local buzz; entrepreneurship; cluster
    Date: 2009
  6. By: Andrea Brasili; Cristina Brasili (Università di Bologna)
    Abstract: This paper is based on the data set of 20 Italian regional high frequency business indicators proposed in Benni, Brasili (2006) and successively developed by RegiosS (Cycle & Trends association). The aim of the present paper is to provide a retrospective analysis of the characteristics of regional cycles and their co-movements to better understand the consequences of the global crisis on the local economies. We will going to apply two methodologies to analyse the distances among the Italian regional business cycle. We calculate the cohesion measure (Croux et al. 2001) on two sub-samples of the indicators, in order to evaluate if co-movements have increased recently. Moreover we calculate the cohesion measure also for the regions before and after the adoption of the Euro currency and respect to the Italian cycle. On the structural side the differential on cycle profiles of the regions is interpreted in terms of the different product specialisation, the degree of financial markets development and the research intensity of firms.
    Keywords: Italian Regional Cycle, Coincident Indicators, Cohesion, Dissimilarity Matrix
    Date: 2009
  7. By: Pierre-Alexandre Balland
    Abstract: Increasing attention had been given recently to understand how networks affect organizational performance in innovation studies. Surprisingly, underlying mechanisms of their evolution have been more neglected, and still remain unclear. This lack of interest is denounced today by recent papers which claim that it is a crucial issue for economic geography. Especially the influence of different forms of proximity on the network’s changes needs to be clarified. This paper contributes to this ongoing debate by determining empirically how organizations choose their partners given to their geographical, organizational, institutional, cognitive and social proximity. The relational database is constructed from publicly available information on the R&D collaborative projects of the 6th European Union Framework Program within the navigation by satellite industry (GNSS). Patterns of evolution of the GNSS collaboration network are determined according to a longitudinal study of the relational changes occurred between four consecutive years, from 2004 to 2007. Empirical results show that geographical, organizational and institutional proximity favour collaboration. Inversely, organizations prefer to avoid partnerships when they share a cognitive proximity (same knowledge bases). The last result demonstrates that the kind of project studied does not create a sufficient level of social proximity to stimulate collaboration.
    Keywords: proximity, collaboration networks, innovation, network longitudinal analysis, R&D collaborative projects, SIENA
    JEL: O32 R12
    Date: 2009–10
  8. By: Julia Spies
    Abstract: This study assesses the determinants of location choices of foreign multinational firms at the level of German federal states. Adjacency and existing firm networks are assumed to influence the investors’ profits in a given location by overcoming informational disadvantages when entering the new market. A conditional and a nested logit model resemble the structure of the location choice process of individual investors well. By using affiliate-level data between 1997 and 2005, the results confirm that firms react positively to local demand, a common border and existing firm networks, while unit labour costs exhibit the expected negative impact. In the sectoral estimations, it is shown that these effects vary in their relevance among manufacturing and service affiliates, and between upstream and downstream activities.
    Keywords: Location choice, multinational firms, nested logit model
    JEL: F23 R39
    Date: 2009–03
  9. By: Jean-Claude Boldrini (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Université de Nantes : EA4272); Emmanuel Chené (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Université de Nantes : EA4272); Nathalie Schieb-Bienfait (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Université de Nantes : EA4272)
    Abstract: In the eighties, public bodies became aware of the importance of the SMEs in the regional economic development. In order to stimulate their innovativeness and to overcome their inward limits, public policies set up innovation agencies all over European countries. Criticisms arose after ten years of existence because of their low usefulness. This article aims to develop a better understanding of the relationship between SMEs and innovation agencies (RTTAs – Regional Technology Transfer Agencies) : it presents the implementation of a management scheme which experimented new solutions, in French SMEs, to overcome previous gaps. Our article seeks to enrich researches exploring the links between the SME and the RTTA ; it advocates new principles to improve SMEs' guidance in innovation processes.
    Date: 2009
  10. By: Tattara, Giuseppe; Constantin, Florentina; De Giusti, Giovanna
    Abstract: The aim of this paper is to analyze the internationalization of Italian firms in Romania, operating in the sectors of footwear, furniture and industrial refrigeration. After describing and quantifying the internationalization process between Veneto and Romania, we discuss for each of the sectors, the changes that occurred in the organisation of the production processes within the firms, and particularly how such processes have been fragmented. This article draws on numerous case studies, posits different models of value chain governance, and discusses their implications for regional development and sustainability
    Keywords: Internationalization; Romania; Italy; Organization of Production
    JEL: L67 F23 L23 L22
    Date: 2009–09–28
  11. By: Horácio C. Faustino; João Peixoto
    Abstract: This study analyzes Portuguese immigration during the period 1995-2006 and estimates the effects of an increase in the stock of immigrants and of the increased percentage of highly-skilled immigrants employed in manufacturing industry. Furthermore, the effects are estimated of immigrant entrepreneurs active in manufacturing industry on Portugal’s bilateral trade with 38 countries. The latter group includes, in addition to the member-countries of the EU27, five African countries with Portuguese as their official language, and known as PALOPs. In 2006, these two blocs combined accounted for 83% of Portugal’s trade in goods and 89% of its immigrant stock. Panel data is used to conduct an econometric analysis. The study finds that a 10% increase in the immigrant stock will produce the following effects on Portugal’s bilateral trade with these countries: an increase of 2.8% in exports, an increase of 2.66% in imports, an increase of 1.87% in IIT, an increase of 4.01% in HIIT and an increase of 1.48% in VIIT. In addition, we conclude that higher percentages both of highly skilled immigrant workers and immigrant employers in manufacturing industry have a positive effect on exports, IIT and VIIT.
    Keywords: Immigration; trade; skills; entrepreneurship; panel data; Portugal.
    JEL: C33 F11 F12 F22
    Date: 2009–10
  12. By: Oh, Donghyun (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Heshmati, Almas (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: This paper presents the parametric estimation of the rates of technical change and total factor productivity (TFP) growth of 7,462 Korean manufacturing firms for the period 1987 to 2007. Two alternative formulations of technical change measured by the time trend and the general index approaches are estimated with panel data models assuming flexible functional forms. Several extensions of each approach are also considered and their benefits and limitations are discussed. In addition to making estimates of the TFP growth and its decomposition, the paper compares the parametric TFP growth measure with the non-parametric Solow residual serving as a benchmark. Several hypotheses related to technology level, firm sizes, industrial sectors, skill biased technological change and macroeconomic and industrial policies are tested to explain the growth patterns and heterogeneity in technical change, input biases and TFP growth rates. Using second regression analysis, the paper explores the determinants of TFP growth and their policy implications.
    Keywords: Total factor productivity; technical change; manufacturing industry; determinants of growth;
    JEL: C23 C51 D24 L25 L60
    Date: 2009–10–12
  13. By: Rune Dahl Fitjar (International Research Institute of Stavanger); Andrés Rodríguez-Pose (IMDEA Ciencias Sociales)
    Abstract: How do peripheral and relatively isolated regions innovate? Recent research has tended to stress the importance of agglomeration economies and geographical proximity as key motors of innovation. According to this research, large core areas have significant advantages with respect to peripheral areas in innovation potential. Yet, despite these trends, some remote areas of the periphery are remarkably innovative even in the absence of critical innovation masses. In this paper we examine one such case – the region of Southwest Norway – which has managed to remain innovative and dynamic, despite having a below average investment in R&D in the Norwegian context. The results of the paper highlight that innovation in Southwest Norway does not stem from agglomeration and physical proximity, but from other types of proximity, such as cognitive and organizational proximity, rooted in soft institutional arrangements. This suggests that the formation of regional hubs with strong connections to international innovative networks may be a way to overcome peripherality in order to innovate.
    Keywords: innovation; institutions; distance; trust; open-mindedness; periphery; Norway
    Date: 2009–10–09

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