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on Small Business Management |
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Issue of 2010‒01‒10
nine papers chosen by Joao Carlos Correia Leitao Polytechnic Institute of Portalegre and Technical University of Lisbon |
| By: | van Praag, Mirjam (University of Amsterdam); van Witteloostuijn, Arjen (University of Antwerp); van der Sluis, Justin (University of Amsterdam) |
| Abstract: | How valuable is education for entrepreneurs' performance as compared to employees'? What might explain any differences? And does education affect peoples' occupational choices accordingly? We answer these questions based on a large panel of US labor force participants. We show that education affects peoples' decisions to become an entrepreneur negatively. We show furthermore that entrepreneurs have higher returns to education than employees (in terms of the comparable performance measure 'income'). This is the case even when estimating individual fixed effects of the differential returns to education for spells in entrepreneurship versus wage employment, thereby accounting for selectivity into entrepreneurial positions based on fixed individual characteristics. We find these results irrespective of whether we control for general ability and/or whether we use instrumental variables to cope with the endogenous nature of education in income equations. Finally, we find (indirect) support for the argument that the higher returns to education for entrepreneurs is due to fewer (organizational) constraints faced by entrepreneurs when optimizing the profitable employment of their education. Entrepreneurs have more personal control over the profitable employment of their human capital than wage employees. |
| Keywords: | entrepreneurship, self-employment, returns to education, performance, personal control, locus of control, human capital, wages, incomes |
| JEL: | J23 J24 J31 J44 M13 |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4628&r=sbm |
| By: | Lööf, Hans (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology) |
| Abstract: | Using an unbalanced panel of about 260,000 Swedish firm-level observations over the period 1997-2006, this paper shows that half of the firms exporting goods are service firms that account for a substantial and increasing share of the total value from exports of goods. Between 1997 and 2006 this fraction increased from 25% to 34%. Previous research provides little systematic evidence of this extension of goods exports among service firms or the benefits of exporting. This paper shows that service firms do become exporters for the same reasons as manufacturing firms. Besides, they are a self-selection of larger, more productive and high-equity firms, with more skilled labour, higher capital intensity and stronger links to multinational groups. However, the export productivity premium is larger for service firms than for manufacturers. No evidence is found to indicate that exporting increases the growth rate of productivity. In contrast, the annual employment growth premium from exporting is substantial for business services, 2% per year, compared to 0.5% for the retail and wholesale business. |
| Keywords: | export productivity premium; manufacturing; services; micro data; panel data |
| JEL: | C16 F14 L25 O33 |
| Date: | 2009–12–07 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0205&r=sbm |
| By: | Stephen Roper (Centre for Small and Medium Enterprises, Warwick Business School, University of Warwick, Coventry,UK); Spyros Arvanitis (KOF Swiss Economic Institute, ETH Zurich, Switzerland) |
| Abstract: | The innovation value chain (IVC) divides the innovation process into three separate links or activities: knowledge gathering, knowledge transformation and knowledge exploitation. Here, we report a comparative panel data analysis of the IVC in Ireland and Switzerland. Both economies are small, very open and depend significantly on innovation to maintain competitive advantage. In recent years, however, R&D and innovation growth in Ireland has been markedly stronger than that in Switzerland. We investigate these differences through the ‘lens’ of the IVC. We identify significant similarities between the determinants of firms’ knowledge gathering behaviours in each country although firms are responding differently to financial and legal constraints. Strong complementarities emerge between external knowledge sources and between firms’ internal and external knowledge. In terms of knowledge transformation – the development of new products or processes – we again find strong similarities between the two countries in terms of the determinants of the probability of innovation. The determinants of innovation intensity vary more, however, with external ownership significantly more important in Ireland. Finally, we consider the link between innovation and productivity which involves significant endogeneity issues. Two-stage estimation procedures do not suggest any significant links between innovation and productivity as we might expect from the macro-economic evidence. |
| Keywords: | Innovation, value chain, Switzerland, Ireland |
| JEL: | O3 O5 P5 |
| Date: | 2009–11 |
| URL: | http://d.repec.org/n?u=RePEc:kof:wpskof:09-244&r=sbm |
| By: | Nicolas Jonard; R. Cowan; B. Sanditov (CREA, University of Luxembourg) |
| Abstract: | This paper presents an economic model of R&D network formation through the creation of strategic alliances. Firms are randomly endowed with knowledge elements. They base their alliance decisions purely on the technological fit of potential part- ners, ignoring social capital considerations and indirect benefits on the network. This is sucient to generate equilibrium networks with the small world properties of ob- served alliance networks, namely short pairwise distances and local clustering. The equilibrium networks are more clustered than "comparable" random graphs, while they have similar characteristic path length. Two extreme regimes of competition are examined, to show that while the competition has a quantitative eect on the equilibrium networks (density is lower with competition), the small world features of the equilibrium networks are preserved. |
| JEL: | D85 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:luc:wpaper:09-12&r=sbm |
| By: | Jozef Konings |
| Abstract: | This paper uses firm level panel data to investigate empirically the effects of direct foreign investment (DFI) on the productivity performance of domestic firms in three emerging economies of Central and Eastern Europe, Bulgaria, Romania and Poland. To this end a unique firm level panel data set is used with detailed information on foreign ownership at the firm level. |
| Keywords: | foreign investment, Bulgaria, Romania, poland, state sector, policy, invest, production, Foreign firms, technological, domestic firms, foreign investors, productivity, domestic firms, panel data, Econometric, employees, emerging economies, central europe, eastern europe, bulgaria, romania, poland, data set, foreign ownership, firm level, Spillovers, Absorptive Capacity, Emerging countries, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2335&r=sbm |
| By: | Cieply, S.; Dejardin, M.A.F.G. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University) |
| Abstract: | We study financial constraints new firms suffer from in France during the mid-nineties. Three types of constraints are distinguished: the classic and well-known weak and strong credit rationing and the new concept of self-rationing bound to the theory of discouraged borrowers. We look for these constraints on a sample of new firms which survived at least 3 years during the mid-nineties. Empirical findings show credit constraints as a whole concern 41.96% of the sample and a very low proportion of new firms suffer from credit rationing “à la Stiglitz-Weissâ€. Weak credit rationing and self-rationing, caused by discouragement, are more widespread among French new firms. We highlight moreover the role of banks during the post-start up stage even if firms have suffered from credit rationing at the beginning of their life. Results not only suggest the absence of firms’ path of exclusion on the credit market but the rent expropriation by banks. |
| Keywords: | credit rationing;self-rationing;discouragement;banks |
| Date: | 2009–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:eureri:1765017430&r=sbm |
| By: | Kroll, Henning |
| Abstract: | -- |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fisifr:r12009&r=sbm |
| By: | Belderbos, Rene (UNU-MERIT, Maastricht University and KU Leuven); Gilsing, Victor (Centre for Innovation Research, University of Tilburg); Lokshin, Boris (UNU-MERIT and Maastricht University) |
| Abstract: | We examine how and to what extent the propensity to be engaged in alliances with different partner types (suppliers, customers and competitors) depends on prior alliance engagement with partner firms of the same type (persistence) and prior engagement in alliances with the other partner types (interrelation). We derive hypotheses from a combined competence and governance view of collaboration, and test these on an extensive panel dataset of innovation-active Dutch firms during 1996-2004. We find persistence in alliance engagement of all three types of partners, but customer alliances are more persistent than supplier alliances. Most persistent are joint supplier and customer alliances, which we attribute to the advantages of value chain integration in innovation processes. Positive interrelation also exists in vertical alliances, as immediate past customer alliances increase the propensity to engage in supplier alliances and vice versa. On the other hand, while prior engagement in horizontal (competitor) alliances increases the propensity to engage in vertical alliances, this effect only occurs with a longer lag. Overall, our findings are highly supportive of the idea that alliance engagement with different partner types is heterogeneous but interrelated. Our analysis suggests that the inter-temporal relationship between different types of alliances may be as important as their simultaneous relationship in alliance portfolios. |
| Keywords: | R&D collaboration, technological partnerships, innovation, path dependency |
| JEL: | O31 O32 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:unumer:2009065&r=sbm |
| By: | Jeong-Dong Lee (Technology Management, Economics and Policy Program(TEMEP), Seoul National University) |
| Abstract: | Firms experience birth (entry), growth and death (exit) as all living things do in any biological system. However, not all firms will show the same rate of growth and the same hazard rate of exit. Industry dynamics is a field of research that analyzes the dynamic patterns of entry, growth and exit of firms, and investigates the sources of those changes.On the other hand, productivity research has focused on the performance measurement of individual economic entities?such as firm, industry and country?and also on the examination of the sources. This paper reviews the past contribution of productivity research on industry dynamics and tries to specify the important future research areas that connect the two fields of research. For the past contribution, the paper emphasizes the following three issues: productivity as a measure of heterogeneity of firm population; productivity as an important source of the event in industry dynamics; source decomposition of industry-level productivity change. For the future work, the paper suggests the three areas of research: theoretical modeling that associates productivity with industry dynamics; accommodation of recent methodological developments of productivity analysis; rigorous study on the causal relationships among factors that affect the productivity change and industry dynamics. It is expected to better understand the logic behind pervasive yet complex behaviors of firms and industries, if the two research areas?productivity analysis and industry dynamics?interact more intensively |
| Keywords: | Industry Dynamics, Entry and Exit, Productivity, Survival Analysis, Firm Population |
| JEL: | D21 D24 L60 O30 C61 |
| Date: | 2009–11 |
| URL: | http://d.repec.org/n?u=RePEc:snv:dp2009:200929&r=sbm |