nep-sbm New Economics Papers
on Small Business Management
Issue of 2010‒01‒30
eight papers chosen by
Joao Carlos Correia Leitao
Polytechnic Institute of Portalegre and Technical University of Lisbon

  1. "I Want to, But I also Need to": Start-Ups Resulting from Opportunity and Necessity By Marco Caliendo; Alexander S. Kritikos
  2. Entrepreneurship and Cultural Creativity By Michael Fritsch; Alina Rusakova
  3. Does family control of small business lead to under exploitation of their financial growth potential? Evidence of the existence of conservative growth behavior in family controlled French SMEs. By Anaïs Hamelin
  4. Genome-wide Association Studies and the Genetics of Entrepreneurship By Loos, M. van der; Koellinger, Ph.D.; Groenen, P.J.F.; Thurik, A.R.
  5. Family Control and Financing Decisions By Ettore Crocia; John A. Doukas; Halit Gonenc
  6. Export Status and Performance in a Panel of Italian Manufacturing Firms By Vito Amendolagine; Rosa Capolupo; Nadia Petragallo
  7. Role of Critical Infrastructure and Incentives in the Commercialisation of Biotechnology in India: An Analysis By Visalakshi S
  8. Managing R&D activities in the Italian red biotech industry. A comparison between Italian independent firms and multinational companies By Alessia Pisoni; Alberto Onetti; Luciano Fratocchi; Marco Talaia

  1. By: Marco Caliendo; Alexander S. Kritikos
    Abstract: When unemployed persons go into business, they often are characterized as necessity entrepreneurs, because push factors, namely their unemployment, likely prompted their decision. In contrast to this, business founders who have been previously employed represent opportunity entrepreneurs because pull factors provide the rationale for their decision. However, a data set of nearly 1,900 business start-ups by unemployed persons reveals that both kind of motivation can be observed among these start-ups. Moreover, a new type of entrepreneur emerges, motivated by both push and pull variables simultaneously. An analysis of the development of the businesses reflecting three different motivational types indicates a strong relationship between motives, survival rates and entrepreneurial development. We find in particular that start-ups out of opportunity and necessity have higher survival rates than do start-ups out of necessity, even if both types face the same duration of previous unemployment.
    Keywords: Entrepreneurship, Push and pull motives, survival and failure, job creation
    JEL: D81 J23 M13
    Date: 2009
  2. By: Michael Fritsch (Friedrich Schiller University Jena, School of Economics and Business Administration, Chair of Business Dynamics, Innovation, and Economic Change); Alina Rusakova (Friedrich Schiller University Jena, School of Economics and Business Administration, Chair of Business Dynamics, Innovation, and Economic Change)
    Abstract: We investigate the relationship between cultural creativity and entrepreneurship in two respects: first, cultural and personal creativity as a characteristic of self-employed individuals; second, self-employment in professions that can be classified as belonging to the 'Creative Class' as compared to the non-creative class. The analysis is based on micro-data for individuals of the German Socio Economic Panel (SOEP). We find, indeed, some significant links between entrepreneurship and cultural creativity that deserve further investigation.
    Keywords: Entrepreneurship, new business formation, cultural creativity, creative class
    JEL: L26 Z1
    Date: 2010–01–12
  3. By: Anaïs Hamelin (Laboratoire de Recherche en Gestion et Economie, Université de Strasbourg)
    Abstract: This paper uses a very large sample of French SMEs to study growth of small businesses. Firms are distinguished according to the intensity of family control. The estimated relationship accounts for firm characteristics of size, age, sector, and ease to access credit. The results show that firms with greater family control are prone to exhibit lower rates of sales growth than feasible, given firm internal financing resources (ie they adopt a conservative growth behavior). Because firm growth is limited not by financing constraints but by family-related incentives to restrict firm size, increasing firm growth requires policies that shape incentives orientated toward growth in small family businesses.
    Keywords: Small Business, Family control, Growth, Sustainable growth, Tax evasion.
    JEL: G31 G32 M13 M21
    Date: 2010
  4. By: Loos, M. van der; Koellinger, Ph.D.; Groenen, P.J.F.; Thurik, A.R. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: We are currently investigating genetic influences on self-employment in an international research consortium using genome-wide association studies (GWAS). By meta-analysing results from numerous independent samples we address identification issues arising from multiple testing. To our knowledge, this is the earliest attempt to apply GWAS to an economic outcome of a relatively general nature. Our study will reveal potentials and limitations of this approach for economic research.
    Keywords: entrepreneurship;genetics
    Date: 2010–01–15
  5. By: Ettore Crocia; John A. Doukas; Halit Gonenc (University of Groningen)
    Abstract: Empirical studies examining the financing decisions of the firm focus exclusively on publicly held firms, not family-controlled firms despite their economic importance. This study investigates the external financing behavior of family-controlled firms, using a comprehensive sample of 777 large European firms during the period 1998 to 2008. We document that, unlike nonfamily-controlled firms, the external financing decisions of family-controlled firms are influenced by control incentives and information asymmetry considerations. We find that family firms have a strong preference for debt financing, a noncontrol diluting security, while they are more reluctant to raise capital through equity offerings in comparison to nonfamily firms. We also find that credit markets, view family firms as more risk-averse and that family firms invest more in low-risk (fixed-asset capital expenditures (CAPEX)), than in high-risk investments (R&D expenditures) confirming their non-risk seeking behavior.
    Keywords: Family firms, financing decisions, equity issues, debt issues, capital structure.
    JEL: G32
    Date: 2010–01
  6. By: Vito Amendolagine (Department of Economics & Mathematics, University of Bari); Rosa Capolupo (Department of Economics & Mathematics, University of Bari); Nadia Petragallo (Department of Economics & Mathematics, University of Bari)
    Abstract: Following a growing literature we test, in this paper, the two alternative hypotheses of self selection and learning by exporting across different Italian manufacturing firms. Using matched sampling techniques, we estimate whether new export-oriented firms are more efficient than domestically-oriented firms on the basis of three Italian representative Surveys of manufacturing firms covering consecutive triennial periods (1995-2003). Our findings indicate that export entrants improve their productivity in the first period after entry. This occurs for both total factor productivity (TFP) and labour productivity growth rates. These results are consistent with those found in the existing literature for many countries. The only lasting significant effect that we find among the different measures of performances is that new exporters earn higher profits than their domestic counterparts.
    Keywords: international trade, Export-led growth, productivity, matched techniques
    JEL: F11 F14 O12 C22
    Date: 2010–01
  7. By: Visalakshi S
    Abstract: The paper investigates the reasons behind slow commercialization. The approach is based on the hypothesis that to achieve successful commercialization in knowledge intensive field with high rates of turn over like biotechnology, the company should have (i) high levels of capabilities in R&D and strong network, to supplement and complement skills and facilities and (ii) an environment which is highly facilitating (high levels of preparedness of the technology delivery system) through favourable policies for regulation, accessing fiscal resources in terms of finances, infrastructure and skills, fiscal incentives, enhancing awareness of the public etc.
    Keywords: commercialization, biotechnology, company, delivery system, regulation, finances, regulation, fiscal incentives, awareness, biological, environment
    Date: 2010
  8. By: Alessia Pisoni (Department of Economics, University of Insubria, Italy); Alberto Onetti (Department of Economics, University of Insubria, Italy); Luciano Fratocchi (Department of Mechanical Thermal and Managerial Engineering – University of L’Aquila); Marco Talaia (Business Research Department – University of Pavia)
    Abstract: This paper aims at analysing the main features of R&D activities carried out by the Italian biotech companies. The proposed contribution can be ascribed to the massive stream of research related to the reconfiguration of the value chain activities at the international level. Such a topic has become more and more actual because of both the markets globalisation and diffusion of networked architectures within internationalised companies (see, among others, Bartlett 1986; Bartlett and Goshal 1987, 1990; Bartlett, Doz and Hedlund 1990; Forsgren 1993; Forsgren and Holm 1993; Forsgren, Holm and Johanson 1991, 1992; Forsgren and Johanson 1992; Forsgren and Pedersen 1998; Hedlund 1979, 1980, 1986, 1994; Hedlund and Ridderstrale 1994; Hedlund and Rolander 1990; Lipparini and Fratocchi 1999). Within such a stream of research, we decided to focus the attention on the biotech industry, due to its specific features, that deeply influence both the strategic behaviour of firms and the economic environment of the countries where they operate.Keeping in mind the different types of biotech firms operating at global level, we have decided to focus our attention to a less heterogeneous population. In so doing, we narrowed the analysis to the red biotech segment (that is health care biotech companies which develop drugs and diagnostics), because of its absolute predominance both in Italy (73% of enterprises, 94% of total revenue and 86% of investments1) and at worldwide level (51% of EU firms and 60% of USA ones2). First of all we collected data for a sample of companies operating in the Italian red biotech industry. Particularly, we focused on R&D activities: we tried to quantify its extent, to understand where they are located (domestically or abroad) and the role played by alliances/cooperation with -in and -out the industry. More specifically, in order to reach the goals above described, attention was paid to the aptitude of the Italian country-system to attract investments from abroad. In doing so, we studied separately the Italian independent firms and MNCs. Analysing the peculiarities of how Italian independent firms and MNCs manage R&D activities, we tried to find out the existence of a different approach to R&D investments. The paper is structured in four main sections. In the first one, the main relevant features of biotech firms are discussed and the literature background presented. The second paragraph deals with sample and methodology description. In the third section, the main results regarding the analysis of R&D activities carried out by the red Italian biotech companies are presented. The conclusions complete the paper.
    Keywords: Biotech, localisation, R&D, collaborative R&D, MNCs.
    Date: 2010–01

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