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on Small Business Management |
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Issue of 2010‒05‒02
six papers chosen by Joao Carlos Correia Leitao University of Beira Interior and Technical University of Lisbon |
| By: | Henrekson, Magnus (Research Institute of Industrial Economics (IFN)); Sanandaji, Tino (Research Institute of Industrial Economics (IFN)) |
| Abstract: | Previous research, notably Baumol (1990), has highlighted the role of insti-tutions in channeling entrepreneurial supply into productive, unproductive or destructive activities. However, entrepreneurship is not only influenced by institutions—entrepreneurs often help shape institutions themselves. The bilateral causal relation between entrepreneurs and institutions is examined in this paper. Entrepreneurs affect institutions in at least three ways. Entrepreneurship abiding by existing institutions is occasionally disruptive enough to challenge the foundations of prevailing institutions. Entrepreneurs sometimes have the opportunity to evade institutions, which tends to undermine the effectiveness of the institutions, or cause institutions to change for the better. Lastly, entrepreneurs can directly alter institutions through innovative political entrepreneurship. As business entrepreneurship, innovative political activity may be productive or unproductive, depending on the incentives facing entrepreneurs. |
| Keywords: | Entrepreneurship; Innovation; Institutions; Regulation; Self-employment |
| JEL: | L50 M13 O31 P14 |
| Date: | 2010–04–19 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:0830&r=sbm |
| By: | Henrekson, Magnus (Research Institute of Industrial Economics (IFN)); Johansson, Dan (The Ratio Institute) |
| Abstract: | This essay argues that the economic contribution of certain firms – be they small, young or rapidly growing – has to be understood in a broader context of creative destruction. Growth of some firms requires contraction and exit of some other firms to free up resources that can be reallocated to expanding firms. Entry and expansion are flip sides to exit and contraction and the process through which the factors of production are put into different use defines structural transformation. We analyze institutions and policies conducive to structural transformation, in particular the expansion of high-growth firms (HGFs), since they have empirically been shown to contribute disproportionately to economic development. Firm growth is viewed as resulting from the continuous discovery and use of productive knowledge. Rapid firm growth requires a set of economic actors with complementary competencies that work together to identify and commercialize novel business ideas. The institutional framework determines the incentives for these individuals to acquire and utilize knowledge. We identify a number of institutions that encourage the creation of HGFs and promote structural transformation. In particular, our analysis points to the key roles played by tax structures, labor market regulation, and the contestability of service markets. Even in advanced economies, there is a large untapped economic potential which can be unleashed by institutional changes, such as the opening up of closed markets for entrepreneurial competition. However, there is no “quick-fix” that will boost the frequency of HGFs and structural transformation. Our analysis suggests that policymakers need to adopt a broad approach and implement a wide array of complementary institutional reforms to increase the prevalence of HGFs and to facilitate structural transformation. |
| Keywords: | Entrepreneurship; Firm growth; Gazelles; High-growth firms; High-impact firms; Institutions; Job creation; Rapidly growing firms |
| JEL: | D21 L25 M13 O10 O40 |
| Date: | 2010–04–28 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ratioi:0150&r=sbm |
| By: | Katalin Erdõs (Department of Economics and Regional Studies, University of Pécs); Attila Varga (Department of Economics and Regional Studies, University of Pécs) |
| Abstract: | Knowledge flows from universities to the regional economy can take different forms ranging from formal research collaborations to consultancy and informal personal connections. One of the knowledge communication channels drawing substantial interest of both researchers and regional policy makers is academic spin-off firm formation. According to the concept of the “academic entrepreneur” (Etzkowitz) university spin-off firm formation has grown naturally from the academic culture of the US where professors traditionally behave very much like entrepreneurs while setting up and maintaining research labs, hiring research assistants, “marketing” research results in conferences and publications or networking with colleagues and funding agencies. Spinning off a company is just a step forward from such entrepreneurial tasks of academics. Thus according to this concept academic motivations are main drivers in university spin-off firm formation in the US. Despite this challenging view the empirical literature pays relatively little attention to the particular “academic” features of university spin-offs and rarely considers the specificities of university entrepreneurship most notably the role of scientists as entrepreneurs. Empirical evidence suggests that Europe performs less successfully than the US in transferring knowledge from university labs to the regional economy via spin-off companies. One potential reason behind this difference is that institutions that determine the continental European research system hold back the emergence of academic entrepreneurs. Thus it is the main research question in our paper whether those specific “academic” drivers behind university spin-off firm formation are present at all in the continental European context. The related question is whether professional characteristics of the academics, their social capital, the norms of academia and the academic and business environment support or hinder these academic motivations? This paper is based on interviews carried out with university researchers who actively participate in firm formation in Hungary. Hungary is an excellent European case since the features of its university system are rooted in the continental (mainly German) tradition, but it also inherits some characteristics from the even more centralized socialist (soviet) tradition. |
| Keywords: | University, spin-off, academic entrepreneurship, regional university technology transfer |
| JEL: | I23 O18 O33 R11 |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:pec:wpaper:2009/7&r=sbm |
| By: | Samaniego, Roberto |
| Abstract: | This paper uncovers evidence of s potentially important channel linking financial development to growth: the financing of innovations introduced by entrepreneurs. Using internationally comparable data on European countries, entry and exit in research-intensive industries are found to be disproportionately sensitive to the level of financial development. Furthermore, financial development is related to increased R&D spending. The results are robust to several different measures of financial development, and are supported by surveys of the sources of finance used by entrepreneurs. The evidence suggests that intellectual property rights provide the institutional underpinning for financial markets to direct funds towards innovative entrepreneurs. |
| Keywords: | Entry; exit; financial development; creative destruction; R&D intensity; entrepreneurship; intellectual property rights. |
| JEL: | G18 O16 L26 O33 O31 O14 |
| Date: | 2009–12–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:22348&r=sbm |
| By: | Priit Vahter |
| Abstract: | Does FDI affect innovation, productivity growth, and knowledge sourcing activities of domestic firms? This study employs detailed firm-level panel-data from Estonia’s manufacturing sector to investigate different channels through which FDI can affect domestic firms. Instrumental variables approach is used to identify the effects. There is no evidence of an effect of FDI entry on local incumbents’ TFP and labour productivity growth in the short term.. However, there are positive spillovers on process innovation. These effects do not depend on the local firms’ distance to the productivity frontier. The results show significant positive correlation between the entry of FDI in a sector and the more direct measures of spillovers in subsequent periods. This is consistent with the view that FDI inflow to a sector intensifies knowledge flows to domestic firms. |
| Keywords: | foreign direct investment, productivity, innovation, learning |
| JEL: | F21 F23 O31 O33 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:mtk:febawb:69&r=sbm |
| By: | Óscar Afonso (Universidade do Porto); Sara Monteiro (Nice Sophia Antipolis University, Faculty of Law, Political Science, Economics and Management); Maria João Ribeiro Thompson (Universidade do Minho) |
| Abstract: | We propose a theoretical growth model with which to frame analytically the Quadruple Helix Innovation Theory (QHIT). The aim is to emphasise the investment in innovation transmission mechanisms in terms of economic growth and productivity gains, in one-high-technology sector, by stressing the role played by the helices of the Quadruple Helix Innovation Model: Academiaand Technological Infrastructures, Firms of Innovation, Government and Civil Society. In the existing literature, the relationship between the helices and respective impacts on economic growth does not appear clear. Results are fragiledue to data weakness and the inexistence of a theoretical framework to specify the relationship between the helices. Hence our motivation for providing the QHIT with a theoretical growth model. Our intent is to model the importance of emerging, dynamically adaptive, and transdisciplinary knowledge and innovation ecosystems to economic growth. We .nd that higher economic growth rate is obtained as a result of an increase in synergies and complementarities between different productive units, or an incease in productive government expenditure. |
| Keywords: | Economic Growth; Quadruple Helix Innovation Model; Innovation Ecosystems. |
| JEL: | O10 O18 O31 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:nip:nipewp:12/2010&r=sbm |