nep-sbm New Economics Papers
on Small Business Management
Issue of 2010‒05‒22
twelve papers chosen by
Joao Carlos Correia Leitao
University of Beira Interior and Technical University of Lisbon

  1. The Circulation of Ideas in Firms and Markets By Thomas Hellman; Enrico Perotti
  2. Innovation Behaviour At Farm Level â Selection And Identification By Sauer, Johannes; Zilberman, David
  3. Small and Medium Enterprises in Japan: Surviving the Long-Term Recession By Uchikawa, Shuji
  4. Drivers and Barriers to Innovation in the Food Processing Industry Continued. A Comparison of the Netherlands and the Shanghai Region in China By Fortuin, Frances T.J.M.; Omta, S.W.F. (Onno)
  5. Knowledge Capabilities, Communication and Innovation in Beef Cattle Farm Enterprises By Noble, Chris
  6. A Control Group Study of Incubators’ Impact to Promote Firm Survival By Michael Schwartz
  7. Complexity and the Coordination of technological Knowledge: the Case of innovation Platforms By Consoli Davide; Patrucco Pier Paolo
  8. Hybrid Strategy and Firm Performance: The Moderating Role of Individual and Technological Ambidexterity By Mahr, Ferdinand
  9. The Regional Dimension of Sectoral Innovativeness An Empirical Investigation of Two Specialised Supplier and Two Science-Based Industries By Uwe Cantner; Matthias Bürger
  10. Research on the Competitiveness Factors of Small and Medium Enterprises By György Kadocsa
  11. Clusters, Transnational Entrepreneurs and the Emergence of New Global Production Patterns. The Palanpuris and the Reorganization of Diamond Manufacturing By Henn, Sebastian
  12. Is 'Open Innovation' Re-Inventing Innovation Policy for Catching-up Economies? By Rainer Kattel; Erkki Karo

  1. By: Thomas Hellman (University of British Columbia); Enrico Perotti (University of Amsterdam)
    Abstract: Novel early stage ideas face uncertainty on the expertise needed to elaborate them, which creates a need to circulate them widely to find a match. Yet as information is not excludable, shared ideas may be stolen, reducing incentives to innovate. Still, in idea-rich environments inventors may share them without contractual protection. Idea density is enhanced by firms ensuring rewards to inventors, while their legal boundaries limit idea leakage. As firms limit idea circulation, the innovative environment involves a symbiotic interaction: firms incubate ideas and allow employees to leave if they cannot find an internal fit; markets allow for wide circulation of ideas until matched and completed; under certain circumstances ideas may be even developed in both firms and markets.
    Keywords: Ideas, Innovation, Entrepreneurship, Firm Organization, Start-Ups
    JEL: D83 L22 M13 O31
    Date: 2010–05
  2. By: Sauer, Johannes; Zilberman, David
    Abstract: Using a squential logit model and a mixed-effects logistic regression approach this empirical study investigates factors for the adoption of automatic milking technology (AMS) at the farm level accounting for problems of sequential sample selection and behaviour identification. The results suggest the importance of the farmerâs risk perception, significant effects of peer-group behaviour, and a positive impact of previous innovation experiences.
    Keywords: Technology Adoption, Mixed-Effects Regression, Risk, Agricultural and Food Policy, Farm Management, Land Economics/Use,
    Date: 2010–04
  3. By: Uchikawa, Shuji (Asian Development Bank Institute)
    Abstract: The relationship between large enterprises (LEs) and small and medium enterprises (SMEs) in Japan has undergone major changes during the long-term recession since 1991. While SMEs still play the important role of supplying parts and components to LEs through subcontracting, many LEs have started to reduce the number of their suppliers and the components they use in manufacturing. While efficient SMEs selected by LEs were able to expand their businesses, inefficient SMEs lost customers. The regression results in this study suggest that the decrease in number of establishments—specifically, the exit of inefficient SMEs—might improve total factor productivity growth rates. The traditional business model of being dependent on certain LEs and doing business within the cluster is not functioning as well as it used to. Heavy dependence on certain industries and highly segmented and specialized production processes prevent the clusters from adjusting to the new business environment. Some SMEs are still able to create new business by taking advantage of more flexible divisions of labor. SME policies must encourage diversification and collaboration that cut across traditional industry groupings to form a flexible division of labor.
    Keywords: japan sme recession; japan sme restructuring
    JEL: L60 O14 O25
    Date: 2009–11–27
  4. By: Fortuin, Frances T.J.M.; Omta, S.W.F. (Onno)
    Abstract: This paper aims at comparing the innovative potential of leading food processing companies in emerging and developed economies. We asked ourselves how the clearly differing economic and social conditions of two areas that are only comparable in terms of their number of inhabitants (about 16 to 18 million), namely a fast growing emerging economy (the Shanghai area in China) and a developed economy (The Netherlands) affect competitiveness and innovation of their leading prospector companies. Our study population consisted of 31 respondents (CEOs, CTOs and R&D directors) from 18 leading prospector companies in the food processing industry: nine in the Netherlands and nine in Shanghai. We focus on how the combination of external forces exerted by actors in the network (competitors, suppliers and buyers) and internal forces (especially innovation capabilities) affect competitiveness and innovation performance of these companies. A 52-item research questionnaire, based on industrial organization theory and the Resource-Based-View, was designed for this study, including quantitative questions on innovative input and output and business performance, and qualitative questions about competitive pressure and the quality of the innovation process. Interesting findings are that both innovative as well as business performance are predominantly related to the companiesâ internal (innovation) capabilities. As expected, clear differences between Chinese and Dutch companies were found regarding the external forces as well as in the internal capabilities they deploy to survive The pressure from the external environment, especially the power of buyers and the threat of new entrants is clearly felt more strongly by the Dutch companies than by their Chinese counterparts. The Chinese companies report to significantly use more KPIâs to monitor the R&D process, whereas the Dutch companies are significantly more active in stimulating an innovative culture. Interestingly, however, neither of these differences leads to significant differences in business or innovation performance between the two groups in our study. The answer to the question whether agri-food companies in developed economies still have a competitive edge compared to those in emerging economies, such as China that emerges from the data collected so far points in the direction of the disappearance of the traditional advantage of the companies from developed economies: no significant differences could be found neither in innovation performance, nor in business performance among the companies from the Netherlands and the Shanghai region in China.
    Keywords: Agribusiness, Agricultural and Food Policy, Farm Management, Food Consumption/Nutrition/Food Safety, Research and Development/Tech Change/Emerging Technologies, Risk and Uncertainty,
    Date: 2009–10
  5. By: Noble, Chris
    Abstract: A capabilities perspective of farm level innovation in the beef cattle industry is presented using information economics. The knowledge capabilities of non-corporate beef cattle enterprises have two interrelated components: the knowledge generated from the activities that takes place during production; and the information channels that producers possess to source external information. Although both are important for analysing innovation, the external information sources relating to producersâ knowledge are emphasised here. Emphasis on the path-dependent nature of knowledge focuses the discussion of innovation on the communication of information and how this affects the organisation of knowledge. The effects of differing knowledge capabilities are central to understanding the variation in innovative processes. Preliminary results from focus groups and in-depth interviews of both producers and their nominated information sources in the New England area of New South Wales in mid-2009 provide evidence for the efficacy of information channels. Case studies of innovations exemplify how differing attributes of innovations combine with network structures and institutional factors to influence the processes of communication between producers and their information sources. Communication of high quality information is shown to be more involved than simple exposure and must be considered from the point of view of the user, allowing it to be reconciled with existing knowledge of the producer. Of importance to producers is the source, delivery and history of the information and these are reflected in the approach taken in this research. The outcomes suggest that producers should be making decisions on the basis of their self organised knowledge capital rather than following innovations fashionable in the industry at large. The role of policy makers is to complement this by providing favourable conditions for knowledge capital formation where high quality information flows are likely outcomes. Policy makers could look at improving the ability of producers to integrate new technologies and practices into their production indirectly rather than looking to directly persuade them to adopt individual innovations.
    Keywords: Farm Management,
    Date: 2010
  6. By: Michael Schwartz
    Abstract: It is widely unclear as to whether start-up firms supported by publicly-initiated incubator initiatives have higher survival rates than comparable start-up firms that have not received support by such initiatives. This paper contributes to the underlying discussion by performing an empirical analysis of the long-term survival of 371 incubator firms (after their graduation) from five German incubators and contrasting these results with the long-term survival of a control group of 371 comparable non-incubated firms. The analysis covers a 10-year time span. To account for the problem of selection bias, a non-parametric matching approach is applied to identify an appropriate control group. For neither of the five incubator locations we find statistically significant higher survival probabilities for firms located in incubators compared to firms located outside those incubator organizations. For three incubator locations the analysis even reveals statistically significant lower chances of survival for those start-ups having received support by an incubator. We therefore arrive at the conclusion that being located in an incubator – contrasting the widespread rhetoric of policy actors and incubator stakeholders – does not increase the chances of long-term business survival.
    Keywords: business incubators, firm survival, control group, matching, survival analy- sis, technology policy
    JEL: L26 O38 M13 C41
    Date: 2010–05
  7. By: Consoli Davide; Patrucco Pier Paolo (University of Turin)
    Date: 2010–05
  8. By: Mahr, Ferdinand
    Abstract: It is discussed whether hybrid strategies are beneficial or detrimental to a firm’s performance, because hybrid strategies lead to organizational tensions that arise from the simultaneous pursuit of distinct strategic activities. However, existing studies on the relationship between hybrid strategy and firm performance have largely neglected the role of the organizational architecture. This study tests the hypothesis that an ambidextrous organizational architecture positively moderates the relationship between a hybrid strategy and firm performance. Particularly, the roles of specific organization structures and HRM practices (individual ambidexterity) and information and communication technologies (technological ambidexterity) are assessed. Further, a hybrid strategy’s performance impact is defined in two distinct ways and measured relative to three different comparison groups, that is, the entire sample, no-emphasis strategies, and pure strategies. A novel multi-source dataset on German and Polish manufacturing firms is constructed from three independent sources, including a dataset on objective firm performance indicators. Evidence is found that a hybrid strategy positively impacts firm performance in the presence of organizational ambidexterity, but negatively impacts firm performance in the absence of organizational ambidexterity. These findings are robust across two types of organizational ambidexterity, three different comparison groups, and further robustness tests.
    Keywords: exploration; exploitation; ambidexterity; hybrid strategy; organizational architecture; firm performance
    Date: 2010
  9. By: Uwe Cantner (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Matthias Bürger (Department of Economics and Business Administration, Friedrich-Schiller-University Jena and Graduate College "The Economics of Innovative Change" (DFG-GK-1411))
    Abstract: The aim of this paper is to test how geographical and technological proximity relate to a particular industry's innovative output. Two mechanisms are therefore tested, i.e. agglomeration economies and the regional exploitation of technological proximity. A new dataset is applied, which includes German patent applications from within the period 1995 to 2006. Four industries are considered, two of which are science-based, whereas the remaining two are specialised supplier industries. While diversity is associated with high innovative output in the specialised supplier industries, the results for specialisation are mixed. However, all industries seem to benefit, at least to a certain degree, from the regional re-combination of their own technologies with those of specific key industries.
    Keywords: Innovation, Proximity, Diversity
    JEL: O18 R11
    Date: 2010–05–12
  10. By: György Kadocsa (Óbuda University)
    Abstract: An Small and Medium Enterprise (SME) is able to cope with the global challenge if it realizes reliable, balanced and high-standard operation in its business. There are some management and organizational methods increasing the competitiveness of SME. Controlling as a management tool and management function as well as a factor affecting competitiveness has come more into focus. Outsourcing of activities not belonging to the main profile of the enterprise seems natural for most SME-s. Family as the driving force of the business can bear bigger loads than SME of similar sizes but not organized around a family.
    Keywords: competitiveness factors, management methods, family business speciality.
    Date: 2010
  11. By: Henn, Sebastian
    Abstract: For a few years now, the concept of transnational entrepreneurship (TE) has gained in importance in social sciences. It focuses on individuals having migrated from one country to another, thereby maintaining business-related linkages with their home countries. These transnational entrepre-neurs are said to maximize their resource bases by engaging simultaneously in two or more so-cially embedded environments. Though the concept explicitly refers to cross-border activities of mostly smaller sized enterprises, it has not found its way into the debate on the change of spatial production patterns so far. One reason for the disregard of the approach is that TE-studies up to now clearly have adopted a micro perspective which has not accounted for regional aspects. The paper aims at closing this research gap. Using the example of diamond manufacturing, it will show that transnational entrepreneurs are able to significantly contribute to the change of tradi-tionally grown regional production patterns and therefore asks for a deeper consideration of these actors in future research on globalization issues.
    Keywords: Transnational Entrepreneurship; Clusters; Diamond Manufacturing; Palanpuris
    JEL: F22 B52 F23 R12
    Date: 2010–05–12
  12. By: Rainer Kattel; Erkki Karo
    Abstract: This paper discusses the current state of the .open innovationÿ thinking in the context of core economic challenges faced by catching-up and developing countries. The main argument of the paper is that due to the paradoxes and contradictions between the .mainstreamÿ innovation discourse and practice and the peculiar challenges of the catching-up countries, applying the concept of .open innovationÿ may have unintended or reverse effects on catching-up development. This problem can be remedied by more conscious attention to the basic contradictions and paradoxes that requires a more comprehensive analytical focus on innovation and technological development at the levels of firm, industry and policy.
    Date: 2010–04

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