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on Small Business Management |
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Issue of 2010‒09‒11
thirteen papers chosen by Joao Carlos Correia Leitao University of Beira Interior and Technical University of Lisbon |
| By: | Attila Varga (Department of Economics and Regional Studies, University of Pécs); Dimitrios Pontikakis (Institute for Prospective Technological Studies, Joint Research Centre, European Commission Seville, Spain); George Chorafakis (Research Directorate-General, European Commission Brussels, Belgium) |
| Abstract: | This paper explores the effects of intra-regional agglomeration and interregional networking on the productivity of R&D across EU regions. The paper is based on the spatial econometric modelling framework presented in Varga (2000), and further develops a methodology for estimating the dynamic effects of agglomeration and interregional networks on R&D productivity in regional knowledge creation (measured by patent applications and publications) at the level of EU regions. This empirical modelling framework is applied to classify EU regions into different tiers according to the strengths of their agglomeration effects. These effects are then compared to the network effects of interregional connectedness as reflected in regional participation in the EU Framework Programme for Research. The estimated model is used then for an assessment of the impacts of EU Framework Programme expenditures on technological development and for carrying out policy impact simulations. |
| Keywords: | Agglomeration, network effects, R&D productivity |
| JEL: | O18 O33 R11 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:pec:wpaper:2010/3&r=sbm |
| By: | Braguinsky, Serguey; Honjo, Yuji; Nagaoka, Sadao; Nakamura, Kenta |
| Abstract: | We present a model of science-based entrepreneurship where ideas initially produced by researchers with high-level knowledge capital may be developed by high-ability entrepreneurs. With moderate investment costs, startups continuously managed by inventors-founders coexist in equilibrium with startups that experience entrepreneurial turnover. The model predicts that startups managed by non-founder entrepreneurs would on average outperform the startups managed by their founders and that better functioning of the market for entrepreneurial talent should result in more entrepreneurial turnover in equilibrium which in its turn leads to more ideas being commercialized and higher rewards to successful startups. The predictions of the model are tested against a unique dataset drawing upon a representative sample of biotechnology startups in Japan and are found to be broadly supported in the data. |
| Keywords: | Science-based Business, Biotechnology, Start-ups, Entrepreneurship, Innovation |
| JEL: | O31 O32 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:hit:iirwps:10-05&r=sbm |
| By: | Lorena M. D’Agostino; Keld Laursen; Grazia Santangelo |
| Abstract: | This paper investigates the relationship between home and offshore R&D activities on the knowledge production of the investing home region. Debate is ongoing on whether R&D offshoring complements the R&D performed at home. In the light of increased offshoring of innovative activities to emerging countries, we explicitly focus on Brazil, Russia, India, China, Singapore and Taiwan. We suggest that complementarity should obtain, when home region and offshore R&D activities are dissimilar as well as when offshore R&D activities is about modular and less complex technologies. We ground our predictions on arguments related to geographical technological specialisation and reverse knowledge transfer from offshore locations to home regions within the more general open innovation trend. Using a theoretical framework based on the international business literature and the regional system of innovation perspective, we estimate a knowledge production function for a sample of 221 regions from 21 OECD countries with home region patent applications as the dependent variable. Our test supports our predictions on the complementarity between home region and offshore R&D. |
| Keywords: | Home Region R&D; Offshore R&D; Knowledge Production; Complementarity; Emerging Countries |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:aal:abbswp:10-19&r=sbm |
| By: | Minniti, Maria; Naudé, Wim |
| Keywords: | Women, Entrepreneurship, Developing Countries |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wa2010-08&r=sbm |
| By: | Ding, Waverly |
| Abstract: | This paper investigates the effect of founder professional education background on the adoption of the open-science technology management strategy by a sample of 512 young biotechnology firms. One major finding of the paper is that after controlling for founder prior work experience and other organizational and environmental factors, biotechnology firms with proportionally more Ph.D.-holding entrepreneurs on the founding team have higher probability to adopt open science. A second note-worthy finding is that founder professional education background can mitigate the constraint of organizational environment on strategy. While a crowded technological niche provides a more challenging environment for firms to implement open science due to higher scooping risks, the deterring effect of such a high-risk environment is smaller among firms founded by proportionally more Ph.D.-holding entrepreneurs. I also found that the link between entrepreneurial professional education background and open science is stronger in a less favorable institutional environment for open science. The finding is consistent with and complements the growing body of work emphasizing the importance of entrepreneurial background in developing knowledge about new venture strategy and structure. It suggests that demographic changes in educational background of entrepreneurs in an organizational field may bring exogenous shocks to and shift the strategic trend in an organizational field. The implications for management innovations in an organizational field are discussed. |
| Date: | 2010–04–14 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:indrel:1274419&r=sbm |
| By: | Elizabeth A. Mack (GeoDa Center for Geospatial Analysis and Computation; Arizona State University); Luc Anselin (GeoDa Center for Geospatial Analysis and Computation; Arizona State University); Tony H. Grubesic |
| Abstract: | Despite the volume of literature afforded knowledge work and innovations in information and communications technologies (ICTs), few studies have examined the importance of ICTs to firms in knowledge industries. This study will develop spatial econometric models to examine the relative importance of the level of broadband provision to knowledge intensive firms in select U.S. Â metropolitan statistical areas (MSAs). Results demonstrate the need for both a spatial econometric and a metropolitan area specific evaluation of this relationship. They also suggest potential spillover effects to knowledge intensive firm location, which may explain why some regional economies are relatively more successful at stimulating firm growth in this increasingly important sector of the U.S economy. |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:asg:wpaper:2010-7&r=sbm |
| By: | D.B. Audretsch (Institute for Development Strategies, Indiana University, U.S.A.); A.R. Thurik (Erasmus University Rotterdam and EIM, Zoetermeer, the Netherlands) |
| Abstract: | A recent literature has emerged providing compelling evidence that a major shift in the organization of the developed economies has been taking place: away from what has been characterized as the <I>managed economy</I> towards the <I>entrepreneurial economy</I>. In particular, the empirical evidence provides consistent support that (1) the role of entrepreneurship has significantly increased, and (2) a positive relationship exists between entrepreneurial activity and economic performance. However, the factors underlying this observed shift have not been identified in a systematic manner. The purpose of this paper is to suggest some of the factors leading to this shift and implications for public policy. In particular, we find that a fundamental catalyst underlying the shift from the managed to the entrepreneurial economy involved the role of technological change. However, we also find that it was not just technological change but rather involved a number of supporting factors, ranging from the demise of the communist system, increased globalization, new competition for multinational firms and higher levels of prosperity. Recognition of the causes of the shift from the managed to the entrepreneurial economy suggests a rethinking of the public policy approach. Rather than the focus of directly and exclusively on promoting startups and SMEs, it may be that the current approach to entrepreneurship policy is misguided. The priority should not be on entrepreneurship policy but rather a more pervasive and encompassing approach, policy consistent with an <I>entrepreneurial economy</I>. |
| Keywords: | entrepreneurship; economic regime switch; economic policy; new firms and startups; economic development; firm performance and market structure; globalization; new technologies |
| JEL: | E10 E60 H11 L1 L2 M13 O10 |
| Date: | 2010–08–24 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20100080&r=sbm |
| By: | Joachim Wagner (Institute of Economics, Leuphana University of Lüneburg, Germany) |
| Abstract: | Heterogeneous firms are at the heart of both the New New International Trade Theory and the Micro-econometrics of International Firm Activities. One important aim of microeconometric studies is to uncover stylized facts that hold over space and time, and that can both inspire theoretical models that are based on “realistic” assumptions, and inform policy debates in an evidence-based way. Which results from the thousands of empirical estimates reported in the literature on the micro-econometrics of international firm activities do we consider as convincing? Based on my own experience from the last twenty years I use the opportunity of this lecture to make twelve recommendations that, hopefully, will help to find the right way on the thorny road from estimation results to stylized facts. I will deal with the following topics: comparisons of means vs. comparisons of distributions; extremely different firms, or outliers; unobserved heterogeneity; simultaneous occurrence of differences across quantiles, outliers, and unobserved heterogeneity; heterogeneous effects of international firm activities on firm performance; replication; within-study replication by international research teams; meta-analysis; and talking to practitioners. |
| Keywords: | International firm activities, heterogeneous firms, stylized facts, robust statistics, replication, meta anaysis |
| JEL: | F14 C21 C23 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:lue:wpaper:186&r=sbm |
| By: | Frederiksen, Anders (Aarhus School of Business); Halliday, Timothy (University of Hawaii at Manoa); Koch, Alexander K. (University of Aarhus) |
| Abstract: | While it is well established that both promotions within firms and mobility across firms lead to significant earnings progression, little is known about the interaction between these types of mobility. Exploiting a large Danish panel data set and controlling for unobserved individual heterogeneity, we show that cross-firm moves at the non-executive level provide sizeable short-run gains (similar to the effect of a promotion), consistent with the existing literature. These gains, however, appear modest when compared with the persistent impact on earnings growth of promotions (either within or across firms) and subsequent mobility at a higher hierarchy level. |
| Keywords: | earnings growth, promotions, dynamic panel data models, matched employer-employee data |
| JEL: | C33 J6 M51 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5163&r=sbm |
| By: | Temouri, Yama (Aston University); Vogel, Alexander (Leuphana University Lüneburg); Wagner, Joachim (Leuphana University Lüneburg) |
| Abstract: | This study reports results from an empirical investigation of business services sector firms that (start to) export, comparing exporters to firms that serve the national market only. We estimate identically specified empirical models using comparable enterprise level data from France, Germany, and the United Kingdom. Exporters are more productive and pay higher wages on average in all three countries. Results for profitability differ across borders – profitability of exporters is significantly smaller in Germany, significantly larger in France, and does not differ significantly in the UK. The results for wages and productivity hold in the years before the export start, which indicates self-selection into exporting of more productive services firms that pay higher wages. The surprising finding of self-selection of less profitable German business services firms into exporting does not show up among firms from France and the UK where no statistically significant relationship between profitability and starting to export is found. |
| Keywords: | business services firms, exports, self-selection, France, Germany, UK |
| JEL: | F14 D21 L80 |
| Date: | 2010–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5147&r=sbm |
| By: | Pavel Vacek (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic) |
| Abstract: | I examine whether foreign direct investment increases the productivity of manufacturing firms. I test the proposition that local firms benefit from supplying multinational firms (spillovers through backward linkages) and by purchasing inputs from multinationals (spillovers through forward linkages). The existing literature on productivity spillovers has relied on industry-level proxies for spillovers. I identify spillovers directly at the firm level. I have conducted field work in the Czech manufacturing sector and built a unique data set that enabled me to construct firm-level measures of backward and forward linkages. My results provide strong support for the existence of productivity spillovers through backward linkages. |
| Keywords: | FDI, spillovers, forward–backward linkages |
| JEL: | F23 |
| Date: | 2010–08 |
| URL: | http://d.repec.org/n?u=RePEc:fau:wpaper:wp2010_19&r=sbm |
| By: | Cole, Rebel |
| Abstract: | In this study, we use data from the SSBFs to provide new information about the use of credit by small businesses in the U.S. More specifically, we first analyze firms that do and do not use credit; and then analyze why some firms use trade credit while others use bank credit. We find that one in five small firms uses no credit, one in five uses trade credit only, one in five uses bank credit only, and two in five use both bank credit and trade credit. These results are consistent across the three SSBFs we examine—1993, 1998 and 2003. When compared to firms that use credit, we find that firms using no credit are significantly smaller, more profitable, more liquid and of better credit quality; but hold fewer tangible assets. We also find that firms using no credit are more likely to be found in the services industries and in the wholesale and retail-trade industries. In general, these findings are consistent with the pecking-order theory of firm capital structure. Firms that use trade credit are larger, more liquid, of worse credit quality, and less likely to be a firm that primarily provides services. Among firms that use trade credit, the amount used as a percentage of assets is positively related to liquidity and negatively related to credit quality and is lower at firms that primarily provide services. In general, these results are consistent with the financing-advantage theory of trade credit. Firms that use bank credit are larger, less profitable, less liquid and more opaque as measured by firm age, i.e., younger. Among firms that use bank credit, the amount used as a percentage of assets is positively related to firm liquidity and to firm opacity as measured by firm age. Again, these results are generally consistent with the pecking-order theory of capital structure, but with some notable exceptions. We contribute to the literature on the availability of credit in at least two important ways. First, we provide the first rigorous analysis of the differences between small U.S. firms that do and do not use credit. Second, for those small U.S. firms that do participate in the credit markets, we provide new evidence regarding factors that determine their use of trade credit and of bank credit, and whether these two types of credit are substitutes (Meltzer, 1960) or complements (Burkart and Ellingsen, 2004). Our evidence strongly suggests that they are complements. |
| Keywords: | availability of credit; bank credit; capital structure; entrepreneurship; relationships; small business; SSBF; trade credit |
| JEL: | L11 J71 G32 M13 G21 |
| Date: | 2010–03–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:24689&r=sbm |
| By: | Attila Varga (Department of Economics and Regional Studies, University of Pécs); Péter Járosi (Department of Economics and Regional Studies, University of Pécs); Tamás Sebestyén (Department of Economics and Regional Studies, University of Pécs) |
| Abstract: | This paper introduces the geographic macro and regional model for NUTS-2 regions of the Euro zone. This model consists of three blocks: the TFP, the SCGE and the MACRO blocks. The model is built for impact analysis of policies targeting intangible assets in the forms of R&D, human capital and social capital. The analysis can be done both at the regional and the EU macroeconomic levels. Policy simulations illustrate the capabilities of the complex model system. |
| Keywords: | TFP, SCGE models, DSGE models, impact analysis, R&D, human capital, social capital |
| JEL: | O31 H41 O40 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:pec:wpaper:2010/4&r=sbm |