nep-sbm New Economics Papers
on Small Business Management
Issue of 2011‒01‒16
fifteen papers chosen by
Joao Carlos Correia Leitao
University of Beira Interior and Technical University of Lisbon

  1. Perceptions, Expectations, and Entrepreneurship: The Role of Extreme Events By Tilman Brück; Fernanda Llussá; José Tavares
  2. Do Firms Benefit from Being Present in Multiple Technology Clusters? An Assessment of the Technological Performance of Biopharmaceutical Firms By Catherine Lecocq; Bart Leten; Jeroen Kusters; Bart Van Looy
  3. Strategische Ausrichtung und Innovationstätigkeit von KMU im Raum Jena By Kaps, Katharina; Pfeil, Silko; Sauer, Thomas; Stoetzer, Matthias-Wolfgang
  4. Do Business Subsidies Facilitate Employment Growth? By Heli Koski; Mika Pajarinen
  5. Eco-innovation and economic performance in industrial clusters: evidence from Italy By Sara Tessitore; Tiberio Daddi; Fabio Iraldo
  6. Competitive capabilities in territorially clustered firms: The strong-tied and cognitive-cohesive social network effect By Bárbara Larrañeta Gómez-Caminero; F. Xavier Molina-Morales
  7. Framing the empirical findings on firm growth By Marco Capasso; Elena Cefis; Sandro Sapio
  8. Spatial Differentiation in Industrial Dynamics. A Core-Periphery Analysis Based on the Pavitt-Miozzo-Soete Taxonomy By Marco Capasso; Elena Cefis; Koen Frenken
  9. The Impact of Technology Licensing Payment Mechanisms on Firms' Innovative Performance By Jung Eun Lee; Younghoon Kim; Yeonbae Kim; Donghyuk Choi
  11. The emerging empirics of evolutionary economic geography By Ron Boschma; Koen Frenken
  13. How SMEs Exploit Their Intellectual Property Assets: Evidence from Survey Data By Gaétan de Rassenfosse
  14. The effects of unionization in an R&D growth model with (In)determinate equilibrium By Lai, Chung-Hui; Wang, Vey
  15. The Dynamics of the Inventor Network in German Biotechnology: Geographical Proximity versus Triadic Closure By Anne L.J. Ter Wal

  1. By: Tilman Brück; Fernanda Llussá; José Tavares
    Abstract: We provide, for the first time, comparative evidence of the impact of various types of extreme events - natural disasters, terrorism, and violent conflicts - on the perceptions of entrepreneurs concerning some key entrepreneurial issues - such as fear of failure in starting a business venture, whether individuals expect that good opportunities are likely to emerge in the next six months, and the expected level of competition stemming from creating new ventures. The occurrence of extreme events is likely to be exogenous to the perceptions affecting it so that we can identify a causal link from events to entrepreneurs and their perceptions. Using individual-level data from 43 countries from the period 2002 to 2005, we find that neither indicator of the intensity of extreme events has a significant impact on entrepreneurial activity, when country characteristics are not controlled for. Once invariant country characteristics are taken into account, we find that Terrorist Attacks have a positive and significant impact on business creation, Natural Disasters have a positive and negative impact on entrepreneurial activity, and Violent Conflict has no significant effect. These results are consistent with differential impacts of extreme events on perception variables such as Fear of Failure, Expected Business Opportunities, and Expected Level of Competition. Our results suggest that extreme events, while costly at the aggregate level, may induce a positive response in terms of entrepreneurial activity in specific circumstances. There is hence scope for entrepreneurs, and policies supporting them, to create growth from the ruins of extreme events.
    Keywords: Perceptions, expectations, entrepreneurship, extreme events
    JEL: D84 M13 L26 O12
    Date: 2010
  2. By: Catherine Lecocq; Bart Leten; Jeroen Kusters; Bart Van Looy
    Abstract: Firms active in knowledge-intensive fields are increasingly organizing their R&D activities on an international scale. This paper investigates whether firms active in biotechnology can improve their technological performance by developing R&D activities in multiple technology clusters. Regions in the US, Japan and Europe, that host a concentration of biotechnology activity are identified as clusters. Fixed-effect panel data analyses with 59 biopharmaceutical firms (period 1995-2002) provides evidence for a positive, albeit diminishing (inverted-U shape) relationship between the number of technology clusters in which a firm is present and its overall technological performance. This effect is distinct from a mere multi-location effect.
    Keywords: region, clusters, biotechnology, technology clusters
    JEL: O30 R12 R30
    Date: 2010–12
  3. By: Kaps, Katharina; Pfeil, Silko; Sauer, Thomas; Stoetzer, Matthias-Wolfgang
    Abstract: Das vom Bundesministerium für Bildung und Forschung (BMBF) geförderte Projekt KompNet2011 – Erfolgsfaktoren regionaler Innovationsnetze – untersucht die strategische Ausrichtung sowie die Innovationsaktivitäten von kleinen und mittelständischen Unternehmen (KMU) in der Region Jena. Für die 225 Befragungsteilnehmer stellt die Qualitätsführerschaft die wichtigste Strategie dar: Fast 80% weisen ihr eine hohe bzw. sehr hohe Bedeutung zu. Allerdings belegt der Datensatz auch die Tendenz zu Mischstrategien, da nur wenige Unternehmen eine eindeutige strategische Ausrichtung aufweisen. Das Innovationsverhalten der KMU in der Region ist stärker auf Produktinnovationen als auf Prozessinnovationen ausgerichtet und fokussiert außerdem intensiver auf Verbesserungen als auf Neuheiten. Zudem finden sich in der deskriptiven Auswertung Belege für eine hohe Bedeutung betriebswirtschaftlich orientierter Innovationsarten, d.h. Marketing- und Organisationsinnovationen sind von erheblicher Relevanz. Während Kunden die mit Abstand wichtigsten Innovationstreiber sind, werden Kostenbarrieren und gesetzliche Restriktionen als bedeutendste Innovationshemmnisse identifiziert. Fehlende technologische Informationen und fehlende Kooperationspartner wirken sich hingegen kaum negativ auf die Innovationstätigkeit aus. -- The research project „KompNet 2011 – Sucess factors of regional innovation networks“, funded by the Federal Ministry of Education and Research (BMBF), examines the innovation activities of small and medium-sized enterprises (SME) in and closely around Jena (Thuringia). According to the answers of 225 survey participants, quality leadership is the most important mode of strategy: Almost 80% claim that quality leadership has a high or very high importance as to the strategic orientation of their company. However, the data show a clear tendency to mixed strategies. Only a few regional SME have a clear strategic alignment. The innovation activities focus clearly on product innovation instead of process innovation. Furthermore the improvement of existing products and processes is much more relevant compared to the development of novelties. In addition the empirical analysis reveals a high importance of business-oriented types of innovation, i.e. marketing and organizational innovation. While customers clearly are the most important drivers of innovation, regional SME are highly hampered in their innovation projects by cost barriers and legal restrictions. Only a few participants point out the hampering effects due to a lack of technological information and absence of cooperation partners.
    Keywords: Innovationshemmnis,Innovationstreiber,Produktinnovation,Prozessinnovation,Unternehmensstrategie,Wettbewerbskräfte Porter,Business strategy,Competitive forces Porter,Drivers of innovation,Obstacles of innovation,Process innovation,Product Innovation
    JEL: L10 O31 O32
    Date: 2010
  4. By: Heli Koski; Mika Pajarinen
    Abstract: We use data from 15508 Finnish companies with 10 or more employees for the years 2003-2008 to explore the relationship between employment growth and three endogenously determined business subsidy types (i.e. employment subsidy, R&D subsidy and other business subsidies). We find a positive contemporary relationship between all business subsidy types and employment growth. Our findings suggest that R&D subsidies further contribute to the firms’ employment for one year after and employment and other subsidies for three years after the reception of subsidies. After that, the differences between the subsidized and non-subsidized firms vanish. We further find, in line with the empirical studies of Harrison et al. (2008) and Hall et al. (2008), that both product innovation and sales growth from a firm’s old products contribute to the firm’s employment growth. Process innovation, instead, does not seem to have any significant effect on employment.
    Keywords: public subsidies, technology policy, employment growth, Finland
    JEL: J23 L10 O33 O38
    Date: 2011–01–04
  5. By: Sara Tessitore (Lab. MaIn – Scuola Superiore Sant’Anna, Pisa); Tiberio Daddi (Lab. MaIn – Scuola Superiore Sant’Anna, Pisa); Fabio Iraldo (– Institute for Environmental and Energy Policy and Economics, Bocconi University, Milan, Italy)
    Abstract: The article aims to investigate the presence of a correlation between eco-innovation and economic performance of an industrial district. The case analyzed in this article takes its cue from a study on a sample of 54 Italian industrial districts entitled "Eco-Districts" that, based on a series of criteria, has compiled a list of the most eco-efficient industrial districts. After selecting two districts in the field, but analyzed in this study for their different levels of eco-innovation, the article assesses the economic performance of the last three years through the analysis of trends in four indicators. However, the results show that only in some cases there is a connection between eco innovation and economic performance.
    Keywords: industrial clusters, industrial districts, eco-innovation, economic performance
    Date: 2010–02–23
  6. By: Bárbara Larrañeta Gómez-Caminero (Department of Business Administration, Universidad Pablo de Olavide); F. Xavier Molina-Morales (Department of Business Administration & Marketing, Universitat Jaume I Castellon)
    Abstract: Recent studies are supporting the idea that understanding the dynamics of firms’ value creation requires a complex and indirect association with their relational or social resources. In particular, in bounded geographical contexts this approach is replacing initial, perhaps too simplistic, assumptions. With this paper our aim is to contribute to this growing stream of research. The work focuses on the specific effects of the strength of ties and the cognitive cohesion of clustered firms on the development of their competitive capabilities. We formed a unique dataset based on a sample of 116 clustered firms from the Spanish fishing sector, where competition is based on efficiency more than on differentiation or any other valuable activity. Our results show that the cognitive cohesion of a clustered firm has a positive curvilinear relation with its competitive capabilities. Yet, contrary to expectations, the strength of ties of a clustered firm has a significant negative curvilinear relation with its competitive capabilities. The implications and contribution of our findings to the literature on both social capital and regional clusters are discussed.
    Keywords: Social capital, tie strength, cognitive cohesion, regional clusters, competitive capabilities.
    Date: 2010–12
  7. By: Marco Capasso; Elena Cefis; Sandro Sapio
    Abstract: This paper proposes a general framework to account for the divergent results in the empirical literature on the relation between firm sizes and growth rates, and on many results on growth autocorrelation. In particular, we provide an explanation for why traces of the LPE sometimes occur in conditional mean (i.e. OLS) autoregressions of firm size or firm growth, and in conditional median (i.e. least absolute deviation) autoregressions, but never in high or low quantile autoregressions. Based on an original empirical analysis of the population of manufacturing firms in the Netherlands between 1994 and 2004, we find that there is no peculiar role played by the median of the growth distribution, which is approximately equal to zero independent of firm size. In economic terms, this is equivalent to saying that most of the phenomena of interest for industrial dynamics can be studied without reference to the behaviour of the median firm, and many "average" relations retrieved in the literature, starting from the negative relation between average size and average growth, are driven by the few dynamic firms in the sample rather than the many stable ones. Moreover, we observe the tent shape of the empirical firm growth rate distribution and confirm the skewness-size and the variance-size relations. The identified quantile regression patterns - autoregressive coefficients above 1 for fast decliners, and below 1 for fast growers - can be obtained by assuming negative variance-size scaling and Laplace growth rate distributions, and are robust to a mild positive relationship between skewness and size. A relationship between quantile regression patterns and previous findings is therefore uncovered.
    Keywords: Firm growth; Law of Proportionate Effect; quantile regression; heterogeneity; variance-size scaling.
    JEL: L11 L25 L60
    Date: 2010–01–10
  8. By: Marco Capasso; Elena Cefis; Koen Frenken
    Abstract: We compare the industrial dynamics in the core, semi-periphery and periphery in The Netherlands in terms of firm entry-exit, size, growth and sectoral location patterns. The contribution of our work is to provide the first comprehensive study on spatial differentiation in industrial dynamics for all firm sizes and all sectors, including services. We find that at the aggregate level the spatial pattern of industrial dynamics is consistent with the spatial product lifecycle thesis: entry and exit rates are highest in the core and lowest in the periphery, while the share of persistently growing firms is higher in the periphery than in the core. Disaggregating the analysis to the sectoral level following the Pavitt-Miozzo-Soete taxonomy, findings are less robust. Finally, sectoral location patterns are largely consistent with the spatial product lifecycle model: Fordist sectors are over-represented in the periphery, while sectors associated with the ICT paradigm are over-represented in the core, with the notable exception of science-based manufacturing.
    Keywords: Entry, exit, spatial product lifecycle, Fordist paradigm, ICT paradigm
    JEL: L25 L26 L60 L80 O18 O33 R10
    Date: 2010–01–10
  9. By: Jung Eun Lee; Younghoon Kim; Yeonbae Kim (Technology Management, Economics, and Policy Program (TEMEP), Seoul National University); Donghyuk Choi (Technology Management, Economics, and Policy Program (TEMEP), Seoul National University)
    Abstract: Although numerous papers have examined the ways in which firms can improve their innovative performance through technology alliances, empirical research on the effect of contract structures in technology licensing has been scarce. This study provides evidence that the payment mechanisms agreed upon in licensing contracts affect the licensee firms¡¯ innovative performance. Based on a dataset of technology licensing contracts concluded by small- and medium-sized enterprises around the world, this paper analyzes the influence of fixed-fee payments and ongoing payments?including royalty, milestone, and equity payments?on firm performance. The findings reveal that ongoing payments are more likely to positively influence the innovative performance of licensee firms. The results also suggest that equity grants to the licensor would not impact the licensee¡¯s performance as much as fixed-fee payments. These outcomes provide crucial insights into the ways in which small high-tech firms can utilize their external technology resources.
    Keywords: Technology licensing, payment mechanism, innovative performance, small-and-medium-sized enterprises.
    JEL: L24 O31 C35
    Date: 2010–12
  10. By: Vladimir-Codrin IONESCU (University of Bucharest, Romania); Toma PLEªANU (“Carol I” National Defence University, Bucharest, Romania)
    Abstract: In order to constantly create competitive advantages in relationship with the competing companies, small and medium enterprises must promote adequate business strategies which should take into account both the modifications occurring in the business environment and their organizational development stage. Designing and implementing business strategies in small and medium enterprises is of major significance both from a theoretical and methodological, as well as from a practical and an applicative point of view. In this context, the paper aims to reveal significant aspects concerning strategy foundation, elaboration and implementation in small and medium enterprises.
    Keywords: small and medium enterprise (SME), strategy, designing, implementation, economic efficiency
    JEL: P40
    Date: 2010–08
  11. By: Ron Boschma; Koen Frenken
    Abstract: Following last decadeÕs programmatic papers on Evolutionary Economic Geography, we report on recent empirical advances and how this empirical work can be positioned vis-ˆ-vis other strands of research in economic geography. First, we review studies on the path dependent nature of clustering, and how the evolutionary perspective relates to that of New Economic Geography. Second, we discuss research on agglomeration externalities in Regional Science, and how Evolutionary Economic Geography contributed to this literature with the concepts of cognitive proximity and related variety. Third, we go into the role of institutions in Evolutionary Economic Geography, and we relate this to the way Institutional Economic Geography tends to view institutions. From this discussion, a number of new research challenges are derived.
    Keywords: evolutionary economic geography, clusters, related variety, institutions, regional branching
    JEL: B25 B52 D85 L25 R0 R1
    Date: 2011–01
  12. By: Vladimir-Codrin IONESCU (University of Bucharest, Romania); Horea COROIU (National Defence University, Bucharest, Romania)
    Abstract: The strategic diagnosis analysis aims to assess the potential of small and medium enterprises by evaluating their inner resources and the business environment within which these enterprises perform their activity. As a first stage in the strategic management process, the strategic diagnosis analysis ensures the premises for founding, elaborating and operationalizing a competitive managerial strategy. In this context, the paper presents the conceptual criteria which are essential for thematically framing the strategic diagnosis analysis, and the main instruments that can be used by the small and medium enterprises in this strategic managerial process stage.
    Keywords: small and medium enterprise, strategic diagnosis analysis, strategic segmentation, strategic profile, technological profile, strategic group
    JEL: C81
    Date: 2010–08
  13. By: Gaétan de Rassenfosse (Melbourne Institute of Applied Economic and Social Research, and Intellectual Property Research Institute of Australia, The University of Melbourne)
    Abstract: This paper seeks to understand how motives to patent affect the use of the patent portfolio with a particular focus on motives aimed at the monetization of intellectual property (IP). The analysis relies on data from an international survey conducted by the European Patent Office (EPO). The main results can be summarized as follows. First, small and medium-sized enterprises (SMEs) exhibit a much stronger reliance on ‘monetary patents’ than large companies and nearly half of the SMEs in the sample patent for monetary reasons. Second, SMEs tend to use their patents more actively than large firms. Third, smaller companies generally have a higher proportion of their portfolio that is licensed but the licensing rate is significantly higher in the U.S. An American SME is twice as likely as a European SME to have a high share of its portfolio that is actually licensed, witnessing a fragmented market for technology in Europe.
    Keywords: Financing constraint, intellectual property strategy, market for technology, motives to patent, multivariate ordered models, technology licensing
    JEL: O32 O34 O38 G21 G24
    Date: 2010–12
  14. By: Lai, Chung-Hui; Wang, Vey
    Abstract: This paper extends an R&D-based growth model of the Rivera-Batiz and Romer-type [Quarterly Journal of Economics 106 (1991) 531] endogenous growth model by embodying a union with elastic labor to investigate the effects of unionization on employment and growth by highlighting the essence of internal conflict within the union. It is shown that an increase in the union’s bargaining power or a union which is more employment-oriented boosts employment and economic growth when the balanced growth equilibrium is determinate. On the other hand, if the union is more wage-oriented, employment and economic growth are enhanced when the balanced growth equilibrium is indeterminate.
    Keywords: Union; Collective bargaining; R&D; Indeterminacy; Economic growth
    JEL: O30 O40 J50
    Date: 2010–11–07
  15. By: Anne L.J. Ter Wal
    Abstract: Economic geography has developed a stronghold analysing how geography impacts innovation. Yet, despite increased interest in networks, a critical assessment of the role of geography in the evolution of networks is still lacking. This paper juxtaposes geographical proximity with the network of prior ties as alternative mechanisms for tie formation. Analysing the evolution of inventor networks in German biotechnology, the paper theoretically argues and empirically demonstrates that - as the technological regime of an industry changes over time - inventors increasingly rely on network resources by forming links to partners of partners, whilst the direct impact of geographical proximity on tie formation decreases.
    Keywords: network evolution, geographical proximity, triadic closure, inventor networks
    JEL: D85 L14 L65 R11
    Date: 2011–01

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