nep-sbm New Economics Papers
on Small Business Management
Issue of 2011‒04‒02
three papers chosen by
Joao Carlos Correia Leitao
University of Beira Interior and Technical University of Lisbon

  1. The Transatlantic Productivity Gap: Is R&D the Main Culprit? By Ortega-Argilés, Raquel; Piva, Mariacristina; Vivarelli, Marco
  2. The Influence of Role Models on Immigrant Self-Employment: A Spatial Analysis for Switzerland By G. Guerra; R. Patuelli
  3. Impact of FDI on Domestic Firms' Exports in China By Yu Sheng; Chunlai Chen; Christopher Findlay

  1. By: Ortega-Argilés, Raquel (European Commission); Piva, Mariacristina (Università Cattolica del Sacro Cuore); Vivarelli, Marco (Università Cattolica del Sacro Cuore)
    Abstract: The literature has pointed to different causes to explain the productivity gap between Europe and United States in the last decades. This paper tests the hypothesis that the lower European productivity performance in comparison with the US can be explained not only by a lower level of corporate R&D investment, but also by a lower capacity to translate R&D investment into productivity gains. The proposed microeconometric estimates are based on a unique longitudinal database covering the period 1990-2008 and comprising 1,809 US and European companies for a total of 16,079 observations. Consistent with previous literature, we find robust evidence of a significant impact of R&D on productivity; however – using different estimation techniques – the R&D coefficients for the US firms always turn out to be significantly higher. To see to what extent these transatlantic differences may be related to the different sectoral structures in the US and the EU, we differentiated the analysis by sectors. The result is that both in manufacturing, services and high-tech sectors US firms are more efficient in translating their R&D investments into productivity increases.
    Keywords: R&D, productivity, embodied technological change, US, EU
    JEL: O33
    Date: 2011–03
  2. By: G. Guerra; R. Patuelli
    Abstract: Theoretical and empirical research suggests a connection between the presence of role models and the emergence of entrepreneurs. Existing entrepreneurs may act as role models for self-employment candidates by providing successful examples. By explicitly considering the self-employment rates of the natives, which may influence locally the decisions of immigrants towards entrepreneurship, we develop a simple model that explains immigrant self-employment rates for a sample of 2,490 Swiss municipalities. In addition, we accommodate for the presence of spatial spillovers in the distribution of rates, and test a spatial autoregressive model which takes into account the average self-employment rates of immigrants living in nearby municipalities. Our evidence shows a significant (positive) effect of such spatial network effects, which are characterized by a quick distance decay, suggesting spatial spillovers at the household and social network level. Additionally, we show that local conditions and immigrant pool characteristics differ, with respect to self-employment choices, when examining separately urban and rural contexts.
    JEL: C21 J24 J61 O15 R13
    Date: 2011–03
  3. By: Yu Sheng (Crawford School of Economics and Governance, Australian National University); Chunlai Chen (Crawford School of Economics and Governance, Australian National University); Christopher Findlay (School of Economics, University of Adelaide)
    Abstract: Using manufacturing industry firm-level census data from the period of 2000-2003 in China, this paper examines the impact of foreign direct investment on domestic firms' exports. After dealing with econometric problems of endogeneity and sample selection, we find that foreign direct investment in China has had a positive impact on domestic firms' export value through backward industrial linkages and a positive impact on domestic firms' export propensities in the same industry through demonstration effects. In particular, non-exporting FDI firms and FDI firms producing homogeneous products are more likely to generate the positive export spillovers to domestic firms through industrial linkages while exporting FDI firms and FDI firms producing heterogeneous products are more likely to generate positive export spillovers to domestic firms through demonstration effects in the same industry.
    Keywords: Foreign Direct Investment, export spillovers, industrial linkage
    JEL: F14 F23
    Date: 2011–03

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