nep-sbm New Economics Papers
on Small Business Management
Issue of 2011‒06‒04
seven papers chosen by
Joao Carlos Correia Leitao
University of Beira Interior and Technical University of Lisbon

  1. Sources of Future Economic Growth in Japan: An empirical analysis based on micro-data (Japanese) By FUKAO Kyoji; KWON Hyeog Ug
  2. Delayering and Firm Performance: Evidence from Swiss firm-level Data By Dieter Kuhn
  3. Spillovers and Risk of R&D Projects, and Targeting of Public R&D Support (Japanese) By NAGAOKA Sadao; TSUKADA Naotoshi
  4. Japanese Banks' Decision Making Process in SME Lending: An analysis of the SME database and the utilization of investment and trust funds for SME financing (Japanese) By YOSHINO Naoyuki
  5. Trade network and international R&D spillovers By Andrea Fracasso; Giuseppe Vittucci Marzetti
  6. Entry of Foreign Multinational Firms and Productivity Growth of Domestic Firms: The case for Japanese firms (Japanese) By ITO Keiko
  7. Role of management control in small and medium enterprises performance assurance By Criveanu, Maria; Iacob, Constanta

  1. By: FUKAO Kyoji; KWON Hyeog Ug
    Abstract: Using micro-data of the <i>Establishment and Enterprise Census and the Basic Survey of Japanese Business Structure and Activities</i>, we examine the characteristics of firms that were active in jobs creation, capital accumulation, and the improvement of total factor productivity (TFP). We also analyze in what industries jobs were created. Our main findings are as follows: (1) younger firms and affiliates of foreign firms have created many jobs through new entry and firm expansion, whereas most of the older and larger firms have been reducing employment; (2) most of the new jobs were created in the service sector, while job destruction mainly occurred in the manufacturing and construction sectors; (3) younger firms were also active in capital accumulation; (4) younger firms and foreign-owned firms tended to have a higher TFP level and achieve higher TFP growth; and (5) large firms, which were active in R&D, international trade, and direct investment abroad, also tended to have a higher TFP level and achieve higher TFP growth.
    Date: 2011–04
  2. By: Dieter Kuhn (University of Basel)
    Date: 2011
  3. By: NAGAOKA Sadao; TSUKADA Naotoshi
    Abstract: This paper analyzes what types of R&D projects and R&D firms generate important spillover effects, and which are subject to funding constraints. It also analyzes what types of projects and firms are targeted for public support and whether the selection of targets is consistent with spillovers. Using data collected in an inventor survey conducted by the Research Institute of Economy, Trade and Industry and those in the Basic Survey of Business Activities by the Ministry of Economy, Trade and Industry, we focus primarily on corporate research projects. Major findings are as follows:<br /><br />Corporate research projects generate substantial spillovers. For example, about 20% of such projects involve basic research. At the same time, however, about 10% of corporate research projects have been delayed or scaled down due to funding constraints, and one quarter of them have faced constraints in funding commercialization investments. It has been also found that only 3% of Japanese corporate R&D projects receive public support, and 5.6% of the financially constrained projects receive such support.<br /><br />Our statistical analysis suggests that although the estimated conditions explaining public support for R&D are largely consistent with the estimated conditions explaining the spillovers as measured by the publication of scientific papers and the occurrence of serendipity, there are some gaps. Although a firm's highly intensive R&D and participation of a PhD inventor are estimated to be significant sources of spillovers, apparently they are not given high weights in terms of factors related to public support for R&D.
    Date: 2011–04
  4. By: YOSHINO Naoyuki
    Abstract: This paper comprises three sections. First, it examines whether or not and how banks use non-quantitative data on borrowers, such as the management skills and personality of owners of small and medium-sized enterprises (SMEs), when making lending decisions. Second, it explores the possibility of utilizing data collected from SMEs to assess the risk of their default. Third, it proposes a way to provide money to start-up companies and riskier businesses in the region.<br /><br />The first chapter is based on data collected through an interview survey conducted by Professor Tadanori Nemoto (Chuo University), Wako Watanabe (Keio University), and Yoshiaki Ogura (Ritsumeikan University). They found that qualitative data are used more often at the branch office level than at the headquarters level in making lending decisions. This shows that those working at headquarters prefer to use solid data when making their lending decisions whereas intuition and the borrowers' behavior play a large part in the decision process by those working at branches.<br /><br />In future research, an empirical analysis will be required to determine whether qualitative data are in fact sometimes important for SME lending and whether quantitative data are important even in the case of SMEs.<br /><br />The second chapter reviews the Credit Risk Database (CRD), a database of financial and non-financial information on Japanese SMEs. The chapter explains the mechanism of how SME data collected by prefectural and municipal credit guarantee corporations are integrated into the database. It also points to the importance of ensuring the independence of the database, which can be achieved by allowing the CRD Association (the administrator of the database) to secure revenue sources by offering consultation services to banks, such as the computation of default probabilities, for example.<br /><br />The establishment of a similar database of SME information in other parts of Asia would put Japanese SMEs and Japanese banks in a better position in launching and expanding operations in the region. Such a database would also help lower the default risks for SME lending in Asian countries. In this regard, cases related to Thailand and Indonesian are briefly discussed.<br /><br />The third chapter discusses ways of channeling more funds to start-ups and other relatively high-risk businesses. As the venture capital market in Japan is still not well developed, it is necessary to explore different channels to supply funds to SMEs and start-ups. This paper proposes the creation of regional investment and trust funds, which would be sold to the general public through regional banks and post offices. The funds are not on banks' balance sheets as they are not collected from depositors and any losses incurred by the funds are to be borne by investors. This is to say that banks and post offices are simply serving as sales agents. A few specific examples of such investment and trust funds are presented.
    Date: 2011–03
  5. By: Andrea Fracasso; Giuseppe Vittucci Marzetti
    Abstract: Following Coe and Helpman (International R&D Spillovers, EER, 39, 859-887, 1995), the literature on the trade-related channels of international knowledge flows has flourished. Departing from Coe and Helpman's tenets on the proportionality of trade and productivity spillovers and thus relaxing the implicit assumption that the knowledge transferred internationally is physically embodied in the exchanged products, we test whether relatively strong bilateral trade relationships are significantly associated with important international R&D spillovers. Notably, we focus on refined measures of bilateral trade that account for country size, time-invariant pair-specific factors and time-varying country-specific factors. By distinguishing closer and more distant trade partners without weighting their R&D stocks for the bilateral trade flows, we show that trade is indeed an international transmission channel of knowledge even when distance and other pair specific time-invariant factors are taken into account.
    Keywords: International R&D spillovers, Total Factor Productivity, International trade network
    JEL: C23 F01 O30 O47
    Date: 2011
  6. By: ITO Keiko
    Abstract: This paper examines whether and how the entry of foreign multinational firms affects the productivity growth of domestically owned firms, using Japanese firm-level data for the period 2000-2007. The data are taken from the comprehensive annual survey by the Japanese government, which covers firms in the manufacturing industries, wholesale and retail trade, information services, business services, and other service industries. Although many previous studies have conducted productivity analyses on foreign multinationals and domestic firms in the manufacturing sector, such analyses for the service sector are still scarce. This paper focuses on the service sector, taking account of the importance of foreign entry in this sector, where cross-border trade is occasionally difficult and firms are therefore less likely to be exposed to international competition. <br /><br />The analysis of this paper reveals that foreign multinationals perform better than domestically owned firms in many sectors. Although the productivity levels of the former tend to be higher than the latter, a significant difference in productivity growth rates is not confirmed. Moreover, a foreign presence in a particular industry tends to be viewed as a factor that negatively affects the productivity growth rate of domestically owned firms in the same industry, when firm-fixed effects are controlled for. However, firms that are catching up with frontier productivity can receive positive FDI spillovers, implying that foreign entry accelerates the catch-up phenomenon.
    Date: 2011–03
  7. By: Criveanu, Maria; Iacob, Constanta
    Abstract: The emergence and development of small and medium enterprises has been and continues to be a driving force for the remarkable economic progress, influencing and accelerating economic growth through more efficient use of resources. Characterized by flexibility, mobility, innovation and capacity to adapt, SMEs have continued to play an important role in economic and social life of any country, positioning itself in the steadily growing economy. Preserving and bracing the role of SMEs in the harmonious development of economy in general and especially to the Romanian economy can be achieved through management control. Management control should intercede in the process of taking decisions and influence the optimal operation of small and medium enterprises. It seeks to control the ability of management to create added value and influence stakeholders in applying the practice of concrete actions to reduce operating costs. During the current businesses period, the companies are operating in an unstable environment which is unpredictable in time and space and distorting the information. At the same time, it is considered that the main engine for creating jobs in Europe and to preserve and revive the economy, is represented by small and medium enterprises.
    Keywords: management control; creativity; SME
    JEL: M41 M21
    Date: 2011–05–27

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