nep-sbm New Economics Papers
on Small Business Management
Issue of 2011‒08‒09
eight papers chosen by
Joao Carlos Correia Leitao
University of Beira Interior and Technical University of Lisbon

  1. Analysis of Regional Innovation Performance in Portugal - Results from an External Logistic Biplot Method By Purificacion Vicente Galindo; Teresa de Noronha Vaz; Peter Nijkamp; Eric de Noronha Vaz
  2. Entrepreneurship capital and technical efficiency : the role of new business / firms as a conduit of knowledge spillovers By Laborda, Leopoldo; Guasch, Jose Luis; Sotelsek, Daniel
  3. Attracting FDI in Business Services to Improve Manufacturing Performance and Competitiveness: Evidence from the Italian Provinces By Massimo Armenise; Giorgia Giovannetti; Gianluca Santoni
  4. Understanding R&D Policy: Efficiency or Politics? By Fidel Pérez Sebastián
  5. Offshoring and company characteristics: some evidence from the analysis of Spanish firm data By Angels Pelegrín; Catalina Bolancé
  6. External Ventures: Why Firms Don't Develop All Their Inventions In-house By Russell Thomson; Elizabeth Webster
  7. Separating wheat and chaff: age-specific staffing strategies and innovative performance at the firm level By Frosch, Katharina; Göbel, Christian; Zwick, Thomas
  8. Gender Differences in Competitiveness, Risk Tolerance, and other Personality Traits: Do they contribute to the Gender Gap in Entrepreneurship? By Werner Boente; Monika Jarosch

  1. By: Purificacion Vicente Galindo (University of Salamanca, Spain, and CIEO, University of the Algarve, Faro, Portugal); Teresa de Noronha Vaz (CIEO, University of the Algarve, Faro, Portugal); Peter Nijkamp (VU University Amsterdam, The Netherlands); Eric de Noronha Vaz (Institute of Statistics and Information Management, Universidade Nova de Lisboa, and CIEO, University of the Algarve, Faro, Portugal)
    Abstract: Portuguese strategic choices regarding innovation and R&D policy have, over the past two decades, produced various positive achievements, in which the regions of Lisbon and Algarve have taken the lead, and are the only ones in the country to converge towards the European average growth rate. Regarding the other Portuguese regions - despite significant national growth rates in the 1990s as well as a successful attempt to cope with the EMU -, these are lagging behind the EU average with respect to gross production, investment or employment generation. Meanwhile, one of the greatest public policy efforts was to diffuse much of the European funds across the entrepreneurial sector. After a long pathway, it is now timely to evaluate the firms' contribution to national and regional growth, their obstacles and impacts. For the purpose of this paper, innovation is used here as a major contributor to the policy evaluation process referred to above. Our investigation aims to explain the present performance of Portuguese firms located throughout the country and to explore those innovation determinants that have a region-specific connotation. To provide a thorough investigation, our analysis defines, on a regional basis, a set of firmsâ?T behavioural patterns regarding innovation. In our modelling, we employ a new methodology, viz. the External Logistic Biplot method, which is applied to an extensive sample of innovative institutions in Portugal. Variables such as 'Promoting knowledge', 'Management skills', 'Promoting R&D', 'Knowledge transfer', 'Promoting partnership & cooperation', and 'Orientation of public measures' have been identified as crucial determinants in earlier studies and are now used to describe regional institutional profiles. Such profiles exhibit a great variety in the way they combine these determinants to promote regional innovation. The creation of a <I>gradient of capacity to dynamically innovate</I> associated with each firm makes it possible to analyse the innovation gradient of each region in Portugal. Our paper presents and systematically investigates these findings and then reaches some policy conclusions.
    Keywords: Innovation; Firms' Performance; Regional Innovation Systems; Principal Coordinates Analysis; External Logistic Biplot; Voronoi Diagram; Dissimilarity Matrix
    JEL: O31 R11
    Date: 2011–07–28
  2. By: Laborda, Leopoldo; Guasch, Jose Luis; Sotelsek, Daniel
    Abstract: Increasingly, entrepreneurship is being discussed and considered as a source of high economic growth and competitiveness. A conceptual process of creative construction that characterizes the dynamics between entrants and incumbents can prove quite useful to analyze the impact of countries'entrepreneurship capital on economic performance and can be a guide for economic policy. This paper applies a Stochastic Frontier Analysis approach to test the hypothesis that entrepreneurship capital promotes economic performance by serving as a conduit of knowledge spillovers. In addition, kernel density functions are employed to analyze convergence (or divergence) in the efficiency estimated for individual countries. The empirical evidence and results here tend to support the hypothesis. Specifically, the empirical analysis shows that the rate of expenditure on research and development in relation to new businesses registered has a positive and significant effect in increasing technical efficiency. These factors facilitate the dissemination of existing knowledge, develop entrepreneurship capital, and thus provide the missing link to economic performance -- entrepreneurship capital. The authors also show the trends and dynamics of changes in countries’ technical efficiency.
    Keywords: Economic Theory&Research,Agricultural Knowledge&Information Systems,Labor Policies,E-Business,Knowledge for Development
    Date: 2011–07–01
  3. By: Massimo Armenise (Fondazione Manlio Masi); Giorgia Giovannetti (Università degli Studi di Firenze, Dipartimento di Scienze Economiche); Gianluca Santoni
    Abstract: Foreign Direct Investment (FDI) increase the productivity of domestic firms through spillovers and incentives to innovate. Hence, the capacity of local firms to absorb new technological knowledge emerges as a crucial factor for a country to benefit from FDI. This process might take time, especially if firms are small and medium as those prevailing in Italy. Between 2001 and 2007 the number of foreign firms in Italy has decreased, showing a particularly negative dynamic. However, in the same period, FDI in business services increased. The number of foreign firms investing in professional business services in Italy passed from 1277 in 2001 to 1700 in 2007, with a concurrent increase in the average dimension of firms. The aim of this paper is to test the effect of FDI in Business Services on the efficiency (Total Factor Productivity and Labor Productivity). Hence, the paper tests whether firms located in provinces better equipped to attract FDI in business services have received a premium in terms of productivity, profitability and other dimensions. Preliminary results show that while it is important to attract FDIs to improve the performance of domestic firms, the capacity of a province to keep the foreign direct inflows has an even more relevant effect. This relationship becomes even more evident for the traditional "Made in Italy" firms.
    JEL: C23 D24 F23
    Date: 2011
  4. By: Fidel Pérez Sebastián (Universidad de Alicante)
    Abstract: This paper searches for the determinants of government-funded R&D. The goal is to disentangle whether the efficiency considerations overwhelmingly emphasized by the theoretical literature are indeed the main driving force behind public R&D expenditures. Another goal of the paper is to assess whether other types of innovation policy such as the degree of patent protection can have an impact on private R&D. I find that there are important differences between rich and poor nations at this respect. In particular, R&D-specific efficiency factors are not significant to explain public R&D in rich nations, whereas related variables such as the access to private credit and knowledge spillovers are important in less developed economies; in rich countries, public innovation effort can be better explained by the political economy variables that determine the size of governments. Private R&D, on the other hand, depends in high income economies on R&D policies that try to improve R&D efficiency, but is highly determined by government size in less income nations. Results suggest that more research on political economy theories of innovation is essential to understand R&D investment.
    Keywords: R&D, policy, market failures, political factors
    Date: 2011–07
  5. By: Angels Pelegrín (Universitat de Barcelona & IEB); Catalina Bolancé (University of Barcelona & RFA-IREA)
    Abstract: This article investigates firm characteristics associated with the probability of relocating activities in a foreign country. Using manufacturing firms’ micro data for the 1999-2005 period, we find evidence that cost-cutting objectives are the main determinants for offshoring production. The analysis reveals that firms that are larger and have higher productivity, more research and development activity and greater human capital intensity are more likely to relocate activity abroad. Thus, ‘the best’ firms self-select to offshoring activities. We note the special prominence of foreign firms among those that engage in offshoring. Our results show that self-selection of ‘the best’ firms are much more significant in foreign firms.
    Keywords: Offshoring determinants, best firms, firm characteristics, foreign firms
    JEL: F21 F23
    Date: 2011
  6. By: Russell Thomson (Melbourne Institute of Applied Economic and Social Research, and Intellectual Property Research Institute of Australia (IPRIA), The University of Melbourne); Elizabeth Webster (Melbourne Institute of Applied Economic and Social Research, and Intellectual Property Research Institute of Australia (IPRIA), The University of Melbourne)
    Abstract: In this paper we consider why firms sometimes choose an external development path for their own inventions, despite the costs of contracting and the risks of opportunistic behaviour and expropriation. We model the probability that firms adopt an external development strategy using survey data from over 2700 Australian inventions. Our results indicate that firms pursue external development strategies in response to perceived project-level risk about the technical feasibility of the invention, especially when suported by confidence in the patent system. Our findings also confirm that small to medium size enterprises, highly leveraged large firms and firms with few co-specialized assets are more likely to pursue an external development strategy.
    Keywords: Outsourcing R&D, managing technological risk, licensing innovation
    JEL: O32 O33
    Date: 2011–07
  7. By: Frosch, Katharina; Göbel, Christian; Zwick, Thomas
    Abstract: Adopting a dynamic perspective, this paper investigates age-related staffing patterns in German establishments and their effect on innovative performance. First, we investigate how establishments achieve the necessary workforce rejuvenation - from the inflow of younger or from outflows of older workers. In addition, we explore whether certain staffing patterns are more likely to appear under different economic regimes. In a second step, we analyse whether an establishment's innovative performance is related to the staffing patterns it experiences. The analysis of linked-employer-employee data shows that most of the 585 German establishments covered rejuvenate by inflows of younger workers. Half of the establishments also use the outflow of older workers. Furthermore, workforces are more likely to become more age-heterogeneous in growing establishments. Finally, we do not find evidence that a youth-centred human resource strategy (always) fosters innovation. --
    Keywords: Workforce aging,staffing strategies,innovation
    JEL: M51 J24 O31
    Date: 2011
  8. By: Werner Boente (Schumpeter School of Business and Economics, University of Wuppertal); Monika Jarosch (Schumpeter School of Business and Economics, University of Wuppertal)
    Abstract: In this study we empirically investigate the contribution of personality traits to the gender gap in entrepreneurship. Our empirical analyses, which are based on data obtained from a large scale survey of individuals in 36 countries, suggest that a group of personality traits which we call Individual Entrepreneurial Aptitude (IEA) has a positive effect on latent and nascent entrepreneurship among women and men. Moreover, women’s considerably lower level of IEA contributes significantly to the gender gap in entrepreneurship. The lower level of IEA is mainly due to women’s lower levels of competitiveness and risk tolerance. Furthermore, these results are confirmed by the results of a country-level analysis which show that the within-country variation of entrepreneurial activities of women and men is significantly related to within-country variation of IEA.
    Keywords: entrepreneurship, gender gap, personality traits, competitiveness
    JEL: J16 L26
    Date: 2011–07

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