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on Small Business Management |
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Issue of 2011‒08‒15
six papers chosen by Joao Carlos Correia Leitao University of Beira Interior and Technical University of Lisbon |
| By: | Ceren Ozgen (VU University Amsterdam); Peter Nijkamp (VU University Amsterdam); Jacques Poot (National Institute of Demographic and Economic Analysis (NIDEA), University of Waikato, Hamilton, New Zealand) |
| Abstract: | The concentration of people with diverse socio-cultural backgrounds in particular geographic areas may boost the creation of new ideas, knowledge spillovers, entrepreneurship, and economic growth. In this paper we measure the impact of the size, skills, and diversity of immigration on the innovativeness of host regions. For this purpose we construct a panel of data on 170 regions in Europe (NUTS 2 level) for the periods 1991-1995 and 2001-2005. Innovation outcomes are measured by means of the number of patent applications per million inhabitants. Given the geographical concentration and subsequent diffusion of innovation activity, and the spatial selectivity of immigrants' location choices, we take account of spatial dependence and of the endogeneity of immigrant settlement in our econometric modelling. We use the location of McDonald's restaurants as a novel instrument for immigration. The results confirm that innovation is clearly a function of regio nal accessibility, industrial structure, human capital, and GDP growth. In addition, patent applications are positively affected by the diversity of the immigrant community beyond a critical minimum level. An increase in the fractionalization index by 0.1 from the regional mean of 0.5 increases patent applications per million inhabitants by about 0.2 percent. Moreover, the average skill level of immigrants (proxied by global regions of origin) also affects patent applications. In contrast, an increasing share of foreigners in the population does not conclusively impact on patent applications. Therefore, a distinct composition of immigrants from different backgrounds is a more important driving force for innovation than the sheer size of the immigrant population in a certain locality. |
| Keywords: | immigration; cultural diversity; economic growth; innovation; spatial autocorrelation |
| JEL: | J61 O31 R23 |
| Date: | 2011–08–09 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20110112&r=sbm |
| By: | Andrea Caragliu (Politecnico di Milano); Peter Nijkamp (VU University Amsterdam) |
| Abstract: | Knowledge triggers regional growth. Evidence suggests that skilled labour force concentrates in islands of innovation, determining an advantage for innovative regions and a challenge for lagging ones. We address the role of knowledge in shaping effective markets for skilled labour. Estimates are based on the Lucas (1988) model, with EVS and EUROSTAT data. The externality driving growth in the model is cognitive capital. Empirical tests show that a higher endowment of cognitive capital generates increasing returns to knowledge, favouring the emergence of islands of innovation; regions with a high endowment of cognitive capital attract knowledge spillovers from neighbours. |
| Keywords: | human capital; cognitive capital; knowledge spillovers; islands of innovation |
| JEL: | C21 E24 R11 |
| Date: | 2011–08–09 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20110116&r=sbm |
| By: | Marina van Geenhuizen (Delft University of Technology, Delft); Peter Nijkamp (VU University Amsterdam) |
| Abstract: | Smart high-tech companies are characterized by knowledge intensity and open innovation. Even when these companies emerge in spatial clusters or dense urban places, they may utilize knowledge networks on a global scale. However, there is not much insight into the factors that shape knowledge networks, the role of virtualization herein and the impact of on global knowledge sourcing on local connectedness. This paper seeks to fill these gaps in understanding, by drawing on a selected sample of young high-technology companies in the Netherlands and application of rough set analysis to identify homogeneous categories of companies in the highly differentiated segment of young high-tech companies. The outcomes suggest that employing mainly local and employing mainly global knowledge networks coexist in city-regions, and that only part of the globalized companies are losing local connectedness, particularly those involved in co-creation with global customers and those acting as learning partners of multinational corporations ('reverse' knowledge transfer). Factors counteracting a weakening of local connectedness are specific local knowledge relationships and the strategy of developing local/regional customer markets. |
| Keywords: | high-technology companies; open innovation; knowledge networks; strategic focus; dynamic capabilities; virtualization; local connectedness; rough set analysis |
| JEL: | D21 |
| Date: | 2011–08–09 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20110119&r=sbm |
| By: | Carlo Drago (University of Naples Federico II); Francesco Millo (Department of Economics (University of Verona)); Roberto Ricciuti (Department of Economics (University of Verona)); Paolo Satella (Bank of Italy) |
| Abstract: | We use an innovative and extended dataset (8 years with 2,057 firms) composed of Italian listed firms. Italy appears to be an interesting case for this kind of study, due to the high presence of interlocking directorate. In particular we use Social Network Analysis to analyze the growth of the female directorship network. We also study the dynamics of change over time, and the different behavior of firms respect the growth of the female directorates. At the same time we study the impact of interlocking directorate and female interlocking directorate on equity value and firm performance. We find that interlocking directorate has a negative impact on equity value and firm performance, which is consistent with economic theory and previous literature findings. Furthermore, female interlocking directorate has no effect on firm value and performance. |
| Keywords: | Corporate Governance, Interlocking Directorships, Company Performance, Social Network Analysis, Board Diversity. |
| JEL: | C14 C23 G34 L14 M21 |
| Date: | 2011–07 |
| URL: | http://d.repec.org/n?u=RePEc:ver:wpaper:10/2011&r=sbm |
| By: | Pami Dua (Department of Economics, Delhi School of Economics, Delhi, India); B. N. GOLDAR (V.K.R.V. Rao Centre for Studies in Globalization Institute of Economic Growth Delhi); SMRUTI RANJAN BEHERA (Department of Economics Shyamlal College, University of Delhi,Delhi) |
| Abstract: | The paper attempts to explore the technology spillover effects of Foreign Direct Investment (FDI) in Indian manufacturing industries across different selected clusters in India. To measure the spillover effect to domestic firms in a particular cluster, a model is used that combines an innovative production function with a conventional production function. The model parameter estimates provide an evaluation of the technology spillovers in a cluster and the inter-cluster spillovers taking place in various regions. The empirical findings reveal significant variations across clusters in regard to spillovers. While some clusters benefit from foreign firm presence and technological stock within the cluster, a more commonly observed pattern is that domestic firms in a cluster gain from the presence of foreign firms in other clusters of the region and spillovers from technological stock in the regions. In some clusters, productivity enhancing effects of investment climates is visible, but in several others there is no such effect. |
| Keywords: | Foreign Direct Investment; Technology Spillover; Clusters; Firm location |
| JEL: | O41 O1 L6 R12 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:cde:cdewps:200&r=sbm |
| By: | Cole, Rebel |
| Abstract: | In this study, we analyze the firm’s choice of legal form of organization (“LFO”). We find that only about one in three firms begins operations as a proprietorship, while almost as many begin as limited-liability companies and as corporations. Moreover, this distribution is remarkably stable over the first four years of the firm’s life. Fewer than one in ten firms changes LFO during its first four years. Those that do change LFO disproportionately move to a more complex form, primarily from proprietorship to a form with limited liability. Our analysis of the firm’s initial choice of LFO reveals that a firm is more likely to choose a more complex LFO when the firm is more complex as proxied by employment size, by offering more complex employee benefit plans, and by offering trade credit. A more complex initial LFO also is more likely when the firm is more highly levered and when its primary owner is more educated; but is less likely when the firm is more profitable, has more tangible assets, uses personal loans for firm financing and when its primary owner is female. Our analysis of the decision to change LFO finds that firms initially organized as LLCs or S-corporations are less likely, while Partnerships are more likely, to change LFO than are Proprietorships or C-corporations. Firms that increase employment or change location between a residence and rented/ purchased space, are more likely to change LFO, as are smaller and more profitable firms. Firms that experience a change in the number of owners (up or down), a decrease in the ownership of the primary owner or a change in industrial classification are more likely to change LFO. Of those firms changing LFO, the choice of a more complex LFO is more likely when the firm has changed location, experienced an increase in the number of owners or the ownership share of the primary owner, but is less likely when the firm has experienced a decrease in the number of owners. |
| Keywords: | corporation; entrepreneurship; Kauffman Firm Survey; LLC; legal form of organization; organizational form; partnership; proprietorship; small business; start-up |
| JEL: | G32 |
| Date: | 2011–01–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:32591&r=sbm |