nep-sbm New Economics Papers
on Small Business Management
Issue of 2011‒10‒01
twelve papers chosen by
Joao Carlos Correia Leitao
University of Beira Interior and Technical University of Lisbon

  1. Internationalisation and the Innovation Activities of Services Firms By Siedschlag, Iulia; Killeen, Neil; Smith, Donal; O'Brien, Catriona
  2. A demand for innovation support in small and medium sized enterprises in the Baltic sea region. By Olczyk, Magdalena
  3. Effect of R&D Tax Credits for Small and Medium-sized Enterprises in Japan: Evidence from firm-level data By KOBAYASHI Yohei
  4. Productivity Gains from R&D Investment: Are High-Tech Sectors Still Ahead? By Ortega-Argilés, Raquel; Piva, Mariacristina; Vivarelli, Marco
  5. Forget R&D - pay my coach: young innovative companies and their relations with universities By Azagra-Caro, Joaquín M.; Mas-Verdú, Francisco; Martinez-Gomez, Victor
  6. Internal and External R&D and Productivity – Evidence from Swedish Firm-Level Data By Bergman, Karin
  7. Innovation, Spillovers and Venture Capital Contracts By Dessi, Roberta
  8. Swedish Business R&D and its Export Dependence By Bergman, Karin; Ejermo, Olof
  9. Improvement of cooperation among SMEs and other stakeholders as means of fostering innovation By Magdalena, Olczyk; Marzena , Starnawska; Izabela, Richter
  10. Small Worlds in Networks of Inventors and the Role of Science: An Analysis of France. By Francesco Lissoni; Patrick Llerena; Bulat Sanditov
  11. Firm Heterogeneity and Development: A Meta Analysis of FDI Productivity Spill-overs By Mebratie, A.D.; Bergeijk, P.A.G. van
  12. Creativity and the Family Tree: Human Capital Endowments and the Propensity of Entrepreneurs to Patent By Link, Albert N.; Ruhm, Christopher J.

  1. By: Siedschlag, Iulia; Killeen, Neil; Smith, Donal; O'Brien, Catriona
    Abstract: This paper examines the relationship between the internationalisation of firms in services and their innovation performance. We use firm-level data over the period 2004- 2006 and estimate an augmented structural model to account for the role of foreign direct investment and exporting on the innovation performance of services firms in Ireland. Our research shows that in comparison to firms serving only the Irish market, domestic exporters were more likely to engage in R&D and innovation and they were more likely to be successful in terms of innovation output, over and above firm characteristics such as size and distance to the technology frontier. Further, we find that adoption of information and communication technologies was positively associated with innovation output. Co-operation with suppliers was positively associated with all innovation types, while knowledge flows from customers and from the government or public research institutes were positively linked to product innovation. Co-operation with universities was positively linked to innovation measured by patents.
    Keywords: Multinational Firms/Exporting/Knowledge Production/Services
    Date: 2011–09
  2. By: Olczyk, Magdalena
    Abstract: The aim of the study is to analyze the actual demand of SMEs from the Baltic Sea region for innovation support. The results of the conducted study can help formulate recommendations designed to increase innovation and competitiveness of SMEs in the Baltic Sea Region in the future. Research activities of this study include: the evaluation of innovation level of the Baltic Sea Region enterprises (type and intensity of implemented innovation changes, innovation climate, barriers in innovation implementation in enterprises), the study of SMEs cooperation with scientific subjects, R&D sphere; and the identification of the needs of enterprises to do with the increase of their innovation capacities (demand for training, consulting, cooperation with universities and R&D sphere, or cooperation in a cluster).
    Keywords: innovation; SME; Baltic region
    JEL: O31 D01
    Date: 2011
  3. By: KOBAYASHI Yohei
    Abstract: Although numerous studies have evaluated the effect of tax credits on R&D, many have neglected the problem of selection bias. Furthermore, empirical studies have found that Japan's total factor productivity (TFP) growth has slowed since the 1990s, and Kim et al. (2010) have attributed this slowdown partly to low R&D expenditures among small and medium-sized enterprises (SME). Evidence suggests that enhancing R&D among small firms is essential for Japan's economic growth. This paper estimates the effect of R&D tax credits for SMEs using firm-level micro data from "The 2009 Basic Survey of Small and Medium Enterprises." We use the propensity score method introduced by Rubin (1974), in which recipients of tax credits are matched with the most similar non-recipients. Empirical results show that R&D tax credits induce an increase in SMEs' R&D expenditures. Moreover, we find that the effect of R&D tax credits on liquidity-constrained firms is much greater than on firms without liquidity constraints.
    Date: 2011–09
  4. By: Ortega-Argilés, Raquel (IN+ Center for Innovation); Piva, Mariacristina (Università Cattolica del Sacro Cuore); Vivarelli, Marco (Università Cattolica del Sacro Cuore)
    Abstract: The purpose of this study is to investigate the relationship between a firm's R&D expenditures considered as an investment in knowledge, and its productivity, looking at sectoral peculiarities which may emerge; to this end, we use a large unique longitudinal database consisting of 1,809 US and European manufacturing and service firms over the period 1990-2008, for a total of 16,079 observations. Our main findings can be summarised as follows: knowledge stock has a significant positive impact on a firm's productivity, with an overall elasticity of about 0.10; this general result is largely consistent with findings presented in previous literature in terms of the sign, the significance and the estimated magnitude of the relevant coefficient. More interestingly, the coefficient turns out to be significantly larger in the service and high-tech sectors than in the non-high-tech manufacturing sectors. These outcomes suggest that firms in high-tech sectors are still ahead in terms of the impact on productivity of their R&D investments; moreover, a shift in favour of the service sectors seems to emerge.
    Keywords: R&D, productivity, knowledge stock, panel data
    JEL: O33 L25
    Date: 2011–09
  5. By: Azagra-Caro, Joaquín M.; Mas-Verdú, Francisco; Martinez-Gomez, Victor
    Abstract: Young innovative companies (YICs) are attracting attention in their role of industry regenerators. However, we have little information about their relations with universities as sources of information. This paper explores university-industry interaction involving YIC in the Valencian Community, using YIC founders? personal attributes and motivations as explanatory variables. The Valencian Community has a relatively high degree of university-industry interaction, but surprisingly little technological innovation. A survey of YICs in the region shows that, in their case, firm size does not affect the probability of contracting with universities, and that R&D intensity is not significant if we consider firm founders? personal characteristics and motivations. YIC founders exploiting market opportunities recognized in previous business activities, and necessity entrepreneurs, are the least likely to interact with universities. We highlight the role of external advisory services to highlight the benefits of universities.
    Keywords: Young innovative companies; University-industry interaction; Motivations; Valencian Community
    JEL: O32
    Date: 2011–09–19
  6. By: Bergman, Karin (Department of Economics, Lund University)
    Abstract: This paper uses a panel of Swedish manufacturing firms to examine the effects of internal and external R&D on total factor productivity over the period 1991-2004. The findings give some support to the notion of complementarity between internal and external R&D, especially in industries with high R&D intensities, and suggest that the employees’ level of education is important for the firm’s capabilities to absorb external R&D. However, external R&D is generally found to have a negative effect on productivity and internal R&D is only significant when not including interaction terms between internal R&D and external R&D or human capital.
    Keywords: Internal R&D; external R&D; productivity; Sweden
    JEL: D24 L24 O32
    Date: 2011–09–20
  7. By: Dessi, Roberta (IDEI, Toulouse School of Economics)
    Abstract: Innovative start-ups and venture capitalists are highly clustered, benefiting from localized spillovers: Silicon Valley is perhaps the best example. There is also substantial geographical variation in venture capital contracts: California contracts are more "incomplete". This paper proposes an economic explanation for these observations, often attributed to regional cultural differences. In the presence of significant spillovers, it becomes optimal for an innovative start-up and its financier to adopt contracts with fewer contingencies: these contracts maximize their ability to extract (part of) the surplus they generate through positive spillovers. This relaxes ex-ante financing constraints and makes it possible to induce higher innovative effort.
    JEL: D82 D86 G24 L22
    Date: 2011–09–13
  8. By: Bergman, Karin (Department of Economics, Lund University); Ejermo, Olof (CIRCLE)
    Abstract: Sweden has seen a rise in business R&D-intensities and dependence on exports to make its economy grow since the early 1990s. This paper examines the role of foreign sales in stimulating R&D as compared to a domestic sales effect, and finds, in line with the literature, that R&D rises proportionally to sales in cross-sections from 1991 to 2001. Among manufacturing firms, foreign sales are distinctly more associated with an increase in R&D than domestic sales. For service firms, domestic sales are as important as foreign. The results are consistent with the hypotheses that manufacturing firms more easily separate production from R&D, economize on transport costs and are subject to learning-by-exporting effects. In general, the results highlight the dependence on openness in stimulating R&D in a small economy, especially among manufacturing firms.
    Keywords: R&D; size; exports; Sweden
    JEL: L23 O32
    Date: 2011–09–20
  9. By: Magdalena, Olczyk; Marzena , Starnawska; Izabela, Richter
    Abstract: In the article the authors present the factors that foster cooperation among SMEs and other market actors. Also, an attempt was made to present how these market actors work together. In addition, analysis of the impact of cooperation on innovation in business has been done
    Keywords: innovation; SME; cooperation
    JEL: O31 D01
    Date: 2011
  10. By: Francesco Lissoni; Patrick Llerena; Bulat Sanditov
    Abstract: · Using data on patent applications at European Patent Office, we examine the structural properties of networks of inventors in France in different technologies, and how they depend from the inventive activity of scientists from universities and public research organizations (PROs). We revisit earlier findings on small world properties of social networks of inventors, and propose more rigorous tests of such hypothesis. We find that academic and PRO inventors contribute significantly to patenting in science‐based fields. Such contribution is decisive for the emergence of small world properties.
    Keywords: networks, inventors, academic patenting, small world.
    JEL: O31 O34
    Date: 2011
  11. By: Mebratie, A.D.; Bergeijk, P.A.G. van
    Abstract: abstract:In order to assess the relationship between economic development and firm heterogeneity, this paper studies productivity levels in the context of FDI. We illustrate that developing and emerging countries show a lot of variation in the extent of heterogeneity of their populations of firms. Heterogeneity is a bit stronger at per capita GDP levels below $10.000, but also remains substantial at higher levels of developmentWe take stock of the rich literature on FDI-spill-overs analysing econometric studies on FDI spill-over effects that were published over the period 1983-2008 and deal with national studies in 30 developing countries and emerging markets. One important finding is that these studies tend to ignore two sources of heterogeneity: exports and – especially – R&D. We use a meta-analysis to correct for differences in research design (including regional effects, sample size and level of aggregation) and investigate the spill-over effects of foreign firms on domestic firms.Focusing on the effect of firm heterogeneity on productivity, we investigate several sources of heterogeneity including firm size (production share), internationalization (both exports and foreign ownership) and labour quality. We observe positive, and significant effects for heterogeneity in terms of labour quality, size and export as 44% –66% of the coefficients are significant and positive and less than 9% of the coefficients are negative and significant. This robustness contrasts with contradictory findings for foreign ownership where 63% of the coefficients are insignificant or negative.At another level this study identifies research design factors that influence the reported findings on FDI spill-over analysis.
    Keywords: productivity;FDI;development;spill-over;firm heterogeneity
    Date: 2011–09–02
  12. By: Link, Albert N. (University of North Carolina at Greensboro, Department of Economics); Ruhm, Christopher J. (University of Virginia)
    Abstract: In this paper we show that the patenting behavior of creative entrepreneurs is correlated with the patenting behavior of their fathers, which we refer to as a source of the entrepreneurs’ human capital endowments. Our argument for this relationship follows from established theories of developmental creativity, and our empirical analysis is based on survey data collected from MIT’s Technology Review winners.
    Keywords: patents; entrepreneurship; human capital endowments
    JEL: J24 L26 O34
    Date: 2011–09–21

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