nep-sbm New Economics Papers
on Small Business Management
Issue of 2012‒08‒23
sixteen papers chosen by
Joao Carlos Correia Leitao
University of Beira Interior and Technical University of Lisbon

  1. Determinants of R&D Cooperation in Small and Medium-Sized Enterprises By Hyunbae Chun; Sung-Bae Mun
  2. Knowledge, Location, and Internationalization: Empirical Evidence for Manufacturing SMEs By Anna Lejpras
  3. The role of human capital in lowering barriers to engage in innovation: evidence from the Spanish innovation survey By D'Este,Pablo; Rentocchini,Francesco; Vega Jurado,Jaider M.
  4. Knowledge Flows, Organization and Innovation: Firm-Level Evidence from Malaysia By Cassey LEE
  5. Innovation and Exports of German Business Services Enterprises: First evidence from a new type of firm data By Alexander Vogel; Joachim Wagner
  6. Firm technological innovation persistence: Organizational innovation matters By HANED Naciba; LE BAS Christian; MOTHE Caroline; NGUYEN Thi Thuc Uyen
  7. Inovation and the city: Review of the Auckland regional innovation system By Chen, EeMun
  8. Engaging Small and Medium Enterprises in Production Networks : Firm-level Analysis of Five ASEAN Economies By Ganeshan Wignaraja
  9. Open innovation strategy of Japanese SMEs: From viewpoint of ICT use and innovative technology By Idota, Hiroki; Bunno, Teruyuki; Tsuji, Masatsugu
  10. Determinants of Evolutionary Change Processes in Innovation Networks – Empirical Evidence from the German Laser Industry By Muhamed Kudic; A. Pyka; Jutta Günther
  11. Should the focus of publicly provided small business assistance be on start-ups or growth businesses? By Greene, Francis
  12. Clusters, Convergence, and Economic Performance By Mercedes Delgado; Michael E. Porter; Scott Stern
  13. The Cluster Scoreboard: Measuring the Performance of Local Business Clusters in the Knowledge Economy By Yama Temouri
  14. The Global Entrepreneurship Monitor (GEM) and its Impact on Entrepreneurship Research By Niels Bosma
  15. Being innovative for surviving: the role of HRM practices. By Mirta Diaz Fernandez; Mar Bornay Barrachina; Alvaro Lopez Cabrales
  16. Do Patent Pools Encourage Innovation? Evidence from 20 U.S. Industries under the New Deal By Ryan L. Lampe; Petra Moser

  1. By: Hyunbae Chun (Department of Economics, Sogang University, Seoul); Sung-Bae Mun (Korea Information Society Development Institute, Kwachun, Kyunggi-do, 427-710 Korea)
    Abstract: We investigate the determinants of R&D cooperation in small and medium-sized enterprises (SMEs). Using firm-level data from the 2002 Korean Innovation Survey and applying a probit model with sample selection, we find that incoming spillovers of knowledge have a significant and positive impact on SMEs¡¯ decisions to engage in R&D cooperation. In particular, the effect of knowledge spillovers on R&D cooperation is much larger for smaller firms. Despite the importance of external knowledge for SMEs, the estimation results suggest that SMEs may be at a disadvantage in establishing external R&D linkages because of their absolute size limitations.
    Keywords: R&D Cooperation, Small and Medium-Sized Enterprises, Spillovers
    JEL: L20 O32
    Date: 2012
  2. By: Anna Lejpras
    Abstract: This paper investigates the links between locational conditions, innovative capabilities and internationalization of manufacturing SMEs. Two modes of foreign market servicing are explored: exporting activity and relocating of selected business activities abroad. The empirical analysis employs two probit models based on survey of about 3,000 firms. The results reveal that the outputs of SMEs' innovative activities-i.e., product innovations and patent applications-enhance exporting propensity as expected. Nevertheless, the input-side indicator-R&D intensity-appears to exert no impact. Further, the locational factor proximity to research institutions promotes SMEs' engagement in exporting. Regarding the determinants of selective relocations abroad, the findings show that SMEs with a high degree of R&D are less likely to separate production from other operations and relocate it abroad. Moreover, manufacturing SMEs assessing the proximity to research facilities, as well as support from various regional authorities and other bodies as important and good-quality locational conditions, exhibit a significantly lower likelihood to relocate selected activities abroad. Indeed, emphasizing the role of institutional setting in firm activity, our findings coincide in this respect with the previous literature focused on innovative milieu, learning regions and regional innovation systems.
    Keywords: Export, innovation, location, manufacturing SMEs, selective relocation abroad
    JEL: R30 O30 M16 L25
    Date: 2012
  3. By: D'Este,Pablo; Rentocchini,Francesco; Vega Jurado,Jaider M.
    Abstract: This paper focuses on the role of human capital in attenuating the barriers that block firms from engaging in innovation activities. The paper distinguishes between firms facing deterring barriers to innovation (firms deterred from engaging in innovation activities) and firms confronting revealed barriers (firms that experience barriers alongside their engagement in innovation activities). We investigate whether human capital has a particularly strong impact in lowering barriers among the former group of firms, since a strong skill base is likely to compensate for the lack of previous experience in innovation-related activities or the necessary complementary assets associated to innovation. We draw on four waves of the Spanish Innovation Survey and examine the impact of human capital on three types of obstacles to innovation: cost, knowledge and market obstacles. Results reveal that human capital has a significant impact in attenuating deterring barriers to innovation associated to knowledge shortages and market uncertainties.
    Keywords: Barriers to innovation, Innovative firms, Human Capital
    JEL: O31 O32 O33
    Date: 2012–08–03
  4. By: Cassey LEE (Cassey LEE School of Economics, University of Wollongong, Australia)
    Abstract: Technological upgrading of a countryfs manufacturing sector requires the enhancement of firm-level capabilities. Knowledge flows within firms and those between firms and other entities are important aspects of this process. The nature and significance of such knowledge flows for innovation-related activities (such as in-house R&D, acquisition of technology-embedded investments and training) are likely to differ for each type of activity. The links between innovation and knowledge flows are particularly important for innovation activities in the form of acquisition of machinery, equipment and software. There is also some weak evidence that globalization-related variables such as foreign direct investment and exporting can affect certain types of innovation activities such as training and acquisition of machinery, equipment and software. This study also finds that firm-level organizational dimensions and innovations are related to both internal and external knowledge flows. However, there is evidence that the links between innovative firms in Malaysia and other firms abroad in terms of co-operative activities are relatively weak. This raises the issue of whether such firms are able to tap the global technological-pool effectively.
    Date: 2012–06–01
  5. By: Alexander Vogel (Leuphana University Lueneburg, Germany); Joachim Wagner (Leuphana University Lueneburg, Germany)
    Abstract: This paper contributes to the literature by providing the first evidence on the link between innovation activities (measured by the share of engineers and scientists in the workforce) and exports of German business services firms based on a large representative longitudinal sample of enterprises. The data combine for the first time information at the firm-level that is taken from data produced by the Statistical Offices and by the Federal Labour Agency. We document that R&D activities are positively linked with exports, and that this link is present when observed firm characteristics (including firm size, productivity, and human capital intensity) and unobserved time-invariant firm characteristics are controlled for. From an economical point of view the effect is, however, rather small. Furthermore, we find some evidence for self-selection of innovative services firms on export markets. We have to admit, however, that the panel is too short, and that the number of firms that start to export and start to perform R&D during the period under investigation is too small, for any convincing attempt to investigate the direction of the causal link between exports and innovation activities.
    Keywords: Innovation, export, business services, Germany
    JEL: F14
    Date: 2012–08
  6. By: HANED Naciba; LE BAS Christian; MOTHE Caroline; NGUYEN Thi Thuc Uyen
    Abstract: Organizational innovation favors technological innovation, but does it also influence technological innovation persistence? This article investigates empirically the pattern of technological innovation persistence and tests the potential impact of organizational innovation using firm-level data from three waves of the French Community Innovation Surveys. Evidence shows a positive effect of organizational innovation on technological innovation persistence, according to various measures of organizational innovation. Moreover, this impact is more significant for complex innovators (i.e., those who innovate in both products and processes). These results highlight the complexity of managing organizational practices with regard to the firm?s technological innovation. They also add to comprehension of the drivers of innovation persistence, through a focus on an often forgotten dimension of innovation in a broader sense.
    Keywords: organizational innovation; technological innovation; persistence
    Date: 2012–06
  7. By: Chen, EeMun (Ministry of Economic Development, New Zealand)
    Abstract: Place matters in innovation. New ideas – and the capability to translate them into innovative goods, services, processes or markets – rely on the sharing of knowledge and resources by a diverse range of players, including firms, suppliers, employees, universities and government research institutes. For this paper, a review was undertaken to examine the extent to which Auckland has all the actors, linkages, inputs and framework conditions required for innovation. A regional innovation system approach was used. The review found that innovation in Auckland is constrained by business and management capability; a general lack of collaboration between business, and between industry and education/research organisations; and a lack of coordinated planning and investment to address the growth needs in areas of competitive strength. A number of recommendations for action are made for central, regional and local government to improve Auckland’s innovation performance, and thus New Zealand’s innovation performance.
    Keywords: regional innovation; innovation system; Auckland
    JEL: O10 O20 R11
    Date: 2012–05–01
  8. By: Ganeshan Wignaraja (Asian Development Bank Institute (ADBI))
    Abstract: The Association of Southeast Asian Nations JEL Classification : F10, F23, O14 (ASEAN) small and medium enterprises (SMEs) are under scrutiny for their engagement in production networks following recent emphasis on increasing intra-regional trade, rebalancing, and inclusive growth in Asia. Using a data set covering 5,900 firms in five ASEAN economies at different stages of development, this paper analyses the participation of SMEs in production networks, determinants, and policy implications. It finds that although large firms dominate production network engagement in ASEAN economies, there are signs that SMEs have modestly increased their participation since the late-1990s. This is linked to firm-specific factors (e.g., firm size, foreign ownership, skills, technological capabilities, and access to credit) as well as a supportive business environment. Tackling residual supply-side and policy constraints can further the participation of ASEAN SMEs in production networks.
    Keywords: Small and medium enterprises, SMEs, Production Networks, ASEAN, intra-regional trade, Business Environment
    JEL: F10 F23 O14
    Date: 2012–06
  9. By: Idota, Hiroki; Bunno, Teruyuki; Tsuji, Masatsugu
    Abstract: --
    Date: 2012
  10. By: Muhamed Kudic; A. Pyka; Jutta Günther
    Abstract: We seek to understand the relationship between network change determinants, network change processes at the micro level and structural consequences at the overall network level. Our conceptual framework considers three groups of determinants – organizational, relational and contextual. Selected factors within these groups are assumed to cause network change processes at the micro level – tie formations and tie terminations – and to shape the structural network configuration at the overall network level. We apply a unique longitudinal event history dataset based on the full population of 233 German laser source manufacturers and 570 publicly-funded cooperation projects to answer the following research question: What kind of exogenous or endogenous determinants affect a firm’s propensity and timing to cooperate and enter the network? Estimation results from a non-parametric event history model indicate that young micro firms enter the network later than small-sized and large firms. An in-depth analysis of the size effects for medium-sized firms provides some unexpected yet quite interesting findings. The choice of cooperation type makes no significant difference for the firms’ timing to enter the network. Finally, the analysis of contextual determinants shows that cluster membership can, but do not necessarily, affect a firm’s timing to cooperate.
    Keywords: network evolution, timing of network entry, innovation networks, German laser industry
    JEL: B52 D85 O32
    Date: 2012–07
  11. By: Greene, Francis (Warwick Business School)
    Abstract: How is New Zealand best able to maximise the potential of its enterprise population? The simple answer is that it has to ensure that the „rules of the game‟ (incentives and signals) are as good as they can be. Nonetheless, there still may be instances of market failure, suggesting grounds for publicly provided business assistance. This paper examines whether any such business assistance would be better provided to start-up or small fast growth firms. The paper presents both arguments for and against support for these two types of small firms. It finds, overall, that the arguments for supporting fast growth firms are more compelling. It then considers a range of potential policy options (e.g. the introduction of a voucher scheme, managerial training). After reviewing the evidence base, the paper recommends that there still remains a need for the stronger evaluation of public assistance programmes.
    Keywords: Economic development; enterprise policy; business assistance; entrepreneurship
    JEL: L26 O10 O25 O38
    Date: 2012–05–01
  12. By: Mercedes Delgado; Michael E. Porter; Scott Stern
    Abstract: This paper evaluates the role of regional cluster composition in the economic performance of industries, clusters and regions. On the one hand, diminishing returns to specialization in a location can result in a convergence effect: the growth rate of an industry within a region may be declining in the level of activity of that industry. At the same time, positive spillovers across complementary economic activities provide an impetus for agglomeration: the growth rate of an industry within a region may be increasing in the size and “strength” (i.e., relative presence) of related economic sectors. Building on Porter (1998, 2003), we develop a systematic empirical framework to identify the role of regional clusters – groups of closely related and complementary industries operating within a particular region – in regional economic performance. We exploit newly available data from the US Cluster Mapping Project to disentangle the impact of convergence at the region-industry level from agglomeration within clusters. We find that, after controlling for the impact of convergence at the narrowest unit of analysis, there is strong evidence for cluster-driven agglomeration. Industries participating in a strong cluster register higher employment growth as well as higher growth of wages, number of establishments, and patenting. Industry and cluster level growth also increases with the strength of related clusters in the region and with the strength of similar clusters in adjacent regions. Importantly, we find evidence that new regional industries emerge where there is a strong cluster environment. Our analysis also suggests that the presence of strong clusters in a region enhances growth opportunities in other industries and clusters. Overall, these findings highlight the important role of cluster-based agglomeration in regional economic performance.
    JEL: L26 R11 R30
    Date: 2012–07
  13. By: Yama Temouri
    Abstract: This paper shows the performance of eighty leading innovative local clusters on six measures of enterprise performance: share of new and young firms and growth of employment, turnover, profitability, liquidity ratio and solvency ratio. The data show the performance of clusters before and during the global economic crisis and suggest that clusters doing well in the phase of economic expansion had different characteristics from those that were able to grow in a time of economic slowdown. The data permit comparison of performance among the clusters. In the pre-recession period the two top performing clusters were the Madison Research District and Silicon Valley in the United States, while during the recession the two leading clusters were the Coimbra Biotech cluster in Portugal and Daedoek Science Town in Korea.
    Date: 2012–08
  14. By: Niels Bosma
    Abstract: The Global Entrepreneurship Monitor (GEM) is a project carried out by a research consortium dedicated to understanding the relationship between entrepreneurship and national economic development. Since 1999 GEM reports have been a key source of comparable data across a large variety of countries on attitudes toward entrepreneurship, start-up and established business activities, and aspirations of entrepreneurs for their businesses. The growing databases increasingly allow for in-depth academic research and this is mirrored by the rapidly increasing amount of GEM-based scientific publications in a wider range of academic journals. At this point it is appropriate to provide an overview on these publications, to summarize their main contributions and to provide some directions for obtaining promising GEM-based academic contributions in the future. This publication provides a review of 89 GEM-based academic publications in SSCI-listed journals since 2004, with the objectives to highlight the particular advantages of GEM data, their quality and usability, as well as their limitations. It also recommends a number of ways in which the GEM project might evolve further and make more impact on entrepreneurship research, on entrepreneurship policy and practice, and ultimately on getting more grip on the complex relation between entrepreneurship and economic development.
    Keywords: Global Entrepreneurship Monitor, Entrepreneurial Activity, Economic Development
    JEL: E02 J24 L26 O11
    Date: 2012–05
  15. By: Mirta Diaz Fernandez (Department of Business Organization and Marketing, Pablo de Olavide University, Seville, Spain); Mar Bornay Barrachina (Department of Business Organization and Marketing, Pablo de Olavide University, Seville, Spain); Alvaro Lopez Cabrales (Department of Business Organization and Marketing, Pablo de Olavide University, Seville, Spain)
    Abstract: The purpose of this paper is to study the relationship between HR practices and innovative performance in the Spanish industry. Specifically, we will focus on innovativeness, measured through the production of patents, analyzing the extent to which this innovative result is favoured by some HRM practices as investments on training and whether it is also affected by the use of full time workers. We propose the assessment of these relationships by means of the Spanish Survey of Industrial Strategic Behaviour. We focus our longitudinal analysis on the period 2001-2008, years of high economic growth in Spain during the last decades. Our findings show that the most innovative firms are also the most competitive ones in terms of added value, and they also use full time workers. Finally, training investments on new technologies, languages and data processes have an impact on innovativeness. The paper is closed with a discussion about some lessons we may learn from these wealthy years and the role played by HRM investments on firms.
    Keywords: Innovativeness, HRM, Training, change environment.
    Date: 2012–04
  16. By: Ryan L. Lampe; Petra Moser
    Abstract: Patent pools, which allow competing firms to combine their patents, have emerged as a prominent mechanism to resolve litigation when multiple firms own patents for the same technology. This paper takes advantage of a window of regulatory tolerance under the New Deal to investigate the effects of pools on innovation within 20 industries. Difference-in-differences regressions imply a 16 percent decline in patenting in response to the creation of a pool. This decline is driven by technology fields in which a pool combined patents for substitute technologies by competing firms, suggesting that unregulated pools may discourage innovation by weakening competition to improve substitutes.
    JEL: K0 L4 N22 O3
    Date: 2012–08

This nep-sbm issue is ©2012 by Joao Carlos Correia Leitao. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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