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on Small Business Management |
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Issue of 2013‒02‒03
eleven papers chosen by Joao Carlos Correia Leitao University of Beira Interior and Technical University of Lisbon |
| By: | Chiara Franco (Catholic University of Milan); Alberto Marzucchi (Catholic University of Milan); Sandro Montresor (JRC-IPTS) |
| Abstract: | The paper aims at extending the analysis of the firm’s absorptive capacity (AC) by taking stock of its manifold nature. Innovation cooperation is recognised as one of its antecedents, along with R&D, but with different possible outcomes, depending on the kind of partner. Human capital is claimed to be as important as other organisational mechanisms for the AC impact on innovation. The empirical application, carried out on about 10,500 firms located in 3 EU countries (i.e. Germany, Italy and Spain), confirms the role of these factors. Interacting with research organisations, for example, increases the firm’s AC providing it occurs within the national boundaries. The transformation of AC into actual innovation is favoured by the human capital of the firm, while it is actually hampered by socialisation mechanisms of an organisational nature. |
| Keywords: | Absorptive capacity – Innovation cooperation – Human capital |
| JEL: | O33 O32 J24 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:wpaper:201205&r=sbm |
| By: | d'Artis Kancs (JRC-IPTS); Boriss Siliverstovs (ETH Zurich - KOF Swiss Economic Institute) |
| Abstract: | The present paper studies the relationship between R&D investment and firm productivity growth by explicitly accounting for non-linearities in the R&D-productivity relationship and inter-sectoral firm heterogeneity. In order to address these issues, we employ a two step estimation approach, and match two firm-level panel data sets for the OECD countries, which allows us to relax both the linearity and homogeneity assumptions of the canonical Griliches (1979) knowledge capital model. Our results suggest that: (i) R&D investment increases firm productivity with an average elasticity of 0.15; (ii) the impact of R&D investment on firm productivity is differential at different levels of R&D intensity – the productivity elasticity ranges from -0.02 for low levels of R&D intensity to 0.33 for high levels of R&D intensity; (iii) the relationship between R&D expenditures and productivity growth is non-linear, and only after a certain critical mass of R&D is reached, the productivity growth is significantly positive; (iv) there are important intersectoral differences with respect to R&D investment and firm productivity – high-tech sectors’ firms not only invest more in R&D, but also achieve more in terms of productivity gains connected with research activities. |
| Keywords: | R&D investment, firm productivity, generalised propensity score |
| JEL: | C14 C21 D24 F23 O32 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:wpaper:201206&r=sbm |
| By: | Becker, Sascha O. (University of Warwick); Hvide, Hans K. (University of Bergen) |
| Abstract: | In the large literature on firm performance, economists have given little attention to entrepreneurs. We use deaths of more than 500 entrepreneurs as a source of exogenous variation, and ask whether this variation can explain shifts in firm performance. Using longitudinal data, we find large and sustained effects of entrepreneurs at all levels of the performance distribution. Entrepreneurs strongly affect firm growth patterns of both very young firms and for firms that have begun to mature. We do not find significant differences between small and larger firms, family and non-family firms, nor between firms located in urban and rural areas, but we do find stronger effects for founders with high human capital. Overall, the results suggest that an often overlooked factor – individual entrepreneurs – plays a large role in affecting firm performance. |
| Keywords: | entrepreneurship, firm performance, human capital |
| JEL: | D21 D24 J23 L11 L25 G39 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7146&r=sbm |
| By: | LOPES BENTO Cindy; HOTTENROTT Hanna |
| Abstract: | This study analyses the effectiveness of targeted public support for R&D investment. In particular, we test whether the specific policy design aiming at incentivizing (international)collaboration and R&D in small and medium-sized firms achieves the desired objectives on input as well as output additionality. Our results show that the targeted R&D subsidies accelerate R&D spending in the private sector, and especially so in the targeted groups. Further, we differentiate between privately financed R&D and subsidy-induced R&D investment to evaluate their respective effects on innovation performance. The results confirm that the induced R&D is productive as it translates into marketable product innovations. While both types of R&D investments trigger significant output effects, we find that the effect of subsidy-induced R&D investment is higher for firms that collaborate internationally as well as for SMEs. |
| Keywords: | Innovation Policy; Subsidies; R&D; Trestment effect; SMEs; International Collaboration; Innovation Performance |
| JEL: | C14 C30 G23 O31 O38 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:irs:cepswp:2012-36&r=sbm |
| By: | Spyros Arvanitis (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Martin Wörter (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Pierre Mohnen (Maastricht University); Boris Lokshin (Maastricht University) |
| Abstract: | There is growing evidence that firms increasingly adopt open innovation practices. In this paper we investigate the impact of two such external knowledge acquisition strategies, ‘buy’ and ‘cooperate’, on firm’s product innovation performance. Taking a direct (productivity) approach, we test for complementarity effects in the simultaneous use of the two strategies, and in the intensity of their use. Our results based on large panels of Dutch and Swiss innovating firms, suggest that while both ‘buy’ and ‘cooperate’ have a positive effect on innovation, there is little statistical evidence that using them simultaneously leads to higher innovation performance. Results from the Dutch sample provide some indication, that there are positive economies of scope in doing external and cooperative R&D simultaneously conditional on doing internal R&D. |
| Keywords: | Open innovation, R&D collaboration, make, buy strategies |
| JEL: | O31 O32 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:kof:wpskof:12-325&r=sbm |
| By: | Procházková, Lenka; Kubíčková, Lea |
| Abstract: | The importance of small and medium enterprises (SMEs) in the national economies of EU countries has been always growing. For these reasons, the increasing attention is paid to small and mediumsized enterprises also in the Czech economy. The paper is focused on the globalization of small and medium enterprises, in particular, identifying the key success factors of small and medium-sized businesses that operate in the engineering industry. For the purpose of fulfi lling the objective of the article, the level of success of SMEs in foreign markets is established with the aggregate indicator of success. Subsequently the results of the primary research among the Czech engineering companies are presented, based on this research the factors aff ecting the success of these entities of engineering industry in foreign markets are defi ned. |
| Keywords: | small and medium-sized enterprises; foreign markets; success; key success factors; engineering industry |
| JEL: | M00 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:43767&r=sbm |
| By: | Javier Aguilera-Caracuel; Javier Aguilera-Caracuel (Department of Business Organization and Marketing, Universidad Pablo de Olavide); Natalia Ortiz-de-Mandojana (Department of Management, Universidad de las Islas Baleares.) |
| Abstract: | Innovation is central to improving economic productivity, human well-being and environmental conservation. Firm-level green innovation includes technological improvements that save energy, prevent pollution, or make it possible to recycle waste. Such innovation also includes green product design and corporate environmental management. This type of innovation contributes to business sustainability as it potentially has a positive effect on the firms’ financial, social and environmental outcomes. However, the specific effect of green innovation on firms’ outcomes can be highly influenced by the context in which firms develops their activities. Using a contingent approach and employing a sample of 88 green prospector firms from 14 different countries, we observe that the intensity of green innovation is positively related to firm profitability. We also show that stringent environmental regulations keep firms from taking the financial advantage of the benefits of green innovation. However, the environmental normative conditions in a country do not have any significant impact on the way firms take advantage of green innovation to increase their level of financial performance. Finally, we also discuss implications for academia, managers and policy-makers. |
| Keywords: | Green innovation, environmental regulations, environmental normative dimension, contingent approach, prospector firms. |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:pab:wpboam:13.02&r=sbm |
| By: | Josheski, Dushko; Magdinceva-Sopova , Marija |
| Abstract: | The aim of this paper is to investigate the issue of R&D investment and the market value of the firm. This idea dating back from Arrow paper, later developed by Paul Romer but in the area of economic growth. Zvi Griliches (1979), first introduced the production function, which later would be used in a vast literature from this area (Market value of the firms and R&D investment). In the theoretical section of this paper we are describing Tobin’s original model, and Abel’s (1984) model, this models relates Tobin’s quotient with intangible assets of the company. In the empirical part we develop cross-section time series model (Feasible Generalized Least Squares Model), for a panel of countries in Europe including UK and Turkey, in total of 11 panels. Later we test that model by estimating the marginal effects of R&D investment with Tobin’s q on a small economy such as R. Macedonia. The results exert positive and statistically significant relationship between market value of the firms and R&D investment. |
| Keywords: | Tobin’s q; R&D; knowledge absorption |
| JEL: | D46 E22 D92 |
| Date: | 2013–01–31 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:44094&r=sbm |
| By: | Nanditha Mathew |
| Abstract: | The paper presents micro evidence on firm dynamics for enterprises in Indian Manufacturing sectors on the grounds of Prowess database provided by the Cen- tre for Monitoring Indian Economy (CMIE) covering the period 1991-2010. The parameterization of the distributions of growth exhibit high level heterogeneity displayed among firms even within the same sector, which widens over time. The transition probabilities matrix reveals the coexistence of firms with very different characteristics and performance within sectors. Given the wide heterogeneities, the paper resorts to quantile regression to identify the differential effect of regressors at different deciles of the conditional distrubution. |
| Keywords: | Firm Dynamics, AEP Distribution, Heterogeneity, Quantile Regression |
| Date: | 2012–12–17 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2012/24&r=sbm |
| By: | Cali, Massimiliano; Menon, Carlo |
| Abstract: | Although a high rate of urbanization and a high incidence of rural poverty are two distinct features of many developing countries, there is little knowledge of the effects of the former on the latter. Using a large sample of Indian districts from the 1983-1999 period, the authors find that urbanization has a substantial and systematic poverty-reducing effect in the surrounding rural areas. The results obtained through an instrumental variable estimation suggest that this effect is causal in nature and is largely attributable to the positive spillovers of urbanization on the rural economy rather than to the movement of the rural poor to urban areas. This rural poverty-reducing effect of urbanization is primarily explained by increased demand for local agricultural products and, to a lesser extent, by urban-rural remittances, the rural land/population ratio, and rural nonfarm employment. |
| Keywords: | Rural Poverty Reduction,Population Policies,Regional Economic Development,Achieving Shared Growth |
| Date: | 2013–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6338&r=sbm |
| By: | Mazen Kebewar (LEO - Laboratoire d'économie d'Orleans - CNRS : UMR7322 - Université d'Orléans, University of Aleppo, Faculty of Economics - Department of Statistics and Management Information Systems) |
| Abstract: | This article aims to expand existing empirical knowledge on the impact of debt level on profitability of companies. We analyze a sample of an unbalanced panel of 2325 unlisted French companies of trade sector spanning over a period of 1999 to 2006. By using the generalized method of moments (GMM), we show that the debt affects negatively the profitability, not only linearly, but also, in a non-linear (concave) way. However, while analyzing according to different size classes (VSEs, SMEs and LEs); we find that the linear negative effect becomes larger and the non-linear effect is significant only in small and medium-sized enterprises (SME). |
| Keywords: | Debt; GMM; Panel data; Profitability |
| Date: | 2013–01–23 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00780310&r=sbm |