nep-sbm New Economics Papers
on Small Business Management
Issue of 2013‒05‒05
twelve papers chosen by
Joao Carlos Correia Leitao
University of Beira Interior and Technical University of Lisbon

  1. Directing Technical Change from Fossil-Fuel to Renewable Energy Innovation: An Empirical Application Using Firm-Level Patent Data By Joëlle Noailly; Roger Smeets
  2. Innovation, Reallocation and Growth By Daron Acemoglu; Ufuk Akcigit; Nicholas Bloom; William R. Kerr
  3. Productivity gains from R&D investment: are high-tech sectors still ahead? By Raquel Ortega-Argilés; Mariacristina Piva; Marco Vivarelli
  4. Implementing an R&D Strategy without Prior R&D-Experience Recruitment as a Source of R&D-related Routines and Capabilities? By Ahlin, Lina; Andersson, Martin; Schubert , Torben
  5. What makes companies pursue an open science strategy? By Markus Simeth; Julio Raffo
  6. Best practices of the SME mining suppliers in the Antofagasta region of Chile By Miguel Atienza; Patricio Aroca; Robert Stimson; Roger Stough
  7. The European Spallation Source (ESS)and the geography of innovation By V. Rekers, Josephine
  8. Do SMEs' linkages with Large Mining Firms improve their performance? Evaluating heterogeneity among firms. By Miguel Atienza; Marcelo Lufin Varas; Mauricio Sarrias
  9. What Does Evolutionary Economic Geography Bring To The Policy Table? Reconceptualising regional innovation systems By Asheim, Bjørn; M. Bugge, Markus; Coenen, Lars; Herstad, Sverre
  10. Indigenous R&D Effectiveness and Technology Transfer on Productivity Growth: Evidence from the Hi-Tech Industry of China By Qazi, Ahmar Qasim; Zhao, Yulin
  11. Micro-enterprises in Italy: a first analysis of economic and financial conditions By Stefania De Mitri; Antonio De Socio; Paolo Finaldi Russo; Valentina Nigro
  12. Getting Patents & Economic Data to Speak to Each Other: An ‘Algorithmic Links with Probabilities’ Approach for Joint Analyses of Patenting & Economic Activity By Travis J. Lybbert; Nikolas J. Zolas

  1. By: Joëlle Noailly (CIES, Graduate Institute of International and Development Studies, Geneva, Switzerland and CPB Netherlands Bureau for Economic Policy Analysis, The Hague, The Netherlands); Roger Smeets (Rutgers Business School, Newark, USA)
    Abstract: This paper investigates the determinants of directed technical change in the electricity generation sector. We use firm-level data on patents led in renewable (REN) and fossil fuel (FF) technologies by about 7,000 European firms over the period 1978-2006. We separately study specialized firms that innovate in only one type of technology during the sample period, and mixed firms that innovate in both technologies. We find that for specialized firms the main drivers of innovation are fossil-fuel prices, market size, and firms' past knowledge stocks. Also, prices and market size drive the entry of new REN firms into innovation. By contrast, we find that innovation by mixed firms is mainly driven by strong path-dependencies since for these firms past knowledge stock is the major driver of the direction of innovation. These results imply that generic environmental policies that affect prices and energy demand are mainly effective in directing innovation by small specialized firms. In order to direct innovation e orts of large mixed corporations with a long history of FF innovation, targeted R&D policies are likely to be more effective.
    Keywords: Directed Technical Change, Energy, Patents, Firms' Dynamics
    JEL: Q4
    Date: 2013–04
  2. By: Daron Acemoglu; Ufuk Akcigit; Nicholas Bloom; William R. Kerr
    Abstract: We build a model of firm-level innovation, productivity growth and reallocation featuring endogenous entry and exit. A key feature is the selection between high- and low-type firms, which differ in terms of their innovative capacity. We estimate the parameters of the model using detailed US Census micro data on firm-level output, R&D and patenting. The model provides a good fit to the dynamics of firm entry and exit, output and R&D, and its implied elasticities are in the ballpark of a range of micro estimates. We find industrial policy subsidizing either the R&D or the continued operation of incumbents reduces growth and welfare. For example, a subsidy to incumbent R&D equivalent to 5% of GDP reduces welfare by about 1.5% because it deters entry of new high-type firms. On the contrary, substantial improvements (of the order of 5% improvement in welfare) are possible if the continued operation of incumbents is taxed while at the same time R&D by incumbents and new entrants is subsidized. This is because of a strong selection effect: R&D resources (skilled labor) are inefficiently used by low-type incumbent firms. Subsidies to incumbents encourage the survival and expansion of these firms at the expense of potential high-type entrants. We show that optimal policy encourages the exit of low-type firms and supports R&D by high-type incumbents and entry.
    JEL: E02 L1 O31 O32 O33
    Date: 2013–04
  3. By: Raquel Ortega-Argilés (IN+ Center for Innovation, Technology and Policy Research, Instituto Superior Técnico); Mariacristina Piva (DISCE, Università Cattolica); Marco Vivarelli (DISCE, Università Cattolica)
    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: 2013–03
  4. By: Ahlin, Lina (CIRCLE, Lund University); Andersson, Martin (CIRCLE, Lund University); Schubert , Torben (CIRCLE, Lund University and Fraunhofer Institute for Systems and Innovation Research (ISI))
    Abstract: Evolutionary economic theorizing and related approaches explain persistent heterogeneity in R&D activities between firms with persistent inter-firm differences in R&D-related routines and capabilities. Emphasizing the importance experiential learning leading to pathdependence of R&D strategies, this raises the question of how firms can organize strategy transitions towards continuous R&D, in particular, if they had not been R&D active before. Building on a growing literature trying to identify the micro-foundations of organizational routines and capabilities, we argue that recruitment of experienced R&D workers is an important means by which firms without prior internal R&D experience can build routines and capabilities needed to implement and sustain an R&D strategy shift. We test our predictions using rich matched employer-employee panel data for Sweden, which allows for the identification of firms that implement a strategy of continuous R&D activities without prior R&D experience. Our findings confirm recruitment of experienced R&D workers as an important mechanism by which firms prepare and sustain a transition towards persistent R&D.
    Keywords: routines; capabilities; R&D strategy; micro-foundations; recruitment
    JEL: D22 J24 J63 O31 O32
    Date: 2013–05–02
  5. By: Markus Simeth (Ecole Polytechnique Fédérale de Lausanne (EPFL), College of Management, Switzerland); Julio Raffo (World Intellectual Property Organization, Economics and Statistics Division, Geneva, Switzerland)
    Abstract: Whereas recent scholarly research has provided many insights about universities engaging in commercial activities, there is still little empirical evidence regarding the opposite phenomenon of companies disseminating scientific knowledge. Our paper aims to fill this gap and explores the motivations of firms that disclose research outcomes in a scientific format. Besides considering an internal firm dimension, we focus particularly on knowledge sourcing from academic institutions and the appropriability regime using a cost-benefit framework. We conduct an econometric analysis with firm-level data from the fourth edition of the French Community Innovation Survey (CIS4) and matched scientific publications for a sample of 2,512 R&D performing firms from all manufacturing sectors. The analysis provides evidence that the access to important scientific knowledge imposes the adoption of academic disclosure principles, whereas the mere existence of collaborative links with academic institutions is not a strong predictor. Furthermore, the results suggest that overall industry conditions are influential in shaping the cost-benefit rationale of firms with respect to scientific disclosure.
    Keywords: R&D, Industrial Science, Knowledge Disclosure, University-Industry collaboration
    Date: 2013–04
  6. By: Miguel Atienza (IDEAR - ORDHUM - Department of Economics, Universidad Católica del Norte - Chile); Patricio Aroca (IDEAR - Department of Economics, Universidad Católica del Norte - Chile); Robert Stimson (Australian Urban Research Infraestructure Network. Faculty of Architecture, Building and Planning, University of Melbourne VIC 3010, Australia); Roger Stough (George Mason University, School of Public Policy 4400 University Drive, MS6D5 Fairfax, Virginia 22030 USA)
    Abstract: In regions whose industrial structure is organized around one or more large firm corporations, the best practices of small and medium enterprises (SMEs) depend on where firms are located in the supply chain. This paper studies 351 SMEs in the Antofagasta Region in Chile between 2007 and 2008, where multinational and public mining companies are the drivers of the local economy and the government is promoting the formation of a mining cluster. Structural equation model (SEM) is used to show that first-tier SME mining suppliers, directly related to large corporations, follow business practices that promote international certification, quality control and investment in innovation, while in contrast second-tier SMEs are more focused on avoiding insolvency and client orientation. These results cast doubt on the formation of a mining cluster in the region and suggest the need for differentiated policies in these two groups of SMEs, especially those related to knowledge transfer.
    Keywords: Spatial concentration, growth, urbanization, development
    JEL: D22 L25 L72 R11
    Date: 2013–03
  7. By: V. Rekers, Josephine (CIRCLE, Lund University)
    Abstract: The design and construction of ESS is portrayed as an enormous injection of scientific infrastructure in the (innovation-based) economy of Lund, Skåne and the Øresund region. Innovation processes are however, inherently uncertain, unanticipated and non-linear, where investments do not directly and predictably lead to successful outputs. This chapter presents the theoretical underpinnings of localized knowledge spillovers, and demonstrates that the prospected local benefits associated with ESS are tied to the degree of embeddedness of the facility in regional knowledge networks that facilitate localized learning. This future scenario is challenged by the level of absorptive capacity of university and industry partners in the region, the presence of institutions that support an innovative milieu, and the multiplicity of ambitions set for ESS by the local, multi-national and global bodies. If actors in the regional economy are to take advantage of the opportunity that is associated with the technical design and construction of ESS in Lund, organizational and institutional features of an innovation milieu need to be prioritized.
    Keywords: Large research facilities; big science; agglomeration economies; knowledge spillovers; European Spallation Source (ESS)
    JEL: O31 R11
    Date: 2012–10–02
  8. By: Miguel Atienza (IDEAR - ORDHUM - Department of Economics, Universidad Católica del Norte - Chile); Marcelo Lufin Varas (IDEAR - ORDHUM - Department of Economics, Universidad Católica del Norte - Chile); Mauricio Sarrias (IDEAR - Master in Regional Science, Universidad Católica del Norte - Chile)
    Abstract: In recent decades, several countries have proposed the promotion of mining clusters as a local development strategy. One of the expected results of this type of policy is the formation of a critical mass of local SMEs able to grow and export internationally. It is assumed that to achieve this result the vertical linkages between mining companies and SMEs favor the growth and competitiveness of local mining suppliers. This assumption, however, has not been verified. This paper analyzes whether the relationship between SME suppliers and large mining companies implies more growth in sales an labor. We study the case of the Antofagasta Region, one of the main miningareas in Latin America, where, since 2001, the government ha been promoting the formation of a mining cluster. We estimate an ordinal Probit model with random parameters, using panel data with a simple of more tan 500 SMEs from the Antofagasta Region, with information from the period 2003-2009. This methodology allows us to estimate whether first and second tier SME suppliers of the mining industry have, on average, better performance tan other SMEs and, also, which is the heterogeneity of results within each of these groups of SMEs.
    Keywords: SME, regional development, supply chain, large scale mining, Chile.
    JEL: D22 L25 L72 R11
    Date: 2013–03
  9. By: Asheim, Bjørn (CIRCLE and the Department of Human Geography, Lund University; Nordic Institute for Studies in Innovation, Research and Education (NIFU), Norway); M. Bugge, Markus (Nordic Institute for Studies in Innovation, Research and Education, Norway); Coenen, Lars (CIRCLE, Lund University; Nordic Institute for Studies in Innovation, Research and Education (NIFU), Norway); Herstad, Sverre (NIFU, Oslo Norway)
    Abstract: The article discusses the strategic roles of public policy and institutions and the way this effect to the efficiency of regional innovation systems in the landscape of evolutionary economic geography. It argues that the current emphasis on path dependency historically contingent preconditions has provided important insights into the interdependencies between industrial knowledge bases and routines, regional system dynamics and long-term development paths. Yet, it falls short of capturing the scope of policy intervention which follows logically from the evolutionary framework itself. Anchored in a renewed regional innovation systems approach, the article presents a policy intervention framework for constructing regional advantage in different contexts.
    Keywords: evolutionary economic geography; institutions; regional innovation policy; clusters; regional innovation systems
    JEL: B52 O33 O38
    Date: 2013–02–10
  10. By: Qazi, Ahmar Qasim; Zhao, Yulin
    Abstract: The study employs the panel data of 15 hi-tech industries over the period of 2000-2010 in order to examine the effectiveness of R&D with respect to productivity change and indentify the significant contributing factors with intensity in the Chinese hi-tech sector. The Malmquist Productivity Indexes are calculated by using the non-parametric programming technique and censored regression model is applied to conduct the empirical investigation. We find that on average, the sector is confronting productivity deterioration which is mainly due to the technical inefficiency. The Office Equipments industry has the highest productivity gain in our sample at the rate of, on average, 3.7% per year and all of which is caused by technical change. Furthermore, the electronic components industry is found to be the most efficient industry in the sector that drives an industry to have productivity progress on average, of 1.7% per year over the study period. At last, Tobit results indicate that spillovers through FDI and technology import are having significant and positive effect on the productivity progress.
    Keywords: Productivity Growth;DEA;Tobit Model
    JEL: C34 C61 D24
    Date: 2013
  11. By: Stefania De Mitri (Banca d'Italia); Antonio De Socio (Banca d'Italia); Paolo Finaldi Russo (Banca d'Italia); Valentina Nigro (Banca d'Italia)
    Abstract: Italy is the European country where firms with fewer than 10 employees account for the largest share of value added and employment. On the basis of data from the company balance sheets and the Central Credit Register during the period 2003-2010, this work contributes to the analysis of these companies describing their economic and financial conditions and their relations with banks based on a sample of about 500,000 companies, of which more than 400,000 are classified as micro-enterprises. On average, they have lower profitability and higher debt, largely bank debt, than the other size classes. The proportion of loans made by the partners and shareholders is significant, a feature that can mitigate some of the risks associated with their weaker financial conditions. Econometric estimates indicate that micro-enterprises must provide more guarantees and pay higher rates of interest. In all aspects investigated in our work, the heterogeneity of micro-enterprises is much higher than for the other size classes, which suggests broad scope for future research.
    Keywords: micro-enterprises, business companies, employment, banking relationships
    JEL: G21 G32 L25
    Date: 2013–04
  12. By: Travis J. Lybbert (Department Agricultural & Resource Economics, University of California, Davis); Nikolas J. Zolas (Center for Economic Studies, United States Census Bureau)
    Abstract: International technological diffusion is a key determinant of cross-country differences in economic performance. While patents can be a useful proxy for innovation and technological change and diffusion, fully exploiting patent data for such economic analyses requires patents to be tied to measures of economic activity. In this paper, we describe and explore a new algorithmic approach to constructing concordances between the International Patent Classification (IPC) system that organizes patents by technical features and industry classification systems that organize economic data, such as the Standard International Trade Classification (SITC), the International Standard Industrial Classification (ISIC) and the Harmonized System (HS). This ‘Algorithmic Links with Probabilities’ (ALP) approach incorporates text analysis software and keyword extraction programs and applies them to a comprehensive patent dataset. We compare the results of several ALP concordances to existing technology concordances. Based on these comparisons, we select a preferred ALP approach and discuss advantages of this approach relative to conventional approaches. We conclude with a discussion on some of the possible applications of the concordance and provide a sample analysis that uses our preferred ALP concordance to analyze international patent flows based on trade patterns.
    Date: 2012–10

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