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on Small Business Management |
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Issue of 2013‒05‒22
eleven papers chosen by Joao Carlos Correia Leitao University of Beira Interior and Technical University of Lisbon |
| By: | Daron Acemoglu; Ufuk Akcigit; Nicholas Bloom; William 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 53 of GDP reduces welfare by about 1.53 because it deters entry of new high-type firms. On the contrary, substantial improvements (of the order of 53 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. |
| Keywords: | entry, growth, industrial policy, innovation, R&D, reallocation, selection. |
| JEL: | E2 |
| Date: | 2013–04 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:13-23&r=sbm |
| By: | Lööf, Hans (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Nabavi, Pardis (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology) |
| Abstract: | We assess the impact of the location of genuinely new ventures and spinoffs on these firms’ survival, productivity and growth. The study distinguishes between four different categories of locations: metro cities, metro regions, urban areas, and rural areas. Using a unique database covering more than 23,000 new entrants between 2000 and 2004 in Sweden and observing them for 5 years, several conclusions may be drawn from our study. First, there is a substantial difference in ex-post entry performance between the manufacturing and service sectors. Second, the proposed superiority of start-ups by ex-employees depends on the performance measures and the sector. Third, knowledge and technology intensity of the industry matter for the viability of the new firms. |
| Keywords: | Location; New ventures; Survival; Productivity; Growth |
| JEL: | L25 L26 M13 O47 R11 |
| Date: | 2013–05–08 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0308&r=sbm |
| By: | Cristiano Antonelli; Alessandra Colombelli |
| Abstract: | This paper explores the role of external knowledge and internal stocks of knowledge in the generation of new technological knowledge. It relies on the notion of recombination and brings together three concepts: the appreciation of current expenses in R&D activities; the analysis of the role of the stock of knowledge composition; the identification of the role of external knowledge available in the regional proximity. The empirical section is based upon a panel of companies listed on the main European financial markets for the period 1995–2006. The econometric analysis considers patents as a measure of the knowledge output and, on the right hand side, next to R&D expenditures, the stock of knowledge internal and external to each firm. The results confirm that the stock of internal knowledge and the access to external knowledge play a key role in assessing the actual capability of each firm to generate new knowledge. |
| Keywords: | knowledge generation function, knowledge stock, external knowledge, path dependence |
| JEL: | O30 |
| Date: | 2013–04 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2013-08&r=sbm |
| By: | Roberto Gabriele; Diego Giuliani; Marco Corsino; Giuseppe Espa |
| Abstract: | The paper proposes a novel methodology to assess the role of ÒlocationÓ in shaping firm growth. Along with traditional determinants (e.g., age, size and financial constraints), geographical location is alleged to drive firm growth. The current literature typically relies on location variables that suffer from a lack of empirical robustness (Combes et al., 2008; Duranton and Overman, 2005; Arbia et al., 2012; Giuliani et al., 2012): indeed arbitrary definitions of the spatial observational units (such as provinces, regions or municipalities) introduce a statistical bias arising from the discretionally chosen definition of space. To address these shortcomings, we use the GetisÕ local K-function (Getis, 1984) at the firm level. This measure allows us to distinguish between Marshallian and Jacobs externalities. The analysis exploits a new database comprising single-unit Italian firms operating in the manufacturing sector. Empirical results show that firms exhibit a differential ability to grow due to different kinds of externalities: small firms benefit more from Marshallian externalities, while medium-large firms exploit also Jacobian externalities. |
| Keywords: | spatial concentration, GetisÕ local K-function, localization externalities |
| JEL: | L25 R11 O30 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:trn:utwpem:2013/06&r=sbm |
| By: | S. Bakhtiari; A. Minniti; A. Naghavi |
| Abstract: | This research sheds light on the role of product scope on the innovation activity of multinational multi-product firms. We use patent citation data to break down innovation into two types by measuring the degree to which innovation performed by firms is fundamental and the extent to which the output of the R&D can be spread across different product lines. We focus on two features in multinational production: (i) fundamental innovation is geographically more difficult to transfer abroad to foreign production sites, (ii) learning spillovers can occur from international operations. The results reveal that the second effect is more likely to dominate when a firm is active in more product lines. We argue that a more diversified portfolio of products increases a firm’s scope of learning from international operations, thereby enhancing its ability to engage in more fundamental research. In contrast, firms with less product lines that geographically separate production from innovation shift the innovation activities towards more specialized types of innovation. |
| JEL: | F12 F23 O31 O32 |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:bol:bodewp:wp879&r=sbm |
| By: | Martin , Roman (CIRCLE, Lund University); Trippl , Michaela (Department of Human Geography and CIRCLE, Lund University) |
| Abstract: | Regional innovation strategies rank on the top of public policy agendas today. There is a widespread consensus in both academic and policy circles that standardised “best practice” innovation policy models suffer from severe limitations and major shortcomings. The recent literature is replete with claims that regional innovation policies should be place-based and context-sensitive, taking into consideration the specificities of regions and their distinctive preconditions and capacities for innovation. Various conceptual approaches and theories support such a view. This paper discusses two concepts, which have a particularly strong potential for informing a differentiated regional innovation policy approach; the regional innovation system (RIS) theory and the knowledge base concept. The RIS literature highlights the importance of the organisational and institutional setting of a region and suggests that system deficiencies or failures should constitute the starting point for designing regional innovation policies. The differentiated knowledge base approach stresses that regional industries differ strongly in the underlying knowledge bases and, as a consequence, in their policy needs. We elaborate on the policy implications that originate from these concepts and argue that tailor-made regional innovation policies should consider both region-specific institutional set-ups and knowledge bases. |
| Keywords: | regional innovation policy; regional innovation system; differentiated knowledge bases |
| JEL: | L52 O21 O25 R11 R58 |
| Date: | 2013–04–18 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2013_013&r=sbm |
| By: | Castelli , Cristina (Italian Trade Promotion Agency (ICE), Csil Milano); Castellani, Davide (University of Perugia, Italy; CIRCLE; Sweden; IWH and LdA) |
| Abstract: | This paper presents the sectoral and geographic distribution of R&D-related activities, in comparison with manufacturing activities, by analysing data (from the fDi Markets database) on the number of cross-border greenfield investment projects. Results show that crossborder R&D investments are concentrated in fewer sectors and countries (of origin and destination) than manufacturing, and they are less sensitive to the obstacles related with the distance between home and host countries. More than the two-thirds of all cross-border investments in R&D-related activities are in ICT/Electronic and Life Sciences/Chemicals sectors, but these sectors differ in their propensity towards R&D and Design, Development and Testing activities. Almost half of the investments is due to multinationals from North America, and over one third from Western Europe, but the two areas show a different sectoral specialization. Considering the areas of destination, Asia is the largest recipient, and specializes in the ICT/Electronics and Industrial Machinery, while Western Europe ranks second and attracts relatively more research investments in Life Sciences/Chemicals, as well as in the Machinery industry |
| Keywords: | Internazionalization of R&D; Multinational Firms; Europe; North America; Asia |
| JEL: | F23 L23 O30 |
| Date: | 2013–03–03 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2013_009&r=sbm |
| By: | Coenen , Lars (Nordic Institute for Studies in Innovation, Research and Education (NIFU), Oslo; CIRCLE, Lund University); Moodysson , Jerker (CIRCLE, Lund University); Martin , Hanna (CIRCLE, Lund University) |
| Abstract: | The objective of this paper is to further insights on the potentials and barriers for industrial renewal in locked-in regions and industries. To do so, the paper analyzes the Swedish policy program ‘Biorefinery of the Future’ (BioF). This initiative is geared to develop a strong regional innovation environment for forestry-based biorefinery development in the area of Örnköldsvik and Umeå in Northern Sweden. Theoretically, the paper draws on concepts from evolutionary economic geography regarding path-dependence, related variety and lockin, and combines these with institutional approaches found in science and technology studies to explain disruptive shifts or transitions in socio-technical systems. |
| Keywords: | Regional Innovation Policy; Old Industrial Regions; Evolutionary Economic Geography; Socio-technical Transitions |
| JEL: | O33 O38 |
| Date: | 2013–05–06 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2013_007&r=sbm |
| By: | Shahid Yusuf |
| Keywords: | Information and Communication Technologies - ICT Policy and Strategies Private Sector Development - E-Business Technology Industry Social Protections and Labor - Labor Policies Education - Knowledge for Development Industry |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:12781&r=sbm |
| By: | Binz , Christian (Swiss Federal Institute of Aquatic Science and Technology, Dübendorf, Switzerland); Truffer , Bernhard (Swiss Federal Institute of Aquatic Science and Technology, Dübendorf, Switzerland); Coenen , Lars (CIRCLE, Lund University; Nordic Institute for Studies in Innovation, Research and Education (NIFU), Norway) |
| Abstract: | Studies on technological innovation systems (TIS) often set spatial boundaries at the national level and treat supranational levels as a geographically undifferentiated and freely accessible global technological opportunity set. This article criticizes this conceptualization and proposes instead to analyze relevant actors, networks and processes in TIS from a relational perspective on space. It develops an analytical framework which allows investigating innovation processes (or ‘functions’) of a TIS at and across different spatial scales. Based on social network analysis of a co-publication dataset from membrane bioreactor technology, we illustrate how the spatial characteristics of collaborations in knowledge creation vary greatly over relatively short periods of time. This finding suggests that TIS studies should be more reflexive on system boundary setting both regarding the identification and analysis of core processes as well as in the formulation of policy advice. |
| Keywords: | technological innovation system; relational space; system functions; knowledge creation; social network analysis; membrane bioreactor technology |
| JEL: | O31 Q55 |
| Date: | 2013–03–16 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2013_011&r=sbm |
| By: | MUKUNOKI Hiroshi |
| Abstract: | This paper theoretically investigates whether improved access to the domestic market increases the speed with which a foreign firm adopts new technology. In our model, foreign firms choose between exporting and foreign direct investment (FDI) in serving the domestic market. In the absence of other foreign firms, a reduction in the fixed cost of FDI promotes and accelerates technology adoption by the foreign firm, while tariff-free access to the domestic market induces the most rapid timing of technology adoption. If there is another foreign firm that has already adopted the advanced technology and both firms compete in the domestic market, a reduction in the fixed cost of FDI or the elimination of the tariff may either deter or delay the timing of technology adoption. The quickest timing of technology adoption may be attained when the fixed cost of FDI and the tariff are neither very high nor very low. These results suggest that improved access to the domestic market does not necessarily contribute to the technological upgrading of foreign firms. |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:13040&r=sbm |