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on Small Business Management |
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Issue of 2013‒11‒16
nine papers chosen by Joao Carlos Correia Leitao Universidade da Beira Interior and Universidade de Lisboa |
| By: | Debuque-Gonzales, Margarita (University of the Philippines) |
| Abstract: | This paper investigates the financial determinants of research and development (R&D) investment in Asia, where innovation is naturally seen as the key driver of future (high) economic growth. We sample listed nonfinancial firms from eight economies in region (the People’s Republic of China; Hong Kong, China; India; Indonesia; the Republic of Korea; Malaysia; the Philippines; and Singapore) for the period 2002–2011 using the Oriana database. Panel data regressions show sensitivity of R&D investment to changes in cash flow, indicating reliance on internal financing of R&D and financially constrained firms, and a greater role of debt, rather than equity, as a source of external financing. In terms of alternative uses of funds, dividend payments by firms seem to divert from their spending on R&D, but investments in financial assets do not. In terms of ownership structure, empirical results show that both higher domestic ownership concentration and higher foreign ownership tend to lower cash flow sensitivity of R&D investment, suggesting more stable funding of innovation. Overall, there does not seem to be an extreme preference of firm shareholders for short-term returns at the expense of long-term productivity. However, there is clearly a gain for firms as well as economies they are in with better access to external financing of R&D. |
| Keywords: | R&D investment; financing innovation; cash flow; R&D financing constraints; Asia |
| JEL: | D92 G30 O30 O40 |
| Date: | 2013–08–16 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbewp:0364&r=sbm |
| By: | Norman Gemmel (Victoria University of Wellington, New Zealand); Richard Kneller (University of Nottingham, UK); Danny McGowan (Bangor University, UK); Ismael Sanz (Universidad Rey Juan Carlos, Spain) |
| Abstract: | Firms that lay far behind the technological frontier have the most to gain from imitating the technology or management practices of others. That some firms converge relatively slowly to the productivity frontier suggests the existence of factors that cause them to under-invest in their productivity. In this paper we explore whether higher rates of corporate taxation affect firm productivity convergence because they reduce the after tax returns to productivity enhancing investments for small firms. Using data for 11 European countries we find evidence for such an effect; productivity growth in small firms is slower the higher are high corporate tax rates. Our results are robust to the use of instrumental variable and panel data techniques with quantitatively similar effects found from a natural experiment following the German tax reforms in 2001. |
| Keywords: | Productivity, taxation, convergence |
| JEL: | D24 H25 L11 O31 |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:bng:wpaper:13001&r=sbm |
| By: | Matthias Duschl (Economic geography and Location Research, Philipps-Universität Marburg); Thomas Brenner (Economic geography and Location Research, Philipps-Universität Marburg) |
| Abstract: | This paper analyses the causal relationships in regional technological systems within a structural vector autoregression (SVAR) framework. Applying a data-driven identification strategy based on Independent Component Analysis, it shows how the regional growth dynamics of economic, research, innovation and educational activities affect each other instantaneously and over time in five different industries. Referring to the type of industry and its knowledge base, expectations are derived on how industry-specific growth processes unfold. Knowledge on the causal relations among the various activities in such regional technological systems is of utmost relevance to the design and implementation of efficient policy instruments. |
| Keywords: | regional growth, SVAR, non-normality, innovations, universities, R&D, regional technological systems |
| JEL: | C33 O30 R11 |
| Date: | 2013–10–09 |
| URL: | http://d.repec.org/n?u=RePEc:pum:wpaper:2013-12&r=sbm |
| By: | Graafland, J.J.; Smid, H. (Tilburg University, Center for Economic Research) |
| Abstract: | Abstract: This paper develops and tests a conceptual framework on the relationships between competition, time horizon and corporate social performance (CSP). We hypothesize that more intense competition discourages CSP by lowering the time horizon of companies. We test the hypothesis on a sample of 4696 of mainly small and medium-sized companies from twelve European countries. We distinguish between price competition, market position and technological competition. We find that companies with a longer time horizon have a higher CSP and that price competition and a ‘level playing field’ market position shorten the time horizon. The intensity of technological competition has a positive effect on time horizon, but also exerts a direct positive influence on CSP. Test results show that time horizon significantly mediates the influence of price competition, the market position and technological competition on CSP. The analysis implies that, from the perspective of CSP, the economic policy of the government should not focus on fostering price competition, but rather on strengthening competition in innovation. |
| Keywords: | Corporate social performance;time horizon;price competition;SMEs;technological competition |
| JEL: | L1 M14 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:2013060&r=sbm |
| By: | David S. Abrams (Penn Law School & Wharton Business Economics & Public Policy Department, University of Pennsylvania,); Ufuk Akcigit (Department of Economics, University of Pennsylvania & NBER); Jillian Popadak (Wharton Business Economics & Public Policy Department, University of Pennsylvania) |
| Abstract: | Prior work suggests that more valuable patents are cited more and this view has become standard in the empirical innovation literature. Using an NPE-derived dataset with patent-specific revenues we find that the relationship of citations to value in fact forms an inverted-U, with fewer citations at the high end of value than in the middle. Since the value of patents is concentrated in those at the high end, this is a challenge to both the empirical literature and the intuition behind it. We attempt to explain this relationship with a simple model of innovation, allowing for both productive and strategic patents. We find evidence of greater use of strategic patents where it would be most expected: among corporations, in fields of rapid development, in more recent patents and where divisional and continuation applications are employed. These findings have important implications for our basic understanding of growth, innovation, and intellectual property policy. |
| Keywords: | productive innovation, defensive innovation, patents, creative destruction, citations, patent value, competition, intellectual property, entrepreneurship, strategic patenting, defensive patenting, patent thickets, fencing patents. |
| JEL: | O3 L2 K1 |
| Date: | 2013–11–05 |
| URL: | http://d.repec.org/n?u=RePEc:pen:papers:13-065&r=sbm |
| By: | Jonathan Potter; Marco Marchese; Maryann Feldman; Tom Kemeny; Helen Lawton-Smith; Andy Pike |
| Abstract: | This report presents the results of the local component of the OECD Review of SME and Entrepreneurship Issues and Policies at National and Local Levels in Mexico. It draws on case studies conducted in the two states of Morelos and Queretaro and examines regional disparities in entrepreneurship activity in Mexico; the governance of entrepreneurship and SME policies, focusing on coordination between national and local policies and how national programmes are tailored to the different state development needs; and policies at state level to support workforce and entrepreneurship skills, business innovation and industry-university knowledge flows, access to finance, and improvements in business regulations. |
| Date: | 2013–10–31 |
| URL: | http://d.repec.org/n?u=RePEc:oec:cfeaaa:2013/14-en&r=sbm |
| By: | Rebérioux, Antoine; Caroli, Eve; Breda, Thomas; Bassanini, Andrea |
| Abstract: | We study the compensation package offered by family firms. Using matched employer-employee data for a sample of French establishments in the 2000s, we first show that family firms pay on average lower wages to their workers. This family/non-family wage gap is robust to controlling for several establishment and individual characteristics and does not appear to be due either to the differential of productivity between family and non-family firms or to unobserved establishment and individual heterogeneity. Moreover, it is relatively homogeneous across workers with different gender, educational attainment and age. By contrast, the family/non-family wage gap is found to be larger for clerks and blue-collar workers than for managers, supervisors and technicians, for whom we find no significant wage gap. As a second step, we investigate why workers stay in family firms while being paid less. We show that these firms offer greater job security. We find evidence that the rate of dismissal is lower in family than in non-family firms. We also show that family firms rely less on dismissals and more on hiring reductions when they downsize. These results are confirmed by subjective data : the perceived risk of dismissal is significantly lower in family firms than in non-family ones. We speculate that our results can be explained either by a compensating wage differential story or by a model in which workers sort in different firms according to their preferences. |
| Keywords: | Family firms; wages; job security; linked employer-employee data; |
| JEL: | G34 J31 J33 J63 L26 |
| Date: | 2013–04 |
| URL: | http://d.repec.org/n?u=RePEc:dau:papers:123456789/7244&r=sbm |
| By: | Federica Rossi (Department of Management, Birkbeck College University of London); Ainurul Rosli (University of Wolverhampton, University of Wolverhampton Business School) |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:img:wpaper:13&r=sbm |
| By: | Rey, Patrick; Tirole, Jean |
| Abstract: | The paper makes two related contributions. First, and in contrast with the rich body of literature on collusion with (mainly perfect) substitutes, it derives general results on the sustainability of tacit coordination for a class of nested demand functions that allows for the full range between perfect substitutes and perfect complements. Second, it studies the desirability of joint marketing alliances, an alternative to mergers. It shows that a combination of two informationfree regulatory requirements, mandated unbundling by the joint marketing entity and unfettered independent marketing by the firms, makes joint-marketing alliances always socially desirable, whether tacit coordination is feasible or not. |
| Keywords: | tacit collusion, cooperation, substitutes and complements, essentiality, joint marketing agreements, patent pools, independent licensing, unbundling, co-opetition. |
| JEL: | D43 L24 L41 O34 |
| Date: | 2013–10–23 |
| URL: | http://d.repec.org/n?u=RePEc:ide:wpaper:27696&r=sbm |