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on Small Business Management |
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Issue of 2013‒11‒29
seventeen papers chosen by Joao Carlos Correia Leitao Universidade da Beira Interior and Universidade de Lisboa |
| By: | Verónica Fernández Gual (CREIP, XREAP, Industry and Territory Research Group, Reus, Spain); Agustí Segarra Blasco (CREIP, XREAP, Industry and Territory Research Group, Reus, Spain) |
| Abstract: | This paper investigates relationships between cooperation, R&D, innovation and productivity in Spanish firms. It uses a large sample of firm-level micro-data and applies an extended structural model that aims to explain the effects of cooperation on R&D investment, of R&D investment on output innovation, and of innovation on firms’ productivity levels. It also analyses the determinants of R&D cooperation. Firms’ technology level is taken into account in order to analyse the differences between high-tech and low-tech firms, both in the industrial and service sectors. The database used was the Technological Innovation Panel (PITEC) for the period 2004-2010. Empirical results show that firms which cooperate in innovative activities are more likely to invest in R&D in subsequent years. As expected, R&D investment has a positive impact on the probability of generating an innovation, in terms of both product and process, for manufacturing firms. Finally, innovation output has a positive impact on firms’ productivity, being greater in process innovations. |
| Keywords: | innovation sources; productivity; R&D Cooperation |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:xrp:wpaper:xreap2013-08&r=sbm |
| By: | Zhang, Mingqian (Shanghai International Studies University); Mohnen, Pierre (UNU-MERIT / MGSoG) |
| Abstract: | Using a large dataset of over 100,000 Chinese firms created between 2000 and 2006, we explore whether there is a link between innovation effort (R&D) or innovation output (the share of innovative sales) and the firm's duration of survival. We estimate a complementary log-log model with time-varying explanatory variables controlling for individual heterogeneity. We find that innovative firms tend to survive longer, more so because of R&D than because of introducing new products. There seems to be an inverted-U relationship between R&D or innovation output and long-term survival, suggesting that too much R&D or product innovation can cause firms to die, perhaps because of excessive risk. Survival has a cyclical behaviour, and it varies across provinces. It also varies with ownership. State-owned firms have a higher hazard rate than privately-owned firms, which have a higher hazard rate than foreign-owned firms. |
| Keywords: | firm survival, complementary log-log duration models, China, innovation |
| JEL: | L25 O32 O38 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2013057&r=sbm |
| By: | Arvanitis, Spyros (KOF, ETH Zürich); Lokshin, Boris (School of Business and Economics, Maastricht University); Mohnen, Pierre (UNU-MERIT/MGSoG); Wörter, Martin (KOF, ETH Zürich) |
| 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: | Innovation, Open innovation, R&D collaboration, make, buy strategies |
| JEL: | O31 O32 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2013003&r=sbm |
| By: | Pellegrino, Gabriele (University of Barcelona, and Università Cattolica del Sacro Cuore, Piacenza and Milano); Savona, Maria (SPRU, University of Sussex,) |
| Abstract: | The paper adds to the scattered empirical evidence on the role of obstacles to innovation in a three-fold way. First, we correct for the usual sample selection bias by filtering out firms not interested in innovation from 'potential innovators'. We then analyse the impact of obstacles on the translation of firms' engagement in innovative activities onto actual innovative outputs. Second, we assess what mostly affects firms' rate of failure in this process, whether finance or, rather, knowledge or demand-related constraints. Third, we do so in a panel framework, which allows to account for endogeneity and firms' unobserved heterogeneity through individual effects. We find that demand- and market-related factors are as important as financing conditions in determining firms' innovation failures. This evidence puts much of the latest hype on finance in perspective and brings back into the picture traditional demand and market structure arguments of why firms fail to innovate. The empirical analysis is based on an unbalanced panel of firm data from four waves of the UK Community Innovation Survey (CIS) between 2002 and 2010 merged with the UK Business Structure Database. |
| Keywords: | Barriers to innovation, Innovative firms, Potential Innovators, Failed Innovators, Panel data |
| JEL: | C23 O31 O32 O33 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2013029&r=sbm |
| By: | Akçomakn Semih (TEKPOL, Middle East Technical University, and UNU-MERIT); Akdeve, Erdal (School of Management, Yıldırım Beyazıt University); Findik, Derya (TEKPOL, Middle East Technical University) |
| Abstract: | This paper provides a novel taxonomy of firms based on specialization versus diversification in production and markets. Firms may choose to specialize on few production activities or alternatively may build expertise in many activities. There is an accompanying decision when firms sell their products: whether to serve few or many markets. We argue that the location on the specialization-diversification spectrum significantly affects how firms manage innovation. For a sample of 90 innovator ICT firms in Ankara we find that cooperation structure, sources of innovation and funding of R&D display statistically significant different patterns according to the specialization-diversification taxonomy. |
| Keywords: | management of innovation, core competency, expertise building, R&D, ICT |
| JEL: | O32 L22 L86 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2013024&r=sbm |
| By: | Tiwari, Amaresh K. (University of Liege); Mohnen, Pierre (UNU-MERIT / MGSoG, SBE, Maastricht University, and CIRANO); Palm, Franz (SBE, Maastricht University and CESifo); Schim van der Loeff, Sybrand (SBE, Maastricht University) |
| Abstract: | Using Dutch data we empirically investigate how financing and innovation vary across firm characteristics. We find that when firms face financial constraints, debt financing and innovation choices are not independent of firm characteristics, and R&D slows down. In the absence of financial constraints, however, as they raise debt, firms become less inclined to innovate and the change in the propensity to innovate no longer varies with firm characteristics. We find that financing constraints faced, propensity to innovate, and R&D intensity are not uniform across firm characteristics. A new 'Control Function' estimator to account for heterogeneity and endogeneity has been developed. |
| Keywords: | Innovation, R&D, Capital Structure, Financial Constraints, Firm Characteristics, Correlated Random Effects, Control Function, Expected a Posteriori |
| JEL: | G30 O30 C30 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2013027&r=sbm |
| By: | Rosa, Julio Miguel (Industry Canada, Economic Research and Policy Analysis Branch); Mohnen, Pierre (UNU-MERIT / MGSoG, and CIRANO) |
| Abstract: | On the one hand, firms prefer to perform R&D in an open mode (letting R&D be performed extramurally or even selling their R&D services) to benefit from knowledge spillovers and complementarities between internal and external R&D. On the other hand, they may also like to perform R&D in a closed mode (funding and executing their R&D intramurally) to minimize outgoing externalities. We examine the dynamic process by which firms change the way of doing R&D and how these strategic choices of doing R&D affect their productivity growth. This study is based on the Statistics Canada Research and Development in Canadian Industry survey (RDCI), which collects data on R&D performed in the business sector in Canada. The paper is based on data for the period 1997 to 2006. The panel dimension of the data allows to control for unobserved characteristics of R&D performers by estimating a multinomial Logit model with unobserved heterogeneities using maximum simulated likelihood (MSL) method. |
| Keywords: | R&D, State Dependence, Dynamic Multinomial Logit, Panel-data, Maximum Simulated Likelihood, Open Innovation |
| JEL: | C35 L23 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2013060&r=sbm |
| By: | Raymond, Wladimir (STATEC Luxemburg); Mairesse, Jacques (CREST-INSEE, UNU-MERIT, Maastricht University, and NBER); Mohnen, Pierre (UNU-MERIT / MGSoG, SBE, Maastricht University, and CIRANO); Palm, Franz (SBE, Maastricht University and CESifo) |
| Abstract: | This paper introduces dynamics in the R&D to innovation and innovation to productivity relationships, which have mostly been estimated on cross-sectional data. It considers four nonlinear dynamic simultaneous equations models that include individual effects and idiosyncratic errors correlated across equations and that differ in the way innovation enters the conditional mean of labour productivity: through an observed binary indicator, an observed intensity variable or through the continuous latent variables that correspond to the observed occurrence or intensity. It estimates these models by full information maximum likelihood using two unbalanced panels of Dutch and French manufacturing firms from three waves of the Community Innovation Survey. The results provide evidence of robust unidirectional causality from innovation to productivity and of stronger persistence in productivity than in innovation. |
| Keywords: | R&D, innovation, productivity, panel data, dynamics, simultaneous equations |
| JEL: | C33 C34 C35 L60 O31 O32 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2013025&r=sbm |
| By: | Belderbos, Rene; Ikeuchi, Kenta; Fukao, Kyoji; Kim, Young Gak; Kwon, Hyeog Ug |
| Abstract: | We examine the effects of R&D spillovers on total factor productivity in a large panel of Japanese manufacturing plants matched with R&D survey data (1987-2007). We simultaneously examine the role of public (university and research institutions) and private (firm) R&D spillovers, and examine the differential effects due to technological, geographic and relational (buyer-supplier) proximity. Estimating dynamic long difference models and allowing for gradual convergence in TFP and geographic decay in spillover effects, we find positive effects of technologically proximate private R&D stocks, which decay in distance and become negligible at around 500 kilometres. In addition to knowledge spillovers from technologically proximate R&D stocks, ‘relational’ spillovers from buyer and supplier R&D stocks exert positive effects on TFP growth that are similar in magnitude. The elasticity of TFP is highest for public R&D (corrected for industrial relevance), in particular for plants operated by R&D conducting firms. We do not find evidence of geographic decay in the impact of public and relational spillovers. Over time, declining R&D spillovers appear to be responsible for a substantial part of the decline in the rate of TFP growth. The exit of proximate plants operated by R&D intensive firms plays a notable role in this process and is an important phenomenon in major industrial agglomerations such as Tokyo, Osaka, and Kanagawa. |
| Keywords: | R&D; spillovers; plant productivity; distance; |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:ner:leuven:urn:hdl:123456789/425526&r=sbm |
| By: | Arias Ortiz, Elena (Education Division, Inter-American Development Bank); Crespi, Gustavo (Competitiveness and Innovation Division, Inter-American Development Bank); Tacsir, Ezequiel (UNU-MERIT / MGSoG, and Competitiveness and Innovation Division, Inter-American Development Bank); Vargas, Fernando (Competitiveness and Innovation Division, Inter-American Development Bank); Zuniga, Pluvia (UNU-MERIT / MGSoG) |
| Abstract: | In this paper, a wide range of innovation indicators are analysed in order to describe the innovation behaviour of manufacturing firms in LAC using the recently released Enterprise Surveys 2010. The Enterprise Surveys define innovation rates as the share of firms introducing product and process innovations. The survey also measures the proportion of firms investing in research and development (R&D) and filing for intellectual property rights (IPRs). The aim of this note is to understand the main characteristics of innovative firms and to gather new evidence with regard to the nature of the innovation process in the region. Statistics about the performance of LAC firms are provided using different types of indicators to measure firms' innovative behaviour. In particular, differences in innovation performance and effort by country, sector, and key firm characteristics, such as being a multinational or exporter, are explored. Those firms in LAC that are top R&D performers are identified, and the analysis closes with an exploration of firm characteristics that strongly correlate with the probability of being a top R&D performer in the region. |
| Keywords: | innovation, research and development, Latin America, enterprise surveys |
| JEL: | D22 O31 O33 O34 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2013028&r=sbm |
| By: | Grillitsch, Markus (CIRCLE, Lund University); Nilsson , Magnus (CIRCLE, Lund University) |
| Abstract: | In this paper, we analyze the relationship between technological competencies (TC) and firm performance. Theoretically, the importance of TC is well established and widely accepted. Therefore, it is surprising that a number of empirical studies have been unable to confirm a substantial positive relationship between TC and firm performance. We identify two major reasons for this: [i] affected by the availability and choice of indicators existing studies are often biased towards large firms; and [ii] they frequently do not consider both internal and potential access to firm-external TC. This paper discusses conceptually the interplay between firm-internal and firm-external TC as well as the mediating effect of firm size. These relationships are then analyzed empirically using Swedish micro data on 15,682 firms in 290 Swedish municipalities. Novel indicators based on occupational statistics are combined with measures of time-distance accessibility to study internal and external TC. The results provide evidence for a positive relationship between firm growth and TC. In particular, the combination of firm-internal and firm-external competencies seems to be conducive for growth. Lastly, our study suggests that firm size is an important factor to further our understanding about these relationships. Based on this we identify a number of future research questions to be addressed. |
| Keywords: | technological competencies; firm performance; accessibility; knowledge; innovation; geography |
| JEL: | L25 O18 O30 |
| Date: | 2013–09–19 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2013_024&r=sbm |
| By: | Valeria Gattai |
| Abstract: | This paper surveys recent contributions about internationalization and performance of Italian enterprises. It covers both theoretical and empirical studies taking a microeconomic perspective and studying a potential link between firms’ global involvement and heterogeneity in economic, human capital & innovation and financial measures. The discussion is organized in an intuitive and non-technical way. More than 40 papers are analyzed from a multifaceted perspective, considering their research outline, internationalization measures, performance indicators, causality and results. |
| Keywords: | Internationalization, Performance, Italy, Firm-level data, Survey |
| JEL: | F1 F2 L2 |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:mib:wpaper:258&r=sbm |
| By: | Wang, Lili (UNU-MERIT/MGSoG); Meijers, Huub (School of Business and Economics, Maastricht University); Szirmai, Eddy (UNU-MERIT/MGSoG) |
| Abstract: | This paper focuses on the role of interregional technology spillovers in the process of industrial growth in Chinese regions in the period 1990-2005. Inflows of FDI increased rapidly from 1990 till 1998, slowing down thereafter. Domestic R&D investment accelerated after 1998. Regional industrial growth benefits from both interregional R&D spillovers and after 1998 from international FDI spillovers. However, in contrast to R&D spillovers, FDI spillovers contribute conditionally, mainly in areas where local R&D stocks are high enough. Interestingly, indirect interregional FDI spillover effects are negative. Foreign investment in one region attracts resources from regions with less FDI, thus having a negative influence on growth of industrial output in neighbouring regions. |
| Keywords: | Technological spillovers, Interregional spillovers, R&D, Foreign direct investment, Industrial growth, Regional growth, Chinese industry |
| JEL: | F43 O14 O33 R11 R12 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2013044&r=sbm |
| By: | Mohnen, Pierre (UNU-MERIT, and SBE, Maastricht University); Hall, Bronwyn H. (University of California at Berkeley, NBER, UNU-MERIT, and SBE, Maastricht University.) |
| Abstract: | This paper reviews the existing evidence regarding the effects of technological and non-technological innovations on the productivity of firms and the existence of possible complementarities between these different forms of innovation. |
| Keywords: | innovation, productivity |
| JEL: | O30 O31 O33 O40 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2013021&r=sbm |
| By: | Figueiredo, Paulo N. (Brazilian School of Public and Business Administration, Getulio Vargas Foundation); Cohen, Marcela (Brazilian School of Public and Business Administration, Getulio Vargas Foundation); Gomes, Saulo (Brazilian School of Public and Business Administration, Getulio Vargas Foundation) |
| Abstract: | Although much has been written about organizational-level learning, there is a dearth of empirical studies that explore the role of changes in the nature of firm-centred learning mechanisms in affecting inter-firm differences and similarities in the accumulation of innovation capabilities, especially among firms from emerging economies, known as latecomers. By examining the relationships between these issues based on fieldwork evidence from 13 natural resource-processing firms in Brazil (1950-2000s), this study found that: (1) firms that combined the use of external and internal learning mechanisms with increased intensity and quality achieved higher innovation capability levels than firms that used these learning mechanisms with limited frequency and unchanged quality over time; (2) the relative importance of both external and internal learning mechanisms changed as firms' capabilities approached world-leading levels; (3) some combinations of external and internal learning mechanisms were associated with the attainment of particular innovation capability levels. Therefore, if latecomer firms expend limited efforts in using and deliberately changing the intensity and, mainly, the quality of both external and internal learning mechanisms over time, they will deepen their innovation capabilities slowly and will remain innovation 'followers' rather than becoming world-leading innovators. Using a novel approach that explores the relationship between latecomer firms' innovation capability-building and the extent of changes in the underlying learning mechanisms, this paper furthers our understanding of the nature and dynamics of learning and its role as a primary source of firms' international innovation performance. It also challenges recent approaches that seem to over emphasize open learning processes and post-Chandlerian forms of learning as the leading sources of firms' innovation capabilities. |
| Keywords: | Innovation capability building, learning mechanisms, latecomer firms, natural resources, multiple case-study, Brazil |
| JEL: | O12 O32 O33 M10 Q20 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2013007&r=sbm |
| By: | Figueiredo, Paulo N. (EBAPE, Brazilian School of Public and Business Administration) |
| Abstract: | This article examines outcomes that are achieved by latecomer firms from the accumulation of innovative capabilities. Drawing on fieldwork evidence from pulp and paper firms in Brazil (1950-2010), it was found that: (1) the firms accumulated innovative capabilities that turned them into world leaders in the segment of the global pulp and paper industry based on eucalyptus forestry; (2) besides this technological catch-up, the accumulation of these innovative capabilities resulted in outcomes that generated benefits within these firms such as (i) implemented inventive and innovative activities; (ii) consistent improvement of several parameters of operational and environment-related performance; (iii) varied patterns of corporate growth; (3) these outcomes were achieved not only by research-based and patent-related capabilities but mainly by a mix of innovative capability levels, with differing degrees of novelty and complexity for diverse technological functions. Therefore, the accumulation of a wide range of types and levels of innovative capabilities does pay off for the innovative firms, their industries and, ultimately, their economies. By combining a novel approach to examining firm capabilities with findings from an inductive fieldwork, this article provides new empirical and methodological insights for the long-standing debate on innovative capabilities as the fundamental source of firm competitive performance. The article draws managers' attention to the importance of a multiplicity of types and levels of capabilities to achieve relevant outcomes, and policy makers in developing economies to adopt a comprehensive view on innovative activities and place firm-centred innovation capability accumulation at the centre of industrial innovation policies. |
| Keywords: | innovative capability accumulation, latecomer firms, catch-up, competitive performance, Brazil |
| JEL: | M16 O32 Q16 Q18 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2013048&r=sbm |
| By: | Cevikarslan, Salih (UNU-MERIT, and SBE, Maastricht University) |
| Abstract: | The aims of this paper are twofold. The first is to analyse the interaction between research and development (R&D) activities of firms and heterogeneous consumer preferences in structuring the evolution of an industry. The second is to explore the effects of patent life and patent breadth on market outcomes. To answer these research questions, an evolutionary, multi-agent based, sector-level cumulative innovation model is designed. The model addresses supply and demand sides of the market simultaneously with the co-evolution of heterogeneous consumer preferences, heterogeneous firm knowledge bases and technology levels at the micro level. In line with the evolutionary modelling tradition, we have a search algorithm-innovation and imitation of products by firms - a selection of algorithm-revealed preferences of the consumers - and a population of objects in which variation is expressed and on which selection operates: namely, firms (Windrum, 2004). Firms compete on quality and price of their products in an oligopolistic market whereas consumers, constrained by their computational limits, act to maximize their utility with their product choices in a boundedly rational way. There is continuous firm entry and exit depending on the competitive performance of the firms. |
| Keywords: | Patents, industrial dynamics, evolutionary economics, agent-based modelling |
| JEL: | B52 L11 O34 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2013020&r=sbm |