nep-sbm New Economics Papers
on Small Business Management
Issue of 2014‒01‒10
six papers chosen by
Joao Carlos Correia Leitao
Universidade da Beira Interior and Universidade de Lisboa

  1. Covariance structure analysis of innovation and ICT use among Japanese innovative SMEs By Idota, Hiroki; Bunno, Teruyuki; Tsuji, Masatsugu
  2. Complementarity, Fragmentation, and the Effects of Patent Thickets By NAGAOKA Sadao; NISHIMURA Yoichiro
  3. Structure of technology evolution: The way on which ICT industry emerged in Korea By Kim, Kibae; Jung, Sungdo; Lee, Changjun; Hwang, Junseok
  4. The level of CEO compensation for the short and long-term - a view on high-tech firms By Paula Faria; Franscisco Vitorino Martins; Elísio Brandão
  5. How to Define and Analyze Business Model Innovation in Service By Xavier Pavie; Eva Hsu; Hanns Justus Tillman Rödle; Raquel Orozco Tapia
  6. Do Small Businesses Still Prefer Community Banks? By Berger, Allen N.; Goulding, William; Rice, Tara

  1. By: Idota, Hiroki; Bunno, Teruyuki; Tsuji, Masatsugu
    Abstract: One of the common features of innovative SMEs identified from our previous surveys and in-depth interviews is innovation capability accumulated inside the firm, which enables them to create new products which meet customer needs and to cooperate with the other firms. The factors that SMEs achieve innovation are complex, and the causal relationships between factors have not been sufficiently clarified yet. This paper attempts to clarify the innovation process using covariance structure analysis, in particular focusing on the role ICT. Seven hypotheses are demonstrated by two models. The results obtained are as follows: (i) top management's participation and employee's motivation in the innovation process promote the effect of introducing ICT; (ii) this effect of ICT use raises innovation capability; in particular ability to connect external linkages; (iii) ICT use, innovation capability and external linkages enhance innovation activity; and (iv) effect of ICT use and innovation capability promote innovation directly. Thus this paper identifies that the effect of introducing ICT promotes innovation, and it is indispensable for innovation in Japanese SMEs. --
    Keywords: ICT,Innovation,innovation capability,external linkages,covariance structure analysis
    Date: 2013
  2. By: NAGAOKA Sadao; NISHIMURA Yoichiro
    Abstract: This paper empirically investigates the effects of patent thickets. One unique feature of our study is to identify two sources of patent thickets: (1) complementarity as measured by the number of the patents to be used jointly with the focal patent in commercialization, and (2) ownership fragmentation as measured by the number of firms whose patents are cited by an examiner for the granting of the focal patent. There are three major findings. First, there is a significant difference between complex industry sectors and discrete ones regarding complementarity, while the difference regarding fragmentation at the patent level is small. Second, more complementarity is significantly associated with the importance of first mover advantage in research and development (R&D) and (less significantly) with that in commercialization, while fragmentation has little effect on them. Consistent with this finding, complementarity is associated with high patent value. Third, cross licensing motivation significantly accounts for patenting propensity while blocking motivation does not. Complementarity is significantly associated with more patenting for cross licensing, which facilitates both combining the inventions of different firms and preventing the risk of being held up. Furthermore, it does not invite patenting for blocking. Thus, we do not see significantly negative consequences of patent thickets on R&D, as seen by incumbents. At the same time, it is important to pay focus on policy to avoid granting patents to low quality inventions and to facilitate the mechanism of ex-ante contracting in complex industry sectors where patenting motivations are high.
    Date: 2014–01
  3. By: Kim, Kibae; Jung, Sungdo; Lee, Changjun; Hwang, Junseok
    Abstract: The role of ICT in the economic growth in Korea is a great attraction to the telecommunication society interested in the relationship among ICT, innovation policy and economic growth. However, prior research concentrates on investigating the effect of policy on innovation and economic growth, but misses the mechanism how a policy affects the technological system which interacts with public institutes, universities and private firms. In this paper, we analyze the structure of technology evolution in Korea with empirical data of patents to understand the prosperity of ICT sector in Korea. To do so, we define a technology network, or a set of nodes and links, representing technology fields and the relations between the fields, respectively, and measure the network topology and position per year between 1970 and 2010. Our results propose that the technology network maintains the scalefree topology, but the entities of the hub positions are gradually replaced emerging entities on the invariant network topology. Our findings are expected to motivate ICT innovation studies to understand the evolutionary mechanism of ICT industry in the systematic perspective of technology, and improve the policy of ICT innovation. --
    Keywords: Industry Change,Information and Communication Technology,Network Analysis,Patent Analysis
    Date: 2013
  4. By: Paula Faria (School of Economics and Management, University of Porto); Franscisco Vitorino Martins (School of Economics and Management, University of Porto); Elísio Brandão (School of Economics and Management, University of Porto)
    Abstract: This study examines the relationship between corporate performance and the Chief Executive Officer compensation in high-technology firms in the S&P 1500. The total CEO compensation and short and long-term compensations were tested regarding corporate performance. A panel data SUR model is estimated and describes the total compensation and cash compensation as a proportion of total pay for the period between 2000 and 2010 in high-technologies firms. The findings indicate that there is a strong and positive relation between CEO compensation and firm performance. This econometric study provides a better understanding on the relationship between CEO compensation and performance in high-technologies firms.
    Keywords: Corporate finance, Executive compensation, Accounting
    JEL: G30 M52 M41
    Date: 2013–12
  5. By: Xavier Pavie (PhD Program - ESSEC Business School); Eva Hsu (The Chinese University of Hong Kong - The Chinese University of Hong Kong); Hanns Justus Tillman Rödle (School of Business, Economics and Law - University of Gothenburg - (SWEDEN)); Raquel Orozco Tapia (Universidad Argentina de la empresa of Buenos Aires - Universidad Argentina de la empresa of Buenos Aires)
    Abstract: This research deals with the process of business model innovation in services. Definitions and explanations of both general innovation terminologies as well as specific service related once will be given and discussed. Moreover, reasons and implementation strategies will be identified and discussed. Last but not least a case will be elaborated how innovative companies in products can become innovative in services.
    Keywords: Business Model ; Business Model Canvas ; Business Model Innovation ; Change Management ; Incremental Innovation, Innovation Management, Innovation Strategy ; Radical Innovation ; Service Innovation ; Service Management
    Date: 2013–12
  6. By: Berger, Allen N. (Board of Governors of the Federal Reserve System (U.S.)); Goulding, William (Board of Governors of the Federal Reserve System (U.S.)); Rice, Tara (Board of Governors of the Federal Reserve System (U.S.))
    Abstract: We formulate and test hypotheses about the role of bank type – small versus large, single-market versus multimarket, and local versus nonlocal banks – in banking relationships. The conventional paradigm suggests that "community banks" – small, single market, local institutions – are better able to form strong relationships with informationally opaque small businesses, while "megabanks" – large, multimarket, nonlocal institutions – tend to serve more transparent firms. Using the 2003 Survey of Small Business Finance (SSBF), we conduct two sets of tests. First, we test for the type of bank serving as the "main" relationship bank for small businesses with different firm and owner characteristics. Second, we test for the strength of these main relationships by examining the probability of multiple relationships and relationship length as functions of main bank type and financial fragility, as well as firm and owner characteristics. The results are often not consistent with the conventional paradigm, perhaps because of changes in lending technologies and deregulation of the banking industry.
    Keywords: Banks; relationships; small business; government policy
    JEL: G21 G28 G34
    Date: 2013–12–01

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