nep-sbm New Economics Papers
on Small Business Management
Issue of 2014‒06‒22
eleven papers chosen by
Joao Carlos Correia Leitao
Universidade da Beira Interior and Universidade de Lisboa

  1. Innovation in the Service Sector and the Role of Patents and Trade Secrets By MORIKAWA Masayuki
  2. Cooperative R&D networks among firms and public research institutions By Marco Marinucci
  3. The Distribution of Employment Growth Rates in Canada: The Role of High-Growth and Rapidly Shrinking Firms By Dixon, Jay; Rollin, Anne-Marie
  4. Finance and Productivity Growth: Firm-level Evidence By Levine, Oliver; Warusawitharana, Missaka
  5. On firms' product space evolution: the role of firm and local product relatedness By Alessia LO TURCO; Daniela MAGGIONI
  6. Innovation ouverte : vers la génération 2.0 By Nicolas JULLIEN; Julien Pénin
  7. Proling the indebtedness of Irish SMEs By McCann, Fergal
  8. Patent Trolls, Litigation, and the Market for Innovation By Haus, Axel; Juranek, Steffen
  9. Sensitivity to Shocks and Implicit Employment Protection in Family Firms By Bjuggren, Carl Magnus
  10. Peer-to-peer lending to small businesses By Mach, Traci L.; Carter, Courtney M.; Slattery, Cailin R.
  11. Cluster Policies and Firm Selection: Evidence from France By Lionel Fontagné; Pamina Koenig; Florian Mayneris; Sandra Poncet

  1. By: MORIKAWA Masayuki
    Abstract: This paper, using Japanese firm-level data, presents findings about innovative activities in the service sector and the role of patents and trade secrets on innovation. According to the analysis, first, service firms have fewer product innovations than do manufacturing firms, but the productivity of innovative service firms is very high. Second, service firms have a low propensity for holding patents, but their holding of trade secrets is comparable to that of the manufacturing firms. Third, patents and trade secrets have positive relationships with product innovations, and the effects are quantitatively similar in magnitude in both the manufacturing and the service sectors. On the other hand, a positive relationship between trade secrets and process innovations is found only in the manufacturing sector. These results suggest a pivotal role of the law protecting trade secrets on innovation and productivity growth in the service sector.
    Date: 2014–06
  2. By: Marco Marinucci (Bank of Italy)
    Abstract: This paper provides theoretical background to the increasing R&D cooperation among firms and public research institutions. We find that R&D spillovers may impede cooperation among firms or research institutions even when the cost of forming a link is negligible. Further, the presence of heterogeneous players results in different concepts of network regularity but also increases the number of possible pairwise stable networks. Consequently, stronger concepts of stability are needed to study networks in which players are not homogeneous.
    Keywords: networks, innovation, R&D cooperation, spillovers
    JEL: C70 L14 O30
    Date: 2014–06
  3. By: Dixon, Jay; Rollin, Anne-Marie
    Abstract: This paper uses data from Statistics Canada's Longitudinal Employment Analysis Program database to study the distribution of annual employment growth rates in Canada over the 2000-to-2009 period, with a special emphasis on firms in the tails of the distribution, referred to here as High-Growth Firms (HGFs) and Rapidly Shrinking Firms (RSFs). The study has three objectives. First, it describes the distributions of employment growth rates in Canada to see whether they are consistent with observations in other countries. Second, it quantifies the contribution of HGFs and RSFs to aggregate job creation and destruction. The third objective is to examine, using quantile regression techniques, the role of firm size and firm age in the performance of HGFs and RSFs.
    Keywords: Business adaptation and adjustment, Business performance and ownership, Employment and unemployment, Entry, exit, mergers and growth, Labour, Small and medium-sized businesses
    Date: 2014–05–15
  4. By: Levine, Oliver (University of Wisconsin); Warusawitharana, Missaka (Board of Governors of the Federal Reserve System (U.S.))
    Abstract: Using data on a broad set of European firms, we find a strong positive relationship between the use of external financing and future productivity (TFP) growth within firms. This relationship is robust to various measures of financing and productivity, and strengthens as financing costs increase. We provide evidence against a reverse-causality explanation by showing that this relationship arises from the component of TFP that is outside the information set of the firm. These findings indicate that financial development supports productivity growth within firms, and helps explain why economic activity remains persistently depressed following financial crisis.
    Keywords: Finance-growth nexus; financial crisis; total factor productivity (TFP)
    Date: 2014–02–24
  5. By: Alessia LO TURCO (Universit… Politecnica delle Marche, Dipartimento di Scienze Economiche e Sociali); Daniela MAGGIONI (Universit… Politecnica delle Marche, Dipartimento di Scienze Economiche e Sociali)
    Abstract: We explore the role of firm and local product-specific capabilities in fostering the introduction of new products in the Turkish manufacturing. Firms' product space evolution is characterised by strong cognitive path dependence which, however, is relaxed by firmheterogeneity in terms of size, efficiency and international exposure. The introduction of new products in laggard Eastern regions, which is importantly related to the evolution of their industrial output, is mainly affected by firm internal product specific resources. On the contrary, product innovations inWestern advanced regions hinge relatively more on the availability of suitable local competencies.
    Keywords: Firm heterogeneity, Product Innovation
    JEL: D22 O12 O53
    Date: 2014–06
  6. By: Nicolas JULLIEN (LUSSI - Département Logique des Usages, Sciences sociales et Sciences de l'Information - Institut Mines-Télécom - Télécom Bretagne - PRES Université Européenne de Bretagne (UEB), M@rsouin - Môle armoricain de recherche sur la société de l'information et les usages d'internet - Groupement d'intérêt scientifique); Julien Pénin (BETA - Bureau d'Economie Théorique et Appliquée - Université de Strasbourg : CNRS, UNIVERSITÉ DE LORRAINE)
    Abstract: L'innovation ouverte reste un concept très large, un peu fourre-tout, dont les frontières, les formes et les enjeux doivent encore d'être clarifiés. C'est précisément ce que nous nous proposons de faire dans cette contribution. Dans un premier temps, nous définissons le concept d'innovation ouverte et nous le confrontons aux théories existantes en économie et gestion de l'innovation. Cela nous amène notamment à distinguer les deux faces de l'innovation ouverte l'" inside-out et l'" outside-in " et à montrer que seule la première est réellement nouvelle en sciences de gestion. Cela nous permet également d'insister sur l'importance des droits de propriété intellectuels (DPI) et notamment du brevet dans l'essor et le succès des stratégies d'innovation ouverte. Dans un second temps nous présentons les différentes modalités de l'innovation ouverte. Nous insistons essentiellement sur la différence entre les formes traditionnelles d'innovation ouverte qui sont peu ouvertes et peu interactives (par exemple un accord bilatéral de collaboration de recherche entre une entreprise et une université) et des modalités qui ont émergé plus récemment et qui sont largement plus ouvertes et plus interactives (par exemple le crowdsourcing ou l'innovation avec des communautés open source). Nous appelons la première " innovation ouverte 1.0 " et la seconde " innovation ouverte 2.0 ", faisant ainsi référence à l'importance des TIC et notamment de l'Internet dit 2.0 pour favoriser la mise en place des modalités d'innovation ouverte 2.0. Enfin, dans un troisième temps nous analysons les enjeux stratégiques de l'innovation ouverte et nous évaluons la rationalité et les problématiques économiques soulevées par ce type de pratiques.
    Keywords: Innovation ouverte; Open source; Crowdsourcing; Inside-out; Outside-in
    Date: 2014
  7. By: McCann, Fergal (Central Bank of Ireland)
    Abstract: While much is known of the magnitude and performance of SME debt in Ireland, up to this point no measure of SME indebtedness has been available for a representative sample of the population. Survey data on the ratio of Debt to Turnover (DT) for Irish SMEs in 2012 and 2013 are presented here, with the data revealing that one third of SMEs carry no debt, while 84 per cent of SMEs have a DT of less than one third. 7 per cent of SMEs have a DT of greater than one, with a small percentage of rms having debt levels that are orders of magnitude larger than turnover. An analysis of the impact of DT on nancial health indicates that, as DT gets larger, solvency and default risk deteriorate, even at low levels of DT. The impact tapers among rms with the very highest levels of DT - among these heavily indebted rms whose default risk is higher than rms at all other points in the DT distribution, an increased DT does not act to further increase default and solvency risk.
    Date: 2014–05
  8. By: Haus, Axel (Dept. of Management and Microeconomics, Goethe University Frankfurt); Juranek, Steffen (Dept. of Business and Management Science, Norwegian School of Economics)
    Abstract: We examine the role of non-practicing entities (NPEs), often called patent trolls, in patent litigation. We present a theoretical model that predicts that cases with NPE patentees resolve faster. We test this prediction using a hand-collected data set of US patent litigation cases. We find that NPEs challenge larger and more technology intensive firms, and use more valuable patents from technology areas that have a less fragmented ownership base compared to the control group. Controlling for these factors, we find that NPE cases are indeed resolved faster. NPEs help to increase the speed of diffusion of technology into the economy; therefore, increasing the effectiveness of the market for innovation.
    Keywords: Litigation; patents; patent trolls; technology diffusion
    JEL: K00 K41 O34
    Date: 2014–06–11
  9. By: Bjuggren, Carl Magnus (Research Institute of Industrial Economics (IFN))
    Abstract: In this study I present empirical evidence that employment in family firms is less sensitive to performance and product market fluctuations, both at the industry and at the firm level. This supports the idea that family firms are able to offer their employees implicit employment protection. Family firms are believed to have longer time horizons, and are as owners more easily identified with their company and its actions. These are features that could make family firms more cautious in terms of adjusting their employment. I confirm previous findings that family firms are less sensitive to sales fluctuations at the industry level and I show that this also holds for fluctuations in value added. I extend the analysis to show that family firms are less sensitive to unanticipated industry shocks by filtering out the trend component. When investigating idiosyncratic shocks to the firm, I find that family firms are less anxious to translate temporary shocks in performance into changes in employment. By using full population data from tax registers, I am able to identify all family firms, both listed and non-listed. This has previously not been feasible.
    Keywords: Family Firms; Risk Sharing; Employment Protection; Shocks
    JEL: D22 G32 J21 J23 L25
    Date: 2014–06–10
  10. By: Mach, Traci L. (Board of Governors of the Federal Reserve System (U.S.)); Carter, Courtney M. (Board of Governors of the Federal Reserve System (U.S.)); Slattery, Cailin R. (University of Pennsylvania)
    Abstract: The current paper examines loan-level data from Lending Club to look at peer-to-peer borrowing by small businesses. We begin by looking at characteristics of loan applications that were and were not funded and then take a more in-depth look at funded applications. Summary statistics show an increasing number of small business loan applications over time. Beginning in 2010—when consistent measures of loan purpose were recorded for all applications--loan applications for small businesses were on average less likely than loans for other purposes to have been funded. However, logistic regression results that control for the quality of the application show that, holding all else constant, applications for a loan for a small business were almost twice as likely to have been funded than loans for other purposes. Focusing on funded applications, we note that funded business loans were slightly larger on average than loans funded for other purposes but paid similar interest rates. However, relative to small business loans from traditional sources, peer-to-peer small business borrowers paid an interest rate that was about two times higher. Regression results that control for application quality show that peer-to-peer loans for small businesses were charged almost a percentage point interest rate premium over non-business loans. Logistic regression results that look at loan performance indicate that loans for small businesses were much more likely to be delinquent or charged off.
    Keywords: Peer-to-peer lending; small business; alternative small business borrowing; lending club
    Date: 2014–01–01
  11. By: Lionel Fontagné (CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, Department of Economics - European University Institute); Pamina Koenig (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - École des Hautes Études en Sciences Sociales (EHESS) - École des Ponts ParisTech (ENPC) - École normale supérieure [ENS] - Paris - Institut national de la recherche agronomique (INRA)); Florian Mayneris (UCL - Université Catholique de Louvain - Université Catholique de Louvain (UCL) - Belgique, CORE - Center of Operation Research and Econometrics [Louvain] - Université Catholique de Louvain (UCL) - Belgique); Sandra Poncet (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne)
    Abstract: In this paper, we shed light on the selection of the benefi ciaries from the French competitiveness cluster policy which was launched in 2005 and extended to 2012. We disentangle the selection and self-selection eff ects, as emphasized in the theoretical literature on regional and industrial policy. Our main conclusion is that winners were (self-)selected at both steps of the procedure, and that this holds for the three cluster types: worldwide clusters , potentially worldwide clusters and national clusters . We thus provide a methodology which allows us to contrast the e ffective outcomes of the selection process and the official objectives of cluster policies in terms of targeting, and which thus helps in their econometric evaluation.
    Keywords: Competitiveness, clusters, international trade, fi rm selection
    Date: 2013–12–09

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