nep-sbm New Economics Papers
on Small Business Management
Issue of 2014‒07‒21
eight 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 Masayuki Morikawa
  2. Constraints, Determinants of SME Innovation, and the Role of Government Support By OUM Sothea; Narjoko Dionisius; Charles HARVIE
  3. Horizon 2020 e COSME: ricerca, innovazione, competitività e accesso al credito per il rilancio dell’industria e delle PMI By Andrea Sartori
  4. Networks and Manufacturing Firms in Africa: Results from a Randomized Field Experiment By Marcel Fafchamps; Simon Quinn
  5. Railroad expansion and entrepreneurship: Evidence from Meiji Japan By John Tang
  6. When does cash matter? Evidence for private firms By Paul Ehling; David Haushalter
  7. Dilemma in Individual Collaboration for Invention: Should We be Similar or Diverse in Knowledge? By Huo, Dong; Motohashi, Kazuyuki
  8. Spinoff and Clustering: a return to the Marshallian district By Lucia Cusmano; Andrea Morrison; Enrico Pandolfo

  1. By: Masayuki Morikawa
    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.
    JEL: O31 O34 L80
    Date: 2014
  2. By: OUM Sothea (Economic Research Institute for ASEAN and East Asia (ERIA)); Narjoko Dionisius (Economic Research Institute for ASEAN and East Asia (ERIA)); Charles HARVIE (Centre for Small Business and Regional Research School of Economics, University of Wollongong, Australia)
    Abstract: This paper provides an empirical analysis of potential constraints to SMEs upgrading their capability to innovate, and assesses the effectiveness of government support in overcoming these constraints. The justification for government support is that market failures can hinder SMEs’ access to information, finance, technology, and human resources. This paper focuses on the impact of the perceived effectiveness of government support through business development services in terms of providing: (i) training; (ii) counselling and advice; (iii) technology development and transfer; (iv) information; (v) business linkages; (vi) financing; and (vii) a conducive business environment. The effectiveness of this support is evaluated against the ability of SMEs to innovate.
    Keywords: : SMEs, constraints, innovation, government support, and developing Asia.
    JEL: L20 L25
    Date: 2014–10
  3. By: Andrea Sartori
    Abstract: The aim of the research is to analyse and summarise two EU programmes within the EU Multiannual Financial Framework (2014-2020): Horizon 2020 and COSME (Competitiveness of Enterprises and Small and Mediumsized Enterprises). They are conceived to stimulate, respectively, research, innovation, and competitive techno-science and competitiveness of productive systems. The research is divided into three parts. The first part outlines the basic features of the Multiannual Financial Framework (2014-2020) in quantitative and qualitative terms with particular reference to Horizon 2020 and COSME. The second part examines Horizon 2020 programme for research and innovation, identifying and describing its legal basis, architecture, budget breakdown and the three pillars: “Excellence science”, “Industrial leadership”, “Societal Challenges”. The analysis focuses on the second pillar detailing the measures to encourage the enabling and industrial technologies, access to risk finance (equity and debt), innovation in SMEs. A specific focus is devoted to the “SME Instrument”. In the third part, similarly, is performed a description of COSME, the programme for the competitiveness of enterprises, deepening the specific actions to internationalisation, to improve access to markets, businesses framework conditions, culture of entrepreneurship and, in particular, access to finance.
    Keywords: Horizon 2020; Orizzonte 2020; COSME; Europa 2020; Quadro finanziario pluriennale; programmi comunitari; ricerca; sviluppo; innovazione; competitività; accesso al credito; internazionalizzazione; industria; piccole e medie imprese; PMI; Community programs; research; development; innovation; competitiveness; access to credit; internationalization; industry; small and medium-sized enterprises; SMEs;
    JEL: O30 O31 O38 L5 I20 I28 H50 H54
    Date: 2014
  4. By: Marcel Fafchamps; Simon Quinn
    Abstract: We run a novel field experiment to link managers of African manufacturing firms. The experiment features exogenous link formation, exogenous seeding of information and exogenous assignment to treatment and placebo. We study the impact of the experiment on firm business practices outside of the lab. We find that the experiment successfully created new variation in social networks. We find some limited evidence of diffusion of management practices, particularly in terms of firm formalisation and innovation. Such diffusion appears to be a combination of diffusion of innovation and simple imitation
    JEL: D22 L26 O33
    Date: 2014
  5. By: John Tang
    Abstract: Railroads in Meiji Japan are credited with facilitating factor mobility as well as access to human and financial capital, but the impact on firms is unclear. Using a newly developed firm-level dataset and a difference-in-differences model that exploits the temporal and spatial variation of railroad expansion, I assess the relationship between railways and firm activity across Japan. Results indicate that railroad expansion corresponded with increased firm activity, particularly in manufacturing, although this effect is mitigated in less populous regions. These findings are consistent with industrial agglomeration in areas with larger markets and earlier development among both new and existing establishments.
    JEL: L26 N75 O53
    Date: 2013
  6. By: Paul Ehling (BI Norwegian business school); David Haushalter (Sheal college of business)
    Abstract: Using a database of more than 180,000 private companies from 2000 to 2009, we find that the benefits of holding more cash vary substantially with a firm’s size and the conditions it faces. Cash holdings matter most for small firms: when there are negative shocks to industry or macroeconomic conditions, a small firm’s cash holdings are positively associated with changes in its sales and assets. Cash is less important for other conditions. Differences in the benefits of cash holdings between large and small firms are traced to a firm’s ability – and willingness – to increase leverage when there is a cash shortfall.
    Keywords: cash holdings, benefits of cash holdings, private companies
    JEL: G30 G32 G35
    Date: 2014–06
  7. By: Huo, Dong; Motohashi, Kazuyuki
    Abstract: This study integrates theories relevant to collaborative knowledge creation and provides evidence to discover effects of knowledge diversity on collaborative knowledge creation. The analysis uses a sample comprising 38,500 granted U.S. utility patents involving two collaborating inventors, from application year 1991 to 2005. Interindividual knowledge diversity is thought to affect collaborative knowledge creation in three dimensions: increasing probability of excellent ideas, increasing probability of disagreements, and lowering knowledge assimilation. Furthermore, these impacts are conditional on two proposed moderators: technology scope and affiliation scope. Empirical evidence supports the positive effect of knowledge diversity weakening as the scope of technology broadens. The effect also differs depending upon whether the collaboration occurs between organizations, within one organization, or outside any organization.
    Keywords: invention, collaboration, knowledge diversity, knowledge quality, technology scope, affiliation scope
    JEL: O31 O32
    Date: 2014–02
  8. By: Lucia Cusmano; Andrea Morrison; Enrico Pandolfo
    Abstract: The origin and growth of industrial clusters have attracted the attention of scholars and policy makers since the early era of industrialisation. The seminal work by Alfred Marshall has represented the foundation for a rich strand of literature, whose late expansion and refinement were inspired by the experiences of localised development in emerging regions. This is the case of Italian industrial districts, which have emerged as a territorial model of industrial agglomeration, decentralised production and flexible specialisation. Recently, the traditional explananda of the emergence of clusters have been reconsidered. The evidence about the growth of clusters in areas that did not have obvious natural advantages, nor the first comers’ benefits of early agglomeration economies, has inspired a different conceptualisation, which draws consistently from the evolutionary perspective on industrial dynamics. Klepper (2001, 2010) shows that more successful firms have higher spin-off rates and their spin-offs tend to outperform competitors. Organizational reproduction and heredity are thus identified as the primary forces underlying clustering. The present paper investigates the emergence and evolution of an Italian industrial district, the Sassuolo tile district, one of the largest and most successful ceramic districts in the world, and a paradigmatic example of Italian Marshallian district. Overall, our findings confirm that organizational reproduction and heredity represent primary mechanisms of clustering. However, our results also show that spin-offs do not perform better than non-spin-offs. It appears that, in dense industrial environments and social networks, competitive advantages can also be acquired or built through other channels.
    Date: 2014–07

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