nep-sbm New Economics Papers
on Small Business Management
Issue of 2014‒09‒25
seven papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. A territorial approach to R&D subsidies: Empirical evidence for Catalonian firms By Agustí Segarra; Mercedes Teruel; Miquel Angel Bove
  2. Do specialists exit the firm outsourcing its R&D? By Wenjing Wang
  3. Financial investment constraints. A panel threshold application to German firm level data. By Artur Tarassow
  4. Imported Intermediates and Productivity: Does Absorptive Capacity Matter? A Firm-Level Analysis for Uruguay By Adriana Peluffo; Dayna Zaclicever
  5. Why do Russian firms invest abroad? A firm level analysis By Amar Iqbal ANWAR; Mazhar Yasin MUGHAL
  6. Flying the nest: How the home department shapes researchers’ career paths. By Hottenrott, Hanna; Lawson, Cornelia
  7. Irish SME property exposure: what do we know? By McCann, Fergal; McIndoe-Calder, Tara

  1. By: Agustí Segarra (Research Group of Industry and Territory, Department of Economics – CREIP, Universitat Rovira i Virgili); Mercedes Teruel (Research Group of Industry and Territory, Department of Economics – CREIP, Universitat Rovira i Virgili); Miquel Angel Bove (Research Group of Industry and Territory, Department of Economics – CREIP, Universitat Rovira i Virgili)
    Abstract: Using a database of 2,263 responses to R&D public calls in Catalonia, during the period 2007–2010, this paper proceeds to analyse the potential interaction of the territorial and policy dimensions with the propensity to apply for, and be awarded, a public R&D subsidy. Controlling for characteristics at the firm and project level, we estimate models using a twostep procedure. In the first step, our results suggest that large firms which export and which belong to high-tech manufactures are more likely to participate in a public R&D call. Furthermore, both urban location and past experience of such calls have a positive effect. Our territorial proxy of information spillovers shows a positive sign, but this is only significant at intra-industry level. Membership of one of the sectors prioritized by the Catalan government, perhaps surprisingly, does not have a significant impact. In the second step, our results show that cooperative projects, SMEs or old firms shows a positive effect on the probability of obtaining a public subsidy. Finally, the cluster policy does not show a clear relationship with the public R&D call, suggesting that cluster policies and R&D subsidies follow different goals. Our results are in line with previous results in the literature, but they highlight the unequal territorial distribution of the firms which apply and the fact that policymakers should interlink the decision criteria for their public call with other policies.
    Keywords: Evaluation, R&D policies, territorial approach, clusters
    JEL: L53 L25 O38
    Date: 2014–09
  2. By: Wenjing Wang (Department of Economics and Business, Aarhus University, Denmark)
    Abstract: Do specialists exit the firm increasingly outsourcing its research and development (R&D) work? Although this question is critical in understanding how R&D outsourcing links to innovation performance, the answer is not yet clear. This paper proposes that the optimal level of firm’s internal employment of R&D specialists decreases with the deepening of R&D outsourcing but increases with the broadening of R&D outsourcing. These relations can be inferred from previous empirical studies as well as our theoretical analysis, and are supported by the empirical evidence from estimations of correlated random effects (CRE) Tobit, CRE selection and CRE fractional response models on a panel dataset of Danish firms.
    Keywords: Correlated random effect models, employment of R&D specialists, R&D strategy, R&D outsourcing breadth and depth
    JEL: J21 M51 O32
    Date: 2014–09–03
  3. By: Artur Tarassow (Universität Hamburg (University of Hamburg))
    Abstract: This paper attempts to test whether financial supply-side shifts explain the low-investment climate of private firms in Germany. The core contention is that a firm's financial position contributes to its access to external finance on credit markets. Special emphasizes is put on small and medium-sized enterprises as these are usually assumed to be more informationally opaque. The application of a non-linear panel threshold model makes it possible to group firms endogenously according to their financial position. Various observable balance sheet indicators such as leverage, interest coverage ratio or measures of solvency are used as potential threshold variables. The firm-level panel dataset covers the period between 2006 and 2012. We find strong evidence for a positive but non-linear nexus between cash flow and fixed investments, suggesting that financially fragile firms rely more heavily on internal funds. Surprisingly, firm size does not seem to be a relevant grouping variable.
    Keywords: Non-linear panel model, Firm investment, Corporate finance, Business cycle, Financial frictions, Credit rationing, Cash flow, Monetary policy
    JEL: C23 D24 E22 E30 G31
    Date: 2014–09
  4. By: Adriana Peluffo (Instituto de Economía Facultad de Ciencias Económicas Universidad de la República); Dayna Zaclicever (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República)
    Abstract: International trade is considered a vehicle for technology diffusion, which in turn can induce productivity growth. Particularly, trade may give domestic firms access to a larger variety and/or better quality of intermediate or capital inputs in which new technologies are embodied. However, the lack of sufficiently skilled labour, an issue especially relevant for small developing countries, may prevent firms from taking advantage of these technologies. Using a panel of Uruguayan manufacturing firms covering the period 1997-2008, we explore the impact of imported inputs on firms’ productivity and evaluate whether the effect is mediated by the firm’s absorptive capacity (proxied by the proportion of skilled labour). We apply an indirect (two-stage) approach by first estimating firms’ productivity and then using impact evaluation techniques to analyze causality between imported inputs and productivity. Our results show that imported intermediates have an enhancing effect on Uruguayan firms’ productivity and absorptive capacity plays a role on this effect.
    Keywords: productividad, importaciones, capacidad de absorción
    JEL: F14 D24 O33
    Date: 2013–07
  5. By: Amar Iqbal ANWAR; Mazhar Yasin MUGHAL
    Abstract: Why do Russian firms invest abroad? A firm level analysis
    Date: 2014–09
  6. By: Hottenrott, Hanna; Lawson, Cornelia (University of Turin)
    Abstract: Academic researchers face mobility related decisions throughout their careers. We study the importance of team and organisational characteristics of the home departments for career choices of departing researchers in the fields of science and engineering at higher education institutions in Germany. We find that the organisational environments–the nests–shape career paths. Research funding, research performance in terms of patents and publications as well as the industry ties of department heads shape job choices. In particular, public research grants increase the probability that departing researchers take a research job at a university or public research centre, while grants from industry increase the likelihood that they take a job in industry. Publication performance of the department head relates to R&D jobs in public, but not in industry and patents predict the probability that departing researchers will move to small and medium-sized firms. For these firms seeking technological knowledge from former university employees may be particularly crucial. Academic start-ups are more likely to be a job destination for departing researchers from technical universities, from departments with higher publication output and with a research focus on experimental development.
    Date: 2014–07
  7. By: McCann, Fergal (Central Bank of Ireland); McIndoe-Calder, Tara (Central Bank of Ireland)
    Abstract: An overhang relating to the pre-crisis property investment of Irish Small and Medium Enterprises has been identified as a potential drag on a recovery in employment, investment and output. This Letter aims to provide information from survey and loan-level data which can help to quantify the extent of firms' property-related borrowing. Survey data show that a minimum of one fifth of Irish SMEs have direct exposure to property debt. Loan-level data show that at least 10 per cent of firms with bank debt have exposure to property investment at the same bank, with this figure rising to 16 per cent when including Buy-To-Let mortgages for a subset of the data. Data on loan default suggests that property-related borrowing has had a detrimental impact on firms: SMEs with property-related borrowings have a loan default rate of 43 per cent, compared to 23 per cent for those without property exposure.
    Date: 2014–08

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