nep-sbm New Economics Papers
on Small Business Management
Issue of 2014‒10‒22
sixteen papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. The capital structure of Polish small and medium-sized enterprises and its impact on their competitiveness By Robert Wolañski
  2. Agglomeration and innovation By Carlino, Gerald A.; Kerr, William R.
  3. Japanese Small and Medium-sized Enterprises Export Decisions: The Role Overseas Market Information By Tomohiko INUI; Keiko ITO; Daisuke MIYAKAWA
  4. E-Skills, Brains and Performance of the Firms: ICT and Ability of Firms to Conduct Successful Projects in Luxembourg By Anissa Chaibi; Adel Ben Youssef; Leila Peltier- Ben Aoun
  5. Demografía de Empresas en Chile By Gonzalo Suazo; Josué Pérez
  6. Is job creation dependent on the local context? An analysis of French industrial establishments over the period 2004-2010 By Aziza Garsaa; Nadine Levratto
  7. Transnational ties and performance of immigrant entrepreneurs: the case of IT industry in Italy By Jan Brzozowski; Marco Cucculelli; Aleksander Surdej
  8. Logistics Performance: a Theoretical Conceptual Model for Small and Medium Enterprises By Rui Mansidão; Luís A. G. Coelho
  9. Territorial Innovation Dynamics: a Knowledge Based Perspective By Rani Jeanne Dang; Karine Roux; Christian Longhi; Damien Talbot; Catherine Thomas
  10. Firm age and the margins of international trade: Comparable evidence from five European countries By Joachim Wagner
  11. The Exporting and Productivity Nexus: Does Firm Size Matter? By Cassey LEE
  12. SMEs are more important than you think! Challenges and opportunities for EU exporting SMEs By Lucian, Cernat; Ana, Norman-López; Ana, Duch T-Figueras
  13. Regional benchmarking in the smart specialisation process: Identification of reference regions based on structural similarity By Mikel Navarro; Juan José Gibaja; Susana Franco; Asier Murciego; Carlo Gianelle; Alexander Kleibrink; Fatime Barbara Hegyi
  14. The Technological Resilience of U.S. Cities By Pierre-Alexandre Balland, David Rigby & Ron Boschma; David Rigby; Ron Boschma
  15. Local intermediate inputs and the shared supplier spillovers of foreign direct investment By Kee, Hiau Looi
  16. Estimating Direct and Indirect Effects of Foreign Direct Investment on firm Productivity in the Presence of Interactions between Firms By Sourafel Girma; Yundan Gong; Holger Görg; Sandra Lancheros

  1. By: Robert Wolañski (Faculty of Management, University of Warsaw)
    Abstract: The article discusses the problem of the relationship between the capital structure and the level of competitiveness of SMEs in Poland. The objective of the article is to determine the impact capital structure has on the level of competitiveness of SMEs in Poland. The capital structure of SMEs is dominated by internal funds. Among external sources of financing, bank loans and leasing are predominant. This structure is consistent with the relevant theoretical models. The study shows no significant differences in the financing of current operations, innovation, and competitiveness improvement. The lack of relationship indicates that the capital structure of SMEs has little impact on their competitiveness. The results of the study demonstrate that all external sources of financing improve the competitiveness of SMEs, but the strength of their impact is different. The strongest impact is shown for venture capital, guarantees, and leasing; the weakest – for bank loans and the issuance of shares and bonds. A significant factor is the degree of alignment of a particular financing source with the special needs of SMEs. This significant relationship is demonstrated for all the sources most commonly used by SMEs.
    Keywords: : SMEs, competitiveness, capital structure
    JEL: L25 L26
    Date: 2013–05
  2. By: Carlino, Gerald A. (Federal Reserve Bank of Philadelphia); Kerr, William R. (Harvard University, Bank of Finland, and NBER)
    Abstract: Draft chapter for the forthcoming Handbook of Regional and Urban Economics, Vols. 5A and 5B This paper reviews academic research on the connections between agglomeration and innovation. The authors first describe the conceptual distinctions between invention and innovation. They then discuss how these factors are frequently measured in the data and note some resulting empirical regularities. Innovative activity tends to be more concentrated than industrial activity, and the authors discuss important findings from the literature about why this is so. The authors highlight the traits of cities (e.g., size, industrial diversity) that theoretical and empirical work link to innovation, and they discuss factors that help sustain these features (e.g., the localization of entrepreneurial finance).
    Keywords: Agglomeration; Clusters; Innovation; Invention; Entrepreneurship
    JEL: J2 J6 L1 L2 L6 O3 R1 R3
    Date: 2014–08–01
  3. By: Tomohiko INUI (Gakushin University); Keiko ITO (Senshu University); Daisuke MIYAKAWA (Harvard University)
    Abstract: This paper examines how the Japanese firms’ export decision is affected by the availability of information on export markets, focusing on whether the availability of such information has a different impact on the export decision between large firms and small and medium-sized enterprises (SMEs). Unlike existing studies which solely focus on information sharing among firms, we are interested in the role of firms’ lender banks as an additional source of information. Specifically, using a unique dataset containing information not only on firms’ export activities but also on their lender banks’ exposure to other exporting firms and lender banks’ own overseas activities, we find that information spillovers through lender banks positively affect SMEs’ decision to start exporting and the range of destinations to which they export. Such information spillovers also reduce the likelihood that exporter firms exit from export markets. The export-to-sales ratio of exporter firms, however, is not affected by such information spillovers. These results imply that information on foreign markets provided by lender banks substantially reduces the fixed entry costs associated with starting exporting and entering new export markets as well as firms’ costs associated with continuing to export. Our results highlight that channels of information spillovers other than those examined in the literature so far may be of considerable importance, especially for SMEs
    Keywords: Export Decision; Lender Bank; Information Spillover; Extensive and Intensive Margins
    JEL: F10 F14 G21 L25
    Date: 2014
  4. By: Anissa Chaibi; Adel Ben Youssef; Leila Peltier- Ben Aoun
    Abstract: This paper provides original empirical evidence on the causal links between e-skills, usage of Information and Communication Technologies (ICT) and firm’s performance using a sample of Luxembourgian manufacturing and services firms. Firm performance is measured in terms of innovation (success of new projects settled). Our main findings are: (i) there’s no relationship between the absorptive technology capacity of the firm (measured by ICT staff and Training) and the probability of the implementation of successful ICT projects, (ii) there is a positive effect of e-applications usage (ICT usage) on the probability of the implementation of successful new projects, and (iii) there is an asymmetric effect of usage of e-commerce and eadministration confirming findings of the recent literature.
    Keywords: Innovation; Usage of ICT; Depth of ICT adoption; Ordered models; Innovative projects.
    JEL: L21 O31 O33
    Date: 2014–09–25
  5. By: Gonzalo Suazo; Josué Pérez
    Abstract: This paper shows evidence on firm demographics and firm survival in Chile. A dataset of sectoral indicators of firm dynamics has been created using unnamed administrative records collected by the Tax Office. The patterns of firm entry, exit and survival are described and analyzed by sales and employment size, sectors and also over time. We find that both sectoral and size effects are important in determining firms demographics. We also find that entry and exit rates are different across countries.
    Date: 2014–09
  6. By: Aziza Garsaa; Nadine Levratto
    Abstract: This paper seeks to shed some light on the relationship between individual performance and local context. We empirically address this question focusing on the employment growth rate of French manufacturing establishments geo-referenced at the employment area level, an economically consistent territorial division. Using an unbalanced panel of 149,929 plants over the period 2004-2010, we estimate different growth models including local specific variables controlled with company specific ones. The results confirm that the firm growth rate is influenced by the local context and that some features such as unemployment, agglomeration effects or skills matter significantly. The robustness checks performed on subsamples, however, show that the profile of the areas or the market (local or larger) may significantly affect the intensity of the link between a firm and its environment.
    Keywords: firm growth, geographical location, manufacturing industry, panel data.
    JEL: L25 R11 C23
    Date: 2014
  7. By: Jan Brzozowski (Cracow University of Economics, Department of European Studies); Marco Cucculelli (Universit… Politecnica delle Marche, Dipartimento di Scienze economiche e sociali); Aleksander Surdej (Cracow University of Economics, Department of European Studies)
    Abstract: This study contributes to the recent empirical literature on the performance of transnational immigrants' firms by investigating the effect of transnational ties on the firm's growth. In addition to the effect of the ties, the paper shows that home-country's institutional and socio-economic characteristics and country-specific entrepreneurial factors have a crucial role in shaping the ties-performance relationship. The evidence from a sample of immigrantowned firms in the Italian ICT sector in the period 2000-2010 confirmed the relevance of the proposed model and helped in understanding a potential channel of improvements in immigrant firms' performance through transnational ties. Our results show the limited relevance of a direct, or linear, impact of ties on the growth of sales in immigrant-run firms in the ICT sector, whereas supports the crucial moderating role of home country characteristics on the ties-performance relationship.
    Keywords: ICT industry, Italy, ethnic business ties, immigrants' firms' performance, transnational entrepreneurship
    Date: 2014–09
  8. By: Rui Mansidão (School of Technology of Setúbal/IPS); Luís A. G. Coelho (CEFAGE-UE and Management Department, Évora University)
    Abstract: This paper presents a theoretical conceptual model for evaluation of logistics performance for small and medium enterprises (SMEs). Based on recent theoretical developments, grounded in a survey of the most important literature in the field, it analyzes the impact of the logistics function on organizational performance. The three main models of logistics performance applied to SMEs inspire the model presented: Fugate et al (2010), Aramyan et al (2007) and Töyli et al (2008). The conceptual model developed in this work is built on three basic elements: organizational performance, competitive advantage and logistics performance, which are grounded in the dimensions of efficiency, effectiveness and service level.
    Keywords: Logistics Performance; Organizational Performance; Competitive Advantage; Efficiency, effectiveness and SMEs.
    JEL: D21 D24 M10
    Date: 2014
  9. By: Rani Jeanne Dang (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS : UMR7321 - Université Nice Sophia Antipolis (UNS)); Karine Roux (CEREFIGE - Centre Européen de Recherche en Economie Financière et Gestion des Entreprises - Université Nancy II : EA3942 - Université de Metz); Christian Longhi (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS : UMR7321 - Université Nice Sophia Antipolis (UNS)); Damien Talbot (GREThA - Groupe de Recherche en Economie Théorique et Appliquée - CNRS : UMR5113 - Université Montesquieu - Bordeaux IV); Catherine Thomas (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS : UMR7321 - Université Nice Sophia Antipolis (UNS))
    Abstract: Many studies have focused on the role played by geographical location in the emergence and building of localised learning capacities (Maskell and Malmberg, 1999). In this perspective, empirical studies have demonstrated that the innovation dynamics of clusters result from the quality of interactions and coordination inside the cluster as well as interactions with external, often global, networks. In this context, knowledge exchange between firms and institutions are claimed to be the main drivers of spatial agglomeration (Canals et al., 2008). Hence, cluster policies have followed the main idea that geographic proximity facilitates collective innovation in that firms can capture knowledge externalities more easily. This idea is in fact very attractive but contains some limitations (Suire and Vicente, 2007): if some clusters are successful, others seem to decline. Therefore, in order to understand the territorial dynamics of clusters, the analysis of the specific nature of knowledge and information flows within a cluster is crucial. The objective of this paper is to enhance the analysis of the role of cognitive and relational dimensions of interactions in territorial dynamics of innovation. We focus on the key sub-process of innovation: knowledge creation, which is above all a social process based on two key complex social mechanisms: the exchange and the combination of knowledge (Nahapiet and Goshal, 1996). We suggest building a theoretical framework that hinges on these two key mechanisms. In this line, we apply Boisot's I-Space model (Boisot, 1998) for the diffusion and exchange of knowledge and suggest completing the model by introducing the concept of architectural knowledge (Henderson and Clark, 1990) so as to take into consideration the complexity of the combination process. This analysis is conducted through the illustrative analysis of three different case studies. We will draw upon the case of Aerospace Valley Pole of Competitiveness (PoC), the Secured Communicating Solutions PoC, and the Fabelor Competence Cluster. The cases show that the existence of architectural knowledge is pivotal to territorial innovation.
    Keywords: architectural knowledge, I-Space model, territorial innovation, geographical clusters
    Date: 2014–01–14
  10. By: Joachim Wagner (Leuphana University Lueneburg, Germany)
    Abstract: This note uses comparable representative data for manufacturing firms from five European countries (Germany, France, Italy, Spain, and the United Kingdom) to investigate the links between firm age and the participation of the firms in export, the share of exports in total sales, the number of countries exported to, and the participation in import. The big picture revealed is in line with the theoretical considerations. Older firms tend to be more often exporters and importers, they export to more different destination countries, and they export a higher share of their total sales in three out of five countries.
    Keywords: Exports, imports, firm age, ´trade margins, EFIGE data
    JEL: F14
    Date: 2014–09
  11. By: Cassey LEE (Institute of Southeast Asian Studies)
    Abstract: The main purpose of this study is to examine whether the relationship between exporting and productivity differs across firm sizes in the Malaysian manufacturing sector. A firm-level panel data from the Study on Knowledge Content in Economic Sectors in Malaysia (MyKE) is used in the study. Overall, exporters were found to be more productive than non-exporters. This productivity gap becomes less important as firms become larger. There is evidence that the selection process for exporting is binding only for small firms. Policies that are meant to encourage small firms to export need to focus on enhancing human capital and foreign ownership.
    Keywords: Globalisation, Firm Size, Exporting, Productivity
    JEL: L60 O30 F14
    Date: 2014
  12. By: Lucian, Cernat (DG Trade); Ana, Norman-López (DG Trade); Ana, Duch T-Figueras (DG Trade)
    Abstract: This paper highlights the heterogeneity among SMEs exporting outside the EU across EU Member States and reviews how barriers facing SMEs can be tackled trade policy discussions. With over 600,000 goods exporting SMEs (over 80% of the total number of EU goods exporting firms) accounting for one third of total EU exports and employing over 6 million people in Europe, EU exporting SMEs play a non-negligible role in EU trade performance. However, SMEs have an untapped export potential, given the intrinsic and trade-specific hurdles that SMEs still face.
    Keywords: SMEs; international trade; export performance
    JEL: F13 L11
    Date: 2014–09–19
  13. By: Mikel Navarro (Orkestra – University of Deusto); Juan José Gibaja (University of Deusto); Susana Franco (Orkestra – University of Deusto); Asier Murciego (Orkestra – University of Deusto); Carlo Gianelle (European Commission – JRC - IPTS); Alexander Kleibrink (European Commission – JRC - IPTS); Fatime Barbara Hegyi (European Commission – JRC - IPTS)
    Abstract: One of the most basic conditions required for drawing lessons from regional benchmarking is to compare homogeneous regions and learn from equivalents. This condition is not met when regions for comparison are chosen based on their high performance, overlooking their regional context or structural conditions. This paper aims to provide a new methodology for the identification of homogeneous regions for regional benchmarking; identifying groups of homogeneous regions using variables that are similar in nature; focusing solely on structural conditions, thereby overcoming the flaws produced by mixing variables of a different nature (comparing structural indicators with performance and / or behavioural indicators). Thus, regional benchmarking can be of great help in making strategic decisions within the process of the design and implementation of regional Research and Innovation Strategies for Smart Specialisation (RIS3), taking into account the relative position of the region to other regions in Europe. Following the RIS3 approach of looking beyond the regional administrative boundaries, benchmarking based on structural similarity enables the region to identify its competitive advantages through systematic comparisons with other regions or to map the national and international context in search of examples to learn from, or to mark a difference with.
    Keywords: European cohesion policy, Structural Funds, smart specialisation, regional benchmarking, structural similarity, policy learning
    JEL: C43 R12 R58
    Date: 2014–04
  14. By: Pierre-Alexandre Balland, David Rigby & Ron Boschma; David Rigby; Ron Boschma
    Abstract: We study the resilience of cities by analyzing their relative capacity to sustain the production of technological knowledge in the face of adverse events. Using patent applications in 366 Metropolitan Statistical Areas in the United States from 1975 to 2002, we analyze the vulnerability and response of cities to technological crises. We define episodes of technological crisis as periods of sustained negative growth in patenting activity. We find that the frequency, intensity and duration of technological crises vary considerably across American cities. We test whether the technological knowledge bases of cities, their network openness and institutional environment condition their resilience to technological crises. Econometric analysis suggests that cities with knowledge bases that are diverse, flexible and that have a high degree of relatedness to technologies in which they do not currently possess comparative advantage tend to avoid technological crises, have limited downturns in patent production and faster recovery.
    Keywords: urban resilience, technological crisis, related knowledge structure, institutions, inter-city networks
    JEL: O33 R11 L65 D83
    Date: 2014–10
  15. By: Kee, Hiau Looi
    Abstract: Trade liberalizations have been shown to improve domestic firms'performance through the new varieties of imported intermediate inputs. This paper uses a unique, representative sample of Bangladeshi garment firms to highlight that local intermediate inputs may also enhance domestic firms'performance, through the shared supplier spillovers of foreign direct investment (FDI) firms. An exogenous EU trade policy shock is shown to cause some FDI firms in Bangladesh to expand, which led to better performance of the domestic firms that shared their suppliers. Overall, the shared supplier spillovers of FDI explain 1/4 of the product scope expansion and 1/3 of the productivity gains within domestic firms.
    Keywords: Markets and Market Access,Water and Industry,Economic Theory&Research,E-Business,Labor Policies
    Date: 2014–09–01
  16. By: Sourafel Girma; Yundan Gong; Holger Görg; Sandra Lancheros
    Abstract: We implement a method to estimate the direct effects of foreign-ownership on foreign firms' productivity and the indirect effects (or spillovers) from the presence of foreign-owned firms on other foreign and domestic firms' productivity in a unifying framework, taking interactions between firms into account. To do so, we relax a fundamental assumption made in empirical studies examining a direct causal effect of foreign ownership on firm productivity, namely that of no interactions between firms. Based on our approach, we are able to combine direct and indirect effects of foreign ownership and calculate the total effect of foreign firms on local productivity. Our results show that all these effects vary with the level of foreign presence within a cluster, an important finding for the academic literature and policy debate on the benefits of attracting foreign owned firms
    Keywords: foreign direct investment, treatment effects, SUTVA, propensity score matching
    JEL: F23 C19
    Date: 2014–09

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