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on Small Business Management |
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Issue of 2014‒11‒07
fifteen papers chosen by João Carlos Correia Leitão Universidade da Beira Interior |
| By: | Gunno Park (Samsung SDS); Jina Kang (Technology Management, Economics, and Policy Program, College of Engineering, Seoul National University) |
| Abstract: | Although their advantages are well-known, technology alliance may not always positively affect innovative performance. Previous studies have found several explanations for this problem. Technology alliances often require excessive resources and capabilities to form and maintain relationships with partners. In addition, they cause a diversion of managerial attention and functions from internal R&D activities, yet many firms are often unequipped to deal with these problems. In this paper, we hypothesize that firms often execute an inefficient technology alliance strategy, thus negatively affecting their innovative capabilities and consequently reducing subsequent innovation performance. More specifically, we test whether firms with greater prior experience on technology alliances are more likely to execute inefficient technology alliance strategies. Second, we try to investigate negative effects of technology alliances on firms’ internal R&D capabilities. To test our hypotheses, we employ data from 9629 technology alliances in the US biotechnology and pharmaceutical industries. Implications from these analyses are offered for executives and technology alliance strategies. Specifically, we propose that firms should undertake technology alliances while considering the negative aspects and the firm’s limited resources. |
| Keywords: | Alliance Experience, Organizational Routine, Alliance Formation, Internal R&D Capability. |
| JEL: | D23 L22 L24 O32 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:snv:dp2009:2014119&r=sbm |
| By: | Juana Sanchez |
| Abstract: | This paper presents a novel empirical study of innovation practices of U.S. companies and their relation to productivity levels using new business micro data from the Business Research and Development and Innovation Survey (BRDIS) for the years 2008-2011. The paper follows the work of Frenz and Lambert, who use factor analysis to reduce a set of inputs and outputs of innovation activities into four latent unobserved innovation modes or practices for OECD countries using Community Innovation Surveys (CIS). Patterns obtained with BRDIS data are very similar to those found by those authors in some OECD countries. Companies are grouped according to their scores across the four factors to see that in large, small and medium companies more than one mode of innovation practices prevails. The next step in the analysis links different types of innovation practices to levels of productivity using regression analysis. The four innovation modes have a statistically signi cant positive relation with the level of productivity, other things constant. The paper demonstrates the possibility of taking into account the multidimensionality of innovation without the use of composite indicators. |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:14-35&r=sbm |
| By: | Kentaro Imai (Graduate School of Economics, Osaka University) |
| Abstract: | Using a panel dataset of firms for the period 1999-2008, we estimated the prevalence of zombies among Japanese Small- and Medium-sized enterprises (SMEs) and their borrowing and investment behaviors. We observe that 4-14% of SMEs were zombie firms during the period 1999-2008. Analysis of borrowing behavior indicates that zombie firms could not reduce their loans. Reductions in the land values of SMEs did not lead to a decrease in the borrowing of zombie firms due to ever-greening. We also observe that the profitability of investment, measured by marginal q, did not increase investment among zombie firms because evergreen loans increased investment in less productive and profitable projects. |
| Keywords: | zombie firms, ever-greening, SMEs, borrowing, investment |
| JEL: | G21 E22 E44 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:osk:wpaper:1316r&r=sbm |
| By: | Uwe Cantner (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Ivan Savin (School of Economics and Business Administration, Friedrich-Schiller-University Jena) |
| Abstract: | This paper analyzes whether firms conducting internal R&D and acquiring external high-tech equipment experience a complementarity effect. For German CIS data we conduct a complete set of indirect and direct complementarity tests refining the analysis by looking at various types of innovations and industries. Complementary effects are found in the indirect but not so in the direct approach. In contrast to previous literature, we find the distinct R&D strategy choices to be significant drivers of innovative activity and we identify contextual variables explaining the joint occurrence of the two strategies. |
| Keywords: | complementarity, equipment with embodied technology, innovation, internal R&D, Pavitt's sectoral taxonomy |
| JEL: | O14 O31 O32 O33 |
| Date: | 2014–10–06 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2014-023&r=sbm |
| By: | Cilem Selin Hazir (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - École Normale Supérieure (ENS) - Lyon - PRES Université de Lyon - Université Jean Monnet - Saint-Etienne - Université Claude Bernard - Lyon I (UCBL)); James Lesage (Texas State University - Texas State University); Corinne Autant-Bernard (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - École Normale Supérieure (ENS) - Lyon - PRES Université de Lyon - Université Jean Monnet - Saint-Etienne - Université Claude Bernard - Lyon I (UCBL)) |
| Abstract: | In this study, we consider R&D collaboration networks as a mechanism that modifies knowledge flows in space, and hence as another source of interaction among regional innovation processes. Our objective is to understand the relative role of spatial neighbors and network neighbors on patenting performance of regions. We make use of data on R&D collaborations supported by the European Union's Framework Programs (FP) and empirically investigate the patent activity of 213 European regions in the field of ICT during 2003-2009. Concerning the short length of the time frame we adopt a static modeling strategy and specify a spatial Durbin Model. As spatial neighbors intersect with network neighbors we decompose neighbor regions into three sets: spatially proximate regions that are not collaboration partners, spatially proximate regions that are collaboration partners, and distant collaboration partners. We express the weight matrix as a convex combination of these three sets and by means of gridding we compare how model fit changes as we move from a purely space based view to a purely network based view to express the dependence structure. The weight matrix that performs the best accords 60% weight to distant collaboration partners, 30% weight to proximate collaboration partners and 10% weight to proximate regions with whom there is no FP collaboration. This result reveals that the interaction (proximate and distant) among European regions within FP networks in the field of ICT is key for understanding dependence among their patenting performances. |
| Keywords: | R&D collaboration networks; innovation performance; spatial econometrics; ICT |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01073031&r=sbm |
| By: | Joelle Noailly; Roger Smeets (The Centre for International Environmental Studies, The Graduate Institute of International and Development Studies, Geneva) |
| Abstract: | This paper investigates the determinants of directed technical change at the Firm level in the electricity generation sector. We use firm-level data on patents filed in renewable (REN) and fossil fuel (FF) technologies by 5,261 european firms over the period 1978-2006. We investigate how energy prices, market size and knowledge stocks affect firms' incentives to innovate in one technology relative to another and how these factors may thereby induce a shift from FF to REN technology in the electricity generation sector. We separately study small specialized firms, which innovate in only one type of technology during our sample period, and large mixed firms, which innovate in both technologies. We also separate the extensive margin innovation decision (i.e. whether to conduct innovation) from the intensive margin decision (i.e. how much to innovate). Overall, we find that all three factors - energy prices, market sizes and past knowledge stocks - matter to redirect innovation towards REN and away from FF technologies. Yet, we find that these factors have a larger impact on closing the technology gap through the entry (and exit) of small specialized firms, rather than through large mixed firms' innovation. An implication of our results is that firm dynamics are of direct policy interest to induce the replacement of FF by REN technologies in the electricity generation sector. |
| Keywords: | Directed technical change; Renewable energy; Fossil fuel energy; Patents; Innovation; Firm dynamics |
| Date: | 2014–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:gii:ciesrp:cies_rp_24&r=sbm |
| By: | Simone Borghesi (University of Siena, Italy.); Giulio Cainelli (University of Padova, Italy.); Massimiliano Mazzanti (University of Ferrara, Italy; SEEDS, Ferrara, Italy.) |
| Abstract: | This paper examines the different forces underlying the adoption of environmental innovations (EI), with a focus on policy related EI. In particular, exploiting the 2006-2008 wave of the Italian Community Innovation Survey (CIS), we investigate whether the first phase of the European Emissions Trading Scheme (EU-ETS) exerted some effects on EI in CO2 abatement and energy efficiency controlling for other variables, grouped as internal/external to the firm, and additional environmental regulation factors. Our empirical analyses show that a few factors emerge as particularly relevant such as relationships with other firms and institutions, sectoral energy expenditure intensity, and current and future expected environmental regulation. For the specific role of the EU ETS, we find that, on the one hand ETS sectors are more likely to innovate than non-ETS sectors but on the other hand that sector specific policy stringency is negatively associated with EI, possibly due to anticipatory behavior from early moving innovative firms and some sector idiosyncratic factors. |
| Keywords: | Environmental innovation, EU-ETS, CIS EU data, manufacturing |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:srt:wpaper:2714&r=sbm |
| By: | Rossi, Federica; Fassio,Claudio; Geuna, Aldo (University of Turin) |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:uto:labeco:201410&r=sbm |
| By: | Annalisa Caloffi; Federica Rossi; Margherita Russo |
| Abstract: | Greater understanding of what factors promote the formation of innovation networks and their successful performance would help policymakers improve the design of policy interventions aimed at funding R&D projects to be carried out by networks of innovators. In this paper, we focus on the organizations that can play the role of intermediaries in the networks, facilitating the involvement of other participants and promoting communication and knowledge flows within the network. Based on an original empirical dataset, capturing the relationships between organizations involved in a set of publicly-funded programmes in support of innovation networks, we have tried to identify what are the main features of different types of intermediaries based on an analysis of their positions within networks of relationships. We have observed that agents that occupy broker positions – linking agents that are not connected to each other – are more likely to be found in technologically turbulent environments, while the agents that occupy intercohesive positions – bridging cohesive communities of network agents – operate in more stable contexts. Intermediaries in general are more likely to be local governments. However, besides this, it is not possible to clearly identify organizations that, by nature, are more likely to be either brokers or intercohesive agents: different innovation networks may require different organizations to mediate relationships between the other participants. |
| Keywords: | Innovation policy, innovation networks, social network analysis, intermediaries, brokers, intercohesion |
| JEL: | D85 O31 O32 O38 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:mod:dembwp:0030&r=sbm |
| By: | Jérôme Vicente |
| Abstract: | Cluster policies have been recently called into question in the aftermath of several empirical evidences. Disentangling how market and network failures arguments play together in cluster policy design, we look for more robust micro foundations of network structuring in clusters. Our aim is to show that, in spite of this growing skepticism, new opportunities for cluster policy exist. They require moving their focus from the “connecting people” one best way that gets through the whole of cluster policy guidelines, to more surgical incentives for R&D collaborations, which favor suited structural properties of local knowledge networks along the life cycle of clusters. |
| Keywords: | cluster policy, knowledge spillover, network failures |
| JEL: | B52 D85 O33 R12 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:1420&r=sbm |
| By: | Thais Laerkholm Jensen (University of Copenhagen); Søren Leth-Petersen (University of Copenhagen); Ramana Nanda (Harvard Business School, Entrepreneurial Management Unit) |
| Abstract: | We study how a mortgage reform that exogenously increased access to credit had an impact on entrepreneurship, using individual-level micro data from Denmark. The reform allows us to disentangle the role of credit access from wealth effects that typically confound analyses of the collateral channel. We find that a $30,000 increase in credit availability led to a 12 basis point increase in entrepreneurship, equivalent to a 4% increase in the number of entrepreneurs. New entrants were more likely to start businesses in sectors where they had no prior experience, and were more likely to fail than those who did not benefit from the reform. Our results provide evidence that credit constraints do affect entrepreneurship, but that the overall magnitudes are small. Moreover, the marginal individuals selecting into entrepreneurship when constraints are relaxed may well be starting businesses that are of lower quality than the average existing businesses, leading to an increase in churning entry that does not translate into a sustained increase in the overall level of entrepreneurship. |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:hbs:wpaper:15-020&r=sbm |
| By: | Falato, Antonio (Board of Governors of the Federal Reserve System (U.S.)); Sim, Jae W. (Board of Governors of the Federal Reserve System (U.S.)) |
| Abstract: | This paper uses the staggered changes of R&D tax credits across U.S. states and over time as a quasi-natural experiment to examine the impact of innovation on corporate liquidity. By generating plausibly independent variation in firms' incentive to invest in R&D, we are able to assess the empirical importance of specific theories of the link between innovation and corporate liquidity. Firms increase (decrease) their cash to asset ratios by about one and a half percentage point when their home state increases (cuts) R&D tax credits. These baseline difference-in-differences estimates hold up to a battery of validation, falsification, and robustness checks, which corroborate their internal and external validity. The treatment effect of R&D tax credits increases monotonically with several specific proxies for debt and equity financing frictions. Increases (cuts) in tax credits also lead to increases (decreases) in the ratios of cash to bank lines of credit and to book equity, and to decreases (increases) in bank debt, secured debt, and overall net indebtness, supporting debt and equity financing channels through which innovation impacts the demand for cash. We also find support for a product market competition channel, and assess repatriation and agency explanations. Overall, our analysis offers endogeneity-free evidence that innovation is a first-order driver of corporate liquidity management decisions. |
| Keywords: | Determinants of corporate cash holdings; financial economics of innovation |
| Date: | 2014–05–21 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2014-72&r=sbm |
| By: | Sara Amoroso Author-1-Name-First: Sara Author-1-Name-Last: Amoroso (European Commission JRC-IPTS) |
| Abstract: | The paper investigates the barriers to collaboration in terms of hidden transaction costs, by deriving the distribution of the operating costs and sunk costs associated with firms’ investment choices in R&D and innovation activities with or without a research partner. To retrieve both fixed and sunk costs of R&D and innovation activities with or without a research partner, we develop and estimate a structural dynamic monopoly model to quantify the linkages between R&D spending, innovation and cooperation investment choices, and endogenous productivity. We find that the sunk costs of innovations are smaller when collaborating with a research partner; the probability to spend in R&D or to innovate increases with the level of productivity, when collaborating in R&D and innovation; finally, we find that the sunk costs of innovation are 1.5 to 3 times smaller than the sunk costs of R&D. Additionally, the suggested structural framework of firm heterogeneity in cost functions offers a straightforward extension to policy impact evaluation. |
| Keywords: | R&D cooperation, transaction costs, dynamic structural model. |
| JEL: | D22 D23 L14 L60 O32 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:wpaper:201402&r=sbm |
| By: | Francesca Checchinato; Lala Hu; Tiziano Vescovi |
| Abstract: | Exports represent an entry mode into international markets that is less risky than more direct strategies, therefore it particularly fits SMEs (small-medium enterprises) that generally have a few resources to invest. In the case of emerging markets because of the high psychic distance, SMEs tend to rely on their distributors for the business operations in the new market. However, although this type of intermediary allows the access to the foreign distribution channel that is particularly complex in countries such as China, it can limit the market control and in some cases, the product expansion. Based on a qualitative research consisting of interviews and secondary data, we present two original case studies of Italian firms operating in the Chinese market. It is shown that in emerging markets, since distributors do not really analyze and know consumer expectations and behaviors, they may represent a barrier in the knowledge accumulation of foreign products in the new market. Managerial implications are discussed on the extent to which SMEs are not able to replicate marketing strategies used in other countries, but they should define a clear strategy that involves their distributors in the process of knowledge accumulation and brand value creation in the foreign market. |
| Keywords: | internationalization, export, SME, distributor, emerging markets. |
| JEL: | F23 M16 M31 D22 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:vnm:wpdman:90&r=sbm |
| By: | Sandra Rothenberger; Koen Tackx |
| Abstract: | In this article we investigate the impact of personal and organizational trust on the financial performance of companies over a period of time. The effect of trust on various economic and managerial transactions is being researched extensively over the last two decades but previous research did not led to empirical proof that the overall trust level of a company actually increases the financial profitability of firms over a longer period of time. Drawing on a sample of 291 German industrial firms over a period of six years we observe that both personal and organizational trust have a positive influence on the return on assets of a firm. Furthermore we proof that trust is driving profitability in certain conditions and environments differently. By analysing the relationship and characteristics between trust and profitability, this study brings a concrete illustration of what was implicitly known by many scholars and has important implications for future research and management practice. |
| Keywords: | Trust; Knowledge Intensity; Performance; Return on Assets (ROA); Structural Equation Modeling (SEM); Environmental Uncertainty |
| JEL: | D02 D80 M20 |
| Date: | 2014–10–15 |
| URL: | http://d.repec.org/n?u=RePEc:sol:wpaper:2013/176348&r=sbm |