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on Small Business Management |
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Issue of 2015‒03‒13
sixteen papers chosen by João Carlos Correia Leitão Universidade da Beira Interior |
| By: | Aldieri, Luigi; Vinci, Concetto Paolo |
| Abstract: | This study contributes to existing literature on firms’ innovative activity examining the influence of both internal firms’ physical and R&D capital, and external national and international knowledge spillovers. The paper presents a cross national analysis of United States, Japan and Europe based upon a new dataset composed of 879 worldwide R&D-intensive manufacturing firms. The empirical results suggest that the effect of R&D capital stock on firms’ innovation output is always positive. The effects of international R&D spillovers are positive in Japan and USA and negative in European economic area, while the national R&D spillovers has the opposite impact |
| Keywords: | R&D spillovers; Innovation; Cross-national analysis |
| JEL: | C23 O33 O4 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:62541&r=sbm |
| By: | Ayyagari,Meghana; Demirguc-Kunt,Asli; Maksimovic,Vojislav |
| Abstract: | Is it the institutions or firm characteristics at birth that shape startups and their early growth in developing countries? Using comprehensive data from the Indian Annual Survey of Industries this paper addresses this question by studying the early lifecycle of firms across diverse institutional environments of regions in India. It finds that the size and characteristics of a start-up at entry are persistent over the first eight years of a firm's life. However, given these initial conditions at entry, institutions do not have much explanatory power in determining growth. The comparative growth rates of large and small start-ups are not significantly different across states with different local institutions or industries with differing reliance on external finance or need for fixed capital. But institutions, particularly the availability of credit, do have an impact on the initial entry process. Access to external finance is associated with greater overall entry, and also smaller sized entry. The results do not appear to be driven by endogeneity of access to credit or sample selection. The results show that the channel through which institutions affect the relative outcomes of young firms is through the initial distribution of firm characteristics at entry rather than their effect on the performance of the firms post entry. |
| Keywords: | Labor Markets,Labor Policies,Microfinance,Environmental Economics&Policies,Banks&Banking Reform |
| Date: | 2015–03–06 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:7207&r=sbm |
| By: | Jürgen Bitzer (University of Oldenburg - Department of Economics & ZenTra); Erkan Gören (University of Oldenburg - Department of Economics); Sanne Hiller (Aarhus University - Department of Economics and Business) |
| Abstract: | This paper explores the role of immigrant employees for a firm’s capability to absorb international knowledge. Using matched employer-employee data from Denmark for the years 1996 to 2009, we are able to show that non-Danish employees from technological advanced countries contribute significantly to a firm’s economic output through their ability to access international knowledge. The empirical results suggest that the immigrants’ impact increases if they come from technological advanced countries, have a high educational level, and are employed in high-skilled positions. |
| Keywords: | R&D Spillovers, Absorptive Capacity, Firm-Level Analysis, Foreign Workers, Immigrants |
| JEL: | D20 J82 L20 O30 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:zen:wpaper:49&r=sbm |
| By: | Sophia Dimelis; Ioannis Giotopoulos; Helen Louri |
| Abstract: | This paper explores the effects of bank credit on firm growth before and after the recent financial crisis, taking into account different structural characteristics of banking sectors and domestic economies. Panel quantile analysis is used on a sample of 2075 euro area firms in 2005-2011. The post-2008 credit crunch is found to seriously affect only small, slow-growth firms and especially those operating in concentrated and domestic-dominated banking systems, and in riskier and less financially developed economies. Large, high-growth firms seem to be able to find alternative financial sources and, thus, may act as carriers and facilitators of a credit-less recovery. |
| Keywords: | credit crunch; firm growth; credit-less recovery; financial crisis; panel quantile regressions |
| JEL: | E51 L1 L25 |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:61157&r=sbm |
| By: | Antonio Acconcia (Università di Napoli Federico II and CSEF); Claudia Cantabene (Seconda Università di Napoli) |
| Abstract: | In concurrence with the recent credit crisis, the Italian government tried to stimulate R&D expenditures through tax credit. We rely on this policy to identify the firm response to an exogenous countercyclical fiscal shock. Large heterogeneity by the size of cash is observed for firms in traditional industries. The tax credit caused higher expenditures for firms with relative large cash holdings. For firms characterized by low levels of cash, the stimulus was instead mainly useful to counteract the negative effects of the credit crunch. No impact is observed among high-tech firms consistent with their tendency to smooth R&D. Our findings complement those on household response to tax rebate in US and Italy, offering new evidence for evaluating fiscal stimulus programmes. Classification-E21, E62 |
| Keywords: | Crisis, Fiscal Stimulus, Investment-cash Sensitivity, Quasi-experiment, R&D |
| Date: | 2015–02–28 |
| URL: | http://d.repec.org/n?u=RePEc:sef:csefwp:392&r=sbm |
| By: | Bircan, Cagatay; de Haas, R. (Tilburg University, Center For Economic Research) |
| Abstract: | We exploit historical and contemporaneous variation in local credit markets across Russia to identify the impact of credit constraints on firm-level innovation. We find that access to bank credit helps firms to adopt existing products and production processes that are new to them. They introduce these technologies either with the help of suppliers and clients or by acquiring external know-how. We find no evidence that bank credit also stimulates firm innovation through in-house R&D. This suggests that banks can facilitate the discussion of technologies within developing countries but that their role in pushing the technological frontier is limited. |
| Keywords: | Credit Constraints; firn innovation; technological change |
| JEL: | D22 G21 O12 O31 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:tiu:tiucen:d7a436de-83f6-4551-aaf9-06ec05d63b2b&r=sbm |
| By: | OGAWA Kazuo; TOKUTSU Ichiro |
| Abstract: | This study is an empirical attempt to compare the exporting behavior of small and medium-sized enterprises (SMEs) with large firms from the viewpoints of export market participation decision (extensive margin) and export volume decision (intensive margin), using firm-level panel data. We find that firm size is an important determinant of both extensive margin and intensive margin decision for SMEs as well as large firms. In contrast, productivity affects only the intensive margin of export for both SMEs and large firms. Quantitatively, the contribution of productivity to export volume is much larger for large firms. Financial factors are also important determinants of export. Liquidity reserve has positive effects on the extensive margin of export for SMEs and large firms. Moreover, financial institutions play an important role in supporting the export activities of SMEs. |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:15031&r=sbm |
| By: | Dessi, Roberta; Yin, Nina |
| Abstract: | This paper explores a new role for venture capitalists, as knowledge intermediaries. A venture capital investor can communicate valuable knowledge to an entrepreneur, facilitating innovation. The venture capitalist can also communicate the entrepreneur's innovative knowledge to other portfolio companies. We study the costs and benefits of these two forms of knowledge transfer, and their implications for investment, innovation, and product market competition. The model also sheds light on the choice between venture capital and other forms of finance, and the determinants of the decision to seek patent protection for innovations. Our analysis provides a rationale for the use of contingencies (specifically, patent approval) in VC contracts documented by Kaplan and Stromberg (2003), and for recent evidence on patterns of syndication among venture capitalists. |
| Keywords: | venture capital, knowledge intermediaries, contracts, innovation, competition, patents. |
| JEL: | D82 D86 G24 L22 |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:29010&r=sbm |
| By: | Gianni Guastella; Frank van Oort |
| Abstract: | In agglomeration studies, the effects of various regional externalities related to knowledge spillovers remain largely unclear. To explain innovation clustering, scholars emphasize the contribution of Localized Knowledge Spillovers (LKS) and, specifically when estimating the Knowledge Production Function (KPF), of (interregional) research spillovers. However, less attention is paid to other causes of spatial heterogeneity. In applied works, spatial association in data is econometrically related to evidence of research spillovers. This paper argues that, in a KPF setting, omitting spatial heterogeneity might lead to biased estimates of the effect of research spillovers. As an empirical test, a spatial KPF is estimated using EU25 regional data, including a spatial trend to control for unexplained spatial variation in innovation. Accounting for geographical characteristics substantially weakens evidence of interregional research spillovers. |
| Keywords: | Generalized Additive Models, Knowledge Spillovers, Regional Innovation, European Union |
| JEL: | R12 R58 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:1506&r=sbm |
| By: | Crespi G.A.; Tacsir E.; Vargas F. (UNU-MERIT) |
| Abstract: | Innovation is fundamental for economic catching-up and raising living standards. Evidence demonstrate a virtuous circle in which RD spending, innovation, productivity, and per capita income mutually reinforce each other and lead to long-term, sustained growth rates and may foster job creation. Previous evidence highlights that Latin America and the Caribbean LAC has great potential to benefit from investment and policies that foster innovation. However, one important limitation of previous research on innovation in LAC is the absence of harmonised and comparable indicators across the different countries. This seriously limits the possibility to infer policy conclusions that are not affected by country specificities with respect to data quality and coverage. Also, most of this research is focused on estimating firm level correlations without attempting to identify market failures or other limitations which harm innovation investment or which could guide policy. In this paper, a wide range of innovation indicators are analysed in order to describe the innovation behaviour of manufacturing firms in LAC using the Enterprise Survey ES database. Our objective is to understand the main characteristics of innovative firms in LAC and to gather new evidence with regard to the nature of the innovation process in the region. In this paper we apply a structural model based on Crepon, Duget and Mairesse 1998, to estimate the determinants of innovation RD and its impact on total factor productivity. We pay special attention to whether there is heterogeneity in the effects of investments in innovation on productivity and whether there is any evidence of spillovers that could guide policy design. We found strong evidence concerning the relationships between innovation input and output, and innovation output and productivity. We found that private returns to innovation depend on the type of innovation, being larger for product than process innovation. Furthermore, we found some evidence that spillovers are stronger in the case of product than process innovation. It was also found that innovation returns are higher for the most productive firms. This increasing relationship between returns and productivity is not consistent with an interpretation that financial constraints cause more harm to low productivity firms. However, it is consistent with alternative interpretations about the lack of innovation opportunities in the case of low productivity firms or that low private returns are the results of poor appropriability. |
| Keywords: | Microeconomic Analyses of Economic Development; Industrialization; Manufacturing and Service Industries; Choice of Technology; Innovation and Invention: Processes and Incentives; Technological Change: Choices and Consequences; Diffusion Processes; Economic Growth and Aggregate Productivity: General; |
| JEL: | O12 O14 O31 O33 O40 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2014092&r=sbm |
| By: | Raymond W.; Plotnikova T. (UNU-MERIT) |
| Abstract: | This paper revisits the competition-innovation relationship using an unbalanced panel of enterprise data stemming from four waves of the Luxembourgish innovation survey for the period 2002-2010. We estimate by full-information maximum likelihood a nonlinear dynamic simultaneous-equations model with pseudo-fixed effects using four measures of perceived competition and three indicators of innovation and find that firms whose main market is characterised by rapid obsolescence of products are more likely to spend on innovation and to introduce product or process innovations. We also find that these firms also often consider their main market to be characterised by rapidly-changing technologies where higher competition also implies higher innovation. |
| Keywords: | Multiple or Simultaneous Equation Models: Models with Panel Data; Longitudinal Data; Spatial Time Series; Multiple or Simultaneous Equation Models: Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Innovation and Invention: Processes and Incentives; Management of Technological Innovation and R&D; Technological Change: Government Policy; |
| JEL: | O31 O32 O38 C33 C35 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2015001&r=sbm |
| By: | Leppälä, Samuli (Cardiff Business School) |
| Abstract: | This paper presents a Cournot oligopoly model with R&D spillovers both within and across industries. The aim is to provide an appropriate theoretical foundation for three different hypotheses regarding the impact of the local production structure on innovation and output, as well as addressing mixed empirical results in this area. Both the effective R&D and total industry output are shown to increase with the variety of industries, which is aligned with Jacobs externalities. With respect to the concentration, the outcome is more ambiguous, where it depends on the variety, both spillover rates, and the R&D efficiency. If the variety is limited, then partial support is given to both Marshall-Arrow-Romer externalities in the case of effective R&D, and to Porter externalities in the case of the total industry output. The use of a relative rather than an absolute measure of variety is also shown to be important. |
| Keywords: | concentration; innovation; knowledge spillover; regional economy; variety |
| JEL: | O33 R11 L13 |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:cdf:wpaper:2015/3&r=sbm |
| By: | Heyen, Daniel |
| Abstract: | Technological innovation is a key strategy for tackling environmental problems. The required R&D expenditures however are substantial and fall on self-interested countries. Thus, the prospects of successful innovation critically depend on innovation incentives. This paper focuses on a specific mechanism for strategic distortions in this R&D game. In this mechanism, the outlook of future conflicts surrounding technology deployment directly impacts on the willingness to undertake R&D. Apart from free-riding, a different deployment conflict with distortive effects on innovation may occur: Low deployment costs and heterogeneous preferences might give rise to 'free-driving'. In this recently considered possibility (Weitzman 2012), the country with the highest preference for technology deployment, the free-driver, may dominate the deployment outcome to the detriment of others. The present paper develops a simple two stage model for analyzing how technology deployment conflicts, free-riding and free-driving, shape R&D incentives of two asymmetric countries. The framework gives rise to rich findings, underpinning the narrative that future deployment conflicts pull forward to the R&D stage. While the outlook of free-riding unambiguously weakens innovation incentives, the findings for free-driving are more complex, including the possibility of super-optimal R&D and incentives for counter-R&D. |
| Date: | 2015–03–02 |
| URL: | http://d.repec.org/n?u=RePEc:awi:wpaper:0584&r=sbm |
| By: | MORIKAWA Masayuki |
| Abstract: | Studies on the globalization of firm activities have been progressing rapidly, but empirical studies on service trade using firm-level data have been scarce. This paper, using panel data from Japanese firms, analyzes the relationship between service trade and firm characteristics such as productivity and finds the following. 1) The number of firms engaged in service trade is far less than that engaged in goods trade, and the ratio of service trade value to total sales is also small. 2) The share of trade with overseas affiliate firms is larger in service trade than in goods trade. 3) The productivity and wage level of service trading firms are higher than those of domestic firms and goods trading firms. 4) The productivity of firms that export services beyond the boundary of their firm groups is higher than those firms that export services only to their affiliate firms. Collectively, the results suggest that the fixed costs to initiate service trade exceed that to initiate goods trade, thus indicating the potentially important role of policies to liberalize and facilitate service trade. |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:15030&r=sbm |
| By: | SUZUKI, Shinya; OKAMURO, Hiroyuki |
| Abstract: | This study explores the determinants of orientation toward international business expansion by academic startups, focusing on their technological capabilities, availability of public support, regional characteristics of their location, and research standards of their parent universities. Based on unique survey data of 457 academic startups in Japan and by estimating an ordered logit model, we find that academic startups are strongly oriented toward expanding its business internationally if they have high technological capabilities, received public support, are established in locations with a high ratio of exporting small firms, or are affiliated with a parent university with an excellent level of research. |
| Keywords: | Academic startups, international business expansion, public support |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:hit:ccesdp:55&r=sbm |
| By: | Lundgren, Tommy (CERE); Zhang, Shanshan (CERE); Zhou, Wenchao (Centre for Regional Science) |
| Abstract: | This paper assesses energy efficiency in Swedish industry. Using unique firm-level panel data covering the years 2001-2008, the efficiency estimates are obtained for firms in 14 industrial sectors by using data envelopment analysis (DEA). The analysis accounts for multi-output technologies where undesirable outputs are produced alongside with the desirable output. The results show that there was potential to improve energy efficiency in all the sectors and relatively large energy inefficiencies existed in small energy-use industries in the sample period. Also, we assess how the EU ETS, the carbon dioxide (CO2) tax and the energy tax affect energy efficiency by conducting a second-stage regression analysis. To obtain consistent estimates for the regression model, we apply a modified, input-oriented version of the double bootstrap procedure of Simar and Wilson (Journal of Econometrics 136(1):31-64, 2007). The results of the regression analysis reveal that the EU ETS and the CO2 tax did not have significant influences on energy efficiency in the sample period. However, the energy tax had a positive relation with the energy efficiency. |
| Keywords: | energy efficiency; EU ETS; data envelopment analysis; double bootstrap |
| JEL: | D22 D24 L60 Q41 |
| Date: | 2015–02–18 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:slucer:2015_003&r=sbm |