nep-sbm New Economics Papers
on Small Business Management
Issue of 2015‒03‒27
twenty-six papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  3. Abandonment of Capital Investments and Survival of Small and Medium Enterprises: Evidence from Nigeria By Sehilat Bolarinwa; Babatunde Yusuf; Khadijah Idowu; Jamiu Tijani
  4. Effect of R&D on firms’ growth: discrepancy between sales growth and employment expansion By Donghyuk Choi; Joseph Kang; Chiyong Kim
  5. Revisitation to R&D market failure with spillover effects: A real option game approach By Gihyun Kwak; Jeongdong Lee
  6. Debt concentration of European Firms By Giannetti, Caterina
  8. Do Leverage and Ownership Concentration influence Firms’ Value? A Study of Jordanian Listed Firms By Dana Al-Najjar
  9. Export behaviour of SMEs in the Swedish computer service industry By Falk, Martin; Hagsten, Eva
  10. Financial constraints and modes of market exit in Slovenian manufacturing and service firms By Nina Ponikvar; Katja Zajc Kejžar; Darja Peljhan
  11. Mapping Innovation Priorities and Specialisation Patterns in Europe By Jens Sörvik; Alexander Kleibrink
  12. Examining the Liaison between Marketing Communication and Open Innovation, in the Scope of the Hungarian Innovation Clusters By István Kovács
  13. An Assessment of Access to Financial Management Services by Small, Medium, and Micro Enterprises in Thohoyandou Business Centre By Muhali Ndou
  14. Clusters and SMEs: An opportunity to be taken: Algerian Experience By Cherroun Reguia
  16. Developing Asian Innovation Scoreboard: Measuring National Innovation Capacity for Underdeveoped Countries By Joseph Kang
  17. Making business green and green into business By Pekka Tervonen; Harri Haapasalo
  18. Contribution of R&D services to added economic value in Estonia By Aaro Hazak; Raul Ruubel
  19. Interfirm cooperation and uncertainty: a study in the ICT Industry By Monika Golonka
  20. Conceptualizing and Developing Alignment Model between Business Strategy and Knowledge Management Strategy By Yue-Yang Chen; Hui-Ling Huang
  21. Legal and institutional determinants of factoring in SMEs: Empirical analysis across 25 European countries By Ginés Hernández-Cánovas; Ana Mol-Gómez-Váquez; Johanna Koëter-Kant
  23. Effects of Entrepreneurship on Economic Growth in Turkey: An Empirical Analysis By Mustafa Gerçeker; Bilal Özel; Ahmet Ay
  24. The influence of corporate board on forming firm-specific assets: Evidence from Japan By Takahiro Nishi
  25. Innovation policy, national innovation systems and economic performance: In search of a useful theoretical framework By Jan Fagerberg
  26. Exploring the role of Social Media Systems on Knowledge Management for SMEs By Jiachen Hou

  1. By: Mehmet Nuri SALUR (Necmettin Erbakan University Faculty of Social and Humanities Sciences)
    Abstract: Small and Medium-Sized Enterprises (SMEs) concept is a concept used in almost all countries. Concept stated size; economy, industrialization level, market size, industry and the varied used production methods between, depending on countries. Today, all the major companies, many risky ventures, innovation and patents are behind the small medium sized enterprises. These functions play an important role in the economy, they have a relatively weak structure and low possibilities when combined with supporting small medium sized enterprises in all economies is an issue that still preserves the validity and in this context, various programs are being implemented in many countries. In this context, the creation of securities exchanges catering to small medium sized enterprises and encourage small medium sized enterprises to benefit from these capital markets is of great importance. In cases where the current financing methods are insufficient initial public offerings as an alternative source of financing of small medium sized enterprises, not only financial but also organizational aspects of the chronic shortage has the potential to eliminate. On public offerings small medium sized enterprises by strengthening their institutional structures to ensure the transition to corporate governance as well as corporate governance principles that have internalized the biggest obstacle to growth rates that will overcome the problem of access to finance. As a result of the public offerings, small medium sized enterprises are more resistant to crises Whilst the closure of the company through the front of a stable socio-economic development will contribute significantly. In our study, all this digression in the direction of some of the EU and other developed/developing countries small medium sized enterprises in exchange for the implementation of Turkey's small medium sized enterprises Stock Exchange application is discussed and examined and small medium sized enterprises ring-opening of the financial performance of the positive effect that has been found.
    Keywords: SMEs, Stock Exchange, Public Offering
    JEL: D51 D51 D51
    Date: 2014–06
  2. By: Francesco Bogliacino
    Abstract: The “virtuous circle” between innovative inputs, outputs and economic performance is investigated in this article with a three equation model highlighting feedback loops and simultaneous relations. An empirical test is carried out considering innovative expenditure, innovative turnover and economic results in a sample of Italian manufacturing firms which are ‘serial innovators’. We use data for the period 2000-2008 from a rich panel of Italian firms over 50 employees drawn from ISTAT, the National Institute of Statistics, including data from three waves of Community Innovation Surveys. The model we use extends the one developed at the industry level by Bogliacino and Pianta (2013a, 2013b), confirming previous findings. For the – rather limited – core of Italian persistent innovators, results show the complex links at play, the lags in the effects of innovative efforts, and the feedbacks between economic success and the ability to sustain innovation expenditure.
    Keywords: Innovation, economic performance, three equation model, Italian firms
    JEL: L6 L8 O31 O33 O52
    Date: 2015–03–16
    Abstract: This paper presents empirical evidence on the impact of abandonment of capital investments on the survival of small and medium enterprises (SMEs) in Nigeria. It employs mixed methodological framework to question the extent to which abandonment of capital investments affects the performance of SMEs in five districts in Lagos. The study adopted survey inferential design. A total of 250 questionnaires were administered to different sets of enterprises, out of which 220 valid responses were received representing 88 per cent. Moreover, judgmental sampling technique was adopted for the purpose of this study. To validate or give further support to the results from specific data sources, triangulation method was used. This method includes both qualitative and quantitative phases. Content validity was adopted. Data gathered from the questionnaire were analysed with the aid of descriptive statistical techniques (such as standard deviation and arithmetic mean) and inferential statistical techniques (Regression analysis and ANOVA). Furthermore, multivariate analysis of factor analysis and its constituent tests were equally employed. Findings related to the study clearly show that the performance of SMEs is characterised by numerous problems including: lack of proper and effective capital budgeting mechanism, failure to access loan, lack of funds, strict banking policies, unethical business practices, lack of stable business policy, among others. The study also discovers that poor capital budgeting practice impacts on the survival of SMEs in Nigeria. The main contribution of this paper to knowledge lies in capital budgeting decision and abandonment option. This has strengthened our understanding that abandonment of capital investments is a critical factor in explaining SMEs survival in Nigeria.
    Keywords: Abandonment; Capital Investments; Survival; Capital Budgeting Theory; SMEs
    JEL: C12 O22 O10
    Date: 2014–07
  4. By: Donghyuk Choi (KISTEP); Joseph Kang (KISTEP); Chiyong Kim (KISTEP)
    Abstract: In this paper, we analyze the effect of firms’ R&D investment on sales growth and employment expansion. We attempt to shed light on the R&D investment effect by comparing the difference of R&D influence on these two growth dimensions. The estimation results of the panel fixed-effect model show that the previous year’s R&D investment has a significant and positive association with the current year’s sales growth but does not result in significant employment expansion. We also conduct a two-digit industry-level analysis based on the Korean Standard Industrial Classification (KSIC), using a quantile regression model, to examine how the discrepancy between sales growth and employment expansion differs between industries. Among various manufacturing industries, high-tech industries such as electronics are characterized by large discrepancies. Based on the estimation results, we discuss industrial policies for sustainable growth when a nation such as South Korea follows a high-growth strategy by increasing the rate of R&D investment.
    Keywords: R&D, firm growth, sustainable growth
    JEL: L25 O43
    Date: 2014–07
  5. By: Gihyun Kwak (Technology, Mangament, Economics and Policy Programme, Seoul National University); Jeongdong Lee (Technology, Mangament, Economics and Policy Programme, Seoul National University)
    Abstract: One of the main topics regarding R&D investment in economics is “R&D market failureâ€. This is imputed that knowledge, which is the primary output of R&D, has spillover effects due to its public-good-like properties. It cause incomplete appropriability of innovating firm and will lead the underprovision of R&D investment in the economy which hinders the process of economic growth as a result. To explain and find solutions for R&D market failure, spillover effects generated in R&D should be thoroughly analyzed. Following earlier literatures on R&D spillovers, we consider two dimensions of spillovers in R&D simultaneously. First one is related to input-side knowledge spillover and second one is related to output-side knowledge spillover. The former implies that information about research activities at one firm may trickles out and influences the research activities of other firms. They are different in affecting incentives to invest in R&D. To consider both spillover effects concurrently, we take real option game approach which can be used to analyze situations with combined strategic interactions among players and uncertain environment. As a benchmark, we first derive an optimal R&D investment rule of a monopolist. Next, we derive an optimal R&D invest rule of a duopolist. To compare both of them, we can find how incomplete appropriaiblity problem of R&D investment is affected by two dimensions of spillover effects. Further, we can derive policy implications such as private R&D investment is stimulated if input-side or output-side spillovers could be mitigated.
    Keywords: R&D market failure, Knowledge spillovers, Real options game
    Date: 2014–10
  6. By: Giannetti, Caterina
    Abstract: This paper investigates the level of debt specialization across European firms relying on a cross-country comparable sample of manufacturing firms. We find that a number of firm characteristics -- such as firm size and age -- help predict the firm composition of the various types of debts (i.e. debt specialization) but not the level of each debt share. In particular, we observe that small and young firms have a more concentrated debt structure (i.e. they rely on few types of debt). However, these relationships are not linear and seem to be U-shaped. We also find that Spanish firms have the most diversified debt structure, and that diversified firms are less likely to experience a severe reduction in turnover.
    Keywords: Debt specialization, European firms, Firm financing
    JEL: F20 G32
    Date: 2015–03–12
  7. By: Francesco Bogliacino
    Abstract: In this article we discuss how to summarize the persistent and large heterogeneity in innovative behaviour and economic performance. A Revision of the Pavitt (1984) taxonomy - covering manufacturing and services, as well as ICT activities – is proposed as a key tool for identifying common characteristics and diversities in patterns. An extensive analysis of Innovation Survey data, on sources, objectives, inputs and outcomes of innovation, allows us to test alternative industry groupings, leading to an extensive assessment of a Revised Pavitt Taxonomy that is able to capture major structural differences in the relationship between innovation and performance. As industries' classifications has changed from NACE Rev.1 to NACE Rev.2 in 2008, a Revised Pavitt taxonomy is also provided for the new industries.
    Keywords: Innovation, Innovation Surveys, Pavitt Taxonomy.
    JEL: O30 O33
    Date: 2015–03–16
  8. By: Dana Al-Najjar (Applied Science Private University)
    Abstract: In the last decade corporate control has been facing a major challenge enhanced by successive corporate scandals; moreover, the shape of relationship between financial decisions (capital structure) and ownership structure on the firm value has been the heart debate of academics and financial experts for recent years. Furthermore, there have been contradictory findings across years by different researchers all over the world, in this path the studies of Demsetz (1983), Demsetz and Lehn (1985) provides support to no statistical relationship between ownership structure and firm performance. On the other hand, subsequent studies by Morck, Shleifer and Vishny (1988), McConnell & Servaes (1990; 1996), Smith & Watts (1992), and Lang et al., (1996) all these studies reported that their statistical analysis support the existence of relationship between both capital structure and firms’ performance. In turn capital structure is likely to affect managers' incentives and, hence, the firms’ performance (Harris & Raviv (1991); Fama & French (1998); Barclays & Smith (1999); and Rizov (2004)).This study uses a sample of Jordanian non-financial firms listed from 2005-2012 to examine how the capital structure, and ownership structure affect the firm’s value. The study depends on panel data analysis; the dependent variable is the firm value measured by P/E ratio, and the independent variables are leverage measured by Debt/ Asset ratio, and ownership concentration through Herfindahl index, for the explanatory variables they contain both firm size, and profitability.Partially consistent with the previous studies; my empirical results support the presence of significant relationship between capital structure and firm value, and insignificant relationship between ownership structure and firms value for Jordanian firms.
    Keywords: Ownership structure; Capital structure; Firm value; Accounting Measurements; Agency Theory; Jordanian Listed firms; Emerging Markets.
    Date: 2014–10
  9. By: Falk, Martin; Hagsten, Eva
    Abstract: Export participation of SMEs in Swedish computer services has increased rapidly over the last decade. Despite the increase, export participation rates of SMEs including micro enterprises remain rather low at 13 percent in 2010. Based on uniquely linked firm-level datasets with full coverage of micro enterprises and sole proprietors, this study investigates the determinants of export participation of Swedish SMEs in the computer service industry. Exports include both goods and services. Estimates based on the conditional logit model show a significantly positive relationship between initial labour productivity and the decision to export. An interesting and new finding is that the magnitude of the relationship between the probability to export and initial labour productivity is low once firm effects are controlled for. Surprisingly, the impact of labour productivity on exporting does not differ between micro enterprises and the remaining SMEs (10-249 employees). Furthermore, skill intensity is significantly related to the probability of exporting with low marginal effects. Overall, labour productivity and skill intensity only explain a small proportion of the export boom of Swedish software SMEs.
    Keywords: exports,productivity,computer service industry,human capital,conditional logit model
    JEL: F14
    Date: 2015
  10. By: Nina Ponikvar (University of Ljubljana, Faculty of Economics); Katja Zajc Kejžar (University of Ljubljana, Faculty of Economics); Darja Peljhan (University of Ljubljana, Faculty of Economics)
    Abstract: The recent financial and economic crisis has brought back the attention to studying the characteristics of surviving firms and those exiting the market. Among these characteristics the access to finance has received large attention, since the economic crisis decreased the availability of finance and increased its costs. Further, literature from industrial organization, entrepreneurship and strategic management all show that factors behind different types of firm exit decisions, such as bankruptcy, voluntary liquidation, mergers and acquisitions (M&A) differ. Our paper studies factors that influence the firm’s decision to exit the market by explicitly considering alternative firm exit modes. Our competing risk models are estimated with a standard multinomial logit model and the alternative multinomial probit model on the population of Slovenian firms in 2006-2012. We distinguish between (1) court driven exit as a result of bankruptcy or forced liquidation; (2) voluntary liquidation, (3) disappearances from the dataset as a result of mergers and acquisitions, and (4) termination based on a resolution/decision of the registration agency or according to the law. We argue that decision over whether to close down a business or to sell out to another company is influenced by financial constraints, firm specific characteristics (size, age, productivity, capital intensity), and industry factors. The paper tests whether different facets of financial constraints and other firm and industry level characteristics hold different degrees of relevance for alternative routes of the firm operations termination. In measuring financial constraints as antecedent to an exit event, we propose the exploratory factor analysis and derive to three dimensions of the financial constraint measure, i.e. liquidity, operational-efficiency factor, and profitability factor and in this way contribute to the financial constraints literature. We contribute to the firm exit literature by showing that court-driven exit, voluntary liquidation and M&A follow diverse exit routes driven by different firm level and industry characteristics. We find that the main difference between bankrupt and liquidated firms is that the choice of exiting through voluntary liquidation is characterized by economic distress while firms choosing to exit by bankruptcy are firms in financial and economic distress. Economically distressed firms have bad prospects because of low or negative profitability and little opportunity for improvement. The main characteristic of financially distressed firms is high leverage level causing problems in repaying debts. Firms that decided to exit by M&A usually have profitability problems, but are not financially distressed.
    Keywords: firm exit, financial constraints, bankruptcy, liquidation, merger and acquisition (M&A)
    JEL: G32 L25 C23
    Date: 2014–07
  11. By: Jens Sörvik (European Commission – JRC - IPTS); Alexander Kleibrink (European Commission – JRC - IPTS)
    Abstract: Mapping public innovation priorities is important for policy makers and stakeholders, allowing them to explore the potential for collaboration and to better understand innovation dynamics. This working paper presents original data on innovation strategies for smart specialisation (RIS3) in European Union (EU) regions and Member States, obtained from the Eye@RIS3 open data tool for sharing information on the areas identified as priority areas by 198 innovation strategies. It also contextualises these priorities and specialisation patterns with regard to the concept of ‘smart specialisation’. The most common RIS3 priority areas in the EU are energy, health, information and communication technologies, food, advanced materials, services, tourism, sustainable innovation, advanced manufacturing systems, and the cultural and creative industries. The paper also explores the degree to which policy makers are creating unique portfolios of priorities or, in contrast, are imitating one another. We find that few regions have developed similar combinations of priorities. However, there are groupings around a number of popular categories and connected to prioritised EU objectives. Finally, we compare the main areas of planned investment with sectoral data on firms, employment and patents, with the conclusion that the connection between priorities and the economic and innovation structures is weak.
    Keywords: smart specialisation, prioritisation, innovation policy, open data, structural funds
    Date: 2015–03
  12. By: István Kovács (Budapest University of Technology and Economics, Department of Management and Corporate Economics)
    Abstract: In the last decade, a new phenomena has appeared in the scope of innovation, deriving from the exaggerated perception of the forming and optimizing effects of the community groups coming exist outside of the company which have an essential role to boost up its competitiveness in the future. Thus many companies have realized that sharing their innovations infers better position in the market.It indeed contributed to the widespread of this concept. Nonetheless this phenomena – non episodically – brings additional advantages for the company, such as exploitation of the own market with enhanced research capacity or building in originally not existed ideas to the current capital (Chesbrough, 2003).On the other hand, open innovation can be described as the flow of direct exploitation of knowledge for the sake of accelerating internal innovation along with expanding markets to its external applicability. On the market this philosophy appeared firstly with the open source software’s (West and Gallagher, 2004).In this manner, open innovation is a paradigm that assumes internal and external ideas are inseparably applied together when a company tends to develop technology, toolkit and communication. This business model is about to utilize even internally and externally created ideas to create values, simultaneously indicates internal movements to exploit a certain (created) value. As a result, open innovation brings significant advantages to the companies which become capable to obtain intellectual power from outside their boundaries (Gassmann, Enkel and Chesbrough, 2010).In Hungary, the idea of open innovation is widely supported by the innovation clusters (currently 23 are operating in Hungary). The target population of my research was made up of the accredited innovation clusters. The duration of data registration took place between July 2011 and May 2013, during which period a total of 21 innovation clusters earned the title accredited cluster. In my assessment I managed to contact 18 accredited innovation clusters, which is 85.71% of the entire target population (access rate). The result and practical significance of my study shows that innovation clusters are relevant organisational forms during the examination of open innovation. Because from networks they secure wider platform for cooperation; help the integrity of knowledge through collective projects and create trustful atmoshpere between the members using different communication technologies and practices.
    Keywords: innovation, open innovation, communication, clusters
    JEL: O32 M31
    Date: 2014–10
  13. By: Muhali Ndou (University of Venda)
    Abstract: SMMEs, as vehicles of growth, innovation and social transformation, are important businesses which must be nurtured and harnessed by the South African authorities to enable them to quickly and effectively adapt to the challenges of globalization thereby benefiting the economy. The importance of SMMEs to the South African economy has already been acknowledged by government. Despite the growth in venture capital funding, access to funding remains a problem for small enterprises, in particular for empowerment groups in South Africa. In most surveys among small enterprises, the provision of concessionary finance comes out as one of the most urgently felt needs. Yet, extensive research reveals that access financing is one of the several important factors that are critical for business survival and growth, the other factors are market access and lack of financial management skills. South Africa’s financial sector has always been reluctant to provide comprehensive services for the fragmented, risk-prone and geographically dispersed small enterprises sector.One of the major hurdles that face entrepreneurship endeavours is the shortage of financial management skills. South Africa has a grim picture of the skills gap. SMMEs become the hardest hit as the entire commerce sector forages for the scarcest skills. Small enterprises have been victims of the instance of developing their employees only to lose them to bigger firms offering more lucrative incentives. As a point in case, SMMEs in South Africa’s expanding construction sector are losing the fight in the battle for scarce skills.Therefore, this study made an assessment on access to financial management services by SMMEs in Thohoyandou Business Centre, as this has a bearing on the economic development and sustainability of SMMEs. The research wanted to establish if the SMMEs in Thohoyandou Business Centre had access to financial management services support and, if they have, are the SMMEs ready to receive these financial management services?
    Keywords: Small, Medium and Micro-Enterprises, financial management services, capital funding,
    JEL: F39
    Date: 2014–10
  14. By: Cherroun Reguia (University)
    Abstract: Companies face a strong competitiveness that characterizes the economic environment; however, the shape of this competitiveness has been changed due to many factors to shift from pure competitiveness, where each company works in isolation for its own benefits, to a new sort of competitiveness under a kind of cooperation between many companies and other economic actors, sharing local resources, using similar technologies, abecause they need to be near from the required financial and human resources, as well as the innovation resources, for obtaining the raw materials in high quality and low prices, meanwhile to find near markets to distribute their outputs. This can be only if they work in a region that contains all that through clustering and networking. These linkages and alliances may be between big companies from both private and public sector, as well as small businesses that have been extended worldwide in an accelerated pace. This new type of companies “SMEs†with their specific characteristics need, such kind of cooperation to face the strong competitiveness and to benefit from the external economies, then to maintain a significant market part. In this context Algerian authorities work to implement effecient strategies to encourage clusters in the interest of SMEs in many fields.This paper is divided into three parts; the first one aims to give a theoretical base about the notion of “clustersâ€, the advantages of clusters, types of clusters, and the second part is about SMEs and how can they get benefits from clustering. The last part discusses the Algerian experience in adopting clusters strategies.
    Keywords: Clusters, SME's, Networks.
    Date: 2014–05
  15. By: Małorzata Kucharczyk (Kozminski University); Iwona Cieślak (Kozminski University)
    Abstract: The role of management accounting in improving the efficiency of business entities management has been described in literature repeatedly. The positive side associated with its use has long been known and the creation of new tools of management accounting only strengthens it. However, so far the management accounting has been used primarily in large enterprises. Numerous examples showing possibilities of its practical application, its advantages and benefits of using it are cases based on experience gained in large business entities. Does it mean that management accounting cannot be applied in small and medium-sized enterprises?The article takes the issue of application of management accounting in small and medium-sized enterprises. The assumptions of management accounting in relation to the specific needs of small and medium-sized enterprises will be discussed. The experience in terms of the applicability of accounting in small and medium-sized enterprises will be analysed. The review of the issues being faced by the managers in small and medium-sized enterprises concerning the application of management accounting tools will be conducted. Challenges for people professionally engaged in management accounting will be intimated. This article is debatable. It is a review of the literature. It complies the result of work concerning the application of management accounting in small and medium enterprises coming form various research centres and other centres professionally dealing with accounting. It also refers to the issue of supporting managers in small and medium-sized enterprises in application of management accounting tools. Its aim is to seek answers to the question whether the outsourcing of accounting in small and medium enterprises creates the possibility to popularize the management accounting. This article is also a reason to consider undertaking further works, the effect of which should be growing knowledge about management accounting among managers/owners of small and medium-sized enterprises as well as the development of abilities of the practical application of management accounting tools in small and medium enterprises. Such work will thus contribute to the improvement of effectiveness of the enterprises’ operation. This is especially important in the economy of the European Union. According to data contained in the ANNUAL REPORT ON EUROPEAN SMEs 2012/2013 in 2012 small and medium-sized enterprises were the place of employment of about 86,8 million of people and the development of over 57% share in gross value added generated by the private, non-financial economy in Europe.
    Keywords: management accouting, small and medium - size enterprises, accounting tools
    JEL: M49
    Date: 2014–10
  16. By: Joseph Kang (Korea Institute of Science and Technology Evaluation and Planning)
    Abstract: The importance of innovation has been highlighted for the past decades. A number of studies regarding economic growth and innovation have emphasized R&D activities and innovation capacity for one nation’s economic growth. Accordingly, major advanced countries established policies by conducting a comprehensive evaluation on the quantitative and qualitative capacity of their S&T innovation. Various approaches and index systems, such as OECD Science, Technology and Industry (STI) Scoreboard for OECD countries, Nordic Innovation Monitor (NIM) for Northern European countries, Composite S&T Innovation Index (COSTII) for South Korea, among others, are used to evaluate the innovation capacity of a country or a region. Despite the Asian region has many issues to address in order to achieve sustained economic growth, enhanced S&T competitiveness, and improved technological innovation, there has not been a good regional-level evaluation for Asia. Because major international innovation evaluation frameworks are centered on the advanced countries in Europe and North America, they cannot accurately reflect the characteristics of Asian countries (of course, underdeveloped countries), which are on the different economic development stage and have different innovation capacity. The research is to develop an indicator system that reflects the characteristics of Asia, which is named Asian Innovation Scoreboard (AIS). Generally, most of Asian countries are underdeveloped. Therefore, its application could be applied to developing indicator systems that measure innovation capacity of underdeveloped countries. We defined the concept of an innovation scoreboard in consideration of Asian characteristics, developed a preliminary innovation indicator system. And then, we applied the Analytic Network Process (ANP) methodology to examine factors related to the model and indicator system. Finally, we evaluated our indicator system by applying a framework that is developed to evaluate an indicator system by Jung (2013). AIS consist of 43 indicators that represent overall area of innovation capacity.
    Keywords: Asian Innovation Scoreboard, Innovation Capacity, Innovation Indicator, Evaluation, Innovation Policy
    JEL: O32 O38 O00
    Date: 2014–10
  17. By: Pekka Tervonen (University of Oulu); Harri Haapasalo (University of Oulu)
    Abstract: Oulu Innovation Alliance (OIA) is a example of triple-Helix consortium. It integrates top know-how from printed intelligence, wellbeing technology, cleantech and 3D internet and brings together research institutions, businesses and public sector organizations. OIA generates cutting-edge global business from research, development and innovation projects and ventures. The essential mission of the Centre for Environment and Energy (CEE) is to be strongly involved in branding Oulu as an eco-innovative city with green economy. Our focus is on air, water, energy and efficiency of resources with measurement technology as a cross-sectional theme. Our vision is to be the number one partner in eco-innovative solutions. Our strategy is to develop a knowledge hub that brings together the fields of environment and energy, thus, creating efficient connections between top experts and research, development and innovation projects (R&D&I projects); and co-operation networks and investors. To achieve our goal, the CEE uses a transparent network of connections where the top research of a chosen field and the business expertise in Oulu can find each other both nationally and internationally. This creates a lasting foundation for co-operation between research and business. Our operational philosophy is based on research programmes and networking which allows for swift and proactive co-operation between research communities and businesses. Through co-operation and joint projects we can develop new expertise and create new business for the world market. The aim of this paper is to describe the theoretical foundation and operative model for our centre of expertise – CEE.
    Keywords: Innovations, environment, energy, cleantech
    JEL: O32
    Date: 2014–10
  18. By: Aaro Hazak (Tallinn University of Technology); Raul Ruubel (Tallinn University of Technology)
    Abstract: The role and intensity of knowledge within an economy remains a key success factor for long-term economic growth, increased productivity, competitiveness and socio-economic sustainability. These challenges are particularly important for emerging economies that are yet to catch up frontier knowledge economies. This paper seeks to understand the contribution that R&D services have through added economic value to the GDP in Estonia. Based on the most recent supply and use matrices on the data from year 2009, prepared under the input-output framework of Estonian national accounts, we identify to which extent do the R&D services used in the Estonian economy originate from domestic industries and imports, and how the supplies of R&D services are allocated between intermediate and final uses, including exports. As an output of that analysis we identify the direct contribution of R&D services to added economic value in the Estonian economy to be 0.5% and their primary indirect contribution to be 0.4%. Further indirect effects however exist which need to be quantified under our following studies. Vast majority (93%) of the R&D services used in the Estonian economy appear to be of local origin, generated primarily by companies specialising in R&D services. Export capacity of Estonian R&D services appears to be very limited, contributing 0.2% of Estonian total exports. Overall, we identify that a significant progress is yet to be made to catch up with knowledge frontier countries.
    Keywords: R&D services, GDP, supply and use tables, input-output modelling
    JEL: L80 C67
    Date: 2014–07
  19. By: Monika Golonka (Kozminski University)
    Abstract: In this empirical study, I take the perspective of the firm in order to explore and understand forming and configuring interfirm cooperation, applying a firm’s alliance portfolio approach. The majority of studies have found interfirm cooperation to be crucial for acquiring resources, increasing firms’ performance, and building competitive advantages, especially in the most globalized industries, knowledge- and technology-intensive and characterized by a high level of uncertainty. Many studies have explored the impact of alliance portfolio configuration on firms’ characteristics. However, little attention has been focused thus far on phenomena of alliance portfolio forming or its impact on portfolio configuration. In order to fill this gap, I applied a mixed method approach, including a multi-site study, and analyzed the phenomena of alliance portfolio forming in 26 ICT firms.The results indicate that, in the same institutional environment, firms conduct various cooperation strategies and create different alliance portfolios. The major reason for this is the different approaches to uncertainty and trust. The results show that initial trust is a crucial factor influencing firms’ ability to take advantage of uncertainty. Moreover, a higher ability to take advantage of uncertainty—namely, trusting instead of applying calculative uncertainty reduction mechanisms in forming interfirm relationships—is a major factor distinguishing the hyper-growth firms from the remaining ordinary analyzed firms. The results contribute to the understanding of approaches to uncertainty and types of trust in forming firms’ alliance portfolios as well as understanding factors—other than institutional ones—behind firms’ cooperation strategies.
    Keywords: Uncertainty, Interfirm Cooperation, Alliance Portfolio Forming, Trust, ICT Industry
    JEL: P13 M10 L24
    Date: 2014–07
  20. By: Yue-Yang Chen (Department of Business Administration, I-Shou University); Hui-Ling Huang (Department of Business Administration, Chang Jung Christian University)
    Abstract: Since knowledge has been regarded as one of the important resources for firms to compete in today’s competitive environment, knowledge management (KM) are so crucial for achieving superior performance. In this vein the strategy of knowledge is likely to be a critical issue of strategic choice for the firm. Evidences showed that the implementation of KM strategy can cultivate organizational dynamic capabilities to improve knowledge quality and quantity, as well as for consolidating the value and practicability of knowledge. Thus, according to the previous research on KM field, this study tries to construct and develop a KM fit model. We contend that the alignment effect will contribution to knowledge management performance.
    Keywords: Knowledge management strategy, Business strategy, Knowledge management performance
    JEL: D83 M10
    Date: 2014–06
  21. By: Ginés Hernández-Cánovas (Universidad Politécnica de Cartagena); Ana Mol-Gómez-Váquez (Universidad Politécnica de Cartagena); Johanna Koëter-Kant (Vrije Universiteit Amsterdam)
    Abstract: We use a survey data set of 4348 SMEs from 25 European countries to analyze the association between the use of factoring as a form of SME financing and the legal environment of the country where in which they operate. Our findings indicate that firms operating in countries with legal environments that weakly protect the rights of creditors, such as those under French-civil-law, with political instability or high enforcement costs, are more likely to use factoring. We hypothesize that in such environments bank financing could be more restricted and factoring might be an alternative source to alleviate SMEs financing constraints. In line with this argument, we find that firms experiencing some financing difficulties are more likely to use factoring. We also show that the likelihood of using factoring increases for firms located in growing economies. Factoring might be a means for these firms to finance the enlargement of their business activity. (Ginés Hernández-Cánovas acknowledges financial support by Fundación Séneca (Project 15403/PHCS/10), and by Ministerio de Ciencia e Innovación (Project ECO2011-29080)
    Keywords: Factoring, SMEs financing, financial constraints, legal system.
    JEL: G00 G30 G32
    Date: 2014–07
    Abstract: Nowadays, the use of social media has become an important tool to introduce new products and services in the world. However, in some countries social networks are very important to show what the company is and what they are doing with their businesses, it means that they sharing everything with their customers, like products, services, goals, some cases they try to educate their public about the use of the product or service, among other things.When people started using social networks on the internet, these were conceived as a mean to communicate with relatives or friends. However, with time, the social networks have evolved to a point that they now allow people to use them to generate sales and increase the competitiveness of enterprises.The purpose of this research is to demonstrate the lack of training and knowledge about the use of social networks by local businesses and the barriers they face when they decide to use them as sales platforms, and to demonstrate the impact it could have on their businesses. Four SMEs located in Colima State in Mexico were studied, selected to be sufficiently successful and representative in terms of industry and size, for theoretical generalization purposes. These tourism SMEs stem from various sectors, such as: travel agencies, tour operator, hotel and restaurant. Data were collected through semi-structured tape-recorded interviews, ranging approximately one hour and a half each, with the owner-manager or the manager responsible for social media. Interview transcripts were then coded and analyzed following Miles and Huberman’s (1994) prescriptions with the assistance of the Atlas.ti application.The results allow us to conclude that the investigated companies believe that the use of social networks is extremely important to be able to compete in the market. However, due to a lack of training, they were not able to implement properly the utilization of social networks in their companies.
    Keywords: Social networks, enterprises, barriers, Micro, small and medium business
    JEL: D22 D23 O39
    Date: 2014–06
  23. By: Mustafa Gerçeker (Selçuk University); Bilal Özel (Selcuk University); Ahmet Ay (Selcuk University)
    Abstract: The entrepreneurship seems to be an important source for economic growth. For this reason, the emphasis on entrepreneurship with the importance for economic growth is increasing day by day. This study investigates the existence of the relationship between entrepreneurship and economic growth by using control variables including employment and savings. For this purpose, possible relations were tried to be determined by using bound test and ARDL method for the period 1988-2012 with annually data. The results of bound test, shows that there is a long-run relationship between economic growth and entrepreneurship. Afterward long-run coefficients and equations were estimated. The results of long run coefficients shows that there is a positive and significant relationship between economic growth and entrepreneurship.
    Keywords: entrepreneurship,economic growth,ARDL method
    Date: 2014–10
  24. By: Takahiro Nishi (Meiji University)
    Abstract: In this study, I have examined the relationship between the corporate governance structure and corporate strategy. While many research works have successfully revealed coherence between board structure and environmental elements, a few studies eliminate the effect of corporate governance on corporate strategy and strategic choice. Previous studies around corporate governance and strategy have focused mainly on the influence of shareholders on corporate diversification and R&D policy, as well as the ownership structure and board’s risk attitude on strategic choice. However, previous studies failed to reveal the effect of corporate governance on accumulating distinctive capabilities that would be the source of competitive advantage. The rent appropriation perspective is applied in this study to consider the effect of corporate governance on accumulating firm-specific assets. The rent appropriation perspective advocated by Coff (2010) gives hints on considering this problem. Dynamic capabilities orchestrate and reconfigure the existing resources into new markets and coordinate appropriate distribution of resources into production factors. The consideration and discretion of the corporate board can lead to changing the allocation of these distinctive resources and accumulate distinctive capabilities. In other words, the configuration of corporate governance would discipline and stimulate innovation in the corporation. Corporate governance would be appropriate when this configuration fits for environmental demand. I have considered the strategic implications of corporate governance by studying recent corporate governance reforms in Japanese electronics corporations that have struggled in sluggish performance for many years. Using quantitative methods, this study has examined the interaction effects of ownership structure and growth opportunities on R&D investment mediated by the corporate board. It also explores the influence of the corporate board on accumulating firm-specific assets by employing firm-specific assets as variables. In this study, I have successfully revealed the mediating role of the corporate board in allocating corporate rent to stakeholders, which creates distinctive capability. Further, this study has found that coherent patterns among board governance structure and ownership characteristics and product architecture do exist.
    Keywords: Corporate Governance, Board of Director, Strategy, Firm-specific assets
    JEL: M10 D23 M16
    Date: 2014–10
  25. By: Jan Fagerberg (Aalborg University, University of Oslo and University of Lund)
    Abstract: The term Òinnovation policyÓ started to penetrate the policy discourse a few decades ago and it may be time to take stock of what is learnt and consider what the challenges for the theory and practice in this area are. This paper contributes to this process by focusing on the extent to which we have a theoretical framework that is sufficiently helpful. The first section introduces the issue. Section 2 discusses theoretical frameworks of relevance for innovation policies and considers the relationship between their underlying assumptions and available evidence from innovation-surveys. Based on recent advances in innovation-systems theory, section 4 presents a synthetic framework for the analysis of innovation policy. Finally, lessons and challenges for future work in this area are considered. Empirical evidence from the Nordic area is introduced at various points to illustrate the relevance of the arguments brought up during the discussion.
    Date: 2015–03
  26. By: Jiachen Hou (University of Strathclyde)
    Abstract: The popularity of social networking tools have significantly contributed to the change in the business models, there has been explosive growth in the number of use of social media tools among enterprises. With the rise of using web tools, the management of knowledge become crucial for enterprises as they understand effectively managing collective intellect can help firms to quickly response to the changeable market. The significance of SMEs to the global economy is obvious. However, current researches show that many SMEs are not taking advantage of the developing knowledge economy and move towards the e-business era. While it is generally accepted that there are much challenges faced by SMEs in utilising web tools when comparing with large sized enterprises, it is clear that very little work has been done to gain understand of using social media for knowledge management purpose. To address this gap, this research investigates the adoption of social media tools for managing knowledge among SMEs. There are two objectives: first, to explore the use of social media among SMEs, and second, to define in detail how social media is being put into practice and contributing towards knowledge management.
    Keywords: Social Media, SMEs, Knowledge Management
    JEL: M15 M19
    Date: 2014–10

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