nep-sbm New Economics Papers
on Small Business Management
Issue of 2015‒04‒02
thirteen papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Are High-Growth Firms Overrepresented in High-Tech Industries? By Daunfeldt, Sven-Olof; Elert, Niklas; Johansson, Dan
  2. The innovative input mix. Assessing the importance of R&D and ICT investments for firm performance in manufacturing and services By Marina Rybalka
  3. Innovation and productivity in services and manufacturing : The role of ICT investment By Aboal D.; Tacsir E.
  4. The Impact of Entrepreneurship Education in High School on Long-Term Entrepreneurial Performance By Elert, Niklas; Andersson, Fredrik; Wennberg, Karl
  5. Barriers to innovation: can firm age help lower them? By Gabriele Pellegrino
  6. EXPORT, R&D AND NEW PRODUCTS By Francesco Bogliacino; Dario Guarascio; Mario Pianta
  7. Inward foreign direct investment and innovation: evidence from Italian provinces By Roberto Antonietti; Raffaello Bronzini; Giulio Cainelli
  8. Dynamics of firm participation in R&D tax credit and subsidy programs By Isabel Busom; Beatriz Corchuelo; Ester Martínez-Ros
  9. Spanish Multinational Firm and its Internationalization Process By David de Matías Batalla
  10. Good enough! Are socially responsible companies the more successful environmental innovators? By Reif, Christiane; Rexhäuser, Sascha
  11. Birth, Survival, Growth, and Death of ICT Companies By Garry A. Gabison
  12. Asset sources of competitive advantage of SMEs from high-tech sector in the region of Greater Poland By Malgorzata Gajowiak
  13. The Italian Firms’ International Activity By Riccardo Cristadoro; Leandro D’Aurizio

  1. By: Daunfeldt, Sven-Olof (HUI Research); Elert, Niklas (Research Institute of Industrial Economics (IFN)); Johansson, Dan (HUI Research)
    Abstract: It is frequently argued that policymakers should target high-tech firms, i.e., firms with high R&D intensity, because such firms are considered more innovative and therefore potential fast-growers. This argument relies on the assumption that the association among high-tech status, innovativeness and growth is actually positive. We examine this assumption by studying the industry distribution of high-growth firms (HGFs) across all 4-digit NACE industries, using data covering all limited liability firms in Sweden during the period 1997–2008. The results of fractional logit regressions indicate that industries with high R&D intensity, ceteris paribus, can be expected to have a lower share of HGFs than can industries with lower R&D intensity. The findings cast doubt on the wisdom of targeting R&D industries or subsidizing R&D to promote firm growth. In contrast, we find that HGFs are overrepresented in knowledge-intensive service industries, i.e., service industries with a high share of human capital.
    Keywords: Entrepreneurship; Firm growth; Gazelles; High-growth firms; High-impact firms; Innovation; R&D
    JEL: L11 L25
    Date: 2015–03–25
  2. By: Marina Rybalka (Statistics Norway)
    Abstract: Business innovation is an important driver of productivity growth. In this paper, I assess the importance of R&D and ICT investment for firm performance in the manufacturing and service industries. Explicitly, I use an extended version of the CDM model that treats ICT together with R&D as the main inputs into innovation and productivity, and test it on a large unbalanced panel data set based on the innovation survey for Norway. Four different types of innovation and the number of patent applications are used as innovation output measures. I find that ICT investment is strongly associated with all types of innovation in both sectors, with the result being strongest for product innovation in manufacturing and for process innovation in service industries. The impact of ICT on patenting is only positive in manufacturing. Overall, ICT seems to be less important than R&D for innovation, but more important for productivity. These results support the proposition that ICT is an important driver of productivity growth. Given the high rate of ICT diffusion in Norway, my results also contribute to explaining what is referred to as the ‘Norwegian productivity puzzle’, i.e. the fact that Norway is one of the most productive economies in the OECD despite having relatively low R&D intensity.
    Keywords: Innovation; ICT; R&D; Productivity; CDM model; Manufacturing and Services
    JEL: D24 L60 L80 O3
    Date: 2015–02
  3. By: Aboal D.; Tacsir E. (UNU-MERIT)
    Abstract: Several studies have highlighted ICT as a driver of firm productivity in developed countries. However, the evidence about the impacts of ICT on services and manufacturing and particularly for developing countries is scarce. This paper focuses on understanding the determinants of investments in ICT at firm level and how this adoption ultimately affects innovation and productivity of Uruguayan services firms vis a vis manufacturing. Results show that ICT investments are more subject to economies of scale than other types of investments, are important for obtaining product or process innovations in services and its absence conspires against non-technological organisational or marketing innovations. Both ICT and other innovation investments are positively associated with productivity in services but only ICT affect productivity in manufacturing. Interestingly, the absence of investment in ICT is associated with lower levels of productivity.
    Keywords: Firm Behavior: Empirical Analysis; Innovation and Invention: Processes and Incentives; Management of Technological Innovation and R&D; Technological Change: Government Policy;
    JEL: O31 O32 D22 O38
    Date: 2015
  4. By: Elert, Niklas (Research Institute of Industrial Economics (IFN)); Andersson, Fredrik (Statistics Sweden); Wennberg, Karl (Stockholm School of Economics)
    Abstract: This paper studies the long-term impact of entrepreneurship education and training in high school on entrepreneurial entry, performance, and survival. Using propensity score matching, we compare three Swedish cohorts from Junior Achievement Company Program (JACP) alumni with a matched sample of similar individuals and follow these for up to 16 years after graduation. We find that while JACP participation increases the long-term probability of starting a firm as well as entrepreneurial incomes, there is no effect on firm survival.
    Keywords: Entrepreneurship Education; Quasi-experiment; Performance
    JEL: D22 L25 L26
    Date: 2015–03–26
  5. By: Gabriele Pellegrino (University of Sussex)
    Abstract: This paper examines how firm age can affect a firm’s perception of the obstacles (deterring vs. revealed) that hamper and delay innovation. Using a comprehensive panel of Spanish firms for the period 2004-2011, the empirical analysis conducted shows that distinct types of obstacle are perceived differently by firms of different ages. First, a clear-cut negative relationship is identified between firm age and a firm’s assessment of both the internal and external shortages of financial resources. Second, young firms seem to be less sensitive to the lack of qualified personnel when initiating an innovative project than when they are already engaged in such activities. By contrast, the attempts of mature firms to engage in innovation activity are significantly affected by the lack of qualified personnel. Finally, mature incumbents appear to attach greater importance to obstacles related to market structure and demand than is the case of firms with less experience.
    Keywords: Barriers to innovation, firm age, probit panel data model
    JEL: C23 O31 O32 O33
    Date: 2015
  6. By: Francesco Bogliacino; Dario Guarascio; Mario Pianta
    Abstract: In this article we extend the model developed by Bogliacino and Pianta (2013a, 2013b) on the link between R&D, innovation and economic performance, considering the impact of innovation of export success. We develop a simultaneous three equation model in order to investigate the existence of a ‘virtuous circle’ between industries’ R&D, share of product innovators and export market shares. We investigate empirically – at the industry level – three key relationships affecting the dynamics of innovation and export performance: first, the capacity of firms to translate their R&D efforts in new products; second, the role of innovation as a determinant of export market shares; third, the export success as a driver of new R&D efforts. The model is tested for 38 manufacturing and service sectors of six European countries over three time periods from 1995 to 2010. The model effectively accounts for the dynamics of R&D efforts, innovation and international performances of European industries. Moreover, important differences across countries emerge when we split our sample in a Northern group – Germany, the Netherlands and the United Kingdom – and a Southern group – France, Italy and Spain. We find that the ‘virtuous circle’ between innovation and competitiveness holds for Northern economies only, while Southern industries fail to translate innovation efforts into export success.
    Keywords: Export, R&D, Innovation, Three Stages Least Squares, Europe.
    JEL: F12 F14 O31 O33 O52
    Date: 2015–03–19
  7. By: Roberto Antonietti (University of Padova); Raffaello Bronzini (Bank of Italy); Giulio Cainelli (Unicversity of Padova)
    Abstract: This paper investigates empirically whether inward greenfield foreign direct investment (FDI) is related to greater sectorial innovation in the host Italian provinces. We combine several sources of data to estimate panel count models, regressing the annual number of patents in each province and industry against a series of lagged FDI variables. Our results show that a positive relationship between FDI and local patenting emerges only for services. In particular, we find that greater inward FDI in services positively influences local patenting activity in knowledge-intensive business services. These results are robust to endogeneity and the inclusion of province controls and fixed effects.
    Keywords: inward greenfield FDI, innovation, patents, research and development, panel count models
    JEL: F14 F23 O31 C23
    Date: 2015–03
  8. By: Isabel Busom (Departament d’Economia Aplicada, Universitat Autonama de Barcelona); Beatriz Corchuelo (Universidad de Extremadura, Departamento de Economía); Ester Martínez-Ros (Universidad Carlos III de Madrid, Departamento de Economía de la Empresa)
    Abstract: We provide comparative evidence on R&D tax credit and subsidy programs by studying whether firms' participation in each program exhibits state dependence and whether cross program interactions exist and are significant. We use a panel of manufacturing Spanish firms, which could use both types of support, to estimate a random effects bivariate dynamic probit model of program participation. We find that true state dependence of participation in R&D subsidy and tax credit programs accounts respectively for about 55% and 60% of observed persistence. In contrast, we do not find evidence of cross program interaction, suggesting that each tool is used by firms with different profiles. Digging on the role of some observable variables, we find that both programs reach on average stable R&D performers, and that they do not foster participation of young firms relative to older ones. We also identify significant differences across programs: while diversified and commercially successful firms are more likely to use tax incentives, those with high productivity are more likely to obtain subsidies. We discuss some policy implications of these findings
    Keywords: R&D, innovation policy, tax incentives, subsidies, persistence, dynamic random effects, bivariate probit
    Date: 2015–03
  9. By: David de Matías Batalla (Economics and Business Administration Dept. - University of Alcala)
    Abstract: The article responds to the need to study and analyze the evolution of the Spanish multinational firm in order to be able to identify the characteristics of success and what kind of factors are drivers to internationalize the activities in the Spanish economy. The first part reviews the evolution of the Spanish firm internationalization; meanwhile the second part describes the characteristics of Spanish multinational firm, resulted of a survey of 166 Spanish multinational firms.
    Keywords: Foreign direct investment, multinational firms, internationalization process, Spanish firms
    JEL: M16
    Date: 2015–04
  10. By: Reif, Christiane; Rexhäuser, Sascha
    Abstract: The link between Corporate Social Responsibility (CSR) activities and financial performance of firms has been intensively examined and debated in academics and politics, but the connection to innovation has so far lacked research attention. This paper investigates whether CSR is complementary to environmental innovations, so that a joint introduction of both strategies generates a higher financial performance than the application of one or none of the strategies. We analyse if environmental innovators can generate higher financial performance by signalling their environmental engagement through CSR. For this purpose, we use panel data of environmental R&D activity together with a CSR variable on the Global Reporting Initiative (GRI) and analyse their effect on the financial performance of a firm. The novelty of our work is the complementary approach with which we examine the effect of a joint strategy of environmental R&D and CSR on financial performance. Although our results support the view of strategic complements for environmental R&D and GRI, we cannot conclude that this is also true for other types of CSR signalling environmental engagement.
    Keywords: complementarity,environmental R&D,CSR,signalling,reputation,Global Reporting Initiative
    JEL: O32 Q56
    Date: 2015
  11. By: Garry A. Gabison (European Commission – JRC - IPTS)
    Abstract: As part of the EURIPIDIS (European innovation Policies for the Digital Shift) project, a joint project with DG CONNECT, IPTS investigates the birth and survival rates of ICT companies and compares it to the whole economy. This report uses the most recent available data from the Business demography dataset gathered by Eurostat. From this data, ICT constitutes a small fraction of European companies (4.6% of all companies in 2011) and the European economy (4.8% of employed in these companies in 2011) but the number of ICT service companies is growing. The majority of European national economies have experienced a growing number of ICT companies between 2008 and 2011. ICT companies tend to have higher survival rate than non-ICT companies. And finally, ICT sector tends to have a higher fraction of companies that are high growth companies than non-ICT sectors.
    Keywords: ICT companies, new companies, company survival rate, high growth
  12. By: Malgorzata Gajowiak (Poznan University of Technology)
    Abstract: The article tackles the question of the ever growing importance of soft factors of production in the process of competitive advantage for contemporary enterprises. This condition has resulted of turbulent environment characterized by increasing competition, generalized uncertainty and information asymmetry. Based on the above assumption during 2013-2014 a research project was carried out on the role of intangible resources in the process of gaining advantage over competitors in high-tech companies from Greater Poland. The study was complete for the given population and was conducted using the CATI method. On the basis of responses to the questions in the survey, one can conclude that these companies implement modern management paradigm and its activities are based largely on soft resources which are impossible to be copied and on skills in the form of human capital, propensity for learning and the social capital of employees. The findings of the project can serve as a valuable clue for those companies which at the moment do not represent a prospective approach to achieving entrepreneurial categories in practice.
    Keywords: soft assets, competitive advantage, high-tech sector, innovations, SME’s
    JEL: O31 O32
    Date: 2015–03
  13. By: Riccardo Cristadoro (Bank of Italy); Leandro D’Aurizio (Bank of Italy)
    Abstract: We look at business survey data on Italian internationalized firms’ characteristics and performances since the outbreak of the 2008 crisis until 2012. Among Italian firms with 20 employees or more, an increasing share (from 7.1 to 13.2% between 2006 and 2011) owns a foreign productive unit. The main reason for locating units in advanced countries is to be close to outlet markets, this remains true for internationalization in developing countries (where nearly half of such units were located), even though in this case the search for lower costs becomes more important. Italian multinationals are on average more productive and profitable, even when compared to exporting firms not operating abroad. More specifically, the productivity gap compared to these latter firms is 15 percent, closely aligned with that measured by Helpman at al. (2004) on a sample of US firms. Since 2008, internationalized firms’ operating profit was above the average, as well as their planned expansion both in Italy and abroad. In firms’ opinion, the support by Italian public institutions to expand their foreign activity is generally not effective.
    Keywords: internationalization, competitiveness, firm performance, economic crisis
    JEL: F1 F23 C12 C21
    Date: 2015–03

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