nep-sbm New Economics Papers
on Small Business Management
Issue of 2015‒06‒13
fourteen papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. R&D policies for young SMEs: Input and output effects By Czarnitzki, Dirk; Delanote, Julie
  2. A New Approach to Estimation of the R&D-Innovation-Productivity Relationship By Christopher F Baum; Hans Lööf; Pardis Nabavi; Andreas Stephan
  3. National or international public funding? Subsidies or loans? Evaluating the innovation impact of R&D support programmes By Huergo, Elena; Moreno, Lourdes
  4. Determinants of R&D offshoring By Gavin Murphy; Iulia Siedschlag
  5. The virtuous circle of innovation in Italian firms By Francesco Bogliacino; Matteo Lucchese; Leopoldo Nascia; Mario Pianta
  6. Foreign Capital, Credit Constraints and Continuity of Firms’ R&D By Pilar Beneito; Maria Engracia Rochina-Barrachina; Amparo Sanchis
  7. Business Cycles, Technology and Exports By Francesco Bogliacino; Dario Guarascio; Mario Pianta; Matteo Lucchese
  8. Unbundling institutions for external finance : worldwide firm-level evidence By Knack,Stephen; Xu,L. Colin
  9. How Do Native and Migrant Workers Contribute to Innovation? By Fassio, Claudio; Montobbio, Fabio; Venturini, Alessandra
  10. Foreign direct investment and firm performance: an empirical analysis of Italian firms By Alessandro Borin; Michele Mancini
  11. Examining Entrepreneurial Potential By Pavlin Bonev; Henrik Egbert; Thomas Neumann
  12. Comment se crée l’identité d’entreprise ? Processus de construction dans la start-up et impact des références identitaires By Canet, Emilie; Hooge, Sophie; Kokshagina, Olga
  13. Women Entrepreneurs in Chile: Three decades of Challenges and Lessons on Innovation and Business Sustainability By Mandakovic Vesna; María Teresa Lepelev; Olga Pizarro
  14. Cyclical Reallocation of Workers Across Employers by Firm Size and Firm Wage By John Haltiwanger; Henry Hyatt; Erika McEntarfer

  1. By: Czarnitzki, Dirk; Delanote, Julie
    Abstract: This paper evaluates the current focus of EU policy makers on small and medium-sized, young independent firms in high-tech sectors. Therefore, the effect of subsidies on both R&D input and R&D output is compared between independent high-tech young firms (NTBFs), independent low-tech young firms (LTBFs) and their non-independent counterparts. A treatment effects analysis reveals that full crowding-out with regard to public funding is rejected for all firm types. However, the treatment effect is highest for independent high-tech firms. The indirect effect of subsidies on R&D output is evaluated within a patent production framework. These results show that independent high-tech firms have no lower output effects than other firms and thus suggest that the current policy focus on certain firm types is not ineffective.
    Keywords: R&D,subsidies,NTBFs,policy evaluation,treatment effects,patents
    JEL: H25 M13 O31 O38
    Date: 2015
  2. By: Christopher F Baum (Boston College; DIW Berlin); Hans Lööf (Royal Institute of Technology, Stockholm); Pardis Nabavi (Royal Institute of Technology, Stockholm); Andreas Stephan (Jönkoping International Business School)
    Abstract: We evaluate a Generalized Structural Equation Model (GSEM) approach to the estimation of the relationship between R&D, innovation and productivity that focuses on the potentially crucial heterogeneity across technology and knowledge levels. The model accounts for selectivity and handles the endogeneity of this relationship in a recursive framework. Employing a panel of Swedish firms observed in three consecutive Community Innovation Surveys, our maximum likelihood estimates show that many key channels of inuence among the model's components differ meaningfully in their statistical significance and magnitude across sectors defined by different technology levels.
    Keywords: R&D, Innovation, Productivity, Generalized Structural Equation Model, Community Innovation Survey
    JEL: C23 L6 O32 O52
    Date: 2015–05–29
  3. By: Huergo, Elena; Moreno, Lourdes
    Abstract: The objective of this study is to compare the effect of different types of public support for R&D projects on firms’ technological capabilities. We distinguish be-tween low-interest loans and subsidies and between national and European sup-port. Using data on 4,407 Spanish firms during the period 2002-2005, we estimate a multivariate probit to analyse the determinants of firms’ participation in public R&D programmes and, later, the impact of this participation on firms’ technologi-cal capabilities using different indicators. The results provide evidence of the ef-fectiveness of all treatments for improving firms’ innovative performance. With respect to innovation outputs, apart from the indirect effect of public support by stimulating R&D intensity, we also find evidence of a direct effect of participation in the CDTI credit system and in the European subsidy programme on the probability of obtaining innovations and applying for patents.
    Keywords: Soft loans, R&D subsidies, impact assessment
    JEL: H81 L2 L52 O3
    Date: 2014–03–07
  4. By: Gavin Murphy (Economic and Social Research Institute); Iulia Siedschlag (European Commission JRC-IPTS)
    Abstract: We analyse determinants of an enterprise’s decision to offshore R&D activities using a novel data set for enterprises in Ireland over the period 2001-2006. Our results suggest that, on average, other things equal, enterprises integrated in international production and innovation networks, and enterprises which used information and communication technologies (ICT) more intensively were more likely to offshore R&D. Furthermore, characteristics of the import source region had an important influence on enterprise offshoring behaviour, with offshoring to regions outside of the advanced European Union’s economies being less likely.
    Keywords: Global production and innovation networks; International sourcing of R&D.
    JEL: F14 F23 D22
    Date: 2015
  5. By: Francesco Bogliacino (Universidad Nacional de Colombia); Matteo Lucchese (Istituto Nazionale di Statistica, Department of Economics, Society & Politics, Università di Urbino "Carlo Bo"); Leopoldo Nascia (Istituto Nazionale di Statistica); Mario Pianta (Department of Economics, Society & Politics, Università di Urbino "Carlo Bo")
    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
  6. By: Pilar Beneito (Departamento de Análisis Económico. Facultad de Economia, Avda-Tarongers, s/n, 46022- Valencia, SPAIN.); Maria Engracia Rochina-Barrachina (Departamento de Estructura Económica. Facultad de Economia, Avda-Tarongers, s/n, 46022- Valencia, SPAIN.); Amparo Sanchis (Departamento de Estructura Económica. Facultad de Economia, Avda-Tarongers, s/n, 46022- Valencia, SPAIN.)
    Abstract: Using data for Spanish manufacturing firms in the period 1990-2006, we show that firms with foreign capital are significantly less likely to stop already initiated R&D projects and also more likely to sustain R&D investment when facing credit constraints. These results are robust to positive selection of target firms by foreign companies and to firms’ fixed effects.
    Keywords: foreign capital; credit constraints; R&D investment; interruptions in R&D.
    JEL: C1 L6 O3
    Date: 2015–06
  7. By: Francesco Bogliacino; Dario Guarascio; Mario Pianta; Matteo Lucchese
    Abstract: This article shows – on both conceptual and empirical grounds - the importance of business cycles in affecting key relationships between innovation and international performance. While periods of upswing are characterized by a well-documented 'virtuous circle' between innovation inputs, new products and export success, during downswings most of the positive relationships and feedbacks tend to break down. The findings of Guarascio et al. (2014) on the long-term relationships between R&D, new products and exports are confirmed and qualified with major novelties. But when the period of analysis is split between periods of upswing and downswing - following Lucchese and Pianta (2012) – significantly different relationships emerge. The empirical test is carried out for the period 1995-2010 at the industry level, on 21 manufacturing and 17 service sectors; country coverage includes Germany, France, Italy, Spain, the Netherlands and the United Kingdom, representing a very large part of the European economy.
    Keywords: Business cycles, Innovation, Export, Three Stage Least Squares.
    JEL: F41 F43 O31 O33 C3
    Date: 2015–05–31
  8. By: Knack,Stephen; Xu,L. Colin
    Abstract: The empirical literature on institutions and development has been challenged on grounds of reverse causality, measurement error in institutional indicators, and heterogeneity. This paper uses firm-level data across countries to confront these challenges. Instead of analyzing ultimate outcomes, such as income levels where institutional quality is likely endogenous, the focus is on firm-level external finance. Moreover, institutions are ?unbundled? to explore how various types of institutions affect external finance differently. The paper documents that micro firms have significantly less access to external finance than small and medium firms. General financial development and contracting institutions that facilitate transactions between private parties exert little effect, on average, on firms? access to external finance. In contrast, property rights institutions that constrain political and economic elites exhibit stronger positive association with access to external finance. The analysis finds evidence of attenuation bias associated with error in measuring institutions. For leveling the playing field between elite and non-elite firms (as proxied by firm size) in their access to external finance, property rights institutions also figure more prominently?with an important exception for the information environment, a component of contracting institutions. The results indicate that a specific channel through which development is affected more by property rights institutions rather than contracting institutions is external financing for firms.
    Keywords: Access to Finance,Debt Markets,Banks&Banking Reform,Emerging Markets,Labor Policies
    Date: 2015–06–02
  9. By: Fassio, Claudio; Montobbio, Fabio; Venturini, Alessandra (University of Turin)
    Abstract: This paper uses the French and the UK Labour Force Surveys and German Microcensus to estimate the effects of the different components of the labour force on innovation at the sectoral level between 1994 and 2005, focusing in particular on the contribution of migrant workers. We adopt a production function approach in which we control for the usual determinants of innovation, such as R&D investments, stock of patents and openness to trade. To address for the possible endogeneity of migrants we implement instrumental variable strategies using both two-stage least squares with external instruments and GMM-SYS with internal ones. In addition we also account for the possible endogeneity of native workers and instrument them accordingly. Our results show that highly educated migrants have a positive effect on innovation even if the effect is smaller relative to the one of the educated natives. Moreover this positive effect seems to be confined to the high tech sectors and among highly educated migrants from other European countries.
    Date: 2015–05
  10. By: Alessandro Borin (Bank of Italy); Michele Mancini (Bank of Italy)
    Abstract: Both empirical and theoretical literature show that multinational firms exhibit a competitive advantage before investing abroad. However, there are no clear empirical results regarding the ex-post effects of foreign direct investment (FDI) on firm performance, partially due to the inadequacy of available firm-level data. We build a brand new firm-level dataset able both to represent the extent of Italian firms' foreign activity and to provide reliable measures of key performance indicators, especially total factor productivity (TFP) and employment. We then use a propensity score matching procedure to analyze the causal relationship between FDI and firm performance. Firms investing abroad for the very first time, especially in advanced economies, show higher productivity and employment dynamics in the years following the investment: the average positive effect on TFP is driven by new multinationals operating in specialized and high-tech sectors, while the positive employment gains are explained by an increase of the white collar component. On average there are no negative effects on the parent firm's blue collar component.
    Keywords: multinational firms, FDI, productivity, propensity score matching
    JEL: F23 C25 D24
    Date: 2015–06
  11. By: Pavlin Bonev; Henrik Egbert; Thomas Neumann (Fachhochschule-Anhalt)
    Abstract: Employing public resources for promoting entrepreneurships demands careful selection of candidates who are most promising to set up a successful entrepreneurial career. This study addresses the relation between an individuals’ entrepreneurial potential, identified through personality traits, and aspects of human and social capital, based on prior individual experiences in the domain of self?employment. A psychometric test, called F?DUPN, measures the strengths of personality traits considered relevant for successful entrepreneurial activity. To test our hypotheses we collected data of 166 individuals. All of them are university students or graduates and have indicated a specific interest in entrepreneurial activity. A major result is that participants experienced in self-employment, with self-employed parents and with self-employed friends show a higher entrepreneurial potential than participants who do not have these experiences or relations. Furthermore, we find in line with other studies that differences in entrepreneurial potential become less pronounced with increasing age. An interpretation is that personality traits significant for entrepreneurial activity are not stable over time and can also be acquired at a later stage in life.
    Keywords: psychometric test, human capital, social capital, observational learning, F?DUP, self-employment experience, personality traits
    JEL: M13 D80
    Date: 2015–02
  12. By: Canet, Emilie; Hooge, Sophie; Kokshagina, Olga
    Abstract: Cette recherche vise à approfondir la question de la construction de l’identité d’entreprise dans le contexte des start-ups. Plus particulièrement, il s’agit de comprendre les liens entre les différents facteurs d’influence (identité des entrepreneurs, écosystème) dans le cas où le cadre de référence identitaire est à constituer et où les entrepreneurs luttent pour identifier l’écosystème qui enrichira la construction de leur identité d’entreprise. Cette recherche repose sur l’analyse d’une étude de cas sur la création de la start-up SoScience, entreprise de Recherche sociale et solidaire, par deux entrepreneures. La méthodologie, reposant sur des entretiens semi-directifs approfondis et l’analyse de données secondaires, vise à mettre en évidence le parcours de la construction de l’identité d’entreprise de cette start-up. Cette étude de cas nous permet de mettre en évidence deux résultats principaux. Tout d’abord, il apparaît que l’identité d’entreprise résulte d’un processus itératif et adaptatif mobilisant l’identité de l’entrepreneur, l’écosystème de la start-up et les constructions identitaires intermédiaires. L’interaction entre ces différents éléments fait évoluer le périmètre de l’identité d’entreprise dans un processus d’apprentissage de l’entrepreneur confronté à des éléments de l’écosystème plus ou moins réceptif au projet entrepreneurial. De plus, l’identité d’entreprise s’affirme par adhésion, modification ou au contraire rejet des références identitaires de l’écosystème. Le rejet d’une référence identitaire permet de renforcer le positionnement des entrepreneurs par affirmation des fondamentaux vis-à-vis des parties prenantes externes tandis que l’adoption d’une référence identitaire conduit et spécifie le positionnement de la start-up au sein du champ de référence. Ces deux résultats nous permettent de discuter le rôle de certains objets d’interaction dans le pilotage actif de la construction de l’identité d’entreprise.
    Keywords: Identité d’entreprise; Entrepreneuriat; Ecosystème;
    JEL: L26 M14
    Date: 2015–06
  13. By: Mandakovic Vesna; María Teresa Lepelev; Olga Pizarro (School of Business and Economics, Universidad del Desarrollo)
    Abstract: This study is framed on a global vision of women participation in entrepreneurial activity as an introductory note and proceeds with a comprehensive assessment of the experience of women entrepreneurs in Chile in the last thirty years. Chile is one of the fastest growing and most stable economies in Latin America and among developing countries with a 5.7 percent unemployment and 14.8 percent poverty level. This case study is focused on Chilean women entrepreneurs from a business sustainability dimension, providing the experience of a pioneer country that introduced entrepreneurship as a central economic development strategy since the late seventies.
    Keywords: Women Entrepreneurs,innovation, business sustainability, economies, América Latina, Chile.
    Date: 2014–04
  14. By: John Haltiwanger; Henry Hyatt; Erika McEntarfer
    Abstract: Do the job-to-job moves of workers contribute to the cyclicality of employment growth at different types of firms? In this paper, we use linked employer-employee data to provide direct evidence on the role of job-to-job flows in job reallocation in the U.S. economy. To guide our analysis, we look to the theoretical literature on on-the-job search, which predicts that job-to-job flows should reallocate workers from small to large firms. While this prediction is not supported by the data, we do find that job-to-job moves generally reallocate workers from lower paying to higher paying firms, and this reallocation of workers is highly procyclical. During the Great Recession, this firm wage job ladder collapsed, with net worker reallocation to higher wage firms falling to zero. We also find that differential responses of net hires from non-employment play an important role in the patterns of the cyclicality of employment dynamics across firms classified by size and wage. For example, we find that small and low wage firms experience greater reductions in net hires from non-employment during periods of economic contractions.
    Date: 2015–06

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