nep-sbm New Economics Papers
on Small Business Management
Issue of 2015‒06‒20
thirteen papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Specific characteristics of Romanian entrepreneurs that innovate and carry out research and development activities By Victor LAVRIC
  2. Inverted-U relationship between innovation and survival: Evidence from firm-level UK data By Guidi, Francesco; Solomon, Edna; Trushin, Eshref; Ugur, Mehmet
  3. The impact of the regional environment on the knowledge transfer outcomes of public research organisations: preliminary results for Europe By Es-Sadki N.; Arundel A.V.
  4. De la société salariale à la société entrepreneuriale. Une analyse critique From the salarial to the entrepreneurial society: A critical analysis By Sophie BOUTILLIER; Dimitri UZUNIDIS
  5. Nouvelles approches de l’innovation et gestion des connaissances : quelle articulation ? quels enjeux ? quels changements ? New approaches to innovation and knowledge management: What articulation? what issues? what changes? By Amel ATTOUR; Pierre BARBAROUX
  6. Determinants of R&D intensity and its impact on firm value in an innovative economy in which family business groups are dominant: The case of South Korea By Byung S. Min; Russell Smyth
  7. Choice of foreign R&D entry mode and impact on firm performance: A firm-level analysis for Switzerland and Austria By Hollenstein, Heinz; Berger, Martin
  8. The significance of working capital management and its components on SMEs performance - Evidence from India By SATISH KUMAR
  9. Identifying High Growth Firms in India: An Alternative Approach By Aradhna Aggarwal; Takahiro Sato
  11. What Determines SMEs’ Funding Obstacles to Bank Loans and Trade Credits? By Sandra M. Leitner; Robert Stehrer
  12. “Differences in efficiency between Formal and Informal Micro Firms in Mexico” By Antonio Baez-Morales
  13. Les clusters territoriaux d’innovation en Russie : origines de conceptualisation et difficultés de réalisation Territorial innovation clusters in Russia: Origins of conceptualization and implementation problems By Guillem ACHERMANN

  1. By: Victor LAVRIC (The Bucharest University of Economic Studies)
    Abstract: The transition to the knowledge-based economy that we are facing now, with different degrees of intensity, has an overwhelming impact on the role of R&D and innovation, therefore it is of great interest for public and private actors to adequately assess the right tools for fostering knowledge creation and competitiveness growth within the new context. As SMEs are considered to be one of the main areas in the economy that combines both the need for support/attention and the potential to deliver growth and progress, we have focused in our paper on the investigation of some specific characteristics of the Romanian entrepreneurs and managers that are involved in innovation and R&D activities. The data we use in our analysis was collected from more than one thousand small and medium-sized enterprises during 2014, thus giving us the possibility to address in a coherent and complex way the issues regarding R&D and innovation. This paper contributes not only to a better understanding of the Romanian entrepreneurs that innovate and carry out research and development activities, but also to the elaboration of specific proposals regarding the design and substance of the public projects that aim to support R&D an innovation activities.
    Keywords: R&D, Innovation, Entrepreneurship, SMEs, Knowledge-based economy, Romania
    JEL: L26 O31 O32
  2. By: Guidi, Francesco; Solomon, Edna; Trushin, Eshref; Ugur, Mehmet
    Abstract: Theoretical and empirical work on innovation and firm survival has produced varied and often conflicting findings. In this paper, we draw on Schumpeterian models of competition and innovation and stochastic models of firm dynamics to demonstrate that the conflicting findings may be due to linear specifications of the innovation-survival relationship. We demonstrate that a quadratic specification is appropriate theoretically and fits the data well. Our findings from an unbalanced panel of 39,705 UK firms from 1997-2012 indicate that an inverted-U relationship holds for different types of R&D expenditures and sources of funding. We also report that R&D intensity is more likely to increase survival when firms are in more concentrated industries and in Pavitt technology classes consisting of specialized suppliers of technology and scale-intensive industries. Finally, we report that the effects of firm and industry characteristics as well as macroeconomic environment indicators are all consistent with prior findings. The results are robust to step-wise modeling, controlling for left truncation and use of lagged values to address potential simultaneity bias.
    Keywords: innovation,R&D,firm dynamics,survival anaysis
    JEL: C41 D21 D22 L1 O3
    Date: 2015–06–15
  3. By: Es-Sadki N.; Arundel A.V. (UNU-MERIT)
    Abstract: We use survey data for 238 European universities and 24 research institutes to examine the effects of regional factors at the NUTS-1 or NUTS-2 level on three knowledge transfer outcomes of public research organisations the number of licence agreements, start-ups and RD agreements with companies. We find that 1 a larger share of regional employment in high and medium-high technology manufacturing sectors in the same region as the public research organisation has a positive impact on the number of licence agreements. 2 A larger share of employment in knowledge-intensive services has a positive impact on the number of start-ups and research agreements, but a negative impact on licence agreements. 3 Competition as measured by the number of public research organisations in a region has a negative impact on all three outcomes.
    Keywords: Higher Education and Research Institutions; Contracting Out; Joint Ventures; Technology Licensing; New Firms; Startups; Management of Technological Innovation and R&D;
    JEL: I23 O32 M13 L24
    Date: 2015
  4. By: Sophie BOUTILLIER (Clersé (UMR-CNRS 8019), Université du Littoral Côte d’Opale); Dimitri UZUNIDIS (UTC, Greece)
    Abstract: Depuis le début des années 1980, la société entrepreneuriale a émergé. L’emploi salarié reste dans les économies développées la forme principale d’emploi, mais l’emploi devient plus précaire (travail intérimaire, contrat de travail à durée déterminée, augmentation du chômage, etc.). D’un autre côté, la création d’entreprise est conçue dans le cadre de politiques économiques comme un moyen de créer des emplois, d’innover ou de créer une activité économique dans des régions et les secteurs en déclin. L’objet de ce document est de présenter les caractéristiques de la société entrepreneuriale et et d’analyser de façon critique les politiques publiques d’aide à l’entrepreneuriat. Since the beginning of the 1980s the entrepreneurial society has emerged. In developed countries salaried employment is still the main form of employment, but it has become more precarious, due to factors such as an increase in unemployment, temporary employment, fixed-term contracts, etc. On the other hand new business start-ups are now understood by politicians as constituting a tool for job creation, innovation, and the redevelopment of areas or sectors in crisis. The purpose of this document is to present the characteristics of the entrepreneurial company and discuss public policies to support entrepreneurship.lization of new product technologies and services. Codification processes, knowledge sharing and transfer, project financing, informational and risk sharing asymmetries have all been affected by that trend towards opening up innovation models. In that view, the co-evolution of innovation models and knowledge management processes represents a major challenge for firms. This joint evolution raises important issues that both economists and organizational theorists that this contribution seeks to address.
    Keywords: Entrepreneur, Entrepreneuriat, Salariat, Innovation, Changement
    JEL: L26 E2 O3
    Date: 2015
  5. By: Amel ATTOUR (Groupe de Recherche en Droit, Economie et Gestion (GREDEG UMR 7321) - Université de Nice Sophia Antipolis); Pierre BARBAROUX (Centre de recherche de l’Armée de l’air (CReA))
    Abstract: Dans un environnement économique turbulent, marqué par l’extension géographique des marchés et l’intensification de la concurrence, les firmes ont peu à peu adapté leurs modèles d’organisation des activités d’innovation. Ces adaptations se traduisent par l’émergence de nouvelles formes organisationnelles facilitant la collaboration entre parties prenantes du processus d’innovation. Pour rendre compte de ces changements, les chercheurs ont renouvelé les cadres d’analyse du management stratégique de l’innovation. Innovation collaborative, innovation ouverte, communautés d’innovation, living labs … autant de concepts développés par la recherche pour étudier les changements opérés par les entreprises pour gérer leurs activités innovantes. Ce renouvellement des cadres théoriques ne concerne pas uniquement les modes d’organisation de l’innovation. Les dispositifs de gestion des connaissances déployés par les firmes pour innover changent également de nature. Le changement concerne l’ensemble des processus cognitifs impliqués lors des différentes phases du processus d’innovation, de l’invention à la commercialisation de nouveaux produits, services, technologies, procédés et organisations. Sont particulièrement concernés les processus de création, de partage, et d’intégration des connaissances mobilisées pour innover, mais également de protection de la propriété intellectuelle, de financement des projets innovants, de gestion des asymétries cognitives et informationnelles, et de partage des risques associés. Cette évolution conjointe des modèles d’organisation de l’innovation et des processus de gestion des connaissances représente un défi majeur pour les entreprises, ainsi qu’un objet de recherche naissant que cet article se propose d’explorer. In a turbulent economic environment, characterized by the geographical extension of markets and hyper-competition, firms gradually adapted their innovation models. New organizational forms thus emerged, in which innovative firms collaborate with a variety of stakeholders (e.g., suppliers, customers, universities, R&D companies, consultants, users’ communities, financial organization, public actors…) to develop innovation. The foregoing renewal does not concern innovation models only. Knowledge management processes deployed by firms to innovate also evolve. By adapting their innovation models, firms altered the various cognitive activities supporting the invention and commercialization of new product technologies and services. Codification processes, knowledge sharing and transfer, project financing, informational and risk sharing asymmetries have all been affected by that trend towards opening up innovation models. In that view, the co-evolution of innovation models and knowledge management processes represents a major challenge for firms. This joint evolution raises important issues that both economists and organizational theorists that this contribution seeks to address.
    Keywords: Innovation ouverte, Innovation collaborative, Gestion des connaissances
    JEL: D85 O32
    Date: 2015
  6. By: Byung S. Min; Russell Smyth
    Abstract: We examine both the determinants of corporate research and development (R&D) intensity, and its impact on firm value, in Korea, a country in which family business groups are dominant and in which corporate-funded R&D intensity is one of the highest in the world. We find that growth opportunities, size of the firm and payment to executive board members have a positive effect on R&D intensity, while leverage has a negative effect on R&D intensity. When leverage is at an extremely high level, the relationship between growth opportunities and R&D intensity turns from positive to negative. The positive effect of firm size on R&D intensity is larger, the greater the number of subsidiaries the firm has, consistent with the firm engaging in cross-subsidisation. The positive effect of payments to executive board members on R&D intensity is smaller for chaebol affiliates than for stand-alone firms. Using instrument variables we find that R&D generates an increase in firm value.
    Keywords: family business; R&D; innovative economy; firm value; chaebol
    Date: 2015–04
  7. By: Hollenstein, Heinz; Berger, Martin
    Abstract: The study seeks to identify the determinants of a firm's foreign entry mode choice and the impact of mode selection on firm performance for the specific case of R&D - a topic so far not investigated in entry mode research. Separate estimates of a Heckman selection model for Austria and Switzerland, based on comparable firm-level data and variable specification, show for both countries that the OLI model is well-suited to explain not only the propensity to investing abroad in R&D but also the respective choice between equity-based and non-equity governance modes. Moreover, it turns out, but only for Swiss companies, that foreign R&D raises (domestic) firm performance with a larger impact in case of equity-based governance. The differences between the two countries primarily reflect the much higher degree of R&D internationalisation of Switzerland.
    Keywords: internationalisation of R&D,foreign R&D entry mode choice,international R&D cooperation
    JEL: F23 L24 O32
    Date: 2015
  8. By: SATISH KUMAR (Malaviya National Institute of Technology Jaipur)
    Abstract: Purpose-The main aim of present study is to empirically examine the importance of working capital management and its components on the profitability of Small and Medium Enterprises (SMEs) in India.Design/methodology/approach - We employ panel data regression method on a sample of 433 Small and Medium Enterprises (SMEs) from India for the period spanning from 2007 to 2012. Following Deloof (2003); Garcia-Teruel and Martinez-Solano (2007) and Tauringana & Afrifa (2013), we use Cash Conversion Cycle (CCC) as measure of working capital management and its components (inventory, accounts receivable and accounts payable) and Return on Assets (ROA) as the proxy for SMEs profitability.Findings -Using panel data analysis, we find that the number of days of inventory (DI), number of days of accounts receivables (DAR), the number of days of accounts payables (DAP) and cash conversion cycle (CCC) are negatively correlated with profitability of SMEs in India. Results further show that the management of inventory (DI) and accounts receivables (AR) are important for SMEs profitability in India, albiet the latter is relatively less important than inventory management. Overall, our findings are consistent with the earlier work on SMEs by Garcia-Teruel and Martinez-Solano (2007) and Tauringana & Afrifa (2013).Research limitations/implications - Our sample is limited to 433 SMEs, and therefore the findings cannot be generalized to all the SMEs in India.Practical implications -Results of the present study imply that the SMEs in India need to focus their resources on managing inventory and accounts receivables in order to be more profitable.Originality/value-To best of author’s knowledge, the present study is the first to examine the relationship between WCM and its components to SMEs portability in India. The main contribution of this paper is the finding of relative importance of components of working capital management and their differential influence on profitability of SMEs in the Indian context.
    Keywords: Working capital management, Cash Conversion Cycle, India, Return on assets, Small to medium-sized enterprises, number of days of inventory.
    JEL: F40 G10
  9. By: Aradhna Aggarwal (Indian Studies at Asia Research Center, Department of International Economics and Management at Copenhagen Business School); Takahiro Sato (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan)
    Abstract: Over the past two decades, considerable interest has grown in high growth firms (HGFs). However, the concept of HGFs still remains controversial. One of the most controversial issues is size and age of these firms. The present study argues that the current literature on HGFs may offer little help in addressing this issue given the constantly changing population of HGFs. This study uses an alternative conceptual framework and proposes a concept of ‘High Impact Group of Firms’ (HIGF). It explains the HIGFs in the framework of a new stream of literature that focuses on business dynamics, productivity growth and industry evolution, formulates testable hypotheses, and uses a novel methodology to identify it. The empirical analysis is based on the plant level panel data of 22 manufacturing industries in Indian manufacturing during the period 2000-01 to 2005-06. Our empirical results reveal that much depends on the industry/sector specific characteristics.
    JEL: L25 L26 O14 O33 O53
    Date: 2015–03
  10. By: Ioana Maria Bucerzan (married Precup) (Bucharest University of Economic Studies, Bucharest, Romania)
    Abstract: Entrepreneurial activity represents a great asset for the European Union economy, and encouraging entrepreneurship poses a great challenge in the context of the recent economic crisis. Considering this and the Europe 2020 strategy, entrepreneurship plays an important role for economic recovery, as it is considered to generate jobs, economic growth and progress. In this context, the aim of this paper is to explore the business dynamics in the European Union over a 5 year period from 2008 to 2012, first by trying to identify, from the perspective of business demography indicators, if disparities are evidenced among EU member states, and secondly, by conducting panel data analysis, to identify the extent to which macroeconomic determinants have an influence on business dynamics in the European Union, in particular on the death rate of enterprises. The results show that there are considerable variations in business dynamics within EU member states and that the macroeconomic environment has an important role in shaping entrepreneurial activity and achieving economic recovery.
    Keywords: business dynamics, business demography, business failure
    JEL: M21 C19
  11. By: Sandra M. Leitner (The Vienna Institute for International Economic Studies, wiiw); Robert Stehrer (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: A Comparative Analysis of EU-15 and NMS-13 Countries This paper analyses bank credits and trade loans as the two most important sources of external finance of firms and identifies particular firm and country characteristics that determine the ease with which both external funding sources can be accessed. It focuses on SMEs in EU Member States and uses ECB/EU SAFE microdata, which differentiate between various degrees of external funding constraints. The results show that innovators of both products and processes have a harder time raising sufficient funds from banks. Further, smaller and younger firms and firms that are part of an enterprise are more likely to face stronger obstacles from banks. Moreover, it points to the important role previous bank loan and trade credit histories plays for successful application processes and demonstrates that banks and suppliers respond asymmetrically to changes in a firm’s financial and economic situation. Finally, it points to the importance of the state and structure of a country’s banking sector for successful bank loan and trade credit application processes.
    Keywords: funding obstacles, bank loans, trade credits, small and medium-sized enterprises
    JEL: G21 G23 O16
    Date: 2015–05
  12. By: Antonio Baez-Morales (Department of Econometrics. University of Barcelona)
    Abstract: The economic role of micro firms is still the subject of much discussion and debate. While these firms can be seen as potential growth drivers, as they are usually related to entrepreneurship, a relatively high share of micro firms can also be a sign of an underdeveloped productive system, which applies especially to developing countries, where micro firms represent the majority of business activity. Unlike other studies, this research separates formal and informal micro firms in order to test whether there are efficiency differences between them, and to explain these differences. One of the novelties of the study is the use of the Oaxaca-Blinder decomposition method, which enables an analysis of the differences between both groups of firms after controlling for their different allocation of factors. Micro firms in Mexico are taken as a case study, with the Encuesta Nacional de Micronegocios (ENAMIN, or the National Micro Firm Survey), for 2008, 2010 and 2011, used to carry out the analysis. The empirical evidence suggests that output differences can be explained by endowment characteristics, while efficiency differences are explained by endowment returns. The main variables to explain the gap between the groups are the owner’s level of education, the firm’s age, the owner’s motivations, and financing.
    Keywords: informality, micro firms, efficiency, productivity, decomposition method. JEL classification: D00, D22, D24
    Date: 2015–05
  13. By: Guillem ACHERMANN (Lab.RII/Clersé (UMR 8019), Université de Lille 1)
    Abstract: Pour effectuer sa transition économique d’une économie de rente vers une économie de l’innovation, la Russie a initié une politique territoriale d’innovation. L’implantation de clusters devient alors un atout pour favoriser l’émergence d’innovations. La transition économique des années 1990 vers une « nouvelle » économie de marché a permis à la Russie de restructurer son système organisationnel et productif. Cependant, pour que les « clusters territoriaux d’innovation » russes deviennent des moteurs de croissance économique, il est nécessaire de prendre en compte la complexité des trajectoires territoriales. To put forward its economic transition from a rent-based economy to an innovation economy, Russia has initiated its regional innovation policy. The implementation of clusters becomes an asset that will foster innovations. The economic transition of the 1990s to a "new" market economy has enabled Russia to restructure its organizational and productive system. However, to allow the Russian "territorial innovation clusters" to become engines of economic growth, it is necessary to take into consideration the complexity of local trajectories.
    Keywords: transition économique, politique territoriale d'innovation, cluster, Russie
    JEL: O18 O38 C38
    Date: 2014

This nep-sbm issue is ©2015 by João Carlos Correia Leitão. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.