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on Small Business Management |
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Issue of 2015‒07‒11
twelve papers chosen by João Carlos Correia Leitão Universidade da Beira Interior |
| By: | Didier Brandao,Tatiana; Levine,Ross Eric; Schmukler,Sergio L. |
| Abstract: | How many and which firms issue equity and bonds in domestic and international markets, how do these firms grow relative to non-issuing firms, and how does firm performance vary along the firm size distribution? To evaluate these questions, a new data set is constructed by matching data on firm-level capital raising activity with balance sheet data for 45,527 listed firms in 51 countries. Three main patterns emerge from the analysis. (1) Only a few large firms issue equity or bonds, and among them a small subset has raised a large proportion of the funds raised during the 1990s and 2000s. (2) Issuers grow faster than non-issuers in assets, sales, and employment, that is, firms do not simply use securities markets to adjust their financial accounts. (3) The firm size distribution of issuers evolves differently from that of non-issuers, tightening among issuers and widening among non-issuers. |
| Keywords: | Access to Finance,Economic Theory&Research,Debt Markets,Microfinance,Emerging Markets |
| Date: | 2015–07–02 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:7353&r=sbm |
| By: | Michael Fritsch (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Michael Wyrwich (School of Economics and Business Administration, Friedrich-Schiller-University Jena) |
| Abstract: | Emerging literature shows that spatial differences in entrepreneurship tend to persist over longer periods of time. A potential mechanism underlying this pronounced persistence is that high levels of start-up activity lead to the emergence of a regional culture and a supporting environment in favor of entrepreneurship that particularly involves social capital. This chapter summarizes the available empirical evidence on the regional persistence of entrepreneurship and elaborates in detail how different elements of such a culture, such as social capital, can exert an influence on the level of new business formation and self-employment. As a demonstration for the relevance of a regional entrepreneurship culture for new business formation, we highlight the case of Germany where we find pronounced persistence of start-up activity despite radical structural and institutional shocks over the course of the 20th century. The German case suggests that there is a long-lasting local culture of entrepreneurship that can survive disruptive changes. We discuss the relationship between place-specific social capital and a regional culture of entrepreneurship and draw policy conclusions. |
| Keywords: | Entrepreneurship, social capital, economic development, self-employment, new business formation, entrepreneurship culture, institutions |
| JEL: | L26 R11 O11 |
| Date: | 2015–07–07 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2015-009&r=sbm |
| By: | Van Roy, Vincent (European Commission, Joint Research Centre); Vertesy, Daniel (European Commission, Joint Research Centre); Vivarelli, Marco (Università Cattolica del Sacro Cuore) |
| Abstract: | This paper explores the possible job creation effect of innovation activity. We analyze a unique panel dataset covering almost 20,000 patenting firms from Europe over the period 2003-2012. The main outcome from the proposed GMM-SYS estimations is the labour-friendly nature of innovation, which we measure in terms of forward-citation weighted patents. However, this positive impact of innovation is statistically significant only for firms in the high-tech manufacturing sectors, while not significant in low-tech manufacturing and services. |
| Keywords: | technological change, innovation, patents, employment, GMM-SYS |
| JEL: | O31 O33 |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9147&r=sbm |
| By: | Flavio Calvino; Chiara Criscuolo; Carlo Menon |
| Abstract: | The report provides a description of start-up dynamics exploiting the richness of the recently collected DynEmp v.2 database. The contribution of new firms in terms of new jobs to the existing workforce can be expressed as a combination of four different elements: the start-up rate; the average size of firms at point of entry; the survival rate; and the average growth rate of survivors. This decomposition shows that the four elements interplay in very different ways, even across economies with similar aggregate start-up contributions. The most homogenous component across countries is the survival rate, which is equal to just above 60% after three years from entry, to about 50% after five years, and to just over 40% after seven years. Furthermore, in most countries the probability of exiting is highest at the age of two, and decreases (linearly) beyond that age. When looking at employment growth of surviving businesses, it is found that the large majority of surviving micro start-ups do not grow; however, the tiny proportion of small start-ups which do grow creates a disproportionate amount of jobs. |
| Keywords: | entrepreneurship, start-ups, firm demographics, employment dynamics |
| JEL: | D22 L11 L26 |
| Date: | 2015–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:oec:stiaaa:2015/6-en&r=sbm |
| By: | Joachim Wagner (Leuphana University Lueneburg, Germany) |
| Abstract: | This paper uses a new tailor-made data set to investigate for the first time the links between innovation activities (measured by employees active in research and development) and the extensive margins of exports (number of destination countries; number of goods exported) for manufacturing enterprises in Germany, the third largest exporter of goods on the world market. It documents that more innovative firms outperform less innovative firms at both margins of exports – they export more goods and they export to a larger number of countries. All these differences are statistically highly significant and large from an economic point of view. |
| Keywords: | Extensive margins of exports, Germany, innovation, research and development |
| JEL: | F14 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:lue:wpaper:343&r=sbm |
| By: | Letizia Montinari (Institute for Prospective Technological Studies (JRC-IPTS)); Massimo Riccabonii (Insititute for advanced studies Lucca); Stefano Schiavo (Department of Economic Geography) |
| Abstract: | This paper contributes to the literature explaining firm-level heterogenenity in the extensive margin of trade, defined as the number of products exported by each firm. We develop a model where firms must invest in R&D to maintain and increase their portfolio of goods: the process of product innovation by new and incumbent firms is such that the probability to capture new products is a function of the number of varieties already exported. This mechanism, together with the entry/exit dynamics that characterize the economy, gives rise to a Pareto distribution for the number of products exported by each firm. On the other hand, we model export sales as depending on exogenous preference shocks on the demand side, which leads to a lognormal distribution for the intensive margin of trade. Both predictions are consistent with a number of empirical findings recently emerged in the literature; this paper provides additional evidence based on a large dataset of French firms. Finally, a simple extension to the model allows us to derive some interesting insights on the behavior of multi-products firms: sales of different products across destinations are not uncorrelated, but show a rather strict hierarchy. |
| Keywords: | International trade; Extensive margin; Innovation; Preferential attachment; Multi-product firms |
| JEL: | F14 F43 L11 O3 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/tfpqfk7fp8g29qsj8rsafures&r=sbm |
| By: | Rong Rong (Department of Economics, Weber State University); Daniel Houser (Interdisciplinary Center for Economic Science and Department of Economics, George Mason University) |
| Abstract: | Innovation occurs in network environments. Identifying the important players in the innovative  process,  namely  “the  innovatorsâ€,  is  key to understanding the process of innovation. Doing this requires flexible analysis tools tailored to work well with complex datasets generated within such environments. One such tool, cluster analysis, organizes a large data set into discrete groups based on patterns of similarity. It can be used to discover data patterns in networks without requiring strong ex ante assumptions about the properties of either the data generating process or the environment. This paper reviews key procedures and algorithms related to cluster analysis. Further, it demonstrates how to choose among these methods to identify the characteristics of players in a network experiment where innovation emerges endogenously. Length: 30 |
| Keywords: | cluster analysis, k-means algorithm, innovation, networks, laboratory experiment |
| JEL: | C46 C81 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:gms:wpaper:1049&r=sbm |
| By: | Marti, Josep; Alguacil, Maite; Orts, Vicente |
| Abstract: | This paper examines the relationship between firms’ heterogeneity and the internationalization decision regarding the number of markets served through both exports and FDI. Theoretically, we base on Helpman et al. (2004) and Yeaple (2009) as a basic framework for understanding this connection. For the empirical analysis, we use firm-level information of manufacturing firms from seven EU countries, as collected in the EFIGE dataset. Two different methodologies have been employed in this study: first, in order to evaluate how firms’ heterogeneity (related with productivity, size, R&D, years of establishment, centralized decision making, human and physical capital intensity), influences the decision to expand exports or foreign production beyond to a single foreign market, we estimate a multinomial logit model. The outcomes show that the increasing complexity in the internationalization strategies of multinationals is not independent of the different characteristics of the firms involved. Second, to determine the extent to which changes in firms’ characteristics influence the number of foreign markets to be attended through exports or foreign direct investment, we estimate a quantile regression model. Our estimates confirm the significant role of firm heterogeneity on the scope of international activities. However, different results across quantiles are obtained, suggesting the existence of heterogeneous effects and non-linearities among the whole distribution of the number of foreign markets served. |
| Keywords: | Firm heterogeneity; Internationalization strategy; Export; FDI |
| JEL: | D24 F14 F21 F23 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:65450&r=sbm |
| By: | Sandro Montresor (Kore University of Enna); Francesco Quatraro (University of Turin) |
| Abstract: | The paper aims at investigating whether Key Enabling Technologies (KETs) can have a role in facilitating regional Smart Specialisation Strategies (S3). Drawing on the economic geography approach to S3, we formulate some hypotheses about the impact that KETs-related knowledge can have on the construction of new regional technological advantages (RTAs). By crossing regional data on patent applications, in KETs-mapped classes of the International Patent Classification (IPC), with a number of regional economic indicators, we test these hypotheses on a panel of 26 European countries over the period 1980-2010. KETs show a positive impact on the construction of new RTAs, pointing to a new “enabling” role for them. KETs also exert a negative moderating role on the RTAs impact of the density of related pre-existing technologies, pointing to the KETs capacity of making the latter less binding in pursuing S3. Overall, the net-impact of KETs is positive, pointing to a new case for plugging KETs in the S3 policy tool-box. |
| Keywords: | Key Enabling Technologies; Smart Specialization Strategies; Revealed Technological Advantages |
| JEL: | R11 R58 O31 O33 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:wpaper:201505&r=sbm |
| By: | Junsong Wang; Martha Prevezer |
| Abstract: | The paper measures agglomeration economies through related variety and their impact on growth and employment in Chinese cities, using prefecture level city-industry data from 2003 to 2010. |
| Keywords: | Related variety; Jacobs externalities; FDI-knowledge spillovers; Urban growth in China |
| JEL: | O2 R1 |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:cgs:wpaper:59&r=sbm |
| By: | Blumberg, Boris F. (Maastricht University); Pfann, Gerard A. (Maastricht University) |
| Abstract: | This paper studies the event history of business foundation. Three theoretical concepts of human, financial and social capital are linked to investigate variations over time of people's decision processes to become self-employed. Data from a cohort of Dutch inhabitants born in 1939/1940 who have been interviewed three times during their lives in 1952, 1983, and 1993 allows for testing theoretical hypotheses that state clear differences between two different roads towards business ownership. Empirical results show that the baseline hazard decreases with time for transgenerational entrepreneurs with self-employed parents, but increases for self-made startups. Social capital in the form of strong ties is a better predictor of enterprise than human capital. |
| Keywords: | entrepreneurship, family business, new venture creation |
| JEL: | D92 M14 M21 |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9155&r=sbm |
| By: | Bullard, James B. (Federal Reserve Bank of St. Louis) |
| Abstract: | St. Louis Fed President James Bullard discussed innovation and entrepreneurship as a local development strategy, trends in startup firms in recent decades, and the return of "bubble" talk about the technology market as he delivered the keynote address at the Emerging Venture Leaders Summit in St. Louis. Earlier in the day, he met with key leaders in the St. Louis innovation and startup communities. |
| Date: | 2015–06–30 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedlps:246&r=sbm |