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on Small Business Management |
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Issue of 2015‒08‒01
eight papers chosen by João Carlos Correia Leitão Universidade da Beira Interior |
| By: | Da Rin, M. (Tilburg University, TILEC); Penas, M.F. (Tilburg University, TILEC) |
| Abstract: | Venture capital is a specialized form of financial intermediation that often provides funding for costly technological innovation. Venture capital firms need to exit portfolio companies within about five years from the investment to generate returns for institutional investors. This paper is the first to examine the association of venture capital funding with a company’s choice of innovation strategies. We employ a unique dataset of over 10,000 innovative Dutch companies, some of which received venture financing. The data include detailed information on patent applications, innovation activities, financing sources, and other company characteristics. We find that companies backed by venture capital focus on the buildup of absorptive capacity, by engaging in in-house R&D, while at the same time acquiring external knowledge. We interpret this finding as a consequence of the time horizon of venture capital firms. Our results suggest that the correlation between venture capital funding and the build-up of absorptive capacity is not only due to a selection effect. We derive implications of these findings for corporate strategy and public policy. |
| Keywords: | Venture Capital; Entrepreneurship; Innovation Strategy; Research & Development; Public Policy |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:tiu:tiutil:12c9c009-13c2-4579-aa87-48edf1c95a89&r=sbm |
| By: | Ciliberti, Stefano; Bröring, Stefanie; Martino, Gaetano |
| Abstract: | Innovation is a clear target of the Europe 2020 growth strategy. It has been widely postulated that cooperation is especially important for innovation in the food industry because it has traditionally been regarded as a “low tech” sector. This paper analyses how different forms of cooperation affect innovation activities in the EU’s food industry. In particular, the study addresses the question of how cooperation between companies and key chain agents influences innovative activity. To do so, we analysed data at the country level drawn from the Community Innovation Survey (CIS). The aggregated data allowed us to investigate national system-level processes that must be considered the outcomes of micro-level decisions and policies. A random effect linear model is formulated and estimated to analyse the panel data obtained from five CIS waves. The model indicates that cooperation with universities positively affects innovative activity and, surprisingly, that government financial support has not been an effective instrument to foster innovation by food companies. |
| Keywords: | Innovation, food industry, cooperation, supplier integration, Agribusiness, |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iefi15:206249&r=sbm |
| By: | Sanchez, Leonardo; Ng, Desmond |
| Keywords: | Innovation, Coherence, Industry Structure, Agribusiness, Industrial Organization, |
| Date: | 2015–05–26 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea15:205389&r=sbm |
| By: | Roberto Fattal Jaef (The World Bank); Francisco Buera (Federal Reserve Bank of Chicago) |
| Abstract: | Development dynamics are characterized by sustained improvements in TFP, protracted increases in investment rates, and a broad transformation in the struc- ture of production. Low income countries are characterized by small average firm size, slow firm growth over the life-cycle, and significant dispersion of marginal products. In this paper we present a quantitative theory that jointly matches the behavior of firms in under-developed economies and key properties of develop- ment paths. We work with a model that features endogenous innovation decisions by entrepreneurs, reallocation of factors due to idiosyncratic productivity shocks, and selection in and out of entrepreneurship. We construct a low-TFP stationary equilibrium with dispersion in marginal products that is driven by idiosyncratic distortions. We then trigger development through a reform that liberalizes the economy from all frictions. Our quantitative theory can account well for cross- sectional and life-cycle patterns in distorted economies, and can generate develop- ment paths with rising TFP and investment dynamics, consistent with the data. Ignoring either endogenous innovation or selection in and out of entrepreneurship would lead to counter-factual transition paths, similar to those of the standard neoclassical growth model. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed015:274&r=sbm |
| By: | Hirsch, Stefan; Gschwandtner, Adelina |
| Abstract: | This article analyzes profit persistence as well as the drivers of profitability in the US and EU food industry using GMM estimations. Due to different structures in firm size comparable samples of US and EU food processors are derived using Propensity Score Matching. The results indicate that the persistence of profitability in the food industry is lower compared to other manufacturing sectors. Firm specific drivers of profitability turn out to be firm size and growth as well as financial risk. Interestingly, while long-term risk has a negative impact on profit persistence in the EU, it has a positive one in the US. Regarding industry characteristics the growth rate measured by the growth in industry sales has a significant impact on profitability. While this impact is positive in the EU, it is negative in the US. |
| Keywords: | Firm profit, food industry, GMM panel estimation, propensity score matching, Financial Economics, Industrial Organization, L12, L66, M21, |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea15:206035&r=sbm |
| By: | Giuditta De Prato (European Commission – JRC - IPTS); Daniel Nepelski (European Commission – JRC - IPTS); Giuseppe Piroli (European Commission – DG Employment, Social Affairs & Inclusion) |
| Abstract: | The European Commission's Framework Programme constitutes an important share in R&D expenditures in Europe. A number of FP7 projects certainly produce cutting-edge technologies and a significant percentage of these technologies could be commercialized. However, there is a general feeling that not all these technologies and innovations with commercial potential reach the market. The question is why? The Innovation Radar (IR) is a support initiative that focuses on the identification of high-potential innovations in the ICT FP7, CIP and H2020 projects and the key organization in delivering these innovations to the market. The current report documents the details of the IR methodology and the results of its first application. The results of the pilot exercise show that ICT FP7 projects deliver a substantial number of innovations. On average, there are nearly two new or substantially improved products or services developed within each ICT FP7 project. However, further nurturing is needed to bring them to the market and exploit their commercial potential. |
| Keywords: | R&D, innovation, innovation assessment, FP7, H2020 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc96339&r=sbm |
| By: | Khanal, Aditya R.; Mishra, Ashok; Koirala, Krishna H. |
| Abstract: | Small farms face significant challenges using conventional crop production methods. They seek methods of generating alternative income both on- and off the farm. The literature considers these opportunities individually; however recent evidence shows that small farms engage in both activities simultaneously. This study analyzes factors influencing such choice decisions and their impact on farm and total household incomes. Using a large nation-wide farm survey data and selectivity based multinomial choice model, we found that small farms have higher household income if they chose a combination of both strategies rather than a single strategy. Additionally, education, age of the operator, financial conditions of the farm and location of the farm are important factors deriving alternative choice decisions for income diversifications. |
| Keywords: | Income diversification, multinomial logit, selectivity, agritourism, off-farm work, small farms, Agribusiness, Agricultural Finance, Farm Management, Labor and Human Capital, Production Economics, Research Methods/ Statistical Methods, |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:ags:saea14:162453&r=sbm |
| By: | D. Blaseg; Michael Koetter |
| Abstract: | Does bank instability push borrowers to use crowdfunding as a source of external finance? We identify stressed banks and link them to a unique, manually constructed sample of 157 new ventures seeking equity crowdfunding. The sample comprises projects from all German equity crowdfunding platforms since 2011, which we compare with 200 ventures that do not use crowdfunding. Crowdfunding is significantly more likely for new ventures that interact with stressed banks. Innovative funding is thus particularly relevant when conventional financiers are facing crises. But crowdfunded ventures are generally also more opaque and risky than new ventures that do not use crowdfunding. |
| Keywords: | equity crowdfunding, credit crunch, bank stress |
| JEL: | G01 G21 G30 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:iwh:dispap:8-15&r=sbm |