nep-sbm New Economics Papers
on Small Business Management
Issue of 2015‒09‒11
fourteen papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Forms of knowledge and eco-innovation modes: Evidence from Spanish manufacturing firms By Alberto Marzucchi; Sandro Montresor
  2. Business science links for a new growth path By Jürgen Janger
  3. How Do Native and Migrant Workers Contribute to Innovation? By Fassio, Claudio; Montobbio, Fabio; Venturini, Alessandra
  4. Capital Market Financing, Firm Growth, and Firm Size Distribution By Tatiana Didier; Ross Levine; Sergio L. Schmukler
  5. Absorptive capacity and space By Mário Alexandre Patrício Martins da Silva
  6. KIBS and the Dynamics of Industrial Clusters: a Complex Adaptive Systems Approach By Benoît Desmarchelier; Faridah Djellal; Faïz Gallouj
  7. Evaluación de impacto de las políticas de incentivo a la actividad innovadora en el sector industrial uruguayo By Evelin Lasarga; Lucía Rosich; Horacio Rueda
  8. SME Credit Risk Analysis Using Bank Lending Data: An Analysis of Thai SMEs By Yoshino, Naoyuki; Taghizadeh-Hesary, Farhad; Charoensivakorn, Phadet; Niraula, Baburam
  9. Innovation, Deregulation, and the Life Cycle of a Financial Service Industry By Fumiko Hayashi; Grace Bin Li; Zhu Wang
  10. Open Innovation in a Model à la Hotelling By Bottai, Carlo
  11. How Cash Transfers Create Businesses? By Rafael P. Ribas
  12. Human Capital-Economic Growth Nexus: A Causality Analysis for Pakistan By Khan, Jangraiz; Khattak, Naeem Ur Rehman Khattak; Khan, Amir
  14. Do we have the right kind of diversity in Innovation Policies among EU Member States? By Reinhilde Veugelers

  1. By: Alberto Marzucchi (Catholic University of Milan (Italy)); Sandro Montresor (Kore University of Enna (Italy))
    Abstract: This paper investigates the relevance of different forms of knowledge for the firm’s propensity to pursue eco-innovation (EI) strategies. The incidence of different types of internal and external knowledge is disentangled in search of specific EI-modes. We employ panel data on around 4,700 manufacturing firms from the Spanish PITEC dataset. Results show that a Science, Technology, EI-mode (STEI) prevails, though generally in an attenuated way, in the use of internal knowledge, with R&D knowledge more pivotal than some (embodied vs. disembodied) non-R&D one. On the other hand, a synthetic kind of external knowledge, typically drawn from business actors, is more important than the analytical one mainly coming from the “world of science”, suggesting a Doing, Using, Interacting EI-mode (DUIEI) in external terms. Overall, a hybrid EI-mode emerges across the internal and external realm of the firm, with interesting qualifications when specific EI strategies (e.g. cleaner production technologies vs. product eco-innovations) are considered.
    Keywords: Eco-innovation, knowledge, innovation modes, DUI, STI
    JEL: Q55 O31 O32
    Date: 2015–09
  2. By: Jürgen Janger
    Abstract: Policies towards business science links have been driven by the concept of the entrepreneurial university, i.e. encouraging universities to directly contribute to economic development through commercialization of their discoveries, e.g. through licensing of patents or start-ups, but also through collaborative R&D with firms. However, efforts to increase the entrepreneurship of universities have seldom targeted the first two missions of universities, research and teaching. Evidence shows that any entrepreneurship can only be as strong as the quality of research and teaching. Based on a conceptual model of universities’ role in innovative activity and a review of the evidence, this paper has tried to argue that a narrow focus on linking universities with firms and society without making sure that universities’ first two missions - research and teaching - work well is an ineffective approach towards increasing the contribution of universities to innovative activity, and hence to a new growth path. In particular, the role of training graduates is not stressed enough, while by far the biggest contribution of universities to innovative activities.
    Date: 2015–08
  3. 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
  4. By: Tatiana Didier (World Bank); Ross Levine (University of California at Berkeley and National Bureau of Economic Research); Sergio L. Schmukler (World Bank and Hong Kong Institute for Monetary Research)
    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 (FSD)? To evaluate these questions, we construct a new dataset 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 terms of assets, sales, and employment, that is, firms do not simply use securities markets to adjust their financial accounts. (3) The FSD of issuers evolves differently from that of non-issuers, tightening among issuers and widening among non-issuers.
    Keywords: Access to Finance, Bond Markets, Capital Market Development, Capital Raisings, Firm Dynamics, Firm Financing, Stock Markets
    JEL: G00 G10 G31 G32 L25
    Date: 2015–08
  5. By: Mário Alexandre Patrício Martins da Silva (Faculdade de Economia do Porto)
    Abstract: In this paper, we assume that the absorptive capacity of firms located in a given region is positively influenced by territorial-dependent aspects, and analyze the effects of the spatial elements that explain the differences between territories to access and absorb external knowledge on the innovative performance of regions and the possibility of arising local increasing returns.
    Keywords: Absorptive capacity, knowledge spillovers, complementarities, proximity, innovation, R&D
    JEL: O33 R11
    Date: 2015–09
  6. By: Benoît Desmarchelier (Xi'an Jiaotong University [Chine] - Xi'an Jiaotong University); Faridah Djellal (CLERSE - Centre lillois d'études et de recherches sociologiques et économiques - CNRS - Université Lille 1 - Sciences et technologies); Faïz Gallouj (CLERSE - Centre lillois d'études et de recherches sociologiques et économiques - CNRS - Université Lille 1 - Sciences et technologies)
    Abstract: An important and highly debated question in economic geography is how to explain the dynamics of industrial clusters, i.e. their emergence and evolution through time. Two main theories are generally explored, without being confronted: the cluster life cycle theory-which mainly adopts an aggregate point of view-and the network-based approach. Although KIBS are an important actor of industrial clusters, these two theories pay little attention to them as a potential driver of clusters' dynamics. We show in this paper that properly taking KIBS into account requires considering an alternative and integrative approach that conciliates these two theories. In particular, we argue that complex adaptive systems (CAS) constitute a promising basis for such a synthesis. We then operationalize the CAS approach by studying an existing industrial cluster-Skywin (aeronautics in Wallonia region, Belgium)-within this framework. For this purpose, we use an exhaustive list of the innovation projects undertaken within this cluster between 2006 and 2014 and we build temporal innovation networks linking the agents of the cluster. It appears that Skywin's innovation networks exhibit a small-world effect. This implies that any agent who takes part into an innovation project of this cluster can easily benefit from knowledge and information generated within another ongoing project. We argue that this effect is an interesting proxy of a cluster's attractiveness and an appropriate aggregate variable for studying clusters' dynamics as it shows cluster's potential for further growth. We also demonstrate that KIBS are the main responsible for the emergence of this small-world effect in Skywin's innovation networks.
    Date: 2015–05
  7. By: Evelin Lasarga (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración.); Lucía Rosich (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración.); Horacio Rueda (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración.)
    Abstract: Government efforts to promote innovation require the evaluation of public policies. In this paper, we make an impact evaluation of public support on key variables such as labor productivity, exports, spending on innovation activities, among others. Also, we evaluate the impact of such support differentiating activities between endogenous and exogenous innovation. To do this, we use Propensity Score Matching method which allows us to estimate with some confidence the average difference of the outcome variables comparing between financed companies and a control group of not financed companies, controlling by observable characteristics. In fact, we found that public support significantly improved the performance of financed firms compared to those who did not receive public support. In particular, the impact was greater on exogenous innovation activities. However, these results must be nuanced by the fact that between the period 2007-2009 and 2010-2012 the number of companies that carried out innovation activities declined, which may indicate a selection bias. Finally, we note that the heterogeneity of public financing instruments analyzed can affect the results obtained with respect to the scope of innovation policies and results obtained, as some instruments do not primarily aim to promote innovation.
    Keywords: innovation, public support, impact evaluation
    JEL: O31 O38 C21
    Date: 2015–09
  8. By: Yoshino, Naoyuki (Asian Development Bank Institute); Taghizadeh-Hesary, Farhad (Asian Development Bank Institute); Charoensivakorn, Phadet (Asian Development Bank Institute); Niraula, Baburam (Asian Development Bank Institute)
    Abstract: Small and medium-sized enterprises (SMEs) are the backbone of most Asian economies. The main obstacle to the development of the SME sector is the lack of stable finance. Considering the bank-dominated characteristic of economies in Asia, banks are the main source of financing, and the lack of a comprehensive credit rating database has been a bottleneck for SMEs. This paper examines how a credit rating scheme for SMEs can be developed, when access to other financial and non-financial ratios is not possible, by using data on lending by banks to SMEs. We employ statistical techniques on five variables from a sample of Thai SMEs and classify them into subgroups based on their financial health. By employing these techniques, banks could reduce information asymmetry and consequently set interest rates and lending ceilings for SMEs. This would ease financing to healthy SMEs and reduce the amount of non-performing loans to this important sector.
    Keywords: credit risk analysis; SMEs; bank lending; Thailand
    JEL: G21 G23 G24 G32
    Date: 2015–09–04
  9. By: Fumiko Hayashi; Grace Bin Li; Zhu Wang
    Abstract: This paper examines innovation, deregulation, and firm dynamics over the life cycle of the U.S. ATM and debit card industry. In doing so, we construct a dynamic equilibrium model to study how a major product innovation (introducing the new debit card function) interacted with banking deregulation drove the industry shakeout. Calibrating the model to a novel dataset on ATM network entry, exit, size, and product offerings shows that our theory fits the quantitative pattern of the industry well. The model also allows us to conduct counterfactual analyses to evaluate the respective roles that innovation and deregulation played in the industry evolution.
    Keywords: Financial services industry;United States;Industrial structure;Technological innovation;Equilibrium. Econometric models;Innovation; Deregulation; Industry Dynamics; Shakeout
    Date: 2015–08–18
  10. By: Bottai, Carlo (University of Turin)
    Abstract: This paper shows a model à la Hotelling in which profit-maximizing firms use either an open or a closed strategy to develop their software products. Only in the first case they can freely interchange information about their R&D, and the spillovers are higher the closer they are. What comes out is a clustering force that drives open firms to stay closer one another in the product characteristic space and which lead to believe that a sense of community is essential to work for an organizational model that is decentralized, modular and that cannot be planned in advance, like the Bazaar development model, used by open firms, is.
    Date: 2015–06
  11. By: Rafael P. Ribas (IPC-IG)
    Abstract: "The creation of small, but formal, enterprises is one of the engines for the process of economic growth with poverty reduction. Among all kinds of policy thought to foster entrepreneurial activity, access to financial services, particularly credit and insurance, usually receives the most attention. The common presumption is that microloans and cash transfers provide the liquidity to poor individuals who want to start a business but cannot afford the start-up costs and potential losses with their own savings."(...)
    Keywords: Cash Transfers, Businesses
    Date: 2014–11
  12. By: Khan, Jangraiz; Khattak, Naeem Ur Rehman Khattak; Khan, Amir
    Abstract: This paper concentrates on the role of human capital in economic growth of Pakistan during the period 1971-2012.Granger Causality test has been used as analytical technique for this purpose. The study used research and development (R&D), education and health as proxies for human capital. The results confirm the role of human capital in the economic growth of the study area. The results show that human capital in form of research and development (R&D) Granger caused economic growth during the study period. Moreover, unidirectional causal relationships exist among different levels of education, physical capital, R&D and economic growth. Realizing the significance of human capital for sustained economic growth of the country, it is suggested to increase investment in R&D, health and education sector of Pakistan.
    Keywords: Causality, Human Capital, Research and Development, Physical Capital, Economic Growth
    JEL: E24 J2 J21 O32 O47 O49
    Date: 2015–04
  13. By: Anthony Dhieux (IAE Lille - Institut d'Administration des Entreprises - Lille - Université Lille 1 - Sciences et technologies); Eric Severin (IAE Lille - Institut d'Administration des Entreprises - Lille - Université Lille 1 - Sciences et technologies); Ludovic Vigneron (GERME - Université Lille II - Droit et santé)
    Abstract: In this study, we examine the link between accrual quality and SMEs’ use of trade credit. Using a sample of 3591 small businesses observed between 2005 and 2012, we provide evidences of a negative impact of a good quality of accruals on SME’s use of trade credit. We also provide evidence that suppliers limit trade credit for firms for which accrual quality is harder to anticipate. Suppliers can deal with low quality of accruals but only if their relationship with the small business allows them to correct related bias.
    Abstract: Dans cette étude, nous examinons le lien entre la qualité de l’information financière diffusée par une PME et le recours de celle-ci au crédit fournisseur pour le financement de son activité. A partir, d’un échantillon de 3591 entreprises observés sur la période 2005-12, nous mettons en évidence un lien négatif entre la qualité de l’information comptable mesuré par la qualité des « accruals » et le recours au crédit fournisseurs. Les fournisseurs financent ainsi les entreprises les plus opaques qui peinent à accéder au crédit bancaire. Nous mettons également en évidence le fait que les fournisseurs limitent leur concours aux PME pour lesquels l’incertitude sur la qualité des « accruals » est importante. Les fournisseurs s’accordent ainsi d’une faible qualité de l’information comptable à condition de pouvoir l’anticipé.
    Date: 2015–05–19
  14. By: Reinhilde Veugelers
    Abstract: This contribution focuses on the heterogeneity in innovation capacity within Europe across its different Member State. Who are the leading and who are the lagging EU countries? Is there a trend towards convergence over time? And how has the crisis affected this trend of convergence? We then take a look at the research and innovation policies which the EU countries have in place and try to assess whether these policies match with the heterogeneous EU countries’ innovation capacity positions. We examine both the budgets allocated by EU Member States to R&I as well as the various kinds of R&I policy programmes being deployed. More particularly, we examine how heterogeneous the deployment of policy instruments is across EU member states and whether this matches with the heterogeneity in innovation capacity development among EU countries. Notwithstanding the large and increasing heterogeneity among EU countries in innovation capacity development, the evidence on innovation policies in EU countries shows a relative homogeneity of policy mixes in different countries. Current innovation policy mixes of instruments do not well reflect the countries’ levels of innovation capacity development.
    Keywords: Innovation, Innovation policy, Institutional reforms, Multi-level governance
    JEL: O31 O38
    Date: 2015–08

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