nep-sbm New Economics Papers
on Small Business Management
Issue of 2015‒11‒01
23 papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Determinants of new business formation in China: Regional evidence from a panel data model By Martin Borowiecki; Karl-Heinz Leitner
  2. Economic crisis and innovation: Do regions matter? By Adelheid Holl; Ruth Rama
  3. Role of SMEs in regional innovation systems in Russia By Vera Barinova; Stepan Zemtsov; Alla Sorokina
  4. University spin-off firms? internationalization: Importance of skills By Marina Van Geenhuizen; Qing Ye; Manuel Au-Yong-Oliveira
  5. Determinants of machinery firms´ innovation activity - case study from the Czech Republic By Viktor Prokop; Jan Stejskal
  6. Internal structures and external connectedness: towards a typology of French clusters By Caroline Hussler; Paul Muller; Patrick Rondé
  7. Wealth, tastes, and entrepreneurial choice By Hurst, Erik; Pugsley, Benjamin
  8. The Causality Between Entrepreneurial Activities and Regional Economic Growth: Case of Turkey By Semiha Turgut; Aliye Ahu Akgun
  9. The impact of firm financing constraints on R&D over the business cycle By Kadri Männasoo; Jaanika Meriküll
  10. An analysis of the characteristics of firms and universities in shaping geographical distance of university-industry linkages By Garcia Renato; Araujo Veneziano; Mascarini Suelene; Santos Emerson; Costa Ariana
  11. An empirical example of spatial process of productivity growth in NUTS 2 regions By Alicja Olejnik; Jakub Olejnik
  12. Firm Performance in the Periphery: On the Relation between Firm-Internal Knowledge and Local Knowledge Spillovers By Grillitsch, Markus; Nilsson, Magnus
  13. Policy Learning and Smart Specialization Balancing Policy Change and Policy Stability for New Regional Industrial Path Development By Moodysson , Jerker; Trippl, Michaela; Zukauskaite, Elena
  14. Formation conditions and criteria of regional innovation systems in Ukraine By Olena Slozko
  15. Analysing spatial concentration of Hungarian knowledge intensive manufacturing sectors on city-region level 1996-2012 By Izabella Szakálné Kanó
  16. The effects of knowledge and innovation on regional growth: Nonparametric evidence By Marcos Sanso-Navarro; Maria Vera-Cabello
  17. Technological diversity and the impact of regional innovation: evidence for the EU By Andrea Morescalchi; Sjoerd Hardeman
  18. Regional Characteristics and the Survival of New Firms By Charlie Karlsson; Johan Klaesson; Özge Öner
  19. Knowledge spillovers from foreign direct invesments ? Czech case study By Jan Stejskal; Abdelwalid Rouag
  20. SME?s cluster identification in Russia By Vera Barinova; Stepan Zemtsov
  21. Rural entrepreneurship and Innovation: some successful women?s initiatives By Lúcia Pato
  22. Industry Structure, Entrepreneurship, and Culture: An Empirical Analysis Using Historical Coalfields By Stuetzer, Michael; Obschonka, Martin; Audretsch, David B.; Wyrwich, Michael; Rentfrow, Peter J.; Coombes, Mike; Shaw-Taylor, Leigh; Satchell, Max
  23. From Plan to Process: Exploring the Leadership Implications of RIS3 By James R. Wilson; Mari Jose Aranguren; Mikel Navarro

  1. By: Martin Borowiecki; Karl-Heinz Leitner
    Abstract: Using a panel data model, we study the effects of regional and industry-level traits on new business formation (NBF) for 164 industries across 266 Chinese prefectures between 1998 and 2007. The objective is to provide empirical estimates on effects of prefecture traits on entry rates, and in particular on effects of prefecture knowledge capital stocks on R&D-intensive new business formation. In line with literature on knowledge spillovers, we find extensive evidence of a positive prefecture knowledge capital stock effect on R&D-intensive NBF rates, whereas knowledge capital stocks do not predict non R&D-intensive entry rates. Among regional and industry-level characteristics, we find that prefecture supplier and customer market strength are strongly linked to higher business entry rates. Our results for China contrast with recent findings on the effects of regional traits on firm entry rates in India and the US, indicating distinct regional patterns of Chinese entrepreneurship.
    Keywords: Entrepreneurship; knowledge spillovers; agglomeration; development; China
    JEL: L26 L60 M13 O10 O14 O33 R00 R10 R12
    Date: 2015–10
  2. By: Adelheid Holl; Ruth Rama
    Abstract: There is broad agreement among economists and policy makers that economic growth is nowadays largely driven by the capacity of firms to innovate. The financial and economic crisis that started in late 2007 has had a far reaching impact on countries around the world. Spain has been one of the countries worst affected. As a result, the government has reduced public funding in R&D. At the same time, the continued credit crunch has dramatically worsened the possibilities for financing new ideas and projects. One of the consequences of the economic crisis is that many companies have reduced their innovation-related activities; however, some firms have been more resilient than others and recent studies also show that there are important differences across countries regarding the degree to which the economic crisis has affected firms? innovation investment. It has been argued that national institutional settings and the structural characteristics of national innovation systems have played an important role in shaping how firms have responded to the crisis. However, within a country, regions may also matter. Learning processes underlying innovation are localised and locally embedded, and regional innovation systems (hereafter, RISs) may play a role too. Spain provides an interesting setting for analysing the role of regions, as it is a country with a highly decentralized unitary state with a unique framework of territorial administration. Spanish regions have very diverse economies and also different degrees of fiscal and political autonomy. They vary greatly in terms of their innovation performance as well as regarding their regional innovation and technology policies. Moreover, their responses to the economic crisis in terms of regional policies have not been the same. A focus on regional difference can contribute to a better understanding of the innovation strategies employed by firms during the crisis. To date, we still know very little about regional differences and the degree to which regions have shaped firms' innovation behaviour in response to the economic crisis. Our analysis contributes to this literature by drawing on a large national sample of micro-data for Spanish manufacturing and service sector firms. Our results show that the crisis has discouraged a significant number of firms from engaging in innovation. These have been mainly small firms and occasional R&D performers. Significant regional differences are also found in the degree to which the crisis has affected firms? innovation expenditures, even after controlling for sectoral differences and firms? structural characteristics. The Basque Country stands out in our analysis. Firms with R&D employment in this region show a significantly lower probability of having abandoned innovation activities and a somewhat higher probability of even having increased their innovation effort. This regional effect has been especially important for small and medium sized companies.
    Keywords: innovation investment; economic crisis; resilience
    JEL: R1 O3
    Date: 2015–10
  3. By: Vera Barinova; Stepan Zemtsov; Alla Sorokina
    Abstract: SMEs play an important role in the development of regional innovative systems because of their potential to accept new technologies and show fast growing rates. There is an interdependence between emergence of fast growing SMEs (?gazelles?) and innovative development of regions. High level of regional innovative development creates a fertile environment for increasing the number of fast growing companies, while we assume that large number of ?gazelles? creates a favourable environment for the dissemination of innovations in regions via spillover effect (NESTA Business growth and innovation, 2009). Fast-growing companies may contribute more than 50% to GDP growth (Europe INNOVA Gazelles Innovation Panel, 2008). There are several works, that explain growth of firms as a stochastic phenomenon (Gibrat, 1929), or as a combination of endogenous (Penrose, 1955) and exogenous factors (Delmar, Davidsson, Gartner, 2003). In our work we assume that regional innovation performance (as a share of RnD personnel in employment, share RnD expenditures in gross regional product, etc.) may be a significant factor because of knowledge spillover effects (Audretsch, Feldman, 2004), affecting more competitive firms. There were no works on Russian regional data that could prove it. The article analyses a variety of endogenous (intra-firm) and exogenous (regional) factors, which determine the share of fast-growing firms in Russian regions. The analysed firms were fast-growing manufacturing SMEs during post-crisis period (2009-2012), the main focus was on the determinants of the companies? share in total number of manufacturing firms in a region. The dataset was collected from SPARK (Professional market and company analysis system), and consists of information about income, owners, location, industry and several financial indicators. Regional factors, according to Russian Federal State Statistical service, include research and development indicators (such as RnD expenditures, RnD employees, etc.), urbanization rate, human capital, investment climate, etc. There are 419 manufacturing fast-growing companies (?gazelles?) from 9220 companies in database, which is approximately 5%. Econometric analyses demonstrates a strong correlation between the share of high-growth companies in regions and indicators of regional innovation performance: number of researchers per 10 000 people, the number of PCT applications per economically active population, the share of employees with higher education in the total number of population in economically active age, and the number of applications for inventions submitted to the Russian Patent Bureau by national applicants per the economically active population. Determined factors could be used for elaborating recommendations for implementation of industrial policy in Russia.
    Keywords: SME; Russian regions; regional innovation systems
    JEL: L25 O31
    Date: 2015–10
  4. By: Marina Van Geenhuizen; Qing Ye; Manuel Au-Yong-Oliveira
    Abstract: Technical and industrial competences are increasingly dispersed across the globe, urging young high-technology firms in Europe to increase distances in their knowledge relations. However, establishment and maintenance of such relationships tend to be hampered by many barriers following from short in capabilities, particularly various missing skills in the management team. In this paper, we examine the role of capability factors and particular skills among a specific category of firms, university spin-offs, in building knowledge networks abroad, specially, the spatial reach involved. Such a study is not new for (innovative) SMEs, but it is new for university spin-off firms. We use two samples of university spin-off firms (each about 100 cases) in various European countries in order to identify the importance of capabilities and certain skills in internationalization of knowledge collaboration, and to this purpose we apply various regression models. The sampled firms are of different age and find themselves in different stages of born-global development. We observe that 60 to 70 per cent of the firms employ knowledge relationships abroad, almost 35 per cent of them outside of Europe. The main underlying capability factors are a high education level (PhD), participation in market/business-related training, and a larger firm size. Another factor is a relatively low level of innovation, indicating a support structure from practical application and customer relations in an established market position of the firm abroad. Examples of such support structure are found in civil engineering works and consultancy concerning transportation infrastructure, land use/protection and the oil and gas industry. Furthermore, one set of missing skills in the management team stands out in limiting larger distances in knowledge collaboration, and these are internationalization skills, for example, skills in presentation of the firm and negotiation of important agreements with a partner abroad, dealing with uncertainty in certification issues and patent protection, and skills in branding the product abroad. Most missing skills are of the conceptual and relational type. Due to different stages in born-global development, the differentiation in missing skills is remarkably large, indicating that training to improve skills requires a multi-faceted and customized approach, without a one-size-fits-all solution. The paper concludes with a summary and some ideas for improving training.
    Keywords: global knowledge collaboration; capabilities; skills; university spin-off firms
    JEL: D03 M13 O32
    Date: 2015–10
  5. By: Viktor Prokop; Jan Stejskal
    Abstract: Innovative activities have been considered mandatory for surviving in a dynamic market environment, inter alia in the machinery industry. Nothing has received as much attention as innovation, which has been pinpointed as the fundamental driving force for economic growth and welfare as well as a key factor in competitiveness. Therefore, innovation growth is seen as a mechanism to influence economic growth, and therefore firms capable of increasing their innovation potential benefit from further increasing competitive advantage and economic growth. However, innovations do not arise within one company in isolation. Today, in the so-called knowledge economy, innovation ? more than most other economic activities ? depends on new economic knowledge, which is perceived to be the basic ingredient of the innovative process. It follows that the increased complexity of knowledge processes influences firms, because organizations need to be able to respond to the growing demand for improved innovation, mainly in the mentioned machinery industry which is trapped by cost and innovation pressure. Thus, innovative units as well as local institutions and individuals have to interact with each other and with their external environment because collaboration with suppliers, customers and competitors enables a firm to deepen its existing technological competence. Moreover, collaboration with research organizations helps a firm broaden its technological knowledge and firms can acquire new scientific knowledge to benefit their product or process innovations by interacting formally and informally with universities and research institutes. The aim of this paper is the identification and evaluation of specific important determinants of innovative activities that influence the economic growth of enterprises in the machinery industry in the Czech Republic by using own multiple regression models. Selected determinants of innovative activities are (i) total turnover, (ii) R&D expenditures, acquisition of external knowledge and total innovation expenditure, (iii) significant market, (iv) membership of a group of enterprises, (v) implementation of innovated goods, (vi) public financial support. For the data analysis we used a harmonized questionnaire of EU Member States from the Community Innovation Survey that was carried out in the Czech Republic for the period 2010 ? 2012. In total, the analysis was performed on data of 284 Czech enterprises from the machinery industry with at least 10 employees. We can say that the greatest influence on the dependent variable was analyzed in determinants of the market supported by the government, and support by EU funds. Results show that there are large numbers of factors that affect the innovation activity, but their significance are marginal.
    Keywords: innovation; innovative collaboration; knowledge economy; machinery industry
    JEL: D83 O32 R11 R59
    Date: 2015–10
  6. By: Caroline Hussler; Paul Muller; Patrick Rondé
    Abstract: In this explorative study, we adopt a knowledge-centred perspective on clusters and investigate whether clusters? internal structure explains clusters? external (knowledge) collaborative strategies. All in all, the main analytical issue underlying this paper is the following: do internal characteristics of clusters vary (among them), and do they have any influence on the characteristics of clusters? external relationships? Our analysis focuses on the 71 French Competitiveness clusters. First, thanks to data analysis techniques, we identify 4 ideal types of clusters according to their internal characteristics. We then pinpoint variety in clusters? relational behaviours using network analysis. In a final step, we confront internal characteristics and the relational patterns of French clusters. Our data analysis combined to a network analysis on French Pôles de compétitivité allows us to highlight several results concerning clusters? cooperation practices and to link them with internal characteristics. First, even though clusters tend to favour cooperation with a given partnering cluster, they try to diversify as much as possible their cooperation with different clusters. They thus try to strike a balance between deepened, more enduring cooperations with a one or a couple of other clusters and the search for novelty variety by initiating cooperations with new partnering clusters. Our results also suggest a significant variety in the cooperation practices among French clusters. Some of them do not play any significant role in the global network, whereas others are associated with high levels of centrality. This suggests that not all clusters implement (or are capable of implementing) similar cooperation practices. This is coherent with our first argument that clusters may not be equally endowed with the same networking capabilities. Investigating further the factors underlying clusters? cooperation practices and trying to bind them with internal characteristics, we confronted the results obtained out of our network analysis based on R&D collaborative projects. Our first results show that French Pôles de compétitivité indeed differ according to their internal characteristics, the most discriminating factors being linked to the complexity level of clusters and their ownership structure while absorptive capacity and the nature of knowledge bases appear to be less discriminating. Considering both Pôles' internal characteristics and cooperation practices, the internal factors determining most of their cooperation practices lie in their levels of internal complexity and their absorptive capacities. Our analysis shows that the dominant ownership structure in a Pôle and the nature of its dominant knowledge base have less influence.
    Keywords: clusters; internal structures; collaborative network; cluster typology
    JEL: D83 D85 L14 O30
    Date: 2015–10
  7. By: Hurst, Erik (University of Chicago); Pugsley, Benjamin (Federal Reserve Bank of New York)
    Abstract: The nonpecuniary benefits of managing a small business are a first order consideration for many nascent entrepreneurs, yet the preference for business ownership is mostly ignored in models of entrepreneurship and occupational choice. In this paper, we study a population with varying entrepreneurial tastes and wealth in a simple general equilibrium model of occupational choice. This choice yields several important results: (1) entrepreneurship can be thought of as a normal good, generating wealth effects independent of any financing constraints; (2) nonpecuniary entrepreneurs select into small-scale firms; and (3) subsidies designed to stimulate more business entry can have regressive distributional effects. Despite abstracting from other important considerations such as risk, financing constraints, and innovation, we show that nonpecuniary compensation is particularly relevant in discussions of small businesses.
    Keywords: entrepreneurship; non-pecuniary benefits
    JEL: J01 L20 L26
    Date: 2015–10–01
  8. By: Semiha Turgut; Aliye Ahu Akgun
    Abstract: The effect of entrepreneurship on regional economic growth has been a research agenda for the last two decades. Entrepreneurship, by creating employment, fostering competitiveness or affecting employment, somehow contributes to economic development. While entrepreneurship is mostly defined or measured as numbers of self-employed, firm formation, business formation, new firm start-ups, firm births or net entry rates in the empirical studies, regional economic development is defined or measured as, the growth of gross domestic product (GDP), gross value added (GVA) and the change of employment/unemployment rate or productivity. The effect of entrepreneurship on economic growth is mainly seen in two time periods: long term and short term. In the literature, there is evidence on the effect of employment growth in short term and on the effects like crowd-out, displacement, the employment decreases because of the firm closures or employment and productivity growth caused by the new firm formations in long term. The purpose of this article is to find the causality between entrepreneurship and regional economic development in Turkey at the NUTS1 level. In order to reach this aim, entrepreneurship is measured as firm formation and net entry, while regional economic development is measured by GVA, GDP and employment. One of the well-known techniques to identify the causal relations among the variables, correlation is used to measure the length, direction and the weight of the causal affects/relations between regional economic development and entrepreneurship. First, the aim, objectives and detailed framework of this article are given. Then, in the following section, the conceptual and theoretical framework of entrepreneurship and regional economic development is discussed. The case study is given in the third section, with the explanation of data and methodology, a short brief of firm and entrepreneurship policies in Turkey and the effect of entrepreneurship on regional economic development in Turkey at two distinctive periods as 1987-2001 and 2004-2011 separately. This study is the first attempt to show such a relation between entrepreneurship and regional economic growth on the basis of the firm formation. The findings show that the causality between (or effect of) entrepreneurship and regional economic growth changes among regions, which clarifies regional similarities of diversities. Therefore, although the trends of entrepreneurship to affect regional growth in Turkey seem corresponding the findings of the current literature, eastern regions acts differently.
    Keywords: entrepreneurship; firm formation; regional economic growth
    JEL: L26 O47
    Date: 2015–10
  9. By: Kadri Männasoo; Jaanika Meriküll
    Abstract: The paper studies financing constraints for R&D over the latest boom and bust episode in Central and Eastern Europe (CEE). Given that financial and venture capital markets in CEE are thin in comparison to those in high-income economies and that many of CEE countries experienced a credit crunch during the last recession, it is proposed that financing constraints have a significant adverse effect on R&D activity in these countries. The paper uses two complementary firm-level data-sources from ten CEE countries. The results suggest that the role of financing constraints for R&D expenditures in CEE countries is substantial, as the probability of credit constrained firms undertaking R&D activities is around 70% lower and firms’ R&D expenditure cash flow sensitivity is very high. Despite the severity of the crisis, the adverse effect of financing constraints for R&D did not increase in the financial crisis. It is also confirmed that, conditional on credit constraints, firms’ R&D activity is higher in a recession.
    Keywords: R&D financing constraints, credit constraints, business cycle, Central and Eastern Europe
    JEL: O16 O32 O52 E32 P23
    Date: 2015–07
  10. By: Garcia Renato; Araujo Veneziano; Mascarini Suelene; Santos Emerson; Costa Ariana
    Abstract: University has being playing an increasing role in supporting innovation. In this way, university-industry linkages has become a growing subject in the literature, in order to understand how these relationships are shaped on space. Recent issue is about the role of geographical distribution of these relations, since geographical proximity can provide important benefits for firms in accessing these sources of information and new knowledge. The aim of this paper is to examine the main factors that affect geographical distance of university-industry linkages, by analysing both sides of collaboration, the characteristics of firms and universities. Several studies show that there are important benefits related to the co-location of firms? R&D staff and academic researchers (Jaffe, 1989; Audrescht & Feldman, 1996; Arundel & Geuna, 2004; D?Este & Iamarino, 2010; De Fuentes & Dutrenit, 2014). However, recent analyses show that, several times, firms prefer to collaborate with geographically distant universities, since there are some factors that stimulate firms to go far to interact with university (D?Este & Iamarino, 2010; Laursen et al, 2011; Muscio, 2013). Hence, the main question that the literature are trying to answer is why firms go far to interact with university. General results points to two main drivers. First, firms look for distant universities when they cannot find local high-performance academic research. Second, firms must have high absorptive capacity in order to be able to search for universities that are able to solve their innovative problems. Previous studies show important evidence to this debate. However, they left an important gap that requires deeper analysis, since evidence presented in previous studies are based only on information about the university (D?Este & Iammarino, 2010; Muscio, 2013) or only of the firm (Laursen et al, 2011; De Fuentes & Dutrenit, 2014). Linked to this issue, this paper aims to contribute to this debate not only by presenting new evidence on the main drivers of the pattern of geographical distance of university-industry linkages, but also by presenting a comprehensive analysis of the collaboration by using complete information of both universities and firms. To do that, a wide-ranging database of interactions between university and industry was used in the scientific fields of Engineering and Agrarian Sciences in Brazil. Main results of the empirical analysis show that bigger firms with higher absorptive capacity tend to interact with more distant research groups, which shows the importance of the skills of the firm to find universities, local or distant, that are able to solve their innovative problems. On the side of the university, larger research groups and those who perform higher quality academic research presents higher average geographical distance of interactions, which shows that they are able to attract more distant firms to collaborate.
    Keywords: O18
    JEL: R12
    Date: 2015–10
  11. By: Alicja Olejnik; Jakub Olejnik
    Abstract: This paper is an attempt to explain variations across EU regions in productivity growth and takes into consideration the important structure of the age-productivity relation of Human Capital. The study is fundamentally based on the theory of Fingleton?s model which analyses the spatial process of productivity growth on the on the foundations of the theory of New Economic Geography. The applied specification links manufacturing productivity growth to the growth of manufacturing output by the means of Verdoorn?s law. The model incorporates productivity-adjusted human capital understood as Total Human Capital Productivity corrected with age structure with the use of productivity as a function of age. Moreover, a new approach to defining the age-productivity curve has been introduced. Based on the previous studies found in the literature the age-productivity function has been interpolated by the means of Radial Basis Function method with thin-plate spline. The age-productivity function allows to describe how the work performance differs over the life period and thus allows for differences in age structure of employees in regions under research. This study covers 261 NUTS 2 regions of EU excluding some French, Portuguese and Spanish regions due to their isolated position and Croatia because of the lack of comparable data. All data used in the empirical part of this study are published by Eurostat and refer to the years 2000-2013. The regional productivity is explained by the quotient of regional GDP and the number of Economically Active Population. The productivity growth is approximated by the exponential change of regional productivity in these years to regional productivity in the year 2000. The regional GDP is expressed in millions of Euro in constant prices (year 2000), where Economically Active Population is in thousands of people 15 years or over. The Human capital is defined by the Employment in Technology and Knowledge-intensive Sectors as a percentage of Economically Active Population. The model has been tested through implemented methodology, namely a spatial panel model with fixed effects. The model presented provides evidence of the importance of increasing returns to scale for regional economic growth, which lead to divergence effects for EU regions. Similar implications can be observed in the case of regionally differentiated human capital. Furthermore, the country fixed effects turned out to be significant. The findings also suggest that productivity in jobs requiring problem solving and learning skills reaches a plateau for the 35-45 age bracket and has its peak around the age of 40. We suggest that the applied approach constitutes an innovation providing additional information hence a deeper analysis of the investigated problem.
    Keywords: spatial panel; productivity growth; Verdoorn?s law; age-productivity curve
    JEL: O40 J24 C21 C23
    Date: 2015–10
  12. By: Grillitsch, Markus (CIRCLE, Lund University); Nilsson, Magnus (Dept. of Business Administration and CIRCLE, Lund University)
    Abstract: This paper challenges one of the fundamental propositions within economic geography; that location in knowledge regions contributes to firm performance in general and especially for knowledge intensive firms that compete on the basis of knowledge. Our analysis of Swedish micro-data on 32,535 firms from 2004-2011 provides evidence that knowledge intensive firms benefit less from local knowledge spillovers than firms with comparably low in-house knowledge. This suggests that firms with high internal competencies can compensate for a lack of local knowledge spillovers and that negative knowledge externalities may make location outside knowledge centers more beneficial for such firms.
    Keywords: periphery; firm performance; spillovers; agglomeration
    JEL: O30 R10 R11
    Date: 2015–10–23
  13. By: Moodysson , Jerker (CIRCLE, Lund University); Trippl, Michaela (CIRCLE, Lund University); Zukauskaite, Elena (CIRCLE, Lund University)
    Abstract: This paper seeks to explain what policy approaches and policy measures are best suited for promoting economic diversification of regions and what needs and possibilities there are for such policy to change and adapt to new conditions in order to remain efficient. The paper departs from the notion of Smart Specialization, which has become a popular strategy among policy makers recently. We discuss how regional smart specialization strategies influence new regional industrial growth paths (path renewal and path creation) and how they are related to and aligned with policy strategies implemented at other territorial scales (local, regional, national, supranational). We distinguish between different levels of policy learning and types of change in relation to path renewal and new path creation. Our main argument is that new regional industrial growth paths require both stability and change within the support structure of the innovation system. Apart from being adaptive and tailor made to the specific preconditions of the regional economy, the regional system must also be resilient and predictable on certain dimensions. Unless smart specialization strategies are able to combine such adaptation and stability, they fail to promote path renewal and new path creation. Our arguments are illustrated with empirical findings from the regional innovation system of Scania, South Sweden.
    Keywords: smart specialization; innovation policy; policy learning; new regional industrial path development
    JEL: O30 O38 R11 R58
    Date: 2015–10–23
  14. By: Olena Slozko
    Abstract: Considering the prospects of regional innovation systems in Ukraine, theoretically found the key organizational and institutional settings that allow the potential of regional innovation systems. A criterion for the onset of systematic innovation at the regional level. They are divided into infrastructure and under- structure parameters. The first question concerns the degree of infrastructure regional financial competence. This includes private and public finances. Where there is a regional stock exchanges, firms, especially small and medium-sized can find financial resources at the local capital market. Regional innovation management process assists in the interaction of the parties, including the competence of public and private resources. The revival of public-private investment in Ukraine can also help to build capacity, reputation, trust and reliability among regional partners. State regional budgets are also important in mobilizing regional innovation capacity. Three types of budget competencies. The first - the regions have the right to manage decentralized expenditure. For example, when the region is the channel through which funds are nation-wide. The second category is applicable in cases where the regions are competent in autonomous spending. This happens when regions determine how the grant will be spent allocated from the national budget. The third category - the regions have the power to collect taxes as well as for the autonomous distribution, which creates opportunities for regional innovation. The strongest basis for promoting regional innovation is found in regions with credit opportunities, and in the regions with autonomous expenditure and authority to collect taxes. The competence of regional authorities to infrastructure issues are divided according control and influence on investment: in 'hard' infrastructure projects such as transport and telecommunications and 'soft' - infrastructure knowledge, such as universities, research institutes, science parks and technology transfer centers. Most regions lack the budget to the most strategic of them, but many have the power to design and construction of such facilities.
    Keywords: innovations; infrastruter; innovative activity;innovation development
    JEL: Q32
    Date: 2015–10
  15. By: Izabella Szakálné Kanó
    Abstract: It seems to be widely accepted that regional development extensively depends on two types of agglomeration economies. On the first hand there are urbanization economies, namely regions with diverse economic environment, these provide firms with opportunities to grow and improve their technologies. On the second hand there are localization economies, which mean regions gaining from specialization because firms enjoy presence of suppliers, specialized labor and knowledge spillover among co-located partners. This is especially important in case of knowledge intensive industries. Knowledge-intensive industries have attracted a great attention nowadays in researches because of its contribution to the development of knowledge driven economy. They generate positive effects on the regional economy and have increasingly high importance in less developed regions, like Hungary. The identification of spatial distribution, the geographical co-location of knowledge-intensive economic activities is substantial to define potential leading industrial branches in regions. Our argument is closely connected to the recent emphasis of European Union on smart specialization. Several different methods can be found in the literature measuring the specialization of regions and the concentration of industries. These two phenomena build two scopes of localization economies, the geographical and the sectorial ones. Our paper addresses the spatial distribution of Hungarian manufacturing industries computing raw concentration index EG G and spatial concentration index EG ?? proposed by Ellison and Glaeser (1994) as measures of internal and external economies of scale. Computations are based on the number of employees for a 17 years period covering early stage of Hungarian transition economy, the EU access and the economic crisis (1996-2012). Our investigation is based on two different types of territorial units: city-regions and subregions (LAU 1 level. In order to apply regional development strategies in regions, one has to consider nodal regions, i.e. functional regions established from labour commuting zones with a powerful centre: the 23 city-regions. Labour commuting zones often extend beyond the borders of subregions (175), but latter are still well applicable for investigation of concentration. Based on our calculations we compared 1. measured spatial concentration of knowledge intensive industries and that of non-knowledge intensive ones. 2. measured spatial concentration based on city regions and subregions. 3. measured spatial concentration of NACE 2-digits and NACE 4digits industries by computation of co-agglomeration index (EG ??) We also investigated change of employment, firms and average firm size of industries over time. Our preliminary results indicate emphasized geographical concentration of knowledge intensive industries compared to non-knowledge intensive ones. The vast majority of cases, this concentration arises from the external economies of scale and it is even more present in case of city-regions than in case of subregions.
    Keywords: specialization; geographic concentration; manufacturing industries; economic crisis
    JEL: O14 R12
    Date: 2015–10
  16. By: Marcos Sanso-Navarro; Maria Vera-Cabello
    Abstract: This paper deals with the relationship between knowledge, innovation and regional growth. The study is carried out through the application of nonparametric estimation methods to European data at NUTS2 level. We provide evidence that the share of innovative ...firms plays a more relevant role in explaining regional growth than R&D expenditures. Further, inward FDI turns out to be a robust growth determinant. Our results also suggest that the effects induced by these variables are of a heterogeneous nature. As a byproduct of the analysis, we show that the estimation results from a local-linear kernel regression can be used for the identi...cation of spatial patterns. In this respect, we ...find a cluster of innovation-driven labour productivity growth in Germany.
    Keywords: Regional growth; knowledge; innovation; nonparametric methods; nonlinearities
    JEL: C14 C20 O18 R11
    Date: 2015–10
  17. By: Andrea Morescalchi; Sjoerd Hardeman
    Abstract: Diversity is considered key to research, innovation and growth. However, throughout the literature, the exact meaning of the notion of diversity is often left in the midst. What is more, whilst the relation between diversity and productivity growth by now has been extensively addressed, still few empirical studies exist that address the relationship between diversity and innovation directly. To fill in this gap in the literature, this paper offers an empirical analysis of the relationship between technological diversity and the impact of innovation at the EU regional level whilst including different measures of diversity oriented at different levels of technological detail. Using EPO patent data, first, a set of different measures related to diversity is created exploiting the hierarchical structure of patent classes of the International Patent Classification (IPC). Second, the impact of innovation is captured by two citation-based indicators. Whilst the count of (field-normalized) citations is used to proxy the quality of innovation in terms of average impact, the number of highly cited patents is used as a proxy for top-quality innovation in terms of research excellence. Concerning the average impact of innovation, we clearly observe an advantage of specializing in innovation activities in few and related technological sectors. Localization economies can operate not only at low levels of aggregation, but also at a very high level, depending on the classification scheme. Results for research excellence are similar, with two main differences though. First, the impact of evenness on research excellence is non-monotonic in the level of aggregation and can be significant also for a very high level of aggregation. Second, while localization has positive impact on research excellence at the lowest level of aggregation similarly to average quality, a negative impact is found for all the other levels. The main conclusion of this paper holds that related specialization (conceived in terms of either similarity or related variety) and localization have a positive effect on the impact of EU regional innovation the more technological detail is taken into account. Our results then first and foremost stress the importance of taking into account (i) the relations among different technologies and (ii) the appropriate level of technological detail along which relations among technologies play out. As related specialization has a positive effect on technological impact, policymakers could consider either one of two policy options in order to boost the impact of innovation in Europe. One option concerns steering related specialization and localization at a coarse-grained technological level further as to increase the impact of innovation. If related diversification and not related specialization is considered to be a viable policy option in Europe, then the reward system of innovation should be drastically revised.
    Keywords: Specialization; related variety; unrelated variety; regional innovation systems
    JEL: R11
    Date: 2015–10
  18. By: Charlie Karlsson; Johan Klaesson; Özge Öner
    Abstract: There is an abundant literature on industrial ecology aiming at explaining the survival propensity of recently started firms. The majority of the contributions concentrate on the character¬istics of the entre¬preneur, the new firm or the industry. Only a small mi¬nority of the ex¬isting studies consider the influence of the loca¬tion where the new firm has been started on survival probability. The evidence of the importance of location in the literature is mixed. However, only a limited share of these studies analyzes the im¬portance of lo¬calized external economies of scale for the survival of newly founded firms. This relative lack of studies is intriguing since, for example, the ?new economic geography? theory empha-sizes the role that clusters of individual industries and of complementary indus¬tries within a distinct geo¬graph¬ical area play in terms of proxim¬ity and network externalities. Thus, a basic motivation for this paper is that the absolute majority of business survival stud¬ies disregard the fundamental facts that every new firm is started in a specific location. A sec¬ond motivation is the fact that in many of the studies that include spatial factors as explana¬tory factors the representation of these factors are often not ideal. A third motivation is that the representa¬tion of geographical space has not taken into consideration of the importance of the hierarchical structure of geographical space. The purpose of this paper is to test the influence of demand and supply conditions and general economic milieu in localities on the survival of newly founded firms while controlling for firm and industry characteristics and using a proper representation of the hierarchical structure of geographical space.
    Keywords: Entry; Start-up size; Market Potential; Region; Industry; Sweden
    JEL: L11 M13 C21 R11 R12
    Date: 2015–10
  19. By: Jan Stejskal; Abdelwalid Rouag
    Abstract: The foreign direct investments (FDI) spillovers are probably the most extensively analyzed channel of knowledge spillovers (the most important channel for the transfer of knowledge and technology to firms of the host country). Scholars as well as policy makers increasingly treat FDI spillovers as very or the most important development effect for host country. However, whether this knowledge and technology are hypothesized to spill over depends on the absorptive capacity of the host country which stems from well-equipped human resources such as scientists and cumulative expenditure in research and development (R&D). In this paper, we examine for the single time the extent of knowledge spillovers and the absorptive capacity of the Czech Republic regions. Our empirical analysis is based on two main sources. First, the confidential micro-data derived from an annual census of R&D collected by the Czech statistical office with the collaboration of the Czech industrial property office. The data measures inputs in R&D such as the financial means and human resources in the entire entities that carry out R&D and their primary and secondary activities. The mico-data includes also indicators about the R&D outputs in the form of new knowledge used in several practical applications such as patents and utility models. The second source of Data consists on the inflow of FDI at the regional level. The data is collected and published by the Czech National bank according to the international standards adopted by the Organization for Economic Cooperation and development (OECD), European commission and the International Monetary Fund (IMF) data compilation of balance of payments. The paper finds that there is a significant knowledge inflow from the FDI to local firms. Our results state that coefficient of FDI inflows is always positive for both models so that the empirical evidence supports that FDI generates spillover effects on the domestic regional innovation capability of the Czech Republic. As advised by the literature, the spillover effects occur through the absorptive capacity such as the skilled labor turnovers and the R&D expenditure in both entrepreneurial and public sector. In this context, our two models suggest a positive impact of labor in private sector and even significant in both models for the public sector which highlights the important role played by universities, scientific institutes and NGO´s. On the other hand, the correlation matrix of both patents application and utility models show a negative relation between two independent variables; FDI inflows and R&D government expenditure that fosters the assumption that the government expenditure in R&D crowds out the FDI inflow and hinder the beneficial effects of the latter.
    Keywords: foreign Direct Investment; knowledge spillovers; absorptive capacity; patent app
    JEL: D83 D92 O11
    Date: 2015–10
  20. By: Vera Barinova; Stepan Zemtsov
    Abstract: Russia inherited pattern of economic activity location from the Soviet Union, where the main forms of industry organization were territorial-production complexes (TPC) - networks of industrial organizations united by a single technological process or the chain of raw materials processing. In a market economy in the 90s, economic ties within the TPC were destroyed, leading to a drop in the level of production, fragmentation of large enterprises and the formation of a set of independent and often competing firms. Some scientists believe that this situation over the last 20 years could serve as a necessary foundation for the formation of industrial clusters (in interpretation of modern regional science). Today, interest in clusters in Russia rises again due to the need to find new mechanisms to support production and innovation in a stagnant economy. Ministry of Economic Development of Russia has developed a project to support the pilot territorial innovative clusters by providing funding for infrastructure formation. The selection of cluster initiatives was based on applications from regional governments, interested in attracting of additional investment. Most of the clusters, formed in Russia, are not in innovative sectors, as shown by studies of the Russian Cluster Observatory. But a lot of potential clusters in Russia is not formed due to the high level of distrust between firms, due to lack of understanding of the potential benefits, etc., although these clusters can develop due to geographical proximity (high concentration) of firms. The aim of our work is to identify clusters as areas of geographical concentration of small and medium businesses (SME). We also wanted to check whether the existing cluster initiatives correspond to the concentration of economic activity and whether there is potential for increasing the cluster initiatives. In our work, we use the analysis based on the localization index, but on three geographical levels for verification reasons: regions, districts and cities. Most of the data were collected from RUSLANA database, consisting information of Russian firms. After identifying a high degree of localization of a particular industry or a group of industries, we analyze the location of enterprises, based on distance-oriented methods in specific regions or between regions. The result is a map of the high concentration and localization of small and medium businesses in certain areas in a number of industries. The authors confirmed the existence of traditional and well-known clusters and identified previously unknown concentration of firms that did not declare their interaction. In the last step, the authors conducted field research - a survey of firms in areas of concentration, where clusters today are not formed, for determining the reasons for the lack of interaction.
    Keywords: cluster identification; localization; SME; Russian regions
    JEL: C19 L70 R12
    Date: 2015–10
  21. By: Lúcia Pato
    Abstract: Although rural entrepreneurship is an emergent field of study and has emerged as one of the most noticeable ways to promote rural development, the few studies concerning the theme are still incipient. Moreover, a lot of studies focus on farmers and rural entrepreneurs as a whole and little research emphasises women?s entrepreneurship, particularly in Portugal. Thus, this study explores entrepreneurial initiatives conducted by women in one of the most peripheral areas of Portugal - Montemuro (municipality of Castro Daire), where subsistence agriculture continues to be the main economic activity. These women have been stimulated to develop entrepreneurial activity in the countryside, taking advantage of local and endogenous materials (flax and wool) and traditional knowledge that through for generations mothers passed orally to daughters. Indeed, these women who have continually been working this type of materials in their homes, putting into practise what they have learnt from their grandmothers and mothers, began to create innovative and fashionable products. The aim of this study, therefore, is to explore women´s entrepreneurship in rural communities of Montemuro region, raise awareness of the role that these women play in rural development and identify some strategic considerations towards the development of their work. Concerning methodological procedures, in addition to the collection of data and news from newspapers and visits on internet pages about these women?s work, this paper is based on exploratory visits in the study communities of the Montemuro region and in the technique of observation. Apart from this, an interview was conducted in one of the organizations of women. The results of the study point out that the women of Montemuro try to not only create their own work, but also keep the culture and local traditions alive, therefore contributing to rural development. However several difficulties in the development of these entrepreneurial initiatives persist and further progress must be made. According to this, rural and local resources should be seen as valuable and entrepreneurial actions must be continually supported in order to contribute towards a process of rural development. Governmental and other institutional support should be directed to these women entrepreneurs in areas which they have lack of knowledge and expertise and conduct to the creation of a culture of entrepreneurship in the local context. Moreover, the success of entrepreneurship actions depends on the cooperation and creation of networks among the different actors that live in the rural communities. In terms of limitations we emphasize the exploratory nature of the study. Thus in order to understand behaviours and attitudes of these women entrepreneurs, limitations and opportunities of their entrepreneurial actions, an in-depth study will be interesting, maybe in the form of a study case.
    Keywords: Rural entrepreneurship; Innovation; Woman; Rural development
    JEL: L26 R11
    Date: 2015–10
  22. By: Stuetzer, Michael; Obschonka, Martin; Audretsch, David B.; Wyrwich, Michael; Rentfrow, Peter J.; Coombes, Mike; Shaw-Taylor, Leigh; Satchell, Max
    Abstract: There is mounting evidence demonstrating that entrepreneurship is spatially clustered and that these spatial differences are quite persistent over long periods of time. However, especially the sources of that persistence are not yet well-understood, and it is largely unclear whether persistent differences in entrepreneurship are reflected in differences in entrepreneurship culture across space as it is often argued in the literature. We approach the cluster phenomenon by theorizing that a historically high regional presence of large-scale firms negatively affects entrepreneurship, due to low levels of human capital and entrepreneurial skills, fewer opportunities for entry and entrepreneurship inhibiting formal and informal institutions. These effects can become self-perpetuating over time, ultimately resulting in persistent low levels of entrepreneurship activity and entrepreneurship culture. Using data from Great Britain, we analyze this long-term imprinting effect by using the distance to coalfields as an exogenous instrument for the regional presence of large-scale industries. IV regressions show that British regions with high employment shares of large-scale industries in the 19th century, due to spatial proximity to coalfields, have lower entrepreneurship rates and weaker entrepreneurship culture today. We control for an array of competing hypotheses like agglomeration forces, the regional knowledge stock, climate, and soil quality. Our main results are robust with respect to inclusion of these control variables and various other modifications which demonstrates the credibility of our empirical identification strategy. A mediation analysis reveals that a substantial part of the impact of large-scale industries on entrepreneurship is through human capital.
    Keywords: Entrepreneurship; entrepreneurship culture; Industrial Revolution; industry structure; personality
    JEL: L26 L64 N13 N53 N94
    Date: 2015
  23. By: James R. Wilson (Orkestra - Basque Institute of Competitiveness); Mari Jose Aranguren (Orkestra - Basque Institute of Competitiveness); Mikel Navarro (Orkestra - Basque Institute of Competitiveness)
    Abstract: Regional innovation strategies for smart specialisation (RIS3) are currently receiving much attention in the face of the European Commission’s requirement that all regions develop smart specialisation strategies in order to receive structural funds linked to innovation. Yet the entrepreneurial discovery process that is at the core of the smart specialisation concept remains a black box. The paper looks inside this black box through an exploration of leadership requirements. A review of literature on place leadership and territorial strategy identifies three key considerations for leadership if RIS3 are to result in coherent and successful place-based strategies for STI investment: a dualism in reference frame; a mix and rotation of leaderships; and the likely different sources of leaders. These are brought together with analysis of the distinct RIS3 processes in two neighbouring Spanish regions – the Basque Country and Navarre – to highlight a series of implications in terms of the context in which RIS3 develop, the required shift from plans to processes, and the required leadership mix.
    Date: 2015–01–26

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