nep-sbm New Economics Papers
on Small Business Management
Issue of 2015‒11‒21
ten papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Innovation, Spillovers and Productivity Growth: A Dynamic Panel Data Approach By Christopher F Baum; Hans Lööf; Pardis Nabavi
  2. The Employment Impact of Innovation: Evidence from European Patenting Companies By Vincent Van Roy; Daniel Vertesy; Marco Vivarelli
  3. SMEs, age, and jobs : a review of the literature, metrics, and evidence By Aga,Gemechu A.; Francis,David C.; Rodriguez Meza,Jorge Luis
  4. Role of Human Resource Practices in Absorptive Capacity and R&D Cooperation By Ipsita Roy
  5. SMEs and access to bank credit: Evidence on the regional propagation of the financial crisis in the UK By Degryse, Hans; Matthews, Kent; Zhao, Tianshu
  6. Role of the Credit Risk Database in Developing SMEs in Japan: Lessons for the Rest of Asia By Kuwahara, Satoshi; Yoshino, Naoyuki; Sagara, Megumi; Taghizadeh-Hesary, Farhad
  7. Efficiency of Female Leaders in Family and Non-Family Firms By Bjuggren, Per-Olof; Nordström, Louise; Palmberg, Johanna
  8. The 2015 PREDIDT Report: An Analysis of ICT R&D in the EU and Beyond By Matilde Mas; Juan Fernández de Guevara
  9. Entrepreneurial Funding Challenges for Latin American Women Start-up Founders By Katherina Kuschel; María-Teresa Lepeley; Fernanda Espinosa; Sebastián Gutiérrez
  10. Entrepreneurship in Micro and Small Enterprises: Empirical Findings from a Baseline Study in Northeastern Areas of Delhi, India By Kurosaki, Takashi; Lal, Kaushalesh; Mangal, A. K.; Banerji, Asit; Mishra, S. N.

  1. By: Christopher F Baum (Boston College; DIW Berlin); Hans Lööf (Royal Institute of Technology, Stockholm); Pardis Nabavi (Royal Institute of Technology, Stockholm)
    Abstract: This paper examines variations in productivity growth due to innovation within a given location and between different locations. Implementing a dynamic panel data approach on Swedish micro data, we test the sepa- rate and complementary effects of internal innovation efforts and spillovers from the local milieu. Measuring the potential knowledge spillover by ac- cess to knowledgeintensive services, the estimation results produce strong evidence of differences in the capacity to benefit from external knowledge among persistent innovators, temporary innovators and non-innovators. The results are consistent regardless of whether innovation efforts are measured in terms of the frequency of patent applications or the rate of R&D investment.
    Keywords: Innovation, spillovers, TFP growth, panel data
    JEL: C23 O31 O32
    Date: 2015–11–01
  2. By: Vincent Van Roy (European Commission, Joint Research Centre, Ispra, Varese, Italy); Daniel Vertesy (European Commission, Joint Research Centre, Ispra, Varese, Italy); Marco Vivarelli (DISCE, Università Cattolica - SPRU, University of Sussex - Institute for the Study of Labour (IZA), Bonn)
    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: 2015–10
  3. By: Aga,Gemechu A.; Francis,David C.; Rodriguez Meza,Jorge Luis
    Abstract: The subject of which firms are the key employers?and which of these create or destroy jobs at a faster rate?is eminently important for academics and policy makers. The relative importance of small versus large firms and old versus young firms has in particular been extensively debated and studied. Nevertheless, the results often hinge on the questions that are asked. Moreover, the categorical definitions used to define firm size and age, and the nature and coverage of the data used have important effects. This paper lays out the relevant definitions and metrics that are central to the debate, reviewing the main findings to date on the subject (with particular emphasis on results in developing economies). The paper adds updated results for 117 developing economies using the World Bank?s Enterprise Survey Data, finding that (i) small and medium enterprises and older establishments are the dominant employers in the nonagricultural private sector labor force in developing economies, and (ii) net job creation is negatively correlated with establishment age and, although the effect of size is also negative, its significance is sensitive to the definition and methods used.
    Keywords: Labor Markets,Labor Management and Relations,Small Scale Enterprises,Microfinance,Labor Policies
    Date: 2015–11–13
  4. By: Ipsita Roy (Graduate College "The Economics of Innovative Change", Friedrich Schiller University Jena, and Max Planck Institute of Economics.)
    Abstract: While significant attention is given to the concept of absorptive capacity as a source of competitive advantage in firms, a major drawback exists in the way it is unidimensionally defined in micro-level analysis. The paper addresses this limitation and reconceptualizes absorptive capacity as a strategic human resource construct in firms, which in turn, provide important conditions for R&D cooperation and innovation. I begin by providing a "beyond-R&D" definition of absorptive capacity constituting employment practices and incentive-based compensation programs. Next, I exploit the relationship between these practices and heterogeneity in firms' R&D cooperation and partner selection strategies distinguishing between different types of external collaboration partners- horizontal, institutional and consulting-based. Further, I examine the impact of such cooperative R&D on incremental product, process and radical innovation. Employing the IAB Establishment Panel Survey on about 1200 German innovation-based establishments during 2007-2011, findings demonstrate that adoption of employment practices positively affects R&D cooperation irrespective of the type of collaboration partner, while compensation programs positively affect only horizontal R&D cooperation. Significant differences in the patterns of research collaboration are found between manufacturing and service sector firms, with respect to importance of human resource management, educational structure of the workforce and internal R&D. Finally, cooperative R&D with research institutes and consulting firms are found to have significantly positive impact on the likelihood of coming up with incremental product, process and radical innovation, but the effect is relatively weak in case of horizontal R&D cooperation.
    Keywords: Absorptive capacity, strategic human resource, employment practices, compensation programs, R&D cooperation, innovation
    JEL: J21 J24 J33 L20 M12
    Date: 2015–11–19
  5. By: Degryse, Hans; Matthews, Kent (Cardiff Business School); Zhao, Tianshu
    Abstract: We study the sensitivity of banks’ credit supply to small and medium size enterprises (SMEs) in the UK to banks’ financial condition before and during the financial crisis. Employing unique data on the geographical location of all bank branches in the UK, we connect firms’ access to bank credit to the financial condition (i.e., bank health and the use of core deposits) of all bank branches in the vicinity of the firm over the period 2004-2011. Before the crisis, banks’ local financial conditions did not influence credit availability irrespective of the functional distance (i.e., the distance between bank branch and bank headquarters). However, during the crisis, we find that SMEs with in their vicinity banks that have stronger financial condition face greater credit availability when the functional distance is low. Our results point to a “flight to headquarters” effect during the financial crisis.
    Keywords: financial crisis; credit supply; flight to headquarters; flight to quality; bank organization
    JEL: G21 G29 L14
    Date: 2015–08
  6. By: Kuwahara, Satoshi (Asian Development Bank Institute); Yoshino, Naoyuki (Asian Development Bank Institute); Sagara, Megumi (Asian Development Bank Institute); Taghizadeh-Hesary, Farhad (Asian Development Bank Institute)
    Abstract: Small and medium-sized enterprises (SMEs) play a significant role in Asian economies as they contribute to high shares of employment and output. However, SMEs generally have limited access to finance compared to large enterprises. Given the bank-dominated financial systems in Asia, banks are the main source of financing for SMEs. For financial institutions, it is crucial to distinguish sound SMEs from non-healthy ones in order to avoid the accumulation of non-performing loans. Information asymmetry in this sector can be reduced by using accumulated data on SMEs and by employing credit analysis techniques, allowing lending institutions to recognize healthy SMEs. It is crucial for governments to collect SME data and prepare rich databases, such as the Credit Risk Database (CRD) of Japan. This will also help governments to formulate economic policies. In this paper we define and describe in detail the role and characteristics of Japan’s CRD in SME development and explain how it can be an example for other Asian economies to establish similar soft infrastructure that can make important contributions to SME development and boost economic growth.
    Keywords: SME finance; Credit Risk Database; risk models
    JEL: G21 G24 G32
    Date: 2015–11–18
  7. By: Bjuggren, Per-Olof (The Ratio institute and Jönköping School of Economics.); Nordström, Louise (; Palmberg, Johanna (Entreprenörskapsforum and Royal School of Technology (KTH))
    Abstract: Female leadership is an expanding area of research. It is a popular topic discussed frequently in both academia and in the popular press. Despite this, comparative studies of the impact of female leadership on firm level performance between family and non-family firms are rare. The present study has the ambition to fill this gap. This paper investigates female leadership in family firms and how it affects firm profitability. A unique database of ownership and leadership in private Swedish firms makes it possible to analyze difference in firm performance due to female leadership in family and non-family firms. Even though much has been written regarding the role of women in family firms we do not know so much about how female leadership in family firms affect the profitability of the firm. The analysis indicates that female leadership makes much more of a positive difference for performance in family firms. The effect is negative in non-family firms.
    Keywords: Family firms; Female Representation; Financial Performance
    JEL: G34 J31 L25
    Date: 2015–11–10
  8. By: Matilde Mas (University of Valencia and Ivie); Juan Fernández de Guevara (University of Valencia and Ivie)
    Abstract: The PREDICT project was designed to help policy makers understand ICT sector dynamics and foster its growth. Since its inception in 2006, PREDICT reports and the accompanying databases have become a unique source of information on the ICT sector and on ICT R&D in the EU and its global competitors. The 2015 report offers a comprehensive and comparable view of the dynamics of value added, employment and R&D in ICT industries, detailed in up to 12 individual activities in 41 countries, from 2006 to 2012, relying on the latest available official statistics delivered by the Member States, Eurostat and the OECD. The Report highlights how the ICT sector's overall weight in the economy in the EU stayed stable at about 4% of GDP, but underwent an important shift in composition towards computer services, as it did in most advanced economies. Meanwhile, ICT sector employment passed from 5.8 to 6.2 million (2.7% of total employment). The report also acknowledges the ICT sector's key role in R&D: its share in total business expenditure in R&D (BERD) is about 16% in the EU, 31% in the USA and 52% in Korea.
    Keywords: ICT; information and communication technologies; R&D, BERD, GBAORD, ICT manufacturing, ICT services; Europe; US, Japan, indicators.
    JEL: O30 O32 O52
    Date: 2015–11
  9. By: Katherina Kuschel; María-Teresa Lepeley; Fernanda Espinosa; Sebastián Gutiérrez (School of Business and Economics, Universidad del Desarrollo)
    Abstract: Purpose: This study explores the funding opportunities for women start-up founders who have received support from the Chilean government agency accelerator Start-Up Chile. It examines the role of gender in Latin American women founders at the stage when they are raising funds and equity capital. Design/methodology/approach: The study includes an inductive, qualitative approach and interviews with 20 female founders. Findings: The thematic analysis revealed 10 subthemes that condition founder’s access to capital in the following categories: capital needs, network, and individual characteristics. Originality/value: The contribution of this study is the identification of predominant factors for female entrepreneurs raising capital followed by implications for public policies in entrepreneurial ecosystems including future research orientation.
    Keywords: Entrepreneurship, New high-technology ventures, Female founders, Entrepreneurial ecosystem, Start-Up Chile, Latin America
    Date: 2015–10
  10. By: Kurosaki, Takashi; Lal, Kaushalesh; Mangal, A. K.; Banerji, Asit; Mishra, S. N.
    Abstract: To deepen our understanding of the urban informal sector and small enterprises in developing countries, we conducted a baseline study of micro and small entrepreneurs in northeastern areas of Delhi, India. The questionnaire-based survey was implemented during November-December 2014, in which 506 entrepreneurs were surveyed who ran enterprises in the manufacturing or service sector. The sample was drawn from a business directory and all fell in the category of micro or small enterprises as defined in the Micro, Small and Medium Enterprises Development Act of 2006. In this paper, we present details of the baseline survey implemented under this project and describe the key variables collected. Out of 506 sample entrepreneurs, 97% were owned by single individuals, and 46% were unregistered with the government. In addition to the standard list of questions, some questions on trust were also included in the General Social Survey style. The trust level towards relatives and friends, neighbors, and business buyers/sellers was found to be significantly higher than the trust level toward government officials, the police, and law officers.
    JEL: O17 O14 L26
    Date: 2015–10

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