nep-sbm New Economics Papers
on Small Business Management
Issue of 2016‒02‒12
sixteen papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Innovation Strategies and Firm Growth By Stefano Bianchini; Gabriele Pellegrino; Federico Tamagni
  3. European Innovations Dynamics and US Economic Impact: Theory and Empirical Analysis By Paul J.J. Welfens; Tony Irawan
  4. GAW-Befragungsdaten verknüpft mit administrativen Daten des IAB : (GAW-ADIAB) Datenreport zur Gründerbefragung des Projekts SFB 580 B10 "Gründungsgeschehen und Arbeitsmarkt in ost- und westdeutschen Wachstumsregimen (GAW)" By Fritsch, Michael; Wyrwich, Michael; Bublitz, Elisabeth; Sorgner, Alina
  5. Impact of R&D Activities of Firms on Productivity: Findings from an Econometric Study of the Turkish Manufacturing Sector By Elif Dayar; Mehmet Teoman Pamukçu
  6. From Knowledge to Innovation Economy: Developing Education and Creating Entrepreneurial Ecosystems By Jean Bonnet
  7. The dynamics of profits and wages: technology, offshoring and demand By Francesco Bogliacino; Dario Guarascio; Valeria Cirillo
  8. An encompassing model & test of the Evans-Jovanovic credit constraints hypothesis By Jean Bonnet; Robert Cressy
  9. Growth and innovation in the presence of knowledge and R&D accumulation dynamics By Verba, M.
  10. “Technological cooperation in Spanish firms” By Erika Raquel Badillo; Rosina Moreno
  11. Nothing is in the air By Fitjar, Rune Dahl; Rodríguez-Pose, Andrés
  12. Personal Insolvency Dynamics in Germany and the UK – A SUR-TAR Approach By Eva Arnold; Nadja König
  13. The role of start-ups in structural transformation By Dent, Robert C.; Karahan, Fatih; Pugsley, Benjamin; Sahin, Aysegul
  14. Technological Progress and Ownership Structure By Geng, Heng; Hau, Harald; Lai, Sandy
  15. Routine jobs, employment and technological innovation in global value chains By Luca Marcolin; Sébastien Miroudot; Mariagrazia Squicciarini
  16. Wage dispersion and technology: A firm-level analysis on European data By Valeria Cirillo; Matteo Sostero; Federico Tamagni

  1. By: Stefano Bianchini; Gabriele Pellegrino; Federico Tamagni
    Abstract: In this work, we explore the relations between sales growth and a set of innovation indicators that capture the different sources, modes and results of the innovative activity undertaken within firms. We exploit a rich panel on innovation activity of Spanish manufacturing firms, reporting detailed CIS-type information continuously over the period 2004-2011. Standard GMM-panel estimates of the average effect of innovation activities reveal significant and positive effect for internal R&D, while no effect is found for external sourcing of knowledge (external R&D, acquisition of embodied and disembodied technologies) as well as for output of innovation (process and product innovation). However, fixed-effects quantile regressions reveal that innovation activities, apart from process innovation and disembodied technical change, display a positive effect on high-growth performance. Finally, we find evidence of super-modularity of the growth function, revealing complementarities of internal R&D with product innovation, and between product and process innovation.
    Keywords: firm growth, product and process innovation, internal and external R&D, embodied and disembodied technical change, fixed-effects quantile regressions, complementarity
    Date: 2016–03–02
  2. By: Paola Cardamone; Valeria Pupo; Fernanda Ricotta (Dipartimento di Economia, Statistica e Finanza, Università della Calabria)
    Abstract: This study provides empirical evidence on the role of universities’ Technological Transfer (TT) activities in the Italian manufacturing sector, with particular attention to the food industry. By using the UniCredit-Capitalia database (2008) for firms and data from the Ministry of Education, University and Research (MIUR) to obtain the university TT indicator, we estimate a probit model to assess the effect of universities’ TT activities on a firm’s likelihood to innovate. Results show that university TT activities seem to stimulate food industry firms innovation and the impact appears significantly higher than for the manufacturing sector.
    Keywords: Universities, Technology transfer, Food firms, Innovation, Spillovers
    JEL: O30 C25 D22
    Date: 2016–02
  3. By: Paul J.J. Welfens (Europäisches Institut für Internationale Wirtschaftsbeziehungen (EIIW)); Tony Irawan (Europäisches Institut für Internationale Wirtschaftsbeziehungen (EIIW))
    Abstract: The analysis explains innovations in EU25 for the period 2006-2012, namely through R&D (relative to GDP), cumulated FDI inflows – relative to the host country capital stock - , joint internet intensity, broadband intensity and potential competition. For the first time we can offer a broad analysis of innovation dynamics in Europe that should be the basis not only for better supply-side policy in EU countries and growth policy, respectively, it also suggests a strong role of international digital communication for innovation dynamics. Moreover, the approach gives new important arguments in favor of the TTIP negotiations between the US and the EU.
    Keywords: Innovation, TTIP, Foreign Direct Investment, EU, Internet
    JEL: O11 O32 F40 F10 F15
    Date: 2015–06
  4. By: Fritsch, Michael; Wyrwich, Michael; Bublitz, Elisabeth; Sorgner, Alina
    Abstract: New business formation plays an important role for economic development. Therefore, policy makers put emphasis on fostering start-up activity. Aims and scope of entrepreneurs can be very heterogeneous much as the structure of new ventures. The project "New business formation and the labor market in East and West German growth regimes" within the Collaborative Research Center (SFB 580) "Social developments in post-socialistic societies: discontinuity, tradition, structural formation" at the Friedrich-Schiller University Jena investigated the development and structures of new firms. To this end, the project team conducted the GAW survey by means of computer-assisted telephone interviewing (CATI). In total, there have been 1105 interviews with firm founders. The data include personal information on the founder and her firm. These information can be merged with administrative data of the Establishment History Panel (BHP = Betriebs-Historik Panel) of the Research Data Centre of the German Institute for Employment Research (IAB). The BHP comprises detailed information on the establishment characteristics. Therefore, the GAW survey data provide the unique opportunity to link characteristics of the entrepreneur with detailed information about his or her establishment. Additional Information Auszählungen
    Date: 2015–12–17
  5. By: Elif Dayar (Department of Economics, Atilim University); Mehmet Teoman Pamukçu (TEKPOL, Science and Technology Policy Studies, Middle East Technical University)
    Abstract: In this paper we are investigating the following question for Turkey: “How does the increase in R&D capital stock and how do foreign knowledge spillovers affect labor productivity?” Our sample is composed of R&D performers only, hence the Heckman two stage procedure with the instrumental variables technique for panel data is implemented (Semykina and Wooldridge, 2010). Appropriate instruments are used in regressions for the endogenous variables. Our findings signal that the indigenous efforts of R&D performers and their physical capital stock intensity exert a positive effect on firm-level labor productivity. However, neither foreign ownership nor foreign knowledge spillovers are found to affect R&D performers’ labor productivity positively. On the other hand, skill exerts a strong positive impact on productivity, pointing to the significant role of educated staff in R&D performing firms. We can conclude that Turkish R&D performers are dependent on their accumulated physical capital stock intensity and their own R&D efforts when it comes to increasing labor productivity.
    Keywords: R&D
    Date: 2014–12
  6. By: Jean Bonnet (CREM, UMR CNRS 6211, UFR SEGGAT, University of Caen Normandie, France)
    Abstract: In a market economy, reward structures are more or less favorable to opportunity entrepreneurship, which brings growth and jobs (Schreyer, 2000). Currently the small group of high-growth firms generates a large proportion of permanent jobs (Henrekson and Johansson, 2010; Falkenhall and Junkka, 2009) and new companies are widely represented (Daunfeldt and al, 2014). How to nurture these new companies with high-growth potential in France is a major issue that, we believe, is mainly based on a better functioning of the labor market, and the development of entrepreneurial education and ecosystems favorable to entrepreneurship.
    Keywords: Entrepreneurship by opportunity, Entrepreneurial Education, Entrepreneurial Ecosystems
    JEL: L26 J24 P16
    Date: 2016–02
  7. By: Francesco Bogliacino; Dario Guarascio; Valeria Cirillo
    Abstract: This article explores the impact of innovation, offshoring and demand on profits and wage dynamics. The growing relevance of functional distribution in terms of explaining personal distribution underscores the importance of our results for understanding recent increases in inequality. The empirical analysis performed herein involves a panel of 38 manufacturing and service sectors over four time periods (1995 to 2010) across five European countries (Germany, France, Italy, Spain and United Kingdom). Our identification strategy relies on instrumental variables and recently proposed heteroskedasticity-based instruments (Lewbel, 2012). Additionally, we perform sensitivity analysis to account for omitted variables bias, following the recent theoretical results of Oster (2015). The main results of our study can be summed up in three points. First, it highlights the contrasting effects of R&D and offshoring as wage determinants: the former exerts a positive effect while the latter exert a negative effect. Second, it shows that external demand is a key variable driving profits growth. Third. it provides evidence of noteworthy results stemming from the categorization of workers according to skill level, such as: high-skilled workers are favored by both innovation and offshoring, offshoring exerts downward pressure primarily on low-skilled wages (not on mediumskilled wages as predicted by SBTC) and profits are positively correlated with high-skill wages, negatively correlated with medium-skill wages and not correlated with low-skill wages.
    Keywords: rent; surplus; distribution; inequality; skills; offshoring; R&D
    Date: 2016–03–02
  8. By: Jean Bonnet (CREM, UMR CNRS 6211, UFR SEGGAT, University of Caen Normandie, France); Robert Cressy (Birmingham Business School, UK)
    Abstract: Using an unbalanced panel of some 36,500 French startup firms and 11,600 closures over the period 1994-2000 we test for a role of bank credit scoring in small business lending using an encompassing version (GEJ) of the seminal Evans-Jovanovic(1989) (EJ) model of credit constraints. In the GEJ model the bank’s estimate of the probabilty of individual company survival (business quality) is allowed to figure in the startup credit decision, alongside collateral. On the French data EJ is rejected in favour of GEJ. Thus we conclude with EJ that there is evidence of startup credit constraints via bank lending rules, but that this imperfection is ameliorated by the bank’s estimate of firm quality: better firms and entrepreneurs are more likely to get loans. Enrepreneurial human capital is also found (consistently with Cressy, 1996) to play a major role in the survival of startup businesses and hence in the chances of getting a loan. Consistent with other empirical work we also establish that startup loan refusal (an upper bound to rationing) affects only a small proportion (9%) of applicants. However, for those whose loan request is rejected, dynamics show that they have a permanently higher hazard of failure (by 50%-90%), relative to their funded counterparts. Credit constraints thus contribute to small business failure.
    Keywords: Entrepreneurship, startups, credit constraints, survival, France, panel data, hazard rate
    JEL: L25 L26 G33
    Date: 2016–01
  9. By: Verba, M. (UNU-MERIT)
    Abstract: This article develops a model of growth and innovation in which accumulation dynamics of knowledge and R&D are explicitly considered. The model is based on a more general knowledge production process than commonly used in Endogenous Growth Theory and R&D productivity literatures, reconciling as special cases of a broader framework disparate analytical approaches. The model of knowledge dynamics highlights the role of human capital, physical capital, and accumulation in the creation of innovations and establishes the theoretical possibility of long-run idea-driven growth without the razor-edge assumption of Romer (1990) and in the absence of growth in R&D employment stipulated by Jones (1995). This analysis also predicts the structure of estimation biases that can result from omission of relevant factors and failure to take into account the accumulation dynamics of knowledge and R&D. Empirical estimation supports these predictions. Findings provide recommendations for future empirical studies aiming to explain innovation.
    Keywords: Growth theory, innovation, R&D, productivity, knowledge, production function, accumulation
    JEL: O30 O31 O32 O40
    Date: 2015–12–04
  10. By: Erika Raquel Badillo (AQR Research Group-IREA. University of Barcelona); Rosina Moreno (AQR Research Group-IREA. University of Barcelona)
    Abstract: This paper aims to study to what extent participating in technological cooperation agreements can be a useful mechanism for improving the innovative capacity of Spanish firms, specially in the context of the economic recession. We analyse if there are differences in the returns obtained from cooperation alliances according to the firm’s size as well as different geographical scopes of such alliances. In addition, we want to study to what extent innovation cooperation may have a different effect on incremental innovations than on radical/breakthrough innovations. We use the Spanish Technological Innovation Panel from 2004 to 2012 to provide evidence on the above issues.
    Keywords: Innovation cooperation; Technological partners; Performance; Spanish firms JEL classification:L25; O31; O33; R1
    Date: 2016–01
  11. By: Fitjar, Rune Dahl; Rodríguez-Pose, Andrés
    Abstract: It has often been argued that ‘there is something in the air’ which makes firms in high-density environments – such as cities or clusters – more innovative. The co-location of firms facilitates the emergence of serendipity and casual encounters which promote innovation in firms. We assess this hypothesis using data from a survey of Norwegian firms engaged in innovation partnerships. The results indicate that there may be ‘much less in the air’ than is generally assumed in the literature. The relationships conducive to innovation by Norwegian firms emerged as a consequence of purpose-built searches and had little to do with chance, serendipity, or ‘being there’.
    Keywords: agglomeration; externalities; firms; innovation; Norway; spillovers; tacit knowledge
    JEL: O31 O33
    Date: 2016–01
  12. By: Eva Arnold (Universität Hamburg (University of Hamburg)); Nadja König (Universität Hamburg (University of Hamburg))
    Abstract: This paper analyses the dynamics of personal insolvencies in Germany and the UK, focusing on the recent recession. These countries are particularly interesting as they are both member countries of the European Union, yet have completely different approaches to deal with overindebted individuals. In Germany unfortunate households who file on their debt are required to undergo a relatively long restructuring period until they eventually receive debt relief, whereas British debtors can choose proceeding out of many alternatives to manage their debt. Even under the official bankruptcy option, debt gets discharged relatively fast. In line with their different insolvency procedures, the two countries also represent two different financial systems: the German system is rather bank-based and the UK system rather market-based. The underlying financial systems already point to different patterns of lending across countries and hence, also to different structures of debt. Specifically, we are interested in the dynamics of petitions and actual insolvencies during the crisis as well as their reaction to exogeneous macroeconomic and financial conditions. The findings suggest that insolvencies are more persistent in the UK than in Germany, i.e. after an external shock it takes longer for insolvencies to return to their previous level in the UK. In both countries, the recent recession has no effect on petitions to default, but it has an effect on actual insolvencies in the UK suggesting that debtors rather opted for official procedures during the recession.
    Keywords: Private Household Debt, Personal Insolvency Laws, Recessions
    JEL: E44 G01 G21 K49
    Date: 2016–02
  13. By: Dent, Robert C. (Federal Reserve Bank of New York); Karahan, Fatih (Federal Reserve Bank of New York); Pugsley, Benjamin (Federal Reserve Bank of New York); Sahin, Aysegul (Federal Reserve Bank of New York)
    Abstract: The U.S. economy has been going through a striking structural transformation—the secular reallocation of employment across sectors—over the past several decades. We propose a decomposition framework to assess the contributions of various margins of firm dynamics to this shift. Using firm-level data, we find that at least 50 percent of the adjustment has been taking place along the entry margin, owing to sectors receiving shares of start-up employment that differ from their overall employment shares. The rest is mostly the result of life cycle differences across sectors. Declining overall entry has a small but growing effect of dampening structural transformation.
    Keywords: structural transformation; employment dynamics; sectoral reallocation
    JEL: E24 J00 J23 L25
    Date: 2016–01–01
  14. By: Geng, Heng; Hau, Harald; Lai, Sandy
    Abstract: Innovation processes under patent protection generate hold-up problems if complementary patents are owned by different firms. We show that in line with Hart and Moore (1990), shareholder ownership overlap across firms with patent complementarities helps mitigate such hold-up problems and correlates significantly with higher patent investment and more patent success as measured by future citations. The positive innovation effect is strongest for concentrated overlapping ownership and for the cases when the overlapping shareholders are dedicated investors.
    Keywords: hold-up problems; innovation; institutional ownership; patents
    JEL: G31 G32 L22
    Date: 2016–01
  15. By: Luca Marcolin; Sébastien Miroudot; Mariagrazia Squicciarini
    Abstract: This work addresses the role of global value chains (GVCs), workforce skills, ICT, innovation and industry structure in explaining employment levels of routine and non-routine occupations. The analysis encompasses 28 OECD countries over the period 2000-2011. It relies on a new country-specific measure of routine intensity built using individual-level information from the OECD Programme for the International Assessment of Adult Competencies (PIAAC) survey, as well as on new industry-level Trade in Value Added (TiVA) indicators of offshoring, domestic outsourcing, and the services content of manufacturing. The results suggest that comparatively higher skills are associated with higher employment in non-routine (NR) and low routine-intensive (LR) occupations. Also, employment in all types of occupations, both routine and non-routine ones, shows to positively relate to innovation, as measured by patents. A generally positive relationship also emerges between employment and the ICT intensity of industries, with the notable exception of jobs in high-routine occupations, where ICTs seemingly displace workers. With respect to offshoring patterns, a positive correlation is observed between the offshoring of inputs and domestic outsourcing with more routine-intensive jobs. Conversely, the offshoring of final assembly in manufacturing leads to the shedding of jobs in NR occupations and a relatively higher service content of manufacturing relates negatively with employment in HR occupations. Taken together, the results point to the existence of complex interactions between the routine content of occupations, skills, technology, industry structure and trade, which do not allow for a neat identification of “winners” and “losers” in a GVC context. While the effects appear heterogeneous across quartiles of routine intensity, a persistent and positive role of skills and innovative output for employment is found across all quartiles of routine intensive occupations.
    Date: 2016–01–14
  16. By: Valeria Cirillo; Matteo Sostero; Federico Tamagni
    Abstract: Within-firm wage dispersion represents a relevant dimension of the overall wage inequality. A large stream of literature has analysed the wage-technology link without explicitly taking into account within-firm wage dispersion. In this work we aim to empirically investigate how technology affects within-firm wage dispersion and how it changes according to employer size. By exploiting employer-employee data from a survey of European firms (Eurostat's Structure of Earnings Survey - 2010) matched with information on sector innovation derived from the Community Innovation Survey, we look at the impact of innovation across small and medium-large firms, both on the average wages paid by firms and on the degree of within-firm wage inequality. Furthermore, we distinguish between high-paying and low-paying firms and more equal and unequal firms by means of a quantile regression approach.
    Keywords: wage inequalities, innovation, quantile regressions, employer-employee matched data
    Date: 2016–03–02

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