nep-sbm New Economics Papers
on Small Business Management
Issue of 2016‒02‒29
twenty-two papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. The Geography of Innovation and Entrepreneurship By Backman, Mikaela; Lööf, Hans
  2. Innovation Performance of Chilean SMEs: A Bivariate Probit Analysis By Rehman, Naqeeb Ur
  3. Uncovering Regional Clustering of high technology SMEs: Russian Case By Vera Barinova; Denis Burkov; Stepan Zemtsov; Vladimir Eremkin
  4. Empirical Analysis of Factors Promoting Product Innovation in ASEAN Economies: Focusing on Absorptive Capacity and ICT Use By Idota, Hiroki; Bunno, Teruyuki; Ueki, Yasushi; Shinohara, Sobee
  5. Industry Clustering and Unemployment in US Regions: An Exploratory Note By Lambert, Thomas; Mattson, Gary; Dorriere, Kyle
  6. Digital Dynamism: How IT and social media are enhancing business opportunities for Sri Lankan entrepreneurs  By Anushka Wijesinha
  7. Entrepreneurship and Innovation: New Entries, Survival, Growth By Alessandra Colombelli; Jackie Krafft; Marco Vivarelli
  8. Strategic Entrepreneurship and Knowledge Spillovers: Spatial and Aspatial Perspectives By Tavassoli, Sam; Bengtsson, Lars; Karlsson , Charlie
  9. Empower Workers to Innovate and Entrepreneurship: Raison d'être of Successful Workers Cooperatives By Sapovadia, Vrajlal
  10. Unternehmensgründungen: Mehr innovative Startups durch einen Kulturwandel für Entrepreneurship? By Röhl, Klaus-Heiner
  11. Do R&D and ICT Affect Total Factor Productivity Growth Differently? By Edquist, Harald; Henrekson, Magnus
  12. Blue Oceans: Looking overseas for business success - How do New Zealand SMEs internationalise and manage branding in foreign markets? By Palazzetti, Daniele
  13. Analyzing Challenges & Opportunities of Ethiopian SMEs: Micro & Macro Economic Drivers By Sapovadia, Vrajlal
  14. Vertical organization of production and firm growth By Fabio Pieri
  15. To Be Born Is Not Enough: The Key Role of Innovative Startups By Colombelli, Alessandra; Krafft, Jackie; Vivarelli, Marco
  17. What determines entepreneurial failure: taking advantage of the institutional context By Lucio Fuentelsaz; Consuelo González-Gil; Juan P. Maicas
  18. A selective review of foreign direct investment theories By Dinkar Nayak; Rahul N. Choudhury
  20. Who Works for Whom? Worker Sorting in a Model of Entrepreneurship with Heterogeneous Labor Markets By Emin M. Dinlersoz; Henry R. Hyatt; Hubert P. Janicki
  21. From technological to symbolic innovation? Open source, Maker Movement and global demand for 3D printers By Fassio, Claudio; Grilli, Luca
  22. Formal credit access for Vietnamese SMEs: What determines credit obtainment? By Nguyet Thi Khanh Cao

  1. By: Backman, Mikaela (Jönköping University, & Centre of Excellence for Science and Innovation Studies (CESIS)); Lööf, Hans (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)
    Abstract: This introduction to the special issue “The Geography of Innovation and Entrepreneurship” in Annals of Regional Science surveys a collection of nine papers which consider agglomeration economies and spatial heterogeneity of regions and firms through the lenses of innovation and entrepreneurship. They all make use of extensive and detailed data sources that enable models to provide a richer picture of how firms, industries and regions are affected by innovation and entrepreneurship but also how these entities shape and foster renewal. These factors include spatial concentration, industry composition, labour market characteristics, immigration, firm characteristics, R&D activities and R&D collaboration. The papers add to the understanding of the geography of innovation and entrepreneurship by suggesting alternative ways of identifying spillovers, combing and integrating internal and external knowledge sources, and by estimating the impact on innovation, new firm formation and growth.
    Keywords: Innovation; entreprenurship; spillovers; regional economy; spatial heterogeneity
    JEL: C10 O30 R10
    Date: 2015–09–11
  2. By: Rehman, Naqeeb Ur
    Abstract: The purpose of this paper is to investigate the innovation activities of Chilean firms’ by using micro level data. Previous studies showed research gap related to micro level analysis of the Chilean SMEs. For the first time, multiple proxies have been used as dependent variables (product/process innovations and patent application/spending), which is neglected by the past studies. A micro level data has been obtained from the World Bank, Enterprise Survey on 696 Chilean SMEs. Bivariate probit estimation method has been used. Results: The results showed that SMEs are less likely to apply for patents and introduce product innovations. This outcome indicates that Chilean SMEs face resource constraint in terms of introducing product innovations and applying for patents. In addition, SMEs undertaking R&D and making network ties with other research institutions are more likely to introduce patents and product innovations. Similarly, SMEs that are engage in quality programs are more likely to spend on patents. Lastly, SMEs with public support for innovation activities positively influence the patent application. Findings imply that SMEs investment in knowledge based assets (e.g., R&D, networks and quality methods) accelerate their innovation output. Policy makers should not only provide financial incentives (R&D subsidies) to SMEs but also encourage their strong ties with research institutions for higher innovation output.
    Keywords: Innovation, R&D, SMEs
    JEL: O31 O32
    Date: 2016–01–04
  3. By: Vera Barinova (Gaidar Institute for Economic Policy); Denis Burkov (RANEPA); Stepan Zemtsov (RANEPA); Vladimir Eremkin (RANEPA)
    Abstract: The Soviet Union predetermined Russia’s economic activity’s location patterns. While the main forms of industry organization were territorial production complexes (TPC) - networks of industrial organizations united by a single technological process, - switch to the market economy in the early 90s destroyed economic ties within the TPC, leading to fragmentation of large enterprises and formation of a number of independent firms. Some scientists believe that this situation over the last 20 years could serve as a necessary foundation for clusters’ formation. Nowadays interest in clusters in Russia is rekindled due to the need to find new support mechanisms for production and innovation in a stagnating economy. The Ministry of Economic Development of the Russian Federation has initiated a project to support pilot territorial innovation clusters with infrastructure formation funding. The aim of this work is to identify clusters as areas of geographical concentration of small and medium enterprises (SMEs) in high technology sector. Authors also try to check, whether existing cluster initiatives comply with the actual concentration of high-tech SMEs and whether there is any potential for new cluster initiatives. The present paper analysis exploits modified methodology, based on localization index. The study provides tables and maps, reflecting small and medium businesses concentration in Russian regions using evidence from high and medium-high technology industries. The authors empirically confirm the existence of traditional and well-known clusters and identify new concentrations of firms in Russia. This useful information can be used for policy advice.
    Keywords: cluster identification, localization, SME, Russian regions, industrial complex, territorial innovation cluster, innovation, high technology, innovative firms
    JEL: F34 G24 O18 O47 R11
    Date: 2016
  4. By: Idota, Hiroki; Bunno, Teruyuki; Ueki, Yasushi; Shinohara, Sobee
    Abstract: In recent years, East Asian economies have been rapidly developing. The reason is that firms have been successfully achieving product and process innovation by introducing advanced technologies and know-how from MNCs. In order to enhance innovation, firms have to own technology, capability and ICT use. In particular, collaborations with outside organizations such as MNCs (Multi-national corporations), universities, public organizations, local firms are indispensable for firms in developing economies. Authors’ previous research clarified external linkages enhance innovation capability and ICT use, and innovation capability and ICT use promote product innovation in ASEAN firms. These studies analyzed under what conditions firms can promote absorptive capability if they had external linkages. Whether or how absorptive capacity affected innovation capability and ICT use were not explained there. Based on survey data from four ASEAN economies such as Indonesia, the Philippines, Thailand, and Vietnam, from 2013 to 2014, this study clarifies how absorptive capacity, ICTs, and innovation capability such as QC and cross-functional team enhance product innovation by using SEM (Structural equation modeling). As a result, the following causality from external linkages (origin) to innovation (final outcome) is demonstrated: (i) absorptive capacity is enhanced by external linkages such as local firms, public organizations, and universities; (ii) absorptive capacity enhances innovation capability; (iii) innovation capability enhances ICT use; and (iv) innovation capability and ICT use promote product innovation. These are similar to those of authors’ previous research. Since data are different, it is difficult to compare the results, but the robustness of the results is demonstrated.
    Keywords: ICT use,absorptive capacity,external linkages,product innovation,SEM (Structural equation modeling)
    Date: 2015
  5. By: Lambert, Thomas; Mattson, Gary; Dorriere, Kyle
    Abstract: Much has been written by various scholars and practitioners over the years about the benefits of industrial clustering, whether the clustering revolves around mature industries or around new and innovative industries (innovation clustering). The benefits of such clustering or local agglomeration economies supposedly include greater regional exports, greater employment growth, greater payroll growth, and greater new business establishment creation, among other impacts. However, the work for this research note has not uncovered much if any literature on how agglomeration affects United States regional unemployment rates. In general, greater clustering is associated with lower US metro area unemployment rates on average, although this depends upon how one defines a cluster. Additionally, most growing industrial and innovation clusters over the last two decades or so require highly educated and skilled workers. Since most of the unemployed at any given time tend to be less educated and less skilled than most workers on average, local and state economic development policies that focus on clustering must be careful in targeting lower unemployment rates as a policy goal or outcome. On the other hand, greater clustering and greater industry concentration do not seem to be associated with greater levels of unemployment during stagnant economic times as some may expect. That is, it does not appear that diversity of industry has an advantage over industry clustering and concentration in bad economic times. Finally, the arguments that decentralized or local economic development planning is better for the macroeconomy than centralized planning at the national level is discussed in light of the results for industrial clustering found in this paper.
    Keywords: agglomeration economies, economic development, industrial clustering, unemployment, and urban economics.
    JEL: R11 R3 R38
    Date: 2016–02–16
  6. By: Anushka Wijesinha (Ministry of Industry and Commerce of Sri Lanka)
    Abstract: As the Sri Lankan economy attempts to transform into a more value-added and knowledge-led one, recent advancements in technology and innovation have created a plethora of new opportunities for small and medium-sized enterprises. This paper provides four case studies of innovative enterprises and initiatives to demonstrate how the digital economy is enhancing the country’s business potential and creating jobs. The firms studied are all start-ups run by young professionals (between 28-35 years) and are specifically unique to show the range of possible benefits. The aim of this initiative is to shape a new narrative around the use of IT and social media for entrepreneurship in the future.
    Keywords: Competitiveness, entrepreneurship, innovation, SMEs, technology
    JEL: M13 M15 M21 M37 O31 O33
    Date: 2015–07
  7. By: Alessandra Colombelli (DIGEP, Politecnico di Torino; BRICK, Collegio Carlo Alberto); Jackie Krafft (Université Nice Sophia Antipolis; GREDEG-CNRS); Marco Vivarelli (Università Cattolica del Sacro Cuore, Milano; Institute for the Study of Labor (IZA))
    Abstract: This paper investigates the reasons why entry per se is not necessarily good and the evidence showing that innovative startups survive longer than their non-innovative counterparts. In this framework, our own empirical analysis shows that greater survival is achieved when startups engage successfully in both product innovation and process innovation, with a key role of the latter. Moreover, this study goes beyond a purely microeconomic perspective and discusses the key role of the environment within which innovative entries occur. What shown and discussed in this contribution strongly supports the proposal that the creation and survival of innovative start-ups should become one qualifying point of the economic policy agenda.
    Keywords: innovation, startups, survival, product innovation, process innovation
    JEL: L26 O33
    Date: 2016–02
  8. By: Tavassoli, Sam (Centre for Innovation, Research and Competence in the Learning Economy (CIRCLE), Lund University); Bengtsson, Lars (Faculty of Engineering, Department of Industrial Management and Logistics, Lund University); Karlsson , Charlie (Centre of Excellence for Science and Innovation Studies (CESIS), Royal Institute of Technology (KTH), & Jönköping International Business School (JIBS))
    Abstract: The literature in the Strategic Entrepreneurship (SE) is increasingly embracing the concept and implication of knowledge spillovers. In this paper, we add to the theoretical literature on SE and knowledge spillovers by investigating the different types of knowledge spill-overs and what they imply for various dimensions of SE. On the one hand, we distinguish between spatial and aspatial knowledge spillovers. On the other hand, we distinguish be-tween various dimensions of SE, i.e. inputs, resource orchestration, and output. Finally, we conceptually link the various types of knowledge spillovers and dimensions of SE and dis-cuss the implications. Doing so, we argue that spatial knowledge spillovers (inter-firm) play the major role in increasing the amount of ‘inputs’ dimension of SE, while the aspatial knowledge (either inter-regional or intra-firm) play the major role not only for ‘inputs’, but also for ‘resource orchestration’ dimension. At the end, the paper provides suggestions for future research.
    Keywords: Strategic entrepreneurship; knowledge spillovers; spatial; aspatial
    JEL: D23 D83 L10 L26 R10
    Date: 2016–01–14
  9. By: Sapovadia, Vrajlal
    Abstract: The study critically analyses selected Indian workers cooperatives to find reasons over time of its success or failures. Worker cooperatives flourish in many industries and regions, where decisions are made democratically by workers who also act as entrepreneurs, managers and members. By value creation it tends to provide employment, remains accountable to community. The entrepreneurs are risk takers but who innovate to satisfy ever-changing consumers’ needs succeed through well managed business. The study has qualitative research design employed on variety of workers cooperatives. It looks at phenomena of business cycle, value creation cum distribution, overlapping multiple roles of workers, management practices, innovation & product life cycle, consumer satisfaction vis-à-vis business performance. We attempts to explore and interpret dynamism of activities and interactions among key stakeholders to ascertain success factors. We find that continuous innovation and entrepreneur spirit is the key to success. The finding may help to advance socio-economic enterprises.
    Keywords: Workers Cooperative, Labour Cooperative, Industrial Cooperative
    JEL: A12 A3 L00
    Date: 2015–01–10
  10. By: Röhl, Klaus-Heiner
    Abstract: Europa hinkt im Vergleich zu den Vereinigten Staaten oder Israel bei der Zahl erfolgreicher Startups hinterher. Innovationsstarke Gründungen, die innerhalb weniger Jahre zu globalen Konzernen wie Google oder Amazon heranwachsen, finden nicht hier statt. In vielen Staaten und Regionen Europas gibt es eine hartnäckige Wachstumsschwäche mit hoher Arbeitslosigkeit, zu deren Überwindung auch ein Gründungsboom zur Umsetzung neuer kreativer Ideen beitragen könnte. Selbst in Deutschland, das eine gute makroökonomische Performance vorweist, sinken die Gründungszahlen seit mehreren Jahren. Vieles weist darauf hin, dass die konstatierte Gründungsschwäche Europas auch eine kulturelle Dimension besitzen könnte. Besonders gründungsstarke Regionen, die auf innovative Start-ups konzentriert sind, haben offenbar einen starken 'Entrepreneurial Spirit'. In diesem Policy Paper wird deshalb der Frage nachgegangen, was die 'Entrepreneurial Culture' erfolgreicher Gründungsregionen ausmacht und inwieweit eine unterschiedliche Gründungskultur zu den Differenzen im Gründungsgeschehen zwischen weiten Teilen Europas und anderen hoch entwickelten Volkswirtschaften, speziell den Vereinigten Staaten, Großbritannien und Israel, beiträgt. Neben den gesellschaftlichen und institutionellen Rahmenbedingungen einer Gründerkultur wird auch auf die Persönlichkeitsstruktur erfolgreicher Entrepreneure beleuchtet. Nach einem internationalen Vergleich der Gründungsquoten wird auf die unterschiedlichen Startup-Systeme in Europa, Amerika und Israel eingegangen, die auch auf Unterschiede in der Verfügbarkeit von Wagniskapital zurückzuführen sein dürften. Abschließend wird die Rolle des Bildungssystems in der Vermittlung von wirtschaftlichen Kenntnissen sowie Entrepreneurship beleuchtet, bevor im Fazit Empfehlungen zum Ausbau von Gründerkultur und Risikobereitschaft gegeben werden.
    Abstract: Europe is lagging behind the United States and Israel in the number of successful start-ups. Highly innovative start-ups that grow to become global companies the size of Google or Amazon within just a few years are not being founded here. Many of Europe’s countries and regions are experiencing persistent low growth with high unemployment, which is something a boom in new companies implementing new creative ideas could help alleviate. Even in Germany, which has a much better macroeconomic performance, the number of companies being founded has been falling for several years. There are strong indicators that Europe’s aforementioned weakness when it comes to the starting of new companies may also have a cultural dimension. Regions which are seeing particularly strong numbers of innovative start-ups being founded appear to have a strong entrepreneurial spirit. This policy paper will therefore examine what defines the entrepreneurial culture of successful start-up regions and to what extent different entrepreneurial cultures contribute to the differences in entrepreneurial activity between large areas of continental Europe and other highly developed economies, especially the United States, the United Kingdom, and Israel. This paper will examine both the societal and institutional framework that exists in an entrepreneurial culture and the personality structure of successful entrepreneurs. Following an international comparison of enterprise birth rates, this paper will review the different start-up systems in Europe, the United States, and Israel, which are also expected to have a connection to differences in the availability of venture capital. Finally, this paper considers the role of the education system in transferring business knowledge and entrepreneurship. This is followed by a conclusion in which recommendations are given regarding how to develop an entrepreneurial culture and a willingness to take risks.
    JEL: L25 L26 M13 M14
    Date: 2016
  11. By: Edquist, Harald (Erricsson Research); Henrekson, Magnus (Research Institute of Industrial Economics (IFN))
    Abstract: We analyze the effect of ICT and R&D on total factor productivity (TFP) growth across different industries in Sweden. R&D alone is significantly associated with contemporaneous TFP growth, thus exhibiting spillover effects. Although there is no significant short-run association between ICT and TFP, we find a positive association with a lag of seven to eight years. Thus, spillovers from R&D affect TFP much faster than spillovers from ICT-investments. We also divide ICT capital into hardware and software capital. To our knowledge, this distinction has not been made in any previous study analyzing TFP at the industry level. The results show that lagged hardware capital services growth is significantly associated with TFP growth. Hence, investments complementary to hardware are needed to reap the long-run TFP effects from reorganizing production.
    Keywords: ICT; R&D; Spillovers; Total factor productivity; Panel data analysis
    JEL: L16 O33 O47
    Date: 2016–02–08
  12. By: Palazzetti, Daniele
    Abstract: The purpose of this study and its underlying research questions is to understand how New Zealand SMEs, that fall within knowledge intensive service industries, internationalise and manage branding in foreign markets. The research is important because it aims to provide insight into cost effective means for SME’’s to directly deliver service solutions to international markets. Consequently, this will allow companies to further build and develop their resources, assets and markets. New Zealand is a small market economy with limited growth potential and domestic market opportunities. Therefore, companies are considering extending their sales activities and customer reach to foreign markets and develop international networks. In the literature review, a strong link between internationalisation and FSA has been established and Dunning (1997) suggested that firms develop a competitive advantage in their home market and transfer this advantage to international markets with CSA. Other literature pointed out that FSA and company capabilities can also be acquired and augmented abroad. Therefore, these can act as a driver and motivator for firms to internationalise. This is a phenomenological research and data was collected through semi-structured interviews. The findings of this research suggest that business have to focus on global niche markets and provide quality outputs in order to effectively compete internationally. The primary method for internationalisation is through personal and direct relationships with international key clients which facilitate foreign market entry. The organisational structure and corporate culture are key competencies that must be managed or they can turn into a barrier.
    Keywords: Internationalise, Branding, SME, Small and medium enterprise,
    Date: 2015
  13. By: Sapovadia, Vrajlal
    Abstract: The Ethiopian economy is dominated by the agriculture and services sectors, with each accounting for about 43-44 percent of gross domestic product (GDP), leaving only about 13 percent for industry of which manufacturing accounts for about 6-7 percent. The low industrial contribution is attributed to lower participation of private enterprises; thanks to lack of encouraging policy & conducive environment for entrepreneurs. This research proposal aims at investigating inhibiting factors of growth at micro, macro & meta level. Industrial development and entrepreneurship are two side of a coin. Entrepreneurship encompasses the promoters, government and financial institutes. Entrepreneurship development is essential to solve the problem of economic development through creating local employment, balanced area development, decentralization of economic power and diversion of profits from rich to middle class & poor. Many local innovations go unnoticed because of innovator’s limitations in commercialize the product. An apex institute may be set up to help and promote commercialization of low cost local innovations. If stakeholders of entrepreneurship work in tandem, SMEs can grow fast
    Keywords: Ethiopia, Export, Ethiopian SMEs
    JEL: A1 A11 A12
    Date: 2015
  14. By: Fabio Pieri
    Abstract: This paper empirically explores if different vertical organizational forms (i.e. vertical integration versus dis-integration) give rise to unlike growth ''behaviors'' within the same industry. An econometric analysis is conducted in a sample of around 500 Italian machine tool (MT) builders for the period 1998-2007, implementing instrumental variables to control for the endogeneity of the organizational form in the relation. Ceteris paribus, vertically integrated firms result to be characterized by a less dispersed distribution of growth rates than their dis-integrated counterparts. Several concurring factors, such as adjustment costs, organizational slacks and a better management of fluctuations in the markets of intermediate and final products, may explain the more ÒstableÓ growth profile of vertically integrated firms. By means of analyzing how different organizational forms map into the distribution of output growth rates, this work provides insight into the firm dynamics in a mature industry in which both vertically integrated and dis-integrated firms coexist.
    Keywords: Vertical integration, Firm growth, Variance-vertical integration scaling relation, Instrumental variables, Quantile regression, Italian machine tool industry
    JEL: D22 L23 L24 L26 L64
    Date: 2016
  15. By: Colombelli, Alessandra (Politecnico di Torino); Krafft, Jackie (GREDEG-CNRS); Vivarelli, Marco (Università Cattolica del Sacro Cuore)
    Abstract: This paper investigates the reasons why entry per se is not necessarily good and the evidence showing that innovative startups survive longer than their non-innovative counterparts. In this framework, our own empirical analysis shows that greater survival is achieved when startups engage successfully in both product innovation and process innovation, with a key role of the latter. Moreover, this study goes beyond a purely microeconomic perspective and discusses the key role of the environment within which innovative entries occur. What is shown and discussed in this contribution strongly supports the proposal that the creation and survival of innovative start-ups should become one qualifying point of the economic policy agenda.
    Keywords: innovation, startups, survival, product innovation, process innovation
    JEL: L26 O33
    Date: 2016–02
  16. By: Marusca De Castris (Roma Tre, University of Rome); Guido Pellegrini (Sapienza, University of Rome)
    Abstract: The existence of a “size” effect on unemployment, related to the dimension of regional labour market, is often attributed to the presence of agglomeration of people and firms. However, urban and industrial cluster agglomeration effects are theoretically and empirically different. In this paper, we propose to disentangle agglomeration effects due to high concentration of population and those due to firm’s clusters or high presence of employees, by controlling for a wide set of variables, basically related to sectorial and dimensional shocks and human capital, in order to highlight the total “size” effect in the labour market. We estimate the correlation between unemployment and agglomeration in UE27 at disaggregated territorial level (Nuts 2), conditioning for covariates related to demographic, economic and geographical effects. Moreover, regional labour markets are spatial correlated within contiguous areas: we carefully model the presence of spatial correlation by a spatial lag model. We expect that the size effect is lower in Europe than in USA. Nevertheless, effects related to agglomeration of firms could be higher than effects related to agglomeration of people. The results show that urban agglomeration in Europe has a negative effect on employment; the results are opposite for industrial clusters, where the presence of firm’s agglomeration has a positive effect on labour markets. These results suggest some policy implications. First of all, government should increase the circulation of labour market information in order to enhance the matching between job seekers and labour positions even in urban areas. Incentive for reducing the costs of search cannot obviously be limited to the case of contiguity between the supply and demand of skills, but also regards the acquisition of information and knowledge which often occurs through informal chains, less strong in urban centres. Improvements in the quality of the matching require policies able to disseminate information which can substitute those channels. It is important to reduce the costs of getting information in order to avoid the discouraging effect on job search activities.
    Keywords: agglomeration, urban density, industrial density, unemployment, European Union
    JEL: C21 E24 R12 R23
    Date: 2015
  17. By: Lucio Fuentelsaz (Faculty of Economics and Business Studies, Universidad de Zaragoza); Consuelo González-Gil (Faculty of Economics and Business Studies, Universidad de Zaragoza); Juan P. Maicas (Faculty of Economics and Business Studies, Universidad de Zaragoza)
    Abstract: Most management literature has been devoted to explaining business success. However, empirical evidence shows that one of the main problems of new ventures is precisely failure. A simple Google search for “business success” provides 986 million results, while “business failure” finds approximately ten times fewer. The same is found in the academic literature, which has been less interested in explaining the determinants of entrepreneurial failure. In this paper, we contribute to the entrepreneurship literature by offering new theoretical insights into and empirical evidence on the determinants of entrepreneurial failure. Our results confirm that both the quality of formal institutions and high-impact entrepreneurship reduce failure and, more importantly, that these two variables reinforce each other. As a consequence, a greater development of formal institutions strengthens the negative relationship between high-impact entrepreneurship and failure.
    Keywords: Entrepreneurship, failure, institutions, GEM
    JEL: L26 M21
    Date: 2015–05
  18. By: Dinkar Nayak (MS University of Baroda); Rahul N. Choudhury (MS University of Baroda)
    Abstract: Several theories have been put forward by the researchers to explain foreign direct investment. However, no single theory fits the different types of direct investment or the investment made by a particular multinational corporation or country in any region. This paper traces the evolution of the theories of foreign direct investment (FDI) during the past few decades. An attempt is also made to explain the growth phenomenon of Third World multinational companies. The applicability of the theory differs with the type and origin of investment. Nevertheless, all these theories are unanimous in their view that a firm moves abroad to reap the benefits of the advantages in the form of location, firm-specific or internationalization of markets.
    Keywords: Foreign direct investment, internalization, MNCs, motivation, trade
    JEL: F21 F23 F36
    Date: 2014–04
  19. By: Marusca De Castris (Roma Tre, University of Rome); Guido Pellegrini (Sapienza, University of Rome)
    Abstract: The paper evaluates the effects of the Central Guarantee Fund on the economic growth of the Italian provinces. There are few works in literature showing a moderate positive effect of CGF on subsidized firms. In this paper the evaluation question is different, and concerns the overall effect of CGF on a regional economy: does the CGF actually support territorial development, taking into account crowding out and spillover effects between treated and not treated firms? We evaluate if an increase of guarantees, issued by the CGF, has been associated with employment or businesses growth in the area. The challenge of the empirical analysis is to capture macro effects of CGF, when its intervention covered on average only 3% of companies and 0.5% of funding at the provincial level. Using different models based on a “long” DID approach, the results suggest that there is a positive and statistically significant, albeit modest, correlation between the use of CGF and the growth of the provincial economies, controlling for sectoral differences, dimensional characteristics and several interactions. These results are robust to different assumptions, estimation strategies and variables used. Our findings therefore indicate that the intervention has mitigated the negative regional effects of the recent economic crisis in Italy.
    Keywords: credit guarantees, public policy, evaluation, regional growth
    JEL: G28 R11 H81
    Date: 2015
  20. By: Emin M. Dinlersoz; Henry R. Hyatt; Hubert P. Janicki
    Abstract: Young and small firms are typically matched with younger and nonemployed individuals, and they provide these workers with lower earnings compared to other firms. To explore the mechanisms behind these facts, a dynamic model of entrepreneurship is introduced, where individuals can choose not to work, become entrepreneurs, or work in one of the two sectors: corporate or entrepreneurial. The differences in production technology, financial constraints, and labor market frictions lead to sector-specific wages and worker sorting across the two sectors. Individuals with lower assets tend to accept lower-paying jobs in the entrepreneurial sector, an implication that finds support in the data. The effect on the entrepreneurial sector of changes in key parameters is also studied to explore some channels that may have contributed to the decline of entrepreneurship in the United States.
    Keywords: Entrepreneurship, borrowing constraints, financial frictions, labor market frictions, worker sorting, decline in entrepreneurship
    JEL: L26 J21 J22 J23 J24 J30 E21 E23 E24
    Date: 2015–01
  21. By: Fassio, Claudio (CIRCLE, Lund University; BRICK, Collegio Carlo Alberto); Grilli, Luca (Politecnico di Milano, Department of Management, Economics and Industrial Engineering)
    Abstract: The recent turbulent evolution of the 3D printing industry is strictly related with two important phenomena: the widespread adoption of Open Source (OS) business models by new companies on the one hand, and the increasing importance of communities of users, such as the so-called Maker Movement, on the other. This study is the first to analyze the factors that drive the adoption of different types of 3D printers and argues that, in line with the classification introduced by Hirschman (1982), 3D printers should be considered as both technological and symbolic innovations in order to understand their adoption patterns. While technological innovations are adopted for their technical utility, the adoption of symbolic product innovations serves mainly to communicate a novel social meaning to a specific pre-existing product. The recent growth of communities of interest that strongly endorse the OS philosophy, like the Maker Movement, has led 3D OS printers to gain many of the features of symbolic innovations. Taking advantage of an international sample of 3D printer users from 39 different countries, our study shows that while the high-quality 3D printers of established producers (3D proprietary printers) are mainly adopted for technologically-driven reasons, the adherence to the Maker Movement and to its ethical values is an important driver behind the adoption of 3D OS printers. Moreover this is especially true for the users that started to use 3D printers after 2011, when the Maker philosophy started gaining great momentum. The findings show that the global demand for 3D printer is increasingly fragmented between users driven by different motivations in their adoption choices. In this respect, the study advances our understanding about the interplay between OS business models, communities of interest and innovation adoption and inform managers on the importance of recognizing and exploiting the novel symbolic nature of 3D OS printers.
    Keywords: 3D printing; symbolic product innovations; communities of users
    JEL: L17 O32
    Date: 2016–02–15
  22. By: Nguyet Thi Khanh Cao (Graduate School of Economics, Kobe University)
    Date: 2016–02

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