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on Small Business Management |
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Issue of 2016‒06‒09
eighteen papers chosen by João Carlos Correia Leitão Universidade da Beira Interior |
| By: | Kerr, William R.; Nanda, Ramana |
| Abstract: | We review the recent literature on the financing of innovation, inclusive of large companies and new startups. This research strand has been very active over the past five years, generating important new findings, questioning some long-held beliefs, and creating its own puzzles. Our review outlines the growing body of work that documents a role for debt financing related to innovation. We highlight the new literature on learning and experimentation across multi-stage innovation projects and how this impacts optimal financing design. We further highlight the strong interaction between financing choices for innovation and changing external conditions, especially reduced experimentation costs. |
| Keywords: | finance, innovation, entrepreneurship, banks, venture capital, experimentation |
| JEL: | G21 G24 L26 M13 O31 O32 |
| Date: | 2015–12–11 |
| URL: | http://d.repec.org/n?u=RePEc:bof:bofrdp:2015_028&r=sbm |
| By: | Broström, Anders (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Lööf, Hans (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Nabavi, Pardis (Swedish Entrepreneurship Forum & Centre of Excellence for Science and Innovation Studies (CESIS), Royal Institute of Technology (KTH)) |
| Abstract: | This paper investigates how incumbent firm characteristics affect the viability of its spinoffs. The survival patterns of spinoffs with roots in exporting firms and in technologically innovative firms are compared to the survival of other spinoffs. Using comprehensive Swedish employer-employee panel data sets, three possible outcomes are identified: survival,acquisition and complete exit from the market. Experience from an exporting parent is positively associated with spinoff survival. These inheritance benefits do, however, decrease with the tenure of ex-employees. This suggests that inherited advantages in this case is not primarily driven by enhanced opportunities for on-the-job learning. Above-average attractiveness to employees, and associated ability sorting and opportunity costs mechanisms, provides explanations for the superior survival of spin-offs from exporting firms that seem more congruent with data. The study also suggest that technological innovativeness, captured by parent's patenting activity, is negatively associated with spinoff survival when controlling for exports. This result support the view that knowledge inside innovative firms is "sticky" and not easily transferable to new ventures by ex-employees. |
| Keywords: | entrepreneurship; exports; organizational heritage; innovation; spinoff; entrepreneurial spawning |
| JEL: | C25 F14 L26 M13 O33 |
| Date: | 2016–04–27 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0437&r=sbm |
| By: | Carlino, Gerald; Kerr, William R. |
| Abstract: | This paper reviews academic research on the connections between agglomeration and innovation. We first describe the conceptual distinctions between invention and innovation. We then discuss how these factors are frequently measured in the data and note some resulting empirical regularities. Innovative activity tends to be more concentrated than industrial activity, and we discuss important findings from the literature about why this is so. We highlight the traits of cities (e.g., size, industrial diversity) that theoretical and empirical work link to innovation, and we discuss factors that help sustain these features (e.g., the localization of entrepreneurial finance). |
| Keywords: | agglomeration, clusters, innovation, invention, entrepreneurship |
| JEL: | J2 J6 L1 L2 L6 O3 R1 R3 |
| Date: | 2015–12–10 |
| URL: | http://d.repec.org/n?u=RePEc:bof:bofrdp:2015_027&r=sbm |
| By: | Gourio, Francois; Messer, Todd; Siemer, Michael |
| Abstract: | Using an annual panel of US states over the period 1982-2014, we estimate the response of macroeconomic variables to a shock to the number of new firms (startups). We find that these shocks have significant effects that persist for many years on real GDP, productivity, and population. This result is consistent with simple models of firm dynamics where a “missing generation” of firms affects productivity persistently. |
| Keywords: | Productivity ; Business dynamics ; Employment ; Firm entry ; Missing generation ; New business formation |
| JEL: | E24 E32 L25 L26 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2016-43&r=sbm |
| By: | MURAKAMI Hiroki |
| Abstract: | In this paper, we present a model which enables us to look into the process of research and development (R&D) for product innovation in the presence of the product life cycle and the resultant firm or economic growth. Specifically, we describe R&D for product innovation as an activity to control the birth rate of a new product, which measures the probability of product innovation; derive the optimal birth rate of a new product, which determines the size of R&D expenditure; and examine the growth rate of the (representative) firm('s expected total revenue) along the optimal R&D plan. We then find that the growth rate of the firm converges to the optimal birth rate of a new product in the long run. |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:16032&r=sbm |
| By: | Antoine Dechezlepretre; Elias Einiö; Ralf Martin; Kieu-Trang Nguyen; John Van Reenen |
| Abstract: | We present the first evidence showing causal impact of research and development (R&D) tax incentives on innovation outcomes. We exploit a change in the asset-based size thresholds for eligibility for R&D tax subsidies and implement a Regression Discontinuity Design using administrative tax data on the population of UK firms. There are statistically and economically significant effects of the tax change on both R&D and patenting, with no evidence of a decline in the quality of innovation. R&D tax price elasticities are large at about 2.6, probably because the treated group is from a sub-population subject to financial constraints. There does not appear to be pre-policy manipulation of assets around the thresholds that could undermine our design, but firms do adjust assets to take advantage of the subsidy post-policy. We estimate that over 2006-11 business R&D would be around 10% lower in the absence of the tax relief scheme. |
| Keywords: | R&D; patents; tax; innovation; Regression Discontinuity design |
| JEL: | J24 M0 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:66428&r=sbm |
| By: | Christopoulos, George (UNU‐MERIT, Maastricht University); Wintjes, René (UNU‐MERIT, Maastricht University) |
| Abstract: | This paper introduces a new approach for the definition of innovation clusters, based on the co-location of concentrated patenting and manufacturing activity in the EU. The incorporation of data on both the production and use of technologies results in an indicator that depicts both formal and informal modes of innovation and conditions which can be expected to be conducive to the generation, diffusion and absorption of innovation, and consequently the enhancement of competitiveness. Our findings indicate that certain types of patenting and manufacturing activity tend to co-locate. The sectoral-technological composition of the three types of concentrations observed points towards a higher level of diversity than one would expect in the case of narrow specialisation. Applying the new indicator in a test of the often hypothesised benefits of innovative clustering, we find that the identified clusters have consistently higher wages in the sectors concerned. |
| Keywords: | Innovation, clusters, regional studies, patenting, manufacturing |
| JEL: | O30 R12 L60 |
| Date: | 2016–05–11 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2016023&r=sbm |
| By: | Heyman, Fredrik (Research Institute of Industrial Economics (IFN)) |
| Abstract: | A large and growing empirical literature has presented evidence of job polarization, i.e. the simultaneous growth of high-wage jobs and low-wage jobs at the expense of middle-wage jobs. Thus far, the focus has been on employment in different occupations, without taking into account the role of firms in the labor demand process. The purpose of this paper is to bridge this knowledge gap by explicitly analyzing how firms influence the current process of job polarization. Using detailed Swedish matched employer-employee data for the 1997–2013 period, we present novel evidence on within-firm job polarization. Applying a decomposition framework, we also find that both within-firm and between-firm components are important for overall job polarization. We also show how the within-firm pattern is related to explanations for job polarization that have been proposed, i.e. the influence of routine-based technological change and the offshorability and automation of jobs. The results indicate that routineness of jobs seems to be the most important factor behind the observed pattern of within-firm job polarization. |
| Keywords: | Keywords: Job polarization; Job tasks; Routinization; Automation; Matched employer-employee data |
| JEL: | J24 J31 O33 |
| Date: | 2016–05–16 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:1123&r=sbm |
| By: | Faggian, Alessandra; Partridge, Mark; Malecki, Ed |
| Abstract: | Researchers have long searched for the underlying causes of growth. In developed countries, as they shifted from industrial to knowledge economies, researchers have recently stressed the following sources of growth embodied in its workforce: human capital (linked to education), entrepreneurship (variously measured), and the creative class (associated with worker occupations). This study first proposes new conceptual ways to portray the interrelationship of these knowledge-based attributes. Then simultaneously considers all of these factors in an empirical model using U.S. counties. We find that human capital as measured by educational attainment and the intensity of small and medium-sized firms are statistically associated with subsequent growth, while other factors such as the share of creative class workers or the share of advanced technology industries are insignificant. We conclude that economic development strategies are too focused on attracting large outside firms and attracting advanced technology firms and not enough attention is given to building a foundation of competitive small and medium-sized firms. |
| Keywords: | Economic growth, human capital, entrepreneurship, creative class, US counties |
| JEL: | J24 O1 R11 |
| Date: | 2016–05–17 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:71445&r=sbm |
| By: | Dory Tibor (Szechenyi Istvan University); Milena Slavcheva (European Commission – JRC - IPTS) |
| Abstract: | The 2015 series of RIO Country Reports analyse and assess the policy and the national research and innovation system developments in relation to national policy priorities and the EU policy agenda with special focus on ERA and Innovation Union. The executive summaries of these reports put forward the main challenges of the research and innovation systems. |
| Keywords: | R&I system, R&I policy, ERA, innovation union, Semester analysis, Hungary |
| JEL: | I20 O30 Z18 |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc101194&r=sbm |
| By: | Gimenez-Nadal, J. Ignacio (University of Zaragoza); Lafuente, Miguel (University of Zaragoza); Molina, José Alberto (University of Zaragoza); Velilla, Jorge (University of Zaragoza) |
| Abstract: | In this paper, we propose an algorithmic approach based on resampling and bootstrap techniques to measuring the importance of a variable, or a set of variables, in econometric models. This algorithmic approach allows us to check the real weight of a variable in a model, avoiding the biases of classical tests, and to select the more powerful variables, or more relevant models, in terms of predictability, reducing dimensions. We apply this methodology to the Global Entrepreneurship Monitor data for the year 2014, and find that innovation and new technologies, help others with their business, and that entrepreneurial education at University and the availability of government subsidies, are among the most important predictors for entrepreneurial behavior. |
| Keywords: | bootstrap, regression, classification, entrepreneurship data |
| JEL: | C21 C52 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9938&r=sbm |
| By: | Susan Alexander (Minerva); Slavcheva Milena (European Commission – JRC - IPTS) |
| Abstract: | The 2015 series of RIO Country Reports analyse and assess the policy and the national research and innovation system developments in relation to national policy priorities and the EU policy agenda with special focus on ERA and Innovation Union. The executive summaries of these reports put forward the main challenges of the research and innovation systems. |
| Keywords: | R&I system, R&I policy, ERA, innovation union, Semester analysis, Luxembourg |
| JEL: | I20 O30 Z18 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc101201&r=sbm |
| By: | Sándor Juhász; Balázs Lengyel |
| Abstract: | Knowledge networks in industrial clusters are frequently analyzed but we know very little about creation and persistence of ties in these networks. We argue that tie creation primarily depends on opportunities and thus the position ofactors in the network and in space; while tie persistence is influenced by the value of the tie. Accordingly, results from a Hungarian printing and paper product cluster suggest that reciprocity, triadic closure, and geographical proximity between firms increase the probability of tie creation. Tie persistence is positively affected by technological proximity between firms and the number of their extra-regional ties. |
| Keywords: | knowledge networks, clusters, network dynamics, stochastic actor-oriented models |
| JEL: | D85 L14 R11 O31 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:1613&r=sbm |
| By: | Muriel Dal-Pont Legrand (GREDEG CNRS; Université Nice Sophia Antipolis); Harald Hagemann (University of Hohenheim, Stuttgart) |
| Abstract: | Joseph A. Schumpeter’s theory of economic development analyzes how growth and cycle dynamics intertwine. The process of Creative Destruction plays an essential role in that dynamics: embodying a cleaning effect, it has a clear beneficial impact on long-run development. For that reason, and also for some of his famous (and provocative) non-interventionists statements, Schumpeter is generally interpreted as a pure liquidationist. This paper contests this rather simplistic view and shows that Schumpeter not only expressed much more nuanced positions as far as practical economic issues were concerned but also that his views on economic policy were rooted in his earlier contributions before the Great Depression, attesting to a stronger time-consistency of his contributions. |
| Keywords: | Business cycles, growth, short run, long run, creative destruction, cleansing effect, productive recessions, economic policy, Schumpeter |
| JEL: | B22 B31 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2016-16&r=sbm |
| By: | Lee, Yoo Hwan; Graff, Gregory D. |
| Abstract: | This study examines the mechanisms and geographic scope of the impact of university knowledge spillovers on the agricultural economy, using the case of Colorado State University (CSU) and the state’s agricultural economy. Our findings show that the spillover impacts of journal publications are rarely localized within Colorado; rather, the geographic scope of these impacts is national and even global. However, the extent to which the spillover impacts of patented knowledge is localized within Colorado is open to question because it is possible to control permissions for use, but at the same time it is impossible to limit everyone’s awareness and use of it, particularly in foreign jurisdictions where patents are not taken out by the university. The collaboration mechanism of knowledge dissemination, such as indicated by industry coauthorship on journal articles and private sponsorship of grants and contracts, which are more rivalrous by virtue of the more tacit qualities of knowledge being disseminated and because of the higher transaction costs, requires closer interaction and greater geographic proximity, which usually prevents global dissemination. Thus, we observe geographic proximity is significantly important for these channels. Finally, university start-ups are highly geographically bounded near universities because in the early stages start-up companies need support from their host university. |
| Keywords: | knowledge spillovers, geographic proximity, innovation, agriculture, university research, non-parametric model, Agribusiness, Community/Rural/Urban Development, Industrial Organization, Research and Development/Tech Change/Emerging Technologies, Q16, R12, O33, D23, C14, |
| Date: | 2016–08–02 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea16:235717&r=sbm |
| By: | Atwood, Joseph; Joglekar, Alison |
| Keywords: | Simultaneous Equation Model, Limited Dependent Variable, Discrete Choice, Theil Correction, Agribusiness, Agricultural and Food Policy, Research and Development/Tech Change/Emerging Technologies, Research Methods/ Statistical Methods, Resource /Energy Economics and Policy, |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea16:235554&r=sbm |
| By: | Cleo Jacobs Johnson; Ava Madoff; Scott Richman; Matthew Johnson; Claudia Gentile |
| Abstract: | After years of operating programs focused on improving education in Kansas City, Kauffman Foundation leaders decided to establish charter school. The path they followed and the lessons they learned may be of interest to those working to found and/or improve charter schools. |
| Keywords: | Kauffman, Charter School, Academic growth, education |
| JEL: | I |
| Date: | 2016–03–16 |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:5ea03c380804432f97d25d1df22e03bc&r=sbm |
| By: | Timothy De Stefano; Richard Kneller; Jonathan Timmis |
| Abstract: | A recent literature has begun to recognise that ICT is heterogeneous and the effects from improving communication are distinct from those that improve the storage and processing of information. In this paper we use the arrival of a new communication technology, ADSL broadband internet, to study the effects of communication ICT on firm performance. To do so free from endogeneity bias, we construct instruments using the infrastructure underlying broadband internet - the pre-existing telephone network. We show that, after placing various restrictions on the sample, instruments based on the timing of ADSL broadband enablement and the cable distance to the local telephone exchange satisfy the conditions for instrument relevancy and validity for some types of ICT. We find in turn, that communication-ICT causally affects firm size (captured by either sales or employment) but not productivity. |
| Keywords: | ICT, firms, instrumental variable JEL codes: D22, D24, O3 |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:not:notecp:16/01&r=sbm |