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on Small Business Management |
| By: | Daniele Bondonio (Universita'del Piemonte Orientale); Federico Biagi (European Commission - JRC); Juraj StanÄ ík (European Commission - JRC) |
| Abstract: | This report uses data from Efige and from Bureau Van Dijk’s Amadeus and Orbis to estimate the effect of funding from the EU and national programmes on firms’ employment, sales, added value, productivity and innovativeness. It also looks at the impact of subsidies to investment and R&D (irrespective of the source of funding) on the same variables. In the first part of the report we use only the Efige dataset (covering the years 2007- 2009) and we look at (contemporaneous) correlation between public support (from national and EU sources) and product and process innovation. Our results indicate that national and EU funding are equally important in stimulating product innovation. However, EU funding has a higher correlation with process innovation. We also find a positive correlation between public support to private R&D and product innovation (but no significant correlation between the former and process innovation). On the other hand, public support to private investment (including ICT capital) is positively associated with process innovation but not with product innovation. In the second part of the report we perform a proper counterfactual analysis, where we merge the Efige dataset with the Bureau Van Dijk’s Amadeus (years 2001-2012) and Orbis (2006-2012) databases. This allows us to test whether firms funded between years 2007 and 2009 have a significantly different economic performance (measured in terms of employment, sales, and value added) in the years 2009-2012, while controlling for firms characteristics measured prior to 2007 (i.e. in the pre-treatment period). Our results indicate that receiving public support from national funds generates positive increments in employment, sales and added value, compared to the counterfactual status of the absence of public intervention. We do not find evidence that EU funds have additional impacts on employment, sales or value added (relative to firms receiving only national funding or no funding). This result is most likely due to the small sample size of firms receiving EU funds, which does not allow us to precisely estimate the impact of EU funding alone or in conjunction with national funding. It is also likely to depend upon the features of EU funding, which is geared towards research that produces results over a longer time horizon than the one observable in our data. We also find that generic support to firm-level investment projects has positive impacts on employment and added value. However, no statistically significant impacts are estimated for subsidies which support R&D expenditures exclusively (possibly due to the nature of R&D support policies, which often require more time to yield noticeable impacts on general firm-level performance). |
| Keywords: | Counterfactual impact evaluation; public funding; innovation; Framework programme |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc99564&r=sbm |
| By: | Nestor Duch-Brown (European Commission – JRC); Andrea de Panizza (European Commission – JRC); Ibrahim Kholilul Rohman (European Commission – JRC) |
| Abstract: | This paper adds to the empirical literature on the relationships between R&D, innovation and productivity at the firm level. The focus is on Spanish enterprises in Information industries, which are acknowledged to be at the forefront for both innovative activity and R&D performance. The analysis is performed on ca. 1800 enterprises included in the PITEC database (the Spanish source of the EU Community Innovation Survey) for the period 2004-2013. Using a three-stage "CDM" model we consider: (i) factors affecting the decision to conduct R&D, including the role of perceived importance of innovation on firm's R&D performance, (ii) the impact of the predicted R&D effort on companies' effective undertaking of product, process, organisational and marketing innovations, as well as their simultaneous occurrence and (iii) whether and to what extent such innovations boost productivity. In the specific context of this R&D intensive array of industries, the decision of undertaking R&D appears to be strongly influenced by the importance attributed to enhancing existing products or creating new ones, as well as by the size of the company, the fact of being young and local, and the availability public funding. These elements also greatly impact on enterprises' R&D effort, thus providing some arguments in favour of R&D promotion policies, in particularly addressed to start-ups. Expected R&D performance, in turn, appears to be strongly related to the actual achievement of such innovations, including non-technical ones. By focusing on innovation patterns, it was possible to ascertain a strong complementarity between different families of innovation (as expected, given these industries' specificities), as well as to qualify existing evidence on the innovation-productivity conundrum. Indeed, we show that results depend on the way innovation types are modelled and combined. Controlling for complementarities, enterprises performing focused non-technical innovations and joint technical and non-technical ones (mixed-mode innovators) are likely to be more productive (in terms of sales per capita) than their peers, while stand-alone technical innovations give inconclusive results. |
| Keywords: | R&D, innovation, ICT sector, productivity, firm level data, panel |
| JEL: | O00 O31 O32 O47 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc101847&r=sbm |
| By: | Lee, Kye Woo (Asian Development Bank Institute) |
| Abstract: | This paper presents targeted government policies for promoting training in small and medium-sized enterprises (SMEs) to increase their contributions to economic development. It first discusses the role of SMEs in country development and the special challenges facing SMEs in developing human resources. It then surveys some innovative, targeted policies for promoting training by SMEs in Asia and Latin America. The paper elaborates on the objectives and achievements of a successful targeted SME training policy, the SME Training Consortiums Program in the Republic of Korea, as a best practice. This paper concludes with some cautionary remarks for developing countries seeking to adopt targeted SME training policies. |
| Keywords: | SME training policies; SME Training Consortiums Program; training levy grants; Republic of Korea |
| JEL: | O31 O32 O38 |
| Date: | 2016–07–21 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0579&r=sbm |
| By: | Michael Fritsch (Friedrich Schiller University Jena); Alina Sorgner (Friedrich Schiller University Jena); Michael Wyrwich (Friedrich Schiller University Jena); Evguenii Zazdravnykh (National Research University Higher School of Economics) |
| Abstract: | This paper investigates the persistence of entrepreneurship in the region of Kaliningrad between 1925 and 2010. During this time period the area experienced a number of extremely disruptive shocks including; devastation caused by World War II, a nearly complete replacement of the native German population by Soviets, and 45 years under an anti-entrepreneurial socialist economic regime followed by a shock-type transition to a market economy. Nevertheless, we find a surprisingly high level of persistence of industry-specific self-employment rates in the districts of the Kaliningrad region. Our analysis suggests that persistence of entrepreneurship is higher in regions with a history of successful entrepreneurship. That is, in regions where a specific industry was particularly efficient and entrepreneurial activity was especially pronounced. |
| Keywords: | Entrepreneurship, regional culture, persistence |
| JEL: | L26 N94 P25 P5 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:143/ec/2016&r=sbm |
| By: | Tavassoli, Sam (CIRCLE, Lund University); Bengtsson, Lars (LTH, Lund University); Karlsson, Charlie (CESIS, KTH) |
| Abstract: | The literature in the Strategic Entrepreneurship (SE) is increasingly embracing the concept and implications of knowledge spillovers. In this paper, we add to the theoretical repertoire on SE and knowledge spillovers by investigating the types of knowledge spillovers 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 between three 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 discuss the implications. Doing so, we argue that spatial knowledge spillovers (inter-firm) has received the major attention in previous research in increasing the amount of ‘inputs’ dimension of SE, while the aspatial knowledge (either inter-regional or intra-firm) has been relatively neglected 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: | D21 D80 L10 L26 |
| Date: | 2016–07–06 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2016_021&r=sbm |
| By: | Semyon MALAMUD (Ecole Polytechnique Federale de Lausanne and Swiss Finance Institute); Francesca ZUCCHI (Ecole Polytechnique Federale de Lausanne and Swiss Finance Institute) |
| Abstract: | We study optimal liquidity management, innovation, and production decisions for a continuum of firms facing financing frictions and the threat of creative destruction. We show that liquidity constraints unambiguously lead firms to decrease their production rate but, surprisingly, may spur investment in innovation (R&D). Using the model, we characterize which firms substitute production for innovation when constrained and thus display a non-monotonic relation between cash reserves and R&D. We embed our single-firm dynamics in a Schumpeterian model of endogenous growth and demonstrate that financing frictions have an ambiguous effect on economic growth. |
| Keywords: | Innovation, Cash management, Financial constraints, Endogenous growth, Creative destruction |
| JEL: | D21 G31 G32 G35 L11 |
| URL: | http://d.repec.org/n?u=RePEc:chf:rpseri:rp1541&r=sbm |
| By: | Mani Sunil (National Graduate Institute for Policy Studies, Centre for Development Studies, and Centre for Development Studies, Trivandrum, Kerala, India) |
| Abstract: | Right through her independence, India has been trying to achieve economic growth with technological self-reliance. In order to achieve this goal, the country has been adopting a mix of industrial and innovation policies. During the period up to and including the early 1990s, the state attempted to give shape to this goal by intervening directly by generating a whole host of industrial technologies through state-owned undertakings and other public research institutes. During the period since the 1990s, coinciding with the economic liberalization policies the state has replaced this with incentivizing the innovation system of the country. This is because the state wants the private sector enterprises to be at the core of the innovation system. Key to incentivizing the private sector was two specific policies, namely the R&D tax policy and the policy on Intellectual Property Rights. The paper undertakes a critical review of the very recent changes to these two policy instruments. |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:ngi:dpaper:16-09&r=sbm |
| By: | Alex Bryson (University College London, National Institute of Social and Economic Research and Institute for the Study of Labor); John Forth (National Institute of Social and Economic Research) |
| Abstract: | Small and medium-sized enterprises (SMEs) are known to contribute significantly to aggregate economic growth. However, little is known about the role played by management practices in SME growth since recession. We contribute to the literature on SME growth by analysing longitudinal administrative data on firms' employment and turnover, taken from the UK's Business Structure Database (BSD), with data on management practices collected in face-to-face interviews from the HR Managers and employees who were surveyed as part of the 2011 British Workplace Employment Relations Survey (WERS). We find off-the-job training is the only management practice that is robustly and significantly associated with higher employment growth, increased turnover, and a decline in closure probabilities, over the period 2011-2014. The findings suggest SME investment in off-the-job training is sub-optimal in Britain such that firms could benefit economically from increasing the amount of off-the-job training they offer to their non-managerial employees. |
| Keywords: | SMEs; small and medium-sized enterprises; employment growth; sales; workplace closure; HRM; training; recession |
| JEL: | L25 M12 M50 M53 |
| Date: | 2016–07–11 |
| URL: | http://d.repec.org/n?u=RePEc:qss:dqsswp:1611&r=sbm |
| By: | Daniel Nepelski; Giuseppe Piroli |
| Abstract: | We analyse the relationship between the composition of innovation partnerships and the potential of their innovations developed within EU-funded research projects under the Seventh Framework Programme for Research and Technological Development (FP7), the European Union's Research and Innovation funding programme for 2007-2013. Innovation potential is assessed using a formal framework capturing three different dimensions: innovation readiness, management and market potential. Both the analysed innovations and innovators were identified by external experts during periodic Framework Programme reviews. Thus, our population includes participants in the FP7 projects that are considered as key organisations in the project delivering innovations in FP7 projects. We show that the innovative potential of research output of homogenous partnerships, e.g. between two SMEs or two large companies, is likely to be higher, as compared to heterogeneous partnerships, e.g. an SME and a large company. The impact of universities on the potential of innovations is unclear. The total number of key organizations in delivering an innovation has a negative impact on its potential. Neither project funding nor duration affects the potential of innovation. Our results contribute to the discussion on the most appropriate design of R&D consortia of organizations in publically-funded projects. |
| Keywords: | R&D consortia; innovation policy; framework programme, small and medium-sized enterprises. |
| JEL: | L52 L53 O31 O32 O25 |
| Date: | 2016–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:eei:rpaper:eeri_rp_2016_01&r=sbm |
| By: | Cortina Lorente,Juan Jose; Ismail,Soha Ismail Ahmed Aly; Schmukler,Sergio L. |
| Abstract: | This paper documents how firms in Arab countries issue equity, corporate bonds, and syndicated loans in domestic and international markets to obtain financing and grow. Using a new data set on issuance activity and firm performance, the paper finds that capital raising through these markets has grown rapidly since the early 1990s and involved an increasing number of issuing firms. Whereas the amounts raised (relative to gross domestic product) in equity and loan markets stand well with respect to international standards, bond issuance activity lags behind. Yet, bond financing has gained importance over time. Equity issuances primarily take place domestically, while bonds and loans are mostly issued internationally, display long maturities, and entail low levels of credit risk. Issuing firms are larger, grow faster, and are more leveraged than non-issuers. While issuers tend to be larger ex ante than non-issuers, the size gap between them seems to widen over time. |
| Date: | 2016–07–20 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:7756&r=sbm |
| By: | Heng GENG (University of Hong Kong); Harald HAU (University of Geneva and Swiss Finance Institute); Sandy LAI (University of Hong Kong) |
| Abstract: | Innovation processes under patent protection generate holdup 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 holdup 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: | Patents, holdup Problems, Innovation, Institutional Ownership |
| JEL: | L22 G31 G32 |
| URL: | http://d.repec.org/n?u=RePEc:chf:rpseri:rp1539&r=sbm |
| By: | Yavuz Arslan; Yunus Emrah Bulut; Tayyar Buyukbasaran; Gazi Kabas |
| Abstract: | With a novel dataset of over two thousand firms covering 2006-2012 period, this study examines liquidity management of non-financial firms in Turkey. We find the following results: First, cash holdings and lines of credits are complementary if the profits are low or cash holdings are small, while they become substitutes if profits are high or cash holdings are large. Second, firms with more available funds (cash plus unused credit lines) invest more than the others; moreover, given the same amount of available funds, those firms which hold more cash make more investment. Third, firms with small cash holdings prefer unused credit lines to cash when they get more profitable; whereas firms with large cash holdings prefer cash to unused credit lines when they get more profitable. Fourth, we find evidence of nonlinearities regarding the determinants of cash holdings and credit limits. Finally, our analysis also includes the effects of aggregate financial uncertainty on liquidity management, and it discriminates between holdings of local currency denominated and foreign currency denominated credit limits. Our study is the first one to examine liquidity management of firms in an emerging economy, and bears some critical differences with the findings of earlier studies. |
| Keywords: | Credit Lines, Cash holdings, Liquidity Management |
| JEL: | G31 G32 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:tcb:wpaper:1604&r=sbm |
| By: | Vassilis Monastiriotis |
| Abstract: | The EU association framework provides European businesses with an entry advantage into the associated countries by facilitating production links and encouraging institutional convergence. It is believed that this has multiple beneficial effects for the associated countries, including ones related to productivity spillovers accruing to domestic firms. However, no empirical evidence exists to show that the presence of European firms produces larger productivity spillovers in recipient economies compared to firms from other world regions. We examine this question using firm-level data covering 28 transition countries over the period 2002-2009. We estimate the intra-industry productivity effects of foreign ownership and examine how these differ across regional blocks (CEE, SEE and ENP), by origin of investor (EU15 versus non-EU15), across geographical scales (national versus regional) and for different types of locations (capital-city regions versus the rest). Our results suggest that investments of EU origin play a distinctive role, helping raise domestic productivity in the associated countries unlike investments from outside the EU. However, this process operates in a spatially selective manner, potentially enhancing regional disparities and spatial imbalances. This assigns a particular responsibility for EU policy to devise interventions that will help redress these problems within its existing association framework. |
| Keywords: | EU neighbourhood; FDI spillovers; institutional proximity; regional disparities |
| JEL: | R14 J01 |
| Date: | 2016–06–24 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:66141&r=sbm |
| By: | Schubert, Torben (CIRCLE, Lund University); Baier, Elisabeth (Hochschule für Wirtschaft, Technik und Kultur (HWTK)); Rammer, Christian (Centre for European Economic Research (ZEW)) |
| Abstract: | In this paper we analyze the conditions under which firms decide to offshore innovation. We consider the role of internal technological capabilities and technological dynamism in the firm environment, distinguishing speed and uncertainty of technological change. Using unique data from the German Innovation Survey we find that while high speed of technological change tends to drive innovation offshoring, high uncertainty about future technology developments results in more innovation offshoring only for firms with low internal technological capabilities. Firms with high technological capabilities instead are less likely to offshore innovation when uncertainty is high. We argue that these differences in offshoring behaviour reflect differing strategic objectives. We show that for firms with low technological capabilities asset augmentation is more important while for firms with high technological capabilities asset exploitation is more important. When faced by high technological uncertainty firms with low technological capabilities offshore innovation strategically in order to reduce uncertainty by augmenting their asset base. For firms with high technological capabilities asset augmentation is less important. When faced by high technological uncertainty, they prefer to innovate onshore in order to keep stronger control of their key assets. |
| Keywords: | offshoring; R&D; uncertainty; competition; technological change; speed |
| JEL: | F21 F23 L22 O32 |
| Date: | 2016–07–25 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2016_022&r=sbm |
| By: | Federico Biagi (European Commission - JRC); Annarosa Pesole (European Commission - JRC); Juraj Stancik (European Commission - JRC) |
| Abstract: | This report was prepared in the context of the three-year research project on European Innovation Policies for the Digital Shift (EURIPIDIS). This project was jointly launched in 2013 by JRC-IPTS and DG CONNECT of the European Commission. It aims to improve understanding of innovation in the ICT sector and ICT-enabled innovation in the rest of the economy. In the context of the EURIPIDIS project, this report analyses innovative activities by ICT-producing firms and provides evidence on innovative activity in the ICT sector, compared to the overall economy. This analysis, based on a set of different indicators, aims to provide a deeper understanding of the modes of innovation adopted by ICT producing firms. To carry out the analysis, we created a panel dataset which matched the information collected by different Community Innovation Survey (CIS) waves from 2004 up to 2012 in twenty EU Member States. We then investigated the major innovation patterns that emerged, and compared the ICT sector to the whole economy. The main findings show that, in general, firms in the ICT sector tend to innovate more with respect to the economy as a whole: the shares of both innovators and technological innovators are consistently higher within the ICT sector than they are in the economy as a whole. Moreover, the ICT sector has a higher share of innovative firms which perform R&D and a higher share of Framework Programme-funded innovative firms. In order to capture the modes of innovation of ICT-producing firms, we used "complex" indicators that condense information from more than one measure and allow us to make multi-dimensional phenomena uni-dimensional. These complex indicators indicate that the share of international and domestic innovators is higher among ICT firms than it is in the economy as a whole. In other words, ICT firms tend to have a higher than average in-house R&D capability and are more likely to introduce new-to-the-market product or process innovations in both international and domestic markets. Looking at international or domestic "modifiers" (i.e. firms that mainly adopt and/or modify innovation made by others), we find no evidence that ICT-producing firms are more likely than the average firm to modify or adopt innovations developed elsewhere. |
| Keywords: | ICT sector, ICT-enabled innovation, ICT Innovation System, Community Innovation Survey |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc101636&r=sbm |
| By: | Mark Boden (European Commission – JRC); Patrice dos Santos (European Commission – JRC); Karel Haegeman (European Commission – JRC); Elisabetta Marinelli (European Commission – JRC); Susana Valero (European Commission – JRC) |
| Abstract: | This policy brief provides a summary of the approach and outcomes of a European Parliament Preparatory Action centred on the refinement and implementation of the Research and Innovation Smart Specialisation Strategy (RIS3) in the region of Eastern Macedonia and Thrace (REMTh). Implemented, mainly during 2015, by the European Commission (the Joint Research Centre in collaboration with the Directorate General for Regional and Urban Policy) and the Managing Authority of the region, this action also had the explicit aim to draw lessons for other low growth and less developed regions in Europe. An essential aspect of the preparatory action was the opportunity it offered for stakeholders, the EC and the regional authority to share experiences and build a common understanding of RIS3 and the challenges to its implementation. This centred on a series of stakeholder events, critical for the mutual learning process and trust building among stakeholders. Stakeholders have thus worked together to identify and exploit research and innovation based opportunities for the region as well as tackling the challenges to RIS3 implementation. The various tools developed and applied in the REMTh preparatory action can, taken together, be seen to constitute a toolbox of approaches for RIS3 implementation. This toolbox and the hands-on approach taken for the implementation of this Preparatory Action, as well as the flexibility to further adapt methodologies to local needs and context, can generate a wide set of tools and lessons on the implementation of regional smart specialisation strategies. These can be of benefit both to less developed regions that have struggled to restructure their economy in spite of considerable investments, and to all regions facing difficulties in implementing RIS3 as a new and largely unknown governance approach. |
| Keywords: | REMTh, Eastern Macedonia and Thrace, RIS3, smart specialisation, toolbox |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc101739&r=sbm |
| By: | Fernanda Ricotta (Dipartimento di Economia, Statistica e Finanza, Università della Calabria) |
| Abstract: | This paper examines the effect of the quality of regional government (QoG) on firm Total Factor Productivity (TFP) in a multi-country context. The analysis is based on comparable cross-country data of manufacturing firms operating in seven European countries (Austria, France, Germany, Hungary, Italy, Spain and the United Kingdom). The measure of the ‘quality of government’ is the European quality of government index (EQI), calculated at regional level over twenty-seven EU members. To disentangle internal from external productivity drivers, the multilevel approach is employed. Results refer to 2008 and show, as expected, the importance of firm-specific determinants of TFP. As far as the specific scope of this paper is concerned, firms located in regions with high quality regional government show higher levels of TFP. When considering the QoG components, corruption and the quality of services positively affect TFP, while the evidence is inconclusive for impartiality. |
| Keywords: | Institutions, firm performance, European regions, multilevel model |
| JEL: | O43 D24 C30 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:clb:wpaper:201606&r=sbm |
| By: | Ana Fernández-Zubieta (CSIC); Thomas Zacharewicz (European Commission - JRC) |
| 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, Spain |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc101188&r=sbm |
| By: | Balaz Vladimir (Slovak Academy of Sciences, (Bratislava, Slovak Republic)); Zifciakova Jana (European Commission - JRC) |
| 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, Belgium |
| JEL: | I20 O30 Z18 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc101220&r=sbm |
| By: | Valeria De Bonis (Università Sapienza di Roma - Dipartimento di Studi Giuridici, Filosofici ed Economici) |
| Abstract: | Should the supply or the demand side bear the risk connected to innovation? The two polar cases identified in the literature are the supply push and the demand pull. The former is the typical one, with the supplier bearing the costs and obtaining the benefits from innovating. The latter is technology procurement, where the buyer takes the risk, by procuring the innovative good or service. With respect to this, pre-commercial procurement is a peculiar solution that can explain the debate found in the literature relative to its configuration either as a supply-side or a demand-side instrument. The separation from the commercial phase allows the procurer to take only (part of) the risks connected to R&D services. Also, competition among suppliers gives the opportunity of evaluating different solutions and to obtain, in the commercial phase, a lower price for the innovative good. The counterpart of all this is a large portion of risk being left to the supplier. As a consequence, suppliers need to obtain a larger share of the benefits of the innovation process. This economic reason, besides the legal restrictions on State aid, explains the need for a shared risks-shared benefits approach, centred on the agreements on the assignment of IPRs. |
| Keywords: | innovation; competition; public procurement for innovation; pre-commercial procurement. |
| JEL: | H57 K21 L16 M38 O34 O38 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:gfe:pfrp00:00023&r=sbm |
| By: | Sandro Claudio Lera (ETH Zurich); Didier Sornette (Swiss Finance Institute; ETH Zürich - Department of Management, Technology, and Economics (D-MTEC)) |
| Abstract: | The distribution of firm sizes is known to be heavy tailed. In order to account for this stylized fact, previous studies have focused mainly on growth through investments in a company’s own operations (internal growth). Thereby, the impact of mergers and acquisitions (M&A) on the firm size (external growth) is often not taken into consideration, notwithstanding its potential large impact. In this article, we make a first step into accounting for M&A. Specifically, we describe the effect of mergers and acquisitions on the firm size distribution in terms of an integro-differential equation. This equation is subsequently solved both analytically and numerically for various initial conditions, which allows us to account for different observations of previous empirical studies. In particular, it rationalises shortcomings of past work by quantifying that, in order to observe a significant influence of mergers and acquisitions on the firm size distribution, more extensive datasets would have been required. Our approach is very flexible and can be extended to account for other sources of external growth, thus contributing towards a holistic understanding of the distribution of firm sizes. |
| Keywords: | firm size distribution, mergers and acquisitions, coagulation equation, econophysics |
| JEL: | C63 D21 G34 L11 |
| URL: | http://d.repec.org/n?u=RePEc:chf:rpseri:rp1639&r=sbm |
| By: | Furlan, Benjamin (University of Salzburg) |
| Abstract: | This paper provides a systematic analysis on the employment effects after merger and acquisition activities for a sample of European production firms. Rather than taking the perspective of the acquired firm, which has been extensively addressed in previous research, this paper focuses on the acquiring firm. At hand with a data set covering roughly 160.000 firms between 2003-2010 we apply propensity score matching methods to evaluate post-merger effects. Our results suggest that acquiring companies show a higher employment growth rate than their counterparts. This result holds by splitting our data in several sub samples (small and medium-sized firms, national takeovers). |
| Keywords: | Merger and acquisition evaluation; propensity score matching; em-ployment effects. |
| JEL: | C00 G00 L00 |
| Date: | 2015–12–06 |
| URL: | http://d.repec.org/n?u=RePEc:ris:sbgwpe:2015_003&r=sbm |
| By: | Yannick LUNG; Bernard JULLIEN; Christophe MIDLER |
| Abstract: | A detailed comparative analysis of two \"low cost\" car projects at Renault (Logan and Kwid) illustrates how the Entry strategy has fundamentally transformed the French carmaker. An increasingly explicit reverse innovation approach has emerged, along with systematic adoption of design-to-cost methods, which are at the heart of fractal innovation. The first part of the paper analyses the conditions under which this strategy has been progressively adopted and the second part explains its implementation throughout the management of these two projects. |
| Keywords: | AUTOMOBILE INDUSTRY, INDIA, LOW COST, RENAULT, REVERSE INNOVATION |
| JEL: | D22 F23 L62 N60 O14 O32 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:grt:wpegrt:2016-19&r=sbm |
| By: | Gray, Elie; Grimaud, André |
| Abstract: | This paper analyzes the link between the fact that fully endogenous growth models exhibit (or not) the non-desirable scale effects property and assumptions regarding the intensity of knowledge diffusion. In that respect, we extend a standard Schumpeterian growth model by introducing explicitly knowledge diffusion over a Salop (1979) circle: a continuum of sectors simultaneously sending and receiving knowledge is located over the circle. The link between knowledge diffusion and scale effects stems from the fact that the more diffusion spreads with the size of the economy, the larger the pools of knowledge used by each sector’s R&D activity are, the higher the marginal productivity of labor in R&D is, and eventually the higher the growth rate is. The paper tackles the apparent following paradox. Knowledge diffusion seems to lead to scale effects; however, the former is empirically desirable while the latter is not. Our first basic result is that a sufficient condition to have a scale-invariant fully endogenous growth model is to assume no inter-sectoral knowledge diffusion. However, this assumption is not empirically reasonable. We overcome the aforementioned paradox by showing that the absence of diffusion is not a necessary condition to suppress scale effects. More precisely, we determine sets of reasonable assumptions on knowledge diffusion under which one can obtain fully endogenous growth models complying with most undeniable empirical facts - namely the absence of significant scale effects, the impact of public policies on the growth rate, and somehow realistic interactions among sectors R&D activities (including the occurrence of GPTs). |
| Keywords: | Schumpeterian growth theory / Scale effects / Inter-sectoral knowledge diffusion / Knowledge spillovers / Non rivalry |
| JEL: | O30 O31 O33 O40 O41 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:30558&r=sbm |
| By: | Francesco Vona (Observatoire français des conjonctures économiques); Giovanni Marin (Scuola Superiore Sant'Anna) |
| Abstract: | This paper explores the nature and the key empirical regularities ofgreen employment in US local labor markets between 2006 and 2014. Weconstruct a new measure of green employment based on the task contentof occupations. Descriptive analysis reveals the following: 1. the share of green employment oscillates between 2 and 3 percent, and its trend isstrongly pro-cyclical; 2. green jobs yield a 4 percent wage premium; 3.despite moderate catching-up across areas, green jobs remain more geographically concentrated than similar non-green jobs; and 4. the top greenareas are mostly high-tech. As regards the drivers, changes in environmental regulation are a secondary force compared to the local endowment of green knowledge and resilience in the face of the great recession. To assess the impact of moving to greener activities, we estimate that one additional green job is associated with 4.2 (2.4 in the crisis period) newjobs in non-tradable activities in the local economies. |
| Keywords: | Green employment; Local labor markets; Environmental regulation; Environmental technologies; Local multipliers |
| JEL: | J23 O33 Q52 R23 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/2lpvf5mlr48dkah5qda4hh4e9g&r=sbm |
| By: | Daniel Nepelski (European Commission – JRC); Giuseppe Piroli (European Commission – DG Employment, Social Affairs & Inclusion); Giuditta De Prato (European Commission – JRC) |
| Abstract: | Through the perspective of VC-backed companies, this report describes the main locations of start-up activity in Europe, i.e. start-up hotspots. It aims at providing evidence on start-up activity in Europe and at describing the European VC activity over the last two decades. The study reports the following: • Europe receives 15% of global VC investments. After the dot.com hype, VC activity in Europe decreased and has never come close to the levels from 2000. VC funds have also moved away from seed to later stage of funding. • 28% of all European VC-backed companies are based in one of the 20 cities. Paris, London and Berlin lead the ranking of cities with the highest number of VC-backed companies in Europe. • The location of a start-up is likely to be one of the major factors influencing the amount of money it receives from VC funds and the number of funding rounds it goes through. • Majority of European VC-backed companies are up to 8 years old and have up to 100 employees. • The majority of VC-backed firms in Europe belong to the Business, Consumer and Retail industries. |
| Keywords: | venture capital, start-ups, entrepreneurship |
| JEL: | O3 L26 G24 R51 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc101215&r=sbm |
| By: | Kurt Unger (Division of Economics, CIDE) |
| Abstract: | After a brief review of contemporary Mexican policy on science and technology we locate innovation experiences of firms in the context of innovation systems and market failures. Given the purpose of competitiveness as related to local innovation policy, the focus must be to solve the market failures inhibiting the firms' willingness to assume innovation risks and uncertainty. Most of all the failure of higher rates of profitability for non-tradeables, which are discriminating against tradeables in higher competition and more uncertain outcomes. For the most part there is also a lack of continuity in the participation of firms in the programs of subsides for innovation projects. In conclusion we argue for highly differentiated policy according to sectors and states. |
| Keywords: | innovation, competitiveness, profitability, continuity, sectors, states, firms. |
| JEL: | O32 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:emc:wpaper:dte595&r=sbm |
| By: | David Carey; John Lester; Isabelle Luong |
| Abstract: | Small business dynamism is a feature of an SME sector that contributes to overall productivity growth, not an end in itself. Such dynamism increases productivity growth by reallocating resources towards more productive firms and strengthening the diffusion of new technologies. Small business dynamism in Canada has declined in recent decades, as in other OECD countries, but overall it remains in the middle of the range, with some indicators above average and others below. Framework economic policies are generally supportive of small business dynamism, especially labour regulation, but there is scope to reduce regulatory barriers to product market competition. Canada has many programmes to support small businesses. Some of the largest programmes are not well focused on reducing market failures. Focusing support more on reducing clear market failures would increase the contribution of these programmes to productivity growth and living standards. This would likely entail redirecting support from small businesses in general to start-ups and young firms with innovative projects, which would boost small business dynamism. This Working Paper relates to the 2016 OECD Economic Survey of Canada (www.oecd.org/eco/surveys/economic-survey-canada.htm) Augmenter la productivité en favorisant le dynamisme des petites entreprises au Canada Le dynamisme des petites entreprises n’est pas une fin en soi, mais un élément du secteur des PME qui concourt à la progression globale de la productivité. Il favorise les gains de productivité en redistribuant les ressources vers les entreprises les plus efficientes et en renforçant la diffusion des nouvelles technologies. Au Canada comme dans les autres pays de l’OCDE, le dynamisme des petites entreprises a été moindre ces dernières décennies, mais il reste dans une position médiane, certains indicateurs étant supérieurs à la moyenne de l’OCDE et d’autres inférieurs. Si le cadre de politique économique lui est en général propice, en particulier la réglementation du travail, il existe une marge de réduction des obstacles réglementaires à la concurrence sur les marchés de produits. Alors que de nombreux programmes ont vocation à aider les petites entreprises, certains des plus importants ne ciblent pas bien les défaillances du marché. En les axant davantage sur l’atténuation des dysfonctionnements manifestes, on ferait davantage contribuer ces programmes à la progression de la productivité et du niveau de vie. Il faudrait probablement pour cela réorienter l’aide des petites entreprises en général vers les start-ups et les entreprises de création récente dotées de projets innovants, ce qui donnerait une impulsion à ce segment de l'économie. Ce Document de travail se rapporte à l’Étude économique de l’OCDE du Canada 2016 (www.oecd.org/fr/eco/etudes/etude-econom ique-canada.htm) |
| Keywords: | venture capital, exit, start-ups, SMEs, entry, capital risque, start-ups, PME, entrée, sortie |
| JEL: | D52 H25 L26 O51 |
| Date: | 2016–07–27 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1314-en&r=sbm |