nep-sbm New Economics Papers
on Small Business Management
Issue of 2016‒08‒14
ten papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Do tax Incentives for Research Increase Firm Innovation? An RD Design for R&D By Antoine Dechezleprêtre; Elias Einiö; Ralf Martin; Kieu-Trang Nguyen; John Van Reenen
  2. Science, university-firm R&D collaboration and innovation across Europe By Barra, Cristian; Maietta, Ornella Wanda; Zotti, Roberto
  3. Taking the Leap: The Determinants of Entrepreneurs Hiring their First Employee By Robert W. Fairlie; Javier Miranda
  4. Experimenting with Entrepreneurship: The Effect of Job-Protected Leave By Joshua D. Gottlieb; Richard R. Townsend; Ting Xu
  6. Numerical labor flexibility and innovation outcomes of start-up firms: A panel data analysis By Masatoshi Kato; Haibo Zhou
  7. Dynamics of rapid innovation By T. M. A. Fink; M. Reeves; R. Palma; R. S. Farr
  8. Revisión de la literatura sobre redes sociales y entrepreneurship By Hernan Herrera-Echeverri
  9. Measures, Drivers and Effects of Green Employment: Evidence from US Local Labor Markets, 2006-2014 By Vona, Francesco; Marin, Giovanni; Consoli, Davide
  10. CEO Personality and Firm Policies By Ian D. Gow; Steven N. Kaplan; David F. Larcker; Anastasia A. Zakolyukina

  1. By: Antoine Dechezleprêtre; Elias Einiö; Ralf Martin; Kieu-Trang Nguyen; John Van Reenen
    Abstract: We present evidence of a causal impact of research and development (R&D) tax incentives on innovation. 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 (even when quality-adjusted). R&D tax price elasticities are large at about 2.6, probably because the treated group is from a sub-population of smaller firms and subject to financial constraints. There does not appear to be pre-policy manipulation of assets around the thresholds that could undermine our design. Over the 2006-11 period aggregate business R&D would be around 10% lower in the absence of the tax relief scheme. We also show that the R&D generated by the tax policy creates positive spillovers on the innovations of techno-logically related firms.
    JEL: O31
    Date: 2016–07
  2. By: Barra, Cristian; Maietta, Ornella Wanda; Zotti, Roberto
    Abstract: According to the National Innovation System (NIS) approach, the innovative capabilities of a firm are explained by its interactions with other national agents involved in the innovation process and by formal and informal rules that regulate the system. This paper intends to verify how product and process innovation in the European food and drink industry are affected by: i) the NIS structure in terms of universities vs public research labs, faculties/department mix and size; ii) the NIS output in terms of WoS indexed publications vs the supply of graduates; iii) the NIS fragmentation and coordination and iv) the NIS scientific impact and specialisation.The source of data on firm innovation is the EU-EFIGE/Bruegel-UniCredit dataset supplemented by information from the International Handbook of Universities, Eurostat and the bibliometric analysis of academic research quality. The results obtained suggest that large size of public research institutions are detrimental to interactions between university and industry and the indicators used for public research assessment are not appropriate proxies of local knowledge spillovers.
    Keywords: university–industry interaction, firm R&D collaboration, product and process innovation, academic research quality, university education, Research and Development/Tech Change/Emerging Technologies, O3, I23, D22, R1,
    Date: 2016–06–17
  3. By: Robert W. Fairlie; Javier Miranda
    Abstract: Job creation is one of the most important aspects of entrepreneurship, but we know relatively little about the hiring patterns and decisions of startups. Longitudinal data from the Integrated Longitudinal Business Database (iLBD), Kauffman Firm Survey (KFS), and the Growing America through Entrepreneurship (GATE) experiment are used to provide some of the first evidence in the literature on the determinants of taking the leap from a non-employer to employer firm among startups. Several interesting patterns emerge regarding the dynamics of non-employer startups hiring their first employee. Hiring rates among the universe of non-employer startups are very low, but increase when the population of non-employers is focused on more growth-oriented businesses such as incorporated and EIN businesses. If non-employer startups hire, the bulk of hiring occurs in the first few years of existence. After this point in time relatively few non-employer startups hire an employee. Focusing on more growth- and employment-oriented startups in the KFS, we find that Asian-owned and Hispanic-owned startups have higher rates of hiring their first employee than white-owned startups. Female-owned startups are roughly 10 percentage points less likely to hire their first employee by the first, second and seventh years after startup. The education level of the owner, however, is not found to be associated with the probability of hiring an employee. Among business characteristics, we find evidence that business assets and intellectual property are associated with hiring the first employee. Using data from the largest random experiment providing entrepreneurship training in the United States ever conducted, we do not find evidence that entrepreneurship training increases the likelihood that non-employers hire their first employee.
    JEL: L26
    Date: 2016–07
  4. By: Joshua D. Gottlieb; Richard R. Townsend; Ting Xu
    Abstract: Do potential entrepreneurs remain in wage employment because of the danger that they will face worse job opportunities should their entrepreneurial ventures fail? Using a Canadian reform that extended job-protected leave to one year for women giving birth after a cutoff date, we study whether the option to return to a previous job increases entrepreneurship. A regression discontinuity design reveals that longer job-protected leave increases entrepreneurship by 1.8 percentage points. The results are driven by more educated entrepreneurs, starting firms that survive at least five years and hire paid employees, in industries where experimentation is more valuable.
    JEL: H50 J13 J16 J65 J88 L26
    Date: 2016–07
  5. By: Craig Wesley Carpenter
    Abstract: This paper employs the Michigan Census Research Data Center to merge three limited-access Census Bureau data sets by individual firm and establishment level to investigate the factors associated with the Latino-owned Business (LOB) location and dynamics over time. The three main LOB outcomes under analysis are as follows: (1) the probability of a business being Latino-owned as opposed to a business being Asian-owned, Black-owned, or White-owned; (2) the probability of new business entry and exit; and (3) LOB employment growth. This paper then compares these factors associated with LOB with past findings on businesses that are Asian-owned, Black-owned, and White-owned. Some notable findings include: (1) only Black business owners are less associated with using personal savings as start-up capital than Latinos; (2) the only significant coefficient on start-up capital source is personal savings and it increases the odds of survival of a Latino business by 4%; (3) on average, having Puerto Rican ancestry decreases the odds of business survival; and (4) LOB are relatively likely to start a business with a small amount of capital, which, in turn, limits their future growth.
    Date: 2016–07
  6. By: Masatoshi Kato (School of Economics, Kwansei Gakuin University); Haibo Zhou (Faculty of Economics and Business, University of Groningen)
    Abstract: Using a panel data set based on repeated questionnaire surveys in Japan, this study examines the effects of numerical labor flexibility on innovation outcomes of start-up firms, a topic that has not been well examined in the literature. Using a random-effects probit model, the estimation results indicate that the use of temporary employees significantly increases the probability of product innovation. In addition, numerical flexibility, measured as external labor turnover of regular employees, initially increases and then decreases the probability of patent application. The implications of our findings are discussed.
    Keywords: start-up firm, numerical flexibility, regular employee flexibility, nonregular employee flexibility, innovation outcome, panel data
    JEL: M13 M50 J63 O32
    Date: 2016–08
  7. By: T. M. A. Fink; M. Reeves; R. Palma; R. S. Farr
    Abstract: We introduce a model of innovation in which products are composed of components and new components are adopted one at a time. We show that the number of products we can make now gives a distorted view of the number we can make in the future: the more complex a product is, the more it gets under-represented. From this complexity discount we derive a strategy for increasing the rate of innovation by choosing components on the basis of long-term growth rather than just short-term gain. We test our model on data from language, gastronomy and technology and predict the best strategy for innovating in each.
    Date: 2016–07
  8. By: Hernan Herrera-Echeverri
    Abstract: En este trabajo se realiza una revisión de la literatura reciente sobre las redes de emprendimiento. Desde una perspectiva instrumental, se pretende integrar las descripciones teóricas acerca de cómo el contenido y la estructura de las redes sociales contribuyen al éxito de la actividad del entrepreneur. Para tal efecto, esta revisión procede primero exponiendo los diferentes enfoques para el estudio de la relación entre las redes sociales y el proceso de emprendimiento. Posteriormente aborda las distintas definiciones y topologías existentes del concepto de red social de emprendimiento. En tercer lugar se exponen 5 modelos que explican la relación que existe entre las dinámicas de las redes y las etapas de evolución del proceso de emprendimiento; seguidamente este trabajo aborda el papel instrumental de las redes para los emprendedores en desarrollo de su actividad, concentrándose en explicar cómo los entrepreneurs usan las redes para obtener legitimidad social y cognitiva. El trabajo finaliza proponiendo algunas conclusiones y elementos a considerarse en investigaciones futuras.
    Date: 2016–05–02
  9. By: Vona, Francesco; Marin, Giovanni; Consoli, Davide
    Abstract: This paper explores the nature and the key empirical regularities of green employment in US local labor markets between 2006 and 2014. We construct a new measure of green employment based on the task content of occupations. Descriptive analysis reveals the following: 1. the share of green employment oscillates between 2 and 3 percent, and its trend is strongly 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 green areas 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) new jobs in non-tradable activities in the local economies.
    Keywords: Green Employment, Local Labor Markets, Environmental Regulation, Environmental Technologies, Local Multipliers, Labor and Human Capital, J23, O33, Q52, R23,
    Date: 2016–07–31
  10. By: Ian D. Gow; Steven N. Kaplan; David F. Larcker; Anastasia A. Zakolyukina
    Abstract: Based on two samples of high quality personality data for chief executive officers (CEOs), we use linguistic features extracted from conferences calls and statistical learning techniques to develop a measure of CEO personality in terms of the Big Five traits: agreeableness, conscientiousness, extraversion, neuroticism, and openness to experience. These personality measures have strong out-of-sample predictive performance and are stable over time. Our measures of the Big Five personality traits are associated with financing choices, investment choices and firm operating performance.
    JEL: D22 D23 G3 G34
    Date: 2016–07

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