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on Small Business Management |
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Issue of 2016‒11‒06
twenty-two papers chosen by João Carlos Correia Leitão Universidade da Beira Interior |
| By: | Johannes VAN DER POL |
| Abstract: | One of the objectives of the analysis of innovation networks is to explain the structure of the network. The latter is important because it reveals strategic decisions of the firms in terms of collaboration. Different factors have already been identified (e.g technological and geographical proximity), the role of the life-cycle of the technology has however not yet been analysed.\r\nThe aim of this paper is to extend the existing literature on innovation networks in two ways. First we show that the International Patent Classification can be used to generate a knowledge network that can be used as a proxy for the identification of the technology life-cycle. Second we show that there is a correlation between the structural dynamics of the network and the life-cycle of the technology. |
| Keywords: | Network analysis ; Innovation network ; technology life-cycle ; Knowledge network |
| JEL: | L14 D83 O32 O33 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:grt:wpegrt:2016-25&r=sbm |
| By: | Johannes VAN DER POL |
| Abstract: | The focus of this paper is on the link between network structure and the financial performance of the individual firm. Under the hypothesis that firms access diverse and valuable knowledge through collaboration we analyse how firms pick their collaborators and how knowledge flows impact the financial performance of the firm. \r\nFirst, the evolution of the structure of the collaboration network of the French aerospace sector is analysed between 1980 and 2013. The global structure is identified and, using an ERGM and clustering identification, the structure of the network is explained. Second, a panel regression identifies a link between the position of the individual firm inside the network and their financial performance. |
| Keywords: | Network analysis ; Innovation network ; ERGM ; Performance ; Small World ; Scale-free |
| JEL: | L25 C23 D85 L14 C20 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:grt:wpegrt:2016-24&r=sbm |
| By: | Flavio Calvino |
| Abstract: | This work studies the firm-level relationship between different types of innovative activities and employment growth rates. Improving on previous investigations on the topic, it combines a dynamic panel analysis of the effects of different types of product and process innovation on employment growth with an outlook on the whole conditional employment growth distribution. Results show that product innovation -- especially in terms of good new to the entire market -- has a positive effect on employment growth. This role is likely to be particularly relevant for both fast-growing and shrinking firms. Process innovation appears instead to have less clear-cut dynamics, consistently with existing evidence. Among different types of process innovation, the introduction of novel auxiliary processes appears to be more positively linked with employment growth. |
| Keywords: | Innovation, Employment growth, Dynamic panel methods, Quantile regression |
| Date: | 2016–10–26 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2016/37&r=sbm |
| By: | Dorothea Schäfer (German Institute for Economic Research DIW Berlin); Andreas Stephan (Jönköping International Business School) |
| Abstract: | Using the Mannheim innovation panel, we investigate whether family firms have higher financial need and how this affects both innovation input and innovation outcomes such as firm or market novelties, or process innovation. Applying the CDM framework, we find that family firms are more likely to have a latent financial need for innovation, which means that they have innovation ideas which they have not implemented yet. We find that family firms have a significantly lower marginal innovation productivity in particular for innovations with radical character, i.e., market novelties. We conclude from this evidence that family firms have a comparative disadvantage in innovation projects that imply high risk and require high innovation capability. |
| Keywords: | Innovation, Capability, Funding gaps, Financing Restrictions, Family Firms, CDM |
| JEL: | D21 D22 G31 O30 O31 O32 |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:lsa:wpaper:wpc14&r=sbm |
| By: | Landini, Fabio (LUISS School of European Political Economy) |
| Abstract: | Recent evidence documents the weakness of market selection based on productivity differentials and the absence of cleansing during recessions. This paper argues that a possible explanation lies in the role of competitive rents, i.e., market advantages due to idiosyncrasies of the firm’s demand. Competitive rents allow firms to sustain profit independently of their internal efficiency, creating a selection advantage. During an economic recession, this advantage increases because competitive rents operate as a resilience factor. The process of firm selection can thus be distorted with relatively inefficient firms that manage to survive. These predictions are tested on a sample of French, Italian, and Spanish manufacturing firms, looking at the selection that took place during the Great Recession. Ceteris paribus, firms with competitive rents are less likely to exit than firms without competitive rents. This effect is stronger in countries more severely impacted by the downturn. The implications of these results for policy interventions to sustain aggregate productivity growth are discussed. |
| Keywords: | firm selection; profit; productivity; competitive rents; Great Recession |
| JEL: | D24 L11 L25 |
| Date: | 2016–10–21 |
| URL: | http://d.repec.org/n?u=RePEc:ris:sepewp:2016_004&r=sbm |
| By: | Elisabeth Maes (KULeuven, Faculty of Economics and Business, Department of Accountancy, Finance and Insurance); Nico Dewaelheyns (KULeuven, Faculty of Economics and Business, Department of Accountancy, Department of Financial Management); Catherine Fuss (Economics and Research Department, National Bank of Belgium); Cynthia Van Hulle (KULeuven, Faculty of Economics and Business, Department of Accountancy, Finance and Insurance) |
| Abstract: | Using a longitudinal dataset comprising of detailed financial and exporting data from Belgian small and medium-sized enterprises (SME) between 1998 and 2013, this article examines the manner in which firms manage to finance their export activities and the resulting impact on corporate capital structure. We find that exporters have to finance relatively more working capital as compared to their non-exporting peers and that they resolve this financing need by carrying more short-term debt. In addition, we evidence that the relationship between pledgeable short-term assets, such as working capital, and short-term debt financing is more pronounced for exporters. In particular, we show that the ties between pledgeable short-term assets and short-term debt financing are stronger for export-intensive firms and firms that serve distant and risky export destinations. Overall, what our empirical findings seem to suggest is that developing tools that facilitate the pledging of assets is likely to boost SME export activities by widening access to bank financing and reducing financial constraints. |
| Keywords: | SMEs, capital structure, debt maturity, export, collateral, working capital |
| JEL: | F10 F14 F42 G3 G32 |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbb:reswpp:201610-311&r=sbm |
| By: | Florence Honoré; Martin Ganco |
| Abstract: | While it is crucial for startups to hire high human capital employees, little is known about what drives the hiring decisions. Considering the stakes for both startups and their hires (i.e., joiners), we examine the phenomenon using a two-sided matching model that explicitly reveals the preferences of each side. We apply the model to a sample of startups from five technological manufacturing industries while examining a range of variables grounded in prior work on startup human capital. The analysis is based on the Longitudinal Employer Household dynamics from the U.S. Census Bureau. Our findings indicate that, in the context of entrepreneurship, both startups and joiners rely heavily on signals of quality. Further, quality considerations that are important for the match play a minimal role in determining earnings. Our approach refines our understanding of how entrepreneurial human capital evolves. |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:16-45&r=sbm |
| By: | Mircea Epure; Martí Guasch |
| Abstract: | This study analyzes the relationship between debt and outside equity investments in early stage firms. The existing evidence on this relationship is scarce and inconclusive, mostly due to the pervasive opaqueness of early stage firms. We argue that outside investors who face the severe information asymmetries that exist in entrepreneurial firms may use the level of debt as a signal. In addition, personal and business debt could signal different information to outside investors. We use the Kauffman Firm Survey and develop an empirical strategy based on a Heckman selection model and a propensity score matching analysis. Our results consistently show that debt, and particularly business debt, is positively related to outside equity investments, especially in times of economic distress. We posit that start-ups with higher levels of business debt can send more credible signals to capital markets, and identify cash holdings and the firm-bank relationship as possible information channels for outside investors. |
| Keywords: | financing; debt; equity; entrepreneurship; information asymmetry; capital structure. |
| JEL: | G32 M13 M40 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:1546&r=sbm |
| By: | Johannes VAN DER POL |
| Abstract: | The main objective of this paper is to offer an analytical review of the literature focusing on the link between collaboration and performance. More precisely, the paper analyses the impact the position of the firm in the network has on the performance of the firm. Evolving in an innovation network implies that the firm is exposed to knowledge flows from collaborators. They are also exposed to the diffusion of their reputation through their partners. This document summarizes the different factors that have an impact on the manner in which firms can profit from their network and how, in their turn, they can impact the network. |
| Keywords: | Innovation networks ; Performance ; Knowledge ; Collaboration |
| JEL: | L14 D83 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:grt:wpegrt:2016-23&r=sbm |
| By: | Daron Acemoglu; Ufuk Akcigit; William Kerr |
| Abstract: | Technological progress builds upon itself, with the expansion of invention in one domain propelling future work in linked fields. Our analysis uses 1.8 million U.S. patents and their citation properties to map the innovation network and its strength. Past innovation network structures are calculated using citation patterns across technology classes during 1975-1994. The interaction of this pre-existing network structure with patent growth in upstream technology fields has strong predictive power on future innovation after 1995. This pattern is consistent with the idea that when there is more past upstream innovation for a particular technology class to build on, then that technology class innovates more. |
| JEL: | D85 O31 O32 O33 O34 |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22783&r=sbm |
| By: | John Deke |
| Abstract: | Cluster randomized controlled trials (CRCTs) often require a large number of clusters in order to detect small effects with high probability. |
| Keywords: | outcome evaluation (other than economic evaluation), design and evaluation of programs and policies, economic evaluation, methodology |
| JEL: | I |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:e2b48515bd5340e28916261b062f52a2&r=sbm |
| By: | Diego Comin (Dartmouth College); Daniel Lashkari (Harvard U.); Marti Mestieri (Northwestern University) |
| Abstract: | We develop a multi-sectoral endogenous growth model in which the direction of innovation across sectors is endogenous. Thus, our model provides a theoretical framework to think about the classical demand-pull versus technology-push drivers of innovation in a general equilibrium framework. A robust prediction that emerges from our analysis is that innovation growth should be higher in more income-elastic sectors. We test this prediction using the universe of U.S. patents for the period 1976-2007. We find empirical support for this prediction. Preliminary analysis of firm R&D expenditures from the U.S. census also confirm this prediction. |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed016:1287&r=sbm |
| By: | Brixiova, Zuzana (University of Cape Town); Kangoye, Thierry (African Development Bank) |
| Abstract: | This paper examines gender differences in entrepreneurial performance and their links with start-up capital utilizing a search model and empirical analysis of survey of entrepreneurs from Swaziland. The results show that entrepreneurs of both genders with higher start-up capital record better sales performance than those with smaller amounts of capital. For women entrepreneurs, formal finance sources of start-up capital are also associated with higher sales. However, as in other developing countries, women entrepreneurs in Swaziland have smaller start-up capital and are less likely to fund it from formal sources than men. Among women entrepreneurs, those with college education and confident in their skills tend to start their firms with higher amounts of capital. Professional support also matters, as women with such support are more likely to fund their start-up capital from the formal financial sector. |
| Keywords: | women's entrepreneurship, start-up capital, search model, multivariate analysis |
| JEL: | L53 O12 C61 |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10279&r=sbm |
| By: | Tomomi Miyazaki (Graduate School of Economics, Kobe University); Haruo Kondoh (Department of Economics, Seinan Gakuin University) |
| Abstract: | This paper examines the relationship between regional business cycle fluctuations and local public investment in Japan. The empirical results show the possibility that a part of the local public investment decided by political factors may amplify regional business cycle fluctuations. @ @ |
| Keywords: | Local public investment; Volatility of the regional economy; Regional business cycles |
| JEL: | E32 E62 H30 H54 R53 |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:koe:wpaper:1624&r=sbm |
| By: | Wataru Miyamoto; Thuy Lan Nguyen |
| Abstract: | Using a novel data set for 17 countries dating from 1900 to 2013, we characterize business cycles in both small developed and developing countries in a model with financial frictions and a common shock structure. We estimate the model jointly for these 17 countries using Bayesian methods. We find that financial frictions are an important feature for not only developing countries but also small developed countries. Furthermore, business cycles in both groups of countries are marked with trend productivity shocks. Common disturbances explain one-third of the fluctuations in small, open economies (both developed and developing), especially during important worldwide phenomena. |
| Keywords: | Business fluctuations and cycles, Economic models, International topics |
| JEL: | F41 F44 E13 E32 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:bca:bocawp:16-48&r=sbm |
| By: | Disdier, Anne-Célia; Gaigné, Carl; Herghelegiu, Cristina |
| Keywords: | Agricultural Finance, Farm Management, |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaa149:244783&r=sbm |
| By: | Devaux, André; Torero, Maximo; Donovan, Jason; Horton, Douglas E. |
| Keywords: | trade; market access; smallholders; producer organizations; transport; wholesale marketing; retail marketing; farmers organizations; value chains; food processors |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:synops:9780896299771&r=sbm |
| By: | Grabrucker, Katharina (University of Passau); Grimm, Michael (University of Passau) |
| Abstract: | An often-heard argument is that South Africa's very high crime rate is the main reason for the country's small share of business ownership. Combining a fixed-effects model with an instrumental variable approach, we estimate the effect of crime on self-employment and business performance using a matched data set of census, survey and police data. In contrast to previous studies, which focus on perceived rather than actual crime and often deal with geographically limited areas, we do not find robust evidence that high crime rates have a negative impact on self-employment. Although the impact of crime is statistically significant and negative, it is economically small. Moreover, our results suggest a positive rather than a negative relationship between robbery and burglary and sales and average business profits. These results suggest that crime may not be in general a serious threat for small businesses in low and middle-income countries. |
| Keywords: | crime, self-employment, microenterprises, South Africa, informal sector |
| JEL: | D22 J24 J46 K40 L26 O12 |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10280&r=sbm |
| By: | Zecca, Francesco; Rastorgueva, Natalia |
| Keywords: | Agricultural and Food Policy, Farm Management, |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaa149:245706&r=sbm |
| By: | Lindquist, Matthew J. (SOFI, Stockholm University); Sol, Joeri (University of Amsterdam); van Praag, Mirjam C. (Copenhagen Business School); Vladasel, Theodor (Copenhagen Business School) |
| Abstract: | Promoting entrepreneurship has become an increasingly important part of the policy agenda in many countries. The success of such policies, however, rests in part on the assumption that entrepreneurship outcomes are not fully determined at a young age by factors that are unrelated to current policy. We test this assumption and assess the importance of family background and neighborhood effects as determinants of entrepreneurship, by estimating sibling correlations in entrepreneurship. We find that between 20 and 50 percent of the variance in different entrepreneurial outcomes is explained by factors that siblings share (i.e., family background and neighborhood effects). The average is 28 percent. Hence, entrepreneurship is far less than fully determined at a young age. Our estimates increase only a little when allowing for differential treatment within families by gender and birth order. We then investigate a comprehensive set of mechanisms that explain sibling similarities. Parental entrepreneurship plays a large role in explaining sibling similarities, as do shared genes. We show that neighborhood effects matter, but are rather small, particularly when compared with the overall importance of family factors. Sibling peer effects, and parental income and education matter even less. |
| Keywords: | entrepreneurship, family background, intergenerational persistence, neighborhood effects, occupational choice, sibling correlations |
| JEL: | D13 J62 L26 |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10278&r=sbm |
| By: | Hélène Latzer (CEREC - Université Saint-Louis - Bruxelles, CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | This paper introduces multi-quality firms within a Schumpeterian framework. Featuring non-homothetic preferences and income disparities in an otherwise standard quality-ladder model, we show that the resulting differences in the willingness to pay for quality among consumers generate both positive investments in R&D by industry leaders and positive market shares for more than one quality, hence allowing for the emergence of multi-product firms within a vertical innovation framework. This positive investment in R&D by incumbents is obtained with complete equal treatment in the R&D field between the incumbent patentholder and the challengers: in our framework , the incentive for a leader to invest in R&D stems from the possibility for an incumbent having innovated twice in a row to efficiently discriminate between rich and poor consumers displaying differences in their willingness to pay for quality. We hence exemplify a so far overlooked demand-driven rationale for innovation by incumbents. Such a framework also makes it possible to analyze the impact of inequality both on long-term growth and on the allocation of R&D activities between challengers and incumbents. We find that an increase in the income gap positively impacts an econ-omy's growth rate, partly shifting R&D activities from challengers to incumbents. On the other hand, a greater income concentration is detrimental for growth, diminishing both the incumbents' and the challengers' R&D activities. |
| Keywords: | Growth,Innovation,Income inequality |
| Date: | 2016–10–25 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:hal-01387266&r=sbm |
| By: | Josh Lerner; Haris Tabakovic; Jean Tirole |
| Abstract: | A key role of standard setting organizations (SSOs) is to aggregate information on relevant intellectual property (IP) claims before deciding on a standard. This article explores the firms’ strategies in response to IP disclosure requirements—in particular, the choice between specific and generic disclosures of IP—and the optimal response by SSOs, including the royalty rate setting. We show that firms with a stronger downstream presence are more likely to opt for a generic disclosure, as are those with lower quality patents. We empirically examine patent disclosures made to seven large SSOs, and find results consistent with theoretical predictions. |
| JEL: | L24 O34 |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22768&r=sbm |