nep-sbm New Economics Papers
on Small Business Management
Issue of 2016‒12‒04
sixteen papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Recruiting for Small Business Growth: Micro-level Evidence By Gidehag, Anton; Lodefalk, Magnus
  2. Growth through Heterogeneous Innovations By Akcigit, Ufuk; Kerr, William R.
  3. Assessment of Framework Conditions for the Creation and Growth of Firms in Europe By Vincent Van Roy; Daniel Nepelski
  4. Effects of credit constraints on the productivity of small and medium-sized enterprises in Cameroon. By Mandiefe Piabuo, Serge; Menjo Baye, Francis; Chupezi Tieguhong, Julius
  5. Granularity of the business cycle fluctuations: The Spanish case By Omar Blanco; Simone Alfarano
  6. The Impact of Formal Networking on the Performance of SMEs By Maurizio Cisi; Francesco Devicienti; Alessandro Manello; Davide Vannoni
  7. Employment Effects of Innovations over the Business Cycle: Firm-Level Evidence from European Countries By Bernhard Dachs; Martin Hud; Christian Köhler; Bettina Peters
  8. Patents and cumulative innovation: causal evidence from the courts By Alberto Galasso; Mark Schankerman
  9. Multiple Banking Relationships: Do SMEs Mistrust Their Banks? By Catherine Refait-Alexandre; Stéphanie Serve
  10. RIO Country Report 2015: China By Can Huang; Xiao Jin; Lanhua Li
  11. Innovation and Export-market Participation in Canadian Manufacturing By Dar-Brodeur, Afshan; Baldwin, John R.; Yan, Beiling
  12. RIO Country Report 2015: India By KRISHNA Venni Venkata
  13. Immigrants and Firms' Outcomes: Evidence from France By Cristina Mitaritonna; Gianluca Orefice; Giovanni Peri
  14. Augmenter la productivité en favorisant le dynamisme des petites entreprises au Canada By David Carey; John Lester; Isabelle Luong
  15. Techno-Globalisierung als Motor des Aufholprozesses im österreichischen Innovationssystem By Bernhard Dachs
  16. Entrepreneur et entrepreneurialisme By Marcus Dejardin; Sylvain Luc

  1. By: Gidehag, Anton (Örebro University School of Business); Lodefalk, Magnus (Örebro University School of Business)
    Abstract: We examine the link between new employees in leading positions and subsequent productivity in small- and medium-sized (SME) enterprises. Managers and professionals are likely to possess important tacit knowledge. They are also in a position to influence the employing firm. Exploiting rich and comprehensive panel data for Sweden in the 2001-2010 period and employing semi-parametric and quasi-experimental estimation techniques, we find that newly recruited leading personnel have a positive and statistically significant impact on the productivity of the hiring SME. Interestingly, our results suggest that professionals with experience from international firms and enterprise groups contribute the most to total factor productivity. Overall, the findings suggest the importance of mobility of leading personnel for productivity-enhancing knowledge spillovers to SMEs.
    Keywords: recruitment; knowledge spillovers; firm growth; productivity; SME
    JEL: D22 D24 D83 J24 J62
    Date: 2016–10–31
  2. By: Akcigit, Ufuk; Kerr, William R.
    Abstract: We build a tractable growth model where multi-product incumbents invest in internal innovations to improve their existing products, while new entrants and incumbents invest in external innovations to acquire new product lines. External and internal innovations generate heterogeneous innovation qualities, and firm size affects innovation incentives. This framework allows us to analyze how different types of innovation contribute to economic growth and how the firm size distribution can have important consequences for the types of innovations realized. Our model aligns with many observed empirical regularities, and we quantify our framework by matching Census Bureau operating data with patent data for U.S. firms. We observe that internal innovation scales moderately faster with firm size than external innovation.
    Keywords: Citations; Endogenous Growth; Entrepreneurs.; External; innovation; Internal; patents; Research and Development; Scientists
    JEL: L16 O31 O33 O41
    Date: 2016–11
  3. By: Vincent Van Roy (European Commission - JRC); Daniel Nepelski (European Commission - JRC)
    Abstract: This report contributes to a better understanding of the framework conditions that are conducive to the emergence and the growth of entrepreneurial activities in Europe. It takes into account a broad variety of framework conditions, including entrepreneurial culture, access to human capital, support initiatives for knowledge creation and networking, market conditions, availability of sufficient and appropriate finance, prevailing business regulations and the quality of the supporting infrastructure. For each of these framework conditions, the prevailing literature identifies the underlying components that affect the creation and growth of firms respectively. A set of two composite indicators – i.e. the Entrepreneurship and Scale-up Indices (ESIS) –have been constructed to facilitate the comparison across Member States. As such, this report provides a working tool to monitor and benchmark EU Member States in the creation of a business-friendly environment that can foster both the creation and the growth trajectories of firms.
    Keywords: ecosystem; financial; growth; ICT; indicator; innovation; policy; research; industry
    Date: 2016–11
  4. By: Mandiefe Piabuo, Serge; Menjo Baye, Francis; Chupezi Tieguhong, Julius
    Abstract: This paper assesses the determinants and effects of credit constraints on the productivity of small and medium-sized enterprises (SMEs) in Cameroon. Use is made of the Cameroon enterprise survey data collected by the World Bank in 2009 and an endogenous switching regression model. Results show that interest rates, size of enterprise, size of loan, size of collateral, maturity of loans and legal status of enterprises are major sources of credit constraints faced by SMEs. Results also indicate that medium enterprises are more credit constrained than small enterprises; meanwhile the effects of credit constraints affect small enterprises more than medium enterprises. Credit constrained firms have lower levels of productivity relative to unconstrained firms. These results have implications for the creation of credit bureaux, prudential stringency and rationalization of the Cameroon tax system.
    Keywords: Small and medium-sized enterprises, credit constraints, endogenous switching regression model, Cameroon tax system.
    JEL: C4 C40 D1 D53
    Date: 2015–06–22
  5. By: Omar Blanco (Department of Economics, Universitat Jaume I, Castellón, Spain); Simone Alfarano (LEE and Department of Economics, Universitat Jaume I, Castellón, Spain)
    Abstract: Following the approach proposed by Gabaix (2011), this paper aims to verify the existence of granularity in the Spanish business cycle fluctuations. A granular firm is characterized by the fact that its idiosyncratic shocks have a significant impact on GDP growth fluctuations. Despite the fact that granular firms constitute just a marginal fraction of the total number of firms, they account for a significant part of business cycle fluctuations. Our analysis shows that half of the GDP growth fluctuations of the Spanish economy can be linked to the idiosyncratic shocks of the largest 100 Spanish firms. Our work contributes to strengthening the empirical relevance of the granular hypothesis. The results show that the Spanish economy, as happens in the US economy, may be represented by a large number of small and medium enterprises whose individual evolution has no impact at the aggregate level, and a small number of large firms whose fluctuations contribute significantly to the variability of the Spanish business cycle.
    Keywords: granularity, granular economy, idiosyncratic shocks, aggregate fluctuations, power law behaviour
    JEL: E32 C16
    Date: 2016
  6. By: Maurizio Cisi (Department of Management, University of Torino, Italy); Francesco Devicienti (Department of Economics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino, Italy); Alessandro Manello (Department of Economics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino, Italy); Davide Vannoni (Department of Economics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino, Italy)
    Abstract: Using a large sample of Italian small and medium enterprises (SMEs), we investigate the effect of membership in a formal business network (“contratto di rete†) on firms’ economic performance. We find that network participation has a positive effect on value added and exports, but not on profitability. The advantages of networking are stronger in the case of: smaller SMEs, firms operating in traditional and in more turbulent markets, firms located in less developed areas and firms not already exploiting the weaker ties offered by industrial districts. Network characteristics, such as size, geographical dispersion and diversity, are also found to influence performance.
    Keywords: Formal Business Network, Small and Medium Firms, Economic Performance
    JEL: D22 L24 L25 M21
    Date: 2016–11
  7. By: Bernhard Dachs (Austrian Institute of Technology, Vienna); Martin Hud (ZEW Centre for European Economic Research, Mannheim); Christian Köhler (ZEW Centre for European Economic Research, Mannheim); Bettina Peters (ZEW, Mannheim, and CREA, University of Luxembourg)
    Abstract: A growing literature investigates how firms’ innovation input reacts to changes in the business cycle. However, so far there is no evidence whether there is cyclicality in the effects of innovation on firm performance as well. In this paper, we investigate the employment effects of innovations over the business cycle. Our analysis employs a large data set of manufacturing firms from 26 European countries over the period from 1998 to 2010. Using the structural model of Harrison et al. (2014), our empirical analysis reveals four important findings: First, the net effect of product innovation on employment growth is pro-cyclical. It turns out to be positive in all business cycle phases except for the recession. Second, product innovators are more resilient to recessions than non-product innovators. Even during recessions they are able to substitute demand losses from old products by demand gains of new products to a substantial degree. As a result their net employment losses are significantly lower in recessions than those of non-product innovators. Third, we only find resilience for SMEs but not for large firms. Fourth, process and organizational innovations displace labor primarily during upturn and downturn periods.
    Keywords: Innovation, employment, business cycle, resilience, Europe.
    JEL: O33 J23 C26 D2
    Date: 2016
  8. By: Alberto Galasso; Mark Schankerman
    Abstract: Cumulative innovation is central to economic growth. Do patent rights facilitate or impede follow-on innovation? We study the causal effect of removing patent rights by court invalidation on subsequent research related to the focal patent, as measured by later citations. We exploit random allocation of judges at the U.S. Court of Appeals for the Federal Circuit to control for endogeneity of patent invalidation. Patent invalidation leads to a 50 percent increase in citations to the focal patent, on average, but the impact is heterogeneous and depends on characteristics of the bargaining environment. Patent rights block downstream innovation in computers, electronics and medical instruments, but not in drugs, chemicals or mechanical technologies. Moreover, the effect is entirely driven by invalidation of patents owned by large patentees that triggers more follow-on innovation by small firms.
    JEL: J1
    Date: 2015
  9. By: Catherine Refait-Alexandre (UBFC - Université Bourgogne Franche-Comté, CRESE - Centre de REcherches sur les Stratégies Economiques - UFC - UFC - Université de Franche-Comté); Stéphanie Serve (CSO - Centre de sociologie des organisations - Sciences Po - CNRS - Centre National de la Recherche Scientifique, Université de Cergy Pontoise)
    Abstract: This article focuses on the use of multiple banking relationships by SMEs, a key issue given their strong dependence on bank financing in a context of increasing financial constraints and higher risk of credit rationing since the crisis. We investigate whether the use of multiple banking relationships is explained by firms’ characteristics or by the quality of the banking relationship. We exploit the results of an original survey conducted on a sample of French SMEs in December 2012. According to the traditional theoretical framework of multiple banking, we find that older, bigger, and betterperforming firms are more likely to access multiple banking relationships. We further find that innovative firms are more likely to engage in multiple banking relationships. We also highlight the explanatory power of an alternative model based on the quality of banking relationship: when the manager trusts its main bank, or when he is closer to his loan officer, the firm will be less likely to engage in multiple banking relationships.
    Keywords: multiple banking relationships, trust, credit rationing, financial crisis
    Date: 2016–01–01
  10. By: Can Huang (School of Management, Zhejiang University, Hangzhou); Xiao Jin (School of Management, Zhejiang University, Hangzhou); Lanhua Li (School of Management, Zhejiang University, Hangzhou)
    Abstract: RIO R&I International Country Reports analyse and assess the research and innovation system, including the main challenges, framework conditions, regional R&I systems, and international co-operation, including with DG JRC.
    Keywords: R&I system, R&I policy, Innovation Union, Regional R&I, International, China
    Date: 2016–10
  11. By: Dar-Brodeur, Afshan; Baldwin, John R.; Yan, Beiling
    Abstract: This paper asks whether research and development (R&D) drives the level of competitiveness required to successfully enter export markets and whether, in turn, participation in export markets increases R&D expenditures. Canadian non-exporters that subsequently entered export markets in the first decade of the 2000s are found to be not only larger and more productive, as has been reported for previous decades, but also more likely to have invested in R&D. Both extramural R&D expenditures (purchased from domestic and foreign suppliers) and intramural R&D expenditures (performed in-house) increase the ability of firms to penetrate export markets. Exporting also has a significant impact on subsequent R&D expenditures; exporters are more likely to start investing in R&D. Firms that began exporting increased the intensity of extramural R&D expenditures in the year in which exporting occurred.
    Keywords: Business performance and ownership, Manufacturing, Research and development, Science and technology
    Date: 2016–11–28
  12. By: KRISHNA Venni Venkata
    Abstract: RIO R&I International Country Reports analyse and assess the research and innovation system, including the main challenges, framework conditions, regional R&I systems, and international co-operation, including with DG JRC.
    Keywords: R&I system, R&I policy, Innovation Union, Regional R&I, International, India
    Date: 2016–11
  13. By: Cristina Mitaritonna; Gianluca Orefice; Giovanni Peri
    Abstract: In this paper we analyze the impact of an increase in the local supply of immigrants on firms’ outcomes, allowing for heterogeneous effects across firms according to their initial productivity. Using micro-level data on French manufacturing firms spanning the period 1995-2005, we show that a supply-driven increase in the share of foreign-born workers in a French department (a small geographic area) increased the total factor productivity of firms in that department. Immigrants were prevalently highly educated and this effect is consistent with a positive complementarity and spillover effects from their skills. We also find this effect to be significantly stronger for firms with low initial productivity and small size. The positive productivity effect of immigrants was also associated with faster growth of capital, larger exports and higher wages for natives. Highly skilled natives were pushed towards firms that did not hire too many immigrants spreading positive productivity effects to those firms too. Because of stronger effects on smaller and initially less productive firms, the aggregate effects of immigrants at the department level on average productivity and employment was small.
    JEL: E25 F22 J15 J61
    Date: 2016–11
  14. By: David Carey (OCDE); John Lester (Université de Calgary); Isabelle Luong (OCDE)
    Abstract: 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 ( ique-canada.htm)
    Keywords: capital risque, PME, productivité, sortie, start-ups
    JEL: D52 H25 L26 O51
    Date: 2016–07–27
  15. By: Bernhard Dachs (AIT Austrian Institute of Technology)
    Abstract: During the last 20 years Austria developed from a country with below-average R&D intensity into one of the leading European countries in research and development. The article shows that affiliates of foreign multinational enterprises played a pivotal role in Austria’s catching up. Moreover, my contribution discusses various positive and negative effects from the presence of foreign-owned firms for the Austrian innovation system.
    Keywords: Innovation, Technological Innovation, R&D, Research and Development, FDI, Foreign Investment
    JEL: O32 G11 F21 F23
    Date: 2016–10
  16. By: Marcus Dejardin (CERPE - Centre de Recherches en Economie Régionale et Politique Economique - Facultés Universitaires Notre Dame de la Paix (FUNDP) - Namur, CIRTES - Centre interdisciplinaire de recherche Travail Etat et Société - UCL - Université Catholique de Louvain); Sylvain Luc (Université Laval, Département des Relations industrielles - Université Laval)
    Abstract: Composé du mot entrepreneurial auquel est ajouté le suffixe -isme, l’entrepreneurialisme serait l'entrepreneuriat comme idéologie. Nous nous concentrons sur ce sens donné à l’entrepreneurialisme.
    Keywords: Entrepreneurship,Entrepreneurialism,Entrepreneuriat,Entrepreneurialisme,Entrepreneur
    Date: 2016

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