nep-sbm New Economics Papers
on Small Business Management
Issue of 2017‒01‒22
fourteen papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Les business angels, révélateurs, plus que moteurs, de l’engagement des entreprises dans l’innovation By Nadine Levratto; Maarouf Ramadan; Luc Tessier
  2. Disentangling Innovation in Small Food Firms: The role of External Knowledge, Support, and Collaboration By Wixe, Sofia; Nilsson, Pia; Naldi, Lucia; Westlund, Hans
  3. Incentivising Innovation and Adoption of ICT: ICT Innovation Voucher Programmes By Paola Valbonesi; Federico Biagi
  4. Setting up a Technology Commercialization Office at a Non-Entrepreneurial University: An Insider's Look at Practices and Culture By Katerina Sideri; Andreas Panagopoulos
  5. Firm dynamics and business cycle: What doesn't kill you makes you stronger? By Roger M. Gomis; Sameer Khatiwada
  6. Tournament in workplaces and transition to entrepreneurship By Virgilio Failla; Francesca Melillo; Toke Reichstein
  7. Adjudication: Does family ownership structure affect investment-cash flow sensitivity? Evidence from Italian SMEs By Valentina Peruzzi
  8. On the Determinants of Cloud Computing Adoption By Ohnemus, Jörg; Niebel, Thomas
  9. The economic performance of innovations in a collaborative setting: the case of KIBS firms By Anna Cabigiosu; Diego Campagnolo
  10. Immigrant entrepreneurship By Pekkala Kerr, Sari; Kerr, William R.
  11. Type of entry choice and firm initial size By Francesca Melillo; Timothy B. Folta; Frédéric Delmar
  12. Finance and Innovative Investment in Environmental Technology: The Case of Sweden By Lööf, Hans; Martinsson, Gustav; Mohammadi, Ali
  13. RIO Country Report 2015: Turkey By Erkan Erdil; Teoman Pamukçu; Gülsah Gülen Çiftçi
  14. RIO Country Report 2015: Brazil By Laura Maragna

  1. By: Nadine Levratto; Maarouf Ramadan; Luc Tessier
    Abstract: Whereas the funding of the first years of the life cycle of companies is presented as a key condition for their survival and growth, the attention given to business angels (BA noted below) by academics have been growing steadily during the past years. This article proposes to discuss the extent, which they contribute to innovation from a unique database of 432 French companies financed by one of the members of the network France Angels (French Federation of Business Angels networks) during the period 2004-2011. We compare it to a test group constituted of 2,160 similar companies. We specify an econometric model specifying the determinants of innovation approximated by the share of non-financial intangible assets in total assets explained by the presence or absence of a BA and control variables. The use of the estimation method using a Fixed Effects Vector Decomposition method shows the positive effect of BA on innovation. Elements of explanation of these results are provided from a qualitative survey of BA members of France Angels and from a subset of companies extracted from the population of 432 ones backed by BA. They illustrate how the specific behavior of BA at the time of selection of companies and their attitude during the accompaniment period explains these different trajectories.
    Keywords: Business Angels, Innovation, Entrepreneurship, Start-up, France.
    JEL: G11 G32 M13
    Date: 2016
  2. By: Wixe, Sofia (Centre for Entrepreneurship and Spatial Economics (CEnSE), Jönköping International Business School, Sweden); Nilsson, Pia (Centre for Entrepreneurship and Spatial Economics (CEnSE), Jönköping International Business School, Swede); Naldi, Lucia (Centre for Family Enterprise and Ownership (CeFEO ), Jönköping International Business School, Sweden); Westlund, Hans (Centre for Entrepreneurship and Spatial Economics (CEnSE), Jönköping International Business School, & KTH Royal Institute of Technology, Sweden)
    Abstract: This paper applies unique survey data on innovation and external interaction of small food producers in Sweden. The overall purpose is to test if firms that are more engaged in external interaction are more innovative. To disentangle innovativeness beyond new goods and services, innovation is measured as new processes, new markets, new suppliers, new ways of organization, and new distributors. Findings point to a positive relationship between firm innovation and external interaction, both in terms of collaboration, external knowledge and support from regional actors. In particular, collaboration regarding transports and sales is shown to enhance most types of innovation. Product and process innovation benefit from external knowledge from extra-regional firms as well as regional support from the largest firm. Findings suggest that current innovation policies can improve their efficiency by increasing their flexibility to enable tailor-made innovation policies at the local level.
    Keywords: Innovation; collaboration; food industry; rural regions
    JEL: L25 L66 O31 R12
    Date: 2017–01–16
  3. By: Paola Valbonesi (Universita'di Padova); Federico Biagi (European Commission - JRC)
    Abstract: This report discusses analyses ICT Innovation vouchers and provides insights on how such instruments can be used to support small- and medium-sized enterprises (SMEs) in developing and adopting information communication technology (ICT) and digital innovation in order to enhance their competitiveness and growth. This report suggests that the effectiveness of ICT innovation voucher programmes are affected by the granting government’s choices, which should be grounded on a preliminary analysis of SMEs’ needs in the region/area considered. In particular, referring to the SMEs’ ICT-based innovation and digital needs, it would be useful to map the actual ‘level’ of ICT adoption and diffusion among local firms (SMEs in particular) in order to gain a better understanding of the ICT services and applications that could improve firms’ competitiveness and growth, especially by stimulating product, process, organisational and marketing innovation. By defining the firms’ needs and the goals of the programme, this preliminary analysis can also highlight the specific competences required from actors – the “Knowledge Service Providers†(KSPs) - supplying and developing the ICT applications supported by the ICT innovation voucher programme. The report also discusses vouchers implementation, and it examines best practices. Indicators for additionality (i.e. input, output and behavioural) and their information needs are also illustrated. Moreover, in the aim to evaluate the vouchers’ impact, we also discuss how to perform a counterfactual analysis for an ICT innovation voucher programme.
    Keywords: Innovation vouchers, ICT
    JEL: O31 O38
    Date: 2016–12
  4. By: Katerina Sideri; Andreas Panagopoulos (Department of Economics, University of Crete, Greece)
    Abstract: The introduction of the entrepreneurial university and the accompanying drive for science to acquire commercial relevance has created tensions (Slaughter and Leslie, 1997; Slaughter and Rhoades, 2000; Ferne, 1995; Bennich-Bjorkman, 1997). One reason is that faculty scientists are nowadays expected to think as entrepreneurs (Lockett and Wright, 2005), and many feel uneasy with both their participation in the commercialization process and the role of University Technology Commercialization Offices (TCO) (Martinelli et al., 2008, Louis et al., 1989). Considering that the main resource for the creation of entrepreneurial universities is human capital (Guerrero and Urbano, 2012), the way faculty scientists view their role and their respective goodwill toward entrepreneurship and the TCO, must be considered when building an entrepreneurial environment (Krueger et al., 2000). Looking into faculty's perceptions is important because they encompass attitudes and values shaping informal rules of interaction in organisations (North, 1990; Vanaelst et al., 2006). The few studies analysing entrepreneurship among faculty scientists indicate that scientists have raised concerns about the role of markets in influencing academic freedom (Baldini, 2008; Davis et al., 2011), especially in terms of autonomy in self-selecting a research agenda and the respective method of dissemination (Jacobsen et al., 2001, Davis et al., 2011). Their concerns relate to the ways the pressure to patent can skew research priorities at the expense of fundamental research, and shift the attention of faculty away from activities best suited to their skills (Nelson, 2001), forcing universities to behave more like firms. Others fear that university patenting may restrict communication with colleagues (Blumenthal et al., 1996; Martinelli, et al., 2008), increase secrecy (Blumenthal et al., 1986), the withholding of data (Campbell et al., 2000), and inevitably limit the dissemination of knowledge (Calderini and Franzoni, 2004; Lee, 2000). This article builds on these insights and offers qualitative evidence about a related category of reasons for the hostile attitude towards commercialization of academic research: lack of a common mindset between TCO's and research faculty. It frequently escapes attention that the prerequisite for arranging a commercial deal is the existence of shared understandings and orientation towards common goals between the TCO, faculty and industry, so that a TCO assesses potential opportunities and sets up well defined legal relationships between the university and a commercial firm (Kaghan and Lounsbury, 2006). These shared understandings play an important role since faculty scientists are effectively gate keepers that control the informal flow of knowledge that is indispensable to the translation of academic research to products with commercial value (Agrawal and Henderson, 2002; Agrawal, 2006; Thursby et al., 2001; Thursby and Thursby, 2002). It follows that faculty's views of the merits of commercialisation and their role in the process can hinder or even sabotage technology transfer. Dispersing myths and addressing suspicion and deep misunderstandings held by communities of practice, such as the community of faculty researchers, is of paramount importance in order to develop a sense of comfort and build trust among faculty and the TCO.
    Keywords: technology, non-profit, university, patent
    JEL: K20 I20 O34
    Date: 2016–09–24
  5. By: Roger M. Gomis (Universitat Pompeu Fabra); Sameer Khatiwada (IHEID, Graduate Institute of International and Development Studies, Geneva and ILO Regional Office Bangkok)
    Abstract: This paper analyses the impact of recessions and booms on firm performance. We look at 70,000 firms in over 100 countries between 1986 and 2014 and document the trends in firm entry over the business cycle. Our paper confirms some standard facts about firm dynamics: employment growth is decreasing with size and age; entry rate is pro-cyclical while the exit rate is countercyclical. For example, in case of advanced economies, 97 per cent of employment creation is by firms between the ages of 0 and 5 years, while for developing and emerging economies, it is 86 per cent of all employment. Our main results are: first, we do see selection effects of recessions, particularly when we look at employment, sales and capital. Specifically, when a firm enters the market during good times, they tend to have lower employment and capital than firms that enter the market during bad times. Second, when we look at total factor productivity (TFP), we don’t see a clear “cleansing effect” of recessions – more productive firms entering the market while less productive leaving. Third, the effects of entering during a boom or a recession tend to persist for a long time, over 15 years. Fourth, we find notable differences between income groups – while recessions tend to create stronger firms in the advanced economies, booms tend to create stronger ones in case of the emerging economies. Lastly, the effects of recessions on firms tend to vary by sector.
    Keywords: business cycles, entry and exit, firm performance, total factor productivity
    JEL: D22 E32 L25 O4
    Date: 2017–01
  6. By: Virgilio Failla; Francesca Melillo; Toke Reichstein
    Abstract: This paper considers the effects of workplace competition induced by tournament-based wage structure on employees’ likelihood of becoming entrepreneurs. Using a unique matched employer–employee longitudinal dataset from Denmark, we find that high levels of tournament is associated with a decrease in the rate of entrepreneurship among small firms employees only. We interpret this finding as the effect of an interaction between firm incentive schemes and individual competitive preferences. This is consistent with the theoretical proposition that entrepreneurial individuals – who tend to sort into small firms – exhibit more willingness to engage in competitive activities. The study highlights the importance of incorporating parent firm incentives to improve our understanding of employees’ decision to become entrepreneurs. Finally, it has implications for the design of retention policies targeting entrepreneurial-minded employees.
    Keywords: Horizontal tournament, Entrepreneurship, Firm size, Workplace competition
    Date: 2017–01
  7. By: Valentina Peruzzi (Università Politecnica delle Marche)
    Abstract: The aim of this paper is to investigate whether family control, family management and family ownership concentration affect the investment-cash flow sensitivity of small- and medium-sized enterprises. By analysing a sample of Italian SMEs for the period 2004-2013, I find that family-owned businesses are significantly associated with higher investment-cash flow dependence. This relation, however, is found to be driven by two distinct factors: (i) the presence of a highly concentrated family ownership (ownership concentration channel) and (ii) the active involvement of the family in the business (family management channel).
    Keywords: family firms, investment-cash flow sensitivity, financing constraints, family CEO, ownership concentration.
    JEL: G31 G32
  8. By: Ohnemus, Jörg; Niebel, Thomas
    Abstract: Cloud computing is widely seen as a new source of innovation as well as a driving factor of productivity improvements of firms. This paper analyses the determinants of cloud computing adoption in general as well as for specific deployment (Public vs. Private) and service models (SaaS, IaaS, PaaS). Our data set contains a representative sample of 2,970 German firms and refers to the years 2014 and 2015. The econometric analysis confirms our three main hypothesis regarding firms' decision to adopt cloud computing in general. The share of workers with mobile internet access, being a start-up, as well as the regional availability of high-speed fixed-line internet access increase the likelihood of a firm for using cloud computing services.
    Keywords: Adoption of ICT,Cloud Computing,Multivariate Probit
    JEL: L10 L86 O33
    Date: 2016
  9. By: Anna Cabigiosu (Dept. of Management, Università Ca' Foscari Venice); Diego Campagnolo (Dept. of Economics and Management, University of Padova)
    Abstract: Collaborative innovation literature shows that collaborating with clients enhances the innovation performance of firms particularly as regard the development of highly new products. In this setting, are highly new products the innovation category that drives the most firmÕs performance? This is a relevant research question in the innovation literature since it warns about the risks and limits of highly new products but has not considered the firmÕs performance implications of different categories of innovations developed by collaborating with clients. In this paper we consider different categories of innovation, product and process innovations new to the industry and new to the firm respectively, and develop original hypotheses about their implications over firmÕs performance. We develop and test our hypotheses on a sample of 99 Italian KIBS firms. We focus on KIBS firms since they are used to customize their services and collaborate with clients during the development of new services. Results support the idea that highly innovative product innovations are more strongly associated with a KIBS firmÕs growth, while weakly innovative process innovations are more strongly associated with a KIBS firmÕs productivity, but only in small firms. Theoretical and managerial implications for collaborative innovations settings are drawn.
    Keywords: collaborative innovation, innovation categories, firmÕs performance, KIBS
    JEL: O32 O33
    Date: 2016–11
  10. By: Pekkala Kerr, Sari; Kerr, William R.
    Abstract: We examine immigrant entrepreneurship and the survival and growth of immigrant-founded businesses over time relative to native-founded companies. Our work quantities immigrant contributions to new firm creation in a wide variety of fields and using multiple definitions. While significant research effort has gone into understanding the economic impact of immigration into the United States, comprehensive data for quantifying immigrant entrepreneurship are difficult to assemble. We combine several restricted-access U.S. Census Bureau data sets to create a unique longitudinal data platform that covers 1992-2008 and many states. We describe differences in the types of businesses initially formed by immigrants and their medium-term growth patterns. We also consider the relationship of these outcomes to the immigrants’ age at arrival to the United States.
    JEL: F22 J15 J44 J61 L26 M13 O31 O32 O33
    Date: 2016–12–21
  11. By: Francesca Melillo; Timothy B. Folta; Frédéric Delmar
    Abstract: This paper develops and tests a model where the performance of an entrepreneur as employee explains why she/he decides to venture outside the industry of the parent firm and what are the implications of this type of entry choice on the initial size of the founded firm. Our findings (1) assist in building a more nuanced theoretical understanding of how individuals determine type of entry, and initial size; (2) have implications for how we interpret the relationship between employee performance and entrepreneurial entry process; and (3) suggest initial size as an important mechanism behind the performance advantage of spinouts.
    Date: 2017–01
  12. By: Lööf, Hans (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Martinsson, Gustav (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Mohammadi, Ali (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)
    Abstract: This report discusses how financing difficulties can affect private sector innovation investments in environmental technology applied to the Swedish setting. Innovative investments are often intangible, the outcomes are highly uncertain, and information asymmetries between entrepreneurs and outside investors are potentially severe. These factors make external finance costly and drive investment in environmental technology below its socially desirable level. Recent evidence from the literature on financing and innovation suggests that financing constraints on innovation are likely economically significant. Therefore, policies and financial developments that affect the availability of finance can have important effects on economy wide rates of environmental technology innovation.
    Keywords: Clean technology; Innovation Investments; Financial constraints; Spillovers; Sustainable growth
    JEL: O32 O33 Q55 Q56 Q58
    Date: 2017–01–16
  13. By: Erkan Erdil (Middle East Technical University); Teoman Pamukçu (Middle East Technical University); Gülsah Gülen Çiftçi (Middle East Technical University)
    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
    Date: 2016–12
  14. By: Laura Maragna (Delegation of the European Union to Brazil)
    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, Brazil
    Date: 2016–12

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