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on Small Business Management |
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Issue of 2017‒02‒05
seventeen papers chosen by João Carlos Correia Leitão Universidade da Beira Interior |
| By: | Thomadakis, Apostolos |
| Abstract: | Venture capital can be a lifeline to innovative and growth-oriented start-ups and small businesses in need of external capital. In this ECMI Research Report, the author argues that the recently proposed changes to the Regulation on European Venture Capital Funds (EuVECA) fail to address three important issues that could further boost financing: the extension of the EuVECA Regulation to third-country managers, the reduction of the €100,000 entry ticket, without further compromises on investor protection, and the harmonisation of rules on managing requirements. He proposes a number of measures that could facilitate access to financing for start-ups and SMEs. |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:eps:ecmiwp:12022&r=sbm |
| By: | Isabel Busom (Departament d'Economia Aplicada, Universitat Autonoma de Barcelona); Jorge-Andrés Vélez-Ospina (Departament d'Empresa, Universitat Autonoma de Barcelona) |
| Abstract: | We investigate the association between perceived barriers to innovation and the allocation of public support for innovation in manufacturing and service industries in Colombia, as well as the potential heterogeneity of returns to innovation across the firm-level productivity distribution. We extend the CDM recursive system by including an equation for the allocation of direct support and using quantile regression methods to estimate the productivity equation. We find some differences across manufacturing and service industries. Financing constraints are correlated with obtaining public support in manufacturing and in some services, but in knowledge intensive services (KIS) barriers associated with regulations are more significant. The introduction of innovations increases mostly the productivity of firms below the median of the productivity distribution, especially in services. Increasing human capital would boost productivity of firms in all industries, providing support to the hypothesis that human capital is indeed a bottleneck for productivity growth across the board in Colombia. We conclude that addressing factors that hinder innovation by low productivity firms in all service industries could significantly contribute to increasing productivity and reduce its dispersion. |
| JEL: | O31 O32 O33 O40 L8 C30 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:uab:wprdea:wpdea1701&r=sbm |
| By: | Colombelli, Alessandra; D'Ambrosio, Anna; Meliciani, Valentina; Francesco Quatraro, (University of Turin) |
| Abstract: | We investigate the determinants of the sectoral variety of newborn firms in different regional contexts. Based on the knowledge spillovers theory of entrepreneurship, we study the role of different dimension of knowledge variety, i.e. technological diversity and cultural diversity. This latter is measured with respect to the nationality of both foreign residents and foreign entrepreneurs. We use a unique dataset stemming from the combination of different sources of information. The results confirm that all the dimensions of knowledge variety are relevant in shaping the sectoral variety of newborn firms and point to the differential contribution of immigrant entrepreneurs in fostering the sectoral diversification in unrelated activities. |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:uto:labeco:201606&r=sbm |
| By: | Elert, Niklas (Research Institute of Industrial Economics (IFN)); Henrekson, Magnus (Research Institute of Industrial Economics (IFN)); Stenkula, Mikael (Research Institute of Industrial Economics (IFN)) |
| Abstract: | It is imperative that the economies of the European Union become more entrepreneurial to promote innovation and economic growth. To achieve these goals, we propose a reform strategy with respect to (i) the rule of law and the protection of property rights; (ii) the tax system; (iii) regulations governing savings, capital and finance; (iv) the organization of labor markets and social insurance systems; (v) regulations governing goods and service markets; (vi) regulations governing bankruptcy and insolvency; (vii) R&D, commercialization and knowledge spillovers; (viii) human capital investments; and (ix) informal institutions. Overall, the proposed institutional changes move in a liberalizing direction; however, one-size-fits-all policy reforms aimed at freer markets will not necessarily be successful. Instead, a successful reform strategy must consider country differences that affect the viability of reform without abandoning the long-term goal of institutional liberalization to promote entrepreneurship, innovation and growth |
| Keywords: | Entrepreneurship; European Union; Innovation; Institutions; Policy reform; Regulation; Self-employment |
| JEL: | L26 L50 M13 O31 P14 |
| Date: | 2017–01–26 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:1150&r=sbm |
| By: | Nguyen, Huu Chi (University of Paris 13); Nordman, Christophe Jalil (IRD, DIAL, Paris-Dauphine) |
| Abstract: | Using a unique panel of household businesses for Vietnam, this paper sheds light on the links between households' and entrepreneurs' social networks and business performance. We address two related questions. One first question asks if we can find evidence of a differentiated effect of employment of members of the family versus hired workers on the business performance. A second question tackles the respective effects of various dimensions of social networks on the business technical efficiency. The hypothesis is that, beyond the channel of labour productivity, entrepreneurs that are confronted with an unfavourable social environment may produce less efficiently and realize a lower output than what could be possible with the same amount of resources. We find evidence of a marginal productivity differential between family and hired labour and highlight results consistent with the presence of adverse social network effects faced by households running a business, in particular ethnic minorities. We stress the importance of professional networks for successful entrepreneurship. |
| Keywords: | family labour, kinship and ethnic ties, sharing norms, social network capital, Informality, household business, panel, Vietnam |
| JEL: | D13 D61 O12 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10482&r=sbm |
| By: | Rong, Zhao; Wu, Xiaokai; Boeing, Philipp |
| Abstract: | Monitoring by institutional investors can act as an important mechanism to promote firm innovation. By investigating Chinese listed firms' patenting between 2002 and 2011, we find that the presence of institutional investors enhances firm innovation. Consistent with the monitoring view, we further find that (1) the effect of institutional investors on firm patenting mainly comes from mutual funds; (2) the effect is more pronounced when market competition is more intense; (3) the effect exists among private- and minor state-owned enterprises, but not among major state-owned enterprises. The above findings are robust when innovation quality is examined. |
| Keywords: | Institutional investor,Firm innovation,Patenting,Mutual funds,China |
| JEL: | G20 G32 O31 O32 O33 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:17005&r=sbm |
| By: | Bergner, Sören Martin; Bräutigam, Rainer; Evers, Maria Theresia; Spengel, Christoph |
| Abstract: | This paper discusses the impact and the appropriateness of tax incentives for small and medium-sized enterprises (SMEs) in the European Union. First, we provide a survey of implemented tax incentives specifically targeted at SMEs in the 28 EU Member States. Building hereon, we measure the impact of these regimes on the effective tax burdens of targeted companies. We find that SME tax incentives are a commonly used measure among European policy makers. The vast majority of regimes, however, only marginally reduce the tax liability of SMEs. If major reliefs are available, they mostly stem from special tax rates whereas tax credits and special allowance play a minor role. In the second main part of the analysis, we examine the arguments potentially justifying the usage of SME tax incentives. As a main result, small firms per se do not create more jobs and innovations nor do they face insurmountable financing constraints. The existence of market failures commonly associated with SMEs - and possibly warranting the use of SME tax incentives - can therefore not be confirmed. Instead, disproportionate tax compliance costs for small entities constitute the most compelling argument for a special tax treatment. These compliance costs can most appropriately be addressed by administrative reliefs. Special tax rates, tax credits and allowances, in contrast, are not only inefficient but also ineffective in this regard. Instead of improving the neutrality of the overall tax system, the latter are likely to add further distortions and unnecessary complexity. Altogether, the focus of policy-makers should thus shift from providing discriminatory incentives to the design of a generally neutral and simple tax system, which would benefit small as well as large enterprises. |
| Keywords: | SME,Tax Policy,European Union |
| JEL: | H24 H25 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:17006&r=sbm |
| By: | Llanto, Gilberto M.; del Prado, Fatima Lourdes E. |
| Abstract: | Aside from physical capital and human resource, private firms are also advised to invest in innovations to be more productive and profitable. However, it is important to ensure such investment is well-spent. This study found that product and process innovations do lead to increase in sales and profits, and improve labor productivity. It also showed that firm size, age, and foreign equity are important factors leading firms to innovate. |
| Keywords: | Philippines, innovation, small and medium enterprises, process innovation, firm performance, product innovation, SMEs |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:phd:rpseri:rps_2016-02&r=sbm |
| By: | OGAWA Hikaru; TSUBUKU Masafumi; YAMORI Nobuyoshi |
| Abstract: | We investigated how regional small and medium-sized enterprises (SMEs) and regional financial institutions evaluate the economic policies of local governments. As the local governments are expected to play a "leading role" in terms of regional revitalization, we need to analyze how to achieve effective collaboration with private financial institutions, from the point of view of local governments. Both analyses from the regional financial institutions and the regional governments are necessary to capture the overall picture of the regional revitalization policy. Therefore, in February 2016, we conducted a survey on the consciousness of local public officers in charge of industrial and commerce development policy and obtained 500 responses. This paper reports the results of the survey. According to this survey, "Chamber of Commerce and Industry," "Designated Financial Institutions," and "Other Financial Institutions" are ranked as the three most important partners for regional revitalization. It is clear that many regional officers attach importance to regional financial institutions. Moreover, they responded that the most critical barrier to collaboration for financial institutions and local governments is that "knowledge on finance is scarce on the part of local government officials." Therefore, the lack of financial knowledge of local public officers should be addressed. Also, the response rate in smaller municipalities stating that "I have never worked together with financial institutions" shows a remarkably large value compared with larger municipalities. This suggests that the motivation of local revitalization and the awareness of the importance of the collaboration between financial institutions and local governments are different between small and large local governments. In order to realize regional revitalization through collaboration between local governments and financial institutions, it is essential for national and prefectural governments to support local governments accordingly based on their circumstances. |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:eti:rdpsjp:16064&r=sbm |
| By: | FUJIKAWA Naoto; MOTOHASHI Kazuyuki |
| Abstract: | Firms' decisions regarding external research and development (R&D) sourcing are influenced by their absorptive capacities, as developed through their internal R&D activities. However, it remains to be determined how the effects of absorptive capacity on firms'external sourcing strategies vary among the R&D stages, namely, upstream "research" or downstream "development" in the entire R&D process. Based on a detailed pharmaceutical R&D data set, which allows us to separately identify "research" and "development" activities, we have empirically investigated how the R&D process stage affects the relationship between internal R&D and external technology sourcing. Additionally, we separate efforts from capabilities for the concept of "absorptive capacity" to observe more precisely the aforementioned relationship between internal capacity and external technology sourcing. A complementary internal-external relationship is found more frequently for vertical looks ("R" and "D") and for internal "efforts," while some substitutional relationships exist between the research's internal "capabilities" and external sourcing (horizontal looks). |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:16102&r=sbm |
| By: | Laura Barbieri (Dipartimento di Scienze Economiche e Sociali, Università Cattolica); Mariacristina Piva (Dipartimento di Scienze Economiche e Sociali, Università Cattolica); Marco Vivarelli (Istituto di Politica Economica, Università Cattolica) |
| Abstract: | This paper explores the employment impact of innovation activity, taking into account both R&D expenditures and embodied technological change (ETC). We use a novel panel dataset covering 265 innovative Italian firms over the period 1998-2010. The main outcome from the proposed fixed effect estimations is a labor-friendly nature of total innovation expenditures; however, this positive effect is barely significant when the sole in-house R&D expenditures are considered and fades away when ETC is included as a proxy for innovation activities. Moreover, the positive employment impacts of innovation activities and R&D expenditures are totally due to firms operating in high-tech industries and large companies, while no job-creation due to technical change is detectable in traditional sectors and SMEs. |
| Keywords: | Technology, innovation, R&D, embodied technological change, employment |
| JEL: | O31 O33 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:ctc:serie2:dises1620&r=sbm |
| By: | Xu, Yilan |
| Abstract: | Innovation is one of the most important factors in production at enterprise level. Substantial studies have been deployed in this topic, but rare researches have been focused on the relation between innovation and the enterprise characteristics, especially the case in China. In this paper, the author analyzes the China Enterprise Survey 2012 established by the World Bank through logistic regressions, and concludes some interesting findings, such as that the R&D input in China showing negative relationship with the firm size, enterprises without internationally-recognized quality certifications or technologies licensed from a foreign-owned company are showing with more R&D input, etc. The results uncovered very practical implications to both enterprises in China and the government, which could guide them to make better decisions in terms of enterprises development and economy policies. |
| Keywords: | Innovation, China, Survey Data, Enterprises Characteristics, Production Economics, Research and Development/Tech Change/Emerging Technologies, |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:ags:saea17:252847&r=sbm |
| By: | Gaétan de Rassenfosse; Adam B. Jaffe |
| Abstract: | This paper presents estimates of the R&D depreciation rate using survey data on Australian inventions. Its novelty is twofold. First, it relies on direct observation of the revenue streams of inventions. This is in sharp contrast with previous studies, which all rely on models based on indirect observation and require strong identifying assumptions. Second, it presents estimates of the effect of patent protection on the depreciation rate. Results suggest that the yearly depreciation rate varies in a range of 1 to 5 per cent, although the depreciation rate is stronger in the first two years of inventions averaging 8–9 per cent. Patent protection slows down the erosion of profits by about 1–2 percentage points. |
| JEL: | M41 O32 O33 O34 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23072&r=sbm |
| By: | MIYAJIMA Hideaki; OGAWA Ryo; USHIJIMA Tatsuo |
| Abstract: | This paper investigates the size and performance effect of corporate headquarters for a large sample of Japanese firms. We find that the size of headquarters is systematically associated with firm attributes such as scale, industrial scope, and research and development (R&D) and advertising intensities. We also observe that better governed firms have larger headquarters in contrast to the view that corporate headquarters are apt to be overstaffed due to agency problems. Our analysis of firm value suggests that enlarging headquarters involves a cost that is particularly great for diversified firms. Specifically, as headquarters grow in size, the efficiency of inter-business fund flow declines. This novel finding suggests that downsizing headquarters can improve firm performance by increasing allocative efficiency. |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:17004&r=sbm |
| By: | Serafica, Ramonette B. |
| Abstract: | Competitive services are necessary for attaining inclusive and sustainable growth. Although the Philippines has notably succeeded in developing several globally competitive services, inefficiencies that affect various economic sectors and the economy as a whole still persist. Thus, it is important to sustain the progress achieved and to address the poor performance especially of the services essential to the growth of the agriculture and manufacturing sectors. This paper presents elements of a comprehensive strategy for efficient competitive services using Porter’s diamond of national advantage, which emphasizes the proper role of government in creating an environment for continuous upgrading and innovation. |
| Keywords: | Philippines, services, competitiveness, competitive services, services sector, labor productivity, comparative advantage, Porter’s diamond of national advantage |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:phd:pjdevt:pjd_2014-2015_vol__41-42_nos__1-2e&r=sbm |
| By: | Marcus Biermann |
| Keywords: | Firm size distribution; firm heterogeneity; technology adoption; German Empire |
| JEL: | F14 F15 |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:69018&r=sbm |
| By: | Juan de Lucio (Universidad Nebrija. Calle de Santa Cruz de Marcenado, 27, 28015, Madrid (Spain).); Raúl Mínguez (Universidad Nebrija. Calle de Santa Cruz de Marcenado, 27, 28015, Madrid (Spain).); Asier Minondo (Deusto Business School, University of Deusto, Camino de Mundaiz 50, 20012 Donostia - San Sebastián (Spain). Research aliate of Instituto Complutense de Estudios Internacionales.); Francisco Requena (Department of Economic Structure, University of Valencia, Avda. dels Tarongers s/n, 46022 Valencia (Spain).) |
| Abstract: | Using data for the universe of exporters, we show that few firms dominate exports in Spain. For example, in 2015 half of Spanish exports were accounted by the top 200 firms. This concentration has not changed substantially over the period 1997-2015. The dominance of few firms, a phenomenon denoted as granularity, is larger in exports than in sales or employment. Granularity also defines the specialization of Spanish exports. If top exporters disappeared, Spain would lose revealed comparative advantage in industries accounting for 26% of Spanish exports. Finally, granularity explains around one-third of the fluctuation of Spanish exports. |
| Keywords: | exports, granularity, superstars, Spain, firm-level data |
| JEL: | F1 F10 F23 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:eec:wpaper:1701&r=sbm |