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on Small Business Management |
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Issue of 2017‒02‒19
fifteen papers chosen by João Carlos Correia Leitão Universidade da Beira Interior |
| By: | Henry Sauermann |
| Abstract: | We examine whether startups attract employees with different pecuniary and non-pecuniary motives than small or large established firms. We then explore whether such differences in employee motives lead to differences in innovative performance across firm types. Using data on over 10,000 U.S. R&D employees, we find that startup employees place lower importance on job security and salary but greater importance on independence and responsibility. Startup employees have higher patent output than employees in small and large established firms, and this difference is partly mediated by employee motives – especially startup employees’ greater willingness to bear risk. We discuss implications for research as well as for managers and policy makers concerned with the supply of human capital to entrepreneurship and innovation. |
| JEL: | J24 O31 O32 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23099&r=sbm |
| By: | Kou, Kou; Kroll, Henning |
| Abstract: | China has experienced a surge in innovation output in which state-owned enterprises (SOE) play an essential role. Using panel data of Chinese listed firms, this paper examines the influence of the state ownership on innovation output at the firm level. Controlling for size, we analyse the effects of central and local government control on the number of firms' patent applications in different time periods. Doing so, standard assumptions on state ownership's inhibiting character are confirmed. However, we then qualify these finding by running separate models for different regions and sectors find that the impact of state-control on innovation performance depends on a number of conditions. More precisely, state control of firms has a negative impact on innovation output in particular in China's Northeast region and in mid-tech sectors whereas under other circumstances it does either not matter or can even exert a positive influence. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fisidp:55&r=sbm |
| By: | Ugur, Mehmet; Trushin, Eshref; Solomon, Edna |
| Abstract: | Existing evidence on the relationship between R&D intensity and firm survival is varied and often conflicting. We argue that this may be due to overlooking R&D scale effects and complementarity between R&D intensity and market concentration. Drawing on Schumpeterian models of competition and innovation, we address these issues by developing a formal model of firm survival and using a panel dataset of 37,930 of R&D-active UK firms over 1998–2012. We report the following findings: (i) the relationship between R&D intensity and firm survival follows an inverted-U pattern that reflects diminishing scale effects; (ii) R&D intensity and market concentration are complements in that R&D-active firms have longer survival time if they are in more concentrated industries; and (iii) creative destruction as proxied by median R&D intensity in the industry and the premium on business lending have negative effects on firm survival. Other findings concerning age, size, productivity, relative growth, Pavitt technology classes and the macroeconomic environment are in line with the existing literature. The results are strongly or moderately robust to different samples, stepwise estimations, and controls for frailty and left truncation |
| Keywords: | R&D; Innovation; Firm dynamics; Survival analysis |
| Date: | 2016–05–10 |
| URL: | http://d.repec.org/n?u=RePEc:gpe:wpaper:15510&r=sbm |
| By: | Godfrey Mahofa; Asha Sundaram; Lawrence Edwards |
| Abstract: | In this paper, we analyse the relationship between crime and the entry of firms across local municipalities in South Africa. We use data on the incidence of crime, sourced from the South African Police Service, and a unique database of business registrations over the period 2003 to 2011, to show that crime reduces business entry. These results are robust to the use of rainfall shocks as an instrumental variable for crime, in order to control for potential bias arising from the fact that crime might be a consequence, rather than a cause of the entry of firms. This paper highlights the importance of strong local institutions that can lower the costs of doing business for business dynamism. Our study has implications for employment and economic growth at the regional level and hence for dealing with regional inequality. |
| Keywords: | crime, Business Activity, Regional Institutions |
| JEL: | R12 O18 L11 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:rza:wpaper:652&r=sbm |
| By: | D'Ambrosio, Anna; Montresor, Sandro; Parrilli, Mario Davide; Quatraro, Francesco (University of Turin) |
| Abstract: | This paper investigates the impact of migration on innovation networks between regions and foreign countries. We posit that immigrants (emigrants) act as a transnational knowledge bridge between the host (home) regions and their origin (destination) countries, reinforcing their networking in innovation and facilitating their co-inventorship. We argue that the social capital of both the hosting and the moving communities reinforces such a bridging role, along with the already recognised effect of language commonality and migrants’ human capital. By combining patent data with national data on residents and electors abroad, we apply a gravity model to the co-inventorship between Spanish provinces (NUTS3 regions) and a number of foreign countries, in different periods of the last decade. Both immigrants and emigrants are found to affect this kind of innovation networking. The social capital of both the moving and the hosting communities actually moderate this impact in a positive way. The effect of migration is stronger for more skilled migrants and with respect to non-Spanish speaking countries, pointing to a language-bridging role of migrants. Overall, individual and community aspects combine in accounting for the impact of migration on international innovation networks. |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:uto:dipeco:201701&r=sbm |
| By: | Buchholz, Manuel; Tonzer, Lena; Berner, Julian |
| Abstract: | This paper analyzes how firm-specific uncertainty affects firms’ propensity to invest. We measure firm-specific uncertainty as firms’ absolute forecast errors derived from survey data of German manufacturing firms over 2007-11. In line with the literature, our empirical findings reveal a negative impact of firm-specific uncertainty on investment. Yet, further results show that the investment response is asymmetric depending on the size and direction of the forecast error: The investment propensity declines significantly if the realized situation is worse than expected. However, firms do not adjust their investment if the realized situation is better than expected, which suggests that the uncertainty effect counteracts the positive effect due to unexpectedly favorable business conditions. This can be one explanation behind the phenomenon of slow recovery in the aftermath of financial crises. Additional results show that the forecast error is highly concurrent with an ex-ante measure of firm-specific uncertainty that we obtain from the survey data. Furthermore, the effect of firm-specific uncertainty is enforced for firms that face a tighter financing situation. |
| JEL: | D22 D84 E32 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc16:145563&r=sbm |
| By: | Ugur, Mehmet; Trushin, Eshref; Solomon, Edna; Guidi, Francesco |
| Abstract: | The relationship between R&D investment and firm/industry productivity has been investigated widely following seminal contributions by Zvi Griliches and others from late 1970s onwards. We aim to providea systematic synthesis of the evidence, using 1253 estimates from 65 primary studies that adopt the so-called primal approach. In line with prior reviews, we report that the average elasticity and rate-of-return estimates are positive. In contrast to prior reviews, however, we report that: (i) the estimates are smaller and more heterogeneous than what has been reported before; (ii) residual heterogeneity remains high among firm-level estimates even after controlling for moderating factors; (iii) firm-level rates of return and within-industry social returns to R&D are small and do not differ significantly despite theoretical predictions of higher social returns; and (iv) the informational content of both elasticity and rate-of-return estimates needs to be interpreted cautiously. We conclude by highlighting the implications of these findings for future research and evidence-based policy. |
| Keywords: | R&D; Knowledge capital; Productivity; Meta-analysis |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:gpe:wpaper:15854&r=sbm |
| By: | Ana Pérez-Luño (Department of Business Organization and Marketing, Universidad Pablo de Olavide); Ana Bojica (Department of Business Organization and Marketing, Universidad de Granada); Shanthi Gopalakrishnan (School of Management, New Jersey Institute of Technology) |
| Abstract: | Innovation has become the cornerstone for achieving high performance and competitive advantage and is currently one of the principal topics of debate in the management literature. In order to develop innovations, ?rms need to deal with complex knowledge that comes from its different areas or departments through cross-functional integration. Using a unique sample of Spanish wineries, this paper shows that cross-functional integration moderates innovation- firm’s performance relationship, and that this moderation is conditioned by the degree of organizational knowledge complexity. These findings add to the innovation literature, showing that cross-functional integration has a direct positive relationship with firm performance, but a negative moderating effect on the relationship between product innovation and firm performance. However, this negative effect remains consistent only when the degree of knowledge complexity the organization has to manage is low and becomes positive (although not significant) when the degree of organizational knowledge complexity is high. |
| Keywords: | Knowledge strategy, structuration, depth, breadth, alliance, biotechnology |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:pab:wpboam:17.01&r=sbm |
| By: | Kyle Herkenhoff (University of Minnesota); Gordon Phillips (Dartmouth College Tuck School of Business); Ethan Cohen-Cole (Econ One Research) |
| Abstract: | How does consumer credit access impact job flows, earnings, and entrepreneurship? To answer this question, we build a new administrative dataset which links individual employment and entrepreneur tax records to TransUnion credit reports, and we exploit the discrete increase in consumer credit access following bankruptcy flag removal. After flag removal, individuals flow into self-employment. New entrants earn more, borrow significantly using unsecured and secured consumer credit, and are more likely to become an employer business. In addition, after flag removal, non-employed and self-employed individuals are more likely to find unemployment-insured ``formal'' jobs at larger firms that pay greater wages. These estimates imply that firms believe previously bankrupt workers are 3.8% less productive than non-bankrupt workers, on average. These results suggest that consumer credit access matters for each stage of entrepreneurship and that credit-checks may be limiting formal sector employment opportunities. |
| Keywords: | credit access, entrepreneurship, bankruptcy |
| JEL: | K35 E50 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:hka:wpaper:2017-011&r=sbm |
| By: | Fei Qin |
| Abstract: | The Australian Innovation System Report 2015, the sixth in the series, explores innovation through the lens of innovative entrepreneurship. Using newly obtained data, it analyses how start-ups and younger businesses often behave differently and are more likely to report increases in employment, sales, profitability, productivity, product range and product innovation. |
| JEL: | N0 J50 L81 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:69375&r=sbm |
| By: | Ugur, Mehmet; Trushin, Eshref; Solomon, Edna |
| Abstract: | This data article is related to the research article entitled “Inverted-U relationship between R&D intensity and survival: Evidence on scale and complementarity effects in UK data”. It describes the trends in R&D expenditures, employment of R&D personnel and firm entry and exit rates in the UK from 1998 to 2012. We also provide statistics on net employment creation and net R&D investments due to firm entry and exits. In addition, we compute the correlation coefficients between entry and exit rates at the two digit industry level so as to examine whether the correlations are contemporaneous or inter-temporal. Finally, we provide information about the underlying dataset to which secure access is available through UK Data Service Archive 7716 at http://dx.doi.org/10.5255/UKDA-SN-7716-1 . |
| Keywords: | R&D; Innovation; Firm dynamics; Survival analysis |
| Date: | 2016–05–21 |
| URL: | http://d.repec.org/n?u=RePEc:gpe:wpaper:15556&r=sbm |
| By: | Pellegrino, Gabriele (EPFL, Lausanne); Piva, Mariacristina (Università Cattolica del Sacro Cuore); Vivarelli, Marco (Università Cattolica del Sacro Cuore) |
| Abstract: | In this work, we test the employment impact of distinct types of innovative investments using a representative sample of Spanish manufacturing firms over the period 2002-2013. Our GMM-SYS estimates generate various results, which are partially in contrast with the extant literature. Indeed, estimations carried out on the entire sample do not provide statistically significant evidence of the expected labor-friendly nature of innovation. More in detail, neither R&D nor investment in innovative machineries and equipment (the so-called embodied technological change, ETC) turn out to have any significant employment effect. However, the job-creation impact of R&D expenditures becomes highly significant when the focus is limited to the high-tech firms. On the other hand – and interestingly – ETC exhibits its labor-saving nature when SMEs are singled out. |
| Keywords: | innovation, R&D, embodied technological change, employment, GMM-SYS |
| JEL: | O33 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10540&r=sbm |
| By: | Stimmelmayr, Michael; Koethenbuerger, Marko; Liberini, Federica |
| Abstract: | The effectiveness of European patent boxes in triggering R\&D and fostering new patentable innovations is the subject of a growing debate. These regimes are considered liable of tax-favouring already successful ideas, without imposing a nexus between the final location of the intellectual property (IP) and its related innovation. This paper brings the debate forward onto the assessment of the quantitative impact of patent box regimes on profit shifting by multinational firms. Our empirical strategy builds on a difference-in-difference model comparing the pre-tax profit of European subsidiaries affiliated to firm conglomerates that owned patents long before the introduction of IP boxes, to that of European subsidiaries affiliated to firm conglomerates with no historical record of patent ownership. We find that European subsidiaries affiliated to foreign IP owners report, after the introduction of a local patent box, on average 2.5 to 3.9 percent higher profit compared to European subsidiaries affiliated to non-IP-owning conglomerates. For countries where the patent box regime incorporates a nexus clause, i.e. grants the IP related tax benefit only to newly created IP, we find no significant difference in the profits of the two groups. |
| JEL: | H26 F23 C23 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc16:145582&r=sbm |
| By: | Donges, Alexander; Meier, Jean-Marie A.; Silva, Rui C. |
| Abstract: | This paper studies the impact of radical institutional reform on innovation. We use the timing and geography of French invasions of different regions of Germany after the French revolution of 1789 as an exogenous shock to the institutions of those regions. German regions that were invaded by the French subsequently changed their institutions in important ways, including the introduction of the civil code, the dissolution of guilds, the abolition of serfdom and the implementation of agrarian reforms. These institutional changes in turn affect innovation. Using patents per capita as our measure of innovation, we show that counties whose institutions are more inclusive as a result of the French occupation also become more innovative. Moving from a county with no occupation to a county with the longest occupation, the implied changes in institutional reforms result in an increase of patents per capita of 123%. Our findings point to institutions as a first order determinant of innovation and highlight the role of innovation as a key mechanism through which institutions may foster economic growth. |
| JEL: | N13 O31 O33 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc16:145952&r=sbm |
| By: | Isaksen, Arne; Tödtling, Franz; Trippl, Michaela |
| Abstract: | There seems to be a widespread consensus in academic and policy circles that the promotion of current economic strongholds and specialisations is no longer sufficient in order to ensure the long-term competitiveness of regions. New policy concepts such as smart specialisation emphasize the need to break with past practices and design and implement innovation strategies that boost regional structural change, i.e. policies that support regional economies to renew their industrial base by diversifying into new but related economic fields or creating entirely new sectors. This new strategic orientation for regional innovation policies has essentially been informed by evolutionary economic geography, which has offered novel insights into how regional economies transform over time and how new growth paths come into being. Applying a regional innovation system (RIS) perspective, recent work has enhanced our understanding of how such processes of regional economic change vary across different types of regions. RIS differ enormously in their capacity to develop new growth paths due to pronounced differences in endogenous potentials and varying abilities to attract and absorb exogenous sources for new path development. The policy implications following from these recent findings on the uneven geography of new path development have hardly been thoroughly discussed so far. General claims such as the need to avoid "one size fits all" strategies and develop place-based policies for regional industrial change remain vague and provide little guidance in this regard. The aim of this paper is to identify opportunities and limitations of regional innovation policies to promote new path development in different types of RIS. We distinguish between (1) organisationally thick and diversified RIS, (2) organisationally thick and specialized RIS and (3) thin RIS. Regarding path development, a distinction is drawn between the extenstion, modernization, importation, branching and creation of industrial paths, reflecting various degrees of radicalness of change in regional economies. The paper offers a conceptual analysis of conditions and influences that enable and constrain new path development in each RIS type and outlines the contours of policy strategies that are suitable for promoting new path development in those different types of RIS. Our point of departure is the well-known distinction between system-based and actor-based policy approaches. The former aims to improve the functioning of the RIS by targeting system failures, promoting local and non-local knowledge flows and adapting the organisational and institutional set-up of the RIS. Actor-based strategies, in contrast, support entrepreneurs and innovation projects by firms and other stakeholders. We argue that both strategies will have only a limited impact on regional economic change when applied alone. However, if they are combined, they are well suited to promote new path development. The paper discusses which specific combinations of system-based and actor-based policy strategies matter for different types of RIS. (authors' abstract) |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wus009:5225&r=sbm |