nep-sbm New Economics Papers
on Small Business Management
Issue of 2017‒03‒12
seventeen papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Migration, communities-on-the-move and international innovation networks: An empirical analysis of Spanish regions By D'Ambrosio, Anna; Montresor, Sandro; Parrilli, Mario Davide; Quatraro, Francesco
  2. Eco‐systems for young digital innovators By Reinhilde Veugelers
  3. Innovation in Clean Coal Technologies: Empirical Evidence from Firm-Level Patent Data By Wetzel, Heike; Kruse, Jürgen
  4. Destructive Creation at Work: How Financial Distress Spurs Entrepreneurship By Tania Babina
  5. Inter vivos transfers of ownership in family firms By Potrafke, Niklas; Hines, James R.; Riem, Marina; Schinke, Christoph
  6. Impact of Financial Crises on Dynamics of Capital Structure: Evidence from Korean Listed Companies By Tsoy, Lyubov; Heshmati, Almas
  7. Politiques favorables à l’innovation en santé By Nadia Benomar; Joanne Castonguay; Marie-Hélène Jobin; François Lespérance
  8. Going Entrepreneurial? IPOs and New Firm Creation By Tania Babina; Paige Ouimet; Rebecca Zarutskie
  9. The key factors of export intensity in Tunisia: A Logistic regression with random effect model By Kahia, Montassar
  10. R&D Expenditures and Employment: Evidence from Europe By Piva, Mariacristina; Vivarelli, Marco
  11. Is R&D Good for Employment? Microeconometric Evidence from the EU By Piva, Mariacristina; Vivarelli, Marco
  12. Jacobian spillovers in environmental technological proximity: the role of Mahalanobis index on European patents within the Triad By Aldieri, Luigi; Kotsemir, Maxim; Vinci, Concetto Paolo
  13. Innovative start-ups in Italy: their special features and the effects of the 2012 law By Paolo Finaldi Russo; Silvia Magri; Cristiana Rampazzi
  14. Following the Code: Spillovers and Knowledge Transfer By Gandal, Neil; Naftaliev, Peter; Stettner, Uriel
  15. Firm Dynamics and Occupational Choice By Koelle, Michael
  16. Environmental policy and directed technological change: evidence from the European carbon market By Raphael Calel; Antoine Dechezlepretre
  17. Policy for system innovation - the case of Strategic Innovation Programs in Sweden By Coenen, Lars; Grillitsch, Markus; Hansen, Teis; Miörner, Johan; Moodysson, Jerker

  1. 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
  2. By: Reinhilde Veugelers
    Abstract: This contribution takes a closer look at innovation in ICT sectors and the failing ability of young innovative firms in Europe to grow into leading world innovators in these sectors. The analysis suggests that Europe might be missing strong digital regional clusters with a symbiotic relationship between young ICT innovators and incumbent ICT leading companies.
    Keywords: Young digital innovators, eco‐systems, regional clusters
    Date: 2017–03–02
  3. By: Wetzel, Heike; Kruse, Jürgen
    Abstract: This article empirically analyzes supply-side and demand-side factors expected to affect innovation in clean coal technologies. Patent data from 93 national and international patent offices is used to construct new firm-level panel data on 3,648 clean coal innovators over the time period 1978 to 2009. The results indicate that on the supply-side a firm’s history in clean coal patenting and overall propensity to patent positively affects clean coal innovation. On the demand-side we find strong evidence that environmental regulation of emissions, that is CO2, NOX and SO2 , induces innovation in both efficiency improving combustion and after pollution control technologies.
    JEL: C33 O31 Q55
    Date: 2016
  4. By: Tania Babina
    Abstract: Using US Census employer-employee matched data, I show that employer financial distress accelerates the exit of employees to found start-ups. This effect is particularly evident when distressed firms are less able to enforce contracts restricting employee mobility into competing firms. Entrepreneurs exiting financially distressed employers earn higher wages prior to the exit and after founding start-ups, compared to entrepreneurs exiting non-distressed firms. Consistent with distressed firms losing higher-quality workers, their start-ups have higher average employment and payroll growth. The results suggest that the social costs of distress might be lower than the private costs to financially distressed firms.
    Date: 2017–01
  5. By: Potrafke, Niklas; Hines, James R.; Riem, Marina; Schinke, Christoph
    Abstract: We examine the determinants of inter vivos transfers of ownership in German family firms between 2000 and 2013. Survey evidence indicates that owners of larger firms, and firms with strong current business conditions, transfer ownership at higher rates than others. When a firm’s self-described business condition improves from “normal” to “good” the chance of an inter vivos transfer increases by 46 percent. Inter vivos transfer rates also rose following a 2009 transfer tax reduction. These patterns suggest that trans-fer taxes significantly influence rates and timing of inter vivos ownership transfers.
    JEL: H24 D31 D22
    Date: 2016
  6. By: Tsoy, Lyubov (Sogang University); Heshmati, Almas (Jönköping University, Sogang University)
    Abstract: This study examines the impact of 1997 Asian and 2008 Global financial crises on the capital structure of Korean listed companies. Using a data set covering 1,159 Korean listed non-financial firms from 10 industrial sectors over period 1985-2015, the pattern of firms' capital structure before and after the crises is investigated and the speed of adjustment toward the optimal leverage identified. Different effects of the two crises on both capital structure and its adjustment speed is found. The average debt ratio fell significantly, the distance between optimal and observed debt ratios shrank, while the speed of adjustment increased twofold after the Asian crisis. Unlike the Asian crisis, the Global crisis of 2008 had a positive effect on companies' debt ratio and the speed of their adjustment toward optimal leverage. The empirical analysis revealed that Korean non-financial listed companies on average decreased their debt ratios over the entire study period, with leverage being highest before the Asian crisis and lowest after the Global financial crisis. The results also show that the debt ratio of Korean chaebols is higher than that of non-chaebols. Moreover, the high level of leverage is associated with tangible assets, income variability, size and age of the firm, non-debt tax shield, and uniqueness.
    Keywords: capital structure, optimal leverage, speed of adjustment, Korean listed companies, financial crises, chaebols
    JEL: C33 D21 C51 E22 G32
    Date: 2017–02
  7. By: Nadia Benomar; Joanne Castonguay; Marie-Hélène Jobin; François Lespérance
    Abstract: Le CIRANO et le Pôle santé – HEC Montréal publient un deuxième rapport de recherche dont l’objectif est de proposer des recommandations pour améliorer l’implantation des innovations en santé. À la lumière de ces études, on constate qu’il existe une faille importante dans la chaîne de valeur de l’innovation, c’est-à-dire entre l’offre d’innovation et la demande pour celle-ci. Traditionnellement, les politiques d’innovation portent sur la facilitation de l’offre, par exemple par du financement de la recherche et de ses infrastructures jusqu’au soutien à la commercialisation. Pourtant, les obstacles à l’intégration des innovations dans la pratique proviennent du peu de demande pour des innovations en santé. Les prestataires et gestionnaires des services de santé n’étant pas imputables quant à l’efficience du système, ils n’ont pas ou peu de motivation et de moyens pour l’améliorer. Plus encore, le système étant principalement orienté vers le contrôle des coûts, ses mécanismes freinent, voire empêchent, toute amélioration de la valeur des services, c’est-à-dire toute innovation. Ainsi, malgré des investissements de plusieurs centaines de millions de dollars en R&D, les données révèlent que la productivité de notre système de santé est en décroissance.
    Date: 2017–02–27
  8. By: Tania Babina; Paige Ouimet; Rebecca Zarutskie
    Abstract: Using matched employee-employer US Census data, we examine the effect of a successful initial public offering (IPO) on employee departures to startups. Accounting for the endogeneity of a firm’s choice to go public, we find strong evidence that going public induces employees to leave for start-ups. Moreover, we document that the increase in turnover following an IPO is driven by employees departing to start-ups; we find no change in the rate of employee departures for established firms. We present evidence that, following an IPO, many employees who received stock grants experience a positive shock to their wealth which allows them to better tolerate the risks associated with joining a startup or to obtain funding. Our results suggest that the recent declines in IPO activity and new firm creation in the US may be causally linked. The recent decline in IPOs means fewer workers may move to startups, decreasing overall new firm creation in the economy.
    Date: 2017–01
  9. By: Kahia, Montassar
    Abstract: Given the growing international competition and globalization being characterized by the massive reduction of institutional barriers, opening new markets for consumer goods, the birth of many trade agreements and the establishment of the World Trade Organization, it is imperative for companies wishing to grow, the possibility to internationalize. Consequently, one of the first modes of internationalization of a firm is export. Indeed, the success of export can be measured by various factors that depend on company's goal against the use of export strategy. Such factors are grouped into two categories namely: external and internal factors to the company. This paper will focus on exploring and analyzing the key factors that affect the export intensity of Tunisian companies. Thus, our study was conducted at the micro-economic level. Indeed, as the available data, we will try to find out the factors of export activity for a sample of Tunisian companies and this through a Logit model with random effects applied to panel data from 1997 to 2003. Indeed, the main factors that positively affect the probability of exporting in Tunisia are: Capital intensity; the company age and size. Furthermore, among the main factors that negatively affect the probability of exporting, we state labor cost.
    Keywords: Export intensity; Logit model; Panel data; Tunisian companies
    JEL: C01 C13 C19 C5 F1 F13 F6 O1
    Date: 2017
  10. By: Piva, Mariacristina; Vivarelli, Marco
    Abstract: Using a unique firm-level database comprising the top European R&D investors over the period 2002-2013 and running LSDVC estimates, this study finds a significant labourfriendly impact of R&D expenditures. However, this positive employment effect appears limited in magnitude and entirely due to the medium-and high-tech sectors, while no effect can be detected in the low-tech industries. From a policy point of view, this outcome is supporting the EU2020 strategy, but - taking into account that most of European economies are specialized in low-tech activities - is also worrying in terms of future perspectives of the European labour market.
    Keywords: R&D,innovation,employment,firm-level analysis,EU
    JEL: O33
    Date: 2017
  11. By: Piva, Mariacristina (Università Cattolica del Sacro Cuore); Vivarelli, Marco (Università Cattolica del Sacro Cuore)
    Abstract: Using a unique firm-level database comprising the top European R&D investors over the period 2002-2013 and running LSDVC estimates, this study finds a significant labour-friendly impact of R&D expenditures. However, this positive employment effect appears limited in magnitude and entirely due to the medium-and high-tech sectors, while no effect can be detected in the low-tech industries. From a policy point of view, this outcome is supporting the EU2020 strategy, but – taking into account that most of European economies are specialized in low-tech activities – is also worrying in terms of future perspectives of the European labour market.
    Keywords: R&D, innovation, employment, firm-level analysis, EU
    JEL: O33
    Date: 2017–02
  12. By: Aldieri, Luigi; Kotsemir, Maxim; Vinci, Concetto Paolo
    Abstract: The aim of this paper is to investigate the role of Jacobian externalities stemmed from different technological sectors for international firms engaged both in environmental and in dirty activi- ties. Firms’ innovation, measured, as the development of new patents, is a key factor behind the achievement of desired economic performances. Empirical literature usually deals with the inte- gration between ecological efficiency and product value enhancement. The results of these stud- ies lead to the lack of integrated innovation adoption behind environmental productivity per- formance. In this work, we analyse the integration between more environmental goals in an original way, by applying different methodologies to compute technological proximity, based on the Mahalanobis approach. To this end, we use information from 240 large international firms, located in three economic areas: USA, Japan and Europe and we select their environmental and dirty patents from European Patent Office data.
    Keywords: Innovation; Technology spillovers; Environmental relatedness.
    JEL: O32 O33 Q5
    Date: 2017–03
  13. By: Paolo Finaldi Russo (Banca d'Italia); Silvia Magri (Banca d'Italia); Cristiana Rampazzi (Banca d'Italia)
    Abstract: In 2012 the Italian Parliament introduced into Italian law a special section in the Companies Register and a large number of financial incentives to create a favorable environment for the development of ‘innovative start-ups’ (ISUPs). In this paper we compare ISUPs with other start-ups. In accordance with the eligibility criteria established by law, ISUPs show a striking capacity for innovation apparent in a higher incidence of intangible assets and the longer time it takes to begin selling their products. ISUPs also report higher investment rates and stronger growth in sales and assets, while their financial structures are characterized by higher capitalization and greater availability of liquid assets. Based on propensity score matching, we also highlight some direct effects of the 2012 law on their financial structures, almost exclusively on ISUPs operating in the service sectors: their external funding, either debt or equity, increases more than for other similar firms; higher investment rates are specifically associated with a stronger upsurge in their capital.
    Keywords: start-ups, financing innovation, equity, financial structure. Classification-JEL: G24, G32, H81, O38
    Date: 2016–07
  14. By: Gandal, Neil; Naftaliev, Peter; Stettner, Uriel
    Abstract: It is believed that there are significant knowledge spillovers in Open Source Software (OSS). If such spillovers exist, it is likely they occur via two channels: In the first channel, programmers take knowledge, expertise, and experience gained from one OSS project they work on and employ it in another OSS project they work on. In the second, programmers reuse software code by taking code from one OSS project and employing it in another OSS project. In previous work, we found knowledge spillovers via the first channel. In this paper we develop a methodology to measure software reuse at the micro-micro level in a large OSS network. We find that projects that reuse code from other projects have higher success. Controlling for code reuse, we also find knowledge spillovers from projects connected via common programmers. Thus, our empirical work suggests that knowledge spillovers occur via both channels.
    Keywords: Knowledge Spillovers; Open Source; Reuse of Software Code; Social Network
    Date: 2017–02
  15. By: Koelle, Michael
    Abstract: I look at the dynamics of firms when investment decisions interact with occupational choice. To model the implications for firm survival and growth, I extend a neoclassical growth model by an endogenous shutdown condition that is driven by the reservation wage in alternative employment. This model is able to generate multiple steady-state equilibria that arise through convexities in the optimal growth path of a firm. I provide empirical evidence consistent with the model predictions using panel data from urban Colombia. I also structurally estimate the model to identify the wage function in a way that is robust to occupational choices being driven by particular wage offers that are observed as subsequent outcomes. The findings are useful for understanding heterogeneous economic decisions of the large number of self-employed small firm owners in developing countries.
    JEL: J24 L26 O10
    Date: 2016
  16. By: Raphael Calel; Antoine Dechezlepretre
    Abstract: This paper investigates the impact of the European Union Emissions Trading System (EU ETS) on technological change, exploiting installations-level inclusion criteria to estimate the System's causal impact on firms' patenting. We find that the EU ETS has increased low-carbon innovation among regulated firms by as much as 10%, while not crowding out patenting for other technologies. We also find evidence that the EU ETS has not impacted patenting beyond the set of regulated companies. These results imply that the EU ETS accounts for nearly a 1% increase in European low-carbon patenting compared to a counterfactual scenario.
    Keywords: directed technological change; EU emissions trading system; policy evaluation
    JEL: C14 O3 Q55 Q58
    Date: 2016–03
  17. By: Coenen, Lars (CIRCLE, Lund University); Grillitsch, Markus (CIRCLE, Lund University); Hansen, Teis (CIRCLE, Lund University); Miörner, Johan (CIRCLE, Lund University); Moodysson, Jerker (CIRCLE, Lund University)
    Abstract: System innovation policy refers to a horizontal policy approach that mobilises technology, market mechanisms, regulations and social innovations to solve complex societal problems in a set of interacting or interdependent components that form a whole socio-technical system. Even if policies start to be aimed at addressing these complex societal challenges, system innovation framing is still under-developed and it is unclear how to implement such policies. In this report we seek to contribute to both gaps. Firstly, we develop an analytical framework that allows to specify the conditions that enable and constrain system innovation. Secondly, we apply this framework on two Strategic Innovation Programs, a policy initiative by Vinnova, Sweden’s Innovation Agency, targeting system innovation.
    Keywords: System innovation; transition theory; innovation systems; policy; strategic innovation porgrammes
    JEL: O30 O33 O38
    Date: 2017–03–05

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