nep-sbm New Economics Papers
on Small Business Management
Issue of 2017‒04‒09
eighteen papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Public R&D support in Italy. Evidence from a new firm-level patent data set By Aiello, Francesco; Albanese, Giuseppe; Piselli, Paolo
  2. Same but Different? The impact of Research and Technology Organizations versus Universities on firms’ innovation. By Giannopoulou Eleni; Barlatier Pierre-Jean; Pénin Julien
  3. Let the user speak: Is feedback on Facebook a source of firms' innovation? By Bertschek, Irene; Kesler, Reinhold
  4. Capital market financing, firm growth, and firm size distribution By Tatiana Didier; Ross Levine; Sergio L. Schmukler
  5. Globalization and Innovation in the Indian Pharmaceutical Industry By Loitongbam, Bishwanjit Singh
  6. Innovation, Spillovers and Productivity Growth: A Dynamic Panel Data Approach By Christopher Baum; Hans Lööf,; Pardis Nabavi
  7. Does FDI Crowd Out Domestic Firms? Micro-Level Evidence from the Republic of Korea By Choi, Hyelin
  8. The impact of the Great Recession on TFP convergence among EU countries By Dolores Añón Higón; Juan A. Mañez; A. Sanchis; A. Sanchis
  9. A New Approach to Estimation of the R&D-Innovation-Productivity Relationship By Andreas Stephan; Christopher BAUM,; Pardis NABAVI; Hans LÖÖF,
  10. The Nexus Between Informal Credit and Informal Labor for Micro and Small Enterprises in Egypt: Sources of Finance and Enterprises Informality: Evidence from MSE Surveys in Two Governorates By Mohamed El Komi; Mona Said
  11. Endogenous Innovation: The Creative Response, By Antonelli, Crisiano
  12. Yabancı İştirakli Firmaların İhracat Yöneliminin Doğrudan Yabancı Sermaye Yatırımlarının Dikey Yayılmaları Üzerindeki Etkileri: Türkiye İmalat Sanayi Örneği By Ebghaei, Felor
  13. A theoretical view on public-private partnerships in research and innovation in Germany By Koschatzky, Knut
  14. Access to Financing and Firm Growth: Evidence from Ethiopia By Dereje Regasa; David Fielding; Helen Roberts
  15. The Causal Impact of Human Capital on R&D and Productivity: Evidence from the United States By Verónica Mies; Matías Tapia; Ignacio Loeser
  16. Combining universities third mission and place-based industrial development By Marco Bellandi; Annalisa Caloffi
  17. Market knowledge as a function of CEOs' personality: A fuzzy set approach By Mickaël Géraudel; Anis Khedhaouria; Caroline Mothe; Barthelemy Chollet
  18. Frugal innovation in Germany: A qualitative analysis of potential socio-economic impacts By Tiwari, Rajnish; Fischer, Luise; Kalogerakis, Katharina

  1. By: Aiello, Francesco; Albanese, Giuseppe; Piselli, Paolo
    Abstract: This paper evaluates the impact of R&D public support on the innovation activities of a sample of Italian SMEs. Unlike most of the literature, the analysis focuses more deeply on the innovation output than on the innovation input. The innovation output is measured through patent data. By using a new data set obtained by combining information from EPO records and the Capitalia data set on Italian corporations, we find that publicly supported firms have similar patenting activity to other R&D performers, regardless of the type of policy tool used to foster innovation. However, as far as patenting is concerned, supported SMEs face higher R&D spending than others.
    Keywords: Patents; R&D policy support; SMEs
    JEL: C21 L1 O31 O38
    Date: 2017–03–27
  2. By: Giannopoulou Eleni; Barlatier Pierre-Jean; Pénin Julien
    Abstract: Research and Technology Organizations (RTOs) and universities are important elements of countries’ innovation system. Due to their intermediate position in between science and industry, RTOs and universities are often blended together and considered as the same thing. However, many studies have stressed the differences between the two. In this paper, we compare the impact of RTOs and universities on firms’ innovation type and performance. More specifically, we analyze what kind of innovation firms which work with RTOs versus universities are more likely to develop. Our study is based on statistical analysis of Community Innovation Survey available micro-data (CIS 2012). Our results suggest that firms which work with RTOs versus universities have different innovation outcomes. In particular, we find that companies that deem RTOs as more important sources of knowledge than universities have a higher probability to develop service innovation, have less need to invest in internal R&D but are less likely to be innovative including new to the world innovation. These results have important policy and management implications.
    Keywords: Research and Technology Organizations (RTOs), Universities, Service Innovation, University-industry linkages, Open Innovation.
    JEL: O31 O32 O33 O34
    Date: 2017
  3. By: Bertschek, Irene; Kesler, Reinhold
    Abstract: Social media open up new possibilities for firms to exploit information from various external sources. Does this information help firms to become more innovative? Combining firm-level survey data with information from firms' Facebook pages, we study the role that firms' and users' activities on Facebook play in the innovation process. We find that firms' adoption of a Facebook page as well as feedback from users are positively and significantly related to product innovations. Analysis of the content of Facebook posts and comments reveals that firms are more likely to introduce product innovations if they actively ask for feedback, while only negative user comments are positively and significantly related to innovation success. These results withstand a large set of robustness checks, including estimations that take potential endogeneity of firms' Facebook use into account.
    Keywords: social media,knowledge sources,product innovation
    JEL: D22 L23 O31
    Date: 2017
  4. By: Tatiana Didier; Ross Levine; Sergio L. Schmukler
    Abstract: How many and which firms issue equity and bonds in domestic and international markets, how do these firms grow relative to non-issuing firms, and how does firm performance vary along the firm size distribution (FSD)? To evaluate these questions, we construct a new dataset by matching data on firm-level capital raising activity with balance sheet data for 45,527 listed firms in 51 countries. Three main patterns emerge from the analysis. (1) Only a few large firms issue equity or bonds, and among them a small subset has raised a large proportion of the funds raised during the 1990s and 2000s. (2) Issuers grow faster than non-issuers in terms of assets, sales, and employment, i.e., firms do not simply use securities markets to adjust their financial accounts. (3) The FSD of issuers evolves differently from that of non-issuers, tightening among issuers and widening among non-issuers. JEL Classification: F65, G00, G10, G31, G32, L25
    Keywords: access to finance, bond markets, capital market development, capital raisings, firm dynamics, firm financing, stock market
    Date: 2016–03
  5. By: Loitongbam, Bishwanjit Singh
    Abstract: The changing global environment brings about new opportunities and new markets for domestic firms in developing countries. We examine the impacts of globalization and IPR protection on the innovation in the Indian pharmaceutical industry, using the firm-level panel data. This paper finds that there is a positive and highly significant level of foreign ownership effect on R&D activities. This indicates that there is technology spillover in the Indian pharmaceutical industry. TRIPS implementation has insignificant effects on R&D innovation. It is also found that exporting firms and firms with a higher productivity level are significantly more likely to carry out R&D activities.
    Keywords: Globalization, Foreign Ownership, Innovation, R&D
    JEL: F1 F14 F6
    Date: 2016–03–07
  6. By: Christopher Baum; Hans Lööf,; Pardis Nabavi
    Abstract: This paper examines variation in productivity growth within a given location and between different locations. Implementing a dynamic panel data approach on Swedish micro data, we test the separate and complementary effect of internal innovation efforts and spillovers from the local milieu. Measuring the potential knowledge spillover by access to knowledgeintensive services, the estimation results produce strong evidence of differences in the capacity to benefit from external knowledge among persistent innovators, temporary innovators and non-innovators. The results are consistent regardless of whether innovation efforts are measured in terms of the frequency of patent applications or R&D investments see above see above
    Keywords: Sweden, Growth, Sectoral issues
    Date: 2015–07–01
  7. By: Choi, Hyelin (Korea Institute for International Economic Policy)
    Abstract: This report analyzes the impact of foreign investment on the exit and sales of domestic firms, using 2006-2013 Korean firm-level data. The results show that the crowding-out and market-stealing effects are more severe for small firms. While foreign firms drive small domestic firms out of the domestic market and take away domestic market shares, large firms rather enjoy the spillover effects from foreign firms. The baseline estimation is further investigated by dividing the full sample into manufacturing vs. service sectors and low-export vs. high-export groups. The crowding-out effect related to exits is more severe in the service sector, while the market-stealing effect on domestic firms' sales is larger in the manufacturing sector. On the other hand, both of the crowding-out and market-stealing effect appear to be larger in high-export groups. To summarize, foreign firms have negative impacts, in particular, on small firms, whereas larger firms rather benefit from the positive externalities of foreign firms. It may be that large firms possess enough ability to compete with foreign firms, and also to learn and apply the advanced technology the foreign firms bring in. The result also shows that since domestic firms in the service sector tend to be small, their survival is vulnerable to the presence of foreign firms, whereas since market competition is more severe in the manufacturing sector, domestic firms' market share loss is more severe in the manufacturing sector. Lastly, we found that domestic exporting firms are in more intense competition with foreign firms.
    Keywords: FDI; Crowd-out Effect; Market-stealing Effect; SMEs
    Date: 2017–01–02
  8. By: Dolores Añón Higón (Department of Economic Structure, University of Valencia, Avda. dels Tarongers s/n, 46022 Valencia (Spain).); Juan A. Mañez (Department of Economic Structure, University of Valencia, Avda. dels Tarongers s/n, 46022 Valencia (Spain).; Department of Economic Structure, University of Valencia, Avda. dels Tarongers s/n, 46022 Valencia (Spain).); A. Sanchis (Department of Economic Structure, University of Valencia, Avda. dels Tarongers s/n, 46022 Valencia (Spain).); A. Sanchis (Department of Economic Structure, University of Valencia, Avda. dels Tarongers s/n, 46022 Valencia (Spain).)
    Abstract: This paper provides evidence on the effect of the Great Recession on productivity convergence among EU economies. We use firm data, aggregated at the country-year level, to analyse the evolution of beta-convergence on total factor productivity (TFP) for 2003-2014. We obtain a positive impact of the recession on TFP (unconditional and conditional) beta-convergence across EU economies. These results support the existence of a catching-up process within the EU during the recent financial crisis. Other macroeconomic and institutional characteristics are important in fostering TFP growth, namely R&D intensity and quality of governance.
    Keywords: convergence, TFP, Great Recession, European Union countries
    JEL: F43 O47 O52
    Date: 2017–02
  9. By: Andreas Stephan; Christopher BAUM,; Pardis NABAVI; Hans LÖÖF,
    Abstract: We evaluate a Generalized Structural Equation Model (GSEM) approach to the estimation of the relationship between R&D, innovation and productivity that focuses on the potentially crucial heterogeneity across technology levels and sectors. see above see above
    Keywords: Sweden, Growth, Macroeconometric modeling
    JEL: C00 L00 O00
    Date: 2015–07–01
  10. By: Mohamed El Komi (Durham University); Mona Said (American University in Egypt)
    Abstract: As a result of the economic meltdown in 2008, the hardest hit sector of the economy was the micro and small enterprises (MSE’s) sector. MSEs’ access to formal finance has been facing increasing restrictions, due to the adoption of more cautious lending strategies by both public and private banks. Hence, MSEs in Egypt still heavily rely on informal credit to finance their operations. This paper identifies the linkages between different sources of finance and their impact on informality of MSEs based on small scale surveys on credit and labor use in household businesses in villages in two governorates in Egypt. Preliminary analysis of this new data confirms that relying on self-finance is associated with increased informality of the surveyed enterprises in both governorate subsamples, whereas access to formal loans is associated with formalization through enterprise registration in non-agricultural enterprises surveyed in one of the governorates. These results provide preliminary evidence that policies that enhance access to formal credit and attempts to formalize informal sources of credit, such as RoSCAs, are likely to impact MSE’s formalization positively in Egypt.
    Date: 2017–03–30
  11. By: Antonelli, Crisiano (University of Turin)
    Abstract: The limits of both evolutionary approaches, based upon biological metaphors, and the new growth theory based on the early economics of knowledge, are becoming apparent. Considerable progress can be made by implementing an evolutionary complexity approach that builds upon the legacy of Schumpeter (1947) with the notions of: i)reactive decision making; ii) multiple feedback; iii) innovation as the outcome of an emergent system process rather than individual action; iv);organized complexity and knowledge connectivity; iv) endogenous variety; vi) non ergodic path dependent dynamics. Building upon these bases, the paper articulates an endogenous theory of innovation centered upon the analysis of the systemic conditions that make the creative reaction and hence the introduction of innovations possible.
    Date: 2017–03
  12. By: Ebghaei, Felor
    Abstract: This study examines the effects of foreign direct investment on productivity performance of firms using firm-level data for the years 2003-2011. The main purpose of this study is to examine effect of backward spillovers generetade by the export oriented multinational corporations on productivity. Within this context, another purpose is to determine whether the backward spillovers effects generated by export oriented multinational corporations is greater than backward spillovers effects generated by domestic oriented multinational corporations or not. For the purpose of determining the direct and indirect productivity effects (forward as well as backward spillovers generated by export and domestic oriented multinational) of FDI, the value-added and total factor productivity based on the methods suggested by Levinsohn and Petrin (2003) and Olley and Pakes (1996) are estimated by using the panel data method.
    Keywords: Foreign Direct Investment, Firms’ Productivity, Spillover Effects, Firm Export
    JEL: F21 F23
    Date: 2015–06
  13. By: Koschatzky, Knut
    Abstract: Many case studies about public-private research partnerships (PPP) between academia and industry provide useful insights into the establishment and operation of these collaborative ties. Nevertheless, many of these studies follow their own perspective of analysis. According to Bozeman (2013: 312) "the scholarship on this topic remains relatively a theoretical or, more precisely, that it is "pre-theoretical" in the sense that much knowledge is accumulated but it has not been integrated into a matrix of empirical explanations". Taking the funding initiative of the German Federal Ministry of Education and Research (BMBF) "Research Campus - public-private partnership for innovation" (Forschungscampus - öffentlich-private Partnerschaft für Innovationen) as an example of a public-private partnership in research and innovation, it is the objective of this paper to develop a theoretical framework for the empirical analysis of this kind of PPP, and to apply this framework to the specific case of the German "Research Campus" initiative.
    Keywords: public-private partnership,research and innovation,theory-based framework,research campus,Germany
    Date: 2017
  14. By: Dereje Regasa (Department of Accountancy and Finance, University of Otago, New Zealand); David Fielding (Department of Economics, University of Otago, New Zealand); Helen Roberts (Department of Economics, University of Otago, New Zealand)
    Abstract: Using Ethiopian firm-level data, we model the effect of different types of financing on firm growth. The form of financing is potentially endogenous to firm growth, and one contribution of this paper is to introduce a new instrumental variable which captures local variation in financial depth. Unlike previous studies of firms in low-income countries, we find evidence for a negative relationship between the use of external finance and firm growth, which suggests that there are substantial cross-country differences in the finance-growth nexus. We discuss possible explanations for this phenomenon and its implications for development policy.
    Keywords: Ethiopia; firm growth; external financing
    JEL: D24 G31 O55
    Date: 2017–04
  15. By: Verónica Mies; Matías Tapia; Ignacio Loeser
    Abstract: This paper contributes to the empirical literature on the impact of human capital on technology adoption and the production structure of the economy by using census micro data aggregated at the state level data for US cohorts born between 1915 and 1939. We test the impact of secondary and tertiary schooling in the US at the state-cohort level on R&D and TFP growth across industries in 1970. While we follow the literature in using the variation in the timing of compulsory schooling laws across states to instrument secondary schooling, we propose a novel instrument for tertiary enrollment. In particular, we exploit, as in Acemoglu, Autor and Lyle (2004), the differences across states and cohorts in World War II mobilization rates. While Acemoglu, Autor, and Lyle (2004) used this variation as an exogenous shift in female labor supply, we exploit the fact that WWII veterans were benefited by the GI Bill Act (1944), which granted them free college education once they were discharged from service. This provides a clean source of variation in the costs of attending college, which allows us to exploit differences in college enrollment across states and cohorts. Our results suggest that, consistent with the initial discussion, different types of human capital are associated to different effects on the productive structure of the economy. Two-stage least squared regressions find no effect of the share of population with secondary schooling over outcomes such as R&D per worker or TFP growth. On the other hand, the share of population with tertiary education has a significant effect on both R&D per worker or TFP growth. In particular, a 1% increase in the share of workers with tertiary education increases R&D per worker by 1.8 percentage points, and annual TFP growth by 1% for 17 years. Creation-Date: 2015
    JEL: J14 O12 L26 M53
  16. By: Marco Bellandi (Dipartimento di Scienze per l'Economia e l'Impresa); Annalisa Caloffi
    Abstract: Drawing on the two models of the University centric industrial district (Patton and Kenney, 2009) and the Civic University (Goddard and Vallance, 2013), the paper develops a framework on the role of universities in local development processes. Such framework develops around three concepts: first, the degree of synergy between the different activities that are promoted by the university in relation to its third mission, from the implementation of single technology transfer activities to the organization of system-based actions; secondly, the degree of alignment between the goal of the university third mission and projects of local development, from a complete misalignment to a complete alignment that can lead to a sustainable local growth; third, the degree of disciplinary specialisation of university research and third mission activities, from a complete specialisation to a multi-disciplinary attitude. The paper includes some exemplification and a tentative application of the framework on the problems of industrial recovery in Italy.
    Keywords: University third mission, Civic University, University centric industrial district
    Date: 2017
  17. By: Mickaël Géraudel (CREA, Center for Research in Economics and Management - - Université du Luxembourg); Anis Khedhaouria (Montpellier Business School, Montpellier Research in Management); Caroline Mothe (IREGE - Institut de Recherche en Gestion et en Economie - USMB [Université de Savoie] [Université de Chambéry] - Université Savoie Mont Blanc); Barthelemy Chollet (GEM - Grenoble Ecole de Management - Grenoble École de Management (GEM))
    Abstract: Market knowledge (MK) improves firm performance, yet knowledge of how MK develops remains sparse. In small and medium-sized enterprises, MK likely depends on the personal dispositions of CEOs. This study draws on personality research to theorize that CEOs' personality traits influence the intensity of seeking (openness and conscientiousness), the opportunity to access (extraversion), or the accuracy of processing (agreeableness and emotional stability) market information. A fuzzy set qualitative comparative analysis of 409 CEOs reveals two equifinal configurations of traits leading to high MK, both of which include traits favoring accuracy, suggesting their particular importance. The findings provide new understanding of the antecedents of MK and have conceptual implications for the study of CEOs' personality in general.
    Keywords: Fuzzy set qualitative comparative analysis (fsQCA), Market knowledge, Personality traits, CEO
    Date: 2016
  18. By: Tiwari, Rajnish; Fischer, Luise; Kalogerakis, Katharina
    Abstract: Frugal innovation is gaining traction globally, not only in emerging economies, but also in the industrialized world. The root causes of frugality's acceptance as a societal value may however differ according to the social context, especially between the developing and the developed world. In this paper we present the results of a trend analysis in Germany that has been conducted as a part of a BMBF-supported project aiming to investigate "Potentials, Challenges and Societal Relevance of Frugal Innovations in the Context of Global Innovation Competition". The research was conducted in two steps. In a first step preliminary insights were generated by an extensive literature review and 3 focus groups with 30 experts discussing the relevance of frugal innovation for Germany. These insights were then verified in 20 semi-structured interviews with additional experts from cross-sections of the German society. The experts opined that frugal products and services (should) focus on the customers' core needs and reduce unnecessary complexity while adhering to high quality standards. They predicted a trend towards frugal solutions in Germany due to a complex interplay of various factors. One notable factor was a growing appreciation of moderation and voluntary simplicity by parts of the German society leading to "frugal choices". The second widespread consensus was that frugal innovations are necessary to secure long-term competitiveness of German companies in fast-growing, unsaturated markets in the emerging economies. Several challenges were pointed out concerning the actual implementation of frugal concepts in the product development process. An overwhelming reliance on high tech-driven and complexity-embracing innovation pathways by engineers in German firms was characterized as a powerful obstacle in implementing frugality.
    Keywords: Frugal Innovation,Germany,Affordability,Moderation,Emerging Markets,Voluntary Simplicity,Affordable Excellence,Frugality 3.0
    Date: 2017

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