nep-sbm New Economics Papers
on Small Business Management
Issue of 2017‒04‒30
eighteen papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Inclusive innovation policies: Lessons from international case studies By Sandra Planes-Satorra; Caroline Paunov
  2. Sources of Knowledge Used by Entrepreneurial Firms in the European High-Tech Sector By Amoroso, Sara; Audretsch, David; Link, Albert
  3. SME Policies as a Barrier to Growth of SMEs By TSURUTA Daisuke
  4. Innovation and willingness to export: Is there an effect of conscious self-selection? By Mohavedi, Mohammad; Shahbazi, Kiumars; Gaussens, Olivier
  5. Endogenous Innovation: The Creative Response. By Antonelli, Crisiano
  6. Yabancı İştirakli Firmaların İhracat Yöneliminin Doğrudan Yabancı Sermaye Yatırımlarının Dikey Yayılmaları Üzerindeki Etkileri: Türkiye İmalat Sanayi Örneği By Ebghaei, Felor; Akkoyunlu Wigley, Arzu
  7. Empirical Analysis on the Earnings Quality of Japanese SMEs (Japanese) By KIM Hyonok; YASUDA Yukihiro
  8. Access to finance as a pressing problem: Evidence from innovative European firms By Anabela Marques Santos; Michele Cincera
  9. Creative Destruction in the Era of Open Innovation: Empirical investigation into the relationship between patenting and survival of Japanese firms By IKEUCHI Kenta; MOTOHASHI Kazuyuki
  10. Regional labour market mobility. A network analysis of inter-firm relatedness By Shamnaaz B. Sufrauj; Giancarlo Corò; Mario Volpe
  11. Intangible Assets and Firms' Liquidity Holdings: Evidence from Japan By HOSONO Kaoru; MIYAKAWA Daisuke; TAKIZAWA Miho
  12. L'Etat en mode start-up: Le nouvel âge de l'action publique By Yann Algan; Thomas Cazenave
  13. Identification of Clusters An Actor based Approachv By Thomas Brenner
  14. Entrepreneurship, institutions and skills in low-income countries By Zuzana Brixiová; Balázs Égert
  15. Entrepreneurship, risk perception and firm performance By M.A. Boermans; Daan Willebrands
  16. Do Family Firms Have Worse (or Better) Management Practices? By ASABA Shigeru
  17. Industry Growth through Spinoffs and Startups By OHYAMA Atsushi
  18. The role of environmental regulations and innovation in TFP convergence: Evidence from manufacturing SMEs in Viet Nam By Thanh Tam Nguyen-Huu; Minh Nguyen-Khac; Quoc Tran-Nam

  1. By: Sandra Planes-Satorra (OECD); Caroline Paunov (OECD)
    Abstract: Innovation policies are central to growth agendas in most countries, but have figured much less prominently in strategies to promote social inclusion. In recent years, many countries have implemented “inclusive innovation policies”– a specific set of innovation policies that aim to boost the capacities and opportunities of disadvantaged individuals to engage in innovation activities, including research and entrepreneurship. Examples include the provision of grants to researchers from disadvantaged groups, the deployment of programmes to popularise science and technology, the provision of micro-credit to entrepreneurs and the provision of grants to firms locating their R&D activities in peripheral regions. This paper analyses the role that inclusive innovation policies can play in tackling social, industrial and territorial inclusiveness challenges by drawing on 33 detailed policy examples from 15 countries. The paper discusses why these policies should be a priority, explores the specific challenges that arise in their implementation and provides recommendations as to how the challenges can best be addressed.
    Date: 2017–04–25
  2. By: Amoroso, Sara (European Commission); Audretsch, David (Indiana University); Link, Albert (University of North Carolina at Greensboro, Department of Economics)
    Abstract: The purpose of this paper is to explore the relationship between an entrepreneur’s experience and education and his/her reliance on alternative sources of knowledge for exploring new business opportunities. The extant literature that is at the crossroads between sources of knowledge and the experiential and intellectual base of an entrepreneur (i.e., dimensions of his/her human capital) suggests that it is through experience and through education that an entrepreneur obtains knowledge. Using information on a sample of high-tech manufacturing firms across 10 European countries, we explore heterogeneities in the influence of experience, age, and education of the firm’s primary founder on the perceived importance of (i.e., use of) alternative sources of knowledge. We find that the association of these characteristics differs significantly across sources of knowledge, and across European regions. Education is positively related to the importance of knowledge from research institutes and internal know-how, while age is negatively related to the importance of research institutes and positively related to publications and conferences. On the one hand, in South/East European countries, the importance of internal know-how is positively associated with age and education, but negatively associated with experience. On the other hand, the characteristics of primary founders of North/West European firms are more linked to the importance of the participation to funded research programmes. This source of knowledge is related positively with age and education and negatively with experience.
    Keywords: Entrepreneurship; Knowledge; Experience; Education; Human Capital
    JEL: D83 J24 L26
    Date: 2017–04–25
  3. By: TSURUTA Daisuke
    Abstract: We investigate whether firms have incentives to retain their positions as small and medium enterprises (SMEs) to benefit from various SME policies. Using small business data from Japan, we show that firms are less likely to increase their registered capital so that they can continue to satisfy the requirement that retains their position as SMEs under the SME Basic Act. In addition, we find that, after the relaxation of this SME requirement under the act, firms were more likely to increase their registered capital. When firms do not increase their registered capital in order to keep their SME status, firm growth is impeded.
    Date: 2017–03
  4. By: Mohavedi, Mohammad; Shahbazi, Kiumars; Gaussens, Olivier
    Abstract: This paper presents an analysis of the crucial relationship between innovation, productivity, and export in Small and Medium Enterprises (SMEs). The primary aims of this study are to evaluate the role of innovation in the premium export and test the hypothesis of firm conscious self-selection on willingness to export. To this end, the authors used their database of SMEs, obtained from the survey conducted in the IDEIS project, which provides highly pertinent information on innovation and export areas. Based on the aforementioned database, the authors evaluate apparent premium of exportation and innovation. In addition, they demonstrate the effectiveness of the export premium for high exportation firms that implement process and organization innovations. Finally, the authors analyse the effect of conscious self-selection from the export process that transforms an intention to export into the capacity to export in short term. The conscious self-selection to export is revealed by simultaneously endogeneizing productivity and innovation output based on recursive non-linear model.
    Keywords: export process,productivity,export premium,innovation premium
    JEL: C14 C35 D22 F12 O31
    Date: 2017
  5. 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
  6. By: Ebghaei, Felor; Akkoyunlu Wigley, Arzu
    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
  7. By: KIM Hyonok; YASUDA Yukihiro
    Abstract: The purpose of this paper is to empirically examine the earnings quality of Japanese small and medium-sized enterprises (SMEs). More concretely speaking, we investigate the current properties of earnings quality including earning persistence, earnings benchmarks, and accruals by using data on Japanese SMEs and listed companies from FY2006 to FY2013. We find that, first, earnings persistence of SMEs is relatively lower than that of listed companies. For example, only 55% of future operating income can be predicted by the current operating income in the case of SMEs, while about 70% can be explained for the listed companies. Second, a "kink" in the distribution of reported earnings around zero is observed for SMEs, which is similar to the case of listed companies. Finally, accruals quality is generally lower for SMEs regardless of the choice of accrual model, indicating that earnings quality as measured by accruals is lower for SMEs compared with the listed companies. Overall, from the viewpoint of earnings quality, our empirical evidence supports the direction of the reform comprised as a new document presenting guidelines for SME accounting ( Chusho Kaikei Yoryo ).
    Date: 2017–04
  8. By: Anabela Marques Santos; Michele Cincera
    Keywords: access to finance; innovative firms; European Union
    JEL: O16 O31 O52
    Date: 2017–04–24
  9. By: IKEUCHI Kenta; MOTOHASHI Kazuyuki
    Abstract: This paper uses patent filings as an indicator of innovation and investigates the relationship between innovation and the survival of young firms, based on a dataset linking the Economic Census and the Institute of Intellectual Property (IIP) Patent Database for Japanese firms. We construct indicators showing the organization of innovative activities, such as external collaboration on inventions and the type of collaborative partners, and disentangle two competing factors on innovative activities, i.e., technological capability (positive influencing firm survival) and commercial risk (negative influencing firm survival). We find that positive impacts surpass negative ones in general, and this tendency strengthens when patents have relatively greater potential market value. In addition, collaboration with universities invariably leads to a higher probability of survival, while the impact of collaboration with other firms depends on firm size, namely, a certain level of managerial resources to overcome the complexity involved in open innovation is required to achieve gains from collaboration.
    Date: 2017–03
  10. By: Shamnaaz B. Sufrauj (Department of Economics, University Of Venice Cà Foscari); Giancarlo Corò (Economics, Languages and Entrepreneurship, University Of Venice Cà Foscari); Mario Volpe (Department of Economics, University Of Venice Cà Foscari)
    Abstract: Labour market rigidity is known to hamper the proper adjustment of an economy, thus, making it less resilient to shocks. This paper investigates the characteristics and resilience of the regional labour flow network in Veneto, a region famous for its industrial districts and the expertise of its workforce. A unique database of inter-firm worker mobility is used and the made-in-Italy relatedness to other industries is quantified. Descriptive results suggest that permanent-contract workers are more mobile within-sector than fixed-term contractors. The latter are more mobile across sectors. A finer disaggregation of the made-in-Italy industries shows that textile, food and woodwork are highly related to leisure-retail, logistics-wholesale and agriculture. These results can orient policy-making in getting faster labour reallocation. Network analysis establishes a number of stylised facts about labour flow networks, in particular, a hierarchical organisation of flows and a preference for workers to move from low-connected to high-connected firms and vice-versa, i.e. disassortativity. Unlike previous research, this paper identifies clusters of a non-spatial nature, that are, based on the intensity of labour flows. Regression analysis shows that labour mobility, both in and out, is beneficial for firms. However, being located inside labour clusters negatively affects firm performance. Interestingly, when these clusters include MNEs, they benefit. These results combined suggest that variety of connections prevails over standardisation.
    Keywords: Labour mobility, network analysis, skill-relatedness cross-industry linkages
    JEL: J24 J62 L14 R23 F23
    Date: 2017
  11. By: HOSONO Kaoru; MIYAKAWA Daisuke; TAKIZAWA Miho
    Abstract: It has been an important open question why firms hold seemingly "excess" liquidity (e.g., cash). Using Japanese firm-level large panel data accounting for 40,000 firms over the period 2000-2013, first, we find a positive correlation between firms' liquidity holding as measured by the ratio of liquidity assets to total assets and the ratio of intangible to tangible assets held by the firms. This result is consistent with the empirical implication of our theoretical model based on collateral constraints for borrowing, and suggests that the increasing importance of nonpledgeable intangible assets in firms' production process partly explains firms' liquidity holding. Second, we also find that such positive correlation is stronger for the firms in industries associated with higher complementarity between tangible and intangible assets. This result suggests that the firms' liquidity holding reflects the technological heterogeneity among industries.
    Date: 2017–03
  12. By: Yann Algan (Département d'économie); Thomas Cazenave (Ministère de l'Economie, des Finances et de l'Industrie)
    Abstract: L'action publique semble aujourd'hui faire face à une équation impossible, entre réduction des moyens et multiplication des mécontentements. Les approches traditionnelles de la réforme sont mises en échec. A cette approche décliniste, L'Etat en mode start-up oppose une autre vision, celle d'une action publique réinventée, plus agile et collaborative, "augmentée" par l'innovation technologique et sociale. Transformation numérique, association des citoyens, remise en cause d'un modèle uniforme de service public au profit d'une approche personnalisée, confiance et responsabilisation de ceux qui ont la charge au quotidien de l'action publique : un nouvel âge de l'action publique se dessine. Il faut pour le porter une nouvelle génération d'acteurs publics. En donnant la parole à certains d'entre eux, cet ouvrage montre que la réforme est possible, qu'elle est bien souvent en cours, et qu'elle est porteuse de réponses aux inquiétudes de notre société. Un ouvrage sous la direction de Yann Algan, doyen de l'Ecole d'affaires publiques de Sciences Po et professeur d'économie, spécialiste de l'économie numérique et collaborative, et Thomas Cazenave, inspecteur des finances, directeur de cabinet adjoint du ministre en charge de l'Économie, de l'Industrie et du Numérique, enseignant à Sciences Po et à l'ENA. Un ouvrage sous la direction de Yann Algan, qui rassemble les contributions de Jack Azoulay, Jean Bassères, Henri Bergeron, Alice Bougnères, Patrick Castel, Aude Costa de Beauregard, Laurent Cros, Elisabeth Grosdhomme Lulin, Marie-Christine Lepetit, Bruno Mettling, Alexandra Roulet, Karim Tadjeddine et Henri Verdier.
    Keywords: Action publique; Etat; Innovation technologique et sociale; Economie numérique et collaborative
    Date: 2016–05
  13. By: Thomas Brenner (Department of Geography, Philipps University Marburg)
    Abstract: This paper provides two things. First, it gives an overview on the existing top-down methods for the identification of clusters (Section II). Second, it presents a new method that has been recently introduced by Scholl and Brenner (2016) in a basic version. However, the existing version of this approach is limited and does not take full advantage of its potential. The approach is further developed here and its characteristics and the procedure of its use are presented and discussed in detail (Section III).
    Keywords: Cluster, cluster identification, spatial methods
    JEL: C43 R12 L60
    Date: 2017–04
  14. By: Zuzana Brixiová (SALDRU, University of Cape Town and Institute of Labor Economics (IZA)); Balázs Égert (OECD Economics Department; University of Paris X-Nanterre and CESifo)
    Abstract: This paper develops a model of costly firm creation in an economy with weak institutions, costly business environment as well as skill gaps where one of the equilibrium outcomes is a low-productivity trap. The paper tests the implications of the model using a cross-sectional dataset including about 100 countries. Both theoretical and empirical results suggest that to move the economy into a productive equilibrium, complementarity matters: reforms to improve the business environment tend to be more effective in creating productive firms when accompanied by narrowing skill gaps. Similarly, more conducive business regulations amplify the positive impact on firm creation of better education and reduced skill mismatches. To escape a low-productivity trap, policymakers should thus create a pro-business framework and a well-functioning education system.
    Keywords: Model of start-ups and strategic complements, institutions, education, low-income countries, threshold regression
    JEL: L26 J24 J48 O17
    Date: 2017
  15. By: M.A. Boermans; Daan Willebrands
    Abstract: Risk attitudes of entrepreneurs are well-established drivers of business performance. Most empirical studies in this field only take into account risk propensity, leaving out the complementary concept of risk perception. Using data on 611 entrepreneurs from Tanzania, we show that risk perception is positively associated with business performance. In addition, we classify the entrepreneurs in four different groups based on their risk profile. The results show that the worst performing entrepreneurs are those with low risk perception and high risk propensity.
    Keywords: risk attitude, risk perception, risk propensity, entrepreneurship, business performance, Africa
    Date: 2017–04
  16. By: ASABA Shigeru
    Abstract: Existing survey evidence suggests that family firms have worse management practices than non-family firms. Given that better management practices result in higher firm performance, family firms are assumed to have lower performance than non-family firms. Performance comparisons between family and non-family firms, however, have found the contradictory result that family firms outperform their non-family counterparts. To resolve this conflict, this study examines the relationship between the ownership-management structure and management practices of firms, using comparable survey data on Japanese firms. We find that family-owned and -managed firms and founder-managed firms have as good management practices as non-family firms and that family-owned but not managed firms have better management practices. Moreover, we find that management ownership has a negative impact on management practices. These results suggest that family ownership has a positive impact, and combined ownership and control have a negative impact on management practices. In family-owned but not managed firms, only a positive effect works while in family-owned and -managed firms, a positive effect is offset by a negative effect. These results contrast with agency theory, which argues that the source of family firms' advantages is reduced agency conflicts. However, they are in line with agency theories emphasizing entrenchment effects, and the theory arguing that the preservation of socio-emotional wealth is the source of the characteristics of family firms.
    Date: 2017–03
  17. By: OHYAMA Atsushi
    Abstract: The literature on industry life cycle suggests that there is some underlying mechanism that generates differences in time for industries reaching their peaks. What causes variation in such peak times across industries? In this paper, I use the Japanese Census of Manufacture and investigate (i) whether creation and destruction of submarkets in an industry affect the length of positive net entry periods and subsequent entry rates, (ii) what type of firm is more likely to be actively engaged in a newly created or destructed submarket, and (iii) how reallocation of unrealized opportunities from incumbent firms to spinoff firms affects the entry process. This study reveals that the creation and destruction of a submarket allow an industry to continue attracting new entrants, that startup and spinoff firms are more likely to enter a newly created submarket than incumbent firms, and that new entry is encouraged when unrealized business opportunities are reallocated smoothly.
    Date: 2017–03
  18. By: Thanh Tam Nguyen-Huu; Minh Nguyen-Khac; Quoc Tran-Nam
    Abstract: This is a pioneer study investigating the relationship between environmental compliance and TFP convergence for SMEs. It examines the impacts of environmental compliance, and its combination with innovation, on TFP convergence of manufacturing SMEs. We applied the dynamic panel regression method to estimate stochastic TFP. We find evidence of a ß-convergence but a s-divergence. Impacts of environmental practices of firms—pollution abatement and control expenditure, and environmental treatment—are only significant through their interaction with innovation. The ß-convergence in firms’ TFP is influenced by their industrial identity, while firms’ size and investment have marginal impacts.
    Date: 2017

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