nep-sbm New Economics Papers
on Small Business Management
Issue of 2017‒06‒18
seven papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Founders f human capital and external knowledge sourcing: An absorptive capacity perspective for innovative start-ups By Masatoshi Kato
  2. European SME policy: Recommendations for a growth-oriented agenda By Röhl, Klaus-Heiner
  3. Personal Bankruptcy Law and Entrepreneurship By Geraldo Cerqueiro; María Fabiana Penas; Robert Seamans
  4. Collaborative Innovation: Creating Opportunities in a Changing World By van de Vrande, V.J.A.
  5. The short-run effects of Knowledge intensive greenfield FDI on new domestic entry By Sara Amoroso; Bettina Mueller
  6. "Internet and enterprise productivity: evidence from Latin America" By Juan Jung; Enrique López-Bazo; Matteo Grazzi
  7. Capital Investment Decisions of Micro, Small and Medium Enterprises: The Case of Digos City By Relativo, Jona Princess; Sumayang, Mildred; Diasana, Sarah Jean; Murcia, John Vianne

  1. By: Masatoshi Kato (School of Economics, Kwansei Gakuin University)
    Abstract: This study explores the role of founders f human capital in determining the external knowledge sourcing (licensing-in and joint R&D) of a firm during the start-up period using panel data drawn from original questionnaire surveys conducted in Japan. The results of a probit model with an endogenous regressor show that firms managed by founders with a high level of specific human capital, measured as prior work experience in a related field or as technological experience, tend to engage in external knowledge sourcing because of their absorptive capacity. The findings indicate that this type of human capital also promotes R&D investment. Contrariwise, this study finds that firms managed by founders with a high level of general human capital, measured as educational attainment, tend to invest more in R&D as an absorptive capacity-building activity, which may promote external knowledge sourcing. The implications of these findings are discussed from the perspective of economic policy.
    Keywords: Start-up, Founder, General human capital, Specific human capital, R&D investment, External knowledge sourcing.
    JEL: M13 L26 O32
    Date: 2017–06
  2. By: Röhl, Klaus-Heiner
    Abstract: The economic policy of the European Union influences the almost 23 million small and medium-sized companies in the 28 Member States in a variety of ways. Yet, there exists no coherent EU policy on small and medium-sized enterprises. With the Small Business Act of 2008, small and medium-sized enterprises received greater attention, but this primarily applies to start-ups and small companies. As a result of the European debt crisis, start-ups and established small and medium-sized companies have returned into focus for policy-makers in Brussels. They hope that SMEs create more jobs and growth. Despite this, the concerns of SMEs are still not at the heart of economic policy and regulation. That is also clear when looking at the EU budget and its high agricultural expenditures. It is particularly problematic that larger family companies with over 250 employees or a turnover of 50 million euro are regarded as large companies. They are treated in the same way as big corporations. A better targeted EU policy on SMEs should reduce red tape for companies and include family companies that have grown beyond the defined SME thresholds. Additionally, it should recognise medium-sized industrial enterprises as key partners in implementing the objective of reinvigorating European industry by 2020.
    Date: 2017
  3. By: Geraldo Cerqueiro; María Fabiana Penas; Robert Seamans
    Abstract: We study the effect of debtor protection on firm entry and exit dynamics. We find that more lenient personal bankruptcy laws lead to higher firm entry, especially in sectors with low entry barriers. We also find that debtor protection increases firm exit rates and that this effect is independent of firm age. Our results overall indicate that the wealth insurance provided by personal bankruptcy exemptions induce individuals to embrace entrepreneurship and that this in turn fosters competition in a Schumpeterian sense.
    Keywords: Debtor Protection, Personal Bankruptcy, Entrepreneurship.
    Date: 2017–01
  4. By: van de Vrande, V.J.A.
    Abstract: Today’s business environment is characterised by fast and frequent change, which is often difficult to predict. As a consequence, companies need to continuously invest in the development of new business to remain competitive. However, due to the increasing complexity of the environment, internal development is often not enough, and collaborative innovation is becoming more important. There are three areas that warrant our attention. First, interest among employees and organisations to pursue entrepreneurial initiatives raises questions around the management and support that is needed to foster these initiatives and how to best organise internal corporate venturing. Second, the increasing number of start-ups provides opportunities for existing companies to tap into emerging technologies and business areas through corporate – start-up collaboration. Third, the changing nature of work provides an opportunity for existing organisations to rethink the relationship they have with their employees and to find a way to benefit from the increased flexibility of their own and other’s workers. I will raise a number of research questions in these areas and provide directions for future research in the field.
    Keywords: Entrepreneurship, Corporate venturing, Corporate venture capital, Collaboration, Innovation, Coworking, Start-ups
    JEL: M D21 L20 O31
    Date: 2017–06–02
  5. By: Sara Amoroso (European Commission - JRC); Bettina Mueller (Centre for European Economic Research (ZEW))
    Abstract: Existing evidence on the impact of foreign direct investment on domestic economies remains ambiguous. Positive technology spillovers of foreign investment may be outweighed by negative crowding out effect due to increased competition. In this paper, we employ a unique country/sector-level data set to investigate the impact of what is considered the best type of foreign investment greenfield knowledge intensive FDI on domestic entry. Our results suggest that, in the short run, this type of FDI is positively related to the entry rate in the host country, if the domestic sector is either dynamic, or highly R&D intensive. These sectors may be respectively characterized by lower entry costs, which encourage a trial and error learning business approach, and by a higher level of absorptive capacity which increases the chance of technology transfer.
    Keywords: foreign direct investments; knowlwdge spillovers; new firm entry
    Date: 2017–04
  6. By: Juan Jung (AQR-IREA, Universitat de Barcelona, Av. Diagonal 690, 08034 Barcelona, Spain.); Enrique López-Bazo (AQR-IREA, Universitat de Barcelona, Av. Diagonal 690, 08034 Barcelona, Spain.); Matteo Grazzi (Competitiveness, technology and innovation division - Inter-American Development Bank, 1300 New York Avenue, NW 20577 Washington DC, USA.)
    Abstract: This paper tests three hypotheses regarding the link between internet and firm productivity: i) internet adoption and use constitute a source of productivity growth for firms in Latin America, ii) the intensity of its use also matters, and iii) the link between the new technologies and productivity levels is not uniform over the whole productivity distribution. The evidence in this paper fills the gap of scarce and fragmented literature focused on Latin America, and is aligned with previous research for more developed regions which has generally recognized that Information and Communication Technologies (ICTs) have radically changed how modern business are conducted, benefitting firm performances through several channels, such as increasing the efficiency of internal processes, expanding market reach or increasing innovation. Our findings suggest that low-medium productive firms benefit more from an expansion in internet adoption and use, in comparison with the most productive ones. If this evidence is supposed to reflect long-term effects, then public policies oriented to massify internet adoption and promote internet use intensively will surely contribute to reduce inequalities of enterprise’s productivity levels, promoting a level playing field among Latin American firms, something especially relevant for the most unequal region of the world.
    Keywords: ICT, Internet, Productivity, firms, Latin America JEL classification:D22, O31, O33, O54.
    Date: 2017–05
  7. By: Relativo, Jona Princess; Sumayang, Mildred; Diasana, Sarah Jean; Murcia, John Vianne
    Abstract: This paper examined the capital investment decisions of micro, small and medium enterprises, with the aim of assessing its current levels and its conditions across industries in Digos City. Questionnaires measuring the four phases of capital investment decisions were administered to a stratified random sample of 125 owners or managers of micro, small and medium enterprises while further in-depth interviews were done to extract explanatory factors of capital investment decisions that were not accounted in the quantitative phase. Non-parametric test of association revealed no significant association of capital investment decisions and nature of industry being engaged by MSME owners/managers. Pearson r correlation test revealed that generation of investment opportunities, project analysis and approval, and post-implementation audit have significant relationship with years of operation. Further qualitative analysis of interviews revealed that the influential factors affecting financing decisions of MSME’s owners include sources of finances, entrepreneurs’ prior experiences, business trends, and diversification of investments.
    Keywords: capital investment decision, MSME, sequential-explanatory design, Digos City, Philippines
    JEL: D81 G31 L25 L26 M14 M2 M21
    Date: 2016–07–12

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