nep-sbm New Economics Papers
on Small Business Management
Issue of 2017‒07‒02
thirteen papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Firms' Dynamics and Business Cycle: New Disaggregated Data By Lorenza Rossi; Emilio Zanetti Chini
  2. Employment Effect of Innovation By d'Artis Kancs; Boriss Siliverstovs
  3. Bridging Organizations between University and Industry: from Science to Contract Research By Angelo Bonomi
  4. The role of inter-organizational proximity on the evolution of the European Aerospace R&D collaboration network. By Pier Paolo Angelini
  5. DO FIRMS INNOVATE ABROAD? - The Case of Swedish R&D in India By Jeremiah, Rupin
  6. Innovaciones sociales para territorios “inteligentes”: ¿ficción o realidad? By Parada, Jairo
  7. The Determinants of Growth in the Information and Communication Technology (ICT) Industry: A Firm-Level Analysis By Giorgio Canarella; Stephen M. Miller
  8. It pays to be active on many foreign markets Profitability in German multi-market exporters and importers from manufacturing industries By Joachim Wagner
  9. Productivity premia for many modes of internationalization - A replication study of Békes / Muraközy, Economics Letters (2016) By Joachim Wagner
  10. Innovation and Inequality in a Small World By Ines Lindner; Holger Strulik
  11. The Annual Survey of Entrepreneurs: An Update By Lucia Foster; Patrice Norman
  13. Some “unexpected proximities” between Schultz and Galbraith on human capital By Alexandre Chirat; Charlotte Le Chapelain

  1. By: Lorenza Rossi (Department of Economics and Management, University of Pavia); Emilio Zanetti Chini (Department of Economics and Management, University of Pavia)
    Abstract: We provide stylized facts on firms dynamics by disaggregating U.S. yearly data from 1977 to 2013. To this aim, we use an unobserved component-based method, encompassing several classical regression-based techniques currently in use. Our new time series of entry and exit of firms at establishment level are feasible proxies of business cycle. Exit is a leading and countercyclical indicator, while entry is lagging and procyclical. A structural econometric analysis supports the findings of the most recent theoretical literature on firms dynamics. Standard macroeconometric models estimated from our data outperform their equivalents estimated using the existing series.
    Keywords: Entry and Exit, State Space, Business Cycle, Disaggregation, SVAR.
    JEL: C13 C32 C40 E30 E32
    Date: 2017–06
  2. By: d'Artis Kancs; Boriss Siliverstovs (KOF Swiss Economic Institute, ETH Zurich, Switzerland)
    Abstract: The present paper estimates and decomposes the employment e?ect of innovation by R&D intensity levels. Our micro-econometric analysis is based on a large international panel data set from the EU Industrial R&D Investment Scoreboard. Employing ?exible semi-parametric methods – the generalised propensity score – allows us to recover the full functional relationship between the R&D investment and ?rm employment, and to address important econometric issues, which is not possible in the standard estimation approach used in the previous literature. Our results suggest that modest innovators do not create and may even destruct jobs by raising their R&D expenditures. Most of the jobs in the economy are created by innovation followers: increasing innovation by 1% may increase employment up to 0.7%. The job creation e?ect of innovation reaches its peak when the R&D intensity is around 100% of the total capital expenditure, after which the positive employment e?ect declines and becomes statistically insigni?cant. Innovation leaders do not create jobs by further increasing their R&D expenditures, which are already very high.
    Date: 2017–02
  3. By: Angelo Bonomi (Ceris - Institute for Economic Research on Firms and Growth,Turin, Italy)
    Abstract: Two bridging organizations, NIS and Agroinnova, formed both in 2003 internally to the University of Turin, have been studied through a good practice benchmarking in view to assess their validity in the science to business process especially concerning Italian SMEs. References for benchmarking have been established by suitable definitions of technology, technology innovation and a structured model of technology followed by a description of the innovation process as a sequence of steps. Benchmarking attention has been focused on contract research and technology transfer office activities. The results of the study show that such type of bridging organizations, and especially their spin-offs in contract research, may be a good possibility to foster the science to business process. However bottlenecks exist and concern the low diffusion of an entrepreneurial mentality that limits generation of innovative ideas for new technologies despite a large activity in scientific research. Bottlenecks concerning SMEs are mainly lack of experience in R&D and technology management. Fostering of science to business process by a simple increase of funds does not appear effective without a change in mentalities, adoption of suitable industrial policies and new concepts for bridging structures and financial aids to SMEs.
    JEL: O32 O38 I23
  4. By: Pier Paolo Angelini
    Abstract: The influence exerted by five dimensions of inter-organizational proximity (geographical, organizational, network, institutional and technological) on the evolution of the collaboration networks subsidized by the European Union Framework Programmes in the Aerospace sector is studied. The role of the proximity dimensions is controlled by means of a longitudinal analysis with a stochastic actor-oriented model, which will be run on four observations of the network starting in the fourth (1994-1998) and ending in the seventh Framework Programme (2007-2013). Results show that organizational proximity is the most important driver for the longitudinal evolution of the network. Further, this form of proximity is constant in time, analogously to the geographical one which, on its side, only moderately affects network’s evolution. Network proximity plays a weak but positive influence, while the institutional and technological dimensions do not affect the evolution of the network. Anyway, when proximity is evaluated on single institutional and technological types, different roles are detected. Regarding the former, research centres have a preference for inter-organizational mixing, while firms prefer to cooperate with firms. As for the latter, a repulsive tendency among system integrators is appreciated. Organizations’ patenting activity, introduced as a control variable, does not play a significant role on network’s evolution. Length: 41 pages
    Keywords: Longitudinal network analysis; Stochastic actor-oriented models; European Framework Programmes; Inter-organizational proximity; R&D collaboration networks; Aerospace. JEL Codes: O33; D85; C63Creation-Date: 2014-03
  5. By: Jeremiah, Rupin (Dept. of Management and Organization)
    Abstract: This is a study of Swedish firms that have offshored their innovation functions to India. How innovation is arranged offshore is the question this paper answers. The sample is a set of Swedish firms with an R&D facility in India. Data are collected from interviews with decision makers from both the Swedish and the Indian sides, responsible for implementing the offshoring decisions. The result is an innovation configuration model which explores how Swedish firms derive value from innovation abroad.
    Keywords: Innovation configuration; Offshoring; Unlearning
    Date: 2017–03–29
  6. By: Parada, Jairo
    Abstract: This essay explores the theoretical arguments regarding the existence of “smart” territories, a recently-developed concept based on notions related to the knowledge society and knowledge economy, sustainable development, and social inclusion. This paper examines the preconditions necessary to make it possible for this type of territorial space to emerge in relation to the economic development underpinning it, as well as the right type of social structure, qualities required for human agency, and the social innovations demanded for such purpose. Finally, as a case study, this paper provides an empirical analysis of such conditions on the Caribbean coast of Colombia, drawing some final conclusions and recommendations from it
    Keywords: Caribbean Region of Colombia, smart cities, urban sustainability, innovation, technological development, governance.
    JEL: O18 P25 Q55 R1 R11
    Date: 2017–07–01
  7. By: Giorgio Canarella (University of Nevada, Las Vegas); Stephen M. Miller (University of Nevada, Las Vegas)
    Abstract: Why do some firms grow faster than others? This question has become the focus of a large number of empirical studies in industrial organization, strategic management, and entrepreneurship since the publications of Gibrat (1931) and Penrose (1959). Using an unbalanced panel data set of 85 U.S. information and communication technology (ICT) firms that survived over the period from 1990 to 2013, we examine the effect of firm size, agency costs, R&D investments, capital structure, profitability, and the Great Recession of 2007-2009 on firm growth. Adopting the two-step, system, generalized-method-of-moments estimator for linear dynamic panel models (Blundell and Bond, 1998), we document that growth in the ICT industry is not stochastic, as predicted by Gibrat (1931), but driven by systematic factors. We find compelling evidence that in the ICT industry: (i) firm growth exhibits positive persistence, which endorses the controversial "success-breeds-success" evolutionary hypothesis; (ii) agency costs and financial leverage exert a negative effect on firm growth; (iii) R&D investment and financial performance generate a positive effect on firm growth; (iv) the Great Recession (2007-2009) produced a negative effect on firm growth; (v) a nonlinear, inverted U-shaped relationship exists between firm size and firm growth; and (vi) Gibrat’s law does not hold. Our findings remain robust to transformations using first differences and forward orthogonal deviations as well as principal components reductions. These results are new to the literature, since the dynamics of firm growth has not been documented at the ICT industry level. Noteworthy policy implications emerge because the growth dynamics of the ICT industry move this sector toward more concentration and less competition.
    Keywords: ICT industry; Agency costs; Firm growth; Panel data; system-GMM
    JEL: G21 G28 G32 G34
    Date: 2017–06
  8. By: Joachim Wagner (Leuphana University Lueneburg, Germany)
    Abstract: This paper provides the first empirical evidence on the link between the number of foreign markets (where a market is defined as the combination of one traded good and one country traded with) a firm is active on and its profitability. We find that in German manufacturing industries the profitability of a firm increases when the number of markets a firm exports to or imports from increases. The extra costs associated with being active on more foreign markets tend to be smaller than the extra benefits. It pays to be active on many foreign markets.
    Keywords: Exports, Imports, Number of foreign markets, Profitability, Germany
    JEL: F14
    Date: 2017–03
  9. By: Joachim Wagner (Leuphana University Lueneburg, Germany)
    Abstract: This study attempts to replicate estimation results from Gábor Békés and Balázs Muraközy, Measuring productivity premia with many modes of internationalization, published in Economics Letters (2016). In this paper the authors use comparable firm-level data for seven European countries based on the EFIGE dataset to estimate the productivity premia of firms with various modes of internationalization by several empirical methods to demonstrate how results differ due to the method applied. While the EFIGE data are available free of charge from the web one core variable used by Békés and Muroközy is not, because total factor productivity (tfp) as computed by the authors is based on data from a commercial data base and, therefore, is available for users with a license to this database only. The freely available EFIGE data, however, come with another tfp-variable that can be used instead. In this replication study I use the EFIGE data with this publicly available tfp-variable to replicate (parts of) the estimations of Békés and Muraközy (2016) to see whether their results hold with the widely used public use version of the EFIGE data, too. It turns out that the big picture that emerges from using both productivity measures tends to be very similar. The use of the public use version of the EFIGE data for empirical investigations that deal with productivity, therefore, seems to be feasible.
    Keywords: Replication study, EFIGE data, productivity premia, internationalization modes
    JEL: F14
    Date: 2017–03
  10. By: Ines Lindner (VU Amsterdam and Tinbergen Institute, The Netherlands); Holger Strulik (University of Goettingen, Germany)
    Abstract: We present a multi-country theory of economic growth and R&D-driven technological progress in which countries are connected by a network of knowledge exchange. Technological progress in any country depends on the state of technology in the countries it exchanges knowledge with. The diffusion of knowledge throughout the world explains a period of increasing world inequality after the take-off of the forerunners of the industrial revolution, followed by decreasing relative inequality. Knowledge diffusion through a Small World network produces an extraordinary diversity of country growth performances, including the overtaking of individual countries and the replacement of the technologically leading country in the course of world development.
    Keywords: networks, knowledge diffusion, economic growth, world income distribution
    JEL: O10 O40 D85 F43
    Date: 2017–06–23
  11. By: Lucia Foster; Patrice Norman
    Abstract: We provide an update on the Annual Survey of Entrepreneurs (ASE), which is a relatively new Census Bureau business survey. About 290,000 employer firms in the private, non-agricultural U.S. economy are in the ASE sample. Its content is relatively constant over collections, allowing for comparability over time; however, each year there are approximately ten new questions in a changing topical module. Earlier topical modules covered innovation (2014) and management practices (2015). The topical module for reference year 2016 covers business advice and planning, finance, and regulations. The ASE is collected through a partnership of the Census Bureau with the Kauffman Foundation and the Minority Business Development Agency. Qualified researchers on approved projects may request access to the ASE micro data through the Federal Statistical Research Data Center (FSRDC) network.
    Keywords: Census Bureau, entrepreneurship, firm-level data, topical module
    Date: 2017–01
  12. By: Jeremiah, Rupin (Dept. of Management and Organization)
    Abstract: This is a study of Swedish firms that have offshored their innovation functions to India. How managers view offshoring decision choices within and across firms and how can we evaluate the decision making is the subject of this study. The sample is a set of Swedish firms with some R&D facility in India. Data are collected from interviews with managers and decision makers from both the Swedish and the Indian sides, responsible for implementing the offshoring decisions. The result is the development of a decision quality evaluation framework which can be used to possibly make better quality decisions when offshoring innovation.
    Keywords: Decision quality; Innovation offshoring
    Date: 2017–03–29
  13. By: Alexandre Chirat (TRIANGLE, University Lyon II); Charlotte Le Chapelain (CLHDPP-BETA, University Lyon III)
    Date: 2017

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