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on Small Business Management |
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Issue of 2017‒07‒23
twenty papers chosen by João Carlos Correia Leitão Universidade da Beira Interior |
| By: | Dora Benedek; Pragyan Deb; Borja Gracia; Sergejs Saksonovs; Anna Shabunina; Nina T Budina |
| Abstract: | Some countries support smaller firms through tax incentives in an effort to stimulate job creation and startups, or alleviate specific distortions, such as financial constraints or high regulatory or tax compliance costs. In addition to fiscal costs, tax incentives that discriminate by firm size without specifically targeting R&D investment can create disincentives for firms to invest and grow, negatively affecting firm productivity and growth. This paper analyzes the relationship between size-related corporate income tax incentives and firm productivity and growth, controlling for other policy and firm-level factors, including product market regulation, financial constraints and innovation. Using firm level data from four European economies over 2001–13, we find evidence that size-related tax incentives that do not specifically target R&D investment can weigh on firm productivity and growth. These results suggest that when designing size-based tax incentives, it is important to address their potential disincentive effects, including by making them temporary and targeting young and innovative firms, and R&D investment explicitly. |
| Keywords: | Productivity;size-based taxation, growth, structural reforms |
| Date: | 2017–06–13 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:17/139&r=sbm |
| By: | Ganau, Roberto; Rodríguez-Pose, Andrés |
| Abstract: | We examine whether organized crime affects firms' performance (defined using Total Factor Productivity growth) both directly and indirectly, by downsizing the positive externalities arising from the geographic concentration of (intra- and inter-industry) market-related firms. The analysis uses a large sample of Italian small- and medium-sized manufacturing firms over the period 2010-2013. The results highlight the negative direct effects of organized crime on firms' productivity growth. Any positive effect derived from industrial clustering is thoroughly debilitated by a strong presence of organized crime, and the negative moderation effect of organized crime on productivity growth is greater for smaller than for larger firms. |
| Keywords: | Total Factor Productivity; Organized crime; Industrial clustering; Externalities; Italy |
| JEL: | D24 L25 R11 R12 |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12140&r=sbm |
| By: | ShiXue He; Marcel Ausloos |
| Abstract: | Changes in the capital structure before and after the global financial crisis for SMEs are studied, emphasizing their financing problems, distinguishing between internal financing and external financing determinants. The empirical research bears upon 158 small and medium-sized firms listed on Shenzhen and Shanghai Stock Exchanges in China over the period of 2004-2014. A regression analysis, along the lines of the Trade-Off Theory, shows that the leverage decreases with profitability, non-debt tax shields and the liquidity, and increases with firm size and tangibility. A positive relationship is found between firm growth and debt ratio, though not highly significantly. It is shown that the SMEs with high growth rates are those which will more easily obtain external financing after a financial crisis. It is recognized that the China government should reconsider SMEs taxation laws. |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1707.06635&r=sbm |
| By: | Stephane Lhuillery; Thomas Zacharewicz (European Commission - JRC) |
| Abstract: | The 2016 series of the RIO Country Report analyses and assesses the development and performance of the national research and innovation system of the EU-28 Member States and related policies with the aim of monitoring and evaluating the EU policy implementation as well as facilitating policy learning in the Member States. |
| Keywords: | research and innovation, France, innovation system |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc105982&r=sbm |
| By: | Ana Fernandez Zubieta; Irene Ramos Vielba; Thomas Zacharewicz (European Commission - JRC) |
| Abstract: | The 2016 series of the RIO Country Report analyses and assesses the development and performance of the national research and innovation system of the EU-28 Member States and related policies with the aim of monitoring and evaluating the EU policy implementation as well as facilitating policy learning in the Member States. |
| Keywords: | research and innovation, Spain, innovation system |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc105983&r=sbm |
| By: | Maja Bucar (Visionary Analytics); Elena Gonzalez Verdesoto (European Commission - JRC) |
| Abstract: | The 2016 series of RIO Country Reports analyse and assess the policy and the national research and innovation system developments in relation to national policy priorities and the EU policy agenda with special focus on ERA and Innovation Union. The executive summaries of these reports put forward the main challenges of the research and innovation systems. |
| Keywords: | R&I system, R&I policy, ERA, innovation union, European Semester analysis, Slovenia |
| JEL: | I20 O30 Z18 |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc105890&r=sbm |
| By: | Behrens, Vanessa; Berger, Marius; Hud, Martin; Hünermund, Paul; Iferd, Younes; Peters, Bettina; Rammer, Christian; Schubert, Torben |
| Abstract: | Innovation is regarded as a key driver of productivity and market growth and thus has a great potential for increasing wealth. Surveying innovation activities of firms is an important contribution to a better understanding of the process of innovation and how policy may intervene to maximise the social returns of private investment into innovation. Over the past three decades, research has developed a detailed methodology to collect and analyse innovation activities at the firm level. The Oslo Manual, published by OECD and Eurostat (2005) is one important outcome of these efforts. In 1993 both organisations have started a joint initiative, known as the Community Innovation Survey (CIS), to collect firm level data on innovation across countries in concord (with each other). The German contribution to this activity is the so-called Mannheim Innovation Panel (MIP), an annual survey implemented with the first CIS wave in 1993. The MIP fully applies the methodological recommendations laid down in the Oslo Manual. It is designed as a panel survey, i.e. the same gross sample of firms is surveyed each year, with a biannual refreshment of the sample. The MIP is commissioned by the German Federal Ministry of Education and Research (BMBF) and conducted by the Centre for European Economic Research (ZEW) in cooperation with the Fraunhofer Institute for Systems and Innovation Research (ISI) and the Institute for Applied Social Science (infas). This publication reports main results of the MIP surveys conducted in the years 2013, 2014, 2015 and 2016. The surveys of the years 2013 and 2015 were the German contribution to the CIS for the reference years 2012 and 2014. The purpose of this report is to present descriptive results on various innovation indicators for the German enterprise sector. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdok:1704&r=sbm |
| By: | Heidi Leonhardt (University of Natural Resources and Life Sciences Vienna, Institute of Sustainable Economic Development); Juschten Maria (University of Natural Resources and Life Sciences Vienna, Institute for Transport Studies); Clive L. Spash, (Vienna University of Economics and Business) |
| Abstract: | While research on alternatives to growth at the level of the economy as a whole is accumulating, few studies have related the criticism of growth to the business level. This paper starts to address this gap by investigating mechanisms of growth for small and medium sized enterprises (SMEs), presenting a case study that applies Q methodology and interviews with owner-managers of both growing and non-growing SMEs in Austria. Some mechanisms stimulating growth are identified across SMEs including contributing to innovativeness and motivation of employees. Others are only of relevance for some SMEs: competition, financial stability and a desire for market power. The owner-managers of non-growing SMEs hold values and pursue goals that free them from mechanisms of growth or prevent them from being triggered. Moreover, they exhibit a strong identification with their SME, operate in niche markets and strive for financial independence. This illustrates that a growth imperative is neither inevitable nor are growth mechanisms always operative, but depend upon structures and institutions. |
| Keywords: | SME growth, growth mechanisms, post-growth society, social ecological transformation. |
| JEL: | L21 M14 O44 |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:sed:wpaper:692017&r=sbm |
| By: | Dennis D. Fehrenbacher; Claudia R Schneider; Elke U. Weber |
| Abstract: | Knowledge about the existence and source of national differences in willingness to take risks plays a vital role in ensuring successful communication, collaboration, and understanding across countries, from the personal to the organizational and political/social domain. The current study investigates differences in financial risk-taking willingness between countries as a function of social and state ‘cushioning’, i.e. the extent of a person’s social support network and the state’s social-safety support network. The study compares large-scale household data and self-reports on willingness to take financial risks across three countries differing in their state support networks: Austria, Italy and the United States. Results show that personal social support network size influences risk-taking willingness (social cushioning). Furthermore, and most notably, we find evidence of an interactive relationship between social and state cushioning. High state cushioning renders the influence of social cushioning on financial risk-taking willingness less important. Contributions to management and business practice as well as theory on the influence of personal distance to financial support on risk-taking willingness are discussed. |
| Keywords: | cushion hypothesis,financial risk-taking willingness,cross-national comparison,social support network,state support network |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:lis:lwswps:16&r=sbm |
| By: | André Luiz Silva Teixeira (Cedeplar-UFMG); Emerson Gomes dos Santos (EPPEN/UNIFESP); Gustavo Henrique Costa Barbosa (FACE/UFMG); Alexandre Abreu Medrado (FACE/UFMG); Márcia Siqueira Rapini (Cedeplar-UFMG); Janaína Ruffoni Trez (PPGE/UNISINOS) |
| Abstract: | The main purpose of this working paper is to present the results of a survey with firms about the relationship between firm’s absorptive capacity (its dimensions and determinants) and its interaction with universities (AC and UFI, respectively). The joint measure of these two innovative process aspects is one of the main contributions of this research. We detail the process to obtain the new and primary data, show the idiosyncrasies of database and indicate some methodological challenges for further analyses. This database is small and consists of innovative firms that interact with universities by joint research with them and tend to have higher AC, especially potential AC. It is necessary specific methods for small database and that permits a better treatment answers like “without conditions to answer”. |
| Keywords: | Absorptive capacity; university-industry interactions; survey |
| JEL: | L20 O31 |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:cdp:texdis:td560&r=sbm |
| By: | Soete, Luc (UNU-MERIT, and Maastricht University); Verspagen, Bart (UNU-MERIT, and Maastricht University); Ziesemer, Thomas (UNU-MERIT, and School of Business and Economics, Maastricht University) |
| Abstract: | Using a vector-error-correction model (VECM) with endogenous stocks for total factor productivity (TFP), domestic and foreign public and private Research and Development (R&D) as well as the GDP from which current resources are taken, we find that for the Netherlands for the period 1968-2014, extra investment in public R&D has a clear positive effect on total factor productivity growth. Taking into account the costs of these extra investments, we find that the rate of return to such a policy is positive and generally high. Including private R&D in the policy from the beginning is better than increasing public R&D alone and private R&D only following. Transitory and permanent shocks to only domestic public R&D in 1971 show positive effects on private domestic and foreign private and public R&D, total factor productivity and GDP. Under a permanent shock to the growth rate of domestic public R&D by 0.005 (an additional half percentage point on the baseline growth rate), TFP is 27.5% higher than baseline after 70 years, and the GDP is 61% higher because a higher TFP also attracts international capital one-to-one with GDP. Foreign private R&D reacts much more positively then foreign public R&D. Private R&D capital increases by up to 5.5% compared to baseline and returns to baseline in the long run. The internal rate of return is 131 percent obtained already in 1988. If domestic and foreign public R&D are increased by the same permanent shock of 0.005, there are positive effects for thirty five years in domestic private R&D but permanently so for all other variables; TFP would have been higher by 0.56% and GDP by 9.4%, much less than under the first strategy without the symmetric and simultaneous foreign policy. The rate of return is 4-6 percent for horizons 2014, 2024, and 2040 because of higher gains in later periods. If domestic and foreign public and private R&D growth get a shock of 0.0025 (each an additional quarter of a percent on baseline) TFP increases by 13 percent until 2040, GDP by 28 percent and the internal rate of return is 77%. |
| Keywords: | Research and Development, Innovation, Public R&D, R&D policy, R&D investment, return on investment, rate of return |
| JEL: | O38 O30 O32 H41 |
| Date: | 2017–05–08 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2017021&r=sbm |
| By: | Hui He; Hanya Li; Jinfan Zhang |
| Abstract: | The paper analyses the effect of the stock market on firm innovation through the lens of initial public offering (IPO) using uniquely matched Chinese firm-level data. We find that IPOs lead to an increase in both the quantity and quality of firm innovation activity. In addition, IPOs expand a firm’s scope of innovation beyond its core business. The impact of IPOs on firm innovation varies across financial constraints, corporate governance, and ownership structures. Our results further illustrate that IPOs induce a firm to increase the number of inventors and enable better retention of existing inventors after the IPO. Finally, we show that the enhanced innovation activity resulting from IPOs increases a firm’s Tobin’s Q in the long run. |
| Date: | 2017–06–30 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:17/147&r=sbm |
| By: | Petr Sedlacek (Bonn University); Benjamin Pugsley (Federal Reserve Bank of NY); Vincent Sterk (University College London) |
| Abstract: | There are vast differences in the growth patterns of firms: high-growth, young businesses, or “gazelles†, account for the vast majority of employment growth at incumbent firms. Using a large administrative panel data set for the United States, we provide evidence that ex-ante differences in the growth potential of firms account for most of the size heterogeneity across firms of a given age. First, we estimate a reduced-form employment process, allowing for heterogeneity in steady-state levels and deriving parameter identification from the autocovariance function of employment. Next, we estimate a general equilibrium firm dynamics model and explore the implications for firm selection and the macro effects of firm-level distortions. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed017:196&r=sbm |
| By: | Montalbano, Pierluigi (University of Roma Tre, University of Sussex); Nenci, Silvia (University of Roma Tre); Pietrobelli, Carlo (, and UNU-MERIT, Maastricht University) |
| Abstract: | This work explores the relationship between exports, Global Value Chains' (GVCs) participation and position, and firms' productivity. To this aim, we combine the most recent World Bank Enterprise Survey in Latin American and Caribbean (LAC) countries with the OECD-WTO trade in value added data. To explore the above relationship we adopt an extended version of the standard Cobb-Douglas output function including indicators of export performance and GVCs. We control for heterogeneity among firms (by country, region, and industry), sample selection, firms' characteristics and reverse causality. Our empirical outcomes confirm the presence of a positive relationship between participation in international activities and firm performance. They also show that both participation in GVCs and position within GVCs matter. These findings have strong policy implications and may help policymakers in choosing the best policy options to enhance the link between GVCs integration and firms' productivity. |
| Keywords: | Firm productivity, Exports, Trade in Value added, Global Value Chains, GCVs, learning by supplying |
| JEL: | F14 F61 D24 L22 O54 |
| Date: | 2017–07–05 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2017030&r=sbm |
| By: | Vladimir Sokolov (National Research University Higher School of Economics); Laura Solanko (Bank of Finland) |
| Abstract: | We examine how regional-level political influence affects firm financial performance and survival. Combining representative survey data on mid-sized manufacturing firms in Russia with official registry data, we find that politically influential firms exhibit higher profitability and retain larger financial investments than non-influential firms. Most importantly, our empirical analysis suggests that the benefits of influence may be transient. Influential firms experienced significantly lower growth during our sample period than non-influential firms. Moreover, influential firms had a significantly higher probability of being liquidated than non-influential firms and the likelihood of the subsequent plant utilization by a new firm was higher for the politically influential liquidated firms. |
| Keywords: | political influence, firm performance, firm liquidation, government quality |
| JEL: | D22 D72 G33 G38 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:60/fe/2017&r=sbm |
| By: | Antonelli, Cristiano (University of Turin) |
| Abstract: | This paper accommodates the new understanding of the limited exhaustibility of knowledge into the Schumpeterian frame of the creative response to articulate a comprehensive model of Schumpeterian growth. The limited exhaustibility of knowledge and its transient appropriability favor the accumulation of a stock of quasi-public knowledge. The increasing stock of quasi-public knowledge together with appropriate knowledge governance conditions account for the secular decline of knowledge costs and the increase of diachronic and pecuniary knowledge externalities. Because of its limited exhaustibility and the consequent cumulability, knowledge is an endogenous endowment that accounts for growth. Unexpected out-of-equilibrium conditions in product and factor markets stir the response of firms. The availability of knowledge externalities accounts for the rate of innovation as they help making the reaction creative so as to enable the introduction of innovations. The search for technological congruence and the secular decline of the cost of technological knowledge accounts for its knowledge intensive direction as it induces the introduction of biased technological changes that augment the output elasticity of knowledge as an input. The limited exhaustibility of knowledge accounts for the secular trend towards the knowledge economy. |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:uto:dipeco:201726&r=sbm |
| By: | Grillitsch, Markus (KEG, Lund University); Asheim, Bjorn (University of Stavanger); Trippl, Michaela (University of Vienna) |
| Abstract: | The paper engages in a critical discussion of the related variety – regional branching argument and foregrounds a more differentiated perspective on regional industrial path development. It contributes by i) sharpening the definition of key concepts, namely specialisation and diversity, related and unrelated variety, ii) discussing their relevance in local and non-local spaces, iii) scrutinizing related variety as source for regional branching, and iv) developing a conceptual framework capturing the opportunity space for regional structural change that unveils the relevance of path upgrading, path importation, path branching, path diversification, and new path creation as different forms of new path development. |
| Keywords: | industrial path development; economic diversification; regional structural change; specialisation and diversity; related and unrelated variety; knowledge base combinations |
| JEL: | B52 O10 R10 R58 |
| Date: | 2017–07–10 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2017_010&r=sbm |
| By: | Krammer, Sorin M.S. |
| Abstract: | Smart specialization (SS) is a policy concept that has gained significant momentum in Europe despite a frail theoretical background and implementation difficulties. These challenges become critical in the case of less-developed economies that often lack regional autonomy, a strong STI base, and local capabilities to identify and sustain such SS strategies. Combining elements from evolutionary economics and the export-led literature, I propose a framework that anchors the role of SS in the national innovation policy of such laggards, as a complementary avenue for improving competitiveness and growth. Moreover, to assist policy makers in lagging regions or countries, I advance a diagnostic tool to identify potential areas for SS, and also address the systemic and the regional-sectoral bottlenecks in these domains. I exemplify the use of this tool in the case of Bulgaria by using a large battery of quantitative and qualitative indicators from publicly available data. This type of investigation may be useful for other less-developed economies to kick-start this process and identify prima facie SS candidates. |
| Keywords: | Smart Specialization; Innovation Systems; Exports; Patents; Scientific publications; |
| JEL: | F14 O14 O31 O38 O52 |
| Date: | 2015–12–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:80203&r=sbm |
| By: | Andrea Linarello (Bank of Italy); Corrado C. Abbate (Istat); Maria G. Ladu (University of Sassari and Istat) |
| Abstract: | In this paper we describe the steps followed to build a new dataset covering the universe of active private non-financial firms in Italy between 2005 and 2014. The construction of the dataset is the outcome of a collaboration between the Bank of Italy and the Italian National Statistical Agency and made use of statistical, administrative and fiscal sources. The dataset, that contains information on firms’ location, legal form, date of incorporation, industry classification, employed persons, turnover and value added, is suitable for studying the evolution of the Italian productive sectors since the mid-2000s. |
| Keywords: | Italy, firm-level data, dataset construction |
| JEL: | D29 J24 L00 |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:opques:qef_384_17&r=sbm |
| By: | Bachtrögler, Julia; Hammer, Christoph; Reuter, Wolf Heinrich; Schwendinger, Florian |
| Abstract: | This study introduces a new firm-level dataset containing over two million projects co-funded by the European Union's (EU) structural and Cohesion funds in 25 EU member states in the multi-annual financial framework 2007-2013. Information on individual beneficiary firms and institutions published by regional authorities is linked with business data from Bureau van Dijk's ORBIS database. Moreover, we show how modern text mining techniques can be used to categorise EU funded projects into fifteen thematic categories proposed by the European Commission. A first analysis of the dataset reveals substantial heterogeneity of beneficiaries and projects across and within countries. While in the majority of lagging regions the largest project expenditure is dedicated to transportation and energy infrastructure, in most other regions the major part is assigned to innovation and technological development as well as business (including SME) support. In an econometric analysis we control for project and firm characteristics and find that the highest single project values are associated with older beneficiary firms that are larger in size. Furthermore, the projects with topmost expenditure are carried out in Dutch and British regions. |
| Keywords: | Distribution of EU structural funds,Regional policy,Firm-level data,Cohesion,European Union |
| JEL: | E61 H77 R11 R58 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:svrwwp:022017&r=sbm |