nep-sbm New Economics Papers
on Small Business Management
Issue of 2017‒07‒30
fourteen papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Under the AEGIS∗ of knowledge intensive entrepreneurship: Employment growth and gender of founders among European Firms By Sara, Amoroso; Albert, Link
  2. The Agglomeration of American Research and Development Labs By Buzard, Kristy; Carlino, Gerald A.; Hunt, Robert M.; Carr, Jake; Smith, Tony E.
  3. To Grow or Not to Grow? That is the Question: Lessons for Social Ecological Transformation from Small-Medium Enterprises By Leonhardt, Heidi; Jutschen, Maria; Spash, Clive L.
  4. Effects of Licensing Reform on Firm Innovation: Evidence from India By Seker, Murat; Ulu, Mehmet Fatih
  5. Demand and innovation: theory and evidence By Dawid, Herbert; Pellegrino, Gabriele; Vivarelli, Marco
  6. A study on stakeholder analysis method applicable to preliminary feasibility study of national R&D program By JUNGKWON KIM
  7. SMEs access to formal finance in post-communist economies: Do institutional structure and political connectedness matter? By Kobil Ruziev; Don Webber
  8. Corporate monitoring mechanism and corporate governance influence CEO compensation level: Evidence from non-financial firms of Pakistan By Anam Tasawar
  9. Family Self-Sufficiency Data Center Creating a Data Model to Analyze TANF Caseloads By Emily Wiegand; Robert Goerge; Leah Gjertson
  10. Expected job creation across the cultural industries : A sectoral division and its implications for cultural policy By Haans, Richard; van Witteloostuijn, Arjen
  11. An Analysis of the Memphis Nurse-Family Partnership Program By James J. Heckman; Margaret L. Holland; Kevin K. Makino; Rodrigo Pinto; Maria Rosales-Rueda
  12. Rethinking Measurement of Pay Disparity and its Relation to Firm Performance By Ethan Rouen
  13. Location of the Software & Videogames Industry: an insight into the case of Barcelona using microgeographic data By Méndez Ortega, Carlos
  14. Persistent heterogeneity of R&D intensities within sectors: Evidence and policy implications By Alex Coad

  1. By: Sara, Amoroso (Joint Research Centre, European Commission); Albert, Link (University of North Carolina at Greensboro, Department of Economics)
    Abstract: An increasing number of theoretical and empirical analyses address the role of innovation as one of the main sources of firm growth. More recently, studies have looked at the role of gen-der diversity as a possible determinant of innovation and entrepreneurial performance. How-ever, the relationship between gender and employment growth —a dimension of entrepreneurial performance— still remains unexplored to a large degree. This paper contributes to the empiri-cal literature on gender and entrepreneurial performance in several ways. First, it examines the role played by both innovation and gender ownership as determinants of employment growth rates of young, knowledge intensive entrepreneurial (KIE) firms. Second, it investigates the indirect impact of contributing factors —such as the characteristics of the market, knowledge-based capital, and human capital— on employment growth. And third, it relies on a rich new cross-sectional data set on young, KIE firms across European Union (EU) countries. The data set contains information not only on the gender of the firm’s founders, but also on the market environment, business strategy, and innovative and economic performance of firms.
    Keywords: innovation; entrepreneurship; employment growth; gender
    JEL: J16 L26 O31
    Date: 2017–07–24
  2. By: Buzard, Kristy (Maxwell School, Syracuse University, Syracuse, NY); Carlino, Gerald A. (Federal Reserve Bank of Philadelphia); Hunt, Robert M. (Federal Reserve Bank of Philadelphia); Carr, Jake (Geography Department, The Ohio State University, Columbus OH); Smith, Tony E. (Department of Electrical and Systems Engineering, University of Pennsylvania, Philadelphia, PA)
    Abstract: We employ a unique data set to examine the spatial clustering of about 1,700 private research and development (R&D) labs in California and across the Northeast corridor of the United States. Using these data, which contain the R&D labs’ complete addresses, we are able to more precisely locate innovative activity than with patent data, which only contain zip codes for inventors’ residential addresses. We avoid the problems of scale and borders associated with using fixed spatial boundaries, such as zip codes, by developing a new point pattern procedure. Our multiscale core-cluster approach identifies the location and size of significant R&D clusters at various scales, such as a half mile, one mile, five miles, and more. Our analysis identifies four major clusters in the Northeast corridor (one each in Boston, New York–Northern New Jersey, Philadelphia–Wilmington, and Washington, D.C.) and three major clusters in California (one each in the Bay Area, Los Angeles, and San Diego).
    Keywords: spatial clustering; geographic concentration; R&D labs; innovation
    JEL: O31 R12
    Date: 2017–07–18
  3. By: Leonhardt, Heidi; Jutschen, Maria; Spash, Clive L.
    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
    Date: 2017
  4. By: Seker, Murat; Ulu, Mehmet Fatih
    Abstract: The regulatory environment in a country is an important factor affecting firm performance. This study investigates the impact of a particular regulation, namely license requirements for certain firm activities, on the innovation performance of Indian firms. Using a firm level panel data set, it shows that removal of license requirements led to roughly eight percentage points faster innovation rates within two years following the reform where innovation is measured as introduction of new product varieties that had not existed in the market. When the residual increase in sales revenues even after controlling for product innovation is called as process innovation, substantial improvements in process innovation are also observed. The results are robust to inclusion of controls for the other policy reforms that occurred during the period of licensing reform, and persist in different subcategories of firms.
    Keywords: Innovation, research and development, regulatory environment, regulations, industrial policy, India.
    JEL: L11 L52 O14 O31 O38
    Date: 2017–07–26
  5. By: Dawid, Herbert; Pellegrino, Gabriele; Vivarelli, Marco
    Abstract: While the extant innovation literature has provided extensive evidence of the so-called "demand-pull" effect, the possible diverse impact of demand evolution on product vs process innovation activities has not been yet investigated. This paper develops a formal model predicting a larger inducing impact of past sales in fostering product rather than process innovation. This prediction is then tested through a dynamic microeconometric model, controlling for R&D persistence, sample selection, observed and unobservable individual firm effects and time and sectoral peculiarities. Results are consistent with the model and suggest that an expansionary economic policy may benefit the diffusion of new products or even the emergence of entire new sectors.
    Keywords: technological change,R&D,demand-pull innovation,dynamic two tobit
    JEL: O31
    Date: 2017
  6. By: JUNGKWON KIM (Korea Institute of S&T Evaluation and Planning)
    Abstract: Stakeholder Analysis is a analytical technique to identify stakeholder and analyze their impact on a given system. It has been considered as a useful tool for developing and/or implementing a policy or program. Preliminary Feasibility Study(PFS) is an official ex-ante evaluation to provide important information on decision of investing new national R&D programs. In order to improve consistency and productivity of PFS results, there are needs for improving its analytical methodology of the standard PFS guide published regularly.The purpose of this study is to suggest a practical approach how to apply the stakeholder analysis to PFS of national R&D programs and the result of this study would help PFS investigators to carry out their PFS more efficiently and systematically.This study provides a PFS stakeholder analysis process consisting of four steps and guideline of each step; ?Understanding the R&D program including drawing a logic model, ?Identification and classification of stakeholder, ?collecting characteristics of stakeholder required for PFS, ?Analysing characteristics of stakeholder and applying the result to PFS. Moreover, An advanced logic model in which stakeholder is newly incorporated in the previous PFS logic model is proposed for better understanding of target programs.
    Keywords: Stakeholder analysis, Preliminary feasibility study, National R&D program
    JEL: O32
    Date: 2017–07
  7. By: Kobil Ruziev (University of the West of England, Bristol); Don Webber (University of the West of England, Bristol)
    Abstract: In post-communist economies, a disproportionately greater share of formal finance is channelled to larger enterprises and SMEs lack appropriately-priced formal finance. This article examines whether institutional structure and interpersonal connectedness with bureaucrats exacerbate this formal finance misallocation. We show that access to and use of interpersonal bureaucratic networks improve chances of receiving formal bank credit by between 4–10%. The benefits of interpersonal links are stronger for larger SMEs, and being connected to bureaucratic networks is not associated with enterprise growth. These findings imply that traditional policies that increase bank finance to SMEs should also aim to improve impartiality of bureaucratic institutions and enforceability of private contracts.
    Keywords: Financial development; Formal finance; Firm-level analysis; Transition economies
    JEL: G00 G38 B52 P3 M2
    Date: 2017–01–01
  8. By: Anam Tasawar (University of Gujrat)
    Abstract: Managerial compensation is strategically pivotal and practically interesting to manage as it has long-lasting ties with firm?s performance. It is regarded as most crucial tool to attract and retain the top-notched professionals to achieve the firm?s strategic and long term objectives. The executives tends to support their comparatively higher level of compensation sometimes, may be at the cost of priority to firm?s value and interest of principles. In corporate finance literature, this phenomenon of opportunistic behavior has been controlled by various monitoring mechanisms. The new spectacle is apposite in Pakistani financial institutions that have no more strict application of compensation regulation. The current study empirically evaluates the impact of different corporate governance attributes such as institutional shareholders? activism, independence of audit committee and board structure and block holding on the level of compensation paid to CEO of Pakistani listed firms for a period of 2007-2013. All these personas worked as monitoring mechanism for CEOs is scrutiny through stepwise regression. The results found that independent audit committee and board of director along with dual CEO structure and greater family ownership are helpful in mitigating the higher level of CEO compensation with is in align with the agency cost hypothesis. Moreover, higher financial institutional ownership found positively related to CEO compensation which is in accordance with the strategic alliance hypothesis. However, the role of institutions in deciding CEO compensation becomes negative in case of family firms as compared to non-family firms.
    Keywords: Managerial Compensation, Corporate Governance, monitoring mechanism
    JEL: G30 G39
    Date: 2017–07
  9. By: Emily Wiegand; Robert Goerge; Leah Gjertson
    Abstract: The Family Self-Sufficiency Data Center releases a new brief describing a model for using TANF data to understand caseload dynamics and address key policy questions.
    Keywords: TANF, data model, administrative data, self-sufficiency, FSSDC, data analysis, data structures
    JEL: I
  10. By: Haans, Richard (Tilburg University, School of Economics and Management); van Witteloostuijn, Arjen (Tilburg University, School of Economics and Management)
    Abstract: The cultural industries have come to the forefront as the potential job creators of the future. However, building on the concentric circles model and production system view of the cultural industries, we pose that many young and small organizations in the industries lack the motivation, ability, and opportunity to become job creator. We reason that industry location crucially affects job creation expectations. Evidence from an international sample of early-stage entrepreneurs strongly supports this thesis. We identify a divide between entrepreneurs in the ‘core’ cultural industries vis-à-vis those in the ‘non-core’ cultural industries, where the latter group is indistinguishable from entrepreneurs in non-cultural industries in their job creation expectations. Simultaneously, those in the core cultural industries are distinct from others in their expectations to maintain the same number of jobs, rather than grow. These findings have important implications for cultural policy aimed at promoting employment growth in the cultural industries.
    Date: 2016
  11. By: James J. Heckman; Margaret L. Holland; Kevin K. Makino; Rodrigo Pinto; Maria Rosales-Rueda
    Abstract: This paper evaluates a randomized controlled trial of the Nurse-Family Partnership (NFP) program conducted in Memphis, TN in 1990. NFP offers home visits conducted by nurses for disadvantaged first-time mothers during pregnancy and early childhood. We test NFP treatment effects using permutation-based inference that accounts for the NFP randomization protocol. Our methodology is valid for small samples and corrects for multiple-hypothesis testing. We also analyze the underlying mechanisms generating these treatment effects. We decompose NFP treatment effects into components associated with the intervention-enhanced parenting and early childhood skills. The NFP improves home investments, parenting attitudes and mental health for mothers of infants at age 2. At age 6, the NFP boosts cognitive skills for both genders and socio-emotional skills for females. These treatment effects are explained by program-induced improvements in maternal traits and early-life family investments. At age 12, the treatment effects for males (but not for females) persist in the form of enhanced achievement test scores. Treatment effects are largely explained by enhanced cognitive skills at age 6. Our evidence of pronounced gender differences in response to early childhood interventions contributes to a growing literature on this topic.
    JEL: C5 H5 I1
    Date: 2017–07
  12. By: Ethan Rouen (Harvard Business School, Accounting and Management Unit)
    Abstract: I develop measures of firm-level pay disparity and examine their relation to firm accounting performance. Using comprehensive compensation data for a large sample of firms, I find no statistically significant relation between the ratio of CEO-to-mean employee compensation and performance. I next create empirical models that allow me to separate the components of CEO and employee compensation explained by economic factors from those that are not, and use these models to estimate explained and unexplained pay disparity. After validating my estimate of unexplained pay disparity as a proxy for pay fairness, I find robust evidence of a negative (positive) relation between unexplained (explained) pay disparity and future firm performance. Additional tests show that the negative relation between unexplained disparity and firm performance is driven by firms where both the CEO is overpaid and employees are underpaid, and is more pronounced for firms with weak corporate governance and high employee turnover.
    Keywords: pay disparity, pay ratio, CEO pay ratio, income inequality
    Date: 2017–07
  13. By: Méndez Ortega, Carlos
    Abstract: This paper analyses location patterns of Software and Videogames industries in the Metropolitan Area of Barcelona using microgeographic data. These industries benefit from agglomeration economies, skilled labour and, generally speaking, spillover effects, and tend to cluster in larger metropolitan areas, but less is known about their detailed location patterns inside these areas. We contribute to the empirical literature by identifying how Software and Videogames industries firms are concentrated in some core areas of the metropolitan area. Our empirical application includes using the Nearest Neighbour Index (NNI) and M-functions, as well as local spatial autocorrelation indicators. JEL Codes: R12, C60, L86 Keywords: Software Industry, Videogames Industry, microgeographic data, spatial location patterns, Barcelona
    Keywords: Programari -- Indústria i comerç -- Barcelona (Catalunya : Àrea metropolitana), Videojocs -- Indústria i comerç -- Barcelona (Catalunya : Àrea metropolitana), Localització industrial -- Barcelona (Catalunya : Àrea metropolitana), 332 - Economia regional i territorial. Economia del sòl i de la vivenda,
    Date: 2017
  14. By: Alex Coad (CENTRUM-Catolica Graduate Business School, Pontificia Universidad Catolica del Peru, Lima, Peru.)
    Abstract: Do firms in the same sector converge towards the same R&D intensities? Previous research has often assumed this to be true. A closer examination, using microdata from the EU Industrial R&D Investment Scoreboard for the years 2000-2015, shows a large amount of heterogeneity in R&D intensities among firms in the same sector, and that this heterogeneity persists over time. Statistical tests of convergence show that the variation in R&D intensities does not decrease over time (i.e. no ?-convergence), although firms with an R&D intensity below the industry average do seem to catch up with the leaders (i.e. evidence of ?-convergence). Overall, firms in the same industry do not converge to a common R&D intensity. Policy implications are discussed.
    Keywords: R&D investment, R&D intensity, convergence, benchmarking
    JEL: O3 L2
    Date: 2017–07

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