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on Small Business Management |
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Issue of 2017‒08‒20
thirteen papers chosen by João Carlos Correia Leitão Universidade da Beira Interior |
| By: | Marco Cucculelli (Universita' Politecnica delle Marche, Dipartimento di Scienze economiche e sociali) |
| Abstract: | This paper examines the influence that the age of a firm has on the probability of product innovation by taking into account two factors: the role of the CEO's tenure and the lifecycle of the last product introduced. In a sample of Italian manufacturing firms (n = 2,163), analysis reveals that the new entrants’ high innovative activity is mainly driven by the new CEO's innovation propensity, which is strictly dependent on his tenure. Likewise, the lower innovation activity observed in mature firms is mostly explained by the dynamics of the product’s lifecycle and the CEO's tenure. More generally, the existence of a negative relationship between innovation and firm age is questioned, as controlling for time-related variables that overlap during the company's lifecycle - product age and CEO's tenure — turns the relationship positive. Finally, the innovative behaviour of incumbent companies turns out to be dependent on the renewal abilities of newly appointed external CEOs, whereas, CEOs from within the family play a minor role. |
| Keywords: | Product innovation, firm age, CEO tenure, product tenure, product lifecycle, industry lifecycle |
| JEL: | D22 G34 L25 O32 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:anc:wmofir:140&r=sbm |
| By: | Lee, Sang-Ho; Chen, Zhao; Xu, Wei |
| Abstract: | Using firm-level data from Changzhou, one of the representative prefectural cities in the Yangzi River Delta in China, we investigate the performances of both internal and external R&D in high-tech firms. We find that, on average, high-tech firms with more internal R&D expenditure apply for more patents in terms of both the total number of patents and the number of invention patents. Internal R&D is the most efficient in foreign firms, followed by private firms and then followed by SOEs (state-owned enterprises). These findings highlight the importance of privatizing high-tech firms in China if the Chinese government intends to accelerate industrial upgrading and convert the pattern of “Made in China” into “Created in China.” |
| Keywords: | internal R&D; external R&D; high-tech firms; R&D performances |
| JEL: | D22 H76 L25 |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:80734&r=sbm |
| By: | Fons-Rosen, Christian; Kalemli-Ozcan, Sebnem; Sørensen, Bent E; Villegas-Sanchez, Carolina; Volosovych, Vadym |
| Abstract: | We study the impact of foreign direct investment (FDI) on total factor productivity (TFP) of domestic firms using a new, representative firm-level data set spanning six countries. A novel finding is that firm-level spillovers from foreign firms to domestic companies can be significantly positive, non-existent, or even negative, depending on which sectors receive FDI. When foreign firms produce in the same narrow sector as domestic firms, the latter are negatively affected by increasing competition and positively affected by knowledge spillovers. We find that the positive spillovers dominate if foreign firms enter sectors where firms are "technologically close,'' controlling for the endogeneity of their entry decision into such sectors. Positive technology spillovers also affect firms in other sectors, if those sectors are technologically close to the sectors receiving FDI. Increasing FDI in sectors that are technologically close to other sectors boosts TFP of domestic firms by twice as much as increasing FDI by the same amount across all sectors. |
| Keywords: | competition; FDI; multinationals; selection; technology; TFP |
| JEL: | E32 F15 F36 O16 |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12205&r=sbm |
| By: | Trofimov, Ivan D. |
| Abstract: | The paper considers public goods in the realm of international governance, provides a framework explaining their provision, and applies it in the analysis of the trade policymaking in the GATT/WTO. International governance regime is seen as a public good; it is conceptualized as an equilibrium state, one where the extent of ideational and material conflicts, incongruities in policy mechanisms and the lack of institutions are substantially minimised. Such state is brought by policy entrepreneurship on the part of multiple actors. Three generic entrepreneurial functions (policy leadership, innovation and facilitation/coordination) are identified. Successful equilibration is characterized by the complementarity of entrepreneurial functions, as well as by the persistence and ingenuity of entrepreneurs in selecting and using specific means and instruments of entrepreneurship. Policy entrepreneurship is considered crucial in several areas, including problem framing, advocacy and coalition building, policy experimentation, and creation of the analytical instruments. It is also salient in moderation of conflicting positions, exercise of influence and management of the policy process. |
| Keywords: | Entrepreneurship; public goods; trade; international governance |
| JEL: | F13 F50 H41 L26 |
| Date: | 2017–08–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:80819&r=sbm |
| By: | Bensassi, Sami; Jabbour, Liza |
| Abstract: | This paper explores the effect of return migration on the performance of Egyptian household firms. A growing body of evidence suggests that return migrants are more likely to become and remain entrepreneurs (Marchetta, 2012; Wahba and Zenou, 2012). The length of the miration spell, the experience and the capital accumulated overseas may influence the ability of return migrants to establish and successfully manage their firms. We expand this literature by examining the impact of return migrants on the revenue of the business units they manage. We control for several layers of selection bias, from the migration decision to the pursuit of entrepreneurial activities. Our findings suggest that two determinants of firms' revenues favour return migrants: larger starting capital and the experience accumulated abroad. These results suggest that economic policies directed at attracting return migrants should consider expanding support schemes formerly limited to the most educated migrants or to some sectors of activity as the positive impact of return migration on entrepreneurial revenues is widespread. |
| Keywords: | Return Migration,Household firms |
| JEL: | F22 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:98&r=sbm |
| By: | Paolo Zeppini; Evangelos Evangelou; Emanuele Pugliese; Lorenzo Napolitano; Graham Room |
| Abstract: | We search an autocatalytic structure in networks of technological fields and evaluate its significance for technological change. To this aim we define a technology network based on the International Patents Classification, and we study if autocatalytic structures in the network foster innovation as measured by the rate of production of patents. The network is identified through patenting activity of geographical regions in different technology fields. Through our analysis we show how the technological landscape of the patents database evolves as a self-organising autocatalytic structure that grows in size, and arrives to cover the most part of the technology network. Technology classes in the core of the autocatalytic structure perform better in terms of their innovativeness, as measured by the rate of growth of the number of patents. Finally, the links between classes that define the autocatalytic structure of the technology network break the hierarchical structure of the database, and indicate that recombinant innovation and its autocatalytic patterns are an important stylised fact of technological change. |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1708.03511&r=sbm |
| By: | Brutscher, Philipp-Bastian; Heipertz, Jonas; Hols, Christopher |
| Abstract: | This paper uses a unique experiment conducted as part of the Investment Survey of the European Investment Bank (EIB) to provide novel evidence on firms' preferences over loan characteristics and the relation between terms of credit and investment decisions. The design of the experiment allows revealing firm's financing preferences and willingness-to-pay in a clean and straightforward manner. The results show that firms are especially sensitive to the loan amount, the collateral requirement and the interest rate. Results are heterogeneous between sectors, size classes and types of projects. |
| Keywords: | firm preferences,investment decision,corporate finance |
| JEL: | D22 D24 G11 G21 G30 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:eibwps:201703&r=sbm |
| By: | EDAMURA Kazuma; INUI Tomohiko; YAMAUCHI Isamu |
| Abstract: | Using plant- and half-year-level micro data for the period 2007-2011, this paper analyzes the location decision of a research and development (R&D) facility on a plant in Japan. We control the effects of the characteristics of the plant, the population, labor cost, industry agglomeration, and other fixed effects of the prefecture in which it is located. The results by logit model show that firms tend to locate their R&D facility on plants near universities or national research institutes with comparatively large research expenditures and a greater number of researchers. |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:eti:rdpsjp:17048&r=sbm |
| By: | Savagar, Anthony (University of Kent); Dixon, Huw David (Cardiff Business School) |
| Abstract: | Slow firm entry over the business cycle causes measured TFP to vary endogenously because incumbent firms bear shocks. Our main theorem states that imperfect competition and dynamic firm entry are necessary and sufficient conditions for these endogenous productivity fluctuations. The result focuses on the short-run absence of entry and incumbents' output response given this quasi-fixity. Quantitatively we show the endogenous productivity effect is as large as a traditional capital utilization effect. |
| Keywords: | dynamic entry, endogenous productivity, endogenous sunk costs, business stealing, business cycle, continuous time |
| JEL: | E32 D21 D43 L13 C62 |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:cdf:wpaper:2017/8&r=sbm |
| By: | John W. Schindler |
| Abstract: | This paper answers two questions that help those analyzing FinTech understand its origins, growth, and potential to affect financial stability. First, it answers the question of why "FinTech" is happening right now. Many of the technologies that support FinTech innovations are not new, but financial institutions and entrepreneurs are only now applying them to financial products and services. Analysis of the supply and demand factors that drive "traditional" financial innovation reveals a confluence of factors driving a large quantity of innovation. Second, this paper answers the question of why FinTech is getting so much more attention than traditional innovation normally does. The answer to this question has to do with the 'depth' of innovation, a concept introduced in this paper. The deeper an innovation, the greater the ability of that innovation to transform financial services. The paper shows that many FinTech innovations are deep innovations and hence have a greater potential to change financial services. A greater potential to transform can also lead to a greater chance of affecting financial stability. |
| Keywords: | FinTech ; Financial innovation |
| JEL: | G10 G18 G28 |
| Date: | 2017–08–10 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2017-81&r=sbm |
| By: | Frank M. Fossen; Ray Rees; Davud Rostam-Afschar; Viktor Steiner |
| Abstract: | We investigate how personal income taxes affect the portfolio share of personal wealth that entrepreneurs invest in their own business. In a reformulation of the standard portfolio choice model that allows for underreporting of private business income to tax authorities, we show that a fall in the tax rate may increase investment in risky entrepreneurial business equity at the intensive margin, but decrease entrepreneurial investment at the extensive margin. To test these hypotheses, we use household survey panel data for Germany eliciting the personal wealth composition in detail in 2002, 2007, and 2012. We analyze the effects of personal income taxes on the portfolio shares of six asset classes of private households, including private business equity. In a system of simultaneous demand equations in first differences, we identify the tax effects by an instrumental variables approach exploiting tax reforms during our observation period. To account for selection into entrepreneurship, we use changes in entry regulation into skilled trades. Estimation results are consistent with the predictions of our theoretical model. An important policy insight is that lower taxes drive out businesses that are viable only due to tax avoidance or evasion, but increase investment in private businesses that are also worthwhile in the absence of taxes. |
| Keywords: | Taxation, entrepreneurship, portfolio choice, investment |
| JEL: | H24 H25 H26 L26 G11 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp922&r=sbm |
| By: | iqbal hussain, hafezali |
| Abstract: | Our paper evaluates the capital structure of Malaysian firms from a unique perspective by evaluating the impact of Shari’ah compliance on firms’ financing decision. We find that firms that are Shari’ah compliant tend to lean towards lower debt issues to finance their deficits, implying that the compliance status has an impact on their cost of equity which ultimately affects cost of capital. |
| Keywords: | Capital Structure, Shari’ah Compliance, Islamic Finance, Malaysian Firms |
| JEL: | G32 Z12 |
| Date: | 2017–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:80786&r=sbm |
| By: | Swati Singh; Manoj Joshi |
| Abstract: | This research paper focuses on how innovations support new market creation emerging from latent opportunities for low-income group. It also emphasizes on novel strategies that can be implemented for sustaining. The paper concludes with a discussion on the implications of the study and directions to stimulate future research on the subject. |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1708.04952&r=sbm |