nep-sbm New Economics Papers
on Small Business Management
Issue of 2017‒09‒03
twelve papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. The Fluidity of Inventor Networks By Michael Fritsch; Moritz Zoellner
  2. Essays on Empirical Industrial Organization : Entry and Innovation By Fernandez Machado, Roxana
  3. Growing Large or Growing old? A New Perspective on the Firm Life Cycle By Giuseppe Moscarini; Emmanuel Dhyne; Costas Arkolakis
  4. Learning from abroad: Export versus foreign ownership By Kadri Männasoo; Heili Hein
  5. Are R&D companies credit-constrained? Credit frictions during and post-crisis By Kadri Männasoo; Heili Hein
  6. R&D policy regimes in France: New evidence from a spatio-temporal analysis By Benjamin Montmartin; Marcos Herrera; Nadine Massard
  7. Measuring the Spillovers of Venture Capital By Schnitzer, Monika; Watzinger, Martin
  8. Better not to ask your employees to come to work? Issues in R&D work efficiency By Aaro Hazak
  9. Small and Large Firms over the Business Cycle By Neil Mehrotra; Nicolas Crouzet
  10. Factors Influencing SMEs’ Engagement in Direct Exporting Activities By Mohamad D. Revindo; Christoper Gan
  11. Are business obstacles different for R&D companies? By Heili Hein; Kadri Männasoo
  12. Environmental and Financial Performance. Is there a win-win or a win-loss situation? Evidence from the Greek manufacturing By Kounetas, Kostas; Alexopoulos, Elias; Tzelepis, Dimitris

  1. By: Michael Fritsch (FSU Jena); Moritz Zoellner (Friedrich Schiller University Jena, School of Economics and Business Administration)
    Abstract: We investigate the stability of cooperative relationships between inventors and consequences for the characteristics and patent productivity of the respective regional innovation systems (RIS). The empirical analysis is for nine German regions over a period of 15 years. We find a rather high level of 'fluidity', i.e., entry and exit of actors, as well as instability of their relationships over time. The aggregate characteristics of the regional networks are, however, quite robust even with high levels of micro-level fluidity. There are both significantly positive and negative relationships between micro-level fluidity and the performance of the respective RIS.
    Keywords: Innovation networks, R&D cooperation, division of innovative labor, patents
    JEL: O3 R1 D2 D8
    Date: 2017–08–29
  2. By: Fernandez Machado, Roxana (Tilburg University, School of Economics and Management)
    Abstract: The dissertation contains three essays on empirical industrial organization devoted to studying firms' strategic interaction in different settings. The first essay develops an entry model to address an important matter in the area of urban economics: the development of cities. In particular, it focuses on the food and beverage service industry in the Netherlands and investigates to what extent the presence of urban amenities produces positive spillovers on other amenities in the market. For the case of take-out places and bars, the findings show evidence of unidirectional spillover effects upon entry. The two policy experiments conducted show that taking into account this asymmetry is relevant for both new entrant firms and policy makers. The second essay analyzes the competitive dynamics of firms in the presence of first- mover advantages. Using data of the U.S. digital mobile markets, the study quantifies the advantage early movers have relative to later entrants. In particular, it measures the impact of competitors' entry on the profits of incumbents and entrants. The findings show an asymmetric competitive effect in favor of incumbents. Finally, the third essay focuses on innovation and firms’ patent portfolio choices. Patent portfolios have become an important tool for firms to compete and secure their position in the market. The essay focuses on the U.S. semiconductor industry and shows how firms of different sizes choose their technologies in relation to other firms. The main findings suggest that small- and medium-size firms replicate large firms' choices while ignoring the giants in the market. While giants' portfolios are positively related to their previous investments, they are overall independent of other types' choices
    Date: 2017
  3. By: Giuseppe Moscarini (Yale University); Emmanuel Dhyne (National Bank of Belgium); Costas Arkolakis (Yale University)
    Abstract: We use a comprehensive administrative panel of Belgian firms to investigate the main driving forces that shape the firm life cycle. The richness and quality of the micro data on firm revenues allows us to avoid statistical bias arising from bundling domestic and foreign sales, first year calendar aggregation, merger and acquisitions, foreign ownership etc. We go beyond the existing literature in documenting in detail the dynamic patterns of firm size (revenues) by firm age and size: exit rate, the first four moments of the growth rate distribution, and autocorrelation of revenues in both log levels and log differences. This evidence reveals sharp departures from the canonical model of firm growth, where the driving force is a one-dimensional idiosyncratic Markov process. It points, instead, to models where learning is the driving force of firm growth, thus firm age plays an independent role, and observed patterns of firm dynamics by age do not arise only from selection by exit.
    Date: 2017
  4. By: Kadri Männasoo; Heili Hein
    Abstract: Companies engaged in innovation and research and development (R&D) are often engaged in business on an international scale and their success is critically dependent on international R&D networking and the ability to absorb new knowledge. Foreign ownership, joint ventures and trade are among the channels that enable companies to learn from abroad. This brief analysis aims to describe these learning patterns and look for associations between R&D engagement and foreign interactions. Using data from eleven Central and Eastern European countries for the years 2007-2009 and 2012-2014 reveals that exporting is the only foreign channel that has a clear positive relationship with R&D engagement.
    Date: 2017–08–31
  5. By: Kadri Männasoo; Heili Hein
    Abstract: Private research and development (R&D) and innovation activity is believed to fall below the socially optimal level. The credit constraints that R&D companies face due to asymmetric information and credit market imperfections may hinder innovation. This descriptive analysis aims to provide a comparative insight into the credit demand and supply patterns of R&D and non-R&D companies in Central and Eastern European countries during and after the Global Financial Crisis. The study uses company-level data from rounds IV and V of the Business Environment and Enterprise Performance Survey, covering the years 2007-2009 and 2012-2014. It reveals that the dependence of R&D companies on bank credit dropped significantly over the two survey rounds, mirroring substantial self-selection into R&D, with a smaller number of able and well-capitalised companies continuing R&D activity after the crisis. We do not subsequently find convincing evidence that R&D firms that remained in business after the crisis are notably credit-constrained.
    Date: 2017–08–31
  6. By: Benjamin Montmartin (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis - UCA - Université Côte d'Azur - CNRS - Centre National de la Recherche Scientifique); Marcos Herrera (Universidad Nacional de Salta, CONICET - Consejo Nacional de Investigaciones Científicas y Técnicas); Nadine Massard (UGA - Université Grenoble Alpes, GAEL - Laboratoire d'Economie Appliquée de Grenoble - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - INRA - Institut National de la Recherche Agronomique - CNRS - Centre National de la Recherche Scientifique - UGA - Université Grenoble Alpes)
    Abstract: Using a unique database containing information on the amount of R&D tax credits and regional, national and European subsidies received by firms in French NUTS3 regions over the period 2001-2011, we provide new evidence on the efficiency of R&D policies taking into account spatial dependency across regions. By estimating a spatial Durbin model with regimes and fixed effects, we show that in a context of yardstick competition between regions, national subsidies are the only instrument that displays total leverage effect. For other instruments internal and external effects balance each other resulting in insignificant total effects. Structural breaks corresponding to tax credit reforms are also revealed.
    Keywords: structural breaks,R&D investment,spatial panel,Additionality,French policy mix
    Date: 2017–07
  7. By: Schnitzer, Monika; Watzinger, Martin
    Abstract: We provide the first measurement of knowledge spillovers from venture capital-financed companies onto the patenting activities of other companies. On average, these spillovers are nine times larger than those generated by the R&D investment of established companies. Spillover effects are larger in complex product industries than in discrete product industries. Start-ups with experienced inventors holding a patent at the time of receiving the first round of investment produce the largest spillovers, indicating that venture capital fosters the commercialization of technologies. Methodologically, we contribute by developing a novel definition of the spillover pool, combining citation-based and technological proximity-based approaches.
    Keywords: innovation; Spillovers; venture capital
    JEL: G24 O3 O31 O32
    Date: 2017–08
  8. By: Aaro Hazak
    Abstract: The understanding that work is done at a workplace is a deeply-rooted social norm, including in the case of creative R&D work. We have studied Estonian creative R&D employees to find out the links between distance work and work outcomes, individual wellbeing, sleep and tiredness. It appears that those who have a distance work option perceive their work results significantly higher than those without that option. Moreover, employees that can work outside the office are happier and less tired, and they feel the constraints that work sets on their sleep habits much less than those who have to do their work at the workplace only. Although some creative R&D jobs may require the use of specific laboratories, equipment, data or teamwork, providing the distance work option appears to be beneficial overall for both the employer and the employee.
    Date: 2017–08–31
  9. By: Neil Mehrotra (Brown University); Nicolas Crouzet (Northwestern University)
    Abstract: We analyze the behavior of small and large firms over the business cycle, using new firm-level quarterly data from the US Census Bureau covering the balance sheets and income statements of all firms in the US manufacturing sector. We find that sales, inventory growth, and investment rates are more cyclical among smaller firms. The differential cyclicality holds after controlling for industry effects, and is driven by the behavior of firms in the top 1\% of the asset distribution. We show that the result survives when directly controlling for firm leverage, liquidity, or bank dependency, suggesting that the excess cyclicality of small firms may not be driven by differences in access to credit. Additionally, we find that independent of size, firms with zero debt exhibit less sensitivity to the business cycle than positive leverage firms. Finally, we assess the importance of the excess cylicality of small firms for aggregate fluctuations in sales, inventory, and investment.
    Date: 2017
  10. By: Mohamad D. Revindo (Researcher, Institute for Economic and Social Research, Faculty of Economics, University of Indonesia, Jakarta); Christoper Gan (Professor in Accounting and Finance, Faculty of Agribusiness and Commerce Department of Finance and Business System Lincoln University New Zealand)
    Abstract: The benefits of trade liberalisation are not shared equally among countries and enterprises across the globe. Small and Medium-sized Enterprises (SMEs) in developing countries are less able to participate in export market than their large counterparts despite various export assistance provision by the government. This study aims to investigate the factors influencing Indonesian SMEs’ decision and ability to engage in direct exporting activities. The evidences were collected from 271 exporting SMEs and 226 non-exporting SMEs in seven provinces in Jawa, Madura, and Bali regions. Logistic regressions were used to identify the distinct characteristics of exporting SMEs. The findings show that the exporters differ from non-exporters in firm and owner characteristics, perceived export barriers, participation in government export assistances and network relationships. The policy and managerial implications of the findings are discussed
    Keywords: SMEs - Firm Internationalisation - Export Decision - Export Barriers - Indonesia
    JEL: F23 L25 M13 M16 O17
    Date: 2017–07
  11. By: Heili Hein; Kadri Männasoo
    Abstract: Investment in research and development (R&D) is often long-term, making R&D companies extremely sensitive to their environment. Using data from the Business Environment and Enterprise Performance Survey rounds IV (2007-2009) and V (2012-2014), we examine the differences in how severe R&D and non-R&D manufacturing companies in Central and Eastern Europe perceive business obstacles to be. Overall, R&D companies were relatively more troubled by various institutional and regulatory obstacles in their business environment than were non-R&D companies, whose main business concern was the tax rate. Over both rounds of the survey, R&D companies perceived labour and trade regulations as more severe obstacles than non-R&D companies did. During the post-crisis period, R&D companies were also relatively more concerned about political instability, courts and corruption.
    Date: 2017–08–31
  12. By: Kounetas, Kostas; Alexopoulos, Elias; Tzelepis, Dimitris
    Abstract: This study examines the causal linkage between environmental and financial performance in Greek manufacturing firms. Environmental performance is measured according to accounting data following the Eco Management and Auditing Scheme guidelines and ISO certification. Return on assets and return on sales are used as indicators of financial performance. Empirical findings suggest that there seems to be a link between these dimensions irrespectively of the particular sector of activity. Contrary to similar studies a “virtuous circle” does not exist as the avoidance of environmental improving investments is related to a better financial performance. On the other hand firms with superior financial performance seem to achieve a better environmental performance. At the same time firm specific and market characteristics significantly affect this relationship. These findings provide evidence that governmental and corporate actions are necessary in order to lead to a more sustainable corporate performance in the long run
    Keywords: environmental performance; financial performance; causality; GMM; Greece.
    JEL: Q0 Q00 Q56
    Date: 2016–03–01

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