nep-sbm New Economics Papers
on Small Business Management
Issue of 2017‒09‒10
thirteen papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. The Dynamics of Inter-firm Networks and Firm Growth By FUJII Daisuke; SAITO Yukiko; SENGA Tatsuro
  2. Towards a network model of innovation in sport – the case of product innovation in nautical sport clusters By Anna Gerke
  3. Carbon Taxes, Path Dependency, and Directed Technical Change: Evidence from the Auto Industry By Philippe Aghion; Antoine Dechezleprêtre; David Hémous; Ralf Martin; John Van Reenen
  4. Firm Capabilities, Technological Dynamism and Innovation Internationalisation – a Behavioural Approach By Schubert, Torben; Baier, Elisabeth; Rammer, Christian
  5. Knowledge triangle policies and practices in Germany By Daimer, Stephanie; Dehio, Jochen; Rothgang, Michael
  6. Developing EU Capital Markets for SMEs: Mission impossible? By Thomadakis, Apostolos
  7. Knowledge spillovers and absorptive capacity - institutional evidence from the 'German Mittelstand' By Proeger, Till
  8. Accessibility, absorptive capacity and innovation in European urban areas By Clément Gorin
  9. Explicating the role of innovation intermediaries in the 'unknown': a contingency approach By Marine Agogué; Elsa Berthet; Tobias Fredberg; Pascal Le Masson; Blanche Segrestin; Martin Stoetzel; Martin Wiener; Anna Yström
  10. Shacklean Uncertainty and Cultural Embeddedness as Innovation Constraints in the UK By Tubadji, Annie; Nijkamp, Peter; Santarelli, Enrico
  11. Innovation Adoption and Liquidity Constraints in the Presence of Grassroots Extension Agents: Evidence from the Peruvian Highlands By Bonjean, Isabelle; Platteau, Jean-Philippe; Verardi, Vincenzo
  12. Equity Regulation and U.S. Venture Capital Investment By Atkinson, Tyler; Duca, John V.
  13. STAR: a facilitation methodology to promote the project emergence in interclustering context Application to H2020 NEPTUNE project concerning Blue Growth By Julien Ambrosino; Dimitri Masson; Jérémy Legardeur

  1. By: FUJII Daisuke; SAITO Yukiko; SENGA Tatsuro
    Abstract: Recent empirical evidence has revealed that firm age is one of the key determinants for firm growth, while other literature points out the importance of customer-supplier networks for firm growth. This paper investigates how the inter-firm transaction network evolves over the firm lifecycle and its relationship with firm growth using large-scale firm network data in Japan. Old firms are large in size and well connected compared to young firms. In particular, older firms are connected to other older firms exhibiting positive assortativity of age. Younger firms tend to add and drop links more frequently, and the stability of a transaction link increases with its duration of active relationships, implying gradual learning of link-specific productivity over time. Moreover, firm's sales growth is positively related with the expansion of transaction partners in various measures, conditional on firm age. This suggests that the observed relationship between firm age and firm growth may be due to the lifecycle pattern of building inter-firm networks.
    Date: 2017–08
  2. By: Anna Gerke (Audencia Recherche - Audencia Business School)
    Abstract: Sport and sport equipment are permanently subject to innovation. The current research on innovation sources in sport industries has focused on user innovation and firm-internal sources of innovation. This paper uses the network approach to analyze external links as sources of product innovation in nautical sport clusters. It addresses the question: how can sport organizations effectively use interorganizational links for innovation? An empirical study identifies and compares innovation practices in the Auckland sailing cluster in New Zealand with the Victorian surfing cluster in Australia. In total 52 firms, non-profit-organizations, and governing bodies were interviewed. In spite of much existing research focusing on internal firm resources and end users as sources of innovation in the sport sector, interorganizational linkages provide rich sources of innovation for organizations located in clustered sport industries. This research identifies 11 practices that can be imitated by other organizations located in sport clusters or similar settings. Eight practices occur in both clusters while three only occur in one of both. This paper contributes to knowledge on mechanisms for information and knowledge transfer that leverage innovation via interorganizational linkages.
    Keywords: interorganizational links, product innovation, sport clusters, networks, sailing, surfing
    Date: 2017–06–15
  3. By: Philippe Aghion (CDF - Collège de France - CdF - Collège de France, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics, CIAR - Canadian Institute for Advanced Research - Université de Montréal, Department of Economics, Harvard University); Antoine Dechezleprêtre (Centre for Economic Performance - LSE - London School of Economics and Political Science, Grantham Research Institute on Climate Change and the Environment - LSE - London School of Economics and Political Science); David Hémous (Insead - INSEAD - INSEAD); Ralf Martin (Imperial College London, Grantham Research Institute on Climate Change and the Environment - LSE - London School of Economics and Political Science, Centre for Economic Performance - LSE - London School of Economics and Political Science); John Van Reenen (National Bureau of Economic Research - National Bureau of Economic Research, Centre for Economic Performance - LSE - London School of Economics and Political Science)
    Abstract: Can directed technical change be used to combat climate change? We construct new firm-level panel data on auto industry innovation distinguishing between “dirty” (internal combustion engine) and “clean” (e.g., electric, hybrid, and hydrogen) patents across 80 countries over several decades. We show that firms tend to innovate more in clean (and less in dirty) technologies when they face higher tax-inclusive fuel prices. Furthermore, there is path dependence in the type of innovation (clean/dirty) both from aggregate spillovers and from the firm’s own innovation history. We simulate the increases in carbon taxes needed to allow clean technologies to overtake dirty technologies.
    Keywords: Carbon Taxes
    Date: 2016–01
  4. By: Schubert, Torben (CIRCLE, Lund University); Baier, Elisabeth (HWTK, Baden-Baden); Rammer, Christian (ZEW, Mannheim)
    Abstract: We develop a behavioural framework of bounded rational decision-making under uncertainty by which we analyse the effect of technological dynamism in the firm’s environment on its decisions to internationalise innovation. Arguing that the firm’s technological performance lev-el affects its risk-preferences, a key-prediction is that firms with low technological compe-tences will internationalise innovation when faced by technological uncertainty while firms with high competences will withdraw from international innovation. A fully rational absorptive-capacity framework would predict the opposite relationship because it ignores the role of dif-ferential risk-preferences. We test our framework using data from the German Community Innovation Survey (CIS).
    Keywords: innovation internationalisation; speed of technological change; bounded rationality; prospect theory; uncertainty; technological capabilities
    JEL: F21 F23 L22 O32
    Date: 2017–09–01
  5. By: Daimer, Stephanie; Dehio, Jochen; Rothgang, Michael
    Abstract: This publication discusses results from a study on knowledge triangle (KT) policies and practices in Germany. Our study analyzes characteristics of the situation in Germany, where the interaction between the different policy levels is rather crucial for understanding KT policies and (non-university) public research institutions play an important role in the KT. We see different forms of interaction between the different angles of the KT: between research and innovation (with a clear focus on the "third mission" of higher education institutions), between research and education (strongly reinforced in the past few years by instruments aiming at a higher quality of education), and between innovation and education (e.g. via participation of representatives from the economy and society in the accreditation process of new B.A. and M.A. study programmes). The second part presents results from case studies of two German higher education institutions. We see that the interaction between different policy levels is crucial for understanding KT policies, and that (non-university) public research institutions (PRIs) play an important role in the KT. Third mission policies and science-industry linkages are thriving, but their adoption by higher education institutions and public research institutes varies greatly depending on the institutions' structure, culture and location (regional context).
    Date: 2017
  6. By: Thomadakis, Apostolos
    Abstract: Bank lending is the most common source of external finance for SMEs, but it doesn’t suit all of them, explains Apostolos Thomadakis in this ECMI Commentary. Young, innovative and fast-growing SMEs, in particular, do not have the required cash flows and collateral for bank financing and need alternatives to unlock their growth potential. Market-based finance is one alternative to help finance the activities of these SMEs. The European Commission’s renewed activities to develop market-based financing need to be stepped up in order to develop a credible capital market to finance SMEs in the EU.
    Date: 2017–09
  7. By: Proeger, Till
    Abstract: Recent extensions to the knowledge spillover theory of entrepreneurship (KSTE) show that the successful commercialization of new knowledge by incumbents depends on their absorptive capacities. For policy-makers focusing on increasing incumbents' innovative performance, the systematic reduction of knowledge filter through improved absorptive capacities thus becomes a crucial goal. While the general working mechanisms of knowledge filter have been analyzed within the KSTE framework, few institutional solutions to increase absorptive capacities have been put forth. This study provides an initial case study explaining a specific institutional framework fostering the systematic penetration of knowledge filters by incumbent firms in the case of German SMEs. Using a set of 177 in-depth interviews with firm representatives, the system of interrelated organizations, institutional arrangements, shared values and economic incentives associated with the institutional structures for knowledge spillovers for German SMEs are described. I identify institutional characteristics connected to the dual system of vocational training, regulatory measures and economic incentives mutually enforcing and fostering broad knowledge spillovers. This exploratory approach enables deriving hypotheses for the further study of knowledge filters as well as policy implications for the design of institutions increasing incumbents' absorptive capacities.
    Keywords: absorptive capacity,entrepreneurship,knowledge filter,knowledge spillovertheory of entrepreneurship,networks,small and medium enterprises
    JEL: D21 D82 H41 K23 L14
    Date: 2017
  8. By: Clément Gorin (Univ Lyon, UJM Saint-Etenne, GATE L-SE UMR 5824, F-42023 Saint- Etienne, France)
    Abstract: Empirical studies on the geography of innovation have established that skilled workers’ mobility and collaboration networks shape the diffusion of knowledge across firms and regions. At the same time, the literature on absorptive capacity insisted on the importance of local research capabilities to take advantage of knowledge developed elsewhere. This paper inves- tigates both phenomena in an integrated framework by assuming that mobility and networks provide access to knowledge, but the proportion of accessible knowledge effectively used for innovation depends on absorptive capacity. Such complementaries in regional research efforts are effectively captured using a spatial Durbin model in which the connectivity structure stems from mobility and collaboration patterns. Results confirm the relative importance of these two channels in the diffusion of knowledge, and suggests that human capital increases absorptive capacity. These findings have implications for the geography of innovation. While greater accessibility encourages convergence, the notion of absorptive capacity implies a self-reinforcing effect leading to divergence.
    Keywords: Innovation, Mobility, Network, Absorptive capacity, Spatial Durbin model, Urban areas
    JEL: C33 J61 O31 O33
    Date: 2017
  9. By: Marine Agogué (HEC Montréal - HEC Montréal); Elsa Berthet (INRA - Institut National de la Recherche Agronomique); Tobias Fredberg (Management of Organizational Renewal and Entrepreneurship - Chalmers University of Technology [Gothenburg]); Pascal Le Masson (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - PSL Research University - CNRS - Centre National de la Recherche Scientifique); Blanche Segrestin (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - PSL Research University - CNRS - Centre National de la Recherche Scientifique); Martin Stoetzel (Chair of Information Systems III - University Erlangen-Nuremberg); Martin Wiener (Bavarian Center for Applied Energy Research - ZAE Bayern); Anna Yström (Management of Organizational Renewal and Entrepreneurship - Chalmers University of Technology [Gothenburg])
    Abstract: Purpose – Innovation intermediaries have become key actors in open innovation (OI) contexts. Research has improved the understanding of the managerial challenges inherent to intermediation in situations in which problems are rather well defined. Yet, in some OI situations, the relevant actor networks may not be known, there may be no clear common interest, or severe problems may exist with no legitimate common place where they can be discussed. The purpose of this paper is to contribute to the research on innovation intermediaries by showing how intermediaries address managerial challenges related to a high degree of unknown. Design/methodology/approach – The authors draw upon the extant literature to highlight the common core functions of different types of intermediaries. The authors then introduce the " degree of unknown " as a new contingency variable for the analysis of the role of intermediaries for each of these core functions. The authors illustrate the importance of this new variable with four empirical case studies in different industries and countries in which intermediaries are experiencing situations of high level of unknown. Findings – The authors highlight the specific managerial principles that the four intermediaries applied in creating an environment for collective innovation. Originality/value – Thereby, the authors clarify what intermediation in the unknown may entail.
    Keywords: Innovation intermediaries,Degree of unknown,Open innovation,Innovation management,Collaborative innovation
    Date: 2017
  10. By: Tubadji, Annie; Nijkamp, Peter; Santarelli, Enrico
    Abstract: We focus on both individual and local uncertainty to explain the innovation potential of entrepreneurs in the NUTS1 UK regions in 2005 and 2009. The ‘potential surprise function’ (Shackle, 1949) clarifying why sometimes promising business choices are truncated is taken as a determinant of an entrepreneur’s innovation decision. GEM (Global Entrepreneurship Monitor) data and data on psychological types are used in the empirical analysis. The econometric estimation strategy addresses both the issue of selection bias (due to uncertainty) and that of zero-inflated data (i.e., presence of only a few highly innovative actors in comparison to the majority in our sample). Findings suggest that local uncertainty is the predominant determinant of individual entrepreneurial choice. The regional effect appears to amount to about 4% of the innovation differences across NUTS1 UK regions, while almost one third of it is determined by the local level of uncertainty bias. Thus, the novelty of the present study is that it shows how differences in local cultural tolerance to uncertainty may explain differences in the quantity of truncated innovative ideas among localities.
    Keywords: potential surprise function,entrepreneurship,innovation,knowledge,epistemic uncertainty,cultural embeddedness,Culture Based Development,quality ladder
    JEL: Z10 D81 R11
    Date: 2017
  11. By: Bonjean, Isabelle; Platteau, Jean-Philippe; Verardi, Vincenzo
    Abstract: To analyze the role of the income constraint in slowing innovation adoption, this paper uses a technology diffusion program based on the work of business-oriented grassroots extension agents in the Peruvian Highlands. Taking advantage of a multiplicity of innovations with different characteristics and of information about innovation suppliers who can grant seller credit, we show that the income constraint operates in a limited manner. Moreover, due to higher trust associated with greater familiarity, households are better able to adopt costly and indivisible innovations when a supplier/lender resides in their own community. The story emerging from the program evokes the relatively egalitarian process underlying the Green Revolution as it has taken place in Asian agriculture, in particular. Overall, our conclusion goes against the pessimistic assessment of the impact of extension work in poor areas that emerges from the current literature.
    Keywords: credit; Innovation adoption; liquidity constraint; Trust
    Date: 2017–09
  12. By: Atkinson, Tyler (Federal Reserve Bank of Dallas); Duca, John V. (Federal Reserve Bank of Dallas)
    Abstract: There is a growing consensus that the long-run per capita growth rate of the U.S. economy has drifted lower since the early 2000s, consistent with a perceived slowdown in business dynamism. One factor that may have contributed to this is a downshift in venture capital investment and its failure to recover in line with stock prices, as pre-2003 patterns would suggest. Critics have argued that this is associated with the increased regulatory burden for publically traded firms to comply with the Sarbanes-Oxley Act of 2002 (SOX). There is inconclusive evidence of SOX deterring firms from becoming publically traded as indicated by IPO activity, a proxy reflecting several factors that may not be as tied to innovation as venture capital. Earlier tests of SOX’s impact on venture capital activity, which tended to focus on cross-sectional evidence, were hampered by a short time-series sample following the Internet-stock bust of the early 2000s. Taking advantage of the large-sized rise, fall, and recovery in stock prices since then, this study assesses whether the time-series behavior of venture capital investment shifted following SOX. We find evidence of a time-series break in the middle of our sample, consistent with the passage of SOX. Estimates indicate that the slower post-SOX pace of venture capital investment is mainly attributed to a reduced elasticity of such investment with respect to stock prices rather than to a simple downshift in the level of investment. Our estimates suggest that a cost-benefit analysis of SOX could be worthwhile, especially given concerns that the long-run growth rate of U.S. productivity and GDP has been unusually sluggish and the emerging consensus that excessive debt financing—not equity financing—is more tied to the subset of financial crises associated with severe macroeconomic downturns.
    Keywords: Venture capital; Sarbanes-Oxley; regulatory costs; long-run growth
    JEL: G24 O47
    Date: 2017–08–23
  13. By: Julien Ambrosino (Aerospace Valley, IMS - Laboratoire de l'intégration, du matériau au système - Université Sciences et Technologies - Bordeaux 1 - Institut Polytechnique de Bordeaux - CNRS - Centre National de la Recherche Scientifique, ESTIA Recherche - Ecole Supérieure des Technologies Industrielles Avancées (ESTIA)); Dimitri Masson (ESTIA Recherche - Ecole Supérieure des Technologies Industrielles Avancées (ESTIA)); Jérémy Legardeur (IMS - Laboratoire de l'intégration, du matériau au système - Université Sciences et Technologies - Bordeaux 1 - Institut Polytechnique de Bordeaux - CNRS - Centre National de la Recherche Scientifique, ESTIA Recherche - Ecole Supérieure des Technologies Industrielles Avancées (ESTIA))
    Abstract: In the specific context of co-operation between members of clusters or competitiveness clusters, the emergence of collaborative innovation projects is a major challenge for clusters and their members (composed of companies, universities, laboratories, etc.). Given the heterogeneity in terms of the knowledge and profiles of the ecosystems that evolve within the clusters, the interclustering strategy, which consists in supporting the emergence of projects between different clusters, requires the use and adaptation new tools. The aspects of the methodology presented here focus in particular on the facilitation of creativity sessions and more particularly on the "live" evaluation of the ideas generated by the participants.
    Abstract: Dans le contexte spécifique de coopétition entre les membres de clusters ou de pôles de compétitivité, l'émergence de projets innovants collaboratifs est un enjeu majeur pour les clusters et leurs adhérents (composés d'entreprises, d'universités, laboratoires…). Étant donné l'hétérogénéité en termes de connaissances et de profils des écosystèmes qui évoluent au sein des pôles de compétitivité, la stratégie d'interclustering, qui consiste à soutenir l'émergence de projets entre différents clusters, nécessite l'utilisation et l'adaptation de nouveaux outils appropriés. Les aspects de la méthodologie présentée ici, portent en particulier sur l'animation des sessions de créativité et plus particulièrement sur l'évaluation « en live » des idées générées par les participants.
    Keywords: Creativity,rating,Créativité,Innovation,Evaluation,cluster,pôle de compétivivité,interclustering
    Date: 2017–04–12

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