nep-sbm New Economics Papers
on Small Business Management
Issue of 2018‒03‒12
twenty-six papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Absorptive Capacity and Firms’ Generation of Innovation - Revisiting Zahra and George’s Model By Dina Pereira; João Leitão
  2. The Impact of Management Practices on SME Performance By Alex Bryson; John Forth
  3. The efficiency of Portuguese Technology Transfer Offices and the importance of university characteristics By Aurora Teixeira; André Monteiro
  4. Persistence in innovation and innovative behavior in unstable environments By Joana Costa; Anabela Botelho; Aurora Teixeira
  5. Creative and science-oriented employees and firm-level innovation By Birkeneder, Antonia; Brunow, Stephan; Rodríguez-Pose, Andrés
  6. The Role of Business Model Innovation for Product Innovation Performance By Bengtsson, Lars; Tavassoli, Sam
  7. Propensity to Patent and Firm Size for Small R&D-Intensive Firms By Link, Albert; Scott, John
  8. Inflation and Growth: A Non-Monotonic Relationship in an Innovation-Driven Economy By Zheng, Zhijie; Huang, Chien-Yu; Yang, Yibai
  9. Spatial perspectives on knowledge brokers: Evidence from Brussels By Nicola Francesco Dotti; André Spithoven
  10. Do Entrepreneurship Policies Work? Evidence From 460 Start-Up Program Competitions Across the Globe By Geoffrey Barrows
  11. Listing and Financial Constraints By Kenichi Ueda; Akira Ishide; Yasuo Goto
  12. Opportunity versus Necessity Entrepreneurship: Two Components of Business Creation By Robert W. Fairlie; Frank M. Fossen
  13. The effect of entrepreneurial origin on firms’ performance - The case of Portuguese academic spinoffs By Natália Barbosa; Ana Paula Faria
  14. Institutional change and the development of lagging regions in Europe. By Andrés Rodríguez-Pose; Tobias Ketterer
  15. How Do Firms Adjust to Rises in the Minimum Wage? Survey Evidence fromCentral and Eastern Europe By Katalin Bodnar; Ludmila Fadejeva; Stefania Iordache; Liina Malk; Desislava Paskaleva; Jurga Pesliakaite; Natasa Todorovic Jemec; Peter Toth; Robert Wyszynski
  16. Innovation and the economic downturn: Insights from Portuguese firms By Hugo Pinto; Tiago Santos Pereira; Elvira Uyarra
  17. Horizontal Mergers and Innovation By Jullien, Bruno; Lefouili, Yassine
  18. The Financing of Entrepreneurial Ventures By Huber, Alexander
  19. Importance of EU Regional Support Programmes for Firm Performance By Konstantins Benkovskis; Olegs Tkacevs; Naomitsu Yashiro
  20. The Hidden Information Content: Evidence from the Tone of Independent Director Reports By Jiao Ji; Oleksandr Talavera; Shuxing Yin
  21. Firms Left Behind: Emigration and Firm Productivity By Yvonne Giesing; Nadzeya Laurentsyeva
  22. Financing Lumpy Adjustment By Christoph Görtz; Plutarchos Sakellaris; John D. Tsoukalas
  23. A Bibliometric Analysis of the Knowledge Exchange Patterns between Major Technology and Innovation Management Journals (1999-2013) By Shikhar Sarin; Christophe Haon; Mustapha Belkhouja
  24. Taste for Science, Academic Boundary Spanning and Inventive Performance of Scientists and Engineers in Industry By Arts, Sam; Veugelers, Reinhilde
  25. Back on Track? A micro-macro Narrative of Italian Exports By Matteo Bugamelli; Silvia Fabiani; Stefano Federico; Alberto Felettigh; Claire Giordano; Andrea Linarello
  26. ICT Adoption in Micro and Small Firms: Can Internet Access Improve Labor Productivity? By Mariana Viollaz

  1. By: Dina Pereira (University of Beira Interior (UBI), UBImedical, CEG-IST, University of Lisbon); João Leitão (University of Beira Interior (UBI), CEG-IST, University of Lisbon & C-MAST, UBI, Instituto Multidisplinar de Empresa, Universidad de Salamanca)
    Abstract: The firm’s absorptive capacity triggers its propensity to capture external knowledge, spurred by internal levers and cooperation liaisons, stimulating innovativeness. This paper revisits Zahra and George’s model of absorptive capacity and others, analysing the firm’s internal and liaison factors that affect its absorptive capacity, in order to predict their influence on innovation. Being the firm an open system, managers acknowledging such effects can design a more efficient open innovation business model in order to generate more innovation. We analyse firm-level internal indicators measuring firm’s absorptive capacity and a set of liaison factors, using a Portuguese sample of 571 service firms and 562 manufacturing firms that participated in the European Community Innovation Survey (CIS), 2010. Results reveal that internal R&D, acquisition of external R&D, acquisition of external knowledge (i.e., equipment, software, licenses and employee training) affect firms' generation of innovation, according to the different sub-samples, which provides several implications for science and innovation policy.
    Keywords: Absorptive Capacity; Innovation; Liaisons; Internal and External Knowledge
    JEL: M20 M21 L25 L26 O32
    Date: 2018–02
  2. By: Alex Bryson; John Forth
    Abstract: We examine the impact of management practices on firm performance among SMEs in Britain over the period 2011-2014, using a unique dataset which links survey data on management practices with firm performance data from the UK’s official business register. We find that SMEs are less likely to use formal management practices than larger firms, but that such practices have demonstrable benefits for those who use them, helping firms to grow and increasing their productivity. The returns are most apparent for those SMEs that invest in human resource management practices, such as training and performance-related pay, and those that set formal performance targets.
    Keywords: SMEs, small and medium-sized enterprises, employment growth, high-growth firms, productivity, workplace closure, management practices, HRM, recession
    JEL: L25 L26 M12 M52 M53
    Date: 2018–03
  3. By: Aurora Teixeira (CEF.UP, Faculdade de Economia, Universidade do Porto; INESC Tec; OBEGEF); André Monteiro (Faculdade de Economia, Universidade do Porto)
    Abstract: Studies on the efficiency of TTOs have mainly focused on well-developed countries (US and UK), whereas intermediate technology countries have been rather neglected. This study intends to complement existing empirical work on this matter by providing evidence on Portugal, an intermediate technology country, which has invested quite heavily in technological support infrastructures (including TTOs) in the last decade. Using the Data Envelopment Analysis approach to 18 Portuguese TTOs over the period 2007-2011, we found that TTOs had improved their efficiency especially in the more upstream stages of the technology transfer process (invention disclosures and priority filings). Additionally, based on econometric models, we found that universities characteristics do matter, with universities with a large number of accumulated patents and publications being associated to more efficient TTOs in terms of invention disclosures and priority filings. Moreover, the regional industrial basis, most notably the weight of the manufacturing industry and new high- and medium-tech firms in regions where the university is located, contributes significantly to the efficiency of TTOs, in both the more upstream (invention disclosure and priority filings) and downstream (start-ups) phases, reflecting the importance of strong business regional spillovers for TTOs efficiency.
    Keywords: Technology Transfer Offices, Efficiency, Data Envelopment Analysis, Universities, Portugal
    JEL: O34 O39 C14
    Date: 2018–02
  4. By: Joana Costa (Universidade de Aveiro); Anabela Botelho (Universidade de Aveiro); Aurora Teixeira (CEF.UP, Faculdade de Economia, Universidade do Porto)
    Abstract: The analysis of persistence in innovation can improve the understanding of firm dynamics, anticipate the effects of the different policy actions, correct macroeconomic disequilibria, help in designing the correct policies to boost R&D and, consequently, generate prosperity. Persistence of innovation is empirically explored mostly using the case of innovation leaders or followers, which may not apply to countries with poorer performances in terms of innovation. Studying the case of a moderate innovator may shed some light into the different conditions of firms and their attitude towards persistence, as well as the adoption of different policy actions to observe this heterogeneity. Additionally, the effect of firm size and industry has not yet been fully explored by the literature on innovation persistence. The present paper analyses the persistence of innovation using a dynamic panel comprising 1099 firms operating in all economic sectors of a moderate innovator country, Portugal. Firms are observed in three waves of the Portuguese part of the Community Innovation Survey (CIS), from 2004 to 2010. Using the random effects probit model, the persistence hypothesis fails to be corroborated. Such result suggest that innovation policy programs do not have long-lasting effect on innovative behavior of firms and it is unlikely that incumbent past innovators be the drivers of creative accumulation and future innovation. There is, however, some evidence that new, smaller, innovators might lead the creative wave. In this vein, there might be a rational to encourage public policies targeting start-up firms and new market entrants when innovation is the main primary funding goal.
    Keywords: Persistence, Innovation, State dependence, Firms, Community Innovation Survey, Portugal
    JEL: D22 L20 O31 O32
    Date: 2018–02
  5. By: Birkeneder, Antonia; Brunow, Stephan; Rodríguez-Pose, Andrés
    Abstract: This paper examines the link between innovation and the endowments of creative and science-oriented STEM - Science, Technology, Engineering and Mathematics - workers at the level of the firm and at the city-/regional-level in Germany. It also looks into whether the presence of these two groups of workers has greater benefits for larger cities than smaller locations, thus justifying policies to attract these workers in order to make German cities 'smarter'. The empirical analysis is based on a probit estimation, covering 115,000 firm-level observations between 1998 and 2015. The results highlight that firms that employ creative and STEM workers are more innovative than those that do not. However, the positive connection of creative workers to innovation is limited to the boundaries of the firm, whereas that of STEM workers is as associated to the generation of considerable innovation spillovers. Hence, attracting STEM workers is more likely to end up making German cities smarter than focusing exclusively on creative workers.
    Keywords: Creative workers; Germany; Innovation; Smart Cities; Spillover; STEM workers
    JEL: J24 R23
    Date: 2018–02
  6. By: Bengtsson, Lars (Faculty of Engineering, Lund University); Tavassoli, Sam (RMIT)
    Abstract: We analyze the effect of Business Model Innovation (BMI) on the product innovation performance of firms, based on a dynamic capabilities theoretical framework. Our empirical study is based on a large-scale representative sample of cross-industry Swedish firms participating in the last three waves of the Community Innovation Survey (CIS) from 2006–2012. Our findings provide support for the dynamics capabilities theoretical framework as well as broad evidence of a significant and positive association between BMI and product innovation performance. Our results imply that BMI in the form of product innovations combined with different complementary innovations will act as isolating mechanisms towards replication by competitors. Therefore, managers should frame product innovations as part of a business model innovation and dynamically adapt the key elements of the firm’s business model.
    Keywords: Business model innovation; Business models; Dynamic capabilities; product innovation; Innovation performance; Community Innovation Survey
    JEL: D22 L20 O31 O32
    Date: 2018–02–27
  7. By: Link, Albert (University of North Carolina at Greensboro, Department of Economics); Scott, John (Dartmouth College, Department of Economics)
    Abstract: The Schumpeterian hypothesis about the effect of firm size on research and development (R&D) output is studied for a sample of R&D projects for R&D-intensive firms that are small but have substantial variance in their sizes. Across the distribution of firm sizes, the elasticity of patenting with respect to R&D ranged from 0.41 to 0.55, with the elasticities being largest for intermediate levels of firm size and also varying directly with the extent to which the projects are Schumpeterian in the cost or value senses. The paper’s findings at the R&D project level are compared with the literature’s findings at the line of business, firm, and industry levels, and the findings are consistent with the literature’s findings for small firms.
    Keywords: Patents; Research and Development (R&D); Firm Size; Schumpeterian hypothesis; Technological Progress; Innovation
    JEL: L10 L20 L25 O30
    Date: 2018–01–24
  8. By: Zheng, Zhijie; Huang, Chien-Yu; Yang, Yibai
    Abstract: This paper investigates the effects of monetary policy on long-run economic growth via different cash-in-advance constraints on R&D in a Schumpeterian growth model with vertical and horizontal innovation. The relationship between inflation and growth is contingent on the relative extents of CIA constraints and diminishing returns to two types of innovation. The model can generate a mixed (monotonic or non-monotonic) relationship between inflation and growth, given that the relative strength of monetary effects on growth between different CIA constraints and that of R&D-labor-reallocation effects between different diminishing returns vary with the nominal interest rate. In the empirically relevant case where horizontal R&D suffers from greater diminishing returns than vertical R&D, inflation and growth can exhibit an inverted-U relationship when the CIA constraint on horizontal R&D is sufficiently larger than that on vertical R&D. Finally, the model is calibrated to the US economy, and we find that the growth-maximizing rate of inflation is around 2.8%, which is closely consistent with recent empirical estimates.
    Keywords: Inflation; Endogenous growth; CIA constraint on R&D
    JEL: E41 O30 O40
    Date: 2018–02–21
  9. By: Nicola Francesco Dotti; André Spithoven
    Abstract: Knowledge brokers have emerged as a new type of actors shaping scientific production, influencing science–policy relationships, and thereby contributing to regional competitiveness. Yet, the spatial dimension of these knowledge brokers has received little attention. Using Framework Programme participations in European cities, we analyse and discuss the location strategy of knowledge brokers, highlighting the importance of co-location with the funding source. Our findings show that knowledge brokers are clustered in Brussels, and not elsewhere, to be closer to the European Commission in order to access strategic, informal and tacit information, while contributing to the construction of transnational R&D networks. While this ‘local buzz’ has positive side effects on the regional innovation system of Brussels; knowledge brokers emerge as a new type of spatially clustered actors shaping the distribution of EU funding for ‘European knowledge pipelines’.
    Keywords: Brussels; Europe; Framework Programme; Knowledge brokers; local buzz
    Date: 2017–10
  10. By: Geoffrey Barrows (CREST)
    Abstract: Many organizations around the world implement programs designed to encourage entrepreneurship, including grant prize awards, accelerator programs, incubators, etc. The goal of these programs is to supply entrepreneurs with early-stage support and visibility to help develop ideas and attract capital; but, if capital markets are efficient, good business ideas should find funding anyways. In this paper, I present evidence from the first global-scale, quasi-experimental study of whether entrepreneurship programs improve outcomes for start-up firms. I employ a regression discontinuity design to test whether winners of start-up program competitions perform better ex-post than losers, where the threshold rank for winning the competition provides exogenous variation in program participation. With 460 competitions across 113 countries and over 20,000 competing firms, I find that winning a competitions increases the probability of firm survival by 64%, the total amount of follow-on financing by $260,000 USD, and total employment by 47%, as well as other web-based metrics of firm success. Impacts are driven by medium-size prize competitions, and are precisely estimated both in countries where the costs of starting a business are low and where these costs are high. These results suggest that capital market frictions indeed prohibit start-up growth in many parts of the world.
    Keywords: Start-ups, Entrepreneurship, Credit Constraints, Prizes, Accelerators
    JEL: G24 L26 M13 O16
    Date: 2018–01
  11. By: Kenichi Ueda (The University of Tokyo and TCER); Akira Ishide (The University of Tokyo); Yasuo Goto (Seijo University and RIETI)
    Abstract: We confirm, with a twist, that listing to a stock exchange can mitigate financial constraints of firms, using Japanese firm-level data over 20 years, 1995-2014, controlling for main-bank relationship and majority owner influence. Compared to a similar unlisted firm, a listed firm has a lower marginal product of capital on average and more new borrowings in recessions. Theoretically, we argue that these are key pieces of evidence to indicate less tight financial constraints for the listed firms than the unlisted. However, the listed firms do not borrow more on average over time. They rather maintain the lower leverage so that they can mitigate the borrowing constraints. We also find that the listed firms do not face lower interest rates.
  12. By: Robert W. Fairlie; Frank M. Fossen
    Abstract: A common finding in the entrepreneurship literature is that business creation increases in recessions. This counter-cyclical pattern is examined by separating business creation into two components: “opportunity” and “necessity” entrepreneurship. Although there is general agreement in the previous literature on the conceptual distinction between these two factors driving entrepreneurship, there are many challenges to creating a definition that is both objective and empirically feasible. We propose an operational definition of opportunity versus necessity entrepreneurship using readily available nationally representative data. We create a distinction between the two types of entrepreneurship based on the entrepreneur’s prior work status that is consistent with the standard theoretical economic model of entrepreneurship. Using this definition we document that “opportunity” entrepreneurship is pro-cyclical and “necessity” entrepreneurship is counter-cyclical. We also find that “opportunity” vs. “necessity” entrepreneurship is associated with the creation of more growth-oriented businesses. The operational distinction proposed here may be useful for future research in entrepreneurship.
    Date: 2018
  13. By: Natália Barbosa (School of Economics and Management, University of Minho); Ana Paula Faria (School of Economics and Management, University of Minho)
    Abstract: We investigate the role of different entrepreneurial origin on firms’ performance by comparing academic spinoff firms with their non-academic counterparts and using alternative growth measures. Estimates based upon dynamic panel-data models reveal that academic spinoffs grow through resources accumulation and internationalization. However, comparatively to non- academic counterparts, they fail to translate these advantages into productivity gains. Also, despite younger academic spinoff outperform, in terms of sales growth, firms from different entrepreneurial origin, they fail to retain these scale effects, as they grow older. Portuguese academic spinoffs are contributing to economic development by creating new jobs, yet their relevance as a source of sustained economic value is limited so far. Policy implications are discussed in light of these findings.
    Keywords: Academic Spinoff, firm growth, dynamic estimators
    JEL: L21 L25 M13 H32
    Date: 2018–02
  14. By: Andrés Rodríguez-Pose; Tobias Ketterer
    Abstract: According to the dominant economic theories, economic growth is the result of a combination of three factors – physical capital, human capital or labour, and innovation –plus a residual factor or error term, which represents what we do not know or cannotexplain. Depending on whether a neoclassical growth (Solow, 1956; Swan, 1956) or an endogenous growth approach is adopted (Romer, 1986: Lucas, 1988), the weight attributed to each of the components varies, but they remain, in different guises the fundamental drivers informing development policies across the world. The European Union’s (EU) regional development and cohesion policy has been no exception. The bulk of cohesion investments have been channelled towards improving the infrastructure endowment and accessibility of the least developed regions of the EU, as well as increasing the availability and quality of human resources, and developing the innovative capacity of individuals and firms across lagging areas of Europe.
    Keywords: changes, development, regions, Europe.
    JEL: H76 O18 O21 R58
    Date: 2018–02
  15. By: Katalin Bodnar (European Central Bank); Ludmila Fadejeva (Bank of Latvia); Stefania Iordache (Banca Nationala a Romaniei,); Liina Malk (Eesti Pank); Desislava Paskaleva (Bulgarian National Bank); Jurga Pesliakaite (Bank of Lithuania); Natasa Todorovic Jemec (Banka Slovenije); Peter Toth (Narodna banka Slovenska,); Robert Wyszynski (Narodowy Bank Polski)
    Abstract: We study the transmission channels for rises in the minimum wage using a unique firm-level dataset from eight Central and Eastern European countries. Representative samples of firms in each country were asked to evaluate the relevance of a wide range of adjustment channels following specific instances of rises in the minimum wage during the recent post-crisis period. The paper adds to the rest of literature by presenting the reactions of firms as a combination of strategies, and evaluates the relative importance of those strategies. Our findings suggest that the most popular adjustment channels are cuts in non-labour costs, rises in product prices, and improvements in productivity. Cuts in employment are less popular and occur mostly through reduced hiring rather than direct layoffs. Our study also provides evidence of potential spillover effects that rises in the minimum wage can have on firms without minimum wage workers.
    Keywords: minimum wage, adjustment channels, firm-level survey
    JEL: D22 E23 J31
    Date: 2017–12–31
  16. By: Hugo Pinto (Centre for Social Studies, University of Coimbra, Coimbra, Portugal / Faculty of Economics, University of Algarve, Faro, Portugal); Tiago Santos Pereira (Centre for Social Studies, University of Coimbra, Coimbra, Portugal); Elvira Uyarra (Manchester Institute of Innovation Research, Alliance Manchester Business School, University of Manchester, Manchester, UK)
    Abstract: Recent research has found evidence of a variety of business profiles regarding innovation during the economic downturn. Several studies reported that firms were reducing or abandoning innovation activities and dropping related expenses while other authors have found that some firms are exploring the economic turbulence as an opportunity for creative destruction and to gain competitive advantage. This article explores the data collected from the last waves of CIS (Community Innovation Survey) in Portugal (2006-2008-2010-2012) to understand the changes in the determinants of the development of innovation activities, product and process innovation, before, during and in the peak of the crisis. The empirical study presents limited dependent variable models to analyse the relevance of structural factors, absorptive capacity and strategic variables in the different periods. The article concludes with implications for the behaviour of firms and innovation resilience.
    Keywords: CIS; crisis; exploitation; exploration; innovation; persistence; resilience
    JEL: C21 C25 O31 O32 O38
    Date: 2018–03
  17. By: Jullien, Bruno; Lefouili, Yassine
    Abstract: This paper discusses the effects of horizontal mergers on innovation. We rely on the existing academic literature and our own research work to present the various positive and negative effects of mergers on innovation. Our analysis shows that, even in the absence of technological spillovers and R&D complementarities, the overall impact of a merger on innovation may be positive. We derive a number of policy implications regarding the way innovation effects should be handled by competition authorities in merger control and highlight the differences with the analysis of price effects.
    Keywords: Merger Policy; Innovation; R&D Investments
    JEL: K21 L13 L40
    Date: 2018–02
  18. By: Huber, Alexander
    Abstract: Entrepreneurship and entrepreneurial activities influence the development and well-being of both economies and societies to a large extent. At the heart of all entrepre-neurial activities are new ventures - vehicles which entrepreneurs use in order to ex-ploit opportunities through the commercialization of newly developed products or services. In addition to the many obstacles entrepreneurs face when creating a new venture and entering new markets, the financing of these entrepreneurial initiatives becomes a large obstacle. In particular, uncertainties regarding market acceptance of the identified opportunity and thus survival and ultimately growth limit the financing options of new ventures notably. Further, the financing decisions made at the begin-ning of the entrepreneurial process have a lasting impact on the development of the new venture once a certain type of financing is acquired. Hence, securing the necessary financing is not only a major challenge for the entrepreneur at the beginning of the entrepreneurial career. The selection of the right amount of financing from the right source also influences the development of the new venture over and beyond the early days of existence. In line with this argumentation and while acknowledging the limited number of fi-nancing options available to new ventures, venture capital is often identified as a via-ble option for firms during in their early stages of development. This form of financing is characterized to be provided by institutional investors that jointly invest financial means, experience, and networks into the firms they consider to be able to generate the desired growth in return. Given the large array of new ventures however, only a few are considered a potential investment, and thereof only a fraction receives the necessary funding. Regarding the latter group of investees however, a venture capital investment has empirically proven to positively influence new venture survival and growth, translating into increased performance of venture capital-backed over non-venture capital-backed firms. Given the fact that venture capital itself is a fascinating field of research but likewise of great importance for the financing of new ventures at the same time, this dissertation develops new empirical insights about the role of ven-ture capital in the context of new ventures that were created in an academic context. Further, crowdfunding as a new means of entrepreneurial finance is analyzed against the background of its signaling value in the investment decision of venture capitalists. The first empirical contribution uses a proprietary dataset of 98 German research-based spin-offs founded between 1997 and 2012 and assesses which firm-specific and system-inherent factors are decisive for the spin-offs’ growth while drawing on the re-source-based view of the firm as theoretical framework. Specifically, this dissertation aims to evaluate whether venture capital-backed research-based spin-offs outperform non venture capital-backed research-based spin-offs and whether a performance differ-ence is explained by venture capitalists’ scouting or coaching capabilities. The empiri-cal findings suggest that a homogeneous educational background of the academic en-trepreneurs is positively associated with the research-based spin-off’s growth. Similar-ly, a training provided by the parent research organization intended to develop entre-preneurial skills and to establish a network to outside professionals as well as the commercialization of a novel technology have a positive impact on a research-based spin-off’s growth. Concerning the involvement of venture capitalists, venture capital-backed research-based spin-offs show a superior employment and revenue growth compared to non-venture capital-backed research-based spin-offs. As a possible cause for this superior performance, the empirical findings support the view that this growth difference can be attributed to venture capitalists’ coaching rather than their scouting capabilities. The second empirical contribution addresses the increasing popularity of crowdfund-ing as a new means to finance new ventures. In particular, this dissertation assesses whether and how crowdfunding campaign-specific signals that affect campaign success influence venture capitalists’ selection decisions in new ventures’ follow-up funding rounds. By doing so, this empirical contribution relies on cross-referencing a proprie-tary dataset of 66,000 crowdfunding campaigns that ran on Kickstarter between 2009 and 2016 with 100,000 investments in the same period from the Crunchbase dataset. Using this approach, 267 new ventures with at least one crowdfunding campaign could be identified. While drawing on signaling theory and the venture capital and micro-finance literature, the empirical findings reveal that a successful crowdfunding cam-paign leads to a higher likelihood to receive follow-up venture capital financing, and that an inverted U-shaped relationship exists between the funding received compared to the funding desired and the probability to receive venture capital funding. Further, the analyses provide statistical evidence that a special endorsement of campaigns by the crowdfunding platform provider as well as social media presence in the form of word-of-mouth volume has a likewise positive impact on the receipt of follow-up ven-ture capital. Interpreting these findings, this dissertation concludes that the results sup-port the view that venture capitalists apparently rely on the decision of the crowd in order to evaluate the potential of the entrepreneurial initiative when selecting new investment opportunities. Over and beyond the signals that a crowdfunding campaign produces and that are ap-parently factored into the investment decision of venture capitalists, this dissertation also elaborates on how the presence of a crowdfunding campaign itself, disregarding all its campaign-relevant aspects, influences the investment decision of venture capital-ists in terms of their decision to form syndicates. For the purpose of this research ques-tion, this dissertation relies again on signaling theory and builds on the syndication literature. The overarching empirical finding is that crowdfunding seems to influence the syndication behavior of venture capitalists. For one thing, the presence of a crowd-funding campaign negatively influences both the likelihood of a syndicated investment as well as the number of syndicate partners. For another, the findings reveal that crowdfunding positively influences the formation of international syndicates. Hence, the results support the assumption that the importance of crowdfunding is also fac-tored into the investment decision of venture capitalists in terms of their decision to syndicate. This dissertation concludes with the major contributions for both theory and practice. In essence, the results derived provide novel insights about growth factors of research-based spin-offs by widening the focus of analysis. This is done by incorporating venture capital into the research scope so as to advance the resource-based view of the firm. Also, this dissertation shows that crowdfunding serves as a catalyst reducing the per-ceived risk in the form of information asymmetries related to new ventures. Thus, this dissertation advances signaling theory and also provides important implications for the microfinance and VC literature.
    Date: 2017–11–29
  19. By: Konstantins Benkovskis (Bank of Latvia); Olegs Tkacevs (Bank of Latvia); Naomitsu Yashiro (OECD)
    Abstract: This paper investigates the effects of EU regional support on firms' productivity, the number of employees and other firm performance indicators. For this purpose, a rich firmlevel dataset for Latvia, a country where investment activities are affected by the availability of EU funding, is used. The paper finds that participation in activities cofunded by the ERDF raises firms' input and output soon after they embark on them, while the effect on labour productivity and TFP appears only with a time lag of three years. However, this positive productivity premium is not homogenous across firms and is more likely to materialise in the case of initially less productive and medium-sized/large firms. Furthermore, statistical significance of positive productivity gains is not particularly robust across different estimation procedures. The study also shows that after controlling for investment expenditures, EU sponsored projects are as efficient as the privately financed ones, irrespective of where private financing comes from.
    Keywords: EU funds, productivity, firm-level data, propensity score matching
    JEL: C14 D22 R11
    Date: 2018–02–23
  20. By: Jiao Ji (Management School, University of Sheffield); Oleksandr Talavera (School of Management, Swansea University); Shuxing Yin (Management School, University of Sheffield)
    Abstract: The paper investigates the link between the information content of independent directors’ re-ports (IDRs) and future firm performance. By conducting sentiment analysis of 23,984 IDRs of the Chinese listed companies from 2004-2012, we find that the tone of IDRs is positively related with future firm performance. We also posit that the tone of IDRs and its association with firm performance depends on director’s incentives to monitor. Our results suggest that independent directors with greater career concerns (i.e., young directors, an expert in ac-counting or finance) are more critical in evaluating firm fundamentals and express more neg-ative tone in their reports. The relationship between the negative tone of IDRs and future firm performance is stronger for firms with greater monitoring needs. Overall, our evidence is consistent with the conjecture that career concerns motivate independent directors to dissem-inate information to external stakeholders.
    Keywords: Brexit, Text Analysis, Tone, Independent Director Report, Corporate Governance
    JEL: G30
    Date: 2018–03–05
  21. By: Yvonne Giesing; Nadzeya Laurentsyeva
    Abstract: This paper establishes a causal link between the emigration of skilled workers and firm performance in source countries. Using firm-level panel data from ten Eastern European countries, we show that the emigration of skilled workers lowers firm total factor productivity. We exploit time, country, and industry differences in the opening of EU labor markets from 2004 to 2014 as a source of exogenous variation in the emigration rates from new EU member states. We argue that a potential channel behind this effect relates to the reduction in firm-specific human capital due to a higher worker turnover.
    Keywords: migration, firm productivity, human capital, EU enlargement
    JEL: O15 D24 F22 J24
    Date: 2017
  22. By: Christoph Görtz; Plutarchos Sakellaris; John D. Tsoukalas
    Abstract: We Study how firms finance Lumpy adjustment in capital, employment and inventories. We analyse U.S. firm data from Compustat covering 1971-2013. Lumpy expansion and contraction episodes in firms' productive assets are important in accounting for movements in macroecnomic and financial aggregate variables. Firms use primarily cash balances and debt in order to expand or contract capacity, but these margins are not perfect substitutes. Cash balances play a preparatory role rising (falling) temporarily prior to lumpy positive (negative) adjustment. Debt is also important as firms de-leverage (increase leverage) prior to lumpy positive (negative) adjustment and then slowly increase leverage (deleverage) often several years after the event. Small and large firms differ in their use of external equity to finance Lumpy events. During Lumpy adjustment profitability and leverage are positively correlated.
    Keywords: Lumpy firm adjustment, Event study, Leverage, Debt, Cash, Financing.
    JEL: G30 G32 E32
    Date: 2017–04
  23. By: Shikhar Sarin (Boise State University); Christophe Haon (GEM - Grenoble Ecole de Management - Grenoble École de Management (GEM), IREGE - Institut de Recherche en Gestion et en Economie - USMB [Université de Savoie] [Université de Chambéry] - Université Savoie Mont Blanc); Mustapha Belkhouja (MTS - Management Technologique et Strategique - Grenoble École de Management (GEM))
    Abstract: This essay takes a longitudinal look at the knowledge flow patterns between major technology and innovation man- agement (TIM) journals and the effect on their impact factors. We analyze the flow of 29,776 citations from 4171 articles published in the top six dedicated TIM journals between 1999 and 2013. Findings indicate one subset of journals becoming more firmly rooted in the TIM domain, while the others becoming increasingly insulated from it. JPIM displays peculiar knowledge flow patterns, suggesting a broadening of its knowledge base and impact. Our bibliometric analysis provides one of the most comprehensive and detailed year-by-year looks at the intradomain knowledge exchange patterns over a 15-year period.
    Date: 2018
  24. By: Arts, Sam; Veugelers, Reinhilde
    Abstract: Matching survey data on Ph.D. scientists and engineers currently working in an R&D job in industry with their publications and patents, we study the relationship between their individual traits and the nature of their inventive performance. We find that individuals with a strong taste for science, i.e. motivated by intellectual challenge, independence, and contribution to society, create more novel and impactful patents. Academic boundary spanning, proxied by scientific publications co-authored with academic scientists, mediates the effect of taste for science, but only partly and only on impact-weighted inventive output. For novelty of inventive output, we find no mediation through academic boundary spanning. Individuals with a strong taste for salary collaborate less with academic scientists, fully mediating the negative effect of taste for salary on impact-weighted inventive output.
    Keywords: industry-science links; taste for science
    JEL: O31
    Date: 2018–02
  25. By: Matteo Bugamelli; Silvia Fabiani; Stefano Federico; Alberto Felettigh; Claire Giordano; Andrea Linarello
    Abstract: Between 1999 and 2016 – after the European Monetary System crisis of the mid-Nineties and the subsequent large swings among European currencies that ended with the adoption of the euro – Italy’s goods exports increased nearly twofold at current prices. Yet, they fared worse than foreign sales of the main euro-area competitors until 2007 (with the exception of France) and fell more intensely during the subsequent “Great Trade Collapse†. Only since 2010 signs of improvement have emerged: Italy’s exports have grown on average half a percentage point faster than the demand stemming from outlet markets and their share on world trade has remained broadly stable, after a protracted decline. Moreover, the negative growth gap vis-à -vis Germany has narrowed significantly. These facts raise two closely related questions. First, what are the main factors explaining Italy’s less favourable export performance relative to the other main euro-area countries since 1999? Second, are the recent signs of recovery the result of a successful structural adjustment of Italian firms or rather the fortuitous consequence of cyclical and hence temporary factors? Addressing these questions can help contribute to the debate on Italy’s structural weaknesses and persistently low productivity and GDP growth, as well as to gather some useful insights into Italy’s export outlook. We employ an extensive set of alternative indicators, based on multiple macro datasets as well as micro-data, to conduct an in-depth analysis of the dynamics of Italian goods exports since 1999, also exploiting the comparison with its three main euro-area competitors (France, Germany and Spain). We start by providing the aggregate picture and dig deeper into the geographical, sectoral and firm-level dimensions. We then analyse export determinants such as external demand, price and non-price competitiveness factors, including competition from emerging markets, the linkages between domestic demand on the one hand and financial and capacity constraints on the other hand. Finally, we try to map our descriptive evidence into a country-sector first and then a firm-level econometric exercise, in order to bridge the macro and the micro dimensions. We argue that the relatively unsatisfactory performance of Italian aggregate exports in the first sub-period, conveniently delimited by the inception of the euro and the eve of the global financial crisis (1999-2007), is the result of the interplay between three factors. The first is the significant appreciation of the real effective exchange rate for Italy, which compounded relative price dynamics and a nominal appreciation that were, on the whole, stronger than those of its main competitors, the latter owing to the different composition of trading partners across countries. These effects may also have been amplified by the higher exchange-rate elasticity of small exporters – as suggested by the literature and confirmed by our empirical findings – which in Italy have a relatively larger weight on aggregate exports. The second factor is the initial specialization in productions that were particularly exposed to the increasing competition of low-wage countries (China in particular) on world exports: we roughly estimate that this exposure could explain at least one tenth of the Italian under-performance on world markets relative to Germany. There is evidence of quality upgrading on the side of Italian exporters, possibly as a reaction to such competitive pressures, although not more pronounced than in the other main euro-area competitors. The third factor, which is intertwined with the previous two, is the size distribution of Italian firms and in particular the large number of small exporters, which struggled to: i) defend their exports in the face of the exchange rate appreciation; ii) keep pace with external demand; iii) successfully face competition from low-wage countries. In addition to these “domestic†factors, Italy’s relative export performance was further penalized by the exceptional growth in exports of both Germany, boosted by large price-competitiveness gains in turn also linked to exceptionally subdued wage dynamics, and Spain, in part favoured by the country’s initially limited penetration into world markets. Against the backdrop of these unfavourable developments before the crisis, over the recent six-year period, in a context of weak internal demand, Italian exports have significantly supported GDP growth and have outpaced the demand stemming from destination markets. Exporting firms have proved capable of adjusting to a shifting external environment more effectively than before and to brave the recessionary phase; they have also managed to reduce the negative growth differential vis-à -vis their main competitors, namely German exporters. To what extent do these facts signal a successful structural adjustment? On this, our evidence is mixed. On the one hand, cyclical or temporary factors may have been at play: price competitiveness was mainly helped by the nominal depreciation of the euro, although some relative-price adjustment vis-à -vis Germany was also in place, while favourable, possibly short-run, developments of world demand in specific sectors led to a positive contribution of Italy’s sectoral specialization. These positive effects were, however, partly counteracted by the cyclical weakness of domestic demand, especially in 2012-2013 against a backdrop of tight financial constraints, which exerted a drag on exports. On the other hand, the specialization of Italy’s exports shifted towards sectors (vehicles and pharmaceuticals) that are less exposed to competitive pressures stemming from Chinese producers, and towards productions that are particularly effective in activating domestic value added (food and beverages). Moreover, the selection process triggered by the exceptional difficulties encountered by micro and small firms both before and during the global financial crisis might have structurally strengthened the population of Italian exporters, making it more resilient to negative shocks and more capable of taking advantage of new opportunities.
    Keywords: exports, competitiveness, specialization, firm size
    JEL: F14 L11 L60
    Date: 2018–01
  26. By: Mariana Viollaz
    Abstract: This paper analyzes the impact of internet adoption on labor productivity in Peruvian micro and small manufacturing firms over the period 2011-2013. Instrumental variables estimates show that internet adoption: (i) increases firms’ labor productivity; (ii) reallocates employment away from temporary administrative workers and non-remunerated workers and expands employment of permanent production workers; (iii) leads to the formalization of labor relationships, to the implementation of new organizational practices, and to the improvement of training measures. These findings point to the implementation of combined policies, where ICT expansion is accompanied by the development of digital skills.
    Keywords: internet adoption, labor productivity, micro and small firms, employment structure, organizational practices
    JEL: J23 J24 O32 O33
    Date: 2017

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