nep-sbm New Economics Papers
on Small Business Management
Issue of 2018‒04‒09
nineteen papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Gender diversity, R&D teams and patents: An application to Spanish firms By Teruel, Mercedes; Segarra Blasco, Agustí, 1958-
  2. Innovative products and services with environmental benefits: design of search strategies for external knowledge and absorptive capacity By Caroline Mothe; Uyen Nguyen-Thi; Angela Triguero-Cano
  3. Creativity and entrepreneurship: Empirical evidence for Catalonia By Coll Martínez, Eva
  4. Firm Survival and Innovation: Knowledge Context Matters! By Fernanda Mazzotta; Ornella Wanda Maietta
  5. Credit constraints, firm investment and growth: evidence from survey data By Gómez, Miguel García-Posada
  6. Gross, Net, and New Job Creation by Entrepreneurs By Astebro, Thomas B.; Tåg, Joacim
  7. The European venture capital landscape: an EIF perspective. Volume IV: The value of innovation for EIF-backed startups By Signore, Simone; Torfs, Wouter
  8. The Startup Europe Ecosystem. Analysis of the Startup Europe projects and of their beneficiaries By Fiammetta Rossetti; Daniel Nepelski; Melisande Cardona
  9. Innovation strategies of firms: Identification, dynamics and intra-industry heterogeneity By Hollenstein, Heinz
  10. How do firms adjust to rises in the minimum wage? Survey evidence from Central and Eastern Europe By Bodnár, Katalin; Fadejeva, Ludmila; Iordache, Stefania; Malk, Liina; Paskaleva, Desislava; Pesliakaitė, Jurga; Jemec, Nataša Todorović; Tóth, Peter; Wyszyński, Robert
  11. Innovation and Product Reallocation in the Great Recession By Sara Moreira; Munseob Lee; David Argente
  12. EntreComp into action - Get inspired, make it happen: A user guide to the European Entrepreneurship Competence Framework By Elin McCallum; Rebecca Weicht; Lisa McMullan; Alison Price
  13. Do Software and Videogames firms share location patterns across cities? Evidence from Barcelona, Lyon and Hamburg By Méndez Ortega, Carles,; Arauzo Carod, Josep Maria
  14. Financing Micro Firms in Europe: An Empirical Analysis By Masiak, Christian; Block, Joern H.; Moritz, Alexandra; Lang, Frank; Kraemer-Eis, Helmut
  15. The impact of financial management on innovation By Marcus Illmeyer; Dietmar Grosch; Maria Kittler; Pamela Priess
  16. Structural Reforms and Firms’ Productivity: Evidence from Developing Countries By Wilfried Kouamé; J.-A Tapsoba
  17. Creative industries and firm creation: disentangling causal effects through historical cultural associations By Coll Martínez, Eva
  18. Agglomeration and Industry Spillover Effects in the Aftermath of a Credit Shock By José Jorge; Joana Rocha
  19. Determinants of energy efficiency and renewable energy in European SMEs By Jové Llopis, Elisenda,; Segarra Blasco, Agustí, 1958-

  1. By: Teruel, Mercedes; Segarra Blasco, Agustí, 1958-
    Abstract: Previous results show that gender diversity increases the probability that firms invest in R&D and engage in innovation. This paper explores the relationship between gender diversity of R&D departments and their capacity to patent. Based on the Spanish Community Innovation Survey between 2004 and 2014, we apply a two-step procedure in order to control for endogeneity. Although gender diversity affects OEPM patents negatively, its impact is non-significant for patents with international coverage (EPO, USPTO, or PCT). A relevant result is the fact that the generation of patents is positively affected by the diversity of categories in the R&D labs. Our results highlight that, gender diversity of R&D teams does not play a relevant impact on the capacity of the firm to register patents. However, the diversity according to the professional role in R&D teams exerts a positive influence. In sum, the key question is not the gender diversity per se but the gender diversity jointly with the professional status. JEL Code: O30, O31, J16. Keywords: gender diversity, patent generation
    Keywords: Innovacions tecnològiques -- Direcció i administració, Patents d'invenció, Programes d'acció positiva -- Espanya, 33 - Economia,
    Date: 2018
  2. By: Caroline Mothe (IREGE - Institut de Recherche en Gestion et en Economie - USMB [Université de Savoie] [Université de Chambéry] - Université Savoie Mont Blanc); Uyen Nguyen-Thi (LISER - Luxembourg Institute of Socio-Economic Research); Angela Triguero-Cano (Department of International Economics - University of Castilla-La Mancha)
    Abstract: Although the antecedents of environmental innovation and open innovation strategies have been well studied separately, the relationship between a firm's openness and environmental technological innovation still remains an interesting topic to research, especially in terms of the various modes of openness on the one hand and the product–process distinction on the other. This study relies on data from the French Community Innovation Survey to differentiate the association of three dimensions of open inbound innovation search strategies—acquiring, sharing, and information sourcing—with environmental product (ecoproduct) and process (ecoprocess) innovations. Inbound innovation, attained through the acquisition of machinery, equipment, and software, is more likely to be associated with ecoprocess than ecoproduct innovations; external R&D only drives ecoproducts. Inbound sharing through R&D cooperation seems associated with the introduction of both ecoproducts and ecoprocesses. For inbound innovation sourcing, external market sources of information are positively associated with firms' involvement in all types of environmental innovation.
    Keywords: R&D cooperation,Sourcing,R&D acquisition,Environmental innovation,Inbound innovation
    Date: 2018
  3. By: Coll Martínez, Eva
    Abstract: In recent years creativity has gained importance because of its potential to generate economic growth based on their role in the innovation processes and economic development. In this regard, this work is twofold. First, it addresses the mechanisms through which creativity promotes knowledge externalities and innovation contributing to regional economic growth and competitiveness. And second, it aims to analyse the role of creativity, diversity and innovation on entrepreneurship at a municipality level for Catalonia. To conduct this analysis, information provided by the Register of Industrial Establishments of Catalonia (REIC) – a register that includes the creation of new establishments located in Catalonia between 2002 and 2007 – , and by the Statistical Institute of Catalonia (IDESCAT) are used. Main results highlight the role of creativity in the spreading of ideas and the creation of new projects encouraging entrepreneurship at local level. However, the role of cultural diversity does not seem to be so relevant in deciding the location of new firms in Catalan municipalities. Finally, intellectual and technological productivity in the municipality (in terms of patents) favours the creation of new firms but only in municipalities closer to technologic and scientific centres. Keywords: creativity, diversity, innovation, entrepreneurship, industrial location JEL codes: O31, M14, O32, L26, O14
    Keywords: Innovacions tecnològiques -- Catalunya, Emprenedoria -- Catalunya, Localització industrial -- Catalunya, Creativitat en els negocis -- Catalunya, 332 - Economia regional i territorial. Economia del sòl i de la vivenda,
    Date: 2018
  4. By: Fernanda Mazzotta (Università di Salerno); Ornella Wanda Maietta (Università di Napoli Federico II and CSEF)
    Abstract: The aim of this paper is to explore the differential effect of innovation on firm survival. We consider the effect of product, process and organisational innovations controlling for the role of the knowledge context and of firm absorptive capacity. At the end of the 1990s, an ad hoc survey was performed on a representative sample of manufacturing firms located in a NUTS3 area of southern Italy, and information on firm survival has been collected for 15 years. A multivariate endogenous probit model is applied to simultaneously analyse the determinants of innovation and of subsequent firm survival. Our estimates confirm that process innovation is a determinant of firm survival followed by product innovation, whereas evidence of a more novel type suggests that organisational innovation plays only a weak role. Entrepreneurial general and specific human capital exerts no direct beneficial effect on firm duration. The requirement of proper technological knowledge from the local university has been the driver of firm duration with the highest marginal effect.
    Keywords: Firm survival, Information network, Human capital, Italian SMEs
    JEL: L20 O3 D22 I2
    Date: 2017–04–02
  5. By: Gómez, Miguel García-Posada
    Abstract: We assess the impact of credit constraints on investment, inventories and other working capital and firm growth with a large panel of small and medium-sized enterprises from 12 European countries for the period 2014-2016. The data come from the Survey on the access to finance of enterprises (SAFE), a survey that is especially designed to analyse the problems in the access to external finance of European SMEs. The key identification challenge is a potential reverse-causality bias, as firms with poor investment and growth opportunities may have a higher probability of being credit constrained. We implement several strategies to overcome this obstacle: proxies for investment opportunities, lagged regressors, random effects and instrumental variables. Our findings suggest that credit constraints, both in bank financing and other financing (e.g. trade credit), have strong negative effects on investment in fixed assets, while the impact on firm growth and working capital is less robust. JEL Classification: G30, G31, G32
    Keywords: firm growth, instrumental variables, investment, ordered probit, working capital
    Date: 2018–02
  6. By: Astebro, Thomas B.; Tåg, Joacim
    Abstract: Using a dataset with over 24 million observations and the universe of more than 230,000 entries into entrepreneurship we analyze the gross (including the founders), net (excluding the founders), and new (jobs to the former unemployed or those outside the labor force) job creation by entrepreneurs two and six years after start-up. These novel measures of job creation shows that the average entrepreneur does not create any jobs for any other than him/her-self, and typically arrives from having another job. Thus, short term job creation by entrepreneurs involves a reshuffling of jobs from older to new firms rather than creating new jobs.
    Keywords: Entrepreneurship; job creation; incorporation; occupational choice; self-employment; sole proprietorship
    JEL: J24 L26
    Date: 2017–02–01
  7. By: Signore, Simone; Torfs, Wouter
    Abstract: The creation of value through innovation is among the defining traits of new technology-driven ventures. In this paper we contribute to the literature by investigating the value of innovations for start-ups supported by EIF in the years 1996 to 2014, as measured through patent applications. The paper is structured around two main parts. The first part presents a series of descriptive statistics on EIF's VC investee patent portfolio and discusses some of the strategic aspects of patenting, such as timing and geographical coverage. The second part develops an econometric model to estimate the Euro-value of innovations based on patent renewal data, following the seminal work of Pakes and Schankerman (1984). We observe that start-ups are efficient at transforming financial capital obtained through VC financing into innovative capital. On average, for every Euro of EIF-supported VC financing, start-ups generated 2.74 Euro of private innovation value.
    Keywords: EIF,venture capital,innovation,patents,renewal data,start-ups
    JEL: G24 M13 O32
    Date: 2017
  8. By: Fiammetta Rossetti (European Commission - JRC); Daniel Nepelski (European Commission - JRC); Melisande Cardona (European Commission - JRC)
    Abstract: In 2015 the European Commission (EC) DG CNECT launched the 2nd edition of the Startup Europe (SE) initiative under the Horizon 2020 EU Research and Innovation programme. This initiative coordinated the efforts of six distinct projects (Digistart, Welcome, ePlus, Startup Scaleup, Twist and Startup Europe Partnership) that connected just as many European entrepreneurial ecosystems. This report provides the theoretical framework to analyse the policy support to entrepreneurship and evidence on the nearly 700 startups participating in the SE projects. This exercise also helps to collect relevant insights about the effectiveness of the matching between the SE offerings and the needs of startups.
    Keywords: Entrepreneurship, Innovation, ICT policy, Digital Economy, Digital Single Market
    Date: 2018–03
  9. By: Hollenstein, Heinz
    Abstract: The study aims at providing new evidence with respect to the still unresolved question, whether the innovation behaviour of firms reflects industry-specific characteristics ("technological regime approach"), or whether it is the outcome of firm-specific strategies to gaining a competitive edge ("strategic management view"). To this end, the author firstly identifies a set of innovation strategies (cluster analysis), whose adequacy he evaluates using the "economics of innovation" as reference. Secondly, the author investigates the dynamics of innovation strategies to get some insights into structural changes of the economy. Thirdly, he examines, based on a large number of 4-digit branches, the intra-industry heterogeneity of innovation strategies. Finally, the author analyses in a production function framework the relative importance of a company's innovation strategy and its industry affiliation as determinants of firm performance. The third part of the paper tends to support the "strategic management view" (high intraindustry heterogeneity), while the final one is rather in line with the "technological regime approach" (industry affiliation is the more important factor determining firm performance). These opposite findings indicate that a company has a certain room of manoeuvre to choose an innovation strategy in line with its specific capabilities, but some structural characteristics at industry level restrict the strategic options.
    Keywords: innovation,firm-level taxonomy of innovation strategies,dynamics of innovation strategies,intra-industry heterogeneity of innovation behaviour,impact of firm strategies and industry affiliation on performance
    JEL: O30 O31 O32 O33
    Date: 2018
  10. By: Bodnár, Katalin; Fadejeva, Ludmila; Iordache, Stefania; Malk, Liina; Paskaleva, Desislava; Pesliakaitė, Jurga; Jemec, Nataša Todorović; Tóth, Peter; Wyszyński, Robert
    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. JEL Classification: D22, E23, J31
    Keywords: adjustment channels, firm survey, minimum wage
    Date: 2018–01
  11. By: Sara Moreira (Northwestern University); Munseob Lee (University of Chicago); David Argente (University of Chicago)
    Abstract: We exploit detailed product- and firm-level data to study the sources of innovation and the patterns of productivity growth in the consumer goods sector over the period 2006-2014. Using a dataset that contains information on the product portfolio of each firm and the characteristics of each product, we document new facts on product reallocation. First, we find that reallocation of products happens within the boundaries of the firm, but the largest changes in product quality come from new firms launching new varieties and from small firms expanding to other product lines. Second, we document that product reallocation within and between firms are procyclical and that product reallocation within firms was more affected than product reallocation between firms during the great recession. Finally, we quantify the extent to which product reallocation affects firm-level productivity growth and and innovation as reflected by changes in their total factor productivity. Our preliminary findings suggest that within-firm product reallocation contributes substantially to the growth in innovation across all sectors.
    Date: 2017
  12. By: Elin McCallum (Bantani Education); Rebecca Weicht (Bantani Education); Lisa McMullan (The Women's Organisation); Alison Price (Enterprise Evolution)
    Abstract: This guide is a tool for those individuals and organisations who wish to explore why, when and how they can use EntreComp, the European Entrepreneurship Competence Framework. The entrepreneurship competence is increasingly recognised as a competence for life, relevant to personal development and fulfilment, finding and progressing in employment, as well as initiating new ventures ranging from community campaigns, social enterprises to new start-up businesses. Why a competence for life? Being creative or thinking about how to do things in new ways is equally relevant to progressing your career as well as coming up with new business ideas. Taking the initiative and mobilizing others to get involved are useful skills when fundraising for your local sports team, or establishing a new social enterprise. Understanding how to put a plan into action and use finances wisely are relevant for your own life and for business planning in an SME. EntreComp is new, so those using it are just starting out in their use of the framework and exploring how it can be implemented in practice. The examples gathered here are intended to illustrate the breadth and depth of potential for using EntreComp, but this will of course evolve through time and experience. This guide is intended to inspire more actors across Europe and beyond to get involved, to join a community of participants committed to embedding these competences for life into education, communities, work and enterprise.
    Keywords: EntreComp, Entrepreneurship, Entrepreneurship Education, Entrepreneurial Learning, Key Competences for Lifelong Learning, Human Capital
    Date: 2018–03
  13. By: Méndez Ortega, Carles,; Arauzo Carod, Josep Maria
    Abstract: The aim of this paper is to analyse common location patterns of Software and Videogames (SVE) industry in Barcelona, Lyon and Hamburg. This is a key industry in developed countries that mainly located at core of bigger metropolitan areas, looking for agglomeration economies, skilled labour and a wide range of spillover effects existent there. Cities used in our empirical application share some common features in terms of size, manufacturing tradition and, specially, economic strategies, as they have managed to promote high-tech neighbourhoods through ambitious urban renewal policies. When analysing location patterns of firms from these industries, although our results highlight predominant role of urban cores of three cities, also indicate important specificities in terms of core-periphery. distribution of SVE’s firms. JEL Codes: R12, C60, L86, N90. Keywords: Software Industry, microgeographic analysis, spatial location patterns, Barcelona, Hamburg, Lyon
    Keywords: Localització industrial, Indústria informàtica, Videojocs -- Indústria i comerç, 332 - Economia regional i territorial. Economia del sòl i de la vivenda,
    Date: 2018
  14. By: Masiak, Christian; Block, Joern H.; Moritz, Alexandra; Lang, Frank; Kraemer-Eis, Helmut
    Abstract: The vast majority of firms in Europe are micro firms. Still, we know little about their financing patterns. Our paper aims to close this gap. Based on a large European firm-level data set, we find that micro firms differ in their financing patterns from small and medium-sized companies. Our empirical results show that micro firms are more likely to use internal financing instruments, whereas they are less likely to use state subsidies, trade credit or asset-based financing instruments. Furthermore, micro firms differ from medium-sized firms by using more short-term debt (credit card overdrafts, credit lines and bank overdrafts). The implications of these findings for micro firms and policy makers are discussed.
    Keywords: Micro firms,SMEs,enterprise financing in Europe,financing patterns
    JEL: C30 G20 G30
    Date: 2017
  15. By: Marcus Illmeyer (Pan-European University); Dietmar Grosch (Pan-European University); Maria Kittler (Pan-European University); Pamela Priess (Pan-European University)
    Abstract: In the current competitive market, innovation has become a crucial element for organizations, willing to grow. Financial management in this regard is playing a significant role in improving firms' innovation capacity. This research paper evaluates the impact of financial management components on innovativeness of Austrian SMEs. Using data of 118 employees from 41 SMEs operating in Austria, the research finds a significant impact of the financial management model on firms' innovation. The three components: liquidity, controlling, and financial literacy are statistically significant is explaining innovativeness at 1% level. The study suggests focus on the three financial management constructs in order to improve their innovation capability and capacity.
    Keywords: innovation capacity,financial management,financial controlling,liquidity,financial literacy,innovativeness
    Date: 2017–09–29
  16. By: Wilfried Kouamé (The World Bank - The World Bank - The World Bank); J.-A Tapsoba (International Monetary Fund (IMF), FERDI - Fondation pour les Etudes et Recherches sur le Développement International)
    Abstract: This paper assesses the effects of structural reforms on firm-level productivity for 37 developing countries from 2006 to 2014 period. It takes advantage of the IMF Monitoring of Fund Arrangements dataset for reform indexes and the World Bank Enterprise Surveys for firm-level productivity. The paper highlights the following results. Structural reforms such as financial, fiscal, real sector, and trade reforms, significantly improve firm-level productivity. Interestingly, real sector reforms have the most sizeable effects on firm-level productivity. The relationship between structural reforms and firm-level productivity is nonlinear and shaped by some firms' characteristics such as the financial access, the distortionary environment, and the size of firms. The pace of structural reforms matters since being a " strong reformer " is associated with a clear productivity dividend for firms. Finally, except for financial and trade reforms, all structural reforms under consideration are bilaterally complementary in improving firm-level productivity. These findings are robust to several sensitivity checks including alternatives methodology and measure of productivity, and a counterfactual experiment based on unsuccessful reforms.
    Keywords: Structural Reforms, Firm-level productivity, Developing countries
    Date: 2018–03–05
  17. By: Coll Martínez, Eva
    Abstract: In the last decade policy makers and scholars have highlighted creative industries’ capacity to stimulate economic dynamism. However, there is still some debate about the potential effect of reverse causality on this relationship, as CIs may also be attracted to successful areas. Therefore, the aim of this paper is to disentangle the role played by the existing spatial concentration of these kinds of activity on new firm creation. In order to deal with this potential reverse causality issue this paper relies on an instrumental variable approach. The main statistical source is the REIC (Catalan Manufacturing Establishments Register), which has plant-level microdata on the location of plants in Catalan municipalities between 2002 and 2007. By using, for the first time, the foundation of cultural associations and urban population as historical instrumental variables, the results confirm CIs’ potential for new firm creation. JEL classifications: R39, Z100 Keywords: creative industries, cultural associations, industrial location, IV
    Keywords: Localització industrial, Economia de la cultura, 332 - Economia regional i territorial. Economia del sòl i de la vivenda,
    Date: 2017
  18. By: José Jorge (Faculdade de Economia, Universidade do Porto, cef.up); Joana Rocha (Faculdade de Economia, Universidade do Porto)
    Abstract: This paper provides empirical evidence showing that industries with intense strategic complementarities exhibit stronger sensitivity to economic shocks. The Portuguese credit crunch of 2009 represents a negative shock for nonfinancial firms, which has created negative spillover effects among firms. Corporate investment declines significantly in industries with strong strategic complementarities following the onset of the crisis, controlling for firm fixed effects, time varying measures of financial constraints and investment opportunities. Consistent with a causal effect, the decline is greatest for firms in industries with strong strategic complementarities. To address sample selection concerns we consider several sample splits and apply a matching approach to find the best counterfactual, and confirm similar results.
    Keywords: Banking, Financial Crises, Industry Spillovers, Production Externalities, Agglomeration
    JEL: G21 D22 G01 D62 C23
    Date: 2018–02
  19. By: Jové Llopis, Elisenda,; Segarra Blasco, Agustí, 1958-
    Abstract: This paper empirically investigates the factors driving the adoption of energy efficiency (EE) and renewable energy (RE) measures in a sample of 8,213 Small and Medium-Sized Enterprises (SMEs) in European countries. Using a bivariate probit model we examine their drivers, complementarities, and potential temporal persistence in three European country clusters (Core countries, Mediterranean countries and New EU members). Our results suggest that sustainable energies actions (EE and RE) are highly persistent both at the firm level and across countries and that there are relevant complementarities between EE and RE practices, as well as other resource efficient practices. In addition, strategies for EE seem to rely more on cost saving and regulations, while those for RE are more linked to public support and environmental awareness. This paper ends with some recommendations for policymakers suggesting that Europe needs to design an energy policy for the SMEs firms that jointly pursues both EE and the diffusion of RE according to the technological gap of each member country. Keywords: energy efficiency, renewable energy, European Union, SMEs firms
    Keywords: Energies renovables -- Unió Europea, Països de la, Empreses petites i mitjanes -- Aspectes ambientals -- Unió Europea, Països de la, 338 - Situació econòmica. Política econòmica. Gestió, control i planificació de l'economia. Producció. Serveis. Turisme. Preus,
    Date: 2018

This nep-sbm issue is ©2018 by João Carlos Correia Leitão. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.