nep-sbm New Economics Papers
on Small Business Management
Issue of 2018‒04‒23
twenty-two papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Firm heterogeneity and exports in the Netherlands: Identifying export potential By Peter Zwaneveld; Raoul van Maarseveen; Steven Brakman; Harry Garretsen
  2. The entrepreneurial activity using GEM data: evidence for Spain (national and regional) and for Europe By Velilla, Jorge
  3. The Reallocation Myth By Chang-Tai Hsieh; Peter J. Klenow
  4. Capital structure determinants and adjustment speed: An empirical analysis of Dutch SMEs By Remco Mocking; Joep Steegmans
  5. International Joint Ventures and Internal versus External Technology Transfer: Evidence from China By Jiang, Kun; Keller, Wolfgang; Qiu, Larry; Ridley, William
  6. Spécificités des sources de connaissances pour l'innovation environnementale des PME By Amandine Pinget; Rachel Bocquet
  7. Are European firms falling behind in the global corporate research race? By Reinhilde Veugelers
  8. The financial structure of family businesses: By Faten Chibani; Jamel Henchiri
  9. Firm Financing Choices and Productivity in Sub Saharan Africa: Evidence from Firm Level Data By Naomi Mathenge; Eftychia Nikolaidou
  10. Corporate scientists as the triggers of transitions towards firms' exploration research strategies By Barge-Gil, Andres; D'Este, Pablo; Herrera, Liliana
  11. Linking forms of inbound open innovation to a driver-based typology of environmental innovation: Evidence from French manufacturing firms By Jason Li-Ying; Caroline Mothe; Uyen Nguyen-Thi
  12. R&D Growth and Business Cycles Measured with an Endogenous Growth DSGE Model By Hasumi, Ryo; Iiboshi, Hirokuni; Nakamura, Daisuke
  13. On the Impact of Structural Reforms on Output and Employment; Evidence from a Cross-country Firm-level Analysis By Luiza Antoun de Almeida; Vybhavi Balasundharam
  14. Networking for innovation, The role of iconic occupiers in the development of the Rotterdam Innovation District By Michaël Meijer; Gert-Joost Peek
  15. Endogenous Growth and Real Effects of Monetary Policy: R&D and Physical Capital Complementarities in a Cash-in-Advance Economy By Pedro Mazeda Gil; Gustavo Iglésias,
  16. Open innovation: the different pathways towards openness By Faïz Gallouj; Faridah Djellal
  17. Review of Empirical Studies of Factors of Entrepreneurial Activity By Barinova, Vera; Zemtsov, Stepan; Tsareva, Yulia
  18. Strengthening partnerships between universities and SMEs within the open innovation framework By Jean-Charles Cadiou; Emmanuel Chené
  19. Knowledge diffusion across regions and countries: evidence from patent citations By Wiljan van den Berge; Jonneke Bolhaar; Roel van Elk
  20. Firm Age, Size, and Employment Dynamics: Evidence from Japanese firms By LIU Yang
  21. Regional inequality in Europe: evidence, theory and policy implications By Simona Iammarino; Andrés Rodríguez-Pose; Michael Storper
  22. Adopting Bricolage for Overcoming Resource Constraints: Case of Social Enterprises in Emerging Market By Pradeep Kumar Hota; Sumit Mitra

  1. By: Peter Zwaneveld (CPB Netherlands Bureau for Economic Policy Analysis); Raoul van Maarseveen (CPB Netherlands Bureau for Economic Policy Analysis); Steven Brakman (RUG); Harry Garretsen (RUG)
    Abstract: According to the Melitz (2003) model, potential exporters have to be sufficiently productive to overcome the entry costs of foreign markets. Once firms pass this productivity threshold, they all export. However, empirical evidence indicates that a substantial share of high-productive firms do not export. Stimulating these highly productive firms to export is of interest to policy makers, as this provides these firms with new growth opportunities. In this paper, we focus specifically on this group of high-productive non-exporters and identify the factors that might prevent them from successfully exporting. We employ a large micro-dataset for Dutch firms both in services and manufacturing for the period 2010-2014. Our findings are threefold. First, high productivity is an important, but not a sufficient condition for exporting. Firm size (substitute for productivity), import status, and foreign ownership are also important. Second, firm location is crucial. A location in peripheral areas prevents high productive firms from exporting; especially a location in the Northern part of the Netherlands reduces the probability to export. Third, our set-up identifies individual firms that are potential exporters.
    JEL: F12 F14
    Date: 2018–01
  2. By: Velilla, Jorge
    Abstract: This work uses different sources of data from the Global Entrepreneur Monitor to show a descriptive and comparative analysis of the different dimensions of the entrepreneurial activity, in the Spanish regions, and at international level. I also study the individual determinants of the entrepreneurial activity in Spain, and Europe, using bootstrapping techniques to avoid overfitted results. My results indicate that entrepreneurial levels in Spain are below the average of European countries, and also below the levels of United States, Canada, and Australia. However, the determinants of entrepreneurship appear to be similar in all the regions studied.
    Keywords: Entrepreneurship; Spain; Europe; Global Entrepreneurship Monitor; GEM Data
    JEL: L26
    Date: 2018–03–28
  3. By: Chang-Tai Hsieh; Peter J. Klenow
    Abstract: There is a widely held view that much of growth in the U.S. can be attributed to reallocation from low to high productivity firms, including from exiting firms to entrants. Declining dynamism — falling rates of reallocation and entry/exit in the U.S. — have therefore been tied to the lackluster growth since 2005. We challenge this view. Gaps in the return to resources do not appear to have narrowed, suggesting that allocative efficiency has not improved in the U.S. in recent decades. Reallocation can also matter if it is a byproduct of innovation. However, we present evidence that most innovation comes from existing firms improving their own products rather than from entrants or fast-growing firms displacing incumbent firms. Length: 26 pages
    Date: 2018–04
  4. By: Remco Mocking (CPB Netherlands Bureau for Economic Policy Analysis); Joep Steegmans (CPB Netherlands Bureau for Economic Policy Analysis)
    Abstract: This paper presents empirical evidence of both the determinants and the adjustment speed of capital structure of small and medium-sized enterprises (SMEs) in the Netherlands. Using an administrative panel data set of the period 2000-2014, containing 153,923 fi rms, we estimate a partial adjustment model through system GMM. The results show that firm size and pro tability reduce debt to assets ratios, while tangible assets, depreciation, and marginal taxes increase them. Growth of assets is either statistically or economically insigni cant. The estimated adjustment speed parameter is 0.748, indicating that the adjustment process is particularly slow in the Netherlands.
    JEL: G24 G28 F23 H25 H26 H87
    Date: 2017–08
  5. By: Jiang, Kun; Keller, Wolfgang; Qiu, Larry; Ridley, William
    Abstract: This paper studies international joint ventures, where foreign direct investment is performed by a foreign and a domestic firm that together set up a new firm, the joint venture. Employing administrative data on all international joint ventures in China from 1998 to 2007-roughly a quarter of all international joint ventures in the world-we find, first, that Chinese firms chosen to be partners of foreign investors tend to be larger, more productive, and more likely subsidized than other Chinese firms. Second, there is substantial technology transfer both to the joint venture and to the Chinese joint venture partner, an external, intergenerational technology transfer effect that this paper introduces. Third, with technology spillovers typically outweighing negative competition effects, joint ventures generate on net positive externalities to other Chinese firms in the same industry. Joint venture externalities are large, perhaps twice the size of wholly-owned FDI spillovers, and it is R&D-intensive firms, including the joint ventures themselves, that benefit most from these externalities. Furthermore, the positive external joint venture effect is larger if the foreign firm is from the U.S. rather than from Japan or Hong Kong, Macau, and Taiwan, while this effect is virtually absent in broad sectors that include economic activities for which China's FDI policy has prohibited joint ventures.
    Keywords: competition effects; Foreign direct investment; international joint ventures; partner selection; technology spillovers
    JEL: F14 F23 O34
    Date: 2018–03
  6. By: Amandine Pinget (IREGE - Institut de Recherche en Gestion et en Economie - USMB [Université de Savoie] [Université de Chambéry] - Université Savoie Mont Blanc); Rachel Bocquet (IREGE - Institut de Recherche en Gestion et en Economie - USMB [Université de Savoie] [Université de Chambéry] - Université Savoie Mont Blanc)
    Abstract: Anchored in a knowledge-based view, this research aims to highlight SMEs’ specificities related to knowledge sources for environmental innovations that remain understudied compared to technological innovations. Results show that knowledge sources, which are essential for environmental innovation of SMEs, differ from those used for technological innovations. SMEs introducing environmental innovation rely more on external than internal knowledge sources. This research leads to the formulation
    Abstract: Basada en la perspectiva knowledge-based, esta investigación se pretende destacar las especificidades de las fuentes de conocimientos que contribuyen al desarrollo de las innovaciones medioambientales, poco estudiadas, a diferencia de las innovaciones tecnológicas. Nuestros resultados demuestran que las fuentes de conocimientos fundamentales para las innovaciones medioambientales de las PYME difieren de aquellas movilizadas por las innovaciones tecnológicas. Las PYME que introducen innovaciones medioambientales recurren más a fuentes externas de conocimientos, que internas. Esta investigación nos conduce a formular varias recomendaciones a las PYME y a los actores a cargo de su desarrollo.
    Abstract: Ancrée dans la perspective knowledge-based, cette recherche vise à mettre en évidence les spécificités des sources de connaissances des PME pour les innovations environnementales qui restent peu étudiées comparativement aux innovations technologiques. Les résultats montrent que les sources de connaissances, essentielles pour les innovations environnementales des PME, diffèrent de celles mobilisées pour les innovations technologiques. Les PME qui introduisent des innovations environnementales font davantage appel aux sources externes qu'internes de connaissances. Cette recherche conduit à formuler des recommandations utiles aux PME et aux acteurs en charge de leur développement.
    Keywords: Environnemental innovation,Technological innovation,Knowledge sources,SMEs,innovación medioambiental,innovación tecnológica,fuentes de conociemento,PYME,Innovation environnementale,Innovation technologique,Sources de connaissances,PME
    Date: 2017
  7. By: Reinhilde Veugelers
    Abstract: Technological progress, such as robotics and artificial intelligence, is often blamed for the loss of jobs and rising income inequality. It is also linked to increasing inequality in the corporate landscape as superstar firms forge ahead in winner-takes-most markets. Our analysis shows that in most sectors there is a high degree of concentration among a few top companies in research and development spending. R&D spending is much more concentrated than sales and employment. In 2015, for example, the top 10 percent biggest spenders on R&D, accounted for 71 percent of the R&D spending of the 2500 companies that spend most on R&D. This concentration is most obvious in the high-tech biopharma and digital sectors, though it is also true for other sectors, such as the vehicles sector. US companies are overrepresented among these R&D superstars, especially in digital sectors where they take up half of the top slots. Over the last decade, there has been little evidence for increasing concentration in the global R&D landscape. On the contrary, a slight decline is discernible. Slight increasing concentration can only be detected in digital sectors, with in particular the top 1 percent of R&D spending firms in these sectors forging ahead. Although the overall concentration of R&D spending among a few leading firms might not be changing much over time, R&D leaders are slowly losing their positions to new R&D-leading firms. Digital Services is the most turbulent high-tech sector. The US and China are more likely to produce new R&D leaders that take over some of the top positions from incumbent R&D leaders. This poses difficult questions for Europe, which is at risk of losing out in terms of R&D leadership in more technologically advanced sectors.
    Date: 2018–04
  8. By: Faten Chibani; Jamel Henchiri (RED-ISGG - UR.RED)
    Abstract: This paper aims to analyze whether pecking order theory has a relevant application for family businesses. For this purpose, we compared two series of family and non-family unlisted firms in the French context. Our results indicate that generally the financial behavior of family businesses differs from non-family enterprises. Family business prefer internal financing to external financing and, in the case of external financing, debt is preferred to the capital increase. The Pecking order theory is more appropriate for family businesses than for non-family businesses.
    Abstract: Cet article a pour objectif d'analyser dans quelle mesure la théorie du financement hiérarchique (Pecking order theory) est d'une application pertinente pour les entreprises familiales. Pour cela, nous avons comparé deux séries d'entreprises familiales et d'entreprises non familiales non cotées dans le contexte français. Nos résultats indiquent que le comportement financier des entreprises familiales diffère en général de celui des entreprises non familiales. Les entreprises familiales privilégient le financement interne au détriment du financement externe et, en cas de recours à un financement externe, l'endettement est préféré à l'augmentation de capital. La théorie du Pecking order se justifie plutôt pour les entreprises familiales que pour les entreprises non familiales.
    Date: 2016–11–17
  9. By: Naomi Mathenge (School of Economics, University of Cape Town); Eftychia Nikolaidou (School of Economics, University of Cape Town)
    Abstract: This study examines the effect of firm financing choices on firm performance. Firm performance is measured by firm productivity, specifically, the Total Factor Productivity (TFP) of a firm. The study uses firm level data from the World Bank Enterprise Survey (WBES) to investigate the effect of different financing options on the productivity of SSA firms. Using data for the period 2005 - 2013 from 26 countries, the study employs a linear Cobb-Douglas production function to estimate total factor productivity (TFP.) It then uses both parametric and non-parametric methods to analyse the effect of financing options on TFP. The results indicate that firms that rely on bank debt rather than other forms of financing (e.g. internal finance, informal finance, private and public equity) are, on average, more productive. This can be partly attributed to the monitoring activities of banks and the threat of bankruptcy faced by firms.
    Date: 2018
  10. By: Barge-Gil, Andres; D'Este, Pablo; Herrera, Liliana
    Abstract: Exploration-oriented research strategies represent a critical factor for firms’ innovation performance and long term survival since they influence the capacity of these organizations to develop breakthrough innovations and move up the quality ladder of product development. However, setting in motion and sustaining exploratory research strategies are not straightforward. In this study, we contend that the availability of corporate scientists (i.e. personnel with PhD qualifications in R&D units) is a triggering factor for two critical transitions in firms’ R&D strategies: i) initiation of exploration-oriented research activities (exploration-enacting strategy); and ii) increased commitment to exploration-oriented research activities (exploration-deepening strategy). We conduct our analysis on a large sample of Spanish manufacturing firms. We address endogeneity concerns by using the exogenous supply of PhD graduates as an instrumental variable. Our results show that firms recruiting doctoral graduates (PhDs) to their R&D units increase the likelihood of initiating and strengthening exploration-oriented research strategies. The implications of these findings for innovation management and policy are discussed.
    Keywords: Scientists, exploration research, R&D strategies, PhDs, instrumental variables.
    JEL: M54 O31 O32
    Date: 2018
  11. By: Jason Li-Ying (DTU - Technical University of Denmark [Lyngby]); 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 - Luxembourg Institute of Socio-Economic Research)
    Abstract: Environmental innovation research has not yet clarified how different forms of inbound innovation might exert effects. The current article proposes four driver-based EI types according to two main dimensions: compliance versus voluntary and own value capture versus customer value capture. With a problem-solving perspective, we develop links from different forms of inbound innovation to various types of EI and test the related hypotheses with two waves of the French Community Innovation Survey. On a short-term basis, R&D cooperation and technology acquisition correlate positively with all four types of EI, but over time, persistent R&D cooperation and technology acquisition are associated with EI only at the production stage, according to voluntary/strategic or compliance drivers. Inbound innovation enables quick responses to market demands for EI in the final use stage.
    Keywords: Environmental innovation,Inbound open innovation,R&D acquisition,R&D cooperation,Technology sourcing,Value creation and capture
    Date: 2017
  12. By: Hasumi, Ryo; Iiboshi, Hirokuni; Nakamura, Daisuke
    Abstract: We consider how and the extent to which a pure technology shock driven by R&D activities impacts on business cycles as well as economic growth, using a medium-scale neo-classical dynamic stochastic general equilibrium (DSGE) model following Comin and Gertler (2006). We try to identify a pure technology shock by adopting "intellectual property product" first entered in 2008 SNA which can be regarded as R&D activity, and by assuming "time to build" by Kydland and Prescott (1982) in the process converting from innovations to products. Our empirical result based on a Bayesian analysis reports a common stochastic trend driven by the pure technology shock is likely to be procyclical, and it accounts for nearly half of variation of the real GDP whose remaining is explained by business cycle components. Meanwhile, a TFP shock, substituting for the R&D shocks, seems to move the common trend independently with business cycle.
    Keywords: R&D shock, technology shock, dynamic stochastic general equilibrium model, common stochastic trend, endogenous growth model
    JEL: C32 E32 O47
    Date: 2017–08–24
  13. By: Luiza Antoun de Almeida; Vybhavi Balasundharam
    Abstract: This paper analyzes the effects of selected structural reforms on output and employment in the short and medium term. It uses a comprehensive cross-country firm-level dataset covering both advanced and emerging market economies over the period 2003-2014. In line with previous studies, it finds that structural reforms have in general a positive impact on output and employment in the medium term. Furthermore, the paper also assesses whether the impact of structural reforms varies with firm-specific characteristics, such as size, leverage, profitability, and sector. We find evidence that firm characteristics do influence the effectiveness of structural reforms. These findings have relevant policy implications as they help policymakers tailor the design of structural reforms to maximize their payoffs, taking into account their heterogeneous impact on firms.
    Date: 2018–04–06
  14. By: Michaël Meijer; Gert-Joost Peek
    Abstract: Our paper will focus on the role of iconic occupiers in development of the Rotterdam Innovation District. This area combines two distinct port areas, RDM Campus and Merwe-Vierhavens (M4H). We will analyse the two approaches of redevelopment of these areas using the conceptual model of multi-helices. These approaches resulted in different preliminary results: a firmly organised redevelopment project resulting in a campus environment versus a loosely organised organic redevelopment process resulting in several lab like innovation environments. We characterise the redevelopment of the RDM site by the Triple Helix of university-industry-government relationships fostering innovation. The M4H area as a less preplanned redevelopment is following the Quadruple Helix, blending in the perspective of civil society in knowledge production and innovation, and the concept of the Living Lab.Certain occupiers are positioned as network builder. These are perceived to be good examples for the branding of M4H or their innovative character are called ‘area ambassadors’. Two of these are regarded as world famous brands and for that as ‘iconic’ occupiers of the area. This in contrast to the iconic buildings that feature the Rotterdam skyline. Studio Roosegaarde creates interactive designs exploring the dynamic relation between people, technology and space. Atelier van Lieshout is a multidisciplinary firm that operates internationally in contemporary art, design and architecture. By collaborating with these iconic end-users the City Ports organization wants to direct more attention to M4H, to create a stronger image for the area and to benefit from the extended network of these users. Previously, we published our preliminary findings on the arrival of Studio Roosegaarde in the area in 2015. Our paper will evaluate the role of Studio Roosegaarde as network builder for the area up until mid 2017 and we will make a start with describing and understanding Atelier van Lieshout’s iconic role.Next to interviews and desk research, we aim to research the network in M4H and RDM using Actor-Network specific methods. And we will put forward an analysis of the role of our own institution, the Rotterdam University of Applied Science, in developing the Rotterdam Innovation District. The university is a prominent actor filling in the university-part of the Triple Helix at RDM and is currently exploring a greater involvement in M4H including the recent opening of a student hub in the area.
    Keywords: Iconic occupiers; Innovation district; Network building; Redevelopment; Urban area development
    JEL: R3
    Date: 2017–07–01
  15. By: Pedro Mazeda Gil (University of Porto, Faculty of Economics, and cef.up); Gustavo Iglésias, (University of Porto, Faculty of Economics)
    Abstract: We study the real long-run effects of inflation and of the structural stance of monetary policy in the context of a monetary model of R&D-driven endogenous growth complemented with physical capital accumulation. We look into the effects on a set of real macroeconomic variables that have been of interest to policymakers – the economic growth rate, the real interest rate, the physical investment rate, R&D intensity, and the velocity of money –, and which have been analysed from the perspective of different, separated, strands of the theoretical and empirical literature. Additionally, we analyse the theoretical predictions of our model as regards the effects of inflation on the effectiveness of real industrial policy shocks and on the market structure, assessed namely by the average firm size, and present novel cross-country evidence on the empirical relationship between the latter and the long-run inflation rate.
    Keywords: Keywords: Endogenous growth, R&D, physical capital, firm size, cash-in-advance, inflation, money.
    JEL: O41 O31 E41
    Date: 2018–04
  16. By: Faïz Gallouj (CLERSE - Centre Lillois d’Études et de Recherches Sociologiques et Économiques - UMR 8019 - Université de Lille, Sciences et Technologies - ULCO - Université du Littoral Côte d'Opale - CNRS - Centre National de la Recherche Scientifique); Faridah Djellal (CLERSE - Centre Lillois d’Études et de Recherches Sociologiques et Économiques - UMR 8019 - Université de Lille, Sciences et Technologies - ULCO - Université du Littoral Côte d'Opale - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Innovation is a condition for the survival of businesses, companies, territories and nations. This entry builds on the concept of "open innovation" to review a number of key aspects of the innovation issue. This metaphor is used to try to report on the major contemporary openings made by experts in "innovation studies", and in so doing, a number of important concepts in this field are reviewed. The openings in question concern not only the modalities of organization and implementation of innovation as implied by the concept of open innovation but also the content and forms of innovation as well as the sectors that engage in these activities.
    Date: 2017
  17. By: Barinova, Vera (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Zemtsov, Stepan (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Tsareva, Yulia (Russian Presidential Academy of National Economy and Public Administration (RANEPA))
    Abstract: Despite active support of small and medium-sized business, its development indicators in Russia lag far behind those in developed countries, including due to the peculiarities of the institutional environment. Therefore, it is important to study the factors that affect entrepreneurial activity. The main goal of this work was a detailed analysis and generalization of the relevant empirical studies. As a result, the influence of the following factors was revealed: individual characteristics of entrepreneurs, institutional conditions, human capital, accumulated wealth and agglomeration effects. The obtained results will make it possible to make informed decisions in the sphere of supporting small and medium-sized businesses.
    Date: 2018–03
  18. By: Jean-Charles Cadiou (LS2N - Laboratoire des Sciences du Numérique de Nantes - UN - Université de Nantes - ECN - École Centrale de Nantes - CNRS - Centre National de la Recherche Scientifique - IMT Atlantique - IMT Atlantique Bretagne-Pays de la Loire); Emmanuel Chené (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - UN - Université de Nantes)
    Abstract: Since about twenty years, the theme of the innovation marks the public's policies of the European Union. In this context, on one hand, universities are incited to value the result of their research; on other hand, SMEs are encouraged to strengthen their capacity to innovate. The common sense might suggest just that these two types of organizations just have to work together remove a mutual benefit from it. Unfortunately, relationships between academic and socioeconomic world are struggling to establish themselves and remain largely focused on large companies. Studies led on collaborations universities-SMEs or on technology transfer from University towards SMEs draw up balance sheets more than very reserved. This state of fact continues in spite of the various structures of intermediation set up by the public authorities since more than a dozen years. It is therefore urgent to consider new forms of organization. In this context, this article presents an original structuring of the valuation of the research in of a university in order to answer the question.
    Keywords: Open innovation,Organizational change,University and SMEs
    Date: 2017–04–11
  19. By: Wiljan van den Berge (CPB Netherlands Bureau for Economic Policy Analysis); Jonneke Bolhaar (CPB Netherlands Bureau for Economic Policy Analysis); Roel van Elk (CPB Netherlands Bureau for Economic Policy Analysis)
    Abstract: We study knowledge spillovers from European universities and other research organizations using data from patent citations at the EPO. Using matching techniques to construct a sample of control patents, we show that the probability to cite a university patent declines with distance. In particular, we fi nd a sharp cut-o ff at around 25 kilometers. For longer distances the probability to cite a university patent is more or less constant. For other research organizations we find no evidence that distance plays a role. Country borders are shown to play an important role in restricting the diff usion of patents of both universities and other research organizations. These results are in line with recent literature for the U.S. and suggest that knowledge spillovers and tacit knowledge are important when using knowledge embodied in university patents.
    JEL: O33 O34 I23
    Date: 2017–04
  20. By: LIU Yang
    Abstract: This study examines the effects of firm age and size on employment dynamics based on large scale panel data from Japan. It contributes to the literature by examining age and size effects on firm-level job creation and job destruction, which have not been clear in previous studies. The empirical results indicate that firm age has significantly negative effects on both job creation and destruction rates; however, firm size has a significantly negative effect on job creation while it has a significantly positive effect on job destruction. The theoretical background of this study is the standard theory on job creation and destruction in labor economics theories, which considers that job creation is determined by expected profit from newly created jobs, and job destruction is determined by whether the job is expected to be profitless. The age and size of firms affect their expected profit and therefore lead to effects on the behaviors of job creation and destruction. Finally, the results are similar for manufacturing firms and service firms.
    Date: 2018–02
  21. By: Simona Iammarino; Andrés Rodríguez-Pose; Michael Storper
    Abstract: Regional economic divergence has become a threat to economic progress, social cohesion and political stability in Europe. Market processes and policies that are supposed to spread prosperity and opportunity are no longer sufficiently effective. The evidence points to the existence of several different modes of regional economic performance in Europe, responding to different development challenges and opportunities. Both mainstream and heterodox theories have gaps in their ability to explain the existence of these different regional trajectories and the weakness of the convergence processes among them. Therefore, a different approach is required, one that strengthens Europe?s strongest regions but develops new approaches to promote opportunity in industrial declining and less-developed regions. There is ample new theory and evidence to support such an approach, which we have labelled 'place-sensitive distributed development policy'.
    Keywords: Regions, inequality, economic divergence, place-sensitive development, European Union
    JEL: R11 R12 R58
    Date: 2018–04
  22. By: Pradeep Kumar Hota (Indian Institute of Management Kozhikode); Sumit Mitra (Indian Institute of Management Kozhikode)
    Abstract: Social enterprises (SEs) primarily aim to create social value i.e. generate benefits or reduce costs for society, while maintaining financial sustainability. Extant research shows that SEs need the same set of resources as required by their commercial counterparts. However, owing to their unique operating condition and organizational characteristics, SEs face severe resource challenges. These resource challenges are further exacerbated for SEs operating in emerging economy. Overcoming these resource constraints is vital for SEs in order to address their mission. In this paper, we show that SEs facing resource constraint environment adopts bricolage process to mobilize required resources. Through inductive multiple case study approach we identified eight different sub-processes of bricolage, which were further aggregated in to three bricolage process namely- Accessing, Organizing, Enacting. In doing so, we contribute to the social entrepreneurship literature as well as entrepreneurial bricolage literature. Our study has important implications for future research and practice.
    Keywords: Social enterprises, financial sustainability, bricolage
    Date: 2018–03

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