nep-sbm New Economics Papers
on Small Business Management
Issue of 2018‒04‒30
nine papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Non-refundable and co-financing instruments: Promoting export innovation among SMEs in the Republic of Korea By Lee, Joon-Ho; Lee, Alexander; Lee, April
  2. Immigrant Entrepreneurship in America: Evidence from the Survey of Business Owners 2007 & 2012 By Sari Pekkala Kerr; William R. Kerr
  3. Absorptive capacity in New Zealand firms: Measurement and importance By Richard Harris; Trinh Le
  4. The Impact of Management Practices on SME Performance By Forth, John; Bryson, Alex
  5. Employment Protection and Firm Relocation: Theory and Evidence By Dewit, Gerda; Görg, Holger; Temouri, Yama
  6. Regional inequality in Europe: evidence, theory and policy implications By Iammarino, Simona; Rodríguez-Pose, Andrés; Storper, Michael
  7. Knowledge sources and impacts on subsequent inventions: Do green technologies differ from non-green ones? By Nicolò Barbieri; Alberto Marzucchi; Ugo Rizzo
  8. Innovation-based regional structural change: Theoretical reflections, empirical findings and political implications By Koschatzky, Knut
  9. When Liability Becomes Potential: Intermediary Entrepreneurship in Dynamic Market Contexts By Tünde Cserpes

  1. By: Lee, Joon-Ho; Lee, Alexander; Lee, April
    Abstract: In the Republic of Korea, public export support programmes for small and medium-sized enterprises (SMEs) have played a significant role in the internationalization process of such firms. Multiple non-reimbursable and co-financing instruments that promote export innovation among SMEs have contributed to their export success which, alongside large firms, made the Republic of Korea the world’s fifth largest exporting country in 2015. This study summarizes these support programmes and some key factors in relation to their implementation, some of which may be useful for those responsible for formulating and implementing similar programmes in Latin America and the Caribbean. First, the authors highlight the continuity of these policies since the 1950s. Second, the Republic of Korea has a unique set-up of institutions supporting SMEs exports, including the Ministry of Small and Medium Enterprises and Startups, the Korea Trade-Investment Promotion Agency (KOTRA) and the Korea International Trade Association (KITA). Third, some new initiatives have been introduced recently to accelerate SME internationalization, including a voucher scheme, in which eligible SMEs can select specific types of support of their own choice. Fourth, many programmes focus on the integration of SMEs into global value chains, particularly in the case of suppliers of parts and components to large Korean firms.
    Date: 2018–04–13
  2. By: Sari Pekkala Kerr; William R. Kerr
    Abstract: We study immigrant entrepreneurship and firm ownership in 2007 and 2012 using the Survey of Business Owners (SBO). The survival and growth of immigrant-owned businesses over time relative to native-founded companies is evaluated by linking the 2007 SBO to the Longitudinal Business Database (LBD). We quantify the dependency of the United States as a whole, as well as individual states, on the contributions of immigrant entrepreneurs in terms of firm formation and job creation. We describe differences in the types of businesses started by immigrants and the quality of jobs created by their firms. First-generation immigrants create about 25% of new firms in the United States, but this share exceeds 40% in some states. In addition, Asian and Hispanic second-generation immigrants start about 6% of new firms. Immigrant-owned firms, on average, create fewer jobs than native-owned firms, but much of this is explained by the industry and geographic location of the firms. Immigrant-owned firms pay comparable wages, conditional on firm traits, to native-owned firms, but are less likely to offer benefits.
    JEL: F22 J15 J44 J61 L26 M13 O31 O32 O33 R12
    Date: 2018–04
  3. By: Richard Harris (Durham University Business School and New Zealand Productivity Commission); Trinh Le (Motu Economic and Public Policy Research)
    Abstract: To the best of our knowledge, this paper reports the first set of nationally representative results on the importance of ‘absorptive capacity’. Absorptive capacity is generally defined as a firm's ability to internalise external knowledge. Using data principally from the New Zealand Business Operations Survey, we measure absorptive capacity across a 10-year period and investigate if it remains stable in the long term. This is followed by considering how firms’ characteristics vary across levels of absorptive capacity and most importantly whether such capacity determines firms’ productivity performance across the primary, manufacturing and service sectors. Our results show that relative to other influences, absorptive capacity as measured here has a substantial influence on exporting, innovation, and undertaking R&D. Set against relatively poor performance, the paper concludes with a discussion of how government should consider helping firms to boost their levels of absorptive capacity.
    Keywords: Exports; R&D; innovation; absorptive capacity
    JEL: L25 O24 O32 R11
    Date: 2018–02
  4. By: Forth, John (National Institute of Economic and Social Research (NIESR)); Bryson, Alex (University College London)
    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
  5. By: Dewit, Gerda; Görg, Holger; Temouri, Yama
    Abstract: We examine the determinants of the decision to relocate activities abroad for firms located in OECD countries. We argue that particular firm-specific features play a crucial role for the link between employment protection and relocation. Stricter employment protection laws in the current production location discourage firms' relocation abroad. While larger, more productive firms and firms with higher labour intensities have, ceteris paribus, higher propensities to relocate, they also face higher exit barriers if the country from which they consider relocating has strict employment protection laws. Our predictions are supported empirically, using firm level data for 28 OECD countries.
    Keywords: Employment Protection,Relocation,Multinational Enterprises
    JEL: F23 L23 J88
    Date: 2018
  6. By: Iammarino, Simona; Rodríguez-Pose, Andrés; Storper, Michael
    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: economic divergence; European Union.; inequality; place-sensitive development; regions
    JEL: R11 R12 R58
    Date: 2018–04
  7. By: Nicolò Barbieri (Department of Economics and Management, University of Ferrara (IT)); Alberto Marzucchi (SPRU, Science Policy Research Unit, University of Sussex (UK)); Ugo Rizzo (Department of Economics and Management, University of Ferrara (IT))
    Abstract: The paper contributes to our understanding of the nature and impact of green technological change. We focus on the search and impact spaces of green inventions, scrutinising the knowledge recombination processes leading to the generation of the invention and the impact of the invention on subsequent technological developments. Using a large sample of patents filed during 1980-2012, we analyse a set of established patent indicators that capture different aspects of the invention process. Technological heterogeneity is controlled for by comparing green and non-green technologies within similar narrow technological domains. Green technologies are found to be more complex and radical than non-green ones and to have a larger and more pervasive impact on subsequent inventions. However, the results show a variety of distinctive patterns with respect to the knowledge dimension considered. We derive some important policy implications.
    Keywords: environmental inventions, patent data, knowledge recombination, knowledge impact
    JEL: O33 O34 Q55
    Date: 2018–04
  8. By: Koschatzky, Knut
    Abstract: The objective of this paper is to broaden the knowledge base on the topic of innovation-based regional structural change and to discuss the possibilities of raising structurally weak regions to a dynamic growth path by means of innovation-promoting measures. The background to this objective are political developments in Germany with regard to the development of a comprehensive German support system for structurally weak regions from 2020 onwards. While regional structural support (ERDF and German regional support) is so far essentially concentrated on regions in the eastern federal states, it should focus in future on structurally weak regions in all federal states and eliminate the differentiation between eastern and western Germany (Deutscher Bundestag 2016, 4). The experience gained in the eastern German states with the focus on innovation as a driver of structural change is intended to provide a starting point here, but taking into account the fact that some structural factors differ markedly between East German and West German regions. Against this background, this paper focuses on the innovation policy component of a system for promoting structural change in structurally weak regions.
    Date: 2018
  9. By: Tünde Cserpes
    Abstract: This paper analyzes how entrepreneurs fare in an intermediary market segment when the segment is closely attached to a single supplier market. While focusing on two structural constraints, organizational structure and competitive pressure, I build off of the fact that in the past thirty years in the U.S. beer industry, as the number of beer producers (i.e. brewers) proliferated, their intermediaries (i.e. wholesalers) declined. Using establishment-level restricted-access economic microdata from the Longitudinal Business Database, I examine what happens with intermediaries when (some) producers start competing on product variety instead of competing on scale. Piecewise exponential survival models show that Stinchcombe’s ‘liability of newness’ principle can get suspended and certain newcomers have better survival chances than industry incumbents. I call this effect the potential of newness under which entrepreneurial establishments fare better if they are part of well-resourced multiunit firms. Furthermore, I show that these resource-rich entrepreneurs benefit from the potential of newness especially in areas with competition-laden history and where the industry experiences shakeouts. For market incumbents, the more competition-laden the history of the local market, the higher the hazards of current time establishment failure. For multiunit entrepreneurs, however, a more competition-laden history of the local market is associated with a decrease in the hazards of current time establishment failure. This paper highlights that market structure not only enables but sometimes traps already existing organizations and make them less adaptive to changing logics of competition. The results highlight how organizational factors and geography create inequalities among intermediary organizations.

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