nep-sbm New Economics Papers
on Small Business Management
Issue of 2018‒05‒21
ten papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Getting the Facts Right on Born Globals By Ferguson, Shon; Henrekson, Magnus; Johannesson, Louise
  2. Innovation activities of gazelles in business services as a factor of sustainable growth in the Slovak Republic By Dana Benešová; Viera Kubičková; Anna Michálková; Monika Krošláková
  3. The Impact of Sickness Absenteeism on Productivity: New Evidence from Belgian Matched Panel Data By Elena Grinza; Francois Rycx
  4. Heterogeneous Foreign Direct Investment and Local Innovation in Italian Provinces By Andrea Ascani; Pierre-Alexandre Balland
  5. Impacto económico del empredimiento en una economía regional: el caso de Andalucía By Joaquin Garcia-Tapial; M. Alejandro Cardenete
  6. ¿Cuál es la incidencia de la innovación sobre las exportaciones del sector industrial uruguayo? Un análisis para el período 1998-2012 By Augusto Souto
  7. African Megacities as Emerging Innovation Ecosystems By Nawrot, Katarzyna A.; Juma, Calestous; Donald, James
  8. Internationalization and firm valuation: New evidence from first offshore bond issuances of US firms By Nebosja Dimic; Vitaly Orlov;
  9. Nothing is in the air By Fitjar, Rune Dahl; Rodríguez-Pose, Andrés
  10. Does Public Debt Crowd Out Corporate Investment? International Evidence By Yi Huang; Ugo Panizza; Richard Varghese

  1. By: Ferguson, Shon (Research Institute of Industrial Economics (IFN)); Henrekson, Magnus (Research Institute of Industrial Economics (IFN)); Johannesson, Louise (Research Institute of Industrial Economics (IFN))
    Abstract: Policymakers in several countries have recently taken steps to promote the rapid export expansion of small- and medium-sized enterprises (SMEs). The goal of these policies has been to create successful export-intensive firms, which are often referred to as born globals. These measures are motivated by studies claiming that born global firms are disproportionately important for job creation and economic growth. Using detailed register data on the universe of Swedish manufacturing firms born between 2001 and 2008, we find that born globals are a very small group of firms whose long-run size and growth do not outperform other exporting firms. Thus, the notion that born globals are superior to firms that follow a more gradual internationalization process, a conclusion largely based on case studies and surveys, does not withstand scrutiny. Policymakers must therefore be aware that encouraging more born globals need not necessarily lead to large benefits for the overall economy, especially in terms of employment.
    Keywords: Born globals; Exporting; Firm growth; Globalization; Job creation
    JEL: F14 F23 L25 M13
    Date: 2018–05–03
  2. By: Dana Benešová (University of Economics in Bratislava); Viera Kubičková (University of Economics in Bratislava); Anna Michálková (University of Economics in Bratislava); Monika Krošláková (University of Economics in Bratislava)
    Abstract: Gazelles create greater share of new jobs in comparison with other businesses operating on the market. These are young businesses of various sizes, but mainly small businesses. They generate a high rate of growth of production within a short time, which is based on the use of innovation, they are also the bearers of innovation. They are characterized by effective use of creativity and human resource capacities. They may be found in all sectors of economy, but to the greatest extent in the services sector and within that sector mainly in business services characterized by high knowledge intensity, high dynamics and continuous growth in employment. Gazelles of business services in the Slovak Republic intensively use all types of innovation. Management ability to optimize innovative processes according to needs of the enterprise seems to be of importance. Human resources and performance is considered to be the most important area of innovation influence. With its innovative activity they act as the accelerator of economy and changes in the thinking and culture of both enterprises, as well as the whole company toward sustainable growth.
    Keywords: sustainable growth,performances,knowledge-intensive services,innovation,gazelles,fast-growing companies,business services
    Date: 2018–03–30
  3. By: Elena Grinza (Department of Economics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino, Italy); Francois Rycx (Université Libre de Bruxelles, Belgium)
    Abstract: We investigate the impact of sickness absenteeism on productivity by using rich longitudinal matched employer-employee data on Belgian private firms. We deal with endogeneity, which arises from unobserved firm heterogeneity and reverse causality, by applying a modified version of the Ackerberg et al's (2015) control function method, which explicitly removes firm fixed effects. Our main finding is that, in general, sickness absenteeism substantially dampens firm productivity. An increase of 1 percentage point in the rate of sickness absenteeism entails a productivity loss of 0.24%. Yet, we find that the impact is much diversified depending on the categories of workers who are absent and across different types of firms. Our results show that sickness absenteeism is detrimental mainly when absent workers are high-tenure or blue-collar workers. Moreover, they show that sickness absenteeism is harmful mostly to industrial firms, high capital-intensive companies, and small- and medium-sized enterprises. This overall picture is coherent with the idea that sickness absenteeism is problematic when absent workers embed high levels of firm/task-specific (tacit) knowledge, when the work of absent employees is highly interconnected with the work of other employees (e.g., along the assembly line), and when firms face more limitations in substituting temporarily absent workers.
    Keywords: Sickness absenteeism, firm productivity, semiparametric methods for estimating production functions, longitudinal matched employer-employee data.
    JEL: D24 M59 I15
    Date: 2018–05
  4. By: Andrea Ascani; Pierre-Alexandre Balland
    Abstract: Countries and regions all over the world compete to attract Foreign Direct Investment (FDI) as a way to access knowledge, technology, and boost economic development. Although the literature shows a positive impact of FDI on local economies, little is known about (1) the impact on innovation of neighbouring regions and the type of FDI that generates the strongest learning effects. To fill this gap, this article investigates the relationship between FDI and the innovation capacity of Italian provinces (NUTS3). In order to capture the heterogeneity of FDI in terms of knowledge inputs, we apply the Pavitt categorisation of manufacturing sectors to inward FDI within Italian provinces, thus accounting for the nature and sources of knowledge in different sectors where foreign multinationals are active. Our results suggest that only some specific typologies of inward FDI, such as that in "Science based" sectors and to a lesser extent in "Specialised supplier" activities, benefit local economies. Nevertheless, other types of inward FDI can produce possible negative outcomes in terms of local innovation. We detect only weak evidence on the spatial implications of inward FDI.
    Keywords: foreign direct investment, spillovers, Pavitt taxonomy, FDI heterogeneity
    JEL: O3 F23 R11
    Date: 2018–05
  5. By: Joaquin Garcia-Tapial (Universidad Loyola Andalucía); M. Alejandro Cardenete (Universidad Loyola Andalucía)
    Abstract: Although traditionally entrepreneurship has been considered as one of the engines of economic activity, it has not been until recent years that public authorities have made a planned and organized effort to support the entrepreneurial initiative. However, even though many millions of euros are invested annually in this support, the effectiveness of such investment is rarely measured in terms of the impact of entrepreneurial activity on the economy. For this reason, in this paper we analyze the effect of this activity (entrepreneurship) on a regional economy and its impact on it. To do so, we develop a Computable General Equilibrium (CGE) model for the Andalusian economy for 2015, within a top-down approach. The model is based in the Andalusian Social Accounting Matrix (SAM) updated for the year 2015. A SAM is a statistical-accounting instrument that collects all the information of an economic system and, in addition, closes the circular flow of incomes, considering direct, indirect and induced effects. This gives an overview of the implications of the economic flows on the different sectors of activity and at the same time details and completes them. The SAM for Andalusia 2015 has a disaggregation level of 35 economic activities (27 productive sectors plus 8 endogenous accounts that include items such as capital, consumption, labor, investment, taxes, public sector and sector Exterior). In order to obtain the impact vector for the entrepreneurial activity, necessary to make the estimates for each one of the activity sector, the statistical official information available about business creation in Andalusia has been used. The results will show the effects on Gross domestic product, Productive Output and employment creation and its distribution by sectors of Activity.
    Keywords: Social Accounting Matrix, Entrepreneurship, Andalusia, Regional Economy.
    JEL: C63 C68 D58 L26 R13
    Date: 2018–05
  6. By: Augusto Souto (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración.)
    Abstract: The present working paper analyzes the impact of innovative activities on the exports of Uruguayan manufacturing firms during the period 1998-2012 using microdata collected by the Uruguayan National Innovation and Research Agency (ANII). Through a methodology based on the application of probit and linear probability models, it is found that innovation at the firm level has a positive and statistically significant effect on its exports, it is estimated that innovative firms are between 6 % and 7 % more likely to export. When this effect was decomposed according to the type of innovation, it was found that there is a positive and statistically significant effect of organizational, process or commercial innovations, whereas there was no evidence that there is a statistically significant impact of product innovations.
    Keywords: Innovation, Exports, Firm, Industry, Uruguay
    JEL: F14 O31 O33
    Date: 2017–05
  7. By: Nawrot, Katarzyna A. (Poznan University of Economics and Business); Juma, Calestous (Harvard University); Donald, James (Harvard University)
    Abstract: The unprecedented population growth in Africa and its projections followed by a high rate of urbanization are resulting in a growing number of huge urban agglomerations – cities and megacities. That phenomenon creates opportunities for the continent, but it also raises concerns about low levels of development and diminished quality of life among the majority of urban residents. African cities are characterized by overcrowding, poor infrastructure, and limited connectivity to the international economic system. They are essentially underperforming as potential centres of creativity and innovation. This paper argues that despite these challenges, Africa’s emerging megacities can unleash their potential as drivers of economic transformation if they can be viewed and managed less as static administrative regions and more as dynamic innovation ecosystems rather than a collection of discrete geographical enclosures that encroach on each other and neighbouring regions without adequate urban planning.
    Date: 2017–08
  8. By: Nebosja Dimic; Vitaly Orlov;
    Abstract: Does internationalization affect firm valuation? To answer this question, literature mainly considers firms from around the world internationalizing by issuing equity in the USA, whereas the current study focuses on US firms that internationalize by issuing debt in overseas markets. This paper provides evidence on theories of internationalization and capital structure, finding that overseas corporate debt offerings have a positive short-term effect on US firms' valuations. The effect varies in firm characteristics, timing, and the location of the issue. Additionally, firms with a strong need for external funds and growth prospects accelerate their offshore public debt market entry.
    Keywords: Internationalization, Debt Structure, Segmentation, Tobins's q
    JEL: G15 G32 F36
    Date: 2018–02
  9. By: Fitjar, Rune Dahl; Rodríguez-Pose, Andrés
    Abstract: It has often been argued that “there is something in the air” which makes firms in high-density environments—such as cities or clusters—more innovative. The co-location of firms facilitates the emergence of serendipity and casual encounters which promote innovation in firms. We assess this hypothesis using data from a survey of Norwegian firms engaged in innovation partnerships. The results indicate that there may be “much less in the air” than is generally assumed in the literature. The relationships conducive to innovation by Norwegian firms emerged as a consequence of purpose-built searches and had little to do with chance, serendipity, or “being there.”
    Keywords: innovation; tacit knowledge; agglomeration; externalities; spillovers; Norway
    JEL: N0 J50
    Date: 2017–03–02
  10. By: Yi Huang (IHEID, Graduate Institute of International and Development Studies); Ugo Panizza (IHEID, Graduate Institute of International and Development Studies, Geneva and CEPR); Richard Varghese (IHEID, Graduate Institute of International and Development Studies)
    Abstract: Using data for advanced and emerging economies, we show that there is a negative correlation between public debt and corporate investment. Industry-level regressions show that high levels of government debt are particularly damaging for industries that need more external ?financial resources. Firm-level regressions show that government debt increases the sensitivity of corporate investment to cash ?flow. These results indicate that the relationship between public debt and investment is likely to be causal and that public debt crowds out corporate investment by tightening credit constraints.
    Keywords: Investment, Public Debt, Crowding Out, Credit Constraints
    JEL: E22 E62 H63
    Date: 2018–05

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