nep-sbm New Economics Papers
on Small Business Management
Issue of 2018‒05‒28
six papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Productivity Dynamics in Japanese Small and Medium-Sized Enterprises: An empirical analysis based on the Credit Risk Database (Japanese) By IKEUCHI Kenta; KIM Young Gak; KWON Hyeog Ug; FUKAO Kyoji
  2. Financial Constraints to SMME Growth: Investigating the Moderating Effect of Microfinance By Nasraldin Omer; Ricardo M. Peters; Kobus Visser
  3. Obstacles to innovation and external sourcing of knowledge: Evidence for German and Spanish firms By Mery Patricia Tamayo; Estefanía Gómez; Elena Huergo
  4. Does the Utilization of Information Communication Technology Promote Entrepreneurship: Evidence from Rural China By Barnett, William; Hu, Mingzhi; Wang, Xue
  5. Contagious Exporting and Foreign Ownership: Evidence from Firms in Shanghai using a Bayesian Spatial Bivariate Probit Model. By Badi Baltagi; Peter H. Egger; Michaela Kesina
  6. A Man is Known by the Company He Keeps? : A Structural Relationship Between Backward Citation and Forward Citation of Patents By Junbyoung Oh; Wonchang Hur

  1. By: IKEUCHI Kenta; KIM Young Gak; KWON Hyeog Ug; FUKAO Kyoji
    Abstract: Although many researchers have investigated Japan's so-called lost decades (1990s and 2000s), a real puzzle is why productivity growth has slowed down since the 1990s for such a long time with just a weak recovery. To solve it, much research has been done using micro-level data on firm and establishment activity, which sheds great light on our understanding of the mechanism of the productivity dynamics in the long-lasting Japan's lost decades. However, most of the research only uses the data on medium-sized or large firms. Especially, research on productivity dynamics in the non-manufacturing industry is extremely limited. Against these backgrounds, this paper analyzes the productivity dynamics among the small and medium-sized enterprises (SMEs). Our analysis covers non-manufacturing firms as well as manufacturing, which makes this research unique and contributes to the literature of economic growth. The dataset used for the analysis is a unique, large, and comprehensive firm level panel dataset of the Credit Risk Database. We find that the productivity dynamics among SMEs is very different from that of large firms. In contrast to the case of large firms, reallocation effect, not within effect, is the main driver of the productivity dynamics among SMEs, implying that market mechanism is properly working among them. However, the shutting down of a small number of highly productive firms drives most of the negative exit effect, which implies another malfunctioning aspect of the market mechanism among SMEs.
    Date: 2018–05
  2. By: Nasraldin Omer (Sudan University of Science and Technology); Ricardo M. Peters (University of the Western Cape); Kobus Visser (University of the Western Cape)
    Abstract: Small, Medium and Micro Enterprises (SMME) play a significant role in an economy. SMMEs are an important source of jobs, entrepreneurial spirit and innovation. However, despite the noted contribution of SMMEs, in many countries they face serious constraints, often resulting in failure. The constraints and economic environment have significant and unequal effects on SMMEs in different industries and in different locations. Constraints have been used, amongst other growth factors, to understand why some SMMEs fail to grow. The aims of this study was to examine the effect of financial constraints on SMME growth and to investigate the moderating effect of microfinance on overcoming, avoiding or mitigating the financial constraints to SMME growth. The study found evidence that the lack of professional financial advisors, lack of access to finance and lack of awareness of financial services and assistance were significant constraints to SMME growth in South Africa.
    Keywords: SMME growth, financial constraints, microfinance, moderating effect, South Africa
    Date: 2018–03
  3. By: Mery Patricia Tamayo; Estefanía Gómez; Elena Huergo
    Abstract: The goal of this research is to empirically study the relationship between obstacles perceived by companies to carrying out their innovation activities and their decisions about external sourcing of knowledge through the outsourcing of R&D or technological cooperation. Using information on German and Spanish companies from the year 2010, we obtain that in both countries this association is positive, and that companies that assign greater importance to factors that impede their innovation activities are also more likely to engage in external sourcing of knowledge. This relationship seems to be especially strong in companies that do not engage in internal R&D activities or do so sporadically, while it is much weaker in companies that perform internal R&D continuously. Nonetheless, the importance that companies assign to the market power of established companies as a barrier to innovation is positively associated with technological cooperation especially in continuous R&D performers.
    Keywords: Obstacles to innovation, outsourcing, technological cooperation
    JEL: L2 O3 O57
    Date: 2018–05–16
  4. By: Barnett, William; Hu, Mingzhi; Wang, Xue
    Abstract: Impacts on the probability of transition to entrepreneurship in rural China associated with the utilization of information communication technology (ICT) are estimated using longitudinal data from the China Family Panel Studies (CFPS) survey. We identify cell phone ownership and internet use as proxy variables for ICT utilization and find that cell phone ownership and internet use have positive impacts on entrepreneurship. After controlling for observables and time and regional fixed effects, cell phone users (internet users) are 2.0 (6.4) percentage points more likely to engage in entrepreneurship than the others. Considering that the average entrepreneurship rate for rural households is only 9.5% in the sample, the influence of cell phone ownership and internet use are very strong in the economic sense. Our results are robust to unobservable individual characteristics, model misspecification, and reverse causality of entrepreneurship to ICT utilization. Evidence also suggests that social network and information and knowledge acquisition play the mediating roles in the impact of ICT utilization on entrepreneurship.
    Keywords: ICT; social network; information acquisition; entrepreneurship
    JEL: D10 M51 Q55
    Date: 2018–03–18
  5. By: Badi Baltagi (Center for Policy Research, Maxwell School, Syracuse University, 426 Eggers Hall, Syracuse, NY 13244); Peter H. Egger (ETH Zurich, CEPR, CESifo, GEP); Michaela Kesina (ETH Zurich)
    Abstract: Whether a firm is able to attract foreign capital and whether it may participate at the export market depends on whether the fixed costs associated with doing so are at least covered by the incremental operating profits. This paper provides evidence that success for some firms in attracting foreign investors and in exporting appears to reduce the associated fixed costs with exporting or foreign ownership in other firms. Using data on 8,959 firms located in Shanghai, we find that contagion and spillovers in exporting and in foreign ownership decisions within an area of 10 miles in the city of Shanghai amplify fixed-cost reductions for both exporting as well as foreign ownership of neighboring firms. Contagion among exporters and among foreign-owned firms, respectively, amplify shocks to the profitability of these activities to a large extent. These findings are established through the estimation of a spatial bivariate probit model.
    Keywords: Firm-Level Exports, Firm-Level Foreign Ownership, Contagion, Spatial Econometrics, Chinese Firms
    JEL: C11 C31 C35 F14 F23 L22 R10
    Date: 2018–04
  6. By: Junbyoung Oh (Department of Economics, Inha University); Wonchang Hur (College of Business Administration, Inha University)
    Abstract: Inventing is a recombinant process that involves searching and recombining differ- ent streams of knowledge. The value of invention is associated with not only how many prior inventions are considered, but also how they are related to each other. We introduce social network analysis broadly used in the social capital theory, and extend the dimension of analysis for the evaluation of patent value. This study em- ploys U.S. pharmaceutical patent data and investigates whether the network charac- teristic of backward citations have significant effect on the future patent value. The empirical results suggest that the network features of backward citations measured by cohesion, constraint, and efficiency have statistically significant implication on the value of invention in both level and depreciation rate. The study also provides empirical evidence that the exploration strategy is more significantly and positively correlated with the future value of invention compared to the exploitation strategy of inventors.
    Keywords: Patent value, Social network analysis, Network structure of backward citation
    JEL: H23 O31 O38
    Date: 2018–05

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