nep-sbm New Economics Papers
on Small Business Management
Issue of 2018‒06‒25
eleven papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Entrepreneurship in the periphery: The role of pre-entry experience and home advantage for newly founded firms By Antoine Habersetzer, Rikard Eriksson, Heike Mayer
  2. From knowledge to business ecosystems: emergence of an entrepreneurial activity during knowledge replication By Amel Attour; Nathalie Lazaric
  3. Defense firms adapting to major changes in the French R&D funding system By Jean Belin; Marianne Guille; Nathalie Lazaric; Mérindol Valérie
  4. Does Proximity to Foreign Invested Firms Stimulate Productivity Growth of Domestic Firms? Firmlevel Evidence from Vietnam By Stephan Kyburz, Huong Quynh Nguyen
  5. The Impact of Sickness Absenteeism on Productivity: New Evidence from Belgian Matched Panel Data By Grinza, Elena; Rycx, Francois
  6. Entrepreneurial skills and growth of Small and Medium Enterprise (SMEs): A comparative analysis of Nigerian entrepreneurs and Minority entrepreneurs in the UK By Eunice Abdul, Omolara
  7. Agri-food manufacturing sector in Romania –internal sizes and in the European context By Rusali, Mirela-Adriana
  8. The Compositional Nature of Productivity and Innovation Slowdown By Uwe Cantner; Holger Graf; Ekaterina Prytkova; Simone Vannuccini
  9. Public R&D Support and Firms’ Performance. A Panel Data Study By Arvid Raknerud; Diana-Cristina Iancu; Øivind A. Nilsen
  10. Foreign exchange derivative use and firm value: Evidence from German non-financial firms By Merkel, Matthias F.
  11. Multinational suppliers: Are they different from exporters? By Van Pham; Mauro Caselli; Alan Woodland

  1. By: Antoine Habersetzer, Rikard Eriksson, Heike Mayer
    Abstract: The aim of this paper is to assess the importance of industry experience and home advantage of entrepreneurs for the competitiveness of new firms in the periphery. We assume that spinoffs founded by local entrepreneurs are generally the most competitive form of entry, and show the highest comparative advantage in peripheral regions. We use matched employer-employee data for Sweden to test the effect of industry experience and home advantage on firm survival (logistic regressions), and job growth of surviving firms (OLS regression) during the period 2004-2012. Our results suggest that industry experience is more important than home advantage for firm survival, but that firms in core areas do benefit from home advantage. Regarding job growth, home advantage seems to be more important than industry experience but with varying significance over the regional hierarchy. After controlling for survival, the positive effect on job growth of being locally embedded seems to be confined to peripheral entrepreneurs.
    Keywords: Entrepreneurship, spinoffs, home advantage, periphery
    Date: 2017–05
  2. By: Amel Attour (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis - UCA - Université Côte d'Azur - CNRS - Centre National de la Recherche Scientifique); Nathalie Lazaric (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis - UCA - Université Côte d'Azur - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Our article emphasizes the relationship between knowledge and business ecosystems. Transformation of a knowledge ecosystem can lead to the emergence of a technological platform embodying a business ecosystem and providing the resources required especially for firm startup. The role of knowledge replication in an innovation ecosystem is identified through exploratory research and a qualitative case study in the technology hotspot of Sophia-Antipolis. Our findings provide evidence of a new technological trajectory in near field communication ecosystems resulting from a radical transformation of traditional knowledge ecosystems. We show that the role of a knowledge filter is reduced by some public actors and universities acting as the “tenant anchor” and accelerating the replication of knowledge, and the resolution of intellectual property rights issues in emergent business ecosystems. We highlight the critical role of a public actor in enabling the emergence and creation of a business ecosystem, and its involvement in this entrepreneurial activity.
    Keywords: Knowledge ecosystem, entrepreneurial opportunities, technological platform, knowledge replication, academic actor.,entrepreneurial opportunities,technological platform,knowledge replication,academic actor
    Date: 2018–04–13
  3. By: Jean Belin (GREThA - Groupe de Recherche en Economie Théorique et Appliquée - UB - Université de Bordeaux - CNRS - Centre National de la Recherche Scientifique); Marianne Guille (UP2 - Université Panthéon-Assas); Nathalie Lazaric (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis - UCA - Université Côte d'Azur - CNRS - Centre National de la Recherche Scientifique); Mérindol Valérie (PSB - Paris School of Business)
    Abstract: The structural changes inside the French innovation system have impacted the role of defense firms since the late 1980s. Major changes have affected the defense budget and public R&D funding system in particular. The aim of this article is to understand French defense firms' repositioning within the National Innovation System (NIS) based on an analysis of their R&D behavior over a long period of time (1987 to 2010). We show that French defense firms remain major players in the NIS and faced up to these major changes by adapting the funding of their R&D and their research priorities and rolling out new innovation capabilities. Additionally, they developed new innovation models to take advantage of new collaborative partnerships developed for civil and military markets. JEL classification: G32, 032
    Keywords: Defense firms,System of innovation,R&D
    Date: 2018
  4. By: Stephan Kyburz, Huong Quynh Nguyen
    Abstract: Inward foreign direct investment (FDI) is regarded as a key engine of industrial growth and technological progress, especially in emerging markets. Regarding the relevance of geographic proximity between foreign and domestic firms for FDI spillover effects, there is yet little clear evidence, owing to a lack of precise location specific firm-level data. This paper presents the so far spatially most detailed analysis of FDI spillover effects by geo-referencing the census of Vietnamese enterprises for the period 2005 to 2010, allowing us to measure the changing presence of foreign invested firms around each domestic firm. We apply a first-differenced two-stageleast- squares estimator to identify spillover effects from proximate FDI exposure on TFP growth of domestic manufacturing firms. We find positive and significant within-industry (horizontal) spillover effects within radii of 2 to 10 km, that decay beyond. Importantly, in particular small and medium enterprises (SMEs) gain from foreign firms in their vicinity. Furthermore, vertical spillovers through forward and backward linkages to other manufacturing firms are localized, while vertical spillovers from foreign firms in the service sector are less geographically restricted.
    Keywords: foreign direct investment, spillover effects, geographic proximity, horizontal and vertical linkages
    JEL: D22 D24 F23 O12 O14 O33 R11 R32
    Date: 2017–10
  5. By: Grinza, Elena (University of Milan); Rycx, Francois (Free University of Brussels)
    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
  6. By: Eunice Abdul, Omolara
    Abstract: The significance of Small and Medium Enterprises (SMEs) to an economy development of a country cannot be ignored. Therefore, the growth of a business depends on the development of abilities needed to execute a smooth running of day to day business activities. Research established the fact that the flat economy growth of region relies on the extent of trade activities in the area. Given this importance of enterprise, this present study aims at developing an understanding of the influence of entrepreneurial skills on SMEs in Nigeria compare with the UK, as perceived by SME owners. The research will benefit the researcher, SME owners in Nigeria, Policymakers, and other researchers. Data collection was through an online survey questionnaire, and it was administered to a population of 38 SME owners both in Nigeria and in the UK. The research followed judgmental sampling techniques to explore their experience, beliefs, and attitudes to entrepreneurial skills because of the limited time frame. Moreover, this survey was used to validate the study conceptual framework and establish an insight on the opinion of business owners of the context. The study findings were that entrepreneurial skills have a significant influence on the growth of SMEs in Nigeria and the UK. However, the respondent in Nigeria and the UK agreed that creative thinking, Problem solving and communication skills are critical for increase sales and competitive advantage. Moreover, the respondent in Nigeria strongly agrees that high level of creative thinking with a bit of problem solving and communication skills will SMEs growth. By contrast, UK minority entrepreneurs argue that great creative thinking and a balance of problem solving and communication skills are critical to SMEs growth.
    Keywords: Entrepreneurship, Small and Medium Enterprise (SME), Entrepreneurial Skills, Creative Thinking, Leadership, Problem-Solving, Teamwork, and Communication
    JEL: L20 L21 L25 L26 M13 M19
    Date: 2018–03–19
  7. By: Rusali, Mirela-Adriana
    Abstract: The sustainability of the food supply of the population in all Member States is a priority objective of the current CAP, with important implications both for ensuring food security and for developing the rural economy. In this context, the European sustainable development economic model promotes based on competitiveness, innovation and knowledge, where a key role lies with the small and medium-sized enterprise sector, due to its great flexibility in adapting the business to new market requirements. The research method used the comparison of the relevant economic and financial indicators for the activity of enterprises in the agro-food industry, in order to analyze the structure and level of development of the sector and to identify possible divergences between Romania and EU-28. The statistical material was provided mainly by Eurostat and NIS - The survey on the activity of the manufacturing enterprises data - NACE Rev.2 codes.
    Keywords: agri-food manufacturing, sustainable development; European Union
    JEL: L6 O5 Q1
    Date: 2017–11–16
  8. By: Uwe Cantner (FSU Jena); Holger Graf (FSU Jena); Ekaterina Prytkova (FSU Jena); Simone Vannuccini (FSU Jena)
    Abstract: A growing number of studies identify a generalized slowdown in labor productivity growth. The very existence of the slowdown ignited a series of academic debates suggesting that secular stagnation or 'mismeasurement' problems are at the root of the observed trends. We posit that the composition of aggregate productivity matters. In a nutshell, we make the analysis of productivity growth slowdown more fine-grained by shifting the focus to the industry level, considering that the downward trend identified at the macroeconomic level emerges from the aggregation of diverse industry-level productivity trends. We perform an analysis of the structural dynamics of labor productivity by conducting a non-parametric dynamic decomposition exercise that separates within (improvement) and between (structural change) effects for 10 OECD countries. By pooling industries in groups identified according to two different taxonomies - one related to R&D intensities rankings, and the other built upon the Pavitt taxonomy of sources of technological change -, this study assess the industry-level contributions to the slowdown and the trends over time of the within and between components. We interpret our findings highlighting common patterns and suggest two related technological explanations for the productivity slowdown: one based on a Baumol-disease-like effect driven by structural change and another based on implementation lags and/or on an exhaustion of technological opportunities - that is, on decreasing returns in innovative activities. To investigate that, we complement our productivity analysis with evidence on innovation slowdown trends, looking at aggregate and compositional trends. We explore the innovation slowdown using an array of indicators based on the notion of 'idea- TFP' and show that there is a generalized evidence for its occurrence. Eventually, we relate productivity and innovation slowdowns deriving tables of trends co-movements, weighted by input-output matrices coefficients, and clustered by Pavitt industry group. We interpret these relationships and highlight patterns and clusters of significant correlations.
    Keywords: productivity slowdown, decomposition, industrial dynamics, innovation
    JEL: L16 O30 O47
    Date: 2018–06–18
  9. By: Arvid Raknerud; Diana-Cristina Iancu (Statistics Norway); Øivind A. Nilsen
    Abstract: We analyse all the major sources of direct and indirect R&D subsidies in Norway in the period 2002- 2013 and compare their effects on individual firms’ performance. Firms that received support are matched with a control group of firms that did not receive support using a combination of stratification and propensity score matching. Changes in performance indicators before and after support in the treatment group are compared with contemporaneous changes in the control group. We find that the average effects of R&D support among those who obtained grants and/or subsidies are positive and significant in terms of performance indicators related to economic growth: value added, sales revenue and number of employees. The estimated effects are larger for start-up firms than incumbent firms when the effects are measured as relative effects (in percentage points), but smaller when these effects are translated into level effects. Finally, we do not find positive effects on return to total assets or productivity for firms who received support compared with the control group.
    Keywords: Public policy; Firm performance; Treatment effects; Stratification; Propensity score matching; Productivity
    JEL: C33 C52 D24 O38
    Date: 2018–06
  10. By: Merkel, Matthias F.
    Abstract: In this paper I investigate whether the use of foreign exchange (FX) derivatives adds value to German firms, which together make up one of the major export economies in the world. I analyze a unique, hand-collected dataset that includes information on the use of FX derivatives by 391 firms between 2004 and 2013. After controlling for a set of fundamental firm characteristics I find that on average the use of FX derivatives does significantly add to their value. This relationship seems to be mainly driven by firms with low values, suggesting that such firms can increase their value by using these instruments. Analysis of the detailed information of my dataset shows that besides the simple decision to use derivatives, the intensity of firms' use of them is also positively linked to firm value. My results show that especially firms with high values can further increase their firm value by increasing their FX derivative holdings.
    Keywords: FX derivatives,hedging,Tobin's Q,firm value
    JEL: F23 G15 G32
    Date: 2018
  11. By: Van Pham (School of Economics, UNSW Business School, UNSW Sydney); Mauro Caselli (School of International Studies, University of Trento); Alan Woodland (School of Economics, UNSW Business School, UNSW Sydney)
    Abstract: This paper focuses on an unexamined area of trade, the behaviour of heterogeneous intermediate suppliers facing final producers of different ability and pursuing different strategies. We develop a theoretical model to analyse the choice of an intermediate supplier between selling to domestic producers, selling to multinational producers and/or exporting to foreign producers. The model’s predictions are: (i) sufficiently productive firms self-select into supplying to multinationals or exporting, while the most productive firms pursue both strategies, and (ii) the order of preferred strategies between supplying to multinationals and exporting depends on foreign direct investment inflows and export set-up costs. The paper tests these theoretical predictions using firm-level data from 29 European and Central Asian countries in 2002 and 2005. The empirical analysis confirms our model’s predictions. Moreover, it suggests that multinational suppliers are more likely to have higher required levels of ex-ante labour productivity than exporters, implying that exporting is easier and a more popular choice for firms.
    Keywords: Firm heterogeneity, intermediate suppliers, multinational suppliers, exporters, productivity, FDI
    JEL: F12 F14 F23 L11 L23 L25
    Date: 2018–04

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