nep-sbm New Economics Papers
on Small Business Management
Issue of 2018‒07‒09
ten papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. An International Comparison of the Contribution to Job Creation by High-growth Firms By Michael Anyadike-Danes; Carl Magnus Bjuggren; Michel Dumont; Sandra Gottschalk; Werner Hölzl; Dan Johansson; Mika Maliranta; Anja Myrann; Kristian Nielsen; Guanyu Zheng
  2. Historical Roots of Entrepreneurial Culture and Innovation Activity - An Analysis for German Regions By Michael Fritsch; Michael Wyrwich; Martin Obschonka
  3. Interfirm Relationships and Business Performance_ By Jing Cai; Adam Szeidl
  4. Working Capital Management, Cash Flow and SMEs’ Performance By Afrifa, Godfred; Tingbani, Ishmael
  5. International Joint Ventures and Internal vs. External Technology Transfer: Evidence from China By Kun Jiang; Wolfgang Keller; Larry D. Qiu; William Ridley
  6. 経営者能力と財務的意思決定―投資政策・株主還元政策・現金保有― By 河内山, 拓磨; 石田, 惣平
  7. Foreign Multinationals and Vietnamese Firm Exports, 2010-2013 By Eric D. , Ramstetter
  8. Young Enterprises and Bank Credit Denials By Mascia, Danilo V.
  9. The Effects of Highway Tolls on Private Business Activity – Results from a Natural Experiment By João Pereira dos Santos; David B. Audretsch; Dirk Christian Dohse
  10. What kinds of regional innovation systems occur around federal agencies? By Martin Warland

  1. By: Michael Anyadike-Danes; Carl Magnus Bjuggren; Michel Dumont; Sandra Gottschalk; Werner Hölzl (WIFO); Dan Johansson; Mika Maliranta; Anja Myrann; Kristian Nielsen; Guanyu Zheng
    Abstract: This paper addresses three simple questions: how should the contribution of high-growth firms to job creation be measured? how much does this contribution vary across countries? to what extent does the cross-country variation depend on variation in the proportion of high-growth firms in the business population? The first is a methodological question which we answer using a more highly articulated version of the standard job creation and destruction accounts. The other two are empirical questions which we answer using a purpose-built data set assembled from national firm-level sources and covering nine countries, spanning the ten three year periods from 2000-2003 to 2009-2012. The basic principle governing the development of the accounting framework is the choice of appropriate comparators. Firstly, when measuring contributions to job creation, we should focus on just job creating firms, otherwise we are summing over contributions from firms with positive, zero, and negative job creation numbers. Secondly, because we know growth depends in part on size, the "natural" comparison for high-growth firms is with job creation by similar-sized firms which simply did not grow as fast as high-growth firms. However, we also show how the measurement framework can be further extended to include, for example, a consistent measure of the contribution of small job creating firms. On the empirical side, we find that the high-growth firm share of job creation by large job creating firms varies across countries by a factor of 2, from around one third to two thirds. A relatively small proportion of this cross-country variation is accounted for by variations in the influence of high-growth firms on job creation. On average high-growth firms generated between three or four times as many jobs as large non-high-growth job creating firms, but this ratio is relatively similar across countries. The bulk of the cross-country variation in high-growth firm contribution to job creation is accounted for by the relative abundance (or rarity) of high-growth firms. Moreover, we also show that the measurement of abundance depends upon the choice of measurement framework: the "winner" of a cross-national high-growth firm "beauty contest" on one measure will not necessarily be the winner on another.
    Keywords: high-growth firms, firm growth, job creation
    Date: 2018–05–18
  2. By: Michael Fritsch (FSU Jena); Michael Wyrwich (FSU Jena); Martin Obschonka (Queensland University of Technology Business School Brisbane)
    Abstract: There is a research gap with respect to understanding the role of entrepreneurial culture and tradition for actual start-up behaviour. We combine historical self-employment data (entrepreneurial tradition) with a psychological measure for entrepreneurial attitudes (entrepreneurial culture). The results reveal a positive relationship between the historical level of self-employment in a region and the presence of people with an entrepreneurial personality structure today. Our measure for a regional culture of entrepreneurship is positively related not only to the level of new business formation but also the amount of innovation activity.
    Keywords: Entrepreneurship, self-employment, new business for mation, personality traits, culture, innovation
    JEL: L26 N94 O11 O30 R11
    Date: 2018–06–25
  3. By: Jing Cai; Adam Szeidl
    Abstract: We organized business associations for the owner-managers of young Chinese firms to study the effect of business networks on firm performance. We randomized 2,820 firms into small groups whose managers held monthly meetings for one year, and into a “no-meetings” control group. We find that: (1) The meetings increased firm revenue by 8.1 percent, and also significantly increased profit, factors, inputs, the number of partners, borrowing, and a management score; (2) These effects persisted one year after the conclusion of the meetings; and (3) Firms randomized to have better peers exhibited higher growth. We exploit additional interventions to document concrete channels. (4) Managers shared exogenous business-relevant information, particularly when they were not competitors, showing that the meetings facilitated learning from peers. (5) Managers created more business partnerships in the regular than in other one-time meetings, showing that the meetings improved supplier-client matching.
    Date: 2017–11–21
  4. By: Afrifa, Godfred; Tingbani, Ishmael
    Abstract: Purpose – The paper presents comprehensive evidence on the relationship between Working Capital Management (WCM) and SMEs’ performance by taking into consideration the plausible effect of cash flow. Design/methodology/approach – The paper adopts a panel data regression analysis on a sample of 802 British quoted small and medium enterprises listed on the Alternative Investment Market for the period from 2004 to 2013. Findings – The results of the study demonstrate the importance of cash flow on SMEs’ WCM and performance. According to our findings, WCM has a significantly negative impact on SME performance. However, with available cash flow, we find a significantly positive relationship. Additionally, our evidence revels that cash flow constrained (non-constrained) SMEs are able to enhance their performance through decreased (increased) investment in WCM. Practical implications – Overall, the results demonstrate the importance of cash flow availability on SMEs’ working capital needs. Our findings suggest that in an event of cash flow unavailability (availability) managers should strive to reduce (increase) the investment in working capital in order to improve performance. Originality/value – This current study incorporates the relevance of cash flow in assessing the association between WCM and firm performance.
    Keywords: Working Capital Management, Performance, SMEs, Cash Flow
    JEL: G3 G31 G32
    Date: 2017
  5. By: Kun Jiang; Wolfgang Keller; Larry D. Qiu; William Ridley
    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 international technology transfer not only to the joint venture itself but also to the Chinese joint venture partner firm. Third, with technology spillovers typically outweighing negative competition effects, joint ventures generate 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: international joint ventures, partner selection, technology spillovers, foreign direct investment, competition effects
    JEL: F14 F23 O34
    Date: 2018
  6. By: 河内山, 拓磨; 石田, 惣平
    Abstract: 本論文の目的は,経営者能力の観点から財務的意思決定が企業の将来業績に及ぼす影響について実証的に検討することにある。とりわけ,本研究では,Demerjian et al.(2012)で提示された経営者能力の指標を援用し,能力の高い経営者が行う財務的意思決定が当該企業の将来業績とどのように結びつくかを分析する。主な検証結果は以下のように要約される。第 1 に,能力の高い経営者が行う投資政策は将来業績と正の関係性を持つことが示され,能力の高い経営者が行う投資政策とりわけ資本的支出は将来業績を向上させるものであることが分かった。第 2 に,能力の高い経営者が行う株主還元政策は将来業績と正の関係性を持つことが示され,当該株主還元政策は将来業績に対する信頼できるシグナルとなることが示された。最後に,追加分析からは経営者の能力が高いほど保有現金が株式市場で相対的に高く評価されることが明らかとなった。以上の発見事項は,能力の高い経営者は効果的に投資を行い, そして,将来業績に関する信頼できるシグナルを資本市場に発信する傾向にあることから, 当該経営者が保有する現金は高く評価されることを示唆している。, We examine whether and how financial policies by high-ability managers relate to future performance. Many finance theories have predicted that financial policies, such as corporate investments and dividends, are function of firm-specific characteristics and that the efficacy of these policies is less relevant to managers’ characteristics. Using a measurement of managerial ability, we extend the literature by providing evidence that the outcome of financial policies differs with managerial ability. We find that (1) investments by high-ability managers are more likely to improve future performance, (2) dividends by high-ability managers are positively related to future performance, and (3) the marginal value of cash is greater for firms with high-ability managers. Our evidence sheds a new light on the effect of managerial ability on organizational outcome and the linkage between financial policies and future performance.
    Keywords: 経営者能力, 財務的意思決定, 投資, 配当, 株主還元, 現金保有, Managerial ability, financial policy, investment, dividend, cash-holding
    JEL: M10 M41
    Date: 2018–06
  7. By: Eric D. , Ramstetter
    Abstract: This paper examines the role foreign multinational enterprises (MNEs) played in Vietnamese firm exports during 2010-2013. Consistent with patterns observed in commodity export data, MNEs are found to account for the majority of firm exports during this period. Wholly-foreign MNEs (WFs), which accounted for the vast majority of MNE production in Vietnam, accounted for most MNE exports. Both WFs and MNE joint ventures (JV) made larger direct contributions to exports than to production or employment, as observed in other Asian developing economies. There was a strong tendency for WFs to have the highest export propensities (export-turnover ratios) followed by JVs. Manufacturing firms exported over four-fifths of the total in most years. Tobit estimates that controlled for the effects of firm size, capital intensity, liquidity, location, and industry affiliation for manufacturers indicate WFs also had the highest conditional export propensities, followed by JVs, private firms, while export propensities tended to be similar in state-owned enterprises (SOEs) and private firms in most industries. Because Vietnam imposes few ownership restrictions on MNEs, these results imply that MNEs generally prefer to export from WFs rather than JVs, and are consistent with previous results for Thailand and Indonesia, for example.
    Keywords: Multinational enterprises, state-owned enterprises, ownership, exports, F14, F23, L33, L60, L81, O53
    Date: 2018–06
  8. By: Mascia, Danilo V. (Asian Development Bank Institute)
    Abstract: By employing a sample of 20,956 observations of nonfinancial small and medium-sized enterprises (SMEs) headquartered in the euro area, between 2009 and 2015, we test whether young businesses are more likely to face credit rejections from lenders than their older peers. Our findings appear to confirm our suspicions that new enterprises consistently experience higher denials from banks compared with more established businesses. Such a result is stable to different model specifications and is also confirmed once we handle the issue of sample selection bias potentially affecting our data. Additional tests also reveal that credit constraints are particularly difficult for young SMEs located in Southern and Central Europe, as well as for those operating in the “trade” industry. Overall, our evidence suggests that actions from the policy maker could be desirable to support the viability of credit and, thus, ensure the growth of young businesses in the euro area.
    Keywords: SMEs; young enterprises; bank loans; credit rationing
    JEL: D82 G20 G21 G30 L26 M13
    Date: 2018–05–09
  9. By: João Pereira dos Santos (Nova School of Business and Economics, Universidade Nova de Lisboa, Campus de Campolide); David B. Audretsch (Institute for Development Studies, Indiana University, 1315 East 10th Street, SPEA Room 201, Bloomington); Dirk Christian Dohse (Kiel Institute for the World Economy, Kiellinie 66, 24105 Kiel, Germany)
    Abstract: The paper studies the impact of a switch from free to charged highway provision on firm numbers and private sector employment in a panel of Portuguese municipalities covering the period 2007–2013. It exploits the fact that tolls on certain highways in Portugal were unexpectedly introduced in reaction to the sovereign debt crisis to establish causality. Results from a difference-in-differences analysis indicate a significantly negative effect of highway tolls on number of firms and employment in treated municipalities vis-à-vis the comparison group. We also find negative effects of tolls in municipalities not directly traversed by the treated highways, with larger firms and manufacturing firms being most strongly affected.
    Keywords: infrastructure provision, highway tolls, regional economic development, natural experiment
    JEL: R48 L25
    Date: 2018–06
  10. By: Martin Warland
    Abstract: Scholars in innovation studies increasingly highlight that federal governments on the demand side spur innovation activities of government contractors. While government contractors tend to concentrate in capital cities, the kinds of regional innovation system (RIS) that occur around federal agencies remain poorly understood. Drawing on the RIS approach, this paper examines the actors and activities that are placed at the interface between public demand and private supply. The analysis draws on 122 interviews with RIS actors in Bern, The Hague, Ottawa and Washington, D.C. The results indicate that intermediaries play crucial roles in stimulating knowledge exchange between public demand and private supply. One important role relates to getting involved in policy formulation in order to enhance interactive learning in federal procurement practices. In interaction inspiring federal procurement policies, government contractors generate technical knowledge that they also can exploit through private sector clients.
    Date: 2016–07

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