nep-sbm New Economics Papers
on Small Business Management
Issue of 2018‒09‒17
twelve papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Corporate R&D and the performance of foodprocessing firms: Evidence from Europe, Japan and North America By Hockmann, Heinrich; Garzon Delvaux, Pedro Andres; Voigt, Peter; Ciaian, Pavel; Gomez y Paloma, Sergio
  2. Money for Something: The Links between Research Funding and Innovation By Glennon, Britta; Lane, Julia; Sodhi, Ridhima
  3. Social Capital as Knowledge Absorptive Capacity and Firm Innovation By Ploychompoo Kittikunchotiwut
  4. International R&D Spillovers, Innovation by Learning from Abroad and Medium-Run Fluctuations By Toshihiro Okada
  5. The Role of Corporate Taxes in the Decline of the Startup Rate By Julian Neira; Rish Singhania
  6. Inter-industry Differences in Organisational Eco-innovation : a panel data study By Martínez Ros, Ester; Kesidou, Effie; García-Quevedo, Jose
  7. Immigrant Entrepreneurship in Finland By Fornaro, Paolo
  8. On sustainable production networks for Industry 4.0 By Gunnar Prause; Sina Atari
  9. An Ecosystem-Level Process Model of Business Model Disruption: The Disruptor's Gambit By Snihur, Yuliya; Thomas, Llewellyn D. W.; Burgelman, Robert A.
  10. Survival of Service Firms in European Emerging Economies By Iwasaki, Ichiro; Kočenda, Evžen
  11. Manager Characteristics and Firm Performance By KODAMA Naomi; Huiyu LI
  12. Institutions vs. ‘first-nature’ geography: what drives economic growth in Europe's regions? By Ketterer, Tobias D.; Rodríguez-Pose, Andrés

  1. By: Hockmann, Heinrich; Garzon Delvaux, Pedro Andres; Voigt, Peter; Ciaian, Pavel; Gomez y Paloma, Sergio
    Abstract: This paper investigates the impact of corporate research and development (R&D) on firm performance in the foodprocessing industry. We apply Data Envelopment Analysis (DEA) with two step bootstrapping using a corporate data for 307 food-processing firms from the EU, US, Canada and Japan for the period 1991–2009. The estimates suggest that R&D has a positive effect on the firms’ performance, with marginal gains decreasing in the R&D level as well as the performance differences are detected across regions and food sectors. R&D investments in food processing can deliver productivity gains, beyond the high-tech sectors generally favoured by innovation policy.
    Keywords: Research and Development/Tech Change/Emerging Technologies
    Date: 2017–08–28
  2. By: Glennon, Britta (Carnegie Mellon University); Lane, Julia (New York University); Sodhi, Ridhima (New York University)
    Abstract: Federal research funding to universities is often based on a desire to stimulate innovation – so that they spend taxpayer money for "something". There is growing understanding of the need to change the structure of research funding in order to do so; less is known about the effectiveness of different organizational structures. Yet, as Jones has pointed out, increasing the efficiency with which we transfer knowledge from one generation to the next could have important implications for innovation and productivity growth. In this paper we use new data to examine how the main organizational structure used to train the next generation of scientists and inventors – teams funded by research grants – leads to innovative activity as measured by patents.
    Keywords: UMETRICS, innovation, patents, research policy, teams
    JEL: O30 O31 O38
    Date: 2018–07
  3. By: Ploychompoo Kittikunchotiwut (Mahasarakham Business School)
    Abstract: The objective of the study is to investigate relationships amongst social capital, potential absorptive capacity, realized absorptive capacity, and firm innovation. The data were collected by using a questionnaire from 89 leather product exporting firms from leather products businesses in Thailand. The hypothesized relationships among variables are examined by using ordinary least square (OLS) regression analysis. The results indicate that social capital have are significant positive impact on potential absorptive capacity and realized absorptive capacity. Potential absorptive capacity and realized absorptive capacity have are significant positive impact on firm innovation. This study might be useful to scholars and those who share an interest in the subject. Moreover, theoretical and managerial contributions, conclusion, and suggestions for future research are also interesting to be discussed.
    Keywords: Social Capital, Potential Absorptive Capacity, Realized Absorptive Capacity, Firm Innovation
    JEL: L20 M19
    Date: 2018–07
  4. By: Toshihiro Okada (School of Economics, Kwansei Gakuin University)
    Abstract: Many developed economies experienced large and correlated fluctuations in the medium run during the postwar period. A good number of industrialized countries experienced high productivity growth during the 1960s and low growth between the early 1970s and the early 1980s. This paper develops a model of medium-run fluctuations incorporating research and development (R&D)-based endogenous growth and international R&D spillovers from a technologically leading country to a technologically lagging country. An important feature of the model is that a key role of the lagging country's R&D is innovation by leaning (IBL) from abroad. After calibration using U.S. and Japanese data, the model shows that changes in U.S.R&D expenditure alone can substantially explain Japan's medium-run fluctuations.The paper argues that the diffusion of U.S. innovations (generated by U.S. R&D) to Japan plays an important role in determining Japan's medium-run fluctuations
    Keywords: International R&D spillovers, technology diffusion, endogenous growth, medium-run fluctuations.
    JEL: E32 O19 O33 O41
    Date: 2018–09
  5. By: Julian Neira (University of Exeter); Rish Singhania (University of Exeter)
    Abstract: The Role of Corporate Taxes in the Decline of theStartup Rate∗Julian NeiraUniversity of ExeterRish SinghaniaUniversity of ExeterOctober 26, 2017AbstractThe business startup rate in the United States has exhibited a large secular declinein recent decades. The reasons behind the decline are not well understood. This paperhypothesizes that the startup rate declined in large part because corporate taxes raisedthe opportunity cost of entrepreneurship. We formalize this thesis using a model ofoccupational choice that features firm entry and exit. Quantitatively, the model accountsfor much of the decline in the startup rate. Taxes alone account for one-fifth of thedecline. Cross-sectoral patterns in US data support our results.
    Date: 2018
  6. By: Martínez Ros, Ester; Kesidou, Effie; García-Quevedo, Jose
    Abstract: Building on insights from institutional theory, the resource-based view of the firm, and internationalisation, we seek to explain the variation in the adoption of organisational eco-innovations such as environmental management systems (EMS) across sectors in Spain in the period 2009&-2014. Previous studies on eco-innovation report that regulatory push/pull, technology-push, market-pull, and firm factors are drivers of this process. However, this literature pays relatively little attention to non-technological forms of eco-innovation, such as EMS. As a result, just how EMS adoption can be encouraged across sectors remains unclear in the innovation literature. Here, we seek to address this problem by combining data from the following sources: the Spanish Technological Innovation Panel, the International Standardisation Organisation (ISO) survey, the Industry Survey, the Environmental Protection Survey, and the Air Emissions Account. The results of the econometric analysis of panel data reveal that, first, coercive institutional pressures are driving the adoption of EMS reflecting differences across sectors in energy and pollution intensity. Second, the adoption of ISO 9000 &- a highly institutionalised system of quality management &- increases the adoption of EMS in each industry because of complementarities between the two systems. Third, sectors with a high percentage of internationalised firms operate a higher number of EMS.
    Keywords: EMS; Panel data; Internationalisation; Institutional theory; Eco-innovation
    JEL: Q58 Q50 O30
    Date: 2018–09
  7. By: Fornaro, Paolo
    Abstract: Abstract Immigrant entrepreneurship is the subject of a prolific economic literature, as well as a source of wide public debate. This is because the participation of immigrants to the business community can provide a significant contribution to innovation and to market dynamics. This report touches multiple aspects of immigrant entrepreneurship in Finland, looking at the years from 2006 to 2014. I find that while the number of self-employed immigrants has increased dramatically, the entrepreneurial rate has been stable. Moreover, the immigrant self-employment rate is similar to the one of natives. I find that the median earnings of foreign entrepreneurs are lower than the ones of Finnish entrepreneurs, but this is driven by the different industry distribution. Finally, I find an overrepresentation of foreign workers and entrepreneurs in the Helsinki region, while the immigrants’ self-employment rate is higher in poorer areas. I gather multiple evidence pointing toward the fact that difficulties in the job market push foreign residents to self-employment. For example, I find a negative correlation between the employment rate and the foreign share of entrepreneurial inflows, and a strong negative relationship between the employment rate and the immigrant self-employment rate at the regional level.
    Keywords: Immigrants, self-employment, earnings differentials
    JEL: J24 J61 M13
    Date: 2018–09–13
  8. By: Gunnar Prause (Hochschule Wismar, University of Applied Sciences: Technology, Business and Design); Sina Atari (TTÜ - Tallinn University of Technology)
    Abstract: Re-industrialization enjoys a renaissance in Western economies due to the role of the industrial sector for innovation, productivity, and job creation. A very promising approach to bring back competitiveness in production seems to be the fusion of the virtual and the real world leading to smart manufacturing and logistics concepts. In Germany, the leading industrial country in the European Union this approach has been called " Industry 4.0 " aiming to develop cyber-physical systems (CPS) and dynamic production networks in order to achieve flexible and open value chains in manufacturing of complex mass customization products in small series. Currently, manufacturing companies gaining experiences in production in networks and smart logistics and develop new organisational structures and business models which better benefit from the new technologies and which adapt faster to the rapidly changing network environments. The modern manufacturing models embrace modular and fractal approaches as well as network-orientation, flexibility and responsiveness. The paper investigates the relationship between networking, organizational development, structural frame conditions and sustainability in the context of Industry 4.0. The research is empirically validated by using data samples from a business reengineering project in an internationally operating high-tech manufacturing enterprise located in Estonia. The empiric analysis is based on semi-structured expert interviews and secondary data together with a case study approach.
    Keywords: sustainability,fractals,production in network,modular factory,Industry 40
    Date: 2017–06–30
  9. By: Snihur, Yuliya (Toulouse Business School); Thomas, Llewellyn D. W. (LaSalle Universitat Ramon Llull); Burgelman, Robert A. (Stanford University)
    Abstract: Based on a longitudinal case study, this paper presents an ecosystem-level process model of the interlocking key activities of the business model disruptor, other ecosystem participants (customers, partners, media, analysts), and the incumbent. Together these constitute a strategic process of ecosystem evolution from incumbent-centered to disruptor-centered. We identify the phenomenon of a "disruptor's gambit," where the disruptor reveals its intentions early on through effective framing, followed by rapid adaptation of its business model to satisfy ecosystem needs. These processes generate a virtuous framing-adaptation cycle, where feed-forward and feedback enable rapid response to customers and partners, while engaging them as force multipliers during new ecosystem creation. Our findings suggest that framing constitutes a dynamic strategic process enabling disruptors to reduce uncertainty, dislodge powerful incumbents, and shape new ecosystems through business model innovation.
    Date: 2018–04
  10. By: Iwasaki, Ichiro; Kočenda, Evžen
    Abstract: Using a dataset of 126,591 service firms in 17 European emerging economies, this paper aims to estimate firm survivability in the years 2007–2015 and examine its determinants. We found that 31.3%, or 39,557 firms, failed during the observation period. At the same time, however, the failure risk greatly differed among regions, perhaps due to the remarkable gap in the progress of economic and political reforms. Moreover, the results of survival analysis revealed that large shareholding, labor productivity, and firm age played strong roles in preventing business failure beyond differences in regions and sectors.
    Keywords: European emerging economies, Service industry, Survival analysis, Cox proportional hazards model
    JEL: D22 G01 G33 L89 P34
    Date: 2018–08
  11. By: KODAMA Naomi; Huiyu LI
    Abstract: This paper studies the relationship between the performance of a firm and the characteristics of its manager for private and public firms in Japan. We use a panel data of firms from 2006-2016 that covers over two-thirds of aggregate employment and is representative of the firm size distribution. We find that firm performance measures—size, growth, and sales per employee—are higher in firms with managers who are male, more educated, and whose self-reported hometown differs from the location of the firm he or she manages (migrant managers). We also find an inverted-U relationship between firm performance level and manager's age, and that growth rate declines with the manager's age. Firm performance first increases with age until middle age, after which it declines with age. However, managers with characteristics that are associated with good performance do not necessarily perform better in recessions: male and migrant managers cut back more on sales and employment during the 2008-2009 recession. These results hold even after controlling for firm characteristics such as industry, age, location, and family ownership. Our results are consistent with human capital and risk preference affecting the productivity of managers. They suggest that demographic shifts—aging, rising female labor participation and education attainment, change in migration patterns—may affect economic growth through the distribution of managerial productivity.
    Date: 2018–09
  12. By: Ketterer, Tobias D.; Rodríguez-Pose, Andrés
    Abstract: The debate on whether institutions or geography prevail in driving economic growth has been rife (e.g., Sachs 2003 vs. Rodrik et al. 2004). Most of the empirical analyses delving into this debate have focused on world countries, whose geographical and institutional conditions differ widely. Subnational analyses considering groups of countries with, in principle, more similar institutional and geographical conditions have been limited and tended to highlight that geography is more important than institutions at subnational level. This paper aims to address whether this is the case by investigating how differences in institutional and ‘first-nature’ geographical conditions have affected economic growth in Europe's regions in the period 1995–2009. In the analysis we use a newly developed dataset including regional quality of government indicators and geographical charactersitics and employ two-stage least squares (2SLS) and instrumental variables-generalized method of moments (IV-GMM) estimation techniques with a number of regional historical variables as instruments. Our results indicate that at a regional level in Europe institutions rule. Regional institutional conditions – and, particularly, government effectiveness and the fight against corruption – play an important role in shaping regional economic growth prospects. This does not imply, however, that geography is irrelevant. There is evidence of geographical factors affecting regional growth, although their impact is dwarfed by the overriding influence of institutions.
    Keywords: regional economic growth; institutions; geography; quality of government; NUTS 2 regions; Europe
    JEL: N0
    Date: 2018–03–01

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