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on Small Business Management |
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Issue of 2019‒01‒07
twenty papers chosen by João Carlos Correia Leitão Universidade da Beira Interior |
| By: | Philippe Aghion; Antonin Bergeaud; Gilbert Cette; Rémy Lecat; Hélène Maghin |
| Abstract: | In this paper we identify two counteracting effects of credit access on productivity growth: on the one hand, better access to credit makes it easier for entrepreneurs to innovate; on the other hand, better credit access allows less efficient incumbent firms to remain longer on the market, thereby discouraging entry of new and potentially more efficient innovators. We first develop a simple model of firm dynamics and innovation-base growth with credit constraints, where the above two counteracting effects generate an inverted-U relationship between credit access and productivity growth. Then we test our theory on a comprehensive French manufacturing firm-level dataset. We first show evidence of an inverted-U relationship between credit constraints and productivity growth when we aggregate our data at sectoral level. We then move to firm-level analysis, and show that incumbent firms with easier access to credit experience higher productivity growth, but that they also experienced lower exit rates, particularly the least productive firms among them. To confirm our results, we exploit the 2012 Eurosystem's Additional Credit Claims (ACC) program as a quasi-experiment that generated exogenous extra supply of credits for a subset of incumbent firms. |
| Keywords: | inverted-u relationship, credit, eurosystem |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1588&r=all |
| By: | Liu, Huiling; Fei, Xing; Yakshtas, Kseniya; Li, Bo |
| Abstract: | This study investigates the impacts of Chinese high-tech enterprise certification policy on enterprise innovation by exploiting the unique data of listed companies and their affiliates from 2006 to 2015. The authors exclude firms certified after year 2009 from the sample, because they may have exhibited R&D manipulation. The results show that high-tech enterprise certification can promote Chinese enterprise innovation, especially the innovation captured by invention patents. The results of a rich set of robustness tests all support this conclusion. Regarding the underlying mechanism, high-tech enterprise certification can influence enterprise innovation through tangible and intangible channels. The heterogeneity analysis shows that private enterprises, enterprises in industries with more competition, and equity-inspired enterprises benefit most from high-tech enterprise certification. This paper helps to scientifically evaluate the validity of Chinese innovation policy and contributes to a more comprehensive understanding of enterprise innovation's driving forces as well as the inconclusive relationship between government support and enterprise innovation. |
| Keywords: | high-tech enterprise certification,innovation,R&D manipulation |
| JEL: | O31 O32 O38 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:201885&r=all |
| By: | Chaminade, Cristina (Lund University); Bellandi, Marco (University of Florence); Plechero, Monica (University of Florence); Santini, Erica (Fondazione per la Ricerca e l’Innovazione) |
| Abstract: | The type of regional innovation system (RIS) strongly affects possibilities of paths of industrial transformation. This paper argues that traditional manufacturing districts, corresponding to specialized RISs and characterised by various nuclei of specialization and know-how, may foster different trajectories in combination with extra-regional networks. In particular, the paper analyses the interplay between regional and national innovation systems, providing an overview of the effect that different multilevel dynamics have on local trajectories. The cases of the textile districts in Prato (Italy) and Borås (Sweden) show SRISs can display not only path extension but also path renewal and creation strategies. |
| Keywords: | path development; regional innovation system; textile; knowledge nuclei; innovation policy; industrial district |
| JEL: | O19 O30 R11 R12 |
| Date: | 2018–12–13 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2018_013&r=all |
| By: | Bertoni, Fabio; Colombo, Massimo G.; Quas, Anita |
| Abstract: | This paper provides a policy-oriented summary of the econometric study commissioned by the European Court of Auditors, in the context of its audit of EU-funded loan guarantee instruments.2 The study assesses the real performance effects of EU-guaranteed loans to SMEs disbursed in France during the years 2002 to 2016. The study estimates the average treatment effect of guaranteed loans over a 10-year period around disbursement, using a combination of difference-in-difference estimation, coarsened exact matching and propensity score analysis. On average, French SMEs benefitting from EU-guaranteed loans experienced additional 9% asset growth, 7% sales growth, and 8% employment growth compared to the control group. The economic significance of the effect is typically stronger for smaller and younger firms. Beneficiary SMEs also experienced 5% lower default rates. The study also estimates the effects of guaranteed loans on SME productivity. Consistent with earlier works, the analysis finds a short-run dip in productivity, accompanied by a medium-run recovery and a long-run positive effect, signalling the presence of adjustment costs in the production function following loan-induced investments. The study concludes by discussing potential implications for policy makers and further research. |
| Keywords: | EIF,credit guarantees,credit constraints,real effects,small and medium-sized enterprises |
| JEL: | G2 H25 O16 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:eifwps:201852&r=all |
| By: | Ermolaeva, L.; Freixanet, J.; Panibratov, A. |
| Abstract: | Exporters' advantages have been discussed in the literature for many decades. Scholars report positive influence of export on firm'’ productivity, efficiency, innovativeness etc. However different contexts suggest different outcomes of the exporting activity. The aim of this study is to analyze the interplay between firms' absorptive capacity, export orientation and innovation strategy of Russian firms. We argue that for Russian firms developed absorptive capacity is an essential antecedent of exporting capacity. Moreover absorptive capacity not only affects firms’ export strategies but is affected itself by export and innovation strategy of the firm. We test our hypotheses using Confirmatory Factor Analysis (CFA). The data was collected by survey of Russian exporters. Total sample accounts 107 observations. |
| Keywords: | internationalization, export, innovation,, absorptive capacity, Russia, |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:sps:wpaper:15108&r=all |
| By: | Ross Levine; Yona Rubinstein |
| Abstract: | We study the effects of ability and liquidity constraints on entrepreneurship. We develop a three sector Roy model that differentiates between entrepreneurs and other self-employed to address puzzling gaps that have emerged between theory and evidence on entry into entrepreneurship. The model predicts—and the data confirm—that entrepreneurs are positively selected on highly-remunerated human capital, but other self-employed are negatively selected on those same abilities; entrepreneurs are positively selected on collateral, but other self-employed are not; and entrepreneurship is procyclical, but self-employment is countercyclical. |
| JEL: | E32 J24 L26 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25350&r=all |
| By: | Sokolov, D.; Zavyalova, E. |
| Abstract: | In this paper, we examine the moderating role of knowledge management strategies of codification and personalization in "HRM – intellectual capital – firm performance" relationship. A survey data from 209 knowledge-intensive companies from Russia demonstrated that knowledge management strategy significantly alters the relationship between company’s HRM practices, intellectual capital and performance. In particular, we found that the more company is oriented towards codification knowledge management strategy, the stronger the positive HRM-performance relationship and the stronger the mediating effect of intellectual capital. However, analyzing decomposed variables of HRM (ability-enhancing, motivation-enhancing and opportunity enhancing) and specific intellectual capital resources (human, social and structural capitals), we found little support to the moderating role of knowledge management strategies in proposed relationships. The paper provides a valuable contribution strategic HRM literature and knowledge-based theory of the firm. |
| Keywords: | human resource management, knowledge management strategies, intellectual capital, HRM practices, knowledge-intensive firms, Russia, |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:sps:wpaper:15119&r=all |
| By: | Daniel Goya; Andrés Zahler |
| Abstract: | We study the effect of different types of barriers to innovation (financial, demand, knowledge, market, cooperation, and regulatory barriers) on firm level innovation inputs and outputs. Using a pooled sample of three Chilean innovation surveys, based on an instrumental variables approach, we find that the probability of generating innovation outcomes is significantly reduced by demand and financial barriers. Regarding inputs for innovation, we find a clear negative relationship between financial and demand obstacles and the propensity to incur (non-R&D) innovation expenditures, but not with its intensity. We also provide evidence of heterogeneous effects across sectors, finding that knowledge obstacles are relevant for manufacturing and market structure obstacles for services, while demand and financial obstacles appear to matter across the board. |
| Keywords: | Financial and non-financial barriers to innovation, sectoral heterogeneity in innovation barriers, potential innovators, instrumental variables. |
| JEL: | D22 O31 O32 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:ucv:wpaper:2018-02&r=all |
| By: | Xavier Giroud; Holger M. Mueller |
| Abstract: | This paper shows that buildups in firm leverage predict subsequent declines in aggregate regional employment. Using confidential establishment-level data from the U.S. Census Bureau, we exploit regional heterogeneity in leverage buildups by large U.S. publicly listed firms, which are widely spread across U.S. regions. For a given region, our results show that increases in firms’ borrowing are associated with “boom-bust” cycles: employment grows in the short run but declines in the medium run. Across regions, our results imply that regions with larger buildups in firm leverage exhibit stronger short-run growth, but also stronger medium-run declines, in aggregate regional employment. We obtain similar results if we condition on national recessions–regions with larger buildups in firm leverage prior to a recession experience larger employment losses during the recession. When comparing regional firm and household leverage growth, we find qualitatively similar patterns for both. Finally, we find that regions whose firm leverage growth comoves more strongly also exhibit stronger comovement in their regional business cycles. |
| JEL: | E24 E32 G32 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25325&r=all |
| By: | Mpho Tsebe; Veron Vukeya; Christine Lewis; Flavio Calvino; Chiara Criscuolo |
| Abstract: | Until recently a lack of data meant that little was known about the distribution of firms and firm dynamics in South Africa. A new firm-level panel dataset based on tax data creates opportunities to better understand how firms enter, grow and exit. By using the OECD’s DynEmp framework, which was designed to create harmonised variables based on confidential firm-level data, this paper provides new insights about the dynamics of firms in South Africa and how these compare to other countries. One concerning finding is that the entry rate of formal sector firms was probably below the exit rate in recent years, which means that firms are growing older. The relatively low start-up rate compared to other countries together with the higher average firm size of entrants are consistent with the low rates of entrepreneurial activity and the presence of barriers to firm entry highlighted in the existing literature on the South African economy. As in other countries, young firms have disproportionately contributed to employment growth and remained net job creators even as GDP growth slowed. Nonetheless, large firms are particularly prominent in the South African economy, including as net job creators. |
| Keywords: | Employment dynamics, Firm demographics, Firm-level data, South Africa, Start-ups |
| JEL: | D22 L11 L26 O55 |
| Date: | 2018–12–19 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1528-en&r=all |
| By: | Benoît Desmarchelier (CLERSE - Centre Lillois d’Études et de Recherches Sociologiques et Économiques - UMR 8019 - Université de Lille - ULCO - Université du Littoral Côte d'Opale - CNRS - Centre National de la Recherche Scientifique); Faridah Djellal (CLERSE - Centre Lillois d’Études et de Recherches Sociologiques et Économiques - UMR 8019 - Université de Lille - ULCO - Université du Littoral Côte d'Opale - CNRS - Centre National de la Recherche Scientifique); Faïz Gallouj (CLERSE - Centre Lillois d’Études et de Recherches Sociologiques et Économiques - UMR 8019 - Université de Lille - ULCO - Université du Littoral Côte d'Opale - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | This article is devoted to a new network form that is developing within the New Public Governance paradigm, namely "Public Service Innovation Networks" (PSINs). PSINs are multi-agent collaborative arrangements that develop within public services (sectoral perspective) or within public service (functional perspective), spontaneously or at the instigation of local, national or European public policies. They mobilize a variable number of public and private agents, especially citizens, to co-produce innovations and ultimately contribute to value co-creation. This article aims to deepen the definition and description of PSINs, especially in comparison with other known network forms, and to examine in particular how PSINs are formed and function to co-create, more or less efficiently, value in public service(s) through innovation. |
| Keywords: | public service,network,innovation,value,co-creation,co-production,collaboration |
| Date: | 2018–11–25 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01934284&r=all |
| By: | Kay, Rosemarie; Nielen, Sebastian; Schröder, Christian |
| Abstract: | This study analyses how established SMEs respond to potentially disruptive inno-vations and business models in the course of increasing digitization. Drawing on the strategic entrepreneurship approach we argue that SMEs showing strategic entrepreneurial behaviour are more likely to respond to potentially disruptive innovations and business models proactively. We find that established SMEs recognizing disruptive innovations and business models as a business opportunity apply significantly more frequently strategic measures to exploit these opportunities. Observing and evaluating relevant new technologies and devel-opments is a key determinant of belonging to the group of SMEs demonstrating strategic en-trepreneurial behaviour. In our sample only a minority belongs to the group of proactive es-tablished SMEs. |
| Keywords: | SMEs,Strategic Entrepreneurship,Digitization,Disruptive Innovations,New Business Models |
| JEL: | L26 L21 M21 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifmwps:0618&r=all |
| By: | Yildirim, Ramazan; Masih, Mansur; Bacha, Obiyathulla |
| Abstract: | Many Muslim individual and institutional investors seek to invest only in stocks that are compliant with the Shari'ah (i.e. Islamic law). Among others, Dow Jones addressed this demand and has developed their proprietary screening methodologies to identify Shari'ah compliant firms (SC). One key factor that distinguishes SC firms from their non compliant peers (SNC) is that the former is not allowed to cross the leverage threshold of 33%. Due to the restrictions imposed on them, it is expected that SC firms exhibit different capital structure compared to the SNC firms. The purpose of this initial comparative study is to analyze the most reliable debt determinants identified in the literature on both firm types. This study utilizes static panel data techniques on the sample consisting of SC and SNC firms from 7 countries and 7 industries over the years 2004–2014. Our study is inconclusive and it shows that most of the determinants do exhibit different effects among both firm types. Depending on the leverage measure, the effect of different independent variables on firms' capital structure varies. A uniform effect can be exerted for debt determinants profitability for both leverage measures, and growth opportunities, firm size and tangibility for market leverage only. Our robustness tests reveal that the impact of some debt determinants on firms leverage remains consistent. The coefficient sign and significance suggests, that the capital structure decision of both firm types, both are better explained by the Pecking Order Theory for book and by the Trade-Off Theory for market leverage, respectively. |
| Keywords: | Capital Structure; Leverage; Shariah Compliant; Shariah Screening; Trade-Off Theory; Pecking Order Theory |
| JEL: | C58 E44 G15 G32 |
| Date: | 2017–06–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:90280&r=all |
| By: | Kornelia Fabisik; Rüdiger Fahlenbrach; René M. Stulz; Jérôme P. Taillard |
| Abstract: | Using more than 50,000 firm-years from 1988 to 2015, we show that the empirical relation between a firm’s Tobin’s q and managerial ownership is systematically negative. When we restrict our sample to larger firms as in the prior literature, our findings are consistent with the literature, showing that there is an increasing and concave relation between q and managerial ownership. We show that these seemingly contradictory results are explained by cumulative past performance and liquidity. Better performing firms have more liquid equity, which enables insiders to more easily sell shares after the IPO, and they also have a higher Tobin’s q. |
| JEL: | G30 G32 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25352&r=all |
| By: | Marie Bjørneby; Annette Alstadsæter; Kjetil Telle |
| Abstract: | Third-party reporting and employers’ tax withholding are powerful compliance mechanisms, as long as the employer and employee do not collude to evade. Using data from randomly assigned on-site audits among 2,462 Norwegian firms, we provide evidence of collusive tax evasion. We find that firms assigned to be audited increased their subsequent wage reporting on behalf of their employees by 18 percent relative to firms assigned to the control group. The effect is more pronounced among small firms with few employees. Our results document the limitations of third-party reporting, but also that these limitations can be counteracted by relatively inexpensive on-site audits. |
| Keywords: | collaborative tax evasion, collusive tax evasion, random audits, undeclared work, third-party reporting |
| JEL: | E26 H26 H32 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7381&r=all |
| By: | Carol Newman; John Page; John Rand; Abebe Shimeles; Måns Söderbom; Finn Tarp |
| Abstract: | This study combines evidence from interviews in seven countries with (i) government institutions responsible for attracting foreign direct investment (FDI), (ii) 102 multinational enterprises (MNEs), and (iii) 226 domestic firms linked to these foreign affiliates as suppliers, customers, or competitors. The purpose of the interviews was to identify whether relations between MNEs and domestic firms lead to direct transfers of knowledge/technology. We first document that there are relatively few linkages between MNEs and domestic firms in sub-Saharan Africa compared with Asia. However, when linkages are present in sub-Saharan Africa, they raise the likelihood of direct knowledge/technology transfers from MNEs to domestic firms as compared with linked-in firms in Asia. Finally, we do not find that direct knowledge/technology transfers are more likely to occur via FDI than through trade. As such, our results are not consistent with the view that tacit knowledge transfers are more likely to occur through localized linkages. |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2018-161&r=all |
| By: | Benoit Desmarchelier (CLERSE - Centre Lillois d’Études et de Recherches Sociologiques et Économiques - UMR 8019 - Université de Lille - ULCO - Université du Littoral Côte d'Opale - CNRS - Centre National de la Recherche Scientifique); Faridah Djellal (CLERSE - Centre Lillois d’Études et de Recherches Sociologiques et Économiques - UMR 8019 - Université de Lille - ULCO - Université du Littoral Côte d'Opale - CNRS - Centre National de la Recherche Scientifique); Faïz Gallouj (CLERSE - Centre Lillois d’Études et de Recherches Sociologiques et Économiques - UMR 8019 - Université de Lille - ULCO - Université du Littoral Côte d'Opale - CNRS - Centre National de la Recherche Scientifique) |
| Date: | 2018–11–25 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01934287&r=all |
| By: | Maria Bas; Pamela Bombarda; Sébastien Jean; Gianluca Orefice |
| Abstract: | Inequalities between workers of different skills have been growing in the era of globalization. Firms' internationalization mode has an impact on job stability. Exporting firms are not only exposed to different foreign shocks, they also pay skill-intensive fixed costs to serve foreign markets. This implies that, for larger exporters, the labor demand for skilled workers is expected to be less volatile than for unskilled workers. In this paper we study the relationship between firms' export activity and job stability across employment skills. Relying on detailed firm-level data from France for the period 1996-2007, we show that firms with higher export intensity exhibit a lower volatility of skilled labor demand relative to the volatility of unskilled labor demand. Our identification strategy is based on an instrumental variable approach to provide evidence on the causal effect of the export performance of the firm on the volatility of employment of different skills. Our findings suggest that exporting increases the stability of skilled jobs, but feeds the precariousness of unskilled ones. |
| Keywords: | Exports;Employment Volatility;Skiller Labor;Firm-level Data |
| JEL: | F1 F16 L25 L60 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:cii:cepidt:2018-20&r=all |
| By: | Sandra M. Leitner (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | This paper determines the key drivers, barriers and effects of eco-innovation, in comparison to innovation in general. It further distinguishes between different types of eco-innovations to better capture their heterogeneous nature. It uses two different data sets (1) the Community Innovation Survey 2014 (CIS-2014) for a large sample of EU Member States, further split up into three groups in accordance with their eco-innovation performance; (2) the German Mannheim Innovation Panel to address additional drivers the CIS-2014 is unable to capture. Results show that both R&D investments and complementary fixed capital investments are key drivers of eco-innovation, with differences across country groups. Results from the German sample further emphasise that expected future demand, rising costs for energy and other resources and the wish to improve one’s reputation and the need to meet industry standards help spur eco-innovation, while public policy is only of limited importance. In contrast, international market orientation turns out to be a barrier for eco-innovation. By and large, eco‑innovations also have a productivity-enhancing effect which is however lower as compared to innovations in general. |
| Keywords: | eco-innovation, demand pull, technology push, public policy, Europe |
| JEL: | Q55 O33 O38 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:wii:wpaper:159&r=all |
| By: | Konstantins Benkovskis (Bank of Latvia); Jaan Masso (University of Tarty); Olegs Tkacevs (Bank of Latvia); Priit Vahter (University of Tartu); Naomitsu Yashiro (Organisation for Economic Co-operation and Development) |
| Abstract: | This paper investigates the effect of export entry on productivity, employment and wages of Latvian and Estonian firms in the context of global value chains (GVCs). Like in many countries, exporting firms in Latvia and Estonia are more productive, larger, pay higher wages and are more capital-intensive than non-exporting firms. While this is partly because firms that are originally more productive and have better performances are more likely to enter exports, Latvian and Estonian firms also realise more than 23% and 14% higher labour productivity level respectively as the result of export entry. Export entry also increases employment and average wages. Gains in productivity and employment are particularly large when firms enter exports that are related to participation in knowledge-intensive activities found in the upstream of GVCs. For instance, Latvian firms that start exporting intermediate goods or non-transport services (which include knowledge-intensive services) enjoy significantly higher productivity gains than those starting to export final goods or transport services. These findings underscore the importance of innovation policies that strengthen firms' capabilities to supply highly differentiated knowledge-intensive goods and services to GVCs. |
| Keywords: | productivity, global value chain, exports, Latvia, Estonia |
| JEL: | F12 F14 O19 O57 |
| Date: | 2018–06–20 |
| URL: | http://d.repec.org/n?u=RePEc:ltv:wpaper:201803&r=all |