nep-sbm New Economics Papers
on Small Business Management
Issue of 2019‒01‒14
fifteen papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Exploring the Impact of R&D on Patenting Activity in Small Women-Owned and Minority-Owned Entrepreneurial Firms By Link, Albert; van Hasselt, Martijn
  2. Advancing Conceptualization of University Entrepreneurship Ecosystems: The Role of Knowledge-based Entrepreneurial Firms By Link, Albert; Sarala, Riikka
  3. Linking content and technology: On the geography of innovation networks in the Bergen media cluster By Martin, Roman; Rypestøl , Jan Ole
  4. Firm Productivity and Agglomeration Economies: Evidence from Egyptian Data By Karim Badr; Reham Rizk; Chahir Zaki
  5. Growth paths and routes to exit: ‘Shadow of Death’ effects for new firms in Japan By Alex Coad; Masatoshi Kato
  6. Gender-Diversity, Financial Performance and Cash Holding in Family Firms By Salehudin Eka Saputra Alrasidi, ST
  8. Entrepreneurial Spillovers from Corporate R&D By Tania Babina; Sabrina T. Howell
  9. Collaborative Knowledge Creation: Evidence from Japanese Patent Data By Tomoya Mori; Shosei Sakaguchi
  10. Financial Frictions, Cyclical Fluctuations, and the Growth Potential of New Firms By Christoph Albert; Andrea Caggese
  11. State Business Relations and the Dynamics of Job Flows in Egypt and Turkey By Eleftherios Giovanis; Oznur Ozdamar
  12. Trade Liberalization and the Agglomeration of Heterogeneous Entrepreneurs By Forslid, Rikard; Okubo, Toshihiro
  13. How does the competitive intensity affect the firm's product strategies? By Lee, Kyungyul; Kwon, Youngsun
  14. Technological Diversification and Smart Specialization: the role of cooperation By Artur Santoalha
  15. Building a Better Bridge: Improving Patent Assignee-Firm Links By David Dreisigmeyer; Nathan Goldschlag; Marina Krylova; Wei Ouyang; Elisabeth Perlman

  1. By: Link, Albert (University of North Carolina at Greensboro, Department of Economics); van Hasselt, Martijn (University of North Carolina at Greensboro, Department of Economics)
    Abstract: The relevant economics literature on the impact of R&D on patenting activity falls within two methodological areas of inquiry. The first area might be classified as a test of the Schumpeterian hypothesis. The second and lesser research area might be classified as an estimation of the knowledge production function relationship between R&D and patenting. This paper focuses on estimates of the R&D-to-patenting relationship for a random sample of small, entrepreneurial firms whose research projects were supported through the U.S. Small Business Innovation Research (SBIR) program. Our paper contributes to the R&D-to-patenting literature in two ways. It examines empirically a unique set of small, entrepreneurial firms funded by the public sector, and it explores the effect of the gender and ethnicity of firm owners on the propensity of their firms to patent from funded research projects.
    Keywords: Patenting; R&D; Entrepreneurship; Gender; Minorities;
    JEL: J15 J16 L26 O32 O34
    Date: 2019–01–04
  2. By: Link, Albert (University of North Carolina at Greensboro, Department of Economics); Sarala, Riikka (University of North Carolina at Greensboro, Department of Management)
    Abstract: University entrepreneurship ecosystems are increasingly important in facilitating innovation and entrepreneurial opportunities in today’s knowledge-based economies. However, we have an incomplete understanding of the role of the entrepreneurial firm as the key user of university knowledge. We propose that use of university knowledge positively influences entrepreneurial firm performance and that the entrepreneurial firm’s resource and capabilities facilitate its ability to create value from university knowledge. We test our hypotheses with survey data on knowledge intensive entrepreneurial firms from 10 European countries. Our study contributes to an increased understanding of the economic, societal, and technological contributions of universities by illustrating empirically the role of entrepreneurial firm’s resources and capabilities as moderators of value in university ecosystems.
    Keywords: entrepreneurship; strategic behavior; university-based knowledge; European Union;
    JEL: L26 O31
    Date: 2019–01–04
  3. By: Martin, Roman (Gothenburg University); Rypestøl , Jan Ole (University of Agder)
    Abstract: This paper deals with the geography of innovation networks and analyses combinatorial knowledge dynamics from a single cluster perspective. Addressing firms in the media cluster in Bergen, Norway, we examine how and from where companies acquire and combine different types of knowledge for their innovation activities. The empirical analysis, which is based on structured interviews with 22 media companies, identifies two main types of cluster firms: media content providers that rely heavily on symbolic knowledge and media technology providers that draw mostly on synthetic knowledge. Even though they draw on different knowledge bases, the two types of firms are strongly interlinked in their innovation activities and source knowledge from each other. Furthermore, we find that synthetic firms constitute a gateway to the regional R&D system and that the region acts as key arena for the combination of dissimilar knowledge bases.
    Keywords: innovation networks; knowledge bases; creative industries; new media; Norway
    JEL: L82 O14 O30 O31
    Date: 2019–01–07
  4. By: Karim Badr (World Bank); Reham Rizk; Chahir Zaki
    Abstract: This paper attempts to shed light on the nexus between firm productivity and economies of agglomeration in Egypt. Using a large dataset of 62,108 firms in 342 four-digit activities in 27 regions governorates, we introduce three measures of agglomeration, which are urbanization or firm diversification, measured by the number of firms in the governorate, localization and specialization, measured by the average productivity in the governorate and sector (generating externalities and knowledge spillovers), and finally competition, measured by the number of firm operating in the same governorate and the same sector. We find strong evidence for the existence of agglomeration economies in Egypt after controlling for firm age, location, economic activity and legal status. In the Egyptian context, productivity spillovers gained from agglomeration economies outweighed the negative effects of congestion implied by our competition measure. The latter is chiefly due to the lack of good infrastructure. When regressions are run by firm size and activity, our main findings show, first, that micro and small firms are more likely to benefit from localization and diversification compared to medium and large firms. Finally, service firms benefit more from a high level of diversification, while manufacturing firms gain more from knowledge spillovers and specialization. Our results support promoting entrepreneurship through the creation of industrial clusters located outside Cairo to lessen disparities between regions and acquire the full advantages of agglomeration.
    Date: 2018–10–15
  5. By: Alex Coad (CENTRUM Catolica Graduate Business School, Pontificia Universidad Católica del Perú); Masatoshi Kato (School of Economics, Kwansei Gakuin University)
    Abstract: Research has recently emphasized that the non-survival of entrepreneurs can be disaggregated into distinct exit routes such as merger and acquisition (M&A), voluntary closure and failure. Firm performance is an alleged determinant of exit route. However, there is a lack of evidence linking exit routes to their previous growth performance. We contribute to this gap by analysing a cohort of incorporated firms in Japan, and find some puzzles for the standard view. In the Japanese context, not all exit routes are available to all firms: small firms do not realistically face the options of M&A or bankruptcy, but essentially face a choice between survival and voluntary liquidation. Our empirical analysis suggests that sales growth generally reduces the probability of exit by merger,voluntary liquidation, and also bankruptcy. However, the relationship is U-shaped - such that rapid growth actually increases the probability of exit. More generally, each of the three exit routes can occur all across the growth rate distribution. Large firms are more likely to exit via merger or bankruptcy, while small firms are more likely to exit via voluntary liquidation.
    Keywords: Exit routes, shadow of death, post-entry growth, start-up size, voluntary liquidation, M&A.
    Date: 2018–12
  6. By: Salehudin Eka Saputra Alrasidi, ST (Faculty of Economics & Business, Telkom University, Indonesia Author-2-Name: Farida Titik Kristanti, S. E. M. Si Author-2-Workplace-Name: Faculty of Economics & Business, Telkom University, Indonesia Author-3-Name: Author-3-Workplace-Name: Author-4-Name: Author-4-Workplace-Name: Author-5-Name: Author-5-Workplace-Name: Author-6-Name: Author-6-Workplace-Name: Author-7-Name: Author-7-Workplace-Name: Author-8-Name: Author-8-Workplace-Name:)
    Abstract: Objective - This research aims to determine the presence of partial effects on gender-diversity and financial performance variables on the cash holding of family firms on the Indonesian Stock Exchange included in the Kompas100 index. Methodology/Technique - The approach used in this research was causal associative testing using a panel data regression with a General Least Square (GLS) method using six independent variables: size, growth opportunity, dividend, return on assets, leverage, and gender diversity. Meanwhile, cash holding acts as a dependent variable. Findings - The results of the research show that the independent variables of leverage have significantly negative relationships on cash holding on the Kompas100 index of Indonesia in the period of 2013-2016. Contrary to this, return on asset has a significantly positive relationship with cash holding. Novelty - Gender diversity is an important variable of boardroom; this paper reveals the impact of gender diversity and performance on family holding firms. These results can be used to assess the performance and fundamentals of a firm.
    Keywords: Cash Holding; Dividend; Gender Diversity; Growth Opportunity; Leverage; Return on Assets; Size.
    JEL: M40 M41 M49
    Date: 2018–12–10
  7. By: Zalizko, Vasyl; Talavyria, Mykola; Lymar, Valeriia; Baidala, Viktoriia
    Abstract: The paper is devoted to bioeconomic security on the European continent in the context of international innovation system creation. The aim of the paper is to study a new direction of bioeconomics - the formation of conditions for strengthening economic security the contextin to define the elements of national innovation system. We define the category "bioeconomic security" and main elements of the national innovation system: synergistic knowledge and innovation creating; shift to innovative advanced technologies; implementation of effective organizational and administrative solutions for creation of agro-biotechnology clusters; promotion of complex resource preservation and transition to renewable energy; implementation of large-scale research. To strengthen economic security of the European countries, it is necessary to organize a comprehensive monitoring of all necessary indicators (using the integrated index) and begin to form bioenergetic clusters. The calculated index bioeconomic security clearly shows that four different countries (Poland, Ukraine, Azerbaijan and the Netherlands) that have individual advantages will be able to create a positive synergetic effect if they join a single bioenergetic cluster. Thus, it can be argued that bioeconomic security on the European continent is possible only if all European innovation systems are integrated into one complex system, which will ensure a high probability of energy independence.
    Keywords: Research and Development/Tech Change/Emerging Technologies
    Date: 2018–12–21
  8. By: Tania Babina; Sabrina T. Howell
    Abstract: This paper documents that corporate R&D investment increases employee departures to entrepreneurship. We use U.S. Census data, and instrument for R&D with its tax credit-induced cost. The ideas or skills that spill into startups seem to benefit from focused, high-powered incentives; for example, R&D-induced startups are much more likely to receive venture capital. The effect also seems to reflect ideas or skills that are poor complements to the firm’s assets. As human capital is inalienable and portable, and startups are crucial to economic growth, R&D-induced labor reallocation to startups appears to be a novel channel of R&D spillovers.
    JEL: G3 O3
    Date: 2018–12
  9. By: Tomoya Mori (Institute of Economic Research, Kyoto University); Shosei Sakaguchi (Graduate School of Economics, The University of Tokyo)
    Abstract: In this paper, we quantitatively characterize the mechanism of collaborative knowledge creation at the individual researcher level `a la Berliant and Fujita (2008) by using Japanese patent data. The key driver for developing new ideas is found to be the exchange of differentiated knowledge among collaborators. To stay creative, inventors seek opportunities to shift their technological expertise to unexplored niches by utilizing the differentiated knowledge of new collaborators in addition to their own stock of knowledge. In particular, while collaborators’ differentiated knowledge raises all the average cited count, average (technological) novelty and the quantity of patents for which an inventor contributes to the development, it has the largest impact on the average novelty among the three.
    Keywords: Knowledge creation, Collaboration, Differentiated knowledge, Technological novelty, Technological shift, Recombination, Patents, Network, Strategic interactions
    JEL: D83 D85 O31 R11 C33 C36
    Date: 2018–08
  10. By: Christoph Albert; Andrea Caggese
    Abstract: We develop a model in which entrepreneurs choose between startup types with heterogeneous short- and long-run growth potential, and we generate testable predictions on the differential effects of financial factors and cyclical fluctuations on these startups. Using a multi-country entrepreneurship survey, we find that, consistent with the model, higher borrowing costs during financial crises negatively affect high-growth startups considerably more than low-growth startups, especially during severe downturns. Our results, supported by additional tests using sector-level financial frictions indicators, uncover a new channel that is potentially important to explain slow recoveries after financial crises.
    Keywords: financial crisis, entrepreneurship
    JEL: E20 E32 D22 J23 M13
    Date: 2018–12
  11. By: Eleftherios Giovanis (Manchester Metropolitan University); Oznur Ozdamar
    Abstract: This study is motivated by the ongoing interest of policy makers in the possible sources of job creation and destruction. The aim is to explore the dynamics of job creation, destruction and net job creation rates in Egypt and Turkey, including various firm characteristics, besides the firm size and age that have not been studied so far, such as the business-state relations (SBRs), whether the firm has been accredited with an international qualification of quality assurance and control and whether one of the owners is female. The analysis relies on firm-level data derived from the World Bank Enterprise Surveys. We implement weighted ordinary least squares (OLS). The findings show constraints to finance and political instability are the main obstacles of SBRs in both countries, including also tax rates and constraints in electricity. The quality of SBRs is found to be positively associated to job growth.
    Date: 2018–12–19
  12. By: Forslid, Rikard; Okubo, Toshihiro
    Abstract: This paper introduces spatial sorting of heterogeneous entrepreneurs (firms) in the 'footloose entrepreneur' trade and geography model. The model generates agglomeration from a uniform space contrary to the 'footloose capital' model. The model also generates spatial sorting in reverse productivity order with the least productive entrepreneur being the first to relocate.
    Keywords: agglomeration; Heterogeneous Firms; trade liberalization
    JEL: F12 F15 R12
    Date: 2018–12
  13. By: Lee, Kyungyul; Kwon, Youngsun
    Abstract: Competitive intensity is a level of competition intensification in a market or an industry. This is expressed in various forms and some paper measured the competitive intensity as the number of products that newly released each year in an industry (Putsis & Bayus, 2001). In other paper, they analyzed the competitive intensity as a market structure such as market concentration (Stavins, 2001) or the number of firms competing in one industry (Giachetti & Dagnino, 2014). Overall, the competitive intensity represents the complex competition within the market. Then how does competitive intensity affects to the company or to the organizational level? In modern times, corporate product innovation takes place rapidly, and the number of products and companies competing in a market is increasing geometrically. Unlike the past, a market that is monopolized by a single or few companies is hard to find except for public goods. In the smartphone market, 11 companies had competed in 2008, but the number of competing companies had risen dramatically, with more than 45 companies competed in 2016. The number of smartphones also rose sharply, with 50 new phones had launched in 2008, but about 545 new smartphones introduced in 2016. Disadvantage of the increase in the competitive intensity for the firm is that it has a major negative impact on the competitive advantage (D'Aveni, 1994). The decline in the competitive advantage of firms due to the rise of these competitive intensities makes them act newly when they enter or compete in the market...
    Date: 2018
  14. By: Artur Santoalha (TIK Centre, University of Oslo)
    Abstract: Smart Specialization is closely associated with the concept of diversification. For better understanding of Smart Specialization, this article investigates one novel explanatory factor of technological diversification: cooperation (distinguishing between cooperation within regions and cooperation between regions). Using OECD REGPAT data on patents co-applications, the empirical analysis measures the role of cooperation between institutions on technological diversification in 226 European regions over 10 periods of 5 years each, 2000–2013. Although cooperation within and between regions is important as a determinant of regional diversification, both forms of cooperation should evolve hand in hand – singly, each form of cooperation may prove ineffective for boosting regional diversification.
    Date: 2019–01
  15. By: David Dreisigmeyer; Nathan Goldschlag; Marina Krylova; Wei Ouyang; Elisabeth Perlman
    Abstract: In this paper we describe the creation of the Business Dynamics Statistics of Patenting Firms (BDS-PF) patent assignee-FIRMID crosswalk. A number of efforts have been made to link patent assignees, the businesses to which patents are granted, to Cesnsus Bureau business microdata (e.g., Kerr and Fu (2008) and Balasubramanian and Sivadasan (2010)). The coverage and quality of these links are limited by the lack of detailed information about patent assignees found in the USPTO patent data. The BDS-PF crosswalk overcomes these limitations by leveraging additional information about inventors to generate more and higher quality patent assignee-FIRMID links. The match methodology extends and improves the triangulation strategy first introduced by Graham et al. (forthcoming). At its core, the triangulation methodology leverages fuzzy matches of both patent assignees and patent inventors, in combination with job-level data, to disambiguate and validate matches.
    Date: 2018–07

This nep-sbm issue is ©2019 by João Carlos Correia Leitão. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.