nep-sbm New Economics Papers
on Small Business Management
Issue of 2019‒02‒11
thirteen papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Financial Inclusion of Small and Medium-Sized Enterprises in the Middle East and Central Asia By Nicolas R Blancher; Maximiliano Appendino; Aidyn Bibolov; Armand Fouejieu; Jiawei Li; Anta Ndoye; Alexandra Panagiotakopoulou; Wei Shi; Tetyana Sydorenko
  2. Discretely Innovating: The Effect of Barriers to Entry on Innovation and Growth By Steven Bond-Smith
  3. “Green regions and local firms’ innovation” By Lorena M. D’Agostino; Rosina Moreno
  4. Do Financing Constraints Matter for the Direction of Technical Change in Energy R&D? By Joelle Noailly; Roger Smeets
  5. Immigrant Networking and Collaboration: Survey Evidence from CIC By Sari Pekkala Kerr; William R. Kerr
  6. The Impact of Compatibility on Innovation in Markets with Network Effects By Steven Bond-Smith
  7. Digitalisation and productivity: In search of the holy grail – Firm-level empirical evidence from EU countries By Peter Gal; Giuseppe Nicoletti; Theodore Renault; Stéphane Sorbe; Christina Timiliotis
  8. Why do innovators not apply for trademarks? The role of information asymmetries and collaborative innovation By Athreye, Suma; Fassio, Claudio
  9. Innovation and Corporate Cash Holdings in the Era of Globalization By Konrad Adler; JaeBin Ahn; Mai Chi Dao
  10. Les activités de transfert de technologie des universités permettent-elles de réduire le gap technologique entre sphères académique et non-académique? Une Etude du cas italien By Laura Ciucci; Marie-Antoinette Maupertuis
  11. Professional networks and their coevolution with executive careers: Evidence from North America and Europe By Berardi, Nicoletta; Lalanne, Marie; Seabright, Paul
  12. Innovation and Income Inequality: World Evidence By Benos, Nikos; Tsiachtsiras, Georgios
  13. Clusterul ca factor de competitivitate în turismul rural By Buzdugan, Adriana

  1. By: Nicolas R Blancher; Maximiliano Appendino; Aidyn Bibolov; Armand Fouejieu; Jiawei Li; Anta Ndoye; Alexandra Panagiotakopoulou; Wei Shi; Tetyana Sydorenko
    Abstract: The importance of financial inclusion is increasingly recognized by policymakers around the world. Small and medium-sized enterprise (SME) financial inclusion, in particular, is at the core of the economic diversification and growth challenges many countries are facing. In the Middle East and Central Asia (MENAP and CCA) regions, SMEs represent an important share of firms, but the regions lag most others in terms of SME access to financing.
    Keywords: Financial inclusion;Middle East and Central Asia;Business enterprises;Small and Medium Enterprises; Financial Inclusion; Middle East and Central Asia
  2. By: Steven Bond-Smith (Bankwest Curtin Economic Centre, Curtin University)
    Abstract: This article considers the effect of a discrete entry barrier (i.e. an integer number of firms) in an endogenous growth model to draw conclusions about the relationship between contestability, innovation and growth. Sector-specific workers provide a tool for calibrating numerical examples. Sectors with lower entrepreneurial contestability have lower innovation and sectors characterized by Cournot oligopoly have lower innovation than sectors characterized by Bertrand. Wage inequality varies depending on the extent that the entry barrier is binding upon a marginal entrant. The model offers policy implications to support entrepreneurial entry, particularly in relatively small or isolated regional economies.
    Keywords: innovation, contestability, Cournot, Bertrand, competition, endogenous growth
    JEL: O41 L13
    Date: 2018–12
  3. By: Lorena M. D’Agostino (Department of Economics and Management, University of Trento, via Inama, 5 - 38122 Trento (Italy). Tel. +390461283197 – Fax +390461882241.); Rosina Moreno (AQR-IREA Research Group, University of Barcelona. Av. Diagonal 690 - 08034 Barcelona (Spain). Tel. +34934021823 - Fax +34934021821.)
    Abstract: Technological innovation is essential to achieve simultaneously economic, environmental and social goals (i.e. the green growth). Indeed, many studies found that environmental innovation spurs overall innovation. However, this topic has not been investigated by taking into account the geographical context. Therefore, our paper seeks to investigate whether ‘green regions’, with an increased public and private commitment in environmental issues, are related to innovation of local firms. Using data on Spanish manufacturing firms and regions, we find that environmental technologies (especially in green energy), environmental investments, and environmental management at the level of regions are positively associated to local firms’ innovation.
    Keywords: innovation, region, firm, green patents, environment. JEL classification:R11, O31, O44.
    Date: 2019–02
  4. By: Joelle Noailly; Roger Smeets
    Abstract: The objective of this study is to examine the impact of firms’ financing constraints on innovation activities in renewable (REN) versus fossil-fuel (FF) technologies. Our empirical methodology relies on the construction of a firm-level dataset for 1,300 European firms over the 1995-2009 period combining balance-sheet information linked with patenting activities in REN and FF technologies. We estimate the importance of the different types of financing (e.g. cash flow, long-term debt, and stock issues) on firms’ patenting activities for the different samples of firms. We use count estimation techniques commonly used for models with patent data and control for a large set of firm-specific controls and market developments in REN and FF technologies. We find evidence for a positive impact of internal finance on patenting activities for the sample of firms specialized in REN innovation, while we find no evidence of this link for other firms, such as firms conducting FF innovation or large mixed firms conducting both REN and FF innovation. Hence, financing constraints matter for firms specialized in REN innovation but not for other firms. Our results have important implications for policymaking as the results emphasize that small innovative newcomers in the field of renewable energy are particularly vulnerable to financing constraints.
    Keywords: R&D;.; Financing constraints; renewable energy
    JEL: O14 O33 Q41 Q42
    Date: 2019–01–31
  5. By: Sari Pekkala Kerr; William R. Kerr
    Abstract: Networking and the giving and receiving of advice outside of one's own firm are important features of entrepreneurship and innovation. We study how immigrants and natives utilize the potential networking opportunities provided by CIC, formerly known as the Cambridge Innovation Center. CIC is widely considered the center of the Boston entrepreneurial ecosystem. We surveyed 1,334 people working at CIC in three locations spread across the Boston area and CIC's first expansion facility in St. Louis, MO. Survey responses show that immigrants value networking capabilities in CIC more than natives, and the networks developed by immigrants at CIC tend to be larger. Immigrants report substantially greater rates of giving and receiving advice than natives for six surveyed factors: business operations, venture financing, technology, suppliers, people to recruit, and customers. The structure and composition of CIC floors has only a modest influence on these immigrant versus native differences.
    JEL: D85 F22 M13 O30
    Date: 2019–01
  6. By: Steven Bond-Smith (Bankwest Curtin Economic Centre, Curtin University)
    Abstract: This article analyses the relationship between compatibility and innovation in markets with network effects using a model of competition with endogenous R&D, commercialization and compatibility. Incumbent acquisition of an innovation or profit from entry provides entrepreneurs with an incentive for developing technological improvements. Entrepreneurs receive greater returns for the innovation if larger incumbents offer compatibility with their installed base. As a result, entrepreneurs must innovate strategically to pre-empt an incompatibility response from incumbents. Similarly, small incumbents also bid strategically to block entry or rival acquisition if it also avoids an incompatibility response from a larger incumbent. A credible threat of incompatibility reduces the entrepreneur?s reserve to sell an innovation, but can also increase offers to acquire the innovation from smaller incumbents attempting to avoid incompatibility. This leads to a complex relationship between the strength of network effects, innovation incentives, the entrepreneur?s ambition for improvement and potentially disrupting the compatibility regime. For weak to moderate network effects entrepreneurs are likely to target more substantial, but improbable innovations such that their network is sufficiently attractive for incumbents to offer compatibility. For a small range of sufficiently strong network effects, entrepreneurs target incremental innovations to avoid the incumbent threatening incompatibility.
    Keywords: network effects, innovation, compatibility
    JEL: L15 L26 L50 O31
    Date: 2018–12
  7. By: Peter Gal; Giuseppe Nicoletti; Theodore Renault; Stéphane Sorbe; Christina Timiliotis
    Abstract: This paper assesses how the adoption of a range of digital technologies affects firm productivity. It combines cross-country firm-level data on productivity and industry-level data on digital technology adoption in an empirical framework that accounts for firm heterogeneity. The results provide robust evidence that digital adoption in an industry is associated to productivity gains at the firm level. Effects are relatively stronger in manufacturing and routine-intensive activities. They also tend to be stronger for more productive firms and weaker in presence of skill shortages, which may relate to the complementarities between digital technologies and other forms of capital (e.g. skills, organisation, or intangibles). As a result, digital technologies may have contributed to the growing dispersion in productivity performance across firms. Hence, policies to support digital adoption should go hand in hand with creating the conditions to enable the catch-up of lagging firms, notably by easing access to skills.
    Keywords: cloud computing, digitalisation, high-speed internet, ICT, productivity, skills
    JEL: D24 J24 O33
    Date: 2019–02–12
  8. By: Athreye, Suma (Essex Business School); Fassio, Claudio (CIRCLE, Lund University)
    Abstract: This paper analyses the underlying reasons why innovators do not apply for trademarks for all of their valuable inventions. Using a unique database of UK innovations linked to innovative firms, the empirical analysis highlights the many ways that firms can alleviate information asymmetries and the constraints imposed by collaborative innovation without taking recourse to trademarks. When information asymmetries are not at stake, i.e. when firms use an already existing trademark for their innovations or when they use intermediaries for its distribution, trademarks no longer serve their purpose, leading firms to avoid using it for their innovations. Open innovation also decreases the incentive to trademark, especially when the innovative process involves users, mainly because of property rights issues or because the innovator prefers to use the clients’ own distribution channels.
    Keywords: rademarks; innovation; intellectual property; open innovation
    JEL: O31 O34
    Date: 2019–02–04
  9. By: Konrad Adler; JaeBin Ahn; Mai Chi Dao
    Abstract: We document a broad-based trend in rising cash holdings of firms across major industrialized countries over the last two decades, a trend that is most pronounced for firms engaged strongly in R&D activities. Our contributions to the literature are twofold. First, we develop a simple model that brings together the insights from modern trade theory (Melitz, 2003) with those of contract theory in corporate finance (Holmström and Tirole, 1998) to show that increased openness to trade can result in rising returns to innovation and in turn greater demand for cash as firms insure against innovation-induced liquidity risk. Second, we derive sharp empirical predictions and find supporting evidence for them using firm-level data across major G7 countries during 1995-2014, a period that saw an unprecedented rise in globalization and business innovation.
    Date: 2019–01–18
  10. By: Laura Ciucci (Laboratoire Lieux, Identités, eSpaces et Activités (LISA)); Marie-Antoinette Maupertuis (Laboratoire Lieux, Identités, eSpaces et Activités (LISA))
    Abstract: This paper aims to investigate the extent to which universities can affect the local innovation ecosystem. We focus on the role that Technology Transfer (TT) activities and Technology Transfer O¢ ces (TTOs) can have in bringing academic and non-academic research closer, through the increase of technological proximity between local academic and non-academic patents, measured by similarity of patent portfolios (Jaffe, 1986). To do so, we consider both academic and non-academic patents data for a panel of Italian Provinces (NUTS3) in the time span 1998-2009. Bymeans of fractional response and zero-ináated beta models, we show a positive and signifcant impact of TT activities on the likelihood to patent in the same technological areas. Moreover, the findings indicate that TTOs implementation does not have any significant effect on local university-industry technological proximity.
    Keywords: Technological Proximity, Technology Transfer, TTO, Frac-tional response model, Patent
    Date: 2019–01
  11. By: Berardi, Nicoletta; Lalanne, Marie; Seabright, Paul
    Abstract: This paper examines how networks of professional contacts contribute to the development of the careers of executives of North American and European companies. We build a dynamic model of career progression in which career moves may both depend upon existing networks and contribute to the development of future networks. We test the theory on an original dataset of nearly 73 000 executives in over 10 000 firms. In principle professional networks could be relevant both because they are rewarded by the employer and because they facilitate job mobility. Our econometric analysis suggests that, although there is a substantial positive correlation between network size and executive compensation, with an elasticity of around 20%, almost all of this is due to unobserved individual characteristics. The true causal impact of networks on compensation is closer to an elasticity of 1 or 2% on average, all of this due to enhanced probability of moving to a higher-paid job. And there appear to be strongly diminishing returns to network size.
    Keywords: professional networks,labor mobility,executive compensation
    JEL: D85 J31 J62 M12
    Date: 2018
  12. By: Benos, Nikos; Tsiachtsiras, Georgios
    Abstract: In this paper we explore the effect of innovation on income inequality using annual country panel data for 29 countries. We demonstrate that innovation activities reduce personal income inequality by matching patents from the European Patent Office with their inventors. Our findings are supported by instrumental variable estimations to tackle endogeneity. The results are also robust with respect to various inequality measures, alternative quality indexes of innovation, truncation bias, the use of patent applications together with granted patents and different ways to split or allocate patents.
    Keywords: top income inequality, overall inequality, innovation, citations, knowledge spillovers
    JEL: D63 O30 O31 O33 O34 O40 O47
    Date: 2019–02–07
  13. By: Buzdugan, Adriana
    Abstract: The tourism cluster approach is considered an appropriate strategy in emerging economies and less developed areas. Due to the limited resources and a large number of structural problems in the rural areas of the Republic of Moldova, bringing together all stakeholders and attractions in a competitive tourism cluster would ensure that the area could work and could become an effective and efficient destination of rural tourism . The objective of this article is to highlight the key challenges of rural tourism clustering and to provide new data and a better understanding of the tourism cluster approach in rural areas of the Republic of Moldova.
    Keywords: cluster, tourism, competitiveness, geographic agglomeration, benefits, strategies
    JEL: R1
    Date: 2018

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