nep-sbm New Economics Papers
on Small Business Management
Issue of 2019‒03‒11
thirteen papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Entrepreneurship, institutional economics, and economic growth: an ecosystem perspective By Acs, Zoltan J.; Estrin, Saul; Mickiewicz, Tomasz; Szerb, László
  2. Intellectual Property Protection Mechanisms and the Characteristics of Founding Teams By Sara Amoroso; Albert N. Link
  3. Bundling and exporting: evidence from German SMEs By Aquilante, Tommaso; Vendrell-Herrero, Ferran
  4. Determinants of choice of credit sources by Eswatini SMEs: A focus on the Agriculture Sector By Dlamini, T.; Mohammed, M.
  6. Heterogeneous Regional Innovation Spillovers of Universities of Applied Sciences By Tobias Schlegel; Curdin Pfister; Dietmar Harhoff; Uschi Backes-Gellner
  7. Spatial drivers of firm entry in Iran By Cheratian, Iman; Goltabar, Saleh; Calá, Carla Daniela
  8. "From A300 to A350: technical and organisational innovation trajectory of Airbus" By Med Kechidi
  9. Place-based Innovation Ecosystems: Ljubljana start-up ecosystem and the Technology Park Ljubljana (Slovenia) By Maja Bucar; Gabriel Rissola
  10. Monopolistic competition for the market with heterogeneous firms and Schumpeterian growth By Federico Etro
  11. Current Status of Startup Firms and Startup Finance in Japan (Japanese) By UCHIDA Hirofumi; Charee KWAK
  12. Entrepreneurship, Institutions, and Economic Growth: Does the Level of Development Matter? By Christopher J. Boudreaux
  13. The real effects of zombie lending in Europe By Tracey, Belinda

  1. By: Acs, Zoltan J.; Estrin, Saul; Mickiewicz, Tomasz; Szerb, László
    Abstract: We analyze conceptually and in an empirical counterpart the relationship between economic growth, factor inputs, institutions, and entrepreneurship. In particular, we investigate whether entrepreneurship and institutions, in combination in an ecosystem, can be viewed as a “missing link” in an aggregate production function analysis of cross-country differences in economic growth. To do this, we build on the concept of National Systems of Entrepreneurship (NSE) as resource allocation systems that combine institutions and human agency into an interdependent system of complementarities. We explore the empirical relevance of these ideas using data from a representative global survey and institutional sources for 46 countries over the period 2002–2011. We find support for the role of the entrepreneurial ecosystem in economic growth
    Keywords: economic growth; entrepreneurship; ecosystem; efficiency; technology; Solow residual; GEM; GEI
    JEL: D02 O38 P11
    Date: 2018–08–01
  2. By: Sara Amoroso (European Commission – JRC); Albert N. Link (Bryan School of Business and Economics University of North Carolina-Greensboro)
    Abstract: Intellectual property protection mechanisms (IPPMs) are critical to fostering innovation and their relevance has grown enormously with the increased trade in goods and services involving intellectual property. Scholars have investigated what factors facilitate or hinder the use of such IP protection strategies, identifying country, sector, and firm characteristics. However, the extant literature has overlooked the role of founding team characteristics on the choice of IPPMs. Using data from a large sample of European small and young entrepreneurial firms, we show that controlling for size, R&D intensity, and other firms and market effects, the founding team characteristics such as gender and education greatly influence the choice of IPPMs.
    Keywords: IP choice, patents, appropriability, entrepreneurship, knowledge intensive firms, gender, AEGIS survey
    JEL: M13 L26 O34
    Date: 2019–01
  3. By: Aquilante, Tommaso (Bank of England); Vendrell-Herrero, Ferran (University of Birmingham)
    Abstract: This paper studies the effect of bundling products and services on the export performance of firms. Using a unique sample, we document several facts about German small and medium enterprises (SMEs). First, bundling is a relatively rare activity, which is unevenly spread across sectors. Second, SMEs that bundle products and services are more productive than those selling products and services separately. Third, these firms tend to be more internationally oriented. While most of the existing literature focuses on large firms, we contribute to the literature by uncovering a robust positive relation between product-service bundling and exporting in SMEs. Importantly, the competitiveness-enhancing effect of bundling goes beyond manufacturing, affecting non-manufacturing firms also. To mitigate endogeneity concerns, we exploit the panel structure of the data and implement several (doubly robust) propensity score matching techniques.
    Keywords: Bundling; innovation; export; SMEs
    JEL: D22 F10 F14 F23 L80
    Date: 2019–03–01
  4. By: Dlamini, T.; Mohammed, M.
    Abstract: The purpose of this study is to identify the factors that influence choice of credit sources by SMEs in the agriculture sector. Understanding factors that determine farmers� choice of credit will help improve and prioritise financial services most frequently used by the SMEs, in order to improve local food production and contribute to the Gross Domestic Production (GDP). The study used FinScope 2016 Survey data entailing 3,024 Eswatini SMEs selected through the two stage stratified random sampling method. Out of these SMEs, 87 of them in the agriculture sector were able to access credit from the informal, semi-formal and formal service providers in 2016, hence this study focuses of them. The data was analysed using a multinomial logistic regression. The study finds that keeping financial records, capital size required to start a business, the size of business, age of the business owner, and interest rates are significant factors that influence choices of agriculture SME owners between informal, semi-formal, and formal credit providers. Entrepreneurs that do not keep records are more likely to use informal sources of credit. Therefore, there is a need to develop policies that should thrust interventions to informal sources of finance/credit such as stokvels and rotating and savings schemes (ROSCAs) and also a policy that will ensure that semi-formal financial institutions do not morph into pseudo formal institutions, that is, commercial banks.
    Keywords: Agriculture; access to finance; SMMEs; SMEs; credit choices; Eswatini JEL codes: Q140, Q180, R200; Agricultural Finance
    Date: 2018–09–25
  5. By: Anabela Marques Santos; Michele Cincera
    Abstract: Access to finance is a key driver of business activities. It can help firms to grow and innovate. However, due to market failures innovative firms are usually more financinally constrained. To improve access to financing for risky but excellent R&D and innovation investment projects, a new debt-financing instrument called “Risk Sharing Finance Facility” was created in 2007, by a joint initiative of the European Commission and the European Investment Bank. Based on a macro-economic analysis, the aim of the paper is to assess the effect of this new debt-financing instrument on enhancing private R&D expenditure. The database used covers the 28 Member States of the European Union in the period 2007-2016. Private R&D decision is estimated by a function of output growth and several R&D policy instruments. The methodological approach is based on a fixed effect model with control function method in order to correct for endogenous bias of Risk Sharing Finance. The results reveal a positive and significant effect of the new EU policy financing instrument on Private R&D expenditure and its rate of return seems to be higher than that of grants or subsidies. Furthermore, in countries where government funding for private R&D expenditure is above the average, the effect of Risk Sharing Finance shows a lower marginal effect. No evidence of significant differences concerning the size of the effect of the new debt-financing instrument is found when differentiating the level of R&D tax incentives.
    Keywords: Financing, Innovation, Risk
    Date: 2018–12
  6. By: Tobias Schlegel (University of Zurich); Curdin Pfister (University of Zurich); Dietmar Harhoff (Max Planck Institute for Innovation and Competition); Uschi Backes-Gellner (University of Zurich)
    Abstract: This paper investigates whether differences in regional economic preconditions lead to heterogeneity of innovation spillovers from newly established universities of applied sciences (UASs). Exploiting a quasi-random establishment of UASs in the 1990s in Switzerland, we analyse the heterogeneity of innovation spillovers from these UASs due to differences in regional economic preconditions — i.e. economic strength, industry structure and economic density. Our estimations show that stronger and denser regional economies and regions with high tech intensive industries exhibited significantly more innovation spillovers from new UASs than regions with less favourable economic preconditions. One possible explanation are agglomeration effects favouring innovation spillovers. Our results imply that nearby UASs do not have positive effects on innovation per se, a finding that is of particular interest for policy makers who decide on the location of public applied research institutions.
    Keywords: Research Institutions, Innovation, Regional Economic Activity
    JEL: I23 O38 R12
    Date: 2019–02
  7. By: Cheratian, Iman; Goltabar, Saleh; Calá, Carla Daniela
    Abstract: Given the importance of entry promotion to prompt economic growth and promote structural transformation, this paper investigates the regional determinants of firm entry in the 30 Iranian regions, considering four different sizes -micro, small, medium and large- over 2000-2015. Using a new and unique database, we estimate panel non-spatial and spatial lag and error dependence models. We find that regional factors explain firm entry, but the impact is not homogeneous across firms of different size. We also find that most types of firms are influenced by the negative effect of economic sanctions during the sample period. Keywords: firm entry, ecological approach, spatial models, Iranian economy.
    Keywords: Dinámica Empresarial; Creación de Empresas; Distribución Espacial; Iran;
    Date: 2019–01
  8. By: Med Kechidi (FRAMESPA - France, Amériques, Espagne – Sociétés, pouvoirs, acteurs - UT2J - Université Toulouse - Jean Jaurès - CNRS - Centre National de la Recherche Scientifique)
    Abstract: The aim of this paper is to show that Airbus's success can be attributed to two types of factors. First, each new aircraft model has produced a technological breakthrough in the design and manufacturing of aircraft. Secondly, Airbus's capacity to evolve their industrial organisation model in keeping with technological transformations. In this trajectory, modularization and outsourcing policies have played major roles. In particular they play a major role in the emergence of new actors the pivot-firms. These firms have a critical position in management of technical and organizational interfaces between the architect-integrator and the firms participating in the design and production of aircrafts.
    Keywords: Airbus,industrial organization,innovation,modularization,outsourcing,pivot-firm,Aeronautics Industry
    Date: 2019–06
  9. By: Maja Bucar; Gabriel Rissola (European Commission - JRC)
    Abstract: This case study focuses on Ljubljana/ Slovenia's start-up ecosystem and its main actors and orchestrators (or "innovation process entrepreneurs") like the Technology Park Ljubljana. While Slovenia has kept its place as a strong innovator (EIS, 2017), the only CEEC in this group, it lacks an effective governance structure for research and innovation and true collaboration between actors. Taking advice from more experienced countries and applying policy and funding instruments prescribed by the EU could have speeded up the process of developing a more advanced innovation system, but frequent changes of the instruments and the support provided to different stakeholders did not help. Against this background, one of the interesting phenomena that can be observed in Ljubljana’s start-up environment is a growth of various kinds of new initiatives, some bottom-up from entrepreneurial activity, others stimulated by public policy, but all aimed at providing stimulating support to start-ups, from co-working spaces, geek house, Hackathon, etc. All together they create a dynamic network, which spreads beyond Ljubljana’s Region across Slovenia, but also much wider across Western Balkans and to EU and USA. This network is developing in parallel, with or without the support of formal institutions and/or governmental support.
    Keywords: Place-based, innovation ecosystem, start-up, Technology Park, Ljubljana, quadruple helix
    Date: 2018–12
  10. By: Federico Etro
    Abstract: I study monopolistic competition in patent races where firms are heterogeneous in R&D costs. Only the most efficient firms invest, and they invest more when the value of innovation is higher, while the endogenous set of active firms depends on the profitability of innovation. In particular, selection effect (increasing R&D productivity) emerge after a reduction of the entry cost or after an increase (a reduction) of the value of innovation if the elasticity of the probability of innovation is increasing (decreasing) in investment. In Schumpeterian models selection effects foster endogenous growth.
    Keywords: Patent races, heterogeneous firms, monopolistic competition, Schumpeterian growth.
    JEL: L1 O3 O4
    Date: 2019
  11. By: UCHIDA Hirofumi; Charee KWAK
    Abstract: The aim of this paper is to clarify the current status of startup firms and startup finance in Japan. Using data obtained from two surveys that the authors were involved in and were conducted in 2017, we analyze descriptive statistics, conduct factor analysis, and obtain evidence on characteristics of startup firms, use of financing sources by those firms, and financial constraints that they face. We also compare the results with tresults using data from the survey on startup firms conducted by the Japan Finance Corporation as well as from the survey on U.S. startup firms conducted by the Kauffman Foundation. From the analysis on the characteristics of startup firms, we find that the three surveys from Japan capture different types of startup firms, and there are also differences within their sample firms. As for the use and the pattern of financing sources, all the surveys show that the founder-owner's funds are the critically important source of finance, but there is heterogeneity in its importance, in the use of other sources of finance, and in combinations. Finally, we find from our two surveys that firms facing financial constraints are the minority, although there is some difference in the extent of the constraints.
    Date: 2019–02
  12. By: Christopher J. Boudreaux
    Abstract: Entrepreneurship is often touted for its ability to generate economic growth. Through the creative-destructive process, entrepreneurs are often able to innovate and outperform incumbent organizations, all of which is supposed to lead to higher employment and economic growth. Although some empirical evidence supports this logic, it has also been the subject of recent criticisms. Specifically, entrepreneurship does not lead to growth in developing countries; it only does in more developed countries with higher income levels. Using Global Entrepreneurship Monitor data for a panel of 83 countries from 2002 to 2014, we examine the contribution of entrepreneurship towards economic growth. Our evidence validates earlier studies findings but also exposes previously undiscovered findings. That is, we find that entrepreneurship encourages economic growth but not in developing countries. In addition, our evidence finds that the institutional environment of the country, as measured by GEM Entrepreneurial Framework Conditions, only contributes to economic growth in more developed countries but not in developing countries. These findings have important policy implications. Namely, our evidence contradicts policy proposals that suggest entrepreneurship and the adoption of pro-market institutions that support it to encourage economic growth in developing countries. Our evidence suggests these policy proposals will be unlikely to generate the economic growth desired.
    Date: 2019–03
  13. By: Tracey, Belinda (Bank of England)
    Abstract: Around 10% of European firms were in receipt of subsidized bank loans following the peak of the European sovereign debt crisis in 2011. To what extent did such forbearance lending contribute to the subsequent low output growth experienced by the euro area? In this paper, we address this question by developing a quantitative model of firm dynamics in which forbearance lending and firm defaults arise endogenously. The model provides a close approximation to key euro-area firm statistics over the period 2011 to 2014. We evaluate the impact of forbearance lending by considering a counterfactual scenario in which firms no longer have access to loan forbearance. Our key finding is that aggregate output, investment and total factor productivity are higher in the absence of forbearance lending than in the benchmark scenario that includes forbearance lending. This suggests that forbearance lending practices contributed to the low output growth across the euro area following the onset of the sovereign debt crisis.
    Keywords: Forbearance lending; zombie firms; firm defaults; firm dynamics
    JEL: G21 G32 L25
    Date: 2019–03–01

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