nep-sbm New Economics Papers
on Small Business Management
Issue of 2019‒04‒08
twenty papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Does combining different types of collaboration always benefit firms? Collaboration, complementarity and product innovation in Norway By Fitjar, Rune Dahl; Haus-Reve, Silje; Rodríguez-Pose, Andrés
  2. R&D Subsidies and Firms’ Debt Financing By Andrea Bellucci; Luca Pennacchio; Alberto Zazzaro
  3. The Patent Troll: Benign Middleman or Stick-Up Artist? By Abrams, David; Akcigit, Ufuk; Oz, Gokhan; Pearce, Jeremy
  4. Size, Internationalization and University Rankings: Evaluating and predicting Times Higher Education (THE) data for Japan By Michael McAleer; Tamotsu Nakamura; Clinton Watkins
  5. The middle-technology trap: The case of the automotive industry in Turkey By Akçomak, Ibrahim Semih; Bürken, Serkan
  6. Firm Heterogeneity and the Activity of Japanese Manufacturing Multinationals in India By Hiroyuki Nishiyama; Azusa Fujimori; Takahiro Sato
  7. An Analysis of the Importance of Both Destruction and Creation to Economic Growth By Gregory Huffman
  8. Credit Access and Approval By Stefania Basiglio; Paola De Vincentiis; Eleonora Isaia; Mariacristina Rossi
  9. Atividade econômica e inovação na indústria brasileira: uma análise com dados em painel (2010-2016) By Gilberto Libânio; Marco Flávio Resende; Débora Freire; Rosa Lívia Gonçalves Montenegro
  10. Machine imports, technology adoption and local spillovers By Békés, Gábor; Harasztosi, Péter
  11. Adapting business framework conditions to deal with disruptive technologies in Denmark By Mikkel Hermansen; Valentine Millot
  12. Review of Statistical Modeling Approaches for Sustainability Analysis of Small and Medium sized Enterprises By Malesios, Chrisovalantis; De, Debashree; Moursellas, Andreas; Dey, Prasanta; Evangelinos, Konstantinos
  13. Family control, pyramidal ownership and investment-cash flow sensitivity: evidence from an emerging economy By Aquiles Kalatzis; Aline Pellicani, Dante Mendes Aldrighi
  14. Firm Size, Corporate Debt, R&D Activity, and Agency Costs: Exploring Dynamic and Non-Linear Effects By Giorgio Canarella; Stephen M. Miller
  15. Does a Guaranteed Basic Income Encourage Entrepreneurship? Evidence from Alaska By Robert M. Feinberg; Daniel Kuehn
  16. Do private enterprises outperform state enterprises in an emerging market? The importance of institutional context in entrepreneurship By Boudreaux, Christopher
  17. The (Anti-)Competitive Effect of Intellectual Property Rights By Michael Peneder; Mark Thompson; Martin Wörter
  18. Bits and bolts: The digital transformation and manufacturing By Matej Bajgar; Sara Calligaris; Flavio Calvino; Chiara Criscuolo; Jonathan Timmis
  19. Services and Manufacturing in Global Value Chains: Is the Distinction Obsolete? By Miroudot, Sébastien
  20. The differential impact of open innovation on the efficiency of firms By Isabel Álvarez; Cipriano Quirós; Francisco J. Santos

  1. By: Fitjar, Rune Dahl; Haus-Reve, Silje; Rodríguez-Pose, Andrés
    Abstract: Product innovation is widely thought to benefit from collaboration with both scientific and supply-chain partners. The combination of exploration and exploitation capacity, and of scientific and experience-based knowledge, are expected to yield multiplicative effects. However, the assumption that scientific and supply-chain collaboration are complementary and reinforce firm-level innovation has not been examined empirically. This paper tests this assumption on an unbalanced panel sample of 8337 firm observations in Norway, covering the period 2006â??2010. The results of the econometric analysis go against the orthodoxy. They show that Norwegian firms do not benefit from doing "more of all" on their road to innovation. While individually both scientific and supply-chain collaboration improve the chances of firm-level innovation, there is a significant negative interaction between them. This implies that scientific and supply-chain collaboration, in contrast to what has been often highlighted, are substitutes rather than complements. The results are robust to the introduction of different controls and hold for all tested innovation outcomes: product innovation, new-to-market product innovation, and share of turnover from new products.
    Keywords: firms; Innovation; Interaction; Norway; scientific and supply-chain collaboration
    JEL: O31 O32 O33
    Date: 2019–03
  2. By: Andrea Bellucci (European Commission - Joint Research Centre and MoFiR); Luca Pennacchio (Università di Napoli Parthenope); Alberto Zazzaro (University of Naples Federico II, CSEF and MoFiR.)
    Abstract: This study investigates the impact of public subsidies for research and development (R&D) on the debt financing of small and medium-sized enterprises (SMEs). It examines a public program implemented in the Marche region of Italy during the period 2005–2012. The study combines matching methods with a difference-in-difference estimator to examine whether receiving public subsidies affects total indebtedness, the structure and cost of debt of awarded firms. The results indicate that R&D subsidies modify firms’ (especially young firms’) debt structure in favor of long-term financing, and help firms to limit the average cost of debt. Subsidies also foster the use of bank financing, but do not affect the overall level of debt. Taken together, these findings suggest that public funding of SMEs’ innovation projects plays a certification role in access to external financial resources for firms receiving subsidies.
    Keywords: R&D subsidies; Finance gap; Debt financing; Debt structure; Certification effects; Resource effect.
    JEL: G30 H25 O31 O38 R58
    Date: 2019–04–01
  3. By: Abrams, David; Akcigit, Ufuk; Oz, Gokhan; Pearce, Jeremy
    Abstract: How do non-practicing entities ("Patent Trolls") impact innovation and technological progress? Although this question has important implications for industrial policy, little direct evidence about it exists. This paper provides new theoretical and empirical evidence to fill that gap. In the process, we inform a debate that has historically portrayed non-practicing entities (NPEs) as either "benign middlemen", who help to reallocate IP to where it is most productive, or "stick-up artists", who exploit the patent system to extract rents and thereby hurt innovation. We employ unprecedented access to NPE-derived patent and financial data, as well as a novel model that guides our data analysis. We find that NPEs acquire patents from small firms and those that are more litigation-prone, as well as ones that are not core to the seller's business. When NPEs license patents, those that generate higher fees are closer to the licensee's business and more likely to be litigated. We also find that downstream innovation drops in fields where patents have been acquired by NPEs. Finally, our numerical analysis shows that the existence of NPEs encourages upstream innovation and discourages downstream innovation. The overall impact of NPEs depends on the share of patent infringements that come from non-innovating producers. Our results provide some support for both views of NPEs and suggests that a more nuanced perspective on NPEs and additional empirical work are needed to make informed policy decisions.
    Keywords: Innovation; Non-practicing entity; NPE; PAE; patent assertion entity; Patent litigation; patent troll
    JEL: O31 O34
    Date: 2019–03
  4. By: Michael McAleer (Department of Quantitative Finance National Tsing Hua University, Taiwan and Econometric Institute Erasmus School of Economics Erasmus University Rotterdam, The Netherlands and Department of Quantitative Economics Complutense University of Madrid, Spain And Institute of Advanced Sciences Yokohama National University, Japan.); Tamotsu Nakamura (Graduate School of Economics Kobe University, Japan.); Clinton Watkins (Graduate School of Economics Kobe University, Japan.)
    Abstract: International and domestic rankings of academics, academic departments, faculties, schools and colleges, institutions of higher learning, states, regions and countries, are of academic and practical interest and importance to students, parents, academics, and private and public institutions. International and domestic rankings are typically based on arbitrary methodologies and criteria. Evaluating how the rankings might be sensitive to different factors, as well as forecasting how they might change over time, requires a statistical analysis of the factors that affect the rankings. Accurate data on rankings and the associated factors is essential for a valid statistical analysis. In this respect, the Times Higher Education (THE) World University Rankings is one of the three leading and most influential annual sources of international university rankings. Using recently released data for a single country, namely Japan, the paper evaluates the effects of size (specifically, the number of Full-Time Equivalent (FTE) students, or FTE(Size)) and internationalization (specifically, the percentage of international students, or IntStud) on academic rankings using THE data for 2017 and 2018 on 258 national, public (that is, prefectural or city), and private universities. The results show that both size and internationalization are statistically significant in explaining rankings for all universities, as well as separately for private and non-private (that is, national and public) universities, in Japan for each of 2017 and 2018.
    Keywords: International and domestic rankings, Size, Internationalization, National, public and private universities, Changes over time.
    JEL: C18 C81 I23 Y1
  5. By: Akçomak, Ibrahim Semih (TEKPOL, Middle East Technical University); Bürken, Serkan (TEKPOL, Middle East Technical University)
    Abstract: This paper argues that Turkey has fallen into a middle-technology trap on the borders of a weak innovation system (IS) and strong global value chains (GVCs). Detailed information from a primary R&D and innovation funding agency is used to show that the technological characteristics of the funded automotive R&D and innovation projects remained reasonably stable between 1995 and 2011. This result is cross-validated with two qualitative designs on beneficiary firms and automotive industry experts. The qualitative designs aided in identifying three mechanisms that explain how the Turkish automotive industry has fallen into a middle-technology trap. Analysis at the project, firm, and expert levels indicate that despite extensive upgrading and learning in manufacturing, the automotive industry has failed to build innovation capabilities. Turkey's delegated role in the automotive GVC, the joint venture (JV) structure and the lack of complementarities collectively work in creating a trap that impedes further technological development.
    Keywords: Middle-technology trap, automotive industry, technology, innovation, Turkey
    JEL: O12 O25 O33 L62
    Date: 2019–03–07
  6. By: Hiroyuki Nishiyama (School of Economics, University of Hyogo, Japan); Azusa Fujimori (Faculty of Management, Osaka Seikei University, Japan); Takahiro Sato (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan)
    Abstract: This paper anatomizes the linkage between country/region characteristics and Japanese MNE activity in India from both theoretical and empirical sides. We construct a North-South firm-heterogeneity model with FDI and exchange rate. We use this model to make three contributions: First, we theoretically reveal how country characteristics affect the average sales of the firm in the host country. Secondly, we make clear the state-level characteristics on three main industrialized areas in India using the data from some valuable databases. Thirdly, we estimate determinant factors of average sales of each Japanese affiliate firms in India focusing on regional characteristics derived in the theoretical part using firm-level data. We also construct several proxy variables of determinant factors of average sales in state-level and put into estimated regression equation. This empirical analysis targets at the 1990s and 2000s. Over this period, India enjoyed steady economic growth and it can be linked with increase of FDI inflow and technological spillover from MNEs. We find out that some regional characteristics such as level of human-capital or transportation cost in each state and also exchange rate have a significant effect on average sales of each Japanese affiliate firms in India.
    Keywords: Firm heterogeneity, foreign direct investment, India, Japanese multinational enterprises
    JEL: F10 F12 F23 L25 O53 R30
    Date: 2019–03
  7. By: Gregory Huffman (Vanderbilt University)
    Abstract: A growth model is studied in which the destruction (or exit) decision is decoupled from the creative (or research) decision. In contrast with the existing literature, the approach adopted here emphasizes that these important decisions are made by different agents, but they ultimately influence each other. As such, the destruction decision is just as important as that of creation, and in the model if destruction ceases, then so will growth. Any distortion introduced into one of these decisions will then inevitably affect the other as well. It is then possible to characterize endogenous features of the equilibrium such as the number of workers and firms, the determinants of income mobility, income inequality (Gini Coefficient), the growth rate, the lifespan of a firm, and the effect of various taxes or distortions. A planning problem is also studied, and it is shown that a multitude of factors may yield an optimum exit decision that is different from the equilibrium decision rule. This may mean that the equilibrium can give rise either too high or low a level of innovation, but also the destruction or exit rate may also be too high or low. It is then shown that a non-linear tax/subsidy scheme, which alters the research and exit decisions, may improve welfare, relative to the equilibrium level. The model also yields welfare benefits/costs that are considerably different from what one might normally expect.
    Keywords: Economic Growth, Creative Destruction, Innovation, Firm Exit, Tax Policy, Inequality
    JEL: E00 E62 H23 O10 O30 O40
    Date: 2019–03–25
  8. By: Stefania Basiglio (Faculty of Law, University of Trento, Italy); Paola De Vincentiis (Department of Management, University of Torino, Italy); Eleonora Isaia (Department of Management, University of Torino, Italy); Mariacristina Rossi (Department of Management, University of Torino, Italy)
    Abstract: This work focuses on the credit access and credit demand of Italian firms using a sample representative of Italian firms. We investigate whether the gender of the decision-maker of the firm affects the demand for credit and we focus on regional differences in credit access and denial. Results suggest that women are significantly less likely to ask for credit, while no significant differences in credit approval are found between the two genders.
    Keywords: Credit demand, Italian firms, Gender.
    JEL: D22 H81 J16
    Date: 2019–04
  9. By: Gilberto Libânio (Cedeplar-UFMG); Marco Flávio Resende (Cedeplar-UFMG); Débora Freire (Cedeplar-UFMG); Rosa Lívia Gonçalves Montenegro (UFSJ)
    Abstract: The aim of the present work is to analyze the relationship between the level of economic activity and technological innovation in Brazilian industry from 2010 to 2016. The central hypothesis of the paper is that the greater the economic activity, the higher the positive impact on the innovation rate, through channels such as the increase in investments in fixed capital and the improvement in the financing conditions for innovation activities. The analysis is based on a database of the first six years of the survey called Innovation Survey in which it was possible to obtain a panel segmented by four blocks of industrial sectors. These data were analyzed by means of panel data regression model that reveals the temporal evolution of the relation between the level of industrial activity and the rate of innovation of firms. The main result suggests that the overcoming of the current crisis and the consequent recovery of economic activity are important elements for the increase of innovation rates in the Brazilian industry.
    Keywords: Innovation; Financing; Economic activity; Panel data
    JEL: C23 O11 O31
    Date: 2019–03
  10. By: Békés, Gábor; Harasztosi, Péter
    Abstract: In less developed economies import can be the primary source of adopting new technologies in the form of modern production equipment. This paper explores the spread of manufacturing machinery across locations and investigates the effects of previous importers on the firms' decision to import certain types of foreign machines. Using a uniquely compiled Hungarian firm-level dataset for the 1992-2003 period, we find that the probability of importing a particular piece of sector specific machinery is positively affected by the presence of local firms previously importing the same machine. A similar pattern is found with regards to the choice of source country. While these results offer evidence of positive externalities, we find that these benefits are concentrated in large and foreign owned companies.
    Keywords: agglomeration; impact of technology adoption; machine imports; trade-related spillovers
    JEL: D22 F14 R12
    Date: 2019–03
  11. By: Mikkel Hermansen; Valentine Millot
    Abstract: Danish firms are close to the technological frontier compared to other OECD countries,making the introduction of new – potentially disruptive – technologies key to boostproductivity growth. Despite a high level of digitalisation and good framework conditions,aggregate productivity growth in Denmark has been only average compared to otheradvanced OECD countries and lags behind in less knowledge-intensive service industries.Policy needs to embrace innovative technologies by leaning against attempts to discourageor exclude them and by tackling unintended or outmoded obstacles in legislation andregulation. Analysis based on Danish firm-level data suggests that digital adoption throughinvestment in ICT capital increases firm productivity and contributes to business dynamicsand firm growth. Improving economic incentives for such investment as well as facilitatingadoption of new business models require a shift of taxation away from capital and labourincome. Ensuring supply of the right skills and maintaining effective upskilling will helpworkers cope with disruptive changes and ensure that economic growth benefits all.
    Keywords: competition, digitalisation, disruption, innovation, productivity, skills, taxation
    JEL: E24 H25 L40 L50 O16 O33 O38
    Date: 2019–04–02
  12. By: Malesios, Chrisovalantis; De, Debashree; Moursellas, Andreas; Dey, Prasanta; Evangelinos, Konstantinos
    Abstract: Sustainability of small and medium sized enterprises (SMEs) is one of the major concerns to today’s economy as SMEs contribute to GDP considerably and employ large proportion of entire population, but negatively affect environment. Sustainability analysis of SMEs has recently gained momentum and many statistical modeling approaches have been adopted across the industries and geographical locations to reveal relationship between independent and dependent variables within the system. However, till date there is no review work that develops a better understanding on the variables for SMEs’ sustainability and their relationship, and methods for analysis. This study bridges these gaps by reviewing research papers that have been published in leading journals during last decade. First, this research undertakes objective content analysis in order to identify independent and dependent variables along with their frequency of usage. Second, the correlation between the independent and dependent variables is studied. Third, all the published articles are categorised according to types of journals, geographical locations, industries, variables and methods. Lastly, a framework that depicts correlation among the high level variables is presented for sustainability analysis of SMEs.
    Keywords: Sustainability drivers, sustainability performance, small and medium enterprises, modeling, SME.
    JEL: Q5 Q56
    Date: 2019
  13. By: Aquiles Kalatzis; Aline Pellicani, Dante Mendes Aldrighi
    Abstract: We investigate the effect of pyramidal ownership and family control in investment-cash flow sensitivity of Brazilian firms using financial constraint indexes to a priori classify firms. For constrained firms, we find that family control does not directly influence the investment-cash flow sensitivity, while for unconstrained firms, Family control shows a negative effect in investment decisions. However, the active involvement of the controlling family in the board increases investment-cash flow of unconstrained firms, possibly aggravating agency problems. Regarding the pyramidal ownership, we provide evidences consistent with the idea of internal transfer of funds among firms belonged to the arrangement structure.
    Keywords: pyramid; family control; investment-cash flow sensitivity; financial constraint.
    JEL: G30 G32
    Date: 2019–04–01
  14. By: Giorgio Canarella (University of Nevada, Las Vegas); Stephen M. Miller (University of Nevada, Las Vegas)
    Abstract: This paper empirically investigates firm-specific determinants of agency costs, a relatively new and unexplored area in corporate finance. We estimate dynamic agency costs models, linking debt, firm size, and R&D activity to agency costs for a panel of U.S. information and communication technology (ICT) firms over 1990-2013. We adopt the Blundell and Bond (1998) two-step system GMM technique, which explicitly accounts for persistence, endogeneity, and unobservable firm heterogeneity. We provide the first evidence that our inverse proxy for agency costs, namely asset turnover (Ang, et al., 2000), exhibits an inverted U-shaped relationship with debt and a U-shaped relationship with firm size and R&D activity. These findings imply that agency costs experience a minimum value (in case of debt) and a maximum value (in case of firm size and R&D activity) and, therefore, that agency costs are higher at both low and high levels of debt, and lower at both low and high levels of firm size and R&D activity. We find that the level of debt of the average firm in the sample falls below the level that minimizes agency costs. We also document that, consistent with the agency literature, short-term debt provides an additional effective monitoring mechanism to alleviate agency costs. Our findings reveal that agency costs are dynamic in nature, mean-reverting, and persistent over time. This notion confirms the Florackis and Ozkan (2009) conjecture that managers behave as though an optimal level of agency costs exist that they pursue. Finally, we find a positive association between firm profitability and agency costs and a negative association between agency costs and firm growth. Extensive additional analysis confirms the robustness of our results.
    Keywords: ICT industry; agency costs; non-linearity; dynamic adjustment; system GMM
    JEL: G21 G28 G32 G34
    Date: 2019–03
  15. By: Robert M. Feinberg; Daniel Kuehn
    Abstract: While the concept has been around for years, recently the policy notion of a “guaranteed basic income (GBI) or universal basic income has had a resurgence of interest. In addition to rationales relating to fairness and response to structural employment shifts due to automation and globalization, another motivation sometimes put forward for these plans is to encourage risk-taking by providing a safety net. One would think this would imply greater entrepreneurial activity if an unsuccessful entrepreneur had the GBI to fall back on. In this paper we investigate a rare long-standing example similar to a GBI in the US, the Alaska Permanent Fund Dividend program. This was not put forth as a GBI and is frankly too small an annual amount to fully allow an individual to rely on these funds, but for a moderate-to-large family the APF can replace a large share of a poverty-level of income. Receipt of the APF also does not preclude a family from receiving other safety net benefits (e.g., food stamps, unemployment compensation), suggesting that the downside risk for a potential entrepreneur may be lower than in other US states. We initially examine trends in small-firm births in Alaska over time from the Census Bureau's Business Dynamics Statistics 1977-2014 before and after the institution of the APF program (the first payment was in 1982) relative to other US states to investigate a possible impact on entrepreneurship, with results suggestive of a positive effect (perhaps wearing off over time). We then turn to micro data to look at changes in self-employment behavior in Alaska, with somewhat similar findings.
    Keywords: Alaska Permanent Fund, Entrepreneurship, Universal Basic Income, Guaranteed Basic Income
    JEL: L10
    Date: 2019
  16. By: Boudreaux, Christopher
    Abstract: Do private-owned enterprises (POEs) outperform state-owned enterprises (SOEs) in an emerging market? Due to political and social connections, SOEs have several advantages over POEs in emerging markets and transition economies, but we hypothesize that these advantages wane in pro-market institutional environments that prioritize market competition, rule of law, and the rewards to profitable enterprise. In this study, therefore, we explore how institutional quality moderates the relationship between privatization and entrepreneurs’ sales performance. To do this, we blend agency theory and entrepreneurial cognition theory with insights from institutional economics to develop a model of emerging market venture performance. Using data from the World Bank’s Enterprise Survey of entrepreneurs in China, our results suggest that POEs outperform SOEs but only in environments with high-quality market institutions. In environments with low-quality market institutions, SOEs outperform POEs.
    Keywords: privatization, institutional quality, entrepreneurship, China, agency theory, entrepreneurial cognition theory
    JEL: L2 L26 M2 M21 P12 P2
    Date: 2019–03–30
  17. By: Michael Peneder (WIFO); Mark Thompson; Martin Wörter
    Abstract: We test whether intellectual property rights foster or hinder innovation by estimating IV structural equations for a large sample of Swiss firms. We find that better appropriability conditions at the industry level raise the number of competitors. However, conditional on the given industry structure, individual firms face fewer competitors, if they actually use intellectual property rights. The further impact of fewer competitors is to raise R&D, when initial competition is strong, but to reduce it, when initial competition is weak ("inverted U").
    Keywords: patents, innovation, competition, simultaneous system
    Date: 2019–03–27
  18. By: Matej Bajgar (OECD); Sara Calligaris (OECD); Flavio Calvino (OECD); Chiara Criscuolo (OECD); Jonathan Timmis (OECD)
    Abstract: The digital transformation forces a re-think of government policy as manufacturing business models increasingly transition from “bolts” to “bits”. The road to Industry 4.0 implies important and pervasive changes in business dynamics, firm growth and the nature of competition. This report presents a framework for measuring the digital transformation of manufacturing industries, and maps the impact of digital technologies across these several dimensions: firm productivity growth, business dynamism, industry concentration, firm mark-ups and mergers and acquisition activity. It suggests policies that governments can use to facilitate digital adoption and reap the benefits of the digital revolution in manufacturing.
    Date: 2019–04–05
  19. By: Miroudot, Sébastien (Asian Development Bank Institute)
    Abstract: Many studies discuss the “de-industrialization” or “servicification” of economies in both developed and developing countries. Such studies rely on statistics that distinguish a manufacturing from a service sector. But in the age of global value chains (GVCs), it becomes increasingly difficult to disentangle manufacturing from service activities. Goods are produced with services, services are produced with goods, some manufacturing firms are factory-less, and companies tend to sell solutions to customers by bundling goods with services. This business reality has important implications for trade and industry analysis. Against this backdrop, the paper introduces a taxonomy of service activities in GVCs and describes the main statistical challenges in assessing the contribution of manufacturing and services to output, value added, or trade. It then reviews three approaches that take GVCs into account in the analysis of income, comparative advantage, and productivity to address these challenges. As statisticians are working on improving the framework for understanding global production, policymakers should be aware of the blurring lines between goods and services.
    Keywords: de-industrialization; servicification; global value chains
    JEL: F14 F23 L60 L80
    Date: 2019–03–04
  20. By: Isabel Álvarez (Instituto Complutense de Estudios Internacionales (ICEI), Universidad Complutense de Madrid.); Cipriano Quirós (Instituto Complutense de Estudios Internacionales (ICEI), Universidad Complutense de Madrid.); Francisco J. Santos (Instituto Complutense de Estudios Internacionales (ICEI), Universidad Complutense de Madrid.)
    Abstract: The effects of open innovation strategies on the economic efficiency of firms is a topic often avoided, and about which little is known. This paper contributes to the exploration of that connection, revealing persistent collaboration and the embeddedness of firms within their environments to be two crucial aspects. Impacts on efficiency are conditioned by the type of external links employed, by the agents with whom a firm collaborates, and by the inherent differences between foreign and domestic firms. Findings obtained from fresh empirical evidence provided in this paper reveal that: 1) collaboration with competitors on innovation generates a direct effect on a firm’s efficiency, whether foreign or domestic; 2) only persistent and vertical linkages have a positive impact; and 3) access to complementary sources of knowledge becomes increasingly relevant to a rise in efficiency as a firm increases its embeddedness within a location, making institutional collaboration especially significant for domestic firms.
    Keywords: Open innovation; Collaboration; Efficiency of firms; Foreign firms; Embeddedness.
    Date: 2018

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