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on Small Business Management |
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Issue of 2019‒04‒22
seventeen papers chosen by João Carlos Correia Leitão Universidade da Beira Interior |
| By: | OA Carboni; G. Medda |
| Abstract: | The outsourcing of R&D activities is considered an important way to acquire external technological information that can be integrated into a firm's own knowledge endowment. Given the complex relationship between R&D partnerships and innovation performance, it becomes of paramount importance for scholars, managers and policy-makers to understand whether and how outsourcing benefits the firm. This paper tries to assess the impact that external sources of R&D may have on product innovation, differentiating between R&D supplied by universities and other companies. The empirical analysis is based on a large and representative sample of European manufacturing companies. The analysis considers R&D an endogenous decision in investigating its effect on product innovation. An instrumental variable two-step estimation method is employed to deal with this issue. The results suggest that R&D intensity, or the share of R&D acquired from external sources, has a positive and significant effect on product innovation. Furthermore, we find evidence of an inverse U-shaped relationship between R&D outsourcing and innovation, meaning that on average, costs start to outweigh benefits as the R&D collaboration projects increase. We also estimate high returns from R&D acquired from universities on the probability to achieve product innovations, while having firms in the same group as research partners has the largest effect on innovative product sales. The results have straightforward implications for the practice of R&D managers. In order to gain advantages from partnership in research, innovation managers need to jointly exploit these different types of collaboration activities and their potential synergies. Given that the innovative firms in the sample desire additional credit which actually they do not obtain, R&D managers should also be concerned with the financing sources firms have access to. Finally, the analysis suggests that managers ought to identify the appropriate level of external acquisition in order to fully benefit on innovation. |
| Keywords: | External R&D;research partners;innovation performance;IV model |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:cns:cnscwp:201906&r=all |
| By: | Crowley, Frank; Jordan, Declan |
| Abstract: | A key concept in the economics of innovation is the 'public good' nature of knowledge. This generates a tension between incentivizing knowledge production by allowing knowledge creators appropriate the economic benefits and encouraging its diffusion to enhance the social return to knowledge creation. Where firms operate in localities that are characterized by greater entrepreneurship, there may be lower incentives to engage in research and development. This would result from a higher risk of knowledge spillovers to local start-ups and/or that employees may exploit new knowledge in spin-out firms. It has also been suggested in the literature that greater local entrepreneurial activity may lower profits for incumbent firms, through greater competition and/or the leakage of commercially valuable new knowledge. This paper presents a novel conceptual perspective on this tension and empirically tests it. Using Swedish firmlevel data and county-level data on new start-ups, this paper estimates the effect on R&D activity of local rates of business start-ups. It finds that greater numbers of new start-ups in a metropolitan area reduces firm-level R&D expenditure. However, this relationship is not linear, so that at higher levels of new firm formation in a region, firm-level R&D expenditure falls at a diminishing rate. This suggests that the effect of local entrepreneurship on a business' R&D decisions is conditioned by the extent of that entrepreneurship. |
| Keywords: | Innovation,entrepreneurship,absorptive capacity,knowledge spillovers |
| JEL: | R11 O33 O31 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:srercw:srercwp20182&r=all |
| By: | Diego Aboal; Gustavo Rojas; Belén Servín; Paz Queraltó |
| Abstract: | In this paper we evaluate the impact of two programs to support innovation in micro, small and medium enterprises in Paraguay. This article has two contributions to literature. First, the evidence on the impact of this type of programs in developing countries is still scarce. Second, we evaluate the impacts on some variables that have been largely overlooked in the literature, such as innovation activities other than R&D. The evaluation finds positive and significant effects on the probability of carrying out various innovation activities, on the probability of achieving different types of innovation and on the incorporation of technical personnel to the firms. A negative effect on R&D was found, which might be showing a displacement effect of this innovation activity by others. The most robust results are those related to the impact of the program on process and product innovation. The impacts on innovation activities and employment are less robust to alternative specifications and samples. |
| Keywords: | Innovation support programs, innovation, impact evaluation, Paraguay |
| JEL: | O31 O32 O38 C21 |
| Date: | 2019–04–11 |
| URL: | http://d.repec.org/n?u=RePEc:col:000518:017233&r=all |
| By: | Daldere, Dace |
| Abstract: | This thesis is devoted to a phenomenon that is currently reshaping the global business architecture: Open innovation (OI) networks. Managers are interested to know how to construct and manage their networks such that they are beneficial for their OI efforts. The goal of the thesis is to determine how network characteristics influence the effectiveness of different types of OI activities and how firms can achieve a beneficial network position by engaging in OI efforts. This thesis is based on three empirical studies that draw on social network theory as an overreaching theoretical framework. Furthermore, this thesis aligns social network theory with the relational view and the literature on distant knowledge. To provide a comprehensive understanding of OI networks, the studies in this thesis also employ different methodological approaches: Crosssectional and longitudinal analysis based on multisource and multiindustry datasets. The key results show that in order to profit from OI firms need well-elaborated risk and network management practices that are applied to the main decisions that managers have to make regarding firms’ entire OI efforts. In specific, network characteristics can help firms to increase the potentials of the upsides of OI and at the same time they can reduce the risks of the downsides of OI. Moreover, certain types of OI activities are more or less suitable for achieving a beneficial position in an OI network and fostering firm performance. Altogether, this thesis provides important implications for managerial practice and closes relevant gaps in the scientific research regarding OI networks. |
| Date: | 2019–03–10 |
| URL: | http://d.repec.org/n?u=RePEc:dar:wpaper:112353&r=all |
| By: | Nathan, Max (University of Birmingham); Rosso, Anna (University of Milan) |
| Abstract: | We take a fresh look at firms' innovation-productivity linkages, using novel data capturing new aspects of innovative activity. We combine UK administrative microdata, media and website content to develop experimental metrics – new product/service launches – for a large panel of SMEs. Extensive validation and descriptive exercises show that launches complement patents, trademarks and innovation surveys. We also establish connections between launches and previous innovative activity. We then link IP, launches and productivity, controlling for media exposure and firm heterogeneity. Launch activity is associated with higher SME productivity, especially in the service sector. High-quality launches and medium-size firms help drive this result. |
| Keywords: | innovation, productivity, ICT, data science |
| JEL: | L86 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12213&r=all |
| By: | Ufuk Akcigit; Sina T. Ates |
| Abstract: | In the past several decades, the U.S. economy has witnessed a number of striking trends that indicate a rising market concentration and a slowdown in business dynamism. In this paper, we make an attempt to understand potential common forces behind these empirical regularities through the lens of a micro-founded general equilibrium model of endogenous firm dynamics. Importantly, the theoretical model captures the strategic behavior between competing firms, its effect on their innovation decisions, and the resulting “best versus the rest” dynamics. We focus on multiple potential mechanisms that can potentially drive the observed changes and use the calibrated model to assess the relative importance of these channels with particular attention to the implied transitional dynamics. Our results highlight the dominant role of a decline in the intensity of knowledge diffusion from the frontier firms to the laggard ones in explaining the observed shifts. We conclude by presenting new evidence that corroborates a declining knowledge diffusion in the economy. We document a higher concentration of patenting in the hands of firms with the largest stock and a changing nature of patents, especially in the post-2000 period, which suggests a heavy use of intellectual property protection by market leaders to limit the diffusion of knowledge. These findings present a potential avenue for future research on the drivers of declining knowledge diffusion. |
| JEL: | E22 L12 O31 O33 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25756&r=all |
| By: | Bircan, Cagatay; de Haas, Ralph |
| Abstract: | We exploit historically-determined variation in local credit markets to identify the impact of bank lending on firm innovation across Russia. We find that deeper credit markets increase firms' use of bank credit, their adoption of new products and technologies, and productivity growth. This relationship is more pronounced in industries further from the technological frontier; more exposed to import competition; and that export more. These impacts are also stronger for firms near historical R&D centers or railways, and in regions with supportive institutions. Consistent with these results, credit markets contribute to economic growth in such regions. |
| Keywords: | credit constraints; Firm innovation; institutions; Russia; Technological change |
| JEL: | D22 G21 O12 O31 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13663&r=all |
| By: | Mohamed Amara (University of Tunis) |
| Abstract: | Using Tunisian manufacturing data between 1998 and 2004 and by referring to multilevel approach, this paper investigates the impact of agglomeration and individual characteristics on firm’s performance. The empirical results show the importance of considering both regional and firm characteristics when examining firm performance. They also support the validity of self selection and learning-by-exporting hypotheses. Urbanization and localization effects are significant and positive for firm’s export behavior, but only localization economies have a positive effect of firm productivity. However, the results of the quantile approach show that selection, rather than agglomeration economies in larger cities, better explain spatial productivity differences |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1297&r=all |
| By: | Iman Cheratian (Tarbiat Modares University); Saleh Goltabar; Carla Daniela Calá |
| 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. |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1285&r=all |
| By: | Bachev, Hrabrin; Ivanov, Bodjidar; Toteva, Dessislava |
| Abstract: | Ecosystem approach has been increasingly incorporated in the management and evaluation of sustainability levels. Despite huge progress in the theory and practice of this new area, still there is no consensus on how to assess the sustainability of agro-ecosystems due to diverse understandings, approaches, methods, employed data, etc. In Bulgaria there are practically no deep studies on sustainability level of diverse agro-eco-systems. This paper tries to fill the blank and assesses the sustainability level of agro-ecosystems of different type in Bulgaria. First a holistic hierarchical framework for assessing integral, economic, social and ecological sustainability of agro-ecosystems in Bulgaria is suggested including 17 principles, 35 criteria, and 46 indicators and reference values. After that, an assessment is made on overall and aspects sustainability of large (agro)ecosystems in North-Central, South-Eastern, South-Central and South-Western geographic regions, and particular main and specific types of agro-ecosystems of the country - mountainous, plain-mountainous, plain, riparian (Struma, Maritza, Yantra), southern Black Sea, mountainous area with natural constraints, non-mountainous area with natural constraints, protected areas and reserves, Western Thracian Plain, Middle Danube Plain, Dupnitsa and Sandansko-Petrich Valley, Sredna Gora Mountains and Western Rila Mountains. The assessment is based on first-hand information collected though in-depth interviews with the managers of “typical” farms in the respective ago-ecosystems. The study has found out that there is a considerable differentiation in the level of integral sustainability in agricultural ecosystems of different types. Furthermore, there are substantial variations in the levels of economic, social and ecological sustainability of agro-ecosystems of different type, and the critical indicators enhancing or deterring overall and particular sustainability of individual agro-ecosystems. Results of the integral agrarian sustainability level of this study, based on the micro agro-ecosystem (farm) data, are similar to the previous assessment based on the aggregate sectoral (statistical, etc.) data. There are large differences in the impact of socio-economic, institutional, behavioral, international, natural, etc. factors and individual public policy instruments on the sustainability of farming enterprises of different types and agro-ecosystems. Having in mind the importance of holistic assessments of this kind for improving agrarian sustainability, farm management and agrarian policies, they are to be expended and their precision and representation increased. |
| Keywords: | agro-ecosystem, sustainability, assessment, economic, social, ecological, Bulgaria agro-ecosystem, sustainability, assessment, economic, social, ecological, Bulgaria |
| JEL: | Q1 Q12 Q15 Q18 Q2 Q3 |
| Date: | 2019–04–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:93320&r=all |
| By: | Blandinieres, Florence |
| Abstract: | This paper is concerned with exploring the implications of replicability issues over the medical innovation process. Each research setting is characterized by a specific level of replicability, variability increasing with the complexity of the testing settings. The study introduces new measures to quantify the research efforts across different medical experimental settings. Doing so allows to map the dynamics of knowledge along the medical R&D spectrum and over time. The lack of replicability of experiments was overcome by recombining technological knowledge coming from distinct uses (laboratory tool and other medical applications) with clinical insights. The citation analysis suggests that science, technology, and clinical learning interact strongly and have an uneven importance over time. The study stresses the importance of economics of scope between experimenting and technology developments. In this process, a new type of chemotherapy emerged without a centralized institution governing the testing effort. Research and innovation policy implications are discussed. |
| Keywords: | medical innovation,knowledge translation,replication,instrumentation |
| JEL: | I12 O31 D83 D85 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:19011&r=all |
| By: | OECD |
| Abstract: | This review provides an in-depth analysis of the Lithuanian policy ecosystem in place for social entrepreneurship and social enterprises. It identifies the country’s key strengths and challenges and provides policy recommendations to support the development of a stronger policy ecosystem for social entrepreneurship and social enterprises. Key policy issues analysed include: raising awareness and clarifying the conceptual framework (Chapter 2); coordinating policy and legal frameworks (Chapter 3); enhancing the role of social enterprises in public procurement (Chapter 4); promoting social impact measurement and reporting (Chapter 5); and improving their access to finance (Chapter 6). |
| Keywords: | local development, policy ecosystem, social economy, social enterprises, social entrepreneurship, social impact, social innovation |
| JEL: | L31 L33 |
| Date: | 2019–04–18 |
| URL: | http://d.repec.org/n?u=RePEc:oec:cfeaaa:2019/02-en&r=all |
| By: | Fabisik, Kornelia (Ecole Polytechnique Fédérale de Lausanne; Swiss Finance Institute); Fahlenbrach, Rudiger (Ecole Polytechnique Fédérale de Lausanne; Swiss Finance Institute); Stulz, Rene M. (Ohio State University (OSU) - Department of Finance; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI)); Taillard, Jerome P. (Babson College) |
| 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:ecl:ohidic:2018-24&r=all |
| By: | Yilmaz Kiliçaslan (Anadolu University); Ugur Aytun; Oytun Meçik |
| Abstract: | In this study, we examine how firms’ positions (supplier, consumer, or both) in both global and domestic value chains (GVC andDVC) affect their productivity. This is said to be the first attempt in exploring the impact of integration of firms to the GVCs on productivity generation in Turkish manufacturing industry at the firm level. The analysis is based on firm level data obtained from Turkish Statistical Institute (TurkStat) and covers the period from 2003 to 2015. The data used in the analysis includes all firms employing 20 or more employees in Turkish manufacturing industry. Our findings based on both fixed-effects and GMM estimations show that while supplier position on domestic chain has negative effect on productivity, the same position in GVC vanishes this effect. Consumer position in the GVC, on the other hand, provide more benefits to SMEs than to large-scale firms. |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1283&r=all |
| By: | Estelle Pellegrin-Boucher (MRM - Montpellier Research in Management - UM1 - Université Montpellier 1 - UM3 - Université Paul-Valéry - Montpellier 3 - UM2 - Université Montpellier 2 - Sciences et Techniques - UPVD - Université de Perpignan Via Domitia - Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School - UM - Université de Montpellier); Fréderic Le Roy (MRM - Montpellier Research in Management - UM1 - Université Montpellier 1 - UM3 - Université Paul-Valéry - Montpellier 3 - UM2 - Université Montpellier 2 - Sciences et Techniques - UPVD - Université de Perpignan Via Domitia - Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School - UM - Université de Montpellier, Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School); Călin Gurău' (Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School) |
| Abstract: | Managing coopetition is important for the success of coopetition strategies. Past studies on the management of coopetition are largely dedicated to R&D coopetition. However, selling coopetition is an important phenomenon that is quite different from R&D coopetition. In this research, we therefore focus on the management of selling coopetition and build on past studies to formalize a framework that combines two complementary principles: separation and integration. We then evaluate the relevance of this framework for managing selling coopetitive agreements by studying how firms from the ERP industry manage their coopetitive selling. The results show that the principles of separation and integration are present but not sufficient to manage selling coopetition. We underline that a third principle, internal arbitration, is a key element in managing selling coopetition. To our knowledge, this is the first study specifically dedicated to the management of selling coopetition. |
| Keywords: | ICT firms,arbitration,coopetition,selling,alliances,management |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-02081431&r=all |
| By: | Paul J.J. Welfens (Europäisches Institut für Internationale Wirtschaftsbeziehungen (EIIW)); Tian Xiong (Europäisches Institut für Internationale Wirtschaftsbeziehungen (EIIW)) |
| Abstract: | Foreign direct investment (FDI) has been widely considered as an essential channel contributing to a host countries’ innovation development through knowledge and skill spillover effects. In recent years, China has become the second biggest FDI recipient in the world and continues to promote its domestic innovation ability. Here, the question of how FDI affect the growth of regional innovation in China is posed. By applying an alternative knowledge production function (KPF), we investigate the effects of FDI on the development of self-innovation capacities in 31 Chinese provinces using a fixed-effects specification panel data analysis covering the period from 2000 to 2015. Our findings on the contribution of FDI to the growth of different kinds of patent applications in different regions are mixed. Significant results were mainly found for invention patents in the eastern region. Concluding, we suggest potential policy implementations. |
| Keywords: | Regional Innovation Capacity, Patent, Foreign Direct Investment, China |
| JEL: | O33 O34 F21 R11 |
| Date: | 2018–06 |
| URL: | http://d.repec.org/n?u=RePEc:bwu:eiiwdp:disbei247&r=all |
| By: | Ana Cuadros (Jaume I University (Spain).); Jordi Paniagua (Department of Economic Structure, University of Valencia, Avda. dels Tarongers s/n, 46022 Valencia (Spain).); Antonio Navas (University of Sheffield (United Kingdom).) |
| Abstract: | The purpose of this paper is to gain insights into the exact mechanisms through which migration enhances the innovative performance of multinational firms and fosters Foreign Direct Investment (FDI). We develop a formal model showing that migrants may help firms to increase the perceived quality of their products at the host country of investment. This can be done by patent an invention that permits the customization of products in order to meet foreign quality standards. We focus on a very specific type of migrants: Those who cross borders and patent an invention (migrant inventors). The structural estimation of our model using high-dimensional PPML 2SLS confirms our theoretical priors at both the intensive and the extensive margins. A placebo test reveals that non-inventor migrants are not a good instrument to capture the effect of patents on FDI. Additionally, a structural PPML gravity estimation shows that both patents and migrants inventors fosters Greenfield FDI, with a larger impact on the intensive margin. Our estimations also reveal certain sectoral heterogeneity. |
| Keywords: | migrant inventors; patents; FDI; foreign Direct Investment; migration |
| JEL: | F20 F21 F23 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:eec:wpaper:1904&r=all |