nep-sbm New Economics Papers
on Small Business Management
Issue of 2019‒05‒06
thirteen papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Entrepreneurial Human Capital and Firm Dynamics By Francisco Queiró
  2. SMMES in South Africa: Understanding the Constraints on Growth and Performance By Haroon Bhorat; Zaakhir Asmal; Kezia Lilenstein; Kirsten van der Zee
  3. Government Support and Firm Performance in Vietnam By Nguyen, Hoai Thu Thi; Vu, Huong Van; Bartolacci, Francesca; Quang Tran, Tuyen
  4. The digital innovation policy landscape in 2019 By Caroline Paunov; Sandra Planes-Satorra
  5. The Contribution of High-Skilled Immigrants to Innovation in the United States By Bernstein, Shai; Diamond, Rebecca; McQuade, Timothy James; Pousada, Beatriz
  6. Competition and Firm Productivity: Evidence from Portugal By Pedro Carvalho
  7. Indian companies’ technological investments in the EU with a special focus on Central and Eastern Europe By Tamas Gerocs
  8. Death and Taxes: Does Taxation Matter for Firm Survival? By Serhan Cevik; Fedor Miryugin
  9. Cloud computing and firm growth By Timothy DeStefano; Richard Kneller; Jonathan Timmis
  10. Local entrepreneurship ecosystems and emerging industries: Case study of Coventry and Warwickshire, United Kingdom By OECD
  11. Financing Entrepreneurship and Innovation in China: A Public Policy Perspective By Cong, Lin William; Lee, Charles M. C.; Qu, Yuanyu; Shen, Tao
  12. Corruption beyond the glass ceiling: do women entrepreneurs perceive corruption differently? By Rajeev K. Goel; Michael A. Nelson
  13. Local entrepreneurship ecosystems and emerging industries: Case study of Malopolskie, Poland By OECD

  1. By: Francisco Queiró (Nova School of Business and Economics)
    Abstract: This paper shows that entrepreneurial human capital is a key driver of firm dynamics using administrative panel data on the universe of firms and workers in Portugal. Firms started by more educated entrepreneurs are larger at entry and exhibit higher growth throughout the life cycle. The differences are driven by productivity, are particularly strong in the upper tail of the distribution, and do not hold for more educated workers in general. In addition, they do not appear to be driven by omitted ability or selection. Combining these findings with cross-country data to calibrate a simple model of heterogeneous firms, I find that accounting for the effect of entrepreneurial human capital on firm-level productivity increases the fraction of cross-country income differences explained by human and physical capital from 40% to 65%-76%.
    Keywords: Entrepreneurship; Human Capital; Firm Dynamics; Productivity
    JEL: I2 L2 O4
    Date: 2018–12
  2. By: Haroon Bhorat; Zaakhir Asmal; Kezia Lilenstein; Kirsten van der Zee (University of Cape Town; Director)
    Abstract: Small, Medium and Micro Enterprises (SMMEs) have been identified as a key component to advancing inclusive growth and development in South Africa. This paper serves to present a snapshot of the current profile of SMMEs in South Africa as well as the key inhibitors of growth for SMMEs. We provide a comparative perspective of the role of SMMEs and entrepreneurship in South Africa, then profile the current landscape of SMMEs in South Africa, evaluating the characteristics of SMMEs across three dimensions: firm, owner and employee characteristics. Following this, we distinguish between formal and informal SMMEs in order to highlight the unique nature of informality in South Africa. This paper also evaluates the endogenous and exogenous impediments to growth faced by South African SMMEs. Endogenous challenges are internal to the firm while exogenous challenges are external to the firm. In summarising these findings, we present the major challenges inhibiting the growth of SMMEs in South Africa, taking into account firm heterogeneity in terms of both firm size and informality status.
    Keywords: SMMEs; South Africa; inclusive growth; development; entrepreneurship; informality
    JEL: E2 E26 J26 J4 O1 O4 O17
    Date: 2018–07
  3. By: Nguyen, Hoai Thu Thi; Vu, Huong Van; Bartolacci, Francesca; Quang Tran, Tuyen
    Abstract: Using a sample of private manufacturing SMEs (small and medium-sized enterprises) in the period 2007-15, we analyze the effect of government support on firms’ financial performance in Vietnam. Contrary to many previous studies, we find that government support affects firms’ financial performance after controlling for heterogeneity, unobservable factors and dynamic endogeneity. The finding supports the viewpoint of institutional theory. Also, the study reveals that assistance measures, such as tax exemptions, soft loans and investment incentives to promote financial performance, are vital for the development of Vietnamese private SMEs.
    Keywords: Government support; innovation; firm financial performance; SMEs; Vietnam
    JEL: H7 H71 M2 M21 O3
    Date: 2018–08–04
  4. By: Caroline Paunov; Sandra Planes-Satorra
    Abstract: How are OECD countries supporting digital innovation and ensuring that benefits spread across the economy? This paper explores the current landscape of strategies and initiatives implemented in OECD countries to support innovation in the digital age. It identifies common trends and differences in national digital, smart industry and artificial intelligence (AI) strategies. The paper also discusses policy instruments used across OECD to support digital innovation targeting four objectives: First, policies aimed at enhancing digital technology adoption and diffusion, including demonstration facilities for SMEs. Second, initiatives that promote collaborative innovation, including via the creation of digital innovation clusters and knowledge intermediaries. Third, support for research and innovation in key digital technologies, particularly AI (e.g. by establishing testbeds and regulatory sandboxes). Fourth, policies to encourage digital entrepreneurship (e.g. through early-stage business acceleration support).
    Keywords: digital innovation, digital technologies and artificial intelligence (AI), innovation and research policy, innovation strategies
    JEL: O30 O31 O33 O38 O25 I28
    Date: 2019–05–06
  5. By: Bernstein, Shai (Stanford University GSB and NBER); Diamond, Rebecca (Stanford University GSB and NBER); McQuade, Timothy James (Stanford University GSB); Pousada, Beatriz (?)
    Abstract: We characterize the contribution of immigrants to US innovation, both through their direct productivity as well as through their indirect spillover effects on their native collaborators. To do so, we link patent records to a database containing the first five digits of 160 million of Social Security Numbers (SSN). By combining this part of the SSN together with year of birth, we identify whether individuals are immigrants based on the age at which their Social Security Number is assigned. We find that over the course of their careers, immigrants are more productive than natives, as measured by number of patents, patent citations, and the economic value of these patents. Immigrant inventors are more likely to rely on foreign technologies, to collaborate with foreign inventors, and to be cited in foreign markets, thus contributing to the importation and diffusion of ideas across borders. Using an identification strategy that exploits premature inventor deaths, we find that immigrant collaborators create especially strong positive externalities on the innovation production of natives, while natives create especially large positive externalities on immigrant innovation production, suggesting that combining these different knowledge pools into inventor teams is important for innovation. A simple decomposition suggests that despite immigrants only making up 16% of inventors, they are responsible for 30% of aggregate US innovation since 1976, with their indirect spillover effects accounting for more than twice their direct productivity contribution.
    Date: 2018–11
  6. By: Pedro Carvalho
    Abstract: This paper presents empirical evidence on the impact of competition on firm productivity for the Portuguese economy. To that effect, firm-level panel data comprising information between 2010 and 2015 gathered from the Integrated Business Accounts System (Portuguese acronym: SCIE) is used. The database enables the construction of economic and financial indicators, which allow for isolating the impact of competition on firm-level productivity. We find a positive relationship between competition and both total factor productivity and labor productivity. This relationship is found to be robust to different specifications and in accordance with the results in the literature obtained for other countries.
    Keywords: Competition, Productivity, Portugal
    JEL: D40 D24 O47
    Date: 2018–07
  7. By: Tamas Gerocs (Institute of World Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences)
    Abstract: India is one of the fastest growing economies in the world whose global share in “outward foreign direct investment” (OFDI) among the developing countries increased from a low level to second only to China. It has not only been a spectacular rise in Indian overseas investment activity, but the nature and the structure of Indian OFDI have also changed in the last decades. In the following paper we will examine the reasons and driving forces behind this spectacular rise, concentrating mostly on those host country characteristics that are the pull factors in attracting Indian investments. We follow the most recent literature on global value-chain specialization as much of Indian outward foreign investment is following a technology-seeking strategy currently. We choose Central and Eastern Europe as our case study because the region combines attributions of both advanced and developing countries in attracting Indian investment.
    Keywords: Central and Eastern Europe, technology-seeking investment, India, OFDI, internationalization, global value chains, production system, global contender, absorptive capacity, medium-tech manufacturing, level of productivity, R&D
    JEL: F14 F23 H63 L22
    Date: 2018–11
  8. By: Serhan Cevik; Fedor Miryugin
    Abstract: This paper investigates the impact of taxation on firm survival, using hazard models and a large-scale panel dataset on over 4 million nonfinancial firms from 21 countries over the period 1995–2015. We find ample evidence that a lower level of effective marginal tax rate improves firms’ survival chances. This result is not only statistically but also economically important and remains robust when we partition the sample into country subgroups. The effect of taxation on firms’ survival probability is found to exhibit a non-linear pattern and be stronger in developing countries than advanced economies. These findings have important policy implications for the design of corporate tax systems. The challenge is not simply reducing the statutory tax rate, but to level the playing field for all firms by rationalizing differentiated tax treatments across sectors, asset types and sources of financing.
    Date: 2019–04–19
  9. By: Timothy DeStefano; Richard Kneller; Jonathan Timmis
    Abstract: The arrival of the cloud has enabled a shift in the nature of ICT use, from investment in sunk capital to a pay-on-demand service that allows firms to rapidly scale up. This paper uses new firm-level data to examine the impact of cloud on firm growth in the UK, using zipcode-level instruments of the timing of high-speed fibre availability and expected speeds. We find cloud leads to the growth of young firms in terms of employment and productivity, but they become more concentrated in fewer plants. For older firms we find no scale or productivity growth, but instead disperse activity by closing plants and moving employment further from the headquarters. In addition, the plants that close tend to be those without access to fibre broadband.
    Keywords: firm growth; the cloud; ICT use; employment; productivity
    Date: 2019
  10. By: OECD
    Abstract: This report examines the local entrepreneurship ecosystem of the Coventry and Warwickshire region in the United Kingdom and its capacity to promote productivity upgrading and industrial renewal. It forms part of the OECD’s work stream on local entrepreneurship ecosystems and emerging industries. This work examines how policy at the local level can promote innovative start-ups, innovative scale-ups and innovation in existing enterprises for entrepreneurship and industrial diversification.
    Date: 2019–05–03
  11. By: Cong, Lin William (University of Chicago - Booth School of Business); Lee, Charles M. C. (Stanford University - Graduate School of Business); Qu, Yuanyu (University of International Business and Economics (UIBE) - School of Banking and Finance); Shen, Tao (Tsinghua University)
    Abstract: This study reports on the current state-of-affairs in the funding of entrepreneurship and innovations in China and provides a broad survey of academic findings on the subject. We discuss the implications of these findings for public policies governing the Chinese financial system. In particular, we conclude that regulations governing the initial public offering (IPO) process in China are antiquated and in dire need of reform. We also identify and discuss promising areas for future research.
    Date: 2018–08
  12. By: Rajeev K. Goel; Michael A. Nelson
    Abstract: Adding to the corruption-gender nexus, this paper contributes across several dimensions: (a) measurement of corruption by studying whether female managers and female owners of firms perceived corruption differently; (b) using survey information at the firm level; and (c) employing a large sample of more than 100 countries. Results show that both female managers and female owners perceived corruption to be lower relative to men. Furthermore, older firms perceived corruption to be a more server obstacle, while sole proprietorships generally had the opposite view. The advantages of piercing the glass ceiling were undermined in nations with severe gender inequality.
    Keywords: corruption perceptions, entrepreneurship, gender, managers, owners
    JEL: K40 L20
    Date: 2019
  13. By: OECD
    Abstract: This report examines the local entrepreneurship ecosystem of the Malopolskie region in Poland and its capacity to promote productivity upgrading and industrial renewal. It forms part of the OECD’s work stream on local entrepreneurship ecosystems and emerging industries.
    Date: 2019–05–03

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