nep-sbm New Economics Papers
on Small Business Management
Issue of 2019‒06‒17
sixteen papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Effects of Buyer and Supplier Relationships and Capital Relationships on R&D Activities (Japanese) By YAMAGUCHI Akira; IKEUCHI Kenta; FUKAO Kyoji; KWON Hyeog Ug; KIM Young Gak
  2. Concordance and Complementarity in IP Instruments By Marco Grazzi; Chiara Piccardo; Cecilia Vergari
  3. The Role of Nonemployers in Business Dynamism and Aggregate Productivity By Pedro Bento; Diego Restuccia
  4. Community Origins of Industrial Entrepreneurship in Pre-Independence India By Bishnupriya Gupta; Dilip Mookherjee; Kaivan Munshi; Mario Sanclemente
  5. Intrapreneurship and Trust By Elert, Niklas; Stam, Erik; Stenkula, Mikael
  6. Impact of the Corrections to the Monthly Labor Survey Data on Productivity Analysis (Japanese) By MORIKAWA Masayuki
  7. Technology Transfer at the U.S. National Institute of Standards and Technology (NIST) By Link, Al
  8. The birth and development of the Italian automotive industry (1894-2015) and the Turin car cluster. By Enrietti, Aldo; Geuna, Aldo; Nava, Consuelo R.; Patrucco, Pier Paolo
  9. Tax Policy for Innovation By Bronwyn H Hall
  10. Leverage Dynamics: Do Financial Development and Government Leverage Matter? Evidence from a Major Developing Economy By Ibrahim Yarba; Zehra Nuray Guner
  11. Effects of R&D subsidies on regional economic dynamics: Evidence from Chinese provinces By Jonathan Eberle; Philipp Boeing
  12. Firm Behavior and Pollution in Small Geographies By Dakshina De Silva; Robert McComb; Anita Schiller; Aurelie Slechten
  13. Public policy reforms to further improve Portuguese export performance By Ben Westmore; Paula Adamczyk
  14. From Research to Market:What the EU can learn from the USA? By Novikova, Jekaterina
  15. The emerging sectoral diversity of startup ecosystems By Clement Gastaud; Theophile Carniel; Jean-Michel Dalle
  16. Drivers of eco-innovation in the Spanish hospitality industry By Magadán-Díaz, Marta; Sotiriadis, Marios; Rivas-García, Jesús

  1. By: YAMAGUCHI Akira; IKEUCHI Kenta; FUKAO Kyoji; KWON Hyeog Ug; KIM Young Gak
    Abstract: In Japan small-and-medium-sized-firms invest less in R&D activities than large firms, which is contrary to the situation observed in the United States. We constructed a new dataset on buyer and supplier relationships and capital relationships including small firms whose number of employees is less than 50 and empirically tested the hypothesis that investments in R&D of buyers and suppliers or capital affiliates have substitution effects on R&D activities of small firms. We found the evidence that is consistent with our hypothesis and results indicating that on the contrary, investments in R&D of buyers, suppliers and capital affiliates complement investments in R&D of large firms.
    Date: 2019–05
  2. By: Marco Grazzi; Chiara Piccardo; Cecilia Vergari
    Abstract: This work investigates the relationship between proxies of innovation activities, such as patents and trademarks, and firm performance in terms of revenues, growth and profitability. By resorting to the virtual universe of Italian manufacturing firms this work provides a rather complete picture of the Intellectual Property (IP) strategies pursued by Italian firms, in terms of patents and trademarks, and we study whether the two instruments for protecting IP exhibit complementarity or substitutability. In addition, and to our knowledge novel, we propose a measure of concordance (or proximity) between the patents and trademarks owned by the same firm and we then investigate whether such concordance exert any effect on performance.
    Keywords: Trademarks; Patents; Innovation; Intellectual Property; Complementarity; Concordance; Technological proximity; firm performance; firm growth.
    Date: 2019–06–14
  3. By: Pedro Bento; Diego Restuccia
    Abstract: A well-documented observation of the U.S. economy in the last few decades has been the steady decline in the net entry rate of employer firms, a decline in business dynamism, suggesting a possible connection with the recent slowdown in aggregate productivity growth. We consider the role of nonemployers, businesses without paid employees, in business dynamism and aggregate productivity. Notwithstanding the decline in the growth of employer firms, we show that the total number of firms, which includes nonemployer businesses, has increased in the U.S. economy since the early 1980s. We interpret this trend, along with the evolution of the employment distribution across firms, through the lens of a standard theory of firm dynamics. The model implies that firm dynamics have contributed to an average annual growth rate of aggregate productivity of at least 0.26% since the early 1980s, over one quarter of the productivity growth of 1% in the data. Further, our implied measure of productivity growth moves closely over time with measured productivity growth in the data.
    Keywords: Nonemployers, employer firms, business dynamism, productivity, TFP.
    JEL: O1 O4 O5 E02 E1
    Date: 2019–06–17
  4. By: Bishnupriya Gupta (University of Wawick); Dilip Mookherjee (Boston University); Kaivan Munshi (University of Cambridge); Mario Sanclemente (University of Warwick)
    Abstract: We argue that community networks played an important role in the emergence of Indian entrepreneurship in the early stages of the cotton textile and jute industry in the late 19th and early 20th century respectively, overcoming the lack of market institutions and government support. From business registers, we construct a yearly panel dataset of entrepreneurs in these two industries. We find no evidence of entry patterns being affected by price shocks or pre-industrial accumulation of wealth or experience in trading in the corresponding upstream sector. Firm directors exhibited a high degree of clustering of entrepreneurs by community. The dynamics of entry is consistent with a model of network-based dynamics.
    Date: 2018–12
  5. By: Elert, Niklas (Research Institute of Industrial Economics (IFN)); Stam, Erik (Utrecht School of Economics); Stenkula, Mikael (Research Institute of Industrial Economics (IFN))
    Abstract: Trust and entrepreneurship are seen as key ingredients of long-term prosperity. However, it is not clear how these two are related. Part of the confusion can be traced back to the measurement of entrepreneurship, biased towards independent entrepreneurship (self-employed and new firms), and excluding entrepreneurship within established organizations. We shed new light on the relationship between trust and entrepreneurship, by proposing two mechanisms relating trust to entrepreneurship by employees, so-called intrapreneurship. We hypothesize that generalized trust influences the prevalence of intrapreneurship in an economy, and the allocation of entrepreneurial talents between independent entrepreneurship and intrapreneurship, through two mechanisms. First, generalized trust may substitute for complete contracts as a means of organizing labor in society, enabling a level of job autonomy in organizations necessary for intrapreneurship to flourish. Second, by way of its influence on the size and scope of the welfare state, generalized trust may increase the benefits of employment relative to self-employment, causing entrepreneurial individuals to elect to be intrapreneurs rather than independent entrepreneurs. Using a novel dataset, we find support for these hypotheses in a cross-country regression model covering the time period 2011–2017.
    Keywords: Trust; Intrapreneurship; Entrepreneurship; Entrepreneurial behavior; Institutions; Job autonomy; Welfare state
    JEL: H30 J20 J83 L26 M13 O12 O31 O43 O57
    Date: 2019–05–24
  6. By: MORIKAWA Masayuki
    Abstract: This study investigates the impact of recent correction to the Monthly Labor Survey on the measurement of productivity analysis at the firm-level. According to the analysis, first, quantitative impact of the correction on measured productivity is insignificant on average, but relatively large revisions are found for a very small number of firms. Second, measurement errors of productivity growth rate resulting from combining the uncorrected years' data with the corrected years' data are sometimes larger than those obtained solely from the uncorrected data. Third, according to our analyses, the qualitative results of past studies on the relationship between firm characteristics and productivity using the uncorrected series of working hours taken from the Monthly Labor Survey are unlikely to be overturned, although it is hard to draw definitive conclusions. In light of the importance of policies in improving productivity, correction to the Monthly Labor Survey data before 2011 is highly expected to facilitate evidence-based policy making.
    Date: 2019–05
  7. By: Link, Al (University of North Carolina at Greensboro, Department of Economics)
    Abstract: This paper analyzes the inter-relationship among technology transfer mechanisms using data specific to the U.S. National Institute of Standards and Technology (NIST). An overview of the history of NIST and U.S. policies that emphasize the economic importance of technology transfer are discussed. The empirical analysis focuses on NIST's investments in R&D and the cascading impact of those investments on new inventions disclosed, new patent applications, new patents issued, and the new patent licenses; and accounting for the effects of R&D on these three investments, an overall estimate of the R&D elasticity of new patent licenses is calculated to be 0.7976. The paper concludes with a policy-focused summary of the implications of the empirical findings, and a suggested roadmap for future research related to technology transfer from U.S. Federal laboratories.
    Keywords: technology transfer; federal laboratories; NIST; R&D; patents;
    JEL: H40 O31 O38
    Date: 2019–06–19
  8. By: Enrietti, Aldo; Geuna, Aldo; Nava, Consuelo R.; Patrucco, Pier Paolo (University of Turin)
    Abstract: By discussing the relation between the traditional Marshallian/Jacobian approach and Klepper’s concept of spinoffs and their role, this paper tries to explain the early genesis and later evolution of the Italian automotive industry, based on the for mation of the Torino’s car cluster from the late nineteenth century. Historical analysis and econometric models are integrated to identify key factors that enabled the creation and success of the automotive industry in Turin. Specifically, we investigate agglomeration economies, the role of spinoffs and institutional factors such as the level and importance of local education. Based on original archival research, we built a new database of all Italian automobile companies. Replication of Klepper’s (2007) and Boschma and Wenting’s (2007) models shows no particular influence of the Turin cluster and no early entry advantages. Our model, which integrates and extends previous contributions, confirms the existence of a spinoffs effect, and in particular the positive effect of inherited technical skills embedded in pilots. We find support also, for positive agglomeration effects at the regional level and inter industry externalities from aeronautics, a metropolitan cluster effect and the significance of metropolitan education.
    Date: 2019–04
  9. By: Bronwyn H Hall
    Abstract: A large number of countries around the world now provide some kind of tax incentive to encourage firms to undertake innovative activity. This paper presents the policy rationale for these incentives, discusses their design and potential effectiveness, and reviews the empirical evidence on their actual effectiveness. The focus is on the two most important and most studied incentives: R&D tax credits and super deductions, and IP boxes (reduced corporate taxes in income from patents and other intellectual property).
    Keywords: R&D tax credit, patent box, super deduction, IP box, tax subsidy, innovation
    JEL: H25 O32 O38
    Date: 2019–06
  10. By: Ibrahim Yarba; Zehra Nuray Guner
    Abstract: This study analyses leverage dynamics of Turkish non-financial firms over the last 20 years using a confidential and unique firm-level dataset. Results of dynamic panel estimations reveal that financial development fosters corporate leverage while government indebtedness inhibits it. Both impacts are more pronounced for private firms rather than public firms. Besides, even though improvements in financial development foster long-term debt usage for both SMEs and large firms, this impact seems stronger for SMEs. Conspicuously, results reveal that SMEs suffer much more than large firms in crowding-out periods of government leverage while both SMEs and large firms benefit in crowding-in periods. Moreover, higher business risk hinders corporate leverage of private firms and SMEs, which is not the case for either large firms or public firms. Results are robust to alternative firm size classification schemes and alternative model specifications.
    Keywords: Leverage dynamics, Financial development, Government leverage, Capital structure, Dynamic panel regression
    JEL: G31 G38 H32 O16
    Date: 2019
  11. By: Jonathan Eberle (Department of Economic Geography and Location Research, Philipps University Marburg); Philipp Boeing (ZEW - Leibniz Centre for European Economic Research, Mannheim and Peking University, China Center for Economic Research (CCER), Beijing)
    Abstract: We investigate the impact of research and development (R&D) subsidies on R&D inputs of large- and medium-sized firms and on additional innovation and economic activities in Chinese provinces. A panel vector autoregressive (VAR) model and corresponding impulse response function (IRF) analysis allow us to differentiate between direct and indirect effects, which add up to total effects. We find that an increase of R&D subsidies significantly decreases private R&D investments, although there is a significant positive effect on the R&D personnel employed in firms. We interpret these findings as a partial crowding-out effect because public funds substitute some private funds while total R&D inputs still increase. Complementarily, we find a positive secondary effect on the provincial patent activity, our measure of technological progress. Interestingly, we also find potentially unintended effects of R&D subsidies on increases in the investment rate in physical capital and residential buildings. Although R&D subsidies fail to incentivize private R&D expenditures, firms increase total R&D inputs, and provincial economies benefit from secondary effects on technological progress and capital deepening.
    Keywords: China, R&D subsidies, regional economic growth, panel VAR, impulse response functions
    JEL: C33 R11 R58 O38 O47
    Date: 2019–06
  12. By: Dakshina De Silva; Robert McComb; Anita Schiller; Aurelie Slechten
    Abstract: We consider the relationship between the location choices of potentially polluting firms and local income. Unlike previous research in the area of economic justice, we distinguish between pollution potential and actual releases of toxic substances in the locality. We explore the relationship between profit maximizing behavior of potentially polluting firms in their choice of both location and expenditures to influence the likelihood of toxic releases and their expected financial costs. We proxy the expenditures on prudential behavior by observing the co-localization of waste remediation activities. Evidence supports the conclusion that firms behave rationally in managing risk of toxic release.
    Keywords: EKC, Environmental Justice, Agglomeration, Entry and Exit
    JEL: Q2 L6 R1
    Date: 2019
  13. By: Ben Westmore; Paula Adamczyk
    Abstract: Portugal’s export performance over the past decade has been impressive, helping to reduce external imbalances. This partly owed to a sequence of structural reforms that benefited the productivity of the export sector and led to an increase in its size. Nonetheless, exports as a share of GDP and the stock of foreign direct investment remain below that of other comparable small European economies. Further shifting the orientation of the economy to the external sector is vital for Portugal given the strong link between trade openness and GDP per capita. To do this, policymakers must ensure that policy settings incentivise exporting firms to expand and improve their competitiveness, both through lower price and improved quality. For example, regulatory barriers that reduce competition in professional services should be lowered to improve the cost and quality of intermediate inputs. Increasing the efficiency of domestic infrastructure is also key, especially through competition-enhancing reforms to the port sector. To further differentiate and improve Portuguese export products, skills in the business sector need to be enhanced through better-targeted lifelong learning opportunities. At the same time, there is a need to focus innovation policies on raising the participation of small and medium enterprises in innovative activities.
    Keywords: competitiveness, export performance, foreign direct investment, infrastructure, innovation, lifelong learning, regulatory reforms
    JEL: F43 G38 H25 O31 O43
    Date: 2019–06–25
  14. By: Novikova, Jekaterina
    Abstract: The research project “From Research to Market: What the EU can learn from the USA” addresses the gap between the laboratory research and market. I examine how government, universities and private companies facilitate the transition of research results to market in the USA. In the report I present various programs that are available to the researchers and entrepreneurs in the US and invite to consider them for implementation in Europe. I argue that different stages of lab-to-market transfer require different mechanisms that should not be limited to funding but include technology transfer assistance and advice on intellectual property, mentoring by peers and industry mentors and access to the laboratory space and incubators. I conclude that the Bay Area answer to closing the lab-to-market gap is by a combination of support mechanisms that reinforce and complement each other, when implemented simultaneously. I invite to discuss which of the US initiatives and programs described in this report shall be promoted in Europe and at which level.
    Keywords: Business, Education, Law, Social and Behavioral Sciences, innovation, innovation ecosystems, lab-to-market, technology transfer, university-industry collaboration, startups, venture capital, grants, accelerators
    Date: 2019–06–12
  15. By: Clement Gastaud; Theophile Carniel; Jean-Michel Dalle
    Abstract: Thanks to the recent availability of comprehensive and detailed online databases of startup companies, it has become possible to more directly investigate startup ecosystems i.e. startup populations in specific regions. In this paper, we analyze the emergence of 20+ such ecosystems in Europe and the USA, with a specific focus on their sectoral diversity. Analyzing the sectoral landscapes of these ecosystems using a new visualization tool indeed highlights marked differences in terms of diversity, which we characterize using metrics derived from ecological sciences. Numerical simulations suggest that the emerging diversity of startup ecosystems can be explained using a simple preferential attachment model based on sectoral funding.
    Date: 2019–06
  16. By: Magadán-Díaz, Marta; Sotiriadis, Marios; Rivas-García, Jesús
    Abstract: The main goal of this research is to determine whether the accommodation capacity and the financial performance can be considered as the main driving forces of eco-innovation in the context of Spanish hotel industry. Eco-innovation is a challenge for tourism industry, given the connection and interrelationship between environmental quality and business performance. The eco-innovation plans represent a new field of research in its infancy. This paper addresses the conceptual evolution of eco-innovation to subsequently develop an analytical framework that tentatively explores this concept and its implementation in Spanish hotel companies through two basic internal characteristics of these organizations: their business performance and their respective size, measured in terms of accommodation capacity. The case study method was applied -through documentary evidence and structured interviews- to the 10 companies leading -in terms of turnover- the national hotel offering and have a remarkable international presence. All these interviews were conducted between November 6th, 2017 and February 28th, 2018.
    Keywords: Eco-innovation; environmental responsibility; hospitality industry; drivers; organizational change; Spain
    JEL: L83 M14 Q2
    Date: 2019–04–15

This nep-sbm issue is ©2019 by João Carlos Correia Leitão. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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