nep-sbm New Economics Papers
on Small Business Management
Issue of 2019‒07‒22
seventeen papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Productivity Drag from Small and Medium-Sized Enterprises in Japan By Mariana Colacelli; Gee Hee Hong
  2. Absorptive capacity in New Zealand firms: Measurement and importance By Harris, Richard; Le, Trinh
  3. Business Dynamics in the National Establishment Time Series (NETS)/Leland Crane, Ryan Decker By Leland Crane; Ryan Decker
  5. How are digital technologies changing innovation?: Evidence from agriculture, the automotive industry and retail By Caroline Paunov; Sandra Planes-Satorra
  6. A Toolkit of Policies to Promote Innovation By Nicholas Bloom; John Van Reenen; Heidi Williams
  7. Youth Drain, Entrepreneurship and Innovation By Massimo Anelli; Gaetano Basso; Giuseppe Ippedico; Giovanni Peri
  8. Professional Networks and their Coevolution with Executive Careers By Nicoletta Berardi; Marie Lalanne; Paul Seabright
  9. Managing the emergence of concepts in fuzzy front end: a framework of strategic performance and emerging process of innovation briefs By Sophie Hooge; Milena Chen; Dominique Laousse
  10. Entrepreneurial beginnings: Transitions to selfemployment and the creation of jobs By Fabling, Richard
  11. Impact of international branch campus KPIs on the university competitiveness: FARE method By Eglė Girdzijauskaitė; Asta Radzevičienė; Artūras Jakubavičius
  13. From Learning to Doing: Diffusion of Agricultural Innovations in Guinea-Bissau By Rute Martins Caeiro
  14. Orientation à l'innovation, intégration de la chaîne logistique et avantage concurrentiel. Cas des entreprises industielles tunisiennes By Rim Ghariani; Boujelbene Younes
  15. Technology and employment in a vertically connected economy: a model and an empirical test By Giovanni Dosi; Mariacristina Piva; Maria Enrica Virgillito; Marco Vivarelli
  16. The impact of outsourcing implementation on service companies By Rima Žitkienė; Ugnė Dudė
  17. Chinese regional inequality and sectoral foreign direct investment By Azarhoushang, Behzad; Wu, Jennifer Pédussel; Zaroki, Shahryar

  1. By: Mariana Colacelli; Gee Hee Hong
    Abstract: Productivity growth in Japan, as in most advanced economies, has moderated. This paper finds supportive evidence for the important role of small and medium-sized enterprises (SMEs) in explaining Japan’s modest productivity growth. Results show a substantial dispersion in firm-level productivity growth across sectors and even across firms within the same sector. SMEs, on average, exhibit lower productivity growth than non-SMEs in Japan, with smaller and older SMEs showing particularly low productivity growth. Estimates suggest that boosting productivity growth in all of the worst-performing SMEs could improve overall productivity growth by up to 1.8 percentage points. The SME credit guarantee system, SME financing constraints, demographic factors, and lack of intangible capital investment are discussed as contributors to the slow productivity growth of Japan’s small and old SMEs.
    Date: 2019–07–01
  2. By: Harris, Richard; Le, Trinh
    Abstract: To the best of our knowledge, this paper reports the first set of nationally representative results on the importance of ‘absorptive capacity’ for firms operating in New Zealand between 2005-15. Absorptive capacity is generally defined as a firm's ability to internalise external knowledge. Using data principally from the Business Operations Survey, we measure absorptive capacity across a 10-year period and investigate if it remains stable in the long term. This is followed by considering how firms’ characteristics vary across levels of absorptive capacity and most importantly whether such capacity determines firms’ productivity performance across the primary, manufacturing and service sectors. Our results show that relative to other influences, absorptive capacity as measured here has a substantial influence on exporting, innovation, and undertaking R&D, and consequently on firm-level productivity. Set against relatively poor productivity performance, the paper concludes with a discussion of how government should consider helping firms to boost their levels of absorptive capacity in New Zealand.
    Keywords: International Relations/Trade
    Date: 2018–02
  3. By: Leland Crane; Ryan Decker
    Abstract: Business microdata have proven useful in a number of fields, but the main sources of comprehensive microdata are subject to significant confidentiality restrictions. A growing number of papers instead use a private data source seeking to cover the universe of U.S. business establishments, the National Establishment Time Series (NETS). Previous research documents the representativeness of NETS in terms of the distribution of employment and establishment counts across industry, geography, and establishment size. But there exists considerable need among researchers for microdata suitable for studying business dynamics---birth, growth, decline, and death. We evaluate NETS in terms of its ability to corroborate key insights from the business dynamics literature with a particular focus on the behavior of new and young firms. We find that NETS microdata exhibit patterns of business dynamics that are markedly different from official administrative sources, limiting the usefuln ess of NETS for studying these topics.
    Keywords: Business Microdata ; Economic Measurement ; Entrepreneurship ; Firm Dynamics ; High-Growth Firms ; Job Flows
    JEL: C81 M13 D22 L26
    Date: 2019–05–13
  4. By: Aleksandra Kordalska (Gdansk University of Technology, Gdansk, Poland); Magdalena Olczyk (Gdansk University of Technology, Gdansk, Poland)
    Abstract: This study examines labour productivity performance and its determinants in Eastern European and Central Asian (EECA) firms using micro-level data. We find significant differences in labour productivity among members of the European Union in Eastern Europe and other Eastern European and Central Asian countries. We also confirm the important impact of foreign ownership, exporter status, and highly skilled workers on productivity levels. However, we reveal a non-linear relationship between firm age and their labour productivity. Additionally, significant differences in labour productivity determinants between the services and manufacturing are found. The productivity of service firms, unlike manufacturing firms, is much more sensitive to changes in productivity factors.
    Keywords: Eastern Europe and Central Asia, firm-level analysis, labour productivity
    JEL: C21 J24 O52 O53
    Date: 2019–07
  5. By: Caroline Paunov; Sandra Planes-Satorra
    Abstract: Digital technologies impact innovation in all sectors of the economy, including traditional ones such as agriculture, the automotive industry, and retail. Similar trends across sectors include that the Internet of Things and data are becoming key inputs for innovation, innovation cycles are accelerating, services innovation is gaining importance and collaborative innovation matters more. Sector-specific dynamics are driven by differences in opportunities such technologies offer for innovation in products, processes and business models, as well as differences in the types of data needed for innovation and the conditions for digital technology adoption. The analysis calls for revisiting innovation policy mixes to ensure these remain effective and address emerging challenges. A sectoral approach is needed when designing innovation policies in some domains, especially regarding data access and digital technology adoption policies. The current focus of innovation policies on boosting R&D to meet R&D intensity targets also requires scrutiny.
    Date: 2019–07–18
  6. By: Nicholas Bloom; John Van Reenen; Heidi Williams
    Abstract: Economic theory suggests that market economies are likely to under-provide innovation due to the public good nature of knowledge. Empirical evidence from the US and other advanced economies supports this idea. We summarize the pros and cons of different policy instruments for promoting innovation and provide a basic "toolkit" describing which policies are most effective, based on our reading of the evidence. In the short-run, R&D tax credits or direct public funding seem the most productive, but in the longer-run increasing the supply of human capital (e.g. relaxing immigration rules or expanding university STEM admissions) are likely more effective.
    Keywords: Innovation, R&D, intellectual property, tax, competition
    JEL: O31 O32
    Date: 2019–07
  7. By: Massimo Anelli; Gaetano Basso; Giuseppe Ippedico; Giovanni Peri
    Abstract: Migration outflows, especially of young people, may deprive an economy of entrepreneurial energy and innovative ideas. We exploit exogenous variation in emigration from Italian local labor markets to show that between 2008 and 2015 larger emigration flows reduced firm creation. The decline affected firms owned by young people and innovative industries. We estimate that for every 1,000 emigrants, 10 fewer young-owned firms were created over the whole period. A simple accounting exercise shows that about 60 percent of the effect is generated simply by the loss of young people; the remaining 40 percent is due to a combination of selection of emigrants among highly entrepreneurial people, negative spillovers on the entrepreneurship rate of locals, and negative local firm multiplier effect.
    JEL: J61 M13 O3
    Date: 2019–07
  8. By: Nicoletta Berardi; Marie Lalanne; Paul Seabright
    Abstract: This paper examines how networks of professional contacts contribute to the development of the careers of executives of North American and European companies. We build a dynamic model of career progression in which career moves may both depend upon existing networks and contribute to the development of future networks. We test the theory on an original dataset of nearly 73 000 executives in over 10 000 firms. In principle professional networks could be relevant both because they are rewarded by the employer and because they facilitate job mobility. Our econometric analysis suggests that, although there is a substantial positive correlation between network size and executive compensation, with an elasticity of around 20%, almost all of this is due to unobserved individual characteristics. The true causal impact of networks on compensation is closer to an elasticity of 1 or 2% on average, all of this due to enhanced probability of moving to a higher-paid job. And there appear to be strongly diminishing returns to network size.
    Keywords: professional networks, labor mobility, executive compensation.
    JEL: E02 E32 E62 F41 H20
    Date: 2019
  9. By: Sophie Hooge (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - PSL Research University - CNRS - Centre National de la Recherche Scientifique, DTMI Chair - MINES ParisTech - École nationale supérieure des mines de Paris); Milena Chen (SNCF : Innovation & Recherche - SNCF, DTMI Chair - MINES ParisTech - École nationale supérieure des mines de Paris); Dominique Laousse (SNCF : Innovation & Recherche - SNCF, DTMI Chair - MINES ParisTech - École nationale supérieure des mines de Paris)
    Abstract: Despite the importance of new concept development (NCD) literature, the variety and evolution of concepts generated in the fuzzy front end and that lead to the concepts that will be design briefs for new product, technology and radical innovation projects is still misunderstood. In this paper, we propose to address this issue of multiplicity and coherence of emerging concept descriptions in the fuzzy front end at three levels of analysis — cognitive, managerial and strategic — in order to describe the dynamics of conceptual works. We rely on a longitudinal study (8 years) of the innovation capability management in a large established firm, SNCF, the French railroad company. Our main results are i) to give a typology of emerging concept formulations; ii) to elicit a structured process of building a "desirable unknown" for both the firm and involved individuals, that gather three dimensions: cognitive generative power, collaborative attractiveness for new organizations experimentation, and strategic positioning renewal of the firm in quickly evolving environments; and iii) to explicit specific patterns of emerging concept that can improve the performance of design briefs. We thereby contribute to guide practitioners involved in NCD work to reach their innovation goals.
    Keywords: Fuzzy front end,Radical innovation,emerging concepts,design briefs
    Date: 2019–06
  10. By: Fabling, Richard
    Abstract: Owner-operated firms are an important part of the New Zealand economy. They employ approximately 30% of the private-for-profit workforce, as well as providing jobs and income to the working proprietors themselves. This paper addresses two questions: what characteristics are associated with entrepreneurship (starting a self-employed business); and which sorts of entrepreneurs are more successful (create jobs)? We pay particular attention to differences in start-up and survival rates by business owner sex and ethnicity, but also consider whether other individual characteristics (including age and skill) and prior job characteristics also relate to the decision to start a business or to create jobs. We find substantial negative gaps in entrepreneurship for females and non-European-only ethnicity groups – gaps that arise in large part because of differential rates of entry into self-employment and, in the case of non- European-only ethnicities, higher attrition rates from self-employment after entry. These gaps persist in the presence of controls for skill, prior labour market experience and other individual characteristics.
    Keywords: Labor and Human Capital, Public Economics
    Date: 2018–10
  11. By: Eglė Girdzijauskaitė (Vilnius Gediminas Technical University); Asta Radzevičienė (Vilnius Gediminas Technical University); Artūras Jakubavičius (Vilnius Gediminas Technical University)
    Abstract: International branch campus is a rather new phenomenon in higher education and it is often questioned if it is an effective tool for HEI competitiveness because of its high risks and extremely high costs. In order for higher education institution managers to be able to use an international branch campus (IBC) as a tool for competitiveness, indicators of IBC having the strongest influence on the competitiveness of HEI must be indicated. In order to determine the main key performance indicators semi structured interviews were executed with the top managers of international branch campuses globally and the gathered data was analysed and coded using the computer assisted qualitative data analysis (CAQDAS) with Nvivo software. Six most important key performance indicators of IBCs have been identified and the FARE (Factor Relationship) method was used in order to determine the weights of the latter criteria. A system of indicators has been developed to assess the impact of HEI international development on the university's competitiveness and a relationship between the key performance indicators of the IBCs and the university's competitiveness has been revealed.
    Keywords: FARE,branch campus,HEI,competitiveness
    Date: 2019–06–30
  12. By: Djamel Fellag (CEREFIGE - Centre Européen de Recherche en Economie Financière et Gestion des Entreprises - UL - Université de Lorraine)
    Abstract: Le concept de territoire est une préoccupation majeure des recherches en sciences sociales et humaines en général et en sciences économiques et de gestion en particulier (Bazillier et al.,). Les économistes mobilisent le territoire comme un niveau d'analyse pertinent (Ferguene, 2003) et le considèrent à l'origine de ressources idiosyncrasiques, source d'avantage concurrentiel et de développement économique local (Benko et Pecqueur, 2001). En sciences de gestion et plus particulièrement en stratégie, les chercheurs se focalisent sur la localisation stratégique des entreprises et leur dynamique d'insertion territoriale (Carluer, 2006 ; Razafindrazaka & Durantaye, 2008). Ils montrent comment les entreprises peuvent bénéficier ou non des effets de la mondialisation de l'économie. Ils s'intéressent également au territoire en tant que ressource et capacités stratégiques reposant sur une proximité plurielle (géographique, culturelle, relationnelle, technologique et organisationnelle). Les dimensions et autres réalités géographique, politique, ou sociologique essentielles liées au territoire ne peuvent être occultées. Ces dimensions peuvent faire l'objet d'analyse spécifique ou être intégrées dans des réflexions plus économiques, stratégiques et managériales. A partir de ces éléments, les définitions et approches portant sur le concept de territoire sont nombreuses et foisonnantes. Une lecture pluri-disciplinaire montre que les principaux travaux portent sur la singularité de la ressource territoriale et des liens qu'elle entretient avec des concepts proches comme l'espace, la proximité, l'environnement, la représentation, la gouvernance. Nous proposons de définir, ici, le territoire comme un espace géographique ayant des spécificités naturelles, culturelles et économiques que des groupes s'approprient en agençant des ressources matérielles et symboliques (Debarbieux, 2003). Le territoire devient dès lors une construction à la fois sociopolitique et économique. En effet, l'émergence d'un territoire se fonde sur l'appropriation d'un espace par un acteur ou un groupe d'acteurs. Di Méo (1998) met l'accent sur l'ensemble des dimensions de la réalité sociale. « Le territoire témoigne d'une appropriation à la fois économique, idéologique et politique (sociale donc) de l'espace par des groupes qui se donnent une représentation particulière d'eux-mêmes, de leur histoire, de leur singularité »
    Date: 2018–03–01
  13. By: Rute Martins Caeiro
    Abstract: This paper analyzes the role of social networks in the diffusion of knowledge and adoption of cultivation techniques, from trainees to the wider community, in the context of an extension project in Guinea-Bissau. In order to test for social learning, we exploit a detailed census of households and social connections across different dimensions. More precisely, we make use of a village photo directory in order to obtain a comprehensive and fully mapped social network dataset. We find evidence that agricultural information spreads across networks from project participants to non-participants, with different networks having different importance. The most relevant connection is found to be between the network of people from which individuals would ‘borrow money’. We are also able to disentangle the relative importance of weak and strong ties: in our context, weak ties are as important in the diffusion of agricultural knowledge as strong ties. Despite positive diffusion effects in knowledge, we found limited evidence of network effects in adoption behavior. Finally, using longitudinal network data, we document improvements in the network position of treated farmers over time.
    JEL: O13 O31 O33 Q16
    Date: 2019–07
  14. By: Rim Ghariani (FSEGS Sfas); Boujelbene Younes (ISAS - ISAS Sfax UREA)
    Abstract: Répondant à la tendance de la mondialisation industrielle et aux progrès de la technologie de l'information ces dernières années, de nombreux pays ont tenté d'améliorer la productivité et la compétitivité industrielle grâce à des activités innovantes de recherche et de développement pour atteindre un avantage concurrentiel. Cet article examine les relations entre l'orientation à l'innovation, l'intégration de la chaîne logistique (intégration avec les fournisseurs, intégration avec les clients, intégration interne) et l'avantage concurrentielle en utilisant les données d'une enquête menée auprès de 60 entreprises. Nous utilisons l'analyse de la régression linéaire multiple pour vérifier les hypothèses de recherches et pour tester l'effet modérateur de l'intégration de la chaîne logistique sur la relation entre l'orientation à l'innovation et l'avantage concurrentielle. Après avoir rappelé les principes fondamentaux de l'intégration de la chaîne logistique, de l'orientation à l'innovation et de l'avantage concurrentiel, un modèle conceptuel a été proposé et testé. Les résultats permettent de dériver des recommandations de nature managériale. Mots clés: Intégration de la chaîne logistique, orientation à l'innovation, avantage concurrentiel.
    Date: 2019
  15. By: Giovanni Dosi (Institute of Economics, Scuola Superiore Sant’Anna, Pisa); Mariacristina Piva (DISCE, Università Cattolica); Maria Enrica Virgillito (DISCE, Università Cattolica); Marco Vivarelli (DISCE, Università Cattolica - UNU-MERIT, Maastricht, The Netherlands and IZA, Bonn, Germany)
    Abstract: This paper addresses, both theoretically and empirically, the sectoral patterns of job creation and job destruction in order to distinguish the alternative effects of embodied vs disembodied technological change operating into a vertically connected economy. Disembodied technological change turns out to positively affect employment dynamics in the “upstream’’ sectors, while expansionary investment does so in the “downstream’’ industries. Conversely, the replacement of obsolete capital vintages tends to exert a negative impact on labour demand, although this effect turns out to be statistically less robust.
    Keywords: Innovation, disembodied and capital-embodied technological change, employment, job-creation, job-destruction, sectoral interdependencies
    JEL: O14 O31 O33
    Date: 2019–06
  16. By: Rima Žitkienė (Mykolas Romeris University); Ugnė Dudė (Mykolas Romeris University)
    Abstract: Outsourcing, as a managerial phenomenon, is gaining importance and attention among both scientists and entrepreneurs. Despite an increasing outsourcing practice among business units, the nature of factors affecting growth of the use of outsourcing on service companies have not received adequate attention in the scientific literature. The aim of paper is to provide in-depth analysis of factor affecting the spread of outsourcing practice among service companies. A comprehensive review of the literature was conducted in the fields of services, to achieve a thorough understanding of the issues involved, and identify the crucial factors affecting the use outsourcing in service companies. Literature analysis shows that spread of outsourcing is affected by external and internal factors. Most important internal factors affecting growth of outsourcing use in service companies are strategic and economic factors.
    Keywords: outsourcing,service companies,services,service management,business management,business
    Date: 2018–09–30
  17. By: Azarhoushang, Behzad; Wu, Jennifer Pédussel; Zaroki, Shahryar
    Abstract: Following the 1978 economic reforms, China gradually became first amongst developing countries and the second in the world, after the USA, in terms of stock of inward Foreign Direct Investment (FDI). Sustained GDP growth, a high rate of capital return and brisk economic development made China one of the best destinations for foreign capital; however, the benefits of this spectacular growth have not been evenly distributed throughout the various Chinese regions. There are many low-income and poor economic performing provinces in China although poverty is mainly concentrated in the inland regions. Since the beginning of the 2000s, a series of policies have been designed and implemented by the Chinese government to encourage foreign company investment in central and western provinces to help decrease the regional inequality with limited successes. This paper uses Panel Least Squares method to empirically analyze the impact of industrial sector FDI on Chinese regional inequality during 2003-2013. The resulting analysis shows the connection between FDI in industrial sectors and regional inequality in China. In particular, regional inequality affects FDI location choices. The findings show that economic and non-economic indicators such as human capital, infrastructure, per capita income, and government policies affect regional inequality and foreign firms' location choices. Despite government policies to support inland regional economic development, foreign firms still prefer to invest in coastal provinces further illustrating the effects of clusters in this region.
    Keywords: FDI,China,Panel,regional inequality,MNCs
    JEL: F21 F23 F16 C33
    Date: 2019

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