nep-sbm New Economics Papers
on Small Business Management
Issue of 2019‒10‒21
sixteen papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Innovation and job creation in (high-growth) new firms By Pietro Santoleri
  2. A geography of corporate knowledge flows across world regions: evidence from patent citations of top R&D-investing firms By Mafini Dosso; Didier Lebert
  3. Entrepreneurial Persistence Beyond Survival: Measurement and Determinants By Marco Caliendo; Maximilian Goethner; Martin Weißenberger
  4. Business and technology paradigms: The entrepreneurial bridge By Gabriel Gimenez Roche
  5. Innovation support in the enterprise sector: Industry and SMEs By Gernot Hutschenreiter; Johannes Weber; Christian Rammer
  6. Using innovation to hedge against economic and political uncertainty evidence from emerging nations By Goel, Rajeev K.; Nelson, Michael A.
  7. Exploring heterogeneous Digital Innovation Hubs in their context By Johan Miorner; Annita Kalpaka; Jens Sorvik; Joakim Wernberg
  8. Foreign Competition and Domestic Innovation: Evidence from U.S. Patents By Autor, David; Dorn, David; Hanson, Gordon H.; Pisano, Gary; Shu, Pian
  9. A shot in the dark? Policy influence on cluster networks By Holger Graf; Tom Broekel
  10. Foreign Competition and Domestic Innovation: Evidence from U.S. Patents By David H. Autor; David Dorn; Gordon H. Hanson; Gary Pisano; Pian Shu
  12. Teaming up with Large R&D Investors: Good or Bad for Knowledge Production and Diffusion? By Sara Amoroso; Simone Vannuccini
  13. Measuring R&D tax support: Findings from the new OECD R&D Tax Incentives Database By Silvia Appelt; Fernando Galindo-Rueda; Ana Cinta González Cabral
  14. Policy initiatives to enhance the impact of public research: Promoting excellence, transfer and co-creation By José Guimón
  15. Tech on the ROC: A New Way of Looking at Exporting Firms By Stefano Costa; Federico Sallusti; Claudio Vicarelli; Davide Zurlo
  16. Task Discretion, Labor Market Frictions and Entrepreneurship By Canidio, Andrea; Legros, Patrick

  1. By: Pietro Santoleri
    Abstract: Recent research has underscored the prominent role played by a small fraction of fast-growing new firms in contributing to aggregate net employment growth. While it is typically assumed that those firms experience this superior performance thanks to their ability in undertaking technological innovation, few empirical studies have explicitly addressed this issue. This article examines the innovation-employment nexus for start-ups using the Kauffman Firm Survey (KFS), a unique longitudinal dataset tracking a single cohort of US firms founded in 2004. Results based on fixed effects panel quantile regressions indicate an overall positive but heterogeneous effect of innovation activities on the conditional employment growth distribution. More in detail, the findings reveal that both research and development (R&D) and patents have a positive association with employment growth especially for those new firms experiencing high-growth.
    Keywords: new firms; high-growth; innovation; employment growth; panel quantile regressions.
    Date: 2019–10–15
  2. By: Mafini Dosso (European Commission - JRC); Didier Lebert (ENSTA ParisTech, UniversiteÌ Paris-Saclay (France))
    Abstract: This exploratory study looks at the structural and geographical patterns of corporate knowledge flows from a regional perspective. The methodological approach combines the centrality indicators developed in the social network analysis (SNA) and complementary tools from the graphs theory to assess the betweenness centrality of regions (or poles)- their ability to control knowledge flows within a network or to impact its cohesiveness - and the relative contribution of individual firms (or layers) to the centrality of regions. The combination of the two approaches brings relevant insights on the way large R&D-driven firms organise their knowledge sourcing and generation across world regions
    Keywords: patent citations; knowledge flows; graphs theory; regions; top corporate R&D investors.
    JEL: L14 O33 R58
    Date: 2019–10
  3. By: Marco Caliendo (University of Potsdam, IZA Bonn, DIW Berlin, IAB Nuremberg); Maximilian Goethner (Friedrich Schiller University Jena); Martin Weißenberger (University of Potsdam)
    Abstract: Entrepreneurial persistence is demonstrated by an entrepreneur’s continued positive maintenance of entrepreneurial motivation and constantly-renewed active engagement in a new business venture despite counter forces or enticing alternatives. It is thus a crucial factor for entrepreneurs when pursuing and exploiting their business opportunities and to realize potential economic gains and benefits. Using rich data on a representative sample of German business founders, we investigate the determinants of entrepreneurial persistence. Next to observed survival we also construct a hybrid persistence measure capturing also the motivational dimension of persistence. We analyze the influence of individual-level (human capital and personality) and business-related characteristics on both measures as well as their relative importance. We find that the two indicators emphasize different aspects of persistence. For the survival indicator, the predictive power is concentrated in business characteristics and human capital, while for hybrid persistence, the dominant factors are business characteristics and personality. Finally, we show that results are heterogeneous across subgroups. In particular, formerly-unemployed founders do not differ in survival chances, but they are more likely to lack a high psychological commitment to their business ventures.
    Keywords: Entrepreneurship, Persistence, Start-ups, Survival
    JEL: L26 M13
    Date: 2019–09
  4. By: Gabriel Gimenez Roche (NEOMA Business School)
    Abstract: In 1982, Giovanni Dosi contributed with an explanation that attempted to conciliate the demand-pull and the technology-push views on technological selection. The solution based on Kuhnian analysis of scientific revolutions assumes the origins of technological changes to be independent of market factors, but ultimately validated by these same factors. This paper demonstrates that technological selection actually occurs within market processes, when entrepreneurs use their judgment to interpret and evaluate the scope of the habitual, conventional, and institutional routines shaping the social environment. Since entrepreneurs specialize around their idiosyncratic interpretations, business paradigms emerge that comprise different technological paradigms. Therefore, business paradigms instrumentally use technological paradigms in order to better correspond to the socially routinized and non-routinized behavior of market agents.
    Keywords: entrepreneurship, innovation, opportunity, technological paradigm
    JEL: D02 O31 L26
    Date: 2019–10
  5. By: Gernot Hutschenreiter (OECD); Johannes Weber (OECD); Christian Rammer (Centre for European Economic Research)
    Abstract: This policy paper outlines major policy trends in public support of innovation activities in industry and SMEs across OECD countries. It discusses the policy mix to strengthen business R&D and innovation, and possible avenues to improve this mix in response to evolving needs, driven new trends in technology and other factors. Across the OECD, governments strive to reinforce international competitiveness through a variety of policy initiatives supporting business innovation. In particular, these initiatives facilitate the technological upgrading of existing industries and the development of strategic sectors. Twelve case studies discuss selected initiatives in the following areas: Support for innovative enterprises and clusters, development of strategic industrial sectors in particular in manufacturing, and the transition of industry towards new production methods (Industry 4.0). While the dimensions for the effective implementation of these initiatives vary, this paper identifies some features that may help identify good practices in their design, implementation and evaluation.
    Date: 2019–10–17
  6. By: Goel, Rajeev K.; Nelson, Michael A.
    Abstract: Using data on 135 countries, this paper studies the determinants of process innovation introduction, focusing on the impacts of economic and political uncertainties. Greater uncertainty, on the one hand, can lower potential benefits from innovation introductions, while on the other hand, the introduction of innovations might enable firms to hedge against uncertainty. The empirical literature has mostly considered uncertainty-investment nexus, and this study uniquely considers uncertainty-innovation introductions. Employing two different measures of economic and political uncertainty across different time lags, results are consistent with the hedging story - greater economic and political uncertainties induce firms to introduce process innovations to the market. With regard to firms' attributes, sole proprietorships and R&D-performing firms were more likely to introduce innovations, while firms located in island nations were less likely to do so. Firms' size and vintage did not have an appreciable influence on the incentives to introduce innovations. Some policy implications of these findings are discussed.
    Keywords: economic uncertainty,political uncertainty,stability,innovation,hedging,R&D,sole proprietorship,inflation,state fragility
    JEL: O33 O31 O57 L29
    Date: 2019
  7. By: Johan Miorner; Annita Kalpaka (European Commission - JRC); Jens Sorvik; Joakim Wernberg
    Abstract: This report explores the regional variation in organisation and implementation of DIHs across six (6) different EU regions: Saxony-Anhalt (Germany), Wielkopolska (Poland), Northern Ostrobothnia (Finland), Tallinn (Estonia), Andalusia (Spain) and Central Macedonia (Greece). The case studies were conducted in conjunction with a wider survey among DIH managers and regional policy managers (RIS3) whose results are presented in a separate JRC Technical Report. While the survey covers a wider scope of questions, this report follows a comparative approach in order to identify common denominators, strengths and challenges concerning 1) how the DIHs are set-up; 2) how DIHs are fitted to the regional policy- and economic context, with particular attention given to the connection between DIHs and the regional/national smart specialisation strategy (RIS3); 3) how regions could better benefit by DIHs; 4) what are the funding sources and how they are coordinated. The report aims to contribute to our understanding of different models of DIHs registered in the DIH Catalogue (yellow pages) across regions and their respective interactions with the regional/national innovation ecosystems and specifically the smart specialisation strategies. The selected approach has also helped to highlight current good practices and suggest alternative ideas on how to set up future DIHs (e.g. multi-sided platforms model) also in view of the upcoming Digital Europe Programme (DEP).
    Keywords: Digital Innovation Hubs, DIH, Smart Specialisation Strategies, S3, RIS3, digital growth, digital transformation, digitisation, industry, SME, regional policy, survey
    Date: 2019–10
  8. By: Autor, David (MIT); Dorn, David (University of Zurich); Hanson, Gordon H. (University of California, San Diego); Pisano, Gary (Harvard University); Shu, Pian (Georgia Institute of Technology)
    Abstract: Manufacturing accounts for more than three-quarters of U.S. corporate patents. The competitive shock to this sector emanating from China's economic ascent could in theory either augment or stifle U.S. innovation. Using three decades of U.S. patents matched to corporate owners, we quantify how foreign competition affects domestic innovation. Rising import exposure intensifies competitive pressure, reducing sales, profitability, and R&D expenditure at U.S. firms. Accounting for confounding sectoral patenting trends, we find that U.S. patent production declines in sectors facing greater import competition. This adverse effect is larger among initially less profitable and less capital-intensive firms.
    Keywords: innovation, patents, trade
    JEL: F14 O30
    Date: 2019–09
  9. By: Holger Graf; Tom Broekel
    Abstract: Cluster policies are often intended and designed to promote interaction in R&D among co-located organisations, as local knowledge interactions are perceived to be underdeveloped. In contrast to the popularity of the policy measure little is known about its impact on knowledge networks, because most scientific evaluations focus on impacts at the firm level. Using the example of the BioRegio contest, we explore cluster policy effects on local patent co-application and co-invention networks observed from 1985 to 2013, in 17 German regions. We find that the initiative increases network size and innovation activities during the funding period but not afterwards. The impact of the BioRegio contest on network cohesion is moderate. In contrast, general project-based R&D subsidisation is found to support cohesion more robustly.
    Keywords: Cluster Policy, Knowledge Networks, Network Analysis, Patent Data, Regional Innovation, Policy Evaluation
    JEL: O31 Z13
    Date: 2019–10
  10. By: David H. Autor; David Dorn; Gordon H. Hanson; Gary Pisano; Pian Shu
    Abstract: Manufacturing accounts for more than three-quarters of U.S. corporate patents. The competitive shock to this sector emanating from China’s economic ascent could in theory either augment or stifle U.S. innovation. Using three decades of U.S. patents matched to corporate owners, we quantify how foreign competition affects domestic innovation. Rising import exposure intensifies competitive pressure, reducing sales, profitability, and R&D expenditure at U.S. firms. Accounting for confounding sectoral patenting trends, we find that U.S. patent production declines in sectors facing greater import competition. This adverse effect is larger among initially less profitable and less capital-intensive firms.
    Keywords: innovation, patents, trade
    JEL: F10 O31
    Date: 2019
  11. By: Devasheesh Mathur
    Abstract: "Bureaucracy and governments seldom innovate due to no competition and high costs of failures while businesses innovate to achieve competitive advantage. In such a scenario, social enterprises are quite well suited and well equipped to usher innovations in public services by their dense engagement with the community and viable business models.This effective combination creates new services with the hitherto neglected community at the helm and gives rise to total innovations in public services" Key Words: social entrepreneurship, public service, innovation, literature Policy
    Date: 2019–09
  12. By: Sara Amoroso (European Commission - JRC); Simone Vannuccini
    Abstract: The participation of top R&D players to publicly funded research collaborations is a common yet unexplored phenomenon. If, on the one hand, including top R&D firms creates opportunities for knowledge spillovers and increases the chance for a project to be funded, on the other hand, the uneven nature of such partnerships and the asymmetry in knowledge appropriation capabilities could hinder the overall performance of such collaborations. In this paper, we study the role of top R&D investors in the performance of publicly funded R&D consortia (in terms of number of patents and publications). Using a unique dataset that matches information on R&D collaborative projects and proposals with data on international top R&D firms, we find that indeed teaming up with leading R&D firms increases the probability to obtain funds. However, the participation of such R&D leaders hinders the innovative performance of the funded projects, both in terms of patents and publications. In light of this evidence, the benefits of mobilizing top R&D players should be carefully leveraged in the evaluation and design of innovation policies aimed at R&D collaboration and technology diffusion.
    Keywords: Collaboration, public funding, innovation performance, appropriability, top R&D investor
    Date: 2019–10
  13. By: Silvia Appelt; Fernando Galindo-Rueda; Ana Cinta González Cabral
    Abstract: Investment in research and experimental development (R&D) is an important driver of innovation and economic growth. Over the past two decades, tax incentives have become a key policy instrument for promoting business R&D. This raises a number of policy questions: How has the role of tax incentives in the R&D support policy mix evolved across OECD countries and other major economies? How generous are tax relief provisions for different types of firms? How effective are they in stimulating business R&D investment? The OECD R&D Tax Incentives Database ( aims to contribute to the data infrastructure available to policy makers and researchers to examine the use and impact of R&D tax incentives across OECD countries and partner economies. This paper provides a practical guide to using this new database, describing the recently released R&D tax incentive data and highlighting their potential for internationally comparative work through descriptive indicators and econometric analysis.
    Date: 2019–10–15
  14. By: José Guimón (Universidad Autónoma de Madrid)
    Abstract: Policies to boost the impact of public research can be classified into three broad categories. Firstly, policy initiatives promoting research excellence encourage frontier research by providing large-scale, long-term competitive funding to selected research centres. Secondly, policies supporting knowledge transfer aim at commercialising the results of public research through patent licensing, spin-off companies, and other channels. Thirdly, policies promoting science-industry co-creation focus on fostering more intense modes of research collaboration through joint funding, shared facilities and mixed teams; often involving other civil society stakeholders besides public research institutions and firms. This paper illustrates the variety of options available within each of these three types of policies, based on a review of twelve case studies across nine different countries. The analysis draws attention to the design options, budgets, implementation challenges, international scope, evaluation practices and lessons learnt from these policy initiatives.
    Date: 2019–10–17
  15. By: Stefano Costa (ISTAT); Federico Sallusti (ISTAT); Claudio Vicarelli (ISTAT); Davide Zurlo (ISTAT)
    Abstract: Policies aimed at increasing firm participation in international markets have been playing an increasing role. Using a new approach to estimate export threshold for manufacturing firms, and considering the technology adoption, this paper analyses the potential mismatch between the conditions required for a firm to become exporter and the pattern of technology in the industry. The export threshold – which is estimated on the basis of the ROC methodology – is the minimum combination of productivity and “economic size” (a broad measure of firm size composed of employment, age, turnover and capital intensity) that firms need to achieve in order to access international markets. In turn, the technology prevailing in each industry is expressed in terms of the relative weights of productivity and size corresponding to a (firm-level) technology level higher than the average within the industry. The interaction between this “technology line” and the export threshold allows for deriving a new firm-based taxonomy that can be useful to study exporting and non-exporting firms in the light of their position with respect to the technology prevailing in the given industry, allowing to have a more efficient selection of policy targets (e.g. intensive or extensive margins).
    Keywords: ROC analysis, export threshold, technology adoption, extensive margin of exports
    JEL: F14 L60 L11 O14
    Date: 2019
  16. By: Canidio, Andrea; Legros, Patrick
    Abstract: Each job can be performed in several ways, which we call tasks An agent's performance at a task is informative about his productivity at different tasks. But tasks are not contractible: choosing tasks is the prerogative of management within firms, and of the agent if he is an entrepreneur. Firms will invest in the discovery of their workers' productivity at different tasks only if they cannot easily move to other firms. Therefore, labor-market frictions determine whether learning an agent's talent occur within firms, or whether an agent may become an entrepreneur to acquire task discretion.
    Keywords: entrepreneurial failures; entrepreneurship; labor-market frictions; learning; organizational choice; Task discretion
    JEL: D83 J24 J62 J63 L26 M13
    Date: 2019–08

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