nep-sbm New Economics Papers
on Small Business Management
Issue of 2019‒11‒04
eighteen papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Entrepreneurial Ecosystems: A Dynamic Lifecycle Model By Uwe Cantner; James A. Cunningham; Erik E. Lehmann; Matthias Menter
  2. Local R&D support as a driver of network diversification? A comparative evaluation of innovation policies in neighboring prefectures in Japan By Takano, Keisuke; Okamuro, Hiroyuki
  3. How innovation affects performance By Ksenia Gonchar; Maria Kristalova
  4. GAW survey data linked with administrative data of the IAB (GAW-ADIAB): A documentation and review of empirical evidence and research opportunities By Michael Wyrwich; Michael Fritsch; Elisabeth Bublitz; Alina Sorgner
  5. Catching up or Lagging Behind? The Long-Term Business and Innovation Potential of Subsidized Start-Ups out of Unemployment By Marco Caliendo; Steffen Künn; Martin Weißenberger
  6. The impact of coproducing services with clients on knowledge-intensive business services’ innovativeness By Nikolay Chichkanov
  7. Import competition and firm productivity: Evidence from German manufacturing By Bräuer, Richard; Mertens, Matthias; Slavtchev, Viktor
  8. A shot in the dark? Policy influence on cluster networks By Holger Graf; Tom Broekel
  9. The Effect of Physical Collateral and Personal Guarantees on Business Start-ups By HONJO Yuji; ONO Arito; TSURUTA Daisuke
  10. Micro fluidity and macro stability in inventor networks By Michael Fritsch; Muhamed Kudic
  11. Agglomeration economies and firm TFP: different effects across industries By Gornig, Martin; Schiersch, Alexander
  12. The Impact of the Heterogeneity of Employees’ Qualifications on Firm-level Innovation Evidence from Nigerian Firms By Medase, Kehinde
  13. Heterogeneous effects of agglomeration on firm innovation in Germany By Niebuhr, Annekatrin; Peters, Jan Cornelius; Schmidke, Alex
  14. Business benefits of local universities: more skills and better management By Andy Feng; Anna Valero
  15. R&D, innovation spillover and business cycles By Uluc Aysun; Zeynep Yom
  16. Persistence of Entrepreneurship in Different Historical Contexts By Michael Fritsch; Korneliusz Pylak; Michael Wyrwich
  17. Mafia Firms and Aftermaths By Maria Rosaria Alfano; Claudia Cantabene; Damiano Bruno Silipo
  18. The Heterogeneous Impact of Market Size on Innovation: Evidence from French Firm-Level Exports By Philippe Aghion; Antonin Bergeaud; Matthieu Lequien; Marc Melitz

  1. By: Uwe Cantner (Friedrich Schiller University Jena, Germany); James A. Cunningham (Northumbria University, Newcastle, United Kingdom); Erik E. Lehmann (University of Augsburg, Germany); Matthias Menter (Friedrich Schiller University Jena, Germany)
    Abstract: The concept of entrepreneurial ecosystems has been used as a framework to explain entrepreneurial activities within regions and industrial sectors. Despite the usefulness of this approach, the concept is under-theorized, especially with regard to the evolution of entrepreneurial ecosystems. The current literature is lacking a theoretical foundation that addresses the development and change of entrepreneurial ecosystems over time and does not consider the inherent dynamics of entrepreneurial ecosystems that lead to their birth, growth, maturity, decline and re-emergence. Taking an industry lifecycle perspective, this paper addresses this research gap by elaborating a dynamic entrepreneurial ecosystem lifecycle model. We propose that an ecosystem transitions from an entrepreneurial ecosystem, with a focus on new firm creation, towards a business ecosystem, with a core focus on the internal commercialization of knowledge, i.e. intrapreneurial activities, and vice versa. Our dynamic model thus captures the oscillation that occurs among entrepreneurs and intrapreneurs through the different phases of an ecosystem's lifecycle. Our dynamic lifecycle model may thus serve as a starting point for future empirical studies focusing on ecosystems and provide the basis for a further understanding of the interrelatedness between and co-existence of new and incumbent firms.
    Keywords: Entrepreneurial Ecosystems, Lifecycles, Dynamism, Transition, Entrepreneurship, Intrapreneurship
    JEL: O31 O32 O33
    Date: 2019–10–18
  2. By: Takano, Keisuke; Okamuro, Hiroyuki
    Abstract: This paper compares the effects of local R&D support programs on firm performance between neighboring three prefectures in the same district in Japan. Particularly, we evaluate the policy effect on regional and sectoral diversification of transaction networks. One of these prefectures, A, has a large industrial agglomeration around world-leading manufacturers, which is not the case for the other prefectures, B and C. Empirical evaluation based on firm-level dataset available through TDB-CAREE shows that the programs in Prefectures B and C promoted market development of recipient firms in unexplored sectors or regions, whereas Prefecture A’s program did not.
    Keywords: place-based policy, R&D support, interregional trade, diversification
    JEL: L25 L52 O38 R11 R12 R58
    Date: 2019–10
  3. By: Ksenia Gonchar (National Research University Higher School of Economics, Moscow); Maria Kristalova (Bremen University and Friedrich-Schiller-University Jena)
    Abstract: This paper studies how innovation strategies of Russian manufacturing firms affect various features of firm performance. A multi stage model is used, which relates the firm's decision to undertake R&D to its innovation output, technical efficiency, labor productivity, and growth. We also include imports into the knowledge production function, because catching up economies may adopt technologies embodied in imported hardware. Additionally, we link productivity and innovation output to survival. We find that both types of knowledge input - R&D and imports - strongly determine innovation. Innovations yield the strongest performance return in the case of catching up to technological frontier. Product innovation is more beneficial than process innovation in all performance features except for labor productivity. However, higher efficiency does not improve the growth rates or survival time of manufacturing firms. Taken together, these results show that innovation is not uniformly rewarded across all features of firm performance.
    Keywords: innovation, productivity, growth, survival, Russia
    JEL: C30 D24 O30
    Date: 2019–02–25
  4. By: Michael Wyrwich (University of Groningen); Michael Fritsch (FSU Jena); Elisabeth Bublitz (University of Hamburg); Alina Sorgner (John Cabot University Rome)
    Abstract: New business formation plays an important role for economic development. Therefore, policy makers put emphasis on fostering start-up activity. Aims and scope of entrepreneurs can be just as heterogeneous as the structure of new ventures. The project "New business formation and the labor market in East and West German growth regimes" within the Collaborative Research Center (SFB 580) "Social developments in post-socialistic societies: discontinuity, tradition, structural formation" at the Friedrich-Schiller University Jena investigated the development and structures of new firms. To this end, the project team conducted the GAW survey by means of computer-assisted telephone interviewing (CATI). In total, there have been 1,105 interviews with founders of firms. The data include personal information on the founder and his or her firm. This information can be merged with administrative data of the Establishment History Panel (BHP = Betriebs-Historik Panel) of the Research Data Centre of the German Institute for Employment Research (IAB). The BHP comprises detailed information on establishment characteristics. Therefore, the GAW survey data provide the unique opportunity to link characteristics of the entrepreneur with detailed information about the characteristics of his or her company and firm growth.
    Keywords: Firm growth, Labour market, Growth, East and West Germany
    JEL: L26 P30
    Date: 2018–11–06
  5. By: Marco Caliendo (University of Potsdam, IZA Bonn, DIW Berlin, IAB Nuremberg); Steffen Künn (Maastricht University and ROA, The Netherlands, IZA Bonn); Martin Weißenberger (University of Potsdam)
    Abstract: From an active labor market policy perspective, start-up subsidies for unemployed individuals are very effective in improving long-term labor market outcomes for participants. From a business perspective, however, the assessment of these public programs is less clear since they might attract individuals with low entrepreneurial abilities and produce businesses with low survival rates and little contribution to job creation, economic growth, and innovation. In this paper, we use a rich data set to compare participants of a German start-up subsidy program for unemployed individuals to a group of regular founders who started from nonunemployment and did not receive the subsidy. The data allows us to analyze their business performance up until 40 months after business formation. We find that formerly subsidized founders lag behind not only in survival and job creation, but especially also in innovation activities. The gaps in these business outcomes are relatively constant or even widening over time. Hence, we do not see any indication of catching up in the longer run. While the gap in survival can be entirely explained by initial differences in observable start-up characteristics, the gap in business development remains and seems to be the result of restricted access to capital as well as differential business strategies and dynamics. Considering these conflicting results for the assessment of the subsidy program from an ALMP and business perspective, policy makers need to carefully weigh the costs and benefits of such a strategy to find the right policy mix.
    Keywords: Entrepreneurship, Start-up Subsidies, Business Growth, Innovation, Job Creation
    JEL: L26 M13 J68
    Date: 2019–10
  6. By: Nikolay Chichkanov (National Research University Higher School of Economics)
    Abstract: Despite the growing interest to the field of coproduction from the service-dominant logic literature, this concept is still being emerging and most of the existing papers do not provide any empirical evidence. The aim of the study is to investigate whether those KIBS firms that involve their customers in coproduction of services are more innovative. This paper explores the relationships between a set of innovation drivers and implementation of innovations in KIBS based on a sample of 441 firms operating in Russia. The results show that coproduction of services increases the possibility of both technological and non-technological innovations in KIBS to be implemented. This finding suggests that in addition to the service offerings quality improvement, coproduction of KIBS also acts as an innovation driver, which requires an attention from innovation managers
    Keywords: KIBS, coproduction, client involvement, innovation, innovation drivers
    JEL: O30 O31
    Date: 2019
  7. By: Bräuer, Richard; Mertens, Matthias; Slavtchev, Viktor
    Abstract: This study analyses empirically the effects of import competition on firm productivity (TFPQ) using administrative firm-level panel data from German manufacturing. We find that only import competition from high-income countries is associated with positive incentives for firms to invest in productivity improvement, whereas import competition from middle- and low-income countries is not. To rationalise these findings, we further look at the characteristics of imports from the two types of countries and the effects on R&D, employment and sales. We provide evidence that imports from high-income countries are relatively capital-intensive and technologically more sophisticated goods, at which German firms tend to be relatively good. Costly investment in productivity appears feasible reaction to such type of competition and we find no evidence for downscaling. Imports from middle- and low-wage countries are relatively labour-intensive and technologically less sophisticated goods, at which German firms tend to generally be at disadvantage. In this case, there are no incentives to invest in innovation and productivity and firms tend to decline in sales and employment.
    Keywords: productivity,multi-product firms,import competition
    JEL: D22 D24 F10 F14 F60 F61 L25
    Date: 2019
  8. By: Holger Graf (Friedrich Schiller University Jena, Economics Department); Tom Broekel (University of Stavanger, Business School, Stavanger, Norway, and Centre for Regional and Innovation Economics, University of Bremen, Germany)
    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 13 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: 2019–10–09
  9. By: HONJO Yuji; ONO Arito; TSURUTA Daisuke
    Abstract: This study examines whether financial constraints discourage individuals from starting businesses by using individual-level micro data that identify nascent entrepreneurs and actual entrepreneurs in Japan. As proxies for financial constraints, we use regional variations in the use ratios of physical collateral and personal guarantees. We find that individuals are less likely to become nascent entrepreneurs if they live in regions where the use ratio of personal guarantees is higher. However, we do not find a negative relationship between the use ratio of physical collateral and the likelihood of becoming entrepreneurs. Our findings indicate that the low level of Japan's entrepreneurship is due to the lack of risk-taking by potential entrepreneurs, rather than a lack of collateralizable physical assets.
    Date: 2019–10
  10. By: Michael Fritsch (Friedrich Schiller University Jena, School of Economics and Business Administration); Muhamed Kudic (University of Bremen, Faculty of Economics and Business)
    Abstract: From a macro perspective, inventor networks are characterized by rather stable structures. However, the high levels of fluidity of inventors and their ties found in reality contradicts this macro pattern. In order to explain these contradicting patterns, we zoom in on the intermediate group structures of co-patenting relationships found among inventors in German laser technology research over a period of 45 years. Our findings suggest that continuity of individual actors is not a key factor in maintaining structural stability of networks. Group level explorations indicate that the successor of an existing key player belonged to the exiting key player's ego-network, indicating that the group level provides a source of stability and functionality to the system.
    Keywords: Inventor network, network stability, key player analysis, innovation, laser technology
    JEL: D22 D85 L23 O3
    Date: 2019–07–29
  11. By: Gornig, Martin; Schiersch, Alexander
    JEL: R11 R12 R15 D24
    Date: 2019
  12. By: Medase, Kehinde
    JEL: O31 I23 J24 O55
    Date: 2019
  13. By: Niebuhr, Annekatrin; Peters, Jan Cornelius; Schmidke, Alex
    JEL: D22 O31 R12
    Date: 2019
  14. By: Andy Feng; Anna Valero
    Abstract: Universities are widely seen as a source of strength for local economies. Research by Andy Feng and Anna Valero confirms their potential contribution to business: firms closer to universities tend to hire better managers and workers, and have better management practices. The effect seems to be driven by universities raising the supply of skilled workers and hence reducing the cost.
    Keywords: management practices, human capital, universities, complementarities
    JEL: I23 I26 J24 L2 M2
    Date: 2019–11
  15. By: Uluc Aysun (University of Central Florida, Orlando, FL); Zeynep Yom (School of Business, Villanova University)
    Abstract: This paper shows that technology shocks have the largest impact on economies when industries adopt innovations of other industries at a high rate, if costs of adopting new technologies and adjusting R&D expenditures are low, and if innovators face a high degree of competition. It is not the level but the spillover of innovations across industries that is the key determinant of these findings. Under the conditions mentioned above, R&D becomes less procyclical and smoother along the business cycle yet R&D driven innovations have a larger impact on output since these innovations spillover at a higher rate. These inferences are drawn from a dynamic stochastic general equilibrium framework describing a real economy with endogenous growth. The latter feature allows us to infer the welfare implications of R&D processes.
    Keywords: Research and development, spillover effects, endgenous growth
    JEL: E30 E32 O30 O33
    Date: 2019–10
  16. By: Michael Fritsch (Friedrich Schiller University Jena, Germany); Korneliusz Pylak (Maria Curie Skłodowska University of Lublin, Poland); Michael Wyrwich (University of Groningen, The Netherlands, and Friedrich Schiller University Jena, Germany)
    Abstract: Persistence of entrepreneurship over longer periods of time could indicate a culture of entrepreneurship among the local population that may be an important factor for regional development, but does persistence of economic activity require cultural transmission? We exploit the diverse historical developments in the territory that is Poland today to analyze the level and the sources of persistence from the 1920s until today. Persistence is mainly found in those regions that were part of Germany before World War II. This persistence is noticeable despite the exchange of most of the pre-war population, ruling out that persistence is driven by transmission of culture. In most regions that were already part of Poland before World War II, the relationship between historical and current levels of entrepreneurship is not significant. Persistence of entrepreneurship is related to the historical success of regions, which we capture by the pre-war level of and self-employment in manufacturing industries, particularly in those that can be regarded as knowledge intensive. Our main conclusion is that persistence of entrepreneurship requires a certain level of successful economic development that we capture by the degree of industrialization in the early 20th century, but it does not necessarily require persistence of the local population.
    Keywords: Persistence, entrepreneurship, self-employment
    JEL: L26 M13 O1 O18 R11
    Date: 2019–06–13
  17. By: Maria Rosaria Alfano (Università degli Studi della Campania); Claudia Cantabene (Università degli Studi della Campania); Damiano Bruno Silipo (Università della Calabria)
    Abstract: We use a unique and unexplored dataset to investigate the determinants and effects of mafia firms in Italy. Mafia may use several tools to expand its firms. However, in this paper, we show that they prefer political corruption to violence to expand mafia firms. In particular, they use the latter more to build up their reputation in new established regions. Mafia firms hamper entrepreneurial activity but they can have beneficial effects on unemployment if mafia firms add to not substitute current economic activities. Policy makers should take account of this twofold effects of mafia firms.
    Keywords: Organized Crime, Mafia Firm, Mafia and Development
    JEL: D02 K14 L11
    Date: 2019–10
  18. By: Philippe Aghion; Antonin Bergeaud; Matthieu Lequien; Marc Melitz
    Abstract: We analyze how demand conditions faced by a firm impacts its innovation decisions. To disentangle the direction of causality between innovation and demand conditions, we construct a firm-level export demand shock which responds to aggregate conditions in a firm's export destinations but is exogenous to firm-level decisions. Using exhaustive data covering the French manufacturing sector, we show that French firms respond to exogenous growth shocks in their export destinations by patenting more; and that this response is entirely driven by the subset of initially more productive firms. The patent response arises 3 to 5 years after a demand shock, highlighting the time required to innovate. In contrast, the demand shock raises contemporaneous sales and employment for all firms, without any notable differences between high and low productivity firms. We show that this finding of a skewed innovation response to common demand shocks arises naturally from a model of endogenous innovation and competition with firm heterogeneity. The market size increase drives all firms to innovate more by increasing the innovation rents; yet by inducing more entry and thus more competition, it also discourages innovation by low productivity firms.
    Keywords: innovation, export, demand shocks, patents
    JEL: D21 F13 F14 F41 O30 O47
    Date: 2019–10

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