nep-sbm New Economics Papers
on Small Business Management
Issue of 2019‒12‒09
fifteen papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. The impact of board directors on the innovation of new ventures By Christopher F. Baum; Hans Lööf; Andreas Stephan; Ingrid Viklund-Ros
  2. The impact of board directors on the innovation of new ventures By F Baum, Christopher; Lööf, Hans; Stephan, Andreas; Viklund-Ros, Ingrid
  3. Determinants of Staged Project Management and Success in Innovation: Empirical Analysis based on the Japanese National Innovation Survey By HANEDA Shoko; IKEDA Yuya
  4. Potentiality and Actuality: Characteristics and Linkage of Entrepreneurs and Angel Investors in Japan By NAKAMURA Hiroki; HONJO Yuji; IKEUCHI Kenta
  5. Does Cooperation with Universities and KIBS Matter? Firm-level Evidence from Spain By Barge-Gil, Andrés; Vivas-Augier, Carlos
  6. Tech on the ROC: Export Threshold and Technology Adoption Interacted By Stefano Costa; Federico Sallusti; Claudio Vicarelli; Davide Zurlo
  7. Intangible Capital and Labour Productivity Growth: A Review of the Literature By Roth, Felix
  8. Direct and Indirect Effects of Subsidized Dual Apprenticeships By Crépon, Bruno; Premand, Patrick
  9. Wage Inequality as a Source of Endogenous Macroeconomic Fluctuations By Jaylson Jair da Silveira; Gilberto Tadeu Lima
  10. Incubator specialization and size: divergent paths towards operational scale By Klofsten, Magnus; Lundmark, Erik; Wennberg, Karl; Bank, Megan
  11. Product Liability, Multidimensional R&D and Innovation By Lin, Ping; Zhang, Tianle
  12. Entrepreneurship among the Unemployed: the Effect of Unemployment Benefit By Xu, Wenjian
  13. CEO age, shareholders’ monitoring and organic growth among European firms By Giorgio Barba Navaretti; Davide Castellani; Fabio Pieri
  14. Contrattazioni integrative aziendali e produttività: nuove evidenze empiriche sulle imprese italiane By Laura Bisio; Stefania Cardinaletti; Riccardo Leoni
  15. Who patents, how much is real invention and how relevant? A snapshot of firms and their inventions based on the 2016 SIPO China Patent Survey By Margit Molnar; Hui Xu

  1. By: Christopher F. Baum (Boston College; DIW Berlin; CESIS, KTH Royal Institute of Technology); Hans Lööf (CESIS, KTH Royal Institute of Technology); Andreas Stephan (Jönköping International Business School; DIW Berlin); Ingrid Viklund-Ros (CESIS, KTH Royal Institute of Technology)
    Abstract: This paper studies the impact of knowledge spillovers on innovation in newly founded firms. Analyzing patent statistics for 12 cohorts of about 7,600 Swedish startups, we apply a recursive bivariate probit model to identify a causal impact from board members of existing innovators on potential new innovators. The results show that new entrants with members of the board linked to innovative firms are more likely to apply for patents than other young entrepreneurial firms. The spillover effect is even stronger when we substitute trademarks for patents as an innovation indicator.
    Keywords: start-ups, board of directors, knowledge diffusion, innovation, endogeneity
    JEL: C36 D24 M13 L21 O33
    Date: 2019–11–29
  2. By: F Baum, Christopher (Boston College, DIW Berlin & Centre of Excellence for Science and Innovation Studies); Lööf, Hans (Royal Institute of Technology & Centre of Excellence for Science and Innovation Studies); Stephan, Andreas (Jönköping University, DIW Berlin & Centre of Excellence for Science and Innovation Studies); Viklund-Ros, Ingrid (Royal Institute of Technology & Centre of Excellence for Science and Innovation Studies)
    Abstract: This paper studies the impact of knowledge spillovers on innovation in newly founded firms. Analyzing patent statistics for 12 cohorts of about 7,600 Swedish startups, we apply a recursive bivariate probit model to identify a causal impact from board members of existing innovators on potential new innovators. The results show that new entrants with members of the board linked to innovative firms are more likely to apply for patents than other young entrepreneurial firms. The spillover effect is even stronger when we substitute trademarks for patents as an innovation indicator.
    Keywords: start-ups; board of directors; knowledge diffusion; innovation; endogeneity
    JEL: C36 D24 L21 M13 O33
    Date: 2019–11–29
  3. By: HANEDA Shoko; IKEDA Yuya
    Abstract: This empirical study examines the impact of a staged approach to management of innovation projects. This approach incorporates the threat of termination at each stage of the product development process. Under these conditions, the present study identifies firms that have abandoned and/or still have ongoing projects using a unique firm-level dataset constructed from the 2015 Japanese National Innovation Survey (J-NIS2015). Combining J-NIS with a firm-level accounting and credit information dataset, the study explores the determinants and the effects of staging of innovation processes. The study results show that R&D-intensive firms with broad collaboration and a lower debt ratio are more likely to adopt a staged approach in the product development process. Success in innovation is measured by the propensity of a firm to produce innovative products (or processes) and the ratio of innovative product sales to the total sales. Additionally, the study compared firms that did not implement staging of projects to those that employed staged project management and found that staging significantly improved innovation performance and increased the degree of radicalness.
    Date: 2019–11
  4. By: NAKAMURA Hiroki; HONJO Yuji; IKEUCHI Kenta
    Abstract: Certain individuals with experience in entrepreneurial activity tend to become angel investors as they understand the challenges encountered by founders in obtaining the funding needed to launch a business. The purpose of this study is to provide a clearer picture of the characteristics and linkages not only between actual entrepreneurs and angel investors, but also among actual and potential entrepreneurs and angel investors in Japan. This paper is based on the results of an internet survey of Japan conducted by RIETI which examined whether individuals have experience in starting a business and angel investing, as well as whether they are interested in starting a business or angel investing. The individuals are categorized into types of entrepreneurs and angel investors. According to the analysis, the number of entrepreneurs and angel investors is quite small across Japan, however we have established that there is a positive relationship in particular regions of Japan between potential entrepreneurs, angel investors, and potential angel investors. These findings can help vitalize entrepreneurial ecosystems where entrepreneurs are linked with angel investors.
    Date: 2019–10
  5. By: Barge-Gil, Andrés; Vivas-Augier, Carlos
    Abstract: This manuscript contributes to the literature on firm cooperation with universities and KIBS by framing the analysis according to the literature on causal effects, comparing the effect of the two different agents and exploring which firms benefit more from cooperation with a specific partner. Results shows that the lower bound for the effect is around 27-30% increase in sales from new products for both types of partners. After covariates and fixed effects are used, it is found that this effect is not likely driven by time-varying unobservable factors. Moreover, we show that firms that benefit the most from cooperation with universities are different from those firms that benefit the most from cooperation with KIBS.
    Keywords: firm cooperation; universities; KIBS; treatment effects; heterogeneity; policy matching.
    JEL: L24 O32 O33
    Date: 2019–11–12
  6. By: Stefano Costa; Federico Sallusti; Claudio Vicarelli; Davide Zurlo
    Abstract: This paper analyses the potential mismatch between the conditions required for a manufacturing firm to become exporter and the pattern of technology adoption within the industry. The 'export threshold', which is estimated using the ROC methodology, is the minimum combination of productivity and 'economic size' (a broader measure of firm size) that firms need to achieve in order to access export markets. To consider the pattern of technology adoption we also estimate a 'technology line'. The relative positioning of the 'technology line' and the export threshold generates a new taxonomy of firms allowing for better policies for internationalization.
    Keywords: ROC analysis; export threshold; technology adoption; extensive margin of exports.
    Date: 2019–12–01
  7. By: Roth, Felix
    Abstract: This paper surveys a wide range of studies on the impact of capital investment in intangible assets on labour productivity growth and highlights their main findings on. Surveying the literature at the country, industry and firm level, this paper finds evidence of the increasing importance of business investment in intangible assets in explaining the dynamics of labour productivity growth. Moreover, the findings reported in the literature surveyed suggest that in order to fully reap the benefits of investment in information and communication technology (ICT) and artificial intelligence (AI), it is essential for businesses to make complementary investment in intangible assets. In addition, the literature on the drivers of business capital investment in intangibles highlights the importance of having in place a well-endowed infrastructure of public intangibles. Judging from the wide range of economic literature surveyed, this paper finds that the contemporary economic debate now broadly acknowledges the importance of intangibles for the transformation of developed economies towards becoming fully-fledged knowledge economies.
    Keywords: Intangible Capital,Labour Productivity Growth,Total Factor Productivity Growth,Information and Communication Technology,Artificial Intelligence,European Union
    Date: 2019
  8. By: Crépon, Bruno (CREST); Premand, Patrick (World Bank)
    Abstract: Traditional apprenticeships based on private arrangements are widespread in developing countries. Public interventions have attempted to address failures in the apprenticeship markets to expand access or improve training quality. Subsidized dual apprenticeships have the potential to address financial constraints for youths and firms' inability to commit to provide general skill training. This paper analyzes the impact of subsidized dual apprenticeships combining on-the-job and theoretical training in Côte d'Ivoire. We set up an experiment that simultaneously randomized whether interested youths were assigned to a formal apprenticeship, and whether apprenticeship positions opened by firms were filled with formal apprentices. We document direct effects for youths and indirect effects for firms, such as whether they substitute between traditional and subsidized apprentices. In the short run, youths increase their human capital investments and we observe a net entry of apprentices into firms. Substitution effects are limited: the intervention creates 0.74 to 0.77 new position per subsidized apprentice. The subsidy offsets forgone labor earnings. Four years after the start of the experiment, treated youths perform more complex tasks and their earnings are higher by 15 percent. We conclude that subsidized dual apprenticeships expand access to training, upgrade skills and improve earnings for youths without crowding out traditional apprentices.
    Keywords: employment, apprenticeship, wage subsidy, training, direct and indirect effects, equilibrium effects, micro and small enterprises, field experiment, Africa
    JEL: D22 J23 J24 O12 C93
    Date: 2019–11
  9. By: Jaylson Jair da Silveira; Gilberto Tadeu Lima
    Abstract: There is extensive evidence on both the endogeneity of labor productivity to the wage remuneration and the persistence of wage inequality across observationally similar workers and firms. The paper builds an evolutionary micro-dynamic model having these two features of the labor market as interconnected, and explores the ensuing implications for the macro-dynamics of the distribution of income, capacity utilization and output growth. Firms periodically revise (and possibly switch) their choice of remunerating workers with a higher or lower wage, and the resulting labor productivity differential across workers is endogenous to the distribution of wage remuneration strategies across firms. The long run features wage inequality as a persistent outcome. Moreover, plausibly low levels of wage inequality suffice to cause the distribution of wage remuneration strategies across firms, and therefore the distribution of income, capacity utilization and output growth, all to experience self-sustaining cyclical fluctuations.
    Keywords: Wage inequality; evolutionary micro-dynamics; distribution of income; capacity utilization; output growth
    JEL: J31 E25 E32 O41 C62
    Date: 2019–11–29
  10. By: Klofsten, Magnus (Linköping University); Lundmark, Erik (Linköping University); Wennberg, Karl (The Ratio Institute); Bank, Megan (Linköping University)
    Abstract: Research on incubators show that size is important in achieving efficiency and networking benefits for clients. However, little research has focused on what factors influence incubator size. We theorize and show partial support for size benefits to incubator specialization. Analyses of the relationship between size and four distinct specialization strategies in a sample of 96 European incubators show that incubator size is positively related to a strategic focus on universities and research institutes as recruitment channels and to a focus on sustainability, but not to a regional or industry focus. Paradoxically, tenants with a focus other than sustainability often dominate sustainability-oriented incubators, suggesting that sustainability may be more of a legitimating strategy than an explicit selection criterion.
    Keywords: Business incubator; industry; region; university; sustainability; specialization; focus; size
    JEL: L25 L26 O32
    Date: 2019–11–26
  11. By: Lin, Ping; Zhang, Tianle
    Abstract: We study the effect of product liability on the incentives of product and safety innovation. We first develop a monopoly model in which a firm chooses both product novelty and safety in an innovation stage followed by a production stage. A greater product liability directly increases the marginal benefit of producing a safer product and thus increases product safety. However, as product liability increases, product novelty may increase or decrease, depending on the relative strengths of demand-shifting and cross-R&D effects identified in the model. Consequently, a greater product liability may decrease consumer welfare and thus total welfare. We extend the results to an oligopoly model with differentiated products and study the effects of competition measured by the number of firms and the degree of product substitutability. We find that equilibrium product novelty and safety decrease with the number of firms but exhibit non-monotonic relationships with the degree of product substitutability.
    Keywords: Product Liability, Safety, Novelty, Innovation Incentive
    JEL: D4 K13 L13
    Date: 2019–11
  12. By: Xu, Wenjian
    Abstract: This paper probes the drivers and constraints that affect an unemployed individual's decision to start a business. Using linear probability model and survival analysis, we find that unemployment benefits have a significantly negative effect on switching from unemployment to self-employment and a positive effect on the duration before the switch, especially on the unincorporated self-employment. Moreover, unemployed individuals are less likely to start a business after being laid off, if their spouse does not have a job or most people expect the unemployment rate to go down in the coming 12 months.
    Date: 2018–01–19
  13. By: Giorgio Barba Navaretti (Univesity of Milan); Davide Castellani (Henley Buisness School, University of Reading); Fabio Pieri (University of Trento)
    Abstract: We examine the relation between CEO age and firm organic growth in a large sample of mostly privately held European manufacturing firms of all size classes. Firms managed by a young CEO grow faster in terms of both sales and assets. Results are robust to the inclusion of a large vector of firm and CEO characteristics and to controls for time horizon, survival bias and endogeneity. We hypothesize that this relation is explained by an incentive of young CEOs to boost firm growth both to signal their talent in the market for managers and to get a longer stream of future compensation benefits. This may create an agency problem, due to a divergence of this corporate strategy from shareholders’ targets. In line with this hypothesis, a larger blockholder ownership, allowing for a more effective monitoring, moderates the relation between CEO age and firm growth.
  14. By: Laura Bisio (ISTAT); Stefania Cardinaletti (ISTAT); Riccardo Leoni (University of Bergamo)
    Abstract: Il paper analizza il ruolo della contrattazione integrativa decentrata rispetto alla produttività aziendale utilizzando la recente banca-dati approntata dall'ISTAT (contenente informazioni relative alle imprese appartenenti al settore privato sopra i 10 addetti, agricoltura esclusa), e affronta la questione se la contrattazione aziendale contribuisce a sviluppare la produttività oppure si limita a ripartirne i guadagni là dove si realizzano. Vengono sviluppati due modelli, riguardanti rispettivamente la probabilità di introdurre un contratto integrativo e l'impatto di questo sulla produttività dell'impresa. La procedura di stima segue un approccio a 3 stadi. Nel primo si stima una funzione di produzione con il metodo GMM-SYS, da cui si ricava una misura della PTF. Nel secondo, per mezzo di stimatori probit, Heckit e OLS, si spiegano (tenendo conto delle dovute endogenità) le determinanti della presenza del contratto integrativo collettivo aziendale (CICA) e della variabile fattoriale che ingloba tutte le pratiche manageriali ed organizzative concordate a livello aziendale. Nel terzo, infine, si indaga la relazione tra contrattazione integrativa e PTF, controllando sia per la potenziale endogenità che la caratterizza, sia per le pratiche manageriali e organizzative che rimangono sotto il controllo dei manager, sia infine per l'erogazione unilaterale di premi ai singoli dipendenti. Dalle stime emerge che: (i) la funzione di produzione stimata si comporta abbastanza bene; (i) la probabilità della presenza di una contrattazione è influenzata sia dalla profittabilità ritardata (intesa come possibilità di investire nelli'incremento del capitale organizzativo dell'impresa), sia dal tasso di sindacalizzazione (interpretabile come strumento per vincere le resistenze autocratiche del management aziendale); (iii) ignorando la questione dell'endogeneità, l'impatto (ritardato) sulla produttività della contrattazione aziendale risulta distorto verso il basso. Nel caso di trattamento binario, l'impatto sulla PTF si attesta attorno al 9,6%, mentre nel caso della variabile fattoriale di sintesi dei contenuti della contrattazione l'elasticità è pari a 0,47, che implica che ad un aumento del 10% nel bundle delle pratiche organizzativo-manageriale sindacalmente concordate è associato un incremento del 4,7% della PTF. Dalle stime emerge anche che le imprese a gestione famigliare hanno una minore propensione, rispetto a quelle a gestione manageriale, sia a stipulare contratti integrativi, sia a concedere terreno ai rappresentanti dei lavoratori sul versante delle pratiche organizzativo-manageriali.
    Keywords: Produttività totale dei fattori, Performance d'impresa, Contrattazione integrativa aziendale, Incentivi economici
    JEL: D24 L25 J52 J33
    Date: 2018–01
  15. By: Margit Molnar; Hui Xu
    Abstract: China has surpassed the United States in patent applications and has become world leader. Strong patenting activity, however, did not lead to strong productivity growth. The delinking of patenting activity from productivity growth could be explained by quality and relevance issues. Although the number of patents has been soaring, few are genuine inventions. Relatively low utilisation rates of patents point to a low degree of relevance. This paper uses a representative survey of Chinese patenting firms to provide a detailed picture of the patenting landscape along the dimensions of geographical areas, detailed industrial sectors, traditional and modern industries as defined by the Chinese government, firm age, size and ownership. It also overviews government subsidies across firms. Transport equipment makers hold most patents per firm, followed by electronics manufacturers. State-owned firms spend more on R&D per patent, but hold fewer patents per researcher than private or foreign-invested firms. High patenting performance and government support are not necessarily linked to high utilisation of patents. Smaller, younger and private firms expect a higher return on their patents and so do exterior design patent holders. Furthermore, the paper examines what drives patenting activity. Higher R&D spending by the firm and higher share of researchers in its workforce tend to be associated with higher patents per employee. Smaller and older firms tend to patent more, and government support also appears to matter. Exterior design patents are associated with different firm characteristics: R&D intensity is lower and government support matters less. Most firms consider IPR protection insufficient and the share of firms having experienced patent infringement is the greatest among the largest firms. Many of them do not do anything once their rights are infringed as they do not expect effective remedy. Instead of patenting, which may not provide sufficient protection from imitators, they adopt other strategies like reaping the first mover advantage to market their goods or sign confidentiality agreements with their staff or contracts on commercial secrets. This Working Paper relates to the 2019 Economic Survey of China ( mic-snapshot/).
    Keywords: Chinese patenting, firm-level analysis, government subsidies, invention patents, IPR
    JEL: O31 O34 O38
    Date: 2019–12–10

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