nep-sbm New Economics Papers
on Small Business Management
Issue of 2020‒01‒13
fifteen papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Core strength or Achilles’ heel : Organizational competencies and the performance of R&D collaborations By de Groot, Harmke
  2. PERCEPTION ABOUT RURAL ENTREPRENEURSHIP IN INDIA By Natanya Meyer; Dhanashree Katekhaye; Robert Magda
  3. A multi-sector model of relatedness, growth and industry clustering By Steven Bond-Smith; Philip McCann
  4. Regional entrepreneurship : the role of communication between actors in local network. An application in southwest France By Meriem Mengi Elayoubi
  5. The 'Margin call'. Export experience and firm entry into new export markets By Matteo Bugamelli; Andrea Linarello; Roberta Serafini
  6. Competitive strategies, heterogeneous demand sources and firms’ growth trajectories By Caravella, Serenella; Crespi, Francesco; Guarascio, Dario; Tubiana, Matteo
  7. SME access to finance in Europe: structural change and the legacy of the crisis By McQuinn, John
  8. A new quantitative method to understand the best innovative strategies for the companies By Gloria Gheno
  10. Self-regulation as a basic competence in the productive development of micro entrepreneurs in depressed environments: Case Province of Guayas - Ecuador By Mario Alfredo Fernandez Ronquillo
  12. Barriers to Entry and Regional Economic Growth in China By Loren Brandt; Gueorgui Kambourov; Kjetil Storesletten
  13. AI and Robotics Innovation: a Sectoral and Geographical Mapping using Patent Data By Van Roy, Vincent; Vertesy, Daniel; Damioli, Giacomo
  14. DECLINING BUSINESS DYNAMISM By Gert Bijnens; Joep Konings
  15. Global networks, local specialisation and regional patterns of innovation By Andrea Ascani; Luca Bettarelli; Laura Resmini; Pierre-Alexandre Balland

  1. By: de Groot, Harmke (Tilburg University, School of Economics and Management)
    Abstract: The three essays collected in this dissertation advance our understanding of how organizational competencies and R&D objectives are related with partner selection and R&D performance at the project level. The first essay shows how the organizational competencies and R&D prime objective of the focal firm are related with who is seen as the most important partner in the R&D project. The second essay examines how organizational competencies affect the innovation performance of companies when collaborating with an external R&D organization. The third essay focuses on the relationship of absorptive capacity and knowledge distance with new product development performance.
    Date: 2019
  2. By: Natanya Meyer (North-West University); Dhanashree Katekhaye (North-West University); Robert Magda (North-West University and Szent István university)
    Abstract: The majority of the Indian population resides in rural areas and their main livelihood is through agriculture and agriculture-related activities. In light of this, rural entrepreneurship is one of the vital contributors to economic development in this country. In many instances, rural entrepreneurs are also considered to be necessity-driven as they face many barriers and obstacles restricting growth. The main aim of this study is to determine rural entrepreneurs' perception of their achievements and how they influence the performance and growth of their businesses. The sample comprised entrepreneurs operating small or medium businesses in rural India more specifically the Vidarbha region. The study is empirical and exploratory and made use of a quantitative research design using a self-administered questionnaire. The study was conducted using a simple random sampling technique resulting in a final sample of 292 participants. Data was analysed using descriptive statistics and Chi-Square tests. The findings from the study revealed that entrepreneurship development provides new job opportunities and was stated as the most significant factor while the least important factors indicated that participants have the opinion that doing business in a rural area is not a good career option. The study concluded that entrepreneurship development provides new job opportunities and that people are aware of this. Furthermore, there is a significant relationship between the negative perception of rural people regarding entrepreneurship and entrepreneurial development. Recommendations include that government should create more favorable policies for business development. Business support services must be accessible to rural entrepreneurs in an attempt to change their perception about the lack of growth potential in rural areas. This would strengthen the enthusiasm among entrepreneurs as well as aspiring entrepreneurs in rural areas.
    Keywords: Entrepreneurship, rural, perception, opportunities, India
    JEL: L26
    Date: 2019–10
  3. By: Steven Bond-Smith (Bankwest Curtin Economic Centre, Curtin University); Philip McCann (Faculty of Spatial Sciences, University of Groningen)
    Abstract: This article builds an understanding of regional innovation specialization by developing a multi-sector model with endogenous growth through quality improving innovations and spillovers from related technologies. The model provides an approach to incorporate the relatedness literature within the mainstream theoretical frameworks of endogenous growth and economic geography. Each firm’s technology sector and the location of other firms play a role in each firm’s ability to improve its own technology. As a result, firms prefer to co-locate in technologically compatible clusters. Without relying on scale assumptions, the model for the first time coherently links related variety knowledge spillovers to mainstream urban economic frameworks and demonstrates that clustering is possible in both core and peripheral areas.
    Keywords: Innovation; endogenous growth; knowledge spillovers; relatedness; clusters
    JEL: R11 O41
    Date: 2019–09
  4. By: Meriem Mengi Elayoubi (CREG - Centre de recherche et d'études en gestion - UPPA - Université de Pau et des Pays de l'Adour)
    Abstract: Social networks stimulate business growth by creating opportunities, reducing transaction costs and develops knowledge exchange (Cavallo et al. 2018). However, conceptual and empirical research on the importance of the regional network on entrepreneurial decisions is still rather limited. Therefore, the purpose of this research is to explore the perception of local ecosystem through the lens of business founders. An exploratory study is conducted in order to better understand entrepreneurs behavior within their environment. Fifteen qualitative interviews reveal that local networking is systematically considered as playing an important role in the start-up creation. Therefore, communication among actors of entrepreneurial ecosystem is perceived as a key variable that actually creates conditions for network dynamism. This research concludes by discussing the main results obtained and focuses on the importance of interactions between local actors, through a communicative ecosystem.
    Keywords: network,communication,territory,regional,local,entrepreneurial ecosystem.
    Date: 2019–11–28
  5. By: Matteo Bugamelli (Bank of Italy); Andrea Linarello (Bank of Italy); Roberta Serafini (European Central Bank)
    Abstract: We use firm-level data on the universe of Italian exporters to characterize the evolution of aggregate goods exports during the period 2000-15. We first decompose aggregate annual export dynamics into the intensive and the extensive margin, where the latter is further broken down into its firm, product and market components. We document that the intensive margin and, to a lesser extent, net market entry have been the main drivers of export growth, counterbalancing the negative effect coming from firms ceasing their exporting activity. The contribution of the intensive margin comes mostly from medium-large and, especially, more productive firms, while that of net market entry is concentrated among medium-sized firms. We then focus on market entry and ask which characteristics are more significant in affecting the probability that an already-exporting firm enters a new destination market. We focus in particular on the role of export experience and show that firm-destination specific dimensions, such as the distance between the new market and the closest market already served by the firm and the contiguity between the two, play an important role. These results show the prevalence of expansion strategies that follow a proximity principle.
    Keywords: firm level data, intensive and extensive trade margins, entry into foreign markets, export experience
    JEL: F10
    Date: 2019–12
  6. By: Caravella, Serenella; Crespi, Francesco; Guarascio, Dario; Tubiana, Matteo
    Abstract: The present paper explores the demand-pull effect of distinct demand sources (i.e. households and retailers, other firms and public sector) on Italian companies’ growth patterns. Data relies on the PEC (Indagine sulle Professioni e le Competenze) survey carried out by the Institute for Public Policy Analysis (INAPP), which provides a rich set of information on a representative sample of Italian companies (~32.000) observed during the years 2012, 2014 and 2017. In particular, we investigate if and to what extent firm-level growth profiles are linked to the prevalent source of the demand flows that such firms face. The analysis contextually accounts for the role played by technological and knowledge-related heterogeneities in shaping the growth pattern-demand type relationship. The empirical analysis shows that the demand-pull effect on firms’ growth is heterogeneous across different types of demand sources and that the ability to seize the growth-related chances provided by distinct demand conditions is contingent on firms’ specific knowledge profiles.
    Keywords: firms,growth,demand-pull,innovation
    JEL: L1 L21 L22 L25
    Date: 2020
  7. By: McQuinn, John (Central Bank of Ireland)
    Abstract: Small and Medium Enterprise (SME) access to credit deteriorated during the financial crisis and credit constraints remain high for some euro area countries. This paper investigates the factors linked to the variation in SME credit access across euro area countries. After controlling for the fundamental performance and characteristics of firms and bank funding costs, I investigate the financial and macroeconomic channels that explain variation in credit constraints across countries and time. The paper combines approaches taken in the literature, extends the analysis to the post-crisis period, distinguishes between alternative measures of credit constraints and incorporates the role of soft information. The most economically important channels associated with SME access to finance are found to be the soft information channel and firm indebtedness. Bank competition and the condition of bank balance sheets are also found to have economically important relationships with SME access to finance.
    Keywords: access to finance, SMEs, financial crises, soft information, firm indebtedness, bank competition, bank balance sheets, capital markets union.
    JEL: G01 G21 D22 D82 E66
    Date: 2019–08
  8. By: Gloria Gheno (Innovative data analysis)
    Abstract: Companies, which profitably analyze the competitive market, are more able than others to determine and discover opportunities for innovation in their sector. Therefore, knowing which methods of investment lead to better levels of innovation is essential in a global and very competitive economy as the current one. Because frequently and usually the transfer of technological knowledge takes place among different sectors, it is essential to compare them. In the global world, in order to improve own business and own development, it is essential to understand the actual and real situation of the market and the position occupied in it, so as to detect quickly its possible progress. In this study, to define the position of companies belonging to one or more sectors in the evolutionary process of innovation, I propose a statistical-mathematical method which orders them using publicly available and therefore cost-free data. I analyze the innovative efforts of companies considering 11 different specific initiatives, including accelerators, incubators and innovation labs, over an extended period of time. To demonstrate concretely my method, I use a dataset composed of 80 companies operating in emerging markets, identifying so which types of investments are the best and which companies and sectors are the most innovative. The objective of my method is to provide each individual company with the opportunity to understand which innovative initiatives are more profitable for its expansion in the market and its level of innovation in comparison with the others, so as to be able to apply and profitably to orient own investments.
    Keywords: factor analysis, innovation, innovative initiatives, principal component analysis
    JEL: C01 C38 M10
    Date: 2019–10
  9. By: Norikun, Bun
    Abstract: This research analyzes the work of marketing in Convection Business in Kudus Disctrict, particularly in the competitiveness of its Micro, Small and Medium business (UKM). UKM does serve an important role in economy development, since it provides job opportunities, as well as opens new field of jobs. It is particularly true in Convection Business UKM, because it has a very competitive market or red ocean (already existed in the market). This research tries to analyze how various strategy variables, which are innovation abilities, market orientation, and entrepreneurship orientation through competitive advantage can significatly improve marketing performance in Convection Business in Kudus District. The research collects the samples from 194 Convection business users in Kudus District. This research bases its analysis using Structural Equation Modelling (SEM). It gets a conclusion that innovation abilities, market orientation, entrepreneurship orientation and competitive advantage do give direct contribution toward marketing performance, while innovation abilities, market orientation and entrepreneurship orientation through competitive advantage do give indirect contribution toward marketing performance
    Date: 2018–12–04
  10. By: Mario Alfredo Fernandez Ronquillo (Universidad Estatal de Milagro)
    Abstract: The microenterprise in Ecuador has a participation of approximately 90% of the productive activity of the country, with the Province of Guayas being the region with the highest percentage of representation, around 25% of the total. Microenterprises are an important source of employment; and, for most micro entrepreneurs, they are generators of self-employment. Ecuadorian microenterprises, in a percentage close to 70%, are managed only by the micro entrepreneur and do not employ additional people. Currently, these companies do not tend to grow, and are considered as survival companies; factor that has high incidence as one of the causes that maintain depressed environments; that are conceptually defined as areas with high rates of poverty and extreme poverty, a very particular characteristic in developing countries, such as Ecuador. Under this premise, 379 micro entrepreneurs located in the region under study were surveyed, using the competency assessment questionnaire developed by Boyatzis in 1991, and applying a new 360 degree instrument called Emotional Competency Inventory, ECI 2.0 (Hay Group McClelland Center for Research and Innovation, 2005), whose data show the level of knowledge that micro entrepreneurs have about their basic competencies, classified into four groups: self-awareness, self-regulation, social awareness, and relationship management. In the present study, self-regulation is analyzed, whose detail is reflected in the related sub competences: 1) emotional self-control, 2) transparency, 3) adaptability, 4) achievement, 5) initiative, 6) optimism. The results of this analysis present to the micro-entrepreneurs, as individuals who qualify with a high degree of self-control, a lot of optimism and great initiative. In addition, they are considered adaptable to changes, and willing to achieve, through the transparency of their actions. These resulting elements should be used by the academy or institutions related to micro entrepreneurs, to promote support programs that enhance these skills, and contribute to the development and productive growth of the microenterprise sector.
    Keywords: basic competence, micro entrepreneur, self-regulation, depressed environments, microenterprise
    JEL: O15 L26 N86
    Date: 2019–10
  11. By: , Ariawan (University Ichsan Of Gorontalo); Sudarma, Made; , Djumahir; Maskie, Ghozali
    Abstract: status ;(post print South East Asia Journal of Contemporary Business, SEAJBEL 11 (2), 87-94 vol. , 2016) Micro SME sector is an important sector in the national economy moving. Management needs to manage internal resources owned by the management of intangible assets that are unique resources, cannot be duplicated, cannot be replaced, and rarely found among competitors. This article aims to explain the role of spiritual capital, human capital, structural capital, relational capital in improving the performance of SMEs. based resources based theory which is the company's resources as the main controller behind the performance and competitiveness. The results show the important role of spiritual capital, human capital, structural capital, relational capital in improving the performance of SMEs.
    Date: 2017–12–04
  12. By: Loren Brandt; Gueorgui Kambourov; Kjetil Storesletten
    Abstract: Labor productivity in manufacturing differs starkly across regions in China. We document that productivity, wages, and start-up rates of non-state firms have nevertheless experienced rapid regional convergence after 1995. To analyze these patterns, we construct a Hopenhayn (1992) model that incorporates location-specific capital wedges, output wedges, and entry barriers. Using Chinese Industry Census data we estimate these wedges and examine their role in explaining differences in performance and growth across prefectures. Entry barriers explain most of the differences. We investigate the empirical covariates of these entry barriers and find that barriers are causally related to the size of the state sector
    Keywords: Chinese economic growth; SOEs; firm entry; entry barriers; capital wedges; output wedges; SOE reform.
    JEL: O11 O14 O16 O40 O53 P25 R13 D22 D24 E24
    Date: 2020–01–05
  13. By: Van Roy, Vincent; Vertesy, Daniel; Damioli, Giacomo
    Abstract: Economic activities based on the invention, production and distribution of artificial intelligence (AI) technologies have recently emerged worldwide. Yet, little is known about the innovative activities, location and growth performance of AI innovators. This chapter aims to map and analyse the global innovative landscape of AI by exploring 155,000 patents identified as AI-related by means of text-mining techniques. It highlights the emergence and evolution of AI technologies and identifies AI hotspots across the world. It explores the scale and pervasiveness of AI activities across sectors, and evaluates the economic performance of AI innovators using firm accounting information. Finally, it assesses recent trends in venture capital investments towards AI as financial support to promising AI startups. Findings of this chapter reveal a tremendous increase in AI patenting activities since 2013 with a significant boom in 2015-2016. While most of AI patenting activities remain concentrated in the sectors of software programming and manufacturing of electronic equipment and machinery, there are clear signs of cross-fertilisation towards (non-tech) sectors. The market of AI patenting firms is very vibrant and characterised by a large increase of new and small players with economic performances above industry average. This trend is also reflected by the recent increase in venture capital towards AI startups.
    Keywords: Artificial intelligence,innovation,patents,robotics
    JEL: O31 O33
    Date: 2019
  14. By: Gert Bijnens; Joep Konings
    Abstract: We build on Decker et al. (2016) who show that business dynamism and entrepreneurship in the U.S. have declined over recent decades and that the characteristics of this decline changed around 2000. Since 2000 the U.S. decline in dynamism has been accompanied by a decline in high-growth, young firms. Using 30 years of data from all for-profit firms incorporated in Belgium, we now offer evidence that Belgium, a far more rigid economy than the U.S., experienced a similar decline in dynamism. Furthermore, the decline set in around 2000 as well. We attribute this not only to the declining share of young firms that become high-growth firms, but more importantly also to the declining propensity for small (not necessarily young) firms to experience fast growth. We do not yet know what caused this decline. Since there are remarkable similarities between Belgium and the U.S. with respect to the secular decline in business dynamism, global trends rather than country specific changes are most likely to be at the basis of this evolution. A possible global trend causing dynamism to decline, is the ICT revolution that started the second half of the ’90s. We find preliminary indications that industries with higher ICT intensity have experienced a dynamism trend change during that same period and show a steeper dynamism decline.
    Date: 2018–01
  15. By: Andrea Ascani; Luca Bettarelli; Laura Resmini; Pierre-Alexandre Balland
    Abstract: A large academic consensus exists on the idea that successful innovative processes are geographically bounded within regions. Nevertheless, the ability of regions to capture and re-use external knowledge is also regarded as a fundamental element to sustain and refine the local profile of specialisation and competitiveness. The present article combines these views to investigate the sources of the regional innovation process, by analysing data on Italian regions over the period 2007-2012. We define regional external networks based on all the foreign subsidiaries of local multinational enterprises identifiable as global ultimate owners. Our main results suggest that both the internal specialisation and the outward networks can generate indigenous innovation, but the role of the networks varies substantially according to its density, its degree of complementarity with the specialisation profile, its geographical spread and the specific location of the foreign subsidiaries. Our results, then, support a view of the regional innovation as an interactive process whereby valuable knowledge resources are not only generated within the reach of the local economy, but they are also integrated with external inputs. This contrasts with recent anti-globalisation views according to which the increase in the foreign operations of national companies impoverishes the local economy.
    Keywords: outward foreign direct investment, innovation, specialisation, networks, relatedness
    JEL: O3 F23 R10 F60
    Date: 2020–01

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