nep-sbm New Economics Papers
on Small Business Management
Issue of 2020‒02‒17
twelve papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. R&D and Knowledge Expertise of French Regions By Tan Tran
  2. Declining Business Dynamism in Belgium By Gert Bijnens; Jozef Konings
  3. Does FDI benefit incumbent SMEs?: FDI spillovers and competition effects at the local level By Alexander C. Lembcke; Lenka Wildnerova
  4. Enterprising women in Southern Africa: When does land ownership matter? By Brixiová, Zuzana; Kangoye, Thierry; Tregenna, Fiona
  5. Intangible capital and productivity: Firm-level evidence from German manufacturing By Kaus, Wolfhard; Slavtchev, Viktor; Zimmermann, Markus
  6. The inpact of the remuneration committee on the CEO pay-performance sensitivity By Ali Dardour; Rim Boussaada; Hazar Ben Barka
  7. Entrepreneurial Access to Finance in the US By Inessa Love
  8. Investment behavior and firms' financial performance: A comparative analysis using firm-level data from the wine industry By Claudiu Albulescu
  9. The Dynamics of High-Growth Firms : Evidence from Tunisia By Marcio,Cruz; Baghdadi,Leila; Arouri,Hassen
  10. The business angel portfolio under the European Angels Fund: An empirical analysis By Gvetadze, Salome; Pal, Kristian; Torfs, Wouter
  11. Why Do Turkish Firms Go Abroad to Invest? By Yilmaz Kilicaslan; Yesim Ucdogruk Gurel; Gokhan Onder; Zeynep Karal Onder
  12. Gender Bias in SME Lending : Experimental Evidence from Turkey By Alibhai,Salman; Donald,Aletheia Amalia; Goldstein,Markus P.; Oguz,Alper Ahmet; Pankov,Alexander; Strobbe,Francesco

  1. By: Tan Tran
    Abstract: Within the literature of regional innovation systems, a growing stream of research emphasizes the role of differentiated knowledge bases. The employees’ occupations mainly measure the existing work on knowledge bases. Even though the conceptual theory highlights the importance of interactions across types of knowledge bases underlying innovation activities, they are separately measured and treated in most empirical studies. While few studies use the interaction term between knowledge bases, it does not reflects their actual relationships. In this study, an attempt is made to analysis and observe the regional knowledge for long periods of time. The study suggests suggesting to measure different types of expertise in science and technology of the region, as the fine-grained layers of regional knowledge bases, by using patent and publication datasets in France. Finally, we imply the new measurements to understand the relationships between regional R&D expenditure and their knowledge expertise. The results show that R&D expenditure has a positive relationship with the numbers of the scientific and technological expertise of the region; however, not to the level of expertise. The results also show that the level of technological expertise will increase if it is complementary to a specific science.
    Keywords: regions, science, technology, interdependence, R&D
    JEL: R11 O32 O34
    Date: 2020–02
  2. By: Gert Bijnens; Jozef Konings
    Abstract: Using 30 years of data from all for-profit firms incorporated in Belgium, we show that business dynamism and entrepreneurship have been declining over recent decades. This decline set in around the year 2000 following a decade of declining start-up rates. We also observe a decreasing share of young firms that become high-growth firms and more importantly a declining propensity for small (not necessarily young) firms to experience fast growth. Interestingly, a similar decline in business dynamism occurred in the U.S., where firms face a far less rigid institutional environment than in Belgium. These remarkable similarities suggest that global trends rather than country specific changes are at the basis of this evolution. We show evidence that points to the role of ICT intensity and in explaining the secular decline in business dynamism.
    Keywords: business dynamism, firm dynamics, firm growth, entry, reallocation, high-growth firms, high-impact firms
    JEL: D21 E24 J6 L25
    Date: 2018–10
  3. By: Alexander C. Lembcke; Lenka Wildnerova
    Abstract: That global networks provide positive externalities to participating firms is a well‑documented fact. Less is known about how the performance of non-participating firms, especially those that are small or medium-sized, changes with exposure to an increase in the presence of globally integrated firms in their vicinity. With global trade being dominated by large firms, the benefits for SMEs are often indirect, e.g. through input relationships with larger companies or through knowledge spillovers that facilitate the adoption of best practices in firms with access to globally integrated peers. This paper combines industry and regional exposure to global links in form of foreign ownership. It uses firm-level microdata for 13 OECD countries, allowing for local spillovers (or crowding out) within the same industry and across industries. Foreign investment in the firm in the same region is associated with increasing productivity of local firms, especially in form of cross-sector externalities. Horizontal (same sector) externalities are negative, especially if they are coming from foreign firms locating in distanced regions. FDI tends to be associated with employment decline in manufacturing firms, but some growth in small firms.
    Keywords: Employment, FDI, Firms, Productivity, SME
    JEL: D22 F14 F23 F21 R12
    Date: 2020–02–12
  4. By: Brixiová, Zuzana; Kangoye, Thierry; Tregenna, Fiona
    Abstract: Limited access to finance is one of the major barriers for women entrepreneurs in Africa. This paper presents a model of start-ups in which firms’ sales and profits depend on their productivity and access to credit. However, due to the lack of collateral assets such as land, female entrepreneurs have more constrained access to credit than do men. Testing the model on data from the World Bank Enterprise Surveys in Eswatini, Lesotho, and Zimbabwe, we find land ownership to be important for female entrepreneurial performance in terms of sales levels. This finding suggests that the small Southern African economies would benefit from removing obstacles to women’s land tenure and enabling financial institutions to lend against movable collateral. While land ownership is linked with higher sales levels, it seems less critical for sales growth and innovation where access to short term loans for working capital seems to be key.
    Keywords: entrepreneurial sales,innovation,credit,land,gender,Africa
    JEL: G21 L26 D24 O17
    Date: 2020
  5. By: Kaus, Wolfhard; Slavtchev, Viktor; Zimmermann, Markus
    Abstract: We study the importance of intangible capital (R&D, software, patents) for the measurement of productivity using firm-level panel data from German manufacturing. We first document a number of facts on the evolution of intangible investment over time, and its distribution across firms. Aggregate intangible investment increased over time. However, the distribution of intangible investment, even more so than that of physical investment, is heavily right-skewed, with many firms investing nothing or little, and a few firms having very large intensities. Intangible investment is also lumpy. Firms that invest more intensively in intangibles (per capita or as sales share) also tend to be more productive. In a second step, we estimate production functions with and without intangible capital using recent control function approaches to account for the simultaneity of input choice and unobserved productivity shocks. We find a positive output elasticity for research and development (R&D) and, to a lesser extent, software and patent investment. Moreover, the production function estimates show substantial heterogeneity in the output elasticities across industries and firms. While intangible capital has small effects for firms with low intangible intensity, there are strong positive effects for high-intensity firms. Finally, including intangibles in a gross output production function reduces productivity dispersion (measured by the 90-10 decile range) on average by 3%, in some industries as much as nearly 9%.
    Keywords: intangible capital,productivity,production functions
    JEL: D24 L60 O30
    Date: 2020
  6. By: Ali Dardour (École doctorale de Sciences de Gestion - IAE - Institut d'Administration des Entreprises - Toulouse); Rim Boussaada; Hazar Ben Barka (CEPN - Centre d'Economie de l'Université Paris Nord - UP13 - Université Paris 13 - USPC - Université Sorbonne Paris Cité - CNRS - Centre National de la Recherche Scientifique)
    Abstract: The research aims to study the influence of the remuneration committee characteristics on the CEO pay-performance sensitivity. Conducted on a sample of listed companies in the SBF 120 over the period 2010-2011, the results show that the number of directorships held by members and the number of committee meetings influence this sensitivity. Other measures such as the size of the committee, attendance, and the gender diversity have no effect. Furthermore, institutional investors are more active on their monitoring role than other types of shareholders. Their presence affects positively and significantly the pay for performance sensitivity.
    Abstract: Cet article a pour objectif d'étudier l'influence des caractéristiques des comités de rémunérations sur la sensibilité du salaire des dirigeants à la performance de l'entreprise. Menée sur un échantillon de sociétés cotées au SBF 120 sur la période 2010 à 2011, les résultats des tests d'hypothèses montrent que le nombre des mandats détenus par les membres et le nombre de réunions de comité influencent cette sensibilité. Les autres mesures comme, la taille du comité, l'assiduité, ainsi que la diversité genre n'ont pas d'effet. Par ailleurs, les investisseurs institutionnels sont plus actifs dans leur rôle de contrôle que les autres catégories d'actionnaires. Leur présence affecte positivement et significativement la sensibilité de la rémunération à la performance. Abstract This article aims to study the influence of the remuneration committee characteristics on the CEO pay-performance sensitivity. Conducted on a sample of listed companies in the SBF 120 over the period 2010-2011, the results show that the number of directorships held by members and the number of committee meetings influence this sensitivity. Other measures such as the size of the committee, attendance, and the gender diversity have no effect. Furthermore, institutional investors are more active on their monitoring role than other types of shareholders. Their presence affects positively and significantly the pay for performance sensitivity.
    Keywords: remuneration committee,CEO pay-performance sensitivity,Directorships,Gender diversity,Bo D independence,comités de rémunérations,sensibilité rémunération-performance,mandats,diversité genre
    Date: 2019–03–11
  7. By: Inessa Love (University of Hawaii at Manoa)
    Abstract: We present a critical assessment of the literature on entrepreneurial access to finance in the US. We present a comprehensive list of sources of finance that entrepreneurs use to start and grow their businesses and evaluate available research on each source. We also discuss different categories of entrepreneurs and identify underserved segments of the population. We perform a meta-analysis of available research on the actual use of different sources of funds and we perform an analysis of citations in the entrepreneurial literature. We conclude that there is a misalignment between the popularity of topics in the literature and the prevalence of different sources of funds. Finally, we identify gaps in existing literature, i.e. what sources of finance don’t have as much research available, and suggest avenues for future research.
    Keywords: Gender entrepreneurship, access to finance, venture capital
    JEL: L26 G32
    Date: 2020–01
  8. By: Claudiu Albulescu (CRIEF - Centre de Recherche sur l'Intégration Economique et Financière - Université de Poitiers)
    Abstract: This paper assesses the role of financial performance in explaining firms' investment dynamics in the wine industry from the three European Union (EU) largest producers. The wine sector deserves special attention to investigate firms' investment behavior given the high competition imposed by the latecomers. More precisely, we investigate how the capitalization, liquidity and profitability influence the investment dynamics using firm-level data from the wine industry from France (331 firms), Italy (335) firms and Spain (442) firms. We use data from 2007 to 2014, drawing a comparison between these countries, and relying on difference-and system-GMM estimators. Specifically, the impact of profitability is positive and significant, while the capitalization has a significant and negative impact on the investment dynamics only in France and Spain. The influence of the liquidity ratio is negative and significant only in the case of Spain. Therefore, we notice different investment strategies for wine companies located in the largest producer countries. It appears that these findings are in general robust to different specifications of liquidity and profitability ratios, and to the different estimators we use.
    Keywords: firm investment,financial performance,wine industry,comparative analysis
    Date: 2020–01–27
  9. By: Marcio,Cruz; Baghdadi,Leila; Arouri,Hassen
    Abstract: This paper examines the dynamics and characteristics of high-growth firms in Tunisia. Further knowledge about the dynamics of these firms can inform the design of business support policies, especially toward small and medium-size firms. The analysis suggests that between 1999 and 2015, about 9 to 10.5 percent of the firms in Tunisia achieved high-growth status per year, on average, depending on the definition used, and these shares have been remarkably stable over time. Although a small share of firms achieves high growth annually, almost one in every three firms that survive for more than a decade has achieved high-growth status at least once. High-growth status is more prevalent among small and young firms, as well as firms that export, import, or receive foreign direct investments.
    Date: 2020–02–10
  10. By: Gvetadze, Salome; Pal, Kristian; Torfs, Wouter
    Abstract: This paper analyses the Business Angel (BA) portfolio of the European Angels Fund (EAF), an initiative of the European Investment Fund, which engages in co-investment relationships with experienced business angels across Europe. It uses EIF's proprietary database to shed light on a specific subset of the European BA sector. The first section covers the basic characteristics of EAF's BAs and draws comparisons with existing studies wherever possible. In addition, it provides a basic description of EAF's investment portfolio, outlining the geographical distribution of its portfolio companies and the sector in which they are active. The next section focusses on BAs' investment practices. For example, we take a closer look at the geographical and sectoral investment strategies, and investigate aspects related to investment timing. We also examine the innovative capacity of the investees, by analysing patenting activity during the first years of the EAF program. Finally, a brief descriptive analysis provides an overview of the post-investment growth patterns experienced by EAF's investee companies.
    Keywords: EIF,business angels,venture capital,equity financing
    JEL: G24 G38 L25
    Date: 2020
  11. By: Yilmaz Kilicaslan (Anadolu University, Department of Economics); Yesim Ucdogruk Gurel (Dokuz Eylul University, Department of Economics); Gokhan Onder (Anadolu University, Department of Business Administration); Zeynep Karal Onder (Anadolu University, Department of Public Finance)
    Abstract: The aim of this paper is to examine the determinants and localization of outward FDI (oFDI) of Turkish firms that differs from developed country MNEs with respect to firm size, technology, skills and access to information about global markets. This research is the first attempt aimed to explore especially the determinants of country/region selection of Turkish outward FDI at the firm level by using discrete choice models. The findings in this paper are based on the primary data collected by in-depth-interviews with 299 outward-investing Turkish firms operating in manufacturing, wholesale and retail trade, transportation and storage, and information and communication sectors. Our descriptive findings show that 60% of the investments are green-field. We found that 68% of the investments were made in developing countries while the developed countries attracted only 32% of Turkish investments. Our findings show that the main motivation of Turkish firms investing in other counties is willingness to reach to the larger markets (77%). Our econometric findings show that the size of the firm and the parent firm are significant factors in selecting developed countries as the host country for the investment. As the size of the firm increases, the possibility of Turkish investors to choose developed countries is diminishing, while as the size of the parent firm bets bigger, the possibility of locating the investment in developed countries is rising. The high share of foreign ownership in parent firms has a positive impact on choosing developing countries to locate the investment. It seems that foreign firms benefit from the experiences of Turkish firms operating in developing markets. Finally, while willingness to avoid from tariffs has no significant impact on the probability of investing in developed countries (including EU countries), it increases the probability of investment in the member countries of Shanghai Cooperation Organization.
    Keywords: Outward Foreign Direct Investment, outward FDI, Probit, Logit, Turkey
    JEL: F12 G1 E2
    Date: 2019–11
  12. By: Alibhai,Salman; Donald,Aletheia Amalia; Goldstein,Markus P.; Oguz,Alper Ahmet; Pankov,Alexander; Strobbe,Francesco
    Abstract: Gender disparities in small and medium-size enterprise lending exist around the world and impede the growth of millions of women-led firms. This paper examines a potential driver of these disparities: gender-biased loan officers. Officer bias is measured through a novel loan application experiment conducted with 77 loan officers in Turkish banks. The analysis finds that 35 percent of the loan officers are biased against female applicants, with women receiving loan amounts $14,000 lower on average compared with men. Experience in the banking sector can attenuate this bias, with each year of experience reducing gender biased loan allocations by 6 percent. The results suggest that loan officers may use gender bias as a heuristic device given limited information and risk aversion. Helping newly recruited and lesser experienced loan officers to better discern loan application quality may thus improve financing of business loans to women and reduce gender gaps in entrepreneurship.
    Date: 2019–12–30

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