nep-sbm New Economics Papers
on Small Business Management
Issue of 2020‒03‒30
sixteen papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  2. Spill over or Spill out? - A multilevel analysis of the cluster and firm performance relationship By Nils Grashof
  3. Putting the watering can away Towards a targeted (problem-oriented) cluster policy framework By Grashof, Nils
  4. Unlocking the radical potential of German innovators How can R&D policy foster radical innovation? By Hesse, Kolja
  5. Patterns of innovation, advanced technology use and business practices in Canadian firms By Fernando Galindo-Rueda; Fabien Verger; Sylvain Ouellet
  6. Tertiary Education Expansion and Regional Firm Development By Tobias Schlegel; Curdin Pfister; Uschi Backes-Gellner
  7. Making a difference: Assessing the impact of the EIB's funding to SMEs By Amamou, Raschid; Gereben, Áron; Wolski, Marcin
  8. Total quality management practices in Bosnia and Herzegovina: Do organizational contextual factors matter? By Kulenović, Mirza; Veselinović, Liljan
  9. Occupational entry regulations and their effects on productivity in services: Firm-level evidence By Giuseppe Nicoletti; Indre Bambalaite; Christina von Rueden
  10. Employer Provided Training in Europe: Determinants and Obstacles By Brunello, Giorgio; Wruuck, Patricia
  11. The Direct Effect of Corporate Law on Entrepreneurship By Guzman, Jorge
  12. Compositional Nature of Firm Growth and Aggregate Fluctuations By Vladimir Smirnyagin
  13. Immigration, trade and productivity in services: evidence from U.K. firms By Ottaviano, Gianmarco I. P.; Peri, Giovanni; Wright, Greg C.
  14. Do Financial Ratios and Financial Characteristics Affect Corporate Social Responsibility Disclosure? By Silvy Christina
  15. The generation of management innovation in microentreprises: absorptive capacity and entrepreneur-CPA relationship By Agnès Mazars Chapelon; Philippe Chapellier; Sophie Mignon
  16. The complexity of the budgetary systems as a sign of the universalism of the systems of control? The case of the Tunisian SMEs By Zouhour Ben Hamadi; Philippe Chapellier; Dupuy Yves

  1. By: Francesco Aiello (Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF, Università della Calabria); Paola Cardamone (Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF, Università della Calabria); Lidia Mannarino (Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF, Università della Calabria); Valeria Pupo (Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF, Università della Calabria)
    Abstract: This article focuses on the relationship between external research and development (R&D) and firm innovation output. Using a sample of Italian manufacturing firms in the period of 2007-2009, the role played by external R&D is evaluated, investigating differences between family and non-family firms. Results show that the R&D acquired from external sources has a positive impact, especially on family firms, suggesting that family companies have a greater capacity to translate external R&D into tangible economic benefits. This result is consistent with those obtained when we consider the combination of internal and external R&D, as well as the family involvement in governance and management.
    Keywords: Family firms, R&D investment, Innovative sales, Italian manufacturing industry
    JEL: O32 G34 C24
    Date: 2020–02
  2. By: Nils Grashof
    Abstract: Regional clusters have become an inseparable component of modern economies. Spurred by the idea that clusters unrestrictedly encourage firm innovativeness, such as in the lighthouse example of Silicon Valley, the cluster approach has particularly gained attention among policy makers who have supported the creation and development of clusters. Nevertheless, due to a lack of holistic consideration of different influencing variables, the scientific results about the effect of clusters on firm innovative performance are highly contradictive. For companies as well as policy makers, it is therefore still difficult to evaluate the concrete consequences of being located in a cluster. Consequently, the aim of this paper is to empirically investigate the conditions and mechanisms through which companies can gain from being located in clusters, focussing thereby in particular on possible knowledge spillovers. Therefore, based on an integration of the theoretical perspectives from the strategic management (e.g. resource-based view) and the economic geography literature (e.g. cluster approach), variables from three different levels of analysis (micro-level, meso-level and macro-level) are considered separately as well as interactively. By analysing a unique multilevel dataset of 11,889 companies in Germany, including 1,391 firms that are located within a cluster, evidence is found that being located in a cluster has indeed a positive impact on firm innovative performance. However, the results also indicate that firms benefit unequally within the cluster environment, depending on the specific firm, cluster and market/industry conditions.
    Keywords: knowledge spillovers, cluster effect, firm performance, multilevelanalysis, innovation
    JEL: C31 L10 L22 O30 R10
    Date: 2020–03
  3. By: Grashof, Nils (University of Bremen)
    Abstract: In view of the undisputed promising effects of regional clusters and spurred by lighthouse examples such as Silicon Valley, cluster policies have been popular in many countries worldwide. However, in recent years the complaints have become louder about the actual economic relevance and efficiency of such regional innovation policies. In particular, the high degree of standardization in the so far applied cluster policies, focusing primarily on collaborative incentives to strengthen the relational density in clusters, have been criticized as being rather ineffective and costly to society. In order to solve this one-size-fits-all problem it has been proposed that cluster policies should instead focus on the concrete conditions and needs within regional clusters. The aim of this paper is to respond this call by considering firm-, cluster- and market-/industry-specific particularities. Based on an extensive systematic literature review and own empirical results about the relationship between clusters and firm’s performance, an overview about relevant conditions is elaborated. Such an overview makes it possible to identify potential problems, e.g. in terms of missing absorptive capacities, which cluster policy can purposeful address. For each identified problem, a potential targeted (problem-oriented) policy intervention is therefore suggested. The corresponding result of this procedure is a policy-framework that offers an increased practical value in terms of bringing forth specific adaptive cluster policies rather than one-size-fits-all policies and thereby contributing to a more sophisticated understanding of the design of cluster policies.
    Keywords: innovation policy; cluster policy; cluster effect; firm performance
    JEL: L52 L53 O25 O38 R10 R10
    Date: 2020–03–23
  4. By: Hesse, Kolja (University of Bremen)
    Abstract: Recently, the outstanding potential of radical innovations has been acknowledged to foster the economic development of countries and regions. However, due to market imperfection, economic actors do not engage in radical innovation to a socially desirable degree. Hence, governments have established measures to compensate the under-investment in private R&D. For instance, in Germany and on the European level innovation agencies have been established to support innovations that move the technological frontier. In the light of this development, this study aims to answer the question whether direct funding of R&D projects in general and collaborative R&D grants in particular can support the emergence of radical innovations. Furthermore, this study scrutinises on the effect of policy-induced cross-innovation activities on radical innovation processes. Although many scholars advise policy makers to support activities inducing cross-fertilisation in order to enhance radical innovation, we lack evidence whether the funding of such research projects actually has an effect. The results can be of interest for scholars as well as policy makers aiming to support this type of innovation.
    Keywords: R&D subsidies; R&D collaboration; cross-innovation activities; radical innovation; treatment effects
    JEL: C30 H20 O31 O38
    Date: 2020–03–27
  5. By: Fernando Galindo-Rueda (OECD); Fabien Verger (OECD); Sylvain Ouellet (Statistics Canada)
    Abstract: This paper uses a distributed microdata analysis approach to map patterns of technology adoption in Canadian firms, exploring the relationship between technology adoption, business practices and innovation. Prepared by the OECD NESTI secretariat in collaboration with Statistics Canada, the paper leverages a unique enterprise database combining information on innovation, technology adoption and the use of selected business practices. This work suggests a number of possible pathways for selecting and defining priority technology and business practices for data collection and reporting, implementing recommendations in the 2018 Oslo Manual on enablers and objectives of business innovation, and identifying potential synergies between business innovation, management and ICT, and other surveys focused on various aspects of technology adoption.
    Date: 2020–03–19
  6. By: Tobias Schlegel; Curdin Pfister; Uschi Backes-Gellner
    Abstract: Previous economic research shows that tertiary education expansions lead to various positive first order effects, such as more patents, higher productivity or newly founded firms. However, less is known on the second order effects of tertiary education expansions, for example, the impact on regional firm development. We evaluate the impact of a tertiary education expansion on regional firm development——as measured by average profits per firm——by using administrative tax data at a geographically disaggregated level (i.e. municipalities). A policy change in Switzerland, leading to a quasi-random establishment of universities of applied sciences (UAS)-bachelor-granting three year-colleges teaching and conducting applied research-thereby serves as our case study. Depending on our regression model, we find that average profits per firm in treated municipalities, i.e., near a UAS, are between 15% to 24% higher than in non-treated municipalities after the establishment of UASs. Analyzing the dynamics of this second order effects shows that profits start to increase significantly three years after the UAS establishment and persist even in the long run.
    Keywords: Higher Education and Research Institution, Innovation, Regional Firm Development
    JEL: I23 I26 O18 O30
    Date: 2020–03
  7. By: Amamou, Raschid; Gereben, Áron; Wolski, Marcin
    Abstract: We look at the impact of intermediated funding provided by the European Investment Bank (EIB) on the performance of small and medium-sized enterprises (SMEs) in the 28 member countries of the European Union between 2008 and 2014. We use a combination of propensity score matching and difference-in-differences to evaluate the impact of EIB lending on corporate performance using firm-level data. We find that EIB lending had a positive effect on employment, firm size, investment and innovation capacity, and it also increased firms' leverage. We also find that the positive impact of EIB funding is higher in the countries of Central and East Europe and also in South Europe, while somewhat smaller, yet still significant, in West and North Europe. All in all, our results indicate that EIB-supported funding made a significant and positive difference to the economic and financial performance of the beneficiary SMEs.
    Date: 2020
  8. By: Kulenović, Mirza; Veselinović, Liljan
    Abstract: The main focus of this paper is to present the TQM practices of 593 companies in Bosnia and Herzegovina. In addition, our results confirm that there are statistically significant differences in TQM practices between firms in a highly competitive and less competitive environment, as well as between firms with and without ISO certificates. TQM practices do not differ between companies that belong to different groups that we constructed based on their age, location, export-orientation and the firm size. We contribute to the existing body of knowledge by identifying organizational contextual factors that might matter in designing more complex structural models.
    Keywords: Total quality management,Contextual factors,Bosnia and Herzegovina
    JEL: L15 M11 L25
    Date: 2019
  9. By: Giuseppe Nicoletti; Indre Bambalaite; Christina von Rueden
    Abstract: This paper assesses the possible dynamic effects of occupational entry regulations (OER) on productivity. It combines firm-level productivity data with a new cross-country policy indicator measuring the stringency of OER by the presence of administrative burdens, qualifications requirements, and mobility restrictions, for five professional and ten personal services. The evidence suggests that bold reforms easing OER, especially those concerning qualification requirements, could help increase the contribution of personal and professional services to aggregate productivity growth via two channels: the acceleration of their catch up to best global practices (within-firm channel), where firms in regulated sectors could gain up to 2.5 percentage points of productivity on average; and a higher contribution of labour reallocation to firms’ employment growth (between-firm channel), which could increase by up to 10 percent for the most productive firms.
    Keywords: catch-up, occupational licensing, productivity, reallocation, regulations
    JEL: J44 O43 L5 O57 L16 C21
    Date: 2020–03–31
  10. By: Brunello, Giorgio (University of Padova); Wruuck, Patricia (European Investment Bank)
    Abstract: This report looks at employer–provided training in Europe. We start with a brief outline of the economic theory of training. We then look at the recent facts, by combining data from two employer surveys, the European Investment Bank's Investment Survey (EIBIS) and Eurostat's Continuous Vocational Training Survey (CVTS). We review the recent empirical literature on the relationship between economic institutions and training and between training and productivity and consider whether financing constraints hamper the training provision by firms. The paper concludes by discussing policy implications.
    Keywords: employer provided training, Europe
    JEL: J24
    Date: 2020–02
  11. By: Guzman, Jorge
    Abstract: I study the impact of better law on regional entrepreneurship. To do so, I take advantage of the introduction of new corporate acts modeled after the Model Business Corporation Act (MBCA), a compendium of best practices created by the American Bar Association, and new data measuring new business registrations by state in the post-war era. From the 1950's to 1970's, nineteen U.S. states introduced new corporate law following the MBCA. While the introduction is endogenous, an approach comparing out of state expansions to local registrations allows me to recover the direct effect of law on entrepreneurship (i.e., the effect on firm formation conditional on general ecosystem improvements). The are no pre-trends using this approach. I estimate better law increases the rate of new local corporations by 5% per year, which is confirmed in robustness tests and two instrumental variables approaches that account for state-level confounders. Of the new corporations, one tenth are substitutions from other firm types, and the rest net-new firms. Consistent with a mechanism whereby better law increases investor protection and entrepreneurship, states with more rudimentary institutions benefited more, and states that only did partial adoption of the MBCA saw no benefit.
    Date: 2020–03–18
  12. By: Vladimir Smirnyagin
    Abstract: This paper studies firm dynamics over the business cycle. I present evidence from the United Kingdom that more rapidly growing firms are born in expansions than in recessions. Using administrative records from Census data, I find that this observation also holds for the last four recessions in the United States. I also present suggestive evidence that financial frictions play an important role in determining the types of firms that are born at different stages of the business cycle. I then develop a general equilibrium model in which firms choose their managers’ span of control at birth. Firms that choose larger spans of control grow faster and eventually get to be larger, and in this sense have a larger target size. Financial frictions in the form of collateral constraints slow the rate at which firms reach their target size. It takes firms longer to get up to scale when collateral constraints tighten; therefore, businesses with the largest target size are affected disproportionately more. Thus, fewer entrepreneurs find it profitable to choose larger projects when financial conditions deteriorate. Using Bayesian methods, I estimate the model using micro and aggregate data from the United Kingdom. I find that financial shocks account for over 80% of fluctuations in the formation of businesses with a large target size, and TFP and labor wedge shocks account for the remaining 20%. An independently estimated version of the model with no choice over the span of control needs larger aggregate shocks in order to account for the same data series, suggesting that the intensive margin of business formation is important at business cycle frequencies. The model with the choice over the span of control generates an empirically relevant and non-targeted collapse in the right tail of the cumulative growth distribution among firms started in recessions, while the model without such a choice does not. The paper also discusses implications for micro-targeted government stimulus policies.
    Keywords: Business cycles, firm dynamics
    JEL: E23 E32 H25
    Date: 2020–03
  13. By: Ottaviano, Gianmarco I. P.; Peri, Giovanni; Wright, Greg C.
    Abstract: This paper explores the impact of immigrants on the imports, exports and productivity of service-producing firms in the U.K. Immigrants may substitute for imported intermediate inputs (offshore production) and they may impact the productivity of the firm as well as its export costs. The first effect can be understood as the re-assignment of offshore tasks to immigrant workers. The second can be seen as a cost cutting effect due to immigration, and the third as a trade-cost reducing effect. To test the empirical significance and size of these effects, we exploit differences in immigrant inflows across U.K. labor markets and a new firm-level dataset on U.K. service firms. We find that immigrants increase overall productivity in service-producing firms, revealing a cost cutting impact on these firms. They also reduce the extent of country-specific offshoring, consistent with a reallocation of tasks, and they increase country-specific exports, consistent with a reduction in bilateral communication and trade costs.
    Keywords: immigration; service trade
    JEL: F10 F16 F22 F23
    Date: 2018–05–01
  14. By: Silvy Christina (Trisakti School of Management, Indonesia Author-2-Name: Fanny Anggraeni Author-2-Workplace-Name: Trisakti School of Management, Indonesia Author-3-Name: Author-3-Workplace-Name: Author-4-Name: Author-4-Workplace-Name: Author-5-Name: Author-5-Workplace-Name: Author-6-Name: Author-6-Workplace-Name: Author-7-Name: Author-7-Workplace-Name: Author-8-Name: Author-8-Workplace-Name:)
    Abstract: Objective - The business world requires that companies not only focus on management and owners, but also that they pay attention to the sustainability of the social environment. This concept is better known as Corporate Social Responsibility. The purpose of this study is to obtain empirical evidence about the factors which influence corporate social responsibility. Methodology/Technique - The independent variables used in this research are: board size, firm size, profitability, liquidity, public ownership, and firm age. The objects used in this study are non-financial companies listed on the Indonesian Stock Exchange (IDX) between 2016 and 2018. The data selected as a research sample of 183 non-financial companies. Sample selection procedures can be obtained from the results of purposive sampling. Finding - The results show that board size, firm size, and profitability all have an influence on corporate social responsibility disclosure. On the other hand, liquidity, public ownership, and firm age have no influence on corporate social responsibility. Type of Paper - Empirical.
    JEL: M14 M41
    Date: 2019–12–31
  15. By: Agnès Mazars Chapelon (MRM - Montpellier Research in Management - UM1 - Université Montpellier 1 - UM3 - Université Paul-Valéry - Montpellier 3 - UM2 - Université Montpellier 2 - Sciences et Techniques - UPVD - Université de Perpignan Via Domitia - Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School - UM - Université de Montpellier); Philippe Chapellier (MRM - Montpellier Research in Management - UM1 - Université Montpellier 1 - UM3 - Université Paul-Valéry - Montpellier 3 - UM2 - Université Montpellier 2 - Sciences et Techniques - UPVD - Université de Perpignan Via Domitia - Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School - UM - Université de Montpellier); Sophie Mignon (MRM - Montpellier Research in Management - UM1 - Université Montpellier 1 - UM3 - Université Paul-Valéry - Montpellier 3 - UM2 - Université Montpellier 2 - Sciences et Techniques - UPVD - Université de Perpignan Via Domitia - Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School - UM - Université de Montpellier)
    Abstract: In microentreprises, considering the management knowledge basis of the entrepreneur, the generation of management innovation (MI) is a crucial question. In this qualitative case study of a microentreprise, we follow Mol and Birkinshaw (2014) who claimed for research on MI generation, highlighting "how relations with external and internal partners can deliver knowledge" (2009). We focus on the entrepreneur-CPA relationship to study how the relationship between the CPA as an external change actor and the entrepreneur as an internal change actor can be a lever of MI generation in microentreprises. More particularly, we aim at understanding how the external CPA knowledge can be internalised by the entrepreneur in microentreprises through the acquisition, assimilation, transformation and exploitation of knowledge. And more particularly, we propose to highlight the key drivers of the generation of MI in microentreprises through the study of the process by which a potential ACAP becomes realised (Cohen and Levinthal, 1990; Lane et al., 2006; Gebauer et al., 2012; Marabelli and Newell, 2014).
    Keywords: management innovation,absorptive capacity,microentreprise,relationship,CPA,entrepreneur
    Date: 2018–09
  16. By: Zouhour Ben Hamadi (EM Normandie - École de Management de Normandie); Philippe Chapellier (MRM - Montpellier Research in Management - UM1 - Université Montpellier 1 - UM3 - Université Paul-Valéry - Montpellier 3 - UM2 - Université Montpellier 2 - Sciences et Techniques - UPVD - Université de Perpignan Via Domitia - Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School - UM - Université de Montpellier); Dupuy Yves (MRM - Montpellier Research in Management - UM1 - Université Montpellier 1 - UM3 - Université Paul-Valéry - Montpellier 3 - UM2 - Université Montpellier 2 - Sciences et Techniques - UPVD - Université de Perpignan Via Domitia - Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School - UM - Université de Montpellier)
    Keywords: Dirigeants de PME,systèmes budgétaires,contingences,universalisme,Tunisie
    Date: 2019

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