nep-sbm New Economics Papers
on Small Business Management
Issue of 2020‒05‒04
eighteen papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Contexts and gender: Looking back and thinking forward By Welter, Friederike
  2. Small business owners as gatekeepers of knowledge? Personality traits & modes of innovation By Runst, Petrik; Thomä, Jörg
  3. Are business angel-backed companies truly different? a comparative analysis of the financial structure By Julien Salin; Nadine Levratto
  4. Firms’ listings: what is new? Italy versus the main European stock exchanges By Paolo Finaldi Russo; Fabio Parlapiano; Daniele Pianeselli; Ilaria Supino
  5. Documentation of RISIS datasets: RISIS CIB2 DATABASE By Patricia Laurens
  6. Explaining Differences in the Returns to R&D in Argentina : The Role of Contextual Factors and Complementarities By Arza,Valeria Luciana; Cirera,Xavier; Colonna,Agustina; Lopez,Emanuel
  7. The 2019 EU Survey on Industrial R&D Investment Trends By Lesley Potters; Nicola Grassano
  8. Not all firms are created equal: SMEs and vocational training in the UK, Italy, and Germany By Benassi, Chiara; Durazzi, Niccolo; Fortwengel, Johann
  9. Factors influencing the potential of European Higher Education Institutions to contribute to innovation and regional development By John Edwards; Eskarne Arregui-Pabollet; Federico Biagi; Koen Jonkers
  10. Developing a typology for mission-oriented innovation policies By Wittmann, Florian; Hufnagl, Miriam; Lindner, Ralf; Roth, Florian; Edler, Jakob
  11. Relationship lending and employment decisions in firms' bad times By Pierluigi Murro; Tommaso Oliviero; Alberto Zazzaro
  12. Asymmetric investment responses to firm-specific forecast errors By Berner, Julian; Buchholz, Manuel; Tonzer, Lena
  13. The Roots of Agricultural Innovation: Patent Evidence of Knowledge Spillovers By Matthew S. Clancy; Paul Heisey; Yongjie Ji; GianCarlo Moschini
  14. The 2019 EU Industrial R&D Investment Scoreboard By Hector Hernandez Guevara; Nicola Grassano; Alexander Tuebke; Sara Amoroso; Zoltan Csefalvay; Petros Gkotsis
  15. Foreign direct investment and trade in agro-food global value chains By Jibran J. Punthakey
  16. Endogenous Growth and Monetary Policy: How Do Interest-Rate Feedback Rules Shape Nominal and Real Transitional Dynamics? By Gustavo Iglésias; Pedro Mazeda Gil
  17. The determinants of corporate governance disclosure level in the integrated reporting context By Vitolla, Filippo; Raimo, Nicola; Rubino, Michele
  18. SMEs’ direct and indirect access to public guarantees: an evaluation of regional regulations By Luciano Lavecchia; Luigi Leva; David Loschiavo

  1. By: Welter, Friederike
    Abstract: Purpose: The paper aims to illustrate the main contributions of the context-gender discussion in entrepreneurship research and its main developments over time, in order to identify promising future research avenues. Design/Methodology/Approach: The paper builds on the author's extensive knowledge of the context-gender debate and on several recent overviews and reviews of the debate. It is written as essay, introducing its main themes through a personal reflection and complemented by a selective review of research on gendered contexts and women's entrepreneurship. Findings: The context-gender discussion has moved forward. In a first wave of context-gender studies, research contextualized gender, considering the impact of contexts on women's entrepreneurship. Nowadays, research studies how contexts are gendered and how they are constructed in gendered ways, through for example, words, images, cognitions, as well as how women entrepreneurs can impact on and enact their contexts. Originality/Value: This paper contributes novel insights into contextualizing gender and gendering contexts. It is unique in suggesting that a perspective on gendering contexts will allow to explore the diversity of entrepreneurship and further develop theories related to contexts and gender.
    Keywords: context,contextualizing gender,gendering contexts,contextual entrepreneurship
    Date: 2020
  2. By: Runst, Petrik; Thomä, Jörg
    Abstract: Previous research has established that certain personality traits represent predictors of start-up activity. We argue that similar cognitive processes that affect entrepreneurship also play a role in firm-level innovativeness. For example, open-ness to novelty can be regarded as a key component of entrepreneurial alertness in terms of both business creation and the generation of innovations within existing businesses. Based on a large survey of less R&D-intensive SMEs from Germany, we show that certain Big Five personality traits as well as certain personality prototypes of business owners are positively related to innovation activity. More importantly, this relationship depends on the mode of innovation, where companies operating under the DUI mode (Doing-Using-Interacting) seem to benefit in particular from certain owners' personality characteristics. In addition, we present evidence that complementarities between entrepreneurs' personality traits exist in terms of self-selection into the DUI mode. To explain our findings, we argue that the personali-ty characteristics of small business owners affect whether or not absorptive capacity can mediate between external knowledge and firm-level innovativeness.
    Keywords: Innovation,Modes of innovation,Absorptive capacity,Personality Traits,Big Five,SMEs
    JEL: L26 O31 O33
    Date: 2020
  3. By: Julien Salin; Nadine Levratto
    Abstract: Through a new eye on corporate finance theories of small firms and of business angel financing determinants, this paper reconsiders the impact of Business Angels on financial structure of backed firms using matching method and a unique individual dataset of French companies over the 2009-2015 period. It shows that the signal effect of Business angel investment, improving access to external finance from another investor is limited. This paper contributes to the corporate finance literature by investigating on the validity of principal corporate finance theories. It also brings insight to the understanding of value added of BA on backed firms.
    Keywords: Keywords: Business angels, Financial Structure, Informal venture capital, Matching techniques
    JEL: G24 L25 L26 M13 O16
    Date: 2020
  4. By: Paolo Finaldi Russo (Bank of Italy); Fabio Parlapiano (Bank of Italy); Daniele Pianeselli (Bank of Italy); Ilaria Supino (Bank of Italy)
    Abstract: Over the last decade and a half non-financial corporations’ (NFCs) listings have displayed a heterogeneous pattern across European countries. The number of listed NFCs has increased in Italy and Spain, while it has declined in Germany, France and the United Kingdom. In Italy, the increase in the number of listed firms has been driven by SMEs’ listings, leaving the stock market small by international standards. We break down the size gap of the Italian equity market (with respect to its European peers) into the share of listed companies and their relative size. We show that the lower share of listed NFCs in Italy accounts for the gap with France and the UK, while the smaller size of Italian public firms has a crucial bearing on the differences with Germany and Spain. Counterfactual exercises provide evidence that there is limited room to bridge these gaps, as the structure of the Italian economy leans towards small enterprises. Policy measures aimed at fostering SMEs’ propensity to go public may be more effective in promoting the further development of the Italian stock exchange.
    Keywords: Capital markets, stock market, IPOs, SMEs listings
    JEL: G1 G3
    Date: 2020–04
  5. By: Patricia Laurens (LISIS - Laboratoire Interdisciplinaire Sciences, Innovations, Sociétés - CNRS - Centre National de la Recherche Scientifique - ESIEE Paris - UPEM - Université Paris-Est Marne-la-Vallée - INRA - Institut National de la Recherche Agronomique)
    Abstract: The Corporate Invention Board (CIB2) database is designed for the analysis of technological knowledge creation of the worldwide top corporate R&D performers, using patents as a proxy. It includes 3992 companies. It focuses on the ‘priority patents' applied by the parent companies and the subsidiaries they control. For patents, it relies on the patent data included in the RISIS Patent Database (RPD) . The list of companies was elaborated using several editions of the EU Industrial R&D Investment Scoreboard and the lists of WIPO top applicants. CIB2 also gives basic data on the companies (locations, sectors, size, financial data).
    Keywords: Innovation,Patent,R&D,Firms
    Date: 2020–03
  6. By: Arza,Valeria Luciana; Cirera,Xavier; Colonna,Agustina; Lopez,Emanuel
    Abstract: Argentina's private investment in research and development is well below that of its peers. One important reason may be low and very heterogeneous returns to research and development activities on productivity. This paper uses novel microdata to estimate the returns to research and development and understand the contextual factors that shape their heterogeneity. The paper groups these context-based factors into knowledge complementary factors (that is, factors that affect the returns via learning capabilities from external sources of knowledge) and market complementary factors (factors that act via business capabilities to appropriate the returns to research and development investments). The paper hypothesizes that the effects of contextual factors depend on firms'management capabilities and attitudes (innovative capacity), which determine firms'ability to benefit from the context. The findings suggest that the returns are indeed heterogeneous across regions and sectors, and these results depend on some context-based factors, which can boost or depress the returns to R&D. The results have important policy implications, considering the effectiveness of innovation policies, need for adapting to specific regions and sectors, and maximization of the impact of these factors on the returns to research and development.
    Date: 2020–04–30
  7. By: Lesley Potters (European Commission - JRC); Nicola Grassano (European Commission - JRC)
    Abstract: This fourteenth Survey on Industrial R&D investment trends is based on 134 responses of mainly large firms from a subsample of the 1000 EU-based companies in the 2017 EU Industrial R&D Investment Scoreboard. The participating EU firms have a total of €64.0 billion of R&D investments, 31% of the total R&D investments by EU firms in the 2017 EU R&D Scoreboard, and expect R&D investment to increase by 4.6% per year in 2018 and 2019.
    Keywords: Research and Development, R&D, innovation, expectations, drivers, trends, survey
    Date: 2019–12
  8. By: Benassi, Chiara; Durazzi, Niccolo; Fortwengel, Johann
    Abstract: Why do skill formation systems put SMEs at greater disadvantage in some countries than others vis-à-vis large employers? By comparing vocational education and training (VET) institutions and their differential effect on firms of different sizes across three countries (UK, Italy, and Germany), we show that the design of VET has profound implications for shaping the ability of SMEs to use institutions as resources. In particular, quasi-market institutions in the UK amplify SMEs' disadvantage, while non-market coordinating institutions in Italy and Germany narrow the gap between SMEs and large employers. By unpacking the comparative disadvantage of SMEs, we offer important nuances to the argument that institutions help firms coordinate their business activities in different varieties of capitalism.
    Keywords: comparative political economy,firm size,small and medium-sized enterprises (SMEs),varieties of capitalism,vocational education and training (VET),Berufsbildung,kleine und mittlere Unternehmen (KMU),Spielarten des Kapitalismus,UnternehmensgröØe,Vergleichende Politische Ökonomie
    Date: 2020
  9. By: John Edwards (European Commission – JRC); Eskarne Arregui-Pabollet (European Commission – JRC); Federico Biagi (European Commission - JRC); Koen Jonkers (European Commission - JRC)
    Abstract: This Science for Policy Report analyses the main factors influencing the potential of Higher Education Institutions to contribute to innovation and regional development. The analysis is structured around two groups of factors: The supply of knowledge and skills through education, research and external engagement, and the demand side concerning the ability of regional actors to absorb it. The report draws on both qualitative and quantitative data, including two sets of case studies from JRC projects related to the regional impact of universities and the role of HEIs in Smart Specialisation Strategies (S3), as well as a recent econometric study that compares flows of human capital and knowledge from HEIs with firm location. The report is part of the Commission's Knowledge Hub for Higher Education at the JRC which brings together a number of tools including University Multi Rank, from which data is analysed in this report.
    Keywords: higher education, innovation, regional development
    Date: 2020–04
  10. By: Wittmann, Florian; Hufnagl, Miriam; Lindner, Ralf; Roth, Florian; Edler, Jakob
    Abstract: The goal to address broader societal problems by mission-oriented research and inno-vation policy has brought new demands for the governance and implementation to the forefront and led to a great diversity of missions. By developing a typology for the clas-sification of different types of missions, this working paper can serve as a first step for studying the impact of the missions of the German High-Tech Strategy 2025 (HTS). Combining existing literature on mission-oriented innovation policy with insights from governance structures, we identify four types of missions - two subtypes of transformer and accelerator missions each - and demonstrate that this typology can be successfully applied to the 12 missions of the German HTS 2025. Thereby, we contribute to a more fine-grained understanding of the different demands and challenges inherent to different missions and thus provide the opportunity for a systematic comparison and a reflection on the varying requirements for assessing the impact of mission-oriented policies.
    Date: 2020
  11. By: Pierluigi Murro (LUISS-Guido Carli University.); Tommaso Oliviero (University of Naples Federico II and CSEF); Alberto Zazzaro (University of Naples Federico II, CSEF and MoFiR)
    Abstract: Using firm-level survey information, we investigate whether relationship lending affects firms' employment decisions when they experience negative shocks on sales. We find that firms maintaining long-lasting relationships with their main bank show a significantly lower sensitivity of employment growth rate to shocks in sales. This result is robust to measurement issues and to an instrumental variable strategy, and is stronger for young, small, human-capital-intensive firms. Our findings indicate that relationship lending acts as an insurance for firms' employees against adverse sales fluctuations, especially for firms whose internal workforce is more valuable and is thus substitutable at larger costs.
    Keywords: employment, relationship banking, insurance
    JEL: G32 G38 H53 J65
    Date: 2020–04
  12. By: Berner, Julian; Buchholz, Manuel; Tonzer, Lena
    Abstract: This paper analyses how firm-specific forecast errors derived from survey data of German manufacturing firms over 2007-2011 affect firms' investment propensity. Understanding how forecast errors affect firm investment behaviour is key to mitigate economic downturns during and after crisis periods in which forecast errors tend to increase. Our findings reveal a negative impact of absolute forecast errors on investment. Strikingly, asymmetries arise depending on the size and direction of the forecast error. The investment propensity declines if the realised situation is worse than expected. However, firms do not adjust investment if the realised situation is better than expected suggesting that the uncertainty component of the forecast error counteracts positive effects of unexpectedly favorable business conditions. Given that the fraction of firms making positive forecast errors is higher after the peak of the recent financial crisis, this mechanism can be one explanation behind staggered economic growth and slow recovery following crises.
    Keywords: risk climate,microeconomic survey data,forecast errors,firm investment,uncertainty
    JEL: D22 D84 E32
    Date: 2020
  13. By: Matthew S. Clancy; Paul Heisey; Yongjie Ji; GianCarlo Moschini
    Abstract: This chapter investigates the extent to which agricultural innovations draw on ideas originating outside of agriculture. We identify a large set of US patents for agricultural technologies granted between 1976 and 2018. To measure knowledge spillovers to these patents, we rely on three proxies: patent citations to other patents, patent citations to the scientific literature, and a novel text analysis to identify and track new ideas in the patent text. We find that more than half of knowledge flows originate outside of agriculture. The majority of these knowledge inflows, however, still originate in domains that are close to agriculture.
    JEL: O31 O34 Q16
    Date: 2020–04
  14. By: Hector Hernandez Guevara (European Commission – JRC); Nicola Grassano (European Commission – JRC); Alexander Tuebke (European Commission – JRC); Sara Amoroso (European Commission – JRC); Zoltan Csefalvay (European Commission – JRC); Petros Gkotsis (European Commission – JRC)
    Abstract: The 2019 edition of the EU Industrial R&D Investment Scoreboard (the Scoreboard) comprises the 2500 companies investing the largest sums in R&D in the world in 2018/19. These companies, based in 44 countries, each invested over €30 million in R&D for a total of €823.4bn which is approximately 90% of the world’s business-funded R&D. They include 551 EU companies accounting for 25% of the total, 769 US companies for 38%, 318 Japanese companies for 13%, 507 Chinese for 12% and 355 from the rest-of-the-world (RoW) for 12%. This report analyses the main changes in companies' R&D and economic indicators over the past year and their performance over the past ten years. It also includes patent-based analyses aimed at characterising further the R&D efficiency of the business health sector and the activity of the Scoreboard companies in the field of environmental technologies.
    Keywords: Industrial R&D, top R&D investors, innovation, company performance, economic and innovation performance
    Date: 2019–12
  15. By: Jibran J. Punthakey (OECD)
    Abstract: Foreign direct investment (FDI) and trade are driving forces in agro-food global value chains (GVCs), allowing companies to spread their activities across countries in complex production chains. This study explores the landscape of FDI in the agriculture and food sectors, using a novel database of mergers and acquisitions (M&As) covering the period 1997 2017. The study finds that FDI plays an important role in driving participation in agro-food GVCs, underscoring the close interdependencies between FDI, trade, and the various other channels that multinational enterprises (MNEs) use to engage with GVCs. The results from a survey of agro-food MNEs suggest that FDI decisions are underpinned by a diverse range of strategic motivations that go beyond commercial considerations and market-related factors. In particular, open, transparent and predictable trade and investment policies can have a strong positive influence on agro-food FDI. The study also highlights the importance of a broader set of policy areas, including dynamic agricultural innovation systems, policies to support supply chain linkages, and strong and effective laws governing responsible business conduct.
    Keywords: Agriculture, FDI, GVCs, M&As, Mergers and Acquisitions, MNEs, Multinational Enterprises
    JEL: F21 F23 F60 Q17 Q18
    Date: 2020–04–29
  16. By: Gustavo Iglésias; Pedro Mazeda Gil
    Abstract: Monetary authorities have followed interest-rate feedback rules in apparently different ways over time and across countries. The literature distinguishes, in particular, between active and passive monetary policies in this regard. We address the nominal and real transitional-dynamics implications of these different types of monetary policy, in the context of a monetary growth model of R&D and physical capital accumulation. In this setup, well-behaved transitional dynamics occurs under both active and passive monetary policies. We carry out our study from three perspectives: the convergence behaviour of catching-up economies; a structural monetary-policy shock (i.e., a change in the long-run inflation target); and real industrialpolicy shocks (i.e., a change in R&D subsidies or in manufacturing subsidies). We uncover a new channel through which institutional factors (the characteristics of the monetary-policy rule) influence the economies’ convergence behaviour and through which monetary authorities may leverage (transitional) growth triggered by structural shocks.
    JEL: E41 O31 O41
    Date: 2020
  17. By: Vitolla, Filippo; Raimo, Nicola; Rubino, Michele
    Abstract: In recent years, the analysis of corporate governance aspects is becoming a central element for understanding corporate dynamics and represents a clear indicator of investor confidence in the decisions taken by the management and board of listed firms. For this reason, corporate governance disclosure is receiving more and more attention from both a professional and academic point of view. The advent of integrated reporting represents a new tool for disclosing information relating to corporate governance. The goal of this study is to investigate the factors that can influence the level of corporate governance disclosure within the integrated reports. The analysis, conducted on a sample of 73 international firms, shows a positive effect of the firm size, firm profitability and audit quality. To our knowledge, this is the first study that analyses corporate governance disclosure level in the integrated reporting context
    Keywords: corporate governance,disclosure,integrated reporting,information quality
    Date: 2020
  18. By: Luciano Lavecchia (Bank of Italy); Luigi Leva (Bank of Italy); David Loschiavo (Bank of Italy)
    Abstract: The Italian public guarantee scheme (Fondo di garanzia - FDG) is the main tool supporting SMEs’ access to credit. This work evaluates the impact of the regional laws limiting the FDG’s operations to loans guaranteed by mutual guarantee institutions. To this end, we exploit the regulations’ discontinuities that occurred in some Italian regions that have either abolished or introduced such a restriction. We study the effects of the regulation changes in a difference-in-differences setting where treated firms are located in regime switching regions and control firms are in neighbouring regions. We find that constraining access to the FDG’s publicly funded collateral to counter-guarantee schemes hampered SMEs’ access to finance overall. Removing the restriction increased both the number of firms with access to the FDG’s guarantees and the total size of the loans granted to treated SMEs of any size. Moreover, the relative cost of credit improved for treated firms. Conversely, the introduction of the restriction to counter-guarantees had mostly negative effects on the number, size and cost of loans granted to treated firms.
    Keywords: access to credit, public guarantees, mutual guarantee institutions
    JEL: H81 G21
    Date: 2020–04

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