nep-sbm New Economics Papers
on Small Business Management
Issue of 2020‒07‒27
eighteen papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Competition and Innovation: Evidence from Worldwide Corporate R&D Spenders By Michele Cincera; Ela Ince; Anabela Marques Santos
  2. Gender of the manager and SMEs innovativeness By Alfonso Expósito; Amparo Sanchis-Llopis; Juan A. Sanchis-Llopis
  3. Voluntary adoption of environmental standards and limited attention: Evidence from the food and beverage industry in Vietnam By Massimo Filippini; Suchita Srinivasan
  4. An Empirical Assessment of Organizational Commitment and Job Performance: Vietnam Small and Medium-Sized Enterprises By Vuong, Bui Nhat; Tung, Dao Duy; Giao, Ha Nam Khanh; Chau, Nguyen Thi Ngoc; Tushar, Hasanuzzaman
  5. Types of Innovation and Firm performance By Michele Cincera; Ela Ince
  6. Entry determinants of the Software and Video games firms in Barcelona By Méndez Ortega, Carles
  7. The value of online banking to small and medium- sized enterprises: evidence from firms operating in the UAE free trade zones By Parvaneh Shahnoori; Glenn P. Jenkins
  8. Enterprising women in Southern Africa: When does land ownership matter? By Zuzana Brixiová; Thierry Kangoye; Fiona Tregenna
  9. Public-private R&D partnerships: A solution to increase knowledge sharing in R&D cooperation By Hervouet, A.; Trommetter, M.
  10. Blinder-Oaxaca Approach to Identify Innovation Differences in Transition Countries By Raul Caruso; Antonella Biscione; Dorothée Boccanfuso; Annunziata de Felice
  11. Firms’ expectations on access to finance at the early stages of the Covid-19 pandemic By Ferrando, Annalisa; Ganoulis, Ioannis
  12. Housing Cycle and Firm Investment: International Firm-level Evidence By Hyunduk Suh; Jin Young Yang
  13. Anatomy of a techno-creative community – the role of places and events in the emergence of videomapping in Nante By Etienne Capron; Dominique Sagot-Duvauroux; Raphaël Suire
  14. Litigating Innovation: Evidence from Securities Class Action Lawsuits By Kempf, Elisabeth; Spalt, Oliver G.
  15. Mergers and Innovation Portfolios By Moraga-González, José-Luis; Motchenkova, Evgenia; Nevrekar, Saish
  16. Cloud Computing and Firm Growth By Timothy DeStefano; Richard Kneller; Jonathan Timmis
  17. Microentrepreneurship in Developing Countries By Jayachandran, Seema
  18. Sources of knowledge flow between developed and developing nations By Florian Seliger; Gaéran de Rassenfosse

  1. By: Michele Cincera; Ela Ince; Anabela Marques Santos
    Abstract: The paper aims at assessing the effect of competition of firm-level innovation. The sample is composed of the world top corporate R&D spender listed in the EU-2017 industrial R&D Scoreboard, and the analysis covers the years spanning 2007 to 2016. We use an industry-year-indicator, the inverse of the Lerner index, to measure the competition level R&D expenditures are used as a proxy for innovation. Model is estimated using two-stage least squares, to control for potential endogeneity of the competition indicator. Results confirm the existence of an inverted-U relationship between competition and innovation. Further analysis is undertaken splitting the overall firm sample into services and manufacturing sectors according to technology and knowledge intensities. We validate the inverted-U shaped relationship between competition and innovation for the firms in medium-high-tech and high-tech manufacturing sectors whereas we do not observe the impact for the firms in medium-low and low-tech manufacturing sectors nor service sectors.
    Keywords: Competition, Innovation, Manufacturing, Services.
    Date: 2019–07
  2. By: Alfonso Expósito (University of Seville, Spain); Amparo Sanchis-Llopis (University of Valencia and ERICES, Spain); Juan A. Sanchis-Llopis (University of Valencia and ERICES, Spain)
    Abstract: This paper analyses the role of the manager’s gender on the propensity to introduce innovations using a sample of Spanish small- and medium-sized enterprises (SMEs). We examine whether there are significant differences between female- and male-led businesses in terms of their propensity to innovate, and whether these differences may be explained by factors related to the attributes of the manager concerning risk tolerance, self-confidence, education level and cooperative behaviour. In particular, this study tests if the linkages between these managerial attributes and the propensity to innovate are moderated by the gender of the manager. Using a multivariate probit model (triprobit), we further investigate the role of gender on the managerial decision to simultaneously introduce product, process and organisational innovations. Our main results indicate that there are not significant gender differences in the propensity to introduce innovations between male- and female-run businesses when considering innovation at an aggregated level, that is, innovating in any of the three types of innovations considered. However, we obtain a higher propensity of male managers to introduce process innovations, as compared to their female counterparts. No significant differences by gender are found for product and organisational innovations. Additionally, results of the multivariate probit model indicate that the three innovation decisions are interdependent and should be jointly analysed. This study contributes to the scant literature regarding gender impact on firm’s innovativeness with novel empirical evidence for SMEs.
    Keywords: manager’s gender; SMEs; product innovation; process innovation; organizational innovations; triprobit model
    JEL: C35 J16 O30 M21
    Date: 2020–06
  3. By: Massimo Filippini (Center of Economic Research (CER-ETH), ETH Zurich and Universita della Svizzera italiana, Switzerland); Suchita Srinivasan (Center of Economic Research (CER-ETH), ETH Zurich, Switzerland)
    Abstract: Voluntary approaches to environmental policy can contribute to stemming environmental degradation in developing countries with weak institutions. We evaluate the role of a behavioral anomaly, limited attention paid by owners or managers, in explaining the voluntary adoption of environmental certification by small and medium enterprises (SMEs) in the food and beverage industry in Vietnam. We find that firms where owners or managers were inattentive were 30 percentage points less likely to receive environmental certification. Moreover, this effect is larger for firms that were previously inspected for technical violations, and that exported or bribed, and it is weaker for household enterprises.
    Keywords: Voluntary environmental standards; Limited attention; Small and medium enterprises; Food and beverage industry; Vietnam
    JEL: D22 D83 D91 O13 Q56 Q59
    Date: 2020–07
  4. By: Vuong, Bui Nhat; Tung, Dao Duy (Tay Do University); Giao, Ha Nam Khanh; Chau, Nguyen Thi Ngoc; Tushar, Hasanuzzaman
    Abstract: Research on employee commitment to the organization is necessary for human resource management, and the result is applied in practice to improve organizational effectiveness. The aim of the present study is to explore factors affecting organizational commitment at the small and medium-sized enterprises (SMEs) in Vietnam. Besides, the relationship between organizational commitment and job performance is examined as well. The research was conducted on a sample consisting of 67 white-collar workers and 260 blue-collar workers at SMEs. A total of 327 valid complete questionnaires were input into SPSS 20 database for processing to provide evidence. The research model and hypotheses were tested using the technique of the hierarchical multiple regression analysis. The research results revealed that income, reward and welfare, direct manager, working environment, coworker, and promotion opportunity tended to associate positively with organizational commitment. Besides, the finding also showed that, when the employee has a high organizational commitment, it would lead to high job performance. The main findings of this study provided some managerial implications for SMEs, in general, and managers, in particular. It implies that Vietnam’s small and medium-sized enterprises should improve these six factors to retain employees as well as enhance their job performance.
    Date: 2020–06–17
  5. By: Michele Cincera; Ela Ince
    Abstract: The paper brings together firm-level R & D spending information with patent information and aims to investigate the impact of different types of patented inventions on firm output growth performance controlling for R & D spending and other firm financials. We consider forward-looking indicators of breakthrough and general innovation, and backward-looking indicators of originality and radicalness in innovation activities. Firm performance is estimated through a Cobb-Douglas production function. We allow for non-linearity in relationship between innovation strategy and firm performance and we investigate sectoral heterogeneity looking at the impact in health industries and ICT producers. Models are estimated using two-stage least squares and generalised method of moments to control for potential endogeneity of innovation indicators. Our findings confirm non-linearity and sectoral heterogeneity in relationship between the different types of innovation and firm performance. While ICT producers are growing with breakthrough innovations, general-purpose technologies and, to a certain extend, with original and radical innovations, the growth of firms operating in health industries is not explained by breakthrough innovations nor by specific trend of feature of ICT and the choice of incremental innovation strategy by pharmaceutical and biotechnology firms
    Keywords: Breakthrough innovation, Generality, Originality, Radicalness, Firm growth
    Date: 2019–07
  6. By: Méndez Ortega, Carles
    Abstract: This paper aims to determine which reasons lead Software and Video games firms (SVE hereafter) to locate in certain areas of Barcelona. This high-tech industry is a key industry in developed economies mainly located in urban areas. To carry out this analysis, we use SVE firm entries at neighbourhood level between 2011 and 2013 and a set of covariates that capture neighbourhood characteristics (localization and agglomeration economies, high-tech amenities, diversity, human capital and crime). Our results show that i) SVE firms tend to choose locations with a high diversity and good high-tech amenities (e.g. 22@ district), ii) the importance of the localization and agglomeration economies, since spatial spillovers are a key factor for this type of firms and iii) the role of the diversity in the location process of these firms, since SVE firms choose places with a high diversity of cultural and creative activity. JEL Codes: R10, R30, L86. Keywords: Software and Video games Industry, location determinants, Count Data models, Barcelona
    Keywords: Localització industrial, Indústria informàtica, Videojocs -- Indústria i comerç, 332 - Economia regional i territorial. Economia del sòl i de la vivenda,
    Date: 2019
  7. By: Parvaneh Shahnoori (Department of Economics, Payame Noor University, Bandar Abbas, Iran); Glenn P. Jenkins (Department of Economics, Queen's University, Kingston, Canada and Eastern Mediterranean University, North Cyprus)
    Abstract: This study estimates the willingness to pay of small and medium-sized enterprises (SMEs) for a business online banking services. The estimation utilizes a contingent valuation method employing data from 400 SMEs in the United Arab Emirates free zones. An interval regression model is used to identify company characteristics affecting WTP. The results indicate an average WTP for online banking of $518.50 per month. Firms engaging in international trade value these services at least 10% more than those with only domestic operations. Other variables that significantly affect WTP include number of employees and the transportation cost of using traditional branch banking.
    Keywords: Contingent Valuation Method, Interval Regression Model, Willingness to Pay, Business Online Banking
    JEL: C13 F10 G21
    Date: 2019
  8. By: Zuzana Brixiová (University of Economics in Prague and VSB – Technical University of Ostrava, SALDRU Research Affiliate, University of Cape Town); Thierry Kangoye (African Development Bank); Fiona Tregenna (University of Johannesburg)
    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
    Date: 2020
  9. By: Hervouet, A.; Trommetter, M.
    Abstract: Knowledge sharing is crucial for the success of most R&D cooperations. This paper investigates the best conditions for fostering knowledge sharing in R&D cooperation and looks at how the establishment of Public-Private R&D Partnerships (PPP in R&D) could be a useful tool for this purpose. In this end, it proposes a theoretical model, related to the R&D cooperation literature, that takes into consideration the impacts of firms outside R&D cooperation and the presence of two kinds of spillover: a technology spillover and a product rivalry effect. The model shows that both spillovers can affect knowledge sharing negatively, and that PPP in R&D can be useful to promote knowledge sharing. First, public authorities can choose partners that will facilitate efficient knowledge sharing. Second, to avoid the negative impacts of spillovers on behavior in terms of knowledge sharing, public laboratories should be used as intermediaries for the prior and strategic knowledge of firms. Public labs can use the prior knowledge of firms to innovate, and then spread this innovation among the partners of the PPP, without spreading the prior knowledge of the firms.
    JEL: L13 L24 O30 O38
    Date: 2020
  10. By: Raul Caruso (Department of Economic Policy and CSEA, Catholic University of Sacred Heart; CESPIC, Catholic University "Our Lady of Good Counsel"); Antonella Biscione (CESPIC, Catholic University "Our Lady of Good Counsel"); Dorothée Boccanfuso (Faculté de Gouvernance, Sciences Economiques et Sociales, Université Mohammed VI Polytechnique); Annunziata de Felice (Department of Law, University of Bari Aldo Moro)
    Abstract: By the use of firm-level data coming from the Business Environment and Enterprise Performance Survey (BEEPS V) conducted in 2012-2014, this paper aims to investigate the sources of the possible gender ownership gap in innovativeness in a set of Transition economies. Through the Blinder-Oaxaca decomposition that allows us to define the factors responsible for the differences in the propensity to innovate between female-owned and male-owned firms, we find that the innovation disparity between firms with females among their owners and those having only male owners is mainly due to the differences in endowment effects. Tangible and intangible assets affect the innovation gap between the two groups of firms.
    Keywords: Blinder-Oaxaca decomposition; non-linear model; gender ownership; innovation gap; Transition Countries
    JEL: O32 J12 P23
    Date: 2020–04
  11. By: Ferrando, Annalisa; Ganoulis, Ioannis
    Abstract: This paper provides novel information on the propagation of the pandemic-induced real shock to firms’ financial conditions. It uses firm-level survey data from end February to early April 2020 for a large sample of euro area SMEs and large firms. Firms’ expectations on the availability of credit lines, bank loans and trade credit deteriorated significantly in the first half of March. Firms mostly expected to be affected if they had previously difficulties in securing finance, had higher indebtedness and, hence, less capacity to deal with a liquidity shock. Conditional on these factors, firm size does not seem to matter, except for trade credit, in which case SMEs had more positive conditional expectations. Together with the overall deterioration of expectations, there seems to have also been a reallocation of opportunities to access finance amidst the crisis. Small firms were more likely to have conditional expectations of improvement in their access to finance. JEL Classification: C83, D22, D84, E65, L25
    Keywords: Covid-19, expectation formation, survey data
    Date: 2020–07
  12. By: Hyunduk Suh (Inha University); Jin Young Yang (Zayed University)
    Abstract: We analyze international firm-level data to examine the relationship between housing cycle and firm capital expenditure or R&D spending. We use the housing price component independent of firms’ investment opportunity and credit supply shocks, obtained by historical decomposition of a structural VAR, as the key explanatory variable. The baseline results support the existence of the collateral channel as housing price growth and firm investment exhibit a positive relationship. This collateral channel is more distinct for capital expenditure than R&D spending, and in housing market downturns than booms. Another notable finding is that despite the collateral channel, large housing price booms are detrimental to investment, which suggests a possible reallocation of resources from the production sector to the housing sector during those phases. Moreover, various firm-specific and country-specific characteristics are found to affect the housing price-investment relationship. Small firms and firms with stronger investment opportunities respond more sensitively to housing price shocks. Countries that rely more on bank financing, collateralized lending, and with higher LTV restraint, display a larger collateral effect in capital expenditure.
    Keywords: Housing cycle, Investment, R&D, Housing price, Collateral channel
    JEL: E22 E32 G31
    Date: 2020–05
  13. By: Etienne Capron; Dominique Sagot-Duvauroux; Raphaël Suire
    Abstract: This article aims to study the role of places and events in the structuring of a community of innovation whose practice is at the crossroads of art and tech - videomapping. Based on an exploratory case study, we observe the relationships between the different actors who form subgroups, sharing a common interest in a techno-creative practice - but whose collective innovation dynamic is only in its beginnings. We also document the usage of places and events in their intermediation role for these subgroups. This reveals preferential circulations - patterns of moves among a set of focal locations in the city for a community – and the crucial role of these locations in creative communities emergence.
    Keywords: techno-creative innovation, places, knowledge, network analysis
    JEL: D85 O32 R11 Z10
    Date: 2020–07
  14. By: Kempf, Elisabeth; Spalt, Oliver G.
    Abstract: Low-quality securities class action lawsuits disproportionally target firms with valuable innovation output and lead to substantial shareholder-value losses. We establish this fact using data on class action lawsuits between 1996 and 2011 and the value of newly granted patents as a measure of valuable innovation output. Our results challenge the widely-held view that greater failure propensity of innovative firms drives their litigation risk. Instead, our findings suggest that valuable innovation output makes a firm an attractive litigation target. Our results support the view that the class action litigation system may have adverse effects on the competitiveness of the U.S. economy.
    Keywords: Class Action Lawsuit; corporate governance; Innovation; law and economics; patents; Shareholder Litigation
    Date: 2020–01
  15. By: Moraga-González, José-Luis; Motchenkova, Evgenia; Nevrekar, Saish
    Abstract: This paper studies mergers in markets where firms invest in a portfolio of research projects of different profitability and social value. The portfolio nature of the investment problem brings about novel insights on the external effects of firms' investments. The investment of a firm in one project imposes a negative business-stealing externality on the rival firms because it lowers the probability they win the innovation contest for that project; however, the investment of a firm in one project also exerts a positive business-giving externality on the rival firms because it increases the likelihood they win the contest for the alternative project. Merging firms internalize these positive and negative externalities they impose on each other. We show that when the project that is relatively more profitable for the firms is also the more appropriable, then a merger increases consumer welfare by reducing investment in the most profitable project and increasing investment in the alternative (less profitable) project. For the case of linear demand and constant marginal costs, the portfolio effect of mergers makes them consumer welfare improving. With constant elasticity of demand and constant marginal costs, a merger increases consumer welfare if the more profitable project corresponds to the market with the higher elasticity of demand. The portfolio effect of mergers may dominate the usual market power effects of mergers.
    Keywords: Horizontal mergers; innovation portfolios; R&D contests
    JEL: L13 L22 O31 O32
    Date: 2019–12
  16. By: Timothy DeStefano; Richard Kneller; Jonathan Timmis
    Abstract: Cloud computing enables a shift in the costs of ICT adoption from investment in fixed capital to pay-on-demand services allowing firms to scale and reorganize. Using new firm-level data we examine the impact of cloud on firm growth, using zip-code-level instruments of the timing of high-speed fiber availability and speeds. Cloud leads to the growth of employment and revenue for young firms, but they become concentrated in fewer establishments. For incumbents, we find smaller scale effects but dispersed activity through closing establishments and moving employment farther from the headquarters. Moreover, cloud adoption leads to worker relocation across establishments within firms.
    Keywords: cloud, digital, productivity, firms
    JEL: J23 J24 L20 O33
    Date: 2020
  17. By: Jayachandran, Seema
    Abstract: This article reviews the recent literature in economics on small-scale entrepreneurship ("microentrepreneurship") in low-income countries. Major themes in the literature include the determinants and consequences of joining the formal sector; the impacts of access to credit and other financial services; the impacts of business training; barriers to hiring; and the distinction between self-employment by necessity and self-employment as a calling. The article devotes special attention to unique issues that arise with female entrepreneurship.
    Keywords: female entrepreneurship; Informal sector; Self-employment; small businesses
    JEL: J16 J24 L26
    Date: 2020–01
  18. By: Florian Seliger (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Gaéran de Rassenfosse (EPFL Lausanne, Switzerland)
    Abstract: This paper provides a long-term view on the sources of knowledge flow between developed and developing nations. It relies on patent data to explore three potential sources: R&D collaboration, technology sourcing, and technology transfer. All three sources provide a very consistent message. First, knowledge flows with East Asia, particularly China, are occurring more frequently. Second, knowledge flows are increasingly concentrateded in information and communication technologies. Third, the United States & Canada had traditionally larger patenting activity with Asia than Europe, but the share of activity between Europe and Asia has been increasing in recent years. Fourth, larger patenting activity between the United States & Canada and Asia implies that the U.S./Canada region is more likely to benefit from reverse knowledge flows as China progresses towards becoming a technological leader.
    Keywords: international technology sourcing; R&D offshoring; R&D collaboration;technology transfer; patent
    JEL: E21 E32 D12 C22
    Date: 2019–02

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