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on Small Business Management |
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Issue of 2020‒08‒24
nineteen papers chosen by João Carlos Correia Leitão Universidade da Beira Interior |
| By: | Isabel Busom (Department of Applied Economics: Universitat Autonoma de Barcelo); Jorge Velez-Ospina (Science Policy Research Unit (SPRU), University of Sussex) |
| Abstract: | We investigate whether the impact of direct support for business investment in R&D and innovation varies over the business cycle. We study whether firms that obtain public support in a recession differ from firms that obtain it during expansions; whether the impact of support is smaller in recessions than in expansions, and whether effects vary with the treatment pattern. Using firm-level data from Spain during the period 2005 to 2014, we combine propensity score matching and difference-in-differences methods to estimate firms’ response. We find that (i) while the impact of support on monetary investment in innovation is pro-cyclical, it is counter-cyclical in terms of the employee-time allocation to innovation activities; (ii) the additionality of a one-year treatment is smaller than that of a longer treatment. Direct public support may have thus prevented a decline of the firms’ knowledge capital during the recession. |
| Keywords: | R&D subsidies, policy evaluation, business cycle, additionali |
| JEL: | O25 O38 C14 C21 D22 L29 L53 H5 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:sru:ssewps:2020-09&r=all |
| By: | Gagliardi, Luisa; Iammarino, Simona |
| Abstract: | This article analyses the relationship between firm’s perception of market risk and engagement in innovation. We conceptualise this relationship by integrating insights from the management literature on innovation barriers with those derived from the international business and economic geography perspectives on the interplay of ownership and location advantages. By exploiting a firm-level panel dataset based on the UK Innovation Survey for the period 2002–2008, we test the relationship between perception of market risk and innovation behaviour in relation to firm ownership—i.e. multinational enterprises (MNEs) versus single domestic enterprises—and location—across regional contexts characterised by different degrees of technological dynamism. Our main results show that ownership advantages operate as a moderator by fundamentally affecting the direction of the relationship: while MNEs react positively to risk perception, single domestic firms reduce their innovation engagement as a strategy to cope with market uncertainty. Yet, ownership advantages play a pivotal role only in relatively inert or stable contexts, as in technologically dynamic regions differences between domestic firms and MNEs disappear. |
| Keywords: | Risk perception; Innovation behaviour; Ownership and Location advantages; Community Innovation Survey; UK Regions |
| JEL: | F23 O31 R11 |
| Date: | 2018–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:89059&r=all |
| By: | Vlados, Charis (Democritus University of Thrace, Department of Economics); Chatzinikolaou, Dimos (Democritus University of Thrace, Department of Economics); Katimertzopoulos, Fotios (Democritus University of Thrace, Department of Economics); Koutroukis, Theodore (Democritus University of Thrace, Department of Economics) |
| Abstract: | This article aims to highlight the different facets of the relative socio-economic underdevelopment of the Greek region of Eastern Macedonia and Thrace. It explores initially regional analysis data, leading to the conclusion that the region does indeed face comparative weaknesses as it exhibits multiplier results and specialization in areas with the lowest value-added and employment. It then presents the main conclusions about small and micro firms of this less developed business ecosystem. It concludes that the region has structural competitiveness problems that are primarily due to the competitiveness of the firms that can host and nurture. The strengthening of competitiveness of this regional business ecosystem requires the improvement of the innovative potential that, in a triple helix condition, is the result of the evolutionary interconnection between local-regional firms, government, and academia. To this end, the proposal to establish a Local Development and Innovation Institute constitutes a new regional policy that can be applied to the region and strengthen the innovative potential of the entire regional business ecosystem. |
| Keywords: | Underdeveloped regional business ecosystem; Eastern Macedonia and Thrace (REMTh); Stra.Tech.Man Lab research team; Regional triple helix; Local Development and Innovation Institutes |
| JEL: | O19 R11 R58 |
| Date: | 2019–12–31 |
| URL: | http://d.repec.org/n?u=RePEc:ris:duthrp:2019_033&r=all |
| By: | Farasat A.S. Bokhari (Centre for Competition Policy and School of Economics, University of East Anglia); Franco Mariuzzo (Centre for Competition Policy and School of Economics, University of East Anglia); Anna Rita Bennato (Centre for Competition Policy, University of East Anglia and Loughborough University) |
| Abstract: | New drug introductions are a key to growth for pharmaceutical firms. However not all innovations are the same and they may have differential effects that vary by firm size. We use quarterly sales data on UK pharmaceuticals in a dynamic panel model to estimate the impact of product (new drugs) and marketing (additional pack varieties) innovations within a therapeutic class on a firm's business unit growth. We find that product innovations lead to substantial growth in both the short and long run, whereas a new pack variety only produces short-term effects. The strategies are substitutes but the marginal effects are larger for product innovations relative to additional packs, and the effects are larger for smaller business units. Nonetheless, pack introductions offer a viable short-term growth strategy, especially for small and medium sized businesses. |
| Keywords: | Growth; Innovation; Size; Pharmaceuticals; Business unit |
| JEL: | L25 L65 O31 O32 |
| Date: | 2019–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:uea:ueaccp:2016_01v3&r=all |
| By: | Negedu, Godwin; Isik, Abdurrahman |
| Abstract: | The purpose of this paper is to examine the importance of WhatsApp and Facebook advertisement on small business startups in Nigeria. Small and medium enterprises (SMEs) is widely belied to be an essential ingredient for economic growth, the performance of current policies are identified and proposals are offered to address the impediments. This paper uses the Abuja Municipal Area Council as a case study. Appropriate literature has adequately reviewed; some citations and data were referenced to, Data was analyzed using statistical package for social sciences (SPSS) software, survey data was distributed to 438 respondents. The survey was carried out to get responses on the contributions, and impact of Social Media Advertisements on Businesses in Abuja Municipal Area Council of Nigeria. The result of the survey analysis came out in the form of frequency tables, bar charts and histogram, and a detailed summary was carefully explained by researcher afterwards. The study showed that social media advertisements not only has a positive impact on business growth in Nigeria but has the potential to improve ease of doing business in Nigeria if research recommendations are followed and adequate improvements are made. The government needs to ensure low-cost tax-free online advertisement for startup businesses. Improvements in internet infrastructure will significantly reduce overhead costs for business owners and help startup businesses to grow. The paper explains the potential benefits of important policy improvements and the current impact of low-cost online advertisement in Nigeria |
| Keywords: | Nigeria, Entrepreneurship, Business Startup, Online Advertisement, WhatsApp, Facebook, Policy, Economic growth, Internet. |
| JEL: | M2 M3 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:102029&r=all |
| By: | Naudé, Wim (RWTH Aachen University) |
| Abstract: | Entrepreneurship, as reflected in the start-up of new firms, the growth and market exit of existing firms, and the ow of venture capital, has been severely curtailed by the lockdown and social distancing measures taken by governments around the world in the fight against COVID-19. This paper, after documenting preliminary evidence on these declines, argues that there is a strong possibility that the unintended damage to entrepreneurship, innovation and growth could be persistent. This requires that short- term economic and business rescue packages be complimented by measures aimed at the longer-term, and that these be based on at least five principles. These 5 principles (5Ds) refer to decentralization, democratization, demand, distribution and demography. |
| Keywords: | entrepreneurship, innovation, COVID-19, public policy, economic growth, development |
| JEL: | I18 L26 L53 M13 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13436&r=all |
| By: | Tung, Dao Duy (Tay Do University) |
| 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 fnding also showed that, when the employee has a high organizational commitment, it would lead to high job performance. The main fndings 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: | 2020–05–06 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:awuk7&r=all |
| By: | Piątkowski, Marcin J. |
| Abstract: | The European Union sees the role of innovations as measurably influencing the improvement of social and economic development in the regions of its member states. Actions that promote the implementation of innovations in the SME sector as one of the elements having a positive impact on the European Union's cohesion policy have a special role in supporting enterprises. Therefore, the EU operational programmes dedicated to small and medium-sized enterprises are a valuable source of external financing for innovations in these entities. The implementation of innovative investment projects positively influences the development of enterprises. A company resistant to implementing innovations may lose its competitive position on the market and slow down its development. The aim of this article is to conduct a comparative analysis of the implementation of innovative investments between the enterprises that received financial assistance from the European Union in relation to the enterprises that implemented innovations using other sources of financing. The study shows that enterprises covered by financial support from operational programmes have a higher level of innovative investments than other economic entities. Companies receiving EU aid are more often implementing production innovations among all four types of innovations as compared to other enterprises. In addition, it was found that in the lack of financial support from the EU, almost half of the companies would not be able to implement innovations as such. Therefore, the issue of innovations implemented in enterprises with the use of the EU financial aid should be considered as a currently relevant topic and an extremely important one from the standpoint of entrepreneurship development. This study should be considered unique, as there are no studies, to the best of the author's knowledge, containing comparative analyses in this area. |
| Keywords: | implementing innovation; investments; enterprises; entrepreneurship; SMEs; EU subsidies; operational programmes; Poland; Małopolska region; comparative analysis; competitive advantage; financial support |
| JEL: | D92 L20 M21 O33 O39 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:101883&r=all |
| By: | Vlados, Charis (Democritus University of Thrace, Department of Economics); Chatzinikolaou, Dimos (Democritus University of Thrace, Department of Economics); Demertzis, Michail (Democritus University of Thrace, School of Law) |
| Abstract: | This article aims to present entrepreneurship policy practices from a micro, meso, and macro dimension to identify if there are signs of divergence or convergence in public intervention and policy of different European countries. To this end, it analyzes first the contemporary significance of entrepreneurship enhancement policies and, second, their relation to multilevel analysis. After proposing a repositioned and compound multilevel approach (micro-meso-macro) of the socio-economic system in terms of the “competitiveness web,” it uses as a case study different countries of the European South affected by the economic crisis and presents their political reforms over the last years. According to the findings of the research, it appears that development initiatives and regulations of these countries primarily focus on macro-economic and macro-social measures to enhance the potential of their business environment. On the contrary, an integrated policy in the context of the “competitiveness web” that takes into account all levels of space and different forms of developmental challenges by focusing primarily on the dynamics of innovative aptitude of the firms seems relatively underused until today. As a result, many firms and local business ecosystems maintain and reproduce their inability to grow and sustain their competitiveness in the current phase of restructuring of globalization, despite a wide variety of entrepreneurship enhancement policies. |
| Keywords: | Entrepreneurship policies; Micro-meso-macro analysis; European South; Doing Business; Competitiveness web; Socio-economic development; Globalization restructuring |
| JEL: | L26 L53 |
| Date: | 2019–12–31 |
| URL: | http://d.repec.org/n?u=RePEc:ris:duthrp:2019_034&r=all |
| By: | Flavio Calvino (OECD Directorate for Science, Technology and Innovation); Daniele Giachini (Sant’Anna School of Advanced Studies); Mattia Guerini (Université Côte d'Azur, CNRS, GREDEG, France; Sant’Anna School of Advanced Studies; Sciences Po., OFCE) |
| Abstract: | We investigate upon the shape and the determinants of the age distribution of business firms. By employing a novel dataset covering the population of French businesses, we highlight that a geometric law provides a reasonable approximation for the age distribution. However, relevant systematic deviations and sectoral heterogeneity appear. We develop a stochastic model of firm dynamics to explain the mechanisms behind this evidence and relate them to business dynamism. Results reveal a long-term decline in entry rates and lower survival probabilities of young firms. Our findings bear important implications for aggregate outcomes, notably employment growth. |
| Keywords: | Firm demographics, age distribution, business dynamism |
| JEL: | L11 L22 M13 M21 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2020-36&r=all |
| By: | Hanan Morsy (Research Department, African Development Bank); Amira El-Shal (Research Department, African Development Bank) |
| Abstract: | We examine the determinants of innovation and its effect on productivity across 52 emerging and developing economies, comparing African firms to their counterparts elsewhere. We use a generalized structural equation model (GSEM) to estimate the causal links while accounting for endogeneity. Our estimates show that access to finance has the strongest effect on firms' decisions to invest in research and development (R&D) in all countries. And while the drivers of innovation are remarkably similar in developed economies, the keys for African firms are access to external knowledge - largely via information and communications technology (ICT)- and skills development via on-the-job training. Only in Africa is the stand-alone effect of ICT adoption on innovation almost as strong as that of R&D; and the combined effect of firms' access to external knowledge through ICT and foreign-technology adoption and training is more than double that of R&D. Regardless of its content, the effect of employee training on innovation in Africa is double that in emerging markets. Finally, innovation is the key determinant of productivity in all countries, but the evidence is much stronger for product innovation by African firms. |
| Keywords: | Innovation, productivity, R&D, ICT, training, GSEM, latent variable, developing countries, Africa JEL classification: C30, D24, J24, M53, O3, O5 |
| Date: | 2020–06–26 |
| URL: | http://d.repec.org/n?u=RePEc:adb:adbwps:2466&r=all |
| By: | Satyajit Chatterjee; Burcu Eyigungor |
| Abstract: | Larger firms (by sales or employment) have higher leverage. This pattern is explained using a model in which firms produce multiple varieties and borrow with the option to default against their future cash flow. A variety can die with a constant probability, implying that bigger firms (those with more varieties) have a lower coefficient of variation of sales and higher leverage. A lower risk-free rate benefits bigger firms more as they are able to lever more and existing firms buy more of the new varieties arriving into the economy. This leads to lower startup rates and greater concentration of sales. |
| Keywords: | Startup rates; leverage; firm dynamics |
| JEL: | E22 E43 E44 G32 G33 G34 |
| Date: | 2020–07–30 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedpwp:88451&r=all |
| By: | Semwal, abhilasha |
| Abstract: | The concept of one Person Company’ was introduced in the Companies Act 2013. This concept was recommended first by the expert committee of Dr. JJ Irani in 2005. OPC is a hybrid of sole proprietor and company form of business: and limited liability being the precious legal invention in the legal history. The introduction of OPC in the Indian legal system is considered as the appropriate legislation to unleash the entrepreneurial talent of the emerging Indian businessmen, especially to start-up ventures. Here we try to dig into the emergence and development of OPC world over as well as in India, examines the concept of OPC which is set to organize the unorganized sector of proprietorship firms and other entities that will be convenient to regulate and manage with the emerging concept of OPC. |
| Date: | 2020–08–17 |
| URL: | http://d.repec.org/n?u=RePEc:osf:lawarx:f6e5s&r=all |
| By: | SEKIZAWA Yoichi; MAKIOKA Ryo; YAMAGUCHI Akira |
| Abstract: | The paper analyzes the causal effects of the subsidies for small and medium-sized firms in Japan (collectively called the Monozukuri Subsidy), provided by the Japanese Small and Medium Enterprise Agency. Given the uniqueness of its selection process, where a firm's acceptance is determined discontinuously by scores granted by selection committees, we utilize a fuzzy regression discontinuity design (RDD) approach in order to derive causal effects of the subsidies. In addition, our RDD estimates for different years are aggregated using a meta-analysis framework. We do not find a significant difference between treated and control firms on their value-added, value-added per worker, employment, or capital. The results suggest that its fuzzy selection process should be improved to derive robust and statistically significant estimates. |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:eti:rdpsjp:20032&r=all |
| By: | Tatiana Didier (World Bank); Ross Levine (University of California at Berkeley, NBER); Ruth Llovet Montanes (World Bank); Sergio L. Schmukler (World Bank) |
| Abstract: | This paper studies whether there is a connection between finance and growth at the firm level. It employs a new dataset of 150,165 equity and bond issuances around the world, matched with income and balance sheet data for 62,653 listed firms in 65 countries over 1990-2016. Three main patterns emerge from the analyses. First, firms that choose to issue in capital markets use the funds raised to grow by enhancing their productive capabilities, increasing their tangible and intangible capital and the number of employees. Growth accelerates as firms raise funds. Second, the faster growth is more pronounced among firms that are more likely to face tighter financing constraints, namely, small, young, and high-R&D firms. Third, capital market issuances are associated with faster growth among firms located in countries with more developed capital markets relative to banks. Capital markets are also comparatively effective at allowing financially constrained firms to raise capital. |
| Keywords: | bond markets, capital market development, capital raising, equity markets, financial structure, firm dynamics, firm financing, firm size |
| JEL: | F65 G10 G31 G32 L25 O10 O16 O40 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:anc:wmofir:166&r=all |
| By: | Vlados, Charis (Democritus University of Thrace, Department of Economics); Chatzinikolaou, Dimos (Democritus University of Thrace, Department of Economics) |
| Abstract: | Competitiveness and industrial policy seem to play a critical role in the development and mutation of different spatialized socio-economic systems. This article aims to review the literature on these two concepts and suggest a novel theoretical framework. First, we identify that, in the relevant literature, industrial policy acquires progressively a repositioned content, described as a new, holistic, multidimensional, or integrated policy that can help create and sustain the competitiveness of the firms, industries, localities, nations, or other socio-economic agglomerations. In this context, we explore the form of an actual integrated industrial policy and propose the theoretical framework of the competitiveness web, in which the co-evolution of micro-meso-macro levels are explored, by placing the dynamics of business innovation at the dialectic center of the overall developmental process. This integrated industrial policy to strengthen competitiveness must also be able to promote innovation in the different local and regional ecosystems and, therefore, we conceive a policy mechanism in the form of the Institutes of Local Development and Innovation (ILDI). The primary purpose of these institutes is to diagnose and strengthen the Stra.Tech.Man physiology (strategy-technology-management synthesis) of the local socio-economic organizations. We believe that this new approach to the integrated industrial policy to strengthen the local competitiveness can contribute to facilitating the adaptation of the socio-economic systems, and especially the less dynamic and developed, to the new emerging challenges of the crisis and restructuring of globalization in the pandemic era. |
| Keywords: | Competitiveness and Industrial Policy; Multilevel Competitiveness; Integrated Industrial Policy; Socio-Economic Development; Competitiveness Web; Institutes of Local Development and Innovation |
| JEL: | B52 F63 L52 |
| Date: | 2020–06–15 |
| URL: | http://d.repec.org/n?u=RePEc:ris:duthrp:2020_010&r=all |
| By: | E. Marrocu; R. Paci; D. Rigby; S. Usai |
| Abstract: | The smart specialization strategy (S3) has been at the core of European Cohesion Policy supporting regions to identify the technologies and economic sectors that might comprise sustainable growth paths. Most regions have included S3 in their development policies and devoted a share of available EU resources to their Regional Operational Programmes for the period 2014-2020. This paper provides one of the first attempts in the literature to assess empirically whether the choices made by European regions in selecting their S3 sectors are consistent, directly and indirectly, with their current specialisation patterns. The latter refer to the regional economy as a whole and not just to the manufacturing sector. Previous contributions that have focused on patent data may be biased because of the concentration of patenting within manufacturing. Analysis of S3 strategies draws from the EC official S3 website, where all regions were compelled to disclose their industrial and technological targets. Results show that regional strategies are heterogeneous. There are a few regions that have chosen a new S3 path rooted both in current sectors within which they enjoy comparative advantage and on related activities. However, overall, regions have not selected sectors highly associated with their current specialization or closely related to it, indicating a limited potential for S3 to activate successful growth trajectories that leverage existing capabilities. |
| Keywords: | Smart Specialization Strategy;regional development;capabilities;revealed comparative advantage;relatedness |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:cns:cnscwp:202004&r=all |
| By: | Georgeta Gogeanu (Valahia University Targoviste) |
| Abstract: | Innovation is one of the key components for the survival of the organization in a competitive environment. While doing this research I started by studying the literature on human resources management and the ways in which management practices in the field (evaluating human resources, recognition and rewarding, professional development, team management) have an influence on innovation among teachers from the pre - universitary school system. The hypothesis of the research is represented by the causality relationship between human resources management and innovation. A supportive human resources management can be perceived as a beneficial method of sustaining innovative behaviour. |
| Keywords: | Human resources management, Innovation, Managerial practice, Innovation management, Sharing knowledge |
| JEL: | M12 M53 I29 |
| URL: | http://d.repec.org/n?u=RePEc:sek:itepro:12113048&r=all |
| By: | Azusa Fujimori (Department of Management, Osaka Seikei University, Japan); Manabu Furuta (Department of Economics, Aichi Gakuin University, Japan); Takahiro Sato (Research Institute for Economics and Business Administration, Kobe University, Japan) |
| Abstract: | This study examines technology diffusion resulting from foreign direct investment (FDI) in the domestic manufacturing sector in India. We employ unit-level panel data (where a unit refers to an enterprise within the manufacturing sector) from 2000 to 2007, covering all medium- and large-size manufacturing enterprises in India, obtained from India's Central Statistics Office. We attempt to empirically capture evidence of FDI technology spillover effects through two key mechanisms: horizontal spillover (technology diffusion within the same industry) and vertical spillover (technology diffusion between foreign firms and their customer or suppliers). Vertical spillover effects can be further divided into backward linkages (technology diffusion from foreign firms to upstream industries), and forward linkages (technology diffusion from foreign firms to downstream industries). In addition, technology diffusion can be the result of both short- and long-term spillover effects. The results of the empirical analyses highlight the presence of short- and long-term horizontal spillover effects, both of which negatively affect the total factor productivity performance of domestic manufacturers. Moreover, we find an inverse relationship between the growth of FDI and total factor productivity in upstream industries in the short term; however, this changes to a positive relationship in the long term. Furthermore, the results show no evidence of FDI spillover effects to downstream sectors. |
| Keywords: | Technology diffusion; Foreign direct investment; Total factor productivity; Backward spillover effect; Manufacturing industries; Unit-Level data |
| JEL: | C81 F21 O53 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:kob:dpaper:dp2020-13&r=all |