nep-sbm New Economics Papers
on Small Business Management
Issue of 2020‒11‒16
seventeen papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. The role of gender in linking external sources of knowledge and R&D intensity By AMOROSO Sara; AUDRETSCH David
  2. Business Dynamism in the UK: New Findings Using a Novel Dataset By Silvia Lui; Russell Black; Josefa Lavandero-Mason; Mohammad Shafat
  3. The Impact of Product innovation on Performance: The Influence of Uncertainty and Managerial Accounting Information Systems By Tsai, Ming-Hsiu; Chang, Jung-Hsin; Lin, Yuan-Sheng; Cheng, Kuo-Chih
  4. Emissions Trading Schemes and Directed Technological Change: Evidence from China By Tian, Ruijie
  5. Firm Financing and the Relative for Labor and Capital By Khalid ElFayoumi
  6. Matching methods for impact evaluation of public subsidies to business R&D: Measuring heterogeneous effects By Heijs, Joost; Guerrero, Alex J.; Huergo, Elena
  7. Open Innovation And Risk Governence On Entrepreneurial Behaviors By Putri, Jenifer
  8. Transition to Industry 4.0 in the Visegrád Countries By Septimiu Szabo
  9. Mengukur Perilaku UMKM Melalui Entrepreneurial Orientation, Open Innovation dan Risk Governance By Fitri, Rohmadina Sabila
  10. Inside the regulatory sandbox: effects on fintech funding By Giulio Cornelli; Sebastian Doerr; Leonardo Gambacorta; Ouarda Merrouche
  11. Entry Decision, the Option to Delay Entry, and Business Cycles By Ia Vardishvili
  12. Inflation, Innovation and Growth: A Survey By Chu, Angus C.
  13. Industrial Clusters, Networks and Resilience to the Covid-19 Shock in China By Ruochen Dai; Dilip Mookherjee; Yingyue Quan; Xiaobo Zhang
  14. Declining business dynamism: Structural and policy determinants By Flavio Calvino; Chiara Criscuolo; Rudy Verlhac
  15. An experiment in knowledge co-creation on the subsistence entrepreneurial ecosystem of metropolitan La Paz, Bolivia By Barja Daza, Gover
  16. How the "EU Innovation Champions" successfully absorbed and reacted to the shock caused by the COVID-19 pandemic By DE MASSIS Alfredo; DI MININ Alberto; MARULLO Cristina; ROVELLI Paola; TENSEN Rik; CARBONE Antonio; CRUPI Antonio
  17. Natural selection: A review of studies on firms’ exit and efficiency By Uchida, Hirofumi

  1. By: AMOROSO Sara (European Commission - JRC); AUDRETSCH David
    Abstract: Scholars examining the effect of knowledge spillovers on R&D and innovation all agree on one thing—there is a strong relationship between the firm’s R&D effort and knowledge spillovers. The sign of this relationship depends, however, on many things, such as the type of spillovers (horizontal, vertical, or from other sources), the level of appropriability, the type of firm (e.g., age and sector), and the measurement of the spillover itself. A missing piece of evidence to this literature is the role of gender in the founding team of the firm. Our contribution is to fill this gap by explicitly analysing the role played by gender in the founding team. Given that the relationship between a firm’s R&D intensity and external knowledge spillovers is ultimately context-specific, we analyse the differences between male-owned and female-owned young entrepreneurial firms with respect to the influence that knowledge spillovers have on their R&D intensity.
    Keywords: Women entrepreneurs, absorptive capacity, knowledge intensive enterprise, spillovers, Europe
    Date: 2020–10
  2. By: Silvia Lui; Russell Black; Josefa Lavandero-Mason; Mohammad Shafat
    Abstract: We use a novel firm-level dataset to measure employment dynamics of UK businesses from 1999 to 2019, building on microdata from the Inter-Departmental Business Register (IDBR) and administrative data on employment from PAYE records at HMRC. We construct a new quarterly dataset by using consecutive snapshots of the IDBR to deduce signs of activity of firms. We present detailed descriptive analysis showing the quarterly averages for job creation and destruction by size, sector, transition status and age. In addition, we compute the marginal effects of age and size on growth using the Davis, Halitwanger and Schuh (DHS) approach. Our results show that business dynamism has slowed down since the 2008-2009 financial crisis on two levels: firstly, a decline in job destruction and secondly, a decline in job creation due to entry. Age has an important role in UK’s business dynamism – young firms are the most dynamic group of enterprises, independently of size.
    Keywords: business dynamism, employment, administrative data
    JEL: C81 D22 L25
    Date: 2020–10
  3. By: Tsai, Ming-Hsiu; Chang, Jung-Hsin; Lin, Yuan-Sheng; Cheng, Kuo-Chih
    Abstract: This paper reports on a survey of Taiwanese high-tech firms, using a path analysis to examine the effects of managerial accounting information systems (MAIS) on the relationship between product innovation and organizational performance. Two of the major characteristics suggested by Chenhall and Morris (1986), broad scope and timeliness, are systematically related to the subject matter of this study, thus, employing these two characteristics to explore the connection between MAIS, product innovation and organizational performance. We find that product innovation has a positive effect on organizational performance through the use of MAIS, and find the extent of this positive effect is more significant in business environments marked by high levels of uncertainty. This study provides evidence to understand whether product innovation requires more extensive use of MAIS in highly uncertain environments and whether the use of MAIS can improve organizational performance. The results also help practicing managers realize the importance of MAIS in modern organizations and the benefits of using MAIS to the organization. Finally, we remind managers engaging in product innovation practices that they should place importance on the use of MAIS, because traditional cost control systems no longer help in solving the problems that are specific to the current, modern business environment.
    Keywords: Information Systems; Managerial Accounting
    JEL: M4 M40 M49
    Date: 2020–09–14
  4. By: Tian, Ruijie (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: This paper examines the impact of carbon emissions trading schemes (ETS) on technical change proxied by the number of green patents in the context of the pilot ETS in China. I find a small increase of 0.16 patents per firm and year. A 10 percent increase in carbon prices increases green patents by 2 percent. The strongest effects are for the two regions in the upper range of carbon prices and for more productive firms. However, there are contrasting patterns at the extensive and intensive margins of green innovation: the pilot ETS reduces entry into green innovative activities but increases levels of innovating for firms that were innovative before they were regulated by ETS, especially for the more productive firms. This indicates that an important policy challenge is to encourage the firms covered by ETS to start innovation in green technologies; this applies particularly to the larger and more productive firms.
    Keywords: Carbon Pricing; Directed Technological Change; Innovation; Heterogeneous Firms.
    JEL: O33 O44 Q54 Q55
    Date: 2020–11
  5. By: Khalid ElFayoumi
    Abstract: During both the 2008 and the COVID crises, aggregate employment in Europe and the US fell despite continuing growth in the aggregate capital stock. Using more than one million firm-year observations of small and medium European firms between 2003 and 2018, this paper introduces new stylized facts on how firms’ relative demand for labor and capital evolved as their capital structure adjusted to the events of the 2008 crisis. It also provides the first micro-level evidence that firms substitute capital for labor when financing costs rise. The empirical evidence lends support to the hypothesis that substitution is driven by an incentive to raise holdings of collateralizable capital. The analysis uses the heterogeneous effects of ECB monetary policy surprises across the firm distribution to identify exogenous firm-level external financing shocks. The results suggest that maintaining a well functioning credit market supports a higher labor share of economic growth.
    Keywords: Labor demand, financial frictions, jobless growth, labor share
    JEL: E3 E5 G3 J2 J3
    Date: 2020
  6. By: Heijs, Joost; Guerrero, Alex J.; Huergo, Elena
    Abstract: The objective of this paper is to offer a broad profile of firms with publicly supported R&D projects, which allows us to explain their different degrees of additionality. With this objective, in a first step we use standard Propensity Score Matching techniques to estimate treatment effects at the firm level, and then we explore the determinants of the heterogeneity in these individual effects through the estimation of an equation for their determinants. For our analysis, we use information from a sample of 8,168 Spanish firms for the period 2007-2014. We report three main results. First, firms with multiple program participation show higher additionality. However, individual treatment effects, which are positive for firms with low support intensities, go sharply below the average for firms with very high support intensities. Second, the degree of additionality is positively related to firm characteristics denoting a more innovative nature, while it is negatively associated with features present in firms involved in more market-oriented R&D projects. Third, firm size has a positive relation to the probability of full additionality, but a negative association with the degree of additionality in terms of net R&D intensity. These results can provide public agencies with some tools for adjusting their selection procedures.
    Keywords: R&D support; policy evaluation; heterogeneous treatment effects; propensity score matching
    JEL: L25 O32
    Date: 2020–10–30
  7. By: Putri, Jenifer
    Abstract: Entrepreneurial Orientation merupakan sebuah penentu tindakan yang akan diambil oleh perusahaan dalam menemukan dan memanfaatkan peluang kewirausahaan (Wang, et al., 2020). Salah satu pendekatan yang fleksibel dengan menawarkan berbagai cara, dimana ide lebih mudah untuk dikembangkan adalah Open Innovation. Yang tidak hanya menitik beratkan sumber daya internal, tetapi juga inovasi teknologi yang digunakan perusahaan dalam proses meningkatkan open innovation.
    Date: 2020–10–02
  8. By: Septimiu Szabo
    Abstract: The brief provides an analysis on the progress made by the Visegrád Four countries in their transition to Industry 4.0, a concept encompassing new digital technologies like automation and robotisation, 3D printing, machine learning or artificial intelligence. As their share of manufacturing to GDP has been historically high, the economies and the workforce of these four countries are likely to be impacted by the technological disruption expected to take place in the coming decades. The automotive industry, one of the trademarks of the Visegrád economy, is the most advanced in the transition, having started to replace some of the more predictable manual and routine labour tasks with industrial robots. Other dimensions of the Industry 4.0 are less advanced and need particular attention. Most domestic firms lag behind in the integration of new technologies and do not have a clear vision in terms of their digital transformation. The level of advanced digital skills among the workforce is also rather low and the prevalence of digital public services remains limited. Also in the light of the economic recovery following the COVID-19 pandemic, various policies can support the digital transition, including by investing in cross-cutting technologies, facilitating access to risk financing to innovative firms and promoting entrepreneurship.
    Keywords: Industry 4.0, automation, robotisation, Visegrad, technological transition, innovation, Szabo.
    JEL: J2 L6 O3 O4
    Date: 2020–06
  9. By: Fitri, Rohmadina Sabila
    Abstract: pada jurnal ini membahas keterkaitan open innovation dalam kinerja perusahaan, dimana hal ini mengacu pada entrepreneurial oriantation. Entrepreneurial Orientation merupakan peran moderasi dari lingkungan yang dinamis, ditambah dengan hubungan bisnis dan jejaring sosial dan sumber daya teknologi, pada hubungan antara orientasi kewirausahaan dan kinerja organisasi.
    Date: 2020–10–02
  10. By: Giulio Cornelli; Sebastian Doerr; Leonardo Gambacorta; Ouarda Merrouche
    Abstract: Policymakers around the world are adopting regulatory sandboxes as a tool for spurring innovation in the financial sector while keeping alert to emerging risks. Using unique data for the UK, this paper provides initial evidence on the effectiveness of the world's first sandbox in improving fintechs' access to finance. Firms entering the sandbox see a significant increase of 15% in capital raised post-entry, relative to firms that did not enter; and their probability of raising capital increases by 50%. Our results furthermore suggest that the sandbox facilitates access to capital through two channels: reduced asymmetric information and reduced regulatory costs or uncertainty. Our results are confirmed when we exploit the staggered introduction of the sandbox and compare firms in earlier to those in later sandbox cohorts, and when we compare participating firms to a matched set of firms that never enters the sandbox.
    Keywords: fintech, regulatory sandbox, startups, venture capital.
    JEL: G32 G38 M13 O3
    Date: 2020–11
  11. By: Ia Vardishvili
    Abstract: I show that firms' ability to delay entry generates a countercyclical opportunity cost of entry and significantly amplifies the effect of the initial aggregate conditions on the selection of entrants. This mechanism enables existing firm dynamics models to reconcile the documented business cycle dynamics of US entrant establishments without leading to an excessive variation in economic aggregates. I find the observed variation of firms at entry is responsible for around three-fourths of the business cycle fluctuations. Finally, I argue that not accounting for the option to delay entry may result in misleading predictions about entrants' responses to different shocks or policies.
    Keywords: Option value, entry, firm dynamics, business cycles, propagation, Great Recession
    JEL: E22 E23 E32 E37 L25
    Date: 2020–10
  12. By: Chu, Angus C.
    Abstract: In this survey, we provide a selective review of the literature on inflation, innovation and economic growth. The relationship between inflation and economic growth is a fundamental question in economics. Most studies in this literature explore this relationship in capital-based growth models. This survey reviews a recent branch of this literature on inflation and innovation-driven growth. Specifically, we develop a canonical monetary Schumpeterian growth model to demonstrate the effects of inflation on innovation and the macroeconomy via different channels. We find that the cash-in-advance constraints on consumption and R&D investment have drastically different implications on the macroeconomic effects of inflation.
    Keywords: inflation; innovation;, economic growth
    JEL: E31 O3 O4
    Date: 2020–10
  13. By: Ruochen Dai; Dilip Mookherjee; Yingyue Quan; Xiaobo Zhang
    Abstract: We examine how exposure of Chinese firms to the Covid-19 shock varied with a cluster index (measuring spatial agglomeration of firms in related industries) at the county level. Two data sources are used: entry flows of newly registered firms in the entire country, and an entrepreneur survey regarding operation of existing firms. Both show greater resilience in counties with a higher cluster index, after controlling for industry dummies and local infection rates, besides county and time dummies in the entry data. Reliance of clusters on informal entrepreneur hometown networks and closer proximity to suppliers and customers help explain these findings.
    JEL: L25 O14
    Date: 2020–10
  14. By: Flavio Calvino (OECD); Chiara Criscuolo (OECD); Rudy Verlhac (OECD)
    Abstract: This paper analyses trends in business dynamism across 18 countries and 22 industries over the last two decades, using highly representative comparable data. It finds that declines in business dynamism, pervasive in many countries, are driven by dynamics occurring at a disaggregated sectoral level, rather than reallocation across sectors. Average trends within sectors point to steady declines in each country over the last two decades, even after accounting for the role of the business cycle, with market structure and firm heterogeneity emerging as prominent determinants. Investments in intangibles and digital technologies, globalisation, and changes in demographics also contribute to these trends. Policy can, however, help boost business dynamism by reducing barriers to entry and to knowledge diffusion, favouring experimentation and creative destruction, and increasing absorptive capacity and firms’ potential to benefit from technological change.
    Keywords: Business dynamism, Employment dynamics, Firm demography, Job reallocation
    Date: 2020–11–10
  15. By: Barja Daza, Gover
    Abstract: The Ecosistema del Emprendedor por Subsistencia Paceño, in Spanish, is a collection of books produced by the Bolivian Catholic University, with the active participation of graduating students involved in fieldwork research on a common topic of interest. Subsistence entrepreneurship is an important issue in a developing country context like Bolivia where it has not been studied from its ecosystem perspective. The collection concentrates mostly on the metropolitan area of La Paz. This article reviews the knowledge co-creation experiment among graduating students from different careers and their professors in studying and analyzing the La Paz’s subsistence entrepreneurial ecosystem under conditions of research constraints.
    Keywords: Subsistence entrepreneurship; Social entrepreneurial ecosystems; Research constraints; Research experiments; Knowledge co-creation
    JEL: A32 D83 O35 O54
    Date: 2020–06
  16. By: DE MASSIS Alfredo; DI MININ Alberto; MARULLO Cristina; ROVELLI Paola; TENSEN Rik; CARBONE Antonio; CRUPI Antonio
    Abstract: The COVID-19 pandemic presented great challenges, but also opportunities, to SMEs across Europe. We examine how the "European Innovation Champions" successfully absorbed and reacted to the shock caused by the COVID-19 pandemic. Five different paradoxical behaviors (i.e., planning, liquidity, time and velocity, partnership, resources and technology) characterized the European Innovation Champions during the peak of the COVID-19 pandemic. We distill 10 management principles representing key actions and decisions that allowed the European Innovation Champions to manage each paradox. This report provides policymakers and business leaders both within and outside the European Union with insights to enhance the capability of SMEs to succeed through a crisis.
    Keywords: innovation, SMEs, COVID-19
    Date: 2020–11
  17. By: Uchida, Hirofumi
    Abstract: In this study, we review the studies on the relation between firms’ efficiency or profitability and their exit. Although we take it for granted that inefficient or unprofitable firms are more likely to exit, which we call the natural selection hypothesis, some theories predict that it is not necessarily the case. After reviewing these theories, we sort out a large amount of empirical studies that report direct and related evidence on the relation between efficiency or profitability and exit.
    Keywords: Natural selection; exit; efficiency; cleansing effect
    JEL: D22 D24 E32 L25
    Date: 2020–03

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