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on Small Business Management |
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Issue of 2020‒11‒30
fourteen papers chosen by João Carlos Correia Leitão Universidade da Beira Interior |
| By: | Scandura, Alessandra; Bolzani, Daniela (University of Turin) |
| Abstract: | This paper investigates the importance of the network of collaborations with other firms, research institutions, and business associations as key drivers of innovation, providing a comparison between immigrant-owned firms and non-immigrant-owned firms. We hypothesise that the network of collaboration is more important for innovative activities of immigrant entrepreneurs than for natives, due to their migrant condition, and that immigrant entrepreneurs’ acculturation to the host country culture moderates the influence of such network. We test our hypotheses on a unique matched-pair sample of immigrant and native domestic entrepreneurs active in high-tech mainstream (non-ethnic) markets. Our results show that universities and research institutions along with business associations are more important for immigrant-owned companies; we further show that immigrant entrepreneurs’ acculturation to the host country culture acts as a substitute for interactions with business associations. These findings are highly relevant for the academic and policy discourses on the link between immigrant entrepreneurship and innovation in developed countries. |
| Date: | 2020–10 |
| URL: | http://d.repec.org/n?u=RePEc:uto:dipeco:202021&r=all |
| By: | Andres Rodriguez-Pose; Roberto Ganau; Kristina Maslauskaite; Monica Brezzi; |
| Abstract: | This paper examines the relationship between credit constraints − proxied by the investment-to-cash flow sensitivity – and firm-level economic performance − defined in terms of labor productivity – during the period 2009-2016, using a sample of 22,380 manufacturing firms from 11 European countries. It also assesses how regional institutional quality affects productivity at the level of the firm both directly and indirectly. The empirical results highlight that credit rationing is rife and represents a serious barrier for improvements in firm-level productivity and that this effect is far greater for micro and small than for larger firms. Moreover, high-quality regional institutions foster productivity and help mitigate the negative credit constraints-labor productivity relationship that limits the economic performance of European firms. Dealing with the European productivity conundrum thus requires greater attention to existing credit constraints for micro and small firms, although in many areas of Europe access to credit will become more effective if institutional quality is improved. |
| Keywords: | Credit Constraints; Labor Productivity; Manufacturing Firms; Regional Institutions; Cross-Country Analysis; Europe |
| JEL: | C23 D24 G32 H41 R12 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:2053&r=all |
| By: | Ruben Fotso (Univ Lyon, UJM Saint-Etienne, GATE UMR 5824, F-42023 Saint-Etienne, France) |
| Abstract: | When it comes to evaluating the causal effect of public policies on corporate performance, most studies tend toexclusively focus on targeted (treated) firms as if they have no relationship to the rest of the economy. Yet, public policies are highly likely to indirectly influence non-targeted firms due to the relationships they have with the targeted firms. This paper aims to fill this gap by evaluating the indirect causal effect of a new French science-industry transfer policy on the financial and employment variables of non-targeted companies. To do so, it focuses on French Technological Research Institutes (TRIs) which are science-industry collaborations based on technological platforms that bring together SMEs, large companies, universities and public research bodies with the goal of accelerating the transfer of knowledge towards firms and generating spillovers inside and outside the scheme. Based on geographical economics literature, it can be assumed that indirect effects tend to be spatially concentrated. By comparing a local untreated company to a non-local untreated company, therefore, using a difference-in-differences method applied to panel data (2008-2016) and combined with a double matching at the department level (NUTS 3) and at the firm level, it can be seen that non-beneficiary companies, located in the treated French department significantly improve their financial performance (turnover, financial autonomy) compared to control companies located in the control departments. The dynamics of employment variables are a little more complex. A negative significant effect is observed on the proportion of managers at the beginning of treatment and a positive significant effect is noticed later at the end of the period of observation. Analysis of the dynamics of the effects indicates that performance does not improve immediately after the treatment but later in time. |
| Keywords: | Indirect effect, impact evaluation, difference-in-differences approach, SMEs, spillovers |
| JEL: | C21 C53 D04 H23 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:gat:wpaper:2031&r=all |
| By: | Francesco Aiello (Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF, Università della Calabria); Paola Cardamone (Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF, Università della Calabria); Lidia Mannarino (Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF, Università della Calabria); Valeria Pupo (Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF, Università della Calabria) |
| Abstract: | Using a large sample of Italian small–medium-sized firms, this note analyses the effects of formal inter-firm cooperation on the performance of family firms (FFs). The study is based on the network contract (“Contratto di rete”) implemented in Italy in 2009. The results show that networks have a positive effect on FFs, while no conclusive evidence is found for non-family firms. Additionally, the advantages for southern FFs and for small firms are considerable. |
| Keywords: | family firms, formal business networks, performance |
| JEL: | G34 L24 L25 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:clb:wpaper:202007&r=all |
| By: | Cristelli, Gabriele; Lissoni, Francesco |
| Abstract: | We study the innovation effects of the Agreement on the Free Movement of Persons (AFMP), signed by Switzerland and the EU in 1999. Using geocoded patent data, complemented by matched inventor-immigrant-census records, we identify a large number of cross-border inventors (CBIs), commuters from neighbouring countries working in Swiss R&D labs. We show that, during the AFMP implementation phase, the influx of CBIs increased differentially across regions at different driving distances from the border. That caused a 24% increase in patents, mostly due to large and medium patent holders (as opposed to very large ones) and to inventor teams mixing CBIs and natives. The latter were not displaced and increased their productivity, thanks to complementarity between their knowledge assets and those of CBIs. |
| Keywords: | Immigration, Innovation, Patents, Inventors, Free Movement of Persons |
| JEL: | F22 J61 O31 O33 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:104120&r=all |
| By: | Julian di Giovanni; Andrei A. Levchenko; Isabelle Mejean |
| Abstract: | This paper uses a dataset covering the universe of French firm-level sales, imports, and exports over the period 1993-2007 and a quantitative multi-country model to study the international transmission of business cycle shocks at both the micro and the macro levels. The largest firms are both important enough to generate aggregate fluctuations (Gabaix, 2011), and most likely to be internationally connected. This implies that foreign shocks are transmitted to the domestic economy primarily through the largest firms. We first document a novel stylized fact: larger French firms are significantly more sensitive to foreign GDP growth. We then implement a quantitative framework calibrated to the full extent of observed heterogeneity in firm size, exporting, and importing. We simulate the propagation of foreign shocks to the French economy and report one micro and one macro finding. At the micro level heterogeneity across firms predominates: 40 to 85% of the impact of foreign fluctuations on French GDP is accounted for by the "foreign granular residual" - the term capturing the fact that larger firms are more affected by the foreign shocks. At the macro level, firm heterogeneity dampens the impact of foreign shocks, with the GDP responses 10 to 20% larger in a representative firm model compared to the baseline model. |
| Keywords: | Granularity, shock transmission, aggregate fluctuations, input linkages, international trade |
| JEL: | E32 F15 F23 F44 F62 L14 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:1751&r=all |
| By: | Aldieri, Luigi (University of Salerno); Grafström, Jonas (The Ratio Institute); Paolo Vinci, Concetto (University of Salerno) |
| Abstract: | The empirical evidence concerning the job-creation impact of wind power technology through knowledge spillovers is yet poor. Our objective is to contribute to the literature and bridge this gap. Specifically, our analysis explores to what extent investments in innovation activities of one firm affect the neighbouring firms’ generation of knowledge spillovers in the same sector (intra-industry) or to different sectors (inter-industry) and how this complex knowledge diffusion process impacts the employment dynamics. The econometric analysis relies on a sector-based panel dataset for the USA, Europe, and Japan between 2002 and 2017. The empirical findings suggest that there were negative employment spillovers from the same technology sector (Marshallian externalities) while the spillovers from more diversified activity (Jacobian externalities) have a positive impact on job-creation. The findings have relevant policy implications for governments who are developing an industrial strategy for wind power technology. |
| Keywords: | Employment; knowledge spillovers; patents; renewable energy; wind power |
| JEL: | J21 O33 Q20 Q40 Q42 |
| Date: | 2020–11–11 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ratioi:0340&r=all |
| By: | Krieger, Bastian (ZEW - Leibniz Centre for European Economic Research); Pellens, Maikel (Ghent University); Blind, Knut (Fraunhofer Institute for System and Innovation Research ISI); Schubert, Torben (CIRCLE - Centre for Innovation Research) |
| Abstract: | Previous research has expressed concerns about firms engaging less in basic research. We contribute to this debate by studying trends in the scientific publishing activities of firms located in Germany. Our results do not confirm a declining trend in raw numbers with numbers indicating that firms’ aggregate volume of scientific publications stayed constant between 2008 and 2016. However, the number of publishing firms declined, in particular in high-tech and knowledge-intensive industries. Beyond that, we observe positive trends in publishing in basic research journals compared to journals focused on applied research, and publishing in collaboration with academic partners compared to publishing alone. Thus, our results paint an ambiguous picture. While they do not confirm a decrease in firms’ basic research engagement in the aggregate, the figures document a concentration of publishing activities on fewer firms. We argue that this concentration of basic research activities in firms may pose a threat to the longer term innovativeness of the German economy. |
| Keywords: | Corporate publishing; Basic research; R&D strategy |
| JEL: | O32 O33 O34 O36 |
| Date: | 2020–11–19 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2020_013&r=all |
| By: | Damien Dussaux; Francesco Vona (Observatoire français des conjonctures économiques); Antoine Dechezleprêtre |
| Abstract: | Concerns about carbon offshoring, namely the relocation of dirty tasks abroad, undermine the efficiency of domestic carbon mitigation policies and might prevent governments from adopting more ambitious climate policies. This paper is the first to analyse the extent and determinants of carbon offshoring at the firm level. We combine information on carbon emissions, imports, imported emissions and environmental policy stringency based on a unique dataset of 5,000 French manufacturing firms observed from 1997 to 2014. We estimate the impact of imported emissions on firm’s domestic emissions and emission intensity using a shift-share instrumental variable strategy. We do not find compelling evidence of an impact of carbon offshoring on total emissions, but show that emission efficiency improves in companies offshoring emissions abroad, suggesting that offshored emissions are compensated by an increase in production scale. The effect is economically meaningful with a 10% increase in carbon offshoring causing a 4% decline in emission intensity. However, this effect is twice as small as that of domestic energy prices and, importantly, does not appear to be driven by a pollution haven motive. |
| Keywords: | Carbon offshoring; CO2 emissions; Emissions intensity; Import competition; Energy prices |
| JEL: | F18 F14 Q56 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/7j6trda2ip9uja53ghj5qo32rg&r=all |
| By: | Maurizio Iacopetta (Observatoire français des conjonctures économiques); Raoul Minetti (Michigan State University); Pierluigi Murro |
| Abstract: | New firms are often based on ideas that the founders developed while working for incumbent firms. We study the macroeconomic effects of spinoffs through a growth model of product variety expansion, driven by firm entry, and product innovation. Spinoffs stem from conflicts of interest between incumbent firms' shareholders and employees. The analysis suggests that incumbents invest more in product innovation when knowledge protection is stronger. An inverted-U shape relationship emerges, however, between the intensity of spinoff activities and the strength of the rule of law. A calibration experiment indicates that, with a good rule of law, loosening knowledge protection by 53 reduces product innovation by one fifth in the short run and one seventh in the long run, but boosts the spinoff rate by one tenth and one sixth in the short and long run, respectively. Nevertheless, per capita income growth drops and welfare deteriorates. The trade-offs are broadly consistent with evidence from Italian firms. |
| Keywords: | Corporate governance; Endogenous growth; Spinoffs |
| JEL: | E44 O40 G30 |
| Date: | 2020–04–29 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/2c47q6gpge8vrbqjak551kmu6c&r=all |
| By: | Flora Bellone (Université Côte d'Azur; GREDEG CNRS); Catherine Laffineur (Université Côte d'Azur; GREDEG CNRS); Sophie Pommet (Université Côte d'Azur; GREDEG CNRS) |
| Abstract: | Public investment banks aim to promote the growth of newly established firms, especially those that are the most innovative. An important policy challenge for such banks is to determine the extent to which and by what means they should support the rapid and early internationalization of these recently founded companies. To guide practitioners’ resource allocation decisions, this paper employs a unique dataset that combines comprehensive information on both the production and export activities of newly established French manufacturing firms over the period 1998-2015 and on a variety of public support instruments allocated to those firms by Bpifrance, i.e., the French public investment bank. |
| Keywords: | Born global, Firm-level data, Public investment bank, Export premia, Subsidies, Loans |
| JEL: | F14 G24 L25 M13 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2020-44&r=all |
| By: | Azmat, Ghazala (Sciences Po, Paris); Boring, Anne (Erasmus School of Economics) |
| Abstract: | This paper explores the recent efforts by the corporate world and public policy to increase the number of women in leadership positions in the workplace. We review and empirically evaluate the "business case" for gender equality, showing some evidence in favour of it. Despite the evidence and growing support, progress towards more diversity in leadership positions has been slow. We study the importance of supply-side constraints, as well as the main diversity policies (gender quotas, mentoring and network programs, diversity training to change firm culture, and family friendly policies) that have been implemented. We focus on the effectiveness of these policies, their shortcomings, as well as potential future steps that could help guide policy. |
| Keywords: | gender, firms, diversity policies |
| JEL: | J16 M14 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izapps:pp168&r=all |
| By: | Muhammad, Akbar; Shahzad, Hussain; Tanveer, Ahmad; Shoib, Hassan |
| Abstract: | The purpose of this research is to analyze the association between corporate governance and firm performance. Specifically, it examines the impact of CEO duality on board characteristics and its relationship with firm performance through dynamic penal estimation. Findings of this research are based on a sample of 230 listed non-financial firms over the period 2004-2014. We document that the corporate governance plays a pivotal role in determining the financial performance of firms operating in Pakistan. Consistent with past studies, findings of this research also show some statistical variations among the sampled firms (large and small size). The CEO duality compromises the efficiency of board independence. Further, the non-linear relationship of managerial ownership with performance is also depicted through the results of this study. |
| Date: | 2020–11–19 |
| URL: | http://d.repec.org/n?u=RePEc:akf:cafewp:6&r=all |
| By: | Majida Jrad; Yamina Tadjeddine |
| Abstract: | This paper examines the factors that affect the collateralizing of a loan specifically for SMEs in Lebanon that is a country with a small open emerging-market economy. Collateral should guarantee the bank loan but in practice it is adjusted according to other socio-economic criteria of companies. This is particularly true for SME's and even more so for emerging countries. We propose in this article to illustrate the signals mobilized by banks when providing collateralized loans. Data on these variables have been derived from the Lebanese Central Band and the World Bank. It contains observations for two samples – 532 firms for 2020 and 561 firms for 2014. Three sets of factors influence the level of collateral required: those related to firm characteristics (relevant variables: age, size, auditing financial statements, developing the qualification of workforce, export orientation, the sector of manufacturing, located in capital city, female manager, export orientation), to loan characteristics (no relevant variable), and to credit market specifics (interest rate). Regression estimates suggest the age and size of a firm contributed to more collateral required in 2019. Smaller collateral is required by firms with bigger size, auditing financial statements, developing the qualification of workforce, export orientation, belonging to the sector of manufacturing, located in capital city in 2013. Female manager, export orientation, and location in capital city contribute to smaller collateral required in 2019. Loan value does not seem to tighten collateral requirements. In opposite perspective, the increases in the interest rate entail stricter collateralizing the loans. |
| Keywords: | Financing, SMEs, collateral, credit risk, regression analysis, Lebanon. |
| JEL: | G32 O16 O53 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ulp:sbbeta:2020-46&r=all |