nep-sbm New Economics Papers
on Small Business Management
Issue of 2021‒01‒11
seventeen papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. International Sourcing in Portuguese Companies Evidence from Portuguese Micro Data By Ana Martins; Guida Nogueira; Eva Pereira
  2. LOCATION DETERMINANTS OF ECOINNOVATIVE FIRMS IN FRANCE By Eva Coll-Martinez; Malia Kedjar; Patricia Renou-Maissant
  3. Local Industry Influence on Commercialization of University Research by University Startups By KANG Byeongwoo; MOTOHASHI Kazuyuki
  4. A Reference Guide for the Business Outlook Survey By David Amirault; Naveen Rai; Laurent Martin
  5. Place-based SME finance policy and local industrial revivals: An empirical analysis of a directed credit program after WW2 By Takano, Keisuke; Okamuro, Hiroyuki
  6. Firm-specific Human Capital Accumulation: Evidence from Brazil By Tiago Pires; Arek Szydlowski; Shuai Zhao
  7. Moderating Effect and Mediating Effect Toward Firm Performance Varying Across Different Organizational Orientations By Lim, Raymond
  8. Business Angels and Firm Performance: First Evidence from Population Data By Andersson, Fredrik W.; Lodefalk, Magnus
  9. Influence of contingency theory, moderating variable, and mediating effect on firm performance By Susanto, Stefanny Magdalena
  10. Amundsen versus Scott: Are growth paths related to firm performance? By Coad, Alex; Daunfeldt, Sven-Olov; Halvarsson, Daniel
  11. Do Stronger Patents Lead to Faster Innovation? The Effect of Duplicative Search By Kaustav Das; Nicolas Klein
  12. Eco-inclusive entrepreneurship: Addressing climate change through technological innovation. The case of cleantech industry By Alina Petronela Alexoaei; Raluca Georgiana Robu
  13. Fragile, yet resilient: Adaptive decline in a collaboration network of firms By Frank Schweitzer; Giona Casiraghi; Mario V. Tomasello; David Garcia
  14. Take a ride on the green side: How do CDM projects affect Indian manufacturing firms’ environmental performance? By Jaraite, Jurate; Kurtyka , Oliwia; Olliver, Hélène
  15. Firms’ leverage across business cycles By Antonio De Socio
  16. The Effect of Occupational Licensing Stringency on the Teacher Quality Distribution By Bradley Larsen; Ziao Ju; Adam Kapor; Chuan Yu
  17. Transformation towards sustainable development goals: Role of innovation ecosystems for inclusive, disruptive advances in five Asian case studies By Iizuka, Michiko; Hane, Gerald

  1. By: Ana Martins (Research Office of the Portuguese Ministry of the Economy and Digital Transition); Guida Nogueira (Research Office of the Portuguese Ministry of the Economy and Digital Transition); Eva Pereira (Research Office of the Portuguese Ministry of the Economy and Digital Transition)
    Abstract: Outsourcing is one of the main drivers behind economic globalization, especially international outsourcing. In general terms it refers to the process of moving stages of production to external providers, either domestic (usually labelled as domestic outsourcing) or international (commonly labelled as offshoring or simply outsourcing). Over time, technological advances in transportation and ICT developments, led to a substantial rise in this phenomenon, growing in extent and nature, from simple to more complex tasks related to both manufactures and services supply. International outsourcing is usually expected to reduce production costs and to increase efficiency, however it has received substantial attention from policy makers for its potential negative consequences on the labour market. This paper combines Portuguese firm-level data from the International Sourcing surveys and longitudinal administrative business record data, to explore the impacts of the sourcing status on a variety of firms’ performance measures specially focusing on employment, competitiveness and productivity. The results suggest that international sourcing has an ambiguous effect on firm level total employment, but a positive effect on both the subset of workers that receive a salary (a proxy to employees) and on R&D jobs, coupled with an increasing effect on firm level total labour costs. Alongside these results, our findings also show that offshoring has a positive causal effect on both firm-level export intensity and trade balance, however the efficiency gains hypothesis was not confirmed. In fact, the results show that newly offshoring firms experienced lower labour productivity growth with a negative effect on both capital stock and capital per person employed.
    Keywords: Outsourcing, international sourcing, offshoring, internationalization, productivity, employment and firm productivity, Propensity score matching
    JEL: F23 L24 F61 D24 J24 F16
    Date: 2020–12
  2. By: Eva Coll-Martinez (Sciences Po, Toulose); Malia Kedjar (Normandie University); Patricia Renou-Maissant (EconomiX, CNRS, University of Paris Nanterre))
    Abstract: This paper analyses the location determinants of eco-innovative firms in France. The analysis is based on a dataset obtained after merging firm-level microdata on the location of new firms from DIANE Mercantil Register (Bureau van Dijk) and patents information from the OECD REGPAT (2018) database for the period 2003 and 2013. This paper departs from previous contributions on the location determinants of eco-innovation in three main ways. First, it analyses the effects of the regional technological knowledge base and its composition focusing on environmental-based innovations. Second, it introduces spatial econometrics techniques to capture any potential spatial spillovers arising from the location of eco-innovative firms. And third, it focuses on the French case which is of special interest in view of the relevance of regional eco-innovation policies. Main results show that unrelated knowledge variety for environmental technologies and the political support in terms of investments for the protection of the environment are the main factors explaining the location of eco-innovative firms. Indeed, by applying spatial econometrics we found that there is a clear spatial dependence on the creation. However, our results also show that the impact of the knowledge composition is quite local. These results may have many implications for French departments’ environmental performance and sustainable growth.
    Keywords: eco-innovative firms’ entry, industrial location, knowledge spillovers, environmental technologies, France
    JEL: L
    Date: 2020
  3. By: KANG Byeongwoo; MOTOHASHI Kazuyuki
    Abstract: This study investigates how regional conditions affect university startups using data from Japan. We use the list of university startups compiled by METI, covering more than 2,000 firms, linked with JPO patent information. The study found that technical field of patents obtained by university startups are influenced by local industry characteristics. In addition, in terms of commercialization of university patents, commercialization by university startups is more locally proximate, as compared to cases realized through university industry collaborations. Our results provide implications that regional conditions must be considered when setting academic entrepreneurship policies.
    Date: 2020–11
  4. By: David Amirault; Naveen Rai; Laurent Martin
    Abstract: In 1997, the Bank of Canada established regional offices to enhance communication and liaison activities across the country and to gather more effective regional input for the Bank’s policy deliberations. Shortly thereafter, the regional offices began conducting the Business Outlook Survey (BOS)—a quarterly face-to-face survey of senior managers at Canadian firms. The BOS has become an important part of monetary policy deliberations at the Bank of Canada and is also well known in Canadian policy and financial circles. This paper compiles more than 20 years of experience conducting the BOS and serves as a comprehensive reference manual. More specifically, it provides a brief history of the BOS; explains and discusses the survey’s sampling strategy and other elements of its design and implementation; highlights some demographic characteristics of the firms that participate; assembles a list of special topics addressed in both the quarterly BOS and the ad-hoc surveys conducted by regional offices; discusses some BOS questions not regularly published; and updates and augments an earlier assessment (Martin and Papile 2004) of the information content of BOS indicators.
    Keywords: Firm dynamics; Regional economic developments
    JEL: C83 D22 E32
    Date: 2020–12
  5. By: Takano, Keisuke; Okamuro, Hiroyuki
    Abstract: This paper examined the effects on the performance of local SMEs of a modernization fund program for small business enterprises implemented by Osaka Prefecture in the early 1950s. Utilizing firm-level panel data based on business credit reports, we empirically evaluated the effects of the program. We found an improvement in production levels among the recipients. In addition, recipients in sectors related to munitions production or in industrial agglomerations specialized in these sectors achieved additional or larger improvements in their production levels.
    Keywords: place-based policy, postwar revival, directed credit, modernization, Osaka
    JEL: H84 N95 O12 R51 R58
    Date: 2020–10
  6. By: Tiago Pires; Arek Szydlowski; Shuai Zhao
    Abstract: We introduce firm-specific returns to experience and tenure into a standard two-way fixed effects model and provide new evidence on heterogeneity of returns to experience and tenure across firms using the administrative matched employer-employee data from Brazil over the years 1999-2014. We find that 1) assuming that employer-employee match quality is determined by firm-specific wage premia and firm-specific returns to experience and seniority, the average return to 5 years of seniority is equal to 14.7%, 2) returns to tenure are not strongly related to firm wage premia (i.e.firm FEs), 3) returns to experience are strongly negatively correlated with firm wage premia, 4) the relationship between firm wage premium and return to experience is stronger for \blue collar" firms.
    Date: 2020–09
  7. By: Lim, Raymond
    Abstract: Moderating effect merupakan efek yang mempengaruhi hubungan antara independent variable dan dependent variable. Moderating dapat berasal dari internal contingencies atau external contingencies. Terdapat pula mediating effect yang memperantarai hubungan antara independent variable dan dependent variable yang kurang signifikan. Mediating effect dan moderating effect memiliki pengaruh yang berbeda tergantung pada orientasi dari organisasi.
    Date: 2020–12–15
  8. By: Andersson, Fredrik W.; Lodefalk, Magnus (The Ratio Institute)
    Abstract: Business angels dominate early stage investment in firms but research on the effects of their investment is scarce and limited by sample selection. We therefore propose an algorithm for identifying business angel investment in total population data. We apply the algorithm to study the effects of business angels on firm performance, using detailed and longitudinal total population data for individuals and firms in Sweden. Employing these data and a quasi-experimental estimator, we find that business angels engage in firms that already perform above par but that there also is a positive effect on subsequent growth, comparing with control firms. Firms with business angel investment perform better in terms of sales and employment growth and likelihood of becoming a high-growth firm. Contrary to previous research, we cannot find any impact on firm survival, however. Overall, our results underline the need to address sample selection issues both in identifying business angels and in evaluating their effects on firm performance.
    Keywords: Business angels; Firm performance; Sample selection; Population Data
    JEL: C23 G24 G32 L25
    Date: 2020–12–21
  9. By: Susanto, Stefanny Magdalena
    Abstract: Maksud dari contingency theory dalam (Pratono, 2016) adalah perusahaan dapat mencapai kinerja terbaik ketika struktur mereka relevan untuk menangani kontingensi yang dipaksakan oleh ukuran, teknologi, dan lingkungan mereka. Teori kontingensi memiliki maksud untuk memahami bagaimana perusahaan menyelaraskan kinerja yang diharapkan dengan lingkungan bisnis internal dan eksternal. Oleh karena itu, teori kontingensi menunjukkan perilaku perusahaan, yang diperlukan untuk kelangsungan hidup (Pratono, 2016). Pandangan kontingensi dapat memperkaya teori tentang strategi luar dengan menentukan kondisi dimana aktivitas jaringan dapat dikonfigurasi untuk mencapai hasil yang diharapkan. Pandangan kontingensi dari ikatan jaringan ini diharapkan dapat memandu perusahaan untuk membangun dan mengkonfigurasi koneksi mereka dengan pemangku kepentingan lain untuk memanfaatkan sumber daya mereka secara tepat waktu dan efektif (Peng & Turel, 2020).
    Date: 2020–12–15
  10. By: Coad, Alex (Waseda Business School, Tokyo, Japan); Daunfeldt, Sven-Olov (Institute of Retail Economics (Handelns Forskningsinstitut)); Halvarsson, Daniel (The Ratio Institute, Stockholm)
    Abstract: In the race to the South Pole, Roald Amundsen’s expedition covered an equal distance each day, irrespective of weather conditions, while Scott’s pace was erratic. Amundsen won the race and returned without loss of life, while Scott and his men died. We investigate how firms’ sales growth deviate from the long-run average growth path. Our baseline results suggest that growth path volatility is associated with higher growth of sales and profits, but is also associated with higher exit rates. This is driven by firms with negative growth rates. For positive-growth firms, volatility is negatively associated with both sales growth and survival.
    Keywords: Firm dynamics; Sales growth; Firm exit; Growth paths; Scale-up; Postentry growth
    JEL: D22 L25 L26
    Date: 2020–12–28
  11. By: Kaustav Das; Nicolas Klein
    Abstract: We analyse a model of two firms that are engaged in a patent race. Firms have to choose in continuous time between a traditional and an innovative method of pursuing the decisive breakthrough. They share a common belief about the likelihood of the innovative method being good. The unique Markov perfect equilibrium coincides with the cartel solution if and only if firms are symmetric in their abilities of leveraging a good innovative method or there is no patent protection. Otherwise, equilibrium will entail excessive duplication of efforts in the innovative method, as compared to the cartel benchmark, for any level of patent protection. We show that the expected time to a breakthrough is minimised at an interior level of patent protection, providing a possible explanation for the decrease in R&D productivity sometimes associated with stronger patent protections.
    Keywords: R&D competition, Duplication, Two-armed Bandit, Learning
    JEL: C73 D83 O31
    Date: 2020–03
  12. By: Alina Petronela Alexoaei (The Bucharest University of Economic Studies); Raluca Georgiana Robu (The Bucharest University of Economic Studies)
    Abstract: The article covers the role of entrepreneurs in developing climate-resilient solutions and business models for sustainable development with a special focus on technological innovation. Building on the concept of social entrepreneurship, the research attempts to investigate the role and the reasons that explain entrepreneurs? engagement in climate change mitigation and in developing new eco-inclusive technologies. The focus will lay on the case of the cleantech industry by attempting to provide a definition of the industry, an analysis of the typology of the financing involved the sectors with the largest impact, and the most innovative types of projects. The results are meant to anticipate key directions and serve as a possible guide to future entrepreneurs and investors interested in cleantech businesses.
    Keywords: Eco-inclusive entrepreneurship, cleantech, social entrepreneurs, sustainable entrepreneurship, climate change
    JEL: L26 O44 O13
  13. By: Frank Schweitzer; Giona Casiraghi; Mario V. Tomasello; David Garcia
    Abstract: The dynamics of collaboration networks of firms follow a life-cycle of growth and decline. That does not imply they also become less resilient. Instead, declining collaboration networks may still have the ability to mitigate shocks from firms leaving, and to recover from these losses by adapting to new partners. To demonstrate this, we analyze 21.500 R\&D collaborations of 14.500 firms in six different industrial sectors over 25 years. We calculate time-dependent probabilities of firms leaving the network and simulate drop-out cascades, to determine the expected dynamics of decline. We then show that deviations from these expectations result from the adaptivity of the network, which mitigates the decline. These deviations can be used as a measure of network resilience.
    Date: 2020–11
  14. By: Jaraite, Jurate (CERE - the Center for Environmental and Resource Economics); Kurtyka , Oliwia (Univ. Grenoble Alpes); Olliver, Hélène (Paris School of Economics)
    Abstract: This study examines the causal impacts of the Clean Development Mechanism (CDM) on the environmental performance of Indian manufacturing firms, as measured by their energy use, carbon dioxide (CO2) emissions, and respective intensities. The impacts of CDM projects are estimated by combining statistical matching with the difference-in-differences approach. We found that CDM projects significantly reduced firms' CO2 emission intensity and energy intensity, but had no effect on total CO2 emissions. These results reveal that CDM projects led to an emission-reducing technique effect (decreased CO2 intensity) and to a positive scale effect (increased sales), and that the latter effect muted the impacts of the former. One of the channels of the technique effect rests on participating firms increasingly generating their electricity on site and relying more on renewable energies. Our results suggest that CDM projects improved firms' environmental performance, even though firm-level absolute CO2 emissions did not decline.
    Keywords: additionality; carbon offsets; CDM projects; CO2 emissions; firms environmental performance; India; micro level data
    JEL: D22 Q53 Q54 Q58
    Date: 2021–01–04
  15. By: Antonio De Socio (Bank of Italy)
    Abstract: Based on a large sample of mostly unlisted non-financial companies, this paper studies the relationship between business cycles and firms’ leverage, disentangling the relative contributions of debt and equity and assessing the role of firm size in explaining cross-sectional heterogeneity. I find that aggregate leverage initially increases during busts, as debt growth remains steady, while the counterbalancing contribution of equity is smaller; after one year, as debt slows down, leverage decreases. Moreover, firm size matters, also after controlling for other proxies of financial frictions (age, risk, profitability, debt structure): leverage increases more at the beginning of busts for both very large and smaller firms; after one year, leverage decreases less for the latter, mainly due to persistently lower profits.
    Keywords: debt, equity, firm size, business cycles, crises
    JEL: E32 G01 G32
    Date: 2020–12
  16. By: Bradley Larsen; Ziao Ju; Adam Kapor; Chuan Yu
    Abstract: Concerned about the low academic ability of public school teachers, in the 1990s and 2000s, some states increased licensing stringency to weed out low-quality candidates, while others decreased restrictions to attract high-quality candidates. We offer a theoretical model justifying both reactions. Using data from 1991–2007 on licensing requirements and teacher quality—as measured by the selectivity of teachers’ undergraduate institutions—we find that stricter licensing requirements, especially those emphasizing academic coursework, increase the left tail of the quality distribution for secondary school teachers without significantly decreasing quality for high-minority or high-poverty districts.
    JEL: I2 J2 J4 J5 K2 K31 L5 L8
    Date: 2020–12
  17. By: Iizuka, Michiko (UNU-MERIT, and National Graduate Institute for Policy Studies (GRIPS)); Hane, Gerald (National Graduate Institute for Policy Studies (GRIPS), and Hitachi Ltd.)
    Abstract: The transformation of sociotechnical systems is considered necessary for achieving the Sustainable Development Goals(SDGs). However, this transformation process is inhibited by institutional inertia of the public sector, vested interests of the private sector, routine habits of individuals, and increased complexity of globalised activities. While policies to stimulate the transition exist, these policies and pathways are still considered insufficient. Meanwhile, there are many individual private initiatives taking place to advance the societal agenda. Although these are still isolated actions of new actors, they have the potential to become broader movements bringing disruptive advances through innovation. This study explores the potential of innovation ecosystem to understand the emerging private sector initiatives to meet social agenda through innovations that are disruptive and inclusive. Four types of businesses are examined: venture capital, an incubator, venture start-ups, and a social impact fund. A common feature underlying these cases are the creation of tailored innovation ecosystems that effectively utilises complementary assets. Currently these activities are self-generated without much government support. However, by aligning with public policy impact can be accelerated towards achieving the SDGs. Examining cases as 'signals' provide hints for how policy can be formulated to scaled-up and transform currently isolated private initiatives.
    Keywords: Innovation Ecosystems, SDGs, Emerging business, Complementary assets, Transformative change, Asia
    JEL: O32 O35 O38 M13
    Date: 2021–01–05

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