nep-sbm New Economics Papers
on Small Business Management
Issue of 2021‒02‒01
seventeen papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Robots, AI, and Related Technologies: A Mapping of the New Knowledge Base By Enrico Santarelli; Jacopo Staccioli; Marco Vivarelli
  2. Institutions, Financial Development, and Small Business Survival: Evidence from European Emerging Markets By Iwasaki, Ichiro; Kočenda, Evžen; Shida, Yoshisada
  3. Macro-Structural Obstacles to Firm Performance: Evidence from 2,640 Firms in Nigeria By Amr Hosny
  4. Boosting SMEs’ internationalisation in Poland By Antoine Goujard; Pierre Guérin
  5. Profiting from big data analytics: The moderating roles of industry concentration and firm size By Elisabetta Raguseo; Claudio Vitari; Federico Pigni
  6. Firm-level R&D after periods of intense technological innovation: the role of investor sentiment By Sirio Aramonte; Matthew Carl
  7. The Role of Nonemployers in Business Dynamism and Aggregate Productivity By Pedro Bento; Diego Restuccia
  8. Bayesian Fuzzy Clustering with Robust Weighted Distance for Multiple ARIMA and Multivariate Time-Series By Pacifico, Antonio
  9. « Introduction du dossier spécial Innovation publique » By David Carassus
  10. In brief...Swings and silicon roundabouts: does cluster policy work? By Max Nathan
  11. Endogeneity in Interlocks and Performance Analysis: A Firm Size Perspective By Tullio Buccellato; Riccardo Busin; Roberto Casarin; Giancarlo Corò
  12. Innovation in the time of Covid-19 By Capucine Riom; Anna Valero
  13. Simple approaches on how to discover promising strategies for efficient enterprise performance, at time of crisis in the case of SMEs : Voronoi clustering and outlier effects perspective By Marcel Ausloos; Francesca Bartolacci; Nicola G. Castellano; Roy Cerqueti
  14. Why does entrepreneurial orientation affect company performance? By Talis Putnins; Arnis Sauka
  15. Growth, development, and structural change at the firm-level: The example of the PR China By Torsten Heinrich; Jangho Yang; Shuanping Dai
  16. Turbulence in startups: Effect of COVID-19 lockdown on creation of new firms and its capital By Camino-Mogro, Segundo
  17. Firm Exports, Foreign Ownership, and the Global Financial Crisis By Peter Eppinger; Marcel Smolka

  1. By: Enrico Santarelli (Department of Economics, University of Bologna – Department of Economics and Management, University of Luxembourg); Jacopo Staccioli (Dipartimento di Politica Economica, DISCE, Università Cattolica del Sacro Cuore – Institute of Economics, Scuola Superiore Sant’Anna, Pisa); Marco Vivarelli (Dipartimento di Politica Economica, DISCE, Università Cattolica del Sacro Cuore – UNU-MERIT, Maastricht, The Netherlands – IZA, Bonn, Germany)
    Abstract: Using the entire population of USPTO patent applications published between 2002 and 2019, and leveraging on both patent classification and semantic analysis, this papers aims to map the current knowledge base centred on robotics and AI technologies. These technologies will be investigated both as a whole and distinguishing core and related innovations, along a 4-level core-periphery architecture. Merging patent applications with the Orbis IP firm-level database will allow us to put forward a threefold analysis based on industry of activity, geographic location, and firm productivity. In a nutshell, results show that: (i) rather than representing a technological revolution, the new knowledge base is strictly linked to the previous technological paradigm; (ii) the new knowledge base is characterised by a considerable – but not impressively widespread – degree of pervasiveness; (iii) robotics and AI are strictly related, converging (particularly among the related technologies) and jointly shaping a new knowledge base that should be considered as a whole, rather than consisting of two separate GPTs; (iv) the U.S. technological leadership turns out to be confirmed.
    Keywords: Robotics, Artificial Intelligence, General Purpose Technology, Technological Paradigm, Industry 4.0, Patents full-text
    JEL: O33
    Date: 2021–01
  2. By: Iwasaki, Ichiro; Kočenda, Evžen; Shida, Yoshisada
    Abstract: In this paper, we traced the survival status of 94,401 small businesses in 17 European emerging markets from 2007–2017 and empirically examined the determinants of their survival, focusing on institutional quality and financial development. We found that institutional quality and the level of financial development impact the survival probability of the researched SMEs in statistically significant and economically meaningful ways. The evidence holds even when we control for a set of firm-level characteristics such as ownership structure, financial performance, firm size, and age. The findings are also uniform across industries and country groups and robust beyond the difference in assumption of hazard distribution, firm size, region, and time period.
    Keywords: small business, institutions, financial development, survival analysis, European emerging markets
    JEL: C14 D02 D22 G33 M21
    Date: 2021–01
  3. By: Amr Hosny
    Abstract: A recent World Bank enterprise survey identified access to finance as the top constraint to Doing Business in Nigeria. In this context, the objective of this paper is two-fold: (i) study firm characteristics associated with more access to finance and export diversification; and (ii) quantify the impact of these structural obstacles on firm performance. Results suggest that (i) larger and export-oriented firms are about 40 percentage points less likely to report access to finance as a business obstacle, while firms perceiving access to finance as a constraint are, on average, about 10-40 percentage points less likely to be export-oriented diversified firms; and (ii) better access to finance and export diversification can help firm employment —as much as 80 percent higher— and capacity utilization. Results are largely robust to different specifications and estimation methods.
    Keywords: Export diversification;Exports;Credit;Capacity utilization;Employment;WP,firm,firm performance,export
    Date: 2020–05–22
  4. By: Antoine Goujard; Pierre Guérin
    Abstract: The rapid internationalisation of the Polish economy has helped develop competitive export-led manufacturing and services sectors fostering robust growth and productivity performance. However, the benefits of this development have been unequal. Many small and medium-sized enterprises (SMEs), some regions and social groups have lagged behind. Poland’s integration into world trade has largely focussed on downstream activities of value chains and relatively labour-intensive products that incorporate little domestic value added. The coronavirus (COVID-19) crisis has put additional pressures on SMEs. A broad range of well-coordinated policies is required to boost SMEs’ internationalisation and their productivity, while easing labour reallocation during the ongoing recovery. Providing stronger support for training programmes in smaller firms and within small firms’ networks would help them upgrade the skills of their workforce, notably for their managers, and ease new technology adoption and internationalisation. Streamlining regulations on start-ups and limiting regulatory and tax barriers to firm expansion would raise firm entry and growth. Strengthening post-insolvency second chance policies for honest entrepreneurs would ease resource reallocation and the adaptation of SMEs to an uncertain and rapidly changing international environment. Improving transport and digital infrastructure would lower trade costs and raise productivity. Ensuring that innovation policies adapt to smaller firms would boost their innovativeness and ease their integration in national and international value chains.
    Keywords: Digitalisation, Global Value Chains (GVCs), Poland, Productivity, SMEs
    JEL: F1 F2 F6 L1 O3
    Date: 2021–01–27
  5. By: Elisabetta Raguseo (Polito - Politecnico di Torino [Torino]); Claudio Vitari (AMU - Aix Marseille Université); Federico Pigni (GEM - Grenoble Ecole de Management)
    Abstract: Big data has gained momentum as an Information Technology that is capable of supporting organizational efforts to generate new and better business value. We here contribute to the emerging literature on big data analytic (BDA) solutions by investigating the moderating roles of firm size and industry concentration in the relationship between BDA solutions and firm profitability. Using a unique panel data set that covers 13 years, from 2004 to 2016, which contains information about 176 firms, we provide robust econometric empirical evidence of the negative moderating effects of industry concentration and the positive moderating effects of firm size on the relationship between the use of BDA solutions and firm profitability. Our findings provide strong empirical evidence on the business value of BDA as well as the essential role played by contextual conditions that managers should consider.
    Keywords: IT business value,big data analytics,firm profitability,econometric analysis,industry concentration,firm size
    Date: 2020–11
  6. By: Sirio Aramonte; Matthew Carl
    Abstract: Following periods of intense technological innovation, R&D is a critical driver of technology diffusion, but it is subject to frictions that can lower it below the level firms would undertake otherwise. We study whether sentiment can counterbalance these frictions and thus strengthen the link between firm-level R&D and lagged aggregate innovation. We find a positive answer for low-tech firms, which represent the main conduit for technology diffusion. The effect is stronger in the presence of informational externalities, that is when the results of experimentation funded by a company are observable by competitors. In contrast to the literature on sentiment and capital expenditures, the effect is weaker for financially constrained firms.
    Keywords: investor sentiment, technological innovation, R&D
    JEL: G02 G31 O32 O33
    Date: 2021–01
  7. By: Pedro Bento; Diego Restuccia
    Abstract: The well-documented decline in business dynamism, measured in the literature by the net entry rate of employer firms, has been proposed as an explanation for the productivity growth slowdown in the United States. We assess the role of nonemployers, firms without paid employees, in business dynamism and aggregate productivity. Including nonemployers, the total number of firms has instead increased since the early 1980s, which in the context of a standard model of firm dynamics implies an average annual growth of aggregate productivity of 0.26%, one-quarter of the productivity growth in the data. Accounting for changes in the share of nonemployers and the firm size distribution over time, the increase in the total number of businesses implies an even higher productivity growth of 0.52% annually. The productivity growth slowdown is not due to changes in business dynamism.
    Keywords: nonemployers, employer firms, business dynamism, productivity, TFP.
    JEL: O4 O51 E1
    Date: 2021–01–19
  8. By: Pacifico, Antonio
    Abstract: The paper suggests and develops a computational approach to improve hierarchical fuzzy clustering time-series analysis when accounting for high dimensional and noise problems in dynamic data. A Robust Weighted Distance measure between pairs of sets of Auto-Regressive Integrated Moving Average models is used. It is robust because Bayesian Model Selection methodology is performed with a set of conjugate informative priors in order to discover the most probable set of clusters capturing different dynamics and interconnections among time-varying data, and weighted because each time-series is 'adjusted' by own Posterior Model Size distribution in order to group dynamic data objects into 'ad hoc' homogenous clusters. Monte Carlo methods are used to compute exact posterior probabilities for each cluster chosen and thus avoid the problem of increasing the overall probability of errors that plagues classical statistical methods based on significance tests. Empirical and simulated examples describe the functioning and the performance of the procedure. Discussions with related works and possible extensions of the methodology to jointly deal with endogeneity issues and misspecified dynamics in high dimensional multicountry setups are also displayed.
    Keywords: Distance Measures; Fuzzy Clustering; ARIMA Time-Series; Bayesian Model Selection; MCMC Integrations.
    JEL: C1 C52 C61
    Date: 2020
  9. By: David Carassus (CREG - Centre de recherche et d'études en gestion - UPPA - Université de Pau et des Pays de l'Adour)
    Abstract: Le 7 ème colloque de l'AIRMAP, organisé à Biarritz par l'Université de Pau et des Pays de l'Adour (Centre de Recherche et d'Études en Gestion), portait sur la question de l'innovation publique. Face à un contexte public de plus en plus complexe et contraint, l'innovation apparait en effet comme le principal vecteur d'amélioration de l'efficacité et de l'efficience de l'action publique (Damanpour et Schneider, 2006 1) et, plus généralement, de la qualité des services publics (Jung et Lee, 2015 2). Ainsi, à l'échelle internationale, les dispositifs et des programmes nationaux et locaux, visant à favoriser et diffuser l'innovation publique internationale, se multiplient (Arundel et al., 2015 3).
    Date: 2020–11–01
  10. By: Max Nathan
    Abstract: Despite scepticism among researchers, policies to promote geographical clusters of firms in the same sector remain popular. Max Nathan evaluates a flagship programme set up a decade ago to accelerate the growth of Tech City in East London. While the cluster has increased in size and density, the outcomes for firm performance are - at best - mixed. That raises some bigger questions for future cluster policies.
    Keywords: cities, clusters, technology, economic development, synthetic controls
    JEL: L53 L86 O31 R30 R50
    Date: 2020–03
  11. By: Tullio Buccellato (Economic Research Department, Confindustria); Riccardo Busin (VERA, University of Venice Cà Foscari); Roberto Casarin (Department of Economics, University of Venice Cà Foscari); Giancarlo Corò (Department of Economics, University of Venice Cà Foscari)
    Abstract: This paper contributes to the literature on interlocking directorates (ID) by providing a new solution to the two econometric issues arising in the joint analysis of interlocks and firm performance which are the endogenous nature of ID and sample selection bias due to the exclusion of isolated firms. Some key determinants of ID network formation are identified and used to check for endogeneity. We analyze the impact of the positioning in the network on firms’ performance and inspect how the impact varies across firms of different sizes drawing on information relating to 37,324 firms in the interlocking network which, to our knowledge, is the widest dataset ever used in approaching the study of ID. Our results, made robust for endogeneity and sample selection bias, suggest that eigenvector centrality and the clustering coefficient have a positive and significant impact on all the performance measures and that this effect is more pronounced for small firms.
    Keywords: Firm performance, interlocking directorates, network formation, network econometrics
    JEL: C02 C26 G30 G34 D85 L14
    Date: 2020
  12. By: Capucine Riom; Anna Valero
    Abstract: Businesses have rapidly adopted new technologies and new ways of working in response to the massive disruptions caused by the pandemic. A CEP report by Capucine Riom and Anna Valero suggests that if such innovation continues, it could boost the UK economy in the long term.
    Keywords: covid-19, business performance, innovation, cbi, uk
    Date: 2020–11
  13. By: Marcel Ausloos; Francesca Bartolacci; Nicola G. Castellano; Roy Cerqueti
    Abstract: This paper analyzes the connection between innovation activities of companies -- implemented before a financial crisis -- and their performance -- measured after such a time of crisis. Pertinent data about companies listed in the STAR Market Segment of the Italian Stock Exchange is analyzed. Innovation is measured through the level of investments in total tangible and intangible fixed assets in 2006-2007, while performance is captured through growth -- expressed by variations of sales or of total assets, -- profitability -- through ROI or ROS evolution, - and productivity -- through asset turnover or sales/employee in the period 2008-2010. The variables of interest are analyzed and compared through statistical techniques and by adopting a cluster analysis. In particular, a Voronoi tessellation is implemented in a varying centroids framework. In accord with a large part of the literature, we find that the behavior of the performance of the companies is not univocal when they innovate. The statistical outliers are the best cases in order to suggest efficient strategies. In brief, it is found that a positive rate of investments is preferable.
    Date: 2020–12
  14. By: Talis Putnins (Finance Discipline Group, University of Technology Sydney); Arnis Sauka (Stockholm School of Economics in Riga)
    Abstract: Research summary To better understand why entrepreneurial orientation (EO) is positively associated with company performance, we propose and test a reconceptualization of how the components of EO (risk-taking, innovativeness, proactiveness) combine in driving performance. Drawing on financial economics theory, our conceptualization highlights that all three components positively contribute to performance, but in different ways. Risk-taking has a direct positive relationship with performance, which can be understood through the risk–return tradeoff that is central in financial economics theory. The relationship between risk-taking and performance is conditional on the level of innovativeness and thus innovativeness contributes to performance through its effect on the type of risk-taking. Proactiveness contributes to performance through its positive effect on the level of risk-taking. Managerial summary This study analyzes three key drivers of company performance: risk-taking, innovativeness, and proactiveness. We show that constructive risk-taking is the central driver of company performance, mirroring the principle of risk and return in financial investment settings. Risk- taking that is associated with innovation has a particularly strong positive relationship with performance, consistent with innovation being a driver of growth and profitability. More proactive firms tend to take on more risk and thus also perform better than less proactive firms.
    Keywords: conceptualization; entrepreneurial orientation; innovativeness; performance; proactiveness; risk-taking
    Date: 2020–01–01
  15. By: Torsten Heinrich; Jangho Yang; Shuanping Dai
    Abstract: Understanding the microeconomic details of technological catch-up processes offers great potential for informing both innovation economics and development policy. We study the economic transition of the PR China from an agrarian country to a high-tech economy as one example for such a case. It is clear from past literature that rapidly rising productivity levels played a crucial role. However, the distribution of labor productivity in Chinese firms has not been comprehensively investigated and it remains an open question if this can be used to guide economic development. We analyze labor productivity and the dynamic change of labor productivity in firm-level data for the years 1998-2013 from the Chinese Industrial Enterprise Database. We demonstrate that both variables are conveniently modeled as L\'evy alpha-stable distributions, provide parameter estimates and analyze dynamic changes to this distribution. We find that the productivity gains were not due to super-star firms, but due to a systematic shift of the entire distribution with otherwise mostly unchanged characteristics. We also found an emerging right-skew in the distribution of labor productivity change. While there are significant differences between the 31 provinces and autonomous regions of the P.R. China, we also show that there are systematic relations between micro-level and province-level variables. We conclude with some implications of these findings for development policy.
    Date: 2020–12
  16. By: Camino-Mogro, Segundo
    Abstract: Business creation is an important measure of real economic activity because it shows the dynamics with which new firms are born, create jobs, move their capital, innovate and compete with old firms. In this sense, this paper analyzes the impact of the lockdown policies implemented to stop the spread of the COVID-19 on the creation of new formal firms in Ecuador. I use a regression discontinuity in time (RDiT) design jointly with official administrative real-time data, and find an overall large decrease in the creation of new formal firms (-73%) but also in the total amount of capital coming from the new formal firms (-40%). Additionally, my results suggest that the negative impacts of the COVID-19 lockdown on creation of new formal firms do not diminish over the time, in particular after one month and a half. Finally, I show that the March 16 lockdown measures help to explain only the observed changes in creation of new formal firms occurred the day after their announcement and not other changes that predate or follow these announcements. The main conclusion is that lockdown policies have a negative impact on firm creation, result that is of high policy relevance which can be a tool to design business attraction policies.
    Keywords: COVID-19; Lockdown; New firms; Regression Discontinuity; Ecuador
    JEL: G38 M13 M21
    Date: 2020–11–23
  17. By: Peter Eppinger; Marcel Smolka
    Abstract: The exceptional export performance of foreign-owned firms is a well-established stylized fact, but the underlying mechanism is not yet fully understood. In this paper, we provide theory and empirical evidence demonstrating that this fact can be explained by ownership differences in access to finance. We develop a theoretical model of international trade featuring firm heterogeneity and credit market frictions in which foreign-owned firms can access foreign capital markets via their multinational parents. The model predicts a financial advantage of foreign ownership for exporting that gains importance as credit conditions deteriorate. To empirically identify this effect, we estimate a triple differences model using rich micro data from Spain that exploits the global financial crisis as an exogenous shock to credit supply. We find that foreign ownership significantly stabilized firm exports when liquidity dried out in the crisis, in particular among small and financially vulnerable firms.
    Keywords: firm exports, foreign ownership, multinational firms, financial frictions, financial crisis
    JEL: F10 F14 F23 G01 G32
    Date: 2020

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