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on Small Business Management |
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Issue of 2021‒03‒08
fifteen papers chosen by João Carlos Correia Leitão Universidade da Beira Interior |
| By: | Qing Li (Department of Economics and Finance, SILC Business School, Shanghai University.); Long Hai Vo (Economics Department, Business School, the University of Western Australia; Research Centre in Business, Economics and Resources, Ho Chi Minh City Open University; Faculty of Finance, Banking and Business Administration, Quy Nhon University) |
| Abstract: | Intangible capital is an important growth driver in the modern knowledge-based and innovation-driven economy. While there seems to be sufficient support for the role of intangible capital from developed economies, evidence from fast-growing developing countries is much more limited. This paper explores the heterogeneous pattern and potential determinants of firm-level intangible capital investment in Vietnam. We found that firm size, human capital, and information and communication technology increase the likelihood to invest in intangible capital. Additionally, an inverted-U shaped relation is identified between market competition and intangible capital investment: Moderate levels of market competition induce firms in Vietnam to invest more in innovative activities, but the effect of stronger competition diminishes. |
| Keywords: | Intangible capital investment; innovation; Vietnamese firms |
| JEL: | O34 O12 R11 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:uwa:wpaper:21-02&r=all |
| By: | Alessandro Bitetto (University of Pavia); Paola Cerchiello (University of Pavia); Stefano Filomeni (University of Essex); Alessandra Tanda (University of Pavia); Barbara Tarantino (University of Pavia) |
| Abstract: | In this paper we assess credit risk of SMEs by testing and comparing a classic parametric approach fitting an ordered probit model with a non-parametric one calibrating a machine learning historical random forest (HRF) model. We do so by exploiting a unique and proprietary dataset comprising granular firm-level quarterly data collected from a large European bank and an international insurance company on a sample of 810 Italian small- and medium-sized enterprises (SMEs) over the time period 2015-2017. Our results provide novel evidence that a dynamic Historical Random Forest (HRF) approach outperforms the traditional ordered probit model, highlighting how advanced estimation methodologies that use machine learning techniques can be successfully implemented to predict SME credit risk. Moreover, by using Shapley values for the first time, we are able to assess the relevance of each variable in predicting SME credit risk. Traditionally, credit risk evaluation of informationally-opaque SMEs has relied on soft information-intensive relationship banking. However, the advent of large banking conglomerates and the limits to successfully "harden" and transmit soft information across large banking organizations, challenge the traditional role of relationship banking, urging the need to evaluate SME credit risk by implementing alternative methodologies mostly based on hard information. |
| Keywords: | Credit Rating, SME, Historical Random Forest, Machine Learning, Relationship Banking, Soft Information |
| JEL: | C52 C53 D82 D83 G21 G22 |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:pav:demwpp:demwp0201&r=all |
| By: | Jelena Relijc; Armanda Cetrulo; Valeria Cirillo; Andrea Coveri |
| Abstract: | Following a market-oriented approach, policies aimed at increasing labour flexibility by weakening employment protection institutions should enable firms to efficiently allocate resources, improve their capability to compete on international markets and adjust to economic cycle. This work documents the rise of non-standard (i.e. temporary and part-time) work in five European countries (Germany, France, Italy, the Netherlands and the United Kingdom) over the period 1994-2016 and investigate the nexus between the use of non-standard work and innovation performance using data for 18 manufacturing and 23 service industries. Contrary to the objectives that market-oriented policy recommendations promised to achieve, we show that there is a significantly negative association between the share of workers employed under non- standard contractual arrangements and the introduction of both product and process innovation. Furthermore, we show that the harmful consequences of the spread of non-standard work on firms' product innovation propensity are more pronounced in high-tech sectors. |
| Keywords: | Non-standard work; Knowledge; Product innovation; Process innovation; Industry-level analysis. |
| Date: | 2021–02–21 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2021/06&r=all |
| By: | Philippe Aghion; Antonin Bergeaud; John Van Reenen |
| Abstract: | Does regulation affect the pace and nature of innovation and if so, by how much? We build a tractable and quantifiable endogenous growth model with size-contingent regulations. We apply this to population administrative firm panel data from France, where many labour regulations apply to firms with 50 or more employees. Nonparametrically, we find that there is a sharp fall in the fraction of innovating firms just to the left of the regulatory threshold. Further, a dynamic analysis shows a sharp reduction in the firm's innovation response to exogenous demand shocks for firms just below the regulatory threshold. We then quantitatively fit the parameters of the model to the data, finding that innovation at the macro level is about 5.4% lower due to the regulation, a 2.2% consumption equivalent welfare loss. Four-fifths of this loss is due to lower innovation intensity per firm rather than just a misallocation towards smaller firms and lower entry. We generalize the theory to allow for changes in the direction of R&D, and find that regulation's negative effects only matter for incremental innovation (as measured by citations and text-based measures of novelty). A more regulated economy may have less innovation, but when firms do innovate they tend to “swing for the fence” with more radical (and labour saving) breakthroughs. |
| Keywords: | Innovation, regulation, patents, firm size. |
| JEL: | O31 L11 L51 J8 L25 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:bfr:banfra:804&r=all |
| By: | Paolo Falco; Henrik Hansen; John Rand; Finn Tarp; Neda Trifkovi? |
| Abstract: | We look into the relationship between business practices and enterprise productivity using panel data with matched employer and employee information from Myanmar. The data show that micro, small, and medium-size enterprises in Myanmar typically do only a few modern business practices. Even so, through estimates of value-added functions and labour demand relations we find a positive and economically important association between business practices and productivity. The results are confirmed when we utilize employer-employee information to estimate Mincer-type wage regressions. |
| Keywords: | Business, Management, Productivity, Myanmar, Small and medium enterprises, Firm behaviour, Manufacturing firms |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp-2021-45&r=all |
| By: | Philippe Larrue (OECD) |
| Abstract: | This paper analyses ‘mission-oriented innovation policies’ (MOIPs), a new type of systemic intervention that a growing number of countries has implemented in order to tackle mounting societal challenges. These policies aim to alleviate some of the most prevalent weaknesses within many national systems of innovation, notably the lack of holistic strategic orientation and policy co-ordination, and fragmented policy mixes. This paper leverages a dedicated analytical framework to systematically explore the challenges and opportunities that these policies present at initiative and country levels. In doing so, it provides a better understanding of the different ways in which governments design, fund and coordinate MOIPs, and contributes to broadening the range of options available to either improve or initiate this policy approach. This paper complements the MOIP Online Toolkit (https://stip.oecd.org/stip/moip), the OECD knowledge platform on MOIPs. |
| Date: | 2021–02–05 |
| URL: | http://d.repec.org/n?u=RePEc:oec:stiaac:100-en&r=all |
| By: | Dörr, Julian Oliver; Murmann, Simona; Licht, Georg |
| Abstract: | COVID-19 placed a special role to fiscal policy in rescuing companies short of liquidity from insolvency. In the first months of the crisis, SMEs as the backbone of Europe's real economy benefited from large and mainly indiscriminate aid measures. Avoiding business failures in a whatever it takes fashion contrasts, however, with the cleansing mechanism of economic crises: a mechanism which forces unviable firms out of the market, thereby reallocating resources efficiently. By focusing on firms' pre-crisis financial standing, we estimate the extent to which the policy response induced an insolvency gap and analyze whether the gap is characterized by firms which had already struggled before the pandemic. With the policy measures being focused on smaller firms, we also examine whether this insolvency gap differs with respect to firm size. Based on credit rating and insolvency data for the near universe of actively rated German firms, our results suggest that the policy reponse to COVID-19 has triggered a backlog of insolvencies in Germany that is particularly pronounced among financially weak, small firms, having potential long term implications on economic recovery. |
| Keywords: | COVID-19 policy response,Corporate bankruptcy,Cleansing e ect,SMEs |
| JEL: | C83 G33 H12 O38 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:21018&r=all |
| By: | , AISDL |
| Abstract: | Improving the quality of accounting information systems through accountant resources is beneficial to the performance and sustainable development of SMEs. This study investigated the impact of accountant resources on the quality of accounting information systems in Vietnamese SMEs. Accounting information system quality was measured by a multidimensional scale including system quality, information quality, and usefulness. The study tested hypotheses using Path analysis of Structural Equation Model based on 434 respondents. The findings indicated a strong interaction between the components of the accounting information system quality under the effect of accountant resources. The results showed a positive direct effect of accountant resources on system quality and the path analysis results also revealed an influence of accountant resources on information quality and usefulness via mediating variables. The results highlighted the importance of accountant resources for the quality of accounting information systems. This study contributed theoretically to the non-financial indicator for measuring accounting information system quality. |
| Date: | 2020–03–30 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:pxjqt&r=all |
| By: | Sheresheva Marina (Department of Economics, Lomonosov Moscow State University); Efremova Marina (The Institute of Economics and Enterpreneurship, Nizhny Novgorod Lobatchevsky University); Simen Ye (Department of Economics, Lomonosov Moscow State University); Shimin Nikolaj (The Institute of Economics and Enterpreneurship, Nizhny Novgorod Lobatchevsky University); Anikin Aleksandr (The Institute of Economics and Enterpreneurship, Nizhny Novgorod Lobatchevsky University) |
| Abstract: | This article presents an approach to the development of an interdisciplinary area of applied research aimed at understanding the place and role of small family businesses networking in the face of big challenges. Based on the results of the literature review, the authors characterize the problem versatility and the expediency to focus on the entrepreneurial intentions of the younger generations, who are able to integrate new technologies into the activities of family enterprises. The role of small family businesses, as the territorial economic system stakeholders, in achieving sustainable development goals is emphasized. The need is underlined to form a theoretical ground for identifying gaps and institutional failures that hinder the creation of small family businesses and reduce their stability, as well as to identify factors that affect the formation and small family businesses networking in the context of digital transformation. |
| Keywords: | small business; small family businesses; family business; entrepreneurial intentions; sustainable development; regional development; networking; big challenges |
| JEL: | L26 M13 |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:upa:wpaper:0033&r=all |
| By: | Richard Fabling (Independent Researcher) |
| Abstract: | Theory and international evidence suggest that firms at the New Zealand productivity frontier may be especially important for the diffusion of knowledge from the global productivity frontier, acting as a conduit for new technologies and ideas to flow into the domestic economy. We identify the NZ productivity frontier in a novel way that is robust to some sources of measurement error, and to criticism that the frontier label is dependent on arbitrary assumptions. We show that economic activity is concentrated in the upper deciles of the productivity distribution, and that frontier firms are disproportionately important to aggregate output, even relative to firms just outside the frontier. Compared to laggard firms, frontier firms: employ a more skilled workforce concentrated in major Urban Areas (particularly Auckland); have superior human resource management practices; are more export intensive; are more likely to have up-to-date technology (including UFB use); and to be in markets with no competitors. |
| Keywords: | Multifactor productivity; productivity frontier; productivity growth; management practices; innovation; exporting; foreign direct investment; competition |
| JEL: | D20 L20 M21 O31 |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:mtu:wpaper:21_01&r=all |
| By: | Buckle, Robert A.; Creedy, John; Ball, Ashley |
| Abstract: | Performance-based research funding systems (PBRFS) have been introduced in many countries for allocating funding to research institutions. There continues to be considerable debate about the effectiveness and consequences of these systems. This paper provides a new approach to this debate. It utilises longitudinal researcher data available from the New Zealand PBRFS, which assesses institutional performance and allocates funds based on individual researcher performance. The longitudinal data enable identification of entry, exit and quality transformation of researchers and the contribution of these dynamics to changes in university and discipline research quality, in a manner similar to Schumpeter’s description of the impact of firm dynamics on productivity and economic growth, in terms of a ‘gale of creative destruction’. The approach enables a deeper understanding of individual and institutional responses to PBRFSs, the sustainability of changes, and the contributions of changes in researcher quality and discipline composition to changes in institutional performance. |
| Keywords: | Performance-Based Research Funding Systems, Policy evaluation, Research quality, Social Accounting Framework, Longitudinal data, |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:vuw:vuwcpf:9447&r=all |
| By: | Christian Abele; Agnes Benassy-Quere; Lionel Fontagné; Lionel Gérard Fontagné |
| Abstract: | We analyse the impact of both the Global Financial Crisis of 2008 and the European sovereign and banking crisis of 2011-13 on firm-level productivity in France, Italy and Spain. We show that relying on a single break date in 2008 misses both the Eurozone crisis and countries' institutional specificities. Although leverage and financial constraints affect firm-level productivity negatively, high-leverage firms suffer more from financial constraints only in Italy, when they are relatively small or when their debt is of short maturity. These results call for approaches taking into consideration country-level characteristics of financial institutions and time varying financing constraints of the firms, instead of pooling data and adopting a common break date. One size does not fit all when it comes to identifying the impact of financial crises on firm level productivity. |
| Keywords: | total factor productivity, firm-level data, financial constraints, crises |
| JEL: | E22 E23 E44 D24 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8891&r=all |
| By: | Taniya Ghosh (Indira Gandhi Institute of Development Research); Prashant Mehul Parab (Indira Gandhi Institute of Development Research) |
| Abstract: | The study evaluates the role of R&D, human capital, and technology spillovers in influencing India's long-run productivity growth. The primary contributions of the article are: (1) analyzing the applicability of various endogenous growth models in the Indian context, while only R&D driven endogenous growth models have been studied so far, (2) highlighting the role of technology spillovers through FDI and import channels in affecting India's productivity at the aggregate level, as opposed to the existing industry level analysis and, (3) the first study to identify the potential non-linear effects of the variables of interest. The main findings are: (a) FDI and human capital influence India's long-term productivity growth, while R&D based models or technology spillovers via the import channel show mixed evidence of support, (b) the decline in FDI has had a more adverse effect on the economy than the positive effect of increased FDI. Therefore, sustained increase in human capital and FDI is recommended. |
| Keywords: | Asymmetries, Endogenous growth, R&D, Human capital, FDI, Technology spillovers |
| JEL: | C5 C6 E3 E61 |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:ind:igiwpp:2021-004&r=all |
| By: | BiN Ni (Faculty of Economics, Hosei University, Machida, Tokyo, Japan.); Hayato Kato (Graduate School of Economics, Osaka University); Yang Liu (Research Institute of Economy, Trade and Industry (RIETI)) |
| Abstract: | This study uses unique division-level data of Japanese firms to examine how foreign direct investment (FDI) affects domestic employment. Contrary to most previous studies focusing on the effect on net employment growth, we decompose it into gross job creation and gross job destruction. We find that FDI destination plays an important role: FDI to Asia increases job creation, while FDI to Europe or North America decreases it. A frictional search-and-matching model with heterogeneous jobs can explain the differential effects. The model provides additional predictions on job creation and destruction by job type, which are also empirically confirmed. |
| Keywords: | Outward FDI, firm-establishment-division-level data, multinational enterprises(MNEs), large-firm search model, high/low-skilled jobs |
| JEL: | F23 J21 J23 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:osk:wpaper:2018&r=all |
| By: | Maibom, Jonas (Aarhus University); Vejlin, Rune Majlund (Aarhus University) |
| Abstract: | To what extent do firms pass through idiosyncratic shocks to their workers? In this paper, we investigate this question focusing on passthrough to income for workers that stay in the firm and passthrough to employment stability. We take an empirical approach and use matched employer-employee data from Denmark, three different measures of firm performance (sales, value added, and value added per worker), and two measures of income (earnings and hourly wages). We distinguish between unemployment and job-to-job transitions. We find that passthrough to income is much higher for permanent (5-9 percent) than transitory (1 percent) shocks. Income passthrough is higher for blue collar workers and workers in small firms. On the employment margin, we find that worse firm performance increases both unemployment and job-to-job transitions. The unemployment risk is especially pronounced for blue collar, low-educated, low tenure workers, while the effect on job-to-job transitions is larger for managers and high-educated workers. We also find clear evidence of non-linearities with negative shocks driving both unemployment and job-to-job transitions. |
| Keywords: | firm shocks, passthrough, income, employment stability |
| JEL: | C33 D22 J31 J33 |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14131&r=all |