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on Small Business Management |
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Issue of 2021‒11‒01
fourteen papers chosen by João Carlos Correia Leitão Universidade da Beira Interior |
| By: | Chanont Banternghansa; Athiphat Muthitacharoen; Archawa Paweenawat; Krislert Samphantharak |
| Abstract: | This paper studies the effects of SME tax incentives on firm behaviors. We use firm-level panel data of all registered firms in Thailand to analyze the effects of a large reduction in corporate income tax rates for SMEs in 2011. First, we find that firms responded strongly to the SME tax incentive as indicated by a sharp bunching of firms just below the threshold after the incentive was introduced. The responses were concentrated among firms with positive EBIT, implying a financial motive for firms to remain small. Second, the bunching was prominent for stand-alone firms, where we observe slower revenue growth for those below the threshold. Third, we do not observe bunching for corporate-group firms, but we find evidence of tax-motivated profit shifting among them instead, especially among firms in small groups with weak corporate governance. Our analysis suggests that transfer pricing was likely a primary channel. Finally, despite the unintended consequences, we find that the incentive significantly raised the probability of firm's survival and encouraged new firm registration, as the policy intended. |
| Keywords: | Bunching; Tax Incentives; Business Group; Corporate Tax; Size-dependent Policy; Tax Evasion |
| JEL: | F23 H25 H26 K34 M42 |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:pui:dpaper:148&r= |
| By: | Jonathan Taglialatela; Andrea Mina |
| Abstract: | The paper focuses on the capital structure of firms in their early years of operation. Through the lens of Pecking Order Theory, we study how the pursuit of innovation influences the reliance of firms on different types of internal and external finance. Panel analyses of data on 7,394 German start-ups show that innovation activities are relevant predictors of the start-ups' revealed preferences for finance, and that the nature of these effects on the type and order of financing sources depends on the degree of information asymmetries specific to research and development activities, human capital endowments, and the market introduction of new products and processes. |
| Keywords: | Innovation; information asymmetries; start-up; pecking order; entrepreneurial finance. |
| Date: | 2021–10–23 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2021/36&r= |
| By: | Xiao, Jing (CIRCLE, Lund University); Lindholm Dahlstrand, Åsa (CIRCLE, Lund University) |
| Abstract: | The purpose of this study is to investigate the relationship between acquisitions and mobility of knowledge workers and managers in small technology companies and how individual skills and capabilities moderate the relationship. Relying on the matched employer-employee data of the Swedish high-tech sectors from 2007 to 2015, we find that acquisitions increase the likelihood of employee departures, mainly in the form of switching to another employer, but that these acquisition effects are weaker for employees with technological competences. Moreover, we also find that managers, compared to other employees, are more likely to exit from the (national) labor market after acquisitions. Our results show that acquiring firms tend to gain access to and retain knowledge workers with engineering background. |
| Keywords: | Acquisitions; Target employee mobility; High-tech sectors; Knowledge workers; Technological capabilities; Managerial capabilities |
| JEL: | C23 G34 J63 L26 |
| Date: | 2021–10–22 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2021_012&r= |
| By: | Marui Du; Zuoquan Zhang; Rui Zhang |
| Abstract: | Nowadays small and medium-sized enterprises have become an essential part of the national economy. With the increasing number of such enterprises, how to evaluate their credit risk becomes a hot issue. Unlike big enterprises with massive data to analyze, it is hard to find enough information of small enterprises to assess their financial status. Limited by the lack of primary data, how to inference small enterprises' credit risk from secondary data, like information of their upstream, downstream, parent, and subsidiary enterprises attracts big attention from industry and academy. Targeting on accurately evaluating the credit risk of the small and medium-sized enterprise (SME), in this paper, we exploit the representative power of Information Network on various kinds of SME entities and SME relationships to solve the problem. A novel feature named meta path feature proposed to measure the credit risk, which makes us able to evaluate the financial status of SMEs from various perspectives. Experiments show that our method is effective to identify SMEs with credit risks. |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2110.11594&r= |
| By: | Jose Asturias; Sewon Hur; Timothy J. Kehoe; Kim J. Ruhl |
| Abstract: | Applying the Foster, Haltiwanger and Krizan (FHK) (2001) decomposition to plant-level manufacturing data from Chile and Korea, we find that the entry and exit of plants account for a larger fraction of aggregate productivity growth during periods of fast GDP growth. To analyze this relationship, we develop a model of firm entry and exit based on Hopenhayn (1992). When we introduce reforms that reduce entry costs or reduce barriers to technology adoption into a calibrated model, we find that the entry and exit terms in the FHK decomposition become more important as GDP grows rapidly, just as they do in the data from Chile and Korea. |
| Keywords: | Entry; Exit; Productivity; Entry costs; Barriers to technology adoption |
| JEL: | E22 O10 O38 O47 |
| Date: | 2021–10–19 |
| URL: | http://d.repec.org/n?u=RePEc:fip:feddgw:93268&r= |
| By: | Raymond Fisman (BU - Boston University [Boston]); Sergei Guriev (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique); Carolin Ioramashvili (LSE - London School of Economics and Political Science); Alexander Plekhanov (EBRD - European Bank for Reconstruction and Development - EBRD) |
| Abstract: | We empirically investigate the relationship between corruption and growth using a firm-level data set that is unique in scale, covering almost 88,000 firms across 141 economies in 2006-2020, with wide-ranging corruption experiences. The scale and detail of our data allow us to explore the corruption-growth relationship at a very local level, within industries in a relatively narrow geography. We report three empirical regularities. First, firms that make zero informal payments tend to grow slower than bribers. Second, this result is driven by non-bribers in high-corruption countries. Third, among bribers growth is decreasing in the amount of informal payments in both high- and low-corruption countries. We suggest that this set of results may be reconciled with a simple model in which endogenously determined higher bribe rates lead to lower growth, while non-bribers are often excluded entirely from growth opportunities in high-corruption settings. |
| Keywords: | Corruption,Firm growth,Enterprise surveys |
| Date: | 2021–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03385243&r= |
| By: | Pellens, Maikel; Peters, Bettina; Hud, Martin; Rammer, Christian; Licht, Georg |
| JEL: | O38 H50 H12 E32 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc21:242467&r= |
| By: | Han, Hyoungmin (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); Kim, Jeong Gon (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); Kim, Doyeon (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); Lee, Sunghee (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); Pek, Jong Hun (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)) |
| Abstract: | 본 연구는 신남방정책의 주요국인 인도와의 경제협력 확대와 인도 스타트업 시장의 발전을 배경으로, 인도 스타트업 생태계 분석과 정책 시사점 도출을 목적으로 한다. 구체적으로 본 연구는 인도 스타트업 생태계의 다양한 구성 요소를 통합적으로 분석하였고, 인도에 진출한 국내 스타트업을 대상으로 인도 생태계에 대한 평가와 애로사항을 청취하여 정책 수요를 파악하였다. 최근 인도정부의 스타트업 지원정책 확대, 인도 내 풍부한 기술 인력, 인도 주요 도시별 혁신 인프라 구축 추진 등을 고려할 때 국내 스타트업의 인도시장 진출 활성화가 필요하다. 이를 위해 신남방정책 및 한·인도 디지털 협력 강화, 스타트업 진출 환경 조성, 스타트업 진출 지원 확대 등의 시사점을 도출하였다. A startup refers to a company with a short period of experience, in many cases with ideas and innovative technologies. Recently, startups are leading the 4th industrial revolution and technological innovation and contributing to job creation and industrial productivity growth, and as a result their economic importance continues to increase. In particular, India is emerging as a startup powerhouse based on its fast-growing economy and relatively cost-efficient excellent talent pool. Also, global investment into the Indian startup market is increasing. While the number of Korean companies entering the Indian startup market is increasing, only a few have made stable inroads into the market. Based on quantitative data, literature analysis, corporate case analysis, online surveys, and in-depth interviews, this study objectively evaluates the Indian startup ecosystem and draws policy implications to increase the accessibility of the Indian market to Korean startups. The startup ecosystem is composed of many elements, such as the founder(s), financial environment, knowledge-related infrastructure, and government system. This report analyzes the Indian start-up ecosystem at the national and state level. Additionally, a survey was conducted on Korean start-ups in the Indian market to identify the policy demand of firms. The main contents of each chapter can be summarized as follows. (the rest omitted) |
| Keywords: | Indian; startup; ecosystem; policy; market |
| Date: | 2020–12–30 |
| URL: | http://d.repec.org/n?u=RePEc:ris:kieppa:2020_010&r= |
| By: | Pantisa Pavabutr |
| Abstract: | This paper analyzes 47 reverse takeovers (RTOs), in which privately held firms acquire public firms to obtain listing status in Singapore and Thailand between 2007–2015. Unlike U.S. RTOs in prior studies, these transactions cannot be regarded as short-cuts to bypass listing rules since merged firms must meet the same minimum listing requirement as firms listing with IPOs. Rather, private firms treat RTOs as an opportunity to become public firms without immediate dilution by acquiring smaller firms at bargain prices. By examining shareholder circulars and analysis of transaction characteristics, we find that co-parties tend to cite growth from business diversification as their motivation for RTOs. Distressed public firms more frequently emphasize the motivation to reorganize and revive by merging with stronger private firms. Analysis of return and financial accounting performance shows that the merged firms experience improved growth and generate positive wealth impact; thus, offering opportunity for incumbent shareholders of public firms to recover some of their investment value. |
| Keywords: | Reverse Takeovers; Back-door Listings; Emerging Markets; Bootstrappin |
| JEL: | G14 G34 |
| Date: | 2021–06 |
| URL: | http://d.repec.org/n?u=RePEc:pui:dpaper:153&r= |
| By: | Fabien Eymas (CREGO - Centre de Recherche en Gestion des Organisations [Dijon] - UFC - Université de Franche-Comté - UBFC - Université Bourgogne Franche-Comté [COMUE] - UB - Université de Bourgogne - Université de Haute-Alsace (UHA) - Université de Haute-Alsace (UHA) Mulhouse - Colmar); Faouzi Bensebaa (UP8 - Université Paris 8 Vincennes-Saint-Denis) |
| Abstract: | Purpose : Despite the critical role given to small independent retailers (SIRs) in the revitalisation of city centres, little knowledge exists about their actual competitive strategies. Existing literature rather is normative, recommending SIRs to focus on customer orientation. Thus, the aim of this study is to identify the types of competitive strategies really adopted by SIRs. Design/methodology/approach : This qualitative study is based on 13 semi-structured interviews of the booksellers, beer and wine merchants we met around Paris (France) in 2018. Data analysis was conducted in two stages: each interview was coded to bring out themes, which were then linked in cognitive maps. Findings : Five types of SIRs' competitive strategies emerged from the study, depending on their main focus of attention. Either SIRs have no weapon to fight against external factors and they suffer competition or they have limited means and focus on their relationship with customers or even they possess a specific resource they can rely on (innovative character, skills, values) to go beyond ordinary customer orientation. Practical implications : The typology should be a useful tool for SIRs interested in competitive strategies and for municipalities looking for new insights to succeed in the revitalisation of their city centres. Social implications : Revitalisation of city centres is a big challenge for many Western cities, especially small- and middle-sized ones. Originality/value : To the best of our knowledge, the typology that comes from this study is the very first one on SIRs. Theoretically, it may help organise researches on SIRs' competitive strategies. Pragmatically, it provides a better understanding of SIRs' competitive strategies. |
| Keywords: | Competitive strategy,Customer orientation,Small independent retailer |
| Date: | 2021–02–19 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03179166&r= |
| By: | Sanaa Haouata (UH2MC - Université Hassan II [Casablanca]); Younes Bennane (KLMSU - Kalmyk State University) |
| Date: | 2020–02–04 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03363441&r= |
| By: | Ricard Gil; Jean-François Houde; Shilong Sun; Yuya Takahashi |
| Abstract: | This paper studies the role and incidence of entry preemption strategic motives on the dynamics of new industries, while providing an empirical test for entry preemption, and quantifying its impact on market structure. The empirical context is the evolution of the U.S. drive-in theater market between 1945 and 1957. We exploit a robust prediction of dynamic entry games to test for preemption incentives: the deterrence effect of entering early is only relevant for firms in markets of intermediate size. Potential entrants in small and large markets face little uncertainty about the actual number of firms that will eventually enter. This leads to a non-monotonic relationship between market size and the probability of observing an early entrant. We find robust empirical support for this prediction using a large cross-section of markets. We then estimate the parameters of a dynamic entry game that matches the reduced-form prediction and quantify the strength of the preemption incentive. Our counterfactual analysis shows that strategic motives can increase the number of early entrants by as much as 50 percent in mid-size markets without affecting the number of firms in the long run. By causing firms to enter the market too early, we show that strategic entry preemption leads on average to a 5% increase in entry costs and a 1% decrease in firms' expected value (relative to an environment without strategic investments). |
| JEL: | L1 L12 L82 |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29408&r= |
| By: | Giovanna D'Inverno; Wim Moesen; Kristof De Witte |
| Abstract: | Although the local provision of public goods accommodates better to the heterogeneous local preferences and mitigates the fiscal illusion problem, it comes at the cost of potential diseconomies of scale. This paper examines the relationship between municipal size and local service level provision by applying state-of-the-art non-parametric techniques to a unique panel dataset of Flemish data. We measure the service provision level by using an innovative robust conditional ‘Benefit of the Doubt’ model and we estimate its efficiency in relationship with the local expenditures by means of a robust conditional Data Envelopment Analysis model. Overall, the main findings suggest the presence of diseconomies of scale, and provide weak evidence on an optimal size of local public good provision of around 10,000 citizens. |
| Keywords: | Efficiency analysis; Municipal mergers; Municipal expenditure; Local governments; Composite indicator |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ete:leerwp:657314&r= |
| By: | Luigi Buzzacchi (Politecnico di Torino); Antonio De Marco (Politecnico di Torino); Marcello Pagnini (Bank of Italy) |
| Abstract: | This paper offers novel evidence on agglomeration economies by examining the link between total factor productivity (TFP) and employment density in Italy. TFP is estimated for a large sample of manufacturing firms and then aggregated at the level of Local Labor Market Areas (LLMAs). We tackle the endogeneity issues stemming from the presence of omitted covariates and reverse causation with an instrumental variable (IV) approach that relies on his-torical and geological data. Our estimate of the TFP elasticity with respect to the spatial con-centration of economic activities is about 6%, a magnitude comparable to that measured for other developed countries. We find that the TFP-density nexus contributes to explaining a large share of the substantial productivity gap between the northern and southern regions of Italy. We also show that no significant heterogeneity emerges in the intensity of agglomera-tion economies across the country and that the positive TFP difference in favor of the firms located in the North is not due to the tougher competition taking place in those areas. |
| Keywords: | agglomeration economies, density, total factor productivity, regional disparities, selection effects |
| JEL: | R12 R23 |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:opques:qef_637_21&r= |