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on Small Business Management |
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Issue of 2021‒12‒20
twenty-two papers chosen by João Carlos Correia Leitão Universidade da Beira Interior |
| By: | Uwe Cantner (Friedrich Schiller University Jena, and University of Southern Denmark); Philip Doerr (Friedrich Schiller University Jena); Maximilian Goethner (Friedrich Schiller University Jena, and IZA - Institute of Labor Economics, and University of Twente); Matthias Huegel (Friedrich Schiller University Jena); Martin Kalthaus (Friedrich Schiller University Jena) |
| Abstract: | We analyze the influence of two contradicting settings on the success in the academic spin-off creation process. Scientists, who are embedded in the academic setting, have to reach out and adapt to the logics of the commercial setting to successfully found their firm. However, along this process, many scientists fail because they cannot overcome the contradictions between these logics. We provide the first empirical evidence on the relevance of these two contradicting logics along the spin-off creation process. Based on a phase-based conceptualization of the spin-off process, we hypothesize a decreasing relevance of the academic setting and an increasing relevance of the commercial setting for successful transitions between the process phases. We test these relationships with a representative sample of German scientists using dominance analysis to determine the relative importance of the two settings. Our findings show a decreasing relative importance of the academic setting along the spin-off creation process, in line with our hypotheses. The relevance of the commercial setting initially increases before it decreases in the latest stage of the process, contrary to our hypothesis. Additionally, we find that the commercial setting is generally more important than the academic setting, especially in the beginning of the process. Our results provide a deepened understanding of the academic spin-off creation process and extend existing theories. Furthermore, they provides intervention points for policy along the spin-off creation process. |
| Keywords: | Academic Entrepreneurship, Transition Process, Phase Model, Dominance Analysis |
| JEL: | L26 O31 O33 |
| Date: | 2021–12–09 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2021-020&r= |
| By: | Coad, Alex; Srhoj, Stjepan |
| Abstract: | The Entrepreneurial Ecosystems (EE) approach makes specific predictions regarding how EE inputs are converted into high-growth firms (HGFs) as an output. A simulation model draws out our hypothesis of regional persistence in HGF shares. Based on intuitions that EEs are persistent, we investigate whether regional HGF shares are persistent, using census data for 2 European countries taken separately (Croatia for 2004-2019, and Slovenia for 2008-2014). Overall, there is no clear persistence in regional HGF shares - regions with large HGF shares in one period are not necessarily likely to have large HGF shares in the following period. This is a puzzle for EE theory. In fact, there seems to be more persistence in industry-level HGF shares than for regional HGF shares. We formulate a 'broken clock' critique - just as a broken clock is correct twice a day, EE recommendations may sometimes be correct, but are fundamentally flawed as long as time-changing outcomes (HGF shares) are predicted using time-invariant variables (such as local universities, institutions and infrastructure). |
| Keywords: | High-Growth Firms,Persistence,Regional Persistence,Entrepreneurial Ecosystems,Clusters,Sectoral Systems of Innovation |
| JEL: | L25 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:996&r= |
| By: | Bui, Anh Tuan; Pham, Linh Chi; Ta, Thi Khanh Van |
| Abstract: | Using firm-level data on 11,000 companies across seven countries in South Asia, this paper explores the effects of access to finance on employment growth and performance at the firm level. The paper focuses on how the impact of financing obstacles varies across firm sizes. The results show that higher obstacles in access to finance reduces employment growth and performance for firms of all sizes, especially micro and small firms. We find significant differences between firms with less than 10 employees and small firm, which suggests that significant reforms are needed to drive micro firm growth to small and medium enterprises. |
| Keywords: | Access to finance obstacles,employment growth,Total factor of productivity |
| JEL: | J21 J41 M51 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:991&r= |
| By: | Bui, Anh Tuan; Pham, Linh Chi; Ta, Thi Khanh Van |
| Abstract: | This paper explores the impact of financial and legal obstacles that affect small and medium enterprises (SMEs) in middle-income East Asian countries by utilizing the most recent and unique dataset from the World Bank Enterprise Surveys. We particularly assess whether and at what level the effects on SMEs differ from those on large firms; We also examine how financial and institutional development levels contribute to firm performance. Our findings provide important guidance for regulators, including the authorities of middle-income nations, who seek to facilitate SMEs' development. |
| Keywords: | Sales Growth,Employment Growth,Financial Obstacles,Legal Obstacles |
| JEL: | G38 G01 G00 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:990&r= |
| By: | Ibrahim Yarba |
| Abstract: | This study investigates the link between corporate indebtedness and investment by utilizing a novel firm-level data, which contains the universe of all incorporated manufacturing firms in Turkey over the last decade. The results of the panel regression model with multi-dimensional fixed effects provide significant evidence of an inverted-U relationship between indebtedness and investment, indicating that leverage increases investment up to a certain level, and after that further increase in leverage has an adverse impact on investment. This non-monotonic relationship is evident for all firm size groups. Conspicuously, the indebtedness level that becomes an impediment to investment is significantly lower for SMEs than large firms, which is in support of the arguments that small firms are more likely to be affected by debt overhang. Results also reveal that firms holding more cash can sustain higher level of debts without hurting investment activity. This is also the case for high capital-intensive firms and exporters. Findings of this paper highlight the importance of policies to make equity financing more attractive, incentivise the uptake and provision of equity capital from private investors, and deepen the capital markets. |
| Keywords: | Corporate debt, Firm investment; Cash policy; SMEs, Debt overhang |
| JEL: | C23 D22 E22 G31 G32 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:tcb:wpaper:2131&r= |
| By: | Isabel Cavalli (Université Côte d'Azur, France; CNRS, GREDEG; Institute of Economics, Scuola Superiore Sant'Anna, Italy); Charlie Joyez (Université Côte d'Azur, France; CNRS, GREDEG) |
| Abstract: | Innovation is a dynamic process whose complexity lies in networks among heterogeneous actors, with collaboration often ending in patent co-ownership. Governments introduced many policies to redefine the role of universities in research collaboration once acknowledging their value in scientific knowledge. This paper explores how patent co-ownership evolved in France after decisive policy interventions (1999, 2006, 2007). Using French copatent data (1978-2018), we first employ Network Analysis to capture the evolution of centrality of French Universities. We then apply a Dif-in-Dif, incorporating a Propensity Score Matching (PSM), to investigate the potential causal relationship between policy interventions and the evolution of universities' centrality, contrasting with with French Public Research Organizations as well as German and Italian universities. Our results point to the increasing centrality gained by French universities in patenting co-ownership over the years and its essential role, as an innovator actor, in the French innovation system. Although the Innovation Act (1999) positively impacted their centrality, the impact of 2006-on legislation is either null or even negative, offsetting the initial trend. |
| Keywords: | Innovation dynamics, Universities, Collaborative Patents, Network centrality, treatment effect |
| JEL: | C54 D85 O32 O33 O34 O38 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2021-38&r= |
| By: | OECD |
| Abstract: | Italy’s start-up visa aims to make the national start-up ecosystem more easily accessible to foreign talent, rich with knowledge and skills, and more integrated into global markets. Government reports show that the programme has not yet achieved a critical scale. The analysis of similar initiatives in Chile, France, Ireland and Portugal identifies five gateways for attracting more foreign entrepreneurs, such as an effective policy outreach, smooth inter-institutional co-operation across the migratory process, and the provision of sound support services for a “soft landing” of entrepreneurs upon arrival. These takeaways may also inform new talent attraction policies targeting remote workers, an expanding group in the context of the ongoing COVID-19 pandemic. |
| Keywords: | capacity building, migrant entrepreneurship, start-up visa, talent attraction |
| JEL: | F20 J68 L26 M13 O38 |
| Date: | 2021–12–14 |
| URL: | http://d.repec.org/n?u=RePEc:oec:cfeaaa:2021/10-en&r= |
| By: | Sophia Chen; Do Lee |
| Abstract: | We provide broad-based evidence of a firm size premium of total factor productivity (TFP) growth in Europe after the Global Financial Crisis. The TFP growth of smaller firms was more adversely affected and diverged from their larger counterparts after the crisis. The impact was progressively larger for medium, small, and micro firms relative to large firms. It was also disproportionally larger for firms with limited credit market access. Moreover, smaller firms were less likely to have access to safer banks: those that were better capitalized banks and with a presence in the credit default swap market. Horseraces suggest that firm size may be a more important and robust vulnerability indicator than balance sheet characteristics. Our results imply that the tightening of credit market conditions during the crisis, coupled with limited credit market access especially among micro, small, and medium firms, may have contributed to the large and persistent drop in aggregate TFP. |
| Keywords: | Credit constraint;Financial crisis;Firm size;Intangibles;Producvitity;SMEs;WP;TFP growth;creditor bank;size premium;credit market access;micro firm;vulnerability indicator |
| Date: | 2020–12–18 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2020/294&r= |
| By: | Chu, Angus |
| Abstract: | This paper provides a survey of studies that analyze the macroeconomic effects of intellectual property rights (IPR). The first part of this paper introduces different patent-policy instruments and reviews their effects on R&D and economic growth. This part also discusses the distortionary effects and distributional consequences of IPR protection as well as empirical evidence on the effects of patent rights. Then, the second part considers the international aspects of IPR protection. In summary, this survey draws the following conclusions from the literature. First, different patent-policy instruments have different effects on R&D and economic growth. Second, there is some empirical evidence supporting a positive relationship between IPR protection and innovation, but the evidence is stronger for developed countries than for developing countries. Third, the optimal level of IPR protection should tradeoff the social benefit of innovation against the social costs of multiple distortions and income inequality. Finally, in an open economy, achieving the globally optimal level of protection requires an international coordination (rather than the harmonization) of IPR protection. |
| Keywords: | economic growth; innovation; intellectual property rights |
| JEL: | O31 O34 O4 |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:110839&r= |
| By: | Dughera, Stefano; Quatraro,Francesco; Ricci,Andrea; Vittori,Claudia (University of Turin) |
| Abstract: | We study the effect of temporary workers on innovation both theoretically and empirically. First, we develop a model where a representative firm chooses between different types of projects (routine vs innovative) and different types of labor contracts (temporary vs permanent). In doing so, it considers the effect of these different strategies on the workers’ incentives to invest in firm-specific skills. Our key finding is that firms offering temporary contracts are less likely to invest in innovative projects, and that this is effect is stronger in industries characterized by a “garage-business” innovation regime. Second, we test our hypotheses using firm-level data on employment composition and patent filing. Consistently with our theoretical predictions, we find that temporary workers are detrimental to innovation, and that this effect is mitigated by the concentration of patent-filing at the industry-level. |
| Date: | 2021–09 |
| URL: | http://d.repec.org/n?u=RePEc:uto:dipeco:202115&r= |
| By: | Yanina Domenella (The World Bank); Julian C. Jamison (Department of Economics, University of Exeter); Abla Safir (The World Bank); Bilal Zia (The World Bank) |
| Abstract: | COVID-19 was a major shock to youth entrepreneurs and their businesses in Kenya. We study the causal impact of grants—worth two months of baseline business revenue—and business development services as potential mitigation measures. Using multiple rounds of phone surveys up to seven months from the start of the pandemic, the analysis finds that youth who are assigned business grants or a combination of grants and business development services are significantly more likely to maintain a business, earn more revenue and profits, retain employees, and report higher confidence and satisfaction with life. There are no corresponding effects of business development services alone, although the follow-up period is extremely short for training effects to materialize. These results suggest that cash infusion for young entrepreneurs in times of an aggregate shock can be instrumental in moderating its immediate harmful impacts. |
| Keywords: | youth entrepreneurship, business grants, business development services, business training, COVID-19, pandemic relief |
| JEL: | O12 O17 J16 L26 M20 M53 |
| Date: | 2021–12–07 |
| URL: | http://d.repec.org/n?u=RePEc:exe:wpaper:2110&r= |
| By: | John Kuada (Aalborg, Denmark) |
| Abstract: | Purpose – The purposes of this paper are to review the streams of studies that link financial inclusion to small enterprise growth in Sub-Sahara Africa (SSA), to identify the research gaps they provide, and to prepare an agenda for future research in the field. Design/methodology/approach – The study employs systematic literature search method to identify relevant literature from journals. It then adopts a narrative approach for the review, highlighting the findings from the prior studies and gaps requiring research attention. Findings – The discussions reveal that there is a need for future studies that can unpack small enterprise growth determinants, identify growth-enabling entrepreneurial characteristics and examine the contextual variabilities that shape their effectiveness. Originality/value – There is currently no comprehensive/integrated review exploring the link between financial inclusion and small enterprise growth in SSA. This review therefore provides insights that contribute to the development of this stream of research. |
| Keywords: | Financial inclusion, entrepreneurship, small businesses, enterprise growth, Africa |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:agd:wpaper:21/084&r= |
| By: | Yusuf Kenan Bagir; Unal Seven |
| Abstract: | We study whether the linkage between financing and productivity growth strengthens as the severity of financial constraints increases by using firm-level administrative data from a large emerging economy. We also explore whether upstream firms’ financial constraints play a role in the linkage between finance and productivity. Using a combination of administrative databases of tax registry and firm-to-firm trade data of 896,317 Turkish firms from 2007 to 2018, employing various robustness tests and controlling for reverse causality, we find strong evidence that firms facing higher financial constraints exhibit a higher sensitivity of total factor productivity (TFP) growth to debt growth. Moreover, we show that a rise in upstream firms’ financial constraint level also leads to increased sensitivity of TFP growth to debt growth. Our results reveal important channels through which financial constraints could hinder productivity growth in Turkey. |
| Keywords: | TFP growth, Financial constraints, Debt growth |
| JEL: | D24 G30 O16 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:tcb:wpaper:2132&r= |
| By: | Song Ma |
| Abstract: | This paper proposes a new measure of technological obsolescence using detailed patent data. Using this measure, we present two sets of results. First, firms' technological obsolescence foreshadows substantially lower growth, productivity, and reallocation of capital. This finding applies mainly for obsolescence of core innovation and embodied innovation, and it is stronger in competitive product markets. Second, in stock markets, high-obsolescence firms under-perform low-obsolescence firms by 7 percent annually. Using analyst forecast data, we show this is due to a systematic overestimation of future profits of obsolescent firms. The measure contains incremental information about firm innovation relative to measures focusing on new innovation. |
| JEL: | G1 G3 G4 O3 O4 |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29504&r= |
| By: | Sandro Mendonca; Hugo Confraria (Science Policy Research Unit, University of Sussex Business School, University of Sussex); Manuel Mira Godinho |
| Abstract: | Three decades after the publication of Zvi Griliches’ (1990) influential survey on “Patent statistics as economic indicators†, the uses and limitations of patent statistics remain a core issue in the field of innovation studies. This paper follows through Griliches’ seminal work to understand how the literature using patents as an empirical resource developed over time. How has this indicator been adopted and how has it been adapted to different research challenges? We address this question by examining the citation tree of nearly 2000 articles published in almost 400 journals found to refer to Griliches’ seminal contribution between 1990 and 2019. We combine bibliometric techniques and qualitative analysis to provide a close-up moving picture of patents as a data resource: growth and variety of usage, impact on disciplines and journals, driving institutions and geographies, major topics and research issues. We find that five main themes emerge: 1) Economic growth; 2) Geography of innovation; 3) Innovation management/performance; 4) Pat-methods; and 5) Green innovation. Shouldered by these findings, we discuss potential pathways for future patent-based research. |
| Keywords: | patents, innovation indicators, bibliometrics, survey, Zvi Griliches |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:sru:ssewps:2021-07&r= |
| By: | Amina Ebrahim; C. Friedrich Kreuser; Michael Kilumelume |
| Abstract: | This paper presents version 4.0 of the CIT-IRP5 firm-level panel dataset. Version 4.0 is the latest edition of the firm-level component of the combined administrative data using sources from the South African Revenue Service. We show that differences in forms and vintages do generally not preclude consistent identification of output, employment, cost of sales, and capital stock over time. We discuss the inclusion of contributions by other researchers in the classification of multi-national firms, industry, and employment income. |
| Keywords: | Administrative data, Tax, Firm-level data, Tax data |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp-2021-173&r= |
| By: | Florian Léon (FERDI - Fondation pour les Etudes et Recherches sur le Développement International); Laurent Weill (EM Strasbourg Business School) |
| Abstract: | We investigate whether the occurrence of elections affect access to credit for firms. We perform an investigation using firm-level data covering 44 developed and developing countries. We find that elections have a detrimental influence on access to credit: firms are more credit-constrained in election years but also in pre-election years. We explain this finding by the fact that elections exacerbate political uncertainty. The negative effect of elections takes place through lower credit demand, whereas the occurrence of elections does not affect credit supply. We further establish that the design of political and financial systems affects how elections influence access to credit. |
| Keywords: | Elections,Access to credit,Credit constraints |
| Date: | 2021–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03462407&r= |
| By: | Lindner, Ralf; Edler, Jakob; Hufnagl, Miriam; Kimpeler, Simone; Kroll, Henning; Roth, Florian; Wittmann, Florian; Yorulmaz, Merve |
| Abstract: | The major problems facing society, the so-called »Grand Challenges«, call for mission-oriented innovation policy. We aim to make a conceptual contribution here and identify the main components. |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fisipp:022021&r= |
| By: | Carlo Cambini; Elena Grinza; Lorien Sabatino |
| Abstract: | We study the impact of ultra-fast broadband (UFB) infrastructures on the total factor productivity (TFP) and labor productivity of firms. We use unique balanced panel data for the 2013-2019 period on incorporated firms in Italy. Using the geographical location of the firms, we match firm data with municipality-level information on the diffusion of UFB, which started in 2015 in Italy. We derive consistent firm-level TFP estimates by adopting a version of the Ackerberg et al.’s (2015) method, which also accounts for firm fixed effects. We then assess the impact of UFB on productivity and deal with the endogeneity of UFB by exploiting the physical distance between each municipality and the closest backbone node. Our results show an overall positive impact of UFB on productivity. Services companies benefit the most from advanced broadband technologies, as do firms located in the North-West and South of Italy. We further decompose the impact of full-fiber networks (FTTH) from mixed copper-fiber connections (FTTC) and find that FTTH networks significantly contribute to enhancing firm productivity. Finally, by exploiting Labor Force Survey data, we provide suggestive evidence that productivity increases from UFB might be related to structural changes at the workforce level. |
| Keywords: | Ultra-fast broadband (UFB); fiber-based networks; fiber-to-the-home (FTTH) |
| JEL: | L96 D24 D22 |
| Date: | 2021–12–03 |
| URL: | http://d.repec.org/n?u=RePEc:sol:wpaper:2013/334687&r= |
| By: | Mr. Serhan Cevik; Fedor Miryugin |
| Abstract: | The global economy is in the midst of an unprecedented slump caused by the COVID-19 pandemic. To assess the likely evolution of nonfinancial corporate performance going forward, this paper investigates empirically the impact of past pandemics using firm-level data on more than 537,000 companies from 14 developing countries during the period 1998–2018. The analysis indicates that the prevalence of infectious diseases has an economically and statistically significant negative effect on nonfinancial corporate performance. This adverse impact is particularly pronounced on smaller and younger firms, compared to larger and more established corporations. We also find that a higher number of infectious-disease cases in population increases the probability of failure among nonfinancial firms, particularly for small and young firms. In the case of COVID-19, the magnitude of these effects will be much greater, given the unprecedented scale of the outbreak and strict policy responses to contain its spread. |
| Keywords: | Pandemics;nonfinancial corporate performance;firm-level;WP;nonfinancial firm;firm level;liquidity pressure;sector peer;firm performance;revenue base |
| Date: | 2020–12–11 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2020/276&r= |
| By: | Miao, Yumeng; Ou, Carol (Tilburg University, School of Economics and Management); Du, Rong |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:tiu:tiutis:f19a203f-abb6-4835-9c34-224bfd8b9507&r= |
| By: | Simon Bruhn (Ilmenau University of Technology, Ilmenau, Germany); Thomas Grebel (Ilmenau University of Technology, Ilmenau, Germany); Lionel Nesta (Université Côte d'Azur, France; GREDEG CNRS; OFCE, SciencesPo; SKEMA Business School) |
| Abstract: | This paper argues that the typical practice of performing growth decompositions based on log-transformed productivity values induces fallacious conclusions: using logs may lead to an inaccurate aggregate growth rate, an inaccurate description of the microsources of aggregate growth, or both. We identify the mathematical sources of this log-induced fallacy in decomposition and analytically demonstrate the questionable reliability of log results. Using firm-level data from the French manufacturing sector during the 2009-2018 period, we empirically show that the magnitude of the log-induced distortions is substantial. Depending on the definition of accurate log measures, we find that around 60-80% of four-digit industry results are prone to mismeasurement. We further find significant correlations of this mismeasurement with commonly deployed industry characteristics, indicating, among other things, that less competitive industries are more prone to log distortions. Evidently, these correlations also affect the validity of studies that investigate the role of industry characteristics in productivity growth. |
| Keywords: | productivity decomposition, growth, log approximation, geometric mean, arithmetic mean |
| JEL: | C18 L22 L25 O47 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2021-39&r= |