nep-sbm New Economics Papers
on Small Business Management
Issue of 2022‒01‒31
eleven papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Innovation Ecosystems in the Creative Sector: The Case of Additive Manufacturing and Advanced Materials for Design By Ubaldo Spina; Ramón Compañó
  2. What prevents spillovers from the pool of knowledge? By Lööf, Hans
  3. Tackling the Scale-up Gap: Evidence and impact of the scale-up financing gap for innovative firms in Europe and reflections on potential solutions By Anita Quas; Colin Mason; Ramón Compañó; James Gavigan; Giuseppina Testa
  4. Finance and Growth of SMEs in South Asia: Evidence from Bangladesh, Pakistan, and Sri Lanka By Sharma, Palak
  5. The Cultural Origins of Family Firms By Yuan, Song; Xie, Jian
  6. A Long View of Employment Growth and Firm Dynamics in the United States: Importers vs. Exporters vs. Non-Traders By Kyle Handley; Fariha Kamal; Wei Ouyang
  7. Innovation Networks and Innovation Policy By Ernest Liu; Song Ma
  8. The identification of Smart Specialisation priority domains in Serbia By RADOVANOVIC Nikola; MATUSIAK Monika; KLEIBRINK Alexander
  9. Fostering the green transition through Smart Specialisation Strategies By Richard Harding; Claire Nauwelaers; Caroline Cohen; Isabelle Seigneur
  10. EU Sustainability Taxonomy for non-financial undertakings: summary reporting criteria and extension to SMEs By Andrea Giacomelli
  11. A Golden Opportunity: The Gold Rush, Entrepreneurship and Culture By Stuetzer, Michael; Brodeur, Abel; Obschonka, Martin; Audretsch, David; Rentfrow, Peter J.; Potter, Jeff; Gosling, Samuel D.

  1. By: Ubaldo Spina; Ramón Compañó (European Commission - JRC)
    Abstract: This report provides an ecosystem analysis of cultural and creative industry (CCI) sector with regard to the adoption of new technologies and as case studies additive manufacturing and advanced materials as these two technologies are becoming consolidated in prototyping and manufacturing in many industrial sectors, but are still in their infancy in the CCI. The introduction of these two technologies, however, is the base of emerging new business models as showcased by a number of promising startups. We identified 430 CCI-startups in Europe that operate innovative products or services and that were further analysed via an online survey to which 83 companies participated. In addition, we discuss the role innovation ecosystems for the CCI development in Europe taking four ecosystems as example, namely the ‘Finnish Additive Manufacturing Ecosystem’ in Helsinki, the ‘Design Farm’ in Berlin, the ‘Sustainable and Tech Fashion’ hub in Amsterdam and “Portuguese footwear cluster” in the northern region of Portugal. Our study shows that green and digital transformations make additive manufacturing and advanced materials technologies quite worth looking into for CCI firms. The survey demonstrates a high degree of business dynamism of those companies that have fully embraced additive manufacturing and advanced materials as their operational basis. Furthermore we show that an effective ecosystem are key for deploying novel technologies to the sector, mostly composed by small and very small enterprises.
    Keywords: cultural and creative industries, additive manufacturing, 3D printing, materials, startups, business models,innovation
    JEL: O32 O31 O25
    Date: 2021–12
  2. By: Lööf, Hans (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)
    Abstract: This paper surveys theoretical and empirical literature on non-pecuniary flow of knowledge and the conditions and limitations for firms to benefit from positive externalities. Spillovers from the pool of accumulated knowledge generated by technological and scientific development is considered to be a key factor for economic development in modern growth models. Knowledge spillovers has also been a major topic of empirical research on firms’ innovation and economic performance over the last thirty years or more. By exploiting theoretical and methodological advances, and using more comprehensive, complex and detailed data sources, scholars from various scientific disciplines have improved the identification of factors, mechanisms, and channels that influence flows of knowledge within and across industries, technological regimes and regions. This research has deepened the understanding of the economic importance of knowledge spillovers.
    Keywords: externalities; innovation; knowledge spillovers; productivity; technology
    JEL: L20 M13 O31 O33 O40
    Date: 2022–01–03
  3. By: Anita Quas (University of Milan); Colin Mason (University of Glasgow); Ramón Compañó (European Commission - JRC); James Gavigan (European Commission - JRC); Giuseppina Testa (European Commission - JRC)
    Abstract: The number of scale-up businesses in the EU, particularly unicorns, lags behind the US and China. This is partially attributed to a deficit in scale-up finance. Based on an a webinar between experts which took place on 5th October 2021, this paper reports and comments on the available evidence of the scale-up financing gap in the EU and discusses its causes and consequences. The paper also reviews what types of instruments might address this gap and discusses issues that need to be addressed in the formulation of effective policy interventions. Finally, it points to missing data, existing knowledge gaps, and areas on which further analysis is required to define better policies.
    Keywords: startups, scaleups, venture capital, finance, innovation
    JEL: O32 O31 O25
    Date: 2021–12
  4. By: Sharma, Palak (Monash University)
    Abstract: This paper studies the determinants of access to finance in small and medium enterprises (SMEs) in three South Asian economies, Bangladesh, Pakistan, and Sri Lanka. The data for this study is from the World Enterprise Survey data set for each country collected by the World bank. The paper uses logistic regression for empirical analysis. Findings of this paper confirm that access to formal and informal finance is significantly determined by the size, age, and formalization of firms. The gender of the owner-manager, sales performance, location, and legal status of the firm are insignificant predictors of a firm’s ability to raise finance. Results from this paper can help governments shape policy and develop programs that can augment a firm’s ability to raise financing from formal sources.
    Keywords: Economic growth ; informal finance ; SMEs ; World Enterprise survey JEL Classification: O11; O53
    Date: 2021
  5. By: Yuan, Song; Xie, Jian
    Abstract: What determines the prevalence of family firms? In this project, we investigate the role of historical family culture in the spatial distribution of family firms. Using detailed firm-level data from China, we find that there is a larger share of family firms in regions with a stronger historical family culture, as measured by genealogy density. The results are further confirmed by an instrumental variable approach and the nearest neighbor matching method. Examining the mechanisms, we find that entrepreneurs in regions with a stronger historical family culture: i) tend to have family members engage more in firms; ii) are more likely to raise initial capital from family members; iii) are more willing to pass on the firms to their children. Historical family culture predicts better firm performance due to a lower leverage ratio.
    Keywords: Family Culture; Family Firms; Genealogy; Cultural Origins; Firm Performance
    JEL: D02 D2 G3 L2 M1 Z1
    Date: 2021–12
  6. By: Kyle Handley; Fariha Kamal; Wei Ouyang
    Abstract: The first experimental product from the U.S. Census Bureau's Business Dynamics Statistics (BDS) program -- BDS-Goods Traders -- provides annual, public-use measures of business dynamics by four mutually exclusive goods-trading classifications: exporter only, importer only, exporter and importer, and non-trader. The BDS-Goods Traders offers a comprehensive view of employment growth at firms associated with goods trading activities in the United States from 1992-2019. We highlight three patterns. First, employment is skewed towards goods traders in several ways. Only 6% of all U.S. firms are goods traders but they account for half of total employment. Moreover, 80% of large firms and 70% of older firms are goods traders. Second, exporter-importer firms represent 70% of manufacturing employment and over half of employment in services-producing industries (management, retail, transportation, utilities, and wholesale). Third, goods-traders exhibit higher net job creation rates than non-traders controlling for firm size, age, and sector. Goods traders contribution to total job creation grows over time, rising to more than half after 2008.
    Keywords: exporters, importers, job creation, job destruction, entry, exit
    JEL: F10 F14 F23
    Date: 2021–12
  7. By: Ernest Liu; Song Ma
    Abstract: We study the optimal allocation of R&D resources in an endogenous growth model with an innovation network, through which one sector’s past innovations may benefit other sectors’ future innovations. First, we provide closed-form sufficient statistics for the optimal path of R&D resource allocation, and we show that planners valuing long-term growth should allocate more R&D toward key sectors that are upstream in the innovation network. Second, we extend to an open-economy setting and illustrate an incentive for countries to free-ride on fundamental technologies: an economy more reliant on foreign knowledge spillovers has less incentive to direct resources toward innovation-upstream sectors, leading to cross-country differences in unilaterally optimal R&D allocations across sectors. Third, we build the global innovation network based on over 30 million global patents and establish its empirical importance for knowledge spillovers. Fourth, we apply the model to evaluate R&D allocations across countries and time. Adopting optimal R&D allocations can generate substantial welfare improvements across the globe. For the United States, R&D misallocation accounts for about 0.68 percentage points of missing annual growth since the 2000s.
    JEL: F43 O33 O38
    Date: 2021–12
  8. By: RADOVANOVIC Nikola (European Commission - JRC); MATUSIAK Monika (European Commission - JRC); KLEIBRINK Alexander
    Abstract: The report documents the findings of the analytical phase of development of the Smart Specialisation Strategy for Serbia, implemented with the methodological and financial support of the Joint Research Centre of European Commission (JRC). The analysis follows the Smart Specialisation Framework for EU Enlargement and Neighbourhood Region (Matusiak and Kleibrink, 2018) and has two complementary parts: the quantitative mapping aims to identify the potential Smart Specialisation priority domains based on the set of indicators showing critical mass, specialisation and growth rates in subsectors of economic activity and specialisation in science, technology and innovation outputs. The results of this analysis are in a second step verified through a qualitative mapping, based on structured interviews, focus groups and case studies. Both analyses provide a sound base for the following entrepreneurial discovery phase of the strategy development. The findings from both analyses represented key inputs for the upcoming stakeholder dialogue under the Entrepreneurial Discovery Process (EDP).Serbia decided to introduce the Smart Specialisation approach into the development of its innovation policy in 2016. Guidance and technical support has been provided by the Joint Research Centre ever since, based on the Smart Specialisation Framework for the EU Enlargement and Neighbourhood Region. Serbia created its National Smart Specialisation team for coordinating the Smart Specialisation process and it has run the process until the strategy was adopted in February 2020. The analytical team of the National Smart Specialisation Team of Serbia played an important role in providing expert support and developing local capacities for both the quantitative mapping, conducted by the Fraunhofer ISI, and the qualitative mapping. Another important contributor was the National Statistical Office of Serbia, which provided necessary disaggregated data sets which made the analysis possible. The quantitative mapping revealed several primary and secondary preliminary priority areas which were further analysed in the qualitative mapping phase. The qualitative analysis set out four final priority domains with sub-areas for Smart Specialisation in Serbia.
    Keywords: mapping, smart specialisation, serbia, innovation
    Date: 2021–12
  9. By: Richard Harding (Carbon to Zero Consulting SRL,Romania); Claire Nauwelaers; Caroline Cohen (European Commission - JRC); Isabelle Seigneur (European Commission - JRC)
    Abstract: The aim of this study is to illustrate the role played by Smart Specialisation Strategies (S3) to foster environmentally oriented activities through the examination of inspiring examples from different European Member States. The report presents ten inspiring examples and highlights how stakeholders from various territorial levels across Europe are using the Smart Specialisation concept to deliver their own innovation-driven green transition agendas, detailing specific policy tools and incentives developed in this context. The selected cases provide insights into the role played by multi-level governance and enhanced stakeholder involvement in the Entrepreneurial Discovery Process (EDP), and/or Smart Specialisation Monitoring and Evaluation mechanisms in fostering the implementation of experimental ‘green’ interventions. They demonstrate that even though the S3 concept was not initially designed with a strong environmental focus, different types of territories have successfully used the S3 approach to promote environment-related priorities. In particular, the circular economy appears as a recurring transversal driver and a source of economic gains in many territories.
    Keywords: Smart Specialisation, environmental policies, territorial development
    Date: 2021–12
  10. By: Andrea Giacomelli (Department of Economics, University Of Venice CÃ Foscari)
    Abstract: The European Taxonomy defines in a technically robust way the system of sustainability objectives at the level of the European Union and the technical criteria for verifying which economic activities contribute to achieve the system of objectives. Compared to the current practices on sustainability, the EU Taxonomy introduces new and articulated principles for assessing the environmental sustainability of undertakings and new operational challenges, which are complex to implement. Indeed, the contents of the Taxonomy have a strong impact and therefore require in-depth analysis on many fronts. The paper aims to contribute to shed light on the above issues, focusing on non-financial undertakings and pursuing 3 main objectives. The first objective of the paper is to disseminate the main contents of the Taxonomy. The second objective is to introduce general criteria to satisfy in order to represent the articulated contents required by the Taxonomy in an exhaustive and easy-to consult summary reporting. The third objective concerns some preliminary reflections on possible ways of extending the Taxonomy to Small and Medium Enterprises (SMEs), which play a very significant role in the European economic system.
    Keywords: EU sustainability taxonomy, environmental sustainability, sustainability plan, sustainable investment, ESG risk, climate change risk, transition risk, ESG sustainability report
    JEL: D81 K32 O21 Q50 Q51 Q56
    Date: 2021
  11. By: Stuetzer, Michael (Technische Universität Ilmenau); Brodeur, Abel (University of Ottawa); Obschonka, Martin (Queensland University of Technology); Audretsch, David (Indiana University); Rentfrow, Peter J. (University of Cambridge); Potter, Jeff (Atof Inc., Cambridge); Gosling, Samuel D. (University of Texas at Austin)
    Abstract: We study the origins of entrepreneurship (culture) in the United States. For the analysis we make use of a quasi-natural experiment – the gold rush in the second part of the 19th century. We argue that the presence of gold attracted individuals with entrepreneurial personality traits. Due to a genetic founder effect and the formation of an entrepreneurship culture, we expect gold rush counties to have higher entrepreneurship rates. The analysis shows that gold rush counties indeed have higher entrepreneurship rates from 1910, when records began, until the present as well as a higher prevalence of entrepreneurial traits in the populace.
    Keywords: gold rush, entrepreneurship, culture
    JEL: L26 R12 N5 N9
    Date: 2021–11

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