nep-sbm New Economics Papers
on Small Business Management
Issue of 2022‒04‒25
seventeen papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. The Employment Impact of Innovation in Europe By LEOGRANDE, ANGELO
  2. Innovation and Appropriability: Revisiting the Role of Intellectual Property By Filippo Mezzanotti; Timothy Simcoe
  3. Workers in the Knowledge Economy in Europe By LEOGRANDE, ANGELO
  4. The impact of regulation on innovation By Aghion, Philippe; Bergeaud, Antonin; Van Reenen, John
  5. The Impact of Acquisitions on Inventors' Turnover in the Biotechnology Industry By Luca Verginer; Federica Parisi; Jeroen van Lidth de Jeude; Massimo Riccaboni
  6. How Digital Are Albanian Enterprises: A Microeconomic Analyses By Kalaj, Ermira; Merko, Flora
  7. Subsidies, Entry, and Economic Growth in a Schumpeterian Model with Incumbents and Entrants By Lu, You-Xun; Chen, Shi-kuan; Lai, Ching-chong
  8. Place-Based Policies and Agglomeration Economies: Firm-Level Evidence from Special Economic Zones in India By Görg, Holger; Mulyukova, Alina
  9. ICT Specialists in Europe By Leogrande, Angelo; Magaletti, Nicola; Cosoli, Gabriele; Giardinelli, Vito; Massaro, Alessandro
  10. COVID-19, Fintech, and the Recovery of Micro, Small, and Medium-sized Enterprises: Evidence from Bangladesh By Hossain, Monzur; Chowdhury, Tahreen Tahrima
  11. Complexity of culture and entrepreneurial practice By Bätz, Kerstin; Siegfried, Patrick
  12. e-Government in Europe. A Machine Learning Approach By Leogrande, Angelo; Magaletti, Nicola; Cosoli, Gabriele; Massaro, Alessandro
  13. What Drives Internet Entrepreneurial Intention to Use Technology Products? An Investigation of Technology Product Imagination Disposition, Social Support, and Motivation By Mai, Nhat Chi
  14. Firms and informality a new data base for Colombia By Fernandez, C.
  15. Fixed Broadband Take-Up in Europe By Leogrande, Angelo; Magaletti, Nicola; Cosoli, Gabriele; Massaro, Alessandro
  16. Boosting productivity in New Zealand by unleashing digitalisation By Naomitsu Yashiro; David Carey; Axel Purwin
  17. Investigating Entrepreneurial Intention of Developing Economy Citizens: A PLS-SEM Approach By Mushkoor ul Hassan Zaidi, Syeda Anzalna; Fazil, Malik; Khalid, Hamza Bin; Jawed, Shahzain; Aleem, Muhammad Owais

    Abstract: The European Innovation Scoreboard calculates the value of the impact of innovation on employment through the sum of two sub-indicators, i.e. employment in knowledge-intensive activities and employment in innovative companies.
    Keywords: Innovation, and Invention: Processes and Incentives; Management of Technological Innovation and R&D; Diffusion Processes; Open Innovation.
    JEL: O30 O31 O32 O33 O34
    Date: 2022–03–23
  2. By: Filippo Mezzanotti; Timothy Simcoe
    Abstract: It is more than 25 years since the authors of the Yale and Carnegie surveys studied how firms seek to protect the rents from innovation. In this paper, we revisit that question using a nationally representative sample of firms over the period 2008-2015, with the goal of updating and extending a set of stylized facts that has been influential for our understanding of the economics of innovation. There are five main findings. First, while patenting firms are relatively uncommon in the economy, they account for an overwhelming share of R&D spending. Second, utility patents are considered less important than other forms of IP protection, like trade secrets, trademarks, and copyrights. Third, industry differences explain a great deal of the level of firms’ engagement with IP, with high-tech firms on average being more active on all forms of IP. Fourth, we do not find any significant difference in the use of IP strategies across firms at different points of their life cycle. Lastly, unlike age, firms of different size appear to manage IP significantly differently. On average, larger firms tend to engage much more extensively in the protection of IP, and this pattern cannot be easily explained by differences in the type of R&D or innovation produced by a firm. We also discuss the implications of these findings for innovation research and policy.
    Date: 2022–03
    Abstract: The European Innovation Scoreboard-EIS calculates the value of employees in knowledge-intensive activities in Europe.
    Keywords: Innovation, and Invention: Processes and Incentives; Management of Technological Innovation and R&D; Diffusion Processes; Open Innovation.
    JEL: O30 O31 O32 O33 O34
    Date: 2022–03–24
  4. By: Aghion, Philippe; Bergeaud, Antonin; Van Reenen, John
    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 labor 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 labor saving) breakthroughs.
    Keywords: innovation; regulation; patents; firm size
    JEL: O31 L11 L51 J80 L25
    Date: 2021–01–18
  5. By: Luca Verginer; Federica Parisi; Jeroen van Lidth de Jeude; Massimo Riccaboni
    Abstract: In high-tech industries, where intellectual property plays a crucial role, the acquisition of intangible assets and employees' tacit knowledge is an integral part of the motivation for Mergers and Acquisitions (M&As). Following the molecular biology revolution, the wave of takeovers in the biotechnology industry in the Nineties is a well-known example of M&As to absorb new knowledge. The retention of critical R&D employees embodying valuable knowledge and potential future innovation is uncertain after an acquisition. While not all employees might be relevant for the success of the takeover, inventors are among the most valuable. This is especially true for the acquisition of an innovative start-up. This paper estimates how likely an inventor working for an acquired biotechnology company will leave. We find that inventors affected by acquisitions are 20\% more likely to leave the company by a difference-in-differences approach matching both firms and inventors.
    Date: 2022–03
  6. By: Kalaj, Ermira; Merko, Flora
    Abstract: This paper focuses on the analyses of the digitalization of enterprises and its performance impact in Albania. Using data from 2019 Enterprise Surveys (ES) we try to give answer questions related to digitalization that characterize Albanian enterprises. The survey was a shared project of the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), and the World Bank Group (WBG). The data are collected in Albania between January and May 2019. The objective of the survey is to better understand firms` experience in the private sector. Collected data are based on firms’ experiences and perceptions of the environment in which they operate. The paper uses these specific questions to study Internet adoption. ES questionnaires focus on the following questions: (1) Does the firm have a high-speed Internet connection on its premises? (2) Does the establishment have its website? The dependent variable is the performance of the firms measured in terms of sales growth and labor productivity, while the vector of independent variables is composed of enterprise characteristics such as firm size, ownership structure, legal status, region, etc. Moreover, dummy variables are used to capture access to formal banking services and gender ownership.
    Keywords: Information,Firm Performance,Entrepreneurship,Digitalization
    JEL: L15 L25 L26 L86
    Date: 2021
  7. By: Lu, You-Xun; Chen, Shi-kuan; Lai, Ching-chong
    Abstract: This paper explores the effects of various subsidies on economic growth and growth composition in a Schumpeterian model with incumbents and entrants. The main results can be summarized as follows. Subsidizing the production of intermediate goods or subsidizing incumbents’ in-house R&D serves to promote economic growth. However, the growth effect of the subsidy on entrants’ R&D can be positive or negative, depending on the level of the fixed entry cost. Moreover, we show that various types of subsidies have different effects on the entry of new firms and market structure. Finally, we calibrate the model and find that the subsidy on intermediate goods production is more effective than R&D subsidies in terms of promoting growth and raising welfare.
    Keywords: innovation, subsidies, economic growth, market structure, incumbents and entrants
    JEL: O31 O38 O40
    Date: 2022–02–10
  8. By: Görg, Holger (Kiel Institute for the World Economy); Mulyukova, Alina (Kiel Institute for the World Economy)
    Abstract: This paper exploits time and geographic variation in the adoption of Special Economic Zones in India to assess the direct and spillover effects of the program. We combine geocoded firm-level data and geocoded SEZs using a concentric ring approach, thus creating a novel dataset of firms with their assigned SEZ status. To overcome the selection bias we employ inverse probability weighting with time-varying covariates in a difference-in-differences frame-work. Our analysis yields that conditional on controlling for initial selection, SEZs induced no further productivity gains for within SEZ firms, on average. This is predominantly driven by relatively less productive firms, whereas more productive firms experienced significant productivity gains. However, SEZs created negative externalities for firms in the vicinity which attenuate with distance. Neighbouring domestic firms, large firms, manufacturing firms and non-importer firms are the main losers of the program. Evidence points at the diversion of inputs from non-SEZ to SEZ-firms as a potential mechanism.
    Keywords: firm performance, agglomerations, Special Economic Zones, India
    JEL: O18 O25 P25 R10 R58 R23 F21 F60
    Date: 2022–03
  9. By: Leogrande, Angelo; Magaletti, Nicola; Cosoli, Gabriele; Giardinelli, Vito; Massaro, Alessandro
    Abstract: The following article estimates the value of ICT Specialists in Europe between 2016 and 2021 for 28 European countries. The data were analyzed using the following econometric techniques, namely: Panel Data with Fixed Effects, Panel Data with Random Effects, WLS and Pooled OLS. The results show that the value of ICT Specialists in Europe is positively associated with the following variables: "Desi Index", "SMEs with at least a basic level of digital intensity", "At least 100 Mbps fixed BB take-up" and negatively associated with the following variables: "4G Coverage","5G Coverage", "5G Readiness", "Fixed broadband coverage", "e-Government", "At least Basic Digital Skills", "Fixed broadband take-up", "Broadband price index", "Integration of Digital Technology". Subsequently, two European clusters were found by value of "ICTG Specialists" using the k-Means clustering algorithm optimized by using the Silhouette coefficient. Finally, eight different machine learning algorithms were compared to predict the value of "ICT Specialists" in Europe. The results show that the best prediction algorithm is ANNArtificial Neural Network with an estimated growth value of 12.53%. Finally, "augmented data" were obtained through the use of the ANN-Artificial Neural Network, through which a new prediction was made which estimated a growing value of the estimated variable equal to 3.18%.
    Keywords: Innovation, and Invention: Processes and Incentives; Management of Technological Innovation and R&D; Diffusion Processes; Open Innovation.
    JEL: O30 O31 O32 O33 O34
    Date: 2022–03–05
  10. By: Hossain, Monzur (Asian Development Bank Institute); Chowdhury, Tahreen Tahrima (Asian Development Bank Institute)
    Abstract: We assess the impact of the COVID-19 pandemic on micro, small, and medium-sized enterprises (MSMEs) and the role of fintech, in particular, mobile financial services (MFS), in their recovery from COVID-induced losses. We use data from a survey of 216 MSMEs from Bangladesh Small and Cottage Industries Corporation industrial estates in Bangladesh during January to March 2021. Our results suggest that firms have been recovering gradually after the withdrawal from lockdown in June 2020. So far, 80% of production of the firms compared with pre-COVID levels had recovered by the end of December 2020. We use instrumental variable regression to assess the impact of the use of MFS on firms’ production, sales, and profit for three periods: lockdown (March–May 2020), limited lockdown (June–September 2020) and the reopening period (October–December 2020). We find significant and positive impact from the use of MFS on the production, sales, and profit of firms during this pandemic. The results indicate that the use of digital finance facilitates firms’ production through ensuring a stable supply of raw materials and sales that have prompted them to recover faster. However, the concern is that only about 31% of our sample firms use MFS for their businesses and an even lower proportion of firms are accustomed to using an online platform. Therefore, more incentives and supportive policies are needed to motivate MSMEs to use digital finance and online platforms to stay active in operations, particularly during the pandemic.
    Keywords: fintech; MSMEs; Bangladesh Small and Cottage Industries Corporation Estates; BSCIC; COVID-19; firm recovery; Bangladesh
    JEL: D20 D22 G10 G20
    Date: 2022–04–01
  11. By: Bätz, Kerstin; Siegfried, Patrick
    Abstract: Objective: The objective of the article highlight the significance of culture in the entrepreneurial landscape and provides entrepreneurs and (project) managers with a guidance tool to overcome previously unconsidered stumbling blocks while operating in the intercultural setting. Research Design & Methods: The following article was prepared based on a critical study review devoted to existing approaches to intercultural impact in business life and used the archival technique from 1990- 2020. The study review reflects on the identification of existing literature gaps in the implementation of a subcultural business environment. It addresses these by designing an appropriate model to bypass the apparent pitfalls of intercultural business communication and co-existence, if possible. Findings: Culture impacts diverse sets of society and businesses, including entrepreneurship. This article underpins which pitfalls are advisable to consider when encountering the intercultural and entrepreneurship-driven workplace. Implications & Recommendations: Based on the study review, startups, as well as big corporate companies’ projects of a creational nature, are advised to reconsider their perception and handling of culture applying The Building of Cultural and Entrepreneurial Force. Contribution & Value Added: The added value of this article is to be found in the solid analysis of cultural essentialism, anti-essentialism, and implications to beware of in the managerial and entrepreneurial context related to The Building of Intercultural and Entrepreneurial Force that intends to ease to co-work of intercultural teams.
    Keywords: Culture; essentialism; anti-essentialism; entrepreneurship; cultural perception; cultural innovation; work cultivation; intercultural teams
    JEL: F00 F53
    Date: 2021–09–01
  12. By: Leogrande, Angelo; Magaletti, Nicola; Cosoli, Gabriele; Massaro, Alessandro
    Abstract: The following article analyzes the determinants of e-government in 28 European countries between 2016 and 2021. The DESI-Digital Economy and Society Index database was used. The econometric analysis involved the use of the Panel Data with Fixed Effects and Panel Data with Variable Effects methods. The results show that the value of “e-Government” is negatively associated with “Fast BB (NGA) coverage”, “Female ICT specialists”, “e-Invoices”, “Big data” and positively associated with “Open Data”, “e-Government Users”, “ICT for environmental sustainability”, “Artificial intelligence”, “Cloud”, “SMEs with at least a basic level of digital intensity”, “ICT Specialists”, “At least 1 Gbps take-up”, “At least 100 Mbps fixed BB take-up”, “Fixed Very High Capacity Network (VHCN) coverage”. A cluster analysis was carried out below using the unsupervised k-Means algorithm optimized with the Silhouette coefficient with the identification of 4 clusters. Finally, a comparison was made between eight different machine learning algorithms using "augmented data". The most efficient algorithm in predicting the value of e-government both in the historical series and with augmented data is the ANN-Artificial Neural Network.
    Keywords: Innovation, and Invention: Processes and Incentives; Management of Technological Innovation and R&D; Diffusion Processes; Open Innovation.
    JEL: O30 O31 O32 O33 O34
    Date: 2022–03–05
  13. By: Mai, Nhat Chi
    Abstract: Technological products such as computer, communication, and consumer electronic products, apps, smart wearables, and streaming services have become inseparable from people’s lives. In technological fields of practice, imagination, creativity, innovation, and entrepreneurship may influence one another. A vivid imagination can generate creativity and trigger the entrepreneurial intention to “bring new things to the market.” This study aims to understand the formation of internet entrepreneurial intention to use technology products.
    Date: 2022–03–15
  14. By: Fernandez, C.
    Abstract: The article Firms & Informality identifies the main stylized facts of business informality in Colombia. To identify these facts, an innovative database (EEG) was built by attaching information from the Micro-business Survey (EMICRON), the structural surveys of manufacturing, trade, and services (EAM, EAC and EAS) and the questions asked to the employer by the household survey. Additionally, some missing information was completed by using the GEIH questions addressed to the workers. According to the exercise the main features that a model of informality in Colombia should consider are the following: 1. The share of microbusiness and self-employment is high. 2. Although informality is decreasing in firm´s size it might not be assumed as restricted to microbusiness. 3. The intensive and extensive margin of informality should be included independently, because they do not always move in the same pace/direction 4. Both worker´s and firm´s heterogeneity should be considered since the reasons to be informal vary among informality types, but informality might also cause further heterogeneity. The heterogeneity variable should be observable to allow the implementation of policy recommendations. 5. Some institutional features that can be contemplated in a model are: the large, exempted tax brackets, the profit taxes formal labor cost deduction, and the limited scope of the single tax scheme that causes a rather continuous than binary variable of informality in the country.
    Keywords: Informality, Firm informality; Informal labor market; Taxonomy of informality;Policy recommendations for informality; Size distribution of firms
    JEL: J46 O17 L11 O47
    Date: 2021–11–11
  15. By: Leogrande, Angelo; Magaletti, Nicola; Cosoli, Gabriele; Massaro, Alessandro
    Abstract: In this article the value of “Fixed Broadband Take Up” in Europe is investigated. Data are collected from the DESI-Digital Economy and Society Index for 28 countries in the period 2016-2021. Data are analyzed with Panel Data with Fixed Effects and Random Effects. The Fixed Broadband Take-Up value is positively associated with the value of "Connectivity", "Human Capital", "Desi Index", "Fast BB NGA Coverage", "Fixed Very High-Capacity Network VHCN coverage". Fixed Broadband Take-Up value is negatively associated with "Digital Public Services for Businesses", "e-Government", "At least Basic Digital Skills", "At Least Basic Software Skills", "Above Basic Digital Skills", "Advanced Skills and Development", "Integration of Digital Technology", "Broadband Price Index", "Mobile Broadband", "Fixed Broadband Coverage". Subsequently the k-Means algorithm optimized by the Silhouette coefficient was used to identify the number of clusters. The analysis shows the presence of the two clusters. Eight different machine learning algorithms were then used to predict the future value of the "Fixed Broadband Take-Up in Europe". The analysis shows that the most efficient algorithm for the prediction is "ANN-Artificial Neural Network" with an estimated value of the prediction equal to 26.39%.
    Keywords: nnovation, and Invention: Processes and Incentives; Management of Technological Innovation and R&D; Diffusion Processes; Open Innovation.
    JEL: O3 O30 O31 O32 O33 O34
    Date: 2022–03–05
  16. By: Naomitsu Yashiro; David Carey; Axel Purwin
    Abstract: This paper overviews structural reforms that promote the diffusion of digital technologies and investment in intangible capital that maximises the potential of these technologies in New Zealand. Effective use of digital technologies enables New Zealand citizens to participate in society in a more inclusive way, firms to strengthen competitiveness and better integrate into the global economy, and the government to offer better services. New Zealand has room to boost its relatively low productivity level by removing the structural bottlenecks holding back the expansion of its digital sector and digital innovation. There are severe shortages of specialised ICT skills owing to COVID-19-related border restrictions and a weak domestic pipeline of these skills that partly results from school students’ poor mathematics achievement. Some regulations have not kept pace with technological change and risk constraining digital innovation while failing to prevent harmful activities. More intensive use of digital tools is also held back by the low availability of high-speed Internet connections in rural areas and a lack of financial support for small businesses. Weak coordination between export promotion and innovation support prevents young firms investing in digital innovation from reaping high returns through exporting. New Zealand should rigorously implement its new national digitalisation strategy so that government agencies and social partners can advance digital transformation.
    Keywords: digital transformation, intangible capital, Internet, New Zealand, productivity, regulation, skills
    JEL: O33 O38 O43 O56
    Date: 2022–04–08
  17. By: Mushkoor ul Hassan Zaidi, Syeda Anzalna; Fazil, Malik; Khalid, Hamza Bin; Jawed, Shahzain; Aleem, Muhammad Owais
    Abstract: This study investigates the intention of graduate students towards entrepreneurial education in context of four factors (Risk-Taking Behavior, Innovativeness, Proactiveness, and Network ties) and their influence on an entrepreneurial intention. The objective is to explore that how people of a developing economy look towards the goal of becoming an entrepreneur instead of working for some organization. The developing economies are facing serious issues regarding lack of job opportunities, increasing inflation, and deteriorating economies conditions. Hence, it necessary to inspect people entrepreneurial intention. So that in upcoming times, it can be promoted. The universities are playing an important role for the higher education of students and the trend of entrepreneurship have been increasing day by day in the recent past years, this will create multiple job opportunities for the emerging talent. To dissect this, question this research was performed via data collection through structured questionnaires, in paper as well as Google survey forms, distributed to 200 respondents using Convenience sampling in different universities of Karachi. The data was analysed using PLS-SEM. We also use 5-point Likert scale Questioner for collection our primary data through online survey. Moreover, 2 paths are showing significant positive effect but 2 are showing insignificant positive effect that’s why 2 hypotheses are rejected and 2 are accepted out of 4. Results show that the study has a few limits hypothetical model was inspected on the University Students in Pakistan just perhaps the understudies are living in different nations and they don't have any source to introduce their thoughts before different people groups. The future review will zero in on taking the information of different nations, besides this study has not many factors so the future analyst will add different factors like business thought, Competitive benefit etc. Thus, further endeavors should think about a few subjective strategies with triangulation through meetings or center gatherings to additionally comprehend and affirm the quantitative outcomes.
    Keywords: Risk-Taking Behavior, Innovativeness, Entrepreneurship, Developing Economy
    JEL: A1 A13 A2 A23 M1
    Date: 2022

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