nep-sbm New Economics Papers
on Small Business Management
Issue of 2022‒06‒27
sixteen papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Opposing firm-level responses to the China shock: horizontal competition versus vertical relationships By Philippe Aghion; Antonin Bergeaud; Matthieu Lequien; Marc J. Melitz; Thomas Zuber
  2. International Scientific Co-Publications in Europe By Leogrande, Angelo; Costantiello, Alberto; Laureti, Lucio; Matarrese, Marco Maria
  3. Productivity Implications of R&D, Innovation, and Capital Accumulation for Incumbents and Entrants: Perspectives from a Catching-up Economy By Jaan Masso; Amaresh K Tiwari
  4. A policy toolkit to increase research and innovation in the European Union By Andreas Teichgraeber; John Van Reenen
  6. Entrepreneurship as the safe option: Evidence from India By Borchhardt, Geoffrey; Sorenson, Olav
  7. Survival of the fittest: Tourism Exposure and Firm Survival By Hugo Reis; Paulo M.M. Rodrigues; Filipe B. Caires
  8. Evolution of biomedical innovation quantified via billions of distinct article-level MeSH keyword combinations By Alexander M. Petersen
  9. Communication incitative et l'approche nudge : introduction, certaines applications dans l'accompagnement des PME By Maya Velmuradova
  10. Public subsidies and cooperation in research and development: Evidence from the lab By Antonio Acconcia; Sergio Beraldo; Carlo Capuano; Marco Stimolo
  11. Job Satisfaction, Structure of Working Environment and Firm Size By Aysit Tansel; Saziye Gazioglu
  12. Key factors for the emergence of innovative Paytech companies in Morocco: Innovation in mobile payment applications for Digital Wallets By Mohammed Eddaou
  13. What constitutes a machine-learning-driven business model? A taxonomy of B2B start-ups with machine learning at their core By Vetter, Oliver A.; Hoffmann, Felix Sebastian; Pumplun, Luisa; Buxmann, Peter
  14. Are entrepreneurs more upwardly mobile? By Matthew J. Lindquist; Theodor Vladasel
  15. Labor force aging and the composition of regional human capital By Prenzel, Paula; Iammarino, Simona
  16. Modelling the financial situation of Portuguese firms using micro-data: a simulation for the COVID-19 pandemic By Carla Marques; Francisco Augusto; Ricardo Martinho

  1. By: Philippe Aghion; Antonin Bergeaud; Matthieu Lequien; Marc J. Melitz; Thomas Zuber
    Abstract: We decompose the "China shock" into two components that induce different adjustments for firms exposed to Chinese exports: a horizontal shock affecting firms selling goods that compete with similar imported Chinese goods, and a vertical shock affecting firms using inputs similar to the imported Chinese goods. Combining French accounting, customs, and patent information at the firm-level, we show that the horizontal shock is detrimental to firms' sales, employment and innovation. Moreover, this negative impact is concentrated on low-productivity firms. By contrast, we find a positive effect - although often not significant - of the vertical shock on firms' sales, employment and innovation.
    Keywords: competition shock, patent, firms, import
    Date: 2021–08–09
  2. By: Leogrande, Angelo; Costantiello, Alberto; Laureti, Lucio; Matarrese, Marco Maria
    Abstract: The determinants of “International Scientific Co-Publications” in Europe are analyzed in the following article. Data from the European Innovation Scoreboard-EIS of the European Union for 36 countries in the period 2010-2019 were used. The data were analyzed using Panel Data with Fixed Effects, Panel Data with Random Effects, Pooled OLS, WLS, Dynamic Panel. The results show that the variable “International Scientific Co-Publication” is negatively associated with “Employment Share Manufacturing”, “Intellectual Assets”, “Turnover Share Large Enterprises”, “Linkages” and positively associated with “SMEs innovating in house”, “Trademark Applications”, “Human Resources”, “Publicprivate co-publications”, “Attractive Research Systems”, “Government procurement of advanced technology products”, “Turnover Share SMEs”. Then, a clustering analysis is realized with the algorithm k-Means. The Silhouette Coefficient and the Elbow Method are confronted to optimize the k-Means algorithm. The results show that the Elbow method is more efficient than the Silhouette coefficient in identifying the optimal number of clusters corresponding to k = 4 with the k-Means algorithm. A network analysis was then carried out using the “Manhattan Distance”. The analysis shows the presence of 9 network structures of which 5 are complex i.e., with a number of linkages greater than 3, and 4 are basic i.e. consist of a single link between two countries. Furthermore, we confront eight different machine learning algorithms to predict the future level of “International Scientific Co-Publications”. We found that the best algorithm in performing prediction with original data is the Tree Ensemble Regression. The predicted value of “International Scientific Co-Publication” is expected to growth by 0.61%.
    Keywords: Innovation, and Invention: Processes and Incentives; Management of Technological Innovation and R&D; Diffusion Processes; Open Innovation.
    JEL: O3 O30 O31 O32 O33 O34
    Date: 2022–05–24
  3. By: Jaan Masso; Amaresh K Tiwari
    Abstract: We study the productivity implications of R&D, capital accumulation, and innovation output for entrants and incumbents in Estonia. First, in contrast to developed economies, a small percentage of firm engage in formal R&D, but a much larger percentage innovate. Second, while we find no difference in the R&D elasticity of productivity for the entrants and incumbents, the impact of innovation output - many of which are a result of 'doing, using and interacting' (DUI) mode of innovation - is found to be higher for the entrants. Entrants who innovate are 21% to 30% more productive than entrants who do not; the corresponding figures for the incumbents are 10% to 13%. Third, despite the adverse sectoral composition typical of catching-up economies, Estonian incumbents, who are the primary carriers of 'scientific and technologically-based innovative' (STI) activities, are comparable to their counterparts in developed economies in translating STI activities into productivity gains. Fourth, while embodied technological change through capital accumulation is found to be more effective in generating productivity growth than R&D, the effectiveness is higher for firms engaging in R&D. Finally, our results suggest that certain policy recommendations for spurring productivity growth in technologically advanced economies may not be applicable for catching-up economies.
    Date: 2022–05
  4. By: Andreas Teichgraeber; John Van Reenen
    Abstract: What research and innovation (R&I) policies should Europe adopt? The world faces a challenge to rebuild after the pandemic, but also faces the same structural slowdown of productivity growth that occurred in the decades before the COVID crisis. We need to have a plan around innovation policy to address the challenge. We show that Europe is less innovative on many dimensions compared to other advanced regions, such as the US and parts of Asia. We review the econometric evidence on R&I policies and argue that there is good evidence for the efficacy of many of them. A mix of R&D subsidies, reinvigorated competition and a big push on expanding the quantity and quality of human capital is needed. These could be bound together around the need for green innovation in order to achieve the mission to radically reduce carbon emissions.
    Keywords: innovation, R&D, human capital, Europe
    Date: 2022–12
  5. By: Abraham Assefa; Darya Lapitskaya; Lenno Uusküla
    Abstract: The paper studies the effects of technology shocks on the creation and destruction of firms. Using US data and a VAR model the paper finds Schumpeterian creative destruction for investment-specific technology shocks. A positive investment-specific technology shock increases the number of firms opening, but also leads to a higher number of firms closing. In contrast, labour-neutral technology shocks also benefit old firms. An increase in overall productivity leads to an increase in the number of new firms and a drop in the number of failures. Both margins contribute to an increase in the number of firms in the economy. A medium-scale DSGE model with endogenous entry and exit that is that is augmented with additional features is able to capture these stylised facts.
    Keywords: VAR, DSGE, Firm dynamics, Productivity, Firm turnover, Technology shocks, Investment specific technology shocks
    Date: 2022
  6. By: Borchhardt, Geoffrey; Sorenson, Olav
    Abstract: We examine the returns to entrepreneurship in India. We find that entrepreneurs, on average, earn more than they would expect in paid employment. Except among the most highly educated, that positive effect holds for every subgroup of entrepreneurs, from the growth-oriented to the self-employed offering personal services. Further analysis reveals that this positive effect appears to stem almost entirely from the fact that entrepreneurs in India have more stable income streams, they have fewer months with no income. Entrepreneurship may therefore represent a safer option for these individuals.
    Date: 2022–05–19
  7. By: Hugo Reis; Paulo M.M. Rodrigues; Filipe B. Caires
    Abstract: In this paper, we estimate a discrete-time hazard model to study firm survival in the Portuguese Tourism sector. This sector has experienced a remarkable performance over the last decades. When compared to other sectors, tourism firms are more likely to exit: (i) if they are young (less than 10 years of existence); and (ii) if they belong to the lower tail of the firm distribution (i.e. belong to the group of worse performers). Within tourism related sectors, we find that firms whose activities are offered mostly to tourists, such as travel agencies and hotels, are always among the best performers in terms of survival. Moreover, despite of Tourism being one of the most volatile sectors in periods of high uncertainty, results show a higher survival resilience among established tourism associated firms.
    JEL: C23 C55 L25 L83
    Date: 2022
  8. By: Alexander M. Petersen
    Abstract: We develop a systematic approach to measuring combinatorial innovation in the biomedical sciences based upon the comprehensive ontology of Medical Subject Headings (MeSH). This approach leverages an expert-defined knowledge ontology that features both breadth (27,875 MeSH analyzed across 25 million articles indexed by PubMed from 1902 onwards) and depth (we differentiate between Major and Minor MeSH terms to identify differences in the knowledge network representation constructed from primary research topics only). With this level of uniform resolution we differentiate between three different modes of innovation contributing to the combinatorial knowledge network: (i) conceptual innovation associated with the emergence of new concepts and entities (measured as the entry of new MeSH); and (ii) recombinant innovation, associated with the emergence of new combinations, which itself consists of two types: peripheral (i.e., combinations involving new knowledge) and core (combinations comprised of pre-existing knowledge only). Another relevant question we seek to address is whether examining triplet and quartet combinations, in addition to the more traditional dyadic or pairwise combinations, provide evidence of any new phenomena associated with higher-order combinations. Analysis of the size, growth, and coverage of combinatorial innovation yield results that are largely independent of the combination order, thereby suggesting that the common dyadic approach is sufficient to capture essential phenomena. Our main results are twofold: (a) despite the persistent addition of new MeSH terms, the network is densifying over time meaning that scholars are increasingly exploring and realizing the vast space of all knowledge combinations; and (b) conceptual innovation is increasingly concentrated within single research articles, a harbinger of the recent paradigm shift towards convergence science.
    Date: 2022–05
  9. By: Maya Velmuradova (Boréal Innovation recherche, IMSIC - Institut mediterranéen des sciences de l'information et de la communication - UTLN - Université de Toulon - AMU - Aix Marseille Université)
    Keywords: Nudge,Official Development Assistance (ODA),Development Studies,Communication,Community Development,Communication for Development,Small and Medium-scale Enterprises,SMES IN DEVELOPING COUNTRIES,Nudge approach,Community-based enterprise for poverty alleviation,Communication for Social Change
    Date: 2021–07–02
  10. By: Antonio Acconcia; Sergio Beraldo; Carlo Capuano; Marco Stimolo
    Abstract: We implement an experimental design based on a duopoly game in which subjects choose whether to cooperate in Research and Development (R&D) activities. We first conduct six experimental markets that differ in both the levels of knowledge spillovers and the intensity of competition. Consistently with the theory, we find that the probability of cooperation increases in the level of spillovers and decreases in that of market competition. We then replicate the experimental markets by providing subsidies to subjects who cooperate. Subsidies relevantly increase the probability of cooperation in focus markets, causing, however, a sensible reduction of R&D investments. Overall, our evidence suggests that, depending on the characteristics of the market, the use of public subsidies might be redundant, for firms would anyway joined their R&D efforts; or counterproductive, inducing firms to significantly reduce R&D investments compared to the non-cooperative scenario.
    Keywords: Cooperation in R&D; Public subsidies; knowledge spillovers; market competition.
    JEL: L24 O3
    Date: 2022–03–04
  11. By: Aysit Tansel (Department of Economics Middle East Technical University, IZA, ERF Cario); Saziye Gazioglu (Department of Economics and Instituted of Applied Mathematics (IAM) Middle East Technical University, Department of Economics University of Aberdeen)
    Abstract: Employees’ wellbeing is important to the firms. Analysis of job satisfaction may give insight into various aspect of labor market behavior, such as worker productivity, absenteeism and job turn over. Little empirical work has been done on the relationship between structure of working environment and job satisfaction. This paper investigates the relationship between working environment, firm size and worker job satisfaction. We use a unique data of 28,240 British employees, Workplace Employee Relations Survey. In this data set the employee questionnaire is matched with the employer questionnaire. Four measures of job satisfaction considered are satisfaction with influence over job, satisfaction with amount of pay, satisfaction with sense of achievement and satisfaction with respect from supervisors. They are all negatively related to the firm size implying lower levels of job satisfaction in larger firms. The firm size in return is negatively related to the degree of flexibility in the working environment. The small firms have more flexible work environments. We further find that, contrary to the previous results lower levels of job satisfaction in larger firms can not necessarily be attributed to the inflexibility in their structure of working environment.
    Keywords: Job Satisfactions, Firm Size, Working Environment, Linked Employer-Employee data, Britain.
    JEL: J21 J28 J29 J81
    Date: 2022–06
  12. By: Mohammed Eddaou (Université Mohammed Premier [Oujda])
    Abstract: Morocco has seen a galloping increase in digital wallets since the introduction of this mobile solution in 2018. However, the period from 2015 to 2020 is marked by a downward trend in the creation of innovative ICT companies. In the context of this article, and in order to explain this reality, we will try to answer the following question: What is the relationship between the key factors of creation of new technological firms and the emergence of innovative Paytech companies in Morocco? To answer our central question, we have used scientific realism as an epistemological position, and the hypothetico-deductive approach as a research approach. In order to study our research hypotheses, we constructed a sample of 30 individuals working with actors of the ecosystem of these companies. In order to carry out the empirical analysis of our conceptual research model, we used cross-sectional data regression. The results of the study show that the emergence of innovative Paytech companies in Morocco is linked to the importance of the external network actors facilitated by the incubators and to the access of the founders of innovative Paytech companies to bank loans.
    Abstract: Le Maroc a connu une augmentation galopante des Digital Wallets depuis la mise en place de cette solution mobile en l'année 2018. Cependant, la période allant de 2015 à 2020 est marquée par une tendance à la baisse de la création des entreprises innovantes en TIC. Dans le cadre de cet article, et pour apporter une explication à cette réalité, nous essayerons de répondre à la question suivante : Quelle relation entre les facteurs clés de création des nouvelles firmes technologiques et l'éclosion des entreprises innovantes en Paytech au Maroc ? Pour répondre à notre question centrale, nous avons eu recours au réalisme scientifique en tant que positionnement épistémologique, et la démarche hypothético-déductive en tant que démarche de recherche. En vue d'étudier nos hypothèses de recherche, nous avons construit un échantillon de 30 individus travaillant auprès des acteurs de l'écosystème de ces entreprises. Pour réussir l'analyse empirique de notre modèle conceptuel de recherche, nous avons eu recours à une régression de données en coupe instantanée. Les résultats de l'étude montrent que l'éclosion des entreprises innovantes en Paytech au Maroc est liée à l'importance des acteurs des réseaux externes favorisés par les incubateurs et à l'accès des fondateurs des entreprises innovantes en Paytech aux prêts bancaires.
    Keywords: innovative entrepreneur,venture capital,Incubators,Fintech,Paytech,Innovative companies,entrepreneur innovateur,Entreprises innovantes,capital-risque
    Date: 2022–04
  13. By: Vetter, Oliver A.; Hoffmann, Felix Sebastian; Pumplun, Luisa; Buxmann, Peter
    Date: 2022–06–18
  14. By: Matthew J. Lindquist; Theodor Vladasel
    Abstract: Entrepreneurship is often hailed as a path to upward intergenerational mobility, but few studies have explicitly tested this belief. We study intergenerational income rank mobility among entrepreneurs and employees in Sweden using high-quality measures of lifetime income for 215,000 father-son pairs. Incorporated entrepreneurs are more upwardly mobile than wage earners; this result is driven by selection and not by the causal impact of entrepreneurship on upward intergenerational mobility. By contrast, unincorporated entrepreneurs are more downwardly mobile, a result explained by selection, income underreporting, and lower returns to skills and education.
    Keywords: Entrepreneurship, incorporation, intergenerational mobility, lifetime income, upward mobility
    JEL: L26 J24 J62
    Date: 2022–06
  15. By: Prenzel, Paula; Iammarino, Simona
    Abstract: Human capital investments are frequently suggested as a policy measure to cope with smaller and older labor forces caused by demographic change across Europe. However, the availability and composition of human capital is fundamentally intertwined with demographic structures, especially at a regional level. This article analyzes how aging is related to the regional composition of human capital for German regions between 2000 and 2010. The findings show that labor force aging is associated with lower educational attainment and that older labor forces have higher shares of traditional vocational degrees. On a national level, education expansion still sufficiently compensates for the effects of population aging, but regional human capital composition shows distinct trends.
    Keywords: demographic change; human capital; regional development; ES/M008436/1; 1378766
    JEL: R10 R12 R23 J21 J24
    Date: 2021–03–15
  16. By: Carla Marques; Francisco Augusto; Ricardo Martinho
    Abstract: We develop a model to simulate firms’ balance sheet, income and cash statements and we use it to study the Portuguese firms’ financial situation in the aftermath of the COVID-19 shock (2020-2023 horizon). After a significant negative shock to firms’ activity in 2020, firms’ aggregate profitability recovers until 2023, when it surpasses the pre-pandemic level. During this period, the firms’ aggregate capital ratio increases marginally while the cash ratio rises significantly. The increase in the dispersion of firms’ financial ratios points to increasing insolvency risks in worst performing firms, particularly for smaller firms and firms in sectors most affected by the pandemic crisis. The proportion of firms with negative equity or insolvent between 2020 and 2023 rises. However, the increase in firms with negative equity is smaller than in the sovereign debt crisis period (2010-2014). The increase is less pronounced when the metrics are weighted by firms’ total assets. These results are robust to numerous changes in model assumptions and parameters.
    JEL: G17 G32 G33
    Date: 2022

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