nep-sbm New Economics Papers
on Small Business Management
Issue of 2022‒07‒11
seventeen papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Knowledge-Based Information and the Effectiveness of R&D in Small Firms By Fletcher, Joshua; Howard, Eric; Link, Albert; O'Connor, Alan
  2. Public Support for Research in Artificial Intelligence: A Descriptive Study of U.S. Department of Defense SBIR Projects By Chowdhury, Farhat; Link, Albert; van Hasselt, Martijn
  3. Causal Effects of a Tax Incentive on SME Capital Investment By HOSONO Kaoru; HOTEI Masaki; MIYAKAWA Daisuke
  4. The impact of German public support transfers on firm finance: Evidence from the Covid-19 crisis By Gärtner, Leo; Marek, Philipp
  5. A new dataset to study a century of innovation in Europe and in the US By Antonin Bergeaud; Cyril Verluise
  6. Network embeddedness indicates the innovation potential of firms By Giacomo Vaccario; Luca Verginer; Antonios Garas; Mario V. Tomasello; Frank Schweitzer
  7. Immigrant and native export benefiting from business collaborations: a global study By Shayegheh Ashourizadeh; Mehrzad Saeedikiya
  8. Innovation to Keep or to Sell and Tax Incentives By Colin Davis; Laixun Zhao
  9. Are EU firms climate-ready? Micro evidence from EIBIS By Kalantzis, Fotios; Dominguez, Sofia
  10. Job Satisfaction, Structure of Working Environment and Firm Size By Aysit Tansel; Saziye Gazioglu
  11. The Spatial Distribution of Public Support for AI Research By Chowdhury, Farhat; Link, Albert; van Hasselt, Martijn
  12. Environmental corporate social responsibility, R&D and disclosure of “green” innovation knowledge By Bárcena-Ruiz, Juan Carlos; Garzón, Maria Begoña; Sagasta, Amagoia
  13. Productivity and responses to the pandemic: Firm-level evidence By Harasztosi, Péter; Savšek, Simon
  14. Corporate training and skill gaps: Did Covid-19 stem EU convergence in training investments? By Pouliakas, Konstantinos; Wruuck, Patricia
  15. B2B e-commerce marketplaces and MSMES: Evidence of global value chain facilitation? By Ladrière, Maxime; Lundquist, Kathryn; Ye, Qing
  16. SME Viability Assessment Methodology: Combining Altman’s Z-Score with Big Data By Dimitar Haralampiev Popov
  17. Etude de cas : l’innovation dans les partenariats numériques inter-organisationnels By Carine Mira

  1. By: Fletcher, Joshua (RTI International); Howard, Eric (University of North Carolina at Greensboro, Department of Economics); Link, Albert (University of North Carolina at Greensboro, Department of Economics); O'Connor, Alan (University of North Carolina at Greensboro, Department of Economics)
    Abstract: This paper explores the impact that external sources of information have on the effectiveness of R&D in small, entrepreneurial firms. The effectiveness of R&D is measured in terms of two probabilities; the probability that a firm that received and completed a Phase I SBIR-funded research project is invited to submit a proposal for a Phase II award, and given such an invitation, the probability that a firm receives the Phase II award. Information from competitors is an important, in a statistical sense, covariate with the probability of being asked to submit a Phase II proposal whereas information from suppliers and customers in an important covariate with the probability of receiving a Phase II award.
    Keywords: Small Business Innovation Research (SBIR) program; small firms; entrepreneurial firms; R&D; knowledge sources; program evaluation;
    JEL: H43 L26 O31 O32 O38
    Date: 2022–06–07
  2. By: Chowdhury, Farhat (University of North Carolina at Greensboro, Department of Economics); Link, Albert (University of North Carolina at Greensboro, Department of Economics); van Hasselt, Martijn (University of North Carolina at Greensboro, Department of Economics)
    Abstract: We describe public support for AI research in small firms using data from U.S. Department of Defense-funded SBIR projects. Ours is the first collection of firm-level project information on publicly funded R&D investments in AI. We find that the likelihood of an SBIR funded research project being focused on AI is greater the larger the amount of the SBIR award. AI-focused research projects are associated with a 7.6 percent increase in average award amounts. We also find suggestive evidence that the likelihood of an SBIR project being AI-focused is greater in smaller-sized firms. Finally, we find that SBIR-funded AI research is more likely to occur in states with complementary university research resources.
    Keywords: Artificial intelligence; machine learning; Department of Defense; Small Business Innovation Research program; agglomeration;
    JEL: O31 O38
    Date: 2022–06–07
  3. By: HOSONO Kaoru; HOTEI Masaki; MIYAKAWA Daisuke
    Abstract: We estimate the causal effects of a tax incentive for specific productivity-enhancing equipment that was introduced in 2014 for Japanese small and medium-sized enterprises. Using firm-level panel data, we obtain the following findings. First, the introduction of the tax incentive did not on average effectively increase the capital investment ratio of eligible firms, which could be due to the small number of firms using the incentives. Second, despite the first finding, the firms using the tax incentive increased their capital investment ratio and improved labor productivity more than the comparable firms did. Third, firms using the tax incentive did not increase capital intensity. Fourth, among the firms using the tax incentive, less cash-rich, smaller, and younger firms increased their capital investment ratio to a greater degree. These results show that the actual use of the tax incentive mitigates financial constraints in upgrading capital and improving labor productivity.
    Date: 2022–05
  4. By: Gärtner, Leo; Marek, Philipp
    Abstract: The economic policy response to COVID-19 lockdowns included a variety of measures. Their effects on non-financial firms, however, remain unclear. To shed light on the effect of transfers, we investigate the effect of German emergency aid transfers (November-December aid), a program designed for small and medium sized firms. Using novel survey data, we exploit variation in application status to estimate its effects on the financial situation of firms. We distinguish between firms that had already used aid transfers and those firms with a pending application. Our results show that firms substantially benefited from the November-December aid program. The provision of transfers improved liquidity and access to credit for distressed firms, while decreasing credit demand. The estimates suggest that firms that had received an approval of their application for November-December aid faced a 5-percentage point lower probability of being confronted with a low liquidity buffer. We also find strong evidence, that firms substituted aid with credit, since firms with a pending application status faced an 8-percentage point higher likelihood of starting credit negotiations. Moreover, the provision of November-December aid improved the creditworthiness of firms. We can show that receiving these transfers increased the probability of obtaining a loan at the desired conditions by 14 to 18 percentage points.
    Keywords: SMEs,emergency aid,treatment effects,COVID-19,firm finance
    JEL: C14 G32 G33 H84 L25 J68
    Date: 2022
  5. By: Antonin Bergeaud; Cyril Verluise
    Abstract: Innovation is an important driver of potential growth but quantitative evidence on the dynamics of innovative activities in the long-run are hardly documented due to the lack of data, especially in Europe. In this paper, we introduce PatentCity, a novel dataset on the location and nature of patentees from the 19th century using information derived from an automated extraction of relevant information from patent documents published by the German, French, British and US Intellectual Property offices. This dataset has been constructed with the view of facilitating the exploration of the geography of innovation and includes additional information on citizenship and occupation of inventors.
    Keywords: history of innovation, patent, text as data
    Date: 2022–12
  6. By: Giacomo Vaccario; Luca Verginer; Antonios Garas; Mario V. Tomasello; Frank Schweitzer
    Abstract: Firms' innovation potential depends on their position in the R&D network. But details on this relation remain unclear because measures to quantify network embeddedness have been controversially discussed. We propose and validate a new measure, coreness, obtained from the weighted k-core decomposition of the R&D network. Using data on R&D alliances, we analyse the change of coreness for 14,000 firms over 25 years and patenting activity. A regression analysis demonstrates that coreness explains firms' R&D output by predicting future patenting.
    Date: 2022–05
  7. By: Shayegheh Ashourizadeh; Mehrzad Saeedikiya
    Abstract: The authors hypothesised that export develops in the network of business collaborations that are embedded in migration status. In that, collaborative networking positively affects export performance and immigrant entrepreneurs enjoy higher collaborative networking than native entrepreneurs due to their advantage of being embedded in the home and the host country. Moreover, the advantage of being an immigrant promotes the benefits of collaborative networking for export compared to those of native entrepreneurs. A total of 47,200 entrepreneurs starting, running and owning firms in 71 countries were surveyed by Global Entrepreneurship Monitor and analysed through the hierarchical linear modelling technique. Collaborative networking facilitated export and migration status influenced entrepreneur networking, in that, immigrant entrepreneurs had a higher level of collaborative networking than native entrepreneurs. Consequently, immigrant entrepreneurs seemed to have benefited from their network collaborations more than their native counterparts did. This study sheds light on how immigrant entrepreneur network collaborations can be effective for their exporting.
    Date: 2022–05
  8. By: Colin Davis (The Institute for the Liberal Arts, Doshisha University, JAPAN); Laixun Zhao (Research Institute for Economics & Business Administration (RIEB), Kobe University, JAPAN)
    Abstract: We study how tax policy affects economic growth through entrepreneurs' choice of commercialization mode. Introducing both heterogeneous quality jumps and a leapfrog versus sell choice into the quality-ladders model, we show that entrepreneurs use high-quality innovations to leapfrog incumbent firms and become new market leaders, but sell low quality innovations to incumbents. Tax incentives that promote leapfrogging slow the rate of innovation. A numerical analysis concludes surprisingly that corporate taxes, capital gains taxes, and subsidies to market entry all harm welfare.
    Keywords: Innovation based growth; Heterogenous quality improvements; Innovation sales; Corporate tax; Capital gains tax; Market entry subsidy
    JEL: O31 O33 O43
    Date: 2022–06
  9. By: Kalantzis, Fotios; Dominguez, Sofia
    Abstract: This study uses unique firm-level data from EIBIS to identify EU firms' climate strategies and their associated factors. To do so, we initially run a clustering analysis that results in five distinct clusters in line with the literature and then investigate the role of various firms' characteristics in their adoption based on a multi-logit regression. Our findings show that almost half of the EU firms adopt either "wait-and-see" strategies or plan to invest in tackling climate change risks. More climate-friendly strategies appear to be positively associated with the awareness of climate-related risks, especially with firms that see the transition to a lowcarbon future as an opportunity. Similarly, those strategies are followed by large firms that are innovative, face fewer credit constraints and operate in an environment where there is a strong push for climate actions from various stakeholders. These findings are valuable as they can guide policymakers on supporting firms' transformation to play their part, as an integral part of our society, in the road to a clean, affordable, and secure energy future.
    Keywords: EIBIS,climate strategies,climate change risks,perception analysis,clustering analysis
    Date: 2022
  10. By: Aysit Tansel (Middle East Technical University); Saziye Gazioglu (Department of Economics, Middle East Technical University, Ankara, Turkey)
    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
  11. By: Chowdhury, Farhat (University of North Carolina at Greensboro, Department of Economics); Link, Albert (University of North Carolina at Greensboro, Department of Economics); van Hasselt, Martijn (University of North Carolina at Greensboro, Department of Economics)
    Abstract: A spatial distributional analysis of the population of Phase II research projects funded by the U.S. SBIR program in FY 2020 shows differences across states in projects focused on Artificial Intelligence (AI). AI is a relatively new research field, and this paper contributes to a better understanding of government support for such research. We find that AI projects are concentrated in states with complementary AI research resources available from universities nationally ranked in terms of their own AI research. To achieve a more diverse spatial distribution of AI-related technology development, the availability of complementary AI research resources must be expanded. We suggest that the National Science Foundation’s National AI Research Institutes represents an important step in this direction.
    Keywords: Artificial intelligence (AI); Public sector program management; Small Business Innovation Research (SBIR); Agglomeration; University research;
    JEL: H54 O31 O38 R11
    Date: 2022–06–07
  12. By: Bárcena-Ruiz, Juan Carlos; Garzón, Maria Begoña; Sagasta, Amagoia
    Abstract: The literature on the environment has analyzed how firms carry out R&D to reduce their pollutant emissions, assuming that they maximize profits. However, empirical evidence shows that firms are increasingly concerned about Environmental Corporate Social Responsibility (ECSR). Following that evidence, we consider that the objective function of firms incorporates the environmental damage they generate as part of their social concern. We find that how firms perform environmental R&D depends crucially on the degree to which they care about ECSR. If that degree is low enough, firms agree to set up an Environmental Research Joint Venture (ERJV) under which they coordinate their R&D investments and fully share their technological knowledge. This is the result obtained when firms maximize profits. If the degree is high enough, firms enter into an ERJV in which each fully shares its technological expertise but they do not coordinate their R&D investments. Finally, if the degree is intermediate, firms neither set up an ERJV nor disclose information. Social welfare is the highest and environmental damage the lowest if firms form an ERJV and coordinate their R&D investments. Therefore, the way in which firms organize their R&D activities is not always the most socially preferable.
    Keywords: environmental corporate social responsibility; environmental tax; endogenous spillovers; R&D competition; Research Joint Ventures.
    JEL: D43 L13 L22 Q56
    Date: 2022–04
  13. By: Harasztosi, Péter; Savšek, Simon
    Abstract: In this paper, we empirically assess repercussions of the pandemic on the firm-level productivity worldwide. COVID-19 shock was very heterogeneous across sectors. Our findings show that firms' responses to the shock also varied within sectors: more productive firms coped with the crisis better in terms of closures and employment adjustments. Besides, they were more likely to speed up some digitalization processes. These findings imply that the recent crisis could amplify the difference between highly productive and less productive firms. As regards the governments' policy measures, we find strong utilization at the firm level, but very little differentiation across productivity quantiles, suggesting room for a more targeted approach in the reminder of the pandemic.
    Keywords: Covid-19,Productivity,Enterprise Survey
    Date: 2022
  14. By: Pouliakas, Konstantinos; Wruuck, Patricia
    Abstract: European firms have increasingly invested in training of employees but differences across countries and types of firms remain - and the COVID-19 shock may have exacerbated them. This report analyses European firms' investment in training over the last six years examining trends, factors supporting training investment as well as the impact of the COVID-19 shock. We base the empirical analysis on a unique dataset, the European Investment Bank's Investment Survey (EIBIS), which allows tracking corporate training investment on a yearly basis. To understand dynamics underpinning firms' decision to invest in their workforce, we examine transition patterns and employ dynamic panel data estimation. Finally, we analyze the impact of the COVID-19 pandemic on firms' investment in workforce training and transitions in and out of training. We find that despite a slow upward trend in training investment observed in recent years, supported by labour market recovery, differences across firms and countries have persisted. The pandemic risks aggravating these, through its asymmetric impact on labour markets and differences in corporate innovation, firm structure and resilience. While firm training can be an important element for firms and their workforce to adjust to the post-pandemic environment, asymmetries in training investment could make it harder for those already lagging. The paper concludes with a discussion of policy implications.
    Date: 2022
  15. By: Ladrière, Maxime; Lundquist, Kathryn; Ye, Qing
    Abstract: In theory, e-commerce marketplaces connect buyers and sellers, open trade opportunities, and reduce transaction costs thereby creating opportunities for more inclusive trade and even GVC participation, especially for micro, small and medium-sized enterprises (MSMEs). Further, there is some evidence that MSMEs are more likely to use e-commerce marketplaces than large firms given these websites reduce search frictions and transaction costs, which can be relatively more beneficial for smaller firms. This discussion paper explores non-traditional data to investigate whether e-commerce marketplaces may contribute to MSME GVC participation. By looking at the development of business-to-business (B2B) e-commerce marketplaces, the gross merchandise value (GMV) of regional e-commerce marketplaces, and MSMEs' overall participation in B2B e-commerce marketplaces, descriptive statistics are gathered that contributes to the overall discussion on this topic. This discussion paper also links B2B e-commerce marketplaces with GVC facilitation through a novel approach of cataloguing these platforms' merchandise and finds that on average, roughly one third of B2B e-commerce marketplace listings are intermediate goods.
    Keywords: Micro,Small and Medium Sized Enterprise (MSME),SME,e-commerce,marketplaces,global value chains (GVC)
    JEL: F13 L81 O30
    Date: 2022
  16. By: Dimitar Haralampiev Popov (University of National and World Economy, Department of Management, Sofia, Bulgaria)
    Abstract: Due to their important place in an economy, small and medium enterprises (SMEs) viability is the focus of numerous scientific studies, European and national programs. One of the most widely used viability prediction model is Altman’s Z-score. Altman’s classical models are not suitable for all situations, though. SMEs’ large nominal number in an economy presents another challenge to researchers. One possible solution to this issue is to use data mining tools that can lead to new knowledge discovery. Data mining is the result of a natural evolution of information technology. The cross industry standard process for data mining (CRISP-DM) is a methodological framework for researching large amounts of data. This paper aims to outline the characteristics of Altman’s Z-score and CRISP-DM, and propose combining them into a methodology for predicting SMEs’ viability.
    Keywords: Altman Z-score, Data mining, CRISP-DM, SMEs, Bulgaria
    JEL: M10 P12 C38 C55
    Date: 2022–06
  17. By: Carine Mira (COACTIS - COACTIS - UJM - Université Jean Monnet [Saint-Étienne] - UL2 - Université Lumière - Lyon 2, BONHEURS - Bien-être, Organisations, Numérique, Habitabilité, Education, Universalité, Relation, Savoirs - CY - CY Cergy Paris Université)
    Abstract: Nous proposons un poster pour revenir sur la mise en place d'un partenariat pédagogique visant à une innovation numérique (Hussherr & Hussherr, 2017) à destination des lycéens, dans le cadre d'un objectif d'un programme interne à l'entreprise de grande envergure. Cette démarche s'inscrit sur un modèle d'étude de cas (Dumez, 2016). L'innovation se distingue de l'invention en ce que cette dernière implique l'« action d'imaginer quelque chose de nouveau », tandis que l'innovation est le « résultat de l'action, chose nouvelle introduite » (Karoui Zouaoui & Hchich Hedhli, 2014 ; Nguetoum, 2017). Nous nous proposons d'interroger la notion d'innovation dans le cadre d'un programme mené en partenariat (Bizzoni-Prévieux, 2010 ; Morel & Pesle, 2020 ; Glasman, 1992 ; Pélissier, 2008 ; Pithon & al, 2008). Nous envisageons ces partenariats comme un moyen de créer de l'innovation dans le champ de l'orientation scolaire.
    Date: 2021–12–22

This nep-sbm issue is ©2022 by João Carlos Correia Leitão. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.