nep-sbm New Economics Papers
on Small Business Management
Issue of 2022‒08‒08
sixteen papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Creative-entrepreneurs and new venture performance a study of the creative class at the firm-level. By Marcos Segantini; Lori A. Dickes
  2. Research joint ventures: The role of financial constraints By Philipp Brunner; Igor Letina; Armin Schmutzler
  3. Unternehmertum, Netzwerke und Innovationen in ländlichen Räumen: Ergebnisse der Begleitforschung zum Modellvorhaben Land(auf)Schwung im Handlungsfeld „Regionale Wertschöpfung“ : Band 2 der Begleitforschung Land(auf)Schwung By Tuitjer, Gesine; Bergholz, Christian; Küpper, Patrick
  4. The Exports of Knowledge Intensive Services. A Complex Metric Approach By Leogrande, Angelo; Costantiello, Alberto; Laureti, Lucio
  5. A snapshot of characteristics and dynamics of Austrian exporting firms By Robert Stehrer; Bernhard Dachs
  6. Recurrent funding in entrepreneurship: an analysis of repeated events. By Marcos Segantini; Lori A. Dickes
  7. Accounting for the slowdown in UK innovation and productivity By Peter Goodridge; Jonathan Haskel
  8. Unpacking the process of overseas knowledge recontextualisation in returnee entrepreneurship - a learning perspective : a study of returnee entrepreneurs in Vietnam By Mai, Nhat Chi
  9. Financial access of midstream agricultural firms in Africa: Evidence from the LSMS-ISA and World Bank enterprise surveys By Ambler, Kate; de Brauw, Alan; Herskowitz, Sylvan; Pulido, Cristhian
  10. Corporate Training and Skill Gaps: Did COVID-19 Stem EU Convergence in Training Investments? By Pouliakas, Konstantinos; Wruuck, Patricia
  11. Spillover Effects of Foreign and Domestic Exporting Firms on Export Decisions of Local Manufacturing Firms: Evidence from Viet Nam By Quang Hoan Truong; Van Chung Dong
  12. Family Firms and Input Procurement: Firm-Level Evidence from Italy By Pietro De Ponti; Valeria Gattai
  13. Informal versus Formal: Microfirms' Productivity Gaps By Gutiérrez, L. H.; Rodríguez- Lesmes, P.
  14. Dynamics of couplings and their implications in inter-organizational multi-actor research and innovation projects By Svetlana Klessova; Sebastian Engell; Catherine Thomas
  15. Public capital and institutions' quality in the Italian regions By F. Aresu; E. Marrocu; R. Paci
  16. La transmisión intergeneracional en el autoempleo: El efecto de la situación financiera familiar By Gutiérrez, Antonio; Velilla, Jorge

  1. By: Marcos Segantini (Universidad ORT Uruguay. Facultad de Administración y Ciencias Sociales. Departmento de Economía); Lori A. Dickes (Clemson University)
    Abstract: Human capital has been a central topic since the beginning of entrepreneurship as a field of academic research. This paper analyzes the association of the human capital level of entrepreneurial teams on the performance of nascent projects by applying a relatively new theory of human capital. The creative class theory, widely used in the research of entrepreneurship at the regional level, is applied here for its first time at the firm level. This article's findings indicate similar results at the firm level to those found at the regional level. More creative-entrepreneur-owned startups are strongly associated with job creation, and to less extent, with projects' survival. As in regional studies, the results of this research also question the classic measures of human capital focused on entrepreneurs' formal education, but now at the firm level.
    Keywords: entrepreneurship, human capital, creative class.
    Date: 2020–12
  2. By: Philipp Brunner; Igor Letina; Armin Schmutzler
    Abstract: This paper provides a novel theory of research joint ventures for financially constrained firms. When firms choose R&D portfolios, an RJV can help to coordinate research efforts, reducing investments in duplicate projects. This can free up resources, increase the variety of pursued projects and thereby increase the probability of discovering the innovation. RJVs improve innovation outcomes when market competition is weak and external financing conditions are bad. An RJV may increase the innovation probability and nevertheless lower total R&D costs. RJVs that increase innovation tend to be profitable, but innovation-reducing RJVs also exist. Finally, we compare RJVs to innovation-enhancing mergers.
    Keywords: Innovation, research joint ventures, financial constraints, mergers, intensity of competition, licensing
    JEL: L13 L24 O31
    Date: 2022–07
  3. By: Tuitjer, Gesine; Bergholz, Christian; Küpper, Patrick
    Abstract: The pilot scheme ‚Land(auf)Schwung‘, funded by the German Federal Ministry of Food and Agricul- ture, was designed to test new approaches in the development of rural areas. 13 peripheral rural counties received between 2.25 and 2.9 million euros each in total funding between the years 2015 ii Kurzfassung und Abstract and 2019, to develop new approaches in the provision of basic services and to foster regional growth and net value creation. Deprived rural areas often face a rather low innovation potential due to a lack of knowledge infra- structure, a composition of the local economy characterized by low-tech branches, few start-ups and an overall dominance of small businesses. The regional economy in rural areas does not offer many jobs for a high-skilled workforce and low levels of productivity prevent competitive salaries for skilled labour. Against this background, the thirteen regions of this pilot scheme experimented with new ap- proaches to strengthen the regional economy. For example, small businesses from the food sector received investment funding to develop new and innovative products, to develop regional market- ing initiatives and networks and to increase the sale of regional products. Likewise, in some regions centres for technology and entrepreneurship were installed. Based on the vast landscape of funded projects in the 13 regions, this research project draws conclusions and recommendations for the development of rural areas. For example, case-studies were conducted analysing the biographical development of innovative products in small food businesses. The development of two technology centres was likewise analysed. In total, 83 interviews were conducted with various stakeholders and agents in rural development, and a survey conducted with 166 members in regional marketing initiatives (micro businesses). The research depicts the vivid innovation activities of the micro and small businesses under focus. By funding specialized machinery, which is adapted to match the needs of small and micro businesses with a niche strategy, the growth of these businesses can be supported. Regional marketing initiatives initiate local cooperation and knowledge sharing be- tween their members and can this way boost innovation in small businesses, which eventually leads to business growth. However, because local marketing initiatives come with comparable overhead for a shared logistic, the regional conditions for an efficient running of a shared logistics unit should be evaluated first. While technology centres can lower the entrance barriers to self-employment, they should always be integrated into a comprehensive regional strategy of economic develop- ment, to unlock their full potential.
    Keywords: Community/Rural/Urban Development, Financial Economics, Labor and Human Capital, Marketing, Research and Development/Tech Change/Emerging Technologies
    Date: 2022–07–12
  4. By: Leogrande, Angelo; Costantiello, Alberto; Laureti, Lucio
    Abstract: In the following article, the value of the "Knowledge Intensive Services Exports in Europe" in 36 European countries is estimated. The data were analyzed through a set of econometric models or: Poled OLS, Dynamic Panel, Panel Data with Fixed Effects, Panel Data with Random Effects, WLS. The results show that “Knowledge Intensive Services Exports” is negatively associated, among others, with "Buyer Sophistication", "Government Procurement of Advanced Technology Products", and positively associated with the following variables i.e. "Innovation Index", "Sales Impacts" and "Total Entrepreneurial Activity". Then a clusterization with k-Means algorithm was made with the Elbow method. The results show the presence of 3 clusters. A network analysis was later built and 4 complex network structures and three structures with simplified networks were detected. To predict the future trend of the variable, a comparison was made with eight different machine learning algorithms. The results show that prediction with Augmented Data-AD is more efficient than prediction with Original Data-AD with a reduction of the mean of statistical errors equal to 55,94%.
    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: 2022–06–11
  5. By: Robert Stehrer; Bernhard Dachs
    Abstract: In view of the importance of the export economy for Austria this study examines the role and characteristics of Austrian exporting firms compared with non-exporting firms. Specifically, it assesses how the share of exporting firms has developed in recent years, whether exports have become more important for firms over time and to what extent exporters have an advantage over other firms (export premium). The results show that about two third of the Austrian manufacturing firms are engaged in exporting activities and indicate that – in line with existing literature - exporting firms are larger, more productive, generate higher surpluses, invest more, and spend more on environmental protection than non-exporters. Further, the results highlight that only a small number of firms account for a large share of Austrian manufacturing exports. Finally, the results point towards a mutual positive relationship between export behaviour, productivity, and R&D expenditures.
    Keywords: export premium, firm-level analysis, productivity and exporting
    JEL: D22 F14
    Date: 2022–07
  6. By: Marcos Segantini (Universidad ORT Uruguay. Facultad de Administración y Ciencias Sociales. Departmento de Economía); Lori A. Dickes (Clemson University)
    Abstract: There is extensive evidence of differential factors in accessing external capital for entrepreneurs. The effects of receiving monitored external funds on the survival probability of entrepreneurial projects have also been well-described by specialized literature. However, it has not yet been analyzed how entrepreneurs acquire different kinds of funds at different stages during the entrepreneurial process and their relationships with entrepreneurship success. This paper aims to fill these gaps by analyzing the relationship between a broad set of entrepreneurial tangible and intangible assets and their impact on receiving external funding several times during new ventures' gestation. Receiving external funding is a critical factor for entrepreneurial success. This article extends from the Matthew effect theory, explaining how initial advantages lead to further cumulative advantages in external funding access.
    Keywords: entrepreuneurship, external funding, event history.
    Date: 2020–12
  7. By: Peter Goodridge (x The Productivity Institute, Alliance Manchester Business School); Jonathan Haskel (Bank of England; Imperial College Business School; CEPR and IZA)
    Keywords: productivity, growth, slowdown, innovation, knowledge, intangibles, investment, capital, TFP
    Date: 2022–06
  8. By: Mai, Nhat Chi
    Abstract: International entrepreneurship research has recently been directed towards returnee entrepreneurship, a phenomenon in which individuals who acquire knowledge in overseas developed markets return to start businesses in their home emerging markets. Returnee entrepreneurs serve as knowledge brokers in their home country. However, research has yet to explain how they transform their overseas knowledge, which is contextually bound, into entrepreneurial outcomes – a process termed overseas knowledge recontextualisation. The thesis positions itself at the intersection of returnee entrepreneurship, international knowledge transfer, and entrepreneurial learning, and explores the phenomenon from both a learning and a socio-cognitive perspective. It approaches the recontextualisation process at an individual entrepreneurial level to answer three research questions: (1) What constitutes the knowledge brought back by returnee entrepreneurs?; (2) What is the process by which returnee entrepreneurs recontextualise their overseas knowledge?; and (3) How do returnee entrepreneurs learn to facilitate the process of overseas knowledge recontexualisation? A qualitative exploratory approach was employed comprising 14 in-depth cases of returnee entrepreneurs in three cities in Vietnam - an emerging economy in South East Asia where returnee entrepreneurship has become increasingly prevalent. To ensure the rigour and validity of the research, multiple data sources were used for triangulation. Given the dynamics of the recontextualisation process and the aim to build a data driven theory, the analysis was underpinned by process thinking and grounded theory principles. The thesis contributes to three distinctive strands of literature. First, it extends the returnee entrepreneurship literature by unpacking the holistic process model of knowledge recontextualisation which involves sensemaking, experimenting, and integrating knowledge, each of which is facilitated by the respective learning mechanisms and intertwined with entrepreneurial outcomes. Second, it adds new understanding at an individual entrepreneurial level to international knowledge transfer literature by highlighting the idiosyncratic role of returnees as simultaneous transferors and receivers of knowledge. Specifically, it elucidates mixed-embedded knowledge structures of returnees and identifies key recontextualisation practices pertaining to returnee entrepreneurship. Third, it adds on entrepreneurial learning literature by unpacking the complex learning mechanisms that facilitate the process of recontextualisation. Finally, it proposes that, throughout the recontextualisation process, returnees not only enact the overseas knowledge per se, they also transform themselves and influence the home country through cognitive, social, psychological and behavioural processes which denote the micro-foundations of the entrepreneurial dynamic capability displayed by returnees.
    Date: 2020–07–06
  9. By: Ambler, Kate; de Brauw, Alan; Herskowitz, Sylvan; Pulido, Cristhian
    Abstract: The midstream of agricultural value chains are rapidly changing in response to shifting domestic and international demand. While the performance of this segment may have important implications for the entire sector, evidence on midstream actors and their financial needs remain thin. We use data from both the Living Standards Measurement Study – Integrated Surveys on Agriculture and the World Bank Enterprise Survey from seven African countries to identify these agricultural midstream firms and assess their access to formal credit, comparing them to other, non-agricultural midstream firms. We find that the identified agricultural midstream firms are larger and more productive than their non-agricultural midstream counterparts and are less likely to report barriers to accessing credit, though overall access levels remain low. Among agricultural midstream firms, those owned or managed by women are more likely to report barriers to accessing credit. Taken together, these findings help build our understanding about the financial needs of micro-, small-, and medium-size enterprises in the agricultural midstream.
    Keywords: AFRICA; AFRICA SOUTH OF SAHARA; CENTRAL AFRICA; EAST AFRICA; NORTH AFRICA; SOUTHERN AFRICA; WEST AFRICA; financial institutions; agro-industry; World Bank; surveys; value chains; demand; credit; enterprises; small and medium enterprises; finance
    Date: 2022
  10. By: Pouliakas, Konstantinos (European Centre for the Development of Vocational Training (Cedefop)); Wruuck, Patricia (European Investment Bank)
    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.
    Keywords: training, skill gaps, investment, COVID-19, panel data, EIB Investment survey
    JEL: J24 M53 C23 D22 E22
    Date: 2022–06
  11. By: Quang Hoan Truong (Institute for Southeast Asian Studies, Vietnam Academy of Social Sciences (VASS)); Van Chung Dong (Institute for Southeast Asian Studies, Vietnam Academy of Social Sciences (VASS))
    Abstract: Our paper investigates the spillover effects generated by foreign and domestic exporting firms on export decisions of local manufacturing firms in Viet Nam – a developing economy – over 2010–18. In the export participation, we find positive spillover effects from foreign and domestic exporting firms on domestic firms’ export participation, while negative spillover effects are detected with the backward channel. Estimation shows the positive forward spillover effects from domestic exporting firms on domestic counterparts’ export participation; on the contrary, the forward spillover effects generated by foreign direct investment exporting firms are negative. In addition, we discover the opposite spillover effects from foreign direct investment and domestic exporting firms on the probability of export exit of domestic firms, with the negative impact under the horizontal channel and the positive one under the backward channel. There are also effects of firms’ characteristics such as labour productivity, wage, firm size, and capital intensity on the export participation and export exit of domestic firms. From empirical evidence, the paper provides policy implications to strengthen linkages between foreign and domestic exporting firms with local firms in Viet Nam.
    Keywords: Spillover Effects; export status; foreign and domestic exporting firms; Viet Nam
    JEL: F15 F23
    Date: 2021–12–15
  12. By: Pietro De Ponti; Valeria Gattai
    Abstract: This paper empirically analyses input procurement using Italian firm-level data. Combining the international economics literature on global sourcing with the family business and international business literature on family firms (FFs)’ internationalization, we build a comprehensive framework in which sourcing is shaped by location (domestic versus foreign sourcing) and ownership (integration versus outsourcing) decisions. Relying on a new firm-level, cross-sectional dataset on a large and stratified sample of Italian manufacturing firms, we address the relationship between global sourcing and firm-level features, such as family presence in ownership and control, productivity, and input specificity. Our probit and multinomial probit estimates suggest that the FF status is negatively related to foreign sourcing, and it plays little role in orienting firms’ ownership decision; moreover, firms’ productivity fosters foreign sourcing, and reliance on specific inputs favours integration. Our study contributes to the International Economics literature on global sourcing by studying factors other than productivity and input specificity that affect input procurement; moreover, it contributes to the Family Business and International Business literature on FFs’ internationalization by taking a supply-side perspective and investigating sourcing through the interplay between location and ownership choices.
    Keywords: productivity, input specificity, family firms, input procurement, sourcing
    JEL: F23 D23 C35 L24
    Date: 2022–06
  13. By: Gutiérrez, L. H.; Rodríguez- Lesmes, P.
    Abstract: Although evidence of a productivity gap between formal and informal firms is observed, this 'formality premium' is less explored for microfirms. The informality of microfirms is a central concern in low- and middle-income countries, and a crucial demand is noted for designing policies addressing this issue because they are the bulk of the economic tissue. We fill this void by estimating a productivity premium for the case of Colombia, considering two margins of informality: extensive, referring to business registration, and the intensive, which includes as well labor regulations. We use a unique longitudinal dataset from the Microenterprise Survey by the Colombian Statistics Department, which follows approximately 39,000 micro-establishments with up to 9 employees during 2012–2016. We utilize the transition into and out of formality to estimate the productivity premium (yearly sales per worker) between informal and formal firms, thereby exploring differences concerning initial productivity. We use a fixed-effects quantile regression to explore differential effects along the productivity distribution. We find evidence of a premium for both the extensive (20%) and intensive margins (6%), a gap that is decreasing along with the firm's productivity. The evidence of these premiums is related to two growth strategies of firms: an increase in capital investments for the extensive margin and an increase in human capital quality for the intensive margin. Further, we find the premium is notoriously wider for young firms (less than three years in the business) with a steeper gradient. We do not find systematic differences across sectors, gender of the owners, and motivation. These results are new evidence that supports the existence of a premium and the transition into and out of formality of microfirms in middleincome countries. Moreover, they suggest that microfirms' formalization and growth policies should be oriented toward promoting and enhancing formality's benefits.
    Keywords: Microfirms, firm informality, productivity premium, Colombia
    Date: 2022–07–05
  14. By: Svetlana Klessova (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (1965 - 2019) - COMUE UCA - COMUE Université Côte d'Azur (2015-2019) - CNRS - Centre National de la Recherche Scientifique - UCA - Université Côte d'Azur); Sebastian Engell (TU - Technische Universität Dortmund [Dortmund]); Catherine Thomas (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (1965 - 2019) - COMUE UCA - COMUE Université Côte d'Azur (2015-2019) - CNRS - Centre National de la Recherche Scientifique - UCA - Université Côte d'Azur)
    Abstract: Publicly funded multi-actor research, development and innovation projects are a setting where a network of multiple organizational actors form a temporary consortium to jointly create new knowledge and marketupstream innovations. The couplings between the organizational actors and subgroups of these actors represent joint work that leads to flows of knowledge and flows of activities. The dynamics of the couplings in this empirical context and their implications are not well understood yet. Using an inductive comparative multiple case study of projects funded in European Research and Innovation Programmes, we investigated 4 projects with 54 organizational actors, which produced 50 innovations. The evolutions of all couplings went through the same phases, although the temporality of the phases differed. We identified eight types of evolutions of couplings and their underlying generative mechanisms. These evolutions led to different, mostly negative implications on the planned collaborative innovations. Particularly, we observed a systematic degradation of the couplings that were planned to connect subgroups of organizational actors. Over time, the projects became less collaborative than planned, and they have a tendency to fragment into isolated activities by subgroups of actors. Based on these findings, we propose an emerging process model which helps to better understand how and why the couplings evolve in multi-actor RDI projects.
    Keywords: Multi-actor projects,Research,Development,Collaborative innovation,Process,Evolution,Tie,Module,Interface,Output,Qualitative research,Coupling,Interdependency,Collaboration
    Date: 2022
  15. By: F. Aresu; E. Marrocu; R. Paci
    Abstract: This paper investigates the role played by public capital on the production level of Italian regions by specifically accounting for the quality of institutions. Our analysis, carried out over the period 2000-2019, benefits from the use of a rich dataset on public expenditures which allows us to build the regional series of public capital stock by distinguishing among public institutions in charge of the investments and sectors of intervention. While controlling for several contextual variables (human capital, social capital, technological capital, population density), main results show that public capital has a positive and significant effect on production. Most interestingly, looking at the Mezzogiorno s regions, public capital carried out by local institutions turns out to have a lower impact than in the rest of the Italian regions. On the other hand, central bodies in the South exhibit an impact higher than the average. Moreover, institutions quality exhibits a positive and significant effect on regional economic performance. These results cast serious doubts about the actual capacity of the local Southern administrations to effectively manage the enormous resources of the National Recovery and Resilience Plan and of the new European Union cohesion framework 2021-2027. Our results are also relevant for other European regions that, featuring structural traits similar to Southern Italian regions, are expected to face the same difficulties in managing public funding.
    Keywords: Public capital stock; Productivity; Italian regions; Institutions' Quality
    Date: 2022
  16. By: Gutiérrez, Antonio; Velilla, Jorge
    Abstract: Existing research has concentrated on the determinants of entrepreneurship and the behaviours that give rise to it. There is a great deal of evidence, which points to intergenerational transmission as one of the fundamental reasons behind the decision of becoming an entrepreneur. However, there is no consensus on the channels of transmission. This Master Thesis empirically analyses the effect of the family financial situation on the intergenerational transmission of self-employment. Using data from the 2019 European Union Statistics on Income and Living Conditions (EU-SILC) we report on the existence of a statistically significant intergenerational correlation of self-employment. In this sense, the results show the relevance of family financial resources on the intergenerational correlations of self-employment.
    Keywords: Self-employment, Intergenerational transmission, Financial status, EU-SILC data, Europe
    JEL: J23 J62 O52
    Date: 2022–06

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