nep-sbm New Economics Papers
on Small Business Management
Issue of 2023‒01‒30
twelve papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  2. Mission-Oriented Policies and the “Entrepreneurial State” at Work: An Agent-Based Exploration By Giovanni Dosi; Francesco Lamperti; Mariana Mazzucato; Mauro Napoletano; Andrea Roventini
  3. Corruption and Firm Growth: Evidence from around the World By Raymond Fisman; Sergei Guriev; Carolin Ioramashvili; Alexander Plekhanov
  4. Managing religion at work: a necessary distinction between words and deeds. A multiple case study of the postures facing religious expression in French organizations By Hugo Gaillard
  5. Firm size distribution and informality effects of a revenue-dependent tax policy By Alvarez, Bruna; Pessoa, João Paulo; Souza, André Portela
  6. Foreign Direct Investment (FDI) Spillovers in Visegrad Countries By Eristian Wibisono; ;
  7. Gender Diversity in Firms By Ghazala Azmat; Anne Boring
  8. Cultural Roots of Entrepreneurship By Kleinhempel, Johannes; Klasing, Mariko; Beugelsdijk, Sjoerd
  9. Effort and Selection Effects of Performance Pay in Knowledge Creation By Erina Ytsma
  10. The Impact of the Pharmaceutical Industry on the Innovation Performance of European Countries By Szabolcs Nagy; Sergey U. Chernikov; Ekaterina Degtereva
  11. The cyclicality of income distribution and innovation induced growth By Uluc Aysun; Sami Alpanda
  12. Make‐or‐buy decisions for industrial additive manufacturing By Friedrich, Anne; Lange, Anne; Elbert, Ralf

  1. By: Francesco Aiello (Department of Economics, Statistics and Finance 'Giovanni Anania', University of Calabria, Rende (Italy)); Lidia mannarino (Department of Economics, Statistics and Finance 'Giovanni Anania', University of Calabria, Rende (Italy)); Valeria Pupo (Department of Economics, Statistics and Finance 'Giovanni Anania', University of Calabria, Rende (Italy))
    Abstract: This study revises the moderating effect of size and age on the relationship between family ownership and innovation. The research hypotheses are tested on a large sample of Italian firms observed over the 2010–2017 period, using a zero-inflated non-linear count model. Results from a three-way interaction approach suggest that the patenting gap between family firms (FFs) and non-family firms is sensitive to size and age. Compared to non-FFs, FFs underperform when they are small and young or large and old, while there are no substantial differences for other types of firms. Much of the evidence is driven by the founder effect which differs over the firm life.
    Keywords: innovation, patent, family firms, size, age
    JEL: D22 L25 L60 O30
    Date: 2023–01
  2. By: Giovanni Dosi (LEM - Laboratory of Economics and Management - SSSUP - Scuola Universitaria Superiore Sant'Anna [Pisa]); Francesco Lamperti (UP1 - Université Paris 1 Panthéon-Sorbonne); Mariana Mazzucato; Mauro Napoletano (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po); Andrea Roventini
    Abstract: We study the impact of alternative innovation policies on the short- and long-run performance of the economy, as well as on public finances, extending the Schumpeter meeting Keynes agent-based model (Dosi et al., 2010). In particular, we consider market-based innovation policies such as R&D subsidies to firms, tax discount on investment, and direct policies akin to the "Entrepreneurial State" (Mazzucato, 2013), involving the creation of public research oriented firms diffusing technologies along specific trajectories, and funding a Public Research Lab conducting basic research to achieve radical innovations that enlarge the technological opportunities of the economy. Simu- lation results show that all policies improve productivity and GDP growth, but the best outcomes are achieved by active discretionary State policies, which are also able to crowd-in private investment and have positive hysteresis effects on growth dynamics. For the same size of public resources allocated to market-based interventions, "Mission" innovation policies deliver significantly better aggregate performance if the government is patient enough and willing to bear the intrinsic risks related to innovative activities.
    Keywords: Innovation policy, mission-oriented R&D, entrepreneurial state, agent-based modelling
    Date: 2021–01–01
  3. By: Raymond Fisman (BU - Boston University [Boston]); Sergei Guriev (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique); Carolin Ioramashvili (LSE - London School of Economics and Political Science); Alexander Plekhanov (EBRD - European Bank for Reconstruction and Development - EBRD)
    Abstract: We empirically investigate the relationship between corruption and growth using a firm-level data set that is unique in scale, covering almost 88, 000 firms across 141 economies in 2006-2020, with wide-ranging corruption experiences. The scale and detail of our data allow us to explore the corruption-growth relationship at a very local level, within industries in a relatively narrow geography. We report three empirical regularities. First, firms that make zero informal payments tend to grow slower than bribers. Second, this result is driven by non-bribers in high-corruption countries. Third, among bribers growth is decreasing in the amount of informal payments in both high- and low-corruption countries. We suggest that this set of results may be reconciled with a simple model in which endogenously determined higher bribe rates lead to lower growth, while non-bribers are often excluded entirely from growth opportunities in high-corruption settings.
    Keywords: Corruption, Firm growth, Enterprise surveys
    Date: 2021–04–01
  4. By: Hugo Gaillard (GAINS - Groupe d'Analyse des Itinéraires et des Niveaux Salariaux - UM - Le Mans Université)
    Abstract: Purpose : Religious expression at work (REW) has a unique place in France. The authors studied the perception of the postures of four organizations in the face of this phenomenon, focusing on the gap between official posture and the posture applied by managers. Design/methodology/approach : Using a qualitative approach, the authors conducted semi-structured interviews (40), observation periods and documentary analysis within four organizations. This multiple embedded case study was undertaken in four different firms in France: an international private firm, a public organization, and two small- and medium-sized enterprises (SMEs) with original models of REW management. Findings : A distinction between aligned and non-aligned postures emerged. There was a lack of alignment in only two of the four organizations, and this alignment concerned only two units of analysis: prayer on break and wearing religious symbols. Several extrinsic factors were identified in this lack of alignment between the official posture and the posture actually applied by managers: the form of REW, the religion concerned and whether it had minority status in the country, the degree of clarity of the official posture, the degree of formalization of the official posture, the size and scope of the company, the degree of awareness of managers and their teams, the degree of involvement of leaders in the definition and implementation of the posture, and the purpose of the official posture. Research limitations/implications : This research provides a sensitive understanding of religious expression at work and shows that alignment is sought specifically for each form of REW. The distinction between official posture and applied posture is highlighted through the study of perceptions. In addition, this study enables the identification of factors that influence the alignment of official and operational postures. Practical implications : These results call for clarity of the official posture and for it to be defended by leaders, provision of meaning to postures by raising awareness among intermediate hierarchical lines, understanding of the applicable legal framework to transpose it to the local level, and analysis of unaligned forms of REW to build a strong, shared posture. Originality/value : This study, which was carried out within a specific French context, concerns areas that have received little attention or have not been studied at all to date, such as REW in SMEs or in the public sector, and demonstrates for the first time the distinction between official postures and effective postures.
    Date: 2022–04–22
  5. By: Alvarez, Bruna; Pessoa, João Paulo; Souza, André Portela
    Abstract: We study how revenue-dependent tax policies affect wages, productivity, and welfare in an economy where formal and informal firms co-exist. We use a dynamic entrepreneurial choice model and bring it to the data to assess the effects of the Brazilian Simples, a simplified tax scheme that reduces the tax burden of small- and medium-sized firms. We find that the Simples increases firm formalization, raising the demand for labor and benefiting workers. Meanwhile, tax collection falls as some formal firms withhold production to pay lower taxes. Overall, productivity (weighted by firm size), per capita production, and welfare fall. Alternative policies that reduce the tax gap between small and large firms perform better in welfare and tax collection terms.
    Date: 2022–12–19
  6. By: Eristian Wibisono; ;
    Abstract: Macroeconomic and microeconomic literature has raised the impact of FDI knowledge and technology spillovers in the host economy. However, there is still a research gap in addressing this topic in the knowledge economy. Based on a comprehensive literature review, this paper demonstrates the performance of FDI spillovers and their impact on the productivity of domestic firms in emerging and transition economies in Europe. Poland is the largest country in the Visegrad group but provides limited studies on FDI experience. The paper then shows the geographic distribution of FDI across Polish regions, where the western and eastern regions appear very different. There is a significant positive impact of FDI presence on the productivity of foreign-affiliated domestic firms. Unfortunately, the presence of FDI in these regions is not significant enough to induce knowledge and technology spillovers to improve firm productivity. The effectiveness of FDI knowledge and technology in boosting the productivity of the local economy may be worth questioning. Therefore, comparable spatial studies are encouraged to be conducted in future research with a more complete and robust data structure which is recognized as a limitation of this study.
    Keywords: FDI; knowledge and technology; spillovers; Visegrad; Poland; spatial dependencies
    JEL: B27 E22 O52 R11 R12
    Date: 2023–01
  7. By: Ghazala Azmat (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, CEP - LSE - Centre for Economic Performance - LSE - London School of Economics and Political Science); Anne Boring (Erasmus University Rotterdam, LIEPP - Laboratoire interdisciplinaire d'évaluation des politiques publiques (Sciences Po) - Sciences Po - Sciences Po)
    Abstract: This paper explores the recent efforts by the corporate world and public policy to increase the number of women in leadership positions in the workplace. We review and empirically evaluate the ‘business case' for gender equality, showing some evidence in favour of it. Despite the evidence and growing support, progress towards more diversity in leadership positions has been slow. We study the importance of supply-side constraints, as well as the main diversity policies (gender quotas, mentoring and network programmes, diversity training to change firm culture, and family friendly policies) that have been implemented. We focus on the effectiveness of these policies, their shortcomings, as well as potential future steps that could help guide policy.
    Date: 2021–01–30
  8. By: Kleinhempel, Johannes; Klasing, Mariko; Beugelsdijk, Sjoerd
    Abstract: Does national culture influence entrepreneurship? Given that entrepreneurship and the economic, formal institutional, and cultural characteristics of nations are deeply intertwined and co-vary, it is difficult to isolate the effect of culture on entrepreneurship. In this study, we examine the self-employment choices of second-generation immigrants who were born, educated, and currently live in one country, but were raised by parents stemming from another country. We argue that entrepreneurship is influenced by durable, portable, and intergenerationally transmitted cultural imprints such that second-generation immigrants are more likely to become entrepreneurs if their parents originate from countries characterized by a strong entrepreneurial culture. Our multilevel analysis of two independent samples –65, 323 second-generation immigrants of 52 different ancestries who were born, raised, and live in the United States and 4, 165 second-generation immigrants of 31 ancestries in Europe– shows that entrepreneurial culture is positively associated with the likelihood that individuals are entrepreneurs. Our results are robust to alternative non-cultural explanations, such as differences in resource holdings, labor market discrimination, and direct parent-child linkages. Overall, our study highlights the durability, portability, and intergenerational transmission of entrepreneurial culture as well as the profound impact of national culture on entrepreneurship.
    Keywords: Entrepreneurship, National culture, Cross-Cultural Studies
    JEL: A13 J24 J61 L26 M13 M16 O57 Z10 Z13
    Date: 2022–12
  9. By: Erina Ytsma
    Abstract: The effects of performance pay in routine, easy to measure tasks are well-documented, but they are much less understood in knowledge creation. This paper studies the effects of explicit and implicit, career concerns incentives common in knowledge work in a multitasking model, and estimates their causal effort and selection effects in knowledge creation by exploiting the introduction of performance pay in German academia as a natural experiment. Using data encompassing the universe of German academics, I find that performance incentives attract more productive academics, and research quantity increases by 14 to 18%, but without increasing output of the highest quality. The latter is explained by response heterogeneity. The quantity effort response is strongest for low productivity academics, who do not produce high quality work. High ability academics also produce more publications, but not more of the highest quality. Medium ability academics do not increase quantity but produce fewer high-quality papers.
    Keywords: performance pay, knowledge creation, career concerns, effort and selection effects, multitasking
    JEL: J33 M52 O31
    Date: 2022
  10. By: Szabolcs Nagy; Sergey U. Chernikov; Ekaterina Degtereva
    Abstract: There are significant differences in innovation performance between countries. Additionally, the pharmaceutical sector is stronger in some countries than in others. This suggests that the development of the pharmaceutical industry can influence a country's innovation performance. Using the Global Innovation Index and selected performance measures of the pharmaceutical sector, this study examines how the pharmaceutical sector influences the innovation performance of countries from the European context. The dataset of 27 European countries was analysed using simple, and multiple linear regressions and Pearson correlation. Our findings show that only three indicators of the pharmaceutical industry, more precisely pharmaceutical Research and Development, pharmaceutical exports, and pharmaceutical employment explain the innovation performance of a country largely. Pharmaceutical Research and Development and exports have a significant positive impact on a country's innovation performance, whereas employment in the pharmaceutical industry has a slightly negative impact. Additionally, global innovation performance has been found to positively influence life expectancy. We further outline the implications and possible policy directions based on these findings.
    Date: 2022–12
  11. By: Uluc Aysun (University of Central Florida, Orlando, FL); Sami Alpanda (University of Central Florida, Orlando, FL)
    Abstract: This paper demonstrates the countercyclicality of income inequality. Inferences are drawn from a unique model that combines a new Keynesian framework with an endogenous growth mechanism that features a labor-augmenting technology. The income disparity is between high-skill workers who service firms’ R&D activities and low-skill workers who contribute to output via a standard neoclassical function. Successful R&D activities increase firms’ knowledge stock that in turn augments low-skill workers’ efficiency and the trend growth rate of the economy. Both a reasonable calibration of the model and a Bayesian estimation exercise demonstrate that the share of high-skill workers’ income is countercyclical and that demand and price shocks are the drivers of this cyclicality. The reason is that the marginal product of high-skill workers is larger in magnitude and this renders the demand for their services less sensitive to shocks. In particular, firms require relatively smaller adjustments in this type of labor to match the changes in the demand for their goods. The disparity in demand for the two types of labor then implies that the high-skill/low-skill wage gap increases during recessions and decreases during expansions.
    Keywords: R&D, endogenous growth, DSGE, income distribution, Bayesian estimation.
    JEL: E24 E32 O30 O33
    Date: 2023–01
  12. By: Friedrich, Anne; Lange, Anne; Elbert, Ralf
    Abstract: Much of the potential of industrial additive manufacturing (AM) is said to lie in the digital specification of components that can be transmitted seamlessly and unambiguously to partners fostering flexible outsourcing. In industry, we observe nuanced AM supply chain governance structures that result from make‐or‐buy decisions, with a tendency to implement AM in‐house. Thus, there is a discrepancy between what is discussed in the literature and implemented in practice. We apply a multiple‐case study approach to investigate why and how AM impacts the make‐or‐buy decision of manufacturing firms. We identify four decision profiles demonstrating the spectrum of specific governance structures and develop a framework to explain the underlying rationales. We find strong arguments for in‐house AM including firms’ perceived need to protect their digitally encapsulated intellectual property, reevaluation of their core competencies, commitment to internal learning, and senior management's enthusiasm for AM. By using transaction cost economics and the resource‐based view, we contribute to the understanding of how arguments of these general theories are modified by the digital and emerging traits of AM. We reveal contradicting guidance in the theories’ argumentation for the case of AM and provide managers a clear perspective on alternative strategies for their AM implementation process.
    Date: 2022

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