nep-sbm New Economics Papers
on Small Business Management
Issue of 2023‒04‒10
fourteen papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Overcoming Financial Challenges for Small and Medium Enterprises: Strategies for Entrepreneurial Success By Amoa-Gyarteng, Karikari
  2. Technical Founders, Digital Transformation and Corporate Technological Innovation: Empirical Evidence from Listed Companies in China’s STAR Market By Zhi-Guang Li; Yanrui Wu; Yao-Kuang Li
  3. SMEs’ Open Innovation: Applying a Barrier Approach By Sandra Dubouloz; Rachel Bocquet; Catherine Equey Balzli; Elodie Gardet; Romain Gandia
  4. Is acquisition-FDI during an economic crisis detrimental for domestic innovation? By Maria Garcia-Vega; Apoorva Gupta; Richard Kneller
  5. Total Factor Productivity: Exploring firms’ dynamics and heterogeneity over the business cycle By Roman Fossati; Heiko Rachinger
  6. Open Innovation and Coopetition By Sea Matilda Bez; Frédéric Le Roy
  7. The Impact of University Patent Ownership on Innovation and Commercialization By Jun Wang; Yi Qian
  8. The Effects of Financial Incentives on Small and Medium-sized Enterprises' Demand for Workers with Disabilities: Evidence from changes in Japan's employment quota system By MATSUMOTO Kodai; OKUMURA Yota; MORIMOTO Atsushi; YUGAMI Kazufumi
  9. Tackling the UK's Regional Economic Inequality: Binding Constraints and Avenues for Policy Intervention By Stansbury, Anna; Turner, Dan; Balls, Ed
  10. Digitalisation and sustainability strategies at the firm level By Horbach, Jens
  11. Growth, Intellectual Capital, Financial Performance And Firm Value : Evidence From Indonesia Automotive Firms By Putri, Indah Ayu Johanda
  12. Creation, destruction and reallocation of jobs in italian firms: an analysis based on administrative data By Luca Citino; Edoardo Di Porto; Andrea Linarello; Francesca Lotti; Enrico Sette
  13. A portrait of AI adopters across countries: Firm characteristics, assets’ complementarities and productivity By Flavio Calvino; Luca Fontanelli
  14. On the direct and indirect effects of ICT on SMEs export performance. Evidence from Colombian manufacturing By Andrés Mauricio Gomez-Sanchez; Juan A. Máñez Castillejo; Juan Alberto Sanchis-Llopis

  1. By: Amoa-Gyarteng, Karikari
    Abstract: The article discusses the challenges faced by small and medium-sized enterprises (SMEs) in obtaining finance, which is a critical issue for their growth and profitability. It highlights that SMEs often lack collateral and financial history, which makes it difficult for them to obtain loans from traditional financial institutions. The article then explores two approaches to entrepreneurship, Effectuation and Bricolage, which focus on internal resourcefulness and making the most of what is available, regardless of long-term returns. The paper lists ten strategies that entrepreneurs can adopt including embracing affordability logic, engaging in networking and collaboration among others. By implementing these strategies, SMEs can overcome funding challenges and achieve sustainable growth.
    Keywords: Effectuation, Bricolage, SMEs, Financial Challenges, Strategies
    Date: 2023
  2. By: Zhi-Guang Li (School of Management, Hefei University of Technology, Hefei, China); Yanrui Wu (Business School, The University of Western Australia); Yao-Kuang Li (School of Management, Hefei University of Technology, Hefei, China)
    Abstract: Technology entrepreneurship and corporate innovation are important for the development of indigenous innovation. In the digital age, founders are subject to fundamental changes in their strategy choices, which in turn affect corporate innovation performance. This paper aims to explore the strategic choices adopted by technical founders of listed companies in China’s STAR market to reap the rewards of innovation in a digital context. Based on the annual reports of 124 listed companies in China’s STAR Market, this paper applies machine learning methods to quantify digital transformation of enterprises, and empirically analyzes the relationship between technical founders and innovation performance by constructing a moderated mediating model. Our results show that companies with technical founders are more likely to adopt digital transformation and thus show better innovation performance. In terms of heterogeneity, the empirical results demonstrate that firms with technical founders show better performance in digital transformation, followed in turn by those with business founders and academic founders. Both the positive relationship between enterprise digital transformation and innovation performance and the mediating effect of digital transformation are positively moderated by venture capital or private equity support. The findings reveal the microscopic mechanism of the role of technology-based founders on corporate innovation performance and hence have practical implications for promoting corporate digital transformation and enhancing firm technological innovation.
    Keywords: Technical founder; Technological Innovation; Technology entrepreneurship; Digital transformation; Innovation performance; STAR Market
    Date: 2023
  3. By: Sandra Dubouloz (IREGE - Institut de Recherche en Gestion et en Economie - USMB [Université de Savoie] [Université de Chambéry] - Université Savoie Mont Blanc); Rachel Bocquet (IREGE - Institut de Recherche en Gestion et en Economie - USMB [Université de Savoie] [Université de Chambéry] - Université Savoie Mont Blanc); Catherine Equey Balzli (HEG - Haute Ecole de Gestion de Genève); Elodie Gardet (IREGE - Institut de Recherche en Gestion et en Economie - USMB [Université de Savoie] [Université de Chambéry] - Université Savoie Mont Blanc); Romain Gandia (IREGE - Institut de Recherche en Gestion et en Economie - USMB [Université de Savoie] [Université de Chambéry] - Université Savoie Mont Blanc)
    Abstract: This article identifies barriers that small and medium-sized enterprises (SMEs) encounter when they openly innovate, according to the open innovation (OI) mode used (inbound, outbound, coupled). A qualitative analysis—involving seven case studies of SMEs active in digital (high-tech) or social economy (low-tech) sectors—reveals that they face more internal than external OI barriers. Overall, the nature of the barriers does not vary across OI modes, but their intensity does. With regard to external barriers, the results reveal a "tribe syndrome, " such that SMEs resist opening up to other firms that do not share the same values.
    Keywords: open innovation (OI), OI barriers, SMEs, digital economy, social economy, tribe syndrome
    Date: 2021–11
  4. By: Maria Garcia-Vega; Apoorva Gupta; Richard Kneller
    Abstract: This paper examines how acquisition-FDI during a financial crisis, or fire-sale FDI, affects the R&D investments of target firms. We compare these effects with acquisitions that occur during periods of strong economic growth. Using a panel of Spanish firms from 2004 to 2014, we find that irrespective of when in the business cycle the acquisition occurs, the best domestic firms are cherry-picked by foreign multinationals. Using propensity score matching and difference-in-difference regressions, we find that firms acquired during crises experience smaller declines in domestic R&D than firms acquired during periods of robust growth. To explain why fire-sale FDI does not result in large declines in R&D in target firms, we rely on the macroeconomic literature on the opportunity cost of R&D over the business cycle. Consistent with this theory, we find that firms acquired during crises search for new markets and technologies by becoming more exploratory in their innovation than firms acquired during non-crisis periods.
    Keywords: foreign acquisition; recession; innovation; business cycle
    Date: 2023
  5. By: Roman Fossati; Heiko Rachinger
    Keywords: Total factor productivity, heterogeneity, entry and exit, firm and industry level productivity, productivity decomposition
    JEL: L16 L60 O30 O47
    Date: 2021–11
  6. By: Sea Matilda Bez (UM - Université de Montpellier, Labex Entreprendre - UM - Université de Montpellier, MRM - Montpellier Research in Management - UM1 - Université Montpellier 1 - UPVM - Université Paul-Valéry - Montpellier 3 - UM2 - Université Montpellier 2 - Sciences et Techniques - UPVD - Université de Perpignan Via Domitia - Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School); Frédéric Le Roy
    Abstract: While the open innovation literature has always acknowledged the competitor as a source of innovative knowledge — i.e. to increase the breadth of open innovation practices — competitors have been relatively neglected relative to other sources such as universities, suppliers, customers, and employees. Growing research in open innovation includes more and more of this counter-intuitive partner and acknowledges that the drivers and management of the open innovation practice with competitors are specific relative to the one with a non-competitive partner. In parallel and independently from the open innovation literature, the research on coopetition and coopetitive innovation has grown and explored when, why, and how a competitor is a relevant partner for innovation. These frameworks develop by the coopetition literature brought into the open innovation research generate new insights and a whole research agenda. The main one is: coopetitive open innovation defined as open innovation with competitors embracing a "coopetitive mindset" and specific managerial principles (i.e. cooperation and competition should be simultaneously pursued and the competition dimension should not be reduced).
    Keywords: open innovation, coopetition, competitors, co-creation, coopetition mindset
    Date: 2023–11–08
  7. By: Jun Wang; Yi Qian
    Abstract: This paper contributes to the literature on innovation policies and institutional theory on conditions for effective institutional changes. The "three rights" reform of 26 universities and the mixed ownership reform of Southwest Jiaotong University are important explorations made by China in recent years to promote innovations and the commercialization of patents in universities. The two reforms have adopted different models in the allocation of university patent ownership. The former completely allocated the patent ownership to universities, while the latter allocated 70% of the patent ownership to the inventors. Based on Chinese patent data and university statistical data, we empirically test the effects of these two university-patent ownership allocation models on innovations and the commercialization of patents. We find that the institutional environment caused unexpected effects in both reform models. The "three rights" reform has a significant impact on patent-licensing in 26 universities. The mixed ownership reform has significantly increased the number of patent transfers and patent applications of Southwest Jiaotong University, yet has tilted R&D toward experimental research with relatively low creativity. The findings yield broader implications for organization and innovation.
    JEL: K11 O30 O32 O38
    Date: 2023–03
  8. By: MATSUMOTO Kodai; OKUMURA Yota; MORIMOTO Atsushi; YUGAMI Kazufumi
    Abstract: This study evaluates whether a levy–grant system for disability employment promotes employment in small and medium-sized enterprises using administrative data recording the firms’ employment of people with disabilities by law. We employ a 2015 policy change in Japan regarding the size of firms subject to the levy–grant system as a natural experiment and use the difference-in-differences method to examine the effect of the change. The results reveal several important findings. First, the policy change generally promotes the employment of people with disabilities in small and medium-sized enterprises in Japan. Second, we observe that firms originally employing workers with disabilities increase their number, while firms that did not originally employ any workers with disabilities start to hire them. Third, the treatment effects appear even before the policy implementation, indicating that prior announcements encouraged firms to secure people with disabilities with the appropriate skills for their firms at an early period. Fourth, a levy imposed for not achieving the legal employment rate is more effective than a grant paid for achieving the rate. Finally, we confirm the heterogeneity in policy effects by region and industry.
    Date: 2023–03
  9. By: Stansbury, Anna; Turner, Dan; Balls, Ed
    Abstract: The UK is one of the most regionally unequal industrialised economies. In this paper, we analyze the UK’s regional economic inequality from the perspective of productivity disparities between large regions, focusing on the gap between London/South East vs the rest. We look at four important economic inputs – education, infrastructure, innovation, and access to finance – for each one building up a collage of evidence to gauge the extent to which it is a binding constraint on regions’ productivity growth. We then analyze interregional migration. We find little evidence consistent with the hypotheses (i) that low shares of university graduates remain the primary constraint on growth for the UK’s regions; (ii) that there is a generalized issue with access to finance for firms outside the South East; or (iii) that low or falling regional migration rates are to blame for the persistence of the UK’s regional economic inequalities. Instead, we find evidence consistent with (i) a specific relative shortage of STEM skills; (ii) binding transport infrastructure constraints within major non-London conurbations; (iii) a failure of public innovation policy to support clusters beyond the South East, in particular through the regional distribution of public support for Research and Development (R&D); and (iv) missed opportunities for higher internal mobility due to London’s overheating housing market.
    Date: 2023–03–04
  10. By: Horbach, Jens
    Abstract: The paper analyses the relationship between digitalisation and sustainability strategies at the firm level. In a first step, operational definitions of digitalisation and sustainability allowing the development of fitting empirical indicators are discussed. The possible technical and social transmission channels of the effects of digitalisation on a sustainable firm development are analysed. From a technical side of view, less energy consumption induced by intelligent sensoring systems or the reduction of meetings in presence by video conferences or the promotion of home office work leading to less travel activities might lead to a more sustainable production. Digitalisation might also act as pre-condition of eco-process innovations (e. g. the introduction of intelligent control systems leading to material and energy savings). From a societal perspective, digitalisation might lead to a higher availability of information on sustainability issues promoting a faster spread of environmentally related social norms. The empirical analysis is based on firm data of the recent Eurobarometer 486/2020 of the European Commission. The econometric results show that 'digitally active' firms seem to be more sustainable for all available indicators. All considered digitalisation measures such as artificial intelligence, machine learning, or the use of smart devices and intelligent sensors are positively correlated to eco-innovation and other sustainability-related activities of the questioned firms.
    Keywords: Digitalisation, sustainability, eco-innovation, probit analysis, negative binomial regression
    JEL: C35 O31 Q01 Q55
    Date: 2023
  11. By: Putri, Indah Ayu Johanda
    Abstract: This study analyzes and explains empirical evidence of the effect of growth and Intellectual Capital respectively on financial performance and firm value, as well as the role of Financial Performance in mediating the influence of company growth and Intellectual Capital respectively on firm value. The benefits of this research are expected to be a reference that enriches the literature of Management Science, especially related to signaling theory and Resource Based Theory. In addition, this research is expected to provide benefits for automotive company managers in developing strategies that can improve financial performance and firm value, investors in automotive companies in making the right decisions in investing in automotive companies and the government in formulating policies related to automotive companies so that more investors invest in automotive companies. To test the hypothesis used Partial Least Square (PLS) analysis. The results of the hypothesis test show that: (1) the company's growth has a positive and insignificant effect on financial performance, (2) Intellectual Capital has a positive and significant effect on financial performance, (3) company growth has a positive and insignificant effect on firm value, (4) Intellectual Capital has a positive and insignificant effect on firm value, (5) financial performance has a positive and significant effect on firm value, (6) financial performance does not mediate the company's growth to the company's value and (7) financial performance mediates Intellectual Capital to the value of the company.
    Date: 2023–03–14
  12. By: Luca Citino (Bank of Italy); Edoardo Di Porto (INPS); Andrea Linarello (Bank of Italy); Francesca Lotti (Bank of Italy); Enrico Sette (Bank of Italy)
    Abstract: We study the creation, destruction and reallocation of jobs in Italy over a period of almost forty years, until 2021. The size of gross job flows was large and in line with other developed economies. Every year, around 13 per cent of jobs are created and 12 per cent are destroyed. Most of this creation and destruction occurs within narrowly defined sectors, highlighting the crucial role that firm heterogeneity – rather than sectoral shocks – plays in driving job flows. Although employment at incumbent firms is more influenced by the business cycle, the entry and exit of firms both contribute, respectively, to one third of job creation and destruction. During the pandemic, and contrary to what has been documented for the US and the UK, Italy experienced a decline in excess job reallocation, entirely due to within-sector flows, while between-sector reallocation increased only slightly. ICT services and the construction sector received larger inflows of workers. The former did so as a result of the opportunities brought about by the shift to a digital economy, while the latter was prompted by hefty fiscal incentives targeted at the industry.
    Keywords: reallocation, job creation, job destruction, COVID-19, recession, pandemic
    JEL: E24 E32 J63 O4
    Date: 2023–03
  13. By: Flavio Calvino; Luca Fontanelli
    Abstract: This report analyses the use of artificial intelligence (AI) in firms across 11 countries. Based on harmonised statistical code (AI diffuse) applied to official firm-level surveys, it finds that the use of AI is prevalent in ICT and Professional Services and more widespread across large – and to some extent across young – firms. AI users tend to be more productive, especially the largest ones. Complementary assets, including ICT skills, high-speed digital infrastructure, and the use of other digital technologies, which are significantly related to the use of AI, appear to play a critical role in the productivity advantages of AI users.
    Keywords: AI, artificial intelligence, productivity, technology adoption
    Date: 2023–04–11
  14. By: Andrés Mauricio Gomez-Sanchez (Universidad del Cauca, Colombia.); Juan A. Máñez Castillejo (Universidad de Valencia and ERICES, Valencia, España.); Juan Alberto Sanchis-Llopis (Universidad de Valencia and ERICES, Valencia, España.)
    Abstract: The objective of this document is to explore the effect of ICT on the performance of Colombian manufacturing SMEs in export markets. To our knowledge, this is the first piece of evidence that explores this issue for an emerging economy. In doing so, we include some cutting-edge novelties such as persistence in export intensity; cross effect from imports to exports, and the role of initial conditions problem. We replicate the Tobit II-Heckman model procedure by using a dynamic Generalized Linear Model (GLM) because the export intensity is a proportion and include the inverse Mills ratio to deal with the selection problem. We merge three databases namely The Annual Manufacturing Survey (EAM); the Innovation and Technological Development Survey (EDIT) and the Annual ICT Manufacturing Survey (EAM-TIC); published by the National Administrative Department of Statistics (DANE) in six waves since 2013 to 2018. In general, our main results suggest that the impacts of information technologies on export intensity are always positive, regardless of the ICT analysed. Other results show persistence in exports, cross effects and self-selection in export markets, among others.
    Keywords: ICT, Exports, Sunk costs, Cross effects, Empirical Studies of Trade, Emerging economies, Empirical Analysis
    JEL: L16 L96 F14 O33 C23 D22 D24
    Date: 2023–04

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