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on Small Business Management |
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Issue of 2023‒05‒22
fifteen papers chosen by João Carlos Correia Leitão Universidade da Beira Interior |
| By: | Ahn, Sohyun (Korea Institute for Industrial Economics and Trade) |
| Abstract: | Financing decisions are some of the most important decisions firms make. Many scholars have focused on studying the mechanism behind these decisions, and comparing the outcomes of different sources of capital. Studies have found that firms’ financial decisions interact with other business decisions, such as investment decisions. Moreover, different sources of capital affect other players in the market differently, through which firms’ financing decisions affect the overall structure of the economy. This article examines the relationship between financing and other firm characteristics to shed light on firms’ strategies and performance in Korea. Korean venture firms’ unique characteristics may affect their business strategies and performance. In this article, I analyze the characteristic of venture firms by focusing on their financing decisions. Specifically, I categorize and define venture firms by the sources of capital utilized and compare their characteristics and performance using survey data from 2021. Keywords: venture firms, venture capital, venture financing, small and medium-sized enterprises, SMEs, capital financing, financing decisions, equity financing, debt financing, imperfect information, imformation asymmetry, angel investment, Korea, innovation policy |
| Keywords: | venture firms; venture capital; venture financing; small and medium-sized enterprises; SMEs; capital financing; financing decisions; equity financing; debt financing; imperfect information; imformation asymmetry; angel investment; Korea; innovation policy |
| JEL: | D81 D83 L25 O30 O31 O38 R11 R12 |
| Date: | 2023–04–30 |
| URL: | http://d.repec.org/n?u=RePEc:ris:kieter:2023_008&r=sbm |
| By: | Raphaël CHIAPPINI; Sophie POMET |
| Abstract: | This article examines the impact of two types of financial support for innovation granted by French public institutions to French SMEs on a set of firm performance measures. Using an original database that provides information on repayable advances and subsidies obtained by 5, 448 French SMEs over the period 2010-2016, we evaluate the effectiveness of such financial support using a quasi-experimental design. Our findings indicate that both repayable advances and subsidies significantly improve targeted SMEs’ turnover, level of intangible assets and total employment at one year and three years after support is granted. The impact on firm-level TFP is only positive and significant after three years, while being negative in the very short run. Our results also provide evidence that the combination of both instruments for a given innovation project within a year does not entail significantly higher effects. A heterogeneous analysis reveals that the impact of financial support instruments for innovation is significantly higher for young, micro and small firms. Furthermore, our analysis shows that innovation support benefits more to firms located in the Paris region than in other regions and this tends to exacerbate regional inequalities. Finally, our findings indicate that the transformation of Oséo into Bpifrance in December 2012 has led to an increase in the effectiveness of the innovation policy. |
| Keywords: | Innovation policy, firm performance, policy evaluation, Mahalanobis distance matching, difference-in-difference. |
| JEL: | O33 O38 C14 C21 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:grt:bdxewp:2023-06&r=sbm |
| By: | Ernesto Nieto-Carrillo (University of Coimbra, Centre for Business and Economics Research, CeBER and Faculty of Economics); Carlos Carreira (Univ of Coimbra, CeBER, Faculty of Economics); Paulino Teixeira (niversity of Coimbra, Centre for Business and Economics Research, CeBER and Faculty of Economics) |
| Abstract: | Increasing evidence shows that business dynamism has weakened in most developed economies. However, except for the US literature, most previous research has only portrayed the new century’s changes in firm dynamics. Instead, we focus on a longer period, 1986-2018, assembling an extensive longitudinal database with a time-consistent industry classification covering the population of Portuguese firmsin the manufacturing and service sectors. The BaiPerron estimate for unknown break dates in time series indicates two structural changes in industrial dynamics, one in its ascending wave (1993) and another in the declining phase (2003). Accordingly, our (HP) estimated trends show that, after an initial period of intense creative destruction, firm dynamics have become less turbulent since 2003, with lower entry, declined job reallocation, and decreased growth rates. Furthermore, survival and counterfactual firm-level regressions suggest that an otherwise-equal post-2003 start-up faced a significantly higher exit hazard than its pre-1993 counterpart (i.e., without any structural change). As a result, new and young companies have seen their share in aggregate employment and net job creation decline, notwithstanding the increasingly higher performance of young, high-growth firms. Lower labour and firm turnover suggest a weakened contribution of reallocation to productivity growth. On the other hand, decreased entry and the higher exit hazard have likely undermined the disruptive potential of transformative entrepreneurship |
| Keywords: | Firm dynamics; Entry; High-growth firms; Resource reallocation; Survival. |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:gmf:papers:2023-03&r=sbm |
| By: | Andrea Orame (Bank of Italy); Daniele Pianeselli (Bank of Italy) |
| Abstract: | We study the European automotive industry in the 2013-2018 period. Volkswagen's Dieselgate scandal and the Paris Agreement, both in 2015, substantially caused a technological shock prompting firms to produce low-emissions cars. By using patent and mergers and acquisitions (M&A) data, we test how firms reacted to that shock. We provide evidence that Italian firms intensified their internal R&D activity but, unlike the rest of Europe, they did not increase their M&A activity. This can potentially reduce the speed of the green transition of Italian firms to the advantage of their competitors. |
| Keywords: | automotive, green transition, technical change, mergers and acquisitions, innovation, patents, electric car |
| JEL: | G34 L62 O14 O3 |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:opques:qef_767_23&r=sbm |
| By: | Ogbumgbada, Oluchi Vincent |
| Abstract: | This work examined the relationship between entrepreneurial resilience and growth of small and medium enterprises in Port Harcourt. Objectives of the study were to examine how dimensions of entrepreneurial resilience such as proactiveness and resourcefulness enhance measures of growth in terms of sales growth and business expansion. The survey research design was adopted. The target population for this study comprised of 316 owners and employees of some selected SMEs in Port Harcourt, Rivers State. The sample size of 175 respondents was determined by using Krejcie and Morgan sample size determination table. Data were collected through primary (questionnaire) and secondary (textbooks, journal articles and internet). A structured questionnaire designed in four point likert rating scale format was adopted for the collection of data. Out of 175 questionnaires administered, the researcher was able to retrieve 152 copies. Spearman Ranking (r) was used for the test of hypotheses via SPSS Version 23.0. The findings revealed that there is a significant relationship between entrepreneurial resilience (proactiveness and resourcefulness) and growth (sales growth and business expansion) of small and medium enterprises in Port Harcourt. The study concluded that entrepreneurial resilience has a favourable outcome on growth of small and medium enterprises in Port Harcourt as it reveals that entrepreneur’s proactiveness and resourcefulness are veritable resilient components to combat with adversity internal and external the business, as it promotes effective sales growth and business expansion. The study recommended amongst other things that management of small and medium enterprises in Port Harcourt should create new fits between demand and supply towards identifying new opportunities in line with perceived disruption and delving into it to enhance effective operations and sales growth as the turbulence emerge; Creating a good social network is a source to acquire resources in times of difficulty. Thus, entrepreneurs should improve their social network base as they will help during perilous times by directly or indirectly providing resources for entrepreneurs thereby improving their business expansion. |
| Date: | 2023–04–12 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:rs5up&r=sbm |
| By: | KOTOKLO, Edoh; TOGBENU, Fo-kossi edem |
| Abstract: | The purpose of this paper is to analyze the effect of formalization on access to credit by taking the example of Togolese (small and medium) enterprises. To achieve this objective, we test the hypothesis that the formalization of firms has a significant effect on access to credit. To do so, a Probit regression and the special regressor method were used on data from 65, 725 firms extracted from the 2019 General Census of Enterprises database piloted by the Institut Nationale de la Statistique et des Etudes Economiques et Démographiques (INSEED). The results show that the variable "Formalization of enterprises (small and medium)" has a significant influence at the 1% level on the probability of access to credit. In addition, the control variables such as guarantees, cost of credit, access to the public market, gender and level of education also explain access to credit at the 1%, 1%, 5% and 10% thresholds respectively. Our results show the importance of training and capacity building for informal enterprises to formalize. Also, they will allow regulatory bodies to develop policies that can reframe the informal sector in order to contribute to the GDP and absorb more young people seeking employment. |
| Keywords: | Keywords: Formalization, SMEs, Access to Credit, Probit and Special Regressor |
| JEL: | D22 |
| Date: | 2023–03–17 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:117179&r=sbm |
| By: | Ducret, Romain (Faculty of Economics and Social Sciences); Isakov, Dušan |
| Abstract: | This paper examines the impact of business group affiliation on the performance and corporate policies of Korean listed firms over the period 2007-2019. This study proposes a novel approach allowing the observation of heterogeneity in the affiliation effects. Overall, we conclude that business group characteristics are reflected in firm outcomes. We find that investors perceive group membership positively as they pay a premium to hold affiliated firms. The premium is related to profitability and size of business groups, consistent with resourcebased theories. The analysis also identifies significant group specific effects on firm policies. These findings suggest that several business groups follow group-level strategies and apply homogeneous financial and investment policies to all their affiliates. |
| Keywords: | Business groups; performance; financing policies; investment; Korea |
| JEL: | G30 G32 G35 L22 |
| Date: | 2023–04–07 |
| URL: | http://d.repec.org/n?u=RePEc:fri:fribow:fribow00531&r=sbm |
| By: | Marina FLAMAND; Vincent FRIGANT; Deivyd VELASQUEZ |
| Abstract: | TIn order to implement a regional innovation policy, regional decision-makers need an efficient information system that enables them to characterise their territory in detail and identify relevant development opportunities. In this article, we propose a methodological framework for developing such an information system, emphasising two dimensions whose complementarity is often neglected: on the one hand, the type of information required, and on the other hand, the characteristics of the data to be collected. Considering that the Regional Innovation Systems approach constitutes a relevant theoretical reference for characterising the first dimension, we mobilise the key principles of informational decision support approaches to identify the desirable characteristics of the data. The last section uses the example of research laboratories to show the heuristic potential of the proposed framework. |
| Keywords: | Technological Intelligence, Regional Policy, Innovation Policy, Informational System, Regional Innovation Systems. |
| JEL: | R58 L52 M15 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:grt:bdxewp:2023-07&r=sbm |
| By: | Daunfeldt, Sven-Olov (Confederation of Swedish Enterprise); McKelvie, Alexander (Syracuse University, New York, United States.); Seerar Westerberg, Hans (Institute of Retail Economics (Handelns Forskningsinstitut)) |
| Abstract: | Hiring new employees is an important part of a new venture’s growth. However, we still have limited understanding of the human capital needs of high-growth new ventures, and how their pace of growth relates to whom they hire. We contribute to the literature by investigating 64, 404 hires among growing new ventures in Sweden from 2008 to 2015, finding that individuals with higher educational attainment and previous management experience are more likely to be hired by high-growth new ventures. In contrast, we find no indications that unemployed individuals or people that are outside the labor force are more likely to be hired by the fastest growing new ventures. High-growth new ventures are thus more selective in their hiring decisions than new ventures with lower sales growth rates, suggesting that ‘the right person’ is more important than ‘the right time’. These differences in hiring practices are most prevalent during new ventures’ first three years of operation and become more negligible as the ventures age. |
| Keywords: | Hiring; High-growth new ventures; Firm growth; Human capital |
| JEL: | D21 D22 J63 L25 |
| Date: | 2023–01–10 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:hfiwps:0025&r=sbm |
| By: | Augendra Bhukuth (Ieseg Management School, France); Damien Bazin (Université Côte d'Azur; GREDEG CNRS); Ani Wulandri (Narotama University, Surabaya, Indonesia); Valentina Teslenko (ARENAP, Russia) |
| Abstract: | Family businesses operating mainly in the informal economy in East Java, Indonesia, generally employ family members and neighbors. As part of a qualitative study on employer-employee relationships, we interviewed the owners of 37 of these family businesses (30 small and 7 medium) to investigate the level of responsibility they feel towards their employees. By using a Social Capital approach to analyze the data, we found that the relationship between employers and employees is based on trust, and that family businesses have to maintain this trust to be able to sustain their activities in a highly competitive market. We then describe the ups and downs of managing employees when the employer-employee relationship is close. |
| Keywords: | Decent work, Employers-employees relationship, Family Business, Informal sector, Microenterprises, Social benefits, Social capital |
| JEL: | D22 J15 J24 J46 |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2022-11&r=sbm |
| By: | Ufuk Akcigit; Nathan Goldschlag |
| Abstract: | How are inventors allocated in the US economy and does that allocation affect innovative capacity? To answer these questions, we first build a model where an inventor with a new idea has the possibility to work for an entrant or incumbent firm. Strategic considerations encourage the incumbent to hire the inventor, offering higher wages, and then not implement her idea. We then combine data on 760 thousand U.S. inventors with the LEHD data. We find that when an inventor is hired by an incumbent, their earnings increases by 12.6 percent and their innovative output declines by 6 to 11 percent. |
| Keywords: | Inventors, innovation, R&D, firms, dynamism, reallocation |
| JEL: | O3 O4 |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:23-17&r=sbm |
| By: | Basheer Kalash (Université Côte d'Azur, France; GREDEG CNRS; Sciences Po, OFCE, France); Sarah Guillou (OFCE Sciences Po. Paris); Lionel Nesta (Université Côte d'Azur, France; GREDEG CNRS; OFCE, SciencesPo; SKEMA Business School); Michele Pezzoni (Université Côte d'Azur, France; GREDEG CNRS) |
| Abstract: | This paper investigates how the intensity of competitive grant funding in public research labs affects the type of knowledge produced. The empirical analysis is conducted on 349 French research labs observed over 2011-2015. To assess the type of knowledge produced by labs, we look at the lab publications’ distance from the technological frontier: the closer a publication to the technological frontier, the more applied its knowledge content. To measure grant funding intensity within labs, we calculate the number of national and European grants per researcher. We also identify grants in partnership with private companies. We find that a higher intensity of national grants within the lab is associated with fewer publications close to the technological frontier, while European grant intensity has the opposite effect. We also find that companies being partners in the grant increase the share of lab publications at the technological frontier. |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2022-14&r=sbm |
| By: | Natalia Fabra (UNIVERSIDAD CARLOS III); Eduardo Gutiérrez (Banco de España); Aitor Lacuesta (Banco de España); Roberto Ramos (Banco de España) |
| Abstract: | We investigate whether investments in renewable energy – solar and wind plants – create jobs in the municipality where they are located. Using 13 years of monthly data, we exploit the variation in the timing and size of investment projects across more than 3, 200 municipalities in Spain, a country with substantial investments in this area. We use a new estimator for staggered differences-in-differences analysis that extends the local projections approach with clean controls (Dube et al., 2022). We find strong heterogeneity in the magnitude and pattern of the impacts of solar and wind investments. On average, solar investments increase employment by local firms, but the effects on the unemployment of local residents are weak. The effects of wind investments on local employment and unemployment are mostly non-significant. These findings have important implications for public policy. |
| Keywords: | renewable energy, employment, unemployment, NIMBY, spatial effects |
| JEL: | L94 C33 O25 R23 |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:bde:wpaper:2307&r=sbm |
| By: | IWASAKI, Ichiro; MA, Xinxin; MIZOBATA, Satoshi |
| Abstract: | To identify the determinants of the generational diversity of board membership in emerging market firms, we conducted an empirical analysis using state-level social inequality indices and data on 14, 598 listed/unlisted firms from 20 Eastern European countries and China. We found that, in these emerging markets, social inequality strongly inhibits the generational diversity of board membership, regardless of the gender of board members. The results also reveal that four firm attributes—board size, CEO duality, state ownership, and the presence of foreign investors from non-advanced economies as firm owners—significantly affect the age composition of board directors in line with our expectations. Two other firm attributes—ownership concentration and firm ownership by foreign investors from advanced economies—are also found to have a significant impact on board generational diversity; however, the direction of their impact contradicts our predictions. Supplementary estimations carried out by introducing various sample restrictions produce similar results, thus confirming the statistical robustness of our findings. |
| Keywords: | board generational diversity, social inequality, emerging markets, Eastern Europe, China |
| JEL: | D22 G32 J44 K22 L22 P34 |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:hit:hitcei:2023-02&r=sbm |
| By: | Vincent Siegerink; Michal Shinwell; Žiga Žarnic |
| Abstract: | This paper presents a conceptual framework for understanding the non-financial performance of firms through the lens of the OECD Well-being Framework. Building on existing approaches for measuring non-financial performance, it proposes a measurement framework and indicator set for what may be referred to as “Scope 1” Social performance. This refers to the well-being of stakeholders that operate within the operational boundaries of the firm, namely employees, and the capital resources that a firm contributes to and depletes that are directly relevant to society as a whole. In line with the OECD Well-being Framework, this paper emphasises the importance of measuring the well-being outcomes of stakeholders alongside the resources that firms produce and deplete. The paper also emphasises the importance of aligning the measurement of the non-financial performance of businesses at the macro-level and sectoral level by national statistical offices (NSOs) with micro-level measures collected by firms themselves. Going forward, the OECD will continue to address the measurement gaps identified in this paper and to encourage further alignment of corporate and official measures of business non-financial performance. |
| Keywords: | ESG, Inclusive business models, Non-financial performance indicators, Social impact measurement, Sustainability, Well-being framework |
| JEL: | D63 G30 I31 M14 |
| Date: | 2022–01–27 |
| URL: | http://d.repec.org/n?u=RePEc:oec:wiseaa:03-en&r=sbm |