nep-sbm New Economics Papers
on Small Business Management
Issue of 2023‒05‒29
twelve papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Intangible Capital as a Production Factor. Firm-level Evidence from Austrian Microdata By Klaus Friesenbichler; Agnes Kügler; Julia Schieber-Knöbl
  2. Getting Schooled: The Role of Universities in Attracting Immigrant Entrepreneurs By Natee Amornsiripanitch; Paul Gompers; George Hu; Kaushik Vasudevan
  3. University as a Knowledge Source of Innovation: A spatial analysis of the impact on local high-tech startup creation By MOTOHASHI Kazuyuki; ZHAO Qiuhan
  4. Personality Predicts Entrepreneurial Success By Maczulskij, Terhi; Viinikainen, Jutta
  5. Does green transition promote green innovation and technological acquisitions? By Udichibarna Bose; Wildmer Daniel Gregori; Maria Martinez Cillero
  6. Digitalisation and productivity: gamechanger or sideshow? By Robert Anderton; Vasco Botelho; Paul Reimers
  7. Women-led firms’ performance during the Covid-19 pandemic. Evidence from an emerging economy By Grijalva, Diego
  8. Does the adoption of Ind AS affect the performance of firms in India? By M N, Nikhil; Chakraborty, Suman; B M, Lithin; Lobo, Lumen Shawn
  9. Innovative HRM Designers: The Design Regimes of Human Resource Management in French Industrial History By John Levesque; Cédric Dalmasso; Sophie Hooge
  10. "A Study on Strategic Application of Business Ecosystem to Practical Management System" By Daisuke Sato
  11. Socioemotional Wealth and Product Differentiation in the Informal Economy: A Simple Theroetical Model By Augendra Bhukuth; Damien Bazin; Abir Khribich
  12. Clean innovation and heterogeneous financing costs By Emanuele Campiglio; Alessandro Spiganti; Anthony Wiskich

  1. By: Klaus Friesenbichler; Agnes Kügler; Julia Schieber-Knöbl (Statistics Austria)
    Abstract: We examine the role of intangible capital as a production factor using Austrian firm-level register data. Descriptive statistics show that intangible investment has increased over time. The intensive and extensive margins of firms' investments are highly skewed. They differ across sectors. A series of sample splits show that the components of intangible capital play different roles as inputs in the production function. Software and especially licenses are important for SMEs and exporters. Research and development play an important role in production in all specifications. For firms that continuously invest in intangible capital, all components of intangible capital gain importance in the production functions. These patterns differ from those found in previous studies and have implications for the strategic orientation of industrial and innovation policy.
    Keywords: Intangible capital, R&D, Firm level productivity, Investment, Production function, Austria
    Date: 2023–05–10
  2. By: Natee Amornsiripanitch; Paul Gompers; George Hu; Kaushik Vasudevan
    Abstract: We study immigrant founders of venture-capital backed firms using a new and detailed data set that we assemble on the backgrounds of founders. Immigrant founders have been critical to the entrepreneurial ecosystem, accounting for roughly 20% of all venture capital-backed founders over the past 30 years. We document the channels through which immigrant founders arrive in the United States and how those channels have changed over time. Higher education has served as the primary entry channel for immigrant founders. The share of foreign-educated immigrant founders who initially arrive for work has decreased over time, while the share of immigrant founders with undergraduate education in the United States has increased over time. Immigrant founders are likely to start their companies in the state in which they were educated, leading to potentially large local economic benefits associated with attracting foreign students. The results of this paper have important policy implications for the supply of entrepreneurial talent and efforts to promote entrepreneurial ecosystems.
    Keywords: entrepreneurship; venture capital; immigration; education
    JEL: G24 J0 J15 J24 L26 L23
    Date: 2022–08–08
  3. By: MOTOHASHI Kazuyuki; ZHAO Qiuhan
    Abstract: This study contributes to the empirical analysis of specific distances in knowledge spillover effects. We propose a geographical distance-based approach to precisely measure the proximity of knowledge spillover from a university's research activities to high-tech startups in surrounding regions. Most current research measuring knowledge spillover typically use states and cities as the statistical caliber, making it difficult to capture the exact extent of knowledge spillover within cities. In this study, we constructed panel data for Japan for 1998-2018 by dividing the research area into 1*1 km2 meshes and geocoding firms (high-tech startups and firms without patents), university patents, and paper data, and subsequently using each mesh as the basic unit. Additionally, variables containing geographical proximity information were calculated by constructing multiple buffers for each mesh. Our findings show that i) the spillover effects of university research attenuate with distance - rapidly within a 2 km range, and slowly thereafter; and ii) patents are more private and localized than papers. The knowledge spillover effect of university patents attenuates more rapidly with distance.
    Date: 2023–04
  4. By: Maczulskij, Terhi; Viinikainen, Jutta
    Abstract: Abstract Personality is related to labor market success, and entrepreneurship differs from paid employment in several ways. In this research, we examine the relationship between six personality traits (neuroticism, extraversion, sociability, hostility, self-confidence, and conscientiousness) and outcomes associated with two different phases of the entrepreneurial process: selection into entrepreneurship and subsequent entrepreneurial success. We utilize register panel data on employment characteristics over a 20-year period. Our results show that self-confidence is associated with entry into entrepreneurship, and this trait is also associated with entrepreneurial success in terms of higher survival probability and 6–20 percent higher entrepreneurial income and the firm’s labor productivity. Self-confidence may not be stable and can change. Therefore, providing support that enhances people’s self-confidence may promote both entrepreneurship and entrepreneurial performance in society. See also Self-confidence Predicts Entrepreneurship and Entrepreneurial Success.
    Keywords: Personality, Entrepreneurship, Entrepreneurial success
    JEL: L26
    Date: 2023–05–15
  5. By: Udichibarna Bose; Wildmer Daniel Gregori; Maria Martinez Cillero
    Abstract: This analysis explores the implications of technological shifts towards greener and sustainable innovations on acquisition propensity between firms with different technological capacities. Using a dataset of completed control acquisition deals over the period of 2009-2020 from 23 OECD countries, we find that innovative firms are more likely to acquire innovative target companies. We also find that green acquirors (i.e. firms with green patents) are more inclined to enter into acquisition deals with green firms, possibly due to their technological proximity and informational advantages which further enhances their post-acquisition green innovation performances. Our results also show an increase in green acquisitions after the Paris Agreement by non-green acquiror firms, and these are more pronounced for acquirors in climate policyrelevant sectors and countries with low environmental standards than their counterparts. However, green acquisitions after the Paris Agreement do not show any significant impact on their post-acquisition innovation performances, raising concerns related to greenwashing behaviour by investing firms.
    JEL: G34 O30 Q54
    Date: 2023
  6. By: Robert Anderton; Vasco Botelho; Paul Reimers
    Abstract: Is digitalisation a massive gamechanger which will deliver huge gains in productivity, or is it more of a sideshow with only limited impacts? We use a large balance sheet panel dataset comprising more than 19 million European firm-level observations to empirically investigate the impact of digitalisation on productivity growth via various previously unexplored channels and mechanisms. Our results suggest that for two otherwise identical firms, the firm that exhibits on average a higher share of investment in digital technologies will exhibit a faster rate of TFP growth, but not all firms and sectors experience significant productivity gains from digitalisation. Digitalisation does not seem to have relatively stronger impacts on the productivity of frontier firms compared to laggards, nor does it help to turn laggards into frontier firms. Overall, firms should not regard digital investment as a ‘one-size-fits-all’ strategy to improve their productivity. Digital technologies are a gamechanger for some firms. But they seem more like a sideshow for most firms, who attempt to be increasingly digital but are not able to adequately reap its productivity gains.
    Keywords: digital technology/transition; productivity growth; technology adoption; technology diffusion
    Date: 2023
  7. By: Grijalva, Diego
    Abstract: In this paper we analyze the on-impact effect of the Covid-19 pandemic on Ecuadorian firms and, conditional on this, we analyze firms' short-run performance. We estimate various econometric models on a combined dataset of almost 5, 000 firms that includes fiscal-year performance variables from the Ecuadorian Superintendencia de Compañías and results from a survey conducted by a major financial institution in Ecuador at the beginning of the pandemic. Our main result is that micro women-led firms and women-led firms outside of the main Ecuadorian cities were more affected at the onset of the pandemic. Despite this impact, their performance by the end of 2020 was not worse compared to less affected firms. We also find that smaller firms as well as firms in the hospitality sector were both more affected and performed worse than other firms. Finally, younger firms were less affected and performed better than older firms, but at the cost of increased debt and less cash.
    Keywords: Firms' performance, Covid-19, emerging economies
    JEL: D22 G32 J16 L25 L26 O54
    Date: 2023–05–05
  8. By: M N, Nikhil; Chakraborty, Suman; B M, Lithin; Lobo, Lumen Shawn
    Abstract: The increasing prevalence of IFRS adoption has resulted in enhanced transparency, accounting quality, and comparability of financial information among firms, especially in emerging markets worldwide, including India. Nonetheless, the question of whether the adoption of IFRS has led to improved firm performance persists. To address this question, this study examines the impact of transitioning from India’s GAAP-based accounting standards to IFRS-converged standards (Ind AS) on non-financial firms’ performance from 2013 to 2022. The empirical findings reveal that the convergence of Indian accounting standards with IFRS significantly improves firm performance, as demonstrated by a positive coefficient of 0.0166 for Ind AS in the fixed-effect model. The study also validates the original empirical findings using the return on equity (ROE) measure of firm performance, which yielded a coefficient of 0.0197, further confirming that the adoption of Ind AS leads to an increase in the performance of Indian firms. These results contribute new insights to the existing IFRS literature and have implications for policymakers and managers.
    Keywords: emerging market, firm profitability, fixed effect model, IFRS convergence, Nifty 500, panel data, return on assets
    JEL: C33 G32 M41 M48
    Date: 2023–03–15
  9. By: John Levesque (CGS i3 - Centre de Gestion Scientifique i3 - Mines Paris - PSL (École nationale supérieure des mines de Paris) - PSL - Université Paris sciences et lettres - I3 - Institut interdisciplinaire de l’innovation - CNRS - Centre National de la Recherche Scientifique); Cédric Dalmasso (CGS i3 - Centre de Gestion Scientifique i3 - Mines Paris - PSL (École nationale supérieure des mines de Paris) - PSL - Université Paris sciences et lettres - I3 - Institut interdisciplinaire de l’innovation - CNRS - Centre National de la Recherche Scientifique); Sophie Hooge (CGS i3 - Centre de Gestion Scientifique i3 - Mines Paris - PSL (École nationale supérieure des mines de Paris) - PSL - Université Paris sciences et lettres - I3 - Institut interdisciplinaire de l’innovation - CNRS - Centre National de la Recherche Scientifique)
    Abstract: The topic of Strategic Human Resource Management (SHRM)'s impact on a firm's innovativeness (or its contribution to innovation, as it is often phrased) has been an ongoing subject of academic debate for the past 2 decades, for both the HRM and the innovation management communities. Indeed, if the purpose of SHRM is to allow "the choice, alignment, and integration of an organization's HRM system so that its human capital resources most effectively contribute to strategic business objectives." (Kaufman, 2015, p.404), then it becomes quickly relevant to understand in what ways the HRM systems contribute to a firm's innovative activities. This type of questioning has produced several works on topics such as 1) how specific HRM strategies, practices or tools directly or indirectly affect a firm's capability to innovate, through its workforce, whether it be employees, managers, or professionals from other support functions; 2) whether the HRM function, characterized by its actors, themselves innovate, to provide the firm with new strategies, practices or tools; 3) how HRM professionals help the firm to respond to external innovations that disrupt its organization and threaten its core activity. It is not coincidental that the same period has been characterized by a profound shift in the context in which firms, particularly large industrial ones, have been operating. Today, the disruptive effects of exogenous breakthrough innovation are no longer an isolated or ephemeral phenomenon: digital transformation, for instance, has become a reality for most industries, creating observable impacts across all sectors of activity, as well as the functions that drive them. This context of intensive innovation, which imposes an acceleration of the pace and intensity of innovation (Christensen, Raynor & Anthony, 2003; Hatchuel et al., 2010; Midler, 2002; Phelps, 2013), implies being able to establish an ambidextrous approach to the firm's activities and steer continuous exploration activities (March, 1991) to renew "dynamic capabilities" simultaneously (Teece, 2007). This current context impacts the entire organization of firms, thereby generating important repercussions on their employees. As a result, Human Resources Departments today are faced with problems that call into question the sustainability of their operations and, by extension, of the firms they support: the actors of HRM find themselves having to deal with new challenges, such as accompanying and/or preventing the accelerated mutation of strategic skills, managing the loss or appearance of knowledge and expertise, as well as recruiting or implementing training programs in the face of unknown futures, or assessing the value of the work of exploring innovative project teams (Wright, Nyberg & Ployhart, 2018). At the SHRM level, this brings both practitioners and researchers to wonder how to ensure an alignment between the firm's goals and its available human resources if its strategies keep changing in real time and their employees' competences (sometimes even highly specialized ones) are being made less relevant by exogenous innovations. Yet, this new context is far from being the first transformative episode to challenge HRM systems and practices: on the contrary, the HR function has a rich history of evolution and diversification when it comes to its mechanisms. The present paper is built on the theory that HRM actors have long been unrecognized designer collectives, who have regularly mobilized their resources and organized creative processes to introduce new managerial solutions, in the form of innovative processes, structures and tools. To test this theory, a longitudinal qualitative study was performed, using the conceptual framework on design regimes to identify collective design phenomena within the evolution of the HRM function throughout industrial French history. The main source of historical data was obtained from Jean Fombonne's seminal work "Personnel & HRM: the affirmation of the Personnel function in [industrial] firms (France, 1830-1990" . The article starts by presenting a review of the literature on HRM contributions to a firm's innovative activities and highlight the enduring absence of a framework to describe the "design activity" expected from SHRM actors. Subsequently, the research question will be presented, and the following longitudinal study will rely on the conceptual framework of design regimes to analyze the historical evolution of the HRM function in French industrial firms. This approach will aim to confirm the hypothesis that HRM actors have historically demonstrated collective design activities that mirror those of industrial engineers, albeit in a less formal way. The core managerial implication of this work is that HRM actors, can build on this history of informal design activity to institutionalize HRM design practices and empower SHRM actors to create better dynamic alignments in intensely innovative situations.
    Keywords: HRM - Human resource management, Design Theory, Design Regimes, HRM History
    Date: 2022–04–21
  10. By: Daisuke Sato (Graduate School of Symbiotic Systems Science and Technology, Fukushima University, Japan Author-2-Name: Masaru Ishioka Author-2-Workplace-Name: Faculty of Symbiotic Systems Science and Technology, Fukushima University, Fukushima, Japan Author-3-Name: Author-3-Workplace-Name: Author-4-Name: Author-4-Workplace-Name: Author-5-Name: Author-5-Workplace-Name: Author-6-Name: Author-6-Workplace-Name: Author-7-Name: Author-7-Workplace-Name: Author-8-Name: Author-8-Workplace-Name:)
    Abstract: " Objective - Recently, the market environment has been rapidly changing, and it is difficult for companies to deal with these changes independently. As a countermeasure to these changes, it is considered effective for companies to build ecosystems as solidarity for sharing knowledge or technology with various organizations outside their companies. Methodology - However, the concept of ecosystems in business is vague and complicated. This makes it difficult for companies to apply ecosystem theory to management strategies. To solve these problems, it is necessary to make the theory of ecosystems available to companies to apply their management strategies. Findings - For that reason, based on previous studies, this study categorizes multiple concepts of ecosystems that have developed in an ambiguous state based on the theoretical background, definitions, and characteristics. Also, this study analyzes the types of multiple complementarities, which is a fundamental element of many ecosystem concepts, and organized the ecosystem concepts. Based on this, we present the ""Ecosystem construction framework"" and the ""Process for conception management Strategies utilizing ecosystems"" as models for incorporating ecosystem theory into management strategies. Novelty - A deeper understanding of ecosystems through this research is expected to stimulate the sharing of management resources among various organizations by utilizing ecosystems. Type of Paper - Empirical"
    Keywords: Business ecosystem, Innovation management, Resources Management, Affiliation approach, Structural Approach.
    JEL: L26 L29
    Date: 2023–03–31
  11. By: Augendra Bhukuth (Ieseg Management School, France); Damien Bazin (Université Côte d'Azur; GREDEG CNRS); Abir Khribich (Université Côte d'Azur, CNRS, GREDEG, France; Faculty of Economic Sciences and Management of Nabeul, University of Carthage, Tunisia; LEGI, Tunisia Polytechnic School)
    Abstract: In this article we develop a simple product differential model in which the input, socioemotional wealth, takes the form of knowledge sharing between employees. Competition in the informal economay depends on product differentiation, and our model shows that when micro family enterprises in the informal economy rely on family workers to differentiate their products from those of their competitors, they increase their productivity, remain competitive, and sustain their activities in a highly competitive market. Micro family enterprises reward the loyalty of family workers by providing them with social benefits, whereas the wage depends on the knowledge shared between workers.
    Keywords: informal economy, know-how (savoir-faire), micro-small enterprises, product differentiation, SEW
    JEL: D21 D29 L21 L23 L25
    Date: 2022–03
  12. By: Emanuele Campiglio (Department of Economics, University of Bologna; RFF-CMCC European Institute on Economics and the Environment (EIEE), Milan; LSE Grantham Research Institute on Climate Change and the Environment, London); Alessandro Spiganti (RFF-CMCC European Institute on Economics and the Environment (EIEE), Milan; Department of Economics, Ca’ Foscari University of Venice); Anthony Wiskich (Centre for Applied Macroeconomic Analysis, Australian National University, Canberra)
    Abstract: Access to finance is a major barrier to clean innovation. We incorporate heterogeneous and endogenous financing costs in a directed technical change model and identify optimal climate mitigation policies. The presence of a financing experience effect pushes the policymaker to strengthen policies in the short-term, both to shift innovation and production towards clean sectors and to reduce the financing cost differential across technologies, which further facilitates the transition. The optimal climate policy mix between carbon taxes and clean research subsidies depends on the drivers of the experience effect. In our benchmark scenario, where clean financing costs decline as cumulative clean output increases, we find an optimal carbon price premium of 47% in 2025, relative to a case with no financing costs.
    Keywords: carbon tax, directed technological change, endogenous growth, financing experience effect, innovation policy, low-carbon transition, optimal climate policy, sustainable finance
    JEL: H23 O31 O44 Q55 Q58
    Date: 2023

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