nep-sbm New Economics Papers
on Small Business Management
Issue of 2023‒07‒24
fourteen papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Skills Shortage and Innovation Openness By Paolo Carioli; Dirk Czarnitzki
  2. Do regional innovation strategies meet societal challenges? A comparative analysis across regions in Belgium, Germany, Netherlands and Finland By Suarsana, Laura; Schneider, Tina; Warsewa, Günter
  3. Firm Exit and Liquidity: Evidence from the Great Recession By Fernando Leibovici; David Wiczer
  4. A Theoretical Framework For Managerial Studies Of Diaspora Entrepreneurial Orientation By Violeta Moskalu
  5. Intuit QuickBooks Small Business Index: A New Employment Series for the US, Canada, and the UK By Ufuk Akcigit; Raman Singh Chhina; Seyit M. Cilasun; Javier Miranda; Eren Ocakverdi; Nicolas Serrano-Velarde
  6. Credit during the pandemics: the case of Tuscany By Luca Casolaro; Francesco Suppressa
  7. Fear the Walking Dead? Zombie Firms in the Euro Area and Their Effect on Healthy Firms’ Credit Conditions By Havemeister, Lea Katharina; Horn, Kristian
  8. Firm Size and Employment Growth in Food Retailing By Çakir, Metin; Perez Castaño, Ana Melissa M.; Zeballos, Eliana
  9. The Illusive Slump of Disruptive Patents By Macher, Jeffrey; Rutzer, Christian; Weder, Rolf
  10. Implementation of Green Accounting to Concern For The Working Environment Of Garment Micro, Small and Medium Enterprises in Gerbang Kertasusila By Yuwandono, Rr Jihan Faadhilah; Maisyaroh, Siti; Ridayati, Salija; Pandin, Maria Yovita R
  11. Risk of burnout in French entrepreneurs during the COVID-19 crisis By Olivier Torrès; Alexandre Benzari; Christian Fisch; Jinia Mukerjee; Abdelaziz Swalhi; Roy Thurik
  12. Does Pricing Carbon Mitigate Climate Change? Firm-Level Evidence From the European Union Emissions Trading Scheme By Jonathan Colmer; Ralf Martin; Mirabelle Muûls; Ulrich J. Wagner
  13. Market Access and Firm Performance: Evidence Based on GIS Analysis of Road Network and Manufacturing-Plant-Level Data from India By Sharma, Somnath; Kant, Shashi; Mishra, Ranjeeta; Azhgaliyeva, Dina
  14. The COVID-19 shock and firm financing: Government or Market or Both? By Miguel Acosta-Henao; Andres Fernandez; Patricia Gomez-Gonzalez; Sebnem Kalemli-Ozcan

  1. By: Paolo Carioli; Dirk Czarnitzki
    Abstract: Skills shortage has become a key policy issue in highly developed and innovationoriented economies, with non-negligible consequences on firms’ innovation activities. We investigate the effect of skills shortage on firms’ innovation openness, which is considered to be one of the key drivers of innovation performance. We hypothesize that scarcity of personnel causes firms to cooperate more broadly with external partners. Using cross-sectional data from the German contribution to the Community Innovation Survey (CIS), and exploiting detailed information on the extent to which firms could fill their job vacancies, we find that, on average, a one standard deviation increase in skills shortage more than doubles a firm’s cooperation breadth. We contribute to the literature on human capital in relation to open innovation by characterizing the necessity of openness as a way to mitigate the scarcity of skills.
    Keywords: open innovation, R&D collaboration, skills shortage
    Date: 2023–05–29
  2. By: Suarsana, Laura; Schneider, Tina; Warsewa, Günter
    Abstract: In addition to traditional, cluster-oriented approaches, both cross-sectional technologies ("key enabling technologies") and societal challenges ("grand challenges") are becoming increasingly important for regional innovation strategies. A more complex, multi-dimensional approach of regional innovation strategies requires but a number of adaptations, which need to adjust to various, different regional preconditions. The article raises the research question how societal demands are considered and implemented by regional innovation strategies in four case study regions: Pirkanmaa/Tampere region in Finland, Groningen region in the Netherlands, West Flanders in Belgium, and the Federal State of Bremen in Germany. The four regional case studies are comparable European regions in terms of their innovation capacity and their level of innovation (all are classified "highly innovative" or "strong innovator" by the European Union). In order to address global societal goals and challenges - in particular climate change and its consequences as well as demographic change - a multidimensional innovation policy spanning sectors and technologies and a close interlinking of technological and societal innovation objectives and strategies, seems inevitable. The analyses revealed that governance structures and the innovation infrastructures in the regions indeed start to adapt to societal needs and to the increasing complexity of regional innovation strategies, though the speed as well as the intensity of transition and adjustment varies greatly across the regions. Interregional learning as is intended by the European Interreg programme could offer meaningful support for the progress of regional measures towards multi-dimensional innovation policies.
    Date: 2023
  3. By: Fernando Leibovici; David Wiczer
    Abstract: This paper studies the role of credit constraints in accounting for the dynamics of firm exit during the Great Recession. We present novel firm-level evidence on the role of credit constraints on exit behavior during the Great Recession. Firms in financial distress, with tighter access to credit, are more likely to default than firms with more access to credit. This difference widened substantially in the Great Recession while, in contrast, default rates did not vary much by size, age, or productivity. We identify conditions under which standard models of firms subject to financial frictions can be consistent with these facts.
    Keywords: Firm exit; Great Recession; Credit constraints; Financial distress
    JEL: E32 G01
    Date: 2023–06–01
  4. By: Violeta Moskalu (Institut d'Administration des Entreprises (IAE) - Metz)
    Abstract: Our research proposes a conceptual framework for understanding diaspora entrepreneurship and outlines a future research agenda to advance the field. The diaspora entrepreneurship is a unique phenomenon that involves the creation and development of new ventures by members of a diaspora community, who draw on their cultural, social, and economic ties to their homelands to create economic opportunities in their host countries, or vice versa (Moskalu, 2018). We propose a conceptual framework that includes three dimensions of the diaspora entrepreneurial orientation: diaspora networks, diaspora mindset and more specifically its psychological ownership and institutional context (rules, regulations, policies, cultural factors), to bridge the gap between theory, practice, and policy (Elo & al., 2022) by using an international business and entrepreneurship lens to analyze the diaspora entrepreneurship phenomena. The two main scientific contributions of our research are 1) we have proposed a research design on diaspora entrepreneurship for the creation of public value, with an unprecedented intersection articulating different dimensions of the phenomenon of entrepreneurship; and 2) we have designed the future research agenda on diaspora entrepreneurship.
    Keywords: diaspora entrepreneurship, entrepreneurial situation, entrepreneurial orientation, trust, entrepreneurial support, social capital
    Date: 2023–06–20
  5. By: Ufuk Akcigit; Raman Singh Chhina; Seyit M. Cilasun; Javier Miranda; Eren Ocakverdi; Nicolas Serrano-Velarde
    Abstract: Small and young businesses are essential for job creation, innovation, and economic growth. Even most of the superstar firms start their business life small and then grow over time. Small firms have less internal resources, which makes them more fragile and sensitive to macroeconomic conditions. This suggests the need for frequent and real-time monitoring of the small business sector’s health. Previously this was difficult due to a lack of appropriate data. This paper fills this important gap by developing a new Intuit QuickBooks Small Business Index that focuses on the smallest of small businesses with at most 9 workers in the US and the UK and at most 19 workers in Canada. The Index aggregates a sample of anonymous QuickBooks Online Payroll subscriber data (QBO Payroll sample) from 333, 000 businesses in the US, 66, 000 in Canada, and 25, 000 in the UK. After comparing the QBO Payroll sample data to the official statistics, we remove the seasonal components and use a Flexible Least Squares method to calibrate the QBO Payroll sample data against official statistics. Finally, we use the estimated model and the QBO Payroll sample data to generate a near real-time index of economic activity. We show that the estimated model performs well both in-sample and out-of-sample. Additionally, we use this analysis for different regions and industries.
    JEL: D22 E24 J20 J21 J24
    Date: 2023–06
  6. By: Luca Casolaro; Francesco Suppressa
    Abstract: During the Covid-19 economic shock the Italian Government implemented several measures aimed at facilitating the access to guaranteed loans, enhancing the role of the Fondo Centrale di Garanzia (FCG) in the financial support of the SME. In this work, we analyse various effects of these policies with a particular focus on the case of Tuscany, that exhibit a double reason for interest. Firstly, it has been interested in the first months of the 2020 by a change in regional rules that significantly enlarged the access to the Fund. Secondly, Tuscany experienced an expansion of FCG operations higher than other Italian regions. By using data from the credits register and company information, we provide evidence on the characteristics of the firms that benefited from FCG loans in terms of economic sectors, firm size and default risk. In the final section, we conduct an econometric analysis to isolate the key determinants of firms' utilization of the Fund, highlighting the importance of pre-existing banking relationships in obtaining loans backed by the Government.
    Keywords: credit, Covid-19, public credit guarantee schemes, SMEs; liquidity shock
    JEL: L25 H81 G32
    Date: 2023–06–01
  7. By: Havemeister, Lea Katharina; Horn, Kristian
    Abstract: Zombie firms may adversely impact healthy firms through several transmission channels. Besides real spillover effects on productivity or investment, zombies may also cause negative financial spillover effects, where zombies receive credit at more favourable conditions than healthy firms. We investigate characteristics of zombie firms in the euro area and whether they cause spillovers on healthy firms’ credit conditions, focusing on two variables: new credit and interest rates. Contrary to existing findings, our results indicate that zombie firms pay higher interest rates and receive less new credit than healthy firms. The spillover effect of zombie firms on healthy firms’ new credit is not significant. For interest rates, the spillover effect is even reversed: Zombie existence significantly lowers healthy firms’ interest rates. Zombie firms across the euro area are smaller, less profitable, and more leveraged with lower credit quality than healthy firms. Yet, they do not seem to pose significant negative externalities on the credit conditions of healthy firms. Novel loan-by-loan data from the European credit registry (AnaCredit) allows our analysis to be over a broad set of countries and firms, on a new level of granularity. This may explain the divergence of our findings from the existing literature. JEL Classification: E43, E44, E51, G21, G32
    Keywords: financial spillovers, financial stability, interest rates, new credit, zombie firms
    Date: 2023–07
  8. By: Çakir, Metin; Perez Castaño, Ana Melissa M.; Zeballos, Eliana
    Keywords: Marketing, Agricultural and Food Policy, Community/Rural/Urban Development
    Date: 2023
  9. By: Macher, Jeffrey (University of Basel); Rutzer, Christian (University of Basel); Weder, Rolf (University of Basel)
    Abstract: Despite tremendous growth in the volume of new scientific and technological knowledge, the popular press has recently raised concerns that disruptive innovative activity is slowing. These dire prognoses were mainly driven by Park et al. (2023), a Nature publication that uses decades of data and millions of observations coupled with a novel quantitative metric (the CD index) that characterizes innovation in science and technology as either consolidating or disruptive. We challenge the Park et al. (2023) methodology and findings, principally around concerns of truncation bias and exclusion bias. We show that 88 percent of the decrease in disruptive patents over 1980-2010 reported by the authors can be explained by their truncation of all backward citations before 1976. We also show that this truncation bias varies by technology class. We update the analysis to 2016 and account for a change in U.S. patent law that allows for citations to patent applications in addition to patent grants, which is ignored by the authors in their analysis. We show that the number of highly disruptive patents has increased since 1980---particularly in IT technologies. Our results suggest caution in using the Park et al. (2023) methodology as a basis for research and decision making in public policy, industry restructuring or firm reorganization aimed at altering the current innovation landscape.
    Keywords: Disruptive Innovation, Truncation Bias, Exclusion Bias, U.S. Patent Law Change
    JEL: O30 O32 O33
    Date: 2023–06–19
  10. By: Yuwandono, Rr Jihan Faadhilah; Maisyaroh, Siti; Ridayati, Salija; Pandin, Maria Yovita R
    Abstract: The purpose of this study was to determine the level of understanding and concern of Micro, Small and Medium Enterprises in the gate Garment ethical paper relating to the application of green accounting in its business. Green Accounting is the development of accounting information, which has its own role through voluntary reporting in the company's financial statements related to environmental costs. Observation, interview and documentation techniques were used to collect research data. Data analysis in this qualitative descriptive research using Miles and Huberman data analysis model in (Sugiyono, Metode Penelitian Kuantitatif, Kualitatif, dan R&D., 2017) specifically reduces data, presents data, then makes conclusions. The results of this study indicate that two out of three Micro, small and medium Garment business actors in Gerbang Kertasusila understand and understand about good care in maintaining the work environment as a form of green accounting. Although for details about the expenditure of business costs garment and the environment they have not telesuri in detail but they realize that the environmental cost is a responsibility that is loaded on the financial statements of their businesses that do not include details, but they recognize that the environmental cost is the responsibility of reporting on their business finance research.
    Date: 2023–06–12
  11. By: Olivier Torrès (Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School, MRM - Montpellier Research in Management - UPVM - Université Paul-Valéry - Montpellier 3 - UPVD - Université de Perpignan Via Domitia - Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School - UM - Université de Montpellier); Alexandre Benzari (MRM - Montpellier Research in Management - UPVM - Université Paul-Valéry - Montpellier 3 - UPVD - Université de Perpignan Via Domitia - Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School - UM - Université de Montpellier, Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School); Christian Fisch (Trier University); Jinia Mukerjee (Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School, MRM - Montpellier Research in Management - UPVM - Université Paul-Valéry - Montpellier 3 - UPVD - Université de Perpignan Via Domitia - Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School - UM - Université de Montpellier); Abdelaziz Swalhi (MRM - Montpellier Research in Management - UPVM - Université Paul-Valéry - Montpellier 3 - UPVD - Université de Perpignan Via Domitia - Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School - UM - Université de Montpellier); Roy Thurik (Erasmus University Rotterdam, Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School)
    Abstract: Abstract The COVID-19 crisis presents manifest threats for entrepreneurs since their business survival is often directly at stake given the alarming economic downturn. This existential threat, together with their crucial role in the economy, is the reason for the plethora of public financial support schemes being implemented throughout the entire world. However, support schemes for mental health are lacking. We aim to investigate, first , whether burnout levels have increased during the crisis and, second , whether burnout levels during the COVID-19 crisis depend on the threat of becoming ill, having to stay at home due to the lockdown, and/or having to file for bankruptcy due to the economic downturn. We do so using seven data sets of French entrepreneurs with a temporal comparison of averages and two data sets of French entrepreneurs with a cross-sectional analysis of individuals. Our findings show that indeed, the risks of burnout have increased during the pandemic and that the threat of bankruptcy is the dominant threat. As an increasing number of studies in the entrepreneurship literature indicate that entrepreneurs' mental health influences their activities, as well as the growth and sustainability of their ventures, our study is important and timely in its contribution, as it takes a close look at the perception of burnout in general and more specifically during the COVID-19 pandemic. Plain English Summary The risk of burnout in French entrepreneurs has increased significantly during the COVID-19 pandemic, which calls for not only financial support but also other forms of support. The COVID-19 pandemic presents many threats for entrepreneurs since their business survival is often directly at stake. These threats are not just financial but also related to health, such as the threat of burnout. The findings of our study show that for French entrepreneurs, the threat of burnout increased after the arrival of the COVID-19 pandemic. This finding raises the question whether this outcome is due to the threat to health, the effects of the lockdown, or the threat of bankruptcy. It appears that all three factors play important roles, although the financial threat is the dominant threat. These findings call for the extension of entrepreneurial support systems beyond the financial area by also involving an "entrepreneurship care" aspect, which includes telephone support, webinars, and mental help facilities.
    Keywords: Small business owners, Entrepreneurs, Burnout, COVID-19 pandemic, France
    Date: 2022–02
  12. By: Jonathan Colmer; Ralf Martin; Mirabelle Muûls; Ulrich J. Wagner
    Abstract: In theory, market-based regulatory instruments correct market failures at least cost. How- ever, evidence on their efficacy remains scarce. Using administrative data, we estimate that, on average, the EU ETS – the world’s first and largest market-based climate policy – induced regulated manufacturing firms to reduce carbon dioxide emissions by 14-16% with no de- tectable contractions in economic activity. We find no evidence of outsourcing to unregulated firms or markets; instead firms made targeted investments, reducing the emissions intensity of production. These results indicate that the EU ETS induced global emissions reductions, a necessary and sufficient condition for mitigating climate change. We show that the absence of any negative economic effects can be rationalized in a model where inattentive firms under- invest in energy-saving capital prior to regulation. Guided by the predictions of this model, we classify firms with low initial productivity or high energy intensity as potentially inattentive. We estimate larger reductions in emissions and increases in economic activity for those firms, consistent with regulation-induced cost savings or efficiency increases.
    Keywords: Emissions Trading System, carbon leakage, investment, climate policy
    JEL: Q54 Q58 H23 L50 F18
    Date: 2023–03
  13. By: Sharma, Somnath (Asian Development Bank Institute); Kant, Shashi (Asian Development Bank Institute); Mishra, Ranjeeta (Asian Development Bank Institute); Azhgaliyeva, Dina (Asian Development Bank Institute)
    Abstract: We investigate whether better access to markets through an improved road network plays a role in improving firm profitability in India. We construct a district-level market access index using shapefiles of India's road network, district boundaries, and nightlight raster images and estimate the shortest driving distances for districts using the road network. Using the annual survey of industries data for India during 2001–2015, we show that market access through improved road connectivity resulted in a lower dispersion of ROA between 2001 and 2015 in India.
    Keywords: India; road infrastructure; firm productivity; market access index; electricity deficit; road length
    JEL: D22 D24 H54
    Date: 2022–12
  14. By: Miguel Acosta-Henao (Central Bank of Chile); Andres Fernandez (International Monetary Fund); Patricia Gomez-Gonzalez (Fordham University, Department of Economics); Sebnem Kalemli-Ozcan (University of Maryland)
    Abstract: We study the interaction between government’s fiscal support policies and firms’ market financing. Using regulatory data on the universe of Chilean firms, we test the role of Central Bank’s special credit line to domestic banks and government-backed credit guarantees provided during COVID-19. Through a regression discontinuity design, we find that firms with access to government support policies increased their domestic debt relative to foreign debt, even though foreign debt in foreign currency is much cheaper than domestic debt in local currency under deviations from the UIP. Further results document how policies reduced UIP premia for firms eligible of guarantees. An open economy model with heterogeneous firms helps rationalize these facts. A shock to the cost of external financing leads to a higher mass of firms with access to domestic credit when the government subsidizes the cost of domestic credit. The government’s credit guarantees loosen domestic collateral constraints and reduce banks’ risk aversion, while the central bank’s special credit line increases the aggregate supply of credit in the economy.
    Keywords: Capital flows, firm financing, unconventional policies, COVID-19
    JEL: F32 F41
    Date: 2023

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