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on Small Business Management |
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Issue of 2023‒08‒28
eighteen papers chosen by João Carlos Correia Leitão, Universidade da Beira Interior |
| By: | Koch, Florian; Hoellen, Max; Konrad, Elmar D.; Kock, Alexander |
| Abstract: | Creative industries contain paradoxes because conflicting tensions arise between the market and the arts. Entrepreneurs need to find and maintain a balance between those two sides to create innovation. This study tests the interaction between business and creative orientations of a founder in their influence on innovation in the context of creative entrepreneurial firms and provides recommendations for how creative agents can leverage and manage their innovations based on their creative visions. Determinants on the individual level, such as the founder's creative or business orientations, have a lasting impact on the practices and process of their venture. To trace the imprinting influence of the founder's orientation on innovation, the empirical setting is a time‐lagged study of German firm owners in the cultural and creative industries surveyed 5 years apart. The results show a significant relationship between creative orientation and innovation, whereas business orientation does not significantly relate to innovation. However, creative and business orientations reveal a negative interaction effect. This study contributes empirical evidence to the paradox theory and the interaction between the opposite poles. Our findings provide valuable insights about the relevance of creative orientation and its visionary impact on the firms' innovation process. Furthermore, the results shed new light on the tension between art and the market, as different compositions of the two orientation poles seem to have a varying impact on the degree of innovation. Thus, the study reveals the complexity of creative entrepreneurship and provides managerial guidance for other knowledge‐based industries. |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:dar:wpaper:138979&r=sbm |
| By: | FUKUGAWA Nobuya |
| Abstract: | Growth of knowledge-based economies hinges on the systematic application of science, which makes the efficient commercialization of university knowledge critical. Economic theory identifies determinants of the commercialization modes of science (license and entrepreneurship), such as search costs for licensees, post-license development costs, intellectual property ownership, commercialization skills of firms, and the efficiency of innovation intermediaries. Based on this theoretical framework, this study analyzes comprehensive university-level panel data (2018–2021) and presents the first evidence of the factor that most influences the commercialization modes of science. Estimation results reveal that universities that intensively engage in basic research create more university spinoffs. Basic research is conducive to radical innovation which tends to be commercialized by entrepreneurial firms that do not suffer from the replacement effect. Therefore, encouraging a broad range of universities to engage in basic research facilitates academic entrepreneurship, which should have positive implications on economic growth. |
| Date: | 2023–07 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:23053&r=sbm |
| By: | NAKAMURA Ryohei |
| Abstract: | The growth of regional economies requires an economic metabolism in which high-productivity firms newly enter the market, while low-productivity firms exit the market, resulting in a shift in labor and other production factors. A "revolving door" economy is an economy in which firms that enter the market exist only for a short time, withdraw and enter the market repeatedly, and new entrants do not contribute to productivity improvement. This means that if new entrants are not sufficiently innovative compared to incumbents, even if the rate of entry into business rises, they will simply be replaced by companies whose productivity level is not significantly higher, and this will not lead to job creation or improved productivity. A contrasting concept is the replacement of companies by Schumpeter's “creative destruction.†The high level of technology and productivity of new firms entering the market drives inefficient incumbents out of the market. Looking at the statistics, there is a tendency for large cities to have both higher business entry and exit rates, but the difference between the entry and exit rates is greater in metropolitan areas. Although it depends on the regional characteristics, location competitiveness is generally higher in metropolitan areas, and there is a tendency for the turnover rate to be comparatively higher or the survival period to be shorter. Before and after regional revitalization, we will examine whether or not there is a departure from the revolving door economy by industry and region, using economic census and TSR (Tokyo Shoko Research) data. |
| Date: | 2023–08 |
| URL: | http://d.repec.org/n?u=RePEc:eti:rpdpjp:23014&r=sbm |
| By: | Guo, Liwen (University of New South Wales); Cheng, Zhiming (University of New South Wales); Tani, Massimiliano (University of New South Wales); Cook, Sarah (University of Nottingham) |
| Abstract: | With air pollution remaining a significant problem in many regions globally, an increasing number of environmentally conscious entrepreneurs have been taking initiatives to combat this issue, accompanied by a growing environmental awareness among the general public. To test the strength of this relationship, we use individual-level information from an enterprise survey in China in 2018 and conducted instrumental variable analyses to study the impact of air pollution on the green innovation behaviours of non-agricultural entrepreneurs. The results indicate that, on average, a one standard deviation increase in PM2.5 concentration is associated with a 4.3 percentage points increase in green innovation (or a 11.9 percentage points increase in green innovation intensity). Entrepreneurs' gambling preferences could potentially mediate the relationship between air pollution and green innovation, while expected firm income and actual firm income may act as suppressors. Specifically, entrepreneurs who launch their businesses following the implementation of environmental policies are more likely to adopt green innovation practices. This study provides insight into why there is a growing trend of environmentally-conscious entrepreneurs in regions with high levels of air pollution. |
| Keywords: | green innovation, air pollution, China |
| JEL: | J01 Q53 Q55 |
| Date: | 2023–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16321&r=sbm |
| By: | Rama, Ruth |
| Abstract: | Purpose. This research examines the possibility of food and beverage (F&B)-processing multinational corporations serving as a viable conduit for the international diffusion of technology. Methodology. This study utilizes existing literature to analyse three potential avenues through which technology transfer occurs from these corporations to host sectors: contract farming, domestic collaboration for innovation, and spillover effects of Foreign Direct Investment (FDI). Findings. In specific instances, these firms might provide support to local innovators through financial assistance or complementary resources. Additionally, they may actively facilitate technology transfers to particular types of local partners and they may generate demonstration effects. Nevertheless, the prevailing evidence consistently indicates that the impact of FDI on the host sector is generally limited or selective. Practical implications. The findings of this study cast doubt on the overly optimistic views held by international organizations and host governments regarding FDI in the food sector as a major source of cutting-edge technology for host countries. The incentives offered to food and beverage multinationals should be carefully calibrated to strike a balance between acknowledging potential benefits to the sector's innovation system and maintaining a realistic perspective on the actual outcomes. Originality. This study combines and analyses three separate empirical lines of research in parallel to offer factual elements for a policy debate. By integrating these different research approaches, the study aims to contribute to a well-informed discussion on relevant policy matters. |
| Keywords: | Innovation, internationalisation of R&D, FDI policy, food and beverage sector, contract farming, spillovers of knowledge, cooperation for innovation. |
| JEL: | F6 F63 F69 O3 O33 |
| Date: | 2023–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:118162&r=sbm |
| By: | Krämer-Eis, Helmut; Block, Jörn; Botsari, Antonia; Lang, Frank; Lorenzen, Solvej; Diegel, Walter |
| Abstract: | The EIF VC Survey and the EIF Private Equity Mid-Market Survey (the largest combined regular survey exercises among General Partners on a pan-European level) provide an opportunity to retrieve unique market insights. This publication is based on the results of the 2022 waves of these two surveys and examines how the Russian offensive war against Ukraine that started in 2022 affected VC and PE mid-market fund managers and their portfolio companies. The results show that the war - and the related consequences - had a strong impact on the two investor types and on entrepreneurial finance in Europe, inter alia regarding the challenges faced, investment strategies as well as LPs' reaction to the changed macroeconomic and geopolitical environment. The results have implications for VC and PE investors and for policy-makers due to the importance of the entrepreneurial finance sector for supporting entrepreneurship and innovation in Europe. |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:eifwps:202389&r=sbm |
| By: | NAKAMURA Ryohei |
| Abstract: | The growth of regional economies requires an economic metabolism in which high-productivity firms newly enter the market, while low-productivity firms exit the market, resulting in a shift in labor and other production factors. A "revolving door" economy is an economy in which firms that enter the market exist only for a short time, withdraw and enter the market repeatedly, and new entrants do not contribute to productivity improvement. This means that if new entrants are not sufficiently innovative compared to incumbents, even if the rate of entry into business rises, they will simply be replaced by companies whose productivity level is not significantly higher, and this will not lead to job creation or improved productivity. A contrasting concept is the replacement of companies by Schumpeter's “creative destruction.†The high level of technology and productivity of new firms entering the market drives inefficient incumbents out of the market. Looking at the statistics, there is a tendency for large cities to have both higher business entry and exit rates, but the difference between the entry and exit rates is greater in metropolitan areas. Although it depends on the regional characteristics, location competitiveness is generally higher in metropolitan areas, and there is a tendency for the turnover rate to be comparatively higher or the survival period to be shorter. Before and after regional revitalization, we will examine whether or not there is a departure from the revolving door economy by industry and region, using economic census and TSR (Tokyo Shoko Research) data. |
| Date: | 2023–08 |
| URL: | http://d.repec.org/n?u=RePEc:eti:rpdpjp:23015&r=sbm |
| By: | Mohamed TAHROUCH (ENCGT - Ecole Nationale de Commerce et de Gestion de Tanger - UAE - Université Abdelmalek Essaâdi); Tayeb OUAZZANI CHAHDI (ENCGT - Ecole Nationale de Commerce et de Gestion de Tanger - UAE - Université Abdelmalek Essaâdi, UEMF - Université Euro Méditerranéenne de Fès) |
| Abstract: | This article provides a review of the scientific literature dedicated to Management Control and Performance in the context of small and medium-sized enterprises (SMEs). It first recalls the field of management control and its dominant schools of thought, and takes stock of its practice over the decades. It then sheds light on the research conducted in the context of SMEs and focuses particularly on the contingency factors that prevail in management control practices for this category of companies. The article naturally emphasizes the notion of firm performance and its significant place in the management sciences literature. The fundamental models from the 1970s to the 1990s that attempt to explain or define its terms. The contemporary models from the 2000s, are mentioned, highlighting their evolution. The shift from a purely commercial and financial approach to a more comprehensive approach, integrating social and environmental aspects of the company, is widly described. Finally, the article addresses the question of performance management in the SME context and the role attributed to prospective dashboards in this management. |
| Abstract: | Cet article propose une revue de littérature scientifique consacrée au contrôle de gestion (CG) et à la performance dans le contexte de la petite et moyenne entreprise. Il rappelle d'abord le champ du contrôle de gestion et ses écoles de pensée dominantes et fait le point sur l'évolution de sa pratique, au fil des décennies. Il jette ensuite la lumière sur les travaux menés dans le contexte de la PME et s'intéresse particulièrement aux facteurs de contingence qui prévalent dans la pratique du contrôle de gestion, pour cette catégorie d'entreprises. L'article met tout naturellement l'accent sur la notion de performance de l'entreprise et sa place majeure dans la littérature en sciences de gestion. Les modèles fondamentaux des années 70 à 90 tentant à l'expliquer ou à en définir les termes. Les modèles contemporains des années 2000 y sont rappelés et leur évolution mise en évidence. Le passage d'une approche purement commerciale et financière vers une approche plus globale, intégrant notamment les aspects sociaux et environnementaux de l'entreprise est largement décrit. L'article aborde enfin la question du pilotage de la performance dans le contexte PME et le rôle attribué aux tableaux de bord prospectifs dans ce pilotage. |
| Keywords: | Management control, Perfomance, SME, Dashboard, Morocco, Contrôle de gestion, Performance, PME, Tableau de Bord, Maroc |
| Date: | 2023–07–12 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04162636&r=sbm |
| By: | Matthew S. Johnson; Michael Lipsitz; Alison Pei |
| Abstract: | Worker mobility across firms can enhance innovation by spreading knowledge, but such mobility may also hinder innovation by making firms reluctant to invest in R&D. A common way that firms limit workers' mobility is with noncompete agreements (NCAs). We examine how the legal enforceability of NCAs affects innovation, as measured by patenting, using data on every state-level NCA enforceability change between 1991–2014. We find that making NCAs easier to enforce (“stricter” enforceability) substantially reduces the rate of patenting: an average-sized increase in NCA enforceability leads a state to have 16-19% fewer citation-weighted patents over the following 10 years. This effect reflects a true loss in innovation rather than a reduction in useless or strategic patents. We then reconcile these findings with contrasting theoretical predictions. Stricter NCA enforceability reduces job mobility and new business formation in innovative industries, suggesting slower knowledge spread. Within publicly-traded firms, stricter NCA enforceability increases investment, but still leads to less innovation, suggesting that any gains from enhanced incentives to invest are more than offset by other ways that NCAs slow down innovation. Finally, using variation in technology classes’ exposure to NCA enforceability changes, we show that the economy-wide losses to innovation from strict enforceability are even larger than what our state-level estimates imply. |
| JEL: | J38 O31 O38 |
| Date: | 2023–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31487&r=sbm |
| By: | Bournakis, Ioannis; Tsionas, Mike G. |
| Abstract: | We developed a non-parametric technique to measure Total Factor Productivity (TFP). Our paper has two major novelties in estimating the production function. First, we propose a productivity modelling with both idiosyncratic firm factors and aggregate shocks within the same framework. Second, we apply Bayesian Markov Chain Monte Carlo (MCMC) estimation techniques to overcome restrictions associated with monotonicity between productivity and variable inputs and moment conditions in identifying input parameters. We implemented our methodology in a group of 4286 manufacturing firms from France, Germany, Italy, and the United Kingdom (2001-2014). The results show that: (i) aggregate shocks matter for firm TFP evolution. The global financial crisis of 2008 caused severe adverse effects on TFP albeit short in duration; (ii) there is substantial heterogeneity across countries in the way firms react to changes in R&D and taxation. German and U.K. firms are more sensitive to fiscal changes than R\&D, while Italian firms are the opposite. R\&D and taxation effects are symmetrical for French firms; (iii) the U.K. productivity handicap continued for years after the financial crisis; (iv) industrial clusters promote knowledge diffusion among German and Italian firms. |
| Keywords: | Total Factor Productivity (TFP), Control Function, Non-parametric Bayesian Estimation, Markov Chain Monte Carlo(MCMC), Research and Development (R\&D), Taxation, European firms |
| JEL: | C11 D24 H21 H25 Q55 |
| Date: | 2023–07–21 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:118100&r=sbm |
| By: | Bustamante, Maria Cecilia; Zucchi, Francesca |
| Abstract: | We develop a model to examine how discount rates affect the nature and composition of innovation within an industry. Challenging conventional wisdom, we show that higher discount rates do not discourage firm innovation when accounting for the industry equilibrium. Higher discount rates deter fresh entry—effectively acting as entry barriers—but encourage innovation through the intensive margin, which can lead to a higher industry innovation rate on net. Simultaneously, high discount rates foster explorative over exploitative innovation. The model rationalizes observed patterns of innovation cyclicality, and predicts that lower entry in downturns hedges innovating incumbents against higher discount rates. JEL Classification: G31, G12, O31 |
| Keywords: | creative destruction, risk premia, time-varying discount rates, Vertical and horizontal innovation |
| Date: | 2023–08 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20232835&r=sbm |
| By: | Filippo Mezzanotti; Timothy Simcoe |
| Abstract: | U.S. firms have reduced their investment in scientific research (“R”) compared to product development (“D”), raising questions about the returns to each type of investment, and about the reasons for this shift. We use Census data that disaggregates “R” from “D” to study how US firms adjust their innovation investments in response to an external increase in funding cost. Companies with greater demand for refinancing during the 2008 financial crisis, made larger cuts to R&D investment. This reduction in R&D is achieved almost entirely by reducing investment in research. Development remains essentially unchanged. If other firms patenting similar technologies must refinance, however, then Development investment declines. We interpret the latter result as evidence of technological competition: firms are reluctant to cut Development expenditures when that could place them at a disadvantage compared to potential rivals. |
| Keywords: | Research and Development, Financial Crisis, Technology Competition. |
| JEL: | O32 O31 G30 L20 |
| Date: | 2023–08 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:23-39&r=sbm |
| By: | Ruochen Dai; Dilip Mookherjee; Kaivan Munshi; Xiaobo Zhang |
| Abstract: | This research examines the determinants of entrepreneurship in the initial transition from agriculture to industrial production and the subsequent transition to higher value exporting in China. Using data covering the universe of registered firms over the 1994-2009 period, we find that individuals born in rural counties with higher agricultural productivity and population density had a greater propensity to enter domestic production in the first transition, but that this association was reversed in the second transition to exporting. This is despite the fact that revenues (and productivity) were increasing more steeply over time for firms drawn from denser birth counties in both activities. The model that we develop to reconcile these facts incorporates a productivity enhancing role for hometown (birth county) networks. We provide causal evidence, using shift-share instruments, that these networks of firms were active and that more densely populated rural counties gave rise to networks that were more effective at increasing the revenues of their members, both in domestic production and exporting. While this generated faster transition in the first stage, the incumbent (more successful) domestic networks drawn from denser counties created a disincentive to subsequently enter exporting. Our analysis identifies a novel dynamic inefficiency that could arise in any developing economy where (overlapping) networks are active. |
| JEL: | O11 O12 O14 |
| Date: | 2023–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31477&r=sbm |
| By: | Cantner, Uwe; Grashof, Nils; Grebel, Thomas; Zhang, Xijie |
| Abstract: | Since the Bologna Process, universities have experienced a tremendous increase in competitive pressure. The Excellence Initiative is a path-breaking initiative to the historically-based egalitarian higher education system in Germany to boost universities' competitiveness and the competition among universities. Despite this systematic change, it remains rather unclear to what extent the Excellence Initiative influences the performance. In this paper, we investigate the effect of the Excellence Initiative on universities relative productivity in teaching and research and hence on the divergence or convergence of universities in these performance dimensions. Based on a unique dataset that combines publication and detailed university-level data, we apply a two-step approach by calculating relative productivity with a non-parametric procedure in the first step and using a difference-in-difference approach for estimating treatment effects of the Excellence Initiative in the second step. Overall, we note only a few moments when universities funded by the Excellence Initiative seem to excel and make progress compared to non-funded universities. In research, only some of the Excellence-funded universities, particularly the winners of the Graduate Schools and Clusters of Excellence funding line, manage to improve significantly, even if only for a few years. In teaching, we found no significant average treatment effect of the Excellence Initiative, but a slightly significant time-specific decline in relative teaching productivity two years after funding. |
| Keywords: | Excellence Initiative, Universities, Relative Productivity, DEA, Difference-in-difference, Funding |
| JEL: | C22 I20 I23 I25 I28 |
| Date: | 2023–07–29 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:118139&r=sbm |
| By: | Johanna Garnitz; Annette von Maltzan; Klaus Wohlrabe |
| Abstract: | FamData is a database covering family businesses and non-family businesses across various size classes and branches containing structural and financial information. The ifo Institute assembled a business panel with executives from almost 4, 000 companies. In addition to the “hard” business data like turnover and number of employees, the database also includes “soft” survey data. The latter one covers information from regular – at least yearly - surveys treating topics like investment behavior, skilled labor shortage or reaction of firms during the Corona pandemic situation and the rise in energy prices observed in 2022. |
| Keywords: | family businesses, micro data, surveys |
| JEL: | C80 C81 C83 D22 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10540&r=sbm |
| By: | Demirguc-Kunt, Asli; Horvath, Balint L.; Huizinga, Harry (Tilburg University, School of Economics and Management) |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:tiu:tiutis:f86d5fb2-4829-426b-b026-b9fe12b9e932&r=sbm |
| By: | Philippe Loyson (VU Amsterdam); Rianne Luijendijk (DNB); Sweder van Wijnbergen (University of Amsterdam) |
| Abstract: | We assess whether climate transition risk is priced in Europe’s equity market by analysing relative equity returns of high versus low CO2-emitting firms. We use a panel data set covering firm-specific carbon emissions of 1, 555 European companies over the period 2005-2019. We add to the existing literature by addressing problems in carbon data and by using various econometric methods ranging from panel data analysis to the SCM. Fama-French style panel regressions at both the individual firm level as well as portfolio level suggest that carbon intensity is negatively related to stock returns. Treatment effect models, however, provide some evidence for increased pricing of climate transition risk after the Paris Agreement. |
| Keywords: | Climate Change, Carbon Emissions Intensity, Paris Agreement, Transition Risk Premia. |
| JEL: | G12 Q54 |
| Date: | 2023–07–24 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20230042&r=sbm |
| By: | Marianna Brunetti (CEIS & DEF, University of Rome "Tor Vergata"); Anzelika Zaiceva (University of Modena and Reggio Emilia) |
| Abstract: | Using a unique Italian dataset covering the period 2004-2020, we assess the immigrant-native gap in entrepreneurship and investigate channels behind it. The data allows us to account for many observable characteristics as well as for risk aversion, which is usually not observed, yet crucial for the self-employment decision. Unlike most of the existing empirical literature, we find that immigrants in Italy are less likely to be self-employed. The negative gap is confirmed when propensity score matching methodology is used. Heterogeneity analysis suggests that the negative gap is larger for men, for economic migrants and those coming from Sub-Saharan Africa, while it is not significant for mixed immigrant-native couples, for highly skilled, and for migrants from Asia and Oceania. The largest gap is found for those working in the agricultural sector. Regarding additional channels, we explore the role of access to credit, including the informal one, and whether migrants are credit constrained, as well as the importance of migrant networks, easiness of doing business, and expenditures on services for migrants. Despite finding significant correlations between self-employment and some of these factors, none of them seem to decrease the magnitude of the negative gap. |
| Keywords: | Immigrants, self-employment, gender, intermarriage, propensity score matching |
| JEL: | F22 J21 O15 J15 |
| Date: | 2023–07–31 |
| URL: | http://d.repec.org/n?u=RePEc:rtv:ceisrp:563&r=sbm |