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on Small Business Management |
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Issue of 2023‒10‒16
thirteen papers chosen by João Carlos Correia Leitão, Universidade da Beira Interior |
| By: | Caliendo, Marco (University of Potsdam); Rodriguez, Daniel (University of Potsdam) |
| Abstract: | Divergent thinking is the ability to produce numerous and diverse responses to questions or tasks, and it is used as a predictor of creative achievement. It plays a significant role in the business organization's innovation process and the recognition of new business opportunities. Drawing upon the cumulative process model of creativity in entrepreneurship, we hypothesize that divergent thinking has a lasting effect on post-launch entrepreneurial outcomes related to innovation and growth, but that this relation might not always be linear. Additionally, we hypothesize that domain-specific experience has a moderating role in this relation. We test our hypotheses based on a representative longitudinal sample of 457 German business founders, which we observe up until 40 months after start-up. We find strong relative effects for innovation and growth outcomes. For survival we find conclusive evidence for non-linearities in the effects of divergent thinking. Additionally, we show that such effects are moderated by the type of domain-specific experience that entrepreneurs gathered pre-launch, as it shapes the individual's ideational abilities to fit into more sophisticated strategies regarding entrepreneurial creative achievement. Our findings have relevant policy implications in characterizing and identifying business start-ups with growth and innovation potential, allowing a more efficient allocation of public and private funds. |
| Keywords: | survival, entrepreneurial performance, divergent thinking, business expansion, innovation |
| JEL: | L25 L26 M13 M51 |
| Date: | 2023–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16443&r=sbm |
| By: | Marco Caliendo (University of Potsdam, CEPA, IZA Bonn, BSE, DIW Berlin, IAB Nuremberg); Daniel Rodríguez (University of Potsdam, CEPA) |
| Abstract: | Divergent thinking is the ability to produce numerous and diverse responses to questions or tasks, and it is used as a predictor of creative achievement. It plays a significant role in the business organization’s innovation process and the recognition of new business opportunities. Drawing upon the cumulative process model of creativity in entrepreneurship, we hypothesize that divergent thinking has a lasting effect on post-launch entrepreneurial outcomes related to innovation and growth, but that this relation might not always be linear. Additionally, we hypothesize that domain-specific experience has a moderating role in this relation. We test our hypotheses based on a representative longitudinal sample of 457 German business founders, which we observe up until 40 months after start-up. We find strong relative effects for innovation and growth outcomes. For survival we find conclusive evidence for non-linearities in the effects of divergent thinking. Additionally, we show that such effects are moderated by the type of domain-specific experience that entrepreneurs gathered pre-launch, as it shapes the individual’s ideational abilities to fit into more sophisticated strategies regarding entrepreneurial creative achievement. Our findings have relevant policy implications in characterizing and identifying business start-ups with growth and innovation potential, allowing a more efficient allocation of public and private funds. |
| Keywords: | divergent thinking, entrepreneurial performance, survival, business expansion, innovation JEL Codes: |
| JEL: | L25 L26 M13 M51 |
| Date: | 2023–09 |
| URL: | http://d.repec.org/n?u=RePEc:pot:cepadp:68&r=sbm |
| By: | Rial Zouina (UMBB - Université M'Hamed Bougara Boumerdes) |
| Abstract: | We present the concepts of entrepreneurship and entrepreneurial accompaniment in Algeria, highlighting the National Fund for Credit Guarantee for Small and Medium Enterprises (FGAR) as one of the mechanisms of entrepreneurial escort by analysing the various statistics and results of this fund. The study concluded with the positive role played by the FGAR in supporting entrepreneurship in Algeria, but the lack of coherence and coordination between the various mechanisms of support and entrepreneurial accompaniment led to the disruption of its development goals. |
| Keywords: | Entrepreneurship Entrepreneurial Accompaniment the National Fund for Credit Guarantee FGAR Start-ups Small and Medium Enterprises. JEL Classification Codes: L26 M13, Entrepreneurship, Entrepreneurial Accompaniment, the National Fund for Credit Guarantee FGAR, Start-ups, Small and Medium Enterprises. JEL Classification Codes: L26, M13 |
| Date: | 2023–06–04 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04183434&r=sbm |
| By: | Henrekson, Magnus (Research Institute of Industrial Economics (IFN)); Stenkula, Mikael (Research Institute of Industrial Economics (IFN)) |
| Abstract: | Mission-oriented innovation policies are becoming increasingly popular among policymakers and scholars. We maintain that these policies are based on an overly mechanistic view of innovation and economic growth, suggesting that a more bottom-up approach is called for. By invoking an entrepreneurial ecosystem perspective, we point out that innovative entrepreneurship requires many other actors―besides the entrepreneur―whose skills and abilities are necessary to realize an entrepreneurial project. When mission-oriented policies play a large role in the economy, connections between actors in the ecosystem risk becoming distorted. A functioning and well-balanced entrepreneurial ecosystem requires instead an institutional framework that levels the playing field for potential entrepreneurs and encourages productive entrepreneurship. To promote this kind of system, we discuss in more detail eight key areas where appropriate horizontal or bottom-up policy measures can foster innovation and, in the end, the welfare-enhancing productive entrepreneurship policymakers and scholars strive for. |
| Keywords: | Collaborative innovation bloc; Entrepreneurial ecosystem; Entrepreneurship policy; Institutions; Public choice |
| JEL: | H50 L26 O31 P16 |
| Date: | 2023–09–28 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:1474&r=sbm |
| By: | Hasan, Kamrul; Shaturaev, Jakhongir |
| Abstract: | This research paper examines the role of technology innovation in the development of entrepreneurship. With the rapid advancement of technology, entrepreneurs have access to innovative tools and platforms that have transformed the way businesses operate and create value. This paper explores the impact of technology innovation on various aspects of entrepreneurship, including idea generation, market analysis, resource utilization, product development, and marketing. It also analyzes the challenges and opportunities that arise from the integration of technology in entrepreneurial ventures. The findings suggest that technology innovation plays a vital role in promoting entrepreneurship by facilitating business growth, enhancing competitiveness, and fostering innovative solutions to societal challenges. |
| Keywords: | Technology innovation, entrepreneurship development, idea generation, market analysis, resource utilization, product development, marketing, challenges, opportunities. |
| JEL: | A2 I2 M2 P0 |
| Date: | 2022–01–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:118282&r=sbm |
| By: | Samuel Bazzi; Marc-Andreas Muendler; Raquel F. Oliveira; James E. Rauch |
| Abstract: | We explore how financial constraints distort the entry decisions among otherwise productive entrepreneurs and limit growth of promising young firms. A model of liquidity-constrained entrepreneurs suggests that the easing of credit constraints can induce more entry of firms with greater long-run growth potential than the easing of conventional entry barriers would bring about. We explore this growth mechanism using a large-scale program to expand the supply of credit to small and medium enterprises in Brazil. Local credit supply shocks generate greater firm entry but also greater exit with no effect on short-run employment growth in the formal sector. However, credit expansions increase average capability among entering firms, which enter at larger size, survive longer, and grow faster. These firm dynamics are more pronounced in areas with weaker credit markets ex ante and consistent with local bank branches using cheap targeted credit lines to expand lending more broadly. Our findings provide new evidence on the general equilibrium effects of credit supply expansions. |
| JEL: | D21 D22 D92 L25 L26 M13 O12 |
| Date: | 2023–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31721&r=sbm |
| By: | Bearzotti, Enia; Polanec, Sašo; Bartolj, Tjaša |
| Abstract: | This paper evaluates the impact of varying subsidy sizes and distinct program objectives on firm size and performance. The magnitude of treatment effects increases with subsidy size, although the marginal effects tend to decrease. We also find that treatment effects differ across subsidy programs due to their distinct objectives. Among these, labor-support measures are most effective at supporting employment, capital, and output while being most harmful to productivity. Contrary to theory, subsidies providing incentives for investments have no impact on capital or productivity. The treatment effects tend to decrease over time and are thus temporary. As recipient firms are more likely to receive additional support in the future, the effects of subsidies accumulate giving rise to permanent differences between subsidized and non-subsidized firms. However, the lack of productivity improvements in such firms questions the benefits of repeated supporting measures. |
| Keywords: | Subsidies, Firm Growth, Firm Performance, Industrial Policy |
| JEL: | H25 L25 L52 |
| Date: | 2023–09–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:118490&r=sbm |
| By: | William R. Kerr |
| Abstract: | We study the relationship between firm centralization and organizational reproduction in satellite locations. For decentralized firms, the ethnic compositions of inventors in satellite locations mostly resemble their host cities, with little link to the inventor composition of their parent firms' R&D headquarters. For highly centralized firms, by contrast, organizational reproduction has an explanatory power equal to half or more of the host city effect. Reproduction is strongest when a firm exhibits a hands-on approach to the satellite facility, such as cross-facility team collaboration or internal talent mobility. |
| JEL: | F22 F23 J61 L22 L25 M51 O31 O32 R11 R12 |
| Date: | 2023–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31724&r=sbm |
| By: | Ufuk Akcigit; Harun Alp; André Diegmann; Nicolas Serrano-Velarde |
| Abstract: | This paper investigates a unique policy designed to maintain employment during the privatization of East German firms after the fall of the Iron Curtain. The policy required new owners of the firms to commit to employment targets, with penalties for non-compliance. Using a dynamic model, we highlight three channels through which employment targets impact firms: distorted employment decisions, increased productivity, and higher exit rates. Our empirical analysis, using a novel dataset and instrumental variable approach, confirms these findings. We estimate a 22% points higher annual employment growth rate, a 14% points higher annual productivity growth, and a 3.6% points higher probability of exit for firms with binding employment targets. Our calibrated model further demonstrates that without these targets, aggregate employment would have been 15% lower after 10 years. Additionally, an alternative policy of productivity investment subsidies proved costly and less effective in the short term. |
| Keywords: | industrial policy, privatizations, productivity, size-dependent regulations |
| JEL: | D22 D24 J08 L25 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10640&r=sbm |
| By: | Joachim Wagner (Leuphana Universität Lüneburg, Institut für Volkswirtschaftslehre) |
| Abstract: | The use of big data analytics (including data mining and predictive analytics) by firms can be expected to increase productivity and reduce trade costs, which should be positively related to export activities. This paper uses firm level data from the Flash Eurobarometer 486 survey conducted in February – May 2020 to investigate the link between the use of big data analytics and export activities in manufacturing enterprises from the 27 member countries of the European Union. We find that firms which use big data analytics do more often export, do more often export to various destinations all over the world, and do export to more different destinations. The estimated big data analytics premia for exports are statistically highly significant after controlling for firm size, firm age, patents, and country. Furthermore, the size of these premia can be considered to be large. Successful exporters tend to use big data analytics. |
| Keywords: | Big data analytics, exports, firm level data, Flash Eurobarometer 486 |
| JEL: | D22 F14 |
| Date: | 2023–09 |
| URL: | http://d.repec.org/n?u=RePEc:lue:wpaper:421&r=sbm |
| By: | Dilaka Lathapipat |
| Abstract: | This paper builds on Chen and Dahlman (2006)’s Knowledge Economy concept by introducing the Knowledge Economy Ecosystem model consisting of five pillars: ICT infrastructure, innovation infrastructure, financial infrastructure, quality of institutions, and educated and skilled workers. The subindices for the first four pillars contribute to the Knowledge Economy Infrastructure (KEI) Index, while the human capital pillar is represented by the learning-adjusted years of schooling (LAYS), a measure introduced by the World Bank in 2018. The utilization of LAYS in our model is important, because it recognizes that mean years of schooling is a poor measure of human capital simply because the quality of education can differ greatly across countries. Employing a dynamic panel data framework, we empirically examine the influence of the KEI Index and LAYS on total factor productivity (TFP) and GDP per capita growth. Our findings affirm the substantial positive impact of both LAYS and the KEI Index on TFP and economic growth. This empirical evidence underscores the essential role of sustained investments in these five pillars for fostering long-term economic growth, offering vital insights for policymakers. Drawing on Thailand as a case study, the analysis illuminates the nation's specific challenges within the Knowledge Economy Ecosystem framework, especially in the realms of human capital development, innovation, and institutional quality. The study underscores the considerable obstacles Thailand encounters in these domains, impeding its transition toward a knowledge-based economy. |
| Keywords: | Human capital; Education; Knowledge economy; Productivity |
| JEL: | I25 O40 |
| Date: | 2023–09 |
| URL: | http://d.repec.org/n?u=RePEc:pui:dpaper:207&r=sbm |
| By: | Khondaker Golam Moazzem; A S M Shamim Alam Shibly |
| Abstract: | This study focuses on the relationship between public policies and research during the Covid pandemic period in addressing the challenges of the marginalised businesses, particularly for SMEs and women-led enterprises, in getting access to financial support (i.e., stimulus loan packages). Theoretically, a knowledge-based policy formulation process generates a policy space where actors and institutions, politics and interests, narratives and evidence intersect altogether. Incorporating these three factors in the context of a developing country is challenging, particularly for the marginalised businesses, since their participation in the policy space is minimal. |
| Keywords: | COVID-19, Public Policy, SMEs, MCSMEs, women-led enterprises, Bangladesh |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:pdb:report:22&r=sbm |
| By: | Benjamin Born; Zeno Enders; Manuel Menkhoff; Gernot J. Müller; Knut Niemann |
| Abstract: | Using firm-level data, we study how firm expectations adjust to news while accounting for a) the heterogeneity of news and b) the heterogeneity of firms. We classify news as either micro or macro, that is, information about firm-specific developments or information about the aggregate economy. Survey data for German and Italian firms allows us to reject rational expectations: Both types of news predict forecast errors at the firm level. Yet while firm expectations overreact to micro news, they underreact to macro news. We propose a general-equilibrium model where firms suffer from ‘island illusion’ to explain these patterns in the data. |
| Keywords: | Survey data, salience, overreaction, underreaction, micro news, macro news, island illusion, business cycle |
| JEL: | D84 C53 E71 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ifowps:_400&r=sbm |