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on Small Business Management |
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Issue of 2024–12–16
thirteen papers chosen by João Carlos Correia Leitão, Universidade da Beira Interior |
| By: | Korneliusz Pylak; Jason Deegan; Tom Broekel; ; |
| Abstract: | This paper explores the phenomenon of mimicry in the selection of economic domains for Smart Specialisation Strategies (S3) and discusses the regional policy implications of strategic mimicry. By analysing S3 documents from European regions, we identify and distinguish between two general types of mimicry: ‘Follow the Peers’ and ‘Follow the Role Models, ’ against the more desirable ‘Follow the Indicators’ priority selection strategy. Our findings reveal that although regions rely on their strengths by following the crucial indicators, thus exhibiting non-mimetic behaviour, there is a stronger tendency for regions to mimic popular domain portfolios, particularly those chosen by neighbouring regions and national strategies. Understanding these patterns in the selection of priority domains helps decision-makers balance mimicry and diversification, promoting specialization, new economic activities, and regional uniqueness. |
| Keywords: | smart specialisation, regional strategy, regional policy, innovation policy, mimicry |
| JEL: | O25 O38 R11 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:egu:wpaper:2439 |
| By: | Thomas Licht; Klaus Wohlrabe |
| Abstract: | This paper examines the adoption of Artificial Intelligence (AI) among German firms, leveraging firm-level data from the ifo Business Survey. We analyze the diffusion of AI across sectors and firm sizes, showing a significant increase in AI usage from 2023 to 2024, particularly in manufacturing and services. The survey data allows us to explore not only sectoral patterns of adoption but also the drivers and barriers that firms face, including firm-specific characteristics and industry dynamics. Additionally, we investigate the role of managerial traits, such as risk tolerance and patience, in shaping AI adoption decisions. Finally, we assess the potential pro-ductivity impacts of AI at the firm level, with a focus on the expected long-term benefits of AI for different sectors of the German economy. Our findings contribute to the growing body of research on AI adoption by providing new evidence from a non-US context, offering valuable insights for both academia and politics. |
| Keywords: | artificial intelligence, AI, ifo business survey, productivity |
| JEL: | M15 O30 C83 L20 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11459 |
| By: | Tacsir, Ezequiel; Pereira, Mariano; Favata, Federico; Leone, Julian |
| Abstract: | Using a multilevel analysis and the new Harmonized Latin American Innovation Surveys Database (or LAIS database) augmented with indicators from the U.S. Census Bureau's Survey of Business Owners (SBO) and the World Banks World Integrated Trade Solution (WITS), this paper presents estimates of the effects of import competition and distance to the technological frontier on firm innovation in Latin American countries. Although innovation is recognized as a multilevel phenomenon, with investment decisions not solely affected by the firm characteristics but also by the context in which each firm is embedded, the empirical literature adopting a multilevel design is still nascent and scarce. Using a two-level random slope model allows us to overcome some of the pitfalls of traditional regression models when dealing with the hierarchical structure of data while allowing us to capture the influence of contextual factors. The results suggest that the fostering effect of foreign competition depends on the firms distance to the technological frontier. The estimates suggest that the lower the foreign competition and the greater the productivity gap, the lower the probability of firms engaging in innovation. In contrast, when a firm operates in a sector that is relatively closer to the technological frontier, firms invest in innovative activities to remain at the top. These results offer a clear and useful guide for designing policies in Latin America regarding innovation among firms. While it is important to promote and stimulate innovation efforts by firms, these factors should not be overlooked as considerations: sectoral characteristics associated with the economies, sectoral openness to foreign competition, and firms distance to the technological frontier. |
| Keywords: | innovation;Latin America;multilevel modeling;LAIS database;Productivity;Competition |
| JEL: | O31 O32 C21 C25 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:idb:brikps:13833 |
| By: | Apichat Pongsupatt (Department of Finance, Faculty of Business Administration, Kasetsart University); Tharinee Pongsupatt (Department of Accounting, Faculty of Business Administration, Kasetsart University) |
| Abstract: | The objective of this study is to investigate the relationship between working capital management and profitability on the Market for Alternative Investment (MAI) in Thailand?s capital market. The general objective of MAI is compatible to the Stock Exchange of Thailand (SET) which is to act as a capital market for various businesses, but this market is focus on small and medium-sized enterprises (SMEs) and innovation. From existing literature reviews, we select five factors including receivables collection period, inventory conversion period, payable deferral period, cash conversion cycle and current ratio as explanatory variables. At the time, firm size and debt ratio are assigned as controllable variables. While return on invested capital (ROIC), a dependent variable is employed as proxy for profitability. This study uses secondary data collected from annual financial statements of companies in MAI index for the period of 10 years from 2014-2023. After examining the data, only 826 samples are qualified under the criteria. The multiple regression model is implemented for statistical testing at the significant level 0.05. The results indicate a negative significant relationship between the receivable collection period and payable deferral period with profitability. This model is supported with R2 of 0.144. We also observe that all types of MAI firms can increase their profitability by shortening the receivable collection period and curtailing the payable deferral period. The findings in this study can assist investors or managers to comprehend the effect of specific determinants to the SME?s profitability in Thailand. |
| Keywords: | Working Capital Management; Cash Conversion Cycle; Receivable Collection Period; Inventory Conversion Period; Payable Deferral Period; Return on Invested Capital; Thailand MAI Index |
| JEL: | L25 M41 Y10 |
| URL: | https://d.repec.org/n?u=RePEc:sek:iefpro:14716372 |
| By: | Saul Estrin; Andrea Herrmann; Moren Levesque; Tomasz Mickiewicz; Mark Sanders |
| Abstract: | We present a Schumpeterian growth model with new venture creation, under uncertainty, which explains the tradeoff between speed-to-breakeven, revenue-at-breakeven and relates this to the level of innovation. We then explore the tradeoffs between these outcomes empirically in a unique sample of 331 information and communication technology (ICT) ventures using a multi-input, multi-output stochastic frontier model. We estimate the contribution of financial capital and labor input to the outcomes and the tradeoffs between them, as well as address heterogeneity across ventures. We find that more innovative (and therefore more uncertain) ventures have lower speed-to-breakeven and/or lower revenue-at-breakeven. Moreover, for all innovativeness levels, new ventures face a tradeoff between speed-to-breakeven and revenue-at-breakeven. Our results suggest that it is the availability of proprietary resources (founder equity and labor) that helps ventures overcome bottlenecks in the innovation process, and we propose a line of research to explain the (large) unexplained variation in venture creation efficiency. Plain English Summary. This study examines how new businesses deal with uncertainty, focusing on the tradeoff between how quickly they become profitable (speed-to-breakeven) and how much revenue they generate when they do. We analyze data from 331 ICT ventures to understand these tradeoffs better, considering factors like financial resources and labor inputs. We find that more innovative ventures, which tend to be more uncertain, often take longer to reach profitability and may earn less when they do. Moreover, regardless of their level of innovation, all new ventures face a tradeoff between speed-to-breakeven and revenue. The study highlights that unique resources, such as founder equity and founder labor, help businesses overcome challenges in the innovation process. It also suggests further research to understand why some ventures are more efficient than others in the early stage of creating new businesses. |
| Keywords: | entrepreneurship, innovation, new venture creation, proprietary resources, stochastic frontier analysis, Schumpeterian growth model |
| Date: | 2024–11–15 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepdps:dp2054 |
| By: | Sabrina Di Addario; Zhexin Feng; Michel Serafinelli |
| Abstract: | This paper presents direct evidence on how firms’ innovation is affected by access to knowledgeable labor through co-worker network connections. We use a unique dataset that matches patent data to administrative employer–employee records from "Third Italy"—a region with many successful industrial clusters. Establishment closures displacing inventors generate supply shocks of knowledgeable labor to firms that employ the inventors’ previous co-workers. We estimate event-study models where the treatment is the displacement of a "connected" inventor (i.e., a previous coworker of a current employee of the focal firm). We show that the displacement of a connected inventor significantly increases connected inventors’ hiring. Moreover, the improved access to knowledgeable workers raises firms innovative activity. We provide evidence supporting the main hypothesized channel of knowledge transfer through firm-to-firm labor mobility by estimating IV specifications where we use the displacement of a connected inventor as an instrument to hire a connected inventor. Overall, estimates indicate that firms exploit displacements to recruit connected inventors and the improved capacity to employ knowledgeable labor within the network increases innovation. |
| Keywords: | social connections, firm-to-firm labor mobility, patents, establishment closure |
| JEL: | J60 O30 J23 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11432 |
| By: | Heng Ma (College of Economics and Management, Nanjing University of Aeronautics and Astronautics); Pengxin Wei (College of Economics and Management, Nanjing University of Aeronautics and Astronautics) |
| Abstract: | Enterprises are vital forces that combine technology and economy, research and development innovation is very important, enterprise research and development innovation need investment, in addition to rely on their own capital, financing plays an indispensable role, high-tech enterprises generally encounter financing problems, and the problem of high financing cost, to this, analyze the research and development investment and the enterprise financing cost, is particularly important. According to the report of the 20th National Congress of the Communist Party of China, the current development trend of high-tech enterprises and the relevant documents of the Ministry of Finance, this paper introduces the research background, research significance, core content and the research methods adopted. By sorting out the relevant documents, the R&D investment, equity and debt financing status of high-tech enterprises are introduced. Select the appropriate measurement method, use the abnormal surplus growth model (PEG model) to measure the equity financing cost, and measure the debt financing cost by the relative number method. In this paper, 1486 A-share listed companies from 2018 to 2021 were selected as research samples, and relevant data was collected through CSMAR and CNRDS. In the data processing and analysis section, in this paper, EXCEL and STATA17.0 software were used to process the collected data and conduct related analysis. The connection between R&D investment intensity and enterprise equity financing cost and debt financing cost is deeply discussed. It is found that the equity financing cost; the effect of the equity financing cost is more obvious in state-owned enterprises. Finally, relevant suggestions are put forward for the R&D investment of high and new technology enterprises and the government innovation subsidies. |
| Keywords: | R&D investment, Financing cost, Property rights |
| URL: | https://d.repec.org/n?u=RePEc:sek:iefpro:14716351 |
| By: | Panle Jia Barwick; Hyuk-Soo Kwon; Shanjun Li; Yucheng Wang; Nahim B. Zahur |
| Abstract: | This paper examines the impact of industrial policies (IPs) on innovation in the global automobile industry. We compile the first comprehensive dataset linking global IPs with patent data related to the auto industry from 2008 to 2023. We document a major shift in policy focus: by 2022, nearly half of all IPs targeted electric vehicles (EV)-related sectors, up from almost none in 2008. In the meantime, there has been a clear technological transition from internal combustion engine (GV) technologies to EV innovations. Our analysis finds a positive relationship between policy support and innovation activity. At the country level, a one-standard-deviation increase in five-year cumulative EV-targeted IPs is associated with a four-percent rise in new EV patent applications. Firm-level analyses (using OLS, IV, and PPML) indicate that a ten-percent increase in EV financial incentives received by automakers and EV battery producers leads to a similar four-percent increase in EV innovations. We confirm the importance of path dependence in the direction of technology change in the automobile industry but find no evidence that EV-targeted IPs stimulate innovation in GV technologies. |
| JEL: | H20 L5 L60 L62 O3 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33138 |
| By: | Kim, Jinhwan (Stanford U); Valentine, Kristen (U of Georgia) |
| Abstract: | Innovative public firms sell 9.6% (615) more patents in the last month, relative to the first half of the fiscal year. Consistent with reporting incentives driving these sales, they are more pronounced among firms with strong incentives to meet earnings expectations. Patents sold in the last month are litigated more frequently because they are disproportionately sold to “patent trolls†, who opportunistically acquire patents to engage in litigation. We find anti-troll laws reduce opportunistic acquisition among trolls. We highlight a novel consequence of corporate reporting incentives: its contribution to strategic patent sales, which in turn impact the market for innovation. |
| JEL: | D23 M40 M41 O30 O31 O32 O34 |
| Date: | 2024–02 |
| URL: | https://d.repec.org/n?u=RePEc:ecl:stabus:4162 |
| By: | Kim, Jinhwan (Stanford U); Shi, Terrence Tianshuo (Harvard U); Verdi, Rodrigo S. (MIT) |
| Abstract: | We examine how the efficiency of the judicial system impacts corporate innovation. To do so, we exploit a pilot program introduced by the U.S. Congress in 2011, which allowed judges with expertise(as opposed to randomly selected judges) to preside over more patent cases to facilitate efficient ruling. We find firms headquartered in counties subject to the Patent Pilot Program increase patent-based innovation by 5.2% to 6.2%, relative to firms in counties not under the program. Our results are concentrated among firms with high legal costs and uncertainty: firms that engage in innovation with “fuzzy boundaries†, that have high litigation risk, and that are more resource-constrained. However, we also find non-random assignment has an adverse impact on firms more likely to be assigned to judges that are favorably-biased towards non-practicing entities (NPEs) or “patent trolls†, who engage in frequent, frivolous litigation. Taken together, our findings underscore the important role of judicial efficiency in helping firms better allocate their resources towards innovation investment, but also indicate that judicial efficiency programs can exacerbate the negative effects of judicial biases in certain contexts. |
| JEL: | J24 K11 K42 M41 O31 O38 O39 |
| Date: | 2024–01 |
| URL: | https://d.repec.org/n?u=RePEc:ecl:stabus:4161 |
| By: | Hambur Wang |
| Abstract: | This paper constructs a novel intellectual property (IP) protection strategy using differential equation theory, aiming to analyze and optimize the effectiveness of IP protection. By developing a mathematical model, it explores the dynamic impact of IP protection intensity on both innovative enterprises and infringement activities. The study finds that a well-designed IP protection strategy can effectively reduce infringement while promoting technological innovation. The paper also discusses the effects of strategies under varying parameter conditions and verifies the model's rationality and effectiveness through numerical simulation. The findings provide theoretical support and references for formulating IP protection policies. |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2411.00981 |
| By: | Francesco Filippucci; Peter Gal; Matthias Schief |
| Abstract: | The paper studies the expected macroeconomic productivity gains from Artificial Intelligence (AI) over a 10-year horizon. It builds a novel micro-to-macro framework by combining existing estimates of micro-level performance gains with evidence on the exposure of activities to AI and likely future adoption rates, relying on a multi-sector general equilibrium model with input-output linkages to aggregate the effects. Its main estimates for annual aggregate total-factor productivity growth due to AI range between 0.25-0.6 percentage points (0.4-0.9 pp. for labour productivity). The paper discusses the role of various channels in shaping these macro-level gains and highlights several policy levers to support AI's growth-enhancing effects. |
| Keywords: | Artificial Intelligence, Productivity, Technology adoption |
| JEL: | E1 O3 O4 O5 |
| Date: | 2024–11–22 |
| URL: | https://d.repec.org/n?u=RePEc:oec:comaaa:29-en |
| By: | Velthuis, Sanne; Le Petit-Guerin, Mehdi; Royer, Jeroen; Leibert, Tim; Cauchi-Duval, Nicolas; Franklin, Rachel S. (Newcastle University); MacKinnon, Danny |
| Abstract: | Over the past ten years or so, concern has mounted about places in the Global North that have been ‘left behind’ by the growth and prosperity experienced in superstar cities and other wealthy regions. This briefing paper summarises the findings from the one of the strands of the ‘Beyond Left Behind Places’ project, which involved quantitative analysis of residential migration patterns in economically ‘left behind’ regions in the UK, France, and Germany during the immediate pre-COVID period. In addition, we conducted qualitative research with residents of economically ‘left behind’ regions in the three countries to get their perceptions. We use national administrative and census data for the three countries to examine whether economically lagging regions tend to lose or gain population through migration, and what age groups are moving in or out. Economic theories often assume that individuals migrate from economically lagging regions to areas offering better economic conditions. But actually, economically lagging regions in the UK, France and Germany generally tend to experience net population inflows. In other words, more people are moving to these regions than are moving out. In fact, when it comes to internal migration (i.e. people moving within the same country), these lagging regions tend to attract more new residents, on average, than more economically successful regions do. |
| Date: | 2024–11–11 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:t4vbd |