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on Entrepreneurship |
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Issue of 2006‒08‒05
seven papers chosen by Marcus Dejardin Facultes Universitaires Notre-Dame de la Paix |
| By: | Mario Pianta; Andrea Vaona |
| Abstract: | The paper investigates the differences between small, medium-sized and large firms regarding their performance in the introduction of new products and processes. After a review of the relevant literature, two models are proposed and tested in search for different business strategies and innovation inputs connected to product and process innovations. The empirical analysis uses innovation survey (CIS 2) data at the industry level for 22 manufacturing sectors, broken down in three firm size classes, for eight European countries. Special attention is devoted to tackling the issues of possible endogeneity of the regressors and of unobserved sectoral heterogeneity. The results - strengthening the findings of previous studies - show that product and process innovations, though having some complementarities, are associated to different innovative inputs and strategies pursued by firms. Systematic differences also emerge between the behaviour of large firms and SMEs. |
| Keywords: | Product innovation; Process innovation; Firm size; Determinants of innovation; European industries |
| JEL: | L11 O31 O33 |
| Date: | 2006–07 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1284&r=ent |
| By: | Per Engström; Bertil Holmlund |
| Abstract: | Self-employed individuals have arguably greater opportunities than wage earners to underreport their incomes. The incentives for underreporting should be especially strong in an economy with generally high taxes. This paper uses recent income and expenditure data to examine the extent of underreporting of income among self-employed individuals in Sweden. A key hypothesis is that underreporting of incomes among the self-employed would be visible in the data as “excess food consumption”, for a given level of observed income. Our results confirm the underreporting hypothesis. In particular, we estimate that households with at least one self-employed member underreport their total incomes by around 30 percent. Underreporting appears to be twice as prevalent among self-employed people with unincorporated businesses as among those with incorporated businesses. |
| Keywords: | tax evasion, self-employment, Engel curves |
| JEL: | D12 H24 H25 H26 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_1736&r=ent |
| By: | Filipe J. Sousa (Departamento de Gestão e Economia (DGE), Universidade da Madeira (UMa)); Luís M. de Castro (Faculdade de Economia, Universidade do Porto) |
| Abstract: | The Industrial Network Theory aims to describe and explain the business relationships and networks in which the focal firm is deeply embedded. One of its major propositions is that business relationships somehow influence, to different extents and over time, the focal firm’s survival. This pertains to the diverse and time-varying significance of business relationships for the focal firm. It has often been implicitly sustained that such significance is strongly related to the role played by business relationships and consequently the relationship outcomes accruing to the focal firm. The logic underlying the relationship significance proposition is outwardly oriented, somewhat overlooking the focal firm’s inside and in particular the conspicuous influence of business relationships on what the focal firm does competently both within and across its vertical boundaries. Arguably, the (predominantly ‘functional’) network-based arguments currently advanced represent a necessary but not sufficient condition for relationship significance. This conceptual paper tentatively suggests that there may be missing a supplementary (essentially internal) explanation supported by Competence-based Theories of the Firm. |
| Keywords: | Industrial Network Theory; relationship significance proposition |
| JEL: | M31 |
| Date: | 2006–07 |
| URL: | http://d.repec.org/n?u=RePEc:por:fepwps:224&r=ent |
| By: | Paulo Santos (MIETE, Faculdade de Engenharia, Universidade do Porto); Aurora A.C. Teixeira (CEMPRE, Faculdade de Economia, Universidade do Porto); Ana Brochado (Faculdade de Economia, Universidade do Porto) |
| Abstract: | Although there is a considerable amount of empirical evidence on inter-firm collaborations within technology-based industries, there are only a few works concerned with R&D cooperation by low-tech firms, especially SMEs. Providing further and new evidence based on a recently built database of CRAFT projects, this study analyzes the relationship between technology and proximity in international R&D networks using Homogeneity Analysis by Means of Alternating Least Squares (HOMALS) and statistical cluster techniques. The resulting typology of international cooperative R&D projects highlights that successful international cooperative R&D projects are both culturally/geographically closer and distant. Moreover, and quite interestingly, geographically distant projects are technologically more advanced whereas those located near each other are essentially low tech. Such evidence is likely to reflect the tacit-codified knowledge debate boosted recently by the ICT “revolution” emphasized by the prophets of the “Death of Distance” and the “End of Geography”. |
| Keywords: | Research and Development (R&D); proximity; SMEs |
| JEL: | O32 R12 R58 |
| Date: | 2006–07 |
| URL: | http://d.repec.org/n?u=RePEc:por:fepwps:222&r=ent |
| By: | Doris Neuberger (University of Rostock); Solvig Räthke (University of Rostock) |
| Abstract: | An overview of previous evidence about relationship banking to SMEs shows that multiple banking relationships prevail even at small firms, but there is hardly evidence on the number of banking relationships held by micro firms. To close this gap, we use data from a survey conducted among professionals in Germany in 2002. Being self-employed persons acting in the services sector, professionals are mostly informationally opaque micro firms. To explain the number of their banking relationships, we investigate characteristics of the firm and its loan demand, characteristics of the housebank and its relationship to the borrower, and variables of bank market structure and regulation. Consistent with the theory of asymmetric information, we find that these firms hold a small number of bank relationships, which increases in firm size and age. An increase in the duration or importance of the housebank relationship does not induce multiple banking relationships as predicted by the hold-up theory. Professionals rather tend to hold multiple banking relationships to increase their credit availability and finance larger loans. The type of the housebank and local banking market concentration do not seem to matter. All in all, the results indicate that multiple bank relationships help to overcome credit rationing. |
| JEL: | G21 G32 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:ros:wpaper:61&r=ent |
| By: | Mario Pianta; Andrea Vaona |
| Abstract: | The labour productivity impact of innovation is investigated in this paper combining neo-Schumpeterian insights on the variety of innovation, with the importance of industrial structures and firm size; two models are proposed for explaining productivity and export success in European manufacturing industries and firm size classes. The empirical estimates are based on data from the European innovation survey (CIS 2), covering Austria, France, Italy, the Netherlands and the UK, broken down by 22 sectors and for large, medium and small firms. The econometric results, obtained adopting cross-sectional estimation methodologies able to account for unobserved industrial characteristics, show that productivity in Europe relies on product and process innovation, with the support of the efficiency gains provided by a grouped business structures. Conversely, in Italy the introduction of new machinery linked to innovation appears as the key mechanism supporting domestic productivity. When export success is considered, all countries have to rely on an innovation-based model of competitiveness. |
| Keywords: | Innovation, productivity, export performance, industries |
| JEL: | O31 O33 O41 |
| Date: | 2006–07 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1283&r=ent |
| By: | von Kalckreuth, Ulf; Murphy, Emma |
| Abstract: | The interrelationship between financial constraints and firm activity is a hotly debated issue. The way firms cope with financial constraints is fundamental to the analysis of monetary transmission, of financial stability and of growth and development. The CBI Industrial Trends Survey contains detailed information on the financial constraints faced by a large sample of UK manufacturers. This paper uses the quarterly CBI Industrial Trends Survey firm level data between January 1989 and October 1999. The cleaned sample contains 49,244 quarterly observations on 5,196 firms. As more than 63% of the observations refer to firms with less than 200 employees, the data set is especially well suited for comparing large and small companies. The data set is presented and a new method of checking the informational content of the data is developed. Whereas the relationship between investment activity and financial constraints is theoretically ambivalent due to simultaneity, the link between financial constraints on the one hand and the prevalence and duration of capacity gaps on the other should be unambiguously positive. Looking at the relationship between both types of constraints, two important results emerge. First, there is shown to be informational content in the survey data on financial constraints. Specifically, financially constrained firms take longer to close capacity gaps. This indicates that financial constraints do indeed play a part in the investment process. Second, small firms close their capacity gaps faster than large firms do, but financial constraints seem to be of higher relevance to their adjustment dynamics. |
| Keywords: | Financial constraints, investment, capacity adjustment, small firm finance, duratio alysis |
| JEL: | C33 C41 D21 D92 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:bubdp1:2935&r=ent |