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on Entrepreneurship |
| By: | Erixon, Lennart (Dept. of Economics, Stockholm University); Johannesson, Louise (Dept. of Economics, Stockholm University) |
| Abstract: | The theory of transformation pressure sheds light on the importance of negative driving forces for economic growth and the countercyclical movement in innovations and productivity growth. The theory suggests that firms have a status-quo bias in periods of increasing profits leading to lower productivity growth. Firm agents are governed by changes in current profits through historical relativism, the peak-end rule and overconfidence. They will first abandon a status-quo bias after an actual decline in profits though both under- and overreaction is possible. On the other hand Schumpeterian economics stress that firm renewal is speeded up during recoveries, e.g. by psychological reasons. The two contradicting hypotheses were tested by a role play where a group of university students in economics completed a questionnaire acting as managers for an established company. The students had the opportunity to choose between different growth strategies and define the underlying psychological mechanism. The questionnaire also provided room for rational considerations. The role play confirmed the theory of transformation pressure more than Schumpeterian economics but primarily that the students expected that they would have reacted rationally as managers. |
| Keywords: | Transformation pressure; Schumpeterian economics; peak-end rule; historical relativism; productivity growth; overconfidence; bounded rationality; the business cycle; heuristic decision rules; role play |
| JEL: | C23 C99 D21 D92 E32 |
| Date: | 2010–06–24 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sunrpe:2010_0013&r=ent |
| By: | Juan Antonio Máñez Castillejo (Universitat de València); Amparo Sanchis Llopis (Universitat de València); Juan A. Sanchis Llopis (Universitat de València); María Engracia Rochina Barrachina (Universitat de València) |
| Abstract: | In this paper we explore in depth the effect of process innovations on total factor productivity growth for small and medium enterprises (SMEs), taking into account the potential endogeneity problem that may be caused by self selection into these activities. First, we analyse whether the ex-ante most productive SMEs are those that start introducing process innovations; then, we test whether process innovations boost SMEs productivity growth using matching techniques to control for the possibility that selection into introducing process innovations may not be a random process. We use a sample of Spanish manufacturing SMEs for the period 1991-2002, drawn from the Encuesta sobre Estrategias Empresariales. Our results show that the introduction of process innovations by a first-time process innovator yields an extra productivity growth as compared to a non-process innovator, and that the life span of this extra productivity growth has an inverted U-shaped form. En este artículo se exploran los posibles efectos de la introducción de innovaciones de proceso en el crecimiento de la productividad de las pequeñas y medianas empresas (PYMES). Para ello se presta especial atención a la existencia de un problema de selección no aleatorio en la implementación de tales innovaciones. En primer lugar, se analiza si son aquellas empresas ex-ante más productivas las que introducen innovaciones de proceso. A continuación, se utilizan técnicas de matching para contrastar si la implementación de innovaciones de proceso acelera el crecimiento de la productividad de las PYMES. La utilización de técnicas de matching permite controlar la posible existencia de un proceso de selección no aleatorio en la implementación de innovaciones de proceso. El análisis empírico se lleva cabo usando una muestra de PYMES manufactureras españolas extraída de la Encuesta sobre Estrategias Empresariales. Nuestros resultados muestran que la implementación de innovaciones de proceso por parte de PYMES sin experiencia previa en la introducción de tales innovaciones, produce un crecimiento extra de la productividad de estas PYMES en comparación con el de aquellas PYMES que no implementan innovaciones de proceso. Adicionalmente, nuestros resultados sugieren la existencia de una relación en forma de U invertida entre el crecimiento extra de la productividad y el tiempo transcurrido desde la introducción de la innovación de proceso. |
| Keywords: | innovaciones de proceso, PTF, dominancia estocástica, técnicas de matching. process innovations, TFP, stochastic dominance, matching techniques. |
| JEL: | C12 C14 D2 D24 L6 O3 L26 |
| Date: | 2009–10 |
| URL: | http://d.repec.org/n?u=RePEc:ivi:wpasec:2009-12&r=ent |
| By: | Alcina Nunes (ESTG, Instituto Politécnico de Bragança and GEMF/Faculdade de Economia da Universidade de Coimbra, Portugal); Elsa Sarmento (Departamento de Economia e Gestão da Universidade de Aveiro, Portugal) |
| Abstract: | We address the post-entry performance of new Portuguese firms by investigating the structural characteristics of the hazard and survival functions, using semi-parametric survival analysis for the total economy and its broad sectors. In order to approach the prevalence of some stylized facts and determinants of new firm survival, a new entrepreneurship database was produced, using the administrative data of Quadros de Pessoal, following the Eurostat/OECD´s internationally comparable business demography methodology. In line with the literature, we find that firms that start small and experience faster post-entry growth, face a higher probability of survival. Firm’s current size dimension matters particularly for the Services sector probability of survival. In industries characterized by high entry rates, post-entry survival is more difficult. This happens mostly in Agriculture and the Construction sectors in Portugal. We find a different result from the literature, for the effect of industry growth in survival rates. Firms operating in industries which are growing faster, seem to suffer from a higher probability of failure. The combined effect of turbulence and entry and growth variables help explaining this unexpected effect of industry growth on survival probabilities. By correcting heterogeneity, we obtain stronger magnitudes of the hazard ratios found previously. |
| JEL: | M13 M20 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:gmf:wpaper:2010-10&r=ent |
| By: | Oliver Falck (Ifo Institute for Economic Research at the University of Munich); Christina Guenther (Max Planck Institute of Economics, Evolutionary Economics Group; WHU- Otto Beisheim School of Management); Stephan Heblich (Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group); William R. Kerr (Harvard Business School, Entrepreneurial Management Unit) |
| Abstract: | We identify the impact of local firm concentration on incumbent performance with a quasi natural experiment. When Germany was divided after World War II, many firms in the machine tool industry fled the Soviet occupied zone to prevent expropriation. We show that the regional location decisions of these firms upon moving to western Germany were driven by non-economic factors and heuristics rather than existing industrial conditions. Relocating firms increased the likelihood of incumbent failure in destination regions, a pattern that differs sharply from new entrants. We further provide evidence that these effects are due to increased competition for local resources. |
| Keywords: | Agglomeration, competition, firm dynamics, labor, Germany |
| JEL: | R10 L10 H25 O10 J20 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:hbs:wpaper:10-112&r=ent |
| By: | Martin Woerter (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Christian Rammer (Centre for European Economic Research (ZEW), Department of Industrial Economics and International Management, Mannheim); Spyros Arvanitis (KOF Swiss Economic Institute, ETH Zurich, Switzerland) |
| Abstract: | This paper analyses the relationship between past innovation output, competition, and future innovation input in a dynamic econometric setting. We distinguish two dimensions of competition that correspond to the concepts of product substitutability and entry barriers due to fixed costs. Based on firm-level panel data for Germany and Switzerland we obtain consistent results for both countries. Innovation output in t-1 as measured by the sales share of innovative products is positively related to the degree of product obsolescence in t, and negatively to the degree of substitutability in t in both countries. Further, we find that rapid product obsolescence provides positive incentives for higher – primarily product-oriented – R&D investments in t+1, while high substitutability exerts negative incentives for future R&D investment. |
| Keywords: | Innovation, R&D, Competition |
| JEL: | O3 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:kof:wpskof:10-259&r=ent |
| By: | dekker, R (TU Delft, Technology, Policy and Management, Innovation Systems; Tilburg University, ReflecT); Kleinknecht, A.H. (TU Delft, Technology, Policy and Management, Innovation Systems); Zhou, H (Erasmus University Rotterdam, Erasmus School of Economics, CASBEC Classification_JEL: J5; M5; O15; O31) |
| Abstract: | Firms with high shares of workers on fixed-term contracts have significantly higher sales of imitative new products but perform significantly worse on sales of innovative new products (“first on the market”). High functional flexibility in “insider-outsider” labor markets enhances a firm’s new product sales, as do training efforts and highly educated personnel. We find weak evidence that larger and older firms have higher new product sales than do younger and smaller firms. Our findings should be food for thought to economists making unqualified pleas for the deregulation of labor markets. |
| Keywords: | Innovation performance; new product sales; numerical flexibility; functional flexibility; SMEs; OSA longitudinal data |
| Date: | 2010–04–12 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:tudemi:20101&r=ent |
| By: | Maria Chiarvesio (Università di Udine); Eleonora Di Maria (Università di Padova); Stefano Micelli (Università di Venezia) |
| Abstract: | The paper is oriented at improving the understanding of internationalization strategies of firms by applying the global value chain studies at the firm level, in the context of SMEs. An original contribution of our paper is to apply such theoretical approach to the Italian model of economic organization mainly characterized by local manufacturing systems. Our hypothesis is that SMEs select the mechanism of governance for supplier selection and management in their international value chains consistently with their business models and the level of suppliers’ competences. The paper discusses how SMEs develop a mix of mechanisms of governance of their supply chains depending on the firm strategy and the specificities of the countries of destination of SMEs’ outsourcing strategies. By exploiting an original dataset of over 1,000 Italian firms, the paper shows that SMEs manage internationalization processes with different patterns across countries. |
| Keywords: | Global Value Chain, Internationalization, SMEs, Industrial Districts, Supply Chain Management |
| JEL: | F23 L10 |
| Date: | 2010–05 |
| URL: | http://d.repec.org/n?u=RePEc:pad:wpaper:0118&r=ent |