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on Small Business Management |
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Issue of 2010‒10‒09
twelve papers chosen by Joao Carlos Correia Leitao University of Beira Interior and Technical University of Lisbon |
| By: | Lööf, Hans (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Johansson, Borje (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology) |
| Abstract: | This paper asks three explicit questions, where the first one concerns the impact of a firm’s choice of innovation strategy and knowledge resources. The study aims at confirming that firms with a strategy with R&D persistency have a markedly higher productivity, profitability and wage level than other firms. The second question is focused on the location of firms, with a distinction between firms dwelling in a metropolitan region and other firms. The hypothesis is that a metropolitan knowledge milieu may augment the performance of firms. The third question concerns knowledge exchange in regional and global networks that pertain to multinational affiliates. Applying Swedish data on individual firms and their location, the paper shows that firm performance is significantly higher when the three factors R&D persistency, metropolitan location and affiliation to a multinational group are combined. |
| Keywords: | R&D; knowledge; productivity; profitability; regional milieu |
| JEL: | F23 L25 O31 O33 R11 |
| Date: | 2010–09–28 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0241&r=sbm |
| By: | Simone Strambach (Department of Geography, Philipps University Marburg) |
| Abstract: | The knowledge society is characterized by knowledge becoming a kind of commodity that can be traded and priced. Knowledge-intensive business services (KIBS) are representative for such a knowledge-based economy, since their main input and output factor is directly related to knowledge itself. While research on KIBS has been mainly conducted on the firm and sector level, focusing on their role in innovation processes, little attention has been paid to the knowledge workers within the firms, whose knowledge assets have to be acquired, configured and deployed. Yet these knowledge creation processes on the micro-level are central to understand how KIBS can drive innovation in regional and national economies by contributing to new patterns of knowledge specialisation and the diversification of knowledge markets. Hence this paper seeks to elaborate on the generic processes which underlay knowledge processing and production. It will introduce the influences of different types of knowledge and knowledge bases of KIBS sub-sectors on the processes and structures in which knowledge is produced. Thereby it will reveal that by gaining experience-based expertise in horizontal and vertical knowledge domains of both their knowledge workers and their clients KIBS foster the emergence of composite and combinatorial knowledge driving knowledge specialisation further. |
| Keywords: | Knowledge development, Innovation, Professional Services, Business Services, Organization |
| JEL: | D23 L1 L84 O3 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:pum:wpaper:2010-04&r=sbm |
| By: | Bates, Timothy (Wayne State University, Detroit); Lofstrom, Magnus (Public Policy Institute of California); Servon, Lisa (The New School) |
| Abstract: | Small business lending programs designed to move disadvantaged low-income people into business ownership have been difficult to implement successfully in the U.S. context. Based in part on the premise that financing requirements are an entry barrier limiting the ability of aspiring entrepreneurs to create small businesses, these programs are designed to alleviate such barriers for low net-worth individuals with limited borrowing opportunities. Our analysis tracks through time nationally representative samples of adults to investigate the role of financial constraints and other factors delineating self-employment entrants from nonentrants. Paying particular attention to lines of business most accessible to adults lacking college credentials and substantial personal net worth, our analysis yields no evidence that financial capital constraints are a significant barrier to small-firm creation. |
| Keywords: | self-employment, entrepreneurship, micro-lending |
| JEL: | J15 L26 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5212&r=sbm |
| By: | Franz Huber |
| Abstract: | A widespread assumption in economic geography and the economics of innovation is that firms located in clusters benefit from territorial learning and knowledge spillovers. However, it remains unclear to what extent these benefits actually occur. This paper aims to address this issue and examines to what extent research and development (R&D) workers in the Cambridge Information Technology (IT) Cluster benefit from being located in the Cluster. The study shows why many do not believe that their work benefits from being located in the Cluster. The results suggest that academics as well as policy makers need to be more careful with the assumption of technological knowledge spillovers in innovative clusters. The significant advantages of the Cambridge IT Cluster seem to be of a different nature; in particular they concern labour market advantages and benefits from the global ‘brand’ of Cambridge. |
| Keywords: | Clusters; Knowledge Spillovers; Territorial Learning; Agglomeration Economies |
| JEL: | D83 O18 R11 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:aal:abbswp:10-21&r=sbm |
| By: | Christoph Hornych; Matthias Brachert |
| Abstract: | The article examines the determinants of the number of cooperation partners and the share of regional cooperations of firms in the German photovoltaic industry. Based on an overview about possible effects of the cooperation of firms with partners inside and outside their region, we derive hypotheses on the relationship between both firm-specific and region-specific variables and the cooperative behavior of firms. The hypotheses are tested with regression models using a data set of 178 firms of the German photovoltaic industry. The results show that in particular large firms and firms with a high absorptive capacity have significantly more co-operation partners. Furthermore, firms cooperate within their region especially when a large number of potential partners are located in the same region. Regarding foreign-owned firms, the results show that these firms tend to cooperate in particular with partners, inside the region where they are located. |
| Keywords: | renewable energy, cooperation, networks, photovoltaic |
| JEL: | D85 L14 Q42 R11 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:iwh:dispap:20-10&r=sbm |
| By: | Chatterjee, Sidharta |
| Abstract: | In this short paper, we discuss some efficient strategic content management practices that would help enhance a firm’s business horizons to deliver better quality product to their end customers. Since business firms who operate data mining and knowledge-based services related to market research needs to evolve sound information management practices through efficient data re-engineering, research and analysis (R&A) techniques. Companies in the business of market research needs to develop certain skills to win on empowered consumers and hence to stay ahead in debate in this age of hyper-competition. These companies in either way continuously innovate and standardize their content development strategic activities through process improvement from knowledge gain and expertise as well from knowledge manipulation in order to move up the value-chain. To this end, we propose some innovative, yet flexible strategies that shed some fresh light on the thought development process by proposing the establishment of a new Office of Strategic Thinking (OST) under an existing R&D set up for setting standards which are of highest and best in quality, while retaining the ability to innovate contemporaneously. Our study concentrates mainly on market research firms and new entrants who put in great effort to keep abreast of skills and process development methodologies in this ever-changing business environment. |
| Keywords: | Content management; OST; organizational approach to learning; market competition; knowledge innovation; market research; information management; value-creation; firm growth |
| JEL: | L16 L26 O32 O31 L15 |
| Date: | 2010–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:25536&r=sbm |
| By: | Jonathan Potter; Alessandra Proto; Marco Marchese |
| Abstract: | The Marche region is one of the most industrialised regions in Italy and is considered a region of excellence, not only for its economic performance, but also for its cultural, natural and social richness. Marche belongs to what has come to be called the “Third Italy”: a model of development based on small and medium-sized enterprises (SMEs) located in industrial districts. Its economy is driven by the performance of a myriad of SMEs, which have been characterised by a high level of creativity and innovation in the past… |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:oec:cfeaaa:2010/12-en&r=sbm |
| By: | Poschke, Markus (McGill University) |
| Abstract: | In contrast to the very large literature on skill-biased technical change among workers, there is hardly any work on the importance of skills for the entrepreneurs who employ those workers, and in particular on their evolution over time. This paper proposes a simple theory of skill-biased change in entrepreneurial technology that fits with cross-country, historical and micro evidence. For this, it introduces two additional features into an otherwise standard occupational choice, heterogeneous firm model à la Lucas (1978): technological change does not benefit all potential entrepreneurs equally, and there is a positive relationship between an individual's potential payoffs in working and in entrepreneurship. If some firms consistently benefit more from technological progress than others, they stay closer to the frontier, and the others fall behind. Because wages rise for all workers, low-productivity entrepreneurs will then at some point exit and become workers. As a consequence, the entrepreneurship rate falls with income per capita, average firm size and firm size dispersion increase with income per capita, and "entrepreneurship out of necessity" falls with income per capita. The paper also documents, for two of the facts for the first time, that these are exactly the relationships prevailing in cross-country data. Quantitatively, the model fits the U.S. experience well. Using the parameters from a calibration to the U.S., the model also explains cross-country patterns quite well. |
| Keywords: | occupational choice, entrepreneurship, firm size, firm entry, growth, skill-biased technical change |
| JEL: | E24 J24 L11 L26 O30 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5202&r=sbm |
| By: | Kenneth G. Huang; Fiona E. Murray |
| Abstract: | We re-conceptualize the role of science policy makers, envisioning and illustrating their move from being simple investors in scientific projects to entrepreneurs who create the conditions for entrepreneurial experiments and initiate them. We argue that reframing science policy around the notion of conducting entrepreneurial experiments – experiments that increase the diversity of technical, organizational and institutional arrangements in which scientific research is conducted – can provide policy makers with a wider repertoire of effective interventions. To illustrate the power of this approach, we analyze the Human Genome Project (HGP) as a set of successful, entrepreneurial experiments in organizational and institutional innovation. While not designed as such, the HGP was an experiment in funding a science project across a variety of organizational settings, including seven public and one private (Celera) research centers. We assess the major characteristics and differences between these organizational choices, using a mix of qualitative and econometric analyses to examine their impact on scientific progress. The planning and direction of the Human Genome Project show that policy makers can use the levers of entrepreneurial experimentation to transform scientific progress, much as entrepreneurs have transformed economic progress. |
| Keywords: | Entrepreneurial Experiments; Science Policy; Human Genome Project |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:aal:abbswp:10-22&r=sbm |
| By: | Ajay Agrawal (University of Toronto); Christian Catalini (University of Toronto); Avi Goldfarb (University of Toronto) |
| Abstract: | We examine the geography of early stage entrepreneurial finance in the context of an internet marketplace for funding new musical artist-entrepreneurs. A large body of research documents that investors in early-stage projects are disproportionately co-located with the entrepreneur. Theory predicts this will be particularly true of artist-entrepreneurs with preliminary-stage projects, difficult-to-contract-for effort, difficult-to-observe creativity, negligible tangible assets, and limited reputations. At the same time, however, observers of the spatial effects of the internet and related technologies report that many economic activities have become much less geographically dependent. At an aggregate level, the internet marketplace we examine does indeed demonstrate a spatial transformation of the entrepreneurial finance process: the average distance between investors and artist-entrepreneurs is 4,831 km. However, geography still matters; investors are disproportionately likely to be local and, conditional on investing, local investors invest more. This apparent role for proximity is strongest before entrepreneurs visibly accumulate capital. Within a single round of financing, local investors are more likely to engage earlier in the funding cycle. However, this difference in the timing of investment is almost entirely explained by a particular type of investor, whom we characterize as ``family, friends, and fans." We conjecture that these individuals, who are disproportionately co-located with the entrepreneur, have offline information about the entrepreneur and therefore derive less new information from observing the aggregate financing raised. We speculate that the path-dependent role of this offline network in conveying information to the online community limits the ``flat world'' potential of these communication technologies. |
| Keywords: | Entrepreneurial nance, crowd-funding, internet, family and friends, local bias, social networks |
| JEL: | R12 Z1 L17 G21 G24 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:net:wpaper:1008&r=sbm |
| By: | Henk Kox; George van Leeuwen; Henry van der Wiel |
| Abstract: | The paper empirically investigates whether a lack of competition determines the poor productivity performance of the European business services. It uses detailed panel data for 13 EU countries over the period 2000-2005. We apply parametric and nonparametric methods to estimate the productivity frontier and subsequently explain the distance to the productivity frontier by market characteristics, entry- and exit dynamics and national regulation. We find that the most efficient scale in business services is close to 20 employees. Scale inefficiencies show a hump-shape pattern with strong potential scale economies for the smallest firms. Nonetheless, some 95% of the firms operate at a scale below the minimal optimal scale. While they are competitive in the sense that their productivities are very similar, they have strong scale diseconomies compared to the larger firms. Their scale inefficiency is persistent over time, which points to growth obstacles that hamper the achievement of scale economies. Regulation characteristics explain this inefficiency, particularly regulation-caused exit and labour reallocation costs are found to have a large negative impact on productivity performance. |
| Keywords: | productivity; frontier models; scale efficiency; market selection; regulation |
| JEL: | L1 L5 D2 L8 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:discus:158&r=sbm |
| By: | Galina Hale (Federal Reserve Bank of San Francisco and Hong Kong Institute for Monetary Research); Cheryl Long (Colgate University); Hirotaka Miura (Federal Reserve Bank of San Francisco) |
| Abstract: | Using panel data from Chinese Industrial Surveys of Medium-sized and Large Firms for 2000-06, we show that while there is evidence of positive technological spillovers from FDI, such spillovers are very unevenly distributed. For some industries, there are positive spillovers from FDI presence in the same industry and province, but for others spillovers are negative. There are positive spillovers from FDI presence in upstream and downstream industries, but such spillovers mostly occur in private firms. There are more spillovers from foreign capital that comes from outside the greater China area. |
| Keywords: | FDI, Spillovers, Forward-Backward Linkages, China |
| JEL: | L33 F23 O17 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:hkm:wpaper:142010&r=sbm |