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on Small Business Management |
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Issue of 2011‒07‒27
fifteen papers chosen by Joao Carlos Correia Leitao University of Beira Interior and Technical University of Lisbon |
| By: | Pietro Moncada-Paterno-Castello (JRC-IPTS) |
| Abstract: | One of the main objectives of the new European research and innovation policy agenda is to favour the positive demographics (creation and growth) of EU companies operating in new/knowledge-intensive industries, especially Small and Medium Enterprises (SMEs). These companies play an important role in shaping the dynamism of the economy’s sectoral composition, favouring the transition towards more knowledge-intensive activities (smart growth) and in contributing to the overall economic growth objectives and more and better jobs. But which kind of companies should be helped by policy? And how? This paper presents a literature review on the economics of research, innovation and competitiveness, focusing on the evidence available regarding the determinants for new and existing company creation and growth and the role played by Research, Development (R&D) and innovation. Furthermore, based on this, it draws a number of policy implications to design future research and innovation support instruments targeting innovative company growth in Europe. The result of this work indicates that: a) EU needs support policies to foster R&D investment in some specific typology of innovative companies and only where there are market failures and clear high social returns; b) the establishment of any targeted support instruments should take into account an integrated set of criteria including: firms' age and size, the sectors where firms operate, the involved risks in and potential for their innovative and commercial activities, the country/techno-economic environment, and the degree of internationalisation; c) to be successful, no matter the new targeted policies and supporting instruments, they should be designed using policy experimentation and its results should be regularly measured and evaluated using appropriate indicators and analyses. |
| Keywords: | Firm demographics and growth, Small and Medium Enterprises, economic dynamics, corporate research and innovation, EU competitiveness, EU policy. |
| JEL: | O31 L25 R38 |
| Date: | 2011–07 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:wpaper:201103&r=sbm |
| By: | Pietro Moncada-Paterno-Castello (JRC-IPTS); Peter Voigt (JRC-IPTS); Marco Vivarelli (Facoltà di Economia, Università Cattolica del Sacro Cuore, Piacenza, Italy; SPRU, University of Sussex, Brighton, UK; IZA, Bonn, Germany) |
| Abstract: | The globalisation of R&D activities has continued to grow as companies are increasingly trying to capture knowledge and market opportunities internationally. The rapid evolution of national economies and the ways to conduct knowledge-intensive businesses has brought researchers and analysts to pursue a deeper understanding of the globalisation of corporate R&D and the related driving factors and impacts. This Working Paper provides an overview of the evolution of globalised business R&D activities and an outline of trends is provided with quantitative information from 2001 to 2009. Thus, the literature on the main drivers and impacts of the research process is reviewed and controversial arguments are discussed and reflected upon in the light of recent empirical observations. In particular, the drivers for firms to undertake R&D in their home country, to internationalise their R&D operations and to select a particular location for R&D implementation are analysed according to both the perspective of S&T supply side and for goods and services demand side. Furthermore, the impact of the internationalisation of business R&D is analysed for firms' host or home countries, with a particular focus on the effects on competitiveness and employment. The conclusions and policy implications from the main results of this work are presented in the last section of the document. |
| Keywords: | Research and Development [R&D], Business Enterprise Expenditure on R&D [BERD], internationalisation, innovation, investment gap, R&D policies |
| JEL: | F F L O |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:wpaper:201102&r=sbm |
| By: | DAUTEL Vincent; WALTHER Olivier |
| Abstract: | The main objective of the paper is to analyse the local determinants of innovation in the Luxembourg metropolitan region. We are particularly interested in the impact of the local milieu and characteristics of firms. Our paper addresses two specific research questions. Firstly, we examine the extent to which geographic space is a determinant of innovation for five intra-regional units based on an aggregation of municipalities. Secondly, we investigate whether innovation is dependent on accessibility to the mean centre. In both cases, we examine innovation propensity and innovation output using microdata from the Community Innovation Survey (CIS 2006) carried out in Luxembourg. The paper shows that space matters both in terms of spatial units and accessibility within the intra-regional context of Luxembourg. It provides, in particular, first evidence of a close link between the effects on innovation at the intra-regional level of firms? profiles and agglomeration externalities. Both favour innovation for firms from Luxembourg-City and, to a lesser extent, from the Suburban Area. |
| Keywords: | intra-regional innovation; firms' profile; location factors; local polynomial regression; Luxembourg metropolitan region |
| JEL: | C14 O31 O38 R11 R12 |
| Date: | 2011–07 |
| URL: | http://d.repec.org/n?u=RePEc:irs:cepswp:2011-38&r=sbm |
| By: | Pinho, José Carlos; Sá, Elisabete |
| Abstract: | The purpose of this paper is to examine the main factors that may influence economic success of new ventures. Particular emphasis will be given to personal attributes and business relationships (social and institutional). The present study relies on a survey questionnaire which was applied to a non-probabilistic sample of firms which were set up in the last 4-5 years. Results have shown that, concerning public and institutional business relationships, three main factors evidenced a difference of means along different categories of entrepreneurial performance. These are: the support from central government, the support from sector associations and support from a financial institution. With regard to social and business networks, particular emphasis goes to entrepreneur's family support. Concerning previous working experiences, the entrepreneur's previous knowledge about potential customers and entrepreneur's previous experience assumed particular relevance along different categories of entrepreneurial performance. Finally, with regard to entrepreneur's personal characteristics particular emphasis goes to entrepreneur's personal qualities, such as, his/her way of being, thinking and acting; entrepreneur's intuition that he/she is in the presence of an innovative and unique business and entrepreneur's need for self -achievement. |
| Keywords: | personal characteristics; previous working experience in the field; social and business networks; Public and institutional support |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:nsu:apasro:349&r=sbm |
| By: | Daunfeldt, Sven-Olov (HUI Research); Elert, Niklas (The Ratio Institute); Rudholm, Niklas (HUI Research) |
| Abstract: | The purpose of this paper is to distinguish between the determinants of new start-ups and in-migration of firms using a data-set that covers 13,471 limited liability firms in the Swedish wholesale trade industries during the period 2000-2004. Our results indicate that the presence of a university more than doubles the expected number of entrants and increases the expected number of in-migrating firms with 30%. A large share of educated workers and a high local unemployment rate is also associated with more start-ups and firm in-migration. |
| Keywords: | Firm growth; firm size; job creation; small firms |
| JEL: | L11 L25 L26 |
| Date: | 2011–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:huiwps:0053&r=sbm |
| By: | Sharma, Chandan |
| Abstract: | This paper examines dynamic as well as static effects of imported intermediary inputs and inhouse R&D on productivity growth using firm-level panel data for Indian technology-intensive manufacturing industries for the period 2000-2009. For this purpose, the present study adopts two empirical frameworks: production function and growth accounting method. Although we do have some comprehensible evidence to conclude that imported inputs have positive and significant impact on the productivity of firms, but the overall findings are rather mixed. Specifically, the results from the production function framework suggest that impact of imported intermediary goods on output is reasonably sizable. Surprisingly, however, the role of R&D activities under this framework is found to be insignificant across industries in various estimation specifications. On the other hand, the analysis based on the growth accounting model some yields positive results, which suggest that TFP of firms are closely linked with import and R&D activities. Firms that engage in these activities have 8% to 12% higher TFP than other firms across the industries. However, labor productivity is found to be insulated from these activities. -- |
| Keywords: | imported intermediary,R&D,Firms' productivity |
| JEL: | D24 F10 O30 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:gdec11:74&r=sbm |
| By: | MOTHE Caroline; NGUYEN Thi Thuc Uyen |
| Abstract: | The growing literature on knowledge and information has focused on the impact of information sources on technological innovation. Our objective was to explore the use made by firms of internal and external (market, research and generally available) sources of information for their organizational innovation practices’ implementation. Furthermore, we studies whether these sources may vary according to whether the firm operates in the manufacturing or service industry. Multivariate probit models’ results on 2008 Community Innovation Survey (CIS) data show notable differences between services and manufacturing, for instance that employees’ skill levels are more important for manufacturing than for services. Overall, this paper provides strong evidence of the heterogeneity in firms’ sources of information to engage in organizational innovation. On one hand, differences appear in the sources of innovation used for the various types of organizational innovation, indicating the appropriateness to differentiate organizational innovation practices rather than using an aggregated measure of organizational innovation. On the other hand, the sources of information vary according to the type of industry, even though some similarities appear. Managerial and theoretical implications for organizational innovation are provided. |
| Keywords: | CIS; manufacturing/services; organizational innovation; sources of information |
| Date: | 2011–07 |
| URL: | http://d.repec.org/n?u=RePEc:irs:cepswp:2011-39&r=sbm |
| By: | Daunfeldt, Sven-Olov (The Swedish Retail Institute (HUI)); Lang, Åsa (Dalarna University); Macuchova, Zuzana (Dalarna University); Rudholm, Niklas (The Swedish Retail Institute (HUI)) |
| Abstract: | To identify the determinants of firm growth within the Swedish retail – and wholesale trade industries during the period 1998- 2004, we analyze a sample of 400 limited companies using quantile regression techniques. Our results indicate that firm growth mainly can be explained by time-invariant firm-specific effects, supporting Penrose’s (1959) suggestion that internal resources such as firm culture, brand loyalty, entrepreneurial skills, and so on, are important determinants of firm growth rates. |
| Keywords: | firm dynamics; firm level heterogeneity; high-growth firms; resource-based view; quantile regression |
| JEL: | L11 L25 L26 L81 |
| Date: | 2011–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:huiwps:0050&r=sbm |
| By: | Fitjar, Rune Dahl; Rodríguez-Pose, Andrés |
| Abstract: | This paper examines the sources of firm product and process innovation in Norway. It uses a purpose-built survey of 1604 firms in the five largest Norwegian city-regions to test, by means of a logit regression analysis, Jensen et al.’s (2007) contention that firm innovation is both the result of ‘science, technology and innovation’ (STI) and ‘doing, using and interacting’ (DUI) modes of firm learning. The paper classifies different types of firm interaction into STI-mode interaction (with consultants, universities, and research centres) and DUI-mode interaction, distinguishing between DUI interaction within the supply-chain (i.e. with suppliers and customers) or not (with competitors). It further controls for the geographical locations of partners. The analysis demonstrates that engagement with external agents is an important source of firm innovation and that both STI and DUI-modes of interaction matter. However, it also shows that DUI modes of interaction outside the supply chain tend to be irrelevant for innovation, with frequent exchanges with competitors having a detrimental effect on a firm’s propensity to innovate. Collaboration with extra-regional agents is much more conducive to innovation than collaboration with local partners, especially within the DUI mode. |
| Keywords: | Competitors; Customers; DUI; Firms; Innovation; Norway; STI; Suppliers; Universities |
| JEL: | L14 O31 O32 |
| Date: | 2011–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:8484&r=sbm |
| By: | Giulia Ajmone Marsan; Karen Maguire |
| Abstract: | National policy makers have shown a growing interest in the regional dimension of innovation processes, and regional policy makers are seeking to promote their own competitiveness by supporting innovation. To advance the OECD quantitative research on regions and innovation, a categorisation of regions was developed using socio-demographic, economic, and innovation-related variables. Many different categorisations are possible depending on the purpose of the peer group comparisons. This categorisation was developed with the main goal of highlighting the diversity of regional profiles across OECD regions. Similar types of analysis have been performed with regions of the European Union. This analysis identifies eight groups of regions based on the similarity of their performance on the 12 variables used in the statistical cluster analysis. These eight groups were then classified into three macro categories based on relevance for policy recommendations. Possibilities for further research to develop different forms of regional peer groupings are discussed.<BR>Les responsables politiques nationaux montrent un intérêt croissant envers la dimension régionale des processus d’innovation, et les responsables politiques régionaux cherchent à promouvoir leur propre compétitivité en soutenant l’innovation. Afin d’améliorer la recherche quantitative de l’OCDE sur les régions et l’innovation, une catégorisation des régions a été développée en utilisant des variables socio-démographiques, économiques et liées à l’innovation. De nombreuses catégorisations sont possibles en fonction de l’objectif des comparaisons entre « groupes de pairs ». La présente catégorisation a été développée avec l’objectif principal de mettre en évidence la diversité des profils régionaux au sein des régions de l’OCDE. Des types d’analyse similaires ont été réalisés avec les régions de l’Union européenne. Cette analyse identifie huit groupes de régions sur la base de la similitude de leur performance dans les 12 variables utilisées pour l’analyse statistique en « cluster ». Ces huit groupes ont ensuite été classés en trois macro-catégories suivant leur pertinence pour les recommandations politiques. Les possibilités de continuer les recherches pour développer différentes formes de groupes de pairs régionaux sont également abordées. |
| Keywords: | economic development, innovation policy, regional development, regional innovation strategies, regional competitiveness, Cluster Analysis |
| JEL: | D2 L2 O2 O31 O32 R3 R5 |
| Date: | 2011–07 |
| URL: | http://d.repec.org/n?u=RePEc:oec:govaab:2011/3-en&r=sbm |
| By: | Stel, F. (Universiteit van Tilburg) |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ner:tilbur:urn:nbn:nl:ui:12-4807701&r=sbm |
| By: | Daunfeldt, Sven-Olov (The Ratio Institute (RATIO)); Elert, Niklas (The Ratio Institute (RATIO)); Lang, Åsa (School of Technology and Business Studies) |
| Abstract: | Gibrat’s Law predicts that firm growth is a purely random effect and therefore should be independent of firm size. The purpose of this paper is to test Gibrat’s law within the retail industry, using a novel data-set comprising all Swedish limited liability companies active at some point between 1998 and 2004. Very few studies have previously investigated whether Gibrat’s Law seems to hold for retailing, and they are based on highly aggregated data. Our results indicate that Gibrat´s Law can be rejected for a large majority of five-digit retail industries in Sweden, since small retail firms tend to grow faster than large ones. |
| Keywords: | firm dynamics; firm size; firm growth; retail industry |
| JEL: | L11 L25 L81 |
| Date: | 2011–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:huiwps:0047&r=sbm |
| By: | Lashitew, Addisu A. (Groningen University) |
| Abstract: | Lack of access to finance is argued to be one of the most binding constraints for firm growth. There is, however, limited empirical evidence on the relationship between access to finance and the cost of capital. This paper uses international manufacturing data to analyze the effect of access to finance on firms? cost of capital. Using a unique dataset that covers tens of thousands firms in more than 80 countries, I examine the effect of credit access on firms? cost of capital. I address the endogeneity of credit access by instrumenting it with indicators of the strength of firms? political connections. The results show that credit access has significant negative effect on the cost of capital. Taking advantage of the large country coverage of the dataset, I also relate firms? cost of capital to country-level measures of financial development and find that financial development reduces cost of capital. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:rugggd:gd-120&r=sbm |
| By: | Daunfeldt, Sven-Olov (The Ratio Institute (RATIO)); Elert, Niklas (The Ratio Institute (RATIO)) |
| Abstract: | The purpose of this paper is to investigate if the industry context matters for whether Gibrat's law is rejected or not using a dataset that consists of all limited firms in 5-digit NACE-industries in Sweden during 1998-2004. The results reject Gibrat's law on an aggregate level, since small firms grow faster than large firms. However, Gibrat's law is confirmed about as often as it is rejected when industry-specific regressions are estimated. It is also found that the industry context - e.g., minimum e¢ cient scale, market concentration rate, and number of young firms in the industry - matters for whether Gibrat's law is rejected or not. |
| Keywords: | Firm growth; firm size; job creation; small firms |
| JEL: | L11 L25 L26 |
| Date: | 2010–11–26 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:huiwps:0045&r=sbm |
| By: | Bassanini, Andrea (OECD); Caroli, Eve (University Paris Dauphine); Rebérioux, Antoine (University Paris Ouest-Nanterre); Breda, Thomas (Paris School of Economics) |
| Abstract: | We study compensation packages in family and non-family firms. Using matched employer-employee data for a representative sample of French establishments, we first show that family firms pay on average lower wages to their workers. We find that part of this wage gap is due to differences in unobserved characteristics of workers across family and non-family firms. However, we also find evidence that company wage policies differ according to ownership status, so that workers staying in the same firm enjoy on average a 3% pay increase when a family firm becomes non-family owned and suffer a similar pay drop when the ownership transition occurs the other way round. In contrast, we find evidence that family firms are characterised by lower job insecurity, as measured by dismissal rates and by the subjective risk of dismissal perceived by workers. In addition, family firms appear to rely less on dismissals – and more on hiring reductions – than non-family firms when they downsize. We show that compensating wage differentials account for a substantial part of the inverse relationship between the family/non-family gaps in wages and job security. |
| Keywords: | family firms, wages, job security, compensating wage differentials, linked employer-employee data |
| JEL: | G34 J31 J33 J63 L26 |
| Date: | 2011–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5842&r=sbm |