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on Small Business Management |
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Issue of 2012‒09‒09
twelve papers chosen by Joao Carlos Correia Leitao University of Beira Interior and Technical University of Lisbon |
| By: | Anna Lejpras |
| Abstract: | The literature argues that research spin-offs (RSOs)-enterprises originating from a university or research institute-appear to have higher innovative potential and capabilities than other start-ups, at least in the early stages of their development. Yet, little is known about the innovative performance of these companies at later development phases. Thus, the main goal of this study is to investigate whether there are any differences in R&D and innovation behavior between established and/or mature RSOs and otherwise created firms and, if so, to what extent they are driven by networking and cooperation activities as suggested by some scholars. To this end, we employ probit regression analysis and a matching approach using survey data on more than 6,000 East German firms, among which are 179 RSOs. Our first findings suggest that established RSOs engage in R&D and innovation activities more frequently than companies whose genesis was of another type. Nevertheless, the results obtained when accounting for collaboration measures show that the precedence of RSOs in further development stages over otherwise created firms in terms of innovativeness is related to their higher intensity of cooperation activity and close, face-to-face interactions with universities, and not to type of firm creation. Moreover, our findings reveal that cooperating in various fields may be of different importance for specific inputs and outputs of the innovation activity. Finally, based on our results, we draw some implications both for practicing managers and public policymakers. |
| Keywords: | Spin-Offs, R&D, innovation, cooperation |
| JEL: | O30 M20 L20 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1237&r=sbm |
| By: | Gordon M. Phillips; Alexei Zhdanov |
| Abstract: | We provide a model and empirical tests showing how an active acquisition market affects firm incentives to innovate and conduct R&D. Our model shows that small firms optimally may decide to innovate more when they can sell out to larger firms. Large firms may find it disadvantageous to engage in an "R&D race" with small firms, as they can obtain access to innovation through acquisition. Our model and evidence show that the R&D responsiveness of firms increases with demand, competition and industry merger and acquisition activity. All of these effects are stronger for smaller firms than for larger firms. |
| JEL: | G20 G3 G34 L11 L22 L25 O31 O34 |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18346&r=sbm |
| By: | Matias Kalm |
| Abstract: | Recent developments in the field of network research have led to a growing interest in interorganisational relationships among social science scholars. One of the most important research areas is related to entrepreneurship research and how relationship networks affect firm performance. However, the existing literature focuses mostly on qualitative case studies and quantitative studies that analyse mergers and acquisitions or patent types of data. By analysing connection and causality between activity in co-operational relationships and firm growth, this study seeks to empirically address the following research question : ‘How does activity in network relationships influence the growth and internationalisation of technology-based firms in emerging technology areas?’ Furthermore, the connection and causality between activity in co-operational relationships and the internationalisation rates of firms are also analysed. This analysis is based on a data set and interviews with 53 small and medium-sized firms. Both a descriptive analysis and regression methods are used to analyse the connection between activity in co-operational relationships and firm growth or internationalisation. Firm growth is measured with both revenue and the employment growth rate. In addition, the activity in in the co-operational relationships is divided into two components : increasing versus consistently high activity with network actors. To address possible causality issues, this research employs activity measures that are based on the importance of the relationships rather than simply the number of relationships. The results show that increasing activity with network actors is positively connected with firm growth as measured in both revenue and employment growth. Furthermore, the results partially support the hypothesis that consistently high activity is positively connected to firm growth. Finally, the results suggest that growth firms positively benefit from increased relationship activity with both current and prospective actors in diverse relationship networks. Moreover, the single most negative result is the relatively low impact of relationship activities on public-sector actors and networks. |
| Keywords: | interorganisational relationships, firm growth, internationalisation, networks |
| Date: | 2012–08–31 |
| URL: | http://d.repec.org/n?u=RePEc:rif:dpaper:1278&r=sbm |
| By: | Colin Davis (The Institute for the Liberal Arts, Doshisha University); Ken-ichi Hashimoto (Graduate School of Economics, Kobe University) |
| Abstract: | This paper develops a two country model to investigate the effects of national R&D subsidies on aggregate product variety and endogenous productivity growth without scale effects. In particular, monopolistically competitive firms invest in process innovation with the aim of lowering production costs. With imperfect knowledge dispersion, the larger of the two countries has a larger share of firms and a greater level of productivity. The higher concentration of relatively productive firms increases the size of knowledge flows between firms, leading to an increase in firm-level employment in innovation. As a result, an economy with asymmetric countries produces a faster rate of growth than one with countries of similar size. The larger scale of firm-level innovation activity reduces market entry, however, and overall product variety falls. Using this framework, we find that a national R&D subsidy has a positive effect on the industry share, relative productivity, and wage rate of the implementing country. Moreover, if the smaller country introduces an R&D subsidy, overall product variety rises but the rate of productivity growth falls. Alternatively, if the larger country introduces an R&D subsidy, the rate of productivity growth rises, but overall product variety may rise or fall. Finally, we briefly consider the effects of a national R&D subsidy on national and world welfare levels. |
| Keywords: | R&D Subsidy, Knowledge Dispersion, Productivity Growth, Scale Effect |
| JEL: | F43 O30 O40 |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:koe:wpaper:1214&r=sbm |
| By: | Paola Brighi (Department of Management, University of Bologna, Italy; Centro Studi Banca e Finanza (CEFIN), Italy; The Rimini Centre for Economic Analysis (RCEA), Italy); Roberto Patuelli (Department of Economics, University of Bologna, Italy; The Rimini Centre for Economic Analysis (RCEA), Italy); Giuseppe Torluccio (Department of Management, University of Bologna, Italy; Centro Studi Banca e Finanza (CEFIN), Italy) |
| Abstract: | Self-financing has often been seen as an important source for research-and-development (R&D) funding. However, an in-depth comparison between the determinants of self-financing in the case of traditional investments versus those in R&D has not been provided yet. We use a comprehensive data set of Italian manufacturing firms to investigate this issue. We analyse the role of a wide number of financial variables in driving the rate of self-financing of firms, in both traditional and R&D investments, and we focus on public subsidies and firm size as critical factors explaining heterogeneity. First, we perform logit and logistic regressions separately for traditional and R&D self-financing, finding that they are positively correlated, and that the availability of public subsidies reduces self-financing. Subsequent poolability tests show that public subsidies and firm size are crucial discriminating factors for self-financing behaviour. Our main finding is that, in the absence of public subsidies, no internal or external market variable is able to explain the firms’ financing decisions. Furthermore, our analyses generally show that credit constraints and banking relationship variables are relevant in determining traditional investment self-financing, while no clear statistical evidence is found in the R&D case. Credit rationing is not significant for R&D self-financing, which may be explained by rationed firms being left out of our sample. |
| Keywords: | SMEs; R&D investments; Corporate structure; Poolability test |
| JEL: | D45 D82 E51 G21 G32 O32 |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:rim:rimwps:61_12&r=sbm |
| By: | Khadidja Benallou (Phd student - UFR de sciences économiques et de gestion, Université de Caen Basse-Normandie, CREM-CNRS, UMR 6211); Jean Bonnet (UFR de sciences économiques et de gestion, University of Caen Basse-Normandie - CREM-CNRS, France); Mohammad Movahedi (Phd student - UFR de sciences économiques et de gestion, Université de Caen Basse-Normandie, CREM-CNRS, UMR 6211) |
| Abstract: | In the present study, we define synthetic and relevant indicators of organizational innovation and measure the link of these indicators with various types of technological innovations (product innovation, process innovation, and hybrid innovations). They are constructed from sixteen variables reflecting organizational innovation with the aid of multiple correspondence analysis (MCA) method. The variables are grouped in five categories corresponding to different aspects of organizational changes, such as training & qualification, knowledge management, production management, quality, and market transaction. We then use a regression to estimate the link between organizational innovation indicators and technological innovations (product, process and their interaction). The original database exploited is part of the IDEIS project and relates to a representative sample of 90 SMEs in Lower Normandy - France. Our estimated indicators interpret the Intensity of the implementation of the Organizational Changes (IOC) and the orientation of the Organizational Innovation Strategies adopted (OIS). We find a positive and significant link between IOC and technological innovation (product innovation, process innovation, and hybrid innovations), particularly so for product innovation. However, we find no clear link between the choice of the OIS and technological innovation. |
| Keywords: | Indicators of organizational innovation, product and process innovation, innovation strategy, quality of human resources, training. |
| JEL: | D23 O33 C81 C2 |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:tut:cremwp:201229&r=sbm |
| By: | Alexander Vogel (Leuphana University Lueneburg, Germany); Joachim Wagner (Leuphana University Lueneburg, Germany) |
| Abstract: | This paper uses newly available data for German business services firms to test a hypothesis derived by Bustos (AER 2011) in a model that explains the decision of heterogeneous firms to export and to engage in R&D. Using a non-parametric test for first order stochastic dominance it is shown that, in line with this hypothesis, the productivity distribution of firms with exports and R&D dominates that of exporters without R&D, which in turn dominates that of firms that neither export nor engage in R&D. These results are in line with findings for firms from manufacturing industries. The model, therefore, seems to be useful to guide empirical work on the relation between exports, R&D and productivity for services firms, too. |
| Keywords: | Exports, R&D, productivity, business services firms, Germany |
| JEL: | F14 |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:lue:wpaper:247&r=sbm |
| By: | Angela Cipollone (Department of Economics and Finance, LUISS Guido Carli University); Paolo E. Giordani (Department of Economics and Finance, LUISS Guido Carli University) |
| Abstract: | This paper proposes and empirically tests a theory of entrepreneurial innovation in order to explain its high degree of concentration in space and time. In the model, a successful entrepreneurial project is the result of a search and matching process between entrepreneurs looking for funds and capitalists looking for new ideas to finance. The resulting strategic complementarity between them gives rise to a multiplier effect, whereby any exogenous shock has a magnified effect on the process of innovation. Moreover, if complementarity is sufficiently strong, multiple equilibria arise, which are characterized by different levels of entrepreneurial activity. Using data from the European and the US business angels markets for the period 1996-2010, we show that (i) a complementarity exists between business angels and the entrepreneurial projects submitted to them, and that (ii) the result of multiple equilibria is empirically plausible. |
| Keywords: | Entrepreneurship, financing of innovation, search and matching, strategic complementarities, venture capital, business angels. |
| JEL: | D83 C78 L26 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:lui:celegw:1201&r=sbm |
| By: | Yuezhou Cai, Aoife Hanley |
| Abstract: | Should inputs such as bank finance affect innovation in BRICS vs. developed countries similarly? Arguably these elasticities may depend on a country’s economic progress (Gerschenkron, 1962; Liu and White, 2001). Applying a combination of DEA and Tobit to a sample of 22 countries, we show how innovation (measured patents, scientific publications and high-tech sectoral output) responds favourably to private-sector R&D. No significant differences are recorded for BRICS countries. Differences emerge between BRICS and non-BRICS for the elasticity of innovative efficiency to banking inputs |
| Keywords: | BRICS countries, National Innovation System (NIS), innovation, DEA |
| JEL: | O30 |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1788&r=sbm |
| By: | Hakim Hammadou; Sonia Paty; Maria Savona |
| Abstract: | The aim of this paper is to test the presence of strategic interactions in government spending on Research and Development (R&D) among EU-15 countries. We add to the literature on public choice strategic interactions in general, and to work on R&D spending in particular. We take account of traditional and some overlooked factors related to countries' public R&D spending, including (i) the international context -- i.e. Lisbon strategy; (ii) country characteristics - the National System of Innovation, and more specifically national similarities in relation to (a) trade and economic size and (b) sectoral specialization. Sectoral specialization is likely to affect government spending, depending on the mechanisms of complementarity or substitution between public and private R&D. Using a spatial dynamic panel model in which spatial matrices are specified both in terms of traditional Euclidean distance, and sectoral specialization proximity, we confirm the existence of strategic interactions on R&D spending among European countries with similar economic size, international trade and sectoral structure. Unlike the results emerging from the literature on strategic interactions in public choice, geographic proximity seems not to affect interactions related to public spending on R&D. |
| Keywords: | Public spending strategic interactions, Public R&D expenditures, National Systems of Innovation, Complementarity public and private R&D, Spatial interactions, EU countries, spatial dynamic panel data |
| Date: | 2012–08–27 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2012/14&r=sbm |
| By: | Yair Tauman (Department of Economics, Stony Brook University); Debrapiya Sen (Department of Economics, Ryerson University, Toronto, ON, Canada.) |
| Abstract: | This article considers the problem of patent licensing in a Cournot oligopoly under a class of general demand functions. We consider two cases, the case where the innovator is an outsider and the one where it is one of the incumbent rms. The licensing policies considered are upfront fees, royalties and combinations of the two. It is shown that (i) for generic values of magnitudes of the innovation, a royalty policy is better than fee or auction provided the industry size is relatively large, (ii) under combinations of fees and royalties, provided the innovation is relatively signicant (or the industry size is relatively large), (a) there is always an optimal policy where the innovation is licensed to practically all rms of the industry and (b) any optimal combination includes a positive royalty. |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:nys:sunysb:12-05&r=sbm |
| By: | Hana Bohusova (Department of Accounting and Taxes, Faculty of Business and Economics, Mendel University in Brno); Patrik Svoboda (Department of Accounting and Taxes, Faculty of Business and Economics, Mendel University in Brno); Petr Valouch (Faculty of Economics and Administration, Masaryk University) |
| Abstract: | At vero Agricultural activity and forestry are largely different from other activities that the entities perform in order to achieve profit. Unlike other business entities, agricultural produce is significantly dependent on natural climatic conditions, and therefore a particular specialization of agricultural produce depends on geographic location. Agricultural and forest producers use every form of business organization, from small farms to large publicly held corporations. Although most entrepreneurs working in agriculture and forestry are small and medium enterprises, the specifics of agriculture are significantly reflected in the financial reporting intended primarily for large corporations traded on the capital markets. There are designed specific procedures of recording in relation to the nature of biological assets and agricultural produce and ways of measurement in this paper. The nature of biological assets is considered as distinguishing criterion (consumable assets, bearer assets and consumable assets with long production cycle). |
| Keywords: | agricultural activity, IFRS for SMEs, biological assets, agricultural produce |
| JEL: | M4 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:men:wpaper:27_2012&r=sbm |