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on Small Business Management |
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Issue of 2013‒03‒16
thirteen papers chosen by Joao Carlos Correia Leitao University of Beira Interior and Technical University of Lisbon |
| By: | Davide Fantino (Bank of Italy); Giusy Cannone (Polytechnic University of Turin) |
| Abstract: | This paper provides some empirical evidence of the impact of two policy measures designed to support innovation in small and medium firms in an Italian region, both financed using the European Structural Funds but managed at regional level. The first measure was a concessional loan to promote the introduction of innovative plant, machinery and equipment, while the second was a free grant to stimulate research activity by firms. The programmes were effective in stimulating targeted investments (respectively tangible and intangible), but the benefits were short-lived, although to different degrees. The impact was stronger for the smallest firms and, in the case of the second measure, for firms with a low credit rating. |
| Keywords: | R&D, public policy, evaluation |
| JEL: | O32 O38 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_902_13&r=sbm |
| By: | Sánchez, Rosario/R; Diaz, M. Angeles |
| Abstract: | One of the characteristics of the Spanish economy is the high percentage of small and medium-sized firms. Size is one of the factors that condition the managerial organization of the firms and their efficiency and productivity. Moreover size has been found a highly significant variable in explaining differences in firm’s innovative activities and the returns of R&D expenditures, and it is a well-established connection between productivity and innovative activities. This paper analyses the relationship between innovative activities and size and their effect over firms’ technical efficiency and then over their productivity. We also take into account other variables that could affect the relationship between productivity and innovative activities: industrial sector, market structure, or firms’ financial conditions. The analysis could help to design political economic measures to encourage small firms’ innovation and then contribute to improve their competitiveness. We use a micro panel data set of Spanish manufacturing firms, during the period 2004–2009, to simultaneously estimate a stochastic frontier production function and the inefficiency determinants. The data source is published in the Spanish Industrial Survey on Business Strategies (Encuesta sobre Estrategias Empresariales, ESEE), collected by the Fundación SEPI. Our preliminary results show that innovative firms are more efficient than non-innovative firms; and that small and medium-sized firms’ tent to be more efficient than large firms are. |
| Keywords: | small firms, technical efficiency, innovative activities. |
| JEL: | C23 J21 L60 |
| Date: | 2013–02–25 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:44592&r=sbm |
| By: | Anna Golejewska (Faculty of Economics, University of Gdansk); Damian Gajda (Faculty of Management, University of Gdansk) |
| Abstract: | The aim of the article is to analyse use of the EU Structural Funds for innovative projects in SMEs from Regional Operational Programme of Pomorskie Voivodeship for 2007-2013. In the analysis we use the data from the Pomerania Development Agency Inc. In the first section we described conditions and rules of grants awarding. The next section contains short description of firms in Pomeranian region and the analysis of granted projects. The results confirmed significant diversity of total values of projects, awarded grants and branches. So far, only small part of them has been implemented in high-technology sectors. With regard to the number of projects, the majority has been implemented using own funds. The results show high concentration of projects in Tri-City Agglomeration. According to our findings, firms rather carefully cooperate with external partners in implementing projects. |
| Keywords: | entrepreneurship, regional analysis, innovativeness, EU Structural Funds |
| JEL: | D22 R11 O3 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:gda:wpaper:1301&r=sbm |
| By: | Pilar Beneito (Universidad de Valencia and ERICES); María E. Rochina-Barrachina (Universidad de Valencia and ERICES); Amparo Sanchis (Universidad de Valencia and ERICES) |
| Abstract: | In this paper we analyse the effect of ownership on the response of firms?’ R&D expenditures to the business cycles in the economy, using a panel dataset of Spanish manufacturing firms for the period 1990-2006. Following Aghion et al. (2012), we allow the impact of the business cycle on firms?' R&D expenditures to depend upon credit constraints, but we extend their analysis by considering the moderating effect of different firms?’ ownership types. We find that firms?’ R&D spending is countercyclical but that credit constraints may reverse this countercyclicality, in line with previous results in the literature. However, our findings indicate that these results are moderated by firms?’ ownership. In particular, in the case of firms that are family owned and firms that are group affiliated the responsiveness of R&D to the business cycle is considerably less dependent on being credit constrained, especially during recessions. |
| Keywords: | R&D investment, business cycle, credit constraints, ownership |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:eec:wpaper:1306&r=sbm |
| By: | Tåg, Joacim (Research Institute of Industrial Economics (IFN)); Åstebro, Thomas (HEC Paris); Tho, Peter (Goizueta Business School) |
| Abstract: | We explore whether the tendency for smaller firms to have fewer hierarchical layers explains the well-documented inverse correlation between firm size and the rate at which employees become business owners. Our analysis is based on a Swedish matched employer-employee dataset. Conditional on firm size, employees in firms with more layers are less likely to enter entrepreneurship, to become self-employed, and to switch to another employer. The effects of layers are much stronger for business creation than for jobswitching and they are stronger for entrepreneurship than for self-employment. However, hierarchies constitute only a partial explanation of the small firm effect. Potential explanations for the effects of layers are examined. Part of the effect appears to be due to preference sorting by employees, and part due to employees in firms with fewer layers having a broader range of skills. |
| Keywords: | Entrepreneurship; Employee mobility; Hierarchy; Rank; Small firm effect |
| JEL: | D20 J20 L26 M50 |
| Date: | 2013–02–13 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:0954&r=sbm |
| By: | Zawadzki, Krystian; Wasilczuk, Julita |
| Abstract: | In the course of preparations to the 2012 European Football Championship (Euro 2012) many doubts have arisen as to the actual cost-benefit balance affecting the hosting country. The event is accompanied by intense promotion of the agglomeration and the region, especially abroad. In effect, one can anticipate the competitive position of both the region and the businesses operating there to improve. The investigation whether the Euro 2012 will have an impact on the Pomeranian Region was conducted threefold. First, a modified Preuss (2007a) model was used to analyse the regional environment factors, which would contribute to improve competitiveness of the region and its Small and Medium Enterprises (SMEs). In the second area, the short run increase in business activities were investigated using the field research among the entrepreneurs. The last part of research was focused on the growth willingness of entrepreneurs. |
| Keywords: | Mega Sport Event, Competitiveness, Entrepreneurship |
| JEL: | D81 R11 |
| Date: | 2013–02–18 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:44468&r=sbm |
| By: | Amoroso, S. (Tilburg University) |
| Abstract: | This thesis addresses a set of interrelated topics that contribute to both structural and empirical fields of the economics of innovation. First, we consider the role of imperfect competition in product and labor markets in shaping the productivity of a firm. Second, we model and evaluate the expected correlations present among firms' R&D cooperative choices due to both firm- and sector-level heterogeneity. In the last study, we develop and estimate a structural dynamic monopoly model to quantify the linkages between R&D spending, cooperation, and innovation investment choices, and endogenous productivity. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:ner:tilbur:urn:nbn:nl:ui:12-5663713&r=sbm |
| By: | Holger Kraft; Eduardo S. Schwartz; Farina Weiss |
| Abstract: | This paper studies the relation between firm value and a firm's growth options. We find strong empirical evidence that (average) Tobin's Q increases with firm-level volatility. However, the significance mainly comes from R&D firms, which have more growth options than non-R&D firms. By decomposing firm-level volatility into its systematic and unsystematic part, we also document that only idiosyncratic volatility (ivol) has a significant effect on valuation. Second, we analyze the relation of stock returns to realized contemporaneous idiosyncratic volatility and R&D expenses. Single sorting according to the size of idiosyncratic volatility, we only find a significant ivol anomaly for non-R&D portfolios, whereas in a four-factor model the portfolio alphas of R&D portfolios are all positive. Double sorting on idiosyncratic volatility and R&D expenses also reveals these differences between R&D and non-R&D firms. To simultaneously control for several explanatory variables, we also run panel regressions of portfolio alphas which confirm the relative importance of idiosyncratic volatility that is amplified by R&D expenses. |
| JEL: | G12 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18836&r=sbm |
| By: | Agustí Segarra (Research Group of Industry and Territory, Department of Economics and CREIP, Universitat Rovira i Virgili, Av. Universitat, 1; 43204 – Reus (Spain)); José García-Quevedo (Department of Public Economics and Barcelona Institute of Economics (IEB), University of Barcelona, Av. Diagonal 690; 08034 – Barcelona (Spain)); Mercedes Teruel (Research Group of Industry and Territory, Department of Economics and CREIP, Universitat Rovira i Virgili, Av. Universitat, 1; 43204 – Reus (Spain)) |
| Abstract: | Theoretical and empirical approaches have stressed the existence of financial constraints in innovative activities of firms. This paper analyses the role of financial obstacles on the likelihood of abandoning an innovation project. Although a large number of innovation projects are abandoned before their completion, the empirical evidence has focused on the determinants of innovation while failed projects have received little attention. Our analysis differentiates between internal and external barriers on the probability of abandoning a project and we examine whether the effects are different depending on the stage of the innovation process. In the empirical analysis carried out for a panel data of potential innovative Spanish firms for the period 2004-2010, we use a bivariate probit model to take into account the simultaneity of financial constraints and the decision to abandon an innovation project. Our results show that financial constraints most affect the probability of abandoning an innovation project during the concept stage and that low-technological manufacturing and non-KIS service sectors are more sensitive to financial constraints. |
| Keywords: | barriers to innovation, failure of innovation projects, financial constraints |
| JEL: | O31 D21 |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:xrp:wpaper:xreap2013-01&r=sbm |
| By: | Doran, Justin; Jordan, Declan; O'Leary, Eoin |
| Abstract: | This paper estimates the private returns to four different kinds of R&D spending on the probability of Irish and foreign-owned businesses engaging in product, process and organizational innovation. By providing econometric analysis of nearly 2000 businesses in the Community Innovation Survey: 2004 to 2006, it makes an important contribution to our understanding of the effects of Irish innovation policy, which has incentivized businesses to spend on R&D in Ireland. The main findings are that Irish owned businesses are significantly more likely than foreign-owned to introduce new products as a result of creative R&D work undertaken. Foreign-owned businesses, which spend nearly 6 times more per worker on R&D than Irish-owned, enjoy very high returns mostly from the purchase or licence of patents. This reflects a fundamental difference in the innovation activities of these businesses, which is critical for policymakers’ understanding of the Irish innovation system. |
| Keywords: | Innovation Policy; Innovation Output; Research & Development |
| JEL: | O31 R19 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:44579&r=sbm |
| By: | Figueiredo, Paulo N. (Brazilian School of Public and Business Administration, Getulio Vargas Foundation); Cohen, Marcela (Brazilian School of Public and Business Administration, Getulio Vargas Foundation); Gomes, Saulo (Brazilian School of Public and Business Administration, Getulio Vargas Foundation) |
| Abstract: | Although much has been written about organizational-level learning, there is a dearth of empirical studies that explore the role of changes in the nature of firm-centred learning mechanisms in affecting inter-firm differences and similarities in the accumulation of innovation capabilities, especially among firms from emerging economies, known as latecomers. By examining the relationships between these issues based on fieldwork evidence from 13 natural resource-processing firms in Brazil (1950-2000s), this study found that: (1) firms that combined the use of external and internal learning mechanisms with increased intensity and quality achieved higher innovation capability levels than firms that used these learning mechanisms with limited frequency and unchanged quality over time; (2) the relative importance of both external and internal learning mechanisms changed as firms' capabilities approached world-leading levels; (3) some combinations of external and internal learning mechanisms were associated with the attainment of particular innovation capability levels. Therefore, if latecomer firms expend limited efforts in using and deliberately changing the intensity and, mainly, the quality of both external and internal learning mechanisms over time, they will deepen their innovation capabilities slowly and will remain innovation 'followers' rather than becoming world-leading innovators. Using a novel approach that explores the relationship between latecomer firms' innovation capability-building and the extent of changes in the underlying learning mechanisms, this paper furthers our understanding of the nature and dynamics of learning and its role as a primary source of firms' international innovation performance. It also challenges recent approaches that seem to over emphasize open learning processes and post-Chandlerian forms of learning as the leading sources of firms' innovation capabilities. |
| Keywords: | Innovation capability building, learning mechanisms, latecomer firms, natural resources, multiple case-study, Brazil |
| JEL: | O12 O32 O33 M10 Q20 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:unumer:2013007&r=sbm |
| By: | Braunerhjelm, Pontus (Swedish Entrepreneurship Forum); Henrekson, Magnus (Research Institute of Industrial Economics (IFN).) |
| Abstract: | The purpose of this research endeavor—in the form of eight articles—published in this Special Issue of Industrial and Corporate Change is to further our understanding of the extent, character and orientation of entrepreneurial activity in today’s wealthy countries. This is done by means of detailed studies of particular aspects of the rules of the game deemed to be of particular importance for entrepreneurship, innovation-based firm growth and its ensuing impact on the economy. Particular aspects of entrepreneurship and economic dynamism are covered by pairs (or in one case three) coauthors, who are renowned specialists in the area and with deep knowledge of the pertinent institutions in Sweden and the US. These two countries have been argued to be located at either end of the spectrum of the types of capitalism with respect to the degree coordination and government intervention. This introductory essay sets off by giving a short overview of the institutional differences that distinguish these economies, but also stresses that convergence has occurred in the last decades in several respects. Still, as is obvious from the summary of the eight comparative analyses included in this issue, considerable differences remain. These constitute the basis for the concluding policy discussion. |
| Keywords: | Entrepreneurship; Innovation; Institutions; Firm growth; Economic dynamism |
| JEL: | G28 H30 K30 L26 L53 O43 O57 |
| Date: | 2013–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:entfor:2012_019&r=sbm |
| By: | Sawako Maruyama (Graduate School of Economics, Kobe University) |
| Abstract: | This paper aims to investigate the structure and the determinants of the trade of products manufactured by small- and medium-sized enterprises. For this purpose, trade database for selected SME-based industries is prepared. Analyzing this database, the following three findings are obtained. First, firms in SME-based industries are facing a large inflow of imported goods, while the volume of their export is relatively small. Secondly, the share of Asian countries in the trade of SME products is larger than overall trade. Thirdly, the gravity model can be applied for the trade of SME products. In some cases, distance and difference of income level tend to be more sensitive for SME products than overall trade. These results are consistent with the labor-intensive characteristics of SME products. |
| Keywords: | Trade; Gravity model; Small and Medium-sized Enterprises(SMEs); Manufacturing |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:koe:wpaper:1304&r=sbm |