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on Small Business Management |
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Issue of 2015‒03‒05
sixteen papers chosen by João Carlos Correia Leitão Universidade da Beira Interior |
| By: | Feser, Daniel; Proeger, Till |
| Abstract: | Knowledge-intensive business services (KIBS) constitute a major source of innovative knowledge for small- and medium-sized enterprises. In regional innovation systems, KIBS play a crucial role in distributing innovations and improving the region´s overall innovative capacities. While the specific properties and effects on client firms and sectors have been comprehensively discussed, the internal perspective of client firms, i.e. the processes and problems in selecting, using, evaluating and recommending KIBS, has been neglected to date. Using a qualitative approach, we describe the internal mechanisms and problems of SMEs cooperating with various KIBS and discuss the implications for regional innovation systems from a policy-making perspective. We find that all stages of cooperation of SMEs and KIBS are characterized by strong information asymmetries, distrust and uncertainty about the effects of using external know-how, which yields the interpretation that SMEs perceive KIBS as credence goods. While informal networks are used to reduce information barriers, they regularly prove counterproductive by disseminating worst-case examples. Regional policy aiming at developing instruments for fostering innovative cooperation could thus strengthen formal networks that primarily create trust between KIBS and SMEs to systematically reduce mutual suspicions and information asymmetries. |
| Keywords: | credence goods,knowledge-intensive business services,regional innovation system,small- and medium enterprises |
| JEL: | D21 D40 H25 H40 L23 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cegedp:232&r=sbm |
| By: | Tetsugen Haruyama (Graduate School of Economics, Kobe University) |
| Abstract: | The paper develops a patent race model of firms which differ in R&D productivity. It is demon-strated that R&D subsidies generate the cleansing effect where relatively lower productivity firms drop out of the race and innovation accelerates due to expanded R&D investment by the remaining firms and new entrants with higher productivity than those that exit. |
| Keywords: | Patent race, R&D, industrial policy, cleansing effect |
| JEL: | L10 L20 L52 O32 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:koe:wpaper:1425&r=sbm |
| By: | Aldieri, Luigi; Vinci, Concetto Paolo |
| Abstract: | The aim of this paper is to explore the impact of intra- and inter-industry spillover components on productivity of large International firms. We use data from all EU R&D investment scoreboards editions issued every year until 2011 by the JRC-IPTS (scoreboards). The analysis is based upon a new dataset composed of 879 worldwide R&D-intensive manufacturing firms whose information has been collected for the period 2002-2010. Given the panel data structure of the sample, ad hoc econometric techniques that deal with both firm’s unobserved heterogeneity and weak exogeneity of the right hand-side variables are implemented. The main contribution to the literature is that of further investigating the industry spillovers at firm level within the Triad for a period of time that considers also the economic crisis. In order to measure the distribution of the firm’s research interests through the different technological areas, we use the patent distribution over technological sectors according to the International Patent Classification (IPC). The patent distribution relies on the whole number of patent applications filed to the European Patent Office until 2011. The empirical results suggest a significant impact of R&D spillover effects on firms’ productivity but the results are quite differentiated according to the spillover stock type and this may represent a relevant source of policy implications. |
| Keywords: | Panel Data Models; R&D Spillovers; Total Factor Productivity growth |
| JEL: | C23 O33 O47 |
| Date: | 2015–02–25 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:62429&r=sbm |
| By: | Grillitsch , Markus (CIRCLE, Lund University) |
| Abstract: | Smart specialisation features prominently in the European regional policy context. This paper discusses how the configuration of the regional institutional framework affects smart specialisation dynamics and policy. It elaborates why and how institutional diversity and integration promote entrepreneurial discovery processes, spillovers and agglomeration effects, and thereby structural change in regions. Policy challenges arising from the regional institutional framework are identified, discussed and related to well-research system failures of regional innovation systems. |
| Keywords: | regional policy; smart specialisation; institutions; regional innovation systems; system failures |
| JEL: | B52 O17 O43 P48 R10 R11 R58 |
| Date: | 2015–02–26 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2015_012&r=sbm |
| By: | Ferrante, Francesco; Ruiu, Gabiele |
| Abstract: | Although there is still no consensus on the causes of large differences in income per capita across countries, a growing literature considers culturally-based beliefs and institutions as main drivers of the latter differences (Guiso et al. 2006; Tabellini 2010). The intuition is that institutions and beliefs affect the incentive to accumulate human and physical capital. Other strands of literature stress that the supply of entrepreneurship is a fundamental ingredient of economic growth and job creation. In this paper, we argue that the two views should be reconciled on the basis of the following arguments: a) occupational choices and the decision to accumulate human capital are affected by cultural and institutional factors; b) occupational choices are the main tool to allocate human capital within societies; c) entrepreneurs govern the allocation of resources in the economy, including the human resources. Confirming our hypothesis, our empirical analysis show that cultural factors matter and fatalism exerts a particularly negative effect on opportunity perception and on opportunity driven entrepreneurship. For what regards institutional variables, three interesting and somehow non conventional results emerge from the analysis. First, low start-up cost are particular favorable for necessity driven entrepreneurship but not for the opportunity driven ones. Second, labor market flexibility yields a lower probability of being an entrepreneur and this results holds for both necessity and opportunity driven entrepreneurs. Third, the more burdensome the administrative requirement (permits, regulations, reporting) in entrepreneurial activity, the lower the probability of being an opportunity driven entrepreneur. On the whole, our results yield some policy relevant implications: a) culturally-based beliefs matter for entrepreneurship and fatalism is more important than trust in others; b) education can affect people’s fatalism; c) entrepreneurial education can be an important tool for fostering good quality entrepreneurship, i.e. opportunity driven entrepreneurship; c) institutions matter for entrepreneurship and growth but, somehow, in unconventional ways. |
| Keywords: | entrepreneurship, culture, fatalism, institutions |
| JEL: | E02 O43 L26 D83 M13 J20 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:41915&r=sbm |
| By: | Sophia Dimelis, Ioannis Giotopoulos and Helen Louri |
| Abstract: | This paper explores the effects of bank credit on firm growth before and after the recent financial crisis, taking into account different structural characteristics of banking sectors and domestic economies. Panel quantile analysis is used on a sample of 2075 euro area firms in 2005- 2011. The post-2008 credit crunch is found to seriously affect only small, slow-growth firms and especially those operating in concentrated and domestic-dominated banking systems, and in riskier and less financially developed economies. Large, high-growth firms seem to be able to find alternative financial sources and, thus, may act as carriers and facilitators of a credit-less recovery. |
| JEL: | L1 L25 E51 |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:hel:greese:89&r=sbm |
| By: | Dessi, Roberta; Yin, Nina |
| Abstract: | This paper explores a new role for venture capitalists, as knowledge intermediaries. A venture capital investor can communicate valuable knowledge to an entrepreneur, facilitating innovation. The venture capitalist can also communicate the entrepreneur's innovative knowledge to other portfolio companies. We study the costs and benefits of these two forms of knowledge transfer, and their implications for investment, innovation, and product market competition. The model also sheds light on the choice between venture capital and other forms of finance, and the determinants of the decision to seek patent protection for innovations. Our analysis provides a rationale for the use of contingencies (specifically, patent approval) in VC contracts documented by Kaplan and Stromberg (2003), and for recent evidence on patterns of syndication among venture capitalists. |
| Keywords: | venture capital, knowledge intermediaries, contracts, innovation, competition, patents. |
| JEL: | D82 D86 G24 L22 |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:ide:wpaper:29009&r=sbm |
| By: | Hsu, Po-Hsuan; Huang, Sterling; Massa, Massimo; Zhang, Hong |
| Abstract: | According to conventional wisdom, family ownership, which signals a lack of social capital and trust in an economy, may impede innovation. This argument, however, fails to recognize that modern family firms can benefit from capitalist institutions that promote innovation. Using a comprehensive sample of U.S. family-owned public firms and patents for the period from 1998 to 2010, we show that family ownership plays multiple roles in promoting innovation and its influence can be attributed to reduced financial constraints, a greater commitment to long-term value, and improved corporate governance. Causality is confirmed through an instrumental variable analysis, a difference-in-difference analysis based on an exogenous regulatory shock and a matched sample analysis. |
| Keywords: | Family firms; innovation; intangible investment |
| JEL: | G32 O32 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:10445&r=sbm |
| By: | Bruno Merlevede; Matthijs De Zwaan; Karolien Lenaerts; Victoria Purice (-) |
| Abstract: | This paper introduces two datasets, AUGAMA, a panel of European firms for the period 1996-2011, and EUMULNET, a European Multinational Network data set. These datasets are constructed on the basis of the Amadeus database issued by Bureau Van Dijk Electronic Publishing. We document the process of building these data sets from the raw Amadeus data for 26 European countries. We show that the data sets adequately approximate the structure of the European economy across countries, regions, and industries as portrayed by data from Eurostat (Structural Business Statistics) and Cambridge Econometrics. As an illustration of possible application, we use the datasets to test a number of results from the theoretical literature regarding the productivity of multinational firms vis-a-vis domestic firms. |
| Keywords: | multinationals, firm performance, total factor productivity, firm-level data |
| JEL: | F23 |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:rug:rugwps:15/900&r=sbm |
| By: | Bruno Merlevede; Victoria Purice (-) |
| Abstract: | This paper investigates the effect of foreign direct investment on the productivity of local firms. We decompose traditional country-wide spillover measures in different components according to both distance between foreign and domestic firms and timesince- foreign-entry. We find larger and faster spillover effects for local suppliers of foreign firms at shorter distance, driven mainly by recent foreign entrants. Irrespective of distance, foreign firms of medium maturity generate backward spillover effects that fade away with longer presence. A positive effect on local competitors is not significantly affected by distance and requires the presence of mature foreign firms. |
| Keywords: | FDI, Spillovers, Dynamics, Timing, Regions, Distance |
| JEL: | F2 D24 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:rug:rugwps:14/896&r=sbm |
| By: | Strambach , Simone (Department of Geography, Philipps-University of Marburg) |
| Abstract: | The aim of the paper is to contribute both conceptually and empirically to a deeper understanding of the territorial shaping of knowledge combination and its development dynamics underpinning innovation. The importance of combining and integrating knowledge bases from different sources, geographical scales and heterogeneous actors is increasingly recognized in innovation studies. Yet, the question of what limits or enables knowledge combinations in innovation processes and what generates relatedness among unrelated knowledge bases in time and space is not fully answered. Conceptually the paper suggests a more specific focus on microfoundations and temporality by taking into account the economics of organization in more detail. This appears a particularly promising approach, as the causal relations and mechanisms across and between aggregated levels such as firms, sectors, regions, or nations are not well understood. Empirically the paper explores the micro-dynamics of knowledge combination and its territorial shaping from a transnational perspective. German-Chinese innovation projects in sustainable construction are investigated by using the methodology of innovation biography. This method allows following the time-space path of innovation. It enables capturing knowledge interactions and their unfolding in multi-scalar and cross-sectoral ways. The results underline a very dynamic geography of organization and barriers for knowledge integration at the micro-level rooted in organizational and institutional path dependencies. The investigation in the interplay between more permanent and temporary organizational forms and its geography holds a large potential for further research to provide new insights into the spatiality of combining knowledge bases in innovation processes. |
| Keywords: | knowledge dynamics; transnational innovation; microfoundations; economics of organization; innovation biography |
| JEL: | D83 L14 L20 L84 O31 |
| Date: | 2015–02–26 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2015_010&r=sbm |
| By: | M. Hamadi; A. Heinen |
| Abstract: | We consider the effect on performance of very large controlling shareholders, who are mostly organized in voting blocks and business groups, in a sample of Belgian listed firms from 1991 to 2006. Since the shape of the relation between ownership and firm value is a controversial issue in corporate finance, we use semiparametric local-linear kernel-based panel models. These models allow us not to impose a priori functional restrictions on the relation between ownership and performance. Our semiparametric analysis shows that the effect on performance varies depending on the size of ownership stakes and that there are departures from linearity. |
| Keywords: | Family firms, Firm performance, Large shareholders, Ownership concentration, Semiparametric panel |
| JEL: | G32 C23 C14 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:cns:cnscwp:201502&r=sbm |
| By: | Asheim , Bjørn (UiS Business School/Centre for Innovation Research, University of Stavanger & CIRCLE, Lund University); Grillitsch , Markus (CIRCLE, Lund University) |
| Abstract: | Smart specialisation as a strategic approach for an innovation-driven regional development policy is extremely important in the European policy context and a precondition for accessing significant amounts of funding. In this paper, we pursue two aims: First, we clarify what smart specialisation means and introduce theoretical perspectives strengthening this policy approach. We will discuss the role of different modes of innovation and knowledge bases for different types of new path development. Second, we aim at identifying the sources for new path development within the smart specialisation framework for a peripheral manufacturing region. We present the key findings from a case study of Møre and Romsdal, in the western parts of Norway, which has been successful economically despite low scores on the typical innovation indicators. The case study was conducted in autumn 2014 and combines an in-depth analysis of relevant policy documents and 17 semi-structured interviews. Thereby, we illustrate to what extent a smart specialisation policy can add value in Norway. As Norway is not part of the EU, it is not compulsory for Norwegian counties to design smart specialisation strategies. |
| Keywords: | Smart specialisation; new path development; periphery; innovation; regional development |
| JEL: | P48 R10 R11 R58 |
| Date: | 2015–02–26 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2015_011&r=sbm |
| By: | Lee, Charles M. C. (Stanford University); Ma, Paul (?); Wang, Charles C. Y. (?) |
| Abstract: | Applying a "co-search" algorithm to Internet traffic at the SEC's EDGAR website, we develop a novel method for identifying economically-related peer firms. Our results show that firms appearing in chronologically adjacent searches by the same individual (Search Based Peers or SBPs) are fundamentally similar on multiple dimensions. In direct tests, SBPs dominate GICS6 industry peers in explaining cross-sectional variations in base firms' out-of-sample: (a) stock returns, (b) valuation multiples, (c) growth rates, (d) R&D expenditures, (e) leverage, and (f) profitability ratios. We show that SBPs are not constrained by standard industry classification, and are more dynamic, pliable, and concentrated. Our results highlight the potential of the collective wisdom of investors--extracted from co-search patterns--in addressing long-standing benchmarking problems in finance. |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:stabus:3062&r=sbm |
| By: | Marco Lugo Rodriguez |
| Abstract: | In this paper, we examine the effects of fiscal policy on entrepreneurship outcomes in the Canadian provinces for the 1984 – 2009 period. This is the first paper to assess the impact of taxation on entrepreneurship in Canada by using intensive-margin measures (i.e. entrepreneurial income and employment) instead of more commonly used participation measures, as they are thought to be more closely related to policy goals such as entrepreneurial sustainability. A dynamic panel data approach is employed in order to account for potential trends in both taxation policy and entrepreneurial outcomes. The results are consistent with previous literature of the United States and indicate that if the trends, caused by incomplete labour mobility among other things, are indeed important then tax policy has no statistically significant impact on the measured entrepreneurial outcomes. <P> |
| Keywords: | Entrepreneurship, tax policy, dynamic panel estimators, |
| Date: | 2014–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2014s-46&r=sbm |
| By: | Peia, Oana (ESSEC Business School); Vranceanu, Radu (ESSEC Business School) |
| Abstract: | This paper analyzes how banks' funding constraints impact the access and cost of capital of small firms. Banks raise external finance from a large number of small investors who face co-ordination problems and invest in small, risky businesses. When investors observe noisy signals about the true implementation cost of real sector projects, the model can be solved for a threshold equilibrium in the classical global games approach. We show that a "socially optimal" interest rate that maximizes the probability of success of the small firm is higher than the risk-free rate, because higher interest rates relax the bank's funding constraint. However, banks will generally set an interest rate higher than this socially optimal one. This gives rise to a built-in inefficiency of banking intermediation activity that can be corrected by various policy measures. |
| Keywords: | Bank finance; Small business; Global games; Optimal return; Strategic uncertainty |
| JEL: | C72 D82 G21 G32 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:essewp:dr-15001&r=sbm |