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on Small Business Management |
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Issue of 2024‒04‒08
fourteen papers chosen by |
| By: | Runst, Petrik; Thomä, Jörg |
| Abstract: | The literature has established that young firms engaged in R&D exhibit a pronounced asymmetry in their economic performance, with high premia at the upper end of the conditional growth distribution. We argue that this binary view - i.e., R&D-oriented firms versus all others - is somewhat limited. In particular, non-R&D innovation activity should be treated as an important category in its own right, and that its sui generis mode of learning is reflected in a distinct growth pattern. We examine data from the German IAB/ZEW Start-up Panel. Our evidence suggests that young non-R&D innovators also exhibit asymmetric and improved economic performance relative to non-innovators, although less so than R&D firms. Our results also suggest that firms engaged in non-R&D innovation grow in a less risky and costly way than R&D innovators, and that a young firm's decision whether to engage in R&D for the purpose of innovation and growth can therefore usefully be understood as being driven by a specific risk-return trade-off. |
| Keywords: | Firm growth, R&D, non-R&D innovation, Modes of innovation |
| JEL: | D21 L11 L25 L26 O31 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifhwps:285360&r=sbm |
| By: | Rachid Achbah (UL2 UFR SEG - Université Lumière - Lyon 2 - UFR de Sciences économiques et de gestion - UL2 - Université Lumière - Lyon 2, COACTIS - COnception de l'ACTIon en Situation - UL2 - Université Lumière - Lyon 2 - UJM - Université Jean Monnet - Saint-Étienne); Marc Fréchet (UJM - Université Jean Monnet - Saint-Étienne, COACTIS - COnception de l'ACTIon en Situation - UL2 - Université Lumière - Lyon 2 - UJM - Université Jean Monnet - Saint-Étienne) |
| Abstract: | This study examines the interaction between insolvency proceedings and strategic variables and their relationship with firm survival. Unlike previous research, this study considers the firm's legal status, including insolvency proceedings, and fills a gap in the literature by considering legal considerations in business studies. Adopting a legitimacy perspective, we employ a Cox proportional hazards model to construct a survival model based on a theoretical framework encompassing insolvency proceedings retrenchment, firm age, and causes of financial distress. Our sample consists of French SMEs facing financial difficulties. The findings reveal that initiating insolvency proceedings is negatively associated with firm survival. However, retrenchment of employees or assets during insolvency proceedings is associated with a higher likelihood of survival. Contrary to expectations, firm age showed a negative association with firm survival during the insolvency proceedings. Moreover, the study revealed a positive association between insolvency proceedings and firm survival in cases of firm-specific financial distress. This research provides new insights into the relationship between insolvency proceedings and firm survival. |
| Keywords: | SMEs, Insolvency proceedings, Legitimacy, Retrenchment, Firm survival, SMEs Insolvency proceedings Legitimacy Retrenchment Firm Survival, Firm Survival |
| Date: | 2024–02–10 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04480487&r=sbm |
| By: | Wagner, Joachim |
| Abstract: | The use of cloud computing by firms can be expected to go hand in hand with higher productivity, more innovations, and lower costs, and, therefore, should be positively related to export activities. Empirical evidence on the link between cloud computing and exports, however, is missing. This paper uses firm level data for manufacturing enterprises from the 27 member countries of the European Union taken from the Flash Eurobarometer 486 survey conducted in February - May 2020 to investigate this link. Applying standard parametric econometric models and a new machine-learning estimator, Kernel-Regularized Least Squares (KRLS), we find that firms which use cloud computing do more often export, do more often export to various destinations all over the world, and do export to more different destinations. The estimated cloud computing premium for extensive margins of exports is statistically highly significant after controlling for firm size, firm age, patents, and country. Furthermore, the size of this premium can be considered to be large. Extensive margins of exports and the use of cloud computing are positively related. |
| Keywords: | Cloud computing, exports, firm level data, Flash Eurobarometer 486, kernel-regularized least squares (KRLS) |
| JEL: | D22 F14 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:kcgwps:285359&r=sbm |
| By: | Deborah Amorim Paixão (FACE/UFMG); Márcia Siqueira Rapini (CEDEPLAR/UFMG); Nathália Domingues Oliveira Barbosa (CTIT/UFMG e PPGTI/UFMG) |
| Abstract: | This paper aims to analyze the difficulties faced by academic spin-offs (SOAs) in their creation and development. To this end, a case study was carried out with SOAs from UFMG that have ceased their activities. The interviews conducted indicated that the main obstacles faced in setting up and consolidating the companies are similar to those reported in the literature, such as the need for funding, the importance of managerial knowledge (and not just technical knowledge), adapting to regulatory issues, and the founding professor's difficulty in reconciling his activities in the company with his academic obligations. University skills - such as support from the TTO Office in intellectual property and technology transfer activities, courses and business incubation - were highlighted as relevant to the entrepreneurial process. However, for all three companies, discontinuity or a reduction in demand for technology were determining factors for the closure or non-growth of the companies, showing that the growth and sustainability of SOAs go beyond institutional university initiatives or policies to promote ST&I. |
| Keywords: | academic spin-offs; technology transfer; innovation, UFMG. |
| JEL: | O31 |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:cdp:texdis:td668&r=sbm |
| By: | Stan Metcalfe (Manchester Institute of Innovation Research, The University of Manchester) |
| Abstract: | This lecture explores the evolution of economics as a discipline during 1870-1920, focusing on the critical question of wealth creation from knowledge. It highlights the tension between understanding economic structures and their transformative growth, with special attention to Alfred Marshall and Joseph Schumpeter's insights on the evolving nature of capitalism and innovation's role in economic development. By contrasting their views — Schumpeter's emphasis on disruptive innovation and Marshall's on gradual change — the lecture underscores the significance of innovation and knowledge in driving economic transformation. This discussion aims to illuminate the complex relationship between knowledge, innovation, and economic dynamics, essential for understanding the workings of modern economies. |
| Keywords: | Economic Evolution, Innovation and Growth, Schumpeter and Marshall, Wealth from Knowledge, Historical Economics |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:bdj:smioir:2024-02&r=sbm |
| By: | Gan Jin; Günther G. Schulze |
| Abstract: | Can historical institutions affect today’s firm innovation? We analyze a historical experiment in 1902, when the foreign-run Chinese Maritime Customs Service (CMC), known for its efficient and transparent governance, took over some of the notoriously corrupt Chinese Native Custom stations and improved their governance. Using a large data set of contemporary industrial firms in China, we show that firms in locations historically affected by the CMC rules exhibit higher innovation intensities today, which can be attributed to the persisting norms of honesty and lawfulness embedded in the CMC institution. They reduce local corruption and stimulate firms’ investment in R&D and training to this day. We identify a causal effect by comparing firms in locations affected by the takeover with firms in similar but unaffected regions nearby. We also use an IV strategy that exploits the takeover criterion, which stipulated that Native Customs stations within a 25 km radius of a CMC customs station could be taken over by the Western powers. |
| Keywords: | innovation, persistence, institutions, corruption, China |
| JEL: | N75 N45 D73 Z10 O31 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10967&r=sbm |
| By: | Joe, Dong-Hee |
| Abstract: | Because international trade is essential for the Republic of Korea’s economic growth and development, the government actively promotes exports by large companies and especially by small and medium-sized enterprises (SMEs). Several programmes support participation by SMEs in cross-border e-commerce, which may have contributed to their rapidly rising exports through this channel. This report reviews selected programmes implemented by the Korea SMEs and Startups Agency (KOSME) and the Korea Trade-Investment Promotion Agency (KOTRA). To maximize the programmes’ impact, KOSME and KOTRA apply a circular process of assigning the required budget, selecting the most promising SMEs, coordinating with private sector stakeholders, and evaluating results. This document reviews each of these aspects in detail for a selection of the programmes. |
| Date: | 2024–01–26 |
| URL: | http://d.repec.org/n?u=RePEc:ecr:col022:68862&r=sbm |
| By: | Rachid Achbah (UL2 UFR SEG) |
| Abstract: | This study aims to empirically investigate the impact of managers' characteristics on their choice between in-court and out-of-court restructuring. Based on the theory of upper echelons, we tested the preferences of 342 managers of financially distressed French firms regarding restructuring decisions. The overall findings of this study provide empirical support for the upper echelons theory. Specifically, managers with a long tenure and those with a high level of education are less likely to restructure before the court and are more likely to restructure privately. The findings also indicate that managers' age and gender do not significantly affect their choice between in-court and out-of-court restructuring. This study contributes to the literature on bankruptcy and corporate restructuring by turning the focus from firm characteristics to manager characteristics to explain restructuring decisions. |
| Date: | 2024–02 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2402.18135&r=sbm |
| By: | Rodepeter, Elisa; Gschnaidtner, Christoph; Hottenrott, Hanna |
| Abstract: | Big Data (BD) is becoming widely available and manageable. This raises the question of whether Big Data Analytics (BDA) in companies leads to better decision-making andhence performance. Based on a large, representative set of start-ups in Germany, we study the adoption of BDA among small and young ventures and analyze its economic effects using various short- and longer-term performance measures. We investigate the effect of adopting BDA on the new ventures' cost structure, sales, profits, survival rate, growth, and their probability of receiving Venture Capital (VC) financing while taking into account fac tors that drive BDA adoption. Our findings, however, show that using BDA does not lead to an immediate competitive advantage in terms of the classical short-term performance measures. BDA adoption is rather associated with greater sales/profit uncertainty, higher (personnel) costs, and a higher probability of failure. Yet, the increased risk of adopting BDA is compensated by a prospect of higher long-term performance conditional on survival. BDA-adopting start-ups perform better than comparable ones when considering longer-term performance measures such as their growth and their ability to secure VC. |
| Keywords: | Big data, Innovation, Productivity, Start-ups, Survival, Venture capital |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:283582&r=sbm |
| By: | Büchele, Stefan; Bünstorf, Guido; Cantner, Uwe; Dreier, Lukas; Meurer, Petra; Neumann, Liam Paul |
| Keywords: | Technology policy, Impact assessment, Germany |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:efisdi:285357&r=sbm |
| By: | Jennifer De la Cruz (Departamento de Economía de la Pontificia Universidad Católica del Perú.) |
| Abstract: | Empirical studies suggest that credit constraints prevent the development of Micro and Small Enterprises (MSEs). This study contributes to the analysis by exploring whether higher regional financial development affects the creation and growth of MSEs in Peru. Based on four cross-sectional databases, mainly the 2018 National Household Survey on Living Conditions and Poverty, this paper finds that there is a positive impact on entrepreneur profits; however, the effect is negative on the likelihood of running a business. Interactions between informality and financial frictions may explain this result. Informal financing emerges as an alternative in this context. This study addresses endogeneity issues by using the number of commercial bank branches per 1, 000 inhabitants in 1995 as an instrument of the degree of regional financial development in 2018. JEL Classification-JE: G20, O16, R11. |
| Keywords: | Financial Development, Micro and Small Enterprises, Informal Finance, Instrumental Variables. |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:pcp:pucwps:wp00532&r=sbm |
| By: | Youssef Moflih (UH2MC - Université Hassan II [Casablanca]); El Houssine Moustaid (UH2MC - Université Hassan II [Casablanca]) |
| Abstract: | The article examines the contribution of social entrepreneurship to job creation, focusing on Program 3 of the third phase of the National Initiative for Human Development (NIHD) in the Casa-Settat region of Morocco. The primary objective is to highlight the specific impact of this program on job generation and to explore the crucial role of social entrepreneurship in this process. The paper begins with a national socio-economic context, emphasizing the challenges of unemployment. It then delves into a review of the literature on social entrepreneurship. Special attention is given to the NIHD, elucidating its context of emergence, assessing the outcomes of previous phases, and focusing on the specifics of Program 3 in the third phase. The obtained results significantly demonstrate the positive impact of Program 3 on job creation in the Casa-Settat region. Finally, the article provides recommendations to further strengthen these efforts. |
| Abstract: | L'article examine la contribution de l'entrepreneuriat social à la création d'emplois, en se concentrant sur le Programme 3 de la troisième phase de l'Initiative Nationale pour le Développement Humain (INDH) dans la région de Casa-Settat au Maroc. L'objectif central est de mettre en lumière l'impact spécifique de ce programme sur la génération d'emplois et d'explorer le rôle crucial de l'entrepreneuriat social dans ce processus. Le document débute par un contexte socio-économique national, mettant en évidence les défis du chômage. Il se penche ensuite sur une revue de la littérature relative à l'entrepreneuriat social, Une attention particulière est portée à l'INDH, exposant son contexte d'apparition, le bilan des phases précédentes, et se concentrant sur les spécificités du Programme 3 de la troisième phase. Les résultats obtenus démontrent de manière significative l'impact positif du Programme 3 sur la création d'emplois dans la région de Casa-Settat. Enfin, l'article offre des recommandations pour renforcer davantage ces efforts. |
| Keywords: | Entreprenariat sociale emploi INDH. JEL Classification : J08 Type du papier : Recherche Théorique Social entrepreneurship employment NIHD. Classification JEL : J08 Paper type : Theoretical Research, Entreprenariat sociale, emploi, INDH. JEL Classification : J08 Type du papier : Recherche Théorique Social entrepreneurship, employment, NIHD. Classification JEL : J08 Paper type : Theoretical Research |
| Date: | 2024–02–21 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04476630&r=sbm |
| By: | Lee, Sul-Ki (Korea Institute for Industrial Economics and Trade) |
| Abstract: | South Korea's active hydrogen industry policy has fueled significant growth, with the number of firms increasing 56 percent by 2021 and industry-wide revenue rising 474 percent. Participation by large corporations led to this rapid expansion, but our analysis identifies further key steps: 1) developing and localizing core materials and technologies to transform the industry into a new growth engine, and 2) incentivizing small and medium enterprises to participate, sustaining the momentum. This study proposes two key policy actions to strengthen the position of the Korean hydrogen industry: 1) foster targeted demand, particularly in the mobility sector, and 2) bolster the supply chains of core materials for hydrolysis and fuel cells. |
| Keywords: | hydrogen; hydrogen energy; alternative energy; renewable energy; green hydrogen; hydrogen policy; hydrogen industry; hydrogen fuel cells; transportation industry; hydrogen supply chains; Korea; KIET |
| JEL: | Q41 Q42 Q48 Q55 Q58 |
| Date: | 2023–11–30 |
| URL: | http://d.repec.org/n?u=RePEc:ris:kietrp:2023_022&r=sbm |
| By: | Miquel-Flores, Ixart; Reghezza, Alessio; Buchetti, Bruno; Perdichizzi, Salvatore |
| Abstract: | This study investigates the underlying reasons for banks’ continued support of fossil fuel-based firms and examines the role of public guaranteed loans (PGLs) in redirecting resources towards greener economic activities, thereby facilitating the climate transition process. Using a unique pan-European credit register dataset, we combine supervisory bank data with firm-level greenhouse gas emission data and financial information. Our analysis yields three main findings. Firstly, European banks perceive lending to green companies as riskier compared to their brown counterparts, a phenomenon we term as the “green-transition risk.” Secondly, we provide evidence that during the COVID-19 pandemic, European banks have strategically leveraged PGLs to channel resources towards environmentally sustainable activities, thereby augmenting the proportion of green loans in their portfolios and partially shifting the inherent “green-transition risk” to European governments and citizens. Lastly, our investigation reveals a banking preference for awarding PGLs to financially robust green firms over less profitable, highly indebted green firms, which could pose significant challenges for green businesses requiring financial support during the COVID-19 crisis. JEL Classification: G20, G21, G28 |
| Keywords: | climate change, credit risk, green lending, public guaranteed loans |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20242916&r=sbm |