Broadband internet is considered an important determinant of economic growth and development. A number of studies have examined the impact of broadband on migration, firm location and economic growth. However, the relationship between broadband infrastructure and new firm formation in the USA has not been sufficiently described. This chapter fills that gap by empirically examining the relationship between broadband internet and new firm formation. It is found that single-unit firm births and the provision of broadband are positively and significantly related across almost all industry sectors in the USA. However, the impact of broadband provisioning on new firm formation is sensitive to agglomeration and aggregate and growth patterns of states and economic sectors.
Jitendra Parajuli and Kingsley E. Haynes
Martin G.A. Svensson
Empirical regularities regarding start-ups that do not show prolonged longevity have been known for some time. In this chapter, the regularity is argued to originate from an interaction between cognition-laden characteristics of entrepreneurs and contextual conditions. Overconfidence is argued to cause miscalibration of objective probabilities of success, which in turn causes excess entry, but also to negatively affect survival rates. Moreover, overconfidence is argued to be an evolutionary mechanism that helps explain the distribution of entrepreneurs at the local level. It does so by advocating overconfident entrepreneurs to be more likely to beacon personal, but miscalibrated, beliefs to others and thereby set off spillover effects. The bias is therefore argued to be detrimental to actors at an individual level (as it negatively affects survival rates), but favorable at the system level (as it facilitates spillover effects). The concluding discussion of these matters is extended by a discussion of policy issues.
Sam Tavassoli, Babak Kianian and Tobias C. Larsson
This chapter argues that the location of manufacturing is gradually shifting to the west again, exemplifying the ‘manufacturing renaissance’. Such a claim is based on the recent observed trend and the discussion is contextualized within the established theory that has been able to explain the location of manufacturing, that is, the product life cycle (PLC) model. Then the chapter identifies and discusses the four main drivers of this new phenomenon: (i) rising wage levels in emerging economies; (ii) falling quality of business milieu in emerging economies; (iii) emergence of new process innovations in western economies; and (iv) rising demand for western-made manufacturing. Finally, it is noted that the return of manufacturing should be kept in proportion to the amount of manufacturing activities that are still being offshored to less developed countries (LDCs), and not all industries are coming back to the west at the same pace.
Viroj Jienwatcharamongkhol and Sam Tavassoli
It is well known that exporters are productive firms, but the source of their productivity is left unexplained. This chapter aims to endogenize the productivity heterogeneity of exporting firms by incorporating innovation in a structural model framework. In doing so, we close the gap between the innovation–productivity and productivity–export literature. Two waves of the Swedish Community Innovation Survey (CIS) are merged. This allows for a setup that takes into account the links from innovation input to innovation output and also from innovation output to productivity and exports. The main findings highlight that exporters are productive firms with innovation output in the past, which in turn was driven by prior R & D and other innovation activity investments.
Roberto Antonietti, Maria Rosaria Ferrante and Riccardo Leoncini
Using an original dataset of small, machine-tool firms located in Emilia Romagna, Italy, we estimate the effect of social capital on the propensity to fully or partially outsource production activities. In particular, we investigate whether social capital favours outsourcing in contexts characterized by a relatively high infrastructure endowment. We show that the likelihood to fully outsource production activities increases with the local level of social capital. We also find that this effect is higher in regions where the density of transport infrastructures is higher. On the other hand, we do not find any significant effect of social capital on the propensity to partially outsource production activities. We argue that social capital is more effective in reducing the scope for opportunistic behaviour when monitoring costs are higher and where mobility is easier.
Knowledge, Technology and Internationalization
Edited by Charlie Karlsson, Urban Gråsjö and Sofia Wixe
María Jesús Abellán Madrid, Antonio García-Tabuenca and Cristina Suárez Gálvez
Innovation is a key factor in modern economies and many companies invest in R & D to obtain such innovations, with both public and private resources. The objective is to achieve and increase productivity and economic growth, but it could also provide a guarantee of long-run performance. The present work explores the relationship between R & D and firm survival. The hypothesis that R & D activity is a positive factor for firm survival is contrasted using data from the Encuesta Sobre Estrategias Empresariales (ESEE – Business Strategies Survey) for the period 1991–2010 and for a sample of Spanish manufacturing firms. With these data, a Cox proportional hazard model is estimated. The results show the existence of a positive relationship between R & D expenditure and survival probability, with differences depending on the environment. Specifically, we show that increasing the ratio of R & D to turnover lowers exit probability, controlling for other factors. The different environments are defined as combinations of both technological (or not) regions and sectors in which firms operate.
Anders Broström and Maureen McKelvey
We examine how firms assess the value of R & D partnerships with two types of public research organizations: public research institutes (PRIs) and universities. Survey data on Swedish engineering and manufacturing firms suggest that contacts with universities provide firms with impulses to innovation and offer opportunities to learn to a higher extent that contacts with PRIs. Guided by a view of institutes as more oriented towards applied R & D than universities, we also test whether managers perceive institute contacts as contributing more strongly to short-term R & D projects than universities. This hypothesis cannot, however, be verified. Our results suggest that, in terms of perceived effects of R & D managers, PRIs and universities are more similar as collaboration partners than would be expected, given the differing institutional set-ups. Implications for current discussions about the role of PRIs in national research and innovation systems are discussed.