Catching Gazelles with a Lasso Coad, Alex; Srhoj, Stjepan
Small business economics,
10/2020, Volume:
55, Issue:
3
Journal Article
Peer reviewed
We investigate whether our limited ability to predict high-growth firms (HGF) is because previous research has used a restricted set of explanatory variables, and in particular because there is a ...need for explanatory variables with high variation within firms over time. To this end, we apply “big data” techniques (i.e., LASSO; Least Absolute Shrinkage and Selection Operator) to predict HGFs in comprehensive datasets on Croatian and Slovenian firms. Firms with low inventories, higher previous employment growth, and higher short-term liabilities are more likely to become HGFs. Pseudo-R² statistics of around 10% indicate that HGF prediction remains a challenging exercise.
Governments allocate financial resources to support small- and medium-sized enterprises (SMEs) through public subsidies and grants. However, do these public investments help supported firms to ...increase their performance and growth? We answer this question by conducting a systematic review of evidence in the European Union. We review studies investigating the effects of public grants on firm performance in the European Union’s 28 member countries that were published from 2000 on. We provide a structured overview of 30 studies covering 13 countries. Our review offers information on the methodological approaches, variables and findings of the previous studies. The summarized findings show mostly the positive outcomes of the grants on firm-survival, employment, tangible/fixed assets, sales/turnover, with mixed findings for labour productivity and total factor productivity (TFP). However, we point out that there are significant differences concerning the time period of analysis (investigating short-term vs long-term outcomes), and importantly, the heterogeneity of effects concerning firm size and age, region, industry and intensity of support. Our study offers a series of recommendations for policymakers and researchers.
Full text
Available for:
CEKLJ, EMUNI, FIS, FZAB, GEOZS, GIS, IJS, IMTLJ, KILJ, KISLJ, MFDPS, NLZOH, NUK, OILJ, PNG, SAZU, SBCE, SBJE, SBMB, SBNM, UKNU, UL, UM, UPUK, VKSCE, ZAGLJ
Kada poduzeće ne može podmiriti dugove, vjerovnici imaju mogućnost blokirati
to poduzeće. Postupak blokiranja poduzeća vodi se ispred Financijske Agencije. Ovim
člankom po prvi puta se primjenjuje ...Omega Score model (Altman i sur., 2022) na
populaciji poduzeća u Republici Hrvatskoj. U članku se koriste podatci o godišnjim
financijskim izvještajima, blokadama poduzeća, ugovorima o radu poduzeća te sudski
registar. Omega Score model omogućuje podjelu poduzeća u tri grupe: 1) niski rizik
(Alpha), 2) srednji rizik (Beta) i 3) visoki rizik (Gamma) od značajne financijske
poteškoće. Rezultati ovog članka prikazuju pet pronalaska, od čega četiri u kontekstu
ekspanzije te jedan tijekom pandemije. Prvo, gotovo 90% poduzeća u ekonomiji su
poduzeća niskog rizika od značajnih financijskih poteškoća. Drugo, velika većina
poduzeća koja imaju srednji ili visoki rizik od značajnih financijskih poteškoća su mikro
poduzeća. Treće, viši udio rizičnijih poduzeća je u razvijenijim županijama, a manji je
udio u manje razvijenim županijama. Četvrto, otprilike 70% poduzeća s visokim rizikom
od značajnih financijskih poteškoća koncentrirano je u pet sektora. Peto, iako Omega
Score predviđa značajnu financijsku poteškoću, a ne nužno stečaj, analiza ukazuje da više
od 50% poduzeća visokog rizika u 2019. godini pokreće stečajni postupak do listopada 2022. godine. Člankom se prikazuju mogućnosti korištenja Omega Score kao alata za
sustavno praćenje financijskih poteškoća poduzeća u ekonomiji.
Full text
Available for:
CEKLJ, NUK, ODKLJ, UL, UM, UPUK
Impact evaluations of business development grants targeting young firms have been somewhat neglected in the literature. While most research studies focus on the impact of research and development ...grants, a larger percentage of young firms would benefit from grants that assist them in business development activities. In this paper, we examine the impact of small business development grants on young small firm survival, turnover growth, labor growth, and access to external finances. We study this topic in the context of a long recession in Croatia (2009 to 2014), which makes it possible to better observe the effect of the public instrument intervention. Results show positive effect on firm survival and on obtaining long-term bank loans and no significant effects on firm performance. The grant scheme was most successful for firms newest to the market.
Full text
Available for:
CEKLJ, EMUNI, FIS, FZAB, GEOZS, GIS, IJS, IMTLJ, KILJ, KISLJ, MFDPS, NLZOH, NUK, OILJ, PNG, SAZU, SBCE, SBJE, SBMB, SBNM, UKNU, UL, UM, UPUK, VKSCE, ZAGLJ
An assessment of the economic impact that can be achieved through grants makes it possible to refine such policy instruments in order to make public funding more effective in relation to the ...objectives pursued. In this paper, we investigate the effects of a business development grant scheme. More specifically, we question whether firms’ performance measures increased after receiving such grants. Methodically, we match grant receiving firms with grant non-receivers and estimate the average treatment effect on the treated using a two-way fixed effects regression. Our results point towards a positive effect of the grant scheme, which is particularly evident for firms of smaller size. Our estimated dose-response functions show that the share of grant amount in firm profits needs to be high enough for the grants to be effective. According to back-of-the envelope analysis, benefits outweigh the direct scheme costs.
Full text
Available for:
CEKLJ, EMUNI, FIS, FZAB, GEOZS, GIS, IJS, IMTLJ, KILJ, KISLJ, MFDPS, NLZOH, NUK, OILJ, PNG, SAZU, SBCE, SBJE, SBMB, SBNM, UKNU, UL, UM, UPUK, VKSCE, ZAGLJ
This study provides new evidence on the impact of tourism grants for service-standard improvement on tourism firm performance. Small matching grants provided to firms in two economically different ...regions are considered. We study additionality caused by the grants in the performance indicators of firms while taking into account regional heterogeneity and differing tourism demand. In the context of tourism firms in Croatia, we estimate the causal effect via a matching difference-in-differences estimator. We find a positive effect on tourism firm sales, value-added, capital, and labor in the region with higher tourism demand but not in the one with lower tourism demand. A cost–benefit analysis suggests that, in more developed regions, the benefits of the grant scheme for tourism outweigh the grant’s direct costs.
Full text
Available for:
NUK, OILJ, SAZU, UKNU, UL, UM, UPUK
The Entrepreneurial Ecosystems (EE) approach makes specific predictions regarding how EE inputs are converted into high-growth firms (HGFs) as an output. A simulation model draws out our hypothesis ...of regional persistence in HGF shares. Based on intuitions that EEs are persistent, we investigate whether regional HGF shares are persistent, using census data for 2 European countries taken separately (Croatia for 2004–2019, and Slovenia for 2007–2019). Overall, there is no clear persistence in regional HGF shares – regions with large HGF shares in one period are not necessarily likely to have large HGF shares in the following period. This is a puzzle for EE theory. In fact, there seems to be more persistence in industry-level HGF shares than for regional HGF shares. We formulate a ‘broken clock’ critique – just as a broken clock is correct twice a day, EE recommendations may sometimes be correct, but are fundamentally flawed as long as time-changing outputs (HGF shares) are predicted using time-invariant variables (such as local universities, institutions, investments in R&D and infrastructure).
Full text
Available for:
GEOZS, IJS, IMTLJ, KILJ, KISLJ, NLZOH, NUK, OILJ, PNG, SAZU, SBCE, SBJE, UILJ, UL, UM, UPCLJ, UPUK, ZAGLJ, ZRSKP
PurposeCoronavirus disease 2019 (COVID-19) has had a tremendous negative effect on the economies around the world by infusing uncertainty into supply chains. In this paper, the authors address two ...important research questions (RQs): (1) did COVID-19 wage subsidies impact small and medium enterprises (SMEs) to become more flexible towards the SMEs' business customers and (2) can such flexibility be a source for greater resilience to the crisis? As a result, the authors investigate the relationship between governmental wage subsidies and SMEs' flexibility norms towards the SMEs' business customers (study 1). The authors further uncover when and how flexibility towards existing customers contributes to SME resilience (study 2).Design/methodology/approachThe authors frame the inquiry under the resource dependence theory (RDT) and behavioural additionality principle. The authors use survey methodology and test the assumptions in study 1 (n = 225) and study 2 (n = 95) on a sample of SMEs from various business-to-business (B2B) industries in Croatia.FindingsOverall, in study 1, the authors find that SMEs that receive governmental wage subsidies have greater flexibility norms. However, this relationship is significantly conditioned by SMEs' competitive profile. SMEs that strongly rely on innovation are more willing to behave flexibly when receiving subsidies, whereas SMEs driven by branding do not. Study 2 sheds light on when flexibility towards existing customers increases SME resilience. Findings show that flexibility norms are negatively related to resilience, but this relationship is becoming less negative amongst SMEs with lower financial dependence on the largest customer.Originality/valueThis study extends RDT in the area of firm–government relationships by showing that wage subsidies became a source of power for the Government and a source of dependency for SMEs. In such cases, the SMEs receiving those subsidies align with the governmental agenda and exhibit higher flexibility towards the SMEs' customers. Drawing arguments from behavioural additionality, the authors show that this effect varies due to SMEs' attention and organisational priorities resulting from different competitive profiles. Ultimately, the authors showcase that higher flexibility norms can contribute to resilience if the SME restructures its dependency by having a less-concentrated customer base.
Bolje
javne politike mogu voditi većem životnom standardu i povjerenju u javne institucije. Svrha ovog članka je pružiti konceptualni okvir ideje
donošenja javnih politika temeljem dokaza
kao ...polazišta pri odlučivanju o javnim politikama. Temeljni problem odlučivanja donositelja javnih politika je neizvjesnost o budućem učinku javne politike, a neizvjesnost je teorijski moguće analizirati tzv.
von Neumann-Morgenstern
teorijom korisnosti. U primjeni teorije korisnosti,
donošenje javnih politika temeljem dokaza
ima potencijal pospješiti odlučivanje. Člankom je opisana hijerarhija dokaza (razina 1, 2 i 3) o učinkovitosti javnih politika te su pruženi primjeri više evaluacija JP - dokaza
razine 1
u Republici Hrvatskoj. Nadalje, provedeno je anketno ispitivanje stručnjaka za javne financije o evaluaciji JP
u Republici Hrvatskoj i pružena su dva pronalaska,
prvo, praksa evaluacija JP je sporadična, i drugo, na preddiplomskoj, diplomskoj ili doktorskoj razini osam javnih sveučilišta, ekonomiste i politologe se ne poučava kolegij vezan uz mikroekonometrijske evaluacije JP (dokaz razina 1). Iskoraci u praksi evaluacije JP mogu voditi povećanju životnog standarda i povećanju povjerenja u javne institucije, međutim, da bi se to ostvarilo, prije svega treba postojati veća potražnja za evaluacijama, a zatim je potrebno i obrazovati stručnjake koji mogu proizvesti evaluacije JP prema međunarodnim standardima.
Better public policies can lead to a higher standard of living and trust in public institutions. The purpose of this article is to provide a conceptual framework for the idea of evidence-based policymaking. The fundamental problem of decision-making by policy officials is uncertainty about the future effect of public policy, and it is possible to analyze uncertainty with the so-called
von Neumann-Morgenstern
utility theory. In the application of utility theory, evidence-based policymaking has the potential to facilitate decision-making. The article describes the hierarchy of evidence (levels 1, 2 and 3) on the effectiveness of public policies and provides examples of policy evaluations - evidence level 1 in the Republic of Croatia. Furthermore, a survey of public finance experts on the topic of public policy evaluation is conducted in the Republic of Croatia. Two findings emerge, first, the practice of public policy evaluation is sporadic, and second, at the undergraduate, graduate or doctoral level of the eight public universities in Croatia, economists and political scientists are not taught microeconometric public policy evaluation (evidence level 1). Stronger emphasis on the practice of public policy evaluation has potential to lead to increased standard of living and trust in public institutions, however, in order to achieve this, stronger demand for evaluations is required, and then current and future experts should be trained on how to conduct public policy evaluations according to international standards.
This study attempts to predict high growth firm (HGF) status with financial ratios. Measures related to the firm's effectiveness in using assets to generate profits, EBITDA margin, debt ratio, ...equity-to-debt ratio and return on assets are associated with HGF status. While the financial ratios improve HGF prediction, prediction remains modest (AUC = 0.627). This study suggests it is difficult to assume a very good HGF forecast from only financial ratios; therefore, the recommendation for researchers and policymakers building models for predicting HGFs is to incorporate non-financial ratio variables, like the intangible innovation and team-related variables. Finally, study suggests a standardized reporting of prediction performance metrics in the out-of-sample and out-of-time simulation for HGF prediction studies.
PDF
