What Makes Small and Medium Enterprises Competitive

: This paper aims at understanding the determinants of Italian small- and medium-sized enterprises competitiveness. Having in mind the fact that the Italian economic system relies substantially on small firms which have managed to stay competitive by adopting strategies such as the creation of well-integrated social and institutional clusters (the so-called industrial districts) or specialising in the production of quality goods (the so called made in Italy). However, the growing competing pressure coming from the Far East has rendered this production system vulnerable, challenging its internationally competitiveness. By developing a conceptual model we identify the sources of competitiveness of Italian SMEs. The model is tested using a unique database which collects data, for the year 2004, over a sample of 2,600 SMEs.SMEs, competitiveness, innovation, interval regression, ordered probit

Exporting quality: is it the right strategy for the Italian manufacturing sector?

ABSTRACT: Recently, most European manufacturing firms have been engaged in a number of innovative activities to survive the growing competition coming from newly-industrialising countries. Italian manufacturing industry, which relies largely on SMEs, is struggling to regain competitiveness in global markets. In light of these stylised facts, we first investigate whether innovating activities and quality goods’ production enhance Italian SMEs’ probability to be exporter. Our findings suggest that both products’ quality and innovative activities affect considerably SMEs’ likelihood to export. Subsequently, using the Chow test, we find evidence for a structural break produced by quality, which results in substantial differences between high and low-quality firms. The former are more likely to export if they introduce product innovation, marketing innovation and/or organisational changes, the latter increase their chances of exporting when introducing process innovations and organisational changes.SMEs, exports, innovative activities, quality, probit

Proximity and Innovation in Italian SMEs

Abstract: In this paper we assess the relevance of both knowledge creation and diffusion processes in affecting Italian SMEs’ propensity to innovate. In doing so a knowledge production function (KPF) is estimated for a representative sample of small and medium manufacturing firms over the period 1998-2003. To account for endogeneity of R&D effort in the KPF, we estimate a Heckman selection model on R&D decisions and obtain two main results. First, we do not find the probability of being engaged in intramural R&D activities to be significantly related to firm size. Second, for those firms engaged in R&D activities, the intensity of R&D effort increases with firm size. Then, the KPF is estimated for three different samples of firms using a standard probit where the probability that SMEs will innovate depends upon intramural R&D effort, regional and industrial spillovers and a vector of interaction and control variables. The main results obtained from this second set of regressions are the following: first, we find the probability to innovate to be positively related to sectoral spillovers, the magnitude of such impact being decreasing in firms’ size. Second, knowledge diffusion via geographical proximity enhances the probability of the recipient firm to innovate only if it has an appropriate endowment of human capital.Innovation, knowledge, spillovers, firm size

Economic Growth and Finance. A cointegration analysis in US and Japan

This paper aims at investigating the relationship between financial and economic development for two countries: the US and Japan. A great deal of theoretical and empirical studies showed the existence of a close relation between the development of the financial sector and economic growth (Greenwood and Jovanovic, 1990, Bencivenga and Smith, 1991, King and Levine, 1993, Levine et al., 2000); nevertheless many concerns still remain: it is, for instance, unclear how the development of financial markets drives economic growth and, more relevant, whether it causes or is caused by economic growth. Moreover, previous empirical studies showed that time series and cross sectional approaches lead to different results. In this paper, the long-run relationship among finance and growth is investigated through the cointegration analysis (an estimation method developed over the last decade). The cointegration analysis can help to shed light on the aforementioned issues: it helps both to examine the interactions between the variables under consideration (real GDP per capita, private credit, investment share and inflation), taking into account the non stationarity of the data, and to capture the existence of potential cointegrating links between series (being explicit a priori about their form). With this regard, the aim of our analysis is twofold: 1) to investigate whether it is possible to find a stable relationship between financial development and real GDP per capita; 2) to investigate the possible channels of transmission from financial intermediation sector to economic growth.Economic growth, finance, cointegration analysis

Improving access to finance for young innovative enterprises with growth potential: evidence of impact on firms' output Part 2. R&D grant schemes: lessons learned from evaluations

This policy report explores the role of R&D grant schemes in supporting young innovative firms with growth potential. This issue is important because it is associated to the ways in which the innovativeness and growth of a myriad of young innovative firms with growth potential can be effectively be supported by policy. We have used primary literature from Science direct and Scopus databases which we have organised and conducted between March and June 2017 and policy evaluations. It contributes to the current political debate in Europe on new sources and forms of R&I funding to enhance EU level support for young innovative companies with growth potential.JRC.B.7-Knowledge for Finance, Innovation and Growt

RIO Country Report 2017: Austria

The R&I Observatory country report 2017 provides a brief analysis of the R&I system covering the economic context, main actors, funding trends & human resources, policies to address R&I challenges, and R&I in national and regional smart specialisation strategies. Data is from Eurostat, unless otherwise referenced and is correct as at January 2018. Data used from other international sources is also correct to that date. The report provides a state-of-play and analysis of the national level R&I system and its challenges, to support the European Semester.JRC.B.7-Knowledge for Finance, Innovation and Growt

Micro-financial System and Sustainable Development: are they compatible?

In recent years, millions of poor people worldwide have benefited from microfinance activities, such as microcredit, microsaving and microinsurance, making these financial services a key-tool for development of many developing countries. At the same time, the concept of sustainable development has taken on an increasing importance in the debate about economic growth and environment. The present study tries to explore the relationship between microfinance and sustainable development in developing areas focusing mainly on environmental sustainability. Our analysis seems to suggest the full compatibility between microfinance institutions and a sustainable development path at local level, on condition that these institutions implement policies aiming to make compatible the loans they provide with the environment and that they encourage the diffusion of environmental awareness across borrowers

RIO Country Report 2017: Croatia

The R&I Observatory country report 2017 provides a brief analysis of the R&I system covering the economic context, main actors, funding trends & human resources, policies to address R&I challenges, and R&I in national and regional smart specialisation strategies. Data is from Eurostat, unless otherwise referenced and is correct as at January 2018. Data used from other international sources is also correct to that date. The report provides a state-of-play and analysis of the national level R&I system and its challenges, to support the European Semester.JRC.B.7-Knowledge for Finance, Innovation and Growt

Innovation activities and Italian SMEs' exports decisions: a multi-treatment analysis

Abstract: This study aims at estimating the effect of innovation on export growth for a sample of Italian small and medium size manufacturing firms. We define two classes of innovation, namely technological and non-technological. For each class of innovation, we use a propensity score matching strategy to assess if innovating in period t – 1 led to an increase in firms’ probability of seeking for new exporting markets in period t + 1. Moreover, we assess the combined effect of both classes of innovation upon the probability of seeking for new markets. We found that both technological and non-technological innovations increases the probability that a firm will plan to look for new markets abroad, the former type of innovation being, on average, twice as relevant as the latter. Moreover, we found evidence that these are complementary activities, which are more effective on future exports decisions when combined

"Mōko Shūrai Ekotoba" (Illustrated Account of the Mongol Invasions)

This paper is a study of a Japanese illustrated handscroll produced in the late Kamakura period (1185-1333), the Mōko Shūrai Ekotoba, that provides an invaluable pictorial account of the two attempted Mongol invasions of Japan in the years 1274 and 1281. It was copied and restored, with some images significantly altered, during the Edo period (1615-1868). While in the original handscroll the appearances of the foreign Mongols were depicted as accurately as possible, the figures added later show exaggerated features and distortions that correspond to new modes of imagining and representing peoples reflecting a new language and the shifting cosmologies brought about by the Japanese encounter with more "different" Others (Europeans)