Business-to-Business Markets – Status Quo and Future Trends

As a phenomenon of modified value-chain structures the economic importance of business-to-business markets has been growing immensely during the past decades. This paper delivers a quantified overview of the market dimensions in terms of transactional volume. In addition, it explains the causes for this market development such as an increased service orientation in business transactions, higher degrees of customization, and influential factors on a macro level. In this context, future trends in this sector will be outlined as well.

The knowledge spillover theory of entrepreneurship

Contemporary theories of entrepreneurship generally focus on the recognition of opportunities and the decision to exploit them. Although the entrepreneurship literature treats opportunities as exogenous, the prevailing theory of economic growth suggests they are endogenous. This paper advances the microeconomic foundations of endogenous growth theory by developing a knowledge spillover theory of entrepreneurship. Knowledge created endogenously results in knowledge spillovers, which allow entrepreneurs to identify and exploit opportunities.

A model of the effect of affect on economic decision making

The standard economic model of decision making assumes a decision maker’s current emotional state has no impact on his or her decisions. Yet there is a large psychological literature that shows that current emotional state, in particular mild positive affect, has a significant effect on decision making, problem solving, and behavior. This paper offers a way to incorporate this insight from psychology into economic modelling. Moreover, this paper shows that this simple insight can parsimoniously explain a wide variety of behaviors.

Entrepreneurship and competitiveness dynamics in Latin America

This study analyses the relationship between entrepreneurial dynamics and the level of competitiveness in Latin American countries. Based on a stage of economic development model, we demonstrate that Latin American countries under the model followed different paths related to competitiveness. These different paths can explain the effect of specific competitiveness conditions on entrepreneurial dynamics in Latin America.

Market Concentration, Economic Welfare, and Antitrust Policy

The authors review the foundation for incorporating market concentration directly into consumer utility functions, and develop a general equilibrium model to derive welfare-maximizing principles for optimal enforcement of antitrust policies toward concentrated market structures, including merger policy. An intriguing result is that increased market concentration can fail to maximize economic welfare even if a proposed merger might generate positive net efficiencies.

R&;D in SMEs: a paradox?

This paper has three objectives: (1) to survey the relevant literature addressing the (apparent) paradox of Research & Development investments carried out within Small and Medium Enterprises; (2) to provide focused summaries of the articles in this special issue; (3) to draw some general conclusions in terms of policy implications.

Neighborhood effects and trial on the internet: Evidence from online grocery retailing

For traditional retailers the customer pool is largely bounded in space, whereas an Internet retailer can obtain customers from a wide geographical area. We examine customer trials at Netgrocer.com, and drawing on studies in marketing and economics conjecture that exposure spatially to proximate others (through direct social interaction or observation), can influence decisions of those who have yet to try. Trials arise from utility-maximizing behavior and the model is estimated as a discrete time hazard. The data span: (1) 29,701 residential zip codes, (2) 45 months of transactions since inception, and (3) zip code contiguity relationships. The estimated neighborhood effect is significantly positive and economically meaningful.

Global Software Piracy: Searching for Further Explanations

This paper identifies that Information and Communication Technology (ICT) has a negative effect on software piracy rates in addition to consolidating prior research that economic development and the cultural dimension of individualism also negatively affect piracy rates. Using data for 59 countries from 2000 to 2005, the findings show that economic well-being, individualism and technology development as measured by ICT expenditures explain between 70% and 82% of the variation in software piracy rates during this period. The research results provide important implications for policy makers and business practitioners to help reduce software piracy.

Banking Competition and SMEs Bank Financing. Evidence from the Italian Provinces

This work investigates whether local differences in banking competition impact on the amount of bank debt used by Italian small and medium sized manufacturing firms. Sample selection and Double Hurdle models are adopted as the process, which results in the choice of bank financing may differ from that determining its amount. Our main finding is that more competitive banking markets seem to be associated with relatively higher usage of bank debt by less transparent firms. On the other hand, a higher banking competition seems to have no effect on the probability of receiving bank loans.

Entrepreneurship in post-socialist economies: A typology and institutional contexts for market entrepreneurship

There is growing recognition among post-socialist (PS) economies that free-market entrepreneurship is essential for ultimately improving their economic future. The promotion of market entrepreneurship, however, has been a challenging experience for these economies. This paper examines various forms of entrepreneurship in PS economies. Drawing upon the institutional theory, we also highlight the clear contexts and attendant mechanisms associated with institutions–entrepreneurship nexus in PS economies’ contexts.

Can Consumers Buy Responsibly? Analysis and Solutions for Market Failures

This paper analyses one of the business case arguments for social responsibility: that corporate social responsibility plans are rewarded by consumers. This paper explores the ability of consumers to buy responsibly, identifies the main obstacles for responsible consumption, and suggests conditions for it to work. The review of previous studies leads us to conclude that consuming responsibly is seen as a time consuming activity, economically disadvantageous, and stressful. The main thesis of this paper is that unless market failures are corrected, consumers will not be able to buy responsibly, and therefore, market incentives for CSR are seriously threatened.

Knowledge spillovers and new ventures’ export orientation

We draw on the knowledge spillover literature to suggest that a country’s proportion of export-oriented new ventures represents an outcome of knowledge spillovers that stem from foreign direct investment (FDI) and international trade (export spillovers) as well as a source of knowledge spillovers (entrepreneurship spillovers). To test the hypotheses, we use macrolevel data from 34 countries during the period 2002–2005. We find that the relationship between FDI and international trade on the one hand and a country’s proportion of export-oriented new ventures on the other differs for higher- and lower-income countries. In addition, a country’s proportion of export-oriented new ventures affects the subsequent emergence of new businesses.

Entrepreneurship,economic development and institutions

This paper is an introduction to the special issue from the 3rd Global Entrepreneurship Monitor Research Conference held in Washington, D.C., in 2008. The paper has three objectives. First, to discuss the importance of the three stages of economic development, the factor-driven stage, the efficiency-driven stage and the innovation-driven stage. Second, to examine the empirical evidence on the relationship between stages of economic development and entrepreneurship. Third, to present a summary of the papers in the context of the theory.

Determinants of growth in non-farm proprietor densities in the US, 1990–2000

The number of non-farm proprietorships in the US has expanded significantly in past decades, but this expansion has not occurred evenly over space. Regression analysis correcting for spatial autocorrelation reveals that proprietors respond rationally to economic incentives. Parameter estimates for variables measuring collateral, age, ethnic mix, government policy, female labor force participation, and natural amenities, each have the expected signs. A few options are available to policymakers for influencing growth in self-employment densities over time.

Business Ethics Training: Insights from Learning Theory

This paper explores research in educational psychology and learning theory in a search for insights to enhance business ethics training Useful educational principles uncovered are then applied to the development of an ethics training initiative for sales professionals. The paper concludes with suggestions for future research to help enrich business ethics training.

Credit market failure intervention: Do government sponsored small business credit programs enrich poorer areas?

Using local market employment rates as our measure of economic performance, we find a positive and significant correlation between the average annual level of employment in a local market and the level of SBA guaranteed lending in that local market. Furthermore, the intensity of this correlation is much larger in low-income markets. Indeed, our results suggest that this correlation is positive and significant only in low-income markets. This result has important implications for public policy in general and SBA guaranteed lending in particular.

New business formation and employment growth: some evidence for the Spanish manufacturing industry

This paper explores the effects of new business formation on employment growth in Spanish manufacturing industries. New firms are believed to make an important contribution to economic growth but the extent of this contribution is unclear. We consider time lags of new firm formation as explanatory variables of employment change and identify how long the effect of new firm entries on employment lasts. Our main results show that the effects of new business formation are positive in the short term, negative in the medium term and positive in the long term, thus confirming the existence of indirect supply-side effects found in similar studies for other countries.

Delegation Commitment in Oligopoly

Dealing with managerial incentive in an oligopolistic competition market where the relevant strategic variables are not directly quantities but incentive schemes. It is found that, in the sequential delegation model, the leader output will not be affected by changing the number of the follower firms when there is only one leader. In addition, more equal distribution of the number of leaders and followers will result in higher industry output, lower price, lower industry profit, higher consumer surplus and higher economic welfare; moreover, economic welfare in the sequential delegation model is always higher than in a simultaneous delegation model.

Fighting off the big guys: comparing competitive retail services strategies in industrialized and developing world settings

As global trends regarding increased mergers and acquisitions continue, small local retailers must learn how to fend off these strong attackers. We assess key services strategies when small-local retailers compete against large-national retailers in industrialized (USA) and developing world (black South African township) retail settings. Of key interest is how theories generated from industrialized world research apply in developing world settings. We found that small retailers fend off large national retailers using virtually identical strategies regardless of the level of economic development.

Employment effects of business dynamics: Mice, Gazelles and Elephants

Much of the theoretical work on industry dynamics focuses on the role of ‘noisy’ selection and incomplete information on firm entry and survival. We extend this research by looking at the impact of firm heterogeneity on employment effects for 320 U.S. Metropolitan Statistical Areas (MSA). We find that only start-ups with greater than 20 and less than 500 employees have persistent employment effects over time and only in large diversified metropolitan regions. Therefore, both the type of entry (Gazelles) and the characteristics of the region are important for employment growth.