The Economics of Small Firms: A European Challenge

228 Pages·1990·6.57 MB·English

by  Zoltan J. Acs, David B. Audretsch (auth.), Zoltan J. Acs, David B. Audretsch (eds.)

THE ECONOMICS OF SMALL FIRMS
A EUROPEAN CHALLENGE
Studies in Industrial Organization
Volume 11
Series Editors:
H. W. de Jong, University of Amsterdam, Amsterdam, The Netherlands
W. G. Shepherd, University of Massachusetts, Amherst, U.S.A.
Advisory Board:
W. Adams, Michigan State University, East Lansing (Mich.), U.S.A.
R. E. Caves, Harvard University, Cambridge (Mass.), U.S.A.
K. D. George, University College of Swansea, Singleton Park, U.K.
E. Heusz, Friedrich Alexander University, Erlangen-NOrnberg, F.R.G.
A. P. Jacquemin, University of Louvain, Louvain, Belgium, and
Commission of the European Communities, Brussels, Belgium
E. Kantzenbach, University of Hamburg, Hamburg, F.R.G.
H. W. Lambers, Erasmus University, Rotterdam, The Netherlands
R. Prodi, University of Bologna, Bologna, Italy, and
lstituto per Ia Ricostruzione lndustriale, Bologna, Italy
F. M. Scherer, Harvard University, Cambridge (Mass.), U.S.A.
The Economics of Small Firms
A European Challenge
edited by
ZOLTAN J. ACS
Merrick School of Business, University of Baltimore, Baltimore, U.S.A.
and
DAVID B. AUDRETSCH
Wissenschaftszentrum Berlin fur Sozialforschung, Berlin, F.R. G.
SPRINGER-SCIENCE+BUSINESS MEDIA. B.V.
Library of Congress Cataloging-in-Publication Data
The Economics of small firms : a European challenge I edited by Zoltan
J. Acs and David B. Audretsch.
p. em. -- <Studies in industrial organization : 11>
ISBN 978-90-481-4057-2 ISBN 978-94-015-7854-7 (eBook)
DOI 10.1007/978-94-015-7854-7
1. Small business--Congresses. I. Acs, Zoltan J. II. Audretsch,
David B. III. Series: Studies in industrial organization v. 11.
HD2341.E255 1990
338.6"42--dc20 89-38742
CIP
Printed on acid-free paper.
All rights reserved
© 1990 by Springer Science+ Business Media Dordrecht
Originally published by Kluwer Academic Publishers in 1990
Softcover reprint of the hardcover 1st edition 1990
No part of the material protected by this copyright notice may be reproduced or utilized in any form or by
any means, electronic or mechanical, including photocopying, recording, or by any information storage and
retrieval system, without written permission from the copyright owners.
Table of Contents
List of Tables Vll
List of Figures ix
Acknowledgements xi
1. Small Firms in the 1990s
Zoltan J. Acs and David B. Audretsch
A. SMALL-FIRM GROWTH
2. Transactional Calculus and Small Business Strategy
Mark H. Lazerson 25
Comment: Felix R. FitzRoy 42
3. Firm Performance and Size
David J. Storey 43
Comment: Zoltan J. Acs 51
4. The Relationship Between Firm Growth and Labor Demand
Bruno Contini and Riccardo Revelli 53
Comment: DavidS. Evans 61
5. Small Business in German Manufacturing
Joachim Schwalbach 63
Comment: Riccardo Revelli 74
B. ISSUES IN ENTREPRENEURSHIP
6. Some Empirical Aspects of Entrepreneurship
David S. Evans and Linda S. Leighton 79
Comment: Hideki Yamawaki 98
7. Creative Destruction Among Industrial Firms in the United States
Bruce A. Kirchhoff 101
Comment: Roy Thurik 117
8. Investment and Capital Diversity in the Small Enterprise
William C. Dunkelberg and Arnold C. Cooper 119
Comment: David B. Audretsch 135
C. TECHNOLOGY, STRATEGY, AND FLEXIBILITY
9. Flexibility, Plant Size and Industrial Restructuring
Zoltan J. Acs, David B. Audretsch and Bo Carlsson 141
Comment: Joachim Schwalbach 155
v
vi
10. Technology Strategy in Small and Medium-Sized Firms
Mark Dodgson 157
Comment: Christopher J. Hull 168
11. Small-Scale Industry at a Crossroads: U.S. Machine Tools in Global
Perspective
Bo Carlsson 171
Comment: Jiirgen Muller 194
D. SMALL FIRMS, NEW ENTRY AND EMPLOYMENT
12. The Size of the Small-Firm Sector in Hungary
Zolt(m Rom(m 199
Comment: Istvan R. Gabor 205
List of Contributors 207
Index 211
List of Tables
Chapter 1
1.1. Employment Growth and Small-Firm Share of Growth by Sector,
1976-1986
1.2. Percentage of Employment by Size of Firm, 1976-1986
Chapter 2
2.1. Company Description
Chapter 3
3.1. The Coefficients of Log Size and Age- US and Italian Results
3.2. Italy: OLS Estimates of Growth Rates, with Lagged Growth as Regressor
3.3. The Coefficients of Initial Size in the Estimates of a Labor Demand
Equation
Chapter 4
4.1. Firm Size Distribution in German Manufacturing Industries, 1986
4.2. Plant Size Distribution in German Manufacturing Industries, 1986
4.3. Importance of Small, Medium-Sized and Large Businesses in German
Manufacturing Industries, 1977-1986
4.4. Determinants of the Size Distribution and Presence of Small Plants
Chapter 5
5.1. Self-Employment Entry and Exit
5.2. Self-Employment Entry Rate by Age: White Men Ages 21-65
5.3. Estimated Survival and Hazard Rates for Self-Employment
5.4. Probability of Entering Self-Employment from Wage Work
5.5. Estimated Probability of Being Self-Employed in 1981: White Men
5.6. Estimated Log Earnings Equations for Self-Employment and Wage
Workers Regression Estimates
5.7. Table A. Definition of Variables for National Longitudinal Survey of
Young Men
Chapter 6
6.1. Relative Size of the 500 Largest Industrial Corporations Based on Assets
6.2. Normalized Growth in Assets of 500 Largest Industrial Firms
6.3. Twenty Years of Assets Growth for the 82 Firms in 1970s 500 but not in
1960s 500 Largest Firms
6.4. Twenty Years of Assets Growth for the 500 Largest Firms as Measured
by Total Assets in 1970
Chapter 7
7. 1. Financial Capital Inputs
7. 2. Percent of Capital from Each Source
7.3. Source of Capital for Small Business Starts
7 .4. Hours Worked
vii
viii
7.5. Total Unpaid Family Hours Worked per Week
7.6. Outside Employment by Family Members
7.7. Number of Full-Time Partners and Initial Capital Investment
7.8. Sources of Capital and the Number of Full-Time Partners
7.9. Initial Employment by Number of Full-Time Partners
7.10. Education and Skill of Entrepreneurs
7 .11. Job-Related Experience
7.12. Regression Results for Factor Inputs
7.13. Coefficients for Desequilibrium Estimation
Chapter 8
8.1. Correlation Matrix for 106 Four-digit SIC Industries
8.2. Regression Results for Changes in Mean Establishment Size
1972-1982
Chapter 10
10.1. Share of Apparent Consumption of Machine Tools in the 20 Largest
Producing Nations, 1975-1987
10.2. Machine Tool Production Indexes in the 20 Largest Producing Nations,
1975-1987
10.3. Share of Machine Tool Production in the 20 Largest Producing
Nations, 1975-1987
10.4. Share of World Exports of Machine Tools: Germany, United States,
United Kingdom and Japan, 1913-1987
10.5. Share of NC Machine Tools in Total Machine Tool Production in
Various Countries, 1968-1987
10.6. Share ofNC Machine Tools in Total Machine Tool Invest in the U.S.,
Japan, U.K. and Sweden, 1978-1984
10.7. Number of Employees in Machine Tool Industry in Various Countries,
1970-1987
10.8. World's Largest Machine Tool Companies
Chapter 11
11.1. Industrial Activities in Hungary by Type of Organization, 1987
11.2. The Percentage Share of Employees in the Small, and Small-and
Medium-Sized Enterprises in the Manufacturing Sector
List of Figures
Chapter 1
1.1. Percentage of Sales Contributed by Small Manufacturing Firms,
1976-1986
1.2. Number of Innovations, and Innovations per Million Employees in
Large and Small Firms
Chapter 4
4.1. The Potential Relation Between Growth and Lagged Growth
Chapter 5
5.1. Firms in Industry Groups
Chapter 6
6.1. Self-Employment Rate vs. Age: White Men Ages 21-65
Chapter 8
8.1. Substitutability Between Human and Physical Capital
Chapter 9
9.1. Small-Firm Share of Sales in the Metalworking Industries, 1976-1986
Chapter 11
11.1. Distribution of Machine Tool Production among the Largest Producing
Nations, 1975-1987
IX
Acknowledgements
On November 17-18, 1988, an international conference was held in West Berlin at the
Wissenschaftszentrum Berlin f!lr Sozialforschung (WZB). The purpose of the confer
ence was to examine the increasing importance of small firms in national economies.
It was Joachim Schwalbach who first suggested the idea of holding a conference on the
subject. It goes without saying that an international conference of this dimension could
not have been held without significant support. We are grateful to the WZB for financial
support and to Manfred Fleischer for institutional guidance.
We would like to thank all of the participants for the time and effort they put into
the conference and their papers. Their willingness to rewrite to our exacting specifi
cations is greatly appreciated. Special thanks go to Bruce Kirchhoff of Fairleigh
Dickinson University and David J. Storey of the University ofWa rwick for their efforts
at helping to organize the conference at various stages. David S. Evans, Joachim
Schwalbach, David J. Storey and Bo Carlsson read the introduction and made many
helpful suggestions.
Special thanks go to Linda Cieminski, Christian Loycke de Raux and Hannelore
Trautmann for organizing the day-to-day activities of the conference. Their painstaking
support made the conference a pleasure for participants and organizers alike. We thank
the AER for permission to reprint chapter six.
xi