Are There Any Economic Impacts of Business R&amp;D Support? The Case of the Czech Republic

Ratinger, Tomáš; Čadil, Vladislav; Agyemang, Sylvester Amoako

doi:10.18267/j.cebr.251

Cited by 8 publications

(4 citation statements)

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“…Arnold et al (2006) document that the liberalization of the Czech energy market led to a significant reduction in customer prices, the entrance of a number of new players purchasing energies on the energy stock markets and resulting in higher pressure on the productivity of the sector, as also found in other countries (Joskow, 2008;Oberndorfer, 2009). The least productive companies are observed in sectors that are not innovative, are not major exporters, and do not make much use of public R&D support, which is required as a key feature of the highest productivity sectors (Aiello et al, 2015;Prokop et al, 2017;Ratinger et al, 2020).…”

Section: Resultsmentioning

confidence: 98%

Exploring firm-level and sectoral variation in total factor productivity (TFP)

Dvouletý

Blažková

2021

IJEBR

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PurposeThe objective of the study is to identify and explore factors affecting the productivity of companies in the Czech Republic with a focus on the role of firm size, firm age, indebtedness and long-term negative equity, efficiency of assets usage, liquidity, legal form, location and sector affiliation.Design/methodology/approachThe study utilizes a large unbalanced panel dataset of 91,257 firms (548,998 observations in total) covering the period 2000–2019. The dependent variable, i.e. total factor productivity (TFP), reflecting the overall firm productivity, was estimated by ordinary least squares (OLS) regression. The main findings were obtained through the estimation of two econometric models explaining the effects of factors on firm-level TFP. First, the OLS regressions together with Nomenclature of Territorial Units for Statistics (NUTS) 3 regions, year dummies and robust standard errors were estimated. Second, as a robustness check, the very same model was estimated with the random effects (RE) generalized least squares (GLS) method.FindingsThe analysis has shown a statistically significant U-shaped relationship (with the turning point of 38, resp. 36 years) between firm age and the overall TFP among the Czech enterprises. The authors provide two key findings in terms of a firm size-productivity relationship. Firms with fewer employees, often officially registered as self-employed individuals/freelancers, report higher levels of productivity. Nevertheless, when it comes to firm property (assets), the authors find a positive relationship between firm size and TFP. A high proportion of debts in the capital structure of analysed companies, or even negative equity, has been negatively associated with TFP levels.Research limitations/implicationsMore research is needed in the deeper exploration of sectoral and regional determinants of firm TFP, as both regional and sectoral heterogeneity were observed in the study. The authors propose the employment of a multi-level modelling approach, including a range of continuous variables and investigation of their role in shaping firm-level productivity.Practical implicationsConcerning the results, managers should be mindful of optimal capital structure principles due to the negative impact of a high level of debts on the productivity level. High indebtedness means high-interest payments drawing earnings off, which may be, especially in the long term, a hindrance to investments. The entrepreneurship and small- and medium-sized enterprise policies may be targeted at the soft policy actions, including advisory services and counselling on business development or risk and on the provision of financial capital allowing firms to strive for growth-oriented projects.Originality/valueTo the best of the authors' knowledge, this is the first attempt to provide insight into the firm-level productivity determinants, based on the large dataset covering enterprises across the whole economy over the long term, representing the structure of the country's entrepreneurial activity.

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Section: Resultsmentioning

confidence: 98%

Exploring firm-level and sectoral variation in total factor productivity (TFP)

Dvouletý

Blažková

2021

IJEBR

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“…These policy efforts might delay business bankruptcies and help entrepreneurs and self-employed persons to survive these difficult times [Betzler et al, 2021;Hedvičáková, Kozubíková, 2021;Novotný, Pellešová, 2021]. However, it is challenging to say whether these policies will get to those most in need as the effects of Czech entrepreneurship and SME policies were not always found to be positive, as documented in evaluation studies by [Assudani et al, 2017;Čadil et al, 2017;Pelucha et al, 2019;Ratinger et al, 2020;Dvouletý et al, 2021a] indicating that the programs are often used by "professional aid applicants" and those who need public support do not even apply. It will be thus critical to assess these programs carefully, see the structure of the applicants and analyze their effects by using rigorous counterfactual impact evaluation research designs.…”

Section: Discussionmentioning

confidence: 99%

A First Year’s Impact of the Pandemic on the Czech Entrepreneurial Activity

Dvouletý¹

2021

Foresight and STI Governance

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Every crisis affects entrepreneurial activity; for some entrepreneurs, it is an opportunity for a new start; others are forced to shut down their businesses. This study aimed to analyze the effect of the global coronavirus (so-called COVID-19) pandemic on Czech entrepreneurial activity. The article exploits the administrative data covering business demographics of seventy-seven Local Administrative Units (LAU1) regions over the years 2008-2020. Data were obtained from the Czech Statistical Office. The study provides insights into the short term effects of the pandemic, i.e. one year after. The results from the panel regression models and placebo tests comparing forecasted values of new businesses registrations and closures with actual values obtained after the end of 2020 do not show that there would be a significant drop in the Czech entrepreneurial activity. On the opposite, the data indicate that the Czech entrepreneurial activity grew and even increased compared with 2019. However, the obtained results need to be interpreted with caution, as many factors influenced Czech businesses’ development. Specifically, we mention the past economic growth, the introduction of public entrepreneurship and SME policy instruments and financial back-ups of the business owners. There are several implications of the conducted research. For instance, there is a need to observe the long-term effects of the pandemic on business demography and its structure. We propose to study changes in bankruptcy rates in the most harmed sectors such as tourism, hospitality, culture or sport and compare them with sectors that could easier transfer their business activities online.

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Section: Discussionmentioning

confidence: 99%

Untitled

2021

Foresight and STI Governance

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Foresight and STI Governance is an international interdisciplinary peer-reviewed openaccess journal. It publishes original research articles, offering new theoretical insights and practice-oriented knowledge in important areas of strategic planning and the creation of science, technology, and innovation (STI) policy, and it examines possible and alternative futures in all human endeavors in order to make such insights available to the right person at the right time to ensure the right decision.The journal acts as a scientific forum, contributing to the interaction between researchers, policy makers, and other actors involved in innovation processes. It encompasses all facets of STI policy and the creation of technological, managerial, product, and social innovations. Foresight and STI Governance welcomes works from scholars based in all parts of the world. Topics covered include:• Foresight methodologies and best practices;• Long-term socioeconomic priorities for strategic planning and policy making;• Innovative strategies at the national, regional, sectoral, and corporate levels;• The development of National Innovation Systems;• The exploration of the innovation lifecycle from idea to market;• Technological trends, breakthroughs, and grand challenges;• Technological change and its implications for economy, policy-making, and society;• Corporate innovation management;• Human capital in STI; and many others.The target audience of the journal comprises research scholars, university professors, postgraduates, policy-makers, business people, the expert community, and others who are interested in S&T and innovation analyses, foresight studies, and policy issues. The journal is included into the 1st quartile (Q1) of the Scopus

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Are There Any Economic Impacts of Business R&D Support? The Case of the Czech Republic

Cited by 8 publications

References 30 publications

Exploring firm-level and sectoral variation in total factor productivity (TFP)

Exploring firm-level and sectoral variation in total factor productivity (TFP)

A First Year’s Impact of the Pandemic on the Czech Entrepreneurial Activity

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