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Small Business Economics

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01.12.2016

Process innovation in small businesses: the self-employed as entrepreneurs

verfasst von: Maria Plotnikova, Isidoro Romero, Juan A. Martínez-Román

Erschienen in: Small Business Economics | Ausgabe 4/2016

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Abstract

Innovation is one of the key attributes that sets the entrepreneurs apart from the rest of self-employed people. This paper attempts to distinguish between these two categories by means of exploring the determinants of process innovation in small businesses using a survey of self-employed workers in Andalusia, Spain. The theoretical framework adopted distinguishes between three types of factors affecting the innovative activities: (1) personal characteristics of the self-employed, (2) business characteristics and (3) the characteristics of the external environment. A Heckman-type model of the extent of process innovation that accounts for sample selection bias is estimated.

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Self-employed people without employees were excluded because in many cases they are freelance workers or those who work for a single company that prefers to not hire them as paid employees to avoid social security costs and other legal constraints.

We consider the introduction of new specialised machinery, the introduction of new computer and electronic equipment and the introduction of new information and communication technology as innovative activities only when new or more sophisticated technology is incorporated. The mere replacement of equipment for other with similar characteristics was not considered as process innovation.

Similarly, including the inverse Mills ratio in the ordered probit equation of the extent of innovation results in a significant estimated coefficient for the inverse Mills ratio showing the presence of self-selection.

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Titel: Process innovation in small businesses: the self-employed as entrepreneurs
verfasst von: Maria Plotnikova
Isidoro Romero
Juan A. Martínez-Román
Publikationsdatum: 01.12.2016
Verlag: Springer US
Erschienen in: Small Business Economics / Ausgabe 4/2016
Print ISSN: 0921-898X
Elektronische ISSN: 1573-0913
DOI: https://doi.org/10.1007/s11187-016-9743-8

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