Formal and informal support and the performance of new start-ups: a quantile regression analysis

Using survey data from the Japan Finance Corporation, we investigate whether formal or informal support contributes to the performance of new start-up enterprises. We apply ordinary least squares (OLS) and quantile regression to explain the achievement rate of monthly sales. The results of the OLS estimation suggest that formal support has negative effects on the achievement rate, whereas informal support has positive effects. From the results of the quantile regression analysis, the estimated coefficients by quantiles indicate that high-performing enterprises are not affected significantly by formal and informal supports in positive or negative directions, whereas low-performing enterprises are affected strongly in positive or negative directions. These results imply that encouraging the start-ups through formal/informal supports has negative/positive effects on achieving their expected performance. Although it is difficult to predict whether entrepreneurs will perform well before they start an enterprise, informal support has little effect on high-performing enterprises.

Digitalization-Based Innovation — A Case Study Framework

Small- and medium-sized enterprises (SMEs) have been leading innovation processes, where the upsurge of digital technology has overpowering implications on competitive positioning, firm’s value chains and overall business model. Value creation facilitated by emerging digital technologies alters costs, as well as process performance. Due to field research and in-depth interviews with owners and managers of SMEs in North-East Italy area, we combine and analyze evidence of the contingent challenges companies face while trying to redesign their business model. Our results point out that being able to accumulate and put into action external ideas can be vital in supplementing internal knowledge base and therefore crucial in escaping technological lock-ins; thus, imposing efforts toward digital transformation offers favorable outcoes.