1/2012 Rui Baptista, Francisco Lima and Miguel Torres Preto, “Entrepreneurial Skills and Workers’ Wages in Small Firms”
This paper contributes to the understanding of how small firms are organized and managed. We develop and test a simple empirical entrepreneur-worker matching model in small firms where individual skills play a central role. The model contemplates the existence of complementarities between workers’ and entrepreneur’s skills. The empirical analysis provides results consistent with the matching model: entrepreneurs are more skilled than workers and more skilled entrepreneurs manage larger firms; more skilled entrepreneurs hire more skilled workers. The estimation of wage regressions shows that the higher the level of education and experience of the entrepreneur, the higher the wage premium for workers.
2/2012 Carla Costa and Rui Baptista, “Agglomeration vs. Organizational Reproduction: The Molds Cluster in Portugal”
The mechanisms driving regional clustering are examined by exploring two theories: agglomeration economies and organizational reproduction. While organizational reproduction through spinoffs dominates clusters' early stages of growth, in clusters populated by small, vertically disintegrated firms accessing networks of external capabilities, agglomeration economies should emerge as a positive force. We examine just such a cluster: the molds industry in Portugal. Our empirical approach is twofold: first, we provide an account of the early evolution (1946–1986) of the industry; second, we use detailed data on firms and founders for the period 1987–2009 to test the predictions of the two theories. We find that while organizational reproduction has played a major role in clustering, agglomeration economies recently have gained influence.