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on Entrepreneurship |
| By: | Domnick Clemens (European Commission - JRC); Compano Ramon (European Commission - JRC); Ponferrada Víctor (European Commission - JRC); Bodgan Tofan; Colombo Massimo; Quas Anita |
| Abstract: | ‣ Relocation of European startups raises concerns about weakening the EU’s innovation ecosystem. A new JRC report provides new evidence on the magnitude and type of startups relocation among European venture capital (VC) backed firms. ‣ The relocation rate of European VC-backed startups is in the order of 3.3% - 4.3%. This number drops down to 0.3% - 0.5% for comparable non-VC backed startups. ‣ Relocation patterns i) differ among startups’ home countries, ii) are higher for asset-light than for manufacturing firms, and iii) happen often in the first years of a startup’s life. ‣ The United States is the dominant destination for relocating startups, in particular the more developed entrepreneurial ecosystems such as San Francisco, Boston, and New York. ‣ Most migrations are not ‘complete’ relocations: 97% of the VC-backed companies that relocate are doing it only partially, i.e., they keep operations in the home country. Only about three-quarters of the CEOs move physically to the new destination when startups relocate. ‣ Startup relocation can be beneficial or detrimental for the country of origin, depending on the context of the firm and its ecosystem. For instance, a ‘virtual’ relocation to tap into VC markets abroad might be positive for firm growth, while losing all activities would be detrimental. Polices ought to accompany startups in their drive to expand to foreign markets, while aiming to retain high-value activities (e.g., R&D) in Europe. These foreign ties will enable positive spillovers to the ecosystem of origin. ‣ To reduce the probability of losing high-value activities framework conditions need to improve. Examples include facilitating access to adequate finance, the supply of skilled human resources, decreasing regulatory complexity, and completing the EU Single Market. |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc146239 |
| By: | Max Sina Knicker; Jean-Philippe Bouchaud; Michael Benzaquen |
| Abstract: | Venture capital outcomes are dominated by a small number of extreme successes, making it difficult to distinguish investor skill from favorable realizations in a highly skewed return distribution. We study this question by comparing empirical VC portfolios to a constrained random benchmark that preserves key portfolio characteristics, including timing, geography, sector composition, and portfolio size, while randomizing individual company selection. Across funding stages, empirical portfolio distributions appear remarkably close to their random benchmarks. We find no evidence that portfolio construction increases the probability of high-multiple outcomes: the right tail remains statistically indistinguishable from random allocation. Deviations in the lower part of the distribution are small and sensitive to the interpretation of zero outcomes, suggesting at most weak evidence of downside improvement. We further introduce a rank-based benchmark distribution to evaluate outperformance at each position in the cross-section. This analysis shows that even the best-performing portfolios do not exceed the outcomes expected for their rank under random sampling. Our results suggest that VC portfolio outcomes are largely consistent with constrained random allocation, highlighting the difficulty of identifying aggregate skill in heavy-tailed investment environments. A similar conclusion holds for the performance of financial analysts in predicting future earnings. |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2605.03980 |
| By: | Teresa Fort; Nathan Goldschlag; Jack Liang; Peter K. Schott; Nikolas Zolas |
| Abstract: | Relatively flat US productivity growth versus rising R&D expenditures is often interpreted as evidence that ideas are getting harder to find. We build a new 45-year panel tracking the universe of US firms' patenting to investigate the micro underpinnings of this conclusion, separately examining the relationships between research inputs and ideas (patents) versus ideas and growth. We find that average patents per R&D input are increasing, the elasticity of patents to R&D inputs is flat or rising, and there is not systematic evidence of a secular decline in patenting after controlling for research inputs. We then document a positive, significant, and fairly steady relationship between firms' patent and labor productivity growth rates. Average firm growth after controlling for patent growth, however, declines. Together, these results suggest that firms' innovative efforts play a key role in sustaining growth that has not diminished over the last four decades. |
| Keywords: | innovation, productivity, R&D, patents, firm growth |
| JEL: | O31 O32 O33 O47 D24 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12652 |
| By: | Giordano MION (ESSEC Business School); Aminata SISSOKO (European Commission) |
| Abstract: | In this paper, we have conducted an econometric analysis of the impacts of the Accelerator scheme of the European Innovation Council (EIC), with a particular focus on the EU Blended Finance providing for the first time grant and direct equity - quasi-equity investment, by means of a difference-in-difference framework combined with propensity score matching and using firms who obtained a Seal of Excellence as control group. Our analysis highlights a number of significant impacts of the EIC Accelerator on firm performance measures like sales, capital stock, wage bill, average wage, employment and value of deals. The analysis also highlights the payment of the EIC direct equity investment as a key root of heterogeneous impacts on firm production factors and output and the lack of a differential impact for projects related to health. |
| Keywords: | company growth, direct investment, EU investment, EIC fund, innovation, research and development, start-up |
| JEL: | O31 O33 L26 M13 G24 O38 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:eug:wpaper:ki-01-26-025-en-n |
| By: | Robert Fairlie; Robert W. Fairlie |
| Abstract: | The paper provides a descriptive analysis of both the early impacts of COVID on business activity among immigrants and the economic recovery over the next few years. The findings indicate that immigrant business owners were disproportionately affected by COVID in the first month of the pandemic when mandated shutdowns through social distancing restrictions were the most severe. Immigrant business activity recovered somewhat inconsistently through the end of 2020 but started a longer-term upward trend in both absolute terms and relative terms over the next few years. By the end of 2024, the number of active immigrant business owners increased to 3.9 million compared with 3.0 million just prior to the start of the pandemic. Growth in the Construction, Transportation, Professional and Business Services, and Financial Activities industry groups fueled total growth in immigrant business activity during the recovery period. The percentage of the labor force owning an active business is 3.5 percentage points higher than U.S. born active business ownership rates, which is larger than the 1.8 percentage point gap before the pandemic started. |
| Keywords: | entrepreneurship, self-employment, business ownership, COVID, pandemic, recovery, immigrant, immigration, inequality |
| JEL: | L26 J15 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12655 |
| By: | Wojdan Omran (Queen's Business School); Shumaila Yousafzai (Nazarbayev University, Graduate School of Business) |
| Abstract: | This study advances a decolonial understanding of women's entrepreneurship in the Global South by synthesizing how women entrepreneurs resist and navigate patriarchal constraints through infrapolitical strategies. It introduces infrapolitics as a critical lens to theorize subtle, informal, and contextually embedded acts of resistance that often remain overlooked in mainstream entrepreneurship literature. |
| Keywords: | Infrapolitics, Strategic disobedience, Quiet activism, Women entrepreneurs, Palestine, Patriarchy, Bricolage, Islamic feminism, Global South, Systematic Literature Review, Decolonial theory |
| JEL: | L26 J16 O17 B54 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:asx:nugsbw:2025-11 |
| By: | Compano Ramon (European Commission - JRC); Johanyak Csaba; Testa Giuseppina; Zhen Ni; Testa Giuseppina; Tuebke Alexander (European Commission - JRC) |
| Abstract: | This paper examines whether, and under which conditions, regional entrepreneurial ecosystems mitigate spatial frictions in cross-regional venture capital (VC) investments. Using a dyadic panel of VC flows across 267 European NUTS-2 regions over 2008-2022, we estimate gravity-style regressions with high-dimensional fixed effects, distinguishing investments by stage and investor origin. Our results show that spatial frictions, particularly geographic and economic distance, remain important determinants of VC allocation. At the same time, regions with stronger entrepreneurial ecosystems attract higher VC inflows and exhibit lower sensitivity to institutional and structural differences. Differences across investor origins suggest that ecosystem legibility is most valuable when institutional uncertainty is high, such as for cross-border investors. |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:wpaper:202601 |
| By: | Viet Trinh; Tan Nguyen; Minh-Huyen Phan; Quan Luu |
| Abstract: | This study presents a novel, AI-driven framework for assessing Environmental, Social, and Governance (ESG) performance in European small and medium-sized enterprises (SMEs). An initial phase established expert-validated ESG baseline scores from a subset of the Flash Eurobarometer FL549 survey data. In the second phase, a scalable AI agent system, built on the n8n automation platform, applied these baselines to perform automated ESG classification and generate contextual recommendations using large language models (LLMs). The results demonstrate the AI system's high consistency with human-derived outputs, thereby supporting more effective monitoring and intervention strategies aligned with the European Green Deal. |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2605.00841 |
| By: | Carlos Carvalho; Bruno Perdigão; Ricardo Schechtman |
| Abstract: | Conditional on a loan application filed by a small or medium enterprise (“SME”), we find that the existence of recent loans of that firm with private domestic banks increases the chance a loan will be granted by a foreign bank relative to a private domestic bank. On the other hand, recent loans extended by foreign banks or by domestic state-owned banks do not produce this differential effect. Furthermore, the forementioned effect vanishes for large firms. These findings are consistent with a mechanism by which foreign banks overcome borrower informational asymmetries by relying on their domestic peers’ recent behavior. Indeed, the higher ability of private domestic banks to access informationally opaque SMEs, dependent on soft information, makes recent loans with them a more valuable signal for foreign lenders who lack the same ability. |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:bcb:wpaper:647 |