|
on Small Business Management |
|
Issue of 2020‒08‒10
twenty-two papers chosen by João Carlos Correia Leitão Universidade da Beira Interior |
| By: | Baum, Christopher F (Boston College, DIW Berlin & Centre of Excellence for Science and Innovation Studies); Lööf, Hans (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Stephan, Andreas (Jönköping University, DIW Berlin & Centre of Excellence for Science and Innovation Studies); Viklund-Ros, Ingrid (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology) |
| Abstract: | We examine the impact of offshoring on patenting and total factor productivity using a panel of 7,000 mainly small Swedish manufacturing firms over the period 2001-2014. We apply the United Nations Broad Economic Categories (BEC)system to identify offshoring-related intermediate imports. The results show that the link between offshoring on the one hand and innovation and productivity on the other is largely explained by self-selection and reverse causality. We find a positive but statistically weak impact of offshoring on innovation, and no effect on productivity. |
| Keywords: | offshoring; patent; trademark; innovation; productivity; panel data |
| JEL: | C33 D24 F61 L23 O31 |
| Date: | 2020–08–03 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0486&r=all |
| By: | Camarero Garcia, Sebastian; Murmann, Martin |
| Abstract: | Despite the importance of business creation for the economy and a relevant share of new firms being started out of unemployment, most research has focused on analyzing the effect of unemployment insurance (UI) policies on reemployment outcomes that ignore self-employment. In this paper, we assess how UI benefit duration affects the motivation for creating a startup while unemployed and the subsequent firms' success. To do so, we create a comprehensive dataset on founders in Germany that links administrative social insurance with survey data. Exploiting reform- and age-based exogenous variations in potential benefit duration (PBD) within the German UI system, we find that longer PBD leads to longer actual unemployment duration for those becoming self-employed. Furthermore, the UI duration elasticity for these individuals is higher than common estimates for those individuals becoming re-employed. With increasing unemployment benefit duration, the founders' outcomes in terms of self-assessed motivation, sales, and employment growth lessen. This overall causal effect of PBD can be rationalized with a mix of composition and individual-level duration effects. Therefore, our findings suggest that it is important to consider the fiscal externality of UI on startup success when it comes to the (optimal) design of UI systems. |
| Keywords: | entrepreneurship,unemployment insurance,fiscal externality |
| JEL: | D22 J21 J23 J44 J62 J64 J65 L11 L25 L26 M13 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:20033&r=all |
| By: | Crescenzi, Riccardo; Dyevre, Arnaud; Neffke, Frank |
| Abstract: | We study whether and when Research and Development (R&D) activities by foreign multinationals help in the formation and development of new innovation clusters. Combining information on nearly four decades worth of patents with socio-economic data for regions that cover virtually the entire globe, we use matched difference-in-differences estimation to show that R&D activities by foreign multinationals have a positive causal effect on local innovation rates. This effect is sizeable: foreign research activities help a region climb 14 percentiles in the global innovation ranks within five years. This effect materializes through a combination of knowledge spillovers to domestic firms and the attraction of new foreign firms to the region. However, not all multinationals generate equal benefits. In spite of their advanced technological capabilities, technology leaders generate fewer spillovers than technologically less advanced multinationals. A closer inspection reveals that technology leaders also engage in fewer technological alliances and exchange fewer workers in local labor markets abroad than less advanced firms. Moreover, technology leaders tend to set up their foreign R&D activities in regions with relatively low absorptive capacity. We attribute these differences to that fact that the trade-off between costs and benefits of local spillovers a multinational faces depends on the multinational’s technological sophistication. This illustrates the importance of understanding corporate strategy when analyzing innovation clusters. |
| Keywords: | innovation; regions; Foreign Direct Investment; patenting; cluster emergence |
| JEL: | O32 O33 R11 R12 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:105684&r=all |
| By: | Zuzana Brixiová (University of Economics in Prague and VSB – Technical University of Ostrava, SALDRU Research Affiliate, University of Cape Town); Thierry Kangoye (African Development Bank); Mona Said (American University in Cairo) |
| Abstract: | In the aftermath of the global financial crisis, policymakers have been increasingly striving to support female entrepreneurship as a possible growth driver. This paper contributes to reconciling mixed findings in the literature on the effectiveness of entrepreneurial training with an analysis that links training and human capital, including tertiary education and non-cognitive skills, with gender gaps in entrepreneurial performance in Africa. We have found that while financial literacy training directly benefits men, it does not raise the sales level of women entrepreneurs. Instead, tertiary education has a direct positive link with the performance of women. Consistent with our theoretical model where different skills are complements, tertiary education can act as a channel that makes training effective. Regarding non-cognitive skills, evidence shows that women entrepreneurs who are tenacious achieve stronger sales performance. Our results underscore the importance of incorporating tertiary education and entrepreneurial training programs focused on a balanced set of skills, including non-cognitive skills, among policies for women entrepreneurs. |
| Keywords: | Female entrepreneurship, training, non-cognitive skills, tertiary education |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ldr:wpaper:256&r=all |
| By: | Gupta, Bishnupriya; Mookherjee, Dilip; Munshi, Kaivan; Sanclemente, Mario |
| Abstract: | We provide evidence of the role of community networks in emergence of Indian entrepreneurship in early stages of cotton and jute textile industries in the late 19th and early 20th century respectively, overcoming lack of market institutions and government support. From business registers, we construct a yearly panel dataset of entrepreneurs in these two industries. We fi nd no evidence that entry was related to prior upstream trading experience or price shocks. Firm directors exhibited a high degree of clustering of entrepreneurs by community. Entry flows were consistent with a model of network-based dynamics. |
| Keywords: | Industrialization; Social Networks |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14263&r=all |
| By: | Quentin Plantec (CGS i3 - Centre de Gestion Scientifique i3 - CNRS - Centre National de la Recherche Scientifique - PSL - PSL Research University - MINES ParisTech - École nationale supérieure des mines de Paris, Institut National de la Propriété Industrielle (INPI)); Pascal Le Masson (CGS i3 - Centre de Gestion Scientifique i3 - CNRS - Centre National de la Recherche Scientifique - PSL - PSL Research University - MINES ParisTech - École nationale supérieure des mines de Paris); Benoit Weil (CGS i3 - Centre de Gestion Scientifique i3 - CNRS - Centre National de la Recherche Scientifique - PSL - PSL Research University - MINES ParisTech - École nationale supérieure des mines de Paris) |
| Abstract: | The paper suggests a new taxonomy of knowledge search modes to describe the creative process of new invention design, in particular how firms combine knowledge components from their own knowledge base-taking into account both the components and the structures of knowledge bases-with those from newly acquired or newly internally developed. Using network theory techniques, we defined four knowledge search modes: (1) refinement, (2) clustering, (3) absorption and (4) recomposition. We conducted an exploratory study on the oil & gas industry, reviewing 50,776 utility patents filed by 16 major firms between 1989 and 2016. The results showed, first, that firms relied to varying extents on different knowledge search modes in their invention design processes. Second, reviewing the technological originality of the designed inventions showed that simply absorbing new knowledge components, without major changes in knowledge base structure, was associated with low technological originality, but constituted one of the main knowledge search modes used by the analyzed firms. In contrast, major changes in knowledge base structure favored technological originality, with or without new knowledge components, but were nevertheless the least used mode. Understanding organizational learning practices associated with the phenomena described here can foster innovation performance in firms. |
| Keywords: | Knowledge search,Patent,Oil & gas,technological originality,knowledge base |
| Date: | 2020–08–11 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-02613665&r=all |
| By: | Zongwu Cai (Department of Economics, The University of Kansas, Lawrence, KS 66045, USA); Meng Shi (Academy of Mathematics and Systems Science, Chinese Academy of Sciences, Beijing, Beijing 100190, and School of Mathematical Sciences, University of Chinese Academy of Sciences, Beijing, Beijing 100049, China); Yue Zhao (School of Business, Renmin University of China, Beijing, Beijing 100872, China); Wuqing Wu (School of Business, Renmin University of China, Beijing, Beijing 100872, China) |
| Abstract: | This paper investigates the relative importance of internal and external sources of funds in financing activities across different levels of investment activities by proposing a panel data quantile regression model with correlated random effects (PDQ-CRE), which accounts for heteroscedasticity in both firm-specific individuals and distribution of investment. A new estimation method is proposed by using the quasi-likelihood function for conditional quantile model and Laplace approximation. We show that the proposed estimator is consistent and normally distributed. A Monte Carlo simulation is conducted to examine the performance of the estimator in finite samples. Finally, empirical results find a strong evidence that the financing hierarchy of U.S. firms is in accordance with the first rung of the pecking order theory across all levels of investments from 10% to 90%. |
| Keywords: | Correlated Random Effects; Panel Data; Pecking Order Theory; Quantile Regression Model; Quasi-Maximum Likelihood Estimator |
| JEL: | C33 C31 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:kan:wpaper:202011&r=all |
| By: | Serhan Cevik; Fedor Miryugin |
| Abstract: | This paper investigates the impact of taxation on firm survival, using hazard models and a large-scale panel dataset on over 4 million nonfinancial firms from 21 countries over the period 1995–2015. We find ample evidence that a lower level of effective marginal tax rate improves firms’ survival chances. This result is not only statistically but also economically important and remains robust when we partition the sample into country subgroups. The effect of taxation on firms’ survival probability is found to exhibit a non-linear pattern and be stronger in developing countries than advanced economies. These findings have important policy implications for the design of corporate tax systems. The challenge is not simply reducing the statutory tax rate, but to level the playing field for all firms by rationalizing differentiated tax treatments across sectors, asset types and sources of financing. |
| Keywords: | Tax revenue;Tax burdens;Tax systems;Tax reforms;Tax regimes;Firm survival,effective marginal tax rate,total factor productivity,tax policy,firm-specific,capital intensity,TFP,probability of failure,survival probability |
| Date: | 2019–04–19 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2019/078&r=all |
| By: | Pierre van der Eng |
| Abstract: | This paper analyses the demography of 1,600 registered firms owned and/or operated by ethnic Chinese businessmen in Indonesia during 1890-1940 in search of generalizable indications of Schumpeterian entrepreneurship. The population of firms increased significantly since 1890, before many went out of business in the 1920s and a new generation of firms and entrepreneurs emerged. By 1910 most firms were active in trade, but this categorisation takes insufficient account of their diverse business activities. During 1910-1940 the share of firms in other industries increased. Several were active in finance, taking deposits and financing business ventures. In the 1930s, the average equity value of the enterprises more than doubled, reflecting diversification into more capital-intensive operations, particularly manufacturing. These changes in the population of firms refute the perception that ethnic Chinese businessmen were not Schumpeterian entrepreneurs. |
| Keywords: | Business demography, entrepreneurship, Chinese, Indonesia, Southeast Asia |
| JEL: | L10 L20 N85 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:auu:hpaper:088&r=all |
| By: | José M. Labeaga (UNED); Juan A. Ester Martínez-Ros (Universidad Carlos III de Madrid); Amparo Sanchis-Llopis (University of Valencia and ERICES); Juan A. Sanchis-Llopis (University of Valencia and ERICES) |
| Abstract: | Despite the generosity of its tax system, Spain is far from EU neighbouring countries in terms of R&D spending, and in innovation outcomes. A policy instrument commonly used to foster firms’ investment in R&D are tax incentives. The use of this instrument is not generalized in firms spending on R&D, and only a fraction of firms are regular claimants. In this paper we investigate whether persistence in using tax credits is positively related to the achievement of product innovations, beyond R&D investments. We consider that firms investing in qualified R&D spending and making a regular use of tax credits are likely to be firms aiming at innovating. By contrast, occasional tax credit users are probably firms seeking to reduce their corporate tax burden, and not prioritizing the achievement innovations. Using a sample of Spanish manufacturing firms spanning 2001-2014, we first estimate persistence using a duration model accounting for firm observed and unobserved heterogeneity. Our results are consistent with negative duration dependence, indicating that the probability of ceasing in claiming tax credits decreases with the passage of time. Second, we estimate a count-data model and find that the number of product innovations positively depends on tax credit persistence only for SMEs. |
| Keywords: | tax credits; persistence; duration dependence; count-data |
| JEL: | C41 H25 H32 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:eec:wpaper:2003&r=all |
| By: | Zuzana Brixiová (University of Economics in Prague and VSB – Technical University of Ostrava, SALDRU Research Affiliate, University of Cape Town); Thierry Kangoye (African Development Bank) |
| Abstract: | This paper analyzes the role of networks in the access of female entrepreneurs to start-up capital and firm performance in Eswatini, a country with one of the highest female unemployment rates in Africa. The paper first shows that higher initial capital is associated with better sales performance for both men and women entrepreneurs. Women entrepreneurs start their firms with smaller start-up capital than men and are more likely to fund it from their own sources, which reduces the size of their firm and sales level. However, women with higher education start their firms with more capital than their less educated counterparts. Moreover, women who receive support from professional networks have higher initial capital, while those trained in financial literacy more often access external funding sources, including through their networks. |
| Keywords: | Networks, start-up capital, women's entrepreneurship, multivariate analysis, Africa |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ldr:wpaper:257&r=all |
| By: | Flavio Calvino; Daniele Giachini; Mattia Guerini |
| Abstract: | We investigate upon the shape and the determinants of the age distribution of business firms. By employing a novel dataset covering the population of French businesses, we highlight that a geometric law provides a reasonable approximation for the age distribution. However, relevant systematic deviations and sectoral heterogeneity appear. We develop a stochastic model of firm dynamics to explain the mechanisms behind this evidence and relate them to business dynamism. Results reveal a long-term decline in entry rates and lower survival probabilities of young firms. Our findings bear important implications for aggregate outcomes, notably employment growth. |
| Keywords: | Firm demographics; age distribution; business dynamism. |
| Date: | 2020–07–26 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2020/20&r=all |
| By: | Massimiliano Nuccio (BLISS – Digital Impact Lab, Department of Management, Università Ca' Foscari Venice); Marco Guerzoni (DESPINA Big Data Lab, Department of Economics and Statistics Cognetti De Martiis, University of Torino); Riccardo Cappelli (Department of Economics and Social Sciences, Polytechnic University of Marche); Aldo Geuna (Department of Culture, Politics and Society, University of Torino) |
| Abstract: | Recent literature on the diffusion of robots mostly ignores the regional dimension. The contribution of this paper at the debate on Industry 4.0 is twofold. First, IFR (2017) data on acquisitions of industrial robots in the five largest European economies are rescaled at regional levels to draw a first picture of winners and losers in the European race for advanced manufacturing. Second, using an unsupervised machine learning approach to classify regions based on their composition of industries. The paper provides novel evidence of the relationship between industry mix and the regional capability of adopting robots in the industrial processes. |
| Keywords: | Robots, Industry 4.0., Innovation, Industry Mix, Self-Organizing Maps |
| JEL: | E32 O33 R11 R12 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:vnm:wpdman:173&r=all |
| By: | Silvia Blasi (Department of Economics and Management, University of Padova); Silvia Rita Sedita (Department of Economics and Management, University of Padova) |
| Abstract: | “Student entrepreneurship" is an innovative way of looking at the impact of universities on the territory, and represents an alternative (and numerically more relevant) model to that of academic spin-offs. The study of the entrepreneurial activities of the 119,347 graduates of the University of Padua between 2000 and 2010 offers useful food for thought on the profile of the student who is oriented towards business creation and on the determinants of the success of entrepreneurial action. Some implications on the orientation of the courses of study and possible actions to support the entrepreneurship of new graduates are illustrated. |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:pad:wpaper:0260&r=all |
| By: | Chen, Ping-ho; Chu, Angus C.; Chu, Hsun; Lai, Ching-Chong |
| Abstract: | This paper investigates optimal capital taxation in an innovation-driven growth model. We examine how the optimal capital tax rate varies with externalities associated with R&D and innovation. Our results show that the optimal capital tax rate is higher when (i) the "stepping on toes effect" is smaller, (ii) the "standing on shoulders effect" is stronger, or (iii) the extent of creative destruction is greater. Moreover, the optimal capital tax rate and the monopolistic markup exhibit an inverted-U relationship. By calibrating our model to the US economy, we find that the optimal capital tax rate is positive, at a rate of around 11.9 percent. We also find that a positive optimal capital tax rate is more likely to be the case when there is underinvestment in R&D. |
| Keywords: | Optimal capital taxation; R&D externalities; innovation |
| JEL: | E62 O31 O41 |
| Date: | 2019–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:101228&r=all |
| By: | Kim, Hyung-Tae; Lee, Seungwon; Park, Sung-Jin; Lee, Brandon |
| Abstract: | We investigate the extent to which a client’s innovative effort affects the level of audit effort and whether the innovative-effort efficiency can attenuate the demand for greater audit effort associated with a client’s risky research-and-development (R&D) investments. We find that a client firm’s strategic emphasis on corporate innovations may require greater audit effort, but the efficiency of a firm’s innovative effort can attenuate the demand for heightened audit effort against risky, innovative efforts. Findings suggest that the external auditor does not always discourage corporate innovation as the efficiency of a firm’s innovation may lower the client business risk perceived by an auditor. |
| Keywords: | Corporate innovation; Auditors; Research and development; Risk management |
| JEL: | M42 O32 |
| Date: | 2019–05–27 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:101081&r=all |
| By: | Christian Abele (PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Agnès Bénassy-Quéré (PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Lionel Fontagné (PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement) |
| Abstract: | We analyse the impact of both the Global Financial Crisis of 2008 and the European sovereign and banking crisis of 2011-13 on firm-level productivity in France, Italy and Spain. We firstly show that relying on a single break date in 2008 misses both the euro crisis and countries' institutional speci_cities. Secondly, although leverage and financial constraints affect firm-level productivity negatively, high-leverage firms su_er more from financial constraints only in Italy, when they are relatively small or when their debt is of short maturity. These results, which are robust to a series of alternative explanations, call for approaches taking into consideration country-level characteristics of financial institutions and time varying _nancing constraints of the firms, instead of pooling data and adopting a common break date. One size does not fit all when it comes to identifying the impact of financial crises on firm level productivity. |
| Keywords: | total factor productivity,firm-level data,financial constraints,crises |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:hal:psewpa:halshs-02883685&r=all |
| By: | Norbäck, Pehr-Johan; Olofsson, Charlotta; Persson, Lars |
| Abstract: | Within the policy debate, there is a fear that large incumbent firms buy small firms' inventions to ensure that they are not used in the market. We show that such "acquisitions for sleep" can occur if and only if the quality of a process invention is small; otherwise, the entry profit will be higher than the entry-deterring value. We then show that the incentive for acquiring for the purpose of putting a patent to sleep decreases when the intellectual property law is stricter because the profit for the entrant then increases more than the entry-deterring value does. |
| Keywords: | Acquisitions; Innovation; IP law; ownership; Sleeping patents |
| JEL: | G24 L1 L2 M13 O3 |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14172&r=all |
| By: | Christian Saborowski; Florian Misch |
| Abstract: | This paper examines the variation in life cycle growth across the universe of Mexican firms. We establish two stylized facts to motivate our analysis: first, we show that firm size matters for development by illustrating a close correlation with state-level per capita incomes. Second, we show that few firms grow as much as their U.S. peers while the majority stagnates at less than twice their initial size. To gain insights into the distinguishing characteristics of the two groups, we then econometrically decompose life cycle growth across firms. We find that firms that have financial access and multiple establishments and that are formal, part of diversified industries and located in population centers can grow at sizeable rates. |
| Keywords: | Social security;Economic growth;Development;Services industry;Manufacturing sector;Firm size,Firm growth,Life cycle dynamics,Distortions,Klenow,initial size,Mexican firm,Hsieh,Saborowski |
| Date: | 2019–05–02 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2019/087&r=all |
| By: | Fafaliou, Irene; Giaka, Maria; Konstantios, Dimitrios; Polemis, Michael |
| Abstract: | This study examines the impact of sustainability (ESG) on US listed firms’ exit decision. Using a recent dataset of a large number of US firms over the period 2007- 2016, we perform a dynamic empirical analysis of the relation between ESG and firms’ exiting mechanism by measuring environmental, social and governance issues. We provide evidence that corporate sustainability is a tool that can reduce risks and enable companies to boost surviving mechanisms and face less probability of failure. Finally, we perform several statistical tests for robustness purposes |
| Keywords: | Sustainability; Longevity, Corporate Sustainability Performance |
| JEL: | G1 G3 L2 M14 O1 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:101445&r=all |
| By: | Sara Amoroso (European Commission - JRC); Roberto Martino (European Commission - RTD) |
| Abstract: | In this paper, we develop a new firm-level measure of distance to the productivity frontier that accounts for international technology spillovers stemming from the use of imported intermediate goods. The trade-weighted technological distance to frontier is matched with sector- and country-level data on regulation and firm dynamics (entry and exit rates) of 16 European countries. Using our measure of trade-adjusted technology gap, we investigate the role of labour, capital, and product market regulatory frameworks in the technology catch-up process, gauging the effect of firms' dynamics in mediating and moderating the impact of regulation on the technology gap. Our study offers a novel perspective and insights to the analysis of the link between framework conditions and technological distance to frontier. While most scholars argue that less regulation always favours productivity growth and the diffusion of technology, our results provide a more nuanced picture. Deregulation is not a one-size-fits-all solution that leads to faster technology diffusion, instead heterogeneity in business dynamism and countries' regulatory structures need to be considered. |
| Keywords: | Innovation diffusion, Framework conditions, Business dynamics, Technological frontier |
| JEL: | L16 L50 M21 O33 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:wpaper:202004&r=all |
| By: | Olivier Sterck; Antonia Delius |
| Abstract: | Theoretically, the effect of household cash transfers depends on how businesses respond to the demand shock and on the resulting effect on prices. Such market effects have been largely overlooked in the literature, which mostly focuses on direct impacts on households. We study the impact of a household cash transfer program on retail businesses operating in two refugee sites in Kenya. Refugees receive a monthly mobile money transfer that can only be spent at licensed businesses. We compare licensed and unlicensed businesses, using matching methods to control for all variables considered in the licensing process. We show that licensed businesses- have much higher revenues and profits and charge higher prices than unlicensed businesses. The cash transfer program created a parallel retail market in which a limited number of businesses enjoy high market power. We identify a series of market imperfections explaining the results. |
| Keywords: | Cash Transfers; Micro-Enterprises; Market imperfections; Salop circle |
| JEL: | L2 O2 O12 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:csa:wpaper:2020-09&r=all |