nep-sbm New Economics Papers
on Small Business Management
Issue of 2022‒07‒18
27 papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Figuring it out: Configurations of high-performing entrepreneurial ecosystems in Europe By Mirella Schrijvers; Erik Stam; Niels Bosma
  2. Migrant inventors as agents of technological change By Ernest Miguelez; Andrea Morrison
  3. Talent Flow Network, the Life Cycle of Firms, and Their Innovations By Mai, Nhat Chi
  4. Firm Incubation through Business Group Affiliation: Acquisition and technology transaction (Japanese) By NAGAOKA Sadao; TSUKADA Naotoshi; ENDO Shiguma
  5. Artificial Intelligence and Firm-level Productivity By Dirk Czarnitzki; Gastón P Fernández; Christian Rammer
  6. Raising EU productivity through innovation- Lessons from improved micro data By Reinhilde Veugelers; Frederic Warzynski
  7. Determinants and Effects of Foreign Direct Investment in Austria: Spillovers to Novel Innovative Environmental Technologies By Mahdi Ghodsi; Branimir Jovanovic
  8. Agribusinesses under siege: Firm-level innovation and productivity in adverse economic environments By Rosero, Gabriel; Salguero, José; Brümmer, Bernhard
  9. Corruption and Firm Growth: Evidence from around the World By Raymond Fisman; Sergei Guriev; Carolin Ioramashvili; Alexander Plekhanov
  10. Quality Innovation, Cost Innovation, Export, and Firm Productivity Evolution: Evidence from the Chinese Electronics Industry By Liu, Mengxiao; Wang, Luhang; Yi, Yimin
  11. Effects of information-based regulation on financial outcomes: Evidence from the European Union's public emission registry By Earnhart, Dietrich; Germeshausen, Robert; von Graevenitz, Kathrine
  12. Export Decision and Credit Constraints under Institution Obstacles By Phan, Trang Hoai; Stachuletz, Rainer; Nguyen, Hai Thi Hong
  13. Spillover Effects of R&D in Japan (Japanese) By EDAMURA Kazuma; NAGAOKA Sadao; ONISHI Koichiro
  14. Productivity Dispersion, Entry, and Growth in U.S. Manufacturing Industries By Cindy Cunningham; Lucia Foster; Cheryl Grim; John Haltiwanger; Sabrina Wulff Pabilonia; Jay Stewart; Zoltan Wolf
  15. Technology Differentiation and Firm Performance By Samuel Arts; Bruno Cassiman; Jianan Hou
  16. Corporate Social Responsibility in Small and Medium Enterprises in Vietnam By Mai, Nhat Chi
  17. The roles of knowledge intermediaries in sustainability transitions and digitalization: Academia driven fostering of socio technical transitions? By Bäumle, Philipp; Hirschmann, Daniel; Feser, Daniel
  18. Policy brief on access to finance for inclusive and social entrepreneurship: What role can fintech and financial literacy play? By OECD; European Commission
  19. Identifying Politically Connected Firms: A Machine Learning Approach By Deni Mazrekaj; Vitezslav Titl; Fritz Schiltz
  20. The business response to Covid-19 one year on: findings from the second wave of the CEP-CBI survey on technology adoption By Juliana Oliveira-Cunha; Capucine Riom; Anna Valero
  21. Determinants of Campaign Success: Empirical evidence from equity crowdfunding in Japan By KURIHARA Koki; HONJO Yuji
  22. Are digital-using UK firms more productive? By Diane Coyle; Kieran Lind; David Nguyen; Manuel Tong Koecklin
  23. The Secular Decline in Private Firm Leverage By Christine L. Dobridge; Erik P. Gilje; Andrew Whitten
  24. Culture and the creative economy in Emilia-Romagna, Italy By OECD
  25. Farm innovation and technical efficiency of Dutch arable farms: An innovation index and DEA approach By Tensi, Annika Francesca; Ang, Frederic; Fels-Klerx, Ine van der
  26. Structural Change Within versus Across Firms: Evidence from the United States By Xiang Ding; Teresa C. Fort; Stephen J. Redding; Peter K. Schott
  27. Systems of innovation, diversification, and the R&D trap: a case study of Kuwait By Arman, Husam; Iammarino, Simona; Ibarra-Olivo, J. Eduardo; Lee, Neil

  1. By: Mirella Schrijvers; Erik Stam; Niels Bosma
    Abstract: Entrepreneurship is an important driver of economic development, but its success depends on a large set of interdependent factors and actors: an ecosystem for entrepreneurship. Is there one way to a successful entrepreneurial ecosystem or are there different paths? This paper applies Qualitative Comparative Analysis to identify and analyze configurations of successful regional entrepreneurial ecosystems in Europe. We test two rivalling causal logics: one stating that all entrepreneurial ecosystem elements need to be present and the weakest link is the most important constraint, and the other arguing that elements are substitutable. High entrepreneurship outputs can be realized with a small variety of entrepreneurial ecosystem configurations. But the higher the entrepreneurship output, the more convergence there is to an all-round entrepreneurial ecosystem.
    Keywords: Entrepreneurship, entrepreneurial ecosystem, regional diversity, QCA
    Date: 2021
  2. By: Ernest Miguelez (BSE - Bordeaux Sciences Economiques - UB - Université de Bordeaux - CNRS - Centre National de la Recherche Scientifique); Andrea Morrison
    Abstract: How do regions enter new and distant technological fields? Who is triggering this process? This work addresses these compelling research questions by investigating the role of migrant inventors in the process of technological diversification. Immigrant inventors can indeed act as carriers of knowledge across borders and influence the direction of technological change. We test these latter propositions by using an original dataset of immigrant inventors in the context of European regions during the period 2003–201. Our findings show that: immigrant inventors generate positive local knowledge spillovers; they help their host regions to develop new technological specialisations; they trigger a process of unrelated diversification. Their contribution comes via two main mechanisms: immigrant inventors use their own personal knowledge (knowledge creation); they import knowledge from their home country to the host region (knowledge transfer). Their impact is maximised when their knowledge is not recombined with the local one (in mixed teams of inventors), but it is reused (in teams made by only migrant inventors). Our work contributes to the existing literature of regional diversification by providing fresh evidence of unrelated diversification for European regions and by identifying important agents of structural change. It also contributes to the literature of migration and innovation by adding fresh evidence on European regions and by unveiling some of the mechanisms of immigrants' knowledge transmission.
    Keywords: Patents,Migration,Technological diversification,Relatedness,Europe
    Date: 2022–05
  3. By: Mai, Nhat Chi
    Abstract: This paper explores how talent flow network and the firm life cycle affect the innovative performances of firms. This study first established an interorganizational talent flow network with the occupational mobility data available from the public resumes on LinkedIn China. Thereafter, this information was combined with the financial data of China’s listed companies to develop a unique dataset for the time period between 2000 and 2015. The empirical results indicate the following: (1) the breadth and depth of firms’ embedding in the talent flow network positively impact their innovative performances; (2) younger firms’ innovations are mostly promoted by the breadth of network embedding, but this positive effect weakens as firms increase in age; (3) mature firms’ innovations are primarily driven by the depth of network embedding, and this positive effect strengthens as firms increase in age. This paper enriches and deepens the studies of talent flow networks, and it provides practical implications for innovation management based on talent flow for various types of firms at different development stages.
    Date: 2022–03–27
  4. By: NAGAOKA Sadao; TSUKADA Naotoshi; ENDO Shiguma
    Abstract: This paper examines the R&D performance of Japanese firms from the perspective of knowledge combination. First, we empirically confirm that the ability to use external knowledge widely and early in R&D significantly enhances R&D performance. This relationship also holds for the firm-level analysis in which firm fixed effects are introduced. Next, we compared the evaluation of Japanese and U.S. twin patents from the same group of inventions and found that the U.S. market places a much higher value on the use of science in inventions, while the Japanese technology market places a higher value on early recognition and use of prior art (small lag from prior art in the technical literature, and use of inventions by foreign inventors). Third, the inventions covered by the Japanese Bayh-Dole patents have achieved a high standard in terms of knowledge combination, including the utilization of science, but have not yet achieved a high reputation in the US market. We also found no significant evidence that firms in Japan that increased the hiring of researchers with PhDs, spending for industry-academia collaborations, or government contract research increased their ability to leverage science. Implications for policy and research are discussed in the last section.
    Date: 2021–06
  5. By: Dirk Czarnitzki; Gastón P Fernández; Christian Rammer
    Abstract: Artificial Intelligence (AI) is often regarded as the next general-purpose technology with a rapid, penetrating, and far-reaching use over a broad number of industrial sectors. A main feature of new general-purpose technology is to enable new ways of production that may increase productivity. So far, however, only very few studies investigated likely productivity effects of AI at the firm-level; presumably because of lacking data. We exploit unique survey data on firms’ adoption of AI technology and estimate its productivity effects with a sample of German firms. We employ both a cross-sectional dataset and a panel database. To address the potential endogeneity of AI adoption, we also implement IV estimators. We find positive and significant effects of the use of AI on firm productivity. This finding holds for different measures of AI usage, i.e., an indicator variable of AI adoption, and the intensity with which firms use AI methods in their business processes.
    Keywords: Artificial Intelligence, Productivity, CIS data
    Date: 2022–02–17
  6. By: Reinhilde Veugelers; Frederic Warzynski
    Abstract: This Working Paper is an output from the MICROPROD project, which received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement no. 822390. Research and development is seen as a key contributor to growth because it generates knowledge, leading to new or improved products through product innovation, and makes firms more efficient at producing goods through process innovation. Firm level studies generally find evidence of strong positive...
    Date: 2022–06
  7. By: Mahdi Ghodsi; Branimir Jovanovic
    Abstract: This study investigates the determinants of FDI in Austria, as well as their spillovers to innovating technologies, productivity, and employment, using firm-level data, for the period 2008-2018. The findings point out that a decrease in the costs of trade increases investment in foreign-owned subsidiaries in Austria, and that FDI is pre-dominantly carried out in industries characterised by greater capital-intensity, higher wages, more agglomeration and regional concentration. Furthermore, FDI is higher in regions with a larger GDP and with a larger share of the population with upper secondary and post-secondary nontertiary education. The study also finds that there are positive spillovers of FDI to the domestic economy, which are strongest and most positive for innovative activities in environmental technologies. In other words, FDI helps Austrian firms to become more innovative in major environmental technologies. Such innovative efforts are best supported at the firm-level by supporting the total assets and investment of domestic firms, and at the regional level by increasing the share of the population with higher levels of education and employing more R&D personnel. The active presence of innovative foreign MNEs that enjoy extensive technological capacities, high-skilled labour, experienced management, and large-scale resources are also conducive to innovative activities.
    Keywords: FDI, Austria, spillovers, innovation, environmental technologies
    JEL: F21 F23 O30 Q55
    Date: 2022–06
  8. By: Rosero, Gabriel; Salguero, José; Brümmer, Bernhard
    Abstract: The role of agribusinesses can be crucial in improving a country’s economic growth, diversification of revenue sources and contributing to its overall development goals. Previous research has focused on innovation in the first step of the agricultural value chain. Despite that, the off-farm segments may have equal weight in the performance of the entire chain; the food and beverage branch alone represents around 40-70% of the value-added cost. The aim of this paper is to analyze whether firm-level innovation improves agribusinesses’ economic performance. Our analysis contributes to the current academic debate providing evidence of the agribusiness sector within a hostile business environment, a recurrent issue in several developing countries. We use the World Bank Enterprise Survey (2010, 2016) of El Salvador and follow a sequential Crépon-Duguet-Mairesse (CDM) approach. Our results suggest that investment in innovation activities and the potential innovation outcomes are determined by both specific firm characteristics and the surrounding hostile environment. The agribusiness sector has not expanded its overall production frontier, and the expenditures on insecurity mitigation outweigh the economic gains from innovation outputs.
    Keywords: Agribusiness, Research and Development/Tech Change/Emerging Technologies
    Date: 2022–04
  9. By: Raymond Fisman (BU - Boston University [Boston]); Sergei Guriev (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique); Carolin Ioramashvili (LSE - London School of Economics and Political Science); Alexander Plekhanov (EBRD - European Bank for Reconstruction and Development - EBRD)
    Abstract: We empirically investigate the relationship between corruption and growth using a firm-level data set that is unique in scale, covering almost 88,000 firms across 141 economies in 2006-2020, with wide-ranging corruption experiences. The scale and detail of our data allow us to explore the corruption-growth relationship at a very local level, within industries in a relatively narrow geography. We report three empirical regularities. First, firms that make zero informal payments tend to grow slower than bribers. Second, this result is driven by non-bribers in high-corruption countries. Third, among bribers growth is decreasing in the amount of informal payments in both high- and low-corruption countries. We suggest that this set of results may be reconciled with a simple model in which endogenously determined higher bribe rates lead to lower growth, while non-bribers are often excluded entirely from growth opportunities in high-corruption settings.
    Keywords: Corruption,Firm growth,Enterprise surveys
    Date: 2021–04–01
  10. By: Liu, Mengxiao; Wang, Luhang; Yi, Yimin
    Abstract: This paper classifies innovation as quality-improving or cost-reducing and estimates a dynamic model incorporating firm export, quality innovation, and cost innovation decisions. Estimation results show that export, quality innovation, and cost innovation increase next-period firm productivity by 1.39%, 1.23%, and 1.27%, respectively. Additionally, quality innovation raises next-period export demand by 47%. Counterfactual analyses suggest that (1) foreign market growth has a larger impact on firm export and innovation decisions than domestic market growth, but neither market significantly affects firm productivity; (2) subsidizing continuing quality innovators generates the highest financial return, and subsidizing continuing cost innovators brings the most productivity gain.
    Keywords: export; quality innovation; cost innovation; firm productivity; dynamic estimation; neural network; machine learning; trade liberalization; innovation policy
    JEL: C45 F14 L1 L10 L25
    Date: 2022–07
  11. By: Earnhart, Dietrich; Germeshausen, Robert; von Graevenitz, Kathrine
    Abstract: Information-based policies play an important role in environmental protection efforts around the world. These policies use information provision and/or disclosure to shape behavior in order to meet the policy objective; for example, mandatory information disclosure requires firms to measure and report their pollutant emissions. This study investigates the influence of a particular information-based policy - the European Union's mandatory and public emission registry of polluting facilities - on financial outcomes of German firms: revenues, costs, and profits. Using detailed firm-level data for the years 1998 to 2016, we exploit size- and pollution-specific reporting thresholds to isolate the effect of this policy. We compare firms that own facilities required to report in the first EPER wave with similar firms that do not own such facilities. For this comparison, we deploy both a difference-in-differences design and an event study. Our findings suggest that the introduction of EPER in 2001 increased both operating revenues and expenditures, yielding a neutral impact on the operating profits of affected firms. These results support neither of the two competing hypotheses regarding financial outcomes: costly regulation hypothesis and Porter Hypothesis.
    Keywords: Information-based Regulation,Environmental Policy,Financial Performance,Porter Hypothesis
    JEL: K32 L21 O31 Q52 Q58
    Date: 2022
  12. By: Phan, Trang Hoai; Stachuletz, Rainer; Nguyen, Hai Thi Hong
    Abstract: The growing demand for goods and technology increases capital requirements, especially in exporting enterprises. However, many firms have difficulty accessing external capital due to institutional obstacles. This study analyzes two main issues: the influence of institutional obstacles on credit constraints and the relationship between credit constraints and export decisions, adopting firm-level data from 131 countries. The study’s remarkable contribution is to cluster the data into four country groups based on their national income. The typical specification of each group can lead to more precise results, thereby highlighting the role of institutions. More advanced, this study complements the literature’s gap in the relationship between credit constraints and exports by controlling for institutions as interactive variables in the model. This work upgrades assessments to be more accurate, thereby providing more valuable information to policymakers. In addition, credit constraints are measured by both quantitative and qualitative methods. The essential role of firm size is emphasized in further analysis. This study approaches the Probit method. Furthermore, an instrumental variable is used to solve the endogeneity problem. The results found that a weak institution prevents access to finance, especially in middle-income countries. In addition, firms’ access to capital negatively affects exports in all regions. The finding in the group of rich countries is most pronounced.
    Date: 2022
  13. By: EDAMURA Kazuma; NAGAOKA Sadao; ONISHI Koichiro
    Abstract: This paper, using large panel data of Japanese companies (1983 – 2019) on the research activities of companies, public research institutes, and universities, calculates the technological distances between companies and public research institutes and those between companies and universities, in addition to those among firms. The paper then calculates the spillover pool as a proxy variable for the spillovers that companies obtain from public research institutes, universities and from themselves. In calculating the distances, the paper uses the number of researchers by each research field, and the research expenditure in each specific field. The paper aggregates research expenditures using the distances as weights and calculate spillover pools to measure spillover effects. It also uses information on basic research, applied research, and development research spending by industry, academia, and government organizations to calculate spillover pools by the types of research activities and organizations. Using the calculated spillover pool, we attempted to quantitatively capture the impact on R&D expenditure. We found that the knowledge spillover effect from the social pool, which aggregates knowledge spillovers from companies, public research institutes, and universities, has a negative correlation with the R&D expenditure of companies. However, estimates differentiating spillover pools by types of R&D and organizations shows both positive and negative correlations, indicating the possibility that knowledge spillover affects corporate R&D in various ways.
    Date: 2021–06
  14. By: Cindy Cunningham; Lucia Foster; Cheryl Grim; John Haltiwanger; Sabrina Wulff Pabilonia; Jay Stewart; Zoltan Wolf
    Abstract: Within-industry productivity dispersion is pervasive and exhibits substantial variation across countries, industries, and time. We build on prior research that explores the hypothesis that periods of innovation are initially associated with a surge in business start-ups, followed by increased experimentation that leads to rising dispersion potentially with declining aggregate productivity growth, and then a shakeout process that results in higher productivity growth and declining productivity dispersion. Using novel detailed industry-level data on total factor productivity and labor productivity dispersion from the Dispersion Statistics on Productivity along with novel measures of entry rates from the Business Dynamics Statistics and productivity growth data from the Bureau of Labor Statistics for U.S. manufacturing industries, we find support for this hypothesis, especially for the high-tech industries.
    Date: 2021
  15. By: Samuel Arts; Bruno Cassiman; Jianan Hou
    Abstract: Prior work has extensively studied how investing in R&D and building a technology portfolio relate to superior firm performance. However, the value of a firm’s technology portfolio should also be driven by the degree to which it is more unique and technologically differentiated from other firms. To study this research question, we develop a new method to characterize firm technology based on the semantic content of patent portfolios that allows us to map a firm’s competitive position in the technology space relative to all other firms and to measure the differentiation of a firm’s technology portfolio. Using a large panel of U.S. public firms from 1980 to 2015, we find that technology differentiation has a strong positive and long-lasting relation with firm performance. Moreover, differentiated firm technology is particularly valuable in industries with higher R&D intensity and with stronger product market competition. We provide open access to all code and data to measure the technology similarity and the technology differentiation of U.S. public firms.
    Date: 2022–01–21
  16. By: Mai, Nhat Chi
    Abstract: Corporate social responsibility (CSR) has received growing attention over recent years. However, scant attention has been paid to investigating the implementation of CSR from the perspective of small and medium enterprises (SMEs) in a developing country context. Along with the focus on developed countries, existing research underpinned by the institutional theory has mainly focused on macro-institutional determinants and cross-national variations in CSR practices. Despite the pivotal role of SMEs owner-managers, there is a lack of understanding on the underlying mechanisms by which institutional structure and owner-managers’ agency interact to influence the construction of CSR in different contexts.
    Date: 2021–10–14
  17. By: Bäumle, Philipp; Hirschmann, Daniel; Feser, Daniel
    Abstract: The concept of intermediation is central to current approaches to innovation policy. While the extant literature distinguishes between academia driven knowledge intermediaries supporting the commercialization of academic knowledge and public intermediaries focusing on the support of socio technical transition processes, little is known about the roles and activities of knowledge intermediaries in sustainability transitions and digitalization, even though the systemic coaction of different intermediaries is essential for policy making. This understudied issue is explored using an explorative-qualitative approach and empirical evidence from interviews of participants in regional knowledge intermediation initiatives. We find that knowledge intermediaries proactively contribute to the two socio technical transitions in question by performing three roles: (i) information dissemination via events, (ii) knowledge exchange via network building, and (iii) implementation support via consulting. Furthermore, we identify additional roles concerning the identification and monitoring of new projects emerging from the interplay between sustainability and digitalization. Working at the intersection of both transitions and cognizant of the effects of digitalization on sustainability, knowledge intermediaries are key actors in fostering digitalization processes that preclude rebound effects on sustainability or contribute to sustainability transitions. This paper contributes to current scholarly discussions by closing the conceptual gap between knowledge and transition intermediaries and emphasizing the interdependencies between digitalization and sustainability.
    Keywords: knowledge intermediaries,transition intermediaries,sustainability transition,digitalization,higher education institutions,qualitative case studies
    JEL: I29 O32 O39 Q29
    Date: 2022
  18. By: OECD; European Commission
    Abstract: This policy brief on access to finance for inclusive and social entrepreneurship was produced by the OECD and the European Commission. It presents evidence on the access to finance challenges faced by entrepreneurs from under-represented and disadvantaged groups and social entrepreneurs, and discusses how public policy could harness the potential of fintech to address these challenges. This covers crowdfunding, blockchain and the application of big data to finance for inclusive and social entrepreneurship. The policy brief also discusses the growing need for governments to strengthen financial literacy among the target groups of inclusive and social entrepreneurship policy, including with respect to fintech. Different policy approaches are discussed, including embedding financial literacy training in financial intermediation.
    Date: 2022–07–04
  19. By: Deni Mazrekaj; Vitezslav Titl; Fritz Schiltz
    Abstract: This article introduces machine learning techniques to identify politically connected firms. By assembling information from publicly available sources and the Orbis company database, we constructed a novel firm population dataset from Czechia in which various forms of political connections can be determined. The data about firms’ connections are unique and comprehensive. They include political donations by the firm, having members of managerial boards who donated to a political party, and having members of boards who ran for political office. The results indicate that over 85% of firms with political connections can be accurately identified by the proposed algorithms. The model obtains this high accuracy by using only firm-level financial and industry indicators that are widely available in most countries. We propose that machine learning algorithms should be used by public institutions to identify politically connected firms with potentially large conflicts of interests, and we provide easy to implement R code to replicate our results.
    Keywords: Political Connections, Corruption, Prediction, Machine Learning
    Date: 2021
  20. By: Juliana Oliveira-Cunha; Capucine Riom; Anna Valero
    Abstract: We present new data from a survey of 425 UK businesses conducted in July 2021 in partnership with the Confederation of British Industry (CBI), which seeks to understand the ways in which firms have innovated one year on in response to the pandemic. We find that process innovation has been widespread since March 2020: 75% of firms have adopted digital technologies, 55% new digital capabilities and nearly 70% new management practices, and a large share of firms continued to innovate beyond the initial lockdowns. We find similar patterns in terms of the introduction of new products or services. We describe how the self-reported impacts of these technologies on firm performance and on workers differ across types of businesses, technologies adopted and business functions that these technologies relate to. We find that previous technology adoption is a strong predictor of a continued innovation response to the crisis, and that gaps in performance between more and less digitised firms might be expected to widen in the future.
    Keywords: Covid-19, Technological change, Productivity
    Date: 2021–11–10
  21. By: KURIHARA Koki; HONJO Yuji
    Abstract: This study investigates campaign success in equity crowdfunding, using campaigns listed on a leading Japanese equity crowdfunding platform. We examine how success depends on campaign- and firm-specific characteristics, including the campaign target amount. We provide evidence that campaigns launched by venture capital-backed firms are more likely to succeed than others. We also find that patenting has a positive effect on campaign success, as well as on the campaign target amount. Moreover, campaigns that have already provided services or products have a lower probability of success, although not always, and tend to set a lower target amount. Furthermore, campaigns launched by firms eligible for the Angel Tax System, introduced in Japan as a tax incentive for investment in young and small firms, have a higher tendency to succeed in equity crowdfunding.
    Date: 2022–06
  22. By: Diane Coyle; Kieran Lind; David Nguyen; Manuel Tong Koecklin
    Abstract: One possible explanation for the productivity slowdown in advanced economies coinciding with widespread digital adoption is that firms need time to change organisational structures or processes to use the new technologies effectively. Using a unique UK firm-level data set, we explore the links between a large set of digital inputs and investments and productivity. We found that large firms are more digital-intensive than small ones and that digital adopters do have higher productivity than non-adopters, but the nature of the digital variables matters. Those reflecting in-house capabilities are positively related to firm-level total factor productivity (TFP) while those indicating bought-in ones are negatively related. This finding that firms' capabilities matter for the impact of digital adoption on productivity takes advantage of the wide range of digital variables we were able to use, and points to the need for future research on the role of digital technology in driving productivity to take account of organisational capabilities.
    Keywords: digital, organisation, productivity
    JEL: D22 O33 O40
    Date: 2022–03
  23. By: Christine L. Dobridge; Erik P. Gilje; Andrew Whitten
    Abstract: Using firm-level administrative tax data on the 43% of business liabilities in the United States tied to privately held firms, we document dramatic reductions in leverage since the Great Recession. Leverage for the average private firm fell fifteen percent between 2004 and 2018. In contrast, leverage among public firms rose during this period. The decline in leverage among private firms is inconsistent with theories that suggest firm leverage tracks pro-cyclical credit market conditions. Younger and smaller private firms see especially large declines in leverage, and we find that reduced leverage among private firms is correlated with lower investment. Our findings have important implications for theories on how firm leverage and investment relate to economic fluctuations.
    JEL: G3 G30 G31 G32
    Date: 2022–05
  24. By: OECD
    Abstract: Cultural and creative sectors are a significant driver of local development through job creation and income generation, spurring innovation across the economy. Beyond their economic impacts, they also have significant social impacts, from supporting health and well-being to promoting social inclusion and local social capital. This paper offers a review of cultural and creative sectors in the Emilia-Romagna region, Italy, highlighting issues and trends in regards to employment, business, entrepreneurship and financing in cultural and creative sectors. It also reviews issues and trends relating to cultural participation and offers in-depth analysis on the role of museums in supporting local development. The paper provides analysis and recommendations to support the region in strengthening the local cultural and creative ecosystem.
    Keywords: creative industries, cultural employment, culture and local development
    JEL: I31 Z1
    Date: 2022–06–17
  25. By: Tensi, Annika Francesca; Ang, Frederic; Fels-Klerx, Ine van der
    Abstract: In this article, we analysed the relationship between farm innovation and farm efficiency. We computed an innovation index based on Dutch Innovation Monitor data and ratings from an expert elicitation. The innovation index is an adaptation and extension of an existing innovation index for Irish dairy farms. We computed technical efficiency scores with a Data Envelopment Analysis (DEA). The DEA scores are computed with Farm Accountancy Data Network (FADN) data. We investigated the relationship with pre-registered ordinary least square (OLS) regression analyses in quadratic form and additional Chi-square tests. Unanimously, we reject the first hypothesis that farm innovation and farm efficiency can be described by an inverse parabolic relationship. Early adopters and innovators are not necessarily less efficient than the early and late majority of innovation adopters. We also reject the second hypothesis that innovation front-runners become more efficient. These are preliminary findings.
    Keywords: Farm Management, Research and Development/Tech Change/Emerging Technologies
    Date: 2022–04
  26. By: Xiang Ding; Teresa C. Fort; Stephen J. Redding; Peter K. Schott
    Abstract: We document the role of intangible capital in manufacturing firms' substantial contribution to non-manufacturing employment growth from 1977-2019. Exploiting data on firms' "auxiliary" establishments, we develop a novel measure of proprietary in-house knowledge and show that it is associated with increased growth and industry switching. We rationalize this reallocation in a model where firms combine physical and knowledge inputs as complements, and where producing the latter in-house confers a sector-neutral productivity advantage facilitating within-firm structural transformation. Consistent with the model, manufacturing firms with auxiliary employment pivot towards services in response to a plausibly exogenous decline in their physical input prices.
    JEL: D24 F14 L16 O47
    Date: 2022–06
  27. By: Arman, Husam; Iammarino, Simona; Ibarra-Olivo, J. Eduardo; Lee, Neil
    Abstract: The relationship between R&D investment and economic development is well established. Yet at a global scale, the resource rich countries of the Gulf Cooperation Council (GCC) are consistent outliers in this relationship, combining rich-world national incomes with R&D expenditure of developing countries. This paper uses a case study on Kuwait to illustrate a particular form of developmental trap, a version of the resource curse which makes it irrational for private business firms to invest in R&D and innovation. Based on an analysis of the literature and secondary data, focus groups, and an original survey of large manufacturing firms, we argue that a narrow focus on R&D-led diversification of economic activity ignores the systemic problems faced by Kuwait, and particularly the unsuitable supply of skills and capabilities provided by the national education and training system.
    Keywords: R&D; innovation systems; diversifiication; resource curse; Kuwait; Kuwait Programme Academic Collaboration Grant from the LSE’s Middle East Centre
    JEL: R14 J01
    Date: 2022–04–01

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