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on Small Business Management |
| By: | Erik Stam |
| Abstract: | In this paper we show that a culture of independent entrepreneurship and a culture of ambitious entrepreneurship are two distinct dimensions of culture in entrepreneurial ecosystems, and are differently related to Venture Capital, growth-oriented entrepreneurship and the prevalence of unicorns in a country. We map the different types of entrepreneurship around the globe, and show the extreme spatial unevenness of entrepreneurial outputs of entrepreneurial ecosystems. We analyze the unicorn production chain from Total Entrepreneurial Activity, to growth-oriented entrepreneurship, and unicorns, and how this connects to culture and capital. |
| Keywords: | entrepreneurial ecosystem, entrepreneurship, growth-oriented entrepreneurship, scale-ups, unicorns, venture capital, culture, ambition |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:use:tkiwps:2112&r= |
| By: | Mai, Nhat Chi |
| Abstract: | Vietnam is well known as a country in successful transition to a market economy with a high concentration of Small and Medium sized Enterprises (SMEs). SMEs contributed significantly to overcoming the “shocks” associated with the transition from a centrally planned to a market-oriented economy with the collapse of the socialist bloc in Eastern Europe. Although they are major contributors to Vietnamese socio-economic success, SMEs in Vietnam have to deal with many difficulties in their survival and development. To solve these problems, SMEs need to understand how their business is operating, identify where improvements should be made, and have a clear strategic planning process. Applying a performance measurement system provides SMEs with a more complete view of an organization through the different measures and perspectives that link together and enable the development of a dynamic system that monitors both internal and external contexts and supports the organization’s objectives. The Balanced Scorecard introduced by Kaplan and Norton in 1992 is a relevant tool that provides SMEs with a framework for dealing with today’s business environment. There have been extensive calls for research into the use of the Balanced Scorecard by SMEs in different national contexts. |
| Date: | 2021–01–20 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:5hx2r&r= |
| By: | Bahaj, Saleem (Bank of England); Piton, Sophie (Bank of England); Savagar, Anthony (University of Kent and Centre for Macroeconomics) |
| Abstract: | We use data on business registrations in the UK to study the response of firm entry to the Covid-19 pandemic. We find that firm entry increased during the pandemic, unlike typical recessions where firm entry declines. The rise in firm creation is driven by individual entrepreneurs creating companies for the first time, and particularly creating companies in online retail. We link the rise in firm creation to declines in brick-and-mortar retail footfall via Google mobility data, and show that it takes 10 weeks for a firm to be registered after a shock to footfall. To study the impacts of the newly created firms, we merge entry data with online job postings from Indeed and show that the rise in firm creation drives increased vacancy postings. However, we also show there is a higher probability of pandemic startups dissolving relative to pre-pandemic cohorts. Therefore, we conclude that booming firm creation aided the rapid recovery of the UK economy in the short run, but the long-run implications are more uncertain. |
| Keywords: | Firm dynamics; Covid-19; business dynamism; firm entry. |
| JEL: | E32 L25 L26 |
| Date: | 2022–05–20 |
| URL: | http://d.repec.org/n?u=RePEc:boe:boeewp:0981&r= |
| By: | Subash Sasidharan (Indian Institute of Technology Madras); Ketan Reddy (Indian Institute of Technology Madras) |
| Abstract: | The present study investigates the role of innovation on global market survival of Indian manufacturing firms. Specifically, the study examines whether research and development (R&D) investment enables firms to survive longer in export markets and global value chain markets. To achieve this objective, we source information on firms trading behaviour and R&D investments from the CMIE-Prowess database for the period 2001–18. Using a complementary log-log model, we find that firms investing in R&D experience a lower probability of exiting international markets. In addition, multiple sub-sample analysis indicates that importance of R&D becomes even more prominent for small and medium-sized firms. Based on the empirical findings, the study proposed policy suggestions for India. |
| Keywords: | Global Value Chains; Research and Development; Survival analysis |
| JEL: | F14 F15 O32 L6 |
| Date: | 2021–12–17 |
| URL: | http://d.repec.org/n?u=RePEc:era:wpaper:dp-2021-45&r= |
| By: | Liliana Gelabert (IE Univeristy); Martín Pereyra (Universidad ORT Uruguay. Facultad de Administración y Ciencias Sociales. Departamento de Economía / CINVE); Flavia Roldán (Universidad ORT Uruguay. Facultad de Administración y Ciencias Sociales. Departmento de Economía) |
| Abstract: | Using Uruguayan data from 2007 to 2015, we examine the role of the distribution of public support within sectors on the firm innovation efforts. Our empirical analysis shows that the manner in which public support is allocated within a sector affects a firm's incentives to undertake innovation expenditures. When public support for innovation activities is more equitably distributed within a sector, firms that persistently undertake innovation activities increase their innovation expenditures, whether or not they are direct recipients of support. These results highlight a new indirect mechanism by which innovation policy affects a firm's incentives to undertake private innovation. |
| Keywords: | innovation policy, innovation expenditure, Latin America. |
| JEL: | L10 L12 |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:avs:wpaper:127&r= |
| By: | Peichang Zhang |
| Abstract: | This paper presents an endogenous growth model in which R&D improves product quality and venture capital supports these qualityenhancing activities both financially and nonfinancially. In the model, the venture capitalists' skill in evaluating entrepreneurs' innovative abilities plays a key role in achieving innovation and economic growth. When their skill is suciently low, neither innovation nor economic growth occurs even if entrepreneurs are abundant in the economy. Moreover, insucient market size discourages entrepreneurs from engaging in R&D activities. Therefore, competent venture capitalists and a suciently large market are indispensable to the economy's long-run growth. |
| Date: | 2022–04 |
| URL: | http://d.repec.org/n?u=RePEc:toh:tupdaa:19&r= |
| By: | Gómez-Aguayo, Ana María; Azagra-Caro, Joaquín M.; Benito-Amat, Carlos |
| Abstract: | Economic ups and downs condition science and innovation. The research strength of business firms and their cooperation with universities are important functions of science systems. The aim of this research is to analyse some of the links between business scientific output co-creation and impact throughout the economic cycle. Economic growth increases the probability of firms increasing both their scientific knowledge co-creation output and their scientific impact (during crises), until reaching an inflection point, after which those relationships become negative (during expansions). Co-creation with universities intensifies the scientific impact of firmsâ output; however, although in theory this effect should vary according to the economic phase, the evidence shows that it remains steady. In this study, the theory is grounded through interviews with key university and firm co-authors, and an empirical test is conducted on publications from 15,000 Spanish firms between 2000 and 2016 and their citations â a period which includes the Spanish Great Recession (2008â2014). The analysis suggests that policies to promote business co-creation output with universities should be more stable throughout economic cycle: in expansions, governments should maintain the support for co-creation that is typical of crises; in crises, governments should not expect co-creation with universities to have an even greater positive effect on firmsâ scientific quality than it already has during expansions. |
| Date: | 2022–07–08 |
| URL: | http://d.repec.org/n?u=RePEc:ing:wpaper:202202&r= |
| By: | Eduard Baumohl (University of Economics in Bratislava & Faculty of Economics, Technical University of Kosice, Slovakia); Evzen Kocenda (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic & CESifo, Munich; IOS, Regensburg) |
| Abstract: | We survey the empirical evidence on corporate survival and its determinants in European emerging markets. We demonstrate that (i) institutional quality is a significant preventive factor for firm survival in all sectors of the economy, which holds for small, medium and large firms alike. On the other hand, (ii) the impact of financial performance indicators is lower than one would expect. However, (iii) other firm-level variables play more important roles in firm survival, and the most important preventive factors are the legal form of a limited liability company, the number of large shareholders, and the presence of a foreign owner. |
| Keywords: | firm survival, institutions, financial development, European emerging markets, survival and exit determinants, hazards model |
| JEL: | D22 G01 G33 G34 P34 |
| Date: | 2022–07 |
| URL: | http://d.repec.org/n?u=RePEc:fau:wpaper:wp2022_16&r= |
| By: | Capucine Riom; Anna Valero |
| Abstract: | We present new data from a survey of 375 UK businesses conducted in July 2020 in partnership with the Confederation of British Industry (CBI), which seeks to understand the way in which firms have innovated in response to the crisis. We find that the pandemic has caused enormous business disruption, which has prompted many firms to focus on innovation. Over 60% of firms report that they have adopted new technologies or management practices since the onset of the pandemic, while a third have invested in new digital capabilities. We find similar patterns in terms of the introduction of new products or services. We describe how these responses differ across types of businesses and find that previous technology adoption is a strong predictor of a rapid innovation response to the crisis, even after controlling for other factors. Nearly all firms report that they expect the adoption of new technologies or practices to be permanent and to have a positive impact on firm performance. We will test these predictions with a follow-up survey one year on. |
| Keywords: | Covid-19, business performance, innovation, CBI, UK |
| Date: | 2020–09–30 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepcvd:cepcovid-19-009&r= |
| By: | Butzin, Anna; Flögel, Franz |
| Abstract: | The attention to "left behind" places triggered a debate about alternative development approaches. Unlike prosperous regions and their prioritisation on high-tech sectors, strategies for left behind places should shift to the foundational economy, community-based social innovation and well-being. While supporting this emphasis, we see a tendency to neglect importance of research and teaching in high-tech areas for developing left behind places. Our case study in the old industrial region Ruhr shows, how unrelated initial funding for cutting-edge research sparked the development of today's cybersecurity ecosystem. The ecosystem contributes to a positive identification within the region and a dynamic start-up landscape. |
| Keywords: | left behind places,entrepreneurial ecosystem,cybersecurity,hightech sectors,regional development |
| JEL: | O31 O32 O18 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:iatdps:2204&r= |
| By: | Xiang Ding (Georgetown University); Teresa C. Fort (Dartmouth College); Stephen J. Redding (Princeton University); Peter K. Schott (Yale University) |
| 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. |
| Keywords: | Intangible capital, Manufacturing, Employment Growth, Non-manufacturing employment, Firms |
| JEL: | D24 F14 L16 O47 |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:pri:econom:2022-7&r= |
| By: | Ana Fernández-Zubieta (Complutense University of Madrid - (ICEI-UCM)) |
| Abstract: | This study aims to analyse the alignment of investments in the Spanish ‘Recovery and Resilience Plan’ with the Smart Specialisation Strategies priorities (2021-2027) of the country and its regions to identify opportunities for potential synergies and complementary between funding instruments. The structure and methodology follows Marques Santos (2021) approach that has been applied in the Portuguese case study. This methodology uses the information available in the Plan and its annexes and establishes the steps for carrying out a detailed analysis to identify and to classify the investments and actions able to enhance Research and Development and Innovation (R&I) and regional innovation ecosystems. The analysis indicates that up to €20.5 Billion of the Spanish Plan (29% of available funding for 2021-2023) could potentially support directly and indirectly the Smart Specialisation processes in Spain. Similarly to the Portuguese case, the effect of the identified contributions will greatly depend on the final beneficiaries, project selected, absorption capacity, and governance model. |
| Keywords: | Covid-19 crisis; Innovation; Government Policy; Spain |
| JEL: | E32 O31 G38 |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:termod:202208&r= |
| By: | Laatsit, Mart (CIRCLE, Lund University); Grillitsch, Markus (CIRCLE, Lund University); Fünfschilling, Lea (CIRCLE, Lund University) |
| Abstract: | In the policy discourse on societal challenges it has become common to think of innovation policy as the universal tool for addressing societal challenges. However, we argue that innovation policy has limits to what it can do, and for it to remain a useful tool for tackling societal challenges, it is necessary to re-assess its role. Thus, this paper addresses the following research questions: What are the theoretical implications of the augmented expectations of innovation policy to deliver system change, what role can innovation policy play in contributing to system change, and what conditions this role. Linking to the literature on wicked problems and radical innovations, we differentiate between disruptive and progressive system change, and show that the potential role of innovation policy differs between these two types of change. Acknowledging both the potential and limitations of innovation policy, we make a proposition for how an ambitious innovation policy contributing to system change may be conceived. |
| Keywords: | Innovation policy; System change; Societal challenges |
| JEL: | O38 |
| Date: | 2022–07–04 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2022_009&r= |
| By: | Stepan Bahteev (Ural Federal University); Sophia Turkanova (Ural Federal University); Andrey Pushkarev (Ural Federal University); Oleg Mariev (Ural Federal University) |
| Abstract: | The relationship between investment and cash flow has been extensively studied since the mid-20th century. The aim of our study is to assess the impact of Tobin's ratio and cash flows on the capital investments of Russian companies. For econometric estimation we data on 206 Russian public companies traded on the Moscow Exchange from 2011 to 2020. We apply quantile regression to obtain more detailed results. The results of our study confirm the significance of the Tobin ratio and cash flow on capital investments. We observe these effects in all quantiles however their magnitude varies. This research is valuable and can be utilized by companies to maximize efficiency of their capital expenditures. |
| Keywords: | Tobin?s Q, Russian firms, quantile regression, capital investments |
| JEL: | L25 M21 |
| Date: | 2021–07 |
| URL: | http://d.repec.org/n?u=RePEc:sek:iefpro:12513370&r= |
| By: | Garcia-Lorenzo, Lucia; Sell-Trujillo, Lucia; Donnelly, Paul |
| Abstract: | Entrepreneurship has been proposed as a solution to extending working lives. However, little is known about how older (50+) entrepreneurs manage their personal transitions into entrepreneurship. In this paper, we propose to use a liminal identity work perspective to explore the identity paradoxes that older entrepreneurs experience during their transition into entrepreneurship and how they manage it. We use a qualitative study conducted over 14 months in the United Kingdom. Our analysis shows how older entrepreneurs confront identity paradoxes, interruptions and identity polarization in their attempts to shift from older identities and activity patterns into new ones. The entrepreneurs who manage to overcome the identity interruptions and polarization that the transition brings move away from an initial sense of isolation and bring creative understandings to older entrepreneuring processes. Our results expand current understanding of entrepreneurial identity work in liminal conditions, especially among older entrepreneurs, by looking at the tensions emerging between potentially new and customary identities and behaviours as an important aspect of entrepreneuring transitions rather than as negative frictions to be avoided. |
| Keywords: | employment transitions; identity work; liminality; narratives; older entrepreneurs |
| JEL: | R14 J01 |
| Date: | 2020–11–24 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:107553&r= |
| By: | Xiang Ding (Georgetown University); Teresa C. Fort (Tuck School of Business, CEPR, and NBER); Stephen J. Redding (Princeton University, CEPR, and NBER); Peter K. Schott (Yale School of Management, CEPR, and NBER) |
| 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. |
| Keywords: | structural transformation, professional services, intangible knowledge, economic growth |
| JEL: | D24 L16 O47 |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:pri:cepsud:297&r= |
| By: | Yannis Tolias (Innovatia Systems, Thessaloniki, Greece) |
| Abstract: | This work analyses the alignment of investments in the Greek Recovery and Resilience Plan (‘the Greek RRP’) with the Smart Specialisation Strategies priorities (2021-2027) of the country and its regions to identify potential synergies and complementarities between funding instruments. The structure and methodology follows the approach that was applied in the Portuguese case by Marques Santos (2021). This methodology uses the information available in the Plan and its annexes and establishes the steps for carrying out a detailed analysis to identify and to classify the investments and actions able to enhance Research and Development and Innovation (R&I) and regional innovation ecosystems. The analysis indicates that up to €0.91billion of the Greek RRP (5.1% of the non-repayable EU support) directly supports the Smart Specialisation processes in Greece by providing for new or upgraded research infrastructures, mobility of researchers, and basic research in public-sector research organisations (universities and research centres), without explicitly earmarking funding for the smart specialisation priorities at the national or at the regional level. Moreover, an additional amount of €1.14billion (6.4% of the non-repayable EU support) contributes in an indirect manner to agri-food, tourism/creative industries and reskilling/upskilling, which are all smart specialisation priorities both at the national and at the regional level. Concluding, the Greek RRP mobilises a considerable amount of public funds and stimulates additional investments in a very short timeframe. The main challenge will be valorising these investments with appropriate policy measures using the approximately €5billion that are earmarked for policy objective 1 in the national and the regional operational programmes of this programming period, which by design are fully aligned with the national S3. |
| Keywords: | Covid-19 crisis; Innovation; Government Policy; Greece |
| JEL: | E32 O31 G38 |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:termod:202209&r= |
| By: | Hansmeier, Hendrik; Koschatzky, Knut; Zenker, Andrea; Stahlecker, Thomas |
| Abstract: | While societal challenges are global in nature, solving and addressing them usually tends to take place at smaller spatial scales. As place-specific technological, institutional and actor settings have a decisive influence on the direction, scope and speed of transformative dynamics, regions vary greatly in the generation and application of innovations required for socio-technical transitions. With a broader understanding of regional innovation systems (RIS), on the one hand, and spatial considerations in transition studies, on the other, geographic research has recently contributed to a better understanding of innovation-based structural and systemic change. At the same time, the research findings are still insufficiently linked with one another. We argue that recent theorizing on expanded regional innovation systems provides additional explanatory power in the context of sys-temic transitions by considering similar aspects, e.g. the role of experimentation and different modes of innovation, yet incorporating a more spatial perspective. Against this background, we show that innovation policies at the regional level seem to be particularly effective when they sup-port innovation dynamics aimed at sustainability through the inclusion of various actor groups and the attention to both the production and application side. Given the increasing spatial disparities in innovation dynamics, however, further research is needed on the opportunities and barriers of different regional settings for sustainability transitions. |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fisifr:r22022&r= |
| By: | Zakari, Mariama; Adusei, Millicent; Quansah, Emmanuel Kweku; Ampah, Godwin |
| Abstract: | Entrepreneurship makes a huge contribution to any country's economy by providing jobs, instilling innovation, and creativity, and fostering exceptional social development. Scholars have recognized the value of entrepreneurship education since it has a significant impact on students by instilling a feeling of entrepreneurship in them. Entrepreneurial passion refers to the good and intense sensations a person gets from participating in activities related to their role as an entrepreneur. The primary goal of this research is to determine the impact of entrepreneurial passion on social entrepreneurial intent, as well as the role of entrepreneurial self-efficacy as a mediating factor. The study developed a mediation model to further research on the relationship between entrepreneurial passion and entrepreneurial intention. The study also investigated if entrepreneurial self-efficacy plays a role in this relationship. This study's philosophical viewpoint is positivism, and the research design is descriptive and explanatory. The study relied on primary data collected using questionnaires. The study adopted a quantitative approach and to analyze the data obtained from a sample of 200 (graduate students). The study revealed that entrepreneurial passion has a positive impact on entrepreneurial intention and self-efficacy. Second, using entrepreneurial self-efficacy as a mediator, the indirect effect of entrepreneurial passion on entrepreneurial intention was significant and positive. It is therefore recommended that more emphasis be paid to Entrepreneurial Self-Efficacy when attempting to build or increase Social Entrepreneurial Intent through Entrepreneurial Passion. |
| Date: | 2022–05–14 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:5m7q8&r= |
| By: | PROTA Francesco; VIESTI Gianfranco |
| Abstract: | This study aims at analysing possible synergies between the Italian National Recovery and Resilience Plan and the Smart Specialisation Strategies for 2021-2027 of Italian regions. Although Smart Specialisation Strategies are not explicitly mentioned in the Plan, we found that sixteen initiatives have a strong link with S3s priority areas, and thirty-one initiatives can be classified as having a medium link. For the remaining initiatives the potential links are weak. Much can be done to increase coherence between S3 and recovery projects, even a posteriori, by considering how the two planning processes complement one another. Obviously, the effective achievement of synergies between the Italian National Recovery and Resilience Plan and the regional Smart Specialisation Strategies will depend on many factors; in particular, a good policy mix and the involvement of relevant regional actors within the governance of the Plan. |
| Keywords: | Recovery and Resilience Plan; Smart Specialisation Strategies; Covid-19 crisis; Innovation; Public policy; Italy. |
| JEL: | E32 O31 G38 |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:termod:202210&r= |
| By: | Juan R. Ferrer (Universidad Politécnica de Madrid); María Carmen García-Cortijo (Instituto de Desarrollo Regional, Universidad de Catsilla-La Mancha); Vicente Pinilla (Universidad de Zaragoza); Juan Sebastián Castillo-Valero (Instituto de Desarrollo Regional, Universidad de Catsilla-La Mancha); Raúl Serrano (Universidad de Zaragoza) |
| Abstract: | The globalisation of the economy, which is a complex environment with changing dynamics, means that the factors that condition and promote the growth of firms need to be determined. This is because growth is an indicator of competitiveness; the capital markets value more highly those companies with positive growth prospects. In this respect, the objective of this study is to analyse the growth of Spanish wine-making companies and its relationship with their orientation towards sustainability. It also examines the possible existence of resources and structural factors that favour the growth of these firms. To do this, a database of 411 wineries operating in Spain has been used, constructed through surveys carried out during 2020 and 2021. The results of the regression model, estimated by OLS with Robust Errors proposed by Eiker-White, indicate that sustainability has come to form part of the growth model of wineries in Spain. |
| Keywords: | growth, sustainability, wineries, resources and capacities. |
| JEL: | L21 L66 N64 Q13 |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:zar:wpaper:dt2022-03&r= |
| By: | Mattia Guerini (SSSUP - Scuola Universitaria Superiore Sant'Anna [Pisa], OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po); Lionel Nesta (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po); Xavier Ragot (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po, ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique); Stefano Schiavo (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po) |
| Abstract: | We simulate the impact of the Covid-19 crisis on corporate solvency using a sample of around one million French nonfinancial companies, assuming they minimize their production costs in the context of a sharp drop in demand. We find that the lockdown triggers an unprecedented increase in the share of illiquid and insolvent firms, with the former more than doubling relative to a No-Covid scenario (growing from 3.8% to more than 10%) and insolvencies increasing by 80% (from 1.8% to 3.2%). The crisis has a heterogeneous effect across sectors, firm size, and region. Sectors such as hotels and restaurants, household services, and construction are the most vulnerable, while wholesale and retail trade, and manufacturing are more resilient. Micro-firms and large businesses are more likely to face solvency issues, whereas SMEs and medium-large firms display lower insolvency rates. The furlough scheme put forward by the government (activité partielle) has been very effective in limiting the number of insolvencies, reducing it by more than 1 percentage point (approximately 12,000 firms in our sample). This crisis will also have an impact on the overall efficiency of the French economic system, as market selection appears to be less efficient during crisis periods relative to "normal times": in fact, the fraction of very productive firms that are insolvent significantly increases in the aftermath of the lockdown. This provides a rationale for policy interventions aimed at supporting efficient, viable, yet illiquid firms weathering the storm. We evaluate the cost of such a scheme aimed at strength-ening firms' financial health to around 8 billion euros. |
| Keywords: | Firm liquidity,Solvency,Covid-19 lockdown |
| Date: | 2020–07–06 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpspec:hal-03403022&r= |
| By: | Krasniqi, Besnik; Ahmetbasić, Jasmina; Bartlett, Will |
| Abstract: | This article investigates how regional supply chains support the Western Balkans' economic growth. It first identifies the role of the cefta free trade agreement in expanding the size of the local market and opening up regional trading opportunities. It recounts how the larger market and specific industrial policies have attracted foreign direct investment (FDI) to the region in recent years. It analyses how these two factors have combined to generate export-led growth in the region and have brought about substantial structural changes within these economies. The article argues that to take continued advantage of the success in trade liberalisation and fdi attraction, policymakers should pay special attention to promoting backward spillovers by promoting linkages between local small and middle sized enterprise (SME) supplier firms and the newly arrived multi national corporations embedded into global value chains. Policies should be adopted which build the capacity of local sme suppliers within regional supply chains, both in terms of labour force skills and technological upgrades. The EU's recently launched Economic and Investment Plan for the Western Balkans and the activities of the Western Balkan Six Chamber Investment Forum may support such policies. |
| Keywords: | backward spillovers; cefta; foreign direct investment; regional supply chains; Western Balkans |
| JEL: | F3 G3 N0 |
| Date: | 2022–05–03 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:115391&r= |