nep-sbm New Economics Papers
on Small Business Management
Issue of 2022‒11‒28
24 papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. The impact of the EU General Data Protection Regulation on innovation in firms By Blind, Knut; Niebel, Crispin Miles; Rammer, Christian
  2. DUI it yourself: Innovation and activities to promote learning by doing, using, and interacting within the firm By Silje Haus-Reve; Rune Dahl Fitjar; Andres Rodriguez-Pose;
  3. Rediscovering the craft entrepreneur: A personality approach By Runst, Petrik; Thomä, Jörg
  4. Reigniting Growth Through Innovation: Challenges and Answers By Kuusi, Tero; Ali-Yrkkö, Jyrki; Helanummi-Cole, Heli; Koski, Heli; Kovalainen, Anne; Kässi, Otto; Poutanen, Seppo; Valmari, Nelli
  5. Trade secret protection and R&D investment of family firms By Hussingera, Katrin; Issahd, Wunnam
  6. Dynamic capabilities, competitiveness and performance of small and medium-sized enterprises: a systematic literature review By Mohamed MANSOURI; Cheklekbire Malainine; Hayat Souti; Ikram Cadimi
  7. The Unicorn Puzzle By Daria Davydova; Rüdiger Fahlenbrach; Leandro Sanz; René M. Stulz
  8. Start-up types and macroeconomic performance in Europe By De Haas, Ralph; Sterk, Vincent; Van Horen, Neeltje
  9. What is productive investment? Insights from firm-level data for the United Kingdom By Karmakar, Sudipto; Melolinna, Marko; Schnattinger, Philip
  10. German financial state aid during COVID-19 pandemic: Higher impact among digitalized self-employed By Bertschek, Irene; Block, Jörn; Kritikos, Alexander; Stiel, Caroline
  11. Improving Workers’ Performance in Small Firms : A Randomized Experiment on Goal Setting in Ghana By Cettolin, Elena; Cole, Kym; Dalton, Patricio
  12. Linking Innovation Systems, International Integration, and Investment Climate to Firm Productivity in Developing Countries: By Mahyar Adibi; Keun Lee
  13. Analyse des variables d’impact sur le comportement entrepreneurial en période de crise covid 19 By Adil Garohe; Rachid Zammar
  14. Innovation By Pascal Le Masson
  15. Effects of syndication network on specialisation and performance of venture capital firms By Qing Yao; Shaodong Ma; Jing Liang; Kim Christensen; Wanru Jing; Ruiqi Li
  16. Mapping the Knowledge Space: Exploiting Unassisted Machine Learning Tools By Florenta Teodoridis; Jino Lu; Jeffrey L. Furman
  17. The Zombification of the Economy? Assessing the Effectiveness of French Government Support During COVID-19 Lockdown By Mattia Guerini; Lionel Nesta; Xavier Ragot; Stefano Shiavo
  18. Mobile Phone Innovation and Doing Business in Sub-Saharan Africa By Simplice A. Asongu
  19. Which Factors Matter Most? Can Startup Valuation be Micro-Targeted? By Max Berre
  20. Regulating the Innovators: Approval Costs and Innovation in Medical Technologies By Rogers, Parker
  21. The joint AU-EU Innovation Agenda: when Science, Technology and Innovation (STI) stand for Sustainable Tangible Impact By Lorusso, Vincenzo; Venturi, Piero; Seke, Lukovi; Teshome, Mahlet; Idinoba, Monica Ebele; Masheleni, Hambani; Buisman, Nienke; Hoegel, Jens
  22. Lessons from the EU effort sharing decision for supranational climate cooperation: A firm-level analysis By Gavarda, Claire; Diethelm, Lukas
  23. The effects of cross-border acquisitions on firms’ productivity in the EU By Wildmer Daniel Gregori; Maria Martinez Cillero; Michela Nardo
  24. The Role of Immigrants, Emigrants, and Locals in the Historical Formation of Knowledge Agglomerations By Philipp Koch; Viktor Stojkoski; C\'esar A. Hidalgo

  1. By: Blind, Knut; Niebel, Crispin Miles; Rammer, Christian
    Abstract: In May 2018, a new regulation by the European Commission on data protection came into force, the General Data Protection Regulation (GDPR). It requires many firms to update their data protection strategy. It may also complicate different types of data usage, particularly related to data on individuals. In the literature, there is little evidence and no consensus on whether this new privacy regulation is beneficial or detrimental to innovation. This study provides empirical evidence on the impact of the GDPR on innovation activities in firms. Exploiting panel data from the German innovation survey, a difference-in-difference analysis shows that the GDPR stimulated additional innovation activity while shifting the focus of innovation away from radical and towards more incremental innovation. This holds for both firms that report that the GDPR complicated their innovation efforts, and for the much smaller group of firms that report that the GDPR facilitated their innovation activities. Finally, larger and older firms experience higher increases in their turnover with incremental innovation compared to smaller and younger firms.
    Keywords: General Data Protection Regulation,Innovation,Community Innovation Survey,Difference-in-difference estimation
    JEL: O31 O38 C22 L51
    Date: 2022
  2. By: Silje Haus-Reve; Rune Dahl Fitjar; Andres Rodriguez-Pose;
    Abstract: Implicitly or explicitly, much innovation policy treats investments in research and development (R&D) as the main input to innovation. A large body of literature in innovation studies has challenged this, highlighting the role of external sources of innovation and of innovation based on learning by doing, using and interacting (DUI). Nonetheless, there has been limited empirical research on how firm-internal activities to promote DUI affect innovation, and on how important such activities are relative to internal R&D and to external sources of knowledge. We also know little about how internal DUI activities interact with internal R&D and with external knowledge sourcing. We address these gaps using Norwegian Community Innovation Survey data from 2010. We find that internal DUI is an important driver of new-to-market product innovation. Further, the results show partial substitution effects between internal DUI and internal R&D, as well as between internal DUI and external DUI.
    Keywords: Innovation; Experience-based knowledge; STI; DUI; Firms
    Date: 2022–10
  3. By: Runst, Petrik; Thomä, Jörg
    Abstract: Personality is a key driver of self-employment decisions. For this reason, the personality traits of entrepreneurs or business owners have been repeatedly studied in previous research. This paper extends this literature by focusing on the craft entrepreneur - as a classic form of strategic entrepreneurship. Based on a large, representative German household panel data set, we show that the entrepreneurial type mediates the effect of broad (Big Five) and narrow personality traits (locus of control, risk tolerance) on the likelihood of being self-employed. Our results support the conventional distinction between craft entrepreneurs from other types of entrepreneurship. The paper concludes with implications for policy and research.
    Keywords: Entrepreneurship,Craft entrepreneur,Self-employment,Big Five,Personality
    JEL: D91 L26 M13 M21
    Date: 2022
  4. By: Kuusi, Tero; Ali-Yrkkö, Jyrki; Helanummi-Cole, Heli; Koski, Heli; Kovalainen, Anne; Kässi, Otto; Poutanen, Seppo; Valmari, Nelli
    Abstract: Abstract The Reigniting growth through innovation project, funded by Business Finland between 2020 and 2022, addressed the key challenges to the current growth paradigm and searched for novel policy levers to increase the effectiveness of innovation in a landscape of global turmoil following the pandemic. In this article, we summarize the key findings of this project, which focused on three innovation challenges and the design of policies that can help mitigate the problems that arise. The first challenge is the recent slowdown in the creation and adoption of new breakthrough ideas in innovation and the barriers to knowledge adoption. The second challenge is to maintain innovation and flexibility in production while companies increasingly outsource their core activities beyond traditional company boundaries. The third challenge is how to support creative destruction and structural change while avoiding considerable friction in the movement of resources between old and new companies.
    Keywords: Productivity, Innovations, Competition, Outsourcing, Platform companies, Creative destruction
    JEL: D22 D24 D43 O32 O38
    Date: 2022–11–09
  5. By: Hussingera, Katrin; Issahd, Wunnam
    Abstract: Family firms are known for their reluctance to invest in research and development. We show that strengthened trade secret protection is associated with higher R&D investment by family firms. More specifically, we show that the association between the strength of trade secret protection through the U.S. Uniform Trade Secrets Act and R&D investment is positively moderated by family control. Our results further show that the positive moderation of family control on the association between the strength of trade secret protection and R&D investment varies with the industry context, being stronger in high tech industries and weaker in discrete product industries.
    Keywords: Family firms,intellectual property protection,trade secret protection,UTSA,R&Dinvestment,socioemotional wealth
    JEL: O34 O32 G32 M14
    Date: 2022
  6. By: Mohamed MANSOURI (UIT - Université Ibn Tofaïl); Cheklekbire Malainine; Hayat Souti; Ikram Cadimi
    Abstract: Dynamic capability theory was developed as part of the Resource Based View (RBV) to explain business performance and the notion of competitive advantage. The objective of this article is to offer a systematic overview of the scientific literature around the theory of Dynamic Capacities (DCs in relation to the performance of Small and Medium Enterprises (SME), it aims to explore how the theory of DCs has been approached by different authors in an SME context, and to examine the contribution of DCs to performance and their competitive advantage. One hundred and fifty-five relevant scientific contributions from 22 journals between 1997 and 2021 were analyzed through careful classification according to discipline, method and country. This literature review offers a summary of the state of the art and shares various trends and developments regarding this emerging research area. Among other things, it demonstrates the existence of conceptual ambiguities, different definitions and a lack of qualitative articles: this contributes to a wide range of research topics. Our analysis shows that DCs have received higher corroboration in the SME context than in the large enterprise context (Pezeshkan et al., 2016), and also a higher level of empirical support than RBV (Newbert, 2007)and other approaches in strategic management research such as transaction cost theory (David & Han, 2004). Thus, a need for empirical evidence and production of an explanatory nature is also noted: many hypotheses on the contribution of DCs to the competitive advantage of SMEs remain to be demonstrated. Moreover, this work highlights the significant and generally positive contribution of DCs to the performance of SMEs.
    Keywords: Dynamic capabilities,Small and Medium Enterprises,Resource Based View,competitive advantage,performance. JEL Classification: M19 Paper type: theoretical Research
    Date: 2022–09–30
  7. By: Daria Davydova; Rüdiger Fahlenbrach; Leandro Sanz; René M. Stulz
    Abstract: From 2010 to 2021, 639 US VC-funded firms achieved unicorn status. We investigate why there are so many unicorns and why controlling shareholders give investors privileges to obtain unicorn status. We show that unicorns rely more than other VC-funded firms on organizational capital as well as network effects and the internet. Unicorn status enables startups to access new sources of capital. With this capital, they can invest more in organizational intangible assets with less expropriation risk than if they were public. As a result, they are more likely to capture the economies of scale that make their business model valuable.
    JEL: G24 G32 G34
    Date: 2022–10
  8. By: De Haas, Ralph (European Bank for Reconstruction and Development, CEPR and KU Leuven); Sterk, Vincent (University College London and CEPR); Van Horen, Neeltje (Bank of England)
    Abstract: Can policymakers improve macroeconomic performance by encouraging the entry of high‑performance start‑ups? To answer this question, we construct a novel and comprehensive data set on 1.3 million start‑ups in 10 European countries. We apply cluster analysis to identify distinct start‑up types and trace their development over time. Three stylised facts transpire. First, we uncover five well‑separated start‑up types that are consistently present across countries, industries, and cohorts. We label these basic, large, capital‑intensive, cash‑intensive, and high‑leverage. Second, the initial differences between these start‑up types are persistent. Third, each start‑up type displays a characteristic life cycle in terms of productivity, employment generation, and exit rates. We feed these empirical results into an agnostic firm dynamics model to quantify how much structural policy could improve macroeconomic performance by shifting the composition of start‑ups. We find that substantial gains in aggregate employment and productivity can be made through policies that benefit high‑performance start‑ups (such as large and capital‑intensive ones) while discouraging the entry of underperforming firms (such as highly leveraged ones).
    Keywords: Start‑ups; firm entry; productivity; corporate tax; entrepreneurship; cluster analysis.
    JEL: D22 D24 G32 L11 L25 L26 O47
    Date: 2022–06–17
  9. By: Karmakar, Sudipto (Bank of England); Melolinna, Marko (Bank of England); Schnattinger, Philip (Bank of England)
    Abstract: This paper studies the effects of different types of investment and levels of debt on productivity in the UK, using firm-level data. We set out a stylised model of a dynamic firm profit-maximisation problem, and augment this model with an external financing option in a novel way. We use the model to illustrate why productivity-enhancing investment differs from other uses of company funds in terms of its effects on total factor productivity (TFP), and how these positive effects can be stronger for firms that have higher indebtedness. We then examine the issue empirically with data on listed firms in the UK. Our main finding is that intangibles investment are a good proxy for productivity-enhancing investment, as they have a positive effect on TFP, and in those firms that have high debt and high levels of intangibles, these effects are even more pronounced. On the other hand, we find no consistent evidence of positive TFP effects for other uses of funds, like tangible capital expenditure or dividends and equity buybacks. The effects of debt on TFP are smaller and more tenuous, but we find no evidence of a negative TFP effect of debt in firms that have high levels of intangibles intensity.
    Keywords: Dynamic programming; firm-level productivity; intangible assets; panel regression
    JEL: C61 D22 D24 O30
    Date: 2022–07–15
  10. By: Bertschek, Irene; Block, Jörn; Kritikos, Alexander; Stiel, Caroline
    Abstract: In response to strong revenue and income losses that a large share of the self-employed faced during the COVID-19 pandemic, the German federal government introduced a €50bn emergency aid program. Based on real-time online-survey data comprising more than 20,000 observations, we analyze the impact of this program on the subjective survival probability. In particular, we investigate how the digitalization level of the self-employed influences the program's effectiveness. Employing propensity score matching, we find that the emergency aid program had only moderately positive effects on the confidence of the self-employed to survive the crisis. However, the self-employed whose businesses were highly digitalized, benefitted much more from the state aid compared to those whose businesses were less digitalized. This holds true only for those self-employed in advanced digitalization stages, who started the digitalization processes already before the crisis. Moreover, taking a regional perspective, we find suggestive evidence that the quality of the regional broadband infrastructure matters in the sense that it increases the effectiveness of the emergency aid program. Our findings show the interplay between governmental support programs, the digitalization levels of entrepreneurs, and the regional digital infrastructure. The study helps public policy to increase the impact of crisis-related policy instruments.
    Keywords: Self-Employment,Emergency Aid,Treatment Effects,COVID-19,Entrepreneurship,Digitalization,Resilience
    JEL: C14 H43 L25 L26 J68 O33
    Date: 2022
  11. By: Cettolin, Elena (Tilburg University, School of Economics and Management); Cole, Kym; Dalton, Patricio (Tilburg University, School of Economics and Management)
    Date: 2022
  12. By: Mahyar Adibi; Keun Lee
    Abstract: This paper analyzes the importance of investment climate (IC), international integration (II), and innovation system (IS) variables on firm productivity. These variables are measured at the firm, sector, and country levels, and the interaction effects among them are also investigated. Multilevel-mixed effect analysis is conducted using the World Bank Enterprise Survey data for 20 developing countries in 21 sectors. Results indicate that firm-level variables tend to be more robust than sector- or country-level variables, and that more II variables are shown be significant than either IC or IS variables. Specifically, sector-level II variables are significant, whereas sector-level IC variables and sector-level R&D variables are not significant. Sector-level IC and IS variables become significant only when they interact with firm-level variables. The results underscore the importance of firm-level capabilities, which can be enhanced by II (e.g., firm-level learning by exporting and Foreign Direct Investment (FDI) arrangement) and IS (e.g., firm-level education and training), as well as by spillover from sector-level II and human capital. Results also reveal the channels through which IC may affect firm productivity. IC exhibits an effect on firm productivity when it interacts with firm-level capabilities and activities.
    Keywords: Firm Productivity; Innovation Systems; Investment Climate; International Integration; Multilevel Analysis; Developing Country;
    JEL: O10 O29 O30 O57
    Date: 2022–11
  13. By: Adil Garohe (UM5 - Université Mohammed V de Rabat [Agdal]); Rachid Zammar (UM5 - Université Mohammed V de Rabat [Agdal])
    Abstract: This article aims to study the impact of the variables age, resilience and space on the behavior of entrepreneurs during the covid19 health crisis. To do this, an empirical study was conducted with 49 entrepreneurs located in the Rabat-Salé-Kénitra region. The results of this study revealed that the well-being of entrepreneurs has been negatively affected by this crisis.
    Abstract: Cet article se propose d'étudier l'impact des variables l'âge, la résilience et l'espace sur le comportement des entrepreneurs en période de la crise sanitaire covid19. Pour ce faire une étude empirique a été menée auprès de 49 entrepreneurs situés dans la region Rabat-Salé-Kénitra. Les résultats de cette étude ont révélé que le bien-être des entrepreneurs a été affeté négativement par cette crise.
    Keywords: Entrepreneuriat,Comportement,Covid-19 Entrepreneurship,Behavior,Covid-19
    Date: 2022–09–25
  14. By: Pascal Le Masson (Mines Paris - PSL (École nationale supérieure des mines de Paris) - PSL - Université Paris sciences et lettres)
    Date: 2022–09
  15. By: Qing Yao; Shaodong Ma; Jing Liang; Kim Christensen; Wanru Jing; Ruiqi Li
    Abstract: The Chinese venture capital (VC) market is a young and rapidly expanding financial subsector. Gaining a deeper understanding of the investment behaviours of VC firms is crucial for the development of a more sustainable and healthier market and economy. Contrasting evidence supports that either specialisation or diversification helps to achieve a better investment performance. However, the impact of the syndication network is overlooked. Syndication network has a great influence on the propagation of information and trust. By exploiting an authoritative VC dataset of thirty-five-year investment information in China, we construct a joint-investment network of VC firms and analyse the effects of syndication and diversification on specialisation and investment performance. There is a clear correlation between the syndication network degree and specialisation level of VC firms, which implies that the well-connected VC firms are diversified. More connections generally bring about more information or other resources, and VC firms are more likely to enter a new stage or industry with some new co-investing VC firms when compared to a randomised null model. Moreover, autocorrelation analysis of both specialisation and success rate on the syndication network indicates that clustering of similar VC firms is roughly limited to the secondary neighbourhood. When analysing local clustering patterns, we discover that, contrary to popular beliefs, there is no apparent successful club of investors. In contrast, investors with low success rates are more likely to cluster. Our discoveries enrich the understanding of VC investment behaviours and can assist policymakers in designing better strategies to promote the development of the VC industry.
    Date: 2022–11
  16. By: Florenta Teodoridis; Jino Lu; Jeffrey L. Furman
    Abstract: Understanding factors affecting the direction of innovation is a central aim of research in the economics of innovation. Progress on this topic has been inhibited by difficulties in measuring distance and movement in knowledge space. We describe a methodology that infers the mapping of the knowledge landscape based on text documents. The approach is based on an unassisted machine learning technique, Hierarchical Dirichlet Process (HDP), which flexibly identifies patterns in text corpora. The resulting mapping of the knowledge landscape enables calculations of distance and movement, measures that are valuable in several contexts for research in innovation. We benchmark and demonstrate the benefits of this approach in the context of 44 years of USPTO data.
    JEL: C55 C80 O3 O31 O32
    Date: 2022–10
  17. By: Mattia Guerini (University of Trento [Trento]); Lionel Nesta (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po); Xavier Ragot (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po); Stefano Shiavo (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)
    Abstract: This paper evaluates the risk of zombification of the French economy during the sanitary crisis, as a result of the unconditional financial support provided to firms by public authorities. We develop a simple theoretical framework based on a partialequilibrium model to simulate the liquidity and solvency stress faced by a large panel of French firms and assess the impact of government support measures. Simulation results suggest that those policies helped healthy but illiquid firms to withstand the shock caused by the pandemic. Moreover, the analysis finds no evidence of a "zombification effect", as government support has not disproportionately benefited less productive companies.
    Keywords: Covid-19,zombie firms,job-retention schemes,microsimulation,policy evaluation
    Date: 2022–07–15
  18. By: Simplice A. Asongu (Yaounde, Cameroon)
    Abstract: This study assesses how knowledge diffusion modulates the effect of the mobile phone on entrepreneurship or doing business in Sub-Saharan Africa. The empirical evidence is based on Generalised Method of Moments in which mobile phones are interacted with three knowledge diffusion variables, namely: education, internet penetration and scientific output. Ten variables of entrepreneurship are used. The following three main findings are established. First, the net effects from interacting mobile phones with the internet and scientific publications are negative whereas the corresponding net impact from the interaction between mobile phones and education is positive on the cost of doing business. Second, the mobile phone interacts with education (the internet) to have a positive (negative) net effect on the time needed to construct a warehouse whereas, the corresponding interaction with the internet yields a net negative effect on the time to enforce a contract. Third, there is a positive net effect from the interaction of mobile phones with education on the time to start a business. Given the construction of the education variable, the positive net effects from education are consistent with corresponding negative net effects from the other knowledge diffusion variables.
    Keywords: Entrepreneurship; the Mobile Phone; Knowledge Diffusion; Sub-Saharan Africa
    JEL: L59 L98 O10 O30 O55
    Date: 2022–01
  19. By: Max Berre
    Abstract: While startup valuations are influenced by revenues, risks, age, and macroeconomic conditions, specific causality is traditionally a black box. Because valuations are not disclosed, roles played by other factors (industry, geography, and intellectual property) can often only be guessed at. VC valuation research indicates the importance of establishing a factor-hierarchy to better understand startup valuations and their dynamics, suggesting the wisdom of hiring data-scientists for this purpose. Bespoke understanding can be established via construction of hierarchical prediction models based on decision trees and random forests. These have the advantage of understanding which factors matter most. In combination with OLS, the also tell us the circumstances of when specific causalities apply. This study explores the deterministic role of categorical variables on the valuation of start-ups (i.e. the joint-combination geographic, urban, and sectoral denomination-variables), in order to be able to build a generalized valuation scorecard approach. Using a dataset of 1,091 venture-capital investments, containing 1,044 unique EU and EEA, this study examines microeconomic, sectoral, and local-level impacts on startup valuation. In principle, the study relies on Fixedeffects and Joint-fixed-effects regressions as well as the analysis and exploration of divergent micropopulations and fault-lines by means of non-parametric approaches combining econometric and machinelearning techniques.
    Date: 2022–10
  20. By: Rogers, Parker
    Abstract: How does FDA regulation affect innovation and market concentration? I examine this question by exploiting FDA deregulation events that affected certain medical device types but not others. I use text analysis to gather comprehensive data on medical device innovation, device safety, firm entry, prices, and regulatory changes. My analysis of these data yields three core results. First, these deregulation events significantly increase the quantity and quality of new technologies in affected medical device types relative to control groups. These increases are particularly strong among small and inexperienced firms. Second, these events increase firm entry and lower the prices of medical procedures that use affected medical device types. Third, the rates of serious injuries and deaths attributable to defective devices do not increase measurably after these events. Perhaps counterintuitively, deregulating certain device types lowers adverse event rates significantly, consistent with firms increasing their emphasis on product safety as deregulation exposes them to more litigation.
    Date: 2022–11–01
  21. By: Lorusso, Vincenzo; Venturi, Piero; Seke, Lukovi; Teshome, Mahlet; Idinoba, Monica Ebele; Masheleni, Hambani; Buisman, Nienke; Hoegel, Jens
    Abstract: Outcome of the African Union (AU) – European Union (EU) Research & Innovation (R&I) Ministerial Meeting of July 2020, the “AU-EU Innovation Agenda” aims to turn R&I investments into tangible businesses, services and jobs. This Agenda proposes specific objectives with short-, medium- and long-term actions for all four priority areas of the AU-EU cooperation in Science, Technology and Innovation (STI), namely (i) Public Health, (ii) Green Transition, (iii) Innovation and Technology and (iv) Capacities for Science. This paper aims to raise awareness on the AU-EU Innovation Agenda and the ongoing public consultation on its working document (open until 30 June 2022). This consultation will gather feedback and input from citizens, stakeholders and their respective organisations, through an online survey ( This is done to ensure that the Agenda will address actual unmet needs on the ground, to ultimately maximise chances to provide for sustainable and inclusive growth in Africa and Europe.
    Date: 2022–06–30
  22. By: Gavarda, Claire; Diethelm, Lukas
    Abstract: As an example of supranational climate policy coordination for sectors not covered by carbon trading, the European Effort Sharing Decision set national targets for emission reductions for the time period 2013-2020. Member States were free to decide the national policies to implement to achieve these objectives. This is the first quantification of the impact this regulation had on the emissions of the corresponding firms. We exploit the differences along three variables: a national-level treatment intensity, an exposure index defined at the firm level and a time dimension (before or after the introduction of the policy). We find that, even in countries with no stringent target, emissions from exposed firms tended to decrease more than emissions from non-exposed firms. In addition, each percentage point increase in the stringency of the treatment leads to a 6.1% reduction in emissions for an average exposed firm. This provides interesting insights for other supranational climate agreements.
    Keywords: carbon emissions,effort sharing decision,firms,climate policy
    JEL: D22 F53 L51 Q54 Q58
    Date: 2022
  23. By: Wildmer Daniel Gregori (European Commission); Maria Martinez Cillero (European Commission); Michela Nardo (European Commission)
    Abstract: This study empirically investigates the extent to which firms in the European Union, once acquired through a cross-border acquisition, show different productivity levels as compared to those firms that have not been acquired. Our identification strategy relies on the combination of Propensity Scores and the Staggered Difference-in-Difference estimator, using firms’ balance sheet for the years 2008-2018. We find that cross-border acquisitions decrease the productivity of the acquired firms, especially in the manufacturing sector, both high- and low-tech. We find evidence of origin and sector heterogeneity. Firms targeted by acquirers with ultimate owners originating in emerging market economies and Offshore Financial Centres also decrease productivity of target firms in high-tech manufacturing.
    Keywords: Cross-border M&As, TFP, European Union, Propensity Score, DiD
    JEL: G
    Date: 2022
  24. By: Philipp Koch; Viktor Stojkoski; C\'esar A. Hidalgo
    Abstract: Did migrants help make Paris a center for the arts and Vienna a beacon of classical music? Or was the rise of these knowledge agglomerations a sole consequence of local actors? Here, we use data on the biographies of more than 22,000 famous historical individuals born between the years 1000 and 2000 to estimate the contribution of famous immigrants, emigrants, and locals to the knowledge specializations of European regions. We find that the probability that a region develops a specialization in a new activity (physics, philosophy, painting, music, etc.) grows with the presence of immigrants with knowledge on that activity and of immigrants specialized in related activities. We also find that the probability that a region loses one of its existing areas of specialization decreases with the presence of immigrants specialized in that activity and in related activities. In contrast, we do not find robust evidence that locals with related knowledge play a statistically significant role in a region entering or exiting a new specialization. These findings advance our understanding of the role of migration in the historical formation of knowledge agglomerations.
    Date: 2022–10

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