nep-sbm New Economics Papers
on Small Business Management
Issue of 2023‒12‒04
23 papers chosen by
João Carlos Correia Leitão, Universidade da Beira Interior

  1. Innovations and the circular economy: a national and regional perspective By Davide Antonioli; Elisa Chioatto; Massimiliano Mazzanti
  2. The role of environmental practices and innovation in total factor productivity convergence -Evidence from small-and medium-sized manufacturing enterprises in Vietnam By Thanh Tam Nguyen-Huu; Khac Minh Nguyen; Quoc Tran-Nam
  3. Company Size Dynamics and Growth Barriers Among Finnish Companies By Laurikka, Annu
  4. Population Aging and Small Business Dynamics By XU Peng
  5. Breaking Barriers: Investigating the Effects of 100% Foreign Ownership on Business Entry in Dubai By Rashad, Ahmed
  6. Survey on Individuals’ Preferences for Employee Entrepreneurship and Mobility (Japanese) By YOSHIDA Yukiko; HONJO Yuji
  7. A new dataset to study a century of innovation in Europe and the US By Antonin Bergeaud; Cyril Verluise
  8. Committing to Grow: Privatizations and Firm Dynamics in East Germany By Ufuk Akcigit; Harun Alp; André Diegmann; Nicolas Serrano-Velarde
  9. Patents that match your standards: firm-level evidence on competition and innovation By Antonin Bergeaud; Julia Schmidt; Riccardo Zago
  10. From public labs to private firms: magnitude and channels of R&D spillovers By Antonin Bergeaud; Arthur Guillouzouic; Emeric Henry; Clement Malgouyres
  11. Exports and firm survival in times of COVID-19: Evidence from eight European countries By Wagner, Joachim
  12. Determinants of social norms and support services for the entrepreneurial spirit of rural farmers in sub-Saharan Africa: The case of Borgou in Benin By Adam Malla Issiou; Jacob Yabi
  13. Opposing firm-level responses to the China shock: output competition versus input supply By Philippe Aghion; Antonin Bergeaud; Matthieu Lequien; Marc J. Melitz; Thomas Zuber
  14. Social push and the direction of innovation By Elias Einio; Josh Feng; Xavier Jaravel
  15. Boosting Social Entrepreneurship and Social Enterprise Development in Ireland: In-depth policy review By OECD
  16. The SME-suitable industry reservation policy: Economic effects and policy direction By Kim, Minho
  17. Learning from Overrated Mission-Oriented Innovation Policies: Seven Takeaways By Henrekson, Magnus; Sandström, Christian; Stenkula, Mikael
  18. Regional productivity differences in the UK and France: From the micro to the macro By Bridget Kauma; Giordano Mion
  19. Small Wins through Inducement Prizes: Introducing Challenge-Oriented Regional Prizes (CORP) By Arnault Morisson; Isabelle Liotard; Valérie Revest
  20. OECD framework for mapping and quantifying government support for business innovation By OECD
  21. High-Speed Railways and Firms Total Factor Productivity: Evidence from a Quasi-Natural Experiment By Bottasso, Anna; Conti, Maurizio; Ferrara, Antonella Rita; Robbiano, Simone
  22. Industrial and innovation policies in times of crisis: a widening technological divide? By Vergara, Sebastian
  23. Green Innovation and Diffusion: Policies to Accelerate Them and Expected Impact on Macroeconomic and Firm-Level Performance By Ms. Zeina Hasna; Ms. Florence Jaumotte; Jaden Kim; Samuel Pienknagura; Gregor Schwerhoff

  1. By: Davide Antonioli (UniFE - Università degli Studi di Ferrara = University of Ferrara); Elisa Chioatto (UniFE - Università degli Studi di Ferrara = University of Ferrara); Massimiliano Mazzanti (UniFE - Università degli Studi di Ferrara = University of Ferrara)
    Abstract: The introduction of innovative practices compatible with the objectives of the circular economy is one of the main enablers for transforming current production patterns towards more sustainable and competitive systems. Understanding whether and to what extent firms are introducing circular-oriented innovations allows monitoring where we stand in the circular transition and thus which further efforts are needed to achieve a resource-efficient economy. This study is based on data from two surveys on Small and Medium Enterprises: the first one reaches 4565 companies located throughout Italy (in the two-year period 207-2018) and the second one focuses on 1603 companies operating in the Emilia-Romagna region (in the three-year period 2017-2019). The analysis is aimed at offering a broad picture of the level of involvement of national and regional firms in the implementation of circular innovation. Despite the overall positive performance, there appears to be a fragmented adoption of circular innovation in terms of firms' size, technological intensity of the sectors and in accordance with the geography and the productive specialization of the territory. In general, circular innovation mainly involves firms operating in low-technology-intensity sectors in Southern Italy and more technological intensive sectors in Northern Italy and it is more widespread among large firms. On the contrary, in Emilia-Romagna, the distribution of circular innovation mainly concerns mediumsized firms, especially those belonging to low and medium technology-intensive sectors, moreover companies in the provinces of Modena and Parma show higher adoption rates.
    Keywords: Circular Economy, Eco-Innovation, Circular Innovation, Small and Medium Enterprises, Business Models, Regional Studies
    Date: 2022–03–30
  2. By: Thanh Tam Nguyen-Huu (Métis Lab EM Normandie - EM Normandie - École de Management de Normandie); Khac Minh Nguyen; Quoc Tran-Nam
    Abstract: This research investigates the nexus between environmental compliance, innovation, and Total Factor Productivity convergence. We use two measures of environmental practices: the firm environmental standard certification and environmental treatment. As for innovation, it has three increasing-levels: no innovation, product or process innovation, and both types of innovation. Using a sample of Vietnamese small-and medium-sized manufacturing enterprises from 2007 to 2015, the environmental practices are not correlated with total factor productivity. By contrast, there is a strong correlation between innovation and environmental treatment. Factors contributing to the firm productivity growth rate, and consequently the speed of convergence, are innovation, firm size, and legal form.
    Abstract: Cette recherche examine le lien entre la conformité environnementale, l'innovation et la convergence de la productivité totale des facteurs. Nous utilisons deux mesures de pratiques environnementales : la norme de certification environnementale et le traitment environnemental. Quant à l'innovation, il s'agit d'une variable qualitative ayant trois modalités croissantes : aucune innovation, innovation de produit ou de procédé et deux types d'innovation. En utilisant une base de données des petites et moyennes entreprises manufacturières vietnamiennes entre 2007 et 2015, les pratiques environnementales ne sont pas corrélées avec la productivité totale des facteurs. En revanche, il existe une forte corrélation entre l'innovation et le traitement environnemental. Les facteurs qui contribuent au taux de croissance de la productivité des entreprises, et par conséquent à la vitesse de convergence, sont l'innovation, la taille de l'entreprise et la forme juridique.
    Keywords: Innovation TFP growth rate β-convergence Environmental practices, Innovation, TFP growth rate, β-convergence, Environmental practices
    Date: 2022–06–28
  3. By: Laurikka, Annu
    Abstract: Abstract The report examines the dynamics of company size classes in Finland and the relationship between growth barriers and company size. It investigates how Finnish companies have moved between different company size categories from 2008 to 2020, categorizing them based on both the number of employees and revenue. The study also explores growth barriers and whether companies of different sizes face different barriers. The results suggest that companies are more likely to shrunk to a smaller size category rather than to grow into a larger one. However, most companies remain in the same size category during both the three-year and five-year observation periods. Heavy regulations and a desire to avoid debt are the most common barriers to growth experienced by companies. Statistically significant differences between size categories were observed for seven growth barriers. The smallest micro-enterprises are more likely to experience growth barriers compared to larger companies, either because they want to avoid taking on debt or because they have deficiencies in sales and marketing. Small and medium-sized enterprises (SMEs) encounter growth barriers more frequently than micro-enterprises due to higher cost levels compared to competitors. The fewest growth obstacles were encountered in the Mittelstand company size category.
    Keywords: Company size, Company size dynamics, Growth, Growth barrier
    JEL: L11 L20 L21 L25 D22
    Date: 2023–11–13
  4. By: XU Peng
    Abstract: This paper uses a large sample of small and medium-sized enterprise financial data (2008-2019) to empirically analyze the effect of a prefecture's population aging on successions, mergers, suspensions/closures, and bankruptcies. The higher the proportion of the population aged 65 and over, the more serious the problem of finding successors for small businesses, that is, the decline in the turnover of aged business owners occurring through succession. Compared to inherited small and medium-sized enterprises, bankrupt enterprises, closed enterprises, and acquired enterprises tend to suffer from poor performance and sales. Companies that suffer from sluggish sales or poor performance go bankrupt, close, or merge; in other words, the metabolism of small and medium-sized enterprises also slow down as the population ages, not only impeding small business metabolism, but also performance— profitability, investment and growth rates--decline with increases in the population aged 65 and older. On the other hand, cash holdings of small businesses increase with population aging, likely because of increases in precautionary liquidity demand in preparation for future business closures.
    Date: 2023–11
  5. By: Rashad, Ahmed
    Abstract: The regulatory and institutional environment of a nation plays a critical role in shaping the level of entrepreneurship. By creating a conducive regulatory and institutional environment, governments can encourage entrepreneurial activity, leading to job creation, innovation, and economic growth. The United Arab Emirates has recently deregulated the ownership rules for more than 1, 000 commercial and industrial activities, allowing full ownership of commercial companies in the UAE without requiring a partnership with a national sponsor. Before the introduction of these amendments, foreign ownership was not permitted to exceed 49% of the total assets of a company outside the free zones, with the majority stake being held by an Emirati partner. This study represents the first attempt to assess the short-term impact of the liberalization of business ownership rules on the number of newly registered firms in the UAE. The study collects unique data that covers all types of business activity in Dubai, using monthly data on the number of newly issued business licenses. We developed a difference-in-difference model with a treatment and a control group using panel data regression models. Our findings suggest that the liberalization of the ownership rules has led to a significant surge in the number of new business licenses in the sectors impacted by the liberalization policy. This early evidence suggests that relaxing the restrictions on business ownership may stimulate entrepreneurial activity and business creation in the Gulf region.
    Keywords: New Firms, Gulf region, regulatory reform, entrepreneurship
    JEL: G18 G38 L51 M13
    Date: 2023
  6. By: YOSHIDA Yukiko; HONJO Yuji
    Abstract: This paper investigates the actual situation of employee entrepreneurship and mobility in Japan. The Government of Japan positioned 2022 as the first year of startup creation and formulated the “Startup Development Five-year Plan†at the end of 2022. Using a questionnaire survey entitled “Survey on Employee Entrepreneurship and Mobility, †we examine how individuals’ attributes, experiences, abilities, and thinking characteristics affect their intention for entrepreneurship and job switching. The following points became clear from the survey results. (1) Young generations are more likely to have an intention for entrepreneurship and job switching. Males are more likely to start a business than females. (2) Individuals with a large amount of financial assets are more likely to have an intention for entrepreneurship. (3) Individuals with large family sizes are more likely to have an intention for entrepreneurship, while those with small family sizes are more likely to have the intention of job switching. (4) Dissatisfaction with the current job environment increases individuals’ intention for entrepreneurship and job switching. (5) A longer working period reduces individuals’ intention for entrepreneurship and job switching. (6) Experience in working overseas and with foreign-affiliated firms, as well as transactions with and investment in startups, is positively associated with individuals’ intention for entrepreneurship and job switching. (7) Experience in filing patents and utility models is positively associated with individuals’ intention for entrepreneurship and job switching. (8) Experience in receiving commendations or awards based on professional competence is positively associated with individuals’ intention for entrepreneurship and job switching. (9) Parents’ experience in entrepreneurship is positively associated with individuals’ intention for entrepreneurship. (10) Individuals who take concrete steps to start a business tend to have high extraversion and low agreeableness in terms of the Big Five personality traits.
    Date: 2023–11
  7. By: Antonin Bergeaud; Cyril Verluise
    Abstract: Innovation is an important driver of potential growth but quantitative evidence on the dynamics of innovative activities in the long-run are hardly documented due to the lack of data, especially in Europe. In this paper, we introduce PatentCity, a novel dataset on the location and nature of patentees from the 19th century using information derived from an automated extraction of relevant information from patent documents published by the German, French, British and US Intellectual Property offices. This dataset has been constructed with the view of facilitating the exploration of the geography of innovation and includes additional information on citizenship and occupation of inventors
    Keywords: history of innovation, patent, text as data
    Date: 2022–04–28
  8. By: Ufuk Akcigit; Harun Alp; André Diegmann; Nicolas Serrano-Velarde
    Abstract: This paper investigates a unique policy designed to maintain employment during the privatization of East German firms after the fall of the Iron Curtain. The policy required new owners of the firms to commit to employment targets, with penalties for non-compliance. Using a dynamic model, we highlight three channels through which employment targets impact firms: distorted employment decisions, increased productivity, and higher exit rates. Our empirical analysis, using a novel dataset and instrumental variable approach, confirms these findings. We estimate a 22% points higher annual employment growth rate, a 14% points higher annual productivity growth, and a 3.6% points higher probability of exit for firms with binding employment targets. Our calibrated model further demonstrates that without these targets, aggregate employment would have been 15% lower after 10 years. Additionally, an alternative policy of productivity investment subsidies proved costly and less effective in the short term.
    Keywords: Industrial policy, Privatizations; Productivity; Size-dependent regulations
    JEL: D22 D24 J08 L25
    Date: 2023–11–07
  9. By: Antonin Bergeaud; Julia Schmidt; Riccardo Zago
    Abstract: When a technology becomes the new standard, the firms that are leaders in producing this technology have a competitive advantage. Matching the semantic content of patents to standards and exploiting the exogenous timing of standardization, we show that firms closer to the new technological frontier increase their market share and sales. In addition, if they operate in a very competitive market, these firms also increase their R&D expenses and investment. Yet, these effects are temporary since standardization creates a common technological basis for everyone, which allows followers to catch up and the economy to grow.
    Keywords: standardization, patents, competition, innovation, text mining
    Date: 2022–10–24
  10. By: Antonin Bergeaud; Arthur Guillouzouic; Emeric Henry; Clement Malgouyres
    Abstract: Introducing a new measure of scientific proximity between private firms and public research groups and exploiting a multi-billion euro financing program of academic clusters in France, we provide causal evidence of spillovers from academic research to private sector firms. Firms in the top quartile of exposure to the funding shock increase their R&D effort by 20% compared to the bottom quartile. We exploit reports produced by funded clusters, complemented by data on labor mobility and R&D public-private partnerships, to provide evidence on the channels for these spillovers. We show that spillovers are driven by outsourcing of R&D activities by the private to the public sectors and, to a lesser extent, by labor mobility from one to the other and by informal contacts. We discuss the policy implications of these findings.
    Keywords: knowledge spillovers, policy instruments, technological distance
    Date: 2022–10–26
  11. By: Wagner, Joachim
    Abstract: This paper uses firm level data from the World Bank Enterprise surveys conducted in 2019 and from the COVID-19 follow-up surveys conducted in 2020 in eight European countries to investigate the link between exporting before the pandemic and firm survival until 2020. The estimated effect of exports is positive and statistically significant ceteris paribus after controlling for various firm characteristics that are known to be related to firm survival. Furthermore, the size of this estimated effect can be considered to be large on average. Exporting helped firms to survive.
    Keywords: Exports, firm survival, COVID-19, World Bank Enterprise Surveys, Robit regression
    JEL: D22 F14 L20 L25 L29
    Date: 2023
  12. By: Adam Malla Issiou (LARDES - Laboratoire d’Analyse et de Recherches sur les Dynamiques Economiques et Sociales (LARDES) - UP - Université de Parakou); Jacob Yabi (LARDES - Laboratoire d’Analyse et de Recherches sur les Dynamiques Economiques et Sociales (LARDES) - UP - Université de Parakou)
    Abstract: The peasant entrepreneur evolves in a very particular context that influences his entrepreneurial spirit and capacities. The objective of this study is to identify the social determinants of the entrepreneurial spirit of rural farmers. The study conducted on 293 farmers in Borgou shows that social norms, the family environment, the personal attributes of the farmer, and the mechanisms put in place to promote the development of agro-economic activities are all factors that influence either positively or negatively the entrepreneurial spirit and skills of farmers.
    Abstract: L'entrepreneur paysan évolue dans un contexte très particulier qui influence son esprit et ses capacités entrepreneuriales. L'objectif de cette étude est d'identifier les facteurs déterminants sociaux de l'esprit entrepreneurial des paysans ruraux. L'étude menées sur 293 paysans dans le Borgou montre que, les normes sociales, le cadre familial, les attributs personnels du paysan, et les mécanismes mis en place pour favoriser le développement des activités agroéconomiques sont autant de facteurs qui influencent soient positivement ou négativement l'esprit et les compétences entrepreneuriales des paysans.
    Keywords: Entrepreneurship in Benin Entrepreneurship in Africa Determinants Peasant entrepreneurship Rural entrepreneurship Agricultural entrepreneurship Entrepreneuriat au Bénin Entrepreneuriat en Afrique Déterminants Entrepreneuriat paysans Entrepreneuriat rural Entrepreneuriat agricole, Entrepreneurship in Benin, Entrepreneurship in Africa, Determinants Peasant entrepreneurship, Rural entrepreneurship, Agricultural entrepreneurship Entrepreneuriat au Bénin, Entrepreneuriat rural, Entrepreneuriat en Afrique, Déterminants Entrepreneuriat paysans, Entrepreneuriat agricole
    Date: 2023–04–01
  13. By: Philippe Aghion; Antonin Bergeaud; Matthieu Lequien; Marc J. Melitz; Thomas Zuber
    Abstract: We decompose the "China shock" into two components that induce different adjustments for firms exposed to Chinese exports: an output shock affecting firms selling goods that compete with similar imported Chinese goods, and an input supply shock affecting firms using inputs similar to the imported Chinese goods. Combining French accounting, customs, and patent information at the firm-level, we show that the output shock is detrimental to firms' sales, employment, and innovation. Moreover, this negative impact is concentrated on low-productivity firms. By contrast, we find a positive effect - although often not significant - of the input supply shock on firms' sales, employment and innovation.
    Keywords: Competition shock, patent, firms, import
    Date: 2022–11–30
  14. By: Elias Einio; Josh Feng; Xavier Jaravel
    Abstract: Innovators are intrinsically-motivated individuals who use ideas to create new goods and services. This raises the possibility that their social backgrounds may affect the direction of their innovative activity. Consistent with this "social push" channel, we document that innovators create products that are more likely to be purchased by customers similar to them along observable dimensions including gender, age, and socioeconomic status, both across and within detailed industries. Next, we provide causal evidence that social experience affects the direction of a person's innovative activity. Specifically, being exposed to peers from a lower-income group increases an entrepreneur's propensity to create necessity products, without affecting her rates of entrepreneurship and entrepreneurial income. We incorporate this channel into a general equilibrium model to assess its implications for cost-of-living inequality and long-run growth when there is unequal access to the innovation system.
    Keywords: innovators social background, social push
    Date: 2022–07–13
  15. By: OECD
    Abstract: Ireland is home to a vibrant social enterprise community, active in essential sectors such as health, care, and education, as well as local development and cultural and creative sectors. This report provides an in-depth analysis of social entrepreneurship and social enterprises in Ireland. It identifies the country’s strengths and challenges and provides policy recommendations. An action plan with concrete and actionable measures is also provided to support Ireland in the development of its new national social enterprise policy. Following an overview of the socio-economic landscape (Chapter 1), the report describes factors underpinning social entrepreneurship, social enterprises and the social economy in the context of Ireland (Chapter 2); analyses the institutional and legal framework around social enterprises (Chapter 3); explores conditions and opportunities for access to finance and funding (Chapter 4); navigates developments in access to public and private markets for social enterprises (Chapter 5); looks at the existing state of social impact measurement and data availability on social enterprises (Chapter 6) and concludes with skills and business development for social entrepreneurship (Chapter 7).
    Keywords: local development, policy ecosystem, social economy, social enterprise, social entrepreneurship, social impact, social innovation
    JEL: L31 L33 L38 O35
    Date: 2023–11–16
  16. By: Kim, Minho
    Abstract: After marking the ten-year milestone since the adoption of the SME-suitable industry reservation policy, this study investigates whether the policy has enhanced the competitiveness of SMEs by safeguarding them as intended and offers implications for its future implementation. This SME policy involves the selection of specific products to protect the business territories of SMEs and limit the entry or expansion of large enterprises; however, evidence-based discussions on its effectiveness have been limited. While the production and employment of large businesses decreased after the adoption, the business activities of SMEs did not change much. This reservation policy aimed to "ensure the competitiveness of SMEs through their protection." It successfully fulfilled its protective role by reducing the likelihood of SMEs exiting the market. However, the reservation policy had limited impact in terms of improving their performance or competitiveness. Following the designation of a set of industries (products) reserved for SMEs, the probability of exit for SMEs engaged in the production of those specific products significantly decreased. However, these SMEs did not show significant differences compared to other product producers in terms of most performance and input indicators. The industry-level analysis shows that the policy contributed little to the performance of overall industries to which the designated products belong. The disappointing outcomes of the policy's stringent measures highlight its limited effectiveness, as the restrictions on the expansion or entry of large enterprises did not lead to significant improvements in the performance of SMEs. Based on the findings, it is recommended to suspend new applications for the designation of SME-suitable industries and gradually phase out the already designated reserved industries. In any business field, when there is greater uncertainty about future market restrictions, firms are less incentivized to engage in that market and invest in domestic production facilities. A policy that restricts production activity in a specific business area solely based on firm size may inadvertently undermine the efficiency of resource allocation in the broader economy. Instead of protecting specific business areas, a win-win policy between SMEs and large firms should prioritize providing effective support for the growth of capable SMEs through appropriate regulatory measures to address anti-competitive and unfair practices.
    Date: 2022
  17. By: Henrekson, Magnus (Research Institute of Industrial Economics (IFN)); Sandström, Christian (Jönköping International Business School, Jönköping, Sweden); Stenkula, Mikael (Research Institute of Industrial Economics (IFN))
    Abstract: This paper integrates findings from several different case studies on Mission-Oriented Innovation Policies (MOIPs) and makes use of existing literature to briefly describe three other missions: The War on Cancer, homeownership in the United States, and the Swedish Million Program. Together with the analyses in the contributions in the volume Moonshots and the New Industrial Policy: Questioning the Mission Economy, seven takeaways regarding mission-oriented innovation policies are developed and described: 1) wicked problems cannot be solved through missions, 2) politicians and government agencies are not exempt from self-interest, 3) MOIPs are subject to rent-seeking and mission capture, 4) policymakers lack information to design MOIPs, 5) MOIPs distort competition, 6) government support programs distort incentives and result in moral hazard, and 7) MOIPs ignore opportunity costs. These seven takeaways are illustrated using the cases described in this essay and in other contributions in the above-mentioned volume.
    Keywords: Mission-oriented policies; Innovation policy; New industrial policy; Moonshots; Rent seeking; Public choice
    JEL: H50 L26 L52 O31 O38 P16
    Date: 2023–11–06
  18. By: Bridget Kauma; Giordano Mion
    Abstract: We propose a new data resource that attempts to overcome limitations of standard firm-level datasets for the UK (like the ARD/ABS) by building on administrative data covering the population of UK firms with at least one employee. We also construct a similar dataset for France and use both datasets to: 1) Provide some highlights of the data and an overall picture of the evolution of aggregate UK and French productivity and markups: 2) Analyse the spatial distribution of productivity in both countries at a fine level of detail - 228 Travel to Work Areas (TTWAs) for the UK and 297 Zones da'emploi (ZEs) for France - while focusing on the role of economic density. Our findings suggest that differences in firm productivity across regions are magnified in the aggregate by an increasing productivity return of density along the productivity distribution.
    Keywords: firm-level dataset, merging, BSD, FAME, VAT, FICUS, FARE, productivity, markups, UK, France, regional disparities, density
    Date: 2023–11–01
  19. By: Arnault Morisson (Institute of Geography [Bern] - University of Bern); Isabelle Liotard (CEPN - Centre d'Economie de l'Université Paris Nord - LABEX ICCA - UP13 - Université Paris 13 - Université Sorbonne Nouvelle - Paris 3 - CNRS - Centre National de la Recherche Scientifique - UPCité - Université Paris Cité - Université Sorbonne Paris Nord - CNRS - Centre National de la Recherche Scientifique - Université Sorbonne Paris Nord); Valérie Revest (Iaelyon - Iaelyon School of Management - UJML - Université Jean Moulin - Lyon 3 - Université de Lyon)
    Abstract: There is an emerging consensus that innovation policies must be geared towards solving societal challenges. The policy complexity of the third generation of innovation policy (TGIP), however, puts less-developed European regions at risk of being left behind from this novel policy paradigm due to lower institutional and governance capacities. Building on the concept of a small wins strategy that focuses on small-scale and bottom-up initiatives that are guided by a shared mission to address wicked problems, the article's methodology uses expert interviews, examples of challenge prizes, and desk research to explore whether inducement prizes can potentially engage less-developed regions (LDRs) in TGIP to address place-based societal challenges through a small wins strategy. The article introduces the concept of a challenge-oriented regional prize (CORP) as a stepping-stone policy tool to engage LDRs in TGIP through a small wins strategy, namely regarding issues of directionality, legitimacy, responsibility, and strategic orientation. CORPs are, however, not a silver bullet policy tool for LDRs to engage in TGIPs due to their design and implementation constraints.
    Keywords: inducement prizes, societal challenges, open innovation, regional policy, mission-oriented innovation policy
    Date: 2023
  20. By: OECD
    Abstract: This paper resents a measurement framework aiming to support the collection of comprehensive and internationally comparable quantitative and qualitative information on governmental innovation support programmes and instruments. It proposes a taxonomic system with definitions, classifications and reporting conventions aligned with OECD and other international standards. The framework is intended to support future OECD measurement efforts in this area and the analysis of innovation support portfolios within and across countries.
    Keywords: Business, Innovation, Public support, R&D, technology
    JEL: H50 H60 O30 H25
    Date: 2023–11–20
  21. By: Bottasso, Anna (University of Genoa); Conti, Maurizio (University of Genoa); Ferrara, Antonella Rita (University of Calabria); Robbiano, Simone (University of Eastern Piedmont)
    Abstract: The focus of this study is to assess the causal impact of the connection of a local area to a high-speed rail network (HSR) on firms' total factor productivity (TFP). The quasi-random location of the HSR station in the Italian city of Reggio Emilia is exploited in a Difference-in Differences (DiD) research design applied to a large sample of firms, observed over the period 2010-2018. The results suggest that the opening of the HSR station improved treated firms' TFP of about 5%; in particular, such effect is larger for firms closer to the HSR station and slightly increases over the sample period. We also find that the impact of the connection to the HSR station is heterogeneous across industries and depends on firms' size and past productivity. Overall results are robust to a large number of sensitivity checks and falsification tests.
    Keywords: transport infrastructure, Difference-in-Differences, total factor productivity
    JEL: C50 D24 L92 R30
    Date: 2023–11
  22. By: Vergara, Sebastian
    Abstract: Industrial and innovation policies are gaining additional traction, becoming crucial aspects of many governments’ toolkits to support innovation, build resilience, and accelerate the green energy transition. There are, however, enormous disparities across economies in their capacity to implement industrial policies, particularly those to support science, technology and innovation. Most developed countries, and some that are developing, are implementing bold, ambitious, and long-term innovation policies towards strengthening technological capabilities, bolstering R&D investments, and supporting advanced manufacturing and green energies. Amid lack of fiscal space and vulnerable fiscal frameworks, institutional deficiencies, and weak innovation ecosystems, developing countries –particularly in Africa and Latin America and the Caribbean– face enormous challenges to implement strategic innovation policies. Under the current economic, financing, and institutional conditions and policy trends, the technological divide across economies could widen even further in the coming years, limiting the progress of developing countries towards the SDGs and leaving many of them further behind.
    Keywords: Industrial policy, innovation policies, R&D investments, technological divide
    JEL: O10 O3
    Date: 2023–11
  23. By: Ms. Zeina Hasna; Ms. Florence Jaumotte; Jaden Kim; Samuel Pienknagura; Gregor Schwerhoff
    Abstract: Innovation in low-carbon technologies (LCTs), which is essential in the fight against climate change, has slowed in recent years. This Staff Discussion Note shows that a global climate policy strategy can bolster innovation in, and deployment of, LCTs. Countries that expand their climate policy portfolio exhibit higher (1) climate-change-mitigation-patent filings, (2) LCT trade flows, and (3) “green” foreign direct investment flows. Importantly, boosting innovation in, and deployment of, LCTs yields medium-term growth, which mitigates potential costs from climate policies. This note stresses the importance of international policy coordination and cooperation by showcasing evidence of potential climate policy spillovers.
    Keywords: Low-carbon technologies; green innovation; technological diffusion and deployment; environmental policies; economic performance; portfolio exhibit; green FDI inflow; Policy implication; LCT trade; policy coordination; Climate policy; Foreign direct investment; Emerging and frontier financial markets; Climate change; Global
    Date: 2023–11–06

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