|
on Small Business Management |
|
Issue of 2024–12–02
seventeen papers chosen by João Carlos Correia Leitão, Universidade da Beira Interior |
| By: | Christoph Koenig (DEF, University of Rome "Tor Vergata"); Letizia Borgomeo (Research Department, Intesa Sanpaolo); Martina Miotto (DEM, University of Padova) |
| Abstract: | We study the impact of a government subsidy program in Italy targeted at R&D-intensive projects presented by high-tech startups in 2009. Using the score assigned by the scientific commission to each project, we employ a Regression Discontinuity Design to study how the subsidy affected successful firms’ innovation activity and performance over more than 10 years. We show that the subsidy led to substantial increases in intangible assets and had a lasting positive effect on various dimensions of firm performance. Innovation as measured by patents did not respond to the subsidy. |
| Keywords: | R&D subsidies, High-tech startups, Innovation policy, Firm performance |
| JEL: | D22 G38 L52 O31 O34 O38 |
| Date: | 2024–10–31 |
| URL: | https://d.repec.org/n?u=RePEc:rtv:ceisrp:585 |
| By: | Adela Luque; Vitaliy Novik |
| Abstract: | Nonemployers, businesses without employees, account for most businesses in the U.S. yet are poorly understood. We use restricted administrative and survey data to describe nonemployer dynamics, overall performance, and performance by demographic group. We find that eventual outcome – migration to employer status, continuing as a nonemployer, or exit – is closely related to receipt growth. We provide estimates of employment creation by firms that began as nonemployers and become employers (migrants), estimating that relative to all firms born in 1996, nonemployer migrants accounted for 3-17% of all net jobs in the seventh year after startup. Moreover, we find that migrants’ employment creation declined by 54% for the cohorts born between 1996 to 2014. Our results are consistent with increased adjustment frictions in recent periods, and suggest accessibility to transformative entrepreneurship for everyday Americans has declined. |
| Keywords: | nonemployers, business owner demographics, nonemployer transition to employer, business dynamism, startups, entrepreneurship |
| JEL: | L21 L25 L26 D22 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:cen:wpaper:24-61 |
| By: | Timothy Wojan |
| Abstract: | The Annual Business Survey (ABS) as the replacement for the Survey of Business Owners (SBO) serves as the principal data source for investigating business ownership of minorities, women, and immigrants. As a combination of SBO, the innovation questions formerly collected in the Business R&D and Innovation Survey (BRDIS), and an R&D module for microbusinesses with fewer than 10 employees, ABS opens new research opportunities investigating how ownership demographics are associated with innovation. One critical issue that ABS is uniquely able to investigate is the role that diversity among ownership teams plays in facilitating innovation or intermediate innovation outcomes in R&D-performing microbusinesses. Earlier research using ABS identified both demographic and disciplinary diversity as strong correlates to new-to-market innovation. This research investigates the extent to which the various forms of diversity also impact tangible innovation related intermediate outcomes such as the awarding of patents or securing venture capital financing for R&D. The other major difference with the earlier work is the focus on R&D-performing microbusinesses that are an essential input to radical innovation through the division of innovative labor. Evidence that disciplinary and/or demographic diversity affect the likelihood of receiving a patent or securing venture capital financing by small, high-tech start-ups may have implications for higher education, affirmative action, and immigration policy. |
| Keywords: | Split-sample, false discovery, self-reported innovation, women and minority owned business, hypothesis testing |
| JEL: | O3 J15 J16 C12 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:cen:wpaper:24-62 |
| By: | Maximiliano Machado (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Carlos Bianchi (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía) |
| Abstract: | A large body of literature has identified positive persistence effects of innovation in firms located in developed countries. However, this is not the rule in developing economies. This article adds to this topic by analysing the short- and medium-term innovation persistence in Uruguayan firms during the recent period of expansion of the innovation policies in this country. Using a panel data set from the Uruguayan Innovation Survey 2007–2018, we run parametric and nonparametric estimations of firms’ innovation persistence in manufacturing and service sectors. Our findings indicate that innovation is an uneven, even erratic, process. Contrary to most of the extant research on the topic, we find mostly negative persistence effects of outcome innovation (both product and process) in the short term and positive persistence effects of R&D and innovation activities based on external knowledge acquisition (input innovation) in the medium term. Moreover, we observe positive effects of public support on both input and outcome innovation in the short term but no effects in the medium term. We discuss timing and coordination challenges for innovation policies in Uruguay, and the applicability of our findings to developing countries as an alternative to the extended interpretation of innovation as a self-efficient process. |
| Keywords: | Innovation input, Innovation persistence, Innovation outcome, Policy mix |
| JEL: | O31 O32 L25 C01 |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:ulr:wpaper:dt-06-24 |
| By: | Gong, Huiwen (University of Stavanger); Hassink, Robert (Kiel University) |
| Abstract: | In regional studies and economic geography, interest in regional economic resilience and regional innovation policy has steadily increased in recent decades. Although these two perspectives appear to be closely related, relatively little research has elaborated on the interrelationships between them. In this chapter, we take stock of the current two key conceptual extensions of the work on regional economic resilience, i.e., 1) the simultaneous consideration of regional and value chain resilience and 2) the discussion on transformative resilience and the normative turn on regional innovation policy in economic geography and beyond. Overall, we find that the shift toward more sustainable and inclusive development is increasingly being advocated by scholars working on regional resilience or regional innovation policy, leading to increased interest in new concepts such as "transformative resilience" and "challenge-oriented/transformative regional innovation policy" in the respective research fields. However, there is relatively little evidence on how regional resilience that is transformative in nature (e.g., transformative resilience) can be fostered by the new generation of regional innovation policy and how the increasing frequency of shocks of all kinds requires new thinking in regional innovation policy. We therefore suggest four promising avenues for future research that link the hitherto largely isolated perspectives of regional resilience and regional innovation policy to explain regional economic change in the post-crisis period. |
| Keywords: | regional innovation policy; regional resilience; transformative resilience; economic geography |
| JEL: | O30 O38 R10 |
| Date: | 2024–11–12 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:lucirc:2024_015 |
| By: | Anton-Tejon, Marcos; Barge-Gil, Andrés; Albahari, Alberto |
| Abstract: | The interest in regional innovation policies has increased in recent years. Science and Technology Parks (STPs) are one of the most widespread regional innovation policies worldwide. They are considered a catalyst for regional innovation because they constitute a source of knowledge spillovers and a mechanism for knowledge transfer. The aim of this work is to evaluate the effect of the adoption of the STP policy on regional innovation performance. To this end, we build a provincial dataset for Spain covering 37 years and implement a difference-in-differences approach taking advantage of the staggered adoption of the STP policy and the fact that some provinces do not have an STP yet. The main results show that STPs increase provincial patents by 49.8% in years 6-10 after the adoption of the policy and by 79.7% in years 11-15.This result is robust to different assumptions and methodological choices. In addition, we find that the increase in patents does not come at the cost of lower patent quality, that STPs perform similarly in more or less advanced provinces, and that approximately 57% of the effect comes through STP spillovers. |
| Keywords: | Science and Technology Parks; innovation policy evaluation; regional effects; spillovers; patents; diff-in-diff |
| JEL: | O30 O31 O32 O38 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:122467 |
| By: | Farzana MUNSHI (Brac University, Dhaka, Bangladesh); Ahsan SENAN (Brac University, Dhaka, Banglades); K.M. Arefin KAMAL (Brac University, Dhaka, Banglades) |
| Abstract: | Agriculture and cottage, micro, small, and medium-sized enterprises (CMSMEs) – the two critically important sectors for pro-poor and inclusive growth in Bangladesh – were severely affected by the coronavirus disease (COVID-19) pandemic and the subsequent lockdowns. Supply chains were interrupted, jobs were lost, and businesses were closed. This study identifies the major challenges faced by these two sectors and develops intervention strategies to promote them in the post-pandemic period. This is done through an extensive review of relevant literature, discussions with sector experts, and a survey. Based on the research findings, we recommend some policy interventions, such as greater digitisation and the development of uninterrupted cold-chain infrastructure across the country. We also recommend more supportive policies to scale up start-ups that offer solutions to at least one of the major challenges faced by these two sectors. |
| Keywords: | Agriculture, SMEs, start-ups, Bangladesh, COVID-19 |
| JEL: | Q10 L10 M13 R11 I1 |
| Date: | 2024–07–03 |
| URL: | https://d.repec.org/n?u=RePEc:era:wpaper:dp-2024-20 |
| By: | Anqi Chen |
| Abstract: | Our 2023 Small Business Retirement Survey looks at why some small firms offer a retirement savings plan and others do not. Factors that affect whether small firms offer a plan include firm size, wages, and industry, as well as beliefs on whether it will help attract workers. The main barriers to offering a plan are concerns about the stability/size of the firm and the perceived costs of a plan. Concerns about costs are driven by misperceptions; many firms are unaware of lower-cost options for employers and tax credits. The results also suggest that state auto-IRA programs are more likely to encourage than discourage firms from offering their own plan. |
| Date: | 2024–03 |
| URL: | https://d.repec.org/n?u=RePEc:crr:issbrf:ib2024-07 |
| By: | Di Addario, Sabrina (Bank of Italy); Feng, Zhexin (University of Essex); Serafinelli, Michel (King's College London) |
| Abstract: | This paper presents direct evidence on how firms' innovation is affected by access to knowledgeable labor through co-worker network connections. We use a unique dataset that matches patent data to administrative employer - employee records from "Third Italy" - a region with many successful industrial clusters. Establishment closures displacing inventors generate supply shocks of knowledgeable labor to firms that employ the inventors' previous co-workers. We estimate event-study models where the treatment is the displacement of a "connected" inventor (i.e., a previous coworker of a current employee of the focal firm). We show that the displacement of a connected inventor significantly increases connected inventors' hiring. Moreover, the improved access to knowledgeable workers raises firms innovative activity. We provide evidence supporting the main hypothesized channel of knowledge transfer through firm-to-firm labor mobility by estimating IV specifications where we use the displacement of a connected inventor as an instrument to hire a connected inventor. Overall, estimates indicate that firms exploit displacements to recruit connected inventors and the improved capacity to employ knowledgeable labor within the network increases innovation. |
| Keywords: | social connections, firm-to-firm labor mobility, patents, establishment closure |
| JEL: | J60 O30 J23 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17398 |
| By: | Brian C. Fujiy |
| Abstract: | I causally estimate local knowledge spillovers in R&D and quantify their importance when implementing R&D policies. Using a new administrative panel on German inventors, I estimate these spillovers by isolating quasi-exogenous variation from the arrival of East German inventors across West Germany after the Reunification of Germany in 1990. Increasing the number of inventors by 1% increases inventor productivity by 0.4%. I build a spatial model of innovation, and show that these spillovers are crucial when reducing migration costs for inventors or implementing R&D subsidies to promote economic activity. |
| Keywords: | inventors, research and development, innovation, agglomeration, spillovers |
| JEL: | F16 J61 O4 O31 R12 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:cen:wpaper:24-59 |
| By: | Jonathan Adams; Min Fang; Zheng Liu; Yajie Wang |
| Abstract: | We document key stylized facts about the time-series trends and cross-sectional distributions of AI pricing and study its implications for firm performance, both on average and conditional on monetary policy shocks. We use the universe of online job posting data from Lightcast to measure the adoption of AI pricing. We infer that a firm is adopting AI pricing if it posts a job opening that requires AI-related skills and contains the keyword “pricing.” At the aggregate level, the share of AI-pricing jobs in all pricing jobs has increased by more than tenfold since 2010. The increase in AI-pricing jobs has been broad-based, spreading to more industries than other types of AI jobs. At the firm level, larger and more productive firms are more likely to adopt AI pricing. Moreover, firms that adopted AI pricing experienced faster growth in sales, employment, assets, and markups, and their stock returns are also more sensitive to high-frequency monetary policy surprises than non-adopters. We show that these empirical observations can be rationalized by a simple model where a monopolist firm with incomplete information about the demand function invests in AI pricing to acquire information. |
| Keywords: | artificial intelligence; firms; pricing; jobs; monetary policy; technology adoption; AI |
| JEL: | D40 E31 E52 O33 |
| Date: | 2024–11–01 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedfwp:99052 |
| By: | Abbasiharofteh, Milad (University of Groningen); Kriesch, Lukas (Justus Liebig University Giessen) |
| Abstract: | A twin (a joint green and digital) transition aims to facilitate achieving the Green Deal goals. The interplay between regional capabilities and twin transition market applications remains understudied. This research utilizes Large Language Models to analyze web texts of more than 600, 000 German firms, assessing whether their products contribute to the twin transition. Our findings suggest while AI capabilities benefit the twin transition market applications, clean technological capabilities play a significant role only in highly specialized regions. To facilitate future research and informed policymaking, we provide open access to our developed dataset and AI tools (i.e., the TwinTransition Mapper). |
| Keywords: | Twin transition; TwinTransition Mapper; digital layer; technological capabilities |
| JEL: | C81 C88 O30 O31 |
| Date: | 2024–11–13 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:lucirc:2024_016 |
| By: | G. Atzeni; L. Deidda; P. Arca |
| Abstract: | Using the BEEPS dataset on Eastern European and Central Asian firms, we investigate how the collateral requirements and the cost of credit expected by firms might discourage them from applying for credit. Based on the data we identify four reported discouragement reasons - (A) high probability of rejection, (B) high cost of credit, (C) high cost of application, (D) and other reasons. We develop a simple statistical model to derive the following set of predictions about the impact of expected collateral requirements and cost of credit on discouragement. First, collateral requirements and cost of credit should induce discouragement across all reported reasons. Second, higher expected collateral requirements and cost of credit should have a lower effect when the reported reason is (A). If the firm already fears rejection, a higher collateral requirement or a higher cost of credit should play little role. Third, collateral requirements should have a larger impact when the reported reason is (B). If the firm is discouraged by the high cost of credit rather than the fear of rejection, an increase in the expected collateral requirements becomes more significant as it may add the risk of rejection as an additional concern for the firm. We test these predictions using a multinomial logit model and we find robust evidence that supports all of them. |
| Keywords: | multinomial logit;loans to collateral value;discouraged;denied;Credit rationing;cost of application |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:cns:cnscwp:202417 |
| By: | Astebro, Thomas B. (HEC Paris) |
| Abstract: | This report to the "Investigation on development of the innovation and entrepreneurship climate in Sweden" SOU 2016:72 regards governmental policies for university technology commercialization. It contains a literature review that spans several areas of research addressing the potential effect of changing the allocation of Intellectual Property rights between universities and their employees. There is also some original research; several secondary datasets are re‐analyzed and some primary interview and case data from a few universities are also added. |
| Keywords: | Technology Commercialization; Intellectual Property; Universities; Property Rights; Technology Transfer |
| JEL: | D72 D81 K31 O31 P14 |
| Date: | 2024–02–08 |
| URL: | https://d.repec.org/n?u=RePEc:ebg:heccah:1502 |
| By: | Patrick Krueger; Melanie Tran |
| Abstract: | We construct race/ethnic and nativity status ownership categories for the combined use of the 2012 Survey of Business Owners (SBO) and 2014-2016 Annual Survey of Entrepreneurs (ASE). In this technical report, we discuss the differences and similarities between these datasets, produce metadata in the form of codes that harmonize the SBO and ASE, and improve imputations for non-response observations that address missingness within the datasets. |
| Keywords: | SBO, ASE |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:cen:tnotes:24-08 |
| By: | J. M. L. Chan; H. Qi (Audencia Business School) |
| Abstract: | We study the firm dynamics associated with mergers and acquisitions (M&A) and their implications at the micro and macro levels. Our paper presents three main findings: (i) mergers generate a more fat-tailed firm-size distribution, thereby amplifying granular fluctuations and increasing aggregate volatility; (ii) the impact of mergers depends on strategic market power and endogenous markups; and (iii) under endogenous markups, we provide a novel characterization of the firm size-volatility relationship in which volatility declines disproportionately with size. We build a quantitative model of domestic horizontal mergers and find a sizeable impact of mergers on aggregate volatility using counterfactual analysis. |
| Keywords: | firm-size distribution, mergers and acquisitions, granularity, size-volatility relationship, variable markups |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04719146 |
| By: | Estrin, Saul; Hu, Yuan; Shapiro, Daniel; Zhang, Peng |
| Abstract: | Theory and evidence from developed economies suggests that innovation activities benefit from agglomeration economies associated with urban economic density. However, despite the fact that eighteen of the world’s top twenty cities are in developing countries, we do not know whether agglomeration affects innovation in the same way in developing countries. We propose that, while there are still agglomeration benefits, the development path followed by cities in developing countries also creates significant agglomeration costs and these act to limit innovation. We build a unique database to measure consistently both urban economic density and innovation across a large number of developing countries. Based on geospatial information, we combine data on nightlights at the city level to proxy urban density with information on innovation activity at the firm level. We find that in developing countries, as urban economic density increases, innovation first increases and then begins to decrease beyond a certain point, with the decline being most prominent in the largest cities. That is, the largest cities in developing countries are not able to act as sustainable sources of innovation. Cities in developing countries therefore display different patterns of agglomeration from those documented in the literature focused on developed countries. Our analysis explores the relationship between UN Sustainable Development Goal (SDG) 9 which fosters innovation, and SDG 11 which promotes sustainable and resilient cities. Our results suggest the importance of addressing urban agglomeration costs as a means to facilitate innovative activity. |
| Keywords: | innovation; nightlights; urban agglomeration; sustainable cities; developing countries; World Bank Enterprise Surveys |
| JEL: | J1 |
| Date: | 2024–11–05 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:125983 |