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on Small Business Management |
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Issue of 2024–12–09
fourteen papers chosen by João Carlos Correia Leitão, Universidade da Beira Interior |
| By: | Ho, Sin Yu; Beri, Parfait Bihkongnyuy |
| Abstract: | Although small and medium-scale enterprises (SMEs) finance and technical support have become critical economic development strategies for many countries in Africa and numerous micro-level studies have examined their effects on firm performance, evidence of how SMEs impact economic growth and the causal pathways remains mixed and largely debatable. Based on different strands of the literature, this study hypothesises a nonlinear relationship between SMEs and economic growth. Regressing growth on SME data as measured by the number of newly registered businesses in 40 African countries from 2006 to 2022, we find support for a nonlinear relation of an inverted U-shape. The results suggest that African countries may pursue policies aimed at boosting SME support as a tool for macro-level development. However, the transient effects of SMEs also suggest the need to consider strategies to ensure that its effects remain positive and sustainable over the long run. While policymakers could consider country-specific studies to understand and design innovative strategies to support the SME sector, more research is required on the types of SMEs and the conditions under which they may influence growth in Africa. |
| Keywords: | Small and medium-size enterprises, SMEs, entrepreneurship, economic growth |
| JEL: | M21 O3 O4 O47 P5 P52 |
| Date: | 2024–10–17 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:122552 |
| By: | Iorio, Roberto (CELPE - CEnter for Labor and Political Economics, University of Salerno, Italy); D'Amore, Rosamaria (Link Campus University, Department of Human Sciences); Lubrano Lavadera, Giuseppe (Link Campus University, Department of Human Sciences) |
| Abstract: | Analyzing data from the 2020 Community Innovation Survey for Italy, we study the phenomenon of eco-innovation, that is the introduction of Innovations With Environmental Benefits (IWEBs). We aim to give an idea of the attitude of firms towards the changes deriving from climate change, of the magnitude of ecoinnovation phenomenon in Italy, of the benefits deriving from eco-innovations, of the reasons that induce firms to introduce them. We analyze whether and to what extent the importance attributed to environmental factors is effectively translated in the introduction of IWEBs, if and how the importance given to different motivations for introducing an IWEB is related to the number of benefits it generates. We also study if and how some characteristics of the firms, like sector, size, human capital, have a relationship with the probability to introduce an IWEB, both directly and influencing the motivations related to the eco-innovation. |
| Keywords: | Environmental economics; Eco-innovations; Determinants of innovation |
| JEL: | O31 Q55 Q58 |
| Date: | 2024–11–19 |
| URL: | https://d.repec.org/n?u=RePEc:sal:celpdp:0169 |
| By: | Pedro Bento; Lin Shao; Faisal Sohail |
| Abstract: | The prevalence of entrepreneurs, particularly low-productivity non-employers, declines as economies develop. This decline is more pronounced for women. Relative to men, women are more likely to be entrepreneurs in poor economies but less likely in rich economies. We investigate whether gender gaps in time dedicated to non-market activities, which narrow with development, can account for this pattern. We develop a quantitative framework in which selection into occupations depends on one’s ability and time and features gender-specific distortions and social norms around market work. When we calibrate the model to match cross-country data, we find that differences in social norms are almost entirely responsible for the patterns of gender gaps in both time use and entrepreneurship. Through affecting time use and entrepreneurship, social norms account for a substantial part of cross-country differences in output per worker and firm size and have significant welfare implications for women. |
| Keywords: | Firm Dynamics; Productivity |
| JEL: | J2 L2 O1 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:bca:bocawp:24-43 |
| By: | Cowx, Mary (Arizona State U); Lester, Rebecca (Stanford U); Nessa, Michelle (Michigan State U) |
| Abstract: | We study the tax payment and innovation consequences of limiting the tax deductibility of research and development (“R&D†) expenditures. Beginning in 2022, U.S. companies are required to capitalize and amortize R&D rather than immediately deduct these expenditures. We utilize variation in U.S. firms’ fiscal year ends to test the effects of the R&D tax change in a difference-in-differences framework. We first document that affected U.S. firms’ cash effective tax rates increase by 11.9 percentage points (62%), on average. We then test and find decreases in R&D investment among domestic-only, research-intensive, and constrained firms. In aggregate, these estimates translate to a reduction in R&D of $12.2 billion in the first year among the most research-intensive firms. Further, we observe decreased capital expenditures and share repurchases among affected companies, suggesting that firms also reduced other types of investment and shareholder payout to meet the increased cash tax liability. The paper provides policy relevant evidence about the significant real effects of limiting innovation tax incentives. |
| JEL: | H25 M41 M48 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:ecl:stabus:4192 |
| By: | Subash SASIDHARAN (Indian Institute of Technology Madras, Chennai, India); Shandre THANGAVELU (Sunway University, The University of Adelaide); Ketan REDDY (Indian Institute of Management Raipur, India) |
| Abstract: | In this study, we explore the impact of urban amenities and the global value chain (GVC) participation of Indian firms on their firm performance using firm-level data. The study uses micro-level data matching firms to urban amenities at the district level based on their district location. Using a panel data framework, we observe a positive relationship between urban amenities and the GVC participation of firms on their productivity performance. We also observe a positive impact of GVC participation on the productivity of firms, especially on their total factor productivity. In terms of channels, we observe the GVC impact through educational amenities on the productivity of the firms. This suggests education amenities increase the productive performance of GVC firms. We also observe that financial amenities tend to increase the productive performance of GVC firms. The results of the paper highlight the importance of urban amenities in affecting the productive performance of Indian firms in GVC activities. |
| Keywords: | Amenities Index; Global Value Chains: Manufacturing; TFP |
| JEL: | F14 F15 L6 |
| Date: | 2024–06–18 |
| URL: | https://d.repec.org/n?u=RePEc:era:wpaper:dp-2024-13 |
| By: | Wenxiao WANG (Zhongnan University of Economics and Law); Shandre THANGAVELU (Sunway University, The University of Adelaide) |
| Abstract: | This study examines the relationship between city agglomeration and firm-level performance of global value chains (GVCs) in China. Using a novel dataset of night-time light data and survey data from Chinese manufacturing firms, the dynamic changes of urban agglomeration in China are studied, analysing their impact on firm-level productivity, GVC participation, and GVC upstreamness. The results highlight that the concentration of economic activity in urban areas can lead to productivity gains for firms, especially in the upstream stages of GVCs, which is characterised by higher value-added activities and better access to knowledge and technology. The study also finds that urban agglomeration promotes industrial specialisation and human capital spillovers, further improving the upstreamness of firms in GVCs. Firms in larger cities also tend to be more productive, participate more in GVCs, and are closer to the final demand of GVCs. |
| Keywords: | city agglomeration, global value chains, productivity, upstreamness, GVC participation |
| JEL: | F14 F23 |
| Date: | 2024–06–18 |
| URL: | https://d.repec.org/n?u=RePEc:era:wpaper:dp-2024-14 |
| By: | Cettolin, Elena (Tilburg University, School of Economics and Management); Cole, Kym; Dalton, Patricio (Tilburg University, School of Economics and Management) |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:tiu:tiutis:d9fa5424-4f53-4e02-8cb2-cb4f98c148c9 |
| By: | Foreman-Peck, James; Hannah, Leslie |
| Abstract: | We explore which business forms were predominant in the later Victorian economy and why some forms were more effective among large British manufacturing firms during this period. With a dataset of 483 manufacturing firms in 1881 that either employed at least 1000 or had done so a decade earlier, we find that the great majority were partnerships. Public corporations attained higher capital–labour ratios and stronger employment growth than other business forms. The separation of ownership from control was most effective where it was most thoroughly practised, as by public, in contrast to private, corporations. Engineers were frequently encountered in all business forms and associated with expanding employment. But the large public manufacturing corporations employed almost twice the proportion of engineers and professionals in top management as other enterprises. Family firms, proxied by heirs, were present in management of three-quarters of partnerships but in only one-third of public corporations. Heirs reduced the employment growth of the firm, whereas engineers boosted it. Lords, mayors, and landed wealth in management were also associated with faster employment growth of enterprises. |
| Keywords: | business performance; corporations; engineers; manufacturing; partnerships; Victorian economy |
| JEL: | J1 |
| Date: | 2024–11–03 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:126037 |
| By: | Vutha HING (University of Adelaide, Australia); Shandre Mugan THANGAVELU (Sunway University, Kuala Lumpur, University of Adelaide, Australia) |
| Abstract: | This paper examines the effects of servicification on productivity from the perspectives of service inputs (demand-side) and service outputs (supply-side) for firms in Cambodia. The empirical analysis adopts the firm-level data from the 2014 Inter-censal Economic Survey of Cambodia. The unique data contain a vast array of annual corporate information and allow us to differentiate between the share of service input to total inputs (our first proxy of servicification) and the share of service revenues to total output (another proxy of servicification). The empirical analysis examines the productivity effects of servicification controlling for firm heterogeneity, such as year of operation, foreign ownership, registration, female manager, and skill intensity. |
| Keywords: | servicification, productivity, skill intensity, firm-level analysis |
| JEL: | D24 |
| Date: | 2024–05–31 |
| URL: | https://d.repec.org/n?u=RePEc:era:wpaper:dp-2024-07 |
| By: | Predrag Vukovi? (Faculty of Teacher Education, University of Zagreb); Ksenija Vukovi? (Faculty of Organization and Informatics, University of Zagreb) |
| Abstract: | In this article, we explore the possibility of using the role-playing method at the pre-school and university level of entrepreneurship education. Our assumption is that an entrepreneurial person can be created through entrepreneurial education. The learning process should be a vehicle for preparing students for interaction with the community, developing democratic and entrepreneurial attitudes and behavior, and encouraging the productivity of student learning activities. Our research approach is qualitative, and has two parts: one part of the research is interviews with preschool teachers, and the second part is a case study at a university program. An example of a case study shows that through role-playing (round tables) we effectively achieve learning outcomes in three main learning domains: affective (attitudes towards entrepreneurial values and entrepreneurship), cognitive (knowledge and information about accessing necessary entrepreneurial resources such as financial capital) and behavioral (self-efficacy required for entrepreneurial practice). The empirical findings obtained from interviews with preschool show three key themes that came to light during the material analysis process when examining what helps and inhibits an entrepreneurial learning environment: active engagement, a purposeful learning environment, and a welcoming environment. |
| Keywords: | Role-playing method, Qualitative approach, Entrepreneurial education, Learning activities |
| JEL: | L26 A21 A23 |
| URL: | https://d.repec.org/n?u=RePEc:sek:iacpro:14616335 |
| By: | Phouphet KYOPHILAVONG (National University of Laos); Shandre Mugan THANGAVELU (Sunway University, University of Adelaide); Inpaeng SAYVAYA (Champasack University) |
| Abstract: | This paper examines the effects of urban amenities on the probability of firms exporting and firm productive performance in the Lao People’s Democratic Republic (Lao PDR). A logit model was used, finding that urban amenities have a positive and statistically significant effect on firm productivity. However, the results do not indicate any impact on the probability of firms exporting. Based on these results, both the government and private sector should invest more in improving urban amenities to facilitate efficient business operations and to enhance firm competition in global markets. In addition, the government should invest more in human capital and production facilities, especially in information and communications technology, to increase firm performance as well as the probability that they will export. |
| Keywords: | productivity, urban amenities, exporting |
| JEL: | O12 L21 L11 D24 |
| Date: | 2024–06–18 |
| URL: | https://d.repec.org/n?u=RePEc:era:wpaper:dp-2024-11 |
| By: | Villalba, Maria Luisa; Spinola, Danilo; Ruiz, Walter |
| Abstract: | This article explores the coevolutionary dynamics of immature innovation systems (IMIS), focusing on the role of marginalized agents often excluded from Conventional Innovation Systems (CIS). Marginalized agents, such as informal entrepreneurs or low-resource communities, are key actors in addressing local challenges but are typically overlooked in mainstream innovation processes, making it crucial to understand how they can be integrated into broader systems. Using an Agent-Based Model (ABM) based on Villalba (2023) and Ruiz et al. (2016), we examine how interactions between agents with different innovation and inclusion capabilities drive system evolution. The model integrates learning and unlearning processes, allowing agents to adapt and build capabilities over time. Through simulations that vary social thresholds, agent configurations, NOPI (Needs, Opportunities, Problems and Ideas) complexity, and the presence or absence of learning, we find that while higher social thresholds and complex NOPIs foster agent specialization, they can limit the inclusion of marginalized agents. Conversely, the absence of learning results in system stagnation despite increased short-term inclusion. By adopting a system-wide perspective, this paper contributes to the literature on innovation systems by analyzing how the relationships between marginalized and conventional actors influence inclusion dynamics. Our ABM captures the complex interplay of inclusion, coevolution, and capability complementarity within IMIS, offering deeper insights into how marginalized agents drive inclusive innovation and emphasizing the importance of fostering both innovation and inclusion capabilities for sustainable, equitable outcomes. |
| Keywords: | Coevolution; Heterogeneous agents; Immature innovation system; Developing countries; Excluded agents |
| Date: | 2024–11–08 |
| URL: | https://d.repec.org/n?u=RePEc:akf:cafewp:31 |
| By: | Campiglio, Emanuele; Spiganti, Alessandro; Wiskich, Anthony |
| Abstract: | Access to finance is a major barrier to clean innovation. We incorporate a financial sector in a directed technological change model, where research firms working on different technologies raise funding from financial intermediaries at potentially different costs. We show that, in addition to a rising carbon tax and a generous but short-lived clean research subsidy, optimal climate policies include a clean finance subsidy directly aimed at reducing the financing cost differential across technologies. The presence of an endogenous financing experience effect induces stronger mitigation efforts in the short-term to accelerate the convergence of heterogeneous financing costs. This is achieved primarily through a carbon price premium of 39% in 2025, relative to a case with no financing costs. |
| Keywords: | carbon tax; endogenous growth; green financial policy; innovation policy; low-carbon transition; optimal climate policy; sustainable finance |
| JEL: | H23 O31 Q55 Q58 G18 |
| Date: | 2024–11–30 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:126063 |
| By: | Sirisuhk Rakthin (College of Management, Mahidol University); Trin Thananusak (College of Management, Mahidol University); Ruilin Zhu (Lancaster University Management School, Lancaster University); Nay Chi Khin Khin Oo (Martin de Tours School of Management and Economics, Assumption University); Prattana Punnakitikashem (College of Management, Mahidol University) |
| Abstract: | This research delves into the remarkable resilience and adaptability of born-global firms in the face of a crisis of unprecedented magnitude, namely the COVID-19 pandemic. Born-global firms, distinguished by their global orientation from inception, have gained prominence in today's interconnected world. Despite extensive previous research on born-global firms, current literature on the subject lacks substantial insights into how these entities have coped with crisis and disruption, in particular, the COVID-19 pandemic. Drawing on a case study of a born-global medical tourism facilitator, this research unveils three pivotal elements in their survival and adaptation during the pandemic. Firstly, their adaptable work model, featuring a hybrid remote work approach, was instrumental. Secondly, their market-driven strategies enabled them to identify and exploit emerging opportunities. Lastly, the adoption of new digital technologies was pivotal in facilitating efficient communication, infrastructure upgrades, and virtual operations. This study illuminates how a born-global firm navigated the pandemic, and thus offers insights for other businesses to enhance their adaptability and sustainability in times of crisis. |
| Keywords: | Born-global, Hybrid remote work model, Market-driven capabilities, Technology adoption, Strategic adaptation, Business development |
| JEL: | M10 M16 L20 |
| URL: | https://d.repec.org/n?u=RePEc:sek:iacpro:14616383 |