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on Small Business Management |
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Issue of 2025–02–17
eightteen papers chosen by João Carlos Correia Leitão, Universidade da Beira Interior |
| By: | D'Allesandro, Francesco; Santarelli, Enrico; Vivarelli, Marco |
| Abstract: | In this paper we integrate the insights of the Knowledge Spillover Theory of Entrepreneurship and Innovation (KSTE+I) with Schumpeter's idea that innovative entrepreneurs creatively apply available local knowledge, possibly mediated by Marshallian, Jacobian and Porter spillovers. In more detail, in this study we assess the degree of pervasiveness and the level of opportunities brought about by AI technologies by testing the possible correlation between the regional AI knowledge stock and the number of new innovative ventures (that is startups patenting in any technological field in the year of their foundation). Empirically, by focusing on 287 Nuts-2 European regions, we test whether the local AI stock of knowledge exerts an enabling role in fostering innovative entry within AI-related local industries (AI technologies as focused enablers) and within non AI-related local industries, as well (AI technologies as generalised enablers). Results from Negative Binomial fixed-effect and Poisson fixed-effect regressions (controlled for a variety of concurrent drivers of entrepreneurship) reveal that the local AI knowledge stock does promote the spread of innovative startups, so supporting both the KSTE+I approach and the enabling role of AI technologies; however, this relationship is confirmed only with regard to the sole high-tech/AI-related industries. |
| JEL: | O33 L26 |
| Date: | 2024–08–12 |
| URL: | https://d.repec.org/n?u=RePEc:unm:unumer:2024016 |
| By: | Gabor Katay (European Commission, Directorate†General for Economic and Financial Affairs); Palma Filep-Mosberger (Magyar Nemzeti Bank (Central Bank of Hungary)); Francesco Tucci (Sapienza Università di Roma) |
| Abstract: | The paper evaluates the impact of the European Commission’s Seventh Framework Programme (FP7) grants on profit†oriented firms’ post†treatment performance. Using a quasi†experimental design and a dataset covering applicants from 46 countries, we find that FP7 grants increase firms’ sales and labour productivity by about 18%. However, there is no significant impact on employment levels, pointing to potential growth barriers that prevent firms from scaling production despite improved productivity. The effectiveness of these grants varies significantly based on factors such as financial constraints, project risk profiles, market structure, and the innovation environment. Smaller, less productive firms with tighter financial constraints in technologyintensive sectors operating in concentrated markets and favourable innovation environments, particularly those undertaking longer and riskier projects, tend to benefit more. |
| Keywords: | EU funds for research and innovation; firm productivity; regression†discontinuity design. |
| JEL: | C31 G28 H57 O31 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:mnb:wpaper:2025/1 |
| By: | Caldarola, Bernardo (Mt Economic Research Inst on Innov/Techn, RS: GSBE other - not theme-related research); Fontanelli, Luca |
| Abstract: | Recent empirical evidence finds positive associations between digitalisation and industry concentration. However, ICT may not be all alike. We investigate the effect of the purchase of cloud services on the long run size growth rate of French firms. Our findings suggest that cloud services positively impact firm growth rates, with smaller firms experiencing more significant benefits compared to larger firms. This evidence suggests that the diffusion of cloud technologies may help mitigate concentration in the era of the digital transition by favouring the digitalisation and growth of smaller firms, especially when the cloud services provided are more advanced. |
| JEL: | L20 L25 O33 |
| Date: | 2024–09–24 |
| URL: | https://d.repec.org/n?u=RePEc:unm:unumer:2024026 |
| By: | Oikawa , Keita (Economic Research Institute for ASEAN and East Asia); Iwasaki , Fusanori (Economic Research Institute for ASEAN and East Asia); Sawada, Yasuyuki (University of Tokyo); Shinozaki, Shigehiro (Asian Development Bank) |
| Abstract: | The coronavirus disease (COVID-19) pandemic profoundly impacted people’s lives, social activities, and businesses. It particularly affected micro, small, and medium-sized enterprises (MSMEs), which account for the vast majority of firms and most of the labor force. Compared to larger firms, MSMEs were less able to absorb the pandemic’s shocks, both in developed and developing economies. While digital technologies, such as e-commerce platforms, were often seen as effective tools for businesses where in-person communications are restricted, they did not guarantee the success of MSMEs. An Indonesian study showed that adopting digital technologies did not always result in positive business outcomes for MSMEs during the early stages of the pandemic (Oikawa et al. 2024a). This paper investigates whether e-commerce use in the Philippines strengthened MSME performance during the pandemic, based on a unique Asian Development Bank dataset on the impact of COVID-19 on Philippine businesses from 2020 to 2021. The findings reveal that internet or e-commerce use did not lead to better MSME outcomes during the strict lockdown in March 2020. In fact, performance sometimes worsened. However, by August 2020, the negative effects had lessened, and by March 2021, one year into the pandemic, a positive impact had emerged. These results are consistent with the Indonesia study by Oikawa et al (2024a). |
| Keywords: | digitalization; digital financial services; access to finance; SME development; SME policy; Philippines |
| JEL: | D22 G20 L20 L50 |
| Date: | 2025–02–04 |
| URL: | https://d.repec.org/n?u=RePEc:ris:adbewp:0767 |
| By: | Damioli, Giacomo; Van Roy, Vincent; Vértesy, Dániel; Vivarelli, Marco |
| Abstract: | Artificial intelligence (AI) is emerging as a transformative innovation with the potential to drive significant economic growth and productivity gains. This study examines whether AI is initiating a technological revolution, signifying a new technological paradigm, using the perspective of evolutionary neo-Schumpeterian economics. Using a global dataset combining information on AI patenting activities and their applicants between 2000 and 2016, our analysis reveals that AI patenting has accelerated and substantially evolved in terms of its pervasiveness, with AI innovators shifting from the ICT core industries to non-ICT service industries over the investigated period. Moreover, there has been a decrease in concentration of innovation activities and a reshuffling in the innovative hierarchies, with innovative entries and young and smaller applicants driving this change. Finally, we find that AI technologies play a role in generating and accelerating further innovations (so revealing to be “enabling technologies”, a distinctive feature of GPTs). All these features have characterised the emergence of major technological paradigms in the past and suggest that AI technologies may indeed generate a paradigmatic shift. |
| JEL: | O31 O33 |
| Date: | 2024–08–13 |
| URL: | https://d.repec.org/n?u=RePEc:unm:unumer:2024018 |
| By: | Dirk Czarnitzki; Robin Lepers; Maikel Pellens |
| Abstract: | The circular economy represents a systematic shift in production and consumption, aimed at extending the life cycle of products and materials while minimizing resource use and waste. Achieving the goals of the circular economy presents firms with the challenge of innovating new products, technologies, and business models, however. This paper explores the role of artificial intelligence as an enabler of circular economy innovations. Through an empirical analysis of the German Community Innovation Survey, we show that firms investing in artificial intelligence are more likely to introduce circular economy innovations than those that do not. Additionally, the results indicate that the use of artificial intelligence enhances firms’ abilities to lower production externalities (for instance, reducing pollution) through these innovations. The findings of this paper underscore artificial intelligence’s potential to accelerate the transition to the circular economy. |
| Keywords: | Circular economy, Innovation, Artificial intelligence |
| Date: | 2025–01–23 |
| URL: | https://d.repec.org/n?u=RePEc:ete:ecoomp:758339 |
| By: | Park , Donghyun (Asian Development Bank); Shin, Kwanho (Korea University) |
| Abstract: | We examine the implications of robots and artificial intelligence (AI) for employment and productivity, using a rich firm-level database from the Survey of Business Activities provided by Statistics Korea. While previous studies have explored the effects of robots and AI separately, we investigate their effects jointly within a unified framework. We deploy propensity score matching to control for firm characteristics, enabling a potential causal interpretation of the differential impacts of robots and AI. We find that the patterns of adopting robots and AI differ significantly across industries. Additionally, although the overall share of firms adopting robots is larger, AI adoption is more concentrated among bigger firms. Our main finding is that, while adopting robots and adopting AI both increase employment, only adopting AI improves labor productivity. However, such productivity gains are accompanied by a decrease in the labor share of income, suggesting a potential shift in value distribution favoring capital income. Furthermore, we find that the immediate impact of adopting both robots and AI is an increase in temporary but not permanent employment. Finally, there is no evidence that firms adopting both robots and AI improve their labor productivity, potentially reflecting a lack of synergy. |
| Keywords: | artificial intelligence; robots; employment; productivity |
| JEL: | D22 J21 J24 O33 O40 |
| Date: | 2025–02–07 |
| URL: | https://d.repec.org/n?u=RePEc:ris:adbewp:0769 |
| By: | Annamaria Fiore |
| Abstract: | The report analyzes labor market developments in Europe, Italy, and Puglia post-COVID-19, highlighting the crucial role of human capital and productive specialization in employment recovery. Based on Eurostat and ISTAT data, the study examines how human resources and innovation stabilized employment rates in hard-hit areas. The report emphasizes the link between employment growth, productive specialization, and tertiary education. In Puglia, high local unit density, entrepreneurship, and qualified human capital drove positive employment trends. The document concludes with recommendations for integrated policies promoting advanced education, continuous training, and entrepreneurship to sustain long-term employment growth. |
| Date: | 2024–11–14 |
| URL: | https://d.repec.org/n?u=RePEc:awg:insrep:ir13 |
| By: | Jacques Mairesse; Pierre Mohnen; Ad Notten |
| Abstract: | This paper reviews the empirical work that has been done over the period 2013-2023 on the topic of innovation and productivity. A visual graph based on keywords shows the main areas that have been investigated. The literature review is organized around the way the link between innovation and productivity has been analyzed, the data that have been used, and the evidence that has been obtained. The paper ends with suggestions of future research on the topic. Ce document passe en revue les travaux empiriques réalisés au cours de la période 2013-2023 sur le thème de l'innovation et de la productivité. Un graphique visuel basé sur des mots-clés montre les principaux domaines qui ont été étudiés. La revue de littérature est organisée autour de la manière dont le lien entre l'innovation et la productivité a été analysé, des données qui ont été utilisées et des preuves qui ont été obtenues. Le document se termine par des suggestions de recherches futures sur le sujet. |
| Keywords: | literature review, productivity, innovation, micro data, Revue de littérature, productivité, innovation, données microéconomiques |
| JEL: | D24 O30 O31 O32 |
| Date: | 2025–02–03 |
| URL: | https://d.repec.org/n?u=RePEc:cir:cirwor:2025s-03 |
| By: | Melissa Chow; Martha Stinson |
| Abstract: | The Business Dynamics Statistics of Coastal Counties (BDS-CC) is a new experimental data product extending the set of statistics published by the Business Dynamics Statistics (BDS) program to provide more detail on businesses operating in coastal regions of the United States. The BDS-CC provides annual measures of employment, the number of establishments and firms, job creation, job destruction, openings, and closings for businesses in Coastal Shoreline (CS), Coastal Non-Shoreline (CNS), and Non-Coastal (NC) counties. Counties are grouped into these categories based on definitions from the National Oceanic and Atmospheric Administration (NOAA). This product allows for comparisons across industries and coastal regions of the impact of natural disasters and other events that affect coastal areas. The BDS-CC series provides annual statistics for 1978 to 2022 for each of the coastal categories by firm size and firm age, initial firm size, establishment size and establishment age, initial establishment size, sector, 3-digit NAICS code, 4-digit NAICS code, urban/rural categories, and various coastal regions. Following a description of the data and methodology, we highlight some historical trends and analyses conducted using these data. |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:cen:wpaper:25-08 |
| By: | Kaushik, Rituparna; Paul, Sourabh Bikas; Sartorello Spinola, Danilo (RS: UNU-MERIT) |
| Abstract: | This article studies the innovation effort in India through the education of corporate board members obtained from prestigious STEM higher education institutes known as the Indian Institute of Technology (IITs). Our primary aim is to enquire whether firms with director/s having an IIT-Bachelors’ degree in their corporate boards positively impact the firm’s innovation effort. To answer this question, we build a novel dataset merging two micro-level databases: CMIE-Prowess (firm innovation) and NSE-Infobase (board of directors' characteristics). Based on the sample of 6151 Indian firms for 2006-2015, we find that overall, having board members with IIT-Bachelor’s qualifications do enhance innovation efforts to some extent. However, the positive effect on innovation effort becomes more robust when the director has a research degree over their IIT- Bachelors’ degree. The paper highlights that when it comes to innovation efforts, the dominant narrative of relying solely on IIT-STE M elite undergraduate education (IIT-Bachelor’s) is insufficient and should also focus on and prioritize research education. |
| JEL: | O31 G30 I23 |
| Date: | 2023–04–17 |
| URL: | https://d.repec.org/n?u=RePEc:unm:unumer:2023014 |
| By: | Wolski, Marcin |
| Abstract: | We examine the relationship between capital structure and carbon intensity in manufacturing firms using a novel dataset that combines information from the EU Emission Trading System with firm-level financial accounts. Our findings indicate that higher financial leverage is associated with lower emission intensity at the firm level, primarily due to long-term debt, suggesting that improving access to such finance is generally conducive to corporate emissions reductions. However, this effect varies along the carbon intensity distribution. For firms with very high carbon intensity, increased leverage is linked to significant reductions in emissions, suggesting that better access to finance can facilitate the adoption of green technologies. Conversely, for firms that are already relatively carbon efficient, the effect disappears. |
| Keywords: | low-carbon transition, climate change, debt finance, financial leverage, EU ETS |
| JEL: | C58 G32 Q51 Q56 Q58 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:eibwps:310333 |
| By: | Bambe, Bao-We-Wal |
| Abstract: | Achieving the Sustainable Development Goals (SDGs) will require significant financing and investment, particularly as growing challenges from climate events highlight the insufficiency of public funds to meet the 2030 Agenda (World Economic Forum 2024). Private capital for low- and middle-income countries (LMICs) surged in recent years, with significant commitments from multilateral development banks (MDBs). However, the financing gap to achieve the SDGs remains sizable, highlighting the need for greater effort to mobilise much larger private capital for sustainable development. In recent years, guarantees have emerged as a key leveraging mechanism. They are designed to mitigate high investment risks to support private capital mobilisation in LMICs. However, despite some progress, guarantees are used sparingly, suggesting considerable scope for increasing their scale, as highlighted by the G20 Independent Expert Group (IEG). This Policy Brief examines whether guarantees can serve as an effective leveraging mechanism for small and medium-sized enterprises (SMEs) in low- and middle-income countries (LMICs). This is especially so because SMEs remain largely hampered by poor access to finance, despite their key role in providing jobs for the local population and contributing to economic growth. Moreover, in the face of climate change, SME adaptation requires new investments in climate-resistant technologies and clean energies, highlighting the need for additional financing amid severe constraints on access to capital. Guarantees can complement other leveraging mechanisms, further easing financing constraints for SMEs in LMICs. Guarantees can absorb some of the risks associated with investment, offering financial institutions greater security. This added security can, in turn, help improve access to capital for SMEs. On the other hand, they can also help catalyse private sector investment in LMICs. Recognising both the potential benefits and short-comings of guarantees, this Policy Brief provides the following policy recommendations on how guarantees could be extended efficiently to the SME sector in LMICs. - Guarantees should be directed at financial institu-tions to mitigate portfolio risk and actively promote lending to small projects or SMEs in high-risk sectors, particularly those with the potential to generate substantial economic, environmental, or social benefits. - Complement guarantees with additional measures to improve SMEs' financial management, enhance risk assessment, and strengthen technical capacity through professional training and advisory services. - Implement partial credit guarantees to require financial institutions to retain a share of the risk, thereby reducing moral hazard and promoting rigorous analyses of borrowers' creditworthiness. Complement these guarantees with conditionalities and monitoring criteria, such as regular reporting, to ensure the incrementality and additionality of guaranteed financing. Enhance the harmonisation of guarantees with other leveraging mechanisms, improve coordination among MDBs and DFIs, and streamline guarantee frameworks to achieve greater efficiency. - Recognise that guarantees alone cannot address structural vulnerabilities and institutional weakness in LMICs; a long-term commitment from decision-makers is essential to improve institutional and economic performance. |
| Keywords: | Guarantees, Multilateral Developemnt Banks, Small and Medium-Sized Enterprises, Low- and Middle-income Countries, 2030 Agenda |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:idospb:309600 |
| By: | Tessmann, Ruben; Elbert, Ralf |
| Abstract: | Standardization is gaining importance for digital platform eco-systems as they try to balance both stability and flexibility of their core as well as their boundary resources. Our knowledge on which factors influence standardization processes in business-to-business (B2B) focused digital platform eco-systems remains limited. Using three B2B platform eco-systems from the cargo transportation and seaport eco-system context, we apply a multiple case study to investigate which factors affect the standardization mode and the standard adoption. Based on 19 interviews and a systematic coding procedure, we identified 24 factors and cluster them into four overarching themes. We show the relatedness between standardization and innovation research, identify standard characteristics as the most important theme of factors and show that standardization has to be seen as a dynamic and interconnected process, as some factors are interdependent but the controllability varies between factors. Lastly, implications of these results and future research directions are discussed. |
| Date: | 2025–01–16 |
| URL: | https://d.repec.org/n?u=RePEc:dar:wpaper:152438 |
| By: | GNAMUS Ales (European Commission - JRC); CHIONCEL Mariana |
| Abstract: | The objective of this report is to investigate the potential for harnessing key features of Transformative Innovation (TI) to improve the design and the implementation of Climate Change Adaptation (CCA) strategies in the specific territory - region Nord-Vest and the city of Cluj-Napoca in Romania.The report belongs to a series of case studies which all draw on the conceptual framework on transformative innovation for better CCA previously defined in the JRC report, that also articulated the methodology for territorial case studies. The series of case studies comprises various biogeographical regions with a variety of climate risks, various institutional contexts, different ranges of population sizes, and demonstrating a diversity of approaches to transformative innovation and CCA, based on empirical analyses. A full list of the case studies is provided in Annex 3. The framework of the analysis against conceptual framework of transformative innovation for better CCA takes the form of an analytical grid, structured into seven dimensions, each of them representing one of the key features of the TI approach where the dimensions are understood as essential conditions for the design and implementation of the transformative CCA strategies. These TI dimensions are as follows: - Directionality; - Articulating instrument portfolios and defining synergies between funding sources; - Ensuring cross-domain synergies; - Increasing breadth and depth of stakeholder involvement; - Setting up effective multi-level governance models; - Making room for experimentation; and - Securing high levels of policy intelligence, learning and strategic capacity. Each section sets out the main questions to be addressed in the territory in relation to its respective transformative innovation feature. This Report provides the findings for the city of Cluj-Napoca and the region of Nord-Vest in Romania, taking into account multilevel governance also at national level, as at November 2023 and is the result of a collaboration between the Joint Research Centre (JRC), DG CLIMA and DG RTD. The revision of the policy documents, of measures introduced and the interviews with the policy makers signposted that despite numerous CCA measures have been put in place in Cluj-Napoca and the Nord-Vest region, lots of actions linked to the established TI for CCA conceptual framework will still need to be put in place in order to assure climate resilience of the territory. While this study proposes numerous specific practical ways forward within each TI dimension, an overall recommendation is that a systematic, quantitative climate risk and adaptation assessments will be needed at various territorial levels in order to make the CCA more transformative. For that aim, the JRC has developed a Self-Assessment Framework that will be thoroughly explained in the upcoming policy brief. |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc138586 |
| By: | de Brauw, Alan; The Anh, Dao; Tho, Pham Thi Hanh |
| Abstract: | The food environment represents the place in which demand for food meets supply—consumers purchase foods in the food environment, while retailers of the food consumers purchase represent the end of the value chain. In many countries, the food environment is undergoing rapid change as economies grow and populations urbanize; a consequence is that a larger share of food consumed is purchased by the end consumer (de Bruin and Holleman 2023). Viet Nam is no different. Viet Nam’s growing and urbanizing economy has, over time, led to a changing food environment. This note focuses on one type of retailer in Viet Nam’s food environment: the small grocery. We define small groceries as stores that are not supermarkets, are not part of a chain, and have a fixed storefront from which they do business on a daily or near daily basis. These stores play a small but important role in Viet Nam’s food environment, particularly in rural areas, and as we will demonstrate, almost all these groceries sell at least one component of a sustainable healthy diet. As a result, what they sell could help play a role in improving the diets of Viet Nam’s population. To focus on learning more about small groceries, this note makes use of two datasets. One is a listing exercise that enumerated all the businesses selling food in sampled wards of three districts: Dong Da, in urban Ha Noi; Dong Anh, which is in peri-urban Ha Noi; and Moc Chau, which is a rural district northwest of Ha Noi. The second survey used the first survey as a sample frame, and was specifically designed to learn about the constraints and opportunities that micro-, small-, and medium-sized enterprises (MSMEs) face in considering selling more healthy foods (Ceballos et al. 2023). Small groceries are one type of business in the food environment, and all can be considered MSMEs. |
| Keywords: | food environment; food consumption; sustainability; nutrition; health; small and medium enterprises; Asia; South-eastern Asia; Vietnam |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:fpr:cgiarp:168651 |
| By: | Pezzoni, M.; Veugelers, Reinhilde; Visentin, Fabiana (RS: GSBE other - not theme-related research, Mt Economic Research Inst on Innov/Techn) |
| Abstract: | This paper investigates how science affects the geographical evolution of technological trajectories. We define a technological trajectory as a series of inventions re-using the same technology, and we follow the geographical development of trajectories by geo-localizing inventors. Following 10, 782 trajectories, we find that technologies with a high scientific content travel longer distances and are more likely to generate new inventors’ clusters than technologies with low scientific content, especially in their growth and maturity phases. |
| JEL: | O30 O33 |
| Date: | 2023–10–16 |
| URL: | https://d.repec.org/n?u=RePEc:unm:unumer:2023036 |
| By: | Jussi Heikkil\"a; Satu Rinkinen; Tero Rantala |
| Abstract: | Intellectual property rights (IPR) and standards are important institutions that by shaping appropriability conditions of companies impact international trade flows and the rate and direction of technological progress and innovation activity. We shed light on microfoundations of IPR and standardization capabilities and explore how companies have developed their IPR and standardization strategies and adapted to related institutional changes in the European Single Market. The analysis of the IPR and standardization strategies of companies active in P\"aij\"at-H\"ame region of Finland, a northern part of the European Union, reveals that only a few companies have explicit IPR and standardization strategies, but several have systematic approaches to following the development of standards and IPR environments in their industries. Companies build dynamic IPR and standardization capabilities and adapt their IPR and standardization strategies to the changing institutional environment via experiential learning. |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2501.16040 |