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on Small Business Management |
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Issue of 2025–09–29
seventeen papers chosen by João Carlos Correia Leitão, Universidade da Beira Interior |
| By: | Olfa Daghsni (RED-ISGG - Recherche, Entreprises et décision - ISGGB - Institut Supérieur de Gestion de Gabès (Université de Gabès)); Jamel Eddine Henchiri (RED-ISGG - Recherche, Entreprises et décision - ISGGB - Institut Supérieur de Gestion de Gabès (Université de Gabès)) |
| Abstract: | The purpose of this research is to ensure the factors that influence the attitude of SMEs towards Islamic banking services. The data of 28 entrepreneurs of SMEs were collected through an interviewer-administered questionnaire using a random sampling technique. This study uses a theoretical model based on the theory of planned behavior. To analyze the data obtained from the questionnaire, exploratory factor analysis techniques are used. The study has found significant impact of the quality of service, knowledge of Islamic finance, religious belief and support for business on the attitude towards Islamic banking, among SMEs in the south- west region of Tunisia. The results identify important factors that Islamic can use to update their strategies to attract potential customers and expand their customer base by adopting innovative financial solutions for small and medium-sized enterprises (SMEs). |
| Keywords: | The South West Region of Tunisia, Attitude, Theory of Planned Behavior, MENA, small business, Tunisia, SME Financing, Mena region, Small And Medium Sized Enterprises |
| Date: | 2025–03–08 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05252681 |
| By: | Drydakis, Nick |
| Abstract: | This study investigates the associations between university-led training in AI business applications and business outcomes among small firms, with a focus on underrepresented entrepreneurs in England, Wales, and Scotland. A total of 121 non-native, disabled, and non-heterosexual entrepreneurs participated in a four-month training programme covering AI applications for communication, finance, project management, and other key business functions. Data were collected before the training (2023) and one year later (2024). Using panel data estimates, the findings indicate that, post-training, firms experienced an increase in digital competencies, which were positively associated with customer satisfaction, entrepreneurs' empowerment, and revenue growth. Notably, interaction effects showed that these associations were significantly strengthened following the training. Additional results reveal that, after the training, firms not only adopted a greater number of AI business applications but also used them more frequently. These behaviours were found to be associated with improvements in business outcomes. The study demonstrates how innovative educational interventions can support entrepreneurs in developing digital competencies within technology-driven environments, thereby enabling more inclusive access to tools and fostering equitable participation in the digital economy. The findings suggest that structured, application-focused training, when clearly aligned with business operations, can accelerate firms' technological adoption and effective use. Continued investment in AI training, sector-specific courses, and practitioner-led learning communities can therefore support small firms and underrepresented entrepreneurs in enhancing their digital competencies and achieving meaningful improvements in performance. The study contributes by developing the AI Business Applications Training Model, reflecting upon theoretical pathways, empirical patterns, and policy implications. |
| Keywords: | AI, AI Business Application Training, Business Education, Small Firms, Digital Competencies, Customer Satisfaction, Entrepreneurs' Empowerment, Revenue Growth, Inclusive Entrepreneurship |
| JEL: | L26 M13 O33 I24 I25 J15 J16 M15 D22 C23 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1670 |
| By: | Lin William Cong; Yao Lu; Hanqing Shi; Wu Zhu |
| Abstract: | We study how exposure to automation affects the nature and level of corporate innovation, which informs how innovation begets innovation. We document that firms with high robot exposure alter their technological focus over time and shift innovative activities towards AI which automation naturally complements through data accumulation. The shift is more pronounced for firms with greater data generation or prior AI-related research experience. Because AI patents are more costly (e.g., in labor input), albeit more general and original, firms with high automation experience a significant rise in R&D expenditure but an initial drop in patent quantity, before benefiting—an innovation “J-Curve.” Our findings not only resolve the puzzle that globally firms invent less despite the greater research effort amidst rising automation, but also provides insights on the heterogeneous paths of innovation, all of which we rationalize in a parsimonious dynamic equilibrium model. |
| JEL: | G30 O36 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34240 |
| By: | Klaus Friesenbichler; Agnes Kügler |
| Abstract: | We study the short- and medium-term extensive and intensive margins of intangible investments in firm growth processes. The intensive and extensive margins of investment are both highly skewed and differ across sectors. Less productive firms are less likely to invest in intangibles, while incorporated firms are more likely to do so. Intangible capital only complements physical capital for a limited number of firms. Intangible investment is positively associated with short-term productivity growth, particularly among firms that consistently invest over time. The medium-term effects on productivity are limited and are largely confined to top-performing firms. We find systematic short-term effects of intangible investment on employment growth. Regular investment patterns correlate with higher employment growth over both time horizons. These results challenge the conventional assumption that intangible capital uniformly enhances firm performance. They also highlight the importance of sustained investment behavior and sectoral context. |
| Keywords: | intangible capital, employment, productivity, investment, firm growth, sample selection, Austria, microdata |
| Date: | 2025–09–17 |
| URL: | https://d.repec.org/n?u=RePEc:wfo:wpaper:y:2025:i:711 |
| By: | Carlo Bottai (University of Milano–Bicocca); Gaétan de Rassenfosse (Ecole polytechnique federale de Lausanne); Emilio Raiteri (Eindhoven University of Technology) |
| Abstract: | Measuring the commercialization of patented inventions remains a key challenge in innovation studies. This paper introduces a novel, web-based method for tracking the commercialization of patented inventions. The method leverages targeted web searches to identify online traces of the commercialization of patented products, offering a scalable alternative to surveys and case studies. We apply this method to patents arising from the U.S. Department of Defense’s Small Business Innovation Research program, linking 3, 070 patents to procurement contracts and assessing their commercialization outcomes. The results indicate that 21.5% of these patents show signs of commercialization, with variations across R&D stages and contract phases. The method provides a systematic way to identify market adoption of patented technologies and can be extended to other contexts where identifying commercialized patents is relevant. |
| Keywords: | government-funded research; invention commercialization; patents; policy evaluation; web-based evidence |
| JEL: | O31 O38 O34 L26 H81 C55 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:iip:wpaper:28 |
| By: | Razan Amine; Qianqian Zhang; Shushanik Hakobyan; Ankita Goel |
| Abstract: | This paper analyzes the major bottlenecks to private sector development in sub-Saharan Africa using novel methods based on firm-level data. Employing both perception-based and proxy-based methodologies, we identify and measure seven key obstacles to development. Our findings reveal significant divergences between firms' perceptions and objective measures of business constraints. While firms frequently cite infrastructure deficiencies as their primary concern, our proxy-based analysis identifies corruption followed by financial constraints as the most severe impediments to firm growth. Furthermore, small and medium-sized enterprises face disproportionate challenges compared to large firms, especially regarding financial access and human capital limitations. These findings underscore the need for targeted, context-specific policy interventions that address the objective constraints facing different types of firms across diverse economic environments in sub-Saharan Africa. |
| Keywords: | Sub-Saharan Africa; private sector development; firm-level data; principal component analysis |
| Date: | 2025–09–19 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2025/188 |
| By: | Christopher Goetz; Henry Hyatt; Zachary Kroff; Kristin Sandusky; Martha Stinson |
| Abstract: | Entrepreneurs are known to be key drivers of economic growth, and the rise of online platforms and the broader “gig economy” has led self-employment to surge in recent decades. Yet the young and small businesses associated with this activity are often absent from economic data. In this paper, we explore a novel longitudinal dataset that covers the owners of tens of millions of the smallest businesses: those without employees. We produce three new sets of statistics on the rapidly growing set of nonemployer businesses. First, we measure transitions between self-employment and wage and salary jobs. Second, we describe nonemployer business entry and exit, as well as transitions between legal form (e.g., sole proprietorship to S corporation). Finally, we link owners to their nonemployer businesses and examine the dynamics of business ownership. |
| Keywords: | entrepreneurship, nonemployer business, dynamics, reallocation, business income |
| JEL: | L26 J63 J21 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:cen:wpaper:25-60 |
| By: | Celiku, Bledi; Ubfal, Diego Javier; Valdivia, Martin |
| Abstract: | This paper estimates the gender gap in the performance of firms in Peru using representative data on both formal and informal firms. On average, informal female-led firms have lower sales, labor productivity, and profits compared to their male-led counterparts, with differences more pronounced when controlling for observable determinants of firm performance. However, gender gaps are only significant at the bottom of the performance distribution of informal firms, and these gaps disappear at the top of the distribution of informal firms and for formal firms. Possible explanations for the performance gaps at the bottom of the distribution include the higher likelihood of small, female-led firms being home-based, which is linked to lower profits, and their concentration in less profitable sectors. The paper provides suggestive evidence that household responsibilities play a key role in explaining the gender gap in firm performance among informal firms. Therefore, policies that promote access to care services or foster a more equal distribution of household activities may reduce gender productivity gaps and allow for a more efficient allocation of resources. |
| Date: | 2025–09–23 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:111218 |
| By: | Christopher Goetz; Henry R. Hyatt; Zachary Kroff; Kristin Sandusky; Martha Stinson |
| Abstract: | Entrepreneurs are known to be key drivers of economic growth, and the rise of online platforms and the broader "gig economy" has led self-employment to surge in recent decades. Yet the young and small businesses associated with this activity are often absent from economic data. In this paper, we explore a novel longitudinal dataset that covers the owners of tens of millions of the smallest businesses: those without employees. We produce three new sets of statistics on the rapidly growing set of nonemployer businesses. First, we measure transitions between self-employment and wage and salary jobs. Second, we describe nonemployer business entry and exit, as well as transitions between legal form (e.g., sole proprietorship to S corporation). Finally, we link owners to their nonemployer businesses and examine the dynamics of business ownership. |
| JEL: | L26 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34252 |
| By: | Patrick Arnold, Marc Möller, Catherine Roux |
| Abstract: | Uncertainty about the value of a contested innovation induces leaders and laggards to update their expectations in opposite directions. We characterize situations in which firms that have obtained an initial advantage are not the most likely to achieve final success. In spite of amplifying a leader’s advantage, greater contest intensity facilitates this effect, challenging the view that laggards require support to remain competitive. |
| Keywords: | innovation contests, learning, competitive balance, leapfrogging |
| JEL: | C72 D82 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:ube:dpvwib:dp2505 |
| By: | Masayuki MORIKAWA |
| Abstract: | This study uses panel data on Japanese firms to examine trends in the shift of manufacturing firms toward service-oriented activities—referred to as “Manufacturing X.†A distinguishing feature of this study is its analysis not only of overall non-manufacturing activities but also of narrowly defined service activities. The main findings are as follows. First, the share of non-manufacturing activities within manufacturing firms has been steadily increasing. If the current trend continues, the share of non-manufacturing sales among these firms is projected to reach 16.5% by 2040. Second, both the proportion of firms engaged in, and the sales share of services such as machine repair, professional services, and business services are rising, indicating a gradual shift toward narrowly defined services. Third, the share of employees working in service and information service sectors within manufacturing firms is also increasing, reflecting servitization in terms of labor input. Fourth, while the expansion of narrowly-defined service sales is positively associated with sales growth and profit margins, the servitization of labor composition appears to have little impact on firm performance, suggesting instead the importance of headquarters functions. |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:eti:rdpsjp:25022 |
| By: | Masayuki MORIKAWA |
| Abstract: | This study presents evidence on the business performance of firms up to FY2023 that used three major support policies during the COVID-19 crisis: financial assistance, the employment adjustment subsidy, and the business sustainability subsidy. The results show, first, that although productivity among firms that received support improved compared to levels immediately following the crisis, it remained low even after the pandemic subsided. Second, mean wages of firms that received financial assistance or the sustainability subsidy returned to their pre-COVID-19 levels, while wages of firms that used the employment subsidy remained low as of FY2023. Third, by FY 2023, employment levels declined among firms that used the support measures, compared to those that did not. Fourth, the probability of survival in FY2023 was lower for firms that used the support measures, suggesting that the effectiveness of these policies was limited. However, the support measures did not appear to hinder the market’s selection mechanism, whereby less productive firms exit the market. |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:eti:rdpsjp:25021 |
| By: | Wenbin Sun; Rahul Govind (UNSW - University of New South Wales [Sydney]); Mahabubur Rahman (ESC [Rennes] - ESC Rennes School of Business) |
| Abstract: | This study explores the under-researched area of vertical coopetition in business-to-business markets. Drawing on the resource-based view of the firm and signaling theory, we develop a conceptual model linking vertical coopetition to a supplier firm's systematic risk (SR) and idiosyncratic risk (IR) profile and incorporating coopetitionspecific attributes as the boundary conditions. Using a dataset of over 20, 000 observations from more than 4000 firms spanning 29 years, employing a novel measure of vertical coopetition and a robust analytical method, we document that vertical coopetition with customers reduces a firm's SR. Additionally, we uncover an inverted Ushaped relationship between vertical coopetition and IR, suggesting that moderate levels of coopetition heighten firm-specific risks due to competitive tensions, while higher levels mitigate risk through improved resource coordination. We also identify that the length of the coopetitive relationship amplifies the risk-reducing effects on SR. In contrast, competition intensity within the relationship increases SR but has a non-monotonic effect on IR. The support for the results is further validated with several additional measures of the key variables, ensuring the robustness of our results. These insights contribute to the theoretical understanding of vertical coopetition and offer practical implications for B2B managers in strategic risk management, emphasizing the importance of balancing cooperation and competition to achieve long-term stability and competitive advantage. |
| Keywords: | Vertical coopetition, Firm performance, Relationship length |
| Date: | 2025–07–24 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05224431 |
| By: | Luc Jacolin; Quentin Dufresne; Marin Ferry |
| Abstract: | Leveraging a unique dataset that combines country-level information on debt restructuring with firm-level data from the World Bank Enterprise Surveys (WBES) spanning from 2004 to 2023, we analyze the effects of debt restructuring on firm sales growth. Using recent advancements in difference-in-differences estimation to account for the staggered implementation of restructurings, we find that sovereign debt restructuring increases firm performance by 5–9 percentage points, with stronger effects for private, domestically-owned firms and those reliant on public and financial services. The impact varies by debt type (domestic or external), creditor composition, and implementation speed. Swift external restructurings led by official creditors, such as the Paris Club, yield the most substantial positive effects, whereas other types of restructurings show no significant impact on private sector growth. |
| Keywords: | Debt Restructuring, Debt Distress, WBES, Difference-in-Differences (DiD), Paris Club |
| JEL: | D22 F34 O16 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:bfr:banfra:991 |
| By: | Michael Kilumelume; Justice Tei Mensah; Aimable Nsabimana; Kunal Sen |
| Abstract: | We examine the effects of automation on firm performance and the labour market in the context of an emerging economy. To do this, we leverage unique administrative data on the universe of manufacturing firms in South Africa to identify causal evidence of firm-level outcomes from automation adoption. In the event-study design, we derive direct effects of automation on automating firms, the spillover effects on non-automating firms, and employment within the industry and location. |
| Keywords: | Firms, Automation, Labour market, South Africa |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:unu:wpaper:wp-2025-61 |
| By: | María Paula Álvarez Arboleda (Universidad de los Andes) |
| Abstract: | This paper investigates the role of consumer preferences in shaping the performance of manufacturing firms in Colombia. I use data from Colombian manufacturing firms between 2000 and 2012 to decompose the contribution of consumer preferences into those attributable to preferences for certain goods (horizontal differentiation) and for particular providers of those goods (vertical differentiation). Employing a model that integrates consumer demand, following a nested CES structure, with firm production, I use key demand parameters to decompose the variance of firm sales into technical efficiency, input costs, and vertical and horizontal differentiation. I find that vertical differentiation plays a dominant role in explaining sales variance (85.9%), while horizontal differentiation and technical efficiency contribute to a lesser extent (26.2% and 29.2%, respectively). These findings underscore the importance of consumer preferences in determining firm outcomes, showing that demand-driven factors, frequently subsumed in productivity measures, outweigh traditional supply-side drivers that explain firms’ performance. |
| Keywords: | size of manufacturing firms; quality; differentiation; productivity; preferences |
| JEL: | L25 L60 O47 D22 D24 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:col:000089:021544 |
| By: | Lorenzo Emer; Andrea Mina; Andrea Vandin |
| Abstract: | Artificial intelligence (AI) is a key enabler of innovation against climate change. In this study, we investigate the intersection of AI and climate adaptation and mitigation technologies through patent analyses of a novel dataset of approximately 63 000 Green AI patents. We analyze patenting trends, corporate ownership of the technology, the geographical distributions of patents, their impact on follow-on inventions and their market value. We use topic modeling (BERTopic) to identify 16 major technological domains, track their evolution over time, and identify their relative impact. We uncover a clear shift from legacy domains such as combustion engines technology to emerging areas like data processing, microgrids, and agricultural water management. We find evidence of growing concentration in corporate patenting against a rapidly increasing number of patenting firms. Looking at the technological and economic impact of patents, while some Green AI domains combine technological impact and market value, others reflect weaker private incentives for innovation, despite their relevance for climate adaptation and mitigation strategies. This is where policy intervention might be required to foster the generation and use of new Green AI applications. |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2509.10109 |