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on Small Business Management |
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Issue of 2025–11–10
twenty papers chosen by João Carlos Correia Leitão, Universidade da Beira Interior |
| By: | Siavash Mohades; Maria Savona |
| Abstract: | This paper investigates whether investments in data affect firms’ R&D and whether the two are productivity-enhancing complements. We conceptualise and test whether investments in data reduce market uncertainty, thereby mitigating the inherent uncertainty of R&D and enhancing research and innovation investment. Using Italian firm-level data from 2002 to 2024 and exploiting the GDPR as an instrument, we identify a positive causal effect of data on R&D investment. Moreover, we find that data and R&D are complementary in enhancing both short- and long-term productivity. Our analyses also identify a positive role of R&D for productivity only when firms are data-intensive. |
| Keywords: | uncertainty, data, R&D, digitalisation, innovation, productivity |
| JEL: | D22 D25 D82 O31 O33 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12230 |
| By: | Loles Añón Higón (Department of Applied Economics II and ERICES, Faculty of Economics (Universitat de València), Avda. Tarongers, s/n, 46022 Valencia (Spain)); Juan A. Máñez (Department of Applied Economics II and ERICES, Faculty of Economics (Universitat de València), Avda. Tarongers, s/n, 46022 Valencia (Spain)); Amparo Sanchis (Department of Applied Economics II and ERICES, Faculty of Economics (Universitat de València), Avda. Tarongers, s/n, 46022 Valencia (Spain)); Juan A. Sanchis (Department of Applied Economics II and ERICES, Faculty of Economics (Universitat de València), Avda. Tarongers, s/n, 46022 Valencia (Spain)) |
| Abstract: | We examine the role of digitalisation in shaping innovation strategies. To capture the multidimensional nature of digital transformation, we construct a firm-level digitalisation index that incorporates four dimensions: technological infrastructure, digital human capital, automation and digital stakeholders’ interactions. Using data from Spanish manufacturing firms for the period 2007-2022, we assess the effects of digitalisation on both technological innovation (product and process) and non-technological (organisational and marketing) innovation. Our empirical strategy is based on a knowledge production function framework that jointly analyses firms' innovation decisions while accounting for unobserved heterogeneity and potential endogeneity of digitalisation. The results show that digitalisation is a key driver of innovation, in particular for SMEs, but also for firms without formal R&D activities. However, its impact varies across innovation types, with the strongest effects observed for process innovation. The analysis further reveals that the components of digitalisation affect innovation strategies in different ways, underscoring the heterogeneous nature of digital transformation. |
| Keywords: | Digital transformation, manufacturing firms, product innovation, process innovation, organisational innovation, marketing innovation. |
| JEL: | O33 O32 L60 C35 D22 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:eec:wpaper:2512 |
| By: | Arnone, Massimo; Costantiello, Alberto; Drago, Carlo; Leogrande, Angelo |
| Abstract: | This paper explores the connection between innovation dynamics and the Bank Capital to Asset Ratio (CAR) in the context of 39 European nations from 2018 to 2025. With a multidimensional panel data approach that incorporates a combination of static and dynamic panel models and machine learning algorithms—specifically Decision Tree Regression—the study conducts a data-oriented analysis of the impact of various types of innovation on the resilience of the banking sector. The study differentiates innovation inputs (e.g., trademark applications, innovator share), outputs (e.g., new-to-marketing and new-to-firm product sales), and productivity factors and factors permitting a finely grained comprehension of innovation inputs and financial consequences. Cluster analysis is applied to classify countries into innovation performance groups and is followed by regression and variable importance calculations. The study identifies that process innovations executed by small and medium enterprises (SMEs) are positively linked with CAR and that information is associated with greater financial stability, whereas innovation outputs and productivity indicators at times relate inversely and register corresponding financial stress in the face of innovation-driven transitions. Further, pre-stage innovation inputs may raise banks' uncertainty and register systematic risk escalation. The model of a Decision Tree also reveals the sales of innovative products and labor productivity to be the most robust determinants of CAR with varied directional impacts between them. These results document the innovation-finance nexus complexity and refute the supposition that innovation equally strengthens economic prudence. The study contributes new knowledge to the literature through the combination of the assessment of financial prudency with the type of innovation and provides clear policy directions for the synchronization of innovation strategies with macroprudency aims across the European region. |
| Keywords: | Innovation, Bank Capital, Financial Stability, Decision Tree Regression, Europe. |
| JEL: | C38 E44 G21 O31 O52 |
| Date: | 2025–08–31 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:125982 |
| By: | Abdo Khoury (CERGAM - Centre d'Études et de Recherche en Gestion d'Aix-Marseille - AMU - Aix Marseille Université - UTLN - Université de Toulon) |
| Abstract: | Entrepreneurial legitimacy is a multidimensional construct that remains conceptually fragmented despite its recognized importance in entrepreneurship research. While various disciplines have explored legitimacy through sociological, psychological, and organizational lenses, a unified theory has yet to emerge. Prior research highlights the role of legitimacy in organizational success, particularly in gaining stakeholder support and facilitating internationalization. Though, little is known about how entrepreneurs construct their identities to gain legitimacy in global markets. This study addresses this gap by investigating how Lebanese entrepreneurs enact entrepreneurial identities to build international legitimacy. Drawing on social identity theory and institutional theory, we examine the interplay between legitimacy and internationalization in entrepreneurial ventures. Using a grounded theory approach, this research develops a framework for understanding how legitimacy is acquired and managed throughout a venture's lifecycle. Our findings contribute to entrepreneurship and legitimacy literature by offering insights into the strategic identity work entrepreneurs engage in to enhance their competitiveness in international markets. |
| Keywords: | Network, Internationalization, Strategies, Entrepreneurship, Legitimacy |
| Date: | 2025–06–25 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05337783 |
| By: | Mahabubur Rahman (ESC [Rennes] - ESC Rennes School of Business); M Ángeles Rodríguez-Serrano (Universidad de Sevilla = University of Seville); Md Tareq Bin Hossain (TU - Thammasat University) |
| Abstract: | While prior studies broadly explored the consequences of environmental innovation, the implications of environmental product innovation for firm performance have received relatively scant research attention. Past studies theorizing that environmental product innovation has a linear effect on firm performance have reported mixed results, indicating that the association between the two is far more complex than conceptualized by earlier research. Drawing on the natural resource-based view of the firm and the resource dependence theory, this study theorizes that the impact of environmental product innovation on firm growth follows a curvilinear (inverted Ushaped) pattern. It is also posited that this curvilinear relationship is moderated by marketing intensity, sustainability disclosure strategy and a firm's propensity to engage in deviant corporate practices. Using a sample of U.S.-based firms and employing an endogeneity-robust econometric modelling technique, this study demonstrates that the effect of environmental product innovation on firm growth is initially positive but subsequently becomes negative. Further, this research shows that this curvilinear relationship between environmental product innovation and firm growth is moderated by a firm's sustainability disclosure strategy (the curve flattens), marketing intensity (the curve flattens) and by a firm's level of engagement in deviant corporate practices (the curve steepens). The results are robust to additional sensitivity analyses. |
| Keywords: | Sustainability disclosure, Deviant corporate practices, Marketing intensity, Firm growth, Environmental product innovation |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05280178 |
| By: | Fichter, Klaus; Neumann, Thomas; Olteanu, Yasmin; Grothey, Tim |
| Abstract: | A central element of this research by the Borderstep Institute is the systematic long-term measurement of the green start-up ecosystem in Germany. This year, the findings will be published as the "Green Startup Report 2025". The study marks a milestone: for the first time, a new, scientifically validated methodology is being used that enables a much more precise analysis of the dynamics of green start-ups. It is based on data on more than 12, 000 young companies and over 50, 000 commercial register entries on investments in start-ups. The Green Startup Report 2025 thus offers a previously unrivalled level of empirical depth and enables more well-founded statements to be made about the development of sustainable business models, their market opportunities and their actual contribution to climate protection. The analysis makes it clear that green start-ups are relevant players in the sustainable transformation. They develop market-based solutions for environmental and climate protection. Through their entrepreneurial activities, they make a measurable contribution to achieving national and European climate targets. |
| Keywords: | Entrepreneurship, Green Startup, Interpreneurship, Sustainable Entrepreneurship, Green Economy, Green Startup Report, Start-up Ecosystem, Impact, Impact Assessment, Impact Forecasting, Climate Protection Potential, Start-up funding and financing |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esrepo:330411 |
| By: | Schilirò, Daniele |
| Abstract: | This paper presents an examination of the knowledge economy, its nature, evolution, and defining features. Such an economy relies on increasing specialization, research, innovation, and continuous learning. Innovation constitutes a fundamental dimension of the knowledge economy; hence, it emerges as the second central theme of this analysis. The findings indicate that the capacity of companies to innovate depends on several factors, including the availability of sufficient human capital with appropriate levels of education and advanced skills, the presence of robust infrastructure, and the role of institutions. In particular, the innovation ecosystem—where stakeholders interact and collaborate—together with the regulatory and legislative framework, serves to foster and sustain innovation. |
| Keywords: | knowledge economy; knowledge; learning; networks; innovation, technological progress; competitiveness |
| JEL: | D83 L1 O30 O32 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:126380 |
| By: | Hiba El Majhed (FSJES Marrakech - Faculté des Sciences Juridiques, Economiques et Sociales-Marrakech); Saad Boumarete (FSJES Marrakech - Faculté des Sciences Juridiques, Economiques et Sociales-Marrakech); Abdellah Tajer (FSJES Marrakech - Faculté des Sciences Juridiques, Economiques et Sociales-Marrakech) |
| Abstract: | While much research has focused on how founders enter and build entrepreneurial ventures, relatively little is known about how they transition out of formal leadership- particularly in family businesses, where their withdrawal is often partial and layered. Founders rarely disengage fully; instead, they tend to maintain a presence that blends operational retreat with symbolic or strategic influence. This paper explores the redefinition of founder roles after leadership succession, focusing on the evolving nature of their engagement. Based on a qualitative multiple case study of six Moroccan family firms, the study identifies five distinct patterns of post-leadership founder influence: heritage-based influence, bi-generational collaboration, multi-generational leadership, fraternal delegation, and posthumous institutionalization. These trajectories reflect how founders shape firm direction through emotional legacy, advisory presence, or embedded values, long after ceding formal control. The findings show that their influence may persist through informal consultation, structured co-leadership, or institutional frameworks that codify their vision. This typology moves beyond binary classifications of active versus retired founders and offers a structured way to interpret the multiple paths founders can take to remain influential. It also emphasizes the role of socioemotional wealth in maintaining family continuity, guiding decision-making, and reinforcing intergenerational cohesion. Overall, the study contributes to a deeper understanding of founder disengagement and legacy preservation in family businesses, offering implications for theory and practice in succession planning and governance. Mots-clés : Family business; Founder transitions; Post-succession influence; Role reconfiguration. Socioemotional wealth Classification JEL : L20, M10, D22 Type de l'article : Empirical Research - Recherche empirique |
| Keywords: | Socioemotional wealth, Role reconfiguration, Post-succession influence, Founder transitions, Family business |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05286671 |
| By: | Miklós Koren; Krisztina Orban; Bálint Szilágyi; Almos Telegdy; András Vereckei |
| Abstract: | How much do CEOs matter for firm performance? We estimate the causal effect of CEO quality on productivity using comprehensive administrative data covering the universe of Hungarian firms and CEOs from 1992--2022. We develop a production function framework that separates owner-controlled strategic decisions from CEO-controlled operational decisions. To address the severe measurement error in CEO fixed effects arising from short tenures, we introduce a placebo-controlled event study design: we compare actual CEO transitions to randomly assigned fake transitions in firms with stable leadership. The results reveal that a CEO better than the incumbent increases firm performance by 3% while a worse CEO decreases it by 2%. CEO changes contribute to the variance growth of productivity by 30% in the first 10 years of the firm's existence. The placebo-controlled methodology provides a general solution for estimating individual effects in short-panel settings. |
| Date: | 2025–09–30 |
| URL: | https://d.repec.org/n?u=RePEc:ceu:econwp:2025_1 |
| By: | Ventsislavova Georgieva, Daniela; Georgieva, Teodora |
| Abstract: | The report analyses the innovation potential of Bulgaria's furniture industry and agribusiness through a cluster approach, emphasizing regional disparities and challenges. The results indicate that the furniture industry suffers from low investment in innovation and limited digitization, while agribusiness faces low productivity and regional imbalances despite its steady growth. Leading regions (Ruse, Gabrovo, Dobrich, Yambol) demonstrate high economic activity and innovation development. National policies in the sector should focus on increasing investments in new technologies, promoting balanced regional development, and enhancing cluster coordination to improve competitiveness and sustainability in both sectors. |
| Keywords: | furniture industry, agribusiness, cluster analysis, innovation potential |
| JEL: | O1 O10 Q00 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:126240 |
| By: | Luisa Alama (Universitat Jaume I and IIDL); Joan Crespo (Universitat de València); Miguel A. Márquez (Universidad de Extremadura); Emili Tortosa-Ausina (Universitat Jaume I, IIDL and Ivie) |
| Abstract: | We empirically evaluate how the efficiency of Spanish public universities impacts regional economic performance in Spain during the period 2010–2019. Efficiency is measured using activity analysis methods that attempt to capture reflect how universities perform in their respective missions— namely, teaching, research, and knowledge transfer. We analyse the geography of higher education by examining efficiency at the provincial (NUTS3) and regional (NUTS2) levels, as well as for groups of regions (NUTS1). Our results offer several key insights. First, we find that geography plays a differential role primarily when knowledge transfer activities are considered, while geographical patterns are similar for teaching and research activities. Second, the impact of universities’ efficiency on regional economic activity varies across different outcome measures. While provinces with more efficient public university systems show higher labor productivity and capital intensity levels, there is no significant relationship with per capita income. The spatial analysis indicates that efficiency gains generate indirect and positive spillovers, particularly for capital intensity, suggesting that improvements in university performance can benefit broader regional areas. Additionally, institutional quality, measured through regional government performance indicators, reinforces these effects. Our findings suggest that policies aimed at enhancing university efficiency should prioritise the research mission. Among the three university missions, research has the greatest impact on improving productive processes and is the most effective in fostering regional economic development. |
| Keywords: | bias-corrected efficiency; capital intensity; higher education institutions; regional growth; productivity |
| JEL: | C61 J24 R11 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:eec:wpaper:2510 |
| By: | Xiaoning Wang; Chun Feng; Tianshu Sun |
| Abstract: | Labor mobility is a critical source of technology acquisition for firms. This paper examines how artificial intelligence (AI) knowledge is disseminated across firms through labor mobility and identifies the organizational conditions that facilitate productive spillovers. Using a comprehensive dataset of over 460 million job records from Revelio Labs (2010 to 2023), we construct an inter-firm mobility network of AI workers among over 16, 000 U.S. companies. Estimating a Cobb Douglas production function, we find that firms benefit substantially from the AI investments of other firms from which they hire AI talents, with productivity spillovers two to three times larger than those associated with traditional IT after accounting for labor scale. Importantly, these spillovers are contingent on organizational context: hiring from flatter and more lean startup method intensive firms generates significant productivity gains, whereas hiring from firms lacking these traits yields little benefit. Mechanism tests indicate that "flat and lean" organizations cultivate more versatile AI generalists who transfer richer knowledge across firms. These findings reveal that AI spillovers differ fundamentally from traditional IT spillovers: while IT spillovers primarily arise from scale and process standardization, AI spillovers critically depend on the experimental and integrative environments in which AI knowledge is produced. Together, these results underscore the importance of considering both labor mobility and organizational context in understanding the full impact of AI-driven productivity spillovers. |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2511.02099 |
| By: | Céline del Bucchia (Audencia Business School); Arnaud Stimec (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Nantes Univ - IAE Nantes - Nantes Université - Institut d'Administration des Entreprises - Nantes - Nantes Université - pôle Sociétés - Nantes Univ - Nantes Université); Anastasia Dereppe (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Nantes Univ - IAE Nantes - Nantes Université - Institut d'Administration des Entreprises - Nantes - Nantes Université - pôle Sociétés - Nantes Univ - Nantes Université); Benoit Marienval (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Nantes Univ - IAE Nantes - Nantes Université - Institut d'Administration des Entreprises - Nantes - Nantes Université - pôle Sociétés - Nantes Univ - Nantes Université) |
| Abstract: | Purpose Recent voices have called for the need to reconsider the myth of male power based on a one-dimensional view of a dominant patriarchy in entrepreneurship. In a search for alternatives to hegemonic masculinities, this paper explores a specific context - that of radical ecological and social transition - to identify how entrepreneuring in this specific social environment questions and shapes entrepreneurial masculinities. Design/methodology/approach We engage with constructivist grounded theory to analyse 17 life story interviews of French entrepreneurs, complemented by 6 focused follow-up interviews and 2 focus groups of women to give a broader and cultural understanding of entrepreneurial masculinities. Findings The paper makes four important contributions to the literature on gender and entrepreneurship. First, it enriches the spectrum of entrepreneurial masculinities with a non-hegemonic type of masculinity, namely, caring Entrepreneurial masculinity (EM). Second, it proposes an alternative model of hybrid hegemonic masculinity by showing that the "hero" posture in entrepreneurship is not necessarily that of a winner but can also serve a mission for the common good. Third, it introduces the concept of ecological EM by bridging two distinct areas of the literature related to our data. Finally, it underscores the strong influence of women in entrepreneurs' social environment by their role in engaging change in entrepreneurial masculinities. We show how a specific social environment can partially challenge hegemonic entrepreneurial masculinities. The paper introduces ecological masculinities as an alternative framework. |
| Abstract: | Objectif Des voix récentes ont appelé à reconsidérer le mythe du pouvoir masculin fondé sur une vision unidimensionnelle d'un patriarcat dominant dans l'entrepreneuriat. À la recherche d'alternatives aux masculinités hégémoniques, cet article explore un contexte spécifique, celui de la transition écologique et sociale radicale, afin d'identifier comment l'entrepreneuriat dans cet environnement social particulier remet en question et façonne les masculinités entrepreneuriales. Conception/méthodologie/approche Nous utilisons la théorie constructiviste fondée sur des données empiriques pour analyser 17 entretiens sur le parcours de vie d'entrepreneurs français, complétés par 6 entretiens de suivi ciblés et 2 groupes de discussion composés de femmes afin d'offrir une compréhension plus large et culturelle des masculinités entrepreneuriales. Résultats L'article apporte quatre contributions importantes à la littérature sur le genre et l'entrepreneuriat. Premièrement, il enrichit le spectre des masculinités entrepreneuriales d'un type de masculinité non hégémonique, à savoir la masculinité entrepreneuriale bienveillante (EM). Deuxièmement, il propose un modèle alternatif de masculinité hégémonique hybride en montrant que la posture de « héros » dans l'entrepreneuriat n'est pas nécessairement celle d'un gagnant, mais peut également servir une mission pour le bien commun. Troisièmement, il introduit le concept d'EM écologique en reliant deux domaines distincts de la littérature liés à nos données. Enfin, il souligne la forte influence des femmes dans l'environnement social des entrepreneurs par leur rôle dans le changement des masculinités entrepreneuriales. Nous montrons comment un environnement social spécifique peut remettre en question, en partie, les masculinités entrepreneuriales hégémoniques. L'article présente les masculinités écologiques comme un cadre alternatif. |
| Keywords: | Sustainable entrepreneurship, Socio-ecological transition, Entrepreneurial masculinities, Cultural change and leadership, Hegemonic masculinities, Constructivist grounded theory, Caring masculinities, Ecological masculinities, Masculinités hégémoniques, Entrepreneuriat durable, Transition socio-écologique, Masculinités entrepreneuriales, Changement culturel et leadership, Théorie ancrée constructiviste, Masculinités du care, Masculinités écologiques |
| Date: | 2025–08–12 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05336916 |
| By: | Miklós Koren; Krisztina Orban |
| Abstract: | Management quality drives firm performance and aggregate productivity, yet the supply of managerial talent remains poorly understood. A key friction is that hired managers cannot fully appropriate the surplus they generate, unlike entrepreneurs who own their firms, creating a wedge between private and social returns to management. Here we develop a general equilibrium model to quantify how this corporate governance friction distorts talent allocation between entrepreneurship, management, and employment. Using the universe of Hungarian firms and CEOs (1986--2022), we exploit the transition to capitalism—when the count of enterprises increased from 21, 000 to 115, 000 in three years—to identify the parameters of the model. We find that managers capture only 60% of the surplus they create, resulting in too few professional managers and too many less-productive entrepreneurs. Eliminating this friction would raise GDP per worker by 4% through improved occupational composition. Uniform subsidies fail to correct the misallocation, raising GDP by only 0.1%. Our results show that management interventions' aggregate effects depend critically on targeting the specific friction between hired managers and entrepreneurs rather than expanding the overall pool of business leaders. |
| Date: | 2025–09–30 |
| URL: | https://d.repec.org/n?u=RePEc:ceu:econwp:2025_2 |
| By: | Ohnishi, Kazuhiro |
| Abstract: | We employ a game-theoretic model to analyze five duopoly regimes: (1) state-owned and labor-managed firms, (2) labor-managed firms, (3) state-owned and capitalist firms, (4) capitalist firms, and (5) capitalist and labor-managed firms. We compare the welfare outcomes across these regimes and find that labor-managed firms may not be socially desirable due to their adverse impact on economic welfare. This may help explain why labor-managed firms are relatively rare compared to capitalist firms. |
| Keywords: | Capitalist firm; Cournot model; Economic welfare; Labor-managed firms; State-owned firm |
| JEL: | C72 D21 L32 |
| Date: | 2025–09–15 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:126158 |
| By: | Thurik, Roy (Erasmus School of Economics); Kato, Masatoshi (Kwansei Gakuin University); van der Zwan, Peter (Leiden University); Kageura, Chihiro |
| Abstract: | Numerous studies deal with the link between daily recovery experiences (DRE) and mental health for employees. Hardly any studies exist for small business owners. This is surprising given that their health is not just important for themselves but also for their environment (such as employees, clients, suppliers, networks). In the present study we analyse if this link also works for some 2, 400 Japanese small business owners. Next to overall DRE, four dimensions of DRE are distinguished (detachment, relaxation, mastery, and control). Mental health is captured using well-being (psychological well-being and job satisfaction) and ill-being (burnout and stress). First, we compare our DRE levels with many other (employee) studies. Second, controlling for many phenomena including participating in nomikai (a typical Japanese custom of getting together after office hours), we show that the quality of overall DRE is positively linked to well-being, and negatively to ill-being. Third, like the quality of overall DRE, nomikai activities of the owner are positively linked to their psychological well-being and job satisfaction, and negatively to burnout and stress. Its role seems to be independent of that of the quality of DRE. |
| Keywords: | well-being, Nomikai, daily recovery experiences, entrepreneurs, small business owners/managers, job satisfaction, burnout, stress, Japan |
| JEL: | I12 I31 L26 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18227 |
| By: | Ogbuigwe, Micheal; Aluya, Samson; John, Edidiong |
| Abstract: | This study examined the effect of cash conversion cycle on financial performance of listed consumer goods firms in Nigeria. The specific objectives were toascertain the effect of accounts receivable turnover ratio on return on assets of listed consumer goods firms in Nigeria, to determine the effect of account payable turnover ratio on return on assets of listed consumer goods firms in Nigeria and to assess the effect of inventory turnover ratio on return on assets of listed consumer goods firms in Nigeria The study adopted an ex-post facto research design and utilized a panel data of one hundred and fifty (150) pooled observations gathered from fifteen (15) listed consumer goods firms in Nigeria over a ten (10)-year period (2014-2023). It also employed a panel multiple regression technique to analyze the data via E-views 10.0 statistical package. The study findings revealed that account receivable turnover ratio has a significant positive (Coeff. =0.0778{0.0012}) effect on return on assets of listed consumer goods firms in Nigeria while account payable turnover ratio has a non-significant negative (Coeff. =-0.0590{0.7897}) effect on return on assets of listed consumer goods firms in Nigeria. It also revealed that inventory turnover ratio has a significant positive (Coeff. =1.5166{0.0472}) effect on return on assets of listed consumer goods firms in Nigeria. It was thus concluded that cash conversion has a significant effect on financial performance of listed consumer goods firms in Nigeria. The recommendations made included that listed consumer goods firms in Nigeria should prioritize efficient accounts receivable management by implementing effective credit policies, credit monitoring, and debt collection strategies for enhanced financial performance. |
| Keywords: | Cash conversion cycle, account receivable turnover, account payable turnover ratio, inventory turnover ratio, return on assets |
| JEL: | M41 |
| Date: | 2025–01–07 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:126477 |
| By: | Mariano Bosch (Inter American Development Bank); Guillermo Cruces (Universidad de San Andrés-CONICET, University of Nottingham); Stephanie González (CEDLAS-FCE-UNLP); María Teresa Silva-Porto (Inter American Development Bank) |
| Abstract: | In developing countries, informal labor is not only employed by illegal or unregistered firms but also by legal firms that hire workers informally, known as the intensive margin of labor informality. Reducing this type of work may have ambiguous effects on formal employment, depending on factors such as firm size and productivity. In collaboration with Peru’s labor inspection authority, we conducted a randomized mailing experiment targeting large firms with a high propensity for employing workers informally. The authority sent letters with either deterrence messages detailing fines for non-compliance or social norms messages highlighting the positive impacts of formality. We analyzed the impact of this intervention on formal employment levels over the following two years using monthly administrative data. The treated firms (particularly those in the deterrence treatment arm) and larger firms increased their formal employment levels. However, these increases followed a seasonal pattern coinciding with the high labor demand during the tourist season, suggesting that prior to the intervention, firms were employing temporary workers informally. The higher perceived cost of non-compliance led them to formalize some of these workers. The informal hiring of seasonal workers by these firms appears to have been motivated by basic tax evasion, and the absence of a negative effect on firm-level formal employment indicates that the firms were exploiting rents from low enforcement of regulations. |
| Keywords: | Randomized Controlled Trial, Social Security, Tax Audit, Tax Evasion, Mailing, Informality, Labor formalization |
| JEL: | C93 D91 H55 J46 O17 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:sad:wpaper:172 |
| By: | Massenz, Gabriella (Research Institute of Industrial Economics (IFN)) |
| Abstract: | How do corporate tax systems shape the boundaries of the firm? This paper shows that nonlinear corporate income taxation can distort firms’ organizational structures by inducing tax-motivated firm splitting. I use administrative data on corporations and their owners and exploit two reforms that altered the tax benefits and costs of dividing a firm into multiple entities. First, I show that a temporary increase in the tax advantage of splitting reduces the share of firms filing jointly for corporate income tax purposes. Second, once the benefit is perceived as permanent and minimum capital requirements for new firms are abolished, the number of firms per entrepreneur rises significantly and persistently. Finally, I show that reorganizations are primarily driven by tax motives, as I find no effect on firms’ total assets, employment, or industry diversification. These findings highlight extensive-margin responses of business organization to corporate taxation, with relevant implications for the understanding of firm dynamics and for tax design. |
| Keywords: | Firm splitting; Corporate income tax; Tax avoidance |
| JEL: | H25 H26 H32 |
| Date: | 2025–10–30 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:iuiwop:1539 |
| By: | Wang, Han; Rodríguez-Pose, Andrés |
| Abstract: | This paper examines whether and how government-led institutional changes can reshape regional industrial development trajectories. Using quarterly panel data from Chinese cities between 2019 and 2024, we assess the impact of reforms of the business environment on firm creation within both path creation and path dependent industries. Applying a staggered difference-in-differences approach combined with coarsened exact matching, our findings reveal that business environment reforms significantly increase firm creation in path creation industries, especially in high-tech sectors and cities with initially weaker business environments. Key mechanisms identified include enhancements in the market environment and government services, which are central to driving these effects. |
| Keywords: | path creation; institutional change; business environment; path dependence; firm creation |
| JEL: | O11 R11 R12 |
| Date: | 2025–10–27 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:129990 |