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on Small Business Management |
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Issue of 2025–11–17
twenty-one papers chosen by João Carlos Correia Leitão, Universidade da Beira Interior |
| By: | I. Etzo; L. Ciucci |
| Abstract: | This study investigates the competitiveness and efficiency of Small and Medium Enterprises (SMEs) within the Cultural and Creative Industries (CCI) in Italy, using a comprehensive firm-level dataset from 2019 to 2023. We estimate Total Factor Productivity (TFP) to analyze firm performance, addressing endogeneity concerns through panel fixed-effects models and employing a Translog production function for flexible input elasticity. Our findings reveal significant spatial heterogeneity, with central and north-western regions exhibiting higher CCI productivity than southern areas. Furthermore, we uncover disparities related to firm size, age, and specialization within Creative versus Cultural domains. The largest and oldest CCI firms show a higher TFP. The Creative industry demonstrates greater productivity than the Cultural industry. We provide evidence that manufacturing-oriented CCI tend to exhibit lower productivity compared to service-oriented CCI. The results underscore the importance of targeted policies to address regional disparities and sectorspecific challenges within the CCI ecosystem, promoting innovation and sustainable growth. |
| Keywords: | Cultural and creative industries;total factor productivity;SMEs;Italian regions |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:cns:cnscwp:202514 |
| By: | Lars Hornuf; Daniel Vrankar |
| Abstract: | Those seeking to drum up public support for the space industry frequently cite its potential to generate valuable spillovers to other industries. However, existing research on spillover effects overlooks differences in business models among commercial actors and focuses only on individual projects or specific space agencies. We analyze how evolving business models influence spillovers by comparing the dynamic capabilities of traditional aerospace conglomerates to those of new space firms, using a unique dataset of 35, 696 space-related patent applications. We find that, in addition to industries directly related to space, such as aeronautics, sectors like manufacturing and communication technology in particular benefit from space activities. At the firm level, we observe that new space business models present greater spillover potential and generate more spillovers than traditional aerospace conglomerates. However, traditional conglomerates such as Airbus or Boeing induce spillovers into digital systems and clean tech, while new space firms cannot translate their digital business models into digital spillovers and occupy more peripheral positions in the innovation network of space. Additionally, based on two different innovation metrics and more than 1.6 million additional patent applications, we find no evidence that the business models of the space industry have generally led to more spillovers than other high-tech industries. |
| Keywords: | new space business models, new space economy, innovation, dynamic capabilities, spillover, patent data |
| JEL: | D62 H57 L20 L21 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12236 |
| By: | G. Atzeni; P. Arca; A. Carosi |
| Abstract: | This paper examines whether climate-risk mitigation investments enhance firms' access to bank credit, with a particular focus on small and medium-sized enterprises (SMEs), which typically operate in information-opaque environments. We hypothesise that the adoption of mitigation practices serves as a signal of managerial quality, which is positively perceived by financial institutions. Using firm-level data from the Enterprise Survey conducted by the EBRD, EIB, and World Bank Group, we estimate an endogenous switching regression model to account for selection on both observables and unobservables. Firms are classified into mitigation-intensive and low-mitigation regimes based on their adoption of ten climate-related practices. Our results show that firms in the mitigation-intensive regime have a 38.6% higher probability of accessing credit compared to the counterfactual scenario, while firms in the low-mitigation regime would increase their probability by 28.9% if they adopted more mitigation measures. The difference between the treatment effects confirms positive selection into the mitigation-intensive regime and supports the signalling hypothesis. |
| Keywords: | climite-risk mitigation measures;Bank Credit;endogenous switching;Signalling |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:cns:cnscwp:202513 |
| By: | Barra Novoa, Rodrigo |
| Abstract: | The study examines the evolution of Chile’s industrial policy between 1990 and 2022 through the lens of state capacity, innovation, and endogenous development. In a global context where governments are reclaiming a proactive role in fostering innovation, Chile presents a paradox. It is a stable and open economy that has expanded investment in science, technology, and innovation but still faces structural barriers to turning that investment into sustainable capabilities. Drawing on the works of Mazzucato, Aghion, Howitt, Mokyr, Samuelson, and Sampedro, the research integrates evolutionary economics, public policy, and humanist ethics to assess Chile’s capacity for innovation-driven transformation. Using a longitudinal case study approach and official data, the study finds institutional progress but persistent coordination gaps, regional disparities, and a fragile culture of knowledge. It concludes that inclusive and sustainable innovation will require adaptive governance, long-term vision, and an ethical understanding of innovation as a public good. |
| Keywords: | State capacity, Innovation, endogenous development, industrial policy, Chile, entrepreneurial state |
| JEL: | O25 O1 O38 E02 L52 P42 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:330597 |
| By: | Cavalcanti, T.; Mohaddes, K.; Nian, H.; Yin, H. |
| Abstract: | This paper investigates the pass-through of environmental compliance costs along supply chains. We compile a firm-level dataset linking regulated firms in pollution-intensive industries with their top five clients and suppliers. We find that clients of regulated firms invest less in R&D, employ fewer skilled R&D staff, and produce fewer innovations than clients of less regulated firms, while no comparable effects are observed for suppliers. The pass-through is stronger with larger trade volumes, higher input prices faced by clients, and in markets where regulated firms hold greater market power or clients face intense competition. Policy simulations suggest that green technology incentives for regulated firms and R&D subsidies for their clients can mitigate these adverse effects and raise social welfare by enhancing both innovation and environmental quality. |
| Keywords: | Environmental Compliance, Supply Chains, Pass-Through, R&D, Innovation |
| JEL: | O30 Q01 Q55 |
| Date: | 2025–10–18 |
| URL: | https://d.repec.org/n?u=RePEc:cam:camjip:2528 |
| By: | Roth, Felix; Rammer, Christian |
| Abstract: | Intangible assets have increasingly been identified as a main source of productivity gains. Since the pioneering work by Corrado, Hulten, and Sichel (2005), empirical research has largely focused on macro and industry-level studies, while firm-level studies have often been confined to a limited set of intangible assets, especially Research and Development (R&D). This paper employs a unique firm-level panel database that contains information on four types of intangible assets: R&D, software & databases (S&D), firm-specific human capital (HC), and brand value (BV). For R&D, we find much lower productivity returns than for S&D and HC. R&D even loses significance once controlling for other intangibles, except for high-tech manufacturing. In contrast to R&D, we find that S&D and HC tend to be the primary drivers of productivity gains, particularly in services. Our findings have implications for research policy, suggesting a stronger focus on supporting investment in non-R&D intangibles, including S&D and HC. |
| Keywords: | Non-R&D intangibles, Productivity, R&D, Digitalisation, Firm-specific human capital, Brand value, Firm-level panel data |
| JEL: | E22 O33 O38 D24 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:uhhhdp:20 |
| By: | Hlaing, Thi Thi Soe; Tun, Yu Yu; San, Aye Moe; Lwin, Hnin Yu |
| Keywords: | Agricultural and Food Policy |
| Date: | 2025–09–15 |
| URL: | https://d.repec.org/n?u=RePEc:ags:asea25:373401 |
| By: | Fabio Franceschini |
| Abstract: | This paper provides robust empirical evidence that shocks to aggregate Research and Development (R&D) have persistent effects on macroeconomic dynamics and represent a significant risk for investors, as predicted by the 'long-run risk' literature. The analysis focuses on a single variable, 'effective R&D', which captures the entire contribution of R&D to productivity growth, flexibly accounting for knowledge spillovers and product proliferation effects. Deviations of effective R&D from its equilibrium level can be empirically identified leveraging the error correction term in the cointegration relationship among R&D, total factor productivity, and the labor force. In US data, structural effective R&D shocks affect productivity and consumption growth rates beyond business cycle horizons and are associated with a significant risk premium in a cross section of stock and bond portfolios (around 2% annually), with cash-flow sensitivities proving a key determinant. |
| JEL: | E32 E44 G12 O30 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:bol:bodewp:wp1215 |
| By: | Giovanna Ciaffi; Matteo Deleidi; Antonino LOfaro |
| Abstract: | This paper evaluates the impact of Mission–Oriented Innovation Policies (MOIPs) and public R&D investment by quantifying the responses of GDP, private investment, hours worked, labour productivity, and the real hourly wage. We combine a Bartik–type identification strategy with the Local Projections method on a novel dataset with a sectoral–regional dimension, covering 333 European NUTS–2 regions over 1995–2019. Results show that R&D government spending exerts robust and persistent expansionary effects, crowding in private investment, raising employment, and boosting productivity. Sectoral heterogeneity emerges, with high multiplicative effects in construction and finance, while employment effects are concentrated in construction and market services. |
| Keywords: | Fiscal policy; Mission-Oriented Innovation Policies; R&D government spending; Sectoral heterogeneity; Regional economics; Local Projections; European regions. Jel Classification: R11; E62; H50; O38 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:usi:wpaper:934 |
| By: | Heng-fu Zou (Institute for Advanced Study, Wuhan University; World Bank) |
| Abstract: | Frank H. Knight's Risk, Uncertainty and Profit(1921) gave economics the canonical distinction between risk and uncertainty and explained profit as the residual return to the bearer of genuine (non-probabilistic) uncertainty. Ludwig von Mises's Human Action (1949) subsumes Knight's insight within a far more comprehensive architecture. Mises embeds en trepreneurship in a praxeological theory of action; shows that monetary calculation and market prices are the preconditions for entrepreneurial judgment; analytically separates entrepreneurial profit from interest, wages, and monopoly gains; locates entrepreneurial roles throughout firms and markets (not only in owner-insurers); frames competition as a dynamic selection process guided by profit and loss; links monetary-financial regimes to systematic entrepreneurial error (business cycles); and derives the institutional constitution-private property, open entry, freedom of contract - of what we call a republic of entrepreneurs. This paper reconstructs Mises's entrepreneur in depth, contrasts it with Knight's narrower uncertainty- bearing vantage, and develops measurable implications for growth, policy, and political economy. |
| Date: | 2025–10–31 |
| URL: | https://d.repec.org/n?u=RePEc:cuf:wpaper:800 |
| By: | Masayuki MORIKAWA |
| Abstract: | This study uses Japanese firm panel data to examine trends in manufacturing firms’ shift toward service-oriented businesses—referred to as “Manufacturing X.†A distinguishing feature of this study is that it analyzes not only overall non-manufacturing businesses but also narrowly defined service businesses. We find that manufacturing firms’ share of non-manufacturing sales 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. Both the proportion of firms engaged in and sales share of narrowly defined services such as machine repair, professional services, and business services are rising, indicating a gradual shift in manufacturers’ service businesses. Expanding narrowly defined service sales is positively associated with sales growth and profitability. |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:eti:dpaper:25103 |
| By: | Filippo Boeri; Riccardo Crescenzi; Davide Rigo |
| Abstract: | Using administrative firm-level data covering the universe of remote workers in Italy, and leveraging exogenous pre-pandemic variation in firm-specific access to fibre broadband as an instrument, this paper investigates the impact of post-pandemic adoption of work from home (WFH) on firm productivity. We find that WFH had a large negative impact on productivity during the pandemic. However, larger firms and those with prior ICT investments mitigated these losses. In the longer term, the impact of WFH is no longer significant. Yet, we find suggestive evidence that firms employing highly qualified workers experienced productivity gains. |
| Keywords: | work from home, firms, productivity |
| JEL: | D22 J21 J24 L25 O33 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12253 |
| By: | Rafael Guntin (UNIVERSITY OF ROCHESTER); Federico Kochen (BANCO DE ESPAÑA AND CEMFI) |
| Abstract: | What are the origins of top firms? What features characterize their life cycle trajectories on the way to the top? Using longitudinal firm-level data, we document novel facts about the first twenty years of the firms that reach the top 1 percent of the size distribution. Compared to the firms in the bottom 99 percent, top firms are eight times larger at entry and grow six times more during their first two decades. In terms of inputs, they start with high capital investments, yet their capital-output ratio and labor share decline as they age. As a result, their profit share is much more backloaded towards the second decade of their life cycle. We show that a firm dynamics model with ex-ante heterogeneity, non-homothetic input costs, and forward-looking financing can explain these empirical patterns. Our quantitative results showcase the importance of accounting for top and bottom firm dynamics for the aggregate implications of financial frictions, recent macroeconomic trends, and corporate taxation. |
| Keywords: | top 1 percent, firm size distribution, firm dynamics, financial frictions |
| JEL: | E44 O47 G30 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:bde:wpaper:2541 |
| By: | Heng-fu Zou (Institute for Advanced Study, Wuhan University; World Bank) |
| Abstract: | We propose a historical political-economy of the republic of entrepreneurs: a civic order where open entry, impersonal law, price signals, and lawful imitation convert dispersed conjectures into growth. Grounded in the Mises-Hayek-Kirzner view (monetary calculation, dispersed knowledge, entrepreneurial discovery) and spanning cases from antiquity to Industry 4.0, we show prosperity tracks proposal density, feedback speed, and dif fusion breadth-not elite R&D alone. Reframing Schumpeter, sustained enrichment is chiefly creative accumulation under general rules. Policy follows: protect the commons of discovery-general rules, interoperable standards, contestable markets, and IP that teaches and expires. |
| Date: | 2025–11–01 |
| URL: | https://d.repec.org/n?u=RePEc:cuf:wpaper:801 |
| By: | Amoa-Gyarteng, Karikari |
| Abstract: | Why does globalization reduce unemployment in some countries but not others? This policy synthesis addresses a puzzle: global market integration helps the UK maintain 4.5% unemployment while South Africa faces 33% joblessness despite similar openness to trade. Drawing on recent comparative research, this paper argues that the key difference lies not in the degree of openness, but in whether entrepreneurial ecosystems enable early-stage ventures to scale into stable, job-creating firms. In the United Kingdom, accessible finance, efficient regulation, and reliable infrastructure allow startups to expand and hire. In South Africa, funding shortages, regulatory hurdles, and infrastructure breakdowns trap most startups in early stages, limiting employment gains from globalization to large incumbents. Based on this analysis, the paper proposes a simple but practical, sequenced policy framework organized around four pillars: finance (co-investment funds, credit guarantees), regulation (digital one-stop shops, startup legal designation), infrastructure (reliable power, broadband), and skills/ networks (targeted training, accelerator support). Reforms in Rwanda, Morocco, Tunisia, and India demonstrate that rapid progress is feasible when policymakers focus on removing binding constraints. The core message for emerging economy policymakers: globalization creates opportunities, but jobs grow only when ecosystem conditions enable local startups to capture them. |
| Keywords: | Entrepreneurial Ecosystems, Job Creation, Globalization, Entrepreneurship Policy, Policy Recommendations |
| JEL: | L26 F62 O57 J21 O43 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:330596 |
| By: | Francis M. Dillon; Sari Pekkala Kerr; William R. Kerr; Andrew J. Wang |
| Abstract: | Immigrant students who attend U.S. colleges are disproportionately employed in either large firms—especially multinationals—or small firms and self-employment. Using linked Census and longitudinal employment data, we trace the jobs taken by college students in 2000 during the 2001-20 period and evaluate four mechanisms shaping sector and firm size placement: geographic clustering, degree specialization, firm capabilities/visas, and ethnic self-employment specialization. Degree fields predict large firm and MNE placement, while ethnic specialization explains small firm sorting. Immigrant students who remain in the U.S. earn more than their native peers, suggesting the segmentation reflects productive sorting rather than blocked opportunity. |
| JEL: | F22 F23 F66 I23 J61 L26 M13 M16 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34440 |
| By: | Dettmann, Eva; Fritz, Sarah |
| Abstract: | This study provides new evidence on the impact of the EU Cohesion Policy on income growth in less developed regions. Our panel includes data from all European regions for the years 1989-2020. Using a fuzzy Regression Discontinuity Design, we model treatment dynamics by applying a random effects estimator. Based on digitized historical data, we precisely replicate the policy rule and correctly classify the regions' eligibility status. Results show that the policy has a moderate positive effect on GDP per capita growth in the targeted regions. |
| Keywords: | causal analysis, EU Cohesion Policy, regression discontinuity design, place-based policy |
| JEL: | H20 R11 R58 Z18 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:iwhdps:330917 |
| By: | Luise Eisfeld (University of Lausanne) |
| Abstract: | New entry is thought to be the primary competitive margin in software markets. I study how acquisitions of venture capital-funded startups affect entry incentives. I assemble a product-level dataset of enterprise software and use text-as-data methods to define markets. I build and estimate a dynamic entry model where acquisitions affect returns to entry via (1) changes in market structure and (2) an entry-for-buyout incentive. In counterfactual simulations, banning all startup acquisitions reduces entry by about 16% in the average market, whereas blocking high-priced deals conducted by incumbents slightly raises entry. These results indicate which acquisitions might merit prioritized scrutiny. |
| Keywords: | Mergers and Acquisitions, Antitrust, Entry, Startups, Enterprise Software, Innovation |
| JEL: | G34 L22 L26 L49 L86 M13 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:chf:rpseri:rp2593 |
| By: | Adamus, Magdalena (Masaryk University); Guzi, Martin (Masaryk University); Ballová Mikušková, Eva (Slovak Academy of Sciences) |
| Abstract: | The paper investigates gender biases and differential treatment of women and men in the business start-up phase. A sample of 498 entrepreneurs from Slovakia participated in an online experiment and evaluated three fictitious business plans in terms of the applicants’ competence, likeability, and business ability. The start-ups were positioned in three different sectors—cosmetics production, services provision, and software development—where men’s and women’s chances of success may be viewed differently. Following Goldberg’s paradigm, half of the evaluators received business plans presented as written by female and half by male applicants; otherwise the plans were identical. Results imply that female applicants are assessed similarly to male applicants, but more masculine evaluators assess women’s business plans and their potential in entrepreneurship more critically. The study advises caution in recommending more female evaluators in the business plan assessment. If women who become involved in entrepreneurship are excessively masculine and masculinity is associated with a less favourable evaluation of potential female entrepreneurs, such policies could backfire against women, putting them in a more disadvantaged position. |
| Keywords: | Goldberg paradigm, start-up, entrepreneurship, masculinity, gender identity, gender-role theory |
| JEL: | J16 M13 L26 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18245 |
| By: | Heng-fu Zou (Institute for Advanced Study, Wuhan University; World Bank) |
| Abstract: | Schumpeter's heroic entrepreneur and "creative destruction" remain the dominant metaphors for innovation and cycles. Read against history and theory-from Cantillon's functional entrepreneur, Mises's monetary calculation and residual claimancy, Hayek's dispersed knowledge and discovery, Kirzner's alertness, Mokyr's Industrial Enlightenment, McCloskey's bourgeois dignity, and Phelps's grassroots dynamism-those metaphors misallocate causal weight. Innovation is chiefly a civic process carried out by a republic of entrepreneurs: many actors proposing small, testable changes under general, impersonal rules; markets and peer criticism supply fast feedback; lawful imitation multiplies gains. Monopoly "havens" are neither necessary nor suficient for discovery and often dull price and reputation signals. Business cycles need not originate in technology clusters; monetary-financial coordination failures (credit booms, interest-rate mispricing, policy shocks) can amplify or swamp a steady flow of decentralized discovery. Historical cases-Britain, the United States, France, Germany, and modern biomedicine - show the braid of the republics of letters, science, and entrepreneurs turning useful knowledge into useful industry through open entry, standards, and disclosure norms. We propose a republican policy constitution: protect the commons of discovery (contestable markets, interoperable standards, IP that teaches and expires, and publication/priority rules) rather than pick champions or sanctify durable market power. The framework yields testable predictions about proposal density, feedback speed, and difusion breadth and offers a practical agenda for growth and development. |
| Date: | 2025–10–31 |
| URL: | https://d.repec.org/n?u=RePEc:cuf:wpaper:799 |
| By: | Schulz, Frederik Nikolai; Hanf, Jon H. |
| Keywords: | Agribusiness |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ags:gewi24:364757 |