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on Small Business Management |
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Issue of 2026–04–27
sixteen papers chosen by João Carlos Correia Leitão, Universidade da Beira Interior |
| By: | Toshihiro OKUBO; Alexander F. WAGNER; Kazuo YAMADA |
| Abstract: | Innovation is central to productivity growth, yet firms facing similar technological and policy environments differ in their R&D investment behavior. We examine whether persistent regional social norms help explain this variation. Using prefecture-level data from Japan, we measure regional conformism based on a 1941 military conscription examination and contemporary school education surveys, demonstrating that regional differences have persisted over time. Linking them to data on all Japanese manufacturing firms from 1995 to 2022, we find that firms in more conformist regions exhibit significantly lower R&D intensity even after controlling for cognitive ability, firm characteristics, and fixed effects. The relationship with patenting is weaker and less robust. To isolate the historical component of conformity, we instrument pre-war conformism using differences in domain-level educational curricula during the Edo-period (1603–1868). The IV results similarly indicate a significant negative effect on firms’ R&D intensity. Overall, the findings suggest that persistent regional social norms are most strongly related to firms’ innovation investment rather than realized innovation output. |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:eti:dpaper:26033 |
| By: | Valente Fernanda; Chen Yujia; Calabrese Raffaella; Cowling Marc; Alessi Lucia (European Commission - JRC) |
| Abstract: | Small and Medium-sized Enterprises (SMEs) are the backbone of the European economy. However, theimpact of nature-related risks on SME creditworthiness is still largely unexplored. To address this gap, we incorporate indicators of nature-related risks - namely the Biodiversity Intactness Index, the HumanFootprint Index, and ENCORE scores - into an Extreme Gradient Boosting (XGBoost) credit scoring modelestimated on millions of securitised SME loans. Our results show that both physical and transition riskindicators significantly improve the predictive performance of SME credit models, highlighting the impor-tance of integrating nature-related risk metrics into financial risk assessment frameworks. |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:jrs:wpaper:202601 |
| By: | Crispeels Thomas; De Buyser Emiel; Gavigan James; Compano Ramon (European Commission - JRC) |
| Abstract: | - University Venture Capital (UVC) are set up to bridge the funding gap for university spin-offs, targeting deep tech sectors. They contribute to fortify the regional entrepreneurial ecosystem - UVCs pursue dual objectives: financial sustainability and societal impact aligned with university missions - UVC in Europe has been steady increasing over the past decade. - UVCs can be grouped into four main archetypes (Anchor, Sleeping Giant, Foundational and Catalyst), according to their governance models, maturity levels, and role within their local innovation ecosystems - EU policy can accelerate the promotion of UVC through capacity-building, co-investment schemes and alignment with broader R&I instruments (e.g., EIC Fund, Lab-to-Unicorn initiative) |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc145719 |
| By: | Michael Fritsch (Friedrich Schiller University Jena and Halle Institute for Economic Research (IWH)); Michael Wyrwich (University of Groningen, and Friedrich Schiller University Jena) |
| Abstract: | Historical structures and developments can have a significant and long-lasting impact on the level and the quality of regional entrepreneurship. One explanation for such effects is the formation of a regional "culture", an informal institution which is long-lasting and influences individual behavior. Another explanation for the long-term effects of historical structures and events is the presence of a collective memory. This article reviews the empirical evidence of the historical roots of regional entrepreneurial activity and its potential explanations. Furthermore, the consequences for the development of theories and the policy implications are discussed. Finally, the article reviews promising avenues for further research. Keywords: History, persistence, long-term effects, institutions, culture, collective memory |
| JEL: | L26 M13 N9 O1 R11 |
| Date: | 2026–04–16 |
| URL: | https://d.repec.org/n?u=RePEc:jrp:jrpwrp:2026-004 |
| By: | Jullien, Bruno; Bedre Defolie, Özlem; Biglaiser, Gary |
| Abstract: | We study a startup’s choice of its “direction of innovation, ” how well the technology fits alternative acquirers, and the effects on acquisition outcomes and market dominance. Two horizontally differentiated firms bid to acquire the innovation and then compete in the product market. Firms differ in initial quality stock and in “absorption capabilities, ” how effectively the acquired innovation is integrated into their stock. The innovator designs the innovation to intensify bidding by putting firms on a more equal footing, thereby favoring the initially lower-quality firm. As a result, “increasing dominance” is less likely than under exogenous fit. The winner of the innovation is driven primarily by relative absorption capabilities rather than initial quality: the f irm with higher absorption capability is more likely to win. The equilibrium innovation direction minimizes industry profit and consumer surplus. In a two-period model, decreasing dominance becomes more likely when the low-quality firm has stronger absorption capabilities. |
| Date: | 2026–04–20 |
| URL: | https://d.repec.org/n?u=RePEc:tse:wpaper:131684 |
| By: | Margherita Gerolimetto (Ca’ Foscari University of Venice); Stefano Magrini (Ca’ Foscari University of Venice); Alessandro Spiganti (University of Genoa) |
| Abstract: | We study the causal effect of the local supply of sector-specific innovators on patenting activity across US metropolitan areas, distinguishing between innovators active in carbon-intensive ("brown") and environmentally sustainable ("green") technological fields. Using USPTO patent data from 1990 to 2016, we document a marked shift in the geography of green innovation: while brown patenting has long been concentrated in established hubs, green patents — initially more dispersed — have increasingly converged toward the same locations. We build a theoretical framework in which local patenting activity is driven by the supply of green and brown innovators, investigating how their interaction shapes the innovation process. Empirically, we address endogeneity using a shift-share instrument that combines predetermined local technological specialization with exogenous shocks to foreign innovation across CPC sections. We find that a one-unit increase in the local supply of brown innovators raises patenting activity by approximately 0.8%, an effect that is robust across specifications. Together, these findings suggest that green innovation is becoming increasingly embedded in existing agglomeration ecosystems, with important implications for place-based climate policy. |
| Keywords: | agglomeration, climate change, innovation, spatial distribution, patents |
| JEL: | O31 O33 O44 O47 R11 R12 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ven:wpaper:2026:14 |
| By: | Duran-Vanegas, Juan |
| Abstract: | This paper examines the relationship between artificial intelligence (AI) adoption and firm-level productivity growth in a middle-income economy. Combining data on AI use from the 2019 Colombian Enterprise ICT Survey with longitudinal manufacturing data, I estimate productivity growth differentials between adopters and non-adopters while accounting for pre-adoption characteristics and productivity trajectories using entropy balancing. AI adoption is associated with a 16 percent cumulative increase in labor productivity over 2016–2019, equivalent to roughly 5 percent annualized growth. These differentials appear to be driven by higher sales and value added rather than reductions in costs or employment, are similar among in-house and outsourced AI developments, and increase for firms with higher pre-existing technical capabilities. Finally, the analysis points to changes in organizational structure as a potential adjustment margin. AI adoption is associated with a small but significant decline in the share of administrative workers, suggesting a reallocation of tasks away from administrative functions. |
| Date: | 2026–04–17 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:64nmf_v1 |
| By: | Barbara Caemmerer (ESSCA School of Management, Paris); Valentina Stan (ESSCA School of Management, Paris); Giorgio Russolillo (CEDRIC - MSDMA - CEDRIC. Méthodes statistiques de data-mining et apprentissage - CEDRIC - Centre d'études et de recherche en informatique et communications - ENSIIE - Ecole Nationale Supérieure d'Informatique pour l'Industrie et l'Entreprise - Cnam - Conservatoire National des Arts et Métiers [Cnam]) |
| Abstract: | ABSTRACT Small and medium enterprises (SMEs) dominate the global business landscape, making their sustainability efforts crucial. Yet little is known about how institutional contexts shape these practices. Using Institutional Theory, we compare the influence of cluster membership (CM), global value chain (GVC) membership, and the organizational business environment (OBE) on SMEs' implementation of sustainability practices. Data from 12, 326 SME decision‐makers in the European Union—collected via computer‐assisted telephone interviewing (CATI)—were extracted from the Eurostat Flash Eurobarometer 486. We use ordinal logistic regression to model SME sustainability practices as a function of CM, GVC membership, and the OBE, and dominance analysis to compare their relative influence. Findings show a hierarchy of contextual influence: CM has the strongest association, followed by GVC membership, while that of the OBE is relatively weak. These insights support efforts to expand SME cluster development and GVC integration to accelerate sustainable transformation and meet EU sustainability objectives. |
| Keywords: | business environment clusters global value chains Institutional Theory SMEs sustainability, business environment, clusters, global value chains, Institutional Theory, SMEs, sustainability |
| Date: | 2026–04–08 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05585592 |
| By: | Hottenrott, Hanna; Schaper, Thomas; Schwierzy, Julian |
| Abstract: | Competitive public research funding is an important policy instrument to foster scientific progress. The effective design of such funding schemes and whether they generate knowledge spillovers to industrial inventions, however, remains debated. In this paper, we investigate the impacts of geographically localized forum grants - Clusters of Excellence - awarded for additive manufacturing research under Germany's Excellence Initiative from 2006-2012. Using synthetic difference-in-differences estimation, we find that Clusters increased local scientific output in funding-related domains in the right tail of the scientific impact distribution - as measured by article citations - compared to non-funded applicant groups in similar locations. While patenting by nearby firms remained unaffected at the extensive margin, we find evidence for significant knowledge spillovers to local industry. These manifested as a rise in the number of high-impact firm patents confined to related technical areas, and Clusters receiving a significantly larger number of prior art citations from industry patents, compared to the control group, which were geographically localized and confined to top publications. Our findings support the effectiveness of forum-based funding programs for top science and provide dual implications for research and industrial policy. |
| Keywords: | Frontier science, research funding, knowledge spillovers, industry-science linkages |
| JEL: | I23 O31 O38 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:zewdip:340105 |
| By: | Luisa Alamá-Sabater (Universitat Jaume I and IIDL); Joan Crespo (Universitat de València and INTECO); Miguel A. Márquez (Universidad de Extremadura); Emili Tortosa-Ausina (Universitat Jaume I, IIDL and Ivie) |
| Abstract: | This article examines the interaction between innovation and employment and population dynamics through the development of a system of simultaneous equations. The model is ap- plied to a panel dataset of 271 European NUTS-2 regions. The results reveal strong bidi- rectional feedbacks between innovation and employment, while population dynamics operate indirectly through employment rather than exerting a direct effect on innovation. Innovation is found to follow jobs rather than people, indicating that the concentration of economic ac- tivity and labor interactions, not demographic size per se, constitute the primary drivers of regional innovative capacity. These mutually reinforcing dynamics give rise to virtuous and vicious cycles that contribute to persistent regional disparities. By opening the black box of employment–population–innovation interactions, the paper provides a structural foundation for designing more effective population, innovation, and employment policies. In particular, the analysis demonstrates that policies targeting a single dimension, whether business climate, quality of life, or innovation support, are unlikely to succeed in isolation. |
| Keywords: | nnovation, population-employment dynamics, European Union, NUTS2, spatial effects, territorial development |
| JEL: | C3 O18 O21 R1 R23 R3 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:eec:wpaper:2605 |
| By: | Aderinwale, Zainab Adewunmi; Majeed, Ajibade Ojo; Nwude, Chukwuma |
| Abstract: | In accessing financial capital and sustaining their businesses, minority women entrepreneurs in the United States confront structural barriers. These barriers are influenced by interconnected structural factors, such as systems of residential estate management, opportunities for educational and leadership, and broader economic frameworks. This research explores how these structural areas enable or impede financial access and entrepreneurial resilience. Drawing on the theory of intersectionality, empirical data from U.S. entrepreneurial studies, and a framework for economic justice, the article investigates (1) how estate and housing policies influence access to networks and resources; (2) the role of education and leadership pathways in equipping minority women for competitive business environments; and (3) how economic systems perpetuate or dismantle barriers to capital. The paper contends that addressing financial exclusion necessitates an integrated strategy that takes into account the spatial, educational, and economic determinants of entrepreneurship. Keywords: minority women, entrepreneurs, Estate Management, Education, Leadership, Financial access, Economic system. |
| Date: | 2026–04–14 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:5znsf_v1 |
| By: | Banri ITO; Naoto JINJI; Megumi NAOI |
| Abstract: | This study uses an original firm-level survey fielded during the Trump 2.0. negotiations to examine how firm characteristics relate to (i) whether and how strongly firms perceive tariff impacts and (ii) whether and how they adjust (including measures under consideration). Impacts are widespread among U.S. exporters and are largest for firms engaged in related-party (intrafirm) exports, consistent with rigid internal transactions and compliance constraints (e.g., rules of origin, pricing, regulation). Among firms with limited direct exposure to North America, more upstream firms report stronger impacts, suggesting supply-chain spillovers beyond direct exports. Adjustments are more selective, rising with firm size, and are most advanced among large, high-productivity firms. Adjustment menus differ by exposure, with intrafirm exporters favoring U.S. localization via foreign direct investment, arms-length exporters relying more on price/cost adjustments, and China/Asia exporters shifting toward third-country markets. Policy should lower export-related fixed costs for smaller firms and expand support for third-country expansion. |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:eti:dpaper:26035 |
| By: | Minjae Kim; J. Daniel Kim |
| Abstract: | Founders are known to attract prospective employees by signaling their startup’s mission, culture, and potential. But do they also shape who stays? And if so, does the founder’s influence diminish as the startup matures? Using matched employer-employee data from the U.S. Census, we address these questions, especially focusing on cases of founder premature death to identify plausibly exogenous exits. We find that founder departures significantly increase employee turnover. These effects are stronger in older and larger startups. Further analyses show that the impact of founder departure is more salient among employees who had longer shared tenure or have the same sex as the founder. These patterns suggest that employees develop complementarities with founders over time—an alignment in skills, relationships, or culture—that reinforce founders’ influence as startups mature. |
| Keywords: | Entrepreneurship, Employee Retention, Founders |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:cen:wpaper:26-21 |
| By: | Michał Gradzewicz (Narodowy Bank Polski; SGH Warsaw School of Economics) |
| Abstract: | This paper quantifies the magnitude and evolution of the efficiency of resource allocation in the Polish enterprise sector over 1993–2023 using a near-census of non-financial firms with 10+ employees. The baseline approach follows Hsieh and Klenow (2009) and shows that hypothetical elimination of within-industry inefficiencies generate sizeable and rising gains in productivity and value added, increasing from close to 40% of value added in the 1990s to roughly 70–75% in the early 2020s. Deteriorating allocation efficiency of resources is robust to changes in the identification scheme and to changes in the underlying model (accounting for wedges related to the use of materials or allowing for non-unit economies of scale and markups that vary across sectors). The efficiency of allocation worsens primarily in services and is due to entry and exit, rather than within-cohort dynamics. Firm-level regressions show that high-productive firms and middle-sized firms are disproportionately too small, that non-exporters and more profitable firms exhibit larger wedges, and that subsidies are conductive to better allocation of resources, while the same characteristics often have opposing effects on actual growth of firms’ value added. It implies that market forces and policies do not systematically steer firms toward efficient scales. Deteriorating allocation efficiency can also be a factor explaining the slowdown of productivity growth in the Polish economy since the 2000s. |
| Keywords: | allocation efficiency, productivity, misallocation, firm dynamics, markups, returns to scale, production function, Poland |
| JEL: | C23 D24 E23 E25 O47 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:nbp:nbpmis:385 |
| By: | Dawn T. Gresham (Marymount University, Arlington, USA) |
| Abstract: | Despite the rapid digital transformation of Higher Education Institutions (HEIs), the organizational dynamics underlying faculty reactions to online instructional resources remain underresearched. While traditional innovation models frequently focus on individual variables, innovation is a purposeful change process requiring fundamental behavioral shifts rather than routine procedural improvements. Faculty acceptance is a critical determinant of successful implementation; however, existing literature often overemphasizes leadership at the expense of followership, a perspective that suggests a significant institutional risk. Drawing upon a socio-constructivist framework, this paper examines innovation adoption through the lens of followership. Since an organization’s reality is built upon collective standards of thought and practice, faculty engagement is a defining element of leadership efficacy. This study utilizes the concept of "followership schemas"—generalized knowledge structures developed through socialization—to explore how these cognitive frameworks influence the integration of new technologies. By repositioning followers as potential "entrepreneurial leaders" who drive innovation from within, this paper demonstrates how a robust understanding of followership can positively impact the practical adoption of innovation in university settings. This shift in perspective offers a more comprehensive understanding of the human factors that determine the success of digital transformation in higher education. |
| Keywords: | Technology Adoption, Innovation, Faculty Adoption, Online Technology, Faculty Development, Higher Education, Followership, Followers, Leadership |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:smo:raiswp:0639 |
| By: | Innessa Colaiacovo; Margaret G. Dalton; Sari Pekkala Kerr; William R. Kerr |
| Abstract: | Multiple studies document a local bias of entrepreneurship (LBE) in recent decades, where self-employed entrepreneurs are systematically more likely than wage workers to operate in their region of birth. This paper documents an important new fact: the LBE has been declining in the United States since 1970. The LBE is still present for white men engaged in self-employment, but it no longer exists for the overall U.S.-born workforce. We connect that decline to the transformation of self-employment away from high startup-capital sectors and the reduced opportunity for local self-employed entrepreneurs to achieve high incomes compared to wage work. |
| JEL: | D24 G51 J11 J24 J62 L26 M13 R11 R13 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35088 |