|
on Small Business Management |
| By: | Pajarinen, Mika; Ylhäinen, Ilkka |
| Abstract: | Abstract We examine how entrepreneurial capital—wealth, experience, skills, and networks—released through acquisitions is reallocated to new and existing firms. We combine Finnish administrative data on firm exits, owners, board members and executives, and financial statements. We identify acquisitions from worker flows and estimate the performance of destination firms using difference-in-differences and doubly robust augmented inverse probability weighting (AIPW) estimators. Entrepreneurs who sell their firms often continue in active ownership, board, and executive roles, especially in existing firms. Acquisition counterparties—acquirers and merger partners—experience substantially faster sales growth than control firms, but their labor productivity develops less favorably, particularly in the first post-acquisition years. Profitability improves relative to controls in the existing firms that former owners join. Newly founded destination firms have substantially higher sales than control firms. We find no evidence that reallocated entrepreneurial capital generates systematic productivity gains or increases the likelihood of equity financing relative to control firms. |
| Keywords: | Mergers and acquisitions, Entrepreneurial capital, Serial entrepreneurship, Firm dynamics, Firm Performance, Difference-in-differences |
| JEL: | C23 G32 G34 L25 L26 |
| Date: | 2026–08–03 |
| URL: | https://d.repec.org/n?u=RePEc:rif:report:179 |
| By: | Berfin Kardaslar; Alexander S. Kritikos; Lukas Menkhoff |
| Abstract: | In this study, we examine the relationship between personality traits, captured by risk tolerance and the Big Five traits, and firm size, as measured by the number of employees. We show that the personality of entrepreneurs matters for the size of their firm they operate. We use a novel add-on to the German Socio-Economic Panel that includes a sub-sample of owner-managers running larger firms. High levels of risk tolerance – associated with an increased likelihood of firm exit in existing research – is positively associated with firm size for entrepreneurs in the market. High scores in extraversion are also associated with larger firms. However, a high level of openness for experience, a main driver of founding ventures, is negatively related to firm size. Overall, we show that running larger firms is associated with traits that are partially different from those that increase the likelihood of entrepreneurial entry or survival. |
| Keywords: | Entrepreneurship, risk tolerance, Big Five personality traits, firm size |
| JEL: | L26 D81 J24 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:diw:diwwpp:dp2173 |
| By: | Dohse, Dirk; Fehrenbacher, Sophia |
| Abstract: | African innovators typically suffer from severe resource constraints and need to develop strategies to cope with these constraints. This paper focusses on external knowledge sourcing and, in particular, on the role of cooperation as a means to compensate for missing resources. Findings suggest that domestic inter-firm cooperation is of outstanding importance for firm-level innovation in Nigeria, whereas cooperation with other partners (research institutions, foreign firms, consultants, or the government) has no sizable impact on the innovative performance of Nigerian firms. Moreover, we show that it is in particular young firms and firms suffering from financial constraints that benefit from cooperation, whereas foreign-owned firms benefit less. Our findings contribute to a better understanding of the drivers of firm-level innovation in sub-Saharan Africa and have important implications for firm strategies and innovation policy. |
| Keywords: | Resource-constrained innovation, Knowledge sourcing, Inter-firm cooperation, Coactive learning, Africa |
| JEL: | D22 L25 O32 O36 O55 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifwkie:341859 |
| By: | Jorge-Vinicio Murillo-Rojas (Instituto Centroamericano de Administración de Empresas (Costa Rica, Alajuela) - INCAE); Jan Brinckmann (URL - Universitat Ramon Llull [Barcelona]); Marc van Essen (EM - EMLyon Business School) |
| Abstract: | Research Summary: Business incubators are among the most widely implemented instruments to foster entrepreneurship. Yet empirical evidence on their effectiveness remains fragmented and often contradictory. Limited research systematically compares how different types of incubators influence multiple venture performance outcomes, including innovation, survival, growth, profitability, and employment. In this meta-analysis of 39 empirical studies encompassing 55, 219 firms, we synthesize the relationship between business incubation and different venture performance dimensions. Our results reveal a significant positive overall effect, moderated by the types of support mechanisms provided and the incubators' ownership identities. We find strong positive effects on innovation and a modest but statistically significant effect on growth, whereas effects on survival, profitability, and employment are weaker and, in part, statistically insignificant. Managerial Summary: Policymakers regularly invest in incubators, yet uncertainty remains about which models deliver meaningful value to supported firms. Drawing on evidence from 39 studies covering more than 55, 000 firms, this meta-analysis shows that incubators can improve innovation and firm growth, while effects on survival, profitability, and job creation are limited or inconsistent. Incubator design and governance are central drivers of support effectiveness. Programs that emphasize bridging-that is, linking startups to investors, customers, and expert networks-generate stronger outcomes than models focused primarily on buffering, such as subsidized space or administrative support. Private and university incubators outperform public models, which often face bureaucratic constraints. These findings provide guidance on how managers and policymakers can align an incubator's support model and governance with the specific outcomes they seek to achieve. |
| Keywords: | incubator, meta-analysis, ownership, performance, resource support |
| Date: | 2026–06–12 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05680688 |
| By: | Akcigit, Ufuk; Alp, Harun; Pearce, Jeremy; Prato, Marta |
| Abstract: | This paper explores the symbiotic relationship between transformative entrepreneurs and inventors, which is crucial for economic growth. We utilize microdata from Denmark to demonstrate that while the relationship between IQ and general entrepreneurship tends to be negative, it is strongly positive among transformative entrepreneurs. Transformative entrepreneurs, often with higher IQ and education levels, significantly drive R&D and business growth, thereby providing substantial opportunities for inventors. In contrast, average entrepreneurs are more influenced by their family’s entrepreneurship background. Our economic model links these dynamics to overall economic progress, highlighting how higher education influences career paths in entrepreneurship and invention. We identify talent misallocation caused by unequal education access, particularly affecting lower-income families. Our findings indicate the most effective policies strengthen the interplay between higher education, innovation, and entrepreneurship to foster transformative businesses and achieve long-run economic growth. |
| Keywords: | entrepreneurship |
| JEL: | O31 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:20185 |
| By: | Francisco Villegas (UDP - Universidad Diego Portales [Santiago - Chili]); Stefan Markovic (NEOMA - Neoma Business School); Cristina Sancha (ESADE Barcelona - Sant Cugat); Nebojsa Davcik (Métis Lab EM Normandie - EM Normandie - École de Management de Normandie = EM Normandie Business School); Piyush Sharma (Curtin University); Joan Llonch (UAB - Universitat Autònoma de Barcelona = Autonomous University of Barcelona = Universidad Autónoma de Barcelona) |
| Abstract: | Among the extensive research into various environmental strategies and their effects on competitive advantage, a gap remains regarding whether small and medium-sized enterprises (SMEs) can benefit from adopting a circular economy and what kinds of internal knowledge they need to embrace it effectively. Based on survey data from 205 SME managers, this study examines how intrinsic and extrinsic learning orientations influence circular economy adoption and competitive advantage. Using structural equation modeling, we validate that both learning orientations are important in fostering the adoption of circular economy within organizations, leading to an increased competitive advantage. Our findings highlight the need for formal knowledgebuilding mechanisms and internal ecosystems to support sustainable change. Overall, our study offers a guide for learning process development for practitioners, consumers, and policymakers in SME contexts. |
| Keywords: | SMEs, Intrinsic vs. extrinsic learning orientation, Environment, Competitive advantage, Circular economy |
| Date: | 2025–09–16 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05652058 |
| By: | D'Alessandro, Francesco; Santarelli, Enrico; Vivarelli, Marco |
| Abstract: | This study examines how regional technological relatedness and local AI knowledge influence regional innovative activity, as measured by patenting activity. Using a novel three-way longitudinal dataset (670 four-digit CPC classes × 302 NUTS-2 regions × nine four-year periods, 1986-2021) and leveraging a deep learning-based identification of AI patents, we show that two broad mechanisms operate in parallel. First, in accordance with the extant literature, technologies that are cognitively close to a region's existing patent portfolio enjoy higher patenting activity, confirming that relatedness remains a strong and persistent predictor of innovative output. Second, local AI endowments are positively associated with patenting across technological fields, even after conditioning on relatedness, indicating that AI plays an enabling and cross-cutting role in a given regional innovation system. Moreover, the interaction between relatedness and AI turns out to be negative and statistically significant, implying that AI attenuates the extent to which local innovative efforts depend on the technology's proximity to the regional portfolio. In sum, AI appears to enhance overall local innovative activity while reducing its reliance on pre-existing regional knowledge structures. |
| Keywords: | Artificial intelligence, AI, technological change, regional innovation, relatedness |
| JEL: | O31 R11 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1792 |
| By: | Valentine Georget (Université Côte d'Azur, CNRS, GREDEG, France; LEST, CNRS, Aix Marseille Univ, Aix-en-Provence, France) |
| Abstract: | The aim of this research is to strengthen the theoretical foundations of Corporate Entrepreneurship (CE) by clarifying its empirical scope. Based on a multiple case study of CE forms implemented by twenty large French firms, the study presents an integrative framework structured around two dimensions: the location of CE actors (internal, external, or mixed) and the managerial orientation of CE (bottom-up, top-down, or hybrid). Their combination identifies nine generic CE forms, including an overlooked form-interpreneurship-which introduces an ecosystem perspective on CE. |
| Keywords: | Corporate Entrepreneurship; Internal Corporate Entrepreneurship; External Corporate Entrepreneurship; Interpreneurship; Innovation |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:gre:wpaper:2026-19 |
| By: | Asia Guerreschi (Sustainability Environmental Economics and Dynamic Studies (SEEDS); Department of Economics and Management, University of Ferrara); Corentin Tenailleau (HEC Paris, Sustainability and Organizations Institute (S&O); École Nationale des Ponts et Chaussées, Department of City, Environment, Transportation); Fernando J. Díaz López (Sustainability Environmental Economics and Dynamic Studies (SEEDS); HEC Paris, Sustainability and Organizations Institute (S&O); Department of Industrial Engineering, Stellenbosch University) |
| Abstract: | Climate adaptation and resilience are increasingly important dimensions of corporate sustainability and R&D strategies, yet management and economics research remains largely focused on climate mitigation and decarbonisation. This paper develops an exploratory framework linking business model innovation, organisational resilience and climate adaptation through the lens of dynamic capabilities. Using a multiple case study of three France-based logistics and transportation firms (CMA CGM, Getlink and Sogaris), the study examines how firm-level micro-foundations of dynamic capabilities contribute to anticipating, absorbing, adapting to and transforming in response to climate change. Findings suggest that climate resilience capabilities are emerging but remain unevenly developed across firms, with sensing and seizing capabilities more mature than reconfiguration and innovation capabilities. The paper proposes an initial conceptual framework (CLIMB Framework) and identifies avenues for future theoretical and empirical research on climate resilience innovation. |
| Keywords: | Climate adaptation; Climate resilience; Dynamic capabilities; Business model innovation; Corporate resilience; Climate innovation |
| JEL: | D81 Q54 Q55 Q56 O32 O39 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:srt:wpaper:1226 |
| By: | Alice Albonico; Marco Guerzoni |
| Abstract: | Is the aggregate productivity slowdown in the U.S. driven by a decline in successful innovation? This paper addresses this question using a medium-scale DSGE model with endogenous technology growth. The model distinguishes between two innovation channels: a spillover channel, which governs the efficiency with which aggregate R&D advances the technological frontier, and a difficulty channel, which governs the probability that sectoral R&D efforts successfully generate innovation. We estimate the model on U.S. macroeconomic and R&D data over the period 1984-2019, using macroeconomic observables and incorporating a patent-text-based measure of technological creativity that is informative about innovation probability. The results show that spillover shocks are the main drivers of short and medium run fluctuations in TFP growth, while R&D difficulty shocks mainly explain the probability of successful innovation. Once creativity data are included, the estimated difficulty shock becomes less volatile and more persistent, suggesting that innovation difficulty is a slow moving force shaping successful innovation. However, its quantitative contribution to TFP fluctuations remains substantially smaller than that of spillover shocks, although it matters in specific episodes. |
| Keywords: | Innovation Difficulty, Endogenous growth, R&D investments, Bayesian estimation |
| JEL: | E3 O3 O4 C11 C13 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:mib:wpaper:580 |
| By: | Fernández-Villaverde, Jesús; Yu, Yang; Zanetti, Francesco |
| Abstract: | Defensive hiring of researchers by incumbent firms with monopsony power reduces creative destruction. This mechanism helps explain the simultaneous rise in R&D spending and decline in TFP growth in the US economy over recent decades. We develop a simple model highlighting the critical role of the inelastic supply of research labor in enabling this effect. Empirical evidence confirms that the research labor supply in the US is indeed inelastic and supports other model predictions: incumbent R&D spending is negatively correlated with creative destruction and sectoral TFP growth while extending incumbents' lifespan. All these effects are amplified when ideas are harder to find. An extended version of the model quantifies these mechanisms' implications for productivity, innovation, and policy. |
| Keywords: | Productivity growth |
| JEL: | E22 L11 O31 O33 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:20041 |
| By: | Coelli, Federica; Pelzl, Paul |
| Abstract: | Using oil and gas shocks as an exogenous source of business cycles at the U.S. commuting zone level, we provide novel evidence that local booms increase local patenting, especially in non-metropolitan areas. This reflects agglomeration economies that make incumbent inventors more productive. In contrast to total patenting, innovation in oil and gas — the sector closest to the boom — is countercyclical, consistent with higher opportunity costs of innovation in a booming industry. Our findings shed new light on the spatial dimension of innovation, inform recent debates on place-based industrial policy, and help to reconcile mixed evidence on the cyclicality of innovation. |
| Keywords: | Innovation |
| JEL: | L71 O12 O31 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:20317 |
| By: | Schmutzler, Armin |
| Abstract: | By affecting prices and thereby market shares of green and brown firms, product innovations and process innovations influence industry emissions even when they do not directly affect the emission intensity of the innovating firm. Using a differentiated two-stage duopoly, this paper therefore analyzes the effects of environmental policy on such innovations, and it asks how these effects differ from each other and from those of environmental innovations that directly reduce the emission intensity. The paper investigates the determinants of R&D investments, showing in particular that incentives for certain types of potentially beneficial innovations may be negative. Moreover, it analyzes how suitable policies can foster green innovation. |
| Keywords: | Innovation; Environmental policy; Imperfect competition |
| JEL: | Q55 L13 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:20170 |
| By: | Canzian, Giulia; Crivellaro, Elena; Duso, Tomaso; Ferrara, Antonella Rita; Sasso, Alessandro; Verzillo, Stefano |
| Abstract: | The Covid-19 pandemic caused a global economic crisis, leading governments to provide substantial State Aid to support firms. This paper examines the effectiveness of Covid-related financial support in Spain and Italy, focusing on its impact on firm recovery. Using a difference-in-differences (DiD) approach combined with propensity score weighting, it compares outcomes of similar firms receiving aid to those without. The results show significant benefits for micro-firms, including mitigated turnover declines and increased investments in both tangible and intangible assets. The findings highlight the critical role of government support in business survival and recovery, especially for SMEs, during the pandemic. |
| Keywords: | State aid; Aid effectiveness; Temporary Framework; Covid; Firm growth; investment; Difference-in-differences |
| JEL: | D04 D22 L25 L52 P43 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:20172 |
| By: | Ferrando, Annalisa; Lamboglia, Sara; Rariga, Judit; Schmidt, Maurice |
| Abstract: | This paper explores the adoption of artificial intelligence (AI) technologies among euro area firms, using harmonised firm-level data from two dedicated modules of the Survey on the Access to Finance of Enterprises (SAFE) conducted in June and December 2025. Based on responses from around 6, 000 firms across 12 euro area countries, the study examines AI adoption rates, drivers, barriers and economic implications. The findings suggest that AI diffusion among euro area firms is progressing rapidly but unevenly, with significant variation across countries and firm characteristics. Approximately 70% of firms report some level of AI use, but only 7% classify their adoption as significant. Adoption is highest in the Netherlands, Finland and Austria, and lowest in Italy and Ireland. Larger and younger firms, particularly in technology-intensive sectors, are leading adopters. Firms identify expected improvements in business processes as the main driver of adoption, while key barriers include skill shortages, data privacy concerns and system incompatibilities. Current AI use and investment are primarily financed through internal funds, complemented by grants and subsidised bank loans. AI adoption is positively associated with firm productivity, turnover growth, fixed investment and own selling price expectations, particularly among intensive users. Survey data show no evidence yet of aggregate labour shedding; instead, AI adoption is positively associated with employment growth. However, firms’ inflation expectations appear largely unaffected by current AI use. JEL Classification: C93, D22, E31, L25, O33 |
| Keywords: | artificial intelligence, firm-level survey data, inflation expectations, productivity |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbops:2026395 |
| By: | Tiago Neves Sequeira (University of Coimbra, Faculty of Economics and CeBER) |
| Abstract: | Many frontier technologies generate both civilian and military applications, raising the question of how policies targeting one application influence innovation when knowledge is shared across sectors. This paper develops a Schumpeterian model of directed technical change in which civilian, military and dual-use technologies coexist as endogenous innovation ladders. The key innovation is to distinguish between a non-rival stock of knowledge generated by dual-use research and rival intermediate goods supplying civilian and military markets. Consequently, policy interventions in one sector redirect research incentives throughout the economy. The model admits a stable balanced-growth path with an interior allocation of research effort. A calibration based on U.S. patent stocks, aggregate R&D intensity and defence R&D expenditure illustrates the transition dynamics. Modest policy interventions substantially redirect innovation towards dual-use technologies, generating civilian knowledge spillovers while leaving long-run aggregate growth largely unchanged. |
| Keywords: | Directed technical change, dual-use innovation, endogenous growth, defense R&D, Schumpeterian growth, industrial policy |
| JEL: | O31 O32 O33 O40 H56 L16 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:gmf:papers:2026-06 |
| By: | Gumpert, Anna; Manova, Kalina; Rujan, Cristina; Schnitzer, Monika |
| Abstract: | This paper provides an integrated analysis of multinational companies' global production and innovation. We establish novel stylized facts using rich data on the network of production affiliates and patent activity of German multinationals. We rationalize these facts with a heterogeneous-firm model, in which companies jointly determine the location and scale of production, basic innovation and applied innovation, under asymmetric complementarities across these three activities. Empirical evidence consistent with the model indicates that bigger MNCs innovate more intensively in terms of patent frequency and quality, and offshore innovation to more countries, including both countries with and without production affiliates. Moreover, MNCs' innovation portfolio follows countries' comparative advantage across technology classes, with applied innovation more likely to be co-located with production than basic innovation. |
| Keywords: | Multinational firms; Fdi; Offshoring; Innovation; Patents |
| JEL: | F20 F23 F63 L23 L24 O31 O32 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:20045 |
| By: | Acharya, Viral; Engle, Robert; Wang, Olivier |
| Abstract: | We study how government policies and corporate commitments to decarbonize interact under two externalities: environmental damages and green innovation spillovers. Unconstrained carbon taxes and innovation subsidies could achieve first-best outcomes, but when government policies face constraints, commitments by large firms and institutional investors can serve as profit-driven coordination devices that spur green innovation and technology adoption, and thereby reduce overall transition costs. Firm commitments also enhance government policy credibility by lowering the need for high future carbon taxes. Our empirical evidence confirms that firm size and green common ownership drive Net Zero commitments and decarbonization investments. |
| Keywords: | Emissions; Abatement; Renewables |
| JEL: | Q5 H2 G3 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:20040 |
| By: | Iglesias-Osores, Sebastian |
| Abstract: | This working paper analyses the architecture and evolution of public funding for science, technology and innovation (STI) in Peru. It applies a descriptive method combining official budget series for 2015-2025 for CONCYTEC and ProInnóvate, administrative grant records, competition information and official 2026 funding calendars. Nominal amounts are contrasted with real values expressed in 2025 soles. The results show high budget execution and real growth for both national operators, with a recent acceleration in business innovation funding. Allocation nevertheless remains fragmented by institution, instrument, beneficiary type and territory: PROCIENCIA is concentrated in universities and research institutes, ProInnóvate mainly serves firms and entrepreneurs, and Lima captures a dominant share of scientific funding. The paper concludes that grants, co-financing and R&D tax incentives perform complementary functions, while firms’ access depends on project stage, co-financing capacity and the quality of project formulation. The analysis is descriptive and does not estimate the causal impact of public funding on innovation outcomes. |
| Keywords: | science, technology and innovation; public funding; public budget; business innovation; Peru |
| JEL: | H54 O31 O32 O38 |
| Date: | 2026–07–07 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:130207 |
| By: | Schoenauer, Anne; Trompke, Tilman (University of Groningen) |
| Abstract: | Purpose: This paper develops a scalable method, called tilt, and an associated dataset to estimategreenhouse gas emissions and emission reduction potentials of small and medium-sized enterprises(SMEs). Thereby, we close the SME emission data gap.Design/methodology/approach: We estimate firm-level emissions by matching firms’ productinformation to product-level emission factors and aggregating them using simulated revenue shares.We apply the method to a sample of 7, 885 German SMEs.Findings: tilt produces granular estimates that capture within-sector heterogeneity omitted bysectoral averages. Benchmarking against a sector-based model and large firms’ reported emissionsshows strong correlations, with tilt yielding more conservative estimates on average. Differences areinherent to methodological choices. We further identify high-emitting SME sectors and emission-intensive firms with high reduction potential.Research limitations/implications: We achieve representativeness through stratified sampling andpost-stratification weighting. The data enable research on SME decarbonisation pathways, regionalanalyses of sectoral emission hotspots, and linkages to financial datasets. The method is applicablebeyond Germany in other countries. Model uncertainty is documented transparently.Practical implications: The data help banks address asymmetric information in SME climaterisk assessment and enable SMEs to conduct emissions analysis and supply-chain disclosure usinginterpretable, product-based estimates.Social implications: Moving beyond sector averages, the dataset supports more targeted climatepolicy, financial regulation, and empirical evaluation of SME decarbonisation pathways.Originality/value: To the best of our knowledge, this paper introduces the first scalable methodand dataset for estimating product-based emissions and reduction potentials for SMEs. |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:gro:rugfeb:2026001-gem |
| By: | Aghion, Philippe; Bergeaud, Antonin; Dewatripont, Mathias; Matt, Johannes |
| Abstract: | We develop a model of endogenous growth and firm dynamics with soft budget constraints, where firms differ in their innovation speed and slower firms need additional financing in order to eventually innovate. As creditors cannot anticipate refinancing needs in advance nor credibly commit to withholding future refinancing, a Soft Budget Constraint Syndromeemerges, causing excessive entry by slow firms and crowding out potentially more efficient innovators. The resulting trade-off between the positive effects of budget constraint softening on innovation by incumbents and slow-type entrants and its negative effects on entry by fast innovators, generates a hump-shaped relationship between refinancing costs and aggregate growth. Calibrating the model to French firm-level data, we show that the budget constraint softening associated with the decline in interest rates in the aftermath of the Global Financial Crisis accounts for 54% of the observed drop in the aggregate growth rates post-crisis. Although the softening in budget constraints has had a positive effect on incumbent innovation, this was more than offset by the resulting decrease in the entry rates of good firms (by 61\% relative to the pre-crisis steady state). |
| Keywords: | Firm dynamics |
| JEL: | O30 O43 E44 E50 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19996 |
| By: | Akcigit, Ufuk; Chhina, Raman; Cilasun, Seyit; Miranda, Javier; Serrano-Velarde, Nicolas |
| Abstract: | Beginning in January 2021, over less than two years, credit card usage by small U.S. businesses nearly doubled, interest payments rose by 60%, and delinquencies reached 2.8%. In this paper, we utilize near real-time QuickBooks data from over 1.6 million small businesses and a targeted survey to highlight the critical role that credit card financing plays in small business activity. We find, first, monthly credit card payments were up to three times higher than loan payments during this time. Second, we use targeted surveys of these small businesses to establish credit cards as a key financing source in response to firm-level shocks, such as uncertain cash flows and overdue invoices. Third, we highlight the critical role of credit cards as a key financial transmission mechanism. Following the Federal Reserve’s rate hikes in early 2022, banks cut credit card supply, leading to a 15.75% drop in balances and a 10% decline in revenue growth, as well as a 1.5% decrease in employment growth among U.S. small businesses. These higher rates also rendered interest payments unsustainable for many, contributing to half of the observed increase in delinquencies. Lastly, a simple heterogeneous firm model with a cash-in-hand constraint illustrates the significant macroeconomic impact of credit card financing on small business activity. |
| Keywords: | entrepreneurship |
| JEL: | J23 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:20130 |
| By: | Ina Ganguli; Jeffrey Lin; Vitaly Meursault; Nicholas Reynolds |
| Abstract: | Over nearly two centuries, U.S. inventions have become increasingly dissimilar: not just fewer head-to-head collisions between inventors, but growing distance between neighboring inventions. We document this secular decline in similarity using validated neural language models applied to the full text of claims in over 11 million U.S. patents (1836–2023), corroborated by a 98 percent decline in patent interference rates, a measure of independent simultaneous invention. Measuring this correctly requires validation, since different representations of the same patent text can yield opposite conclusions about whether inventions are converging or spreading out. Our validation framework, the first systematic comparison for patent text, selects among these locations in idea space. The model explains spreading out and connects it to several independently documented patterns — rising R&D investment per inventor, increasing patent values, weakening knowledge spillovers, and declining research productivity. The mechanism is spatial; as inventors spread out to capture new territory, inventions become more valuable but also more costly for others to absorb. In doing so, the model turns spillover intensity, innovation step size, and research productivity from fixed primitives into outcomes of inventor positioning. A calibrated decomposition attributes roughly 40 percent of the long-run decline in U.S. research productivity to these spatial forces, alongside traditional explanations such as fishing out and the burden of knowledge. Where inventors stand relative to each other in idea space matters as much for growth as how many of them there are. |
| Keywords: | Idea Space; Knowledge Spillovers; Research Productivity; Endogenous Growth; Technological Distance; Patent Embeddings |
| JEL: | O31 O41 O47 C55 |
| Date: | 2026–08–05 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedpwp:103607 |
| By: | Fichter, Klaus; Neumann, Thomas; Olteanu, Yasmin; Grothey, Tim; Block, Jörn |
| Abstract: | The Green Startup Report 2026, published by the Borderstep Institute for Innovation and Sustainability, analyzes the current development of the green startup landscape in Germany and continues the scientific observation of the scene that has been carried out continuously since 2013. The long-term perspective enables a reliable classification of structural trends, technological developments, and changes in startup dynamics. The green startup community has continued to grow and now comprises 4, 668 companies (founded between 2016 and 2025). Green startups make a key contribution to Germany's technological innovation capacity and climate protection performance as a business location. They are characterized by a high patent rate, above-average research intensity, and significant CO2 reduction potential. On average, their solutions reduce greenhouse gas emissions by more than 70 percent compared to standard technologies on the market. At the same time, the report shows a decline in start-up momentum for the first time in years. Despite stable and growing green tech markets, shifts in political and public attention as well as regulatory uncertainties, particularly in capital-intensive sectors, are slowing further growth. The Green Startup Report 2026 thus provides a key data basis for the strategic development of German start-up, innovation, and climate policy. |
| Keywords: | green startups, climate protection potential, green startup ecosystem, Business model, Sustainable business model, Green tech business model, Impact potential, Energy transition, Sustainable chemistry, Sustainability, GreenTech, Climate Forward Financing |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esrepo:341854 |
| By: | W. Addessi; I. Etzo; A. Tidu; S. Usai |
| Abstract: | Given the Cultural and Creative Industries' (CCIs) growing contribution to Italy's GDP and their fragmented structure of small-medium enterprises, this paper explores the impact of agglomeration on Italian province productivity. To overcome the Modifiable Areal Unit Problem (MAUP) inherent in administrative boundaries, we employ a distance-based specialization index to assess whether firms benefit from operating in close proximity to peers within the same industry. We replicate this analysis at both the domain level (Cultural vs Creative) and the macro-sector level (e.g., Architecture and Design, Performing Arts). Our findings reveal a positive effect of agglomeration on Total Factor Productivity (TFP) across all levels of aggregation. However, when utilizing value added per employee as a metric for productivity, the positive impact is exclusively significant at the macro-sector level, dissipating at more aggregated domain classifications. These results underscore the necessity of facilitating co-location policies for CCIs, particularly given their SME-dominated nature. |
| Keywords: | Cultural and Creative Industries, spatial concentration, agglomeration economies, total factor productivity, M-index |
| JEL: | D24 L25 R12 Z11 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:cns:cnscwp:202612 |
| By: | Züfle, Simon; Bickenbach, Frank |
| Abstract: | The global proliferation of organizations like incubators, accelerators, and co-working spaces is particularly striking on the African continent. Over the last 10+ years, a large number of such organizations have been established in African countries, which are mainly referred to as (innovation) hubs. However, along with the strong growth in the number of innovation hubs, a vast increase in the diversity of these organizations can also be observed, resulting in a general fuzziness of the hub concept. In this critical review, we describe the origin and the evolution of the concept. We contribute to the literature by providing conceptual clarity and disentangling the fuzziness of the innovation hub concept. We introduce a new definition of innovation hubs and develop four key differentiation criteria. Based on that, we provide avenues for advancing research on innovation hubs. Our review also entails practical implications, as entrepreneurs in African countries are wondering which type of hub they should choose for developing their business ideas and growing their entrepreneurial ventures. |
| Keywords: | Innovation, Technology, Africain, cubator, accelerator, innovation hub |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifwkie:341698 |
| By: | Comin, Diego; Lashkari, Danial; Mestieri, Marti |
| Abstract: | We document the structural transformation of innovation using historical patent data since the 1850s, along with R&D expenditure and TFP growth for the post-war period. Over time, innovation has shifted from agricultural sectors to manufacturing, and, more recently, to services. We develop and quantify a multi-sector semi-endogenous growth model of structural change in innovation and production, incorporating the classical demand-pull and technology-push drivers of innovation. Sectors differ in their innovation technologies, and the extent to which they benefit from knowledge spillovers (technology-push). Nonhomothetic demand shifts the market shares toward income-elastic sectors along the growth process (demand-pull). A calibrated version of our model replicates the structural transformations of innovation and production observed in the US data. Using the model, we evaluate the future impact of Baumol’s disease on aggregate productivity and find it to be minimal. Our results suggest that aggregate productivity growth may recover in the coming decades as the service sector becomes increasingly innovation-driven. |
| Keywords: | Innovation; Productivity |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:20273 |
| By: | Krieger, Bastian; Steines, Leon; Bangert, Hendrik Hermann; Glas, Andreas; Eßig, Michael |
| Abstract: | Public organizations rely on open innovation to maintain and improve public service performance. Suppliers are a key source of such innovation. Public contracting authorities act as the interface between public organizations and supply markets, shaping whether supplier innovations are identified, rewarded, and selected. Combining representative firm-level data from the German Community Innovation Survey with official tender-level data from the Tenders Electronic Daily database, we construct firms' public procurement award histories between 2006 and 2023. We distinguish between four tender categories that differ by geographic scope (domestic versus international) and award mechanism (price-based versus criteria-based). We further differentiate between "real outsiders" and "pseudo-outsiders" based on experience supplying public markets. Using multivariate probit models, we examine how different degrees of innovation novelty are associated with supplier selection across tender categories and outsider status. Three findings emerge. i) Suppliers' category-specific procurement experience increases the likelihood of subsequent selection, indicating rigidity in public procurement markets. ii) Price-based tenders are associated with firm-level novelties, whereas criteria-based tenders are associated with market-specific novelties. iii) These innovation advantages are concentrated among "real outsiders" and largely disappear for "pseudo-outsiders", for whom prior category-specific procurement experience becomes the main predictor of subsequent selection. |
| Keywords: | Public procurement, open innovation, supply markets, tender design, competition |
| JEL: | H57 O36 D40 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:zewdip:341998 |
| By: | Mutsamwira, Sam |
| Abstract: | This study examines how scientist-entrepreneurs in New Zealand experience and navigate intellectual property (IP) during the technology transfer process. Using interpretative phenomenological analysis, the study draws on semi-structured interviews with fourteen scientist-entrepreneurs, analysed via reflexive thematic analysis. The findings reveal a central IP Paradox; IP is simultaneously an indispensable prerequisite for technology transfer and a significant impediment. Useful theories, the Innovation Incentive Theory, Knowledge Spillover Theory of Entrepreneurship, and Resource-Based View, only partially explain this phenomenon, as managing IP introduces profound strategic tensions, costs, and uncertainties. The analysis elucidates the IP Paradox for scientific start-ups, which complements and adds on to these dominant theoretical frameworks, and then develops an IP Navigation Matrix as a sense-making and decision-support tool grounded in entrepreneurs’ lived experience. This provides a nuanced understanding of IP’s dual role, offering direct managerial and policy implications for improving technology transfer, supporting academic entrepreneurship, and fostering innovation in New Zealand and other small open economies. The findings also provide practical insights for IP practitioners advising scientific ventures in New Zealand. Keywords: intellectual property protection; scientific start-ups; patents; trade secrets; technology transfer; New Zealand |
| Date: | 2026–05–31 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:ywp2a_v1 |
| By: | Ideal Syka (i6eal / Syka Ventures UG (haftungsbeschränkt)) |
| Abstract: | This research note uses harmonised Eurostat ICT-usage statistics to describe enterprise artificial-intelligence adoption in Germany relative to the EU-27 in 2025. The population covers enterprises with at least ten employees and self-employed persons in covered non-financial NACE activities. AI use is reported by 25.97% of German enterprises, compared with 19.95% in the EU-27, placing Germany eighth among member states. Adoption rises sharply with firm size in Germany, from 23.06% among enterprises with 10–49 employees to 56.99% among enterprises with 250 or more. Germany exceeds the EU-27 aggregate in each of eight displayed activity groups, with the largest difference in information and communication (75.38% versus 62.52%). The comparisons are descriptive, not causal. Survey flags, missing values and denominators are retained, and a reported German enterprise-definition break in 2025 limits longitudinal interpretation. |
| Keywords: | artificial intelligence; technology adoption; firm size; sector heterogeneity; Germany; European Union; digitalisation |
| JEL: | O33 L25 M15 |
| Date: | 2026–07–31 |
| URL: | https://d.repec.org/n?u=RePEc:evi:irnote:2026-01 |
| By: | Santosh Anagol; Shing-Yi Wang |
| Abstract: | We harmonize survey data on interest rates paid by approximately 15, 000 small and medium enterprises across 125 firm surveys and 285, 000 households across 83 household surveys spanning developing and rich countries to study the relationship between monetary policy rates and borrowing costs faced by SMEs and households. Using within-country variation in policy rates over time, we find that pass-through to firm and household borrowing rates is stronger in richer countries than in poorer ones. |
| JEL: | E52 O57 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35439 |
| By: | Cai, Wei; Prat, Andrea; Yu, Jiehang |
| Abstract: | Prior research has pointed to differences in organizational capital as a reason for the persistent performance discrepancies among similar firms. In this paper, we develop and validate new measures of organizational capital. Based on over a million crowd-sourced employee reviews scraped from Glassdoor, we construct the measures of organizational capital at the firm-year level using the word embedding model and ChatGPT-generated synthetic reviews. Our measures vary over time in accordance with macro trends, and differ both across and within firms, reflecting firm heterogeneity and major internal changes. We validate our measures by testing empirical predictions of the properties of organizational capital discussed in prior literature. Our findings suggest that this measure captures a slowly evolving intangible asset that is significantly associated with firm performance and top management's influence, aligning with the conceptualization of organizational capital by Dessein and Prat (2022). We further showcase applications of our measures in accounting, economics, finance, and management literature. Taken together, the paper provides implications for various stakeholders who are interested in assessing and managing firms' organizational capital. |
| Keywords: | Organizational capital |
| JEL: | M21 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:20229 |
| By: | Liana Bomm (first name last name) (Paderborn University); ... (first name last name of second author) (... (workplace of second author)) |
| Abstract: | Executive compensation increasingly relies on long-term incentives (LTIs) to align managerial decision-making with firms' long-term objectives. Prior research provides mixed evidence on the relationship between LTIs and firm performance, with most studies relying on aggregate measures of long-term incentives. Using panel data on executives from 80 German DAX and MDAX firms covering the period 2006–2021, this study employs fixed-effects panel regressions to distinguish between equity- and cash-based LTIs, examine the relative weighting of LTIs within executive compensation, and analyze differences across organizational contexts proxied by compensation regimes. The results reveal systematically different relationships between equity- and cash-based LTIs across accounting- and market-based performance measures and across different time horizons. The relative weighting of LTIs provides information beyond compensation levels, and the relationships between executive incentive structures and firm performance vary across organizational contexts. Overall, the findings demonstrate the importance of moving beyond aggregate measures toward a more differentiated understanding of executive incentive design by jointly considering the form of long-term incentives, their relative weighting within the overall compensation package, and the organizational context in which they operate. (abstract of the paper) |
| Keywords: | Executive Compensation, Long-Term Incentives, Incentive Design, Compensation Structure, Firm Performance (keywords) |
| JEL: | G30 G34 J33 M12 |
| URL: | https://d.repec.org/n?u=RePEc:pdn:dispap:181 |