|
on Small Business Management |
| By: | Mitsch, Frieder; Hassel, Anke; Soskice, David |
| Abstract: | This paper examines Germany’s distinctive path toward the knowledge economy, emphasizing the role of regional innovation dynamics and governance, with a focus on Southern Germany’s high-innovation clusters. Unlike other advanced economies that pivoted toward high-tech services, Germany has prioritized digital advancements within its manufacturing base, creating a model driven by smart manufacturing and Industry 4.0. We argue that regional growth coalitions, formed by firms, social partners, and local governments, foster institutional configurations supporting knowledge-based and innovation-focused competition. This regionalized governance has enabled Southern Germany to capitalize on Germany’s innovation agenda, a success that other regions have struggled to replicate. By analysing multi-scalar dynamics—interactions across regional, national, and EU levels—our study expands evolutionary economic geography (EEG) and political economy literature, challenging traditional, nation-centric frameworks. Our findings highlight that cohesive regional governance can enhance national and supranational innovation strategies, underscoring the importance of regional institutions in advancing and sustaining knowledge economy innovation. |
| JEL: | N0 R14 J01 |
| Date: | 2024–12–05 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:126264 |
| By: | Leogrande, Angelo; Drago, Carlo; Mallardi, Giulio; Costantiello, Alberto; Magaletti, Nicola |
| Abstract: | This article focuses on the propensity to patent across Italian regions, considering data from ISTAT-BES between 2004 and 2019 to contribute to analyzing regional gaps and determinants of innovative performances. Results show how the North-South gap in innovative performance has persisted over time, confirming the relevance of research intensity, digital infrastructure, and cultural employment on patenting activity. These relations have been analyzed using the panel data econometric model. It allows singling out crucial positive drivers like R&D investment or strongly negative factors, such as limited mobility of graduates. More precisely, given the novelty of approaches applied in the used model, the following contributions are represented: first, the fine grain of regional differentiation, from which the sub-national innovation system will be observed. It also puts forward a set of actionable policy recommendations that would contribute to more substantial inclusive innovation, particularly emphasizing less-performing regions. By focusing on such dynamics, this study will indirectly address how regional characteristics and policies shape innovation and technological competitiveness in Italy. Therefore, it contributes to the debate on regional systems of innovation and their possible role in economic development in Europe since the economic, institutional, and technological conditions are differentiated between various areas in Italy. |
| Keywords: | Innovation, Innovation and Invention, Management of Technological Innovation and R&D, Technological Change, Intellectual Property and Intellectual Capital |
| JEL: | O30 O31 O32 O33 O34 O35 O38 |
| Date: | 2024–12–23 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:123081 |
| By: | Pylak, Korneliusz; Mickiewicz, Tomasz; Kitsos, Tasos |
| Abstract: | Our study explores the factors influencing the creation and closure of firms in urban micro-spaces, highlighting the relationship between Knowledge-Intensive Business Services (KIBS) and non-KIBS sectors. Employing 2007-2019 firm-level data from Warsaw, the capital of Poland, we uncover overlooked micro-geographical and sectoral patterns. We reveal spatial and sectoral interdependencies, highlighting the cross-sectoral effects of density and age of incumbent firms on new firm creation and closure. Our findings highlight the potential of policies supporting KIBS to generate positive multiplier effects, cultivating entrepreneurial ecosystems while accounting for micro-geographical contexts. |
| Date: | 2024–12–03 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:emv45 |
| By: | Flavio Calvino; Luca Fontanelli |
| Abstract: | In this work we characterise French firms using artificial intelligence (AI) and explore the link between AI use and productivity. We distinguish AI users that source AI from external providers (AI buyers) from those developing their own AI systems (AI developers). AI buyers tend to be larger than other firms, but this relation is explained by ICT-related variables. Conversely, AI developers are larger and younger beyond ICT. Other digital technologies, digital skills and infrastructure play a key role for AI use, with AI developers leveraging more specialised ICT human capital than AI buyers. Overall, AI users tend to be more productive, however this is related to the self-selection of more productive and digital-intensive firms into AI use. This is not the case for AI developers, for which the positive link between AI use and productivity remains evident beyond selection. |
| Keywords: | technology diffusion, artificial intelligence, digitalisation, productivity |
| JEL: | D20 J24 O14 O33 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11466 |
| By: | Domenico Delli Gatti; Roberta Terranova; Enrico Maria Turco |
| Abstract: | Can standard measures of industrial policy such as R&D subsidies or financial support for machine replacement be effective tools to reverse the current pattern of increasing market power and declining business dynamism? To answer this question we explore the effects of various industrial policy instruments in a macroeconomic agent-based model calibrated to reproduce the decline in US business dynamism over the last half-century. Our results indicate that R&D subsidies alone are insufficient to address the underlying causes of declining dynamism. They become effective, however, when combined in a policy mix with knowledge diffusion policies, particularly those favoring advanced technology adoption by small firms. In this case, industrial policy fosters growth by closing the productivity gap between leaders and laggards, and thereby curbing market power. These findings suggests a two-pronged approach to the design of industrial policy, integrating firm-level subsidies with knowledge diffusion measures and therefore ensuring that innovation and competition policies advance together. |
| Keywords: | macroeconomic dynamics, innovation, knowledge diffusion, market power, industrial policy, agent-based model |
| JEL: | C63 E32 L10 L52 O31 O33 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11544 |
| By: | Avendano, Rolando (Asian Development Bank); Tani, Massimiliano (University of New South Wales); Tolin, Lovely C. (Asian Development Bank) |
| Abstract: | In this paper, we examine whether, and if so how, an economy's deliberate policy choices of regional cooperation and integration influence underlying determinants of economic growth. Building on models of growth and innovation, we analyze the role of regional integration on labor productivity and firms' probability to innovate using data from a panel of 170 economies and 60, 000 firms over a period of two decades. Our results suggest that regionalism, as captured by metrics of regional cooperation and integration, can positively contribute to labor productivity and innovation, in addition to known factors of production. |
| Keywords: | regional integration, productivity, innovation, Asia |
| JEL: | F02 F15 O4 O30 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17495 |
| By: | Henrekson, Magnus (Research Institute of Industrial Economics (IFN),); Johansson, Dan (Örebro University School of Business) |
| Abstract: | The neo-Schumpeterian growth models, which appeared in the early 1990s, have ostensibly reintroduced the entrepreneur into mainstream growth theory. However, we show that by ignoring genuine uncertainty and by assuming that profits follow an objectively true and ex ante known probability distribution, the entrepreneur is made redundant. Thus, the theory fails to exhaustively explain innovation, the role of ownership competence, profits, the function of financial markets, wealth and income distribution, and, ultimately, economic growth. These shortcomings risk leading to erroneous or overly narrow policy conclusions by overestimating the importance of supporting R&D investments. Rather, the presence of genuine uncertainty forms a fundamental theoretical basis for the importance of new venture creation as a source of innovation-driven growth; entrepreneurs must establish and expand firms to capture the subjectively perceived profit opportunities. Therefore, tax policy is decisive for the commercialization and dissemination of innovations by providing incentives to uncertainty-bearing, not only for entrepreneurs, but also for intrapreneurs and financiers taking an active part in the governance and development of firms based on innovations characterized by genuine uncertainty. Furthermore, taxation can distort the evolutionary selection of innovations and firms, for instance, by taxing owners and firms differently. |
| Keywords: | creative destruction; economic growth; entrepreneur; entrepreneurship policy; innovation; judgment; Knightian uncertainty |
| JEL: | B40 O10 O30 |
| Date: | 2025–01–02 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:oruesi:2025_001 |
| By: | Jun Cui |
| Abstract: | Drawing upon Resource-Based Theory (RBT) and the Knowledge-Based View (KBV), this study investigates the impact of Knowledge-Based Organizational Support (KOS), AI-Driven Knowledge Sharing (KS), Organizational Learning (OL), and Knowledge Management Dynamic Capabilities (KMDC) on Organizational Performance (OP) in Chinese firms. In particular, this research explores the relationships among these factors, alongside control variables such as education level, staff skills, and technological innovation, to provide a comprehensive understanding of their influence on performance management. While recent studies on organizational performance have predominantly concentrated on digital business strategies and high-level decision-making, limited attention has been given to the role of digital maturity, workplace activities, and communication-related dynamics. This study addresses these gaps by consolidating critical factors that contribute to overarching job performance within organizations. Moreover, to empirically test the proposed hypotheses, data were collected from 129 valid questionnaires completed by employees across various Chinese firms. The research employed confirmatory factor analysis (CFA) to validate the measurement constructs and structural equation modeling (SEM) to evaluate the hypothesized relationships. The findings reveal several significant insights: (1) KOS, KS with AI, KMDC, and OL each have a direct positive effect on OP, emphasizing their critical roles in enhancing organizational outcomes. (2) Control variables, including education level, staff skills, and technological innovation, significantly moderate the relationships between KOS, KS with AI, KMDC, OL, and OP, further amplifying their impact. |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2501.02468 |
| By: | Marc-Andreas Muendler; James E. Rauch; Sergio Mikio Koyama |
| Abstract: | New firms do not yet have employees who can aid recruiting by referrals, but entrepreneurs can recruit workers they know to their startups—in effect making their own referrals. We consider new firms in Brazil’s formal sector founded between 2002 and 2014, for which at least one founding owner can be traced to previous formal employment. We find that 35.1 percent of new firms with at least five employees hire one or more coworkers from a founding owner’s last employer in their first year of operation, and that 9.2 percent of first-year hires at new firms were coworkers at a founding owner’s last employer. The former coworkers most likely to join a founding owner’s new firm are those who, at their last employer, worked in the same plant as a founding owner, had long overlap with a founding owner, were classified in the same industry or occupation as a founding owner, and were hired at roughly the same time as a founding owner. Controlling for observable human capital and new firm fixed effects, former coworkers earn eight percent higher initial wages at new firms and are six percentage points less likely to separate before a new firm’s second year of operation. We find that the coworker wage premium diminishes with tenure by 0.5 percentage points per year and the coworker separation premium diminishes with tenure by 2.0 percentage points per year. |
| Keywords: | job referrals, business formation, entrepreneurship, employee spinoffs, firm performance |
| JEL: | J63 L26 J24 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11520 |
| By: | Drydakis, Nick (Anglia Ruskin University) |
| Abstract: | In the contemporary business landscape, digital competencies have become a crucial factor for small enterprises to remain competitive and thrive. The present study examines how a business applications training, aiming to boost small enterprises' digital competencies, affects their financial performance. The business applications training took place in Greece, Cyprus, and the United Kingdom. Longitudinal data were collected between 2021 and 2023. The study revealed a positive association between digital competencies and the revenue growth rate of enterprises. Moreover, it was observed that following business applications training, the impact of digital competencies on the revenue growth rate strengthened compared to before the training. This pattern persisted across all three regions, underscoring the robustness of the estimated outcome. The study indicates that training that boosts enterprises' digital competencies could facilitate their ability to adapt to changing market conditions and stay competitive, contributing to increased financial performance. Small enterprises that develop and leverage digital competencies could be better positioned to seize growth opportunities, enhance efficiency, and adapt to the evolving business landscape. |
| Keywords: | financial performance, business applications, small enterprises, digital competencies, revenue growth, immigrant entrepreneurship |
| JEL: | D25 O14 M53 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17516 |
| By: | Victor M. Bennett; David T. Robinson |
| Abstract: | We study racial and gender disparities in entrepreneurial activity through the lens of a Roy model, focusing on the distinction between idea generation and execution. Using nationally representative sur-vey data, we find that Black and Hispanic individuals demonstrate higher entrepreneurial intentions than white respondents. They are much less likely, however, to launch ventures once ideas are conceived. A critical determinant of this gap is differential reliance on social networks, which shapes both the likelihood of launching a business as well as the reasons for stopping. Variation in the strength of local, own-group entrepreneurship reveals that stronger networks enhance the relationship between social engagement and business formation. Also, as predicted by the model, access to social networks also predicts seeking capital. The interconnections between socialization and searching for capital are important for understanding-policies aimed at boosting rates of entrepreneurship in underrepresented groups. |
| JEL: | G50 J15 L26 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33229 |
| By: | Bridget Kauma; Giordano Mion |
| Abstract: | We propose a new data resource that attempts to overcome limitations of standard firm-level datasets for the UK (like the ARD/ABS) by building on administrative data covering the population of UK firms with at least one employee. We also construct a similar dataset for France and use both datasets to: 1) Provide some highlights of the data and an overall picture of the evolution of aggregate UK and French productivity and markups: 2) Analyse the spatial distribution of productivity in both countries at a fine level of detail – 228 Travel to Work Areas (TTWAs) for the UK and 297 Zones d‘emploi (ZEs) for France – while focusing on the role of economic density. Our findings suggest that differences in firm productivity across regions are magnified in the aggregate by an increasing productivity return of density along the productivity distribution. |
| Keywords: | firm-level dataset, merging, BSD, FAME, VAT, FICUS, FARE, productivity, markups, UK, France, regional disparities, density |
| JEL: | R12 D24 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11543 |
| By: | Brown, J. David (U.S. Census Bureau); Davis, Steven J. (Hoover Institution); Foster, Lucia (U.S. Census Bureau); Haltiwanger, John C. (University of Maryland); Sabelhaus, John (Brookings Institution) |
| Abstract: | The Census Bureau's Longitudinal Business Database (LBD) underpins many studies of firm-level behavior. It tracks longitudinally all employers in the nonfarm private sector but lacks information about business financing and owner characteristics. We address this shortcoming by linking LBD observations to firm-level data drawn from several large Census Bureau surveys. The resulting Longitudinal Employer, Owner, and Financing (LEOF) database contains more than 3 million observations at the firm-year level with information about start-up financing, current financing, owner demographics, ownership structure, profitability, and owner aspirations – all linked to annual firm-level employment data since the firm hired its first employee. Using the LEOF database, we document trends in owner demographics and financing patterns and investigate how these business characteristics relate to firm-level employment outcomes. |
| Keywords: | longitudinal business database, employment outcomes, profitability, owner characteristics, financing sources |
| JEL: | D22 G32 L26 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17517 |
| By: | Astebro, Thomas B. (HEC Paris); Fossen, Frank M. (University of Nevada); Gutierrez, Cédric (Bocconi University) |
| Abstract: | Entrepreneurship scholars are interested in understanding and describing how entrepreneurs make decisions under uncertainty, where the probabilities of outcomes are not known but perceived, resulting in ambiguous probabilities. In this context, ambiguity refers to the lack of precise and objective probability assessments and the presence of subjective judgments regarding potential outcomes. In this chapter, we discuss the development of thought on how entrepreneurs perceive and react to uncertainty from Frank Knight (1921) to the present day. Recognizing that entrepreneurs face uncertainty rather than risk and are unlikely to have estimates of all probabilities for all potential outcomes, it becomes difficult to accept Expected Utility Theory (EUT), developed by Savage (1951) and von Neumann and Morgenstern (1953), as a relevant model for entrepreneurial decision-making. We examine a range of decision theories, ranking them in an order starting from EUT and proceeding to the most structure-free models of entrepreneurial choice, allowing for comparisons and contrasts of the main components and underlying concepts as they apply to entrepreneurial decision making. |
| Keywords: | entrepreneurship; uncertainty; ambiguity; decision theory; Bayesian Entrepreneurship |
| JEL: | J24 L26 |
| Date: | 2024–08–21 |
| URL: | https://d.repec.org/n?u=RePEc:ebg:heccah:1529 |
| By: | J. David Brown; Steven J. Davis; Lucia S. Foster; John C. Haltiwanger; John Sabelhaus |
| Abstract: | The Census Bureau’s Longitudinal Business Database (LBD) underpins many studies of firm-level behavior. It tracks longitudinally all employers in the nonfarm private sector but lacks information about business financing and owner characteristics. We address this shortcoming by linking LBD observations to firm-level data drawn from several large Census Bureau surveys. The resulting Longitudinal Employer, Owner, and Financing (LEOF) database contains more than 3 million observations at the firm-year level with information about start-up financing, current financing, owner demographics, ownership structure, profitability, and owner aspirations – all linked to annual firm-level employment data since the firm hired its first employee. Using the LEOF database, we document trends in owner demographics and financing patterns and investigate how these business characteristics relate to firm-level employment outcomes. |
| JEL: | C81 E32 L26 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33254 |
| By: | Audrey Guo (Santa Clara University); Melanie Wallskog (Duke University) |
| Abstract: | How costly are taxes for young firms? In this paper, we demonstrate that even small payroll taxes significantly distort entry, growth, and hiring decisions. First, leveraging cross-sectional variation in the taxes faced by new employers, we find that higher taxes discourage new firms from hiring their first workers, with an elasticity of the number of new employers to taxes of -0.1. Second, studying changes in taxes after entry, we find that higher taxes lead more firms to exit, while also reducing employment for those who survive and leading some firms to avoid taxes by using non-taxable contract labor. |
| Keywords: | firm entry, young firms, labor costs, unemployment insurance |
| JEL: | H25 H71 L26 M13 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:upj:weupjo:24-410 |
| By: | Antonin Bergeaud; Max Deter; Maria Greve; Michael Wyrwich |
| Abstract: | We investigate the causal relationship between inventor migration and regional innovation in the context of the large-scale migration shock from East to West Germany between World War II and the construction of the Berlin Wall in 1961. Leveraging a newly constructed, century-spanning dataset on Germanpatents and inventors, along with an innovative identification strategy based on surname proximity, we trace the trajectories of East German inventors and quantify their impact on innovation in West Germany. Our findings demonstrate a significant and persistent boost to patenting activities in regions with higher inflows of East German inventors, predominantly driven by advancements in chemistry and physics. We further validate the robustness of our identification strategy against alternative plausible mechanisms. We show in particular that the effect is stronger than the one caused by the migration of other high skilled workers and scientists. |
| Keywords: | Patents, Migration, Germany, Iron Curtain, Innovation |
| JEL: | H10 N44 P20 D31 |
| Date: | 2025–01–14 |
| URL: | https://d.repec.org/n?u=RePEc:bdp:dpaper:0059 |
| By: | Hege, Ulrich; Li, Kai; Zhang, Yifei |
| Abstract: | We study the effect of climate-related innovation on carbon emissions by analyzing supply chain networks. We find that climate innovation reduces carbon emissions at customer firms, driven by product innovations. The effect is economically significant, dominated by the most emission-intensive customer firms, gradually increases over a five-year horizon, and is significant for Scope 1 and Scope 2 emissions. We then look at the diffusion of climate innovation to new customers. We find that customers ex-hibit a strong preference for suppliers with new climate patents, that climate patents allow suppliers to attract new customers, especially customers with high environmental ratings or a large carbon footprint, and that these new customers subsequently also reduce their emissions. We use the quasi-random assignment of patent examiners and the exogenous technological obsolescence of climate patents as instruments to suggest a causal interpretation of the main findings. |
| Keywords: | climate innovation; supply chains; new customer firms; business stealing; carbon emissions; environmental scores; patent examiner leniency; technology obsoles-cence. |
| JEL: | L14 O31 O33 Q54 Q55 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:tse:wpaper:130108 |
| By: | Antonin Bergeaud (HEC Paris, CEP-LSE, CEPR); Max Deter (University of Potsdam); Maria Greve (Utrecht University); Michael Wyrwich (Groningen University) |
| Abstract: | We investigate the causal relationship between inventor migration and regional innovation in the context of the large-scale migration shock from East to West Germany between World War II and the construction of the Berlin Wall in 1961. Leveraging a newly constructed, century-spanning dataset on German patents and inventors, along with an innovative identification strategy based on surname proximity, we trace the trajectories of East German inventors and quantify their impact on innovation in West Germany. Our findings demonstrate a significant and persistent boost to patenting activities in regions with higher inflows of East German inventors, predominantly driven by advancements in chemistry and physics. We further validate the robustness of our identification strategy against alternative plausible mechanisms. We show in particular that the effect is stronger than the one caused by the migration of other high skilled workers and scientists. |
| Keywords: | patents, migration, Germany, Iron Curtain, innovation |
| JEL: | H10 N44 P20 D31 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:pot:cepadp:84 |
| By: | Wided Mattoussi (University of Tunis); Ameny Ben Sayari (University of Tunis); Younes Ben Zaied (EDC Paris Business School, Paris) |
| Abstract: | The COVID-19 pandemic has had a substantial impact on the global economy, particularly small and medium-sized enterprises (SMEs). This empirical study examines the effects of the pandemic on credit rationing for SMEs in Tunisia using a panel firm-level dataset spanning from 2014 to 2020. To analyze these effects, we employ the conditional difference-indifferences (CDiD) approach, which extends the commonly used difference-in-differences evaluation method. Our findings indicate that despite government support measures for SMEs, the COVID-19 pandemic has led to increased rates of credit rationing. We further explore heterogeneity in these effects based on criteria like corporate indebtedness and investment levels, identifying the most affected categories. Our results highlight that SMEs heavily reliant on suppliers, those with significant reliance on the banking system, and low financial resilience encounter more severe credit rationing compared to other groups. Additionally, credit rationing is more pronounced in the secondary sector compared to the tertiary sector. |
| Date: | 2024–08–20 |
| URL: | https://d.repec.org/n?u=RePEc:erg:wpaper:1716 |
| By: | Berlingieri, Giuseppe; Calligaris, Sara; Criscuolo, Chiara; Verlhac, Rudy |
| Abstract: | Using a unique microaggregated data set on firm-level productivity in 13 countries from 1995 to 2014, this article provides new evidence on technology- and knowledge-diffusion barriers for laggard firms. We show that, although the least productive firms benefit from a catch-up effect, their speed of catchup is lower in digital- and skill-intensive industries. This is especially true in countries with high skill mismatch, high financing frictions, and low absorptive capacity. These barriers to diffusion, combined with the rising importance of tacit knowledge and intangibles, could help explain the productivity growth slowdown observed in the last decades. |
| JEL: | J1 F3 G3 |
| Date: | 2024–11–19 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:126229 |
| By: | Schilirò, Daniele |
| Abstract: | This paper aims to analyze the competitive capacity of the Sicilian production system in a region that has historically exhibited a delayed development. It argues, first, that innovation is the most critical driver for fostering competitiveness, as it enhances total factor productivity. Second, investing in knowledge emerges as the optimal strategy to increase the efficiency of production factors and serves as a cornerstone for achieving long-term growth and development. The ability to create and utilize knowledge is fundamental to the competitive advantage of companies and the generation of wealth in the economy. Furthermore, it is argued that institutions must foster competitiveness and growth through a simple, clear, and less bureaucratic regulatory framework. This is particularly crucial in regions that have historically invested significant public resources but achieved relatively modest outcomes in terms of income and employment growth. Specifically, this paper emphasizes the necessity of substantial public investments to strengthen infrastructure, the education and training sector, and research. Equally important are private investments, not only to expand the production base but, more critically, to enhance it qualitatively through new digital technologies, thereby raising the level of total factor productivity. |
| Keywords: | Competitiveness; Sicilian Economy; Productive Districts; Innovation; Knowledge; Institutions. |
| JEL: | O1 O30 R1 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:122879 |
| By: | N. Nergiz Dincer (TED University); Pelin Pektekin (TED University); Ayça Tekin-Koru (TED University) |
| Abstract: | This paper presents the panorama of zombie firms in the Turkish economy, which are highly inefficient, highly indebted firms that have low or sometimes negative productivity and provides an analysis of the impact of these firms on economic activity for the period 2012-2015. Our results suggest that the number of zombie firms in Türkiye has increased. The share of these firms in sales and employment has also increased, but at a lower rate. These firms are mainly found in lowtechnology manufacturing and transportation and distribution services. The paper also shows that healthy firms increase total factor productivity, employment growth, and the investment-to-capital ratio in the economy in a robust manner. The sales of zombie firms have no distorting effect on the economic activity of healthy firms. However, capital sunk into zombie firms has a differential impact on the performance of healthy firms. When the share of zombie capital in a sector increases, the TFP growth of manufacturing firms decreases, while the employment growth of medium-sized service firms increases. |
| Date: | 2024–08–20 |
| URL: | https://d.repec.org/n?u=RePEc:erg:wpaper:1720 |
| By: | Marc-Andreas Muendler; James E. Rauch; Sergio Mikio Koyama |
| Abstract: | New firms do not yet have employees who can aid recruiting by referrals, but entrepreneurs can recruit workers they know to their startups—in effect making their own referrals. We consider new firms in Brazil’s formal sector founded between 2002 and 2014, for which at least one founding owner can be traced to previous formal employment. We find that 35.1 percent of new firms with at least five employees hire one or more coworkers from a founding owner’s last employer in their first year of operation, and that 9.2 percent of first-year hires at new firms were coworkers at a founding owner’s last employer. The former coworkers most likely to join a founding owner’s new firm are those who, at their last employer, worked in the same plant as a founding owner, had long overlap with a founding owner, were classified in the same industry or occupation as a founding owner, and were hired at roughly the same time as a founding owner. Controlling for observable human capital and new firm fixed effects, former coworkers earn eight percent higher initial wages at new firms and are six percentage points less likely to separate before a new firm’s second year of operation. We find that the coworker wage premium diminishes with tenure by 0.5 percentage points per year and the coworker separation premium diminishes with tenure by 2.0 percentage points per year. |
| JEL: | J24 J63 L26 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33230 |
| By: | John M. Barrios; Yael Hochberg; Hanyi (Livia) Yi |
| Abstract: | We investigate the influence of the growing trend of work-from-home (WFH) on new business formation, with a particular focus on the period surrounding the COVID-19 pandemic. At baseline, local new business entry is positively associated with the proportion of occupations amenable to telework in the region. Utilizing the advent of the COVID-19 pandemic and the implementation of stay-at-home mandates as an exogenous shock, we examine the effects of realized flexibility for WFH on entrepreneurial entry. While overall new business registrations increased following pandemic stay-at-home mandates, areas with an occupational mix that has higher potential for telework demonstrate less pronounced growth in new business formation, particularly in regions with lower economic demand factors. Survey evidence highlights how flexibility provided by traditional employment reduces entrepreneurial intent, especially for workers seeking non-pecuniary benefits such as autonomy or flexibility. Consistent with this substitution effect, we observe significant gender disparities, with a notable decline in women-led startups in areas with greater telework potential. Our results suggest a nuanced tension between the attractiveness of flexibility in traditional employment and the autonomy provided by entrepreneurial entry. |
| JEL: | J10 J22 L26 M13 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33237 |
| By: | Immaculate, Nakalembe; Muathe, Stephen M. A; Maina, Samuel |
| Abstract: | Youth-owned micro, small, and medium businesses face various constraints while accessing financial services in Uganda. Various stakeholders have assisted these enterprises in accessing finance at better conditions but their non- financial performance has continued to deteriorate. This study tried to investigate the effect of access to financial services on non-financial performance of youth-owned MSMEs in Mukono district, Uganda. Specific objectives included effect of bank, branch network, financial information, loan accessibility and financial technology on non-financial performance of youth-owned micro, small and medium enterprises. The study's guiding theories were the resource-based view, dynamic capability, and innovation of entrepreneurship theories. A positivism research philosophy and explanatory research design were used. The target population was 3717 registered MSMEs. A sample size of 400 was obtained using both stratified and simple random sampling methods. Primary data was collected using questionnaires, analyzed using multiple regression analysis. The study's findings revealed that financial information, bank branch networks, loan accessibility, and financial technology had a positive and significant effect non-financial performance of youth-owned MSMEs. The study concluded that access to financial services is critical to non-financial performance of youth-owned MSMEs in Mukono district, Uganda. The study recommends that youth-owned MSMEs should first gather reliable information about operations of financial service providers to avoid being charged hefty penalties and interests, branch expansion to provide greater supply of credit in order to improve the non-financial performance of youth-owned MSMEs. The study further recommends that financial institutions should reduce collateral requirements in order to increase micro-credit loan uptake by the youth who own MSMEs. |
| Date: | 2024–12–15 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:5ek6f |
| By: | Aghion, Philippe (INSEAD); Bergeaud, Antonin (HEC Paris); De Ridder, Maarten (University of Cambridge); Van Reenen, John (London School of Economics) |
| Abstract: | Green innovation offers a solution to climate change without compromising living standards. Yet the share of climate-enhancing innovations in total patents, after booming for two decades, has seized to grow since the Global Financial Crisis. We develop a quantitative framework in which firms direct innovation towards green or polluting technologies, and become better at innovating in technologies that they have previously succeeded in. This causes mature, incumbent firms to predominantly innovate in polluting technologies. When green technologies become more attractive, e.g. due to a carbon tax, young firms are responsible for a large share of the transition to green innovation. As young firms are financially constrained, a credit shock harms their innovation, bringing the green transition to a halt. We validate the theory with two empirical exercises. First, we use micro data to provide causal evidence that tight credit disproportionately affects green innovation, through its effect on young firms. Second, we show that contractionary monetary policy shocks have a significantly larger effect on green patenting than non-green patenting, in line with the model. Quantifying the model, we find that tight credit can explain around 60% of the recent slowdown in the rise of green patenting. This translates to a cumulative increase in emissions by half a year of the initial (high pollution) steady state. |
| Keywords: | Climate Change; Productivity; Endogenous Growth; Innovation; Creative Destruction |
| JEL: | A10 |
| Date: | 2024–03–25 |
| URL: | https://d.repec.org/n?u=RePEc:ebg:heccah:1512 |
| By: | Portocarrero, Florencio; Newbert, Scott; Young, Maia; Zhu, Lily |
| Abstract: | Entrepreneurial affect has emerged as a burgeoning area of study, with a wealth of articles demonstrating that affect, broadly conceptualized, plays an important part in entrepreneurial life. While a few affective phenomena, such as passion and positive and negative affect, are primarily driving the affective revolution in entrepreneurship, a wide range of additional forms of affect, from momentary feelings to enduring affective dispositions, have been found to influence entrepreneurs’ judgements, decision-making, attitudes, and behaviors in distinct parts of the entrepreneurial process. Moreover, entrepreneurs’ affective experiences and displays of these experiences influence entrepreneurial behaviors and investors’ decision-making. Although this is an exciting time for work on entrepreneurial affect, several theoretical and empirical inconsistencies impede further knowledge accumulation. To assess how and why affect is critical to entrepreneurship, to clarify the theoretical inconsistencies, and to provide an integrative framework, we conduct a systematic review of 276 published empirical and conceptual articles on entrepreneurial affect. In doing so, we analyze how various affective phenomena (e.g., emotions, moods, sentiments), along with their discrete forms (e.g., anger, grief, happiness), influence and are influenced by specific stages of the entrepreneurial process. We conclude that while this body of research confirms that entrepreneurship is an emotional endeavor, the collective approach has thus far obscured a more detailed and useful understanding of affect in each stage of the entrepreneurial process. We examine the theoretical and empirical approaches taken to date and lay out an agenda for future scholars, thus bolstering the affective revolution in entrepreneurship. |
| JEL: | J50 |
| Date: | 2024–11–11 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:126090 |
| By: | Flamand, Marina; Frigant, Vincent; Miollan, Stéphane; Dimitrova, Zlatina; Sauve, Henri |
| Abstract: | At the heart of the Technological Innovation Systems (TIS) approach is the knowledge production function. Its evaluation requires the study and characterization of the TIS knowledge base and its evolution. Although patents are often used to study this knowledge production function, current techniques for mobilizing these data can be improved. In this article, we propose to work in two directions. Firstly, most studies focus on a singular knowledge base associated with the focal TIS. However, the knowledge spaces associated with a technology are themselves plural, comprising a variety of constituent elements that must be considered separately. In this way, we have broken down the knowledge base required to develop the focal TIS into different technological building blocks. These building blocks have been classified according to three different levels of analysis: type of technological solution, challenges to be met and field of application. Secondly, most studies measure the knowledge production function by the number of patents applications. However, the sheer volume of patents is a biased indicator. A more comprehensive approach to patent analysis is recommended, based on cross-checking several indicators to ensure the accuracy of patent statistics. From this perspective, we evaluate three sets of patent indicators - persistence, commitment, and coherence - to determine, for each subset, whether there is a sufficient level of knowledge created to promote the development of the TIS. All in all, this article proposes a new method of multi-criteria analysis of the knowledge production function in four stages. The relevance and operability of this method is illustrated in the case of hydrogen storage TIS. |
| Keywords: | Technological Innovation System, Knowledge production, Metrics, Patent, Hydrogen storage technologies |
| JEL: | O31 O33 Q55 |
| Date: | 2024–12–19 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:123050 |
| By: | Gabrielli Florencia; Culós Verónica; Herrera Gómez Marcos; Willington Manuel |
| Abstract: | This paper studies the demand for liquid fuels at the wholesale level, using the discrete choice approach. Demand is conditioned by the presence of wholesale competitors, the existence of a reward card, and the percentage of flagged outlets kept by each firm. Using a novel dataset from Argentina, we provide new empirical evidence that quantifies market power across firms and regions. We find differences among markups estimated at regional levels, based both on different presence of the firms within each region and on price elasticity of demand of each region itself. Even though leading firms tend to have higher markups on the whole, there are specific niche markets where small firms reach higher markups than those they could have obtained in more crowded markets, exceeding markups obtained by larger competitors. Price elasticity of demand is different among regions, partly because it reflects the variability that coexists in the productive structure of each economy and because of different income levels and consumption patterns in these geographic areas. |
| JEL: | C52 L13 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:aep:anales:4732 |
| By: | S Gokula Krishnan (SEI - Surana College, Kengeri Campus, Bengaluru) |
| Abstract: | The adoption of data analytics by Micro, Small, and Medium Enterprises (MSMEs) has become critical for enhancing decision-making processes, improving operational efficiency, and remaining competitive in the digital economy. This study explores the impact of data analytics adoption on job roles and skill requirements within MSMEs. Specifically, it examines how traditional roles like marketing, finance, and operations are transforming to include data-driven decision-making responsibilities. The study highlights emerging roles such as data analysts and business intelligence specialists, as well as the increasing demand for technical skills like data literacy, programming, and machine learning. However, MSMEs face challenges in adopting data analytics, including resource constraints, skill gaps, and cultural resistance. To address these issues, this study employs a qualitative method approach, primarily explorative study. The research develops a conceptual model that outlines the interplay between data analytics adoption, job role transformation, skill development, and organizational adaptation. This model provides insights into how MSMEs can strategically manage the transition to a datadriven culture, overcoming key barriers to successfully integrating analytics into their operations |
| Keywords: | Data Analytics Adoption, MSMEs, Job Roles, Skill Requirements, Data-Driven Decision-Making, Organizational Adaptation, Technical Skills, Data Literacy |
| Date: | 2024–12–07 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04850699 |
| By: | Navaretti, Giorgio Barba; Rosso, Anna |
| Abstract: | This paper examines whether access to the capital market of convertible and nonconvertible bonds affects total factor productivity (TFP) for the population of Italian joint stock manufacturing companies, based in highly segmented local financial markets, between 2007 and 2017. The hypothesis, well grounded in the literature, is that long-term capital favors investment in intangibles and other risky assets necessary for productivity growth. To identify this effect, we exploit the exogenous shock of the Italian banking deregulation of the mid-1990s as an instrument for firm-level access to capital, interacted with distance from logistic networks. These reforms changed the distribution of the type of branches at the local level, increasing the share of joint stock banks, which have high connections to international capital markets. This geographical reallocation of banking activities ultimately affected firms' financial structure, favouring their access to capital, even when based in peripheral financial areas. Firms which issued instruments of market debt achieved higher levels of productivity and a higher probability to reach top percentiles of productivity distribution. |
| Keywords: | access to capital markets; bank deregulation; logistic networks dynamics; productivity |
| JEL: | J1 |
| Date: | 2023–01–31 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:126435 |
| By: | Arnone, Massimo; Costantiello, Alberto; Leogrande, Angelo |
| Abstract: | The article reviews the linkage of banking credit with technological innovation at global level underlining that access to finance is important for and innovation. The domestic credit percentage involving the private sector to GDP allows projects of high risk but with a very high reward, projects that are key in increasing productivity and global competitiveness significantly. This paper explores that dynamic in infrastructure, creative industries, and greening technologies. Indeed, findings from such studies do show positive correlations, such as between credit and infrastructure development or creative exports, suggesting the capability of systems of finance to transform. These findings indicate the positive relationships that exist in some contexts, such as reduced R&D investment. Taking into account the ecological bottom line, this research underlines ecosystem-based strategies of banking, green credit, and poised financial regulations for sustainable development. Synthesizing into this paper provides actionable insight into how policy makers, financial institutions, and researchers can tap into the synergy between the financial system and innovation. |
| Keywords: | Panel Data, Banking, Innovation. |
| JEL: | G00 G20 G21 G22 G23 G24 G28 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:122774 |
| By: | Marc Bourreau; Axel Gautier |
| Abstract: | In this paper, we consider two platforms that compete for the development of a new product to integrate into their ecosystems. The new product can be developed either inhouse by the platforms or by an independent startup active only in the technology market. The presence of the startup affects the platforms’ R&D efforts through an insurance effect, which reduces the cost of failure in innovation, and a competition effect, which diminishes the returns to innovation. The magnitude of these effects depends on the attitude of the competition authorities towards the acquisition of the startup by one of the platforms. We show that allowing acquisitions stimulates platform innovation, but at the cost of a more concentrated market structure. We also compare the funding of the startup by independent venture capitalists or by the platforms themselves, and investigate how the merger regime influences the direction of the startup’s innovation. |
| Keywords: | innovation, startup acquisitions, mergers, digital, big tech, competition policy |
| JEL: | D43 G34 K21 L40 L86 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11569 |
| By: | Leogrande, Angelo; Arnone, Massimo; Costantiello, Alberto |
| Abstract: | The article reviews the linkage of banking credit with technological innovation at global level underlining that access to finance is important for and innovation. The domestic credit percentage involving the private sector to GDP allows projects of high risk but with a very high reward, projects that are key in increasing productivity and global competitiveness significantly. This paper explores that dynamic in infrastructure, creative industries, and greening technologies. Indeed, findings from such studies do show positive correlations, such as between credit and infrastructure development or creative exports, suggesting the capability of systems of finance to transform. These findings indicate the positive relationships that exist in some contexts, such as reduced R&D investment. Taking into account the ecological bottom line, this research underlines ecosystem-based strategies of banking, green credit, and poised financial regulations for sustainable development. Synthesizing into this paper provides actionable insight into how policy makers, financial institutions, and researchers can tap into the synergy between the financial system and innovation. |
| Date: | 2024–11–24 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:mnd4f |
| By: | Clarke, Jeanelle |
| Abstract: | Access to credit is a key component for business development. Yet, for women in Latin America and the Caribbean, there are barriers which hinder this access, hamper women’s entrepreneurship and slow economic empowerment efforts in the region. One of these barriers is risk aversion, both as supply and demand constraint. On the supply side, financial institutions may exhibit inherent gender bias by providing lower levels of financing and higher interest rates to women entrepreneurs. On the demand side, women entrepreneurs may refrain from approaching financial institutions for fear of rejection or unfavourable terms of credit. The number of women entrepreneurs has grown within the region and represents an important area of opportunity for inclusive economic development. Financial institutions have a role to play in widening access to credit to support women’s entrepreneurship. It has been found that targeted gender responsive financing programmes can be highly effective at widening access and combatting negative gender bias. In Latin America and the Caribbean, successful examples have focused on creating innovative financial products that cater to the unique characteristics of women entrepreneurs, providing financial education and training, using appropriate indicators to determine financial needs. |
| Date: | 2024–12–30 |
| URL: | https://d.repec.org/n?u=RePEc:ecr:col035:81174 |
| By: | Esther Ann Bøler; Katinka Holtsmark; Karen Helene Ulltveit-Moe; Katinka Kristine Holtsmark |
| Abstract: | We analyze how a major negative shock to the producers of fossil fuels may lead to a shift from dirty to clean R&D along the supply chain. First, we develop a theoretical framework of directed technical change, showing that adjustment costs in R&D activity can lead fossil energy sector suppliers to shift their R&D activity towards clean innovation more than other firms, as a consequence of a negative oil price shock. Second, we investigate the impact of a major drop in the oil price in 2014 on clean R&D. Relying on rich firm level trade data, we propose a novel method of identifying firms’ exposure to the price shock. We find that more exposed firms increased their clean R&D investments more than less exposed firms. Our findings contribute to the understanding of the drivers of clean technological change, which is vital to assess the effectiveness of different climate policy measures, including carbon pricing. |
| Keywords: | clean innovation, supply chains, carbon pricing |
| JEL: | D25 F18 O31 Q55 Q58 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11550 |
| By: | Stefan Sauer; Klaus Wohlrabe |
| Abstract: | The ifo Business Climate Index is considered as one of the most important leading indicators for the German economy. It is based on a monthly survey of about 9, 000 companies located in Germany and composed of two main questions from the monthly questionnaire: the assessment of the current business situation and the business expectations for the next six months. The terms 'business situation' and 'business expectations' are formulated deliberately vague and not explicitly defined. Thus, each survey participant can consider its own main driving factors. But what are these underlying factors? Do they differ between sectors or by firm size? To answer these questions, we conducted a meta-survey among all survey participants. The results suggest, that especially internal company factors, such as the profit situation, demand, and turnover, are crucial. Generally, using a principal component analysis we show, that these factors can be decomposed into three components: (1) the overall financial situation, (2) the demand and order situation, and (3) external influences. Our findings provide some insights concerning the high predictive power of the ifo Business Climate Index and its components. Furthermore, the identified factors might also be useful for business cycle analyses in practice. |
| Keywords: | ifo Business Climate, business expectations, business situation, meta-survey |
| JEL: | C53 C83 L20 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11482 |
| By: | Elias Julio; Depetris-Chauvin Nicolas; Ferro Gustavo; Gatti Nicolás; Villanueva Emiliano |
| Abstract: | Argentina is one of the latecomers as a wine exporter among New World producers. However, its insertion in the international market is steady in volume and improving in relative prices, indicating an increasing appreciation of its quality over time. Quality is essential for differentiating products and is intimately related to innovation. We use a new, unique microdata set of wineries in Argentina to quantitatively characterize the innovators’ approach to innovation. Based on the innovator type in the Argentine wine industry, we link these types with variables capturing critical decisions in the production process and variables capturing the winery's performance. We use innovator profiles defined by a questionnaire to estimate the impact of being an extremely conceptual innovator on export performance. We hypothesize that there are differences in export performance between different types of innovators. Using an Inverse Probability Weighting with Regression Adjustment (IPWRA) methodology, we find that being an extremely conceptual type of innovator is associated with larger shares of export volume and value. This research has implications for focusing on the types of innovators who succeed as international wine exporters. |
| JEL: | L66 O30 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:aep:anales:4729 |
| By: | Viral V. Acharya; Robert F. Engle III; Olivier Wang |
| 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. |
| JEL: | G3 H2 Q5 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33335 |
| By: | Nerlich, Carolin; Köhler-Ulbrich, Petra; Andersson, Malin; Pasqua, Carlo; Abraham, Laurent; Bańkowski, Krzysztof; Emambakhsh, Tina; Ferrando, Annalisa; Grynberg, Charlotte; Groß, Johannes; Hoendervangers, Lucia; Kostakis, Vasileios; Momferatou, Daphne; Rau-Goehring, Matthias; Rariga, Erzsebet-Judit; Rusinova, Desislava; Setzer, Ralph; Spaggiari, Martina; Tamburrini, Fabio; Simon, Josep Maria Vendrell; Vinci, Francesca |
| Abstract: | The green transition of the EU economy will require substantial investment to 2030 and beyond. Estimates of green investment needs vary between institutions and are surrounded by high uncertainty, but they all point to a requirement for faster and more ambitious action. Green investment will need to be financed primarily by the private sector. While banks are expected to make a key contribution to funding the green transition, capital markets need to deepen further, especially to support innovation financing. Progress on the capital markets union would support the green transition. Public funds will be vital to complement and de-risk private green investment. Structural reforms and enhanced business conditions should be tailored to encourage firms, households and investors to step up their green investment activities. JEL Classification: E22, E44, G21, Q41, Q50, Q58 |
| Keywords: | financing, fiscal policy, green transition, investment, structural policy |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbops:2025367 |
| By: | Challoumis, Constantinos |
| Abstract: | Startups in artificial intelligence are transforming the landscape of the global economy, serving as laboratories of innovation and productivity. These enterprises are not merely creating new technologies; they are reimagining entire industries, driving efficiency, and enhancing human capabilities. In the 21st century, AI startups have emerged as pivotal players in bolstering economic growth, shaping labor markets, and influencing societal progress. This post explores into the remarkable impact of AI startups, exploring their role as catalysts for change and their implications for the future of economic development. |
| Keywords: | AI startups, economy, 21st Century, Economocracy, Cycle of Money |
| JEL: | B00 D00 D30 Z1 Z10 Z13 Z18 |
| Date: | 2024–12–09 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:122923 |
| By: | da Cruz, Nuno F.; Ellaway, Louise; Hamilton-Jones, Imogen; Heeckt, Catarina; Rogers, Ben |
| Abstract: | This new report, led by LSE Cities and developed in partnership with Bloomberg Philanthropies and Eurocities, is based on a Eurocities Pulse survey of 65 European cities and seven deep-dive case studies. It maps the landscape of government innovation capacity in Europe’s cities, and asks what’s working, what can cities learn from each other, and where they need more support to meet the challenges of the 21st century through city government innovation. Cities across Europe, like those around the world, are grappling with unprecedented challenges – whether it’s addressing the climate crisis, managing disruptive technologies, fostering more inclusive economies, or supporting rapidly ageing populations. The scale and urgency of these challenges mean cities are confronted, as perhaps never before, with the need to innovate. Public sector innovation – from mission-driven policies to citizens’ assemblies or new cross-sector leadership roles – is increasingly being recognised as a necessity rather than a ‘nice-to-have’. But innovation in city governments does not happen by magic. City governments must build up their innovation muscles – their capacity to generate new ideas, test them and learn the lessons. Building on work by the OECD and others, this report identifies four key components that make up a city’s capacity to innovate: leadership capabilities, organisational capabilities, analytical capabilities, partnership capabilities. This report describes how European cities are working to build their innovation capacity across these four components. |
| JEL: | N0 J50 |
| Date: | 2024–11–12 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:126115 |
| By: | Tranos, Emmanouil; Kitsos, Tasos; Wolf, Levi John (University of Bristol) |
| Abstract: | The discussion about the productivity gains from digital technologies is almost as old as digital technologies themselves. From early futuristic approaches to the various forms of the productivity paradox, there are still open questions regarding if and how the internet can lead to positive economic effects as well as their spatial heterogeneity. The usual caveat to unpack this relationship is data about internet usage that is detailed enough to be linked both to economic outputs and places. We develop a multilevel modelling framework and combine firm-level microdata with novel internet speed microdata illustrating how connectivity has been experienced by end-users. Although it is not possible to directly observe the online activities of individuals, these data allow us to approximate business usage. Additionally, we can distinguish between upload and download speeds, which is important as these channels can support different internet functions (e.g. video streaming vs. synchronous communications). We then observe firms, their productivity, and other firm characteristics and estimate the firm productivity effects of broadband speeds after accounting for spatial effects and platial characteristics, which are also associated with the underpinning digital divides. We find that increases in a place's internet speeds can lead to higher firm productivity whilst the opposite holds for instability of internet speeds. These results vary by sector and firm characteristics. Our results have significant policy implications, highlighting the economic impact of high-speed internet infrastructure planning decisions and presenting policymakers with a clear efficiency vs. equity trade-off. |
| Date: | 2024–12–02 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:va375 |
| By: | Nataliia Kriuchkova; Vyacheslav Truba; Iryna Nyenno |
| Abstract: | Understanding how economic factors affect a business is essential to making smart decisions and leading a business. However, this starts with understanding the role of internal and external factors and how they play out in a business. A start-up is no exception, although it is hard to call it a full-fledged business; a start-up is a project of any kind that is just starting to develop in the market. For the successful implementation of a new project, a certain amount of start-up capital is required. No start-up can be implemented without appropriate financial injections, without attracting investments that are quite risky and require significant attention from the investor at the investment planning stage. Almost all start-up projects are financed by investors who are willing to invest their own capital in the development of a promising project. In general, any project begins with an idea that will form the basis of a new business. If an entrepreneur manages to offer consumers a high-quality product that has no analogues in the market but is in demand, his success will be guaranteed. But to achieve this, a good idea needs to be properly developed, involving specialised professionals and investors. Venture capital funds and investment companies that invest in innovative projects are engaged in the development of such ideas, and the state stimulates these processes through a system of mechanisms and levers of economic development of business. Given the significant importance of start-ups for the economic growth of the State, the purpose of the study is to determine the role of start-ups in stimulating innovative economic growth, taking into account the challenges and risks posed by the environment. To achieve this goal, the methods of statistical data analysis, generalisation of scientific sources, specification of opportunities and risks created by start-up projects for economic systems were used. In the process of developing the study, it was found that start-ups play an important role in ensuring economic growth opportunities for the entire state, since creating favourable conditions for the development of small businesses and stimulating investment activity in innovative projects can lead to a significant increase in tax revenues to budgets of various levels in the future, but an important aspect of stimulating start-up projects is risk assessment and prudent investment in such projects. |
| Keywords: | barriers to market entry, innovation ecosystem, scaling strategies, technology commercialisation, venture funding |
| Date: | 2025–01–06 |
| URL: | https://d.repec.org/n?u=RePEc:ete:msiper:756676 |
| By: | Shakeel, Jovera; Attique, Iman; Nadir, Munazza |
| Abstract: | According to the Ministry of Finance, more than 40 percent of Pakistan’s GDP is attributed to the informal sector. Nearly 75 percent of Pakistan’s working-age population is employed in the informal sector, according to the Labour Force Survey (2020-2021). The widespread persistence of the informal sector has several manifestations in the country’s agricultural economy. This study analyses the impact of the informal economy on agricultural productivity in Pakistan by applying Stochastic Frontier and Principal Component Analysis models using the Pakistan Standards of Living Measurement (PSLM) farm-level data collected in 2014, 2016, and 2019. It is the first regionally and nationally representative study of the informal economy’s impact on agricultural indicators using the country’s largest dataset. These findings show, as prior literature has suggested, that farms utilizing formal economic relations, including better working employment contracts, more access to proper credit resources, and better irrigation systems, produce higher yields than farms that operate within informal structures. In addition, crop diversification and resource allocation were found to be significant in raising the efficiency of agriculture. But there is also a geographical dimension to productivity - some of the agro-climatic regions are lagging consistently implying a case for focused attention. |
| Keywords: | Agricultural Productivity, Farm Efficiency, Cropping Patterns, Agro-climatic Zones, Crop Diversification, Informal Economy, Stochastic Frontier Analysis, Resource Allocation |
| JEL: | C13 Q10 Q12 Q15 |
| Date: | 2024–09–16 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:122828 |
| By: | Kallmer, Josh |
| Abstract: | Technology firms often make their greatest contributions to markets without making significant physical investments or hiring many people. This Perspective argues that governments need to think more expansively about their investment policies, to recognize the importance of cross-border data flows and enable these firms to deliver the benefits they promise. |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:colfdi:308150 |
| By: | Manuel Hoffmann; Sam Boysel; Frank Nagle; Sida Peng; Kevin Xu |
| Abstract: | Recent advances in artificial intelligence (AI) technology demonstrate considerable potential to complement human capital intensive activities. While an emerging literature documents wide-ranging productivity effects of AI, relatively little attention has been paid to how AI might change the nature of work itself. How do individuals, especially those in the knowledge economy, adjust how they work when they start using AI? Using the setting of open source software, we study individual level effects that AI has on task allocation. We exploit a natural experiment arising from the deployment of GitHub Copilot, a generative AI code completion tool for software developers. Leveraging millions of work activities over a two year period, we use a program eligibility threshold to investigate the impact of AI technology on the task allocation of software developers within a quasi-experimental regression discontinuity design. We find that having access to Copilot induces such individuals to shift task allocation towards their core work of coding activities and away from non-core project management activities. We identify two underlying mechanisms driving this shift - an increase in autonomous rather than collaborative work, and an increase in exploration activities rather than exploitation. The main effects are greater for individuals with relatively lower ability. Overall, our estimates point towards a large potential for AI to transform work processes and to potentially flatten organizational hierarchies in the knowledge economy. |
| Keywords: | generative artificial intelligence, digital work, open source software, knowledge economy |
| JEL: | H40 O30 J00 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11479 |