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on Small Business Management |
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Issue of 2026–03–09
twenty papers chosen by João Carlos Correia Leitão, Universidade da Beira Interior |
| By: | Deng, Haotian; Desiere, Sam; Cockx, Bart (ROA / Human capital in the region); Bijnens, Gert |
| Abstract: | This paper studies how employment subsidies for start-ups shape their performance. We exploit an unexpected policy reform in Belgium that permanently exempted start-ups hiring their first employee from payroll taxes for that employee. Using firm-level administrative data and a regression-discontinuity-in-time design, we find that subsidized post-reform start-ups employed fewer workers and generated lower output, value added, and profits compared to pre-reform start-ups. However, post-reform start-ups were more likely to survive as employers. These effects emerged within the first year after hiring and remained stable over a medium horizon of three years. Our findings indicate a compositional shift: the subsidy primarily induced low-productivity firms to enter the market. As most firms nowadays are nonemployers, our results meaningfully generalize the theoretical implications of standard neoclassical entrepreneurship models (employee–employer margin) and fill the important gap of the nonemployer–employer margin. |
| Keywords: | entrepreneurship, start-up, employment subsidy, tax reduction, labor de-mand;, Small firms |
| JEL: | H25 J23 J24 J38 L25 L26 M51 |
| Date: | 2026–02–24 |
| URL: | https://d.repec.org/n?u=RePEc:unm:umaror:2026001 |
| By: | Sasso Simone (European Commission - JRC); Perpiña Castillo Carolina; Napolitano Lorenzo (European Commission - JRC) |
| Abstract: | This brief presents new JRC evidence on innovation performance across EU territories, with a focus on differences between urban, intermediate and rural regions. By building innovation indicators constructed and estimated for the first time at a sufficiently granular territorial level to capture differences between urban and rural regions on R&D investment, patents, trademarks and industrial designs, the analysis confirms urban–rural innovation gaps, while also revealing substantial heterogeneity not only between urban and rural regions, but also among rural regions themselves. While innovation activity remains highly concentrated in urban areas, the evidence also points to a limited number of rural regions that notably stand out in specific innovation dimensions, often linked to specialised industrial structures, public research capacity or proximity to urban innovation hubs. These findings highlight both the concentration of innovation activity in urban regions and the presence of pockets of strong innovation capacity in rural territories, pointing to the existence of innovation potential beyond urban centres and underscoring the importance of place-based policies that recognise territorial diversity and support more balanced innovation-driven competitiveness across EU regions |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc145387 |
| By: | Gert Bijnens (National Bank of Belgium, Research Department); Sam Desiere (Ghent University, Belgium); Haotian Deng (Ghent University, Belgium); Bart Cockx (Ghent University, Belgium) |
| Abstract: | This paper studies how employment subsidies for start-ups shape their performance. We exploit an unexpected policy reform in Belgium that permanently exempted start-ups hiring their first employee from payroll taxes for that employee. Using firm-level administrative data and a regression- discontinuity-in-time design, we find that subsidized post-reform start-ups employed fewer workers and generated lower output, value added, and profits compared to pre-reform start- ups. However, post-reform start-ups were more likely to survive as employers. These effects emerged within the first year after hiring and remained stable over a medium horizon of three years. Our findings indicate a compositional shift: the subsidy primarily induced low-productivity firms to enter the market. As most firms nowadays are nonemployers, our results meaningfully generalize the theoretical implications of standard neoclassical entrepreneurship models (employee–employer margin) and fill the important gap of the nonemployer–employer margin. |
| Keywords: | entrepreneurship; start-up; employment subsidy; tax reduction; labor demand; small firms. |
| JEL: | H25 J23 J24 J38 L25 L26 M51 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:nbb:reswpp:202603-488 |
| By: | Beraja, Martin; Peng, Wenwei; Yang, David Y.; Yuchtman, Noam |
| Abstract: | Venture capital plays an important role in funding and shaping innovation outcomes, characterized by investors’ deep knowledge of the technology, industry, and institutions, as well as their long-running relationships with the entrepreneurship and innovation community. China, in its pursuit of global leadership in AI innovation and technology, has set up government venture capital funds so that both national and local governments act as venture capitalists. These government-led venture capital funds combine features of private venture capital with traditional government innovation policies. In this paper, we collect comprehensive data on China’s government and private venture capital funds. We draw three important contrasts between government and private VC funds: (i) government funds are spatially more dispersed than private funds; (ii) government funds invest in firms with weaker ex-ante performance signals but these firms exhibit growth rates exceeding those of firms in which private funds invest; and (iii) private VC funds follow government VC investments, especially when hometown government funds directly invest on firms with weaker ex-ante performance signals. We interpret these patterns in light of VC funds’ traditional role overcoming information frictions and China’s unique institutional environment, which includes important frictions on mobility and information. |
| Keywords: | venture capital; artificial intelligence; innovation policy |
| JEL: | G24 G28 O38 |
| Date: | 2025–02–28 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:124143 |
| By: | John Van Reenen |
| Abstract: | How the study of innovation and competition has been transformed. |
| Keywords: | Growth, Creative destruction, Nobel, Innovation, , Productivity |
| Date: | 2026–02–20 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepcnp:722 |
| By: | Mathieu Le Moal (MRM-EPME - Montpellier Research in Management - Entrepreneuriat et PME - MRM - Montpellier Research in Management - UPVD - Université de Perpignan Via Domitia - UM - Université de Montpellier); Olivier Torrès (MRM-EPME - Montpellier Research in Management - Entrepreneuriat et PME - MRM - Montpellier Research in Management - UPVD - Université de Perpignan Via Domitia - UM - Université de Montpellier) |
| Abstract: | This longitudinal study explored links between workplace loneliness, health, sleep, working hours, and burnout among 349 small business owners in construction/public works, using four waves of telephone data (2015-2016). A fixed-effects panel regression assessed within-person changes over time.Workplace loneliness was positively associated with burnout (β = 0.28, p < .001), while mental health (β = -0.27, p < .001) and sleep duration (β = -0.17, p = .018) were negatively associated. Physical health and working hours showed no significant effects. Additional analyses revealed stronger associations between loneliness, mental health, and burnout in SMEs compared to microenterprises, where sleep had a modest protective effect. These results underscore the need to address loneliness, support mental health, and promote sleep to reduce burnout in small business owners. Interventions should be adapted to the distinct needs of microenterprises and SMEs. |
| Keywords: | Burnout, Workplace loneliness, Mental health, Sleep duration, Small business owners, Fixed-effects analysis, Longitudinal study, Entrepreneurs |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05507725 |
| By: | Radovanovic Nikola; Fabbri Emanuele (European Commission - JRC); Sanz Macarena; Predic Marina; Radovanovic Nikola; Fabbri Emanuele (European Commission - JRC) |
| Abstract: | This paper examines the effectiveness of Smart Specialisation strategies in addressing sustainability and competitiveness challenges in the Western Balkans, a region whose innovation performance is strongly tied to EU accession efforts. Emphasizing green and digital transitions as key drivers but also situating Smart Specialisation within the New European Innovation Agenda (NEIA), the Growth Plan for the Western Balkans, and their emphasis on building connected Regional Innovation Valleys (RIVs), it highlights the need for system-level innovation focused on inclusive growth. The involvement of local players and strategic resource allocation remain crucial for practical outcomes. Evidence shows progress in digital infrastructure and sectoral initiatives, yet persistent gaps in data availability, skills and regulatory frameworks hamper uptake. In addition to environmental considerations, the paper draws attention to ICT cooperation, sectoral knowledge and innovation systems and sustainability reporting alignment as critical enablers for resilient development. Strengthening regional cooperation and stakeholder trust emerges as the key to optimising Smart Specialisation strategies for sustainable, innovation-led growth in line with EU priorities |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc143970 |
| By: | Hassan F. Gholipour; Georges Harb; Mohammad Reza Farzanegan |
| Abstract: | This study examines the relationship between conflict events, conflict-related fatalities, and entrepreneurial intentions in Iraq, one of the most war-affected countries over the past four decades and a context largely overlooked in the entrepreneurship literature. By combining regional-level data from the Armed Conflict Location and Event Data (ACLED) with individual-level data from the World Values Survey (WVS), we find that, controlling for other factors, entrepreneurial intentions are significantly lower in regions experiencing higher levels of conflicts and fatalities. This finding is robust across multiple estimation methods and model specifications. Furthermore, our results indicate that financially stable individuals show a sharper decline in entrepreneurial intentions in response to conflicts compared to financially vulnerable individuals. |
| Keywords: | business formation, conflicts, entrepreneurial intentions, Iraq, WVS |
| JEL: | D74 L26 O53 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12507 |
| By: | Emin Dinlersoz; Timothy Dunne; John C. Haltiwanger; Veronika Penciakova |
| Abstract: | The business entry literature typically observes firms only at the first hire. We provide a new perspective using linked administrative microdata tracking the universe of U.S. business applications and their transition into employer firms. We model entry as a two-stage process: pursuit of a business idea (proxied by a business application) and implementation (transition). Results show these margins are distinct and associate differently with local conditions. While both margins matter, high-startup locations are characterized by high application intensity, whereas low-startup locations exhibit low transition rates, suggesting geographic disparities in entry arise from different dynamics at each stage of the entrepreneurial process. |
| JEL: | L26 M13 R12 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34881 |
| By: | Kateryna Tkach (Gran Sasso Science Institute); Alberto Marzucchi (Gran Sasso Science Institute); Ugo Rizzo (Department of Mathematics and Computer Science, University of Ferrara); Michela Borghesi (Department of Economics and Management, University of Ferrara) |
| Abstract: | We contribute to the literature on the green, digital and twin transitions by providing novel evidence on their implications for industrial dynamics. In particular, we investigate whether the local supply of skills in the green, digital and twin domains is related to firm entry and exit at the NUTS3 level in Italy. We exploit a recently created dataset on the near-universe of Italian university programme descriptions to capture the skills provided through higher education. We find that the supply of green, digital and twin skills enhances opportunities for firm entry. We rule out the possibility that this effect simply reflects the supply of high-skilled labour in general. The supply of green skills may induce higher industrial renewal, being it also correlated with higher exit rates. |
| Keywords: | skill supply; university graduates; industrial dynamics; local economic performance |
| JEL: | O33 Q55 J24 R11 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:srt:wpaper:0726 |
| By: | Anna Bastone (Parthenope University of Naples (Italy, Naples)); Luigi Mosca; Christopher Tucci; Sai Lan (EM - EMLyon Business School) |
| Abstract: | Digital transformation is reshaping the competitive landscape by forcing incumbent firms to rethink their strategies, organizational structures, and business models. While a substantial body of literature has explored digital transformation in specific sectors, focusing on various factors and organizational mechanisms, there remains a lack of a comprehensive and cohesive understanding of how incumbent firms actively lead or respond to these transformations. As a result, the concept remains somewhat fragmented and underdeveloped. This review addresses this gap by conducting a systematic review of 68 peer-reviewed articles across five major academic domains: entrepreneurship, general management, innovation, organization studies, and strategy. Our review identifies pathways of leading versus responding to digital transformation as well as the internal and external consequences and antecedents that enable or constrain digital transformation. We also offer a research agenda aimed at deepening our theoretical and managerial understanding of how incumbent firms navigate digital transformation , providing novel directions for future studies. |
| Keywords: | organizationalstructure, Business models, digital transformation, incumbent, strategy, responding, leading, literature review |
| Date: | 2025–12–09 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05489666 |
| By: | Henrekson, Magnus (Research Institute of Industrial Economics (IFN)); Sandström, Christian (Linneaus University, Växjö, Sweden); Stenkula, Mikael (Research Institute of Industrial Economics (IFN)) |
| Abstract: | Green Deals have been introduced across Western economies as large-scale, mission-oriented innovation policies (MOIPs) intended to combine economic growth with environmental sustainability. Rooted in the concept of an “entrepreneurial state, ” these initiatives reflect renewed confidence in governments’ ability to direct technological and industrial transformation. However, their outcomes have frequently diverged from expectations. This volume examines the theoretical foundations and empirical results of Green Deals, highlighting the institutional, economic, and behavioral factors that contribute to their shortcomings. Drawing on perspectives from evolutionary economics, public choice theory, and behavioral political economy, the contributors analyze a wide range of cases, including Germany’s Energiewende, Italy’s Superbonus, and the European Union’s hydrogen and battery programs. Across these examples, recurring challenges such as rent-seeking, mission capture, optimism bias, and distorted incentives are identified. The findings indicate that while Green Deals have advanced ambitious sustainability goals, they often undermine competitiveness and fiscal stability while generating limited environmental benefits. The volume concludes by outlining alternative pathways that emphasize incremental, technology-neutral, and institutionally grounded approaches to sustainability—approaches that align more closely with long-term economic resilience and effective environmental policy. |
| Keywords: | Entrepreneurship policy; Green deals; Green transition; Innovation policy; Moonshot policies; Public choice |
| JEL: | H50 L26 L52 O33 O38 P16 |
| Date: | 2026–02–25 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:iuiwop:1553 |
| By: | Heather Hennerich |
| Abstract: | China has focused on innovation and is moving from being a low-cost producer to a high-tech producer and exporter. An economist explains the trajectory. |
| Date: | 2025–11–05 |
| URL: | https://d.repec.org/n?u=RePEc:fip:l00100:102781 |
| By: | Bo Cowgill; Pablo Hernandez-Lagos; Nataliya Langburd Wright |
| Abstract: | Screening human capital based on signals such as job applications or entrepreneurial pitches is crucial for organizations. Signals are often informative insofar as they require differential knowledge and effort to produce. Generative AI (GAI) complicates screening by lowering the cost of producing impressive signals. We model the informational effects of GAI, showing that applicants' access to GAI can increase - but also decrease - an evaluator's screening mistakes. This result depends on how GAI affects experts' signals compared to non-experts'. Using experiments in hiring and startup investing, we estimate that senders' access to GAI (ChatGPT) lowers screening accuracy by 4-9% for employers and startup investors. Consistent with our model, senders' access to GAI also improves screening accuracy in some settings - in our case, among senders from non-English-speaking countries. These results show that GAI can profoundly shape screening accuracy. |
| Keywords: | screening, artificial intelligence, entrepreneurship, human capital |
| JEL: | D82 M51 L26 D83 O33 M13 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12508 |
| By: | Norman Jones III |
| Abstract: | Small Business Credit Survey respondents signaled that higher costs, staffing issues, and increased difficulty growing their sales are their most prevalent issues. |
| Date: | 2025–10–01 |
| URL: | https://d.repec.org/n?u=RePEc:fip:l00100:102778 |
| By: | Wagner, Joachim |
| Abstract: | This short note looks at the link between churning of exporters and dynamics of exports using data from the World Bank Exporter Dynamics Database from 69 countries primarily for the period between 2003 and 2010. In line with Schumpetarian theory of creative destruction we report that a higher rate of turnover in export activity by entry and exit of firms in the year before is positively linked to export growth in the current year after controlling for unobserved time-invariant country effects and country-invariant time effects. Creative destruction is at work in exports. |
| Keywords: | Exporter Dynamics Database, creative destruction, export entry, export exit |
| JEL: | F14 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:kcgwps:337456 |
| By: | Jan LukÅ¡iÄ; Jörg Peschner; Giuseppe Piroli |
| Abstract: | We find that patents registered by multinational enterprises (MNEs) in tax havens help avoid taxes in the EU but fail to increase the total factor productivity (TFP) of EU-located group members. We conclude that many of those patents' prime purpose is not to make technology available and then diffuse it smoothly within the group. It is rather to avoid taxes in the EU by shifting profits to low-tax offshore entities. We suggest that implementing a comprehensive system of withholding taxes on outbound royalty payments could reduce profit-shifting associated with patents, thereby fostering more innovative and efficient uses of intellectual property. |
| Keywords: | Multinational enterprises, taxes, TFP, innovation. |
| JEL: | D24 F38 H21 H25 O32 |
| Date: | 2026–01–04 |
| URL: | https://d.repec.org/n?u=RePEc:eei:rpaper:eeri_rp_2026_04 |
| By: | Joel Bothello (EM - EMLyon Business School); Sorin M. S. Krammer (UNIS - University of Surrey); Vlad‐andrei Porumb (University of Manchester [Manchester]); Yasemin Zengin-Karaibrahimoglu (University of Groningen (The Netherlands, Groningen)) |
| Abstract: | Research Summary: Prior studies on business groups (BGs) have predominantly focused on the impact of group affiliation on financial performance. In contrast, we argue that BG affiliates will outperform standalone firms in terms of corporate social performance (CSP) and that this effect will be positively moderated by the strength of formal and informal institutions. Moreover, we examine also differences among BGs and hypothesize that diversification and hierarchy of the group will negatively affect the CSP of affiliates. Employing a panel of 4368 firms from 43 countries between 2003 and 2016 and a propensity score matching approach in our regressions, we find robust support for these predictions. Our findings advance two distinct strands of literature on BGs and, respectively, corporate social responsibility. Managerial Summary: BG are a common organizational structure in many countries. Despite this, we still do not know much about them beyond their financial performance. In this study, we focus on examining the impact of BG affiliation on non-financial performance (i.e., CSP) in the light of growing societal grand challenges. Using an international dataset of several thousands of firms, we find out that BG affiliates exhibit superior CSP results compared to non-affiliated firms. |
| Keywords: | organizational structure, institutions, corporate social performance, business groups |
| Date: | 2024–11–15 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05511785 |
| By: | Mselmi Chaimae (Université Mohammed Premier [Oujda] = Université Mohammed Ier = University of Mohammed First) |
| Abstract: | Face aux mutations économiques et technologiques contemporaines, l'entrepreneuriat des jeunes s'impose comme un axe stratégique majeur des politiques publiques de développement au Maroc. Toutefois, malgré la multiplication des programmes d'appui et d'incitation à la création d'entreprises, la persistance d'un secteur informel important révèle des dysfonctionnements structurels, parmi lesquels figurent la complexité du système fiscal et la faiblesse de la culture de conformité. Dans ce contexte, la digitalisation fiscale apparaît comme un levier déterminant susceptible de favoriser l'intégration des jeunes entrepreneurs dans l'économie formelle.Cette recherche adopte une approche qualitative fondée sur une revue approfondie de la littérature académique et institutionnelle relative à l'entrepreneuriat des jeunes, à la gouvernance fiscale et à la transformation numérique des administrations publiques. L'analyse mobilise des travaux nationaux et internationaux ainsi que des rapports émanant d'organismes publics marocains, notamment la Direction Générale des Impôts (DGI), le Haut-Commissariat au Plan (HCP) et l'Agence Nationale de Promotion de l'Emploi et des Compétences (ANAPEC).Les résultats montrent que la digitalisation des procédures fiscales contribue à la réduction des coûts administratifs, à l'amélioration de la transparence et à la simplification de la relation entre l'administration fiscale et les jeunes entrepreneurs. Elle permet notamment de diminuer les délais de traitement des déclarations, de réduire les risques d'erreurs et de faciliter l'accès à l'information fiscale. Toutefois, son impact demeure limité par des facteurs tels que l'insuffisance des compétences numériques, la faible sensibilisation aux obligations fiscales, la persistance de la méfiance institutionnelle et les inégalités territoriales d'accès aux infrastructures numériques.L'étude conclut que la digitalisation fiscale, bien qu'essentielle, ne saurait à elle seule stimuler durablement l'entrepreneuriat des jeunes sans un dispositif d'accompagnement global incluant formation fiscale et numérique, simplification réglementaire, gouvernance inclusive et mécanismes incitatifs adaptés aux spécificités des jeunes entrepreneurs. Une approche systémique impliquant l'ensemble des parties prenantes (administration fiscale, établissements de formation, structures d'accompagnement, secteur privé) s'avère indispensable pour maximiser les retombées de la transformation numérique sur l'écosystème entrepreneurial. |
| Keywords: | Tax digitalization, Business formalization, Public governance, Tax compliance, Digital transformation, Morocco, Youth entrepreneurship, Youth entrepreneurship Tax digitalization Business formalization Public governance Tax compliance Digital transformation Morocco |
| Date: | 2025–12–31 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05450839 |
| By: | Sanae El-Amraoui (UAE - Abdelmalek Essaadi University [Tétouan] = Université Abdelmalek Essaadi [Tétouan]); El Aaroubi (UAE - Abdelmalek Essaadi University [Tétouan] = Université Abdelmalek Essaadi [Tétouan]) |
| Abstract: | Abstract : The introduction on the stock market constitutes a considerable strategic opportunity for Moroccan SMEs, offering them access to new financing and the opportunity to increase their reputation. However, the use of the stock exchange remains restricted in this sector. This article aims to study the factors influencing the IPO decision of Moroccan SME managers, by adopting a global approach that combines Ajzen's planned behavior model and the contributions of behavioral finance. We used bibliometric analysis and systematic review to examine the patterns and trends of subject area , with the main focus on citations as the primary measurement unit . Leveraging tools such as Scopus and VOSviewer, the analysis involves 28 papers to unveil evolving trends and scholarly contributions spanning from 2020-2025 . This analysis is important to filling a gap in the researched field because no other bibliometric study has been done on the same topic before .It will also serve to provide a scientific foundation for following research .The results showed that the behavioral biases in particular Overconfidence, optimism, Loss aversion, Herding, risk perception significantly influence the decision of SME managers to resort to an IPO. Overconfidence, optimism, Herding, risk perception has a positive impact, motivating executives to regard the IPO as a profitable option. As a result, the combination of behavioral biases and Theory of Planned Behavior makes it possible to better explain the intention of SMEs to go public than economic or financial factors alone . Keywords: Behavioral finance, IPO, Moroccan SMEs, TPB, Behavioral Biases , Overconfidence |
| Abstract: | Déclaration de divulgation : L'auteur n'a pas connaissance de quelconque financement qui pourrait affecter l'objectivité de cette étude. |
| Keywords: | Overconfidence, Behavioral Biases, TPB, Moroccan SMEs, IPO, Behavioral finance |
| Date: | 2025–12–18 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05440332 |