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on Small Business Management |
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Issue of 2025–05–05
fifteen papers chosen by João Carlos Correia Leitão, Universidade da Beira Interior |
| By: | Tan , Yeng-May (Xiamen University Malaysia); Amorós , José Ernesto (EGADE Business School, Tecnológico de Monterrey); Autio , Erkko (Imperial College London); Fu , Kun (Loughborough University); Park, Donghyun (Asian Development Bank) |
| Abstract: | This study explores the relationship between digitalization and entrepreneurial innovation across developing economies. We assess whether higher levels of digital technology development within a country enhance the innovation potential of its entrepreneurial ventures and how this impact varies between Asia and other regions. Using data from the Global Entrepreneurship Monitor (2013–2022) and the Global Innovation Index along with its subindexes, we examine 11 developing economies in Asia and 57 developing economies in other regions. We find that digital technology development generally boosts entrepreneurial innovation. However, our results reveal a significant regional variation. The impact on product innovation is significantly stronger in developing economies outside Asia. This suggests that while digitalization supports innovation generally, its effects may be more transformative in regions outside Asia. These findings offer valuable insights for policymakers seeking to leverage digitalization to drive innovation and economic growth. |
| Keywords: | digitalization; digital technologies; entrepreneurial innovation; ICT development; developing Asia; developing economies |
| JEL: | L26 O31 O33 O57 |
| Date: | 2025–04–28 |
| URL: | https://d.repec.org/n?u=RePEc:ris:adbewp:0776 |
| By: | Czarnitzki Dirk; Confraria Hugo (European Commission - JRC) |
| Abstract: | It has been a long-standing debate whether Europe suffers from an innovation gap. Recent studies indicate a global decline in research and development (R&D) productivity across various sectors, raising concerns about the efficiency of innovation investments. New panel data from the EU Industrial R&D Investment Scoreboard allow examining long-term relationships between firm productivity and R&D. The results show that EU top R&D investors struggle more than their global counterparts to convert their R&D into new ideas and marketable products. |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc141091 |
| By: | Wang, Jian-xiu; Hou, Dan-dan; Zhong, Shun-chang; You, Yun-tian |
| Abstract: | Research conducted worldwide has established that industrial agglomeration can improve firm productivity, regardless of policy and institutional factors. In this study, we utilize firm-level data from the Chinese Industrial Enterprises Database (CIED) for the period of 1998-2014 to analyze the relationship between induced-agglomeration policy and the productivity of firms operating within industrial parks while considering productivity and regional heterogeneities. To ensure the reliability of our results, we adopt various identification strategies that produce consistent outcomes. Additionally, we examine the impact of induced-agglomeration policy on firm survival in industrial parks by utilizing a Cloglog survival model. Our findings indicate that induced-agglomeration policy has a negative effect on the productivity of firms operating within industrial parks, with the negative effects diminishing as TFP increases and being stronger in less developed areas. We also find that induced-agglomeration policy can effectively enhance the lifespan of firms, particularly in less developed regions. We then point out policy optimization and other future research topics. |
| Keywords: | Keywords induced-agglomeration policy·productivity·survival·China |
| JEL: | C0 O25 O4 O40 |
| Date: | 2025–04–14 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:124377 |
| By: | Aimaq, Hasina; Rasa, Mohammad Mirwais; Islam, InamUl |
| Abstract: | The purpose of this study is to explore determinants of innovation in female-owned small and medium enterprises in Kabul city, Afghanistan, and in turn contribute to entrepreneurship-related literature mainly in developing countries. The study employed an explanatory research design with agreement of primary data collection via a cross-sectional survey questionnaire, followed by OLS linear regression as a quantitative research approach. The sample of this study was 303 women entrepreneurs and was selected using a random sampling technique. Being mindful of such importance of innovation, this study inferred that knowledge improvement and transfer, technology, and owner-manager qualification behaviour significantly influence the innovation performance and as such regarded as the strong determinants of innovation. The study didn’t account for the determinants like level of education, previous working experience, age, and profitability of the enterprise. Thus, due to frequent changes in such variables, the study may not reflect the dynamics of the data, which would have a convincing influence on the conclusion. In addition, the research has only consisted of 303 samples. Moreover, such a number may not represent the whole population of the entrepreneurs of women-led Afghan SME. The study might help women entrepreneurs in addressing the factors affecting innovation level to take actions towards improving their innovative behaviour and, in turn, contribute to job creation, wealth, and poverty alleviation. |
| Keywords: | SMES, Afghanistan, International Trade, Innovation, Trade Dynamics |
| JEL: | F1 F12 F18 F4 F41 |
| Date: | 2024–11–14 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:124567 |
| By: | Ohki, Kazuyoshi |
| Abstract: | In this paper, we construct a tractable endogenous growth model that incorporates both incremental innovation by heterogeneous incumbents and innovation by entrants. Our model features two endogenous sources of growth: quality improvement (vertical growth) and expansion in the variety of goods (horizontal growth). We then examine the policy effects of a subsidy for incremental innovation by incumbents and a subsidy for innovation by entrants on the overall economic growth rate, as well as on the relationship between the two sources of growth. Our model confirms that incumbents with higher profit flows tend to engage in incremental innovation for a longer duration and incur greater innovation costs, which is consistent with both Schumpeter's hypothesis and the findings of Christensen (1997) Additionally, the model generates counterintuitive results that are not commonly found in the conventional literature. First, a subsidy for incremental innovation by incumbents may reduce the entry of new firms. Second, a subsidy for innovation by entrants may have a negative effect on the overall economic growth rate. |
| Keywords: | Economic Growth, \&D, In-house model, Firm-Heterogeneity, Innovation by Incumbents, IPR policy, Incremental Innovation, Sustaining Innovation |
| JEL: | O31 O32 O33 O34 O41 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:124304 |
| By: | Tani, Massimiliano (University of New South Wales); Vivarelli, Marco (Università Cattolica del Sacro Cuore); Piva, Mariacristina (Università Cattolica del Sacro Cuore) |
| Abstract: | Labor mobility is considered a powerful channel to acquire external knowledge and trigger complementarities in the innovation and R&D investment strategies; however, the extant literature has focused on either scientists’ mobility or migration of high-skilled workers, while virtually no attention has been devoted to the possible role of short-term business visits. Using a unique and novel database originating a country/sector unbalanced panel over the period 1998-2019 (for a total of 8, 316 longitudinal observations), this paper aims to fill this gap by testing the impact of BVs on R&D investment. Results from GMM-SYS estimates show that short-term mobility positively and significantly affects R&D investments; moreover, our findings indicate - as expected - that the beneficial impact of BVs is particularly significant in less innovative countries and in less innovative industries. These outcomes justify some form of support for BVs within the portfolio of the effective innovation policies, both at the national and local level. |
| Keywords: | knowledge transfer, labor mobility, business visits, R&D investments |
| JEL: | O3 O40 J60 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17806 |
| By: | Marjan Petreski; Magdalena Olczyk |
| Abstract: | This study examines the impact of foreign direct investment (FDI) on job creation across 109 regions in the old EU member states from 2012 to 2023. Using dynamic and spatial econometric models combined with a unique dataset of FDI projects, we find that increased FDI inflows significantly enhance regional job creation, but the relationship is nonlinear. Sectoral specialization plays a crucial role, as more concentrated FDI inflows lead to higher employment growth. Furthermore, FDI-driven job creation exhibits significant spatial spillover effects. However, regions attracting high-value FDI jobs, such as those in R&D and management, tend to experience slower overall employment growth. |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2503.23999 |
| By: | Jun Cui |
| Abstract: | This study explores the impact of entrepreneurial motivations on ESG performance in Chinese stock exchange listed automobile companies. Using quantitative methods and empirical analysis via STATA software, the research examines baseline stability, endogeneity, heterogeneity, and mediation/moderation mechanisms. A sample of 50 firms from the Shanghai and Shenzhen Stock Exchanges 2003 and 2023 was analyzed. Results indicate that entrepreneurial motivations positively influence ESG performance. mediated by innovation capability and moderated by market competition intensity. These findings offer theoretical and practical insights, aligning with Stakeholder and institutional theories. The study provides a robust framework for understanding strategic ESG behavior in Chinas automobile sector. |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2503.21828 |
| By: | Anna Gumpert; Kalina Manova; Cristina Rujan; Monika Schnitzer; Kalina B. Manova |
| Abstract: | This paper provides an integrated analysis of multinational companies’ global production and innovation. We establish novel stylized facts using rich data on the network of production affiliates and patent activity of German multinationals. We rationalize these facts with a heterogeneous-firm model, in which companies jointly determine the location and scale of production, basic innovation and applied innovation, under asymmetric complementarities across these three activities. Empirical evidence consistent with the model indicates that bigger MNCs innovate more intensively in terms of patent frequency and quality, and offshore innovation to more countries, including both countries with and without production affiliates. Moreover, MNCs’ innovation portfolio follows countries’ comparative advantage across technology classes, with applied innovation more likely to be co-located with production than basic innovation. |
| Keywords: | multinational firms, FDI, offshoring, innovation, patents |
| JEL: | F20 F23 F63 L23 L24 O31 O32 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11713 |
| By: | Andre Diegmann (Halle Institute for Economic Research); Laura Pohlan (Institute for Employment Research (IAB)); Andrea Weber (Central European University) |
| Abstract: | We study how connections to German federal parliamentarians affect firm dynamics by constructing a novel dataset linking politicians and election candidates to the universe of firms. To identify the causal effect of access to political power, we exploit (i) new appointments to the company leadership team and (ii) discontinuities around the marginal seat of party election lists. Our results reveal that connections lead to reductions in firm exits, gradual increases in employment growth without improvements in productivity. Adding information on credit ratings, subsidies and procurement contracts allows us to distinguish between mechanisms driving the effects over the politician’s career. |
| Keywords: | Politicians, Firm Performance, Identification, Political Connections |
| JEL: | O43 L25 D72 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:2506 |
| By: | Giulia Canzian; Elena Crivellaro; Tomaso Duso; Antonella Rita Ferrara; Alessandro Sasso; Stefano Verzillo |
| Abstract: | The Covid-19 pandemic caused a global economic crisis, leading governments to provide substantial State Aid to support firms. This paper examines the effectiveness of Covid-related financial support in Spain and Italy, focusing on its impact on firm recovery. Using a difference-in-differences (DiD) approach combined with propensity score weighting, it compares outcomes of similar firms receiving aid to those without. The results show significant benefits for micro-firms, including mitigated turnover declines and increased investments in both tangible and intangible assets. The findings highlight the critical role of government support in business survival and recovery, especially for SMEs, during the pandemic. . |
| Keywords: | State aid, aid effectiveness, temporary framework, Covid, firm growth, investment, difference-in-differences |
| JEL: | D04 D22 L25 L52 P43 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:diw:diwwpp:dp2116 |
| By: | Xu, Tao Louie; Zhu, Weiwei |
| Abstract: | This research identifies the causality between entrepreneurial behaviour and informal institutions of social trust within the context of China’s development. Revisiting the Polanyi-Schumpeter theoretical framework, entrepreneurship embedded in social relations interlinked by trust is a dynamo of sustainable socioeconomic progress. The institutionalised trust, however, was not clarified. With micro-individual data from the Chinese General Social Survey 2011–2021, our research employs the instrumental variable approach rooted in historical rice farming to tackle endogeneity. The results demonstrate that social trust elevates entrepreneurial engagement by 32.65 and 10.37 percentage points in self-employment and business incorporation, respectively. Increased trust paradoxically hampers self-employment in the central due to insular networks and structural disparities. The findings uncover the nuanced role of social trust in facilitating and constraining entrepreneurship with contextually regional determinants. The research contributes to knowledge and evidence of institutional endowments that mediate entrepreneurial agency and argues for synchronising formal and informal institutions in development. |
| Date: | 2025–03–10 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:nka6s_v3 |
| By: | Aurélien Ferry (CNAM - Conservatoire National des Arts et Métiers [CNAM]); Stéphane Jacquet |
| Abstract: | This article explores the support of entrepreneurs through a collaborative and co-active approach. It facilitates the guidance of an entrepreneur who is both locally and globally engaged (concept of glocalization) and operates in a multidimensional manner (concept of polychrony). It then refines the contemporary profile of the proximity entrepreneur, deeply rooted in their community and perceived as a driver of innovation and social responsibility. Furthermore, the article conceptualizes action sciences as an interdisciplinary field. It also examines entrepreneurial support practices, emphasizing flexibility, adaptability, emotional support, effective communication, and awareness of ongoing transitions that foster innovation and entrepreneurial project development. From these insights, new support competencies focused on agility and adaptability are derived. The identified and modeled practices have led to the creation of an innovative training program centered on action sciences. |
| Abstract: | Cet article aborde la question de l'accompagnement de l'entrepreneur dans une dimension collaborative et co-active. Il facilite l'accompagnement d'un entrepreneur présent, à la fois au niveau local et mondial (concept de glocalisation), et qui travaille de manière multidimensionnelle (concept de polychronie). Il affine ensuite le portrait contemporain de l'entrepreneur de proximité, enraciné dans sa communauté et perçu comme un moteur d'innovation et de responsabilité sociale. Ensuite, il 2 marché & organisations conceptualise les sciences de l'action, un domaine interdisciplinaire. Enfin, il explore les pratiques d'accompagnement d'entrepreneurs, mettant en avant la flexibilité, l'adaptabilité, le soutien émotionnel, la communication efficace, et la sensibilisation aux transitions actuelles, qui favorisent l'innovation et la progression des projets entrepreneuriaux ; pour en déduire de nouvelles compétences d'accompagnement axées sur l'agilité et l'adaptabilité. Ces pratiques identifiées et modélisées ont pu permettre de mettre en place une formation inédite, axée sur les sciences de l'action. |
| Keywords: | Accompagnement entrepreneurial, Intention entrepreneuriale, sciences de l'action, acteurs de l'accompagnement, émotion, individuel et collectif, logique inductive, Entrepreneuriat |
| Date: | 2025–03–24 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05009032 |
| By: | Falk Bartscherer (Technical University of Munich, TUM School of Management); Felix Kurz (Technical University of Munich, TUM School of Social Sciences and Technology); Stefan Wurster (Technical University of Munich, TUM School of Social Sciences and Technology); Hanna Hottenrott (TUM School of Management, Technical University Munich & ZEW Leibniz Centre for European Economic Research, Mannheim) |
| Abstract: | Countries worldwide implement mission-oriented innovation policies to address contemporary challenges. However, how the understanding of ‘missions’ differs across countries remains unclear. We distinguish between traditional, narrowly focused missions, and newer, wider, and multiple stakeholder-based missions. Mapping MOIPs in 39 countries reveals a growing popularity of wider missions, though narrow missions persist. We identify distinct mission profiles for different countries with varying foci and understandings of MOIPs. In-depth analyses of selected countries suggest linkages between national innovation systems and mission designs. |
| Keywords: | Mission orientation, mission innovation, innovation policy, grand challenges, policy instruments, Organisation for Economic Co-operation and Development (OECD) |
| JEL: | O14 O30 O38 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:aiw:wpaper:40 |
| By: | Fang, Tony (Memorial University of Newfoundland); Gunderson, Morley (University of Toronto); Hartley, John (Memorial University of Newfoundland) |
| Abstract: | Using data from a largely representative survey of 801 Atlantic Canadian employers, this paper conducts regression analyses to test associations between two diversity variables and five objective and subjective measures of firm performance: revenue change and employment change in the previous three years, projected revenue change and employment change over the next three years and projected provincial economic growth/decline over the next three years. We find that firms with an immigrant CEO and/or owner are more likely to forecast revenue growth, report recent employment growth, and forecast provincial economic growth. Employers who believe that a multicultural workforce enhances creativity are more likely to report recent employment growth and more likely to forecast provincial economic growth in the medium-term. This is consistent with most national studies, which tend to show immigrant-owned companies are more likely to create jobs and firm growth (Picot and Ostrovsky, 2021). |
| Keywords: | organizational performance, multiculturalism, management diversity, immigrant-owned businesses, employer survey, Atlantic Canada |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17810 |