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on Small Business Management |
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Issue of 2026–02–09
twenty-two papers chosen by João Carlos Correia Leitão, Universidade da Beira Interior |
| By: | Amira El-Shal (Cairo University); Eman Moustafa (African Export-Import Bank) |
| Abstract: | This study examines the relationships between gender, research and development (R&D), innovation, and productivity in Egyptian firms, leveraging panel data from 2013, 2016, and 2020. We explore whether female-led firms exhibit differences in productivity and innovation compared to their male-led counterparts. Going beyond most prior investigations, we allow for endogenous selection in innovation by incorporating instrumental variables within generalized structural equation models. Contrary to earlier findings, our results reveal that female-led firms are more likely to invest in R&D and innovate. Moreover, we show that female-led firms are as productive as male-led firms, challenging any notion of lower productivity among female-headed firms. In examining the links between R&D, innovation, and productivity, we determine that innovative and younger firms are more productive. Additionally, factors such as R&D expenditure, younger age, foreign technology adoption, and formal training provision increase the likelihood of innovation. Finally, firms adopting foreign technology and those with access to finance are more likely to invest in R&D. |
| Date: | 2024–10–20 |
| URL: | https://d.repec.org/n?u=RePEc:erg:wpaper:1744 |
| By: | Saleh Goltabar (Academic Center for Education, Culture, and Research); Iman Cheratian (Academic Center for Education, Culture, and Research (ACECR)); Hamed Najaf (Economist, UN Administrative and Budgetary Expert, Iran Representative) |
| Abstract: | This paper examines the relationship between supply chain diversification (SCD) and the persistence of micro, small, and medium-sized enterprises (MSMEs) in Iran, with a focus on the moderating role of external finance. Using a Probit regression analysis and marginal effect estimations on a sample of 480 firms, the study reveals that SCD positively influences the persistence of firms with full access to external finance. However, for firms lacking external finance or relying solely on internal finance, SCD reduces their probability of persistence. These findings underscore the essential role of external finance in enabling MSMEs to leverage SCD as a resilience strategy. The paper provides policy recommendations to enhance MSMEs' access to external finance, especially in regions affected by sanctions. |
| Date: | 2025–05–20 |
| URL: | https://d.repec.org/n?u=RePEc:erg:wpaper:1774 |
| By: | Faruk Hadžić (Sarajevo School of Science and Technology, Bosnia and Herzegovina); Ema Radončić (Sarajevo School of Science and Technology, Bosnia and Herzegovina) |
| Abstract: | This paper explores the relationship between the level of digital maturity and innovation of SMEs in Bosnia and Herzegovina, with a particular focus on the role of ICT as one of the drivers of innovation within the enterprise. Based on data collected from 304 enterprises from different sectors, a composite ICT index was created that quantifies the level of digital maturity of enterprises, as well as an innovation index that measures their activities in the field of innovation. Using descriptive statistics, sectoral segmentation, and K-means cluster analysis, the paper identifies significant differences in the level of digitalization between sectors, and also companies a positive relationship between a higher ICT index and greater innovation. The results show that enterprises with a higher level of digital maturity also achieve a higher level of innovation, while enterprises with a lower ICT index show a lower propensity to innovate. Based on the analysis, three clusters were formed that clearly distinguish enterprise profiles according to digital-innovation behavior. Furthermore, the findings of this research provide an empirical basis for the development of a targeted policy to support the digital transformation of sectoral SMEs, while identifying sectors with the lowest digital capacities as priorities for government intervention. The results obtained should be viewed with caution due to the subjectivity of the respondents' responses. As a practical suggestion, vouchers for digital tools and reskilling programs for the construction and hospitality sectors could accelerate the digital literacy of these companies. The paper aims to contribute to the understanding of the relationship between digital technologies and the innovation capabilities of enterprises in a transitional economic context. |
| Keywords: | Digital maturity, ICT index, Innovation, SMEs, Cluster analysis, Small and medium-sized enterprises |
| JEL: | O33 L26 M15 |
| Date: | 2025–12–15 |
| URL: | https://d.repec.org/n?u=RePEc:aoh:conpro:2025:i:6:p:166-179 |
| By: | Yuichiro KUBO; Tomohito HONDA; Hirofumi UCHIDA |
| Abstract: | This study examines whether, when acting as sellers in M&A transactions, privately held firms set sales conditions and make buyer selection decisions that reflect stewardship considerations. Using unique data on M&A involving privately held small and medium-sized enterprises (SMEs), our analysis reveals that many set sales conditions which reflect their preferences for stewardship-orientation. However, we do not find that family firms are more likely to do so, nor to select buyers with less informational asymmetry, than non-family firms. These findings indicate that in M&A transactions, privately held firms behave as suggested by stewardship theory, but there are no significant differences between family and non-family firms. |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:eti:dpaper:26006 |
| By: | Kyoji FUKAO; YoungGak KIM; Hyeog Ug KWON |
| Abstract: | This study examines the dynamics of total factor productivity (TFP) by firm size to clarify the recent drivers of productivity growth in the Japanese economy, utilizing firm-level financial data from Teikoku Databank (TDB) spanning the years 1999 to 2020. In particular, we examine Japan’s distinctive “negative exit effect†by differentiating among various types of firm exit, including bankruptcy, closure, dissolution, and mergers. Our analysis shows that while within-firm productivity improvements at large firms played a dominant role in driving productivity growth through the 2000s, reallocation effects have become increasingly important since the 2010s. Notably, a substantial share of high-productivity firms exited the market through mergers, accounting for nearly half of the overall negative exit effect. Furthermore, while TFP among acquiring firms tends to stagnate in the short term after mergers, their labor productivity shows a significant and sustained increase, likely driven by capital deepening. These findings provide new insights into the shifting drivers of productivity growth in Japan—from within-firm productivity growth to market-driven resource reallocation—as well as into firm-size heterogeneity and the role of mergers in shaping productivity dynamics. |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:eti:dpaper:26007 |
| By: | Wided Mattoussi (University of TunisAuthor-Name: Younes Ben Zaied; EDC Paris Business School, Paris); Omar Al Tabaa (Leeds University Business School); Foued Mattoussi (University of Jendouba) |
| Abstract: | Foreign Direct Investment (FDI) can inject technology and knowledge into host- country economies, potentially influencing their firms' R&D investments and export capacities; as a result, these firms may engage in R&D (exports), potentially shaping the interaction between the two strategies. This paper investigates whether and when these strategies are complementary and reinforce each other, or whether they are substitutes, and should not be jointly pursued, as well as how combining the two strategies may lead to synergies positively affecting growth. The analysis was conducted on four clusters of firms using panel data of Tunisian manufacturing firms over the period 2016-2018. The first and second clusters include any exporting firms (differentiating exporters from non-exporters) without and with foreign participation, respectively. The third and fourth clusters are made up of fully exporting firms without and with foreign involvement, respectively. The findings suggest that R&D and exports positively reinforce each other in a dynamic virtuous circle to boost exports for firms with no foreign participation, whereas substitutability effects emerge for R&D activity, primarily for firms with foreign participation. The findings are also consistent with complementarities between the two activities in boosting the growth of fully exporting firms with foreign ownership.Length: 55 |
| Date: | 2024–12–20 |
| URL: | https://d.repec.org/n?u=RePEc:erg:wpaper:1770 |
| By: | Shigehiro Shinozaki (Asian Development Bank) |
| Abstract: | This paper empirically investigates what drives the growth of private businesses in Timor-Leste and the policy actions needed to facilitate growth amid global uncertainty, especially for micro, small, and medium-sized enterprises (MSMEs). It uses the linear probability model (LPM) to identify the MSME growth structure and the Oaxaca decomposition to reveal detailed growth factors by firm type in determining which policy areas need to be strengthened. Estimation results show that four types of MSMEs—those formalized, digitalized, internationalized, and women-led —exhibit different business characteristics and performance results compared with control groups. Accordingly, policy support areas differ by firm type, with a focused approach critical in designing and delivering policy assistance to MSMEs in Timor-Leste. The study suggests policy implications to consider when designing an evidence-based MSME policy framework that can maximize the benefits from the country’s recent accession to Association of Southeast Asian Nations membership. |
| Keywords: | digitalization;heterogeneity;Oaxaca decomposition;private sector development;SME development;SME policy;Timor-Leste |
| JEL: | D22 G20 L20 L50 |
| Date: | 2026–02–05 |
| URL: | https://d.repec.org/n?u=RePEc:ris:adbewp:022185 |
| By: | Nguyen, Hang T. T. |
| Abstract: | This paper investigates the relationship between corporate income tax rates (CITR) and firm-level productivity growth using AMADEUS data of 304, 410 observations from 79, 842 European firms from 2006 to 2019. The results imply a robust non-linear relationship: higher CITRs are positively associated with productivity growth for high-productivity firms near the technological frontier and negatively associated with the productivity catch-up of less productive firms. Heterogeneity tests suggest a stronger productivity response to tax rate changes of small and medium-sized enterprises (SMEs) and domestic firms, while I do not find a significant productivity response to tax rate changes for large and multinational firms. The main findings are robust across various productivity estimation methods and model specifications and challenge the conventional view that higher business tax rates have a linear and negative effect on productivity growth. The paper contributes to the ongoing debate about the role of corporate taxation in shaping economic competitiveness and long-term growth. |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:arqudp:335901 |
| By: | Marco Bellandi; Maria Chiara Cecchetti; Caterina Orlando |
| Abstract: | This Handbook presents a database of selected cases and good practices on Circular Economy (CE) for Small and Medium-sized Enterprises (SMEs). Developed within the HEADCET project, it constitutes a valuable tool for supporting Higher Education Institutions and policymakers in addressing sustainable development challenges in Latin America and the Caribbean (LAC). Specifically, it provides: a concise review of the CE literature; an analytical framework of indicators for evaluating CE initiatives; literature-based SME case studies adopting CE practices in LAC; empirical case studies derived from a project survey involving SMEs, social enterprises, and business organisations; and good practices identified from the survey and linked to the indicator framework. The Handbook combines conceptual and empirical insights to analyse and assess CE initiatives and innovations at the business level, offering an evidence-based resource to compare and disseminate CE experiences, supporting knowledge transfer and policy-oriented learning around multi-actor initiatives in support of sustainable local and regional development. |
| Keywords: | Circular Economy, Small-Medium Enterprises, Case Study, Latin America and Caribbean |
| JEL: | O44 Q56 R11 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:frz:wpaper:wp2026_03.rdf |
| By: | Alor, Achai Deng Genevieve; Xiaojing, Li; Ndayipfukamiye, Tharcisse |
| Abstract: | Purpose: This study examines whether perceived military skills transferability (PMST) influences entrepreneurial intention (EI) in a post-conflict economy. Drawing on Social Cognitive Theory, it tests entrepreneurial self-efficacy (ESE) as a mediator and perceived environmental hardship as a moderator. Design/methodology/approach: A quantitative cross-sectional survey was conducted with 270 working-age adults across three regions of South Sudan (Juba/Central Equatoria, Upper Nile and Western Bahr el Ghazal) between July and October 2025 using paper-based and online questionnaires. Hypotheses were tested using hierarchical regression and PROCESS-based mediation (Model 4) and moderation (Model 1) with 5, 000 bootstrap resamples. Findings: PMST is positively associated with EI. ESE mediates this relationship (indirect-only): the bootstrapped indirect effect is significant and the PMST→EI direct effect becomes non-significant when ESE is included. Perceived environmental hardship weakens the positive PMST–EI relationship. Resilience is positively related to EI but does not moderate the focal relationship. Research limitations/implications: The cross-sectional design limits causal inference and self-reports may introduce common method bias. Future research should use longitudinal and comparative designs and examine behavioral outcomes (e.g., business start-up). Practical implications: Reintegration and entrepreneurship programs should combine skills-recognition and ESE-building (e.g., mastery-based training and mentoring) with ecosystem interventions that reduce contextual constraints. Social implications: Supporting entrepreneurship among individuals with military experience may contribute to livelihood recovery, inclusion and reintegration in fragile settings. Originality/value: The study integrates perceived skills transferability, cognitive mechanisms and contextual constraints to explain entrepreneurial intention in a fragile, post-conflict economy. Type of paper: Research paper. Keywords: perceived skills transferability; entrepreneurial self-efficacy; entrepreneurial intention; environmental hardship; resilience; post-conflict; fragile economy. |
| Date: | 2026–01–31 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:7rkap_v1 |
| By: | Aldasoro, Iñaki; Gambacorta, Leonardo; Pal, Rozalia; Revoltella, Debora; Weiss, Christoph; Wolski, Marcin |
| Abstract: | This paper provides new evidence on how the adoption of artificial intelligence (AI) affects productivity and employment in Europe. Using matched EIBIS-ORBIS data on more than 12, 000 non-financial firms in the European Union (EU) and United States (US), we instrument the adoption of AI by EU firms by assigning the adoption rates of US peers to isolate exogenous technological exposure. Our results show that AI adoption increases the level of labor productivity by 4%. Productivity gains are due to capital deepening, as we find no adverse effects on firm-level employment. This suggests that AI increases worker output rather than replacing labor in the short run, though longer-term effects remain uncertain. However, productivity benefits of AI adoption are unevenly distributed and concentrate in medium and large firms. Moreover, AI-adopting firms are more innovative and their workers earn higher wages. Our analysis also highlights the critical role of complementary investments in software and data or workforce training to fully unlock the productivity gains of AI adoption. |
| Keywords: | Artificial intelligence, firm productivity, Europe, digital transformation |
| JEL: | D22 J24 L25 O33 O47 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:eibwps:335876 |
| By: | Ahmed Chafai (University of Manouba); Rym Oueslati (University of Tunis); Hatem Salah (University of Manouba) |
| Abstract: | The objective of this study is to explore the curvilinear relationship between innovation and sustainable firm growth, as well as the moderating role of bank funding on research and development (R&D), institutional quality and bank market power on this nexus. To do this, we selected a sample of 424 companies listed in ten Arab countries (Bahrain, Egypt, Jordan, Kuwait, Morocco, Oman, Qatar, Saudi Arabia, Tunisia, and the United Arab Emirates) over the period 2010-2022. Using a systemic GMM model, the results show that there is a curvilinear (inverted U-shaped) link between innovation and sustainable firm growth. In addition, the outcome shows that bank funding on R&D, institutional quality and bank market power moderate the curvilinear nexus between innovation and sustainable firm growth. This study offers valuable insights into strategic innovation planning and elaboration of important implications by highlighting the role of bank funding on R&D, institutional quality and the power of the banking market in promoting firm sustainability. |
| Date: | 2025–12–20 |
| URL: | https://d.repec.org/n?u=RePEc:erg:wpaper:1819 |
| By: | Bojan Kitanovikj (Faculty of Economics-Skopje, Cyril and Methodius University in Skopje, North Macedonia); Stojan Debarliev (Faculty of Economics-Skopje, Cyril and Methodius University in Skopje, North Macedonia); Aleksandra Janeska-Iliev (Faculty of Economics-Skopje, Cyril and Methodius University in Skopje, North Macedonia) |
| Abstract: | Social entrepreneurship appears as a newer business model that, in addition to profit, aims to solve a social problem with the help of social innovation. As the number of social enterprises increases, so does the interest in acquiring knowledge, skills, and abilities to create a new social entrepreneur who is ready to respond to modern challenges. That is why the eyes are immediately focused on education and educational institutions that are tasked with laying the foundations of learning for social entrepreneurship. To date, the literature on social entrepreneurship education (SEE) is fragmented and without a clear systematic framework. To fill this research gap, the purpose of this paper is to synthesize and map the landscape of SEE and create a new taxonomy of the ecosystem. Namely, this is one of the first research endeavors to map the educational opportunities for learning social entrepreneurship. The research is aimed at examining key trends in SEE, key themes and concepts, their interrelationships, and impact on the social entrepreneurship ecosystem based on abstract mining of scholarly articles published in journals, which are indexed in the Scopus database. The results have implications for a multitude of stakeholders such as academia, managers and entrepreneurs, practitioners, and decision-makers. |
| Keywords: | Social entrepreneurship, Education, Social entrepreneur, Training, Taxonomy |
| JEL: | L31 I21 |
| Date: | 2025–12–15 |
| URL: | https://d.repec.org/n?u=RePEc:aoh:conpro:2025:i:6:p:241-256 |
| By: | Tomohiko INUI; YoungGak KIM; Hyeog Ug KWON |
| Abstract: | This paper examines how artificial intelligence (AI) development is related to firm productivity and business dynamism in Japan. Using firm-level panel data from the Basic Survey of Japanese Business Structure and Activities matched with the Institute of Intellectual Property (IIP) patent database, we use AI-related patent applications as a proxy for AI development and analyze its association with productivity, firm organization, and industry-level reallocation. The empirical analysis combines fixed-effects estimation, event-study methods, and inverse probability weighting to address potential endogeneity. We find that firms engaging in AI development tend to exhibit higher productivity in the medium to long run, while displaying distinctive dynamics around the timing of AI development. In particular, productivity temporarily declines around the onset of AI development and subsequently improves. This pattern is consistent with adjustment costs associated with the adoption of new general-purpose technologies, but it is also compatible with endogenous selection into AI development, and therefore, the analysis does not make strong causal claims. Importantly, the association between AI development and productivity is heterogeneous across firms. The positive relationship is more pronounced among firms with higher initial productivity levels and larger firm size, while it is weaker among smaller and lower-productivity firms, highlighting the role of complementary assets such as skilled labor and organizational capabilities. We further show that AI development is associated with changes in firm organization and labor composition. While total employment does not decline significantly, the share of high-skilled workers increases, and the number of subsidiaries tends to decrease. At the industry level, greater AI development is associated with stronger reallocation toward more productive firms, linking AI development to business dynamism in the Japanese economy. |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:eti:rdpsjp:26004 |
| By: | Belso-Martinez, Jose Antonio; Díez-Vial, Isabel; Rodríguez-Pose, Andrés |
| Abstract: | This article examines the effect of formal and informal institutional settings and of the governance of inter-organizational relationships on innovation at the cluster level. The research primarily relies on quantitative methods, utilizing data obtained from a survey involving 115 firms and 12 in-depth interviews. Supplementary qualitative information from the interviews has also been incorporated into the analysis. The results support the hypothesis that innovative firms should consider not only the impact of different governance modes but also how these modes align with the existing local contexts. Failure to do so may result in firms becoming entrenched in the prevailing practices and products of a specific location. |
| Keywords: | firms; innovation; clusters; institutions; governance; inter-organizational relationships |
| JEL: | M20 O30 D83 |
| Date: | 2024–06–01 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:122118 |
| By: | Elvy Maria Manurung (Parahyangan Catholic University, Indonesia); Tahta Alfina (Parahyangan Catholic University, Indonesia) |
| Abstract: | The coffee drinking culture has become a part of daily life. Many studies have been conducted on the coffee business, coffee drinking culture, and technological advancements. However, there is still a lack of focus on the creativity process and the impact of the coffee drinking culture. This research focuses on the technological changes in coffee machines, especially the transition from manual to semi-automatic roasting machines, and how this affects the coffee beverage business and the coffee drinking culture. Using observation and several interviews with three entrepreneurs in the coffee drinking businesses in West Java, Indonesia, the research findings indicate that coffee machine technology has been utilized to develop the coffee beverage business and has contributed to changing the landscape of coffee drinking culture in Indonesia. Coffee drinking now serves as a beverage and a symbol of social status and individual identity. The four steps of the creativity process by Richard Florida confirmed that business continuity needs to adopt four stages: preparation, incubation, illumination, and verification. If one or several creative ethos are skipped, business sustainability will be impacted. |
| Keywords: | technology innovation, creativity process, entrepreneurship, coffee drinking culture, sustainability |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:smo:raiswp:0558 |
| By: | Will Aarons; Asani Sarkar |
| Abstract: | The New York Fed’s Economic Heterogeneity Indicators (EHIs) aim to study macroeconomic outcomes experienced by various groups of people and businesses. We recently added a suite of indicators describing the performance of small businesses to the EHIs—both for the region (defined, for the purpose of this study, as New York, New Jersey, and Connecticut) and nationally. Small businesses are critical to employment generation as they accounted for almost 63 percent of new private sector jobs since 2005 and employed almost 46 percent of all U.S. workers in 2025. Thus, understanding economic trends and impacts for small businesses is important for designing effective monetary policy and aligns with the New York Fed’s mission to support the regional economy. In this post, we highlight some aspects of small business profitability, revenues, employment, and indebtedness since 2019 for firms of different sizes. |
| Keywords: | small business; performance; Second District |
| JEL: | G0 G30 |
| Date: | 2026–02–03 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fednls:102391 |
| By: | Gu, Grace (University of California, Santa Cruz); Mulalic, Ismir (Department of Economics, Copenhagen Business School); Pozzoli, Dario (Department of Economics, Copenhagen Business School); Wu, Jinhong (The Technical University of Denmark) |
| Abstract: | Climate-related risks have increased significantly over the past two decades, including both physical risks (such as extreme weather events) and transition risks (arising from climate change mitigation policies). This paper examines how these risks relate to firms’ innovation outcomes, including those related to green technologies. We first develop a model in which firms choose how many workers to employ for R&D and production activities in response to rising climate risks. The model predicts an increase in green innovation and overall innovation under certain conditions. Empirical evidence from Danish administrative data generally supports these predictions, showing that firms exposed to climate risks exhibit higher innovation activity, especially in green technologies. |
| Keywords: | Climate change; Physical risks; Transition risks; Firms’ innovation |
| JEL: | Q54 Q55 Q56 |
| Date: | 2026–01–23 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:cbsnow:2026_003 |
| By: | Vasilios Kanellopoulos |
| Abstract: | This paper examines a competition game whose key variables are the R&D efforts (e.g. R&D expenditures) and accumulated knowledge of firms located in a specific region. The most significant element of accumulated knowledge is knowledge spillovers. These are considered intra-industry as it is assumed that the firms operate within the same industry (i.e. similar types of firms) and competitors offer similar products. The present study identifies a Nash equilibrium based on firm cost minimisation. This is derived under the assumption that the firms under examination act rationally and are primarily concerned with achieving optimal outcomes - specifically, by minimising their total costs. |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2601.13282 |
| By: | Hong, Jong Soo |
| Abstract: | Despite increasing risk exposure from expanding assets and leverage among large securities firms, the current Net Capital Ratio (NCR) framework does not adequately capture these risks. To strengthen risk sensitivity while maintaining a balance between financial soundness and industry growth, the NCR formula for large securities firms should revert to its pre-2016 structure, and a differentiated regulatory approach tailored to business scope and risk characteristics should apply to small- and medium-sized firms. |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:kdifoc:335927 |
| By: | Tea Josimovska (Faculty of Economics-Skopje, Ss. Cyril and Methodius University in Skopje, North Macedonia); Daniel Nauck (h2 Magdesburg-Stendal University of Applied Sciences, Germany); Vladimir Trajkovik (Faculty of Computer Science and Engineering, Ss. Cyril and Methodius University in Skopje, North Macedonia) |
| Abstract: | Purpose Decision-making under conditions of uncertainty has long been a central concern in various disciplines focusing on behavioral research (Bjurström and Bakken, 2022; Johnson and Busemeyer, 2010), particularly within the field of entrepreneurship (Shepherd et al., 2015; Zayadin et al., 2023). Entrepreneurial intention among emerging adults is not shaped by personality alone but is also strongly influenced by contextual enablers such as perceived support and opportunity structures (Apasieva et al., 2024). In this context, sensemaking emerges as a multidimensional concept explaining how entrepreneurs interpret ambiguous signals, reassess assumptions, and construct meaning to guide pivotal decisions (Niemi et al., 2022). Despite growing interest among researchers in entrepreneurial sensemaking processes and their antecedents, particularly within nascent entrepreneurial ventures, remains underexplored. This is particularly important since the nascent entrepreneurs are lacking established routines guiding their decision-making processes. In that vein, the sensemaking process is a meaningful mechanism for identifying opportunities, assessing them, and adapting to unexpected challenges (Maitlis and Christianson, 2014; Snowden, 2011; Sandberg and Tsoukas, 2015). It is a communicative process through which individuals construct meaning by using language, talk, and interaction to interpret ambiguous situations (Weick et al., 2005). The paper focuses on the entrepreneurial sensemaking process during pivoting from a nascent venture to a sustainable business model. The aim is to explore the interaction mechanisms between the triggers - a disruption that challenges existing understanding and initiates sensemaking (Kocielnik and Hsieh, 2017; Obear, 2007) and enablers - routines, practices, and structures that facilitate the sensemaking process (Maitlis and Lawrence, 2007). Design/methodology/approach This paper is grounded on a single case study from North Macedonia. Data were collected between January and March 2025 through a written interview and an in-depth, in-person interview with both founders. The analysis was based on the Gioia qualitative inductive research approach (Gioia et al., 2013). In the first stage, 1st-order coding was applied to capture informant-centric terms and experiences of the founders with third-party actors, generating a wide array of descriptive codes related to emotional reactions, pivot decisions, and stakeholder interactions. In the second stage, 2nd-order coding grouped these categories into abstract themes reflecting deeper patterns in the entrepreneurial sensemaking process. Finally, these themes were organized into aggregate dimensions to identify underlying mechanisms, particularly the role of specific triggers and enablers shaping how sense was made during the venture’s strategic transition. Findings The analysis revealed distinct types of triggers, such as institutional, individual peer signals, market silence, as well as enabling conditions like urgency, credibility, and relational trust, shaping how and when entrepreneurial sensemaking was initiated and sustained. Additionally in the analysis were identified three distinct mechanisms through which triggers and enablers interact to shape sensemaking were identified: enabler-driven, trigger-driven, and interpretative breakdown. In enabler-driven mechanisms, sensemaking only occurred when the trigger was reinforced by internal or contextual enablers like technical knowledge or urgency. Trigger-driven mechanisms emerged when the trigger was strong or clear enough that sensemaking would likely occur in the same way with or without the presence of an enabler. In contrast, interpretative breakdown mechanisms reflected moments where the absence of clear signals or supportive enablers led to the new concept of the sensemaking gap. Finally, we reveal two previously underexplored dimensions of entrepreneurial sensemaking: self-driven sensemaking - emerging from pure internally motivated reflections, and reactive sensemaking - emerging from authoritative time-bound external pressures. Nevertheless, the findings have some limitations because they are based on a single case, which can limit their broader use and leave out other relevant aspects, such as cross-cultural factors. Originality/value This paper offers original insight into how distinct types of triggers, such as institutional, individual peer signals, or market silence, interact with enabling conditions like urgency, credibility, and relational trust to shape entrepreneurial sensemaking in nascent entrepreneurial ventures. It moves beyond linear models of decision-making by emphasizing social dimensions through which meaning is constructed and actions are justified. The value lies in providing an understanding of how founders navigate the uncertainty, offering guidance on how support mechanisms can be better tailored to trigger productive sensemaking and timely strategic adaptation. In practical terms, the findings suggest that policy-makers should strengthen this process by supporting the development of entrepreneurship support organizations that offer mentorship programs, peer-learning platforms, and help build trust-based initiatives that can ultimately foster productive sensemaking in new ventures. Table 1: Triggers, Enablers, and Outcomes of the Sensemaking Process in Nascent Entrepreneurship Stage Trigger Enabler Mechanism Outcome Early incubation phase Environmental jolt Technical knowledge/founder activism Enabler Driven Mechanism Immediate self-driven sensemaking Market exploration phase Early transition phase Accelerator invitation: B2B transition requirement Stagnation and urgency (internal crisis)/Conditional invitation Enabler Driven Mechanism Reframed retrospective sensemaking Institutional Аuthoritative, time-intensive Trigger-Driven Mechanism Immediate reactive sensemaking Individual peer trigger Relational connection Enabler Driven Mechanism Relational sensemaking Absence of a signal (inaction or silence) / Interpretative Breakdown Mechanism Sensemaking gap Industry disinterest Knowledge about validation Enabler-driven Mechanism Reflective sensemaking Late transition phase Recognition of strategic misalignment Temporal distance Trigger-Driven Mechanism Deliberative collective sensemaking Post accelerator investor excitement Founders’ self-confidence Trigger-Driven Mechanism Prospective sensemaking Market signal of willingness to pay Legitimacy Trigger-Driven Mechanism Ongoing sensemaking (Source: Author’s work) |
| Keywords: | Nascent entrepreneurship, Sensemaking, Pivot, Qualitative process research |
| JEL: | L26 D83 M13 |
| Date: | 2025–12–15 |
| URL: | https://d.repec.org/n?u=RePEc:aoh:conpro:2025:i:6:p:321-324 |
| By: | Tamara Kaftandjieva (School of Economics and Business, University of Ljubljana, Slovenia); Metka Tekavčič (School of Economics and Business, University of Ljubljana, Slovenia) |
| Abstract: | The Balkan wine industry, dominated by small and medium-sized enterprises (SMEs), faces increasing pressure to adopt sustainability practices, yet efforts remain fragmented due to misaligned stakeholder interests and weak governance coordination. This paper applies stakeholder mapping to identify key actors, relationships, and governance levers influencing sustainability across Slovenia, Serbia, and North Macedonia. Using eight semi-structured interviews, document analysis, and triangulation through policy review, the study constructs a stakeholder map based on power, interest, and feasibility dimensions. Stakeholders were classified as internal or external and positioned within a power–interest matrix using qualitative coding and document triangulation. Findings reveal four clusters: Key Players, Context Setters, Subjects, and Minimal Stakeholders, whose interactions shape governance outcomes. Misalignments emerge between policy ambition and SME capacity, between market power and sustainability incentives, and between fragmented institutional levels. The analysis highlights how high interest often fails to produce action when feasibility is constrained. The study contributes a region-specific governance roadmap that links stakeholder alignment with actionable policy levers. It provides insights into how SMEs, associations and policymakers can strengthen coordination, integrate demand-side incentives and accelerate sustainability transitions in the Balkan wine value chain. |
| Keywords: | Stakeholder mapping; Power–interest matrix; Wine value chain; Sustainability governance; Balkan region; Small and medium-sized enterprises (SMEs); Stakeholder clusters; Value chain governance |
| JEL: | Q56 |
| Date: | 2025–12–15 |
| URL: | https://d.repec.org/n?u=RePEc:aoh:conpro:2025:i:6:p:218-230 |