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on Small Business Management |
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Issue of 2024‒05‒27
fifteen papers chosen by |
| By: | Lee, Kyung Min; Kim, Mee Jung; Brown, J. David; Earle, John S.; Liu, Zhen |
| Abstract: | We evaluate the contributions of immigrant entrepreneurs to innovation in the U.S. using linked survey-administrative data on 199, 000 firms with a rich set of innovation measures and other firm and owner characteristics. We find that not only are immigrants more likely than natives to own businesses, but on average their firms display more innovation activities and outcomes. Immigrant-owned firms are particularly more likely to create completely new products, improve previous products, use new processes, and engage in both basic and applied R&D, and their efforts are reflected in substantially higher levels of patents and productivity. Immigrant owners are slightly less likely than natives to imitate products of others and to hire more employees. Delving into potential explanations of the immigrant-native differences, we study other characteristics of entrepreneurs, access to finance, choice of industry, immigrant self-selection, and effects of diversity. We find that the immigrant innovation advantage is robust to controlling for detailed characteristics of firms and owners, it holds in both high-tech and non-high-tech industries and, with the exception of productivity, it tends to be even stronger in firms owned by diverse immigrant-native teams and by diverse immigrants from different countries. The evidence from nearly all measures that immigrants tend to operate more innovative and productive firms, together with the higher share of business ownership by immigrants, implies large contributions to U.S. innovation and growth. |
| Date: | 2024–04–18 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:3kycm&r=sbm |
| By: | Daan Freeman; Leon Bettendorf; Gerrit Hugo van Heuvelen; Gerdien Meijerink |
| Abstract: | This study examines the decline in firm dynamism within the Netherlands, potentially linked to the deceleration of productivity growth. We utilise a rich microdata set covering the period 2006-2016, encompassing nearly all Dutch corporations. This dataset facilitates an evaluation of start-ups’ and exiting firms’ contributions to Total Factor Productivity (TFP) growth across various industries, employing the Melitz and Polanec (2015) decomposition approach. Our findings reveal that in service sectors, the creative destruction hypothesis is substantiated, as start-ups and exiting firms positively impact overall TFP growth. In contrast, TFP growth in manufacturing is primarily driven by incumbent firms. Entry and exit dynamics in this context exert minimal or even negative influence on TFP growth. Although entrants in manufacturing initially display lower productivity than incumbents, their productivity growth outpaces that of incumbents. In services, entrants commence operations with higher initial productivity, a trait that gradually diminishes over time. Generally, entrants with relatively low productivity are predisposed to exit within five years, aligning with the ’up-or-out’ pattern. |
| Keywords: | productivity slowdown, firm dynamics, TFP, Netherlands |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_11071&r=sbm |
| By: | Andres Rodriguez-Pose; Zhuoying You; ; |
| Abstract: | Artificial intelligence (AI) and robotics are revolutionising production, yet their potential to stimulate innovation and change innovation patterns remains underexplored. This paper examines whether AI and robotics can spearhead technological innovation, with a particular focus on their capacity to deliver where other policies have mostly failed: less developed cities and regions. We resort to OLS and IV-2SLS methods to probe the direct and moderating influences of AI and robotics on technological innovation across 270 Chinese cities. We further employ quantile regression analysis to assess their impacts on innovation in more and less innovative cities. The findings reveal that AI and robotics significantly promote technological innovation, with a pronounced impact in cities at or below the technological frontier. Additionally, the use of AI and robotics improves the returns of investment in science and technology (S&T) on technological innovation. AI and robotics moderating effects are often more pronounced in less innovative cities, meaning that AI and robotics are not just powerful instruments for the promotion of innovation but also effective mechanisms to reduce the yawning gap in regional innovation between Chinese innovation hubs and the rest of the country. |
| Keywords: | AI, robotics, China, technological innovation, territorial inequality |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:2412&r=sbm |
| By: | OECD |
| Abstract: | Rural regions across the OECD depend on a wide range of economic engines for growth, as well as the quality of place to attract and retain people. Social innovation seeks new answers to social and environmental problems, using new solutions that improve the quality of life for individuals and communities. Social innovation can be a tool to create vibrancy in rural areas by filling public service gaps, experimenting with new business models, and creating a stronger sense of community. However, not all rural areas are equally equipped to engage in social innovation. This paper provides guidance for policy makers and proposes an approach alongside a dashboard of indicators for measuring readiness and capacity to engage with social innovation in rural areas. |
| Keywords: | local ecosystem, measurement of social innovation, rural development, rural innovation, social economy, social entrepreneurship, social innovation |
| JEL: | I30 L31 O35 R11 O38 |
| Date: | 2024–05–11 |
| URL: | http://d.repec.org/n?u=RePEc:oec:cfeaaa:2024/4-en&r=sbm |
| By: | Mengus, Eric (HEC Paris); Michalski, Tomasz (HEC Paris) |
| Abstract: | Specialized knowledge-generating jobs comprise close to one fifth of employment and one fourth of the wage bill in French manufacturing firms. They are positioned high in the firm hierarchy, horizontally aside upper-tier managers but are not managerial in nature. This escapes the patterns implied by the hierarchy view of the firm. Conditioning on firm size and shares of management workers, their higher shares in employment at the firm level are correlated with more innovation and intangible capital, greater product complexity, higher revenue and quantity total factor productivity and profitability. This suggests that firms use specialized knowledge workers to generate within-firm knowledge and create firm capabilities. Consistently, we model firms as organizations where efficient production of higher-value added, complex goods requires information acquisition by within-firm knowledge workers to develop capabilities beyond those created by management and hierarchies. |
| Keywords: | firm organization; complexity; productivity; knowledge generation; capabilities |
| JEL: | D23 D24 D83 J24 L20 M10 M50 |
| Date: | 2023–01–20 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:heccah:1493&r=sbm |
| By: | Jos\'e Moran; Angelo Secchi; Jean-Philippe Bouchaud |
| Abstract: | We revisit "granular models of firm growth" that have been proposed in the literature to explain the anomalously slow decrease of growth volatility with firms size and how this phenomenon shapes the distribution of their growth rates. In these models, firms' sales are viewed as collections of independent "sub-units", and these non-trivial statistical properties occur as a direct result of the fat-tailed distribution of the number or sizes of these sub-units. We present and discuss new theoretical results on the relation between firm size and growth rate statistics. Our results can be understood by noting that granular models imply the existence of three types of firms: well-diversified firms, with a size evenly distributed among several sub-units; firms with many sub-units but with their total size concentrated on only a handful of them, and lastly firms which are poorly diversified simply because they are made up of a small number of sub-units. We establish new empirical facts about growth rates and their relation with size. As predicted by the model, the distribution of growth rate volatilities is to a good approximation {independent of firm size}, once rescaled by the average size-conditioned volatility. However, the tail of this distribution is much too thin to be consistent with a granular mechanism. Moreover, the moments of growth volatility scale with size in a way that is at odds with theoretical predictions. We also find that the distribution of growth rates rescaled by firm-specific volatility, which is predicted to be Gaussian by all the models we consider, remains very fat-tailed in the data, even for large firms. This paper, in ruling out the granularity scenario, suggests that the overarching mechanisms underlying the growth of firms are not satisfactorily understood, and argues that they deserve further theoretical investigations. |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2404.15226&r=sbm |
| By: | Leogrande, Angelo |
| Abstract: | The following article analyzes Italian companies with more than 10 employees that use online sales tools. The data used were acquired from the ISTAT-BES database. The article first presents a static analysis of the data aimed at framing the phenomenon in the context of Italian regional disparities. Subsequently, a clustering with k-Means algorithm is proposed by comparing the Silhouette coefficient and the Elbow method. The investigation of the innovative and technological determinants of the observed variable is carried out through the application of a panel econometric model. Finally, different machine learning algorithms for prediction are compared. The results are critically discussed with economic policy suggestions. |
| Date: | 2024–04–06 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:y3t4j&r=sbm |
| By: | Tommaso Oliviero (Università di Napoli Federico II and CSEF); Sandro Rondinella (University of Calabria.); Alberto Zazzaro (University of Naples Federico II, CSEF and MoFiR.) |
| Abstract: | Green investment by private companies is essential to sustainable growth paths in the advanced economies. Whether, and to what extent, investments by green firms are hampered by lack of external finance is an open question. Here we estimate the sensitivity of investment to internal finance in firms engaging in green innovation, finding that the elasticity of investment to cash flow is four times less for green than for non-green firms. This result is stronger among smaller firms and robust to alternative definitions of “green firms.” Our findings indicate that green firms are less financially constrained, consistent with the growing perception of the importance of the green transition, which potentially affects financial investors outside the company. |
| Keywords: | Green investment; cash flow; external finance; financial constraints. |
| JEL: | E22 G30 Q55 |
| Date: | 2024–02–23 |
| URL: | http://d.repec.org/n?u=RePEc:sef:csefwp:700&r=sbm |
| By: | Chahal, Jyoti; Dagar, Vishal; Dagher, Leila; Rao, Amar; Ntom Udemba, Edmund |
| Abstract: | This research examines college students' entrepreneurial inclinations using TPB, self-efficacy, and the crisis effect. It also examines the crisis effect's moderating influence post-pandemic. A unique analytical technique using Structural Equation Modeling (SEM) and Artificial Neural Network (ANN) was used to evaluate the model's resilience. 310 Indian university students were surveyed online. Self-efficacy is a crucial predictor of entrepreneurial tendencies among higher education students. ANN analysis confirms SEM findings that self-efficacy and perceived behavior control shape entrepreneurial desires. Despite its negative impact, the crisis effect doesn't appear to affect entrepreneurs' objectives. The crisis impact moderates all exogenous and endogenous factors except subjective norms and entrepreneurial goals, the research finds. The research also shows that students' education and geography affect their entrepreneurial inclinations. Gender, however, has little control. Policymakers and higher education administrators could boost entrepreneurial ambitions by fostering students' self-efficacy and perceived behavior control. Understanding these elements allows higher education stakeholders to create targeted interventions and support systems to foster college student entrepreneurship. |
| Keywords: | Entrepreneurial Intentions; Crisis-Effect; Self-efficacy; Artificial Neural Network (ANN); PLS-SEM; Post-Pandemic |
| JEL: | A22 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:120706&r=sbm |
| By: | Eslava, Marcela; Meléndez, Marcela; Ulyssea, Gabriel; Urdaneta, Nicolás; Flores, Ignacio |
| Abstract: | The relationship between firms and inequality has been a focus of recent attention globally. This chapter summarizes basic facts about this relationship for Latin America. Unlike advanced economies where superstar firm growth has prompted concerns over disproportionate income growth at the top, the facts we summarize illustrate that the main concern for Latin America is the extreme prevalence of tiny businesses whose workers and owners tend to populate the bottom income segments. The empirical likelihood that these businesses improve their productivity and grow to hire more workers and pay better wages is also very low. The region displays a deficit of employment generation in SMEs, by contrast to both microbusinesses (including self-employment) and large corporations. While the former tend to remunerate both workers and owners with very low incomes, the latter pay high wages but also exhibit low labor shares. |
| JEL: | E20 J21 O54 |
| Date: | 2024–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:122760&r=sbm |
| By: | Pillai, Neiil (Nehaal); Dietlmeier, Simon Frederic; Urmetzer, Florian |
| Abstract: | This paper examines whether the geopolitical objective of technological sovereignty is attainable and enabled by entrepreneurial ecosystems, as both concepts aim to improve economic competitiveness. A qualitative single-case study of the Indian short-form video (SFV) market, which provides some of the most innovative business-to-consumer (B2C) digital applications, was conducted based on 20 stakeholder interviews and triangulated archival data. Numerous SFV start-ups were created in the city of Bangalore after a geopolitical incident that prompted the Indian government to ban comparable Chinese SFV apps, including TikTok. The research empirically demonstrates that the Bangalore entrepreneurial ecosystem facilitated technological sovereignty in three steps based on an input-process-output (IPO) model to enable the creation of these “sovereign” Indian SFV apps. Core of the theoretical enablement process is the adaptability of an entrepreneurial ecosystem to socio-political disruptions induced by geopolitical and geoeconomic objectives. This allows for ecosystem self-sustainment and triggers technological sovereignty as ecosystem response. |
| Keywords: | Ecosystem; Sovereignty; Technology; Geopolitics; Innovation |
| JEL: | F2 I2 L1 N4 Y4 |
| Date: | 2024–03–30 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:120620&r=sbm |
| By: | D'Amico, Enrique; Del Giorgio Solfa, Federico Ph.D. (National University of La Plata) |
| Abstract: | The paradigm shift has revealed a need among industrial designers to have entrepreneurial capabilities. Being the most effective modality to exercise discipline today. The implementation of this approach requires reviewing the discursive scaffolding that the design has been using to set immovable high standards of complexity and quality, reducing the field of professional action and limiting the intervention alternatives. This article considers the dynamics and trends in people's lifestyles, explores possible strategies and specific content for the entrepreneurial training required by design. |
| Date: | 2024–04–06 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:mcet3&r=sbm |
| By: | Matthias Raddant; Fariba Karimi |
| Abstract: | Diversity in leadership positions and corporate boards is an important aspect of equality. It is important because it is the key to better decision-making and innovation, and above all, it paves the way for future generations to participate and shape our society. Many studies emphasize the importance of the visibility of role models and the effect that connectivity has on the success of minorities in leadership. However, the connectivity of firms, the dynamics of the adoption of minorities, and the long-term effects have not been well understood. Here, we present a model that shows how these effects work together in a dynamic model that is calibrated with empirical data of firm and board networks. We show that homophily -- the appointment of minorities is influenced by the presence of minorities in a board and its neighboring entities -- is an important effect shaping the trajectory towards equality. We further show how perception biases and feedback related to the centrality of minority members influence the dynamic. We find that reaching equality can be sped up or slowed down depending on the distribution of minorities in central firms. These insights bear significant implications for policy-making geared towards fostering equality and diversity within corporate boards. |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2404.11334&r=sbm |
| By: | Reinhilde Veugelers (Peterson Institute for International Economics) |
| Abstract: | This paper focuses on the innovation angle in green industrial policy design. The innovation system, delivering new and improved technology solutions for the clean energy transition, can be the cornerstone of a successful transition that reconciles decarbonization, competitive value creation and jobs, and strategic autonomy on a global scale. This, however, requires the innovation system to be properly directed. This paper first lays out the principles of a policy design that properly steers the innovation system. It then documents the current performance on clean energy innovations and clean energy policymaking globally, with focus on the Inflation Reduction Act (IRA) and the Net-Zero Industry Act (NZIA) trends in clean tech policymaking in the United States and European Union, respectively. The evidence shows that the innovation system is not at full potential, and there is still ample room to improve the current clean energy policymaking and international policy coordination. |
| Keywords: | climate change, clean tech, innovation, green innovation policy, strategic autonomy |
| JEL: | O31 O38 Q55 |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:iie:wpaper:wp24-5&r=sbm |
| By: | Carla Guerriero (Università di Napoli Federico II and CSEF); Antonia Pacelli (University of Naples Federico II, Naples School of Economics.) |
| Abstract: | This paper uses Italian data on industrial plant emissions over a 12 years period to assess the differential impact of negative shocks in the allocation of free allowances across various industrial sectors in the context of the EU Emission Trading Scheme (ETS). Specifically, it examines the consequences of reduced free allowances for certain sectors in contrast to those that maintain their existing allocation. By using a novel indicator of emission intensity based on quantity this study shows that the absence of free allowances does not directly impact the incentive to abate emissions but foster the entry of cleaner producers. The results offer evidence of regional heterogeneity by analysing the variations in policy effects between the South and the North of Italy. |
| Keywords: | Carbon pricing, free allowances, carbon leakage, emission intensity. |
| JEL: | D22 H23 Q54 Q58 |
| Date: | 2023–12–12 |
| URL: | http://d.repec.org/n?u=RePEc:sef:csefwp:699&r=sbm |