|
on Small Business Management |
| By: | Gourène, Grakolet; Brixiova Schwidrowski, Zuzana; Balcar, Jiří; Johnson Filipova, Lenka |
| Abstract: | Family-owned firms account for majority of small and medium-sized enterprises (SMEs) in Arab countries, but evidence on the impact of this ownership type on access to credit in the region is scarce. Yet the issue is key for understanding barriers to the emergence of dynamic private sector and growth acceleration. Utilizing the World Bank Enterprise Surveys, this paper contributes to closing this knowledge gap by examining the links between family ownership and credit constraints of SMEs in Egypt, Jordan, Morocco, and Tunisia. We found that while family-owned firms have a higher need for credit than nonfamily-owned firms, they are more likely to be discouraged from applying for it. Due to this self-selection out of credit markets, they end up more credit constrained even though their credit application rejection rates are below those of nonfamily firms. Stronger firm governance, formal business strategies and good managerial practices can ease access to credit for family-owned SMEs. |
| Keywords: | Family-owned SMEs, access to credit, firm governance, Arab countries |
| JEL: | D22 G21 G32 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1548 |
| By: | MARIOTTI Ilaria; SASSO Simone (European Commission - JRC) |
| Abstract: | The European Commission has increasingly highlighted the importance of fostering conditions that support the emergence and flourishing of innovation and entrepreneurship across all regions. The Long-Term Vision for EU’s Rural Areas recognises the key role that innovation can play in revitalising these territories and transforming them into places of opportunity, while the New European Innovation Agenda emphasises the need to accelerate and strengthen innovation across the EU and thereby address the existing territorial innovation divide. This report, which is part of the Startup Village Forum’s research activities, analyses successful initiatives, supported by public policies or private efforts, which focus on attracting, training or retaining human capital to bolster entrepreneurial and innovation ecosystems in European non-urban areas. The analyzed initiatives - selected for their sustainability, resilience, replicability, inclusivity, cohesiveness, and urban-rural networks - have been promoted by public actors in Ireland (Connected Hubs), Spain (RAISE Youth) and Sweden (Lärcentrum), and by private ones in Portugal (Rural Move) and Italy (Incubatore SEI). They vary widely in terms of their typology, objectives, operational approaches, target groups, services provided, and implementation periods. They leverage urban-rural networks, thus enhancing brain circulation and brain bank. The countries hosting these initiatives present a heterogeneous distribution of tertiary education across cities, towns and suburbs, and rural areas, highlighting a north-south divide. The study shows that all the initiatives have been supported by urban-rural networks and have enhanced the inclusiveness of people coming from outside the area. Additionally, it reveals that key elements for their success, apart from the participation in urban-rural networks, include close collaboration with higher educational institutions, engagement with public institutions, and robust political support across different tiers of government. |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc138968 |
| By: | Maczulskij, Terhi |
| Abstract: | Abstract This study examines the relationship between immigration and firmlevel innovation in the Finnish manufacturing sector. The analysis leverages unique matched data, including employees’ immigration status, firm-level patenting, process and product innovation activities, and innovation inputs spanning the 2000–2018 period. To address the potential endogeneity of a firm’s immigrant employment, an instrumental variables approach is employed using the historical geographic distribution of immigrants in the region where the firm is located. The results reveal that an increase in immigrant employment positively influences process and product innovation, and skilled foreign knowledge boosts the number of patent applications. Additionally, immigration leads to reduced external R&D expenditures, indicating that immigrant workers may substitute outsourced innovation inputs. The study also finds no evidence that immigration adversely affects native workers’ employment in Finnish firms. By contrast, it may benefit natives with complementary skills. |
| Keywords: | Firm-level, Immigration, Innovation |
| JEL: | D22 F22 O30 |
| Date: | 2025–01–02 |
| URL: | https://d.repec.org/n?u=RePEc:rif:wpaper:124 |
| By: | Serafica, Ramonette B.; Oren, Queen Cel A. |
| Abstract: | The Philippine Development Plan 2023–2028 recognizes innovation as one of the drivers of growth in the services sector, creating a strategic framework to reinvigorate the sector and strengthen creativity and innovation. To help formulate the appropriate strategies and policies, this paper examines the evidence on innovation in service industries using the 2021 Survey of Innovation Activities of Establishments, which provided broader sector coverage. The survey was conducted during the pandemic when firms had to pivot to new modes of service delivery to survive. It gives a more nuanced profile and innovation behaviors of services firms and seeks to identify the effects and determinants of innovation across the services subsectors. Among the four types of innovation, organizational innovation was the most common type of innovation introduced in most service sectors, followed by marketing, process, and product innovation. For most of the services subsectors, the most common innovation activity of the establishments was “Training for innovative activities”. Across all services subsectors, cost factors are identified as the most common barrier considered of high significance. Organizations that employ at least one FIRe technology, obtain funding, use platforms, engage in R&D activities (whether outsourced or in-house), or use knowledge management methods are more likely to be innovation active and produce at least one type of innovation. The survey also reveals greater reliance on internal and market sources of information while the utilization of institutional and other sources of information, such as incubators, scientific journals or technical publications, and regulatory bodies was low for most subsectors. Universities or other higher education institutions were also not popular cooperation partners. In terms of knowledge management, regularly updating internal databases or manuals was the most popular practice while a policy to bring in external experts from universities, research institutes, or other establishments to participate in project teams was the least common practice across the subsectors. The Philippine Innovation Act (RA 11293) provides different interventions to address the various impediments related to cost factors, knowledge factors, market factors, and legal or regulatory factors (Albert et al. 2023). Given the diversity of services, a one-size-fits-all strategy will not be effective. While this study presents a snapshot of the innovation profiles of the different subsectors, in-depth analysis of the innovation ecosystem is required to develop industry-specific innovation roadmaps. Comments on this paper are welcome within 60 days from the date of posting. Email publications@pids.gov.ph. |
| Keywords: | innovation;services;product innovation;process innovation;marketing innovation;organizational innovation |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:phd:dpaper:dp_2024-14 |
| By: | Danial Lashkari; Jeremy Pearce |
| Abstract: | In a previous post, we provided evidence for a broad-based slowdown in productivity growth across industries and firms in the U.S. manufacturing sector starting in 2010. Since firms’ investment in research and development (R&D) for new technologies constitutes a central driver of productivity growth, in this post we ask if the observed slowdown in productivity may be due to a decline in R&D. We find that “R&D intensity” has been increasing at both the firm and industry level, even as productivity growth declines. This points to a decline in the effectiveness of R&D in generating productivity growth in U.S. manufacturing. |
| Keywords: | productivity; manufacturing; innovation; competition; economic growth |
| JEL: | O33 O40 |
| Date: | 2025–01–06 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fednls:99374 |
| By: | Giorgio Di Pietro (European Commission - JRC) |
| Abstract: | Reliance on workers from outside the EU to address skills and labour shortages is found to increase with firm size. This suggests that small firm size may be a significant barrier to the recruitment of these workers. Increasing the possibility for micro enterprises and small firms to hire non-EU people is therefore an important challenge for the EU. Our results suggest that compared to older SMEs, younger SMEs are more likely to consider the recruitment of third-country nationals as a solution to labour and skills shortages. Further research is however needed to confirm these findings. SMEs are more likely to rely on third-country nationals to fill low to medium-skilled positions than highly skilled positions. Given the existence of skill shortages in high level occupations in Europe, it is important to investigate what factors make SMEs less likely to consider filling high skilled vacancies with third-country nationals. |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc139979 |
| By: | Mr. Salih Fendoglu; Ms. TengTeng Xu |
| Abstract: | The startup ecosystem in Japan has seen gradual growth, supported by the government’s recent "Startup Development Five-Year Plan" and a significant interest from overseas venture capital. This paper lays out the startup financing ecosystem in Japan, with comparison to international peers, and studies potential drivers of startup financing and their relevance for startups’ performance. The results, based on country-level aggregate analysis, underscore the critical role of firm dynamism and entrepreneurship in supporting capital investment and firm valuations. Further analyses at the firm level suggest that equity funding helps startups innovate, grow, and successfully exit. Moreover, the impact of funding on the likelihood of a successful exit appears to be higher in cultures that seem to reward risk taking. |
| Keywords: | Startups; venture capital; Japan; firm dynamics |
| Date: | 2024–12–06 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2024/246 |
| By: | Ferrando, Annalisa; Pál, Rozália |
| Abstract: | The availability of internal and external financing sources significantly influences firms' investments and growth. Even profitable firms with ample financing in normal times can be adversely affected by demand and supply shocks such as the COVID-19 pandemic, the energy crisis, or the recent tightening of financing conditions. This paper examines the impact of funding difficulties on firms' investment, performance and growth during normal period and periods of external shocks, using a regression adjustment treatment effect approach. We distinguish between structural barriers to external financing and cyclical deteriorations in financing conditions, while controlling for other major investment barriers. The analysis uses survey data collected from the 1 st to 8 th vintage of the European Investment Survey (EIBIS). Empirical evidence shows that micro and small firms, as well as leading innovators, are particularly vulnerable to deteriorating funding conditions. Results indicate that firms lagging in digitalisation and green investments face more of a structural rather than a cyclical financing issue. Consequently, policy support should be oriented towards these structural financing impediments to ensure a fair and faster transformation. |
| Keywords: | SMEs, investment gap, external funding, internal funding, financing constraints, uncertainty, investment barriers, firm performance, growth, digital and green transition |
| JEL: | C83 D22 G32 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:eibwps:308041 |
| By: | Henrekson, Magnus (Research Institute of Industrial Economics); Johansson, Dan (Örebro University) |
| Abstract: | The neo-Schumpeterian growth models, which appeared in the early 1990s, have ostensibly reintroduced the entrepreneur into mainstream growth theory. However, we show that by ignoring genuine uncertainty and by assuming that profits follow an objectively true and ex ante known probability distribution, the entrepreneur is made redundant. Thus, the theory fails to exhaustively explain innovation, the role of ownership competence, profits, the function of financial markets, wealth and income distribution, and, ultimately, economic growth. These shortcomings risk leading to erroneous or overly narrow policy conclusions by overestimating the importance of supporting R&D investments. Rather, the presence of genuine uncertainty forms a fundamental theoretical basis for the importance of new venture creation as a source of innovation-driven growth; entrepreneurs must establish and expand firms to capture the subjectively perceived profit opportunities. Therefore, tax policy is decisive for the commercialization and dissemination of innovations by providing incentives to uncertainty-bearing, not only for entrepreneurs, but also for intrapreneurs and financiers taking an active part in the governance and development of firms based on innovations characterized by genuine uncertainty. Furthermore, taxation can distort the evolutionary selection of innovations and firms, for instance, by taxing owners and firms differently. |
| Keywords: | creative destruction, economic growth, entrepreneur, entrepreneurship policy, innovation, judgment, Knightian uncertainty |
| JEL: | B40 O10 O30 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17577 |
| By: | Görg, Holger; Jacobs, Anna; Meuchelböck, Saskia |
| Abstract: | In this paper, we use a novel firm level dataset for Germany to investigate the effect of sanctions on export behaviour and performance of German firms. More specifically, we study the sanctions imposed by the EU against Russia in 2014 in response to the annexation of Crimea and Russia’s countermeasures. We find a substantial negative effect on both the extensive and intensive margin of German exports. While the negative effects are strongest for firms exporting products subject to trade restrictions, we provide further evidence on the indirect effects of sanctions. Analysing the impact on broader measures of firm performance, we document that the cost of sanctions is heterogeneous across firms but overall modest. Our results reveal that the negative impact of the shock was concentrated primarily among a small number of firms that were highly dependent on Russia as an export market and those directly affected by the sanctions. |
| Keywords: | Sanctions, Foreign policy, Firm behaviour, Germany, Trade |
| JEL: | F1 F14 F51 L25 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifwkie:307099 |
| By: | Giovanazzi, Carmen |
| Abstract: | We analyze the dynamics of mergers and acquisitions (M&A) in the United States (US) and Germany in the 2000s, drawing on the Varieties of Capitalism (VoC) framework and the concept of internal capitalist diversity. Using SDC Platinum transaction data from 2000 to 2023 and qualitative insights from semi-structured interviews with 28 M&A professionals, we investigate how firm characteristics and institutional frameworks drive M&A activity in both countries. We confirm VoC-based expectations regarding transaction volumes and industry patterns but also highlight the professionalization of M&A functions across large, listed firms, alongside an increasing role of financial acquirers in both markets. While the rise of private equity aligns with the exit-driven strategies of small and medium-sized enterprises (SMEs) in the US, it raises questions regarding family-owned SMEs in Germany, which prioritize continuity and legacy but increasingly face succession challenges. Our findings suggest a continued hybridization of Germany's stakeholder-oriented corporate governance, integrating shareholder-oriented practices beyond large, listed firms. |
| Keywords: | M&A, Varieties of Capitalism, Financialization, Germany, US |
| JEL: | G34 L2 P52 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifsowp:308062 |
| By: | Fernando Leibovici; David Wiczer |
| Abstract: | This paper studies the role of credit constraints in accounting for the dynamics of firm exit during the Great Recession. We present novel firm-level evidence on the role of credit constraints on exit behavior during the Great Recession. Firms in financial distress, with tighter access to credit, are more likely to default than firms with more access to credit. This difference widened substantially in the Great Recession while, in contrast, default rates did not vary much by size, age, or productivity. We identify conditions under which standard models of firms subject to financial frictions can be consistent with these facts. |
| Keywords: | firm exit; Great Recession; credit constraints; financial distress |
| JEL: | E32 G01 |
| Date: | 2024–09–23 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedawp:99194 |
| By: | Cavalcanti, T.; Mohaddes, K.; Nian, H.; Yin, H. |
| Abstract: | This paper explores the long-term impact of air pollution on firm-level R&D human capital composition and innovation, as well as the strategies firms adopt to mitigate these effects. Using a spatial regression discontinuity design based on China’s Huai River heating policy and exploring a novel dataset with detailed information on firm-level R&D sector, we show that prolonged exposure to air pollution significantly reduces the proportion of R&D workers with advanced degrees, such as PhDs and master’s degrees. To counteract these challenges, firms in polluted areas increase their reliance on external strategies, such as acquiring technology and collaborating with universities, and adopt internal measures, including enhanced welfare subsidies for R&D staff and greater investment in experimental instruments. Despite these efforts, firms in polluted areas still produce lower R&D value compared to those in cleaner regions. Our results highlight the key importance of internal human capital in complementing external technological investments. |
| Keywords: | adaptive strategies, air pollution, firm value, innovation, R&D human capital composition |
| Date: | 2024–11–06 |
| URL: | https://d.repec.org/n?u=RePEc:cam:camdae:2466 |
| By: | Mr. Serhan Cevik; Sadhna Naik; Keyra Primus |
| Abstract: | European countries are lagging behind in productivity growth, with significant productivity gaps across industries. In this study, we use comparable industry-level data to explore the patterns and sources of total factor productivity (TFP) growth across 28 countries in Europe over the period 1995–2020. Our empirical results highlight four main points: (i) TFP growth is driven largely by the extent to which countries are involved in scientific and technological innovation as the leader country or benefiting from stronger knowledge spillovers; (ii) the technological gap is associated with TFP growth as countries move towards the technological frontier by adopting new innovations and technologies; (iii) increased investment in information and communications technology (ICT) capital and research and development (R&D) contributes significantly to higher TFP growth; and (iv)the impact of human capital tends to be stronger when a country is closer to the technological frontier. The core findings of this study call for policy measures and structural reforms to promote innovation and facilitate the diffusion of new and existing technologies across Europe. |
| Keywords: | Total factor productivity; technology; R&D; innovation; human capital; Europe |
| Date: | 2024–12–20 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2024/258 |
| By: | Tani , Massimiliano (University of New South Wales); Avendano, Rolando (Asian Development Bank); Tolin, Lovely (Asian Development Bank) |
| Abstract: | In this paper, we examine whether, and if so how, an economy’s deliberate policy choices of regional cooperation and integration influence underlying determinants of economic growth. Building on models of growth and innovation, we analyze the role of regional integration on labor productivity and firms’ probability to innovate using data from a panel of 170 economies and 60, 000 firms over a period of two decades. Our results suggest that regionalism, as captured by metrics of regional cooperation and integration, can positively contribute to labor productivity and innovation, in addition to known factors of production. |
| Keywords: | regional integration; productivity; innovation; Asia |
| JEL: | F02 F15 O30 O40 |
| Date: | 2024–12–13 |
| URL: | https://d.repec.org/n?u=RePEc:ris:adbewp:0760 |
| By: | Jo, Karam (Korea Development Institute); Kim, Seula (Pennsylvania State University) |
| Abstract: | We study how frictions in learning others' technology, termed "imperfect technology spillovers, " impact firm innovation strategies and the aggregate economy through changes in innovation composition. We develop an endogenous growth model that generates strategic innovation decisions, where multi-product firms improve their products via own-innovation and enter new product markets through creative destruction under learning frictions. In our model, firms with technological advantages intensify own-innovation as learning frictions enable them to protect their markets from competitors, thereby reducing creative destruction of rivals. This pattern gets more pronounced when competitive pressure increases exogenously. Using U.S. administrative firm-level data, we provide regression results supporting the model predictions. |
| Keywords: | innovation, technology spillover, endogenous growth, competition |
| JEL: | L11 L25 O31 O33 O41 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17581 |
| By: | Losacker, Sebastian (Justus Liebig University Giessen); Befort, Nicolas (NEOMA Business School); Kriesch, Lukas (Justus Liebig University Giessen); Lhuillery , Stephane (NEOMA Business School) |
| Abstract: | National governments worldwide have implemented strategies to transition towards biobased economies, primarily driven by technological progress. However, how this transition unfolds at the regional level remains under-researched. This paper aims to uncover regional trajectories towards a bioeconomy with a focus on bio-based technologies. We build on the geography of innovation literature and show that potential pathways towards regional bioeconomies are very heterogeneous, thus requiring place-based policy strategies to advance the bioeconomy and its innovations. Empirically, the paper combines two unique patent datasets to reveal how the bioeconomy patent portfolio of 617 regions from 27 OECD countries has changed from 1982 to 2014. We utilize geographical sequence analysis, a novel tool recently introduced to geographical research, and shift-share techniques to categorize and better understand the regional trajectories. |
| Keywords: | Bioeconomy; Sequence Analysis; Geography of Innovation; Sustainability Transitions |
| JEL: | O31 R11 R12 |
| Date: | 2024–12–03 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:lucirc:2024_021 |
| By: | Sermet Pekin; Aykut Sengul |
| Abstract: | This study aims to classify high-growth firms using several machine learning algorithms, including K-Nearest Neighbors, Logistic Regression with L1 (Lasso) and L2 (Ridge) Regularization, XGBoost, Gradient Descent, Naive Bayes and Random Forest. Leveraging a dataset composed of financial metrics and firm characteristics between 2009 and 2022 with 1, 318, 799 unique firms (averaging 554, 178 annually), we evaluate the performance of each model using metrics such as MCC, ROC AUC, accuracy, precision, recall and F1-score. In our study, ROC AUC values ranged from 0.53 to 0.87 for employee-high growth and from 0.53 to 0.91 for turnover-high growth, depending on the method used. Our findings indicate that XGBoost achieves the highest performance, followed by Random Forest and Logistic Regression, demonstrating their effectiveness in distinguishing between high-growth and non-high-growth firms. Conversely, KNN and Naive Bayes yield lower accuracy. Furthermore, our findings reveal that growth opportunity emerges as the most significant factor in our study. This research contributes valuable insights in identifying high-growth firms and underscores the potential of machine learning in economic prediction. |
| Keywords: | High-growth firms, Machine learning, Prediction, Firm dynamics |
| JEL: | C40 C55 C60 C81 L25 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:tcb:wpaper:2413 |
| By: | Wendt, Charlotte; Adam, Martin; Benlian, Alexander; Kraus, Sascha |
| Abstract: | COVID-19 caused significant challenges for small and medium-sized enterprises (SMEs) in the event industry. To address these challenges, many SMEs leveraged information and communication technologies (ICTs), with some even emerging strengthened from the crisis. Drawing on the technology-organization-environment framework and technology-affordances-and-constraints theory, we investigate the adoption of ICTs as a crisis response strategy in 10 SMEs in the German business event (e.g., corporate events, conferences) industry. Our findings reveal that ICT adoption not only depends on rational decisions based on organizational, environmental, and technological characteristics, but also on these dimensions’ interrelationship and the specific ICTs’ affordances and constraints. Introducing readily available ICTs (e.g., video-conferencing) has significant potential in addressing physical distancing in the short and medium term, while more sophisticated ICTs (e.g., virtual reality) are more likely to gain importance in the long term. Thus, we expand our understanding of organizational technology adoption and ICT-enabled crisis response strategies in SMEs. |
| Date: | 2024–12–10 |
| URL: | https://d.repec.org/n?u=RePEc:dar:wpaper:150918 |
| By: | Jin Liu |
| Abstract: | Multinational firms colocate production and innovation by offshoring them to the same host country or region. In this paper, I examine the determinants of multinational firms’ production and innovation locations. Exploiting plausibly exogenous variations in tariffs, I find complementarities between production and innovation within host countries and regions. To evaluate manufacturing reshoring policies, I develop a quantitative multicountry offshoring location choice model. I allow for rich colocation benefits and cross-country interdependencies and prove supermodularity of the model to solve this otherwise NP-hard problem. I find the effects of manufacturing reshoring policies are nonlinear, contingent upon firm heterogeneity, and they accumulate dynamically. |
| Keywords: | multinational firms, colocation of production and innovation, offshoring |
| JEL: | F14 F23 L23 O32 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:cen:wpaper:24-64 |
| By: | Meissner, Leonie P.; Peterson, Sonja; Semrau, Finn Ole |
| Abstract: | In a race against global warming, the world must accelerate the development and adoption of environmental innovations (EIs). In this literature review, we explore the role of governments in promoting EIs across stages of maturity and assess the potential to reduce emissions. Theoretical frameworks on market imperfections underline the necessity of governmental Research and Development (R&D) support. While emission pricing remains the most cost-efficient climate policy, it fails as a stand-alone instrument to sufficiently encourage EI. Overall, the optimal approach is a policy mix complementing emission pricing with governmental R&D support. The theoretical finding is backed by empirical studies on the developmentand deployment of renewable energies, which also show that investment in R&D can effectively reduce emissions. The review concludes by dissecting two pivotalpolicy initiatives, the US Inflation Reduction Act and the European Green New Deal Industrial Plan, evaluating their potential to effectively contribute to decarbonization. |
| Keywords: | green/eco-/environmental innovation, R&D support, climate policy, innovation policy |
| JEL: | O32 O38 Q54 Q55 Q58 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifwkie:306604 |
| By: | Sousso Bignandi (ULiège); Cédric Duprez (Economics and Research Department, National Bank of Belgium); Céline Piton (Economics and Research Department, National Bank of Belgium) |
| Abstract: | This paper investigates the effects of digitalisation on firm-level employment and workforce composition in Belgium from 2003 to 2019, using a novel dataset that merges ICT expense data with administrative employment records. We find that digitalised firms experienced higher employment growth relative to non-digitalised firms, driven by both increased hiring and higher retention rates. The effect is particularly pronounced in large firms and reflects both faster employment growth in expanding firms and slower declines in shrinking firms. Digitalisation also significantly altered workforce composition, leading to a decrease in the share of low-educated workers and an increase in the share of highly educated workers, alongside shifts in the age distribution towards middle-aged workers. Our analysis employs a long-difference regression approach, well suited to capturing the gradual nature of ICT investments. While endogeneity concerns prevent causal interpretation, we show robust correlations between digitalisation and employment growth. The study contributes to the literature by providing a granular measure of digitalisation at firm level, offering new insights into the dynamics of worker turnover and sectoral differences, and by shedding light on the heterogeneous impact of digitalisation across worker education levels and age groups. |
| Keywords: | Digitalisation, employment, firms |
| JEL: | D22 D25 J21 J24 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbb:reswpp:202410-463 |
| By: | Tommaso Oliviero (University of Naples 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 advanced economies. Whether, and to what extent, investments by green firms are hampered by lack of external finance is an open question. 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: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:anc:wmofir:189 |
| By: | Koski, Heli; Kuosmanen, Natalia; Kuusi, Tero |
| Abstract: | Abstract This brief presents key findings from Etla’s “Innovation-Driven Pathways to Economic Growth” project, which deepen the understanding of the mechanisms behind innovation-driven growth and evaluate the role of innovation policy in promoting sustainable growth in Finland. The findings underscore the critical role of foreign inventors and skilled employees in driving innovation and economic renewal. Immigration of highly skilled individuals enhances knowledge and diversity, boosting the effectiveness of innovation policy measures, such as R&D subsidies. Fully realizing this potential requires the effective integration of foreign experts into research and innovation activities. Supporting the green transition simultaneously presents Finland with significant opportunities to strengthen its competitiveness. While Finland’s share of green production currently lags behind international leaders, the country’s industrial structure and high-tech expertise provide a solid foundation for growth. Effectively targeted R&D subsidies can boost productivity and improve societal welfare. Targeting support for high-innovation-capacity companies can accelerate structural economic reforms. However, policymakers must consider adjustment costs, which can reduce the impact of growth policies. |
| Keywords: | Innovations, Immigration, Productivity, Economic growth |
| JEL: | D23 F22 J61 O3 |
| Date: | 2024–12–11 |
| URL: | https://d.repec.org/n?u=RePEc:rif:briefs:147 |
| By: | J. David Brown; Steven J. Davis; Lucia Foster; John Haltiwanger; John Sabelhaus |
| Abstract: | The Census Bureau’s Longitudinal Business Database (LBD) underpins many studies of firm-level behavior. It tracks longitudinally all employers in the nonfarm private sector but lacks information about business financing and owner characteristics. We address this shortcoming by linking LBD observations to firm-level data drawn from several large Census Bureau surveys. The resulting Longitudinal Employer, Owner, and Financing (LEOF) database contains more than 3 million observations at the firm-year level with information about start-up financing, current financing, owner demographics, ownership structure, profitability, and owner aspirations – all linked to annual firm-level employment data since the firm hired its first employee. Using the LEOF database, we document trends in owner demographics and financing patterns and investigate how these business characteristics relate to firm-level employment outcomes. |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:cen:wpaper:24-73 |
| By: | Peter J. Klenow; Huiyu Li |
| Abstract: | Over time and across states in the U.S., the number of firms is more closely tied to overall employment than to output per worker. In many models of firm dynamics, trade, and growth with a free entry condition, these facts imply that the costs of creating a new firm increase sharply with productivity growth. This increase in entry costs can stem from the rising cost of labor used in entry and weak or negative knowledge spillovers from prior entry. Our findings suggest that productivity-enhancing policies will not induce firm entry, thereby limiting the total impact of such policies on welfare. |
| JEL: | E23 O47 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:cen:wpaper:24-63 |
| By: | SCHWAAG SERGER Sylvia; RADOSEVIC Slavo |
| Abstract: | The evolving policy-making landscape demands a new conceptualization of the interaction between policy research and policy context. This is particularly crucial in the realm of transformative innovation policy, which involves a multitude of stakeholders and instruments in its formulation and execution. Moreover, the dynamics of both innovation and science for policy are shaped by the interplay of state, markets, and society, underscoring the need for a fresh and innovative approach. As the landscape of policy research and innovation policy continues to evolve, it becomes increasingly important to reevaluate the science for policy approach. This paper strongly advocates that policy research should no longer function in isolation as a single input into the policy-making process. Instead, it should be integrated as one of several inputs that collectively and iteratively shape innovation policy, thereby strengthening the core argument of the paper. |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc139533 |
| By: | GEORGHIOU Luke |
| Abstract: | The paper explores the strategic role of policy mixes in steering large-scale incumbent firms towards sustainable economic pathways in Europe. The paper acknowledges the critical contribution of start-ups in the sustainability sector but emphasizes the need for a transition among the established firms dominating carbon-intensive industries so as to meet climate neutrality targets. Drawing upon a review of existing policy instruments in the EU and beyond and on the policy mix literature, Georghiou emphasises the complexity of aligning technological innovation, business models, and regulatory frameworks at different governance levels. Principles for a taxonomy of policy instruments and measures are proposed. These highlight the need to supplement supply-side and regulatory interventions with demand-side instruments. Systemic frameworks are needed to embrace the complexity of transition and to ensure that changes in corporate behaviour are embedded. The paper calls for more evaluation to gain a nuanced understanding of policy influences on corporate behaviour and the combination of resources, incentives, capabilities and opportunities needed to support policy frameworks that encourage innovation and the diffusion of green technology, balancing sustainability with growth and employment objectives. |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc139561 |
| By: | Thomas Gaertner; Christoph Lippert; Stefan Konigorski |
| Abstract: | In response to the growing demand for accurate demand forecasts, this research proposes a generalized automated sales forecasting pipeline tailored for small- to medium-sized enterprises (SMEs). Unlike large corporations with dedicated data scientists for sales forecasting, SMEs often lack such resources. To address this, we developed a comprehensive forecasting pipeline that automates time series sales forecasting, encompassing data preparation, model training, and selection based on validation results. The development included two main components: model preselection and the forecasting pipeline. In the first phase, state-of-the-art methods were evaluated on a showcase dataset, leading to the selection of ARIMA, SARIMAX, Holt-Winters Exponential Smoothing, Regression Tree, Dilated Convolutional Neural Networks, and Generalized Additive Models. An ensemble prediction of these models was also included. Long-Short-Term Memory (LSTM) networks were excluded due to suboptimal prediction accuracy, and Facebook Prophet was omitted for compatibility reasons. In the second phase, the proposed forecasting pipeline was tested with SMEs in the food and electric industries, revealing variable model performance across different companies. While one project-based company derived no benefit, others achieved superior forecasts compared to naive estimators. Our findings suggest that no single model is universally superior. Instead, a diverse set of models, when integrated within an automated validation framework, can significantly enhance forecasting accuracy for SMEs. These results emphasize the importance of model diversity and automated validation in addressing the unique needs of each business. This research contributes to the field by providing SMEs access to state-of-the-art sales forecasting tools, enabling data-driven decision-making and improving operational efficiency. |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2412.20420 |
| By: | Moïse Drabo; Raquel Fonseca |
| Abstract: | LE QUÉBEC DES BÂTISSEURS The increase in university graduation rates has enriched human capital in Canada and positively impacted the labor market, including the field of entrepreneurship. This chapter explores the relationship between university education and entrepreneurship in Quebec, Ontario, and Canada, using econometric analyses based on data from the Labour Force Survey, the National Household Survey, and the Census of Population from Statistics Canada. The findings show that holding a university degree increases the likelihood of becoming an entrepreneur and enhances entrepreneurs' earnings. LE QUÉBEC DES BÂTISSEURS L’augmentation du taux de diplomation universitaire a enrichi le capital humain au Canada et a eu un impact positif sur le marché du travail, y compris dans le domaine de l’entrepreneuriat. Ce chapitre explore la relation de l’éducation universitaire sur l’entrepreneuriat au Québec, mais également en Ontario et au Canada, avec des analyses économétriques basées sur les données de l’Enquête sur la population active, de l’Enquête nationale auprès des ménages et du Recensement de la population de Statistique Canada. Les résultats montrent qu’un diplôme universitaire augmente la probabilité de devenir entrepreneur et améliore la rémunération des entrepreneurs. |
| Keywords: | University Graduation, Entrepreneurship, Returns to Education, Diplomation universitaire, Entrepreneuriat, Rendements de l’éducation |
| JEL: | I26 J24 L26 |
| Date: | 2024–12–05 |
| URL: | https://d.repec.org/n?u=RePEc:cir:circah:2024pr-05 |
| By: | Le Moal, Mathieu (Université de Montpellier); Thurik, Roy (Erasmus School of Economics); Torrès, Olivier (Université de Montpellier); Soenen, Guillaume (Université de Montpellier) |
| Abstract: | We analyse the links between daily recovery experiences after work (detachment, relaxation, mastery and control) and mental health (well-being and burnout) based on four surveys of French small business owners. First, comparing our results with those of employees' recovery experiences, we find that small business owners have fewer recovery experiences for all four dimensions. Second, controlling for gender, age, life partner, education level, executive experience, business size, capital ownership and type of entrepreneur, both linear regressions and SEM analysis show that the quality of overall daily recovery experiences increases well-being and reduces burnout. Third, we show that the detachment component is not correlated with well-being, and the mastery component is not correlated with burnout. Relaxation and control are most strongly associated with wellbeing, whereas control has the strongest association with burnout. Many implications (including clinical) are discussed. |
| Keywords: | small business owners, entrepreneurs, daily recovery experiences, well-being, burnout, France |
| JEL: | I12 I31 L26 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17548 |
| By: | Mark Vancauteren (Universiteit Hasselt); Kevin Randy Chemo Dzukou (INRAE, Nantes); Michael Polder (Statistics Netherlands); Pierre Mohnen (Maastricht University); Javier Miranda (Halle Institute for Economic Research, Friedrich-Schiller University Jena) |
| Abstract: | We study the relationship between ICT, total factor productivity and export at the firm level in Belgium, France and the Netherlands. In particular, we look at whether ICT has both a direct effect on export and an indirect effect via productivity improvements. We allow for endogeneity, unobserved heterogeneity, dynamic feedback, initial conditions and correlations between the time-invariant random effects and between the idiosyncratic random effects. We find similarities but also differences in the effects of ICT on export between the three countries. |
| Keywords: | ICT, productivity, export, firm data, Panel Data, international comparison |
| JEL: | C23 D24 F14 O30 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbb:reswpp:202410-462 |
| By: | Okan Akarsu; Emrehan Aktug; Huzeyfe Torun |
| Abstract: | We explore the spillover impact of zombie firms in Türkiye by exploiting a rich administrative dataset that contains firm-level information on balance sheets, inter-firm sales, employment, and firm-bank level credit records. We document four key facts regarding zombie dynamics: (i) Leveraging matched firm-bank level credit registry data, we highlight the presence of an evergreening motive, leading to a misallocation of credit away from productive firms. At the same time, healthy firms in zombie-dense networks face reduced credit access. (ii) Zombie firms, which are on average less productive than nonzombie firms, impede investment and employment opportunities at healthier firms. Nonzombie firms operating in sectors with a high prevalence of zombie firms experience lower sales, assets, and productivity. (iii) Incorporating B2B sales data structured similarly to firm-level input-output data, our study reveals that firms with stronger upstream or downstream zombie connections tend to exhibit reduced sales, investment, and employment compared to firms without any zombie connections. (iv) A higher number of zombie connections leads to significant reductions in markups, value-added, productivity, and EBIT margins due to the cascading effects on production technology, shifting it toward lower value-added. Additionally, a higher share of zombies in the upstream sector reduces input costs for firms due to excess production. |
| Keywords: | Zombie firms, Firm dynamics, Evergreening, Credits |
| JEL: | E12 E24 E31 E52 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:tcb:wpaper:2414 |