Call for papers: Small Business Growth and Productivity

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Small Business Growth and Productivity Call for papers for: International Journal of Entrepreneurial Behavior & Research

Guest Editors
Jun Li, University of Essex
Vania Sena, University of Essex
Andrew Henley, University of Cardiff
Zheng Li, Jilin University

Aims and Scope
Productivity growth has enormous societal implications. The slowdown of productivity growth around the world is a disturbing global phenomenon today (Eichengreen, Park & Shin, 2017; Haldane, 2017). Tackling productivity slowdown is among the most pressing contemporary public policy issues (Business, Energy and Industrial Strategy Committee, 2017). The within-country empirical evidence suggests that there is a long tail of companies with low, slow productivity growth as opposed to an upper tail of companies that has maintained high and rising levels of productivity (Andrews, Criscuolo & Gal, 2015). The phenomenon of productivity slowdown thus manifests itself in the co-existence of secular innovation (among leaders) and stagnation (among laggards) with the productivity laggards being unable to keep-up, or catch-up, with frontier companies (Haldane, 2017).

The striking pattern of secular innovation and stagnation poses challenges in entrepreneurship research in a number of ways. First, it poses the question as to whether young and high grow firms (HGFs) contribute to productivity growth. Small firm growth does not guarantee productivity-enhancing improvement (Henley, 2018). In an early meta-analysis of the economic value of entrepreneurship, Van Praag and Versloot (2007) find that entrepreneurial firms are not more productive and potentially less productive. More recent research has found that high growth firms are disproportionately young and make disproportionate contributions to productivity growth (Alon, Berger, Dent & Pugsley, 2018; Haltiwanger, Jarmin, Kulick & Miranda, 2016) and that firms are more likely to become HGFs when they exhibit higher total factor productivity (TFP) growth and firms that have had HGF experience tend to enjoy faster TFP growth (Du & Temouri, 2015). There is also evidence that young companies tend to exhibit faster rates of productivity growth albeit from a low base and greater dispersion in these growth rates than larger ones (Haldane, 2017). Firm growth may also be volatile and episodic (Anyadike-Danes & Hart, 2017; Daunfeldt & Halvarsson, 2015; Grover Goswami, Medvedev & Olafsen, 2019). So, we still do not know much about the drivers of growth in small firms and the connection between small firm growth and productivity improvement.

Second, it poses a challenge in understanding the productivity problems among the long-tail of low-productivity companies, mostly small firms. There is evidence showing that it is non-frontier companies that largely explain flat-lining productivity over recent years (Haldane, 2017). Indeed, our understanding of the characteristics of low-productivity companies is limited because of their large numbers and disparate characteristics. Yet given their scale, the returns to modest improvements in these firms could be dramatic.

Third, it poses a challenge in understanding the slow rates of diffusion of new innovation from leaders to the long lower tail of laggards. Recent empirical work by the OECD has highlighted that rates of technological diffusion from leaders to laggards have slowed, and perhaps even stalled, leading to productivity leaders pulling away from the lower tail (Andrews et al., 2015). What is responsible for the failing diffusion dynamics? Among a variety of forces, management failings may explain the failure of non-frontier companies to keep pace with innovation. Bloom & Van Reenen (2007) have found that weaknesses in management processes and practices go a long way towards explaining the long tail of low productivity manufacturing companies.

Fourth, there is evidence that the national system of entrepreneurship enhances efficiency change via enhanced Kirznerian entrepreneurship in the short-run and has the positive effect on total factor productivity of Schumpeterian entrepreneurship in the long run (Acs, Lafuente, Sanders & Szerb, 2017). Yet, even though Israel is considered a successful start-up nation and its high tech industry is considered a world leader, the country’s average labor productivity is relatively low and has remained so for many years (Brand, 2017). While governments at various levels and in different countries have promoted and funded policy interventions, serious quantitative evaluation evidence is scarce, and rarely if ever addresses potential impact on productivity (Henley, 2018).

All the above-mentioned challenges have opened up opportunities for entrepreneurship research (Lafuente, Acs, Sanders & Szerb, 2019; Li & Rama, 2015). Yet, entrepreneurship is found to be practically absent from studies that examine the long-term relationships between economic variables and productivity development (Erken, Donselaar & Thurik, 2018). The purpose of the special issue will be to invite and include papers that identify and explore small firm growth and productivity in times of digitalization, deglobalisation and dispersion of wealth. It encourages theoretical and empirical papers on small firm growth and productivity that take account of these changes so as to improve the rigor and relevance of studies on this topic for academics, managers and policy makers.

Possible Topics

The Guest Editors encourage submissions of theoretical and empirical contributions investigating the long-term relationships between economic variables and productivity development, and the role of entrepreneurship. Possible topics include:

Drivers of small firm productivity growth: What are the characteristics of high and low productivity businesses? What are the characteristics/capabilities of owner-managers and firms that drive productivity growth? How do companies’ intangible assets influence growth and productivity?

Entrepreneurial firm life cycle dynamics and productivity: What are firm life cycle dynamics and its drivers? What explains small firm growth non-linearities and hurdles? What is the role of high growth in influencing economy-wide aggregate productivity? How do HGFs drive within-firm TFP growth? How is aggregate TFP growth driven through resource reallocation, either organically or through mergers and acquisitions?

Long tail of low-productivity non-frontier firms: What are the characteristics of the long tail of low-productivity non-frontier firms?  What explains the high heterogeneity in absorptive capacity of small firms? Which firm characteristics drive management practices?

Diffusion dynamics and productivity growth: What explain innovation spill-over and its effect on new firm formation and performance? What is the evidence of technology and innovation adoption, diffusion and productivity? What are the magnitudes of the potentially direct and indirect productivity growth enhancing effects and their channels, such as increasing human capital and innovation?

Entrepreneurial system and productivity: how does country-level/ region-level entrepreneurship impact firm productivity? Are regional differences the main factor explaining the long tail of firms? how does the national/regional system of entrepreneurship trigger productivity by increasing the beneficial effects of different types of entrepreneurship, namely Kirznerian and Schumpeterian entrepreneurship? how do the sub-indexes that form the entrepreneurial system variable affect productivity? How do local norms and entrepreneurial culture influence small firm growth and productivity? How does regional path dependence influence small firm growth and productivity?

Effect of productivity interventions: how effective is support for the creation and growth of frontier firms? What is the impact of policies that support productivity improvements of long tail of low-productivity non-frontier firms? How does the utilisation of business support influence productivity?

Submissions

Papers should be submitted via the journal’s online submission system available through the journal homepage. When submitting please choose the special issue: “Small business growth and productivity” as the article type from the drop down menu.

All papers must follow the guidelines outlined by the journal for submission on the
journal’s page.
For any questions interested authors can contact the corresponding guest editor: Jun Li (junli@essex.ac.uk)

Submission deadline: 30 October,2020

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