Alexandra Tsvetkova

This paper extends the Knowledge Spillover Theory of Entrepreneurship (KSTE) by incorporating the role of incremental knowledge spillovers as a key driver of business performance. The core proposition is that firms embedded in regions with a more cohesive industrial structure, which serves as a diffusion mechanism for incremental knowledge, are better able to absorb, combine and apply such knowledge even in the absence of high R&D capacity. Thus, the focus shifts from radical knowledge to incremental knowledge flows as an alternative engine of firm success. The empirical findings reveal that firms, particularly single-unit and those in non-metropolitan regions, tend to benefit from cohesive industrial structures likely through improved knowledge diffusion. Further analyses establish a positive link between local industrial cohesion and local economic performance measured by employment and income growth. This lends indirect support to the hypothesis that local industrial cohesion leads to greater businesses competitiveness and not the other way around.

It is well established that there is uneven availability of credit across space, in particular for SMEs. The evidence on whether this translates into differences in actual business investments remains scarce. We assess this question by using firm-level data for Swedish firms and estimate the extent to which the average investment-cash flow sensitivities of firms vary across the urban–rural hierarchy. We find that the world of financing is not yet flat for the majority of Swedish SMEs. Companies located in non-metro regions are most dependent on own cash flow in their investments. The results hold for all firms, firms of different sizes, firms operating in low-end services, unaffiliated firms and those belonging to domestic corporations. In contrast, investment-cash flow sensitivity of firms operating in high-tech services and those belonging to a multinational enterprise does not differ geographically. On average, regional investment-cash flow sensitivity is lower in bigger, denser and more educated local labour market regions; it is higher in regions with greater concentration of SMEs.

The emergence of the Covid-19 pandemic caused immense labour market turbulences and a large-scale turn towards teleworking. This paper contributes to the understanding of how teleworking shapes regional economic outcomes by focusing on labour market resilience in US cities during the 2020 Covid-19 emergency. It examines employment and labour demand and finds that the share of teleworkable jobs is linked to stronger employment resilience, and enhances labour demand resilience during the onset of the pandemic and in smaller cities. The paper discusses possible mechanisms and policies that can help leverage the promise of teleworking for resilient labour markets.

‘Productivity isn’t everything, but in the long run it is almost everything. A country’s ability to improve its standard of living over time depends almost entirely on its ability to raise its outp...

Economists typically celebrate productivity growth as the chief way to improve living standards. Productivity growth may reduce costs, improve quality, or lead to innovation and new products, but if demand is insufficiently elastic, productivity growth can lead to weakening of labor markets. We study county‐level effects of productivity growth and productivity levels on growth in employment, income, and earnings. The results suggest that productivity growth generally suppresses job growth but has boosting effects on earnings and, to a lesser degree, on per‐capita income, although there is considerable variation across geographies and specific outcomes.

Even as economic incentives are increasingly used by policy makers to spur state and local economic development, their use is controversial among the public and academics. The authors examine whether state and local incentives lead to higher rates of business start-ups in metropolitan counties. Existing research indicates that start-ups are important for supporting (net) job creation, long-term growth, innovation, and development. The authors find that incentives have a statistically significant, negative relationship with start-up rates in total and for some industries including export-based and others that often receive incentives. The findings support critics who contend that incentives crowd out other economic activity, potentially reducing long-term growth. The authors also find that greater intersectoral job flows are positively linked to total start-ups, consistent with claims of those who advocate for policies that enhance labor market flexibility through reducing barriers to job mobility.

Electronic evidence in Bulgaria – one step further, one step back