This paper examines how Industry 4.0 technologies reshape the upgrading opportunities of micro and small enterprises (MSEs) in the Italian fashion industry. While digital transformation is widely viewed as a potential source of renewal for mature manufacturing sectors, little is known about whether these technologies generate genuine windows of opportunity for small firms embedded in historically specialized, district-based production systems. Building on the windows of opportunity framework, the paper develops a history-friendly model (HFM) that reproduces key empirical features of the Italian fashion value chain and simulates alternative technological trajectories. The model incorporates heterogeneous suppliers and clients, spatial constraints, capability accumulation, and differentiated Industry 4.0 shocks. Results show that upgrading in the baseline scenario is shaped primarily by geography and access to non-local or multinational clients. Production-Efficiency Enhancers (e.g., robotics, IoT monitoring) do not expand overall upgrading but disproportionately benefit geographically constrained firms by reducing cost disadvantages. In contrast, Capability-Building Technologies (e.g., digital prototyping, additive manufacturing) reduce upgrading opportunities by enabling client firms to internalize functions, despite raising suppliers’ learning capacity. These findings highlight the asymmetric and technology-specific nature of digital transformation and call for differentiated industrial policies that consider both spatial inequalities and supply-chain power dynamics.
The privatization of space is transforming the global space economy, shifting it from a state-led enterprise to a competitive, profit-driven arena. This paper investigates whether the increasing dominance of a few private actors—particularly SpaceX in space launches and its subsidiary Starlink in satellite-based communications—heralds a “winner-takes-all” paradigm in the New Space Economy. Through an in-depth longitudinal embedded case study, the paper analyzes how technological disruption, vertical integration, and first-mover advantages have enabled these firms to shape market dynamics and potentially entrench monopolistic or oligopolistic structures. Drawing on theoretical frameworks of market concentration and technological lock-in, the study reveals how infrastructural dominance can deter new entrants and influence regulatory processes. While SpaceX and Starlink have accelerated innovation and lowered entry costs for downstream services, their market power also raises critical concerns about sustainability, competition, and equitable access to space-based infrastructure. The findings call for a reassessment of regulatory and governance mechanisms to balance innovation incentives with fair market structures in the evolving space economy.
The configurational nature of institutions views the interrelationship of institutions as configurations that influence firms’ behavior and success, even though firms differ in their ability to deal with each institutional configuration. However, our understanding of how institutional and firm-level conditions complement each other, and influence firms’ financial performance remains scarce. The purpose of this paper is to further understand the conflicting predictions about institutional configurations in European Union (EU) that extant theories put forward. We argue that firms achieve high financial performance by relying on the complementary and substitutive benefits provided by the effective institutional configurations, and by relying on firms’ specific conditions as mechanisms to override fragile institutional configurations. Following an abductive approach using fsQCA on EU firms, this iterative theorizing process entail specifying the underlying mechanism of each configurational pathway to high financial performance. Our results advocate important theoretical insights as it advances different combinations of institutional and firm-level conditions that can yield different pathways toward the same outcome of high firm financial performance.
Driven by rapid technological advancements and evolving market dynamics, the space sector is undergoing a profound transformation, emerging as a commercially reconfigured industry in which private firms play an increasingly central role. Over the past decades, private actors have demonstrated not only their capacity to enter the space market, but also to lead innovation, shape technological trajectories, and redefine competitive structures. These developments call for regulatory adaptation, both to reduce uncertainty for institutions and firms and to enhance the sector’s competitiveness and innovative capacity. In this context, Italy promulgated its new Space Economy Law in June 2025. This paper examines the opportunities and challanges of this legislation. Our study contributes to existing literature providing a documented and critical analysis of the law’s key features, highlighting its potential to support emerging private firms, sustain research activities, strengthen public–private collaboration, and advance a coherent strategic industrial vision. The paper also makes a theoretical contribution to the Sectoral Systems of Innovation (SSI) literature by extending the framework toward an “inter-sectoral systems of innovation” perspective, better suited to capturing innovation dynamics that span multiple technological and industrial domains. Finally, the paper proposes a set of policy recommendations aimed at ensuring the effective, competitive, and sustainable implementation of the new law.
The New Space Economy (NSE) has shifted from a state-led domain to a dynamic, multi-industry commercial arena, attracting more than 271 billion in private investment since 2015. As private investment and downstream applications expand, space discourse has spread well beyond aerospace firms and into the language of corporate leaders across sectors. We examine how space-related rhetoric in 47,982 quarterly earnings calls (2021–2025) is associated with firm valuation, distinguishing by executive role (CEO versus CFO) and communication context (prepared remarks versus spontaneous Q A). We find that CEO use of space-exclusive technical language in spontaneous Q A is positively associated with firm valuation, whereas the same language in prepared remarks and CFO space rhetoric is not similarly rewarded. However, CFO entrepreneurial orientation (EO) is positively associated with firm valuation, which suggests that the finance function can credibly endorse growth postures even when space rhetoric is ineffectual. Finally, we find that markets broadly penalize negativity and, for CEOs, positivity as well, consistent with a credibility logic that favors emotionally restrained frontier talk. We conceptually synthesize these patterns as linguistic territories that specify who can speak credibly about space, when, and in what style.
Despite extensive research, a consensus remains elusive regarding the optimal method for measuring the effects of technological change and innovation on employment. This study introduces a Technological Change Composite Indicator (TCI), constructed using Principal Component Analysis (PCA) to synthesize seven firm-level innovation metrics. This methodology mitigates issues associated with multicollinearity in regression analyses involving correlated variables. The proposed TCI serves as a proxy for technological change to examine its association with employment in manufacturing sectors across European Union countries. Applying the TCI to a pooled cross‑section of ten European countries and seventeen manufacturing sectors (170 observations) with country fixed effects and a one‑year time lag, we find that a one‑unit increase in the TCI corresponds to a 0.58
This paper examines the structural transformation of the US economy over the past two decades, highlighting how deindustrialization, import dependence, and shifting sectoral dynamics have undermined sustainable growth. Using a Sraffian multiplier framework and OECD input–output data, the analysis identifies a persistent trade deficit and increasing import multipliers in high-technology and machinery industries, signaling a reversal in technological specialization. Meanwhile, the manufacturing share of GDP has contracted, while the energy sector—particularly refined petroleum—has expanded, reflecting a late resource-curse or Dutch-disease effect. These trends coincide with declining labor shares, weakened employment multipliers, and changing consumption patterns, all of which exacerbate functional income inequality. Labor share and employment multipliers within US manufacturing have also declined, accompanied by structural shifts in the consumption share of wages. The findings point to the urgent need for a renewed and coherent US industrial policy aimed at rebuilding domestic production capacities, fostering innovation in high-value sectors, and promoting inclusive and sustainable growth. Identifies urgent need for a modernized US industrialpolicy to address unsustainable trends in trade and manufacturing. It reveals a decline in the trade balance and increased import dependency, especially within machinery, equipment, and high-tech industries. Observes reduced GDP share of manufacturing, coupled with a rising share in energy, indicating a Dutch disease-type effect. Notes declines in labor share and employment multipliers in manufacturing, alongside structural shifts affecting the consumption share of wages. Advocates for targeted, innovative industrial policies to mitigate income inequality, counter negative sectoral shifts, and support long-term economic stability.
The aim of this study is to examine how industrial robot adoption affects innovation dynamics across European manufacturing sectors. Using a country-sector-year panel for the period 2000–2019, we combine EPO–OECD patent microdata with indicators from the International Federation of Robotics (IFR). We assess both the quantity and quality of innovation through patent counts and citation-based patent-quality indicators, and employ instrumental-variable estimations to address potential endogeneity. The results show that robot adoption is negatively associated with both the quantity and quality of innovation. These effects are robust to several robustness checks and appear to be particularly pronounced in low and medium-technology sectors. We interpret these findings as consistent with the view that robot adoption is often driven by efficiency-oriented motives and may divert financial, managerial, and organisational resources away from exploratory innovative activities.
This paper analyzes the long-memory properties in U.S. semiconductor industry production and price series. The analysis is framed within the context of the U.S.-China geopolitical rivalry, which is hypothesized to present a series of persistent economic shocks. The paper aims to determine whether the policy measures and strategic responses characterizing this rivalry have permanently altered the time-series properties of economic variables. It is demonstrated that the global semiconductor market is undergoing a fundamental and irreversible bifurcation, with statistically significant changes in the long memory parameter: the U.S. internal market shifted toward stability and resilience, while the external market fell subject to greater volatility and permanent price shocks.
The role of fuel substitution in production structure has been the focus of several previous studies, but empirical evidence on the theme remains inconclusive. We offer new insights on the subject matter using disaggregated industry level data across seven emerging economies over the period 2000–2014. The results provide mixed evidence that demand for specific energy sources exhibits higher price sensitivity. Production technologies across these economies are found to be heterogeneous and characterized by inefficiency, as indicated by decreasing returns to scale and low output elasticities. Furthermore, the findings reveal that ignoring asymmetric demand responses in conventional long-run models may lead to an underestimation of producers’ sensitivity to energy price changes, though not necessarily of fuel substitution effects. We argue for the need for appropriate incentive mechanisms which align with fuel- and sector-specific needs to address inefficient production technologies and effective price adjustment strategies. The price adjustments must be implemented in line with unequal demand responses and limited substitution possibility. Overall, our findings strengthen the need for radical cleaner production techniques without compromising sustainable production and energy security.
This study investigates the R D behavior of the world’s top R D investors during the Great Financial Crisis and the COVID-19 crisis. Focusing on the resilience of corporate R D activities, we explore two dimensions: stability and adaptability. Using two large datasets on the world’s leading R D-investing companies covering the periods 2004–2010 and 2015–2021, thus including both crises, our analysis reveals substantial heterogeneity in how top global R D-investing companies respond to economic downturns. Three patterns emerge: non-resilient companies (one-third), adaptive resilient companies that quickly recover after initial reductions (one-third), and stable resilient companies that maintain or expand R D throughout crises (one-third). Remarkably, this distribution remains consistent across both crises, suggesting generalizable response patterns among leading MNEs. However, the mechanisms driving these responses differ between crises. Pre-crisis sales growth consistently emerges as the strongest predictor of stable R D resilience in both crises, while pre-crisis profitability reinforces adaptive resilience, reflecting firms’ internal financing capabilities. Notably, resource reconfiguration capabilities—proxied by capital expenditure growth—positively influence stable resilience only during COVID-19, likely reflecting digital infrastructure investments that enabled distributed R D operations under mobility restrictions. Conversely, both high pre-crisis capex intensity and low profitability significantly increase the likelihood of non-resilient behavior, particularly during the 2009 GFC. We also identify significant regional and industry effects that vary between the two crises.
This study investigates the relationship between financial literacy and business performance among ultra micro, micro, small, and medium enterprises (UMSMEs). Analyzing survey data from nearly 10,000 UMSMEs across 34 provinces in Indonesia, we find that financial literacy is positively and significantly associated with higher sales, profitability, and productivity. We identify innovation, the adoption of advanced information and communications technology and digital technologies, and access to bank loans as the key mechanisms explaining these improvements. We also demonstrate that the positive association is stronger for ultra-micro firms, women entrepreneurs, informal businesses, and enterprises outside the Java-Bali region. These findings underscore the critical role of financial literacy in fostering UMSME growth and highlight the need for targeted financial education initiatives to unlock the potential of diverse entrepreneurial segments.
The employment effects of GVC participation depend on which of three competing mechanisms dominates: a demand channel, through which access to new markets expands output and hiring; a productivity channel, through which efficiency gains reduce labour demand; and an innovation channel, through which exposure to international standards stimulates technological upgrading, with ambiguous employment effects. Despite a large literature on each mechanism individually, no study has quantified their relative importance jointly at the firm level, a gap that matters both methodologically, because the three channels have potentially offsetting effects, and for policy, since without knowing which channel dominates it is impossible to predict how ongoing reshoring and regionalisation trends will affect firm-level employment. Using a panel of Italian firms observed between 2011 and 2019 and a multiple mediation framework, we decompose the GVC–employment relationship into the three channels simultaneously. GVC participation is associated with a 3
This study investigates firm-level productivity convergence in Italy over the period 2012–2020, focusing on conditional firm-level convergence in productivity growth and the role of firm size and growth patterns. Using a unique employer–employee dataset, we construct labour quality indicators—including education, age composition, and employment characteristics—to capture firm heterogeneity affecting convergence. The results indicate conditional convergence, with smaller firms catching up more rapidly under favorable workforce and structural conditions. Firms that move to higher size classes tend to experience productivity improvements and an enhanced capacity to narrow the gap with frontier firms. However, barriers to size growth persist, particularly in services. These firm-level convergence dynamics coexist with weak aggregate productivity performance, suggesting that micro-level catch-up does not necessarily imply broad macroeconomic convergence. The findings highlight the importance of policies aimed at strengthening workforce skills, reducing structural obstacles to firm growth, and encouraging strategic resource allocation to support sustained productivity improvements.
This paper examines the impact of market liberalization on telecommunications adoption in Morocco. Using a quarterly dataset (2004–2023), we investigate how changes in market concentration influence penetration rates across the Voice calls and Access to Internet segments. Our empirical results reveal that while liberalization successfully drove penetration, the Voice calls segment responded rapidly to market competitiveness, whereas the Access to Internet segment exhibited a gradual adjustment. Furthermore, our analysis identifies a technological substitution effect, as the rise of 4G technology has begun to displace traditional voice services in favor of data centric usage. We also find that the increase in local loop access tariffs failed to encourage the transition toward advanced technologies, thereby reinforcing the incumbent operator’s strategic dominance over the fixed infrastructure. We conclude that market penetration is increasingly driven by mobile connectivity rather than firm ownership structure. Our findings suggest that for developing nations, liberalization should prioritize the privatization of incumbents and the strategic deployment of mobile technologies to ensure inclusive growth.
The aim of this paper is to use a comparative approach to assess the role played by national and local opportunity structures, as well as individual characteristics, in influencing migrants’ self-employment decisions in Italy and the UK, two countries characterized by significantly different institutional environments. The empirical investigation exploits data from the EU Labor Force Survey for the 2005–2016 period. Our results confirm that migrant entrepreneurship is a context-dependent phenomenon: while individual determinants like age, seniority, and gender, as well as local positive factors such as native self-employment rates, exert a consistent influence across both nations, other drivers diverge sharply. Notably, the impact of education and world region of origin is significantly modulated by country-specific institutional and economic conditions. These findings align with mixed-embeddedness and intersectionality literature, emphasizing that entrepreneurial trajectories are not uniform but are fundamentally shaped by the interplay between migrants’ personal attributes and the host country’s specific opportunity structure.
The New Space Economy (NSE) is reshaping the space sector through the transition from government-led exploration to market-driven innovation. In this scenario, startups are the main actors and have become central to technological advancement and the development of new business models. However, academic research has largely neglected the understanding of how space startups construct and adapt their business models. This study addresses this gap by investigating how Italian space startups navigate these dynamics. Employing an inductive qualitative research design and multiple-case study methodology, we analyse three Italian startups through semi-structured interviews and secondary data. Our findings suggest the existence of an interpretative framework of the main strategic choices startups adopt to balance technological innovation, institutional engagement, and environmental sustainability. The study contributes to the emerging NSE literature by offering empirical insights into business model adaptation in policy-driven high-tech sectors. Furthermore, it provides managerial recommendations for entrepreneurs and policymakers on leveraging institutional support, fostering sustainable design, and enhancing adaptability and flexibility. This research advances understanding of how entrepreneurial actors shape and are shaped by evolving public–private boundaries and sustainability imperatives in the rapidly transforming space economy.
This study investigates how gender moderates the relationship between digitalization, innovation, and firm productivity in Egypt, Jordan, and Morocco using the ERF Combined Survey of Enterprises’ Digitization—the only harmonized, cross-country microdata on digital adoption in MENA—supplemented by the World Bank Enterprise Survey panel (2013–2020). The ERF survey captures granular digital metrics including website ownership, digital platform participation, online sales engagement, and internet utilization. Generalized structural equation models account for selection into digital adoption and innovation. Results show that women-led firms demonstrate a greater likelihood of adopting digital technologies compared to men-led firms, reflecting strong positive selection into firm leadership. Among firms that pursue digital adoption, the association with innovation is at least as strong for women-led firms as for men-led firms. Innovation improves firm performance, and returns to innovation for women-led firms are comparable to those for men-led firms. Policy implications suggest focusing on broadening entry into entrepreneurship itself rather than assuming targeted post-entry support is needed, given the exceptional capabilities demonstrated by women once they become entrepreneurs.
This paper maps Venture Capital (VC) investments received by startups operating in the new space economy located in European countries and the United States of America (US). Relying on a Large Language Model few-shot learning text-based classification methodology implemented via the GPT-5 model, we classify 113,910 VC-backed startups from the PitchBook database and identify 2,336 space startups. Results show that European VC-backed startups are relatively more specialized in the new space economy compared to their US counterparts. However, they raise lower amounts of capital, receive fewer VC rounds, less quickly, and are backed by smaller VC syndicates. They are also less likely to exit via IPO or merger and acquisition. These weaknesses are similar to those European VC-backed startups experience in other industries. Our results highlight that, despite their attractiveness to VC investors, European space startups suffer from the relative underdevelopment of the European VC industry. Overall, this paper provides an original overview of the VC funding landscape in the new space economy, offering relevant insights to improve the European industrial policy in this nascent industry.
As one of the world’s largest producers and traders of agricultural products, China faces a critical issue of upgrading the quality of its agricultural exports. The agricultural sector is also an inevitable focal point in its free trade negotiations. This paper uses agricultural trade data between China and 26 free trade agreement (FTA) partner countries from 1996 to 2022 to examine the impact of the depth of FTAs, the depth of “WTO+” provisions, and the depth of “WTO-X” provisions on the quality of China’s exported agricultural products. The study finds that the deepening of FTAs significantly promotes the quality upgrade of China’s agricultural exports, with the effect of “WTO-X provisions” being more pronounced than that of “WTO+ provisions.” The impact of FTA depth on the quality of China’s agricultural exports varies based on geographic locations, countries’ income levels, and product heterogeneity. Based on empirical findings, this paper proposes policy recommendations such as actively constructing bilateral and multilateral FTAs, emphasizing the depth of agricultural provisions in FTAs, enhancing the legal enforceability of FTA provisions.
