Publications
Ross Brown, Haoran Sun, Augusto Rocha, Marc Cowling
British Journal of Management (ABS 4)
Ross Brown, Augusto Rocha, Haoran Sun, Marc Cowling
Small Business Economics (ABS 3)
Why do Owls Fly While Ostriches Flounder? SME Advice, Impacts and Entrepreneurial Outcomes
Ross Brown, Marc Cowling, Weixi Liu, Sabrina Song, Haoran Sun
Journal of Small Business Management (ABS 3)
Under Review
Can We See it in the Numbers Yet? Artificial Intelligence, Firm-Level Productivity and SMEs
Ross Brown, Haoran Sun, Marc Cowling, David Dowell
Journal of Technology Transfer (ABS 3)
Abstract
Given the ubiquitous nature of Artificial Intelligence (AI) and associated advanced new technologies we would expect to see this featuring in productivity levels of firms adopting these new technologies. Yet surprisingly, evidence on the “AI-productivity nexus” remains sparse and results mixed, especially for this dynamic interplay in smaller firms. This paper wishes to address this omission by empirically examining the impact of AI on productivity small entrepreneurial firms. Utilising a comprehensive longitudinal dataset, this paper explores the firm-level labour productivity effects of AI in a large cohort of UK small firms. Our findings are fairly unequivocal: AI has a significant and sizeable positive impact on productivity levels compared to non-adopters. The paper’s baseline results reveal a positive and statistically significant relationship between AIT adoption and future labour productivity, with AIT adoption associated with approximately 23.8% higher future labour productivity. Other results show that in terms of those benefitting from AI it is firms with the firms with lower unobserved productivity potential are more likely to adopt AI technologies and the benefits from AI adoption seems sector specific with service sector firms particularly prominent among the beneficiaries of AI. Overall, our results point towards the need for a carefully targeted policy approach towards encouraging AI adoption in small firms.
Does ``Slow'' Thinking ``Speed Up'' Performance? The Impact of ``Guided Preparation'' on Innovation and Productivity in UK SMEs
Ross Brown, Haoran Sun, Weixi Liu, Marc Cowling, Sabrina Song
Journal of Technology Transfer (ABS 3)
Abstract
The role of business advice or so-called “guided preparation” on business performance in small and medium-sized enterprises (SMEs) has become a topic of perennial interest within entrepreneurship research. Despite a sizable body of work on this topic, the evidence remains mixed about the impact business advice has on SME performance. Using a unique longitudinal dataset, this study examines the impact of both day-to-day and strategic advice on firm-level innovation and productivity in UK SMEs. We find that strategic advice appears to play a central role in unlocking the innovative potential of firms which then ultimately leads to productivity enhancing behaviours. It would appear that the efficacious performance benefits accruing to firms are consistent with belief that seeking advice is congruent with certain cognitive behavioural decision-making processes associated with what is labelled as type 2 or “slow” thinking. In sum, slow thinking speeds up firm-level performance.
Working Papers
Nigar Hashimzade, Haoran Sun*
Job Market Paper
The Effect of Direct and Indirect Support for Innovation on Productivity: Evidence from Young UK Businesses
John Moffat, Haoran Sun*
Main analysis complete; further empirical work in progress
Abstract
This paper analyses the effect of direct and indirect support for innovation from central government on the labour productivity of young businesses in the United Kingdom. Using samples of supported and unsupported businesses constructed using coarsened exact matching, we find some evidence of positive effects of indirect support on productivity. By contrast, the effect of receiving both direct and indirect support is negative, quantitatively large and persistent. This suggests that the central government was singularly unsuccessful in `picking winners' when providing direct support.
Taxing the Clouds: An Economic Analysis
Nigar Hashimzade, Haoran Sun*
Manuscript being prepared for submission
Abstract
Digital firms can earn substantial profits in countries where they have little or no physical presence, creating a challenge for international tax rules built around the concept of permanent establishment. This paper develops a two-country model, extended to three countries, to analyse how the tax base of a digital firm should be divided between the country where it is registered (residence country) and the countries where it sells (source countries). The division is modelled as a share of profit earned in each source country, determined through a two-stage game: governments choose their profit-split shares in the first stage, and the firm allocates its productive resources across countries in the second. We analyse both non-cooperative and cooperative (Nash bargaining) solutions and show that the two approaches yield equivalent equilibria when the ratio of bargaining powers equals the ratio of shadow prices in the non-cooperative case. In the three-country extension, a source country can capture a larger share of the tax base when its bargaining power is high, but profit-splitting reduces the residence country's welfare while raising aggregate welfare. The results provide a framework for evaluating proposals for international tax reform, including the OECD Two-Pillar solution and digital services taxes.
Working in Progress
Finance, Growth and Productivity in Family-Owned SMEs
Ross Brown, Marc Cowling, Haoran Sun
ERC--DBT grant awarded (2026); analysis of LSBS data in progress
Draft Abstract
Family-owned firms account for approximately 75% of SME employers in the UK and contribute half of all private sector gross value added, yet their distinct financial behaviour and its consequences for firm performance remain poorly understood. This paper uses the Longitudinal Small Business Survey to examine how family ownership shapes access to finance, borrower discouragement, and productivity in UK SMEs. We compare family-owned firms to their non-family counterparts across several dimensions: willingness to seek external finance, experiences of credit rationing, and the relationship between financing constraints and firm growth and productivity outcomes. Our analysis addresses the "peculiar financial logic" that characterises family firm funding decisions, including stronger preferences for internal finance and greater sensitivity to perceived loss of control. The findings contribute to a growing literature on how ownership structure interacts with financial constraints to shape SME performance, with implications for the design of business support and finance policy in the UK.
Do Science Parks Act as a Magnet for Investment? The Role of University Proximity
Ross Brown, Marc Cowling, Haoran Sun
Dataset constructed; empirical analysis forthcoming
Draft Abstract
Science parks are widely promoted as catalysts for innovation and growth, yet evidence on whether they help firms attract external equity investment remains limited. This paper uses Crunchbase data on UK firms that received private equity and venture capital funding to test whether location on or near a science park confers a significant advantage in attracting capital investment. We construct two groups, science park firms and non-science park firms, and compare the volume and likelihood of PE and VC investment across them. To capture the role of the local knowledge environment, we measure each firm's distance to the nearest university and the research quality of that university using REF 2020 rankings. This allows us to disentangle whether any investment premium associated with science parks reflects genuine agglomeration and knowledge spillover effects or simply proximity to high-quality research institutions.