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The aim of this article is to investigate the determinants of the performance of small and medium-sized enterprises in emerging markets: evidence from Vietnam.
Abstract
Purpose
The aim of this article is to investigate the determinants of the performance of small and medium-sized enterprises in emerging markets: evidence from Vietnam.
Design/methodology/approach
This article relies on the resource-based view to examine the factors affecting the performance of small and medium-sized enterprises in emerging markets. The method employed in the research is the generalized method of moments for testing hypotheses of data collected from the General Statistics Office of Vietnam in the period of 2013–2016.
Findings
The results show that factors such as the intensity of capital investment, age and size of the firm, labor productivity, foreign ownership, location, cost management effectiveness and export activities have a positive effect on the performance of Vietnamese small and medium-sized enterprises, while revenue growth rate, fixed assets and financial leverage tend to hinder their performance. This has brought important messages that the input markets and the business environment in emerging markets like Vietnam have not yet stimulated well-economic activities.
Originality/value
This study sheds light on a topic that has not been fully explored in small and medium-sized enterprises in emerging markets in general, and Vietnam in particular. Specifically, small and medium-sized enterprises in emerging markets reconfigure available resources and strengthen internal capabilities to overcome barriers of the shortages of strategic, rare and irreplaceable resources in order to improve their performance. This is a unique contribution to the existing literature and highlights the original value of this article.
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Khorshed Alam, Adewuyi Ayodele Adeyinka and Retha Wiesner
The purpose of this paper is to understand whether or not factors that impact the performance–innovation nexus differ from one percentage level of performance to another among…
Abstract
Purpose
The purpose of this paper is to understand whether or not factors that impact the performance–innovation nexus differ from one percentage level of performance to another among small- and medium-sized enterprises in regional Australia, with a specific focus on e-innovation by strategic and non-strategic firms in the agricultural sector and in other industries.
Design/methodology/approach
Researchers implicitly assumed that the performance–innovation relationship is uniform across high-level, mid-level and low-level performing small- and medium-sized enterprises. In this study, the authors analysed performance at different percentage levels.
Findings
The findings indicate that the levels of small- and medium-sized enterprises performance have a significant difference in terms of the factors influencing their performance. The industry may be a determinant of performance, which is similar in the case of the topmost performers in the non-agricultural sector. The major findings of this study are as follows: the performance–innovation relationship differs by the percentage level of small- and medium-sized enterprises performance; and Solow’s productivity paradox exists at the firm level.
Practical implications
The authors recommend that rural policies should target low-performing firms. Moreover, researchers should adopt methodologies that shed light on the differences in the performance–innovation nexus across performance levels rather than one-size-fits-all methodologies that are often adopted.
Originality/value
The major contributions of this study are that the performance–innovation relationship differs by the level of small- and medium-sized enterprises performance, and Solow’s productivity paradox exists at the firm level.
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Caroline Nicholas and Michael Fruhmann
This paper will consider the rationale and effectiveness of SMEsupport policies in the award of public procurement (PP) contracts. One group of economic justifications for SME…
Abstract
This paper will consider the rationale and effectiveness of SMEsupport policies in the award of public procurement (PP) contracts. One group of economic justifications for SME policies derives from the notion that awarding PP contracts to SMEs (and micro-enterprises) encourages innovation, entrepreneurship and so contributes to job creation, economic growth and can support local and regional developments to the benefit of wider society. The link between SMEs, innovation and economic growth has often been assumed in PP policy-making. While some studies show higher growth rates in small than larger firms, others indicate, to the contrary, that many micro and small enterprises, and particularly informal businesses, are not actively seeking to grow. This paper will assess how effective SME policies may be, and questions the extent to which they are properly evaluated.
Harald Pechlaner, Frieda Raich, Anita Zehrer and Mike Peters
Globalization and internationalization tendencies imply new challenges for small and medium‐sized enterprises (SMEs), which are either facing the pressure to achieve short‐term…
Abstract
Globalization and internationalization tendencies imply new challenges for small and medium‐sized enterprises (SMEs), which are either facing the pressure to achieve short‐term profits, or have to attract new market segments by means of long‐term strategies. This trend raises the question of growth perspectives of SMEs and their future development. The paper gives an insight into selected growth theories, entrepreneurship and SMEs, firm competencies, core competencies and the wellbeing of entrepreneurs as a growth indicator. The majority of SMEs are run by the family and characterized by low growth rates or even stagnation, and relatively low market entry and qualification barriers. An exploratory study was carried out among 3‐ and 4‐star hotels in South Tyrol (Italy) in 2004 for a better understanding of the driving forces, growth barriers, entrepreneur's satisfaction, and prerequisites and incentives of growth.
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Richard Tonge, Povl Larsen and Martyn Roberts
IS spending by high‐growth medium‐sized enterprises is at a significantly lower level than that for other companies. However, there was no set pattern or correlation that…
Abstract
IS spending by high‐growth medium‐sized enterprises is at a significantly lower level than that for other companies. However, there was no set pattern or correlation that identified relatively high IS investment with high growth or vice versa. The future forecast for IS investment favours a modest increase in the one to three years planning horizon. Although, given that these are high‐growth companies growing at rates in excess of 15 per cent per annum, the modest increase could represent a real reduction unless the price of technology reduces at a significant rate. The most notable evaluation criteria were “to facilitate change” and “formal financial investment”, but these were closely followed by “act of faith” or “gut feel” approaches. When asked to identify preferred project options, in the past the clear choice of most was medium risk and medium pay off. In the future the preferred options support medium risk and high pay off.
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Shiaw‐Wen Tien, Yi‐Chan Chung, Chih‐Hung Tsai, Chia‐Hsiang Hsieh and Hung‐Hsi Chen
This research probes into the execution of small and medium‐sized enterprises’ value creativities by a difference analysis with different classifications, different capital…
Abstract
This research probes into the execution of small and medium‐sized enterprises’ value creativities by a difference analysis with different classifications, different capital, different turnover, different employees, and different established years. This study develop a questionnaire about value creativity with five dimensions and thirty‐five items according to “Valuation” by McKinsey and Company, Inc. and Copeland et al., such as: “Aspiration and target,” “Portfolio management,” “Organization design,” “Process management,” and “Business and individual performance management.” The results are as follows: (1) Most small and medium‐ sized enterprises (SMEs) have executed value creativities; (2) There is a difference in the execution of value creativities between the livelihood industry and the chemical industry; the execution of value creativities by livelihood industry is better than the chemical industry; (3) For value creativities of the execution of different capital and turnover for SMEs, bigger entities are better than smaller ones; (4) For the value creativities of the execution of different numbers of staff in SMEs, those with more staff are better than those with fewer staff; (5) For the value creativities of the execution of different established years for SMEs, those established longer are better than those established shorter.
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Sanna Laukkanen, Sami Sarpola and Petri Hallikainen
The purpose of this paper is to contribute to the discussion on enterprise resource planning (ERP) system adoption by investigating the relationship of enterprise size to the…
Abstract
Purpose
The purpose of this paper is to contribute to the discussion on enterprise resource planning (ERP) system adoption by investigating the relationship of enterprise size to the objectives and constraints of ERP adoption.
Design/methodology/approach
In the paper, survey data, based on the responses of 44 companies, are analyzed, by dividing the companies into small, medium‐sized, and large enterprises; and comparing these groups, using statistical methods.
Findings
The paper finds significant differences exist between small, medium‐sized and large enterprises regarding the objectives and constraints of ERP system adoption. While small enterprises experience more knowledge constraints, large enterprises are challenged by the changes imposed by ERP adoption. Further, large and medium‐sized enterprises are more outward‐oriented in ERP adoption than small enterprises. Business development, as opposed to mere efficiency improvement, while being the most prevalent objective for ERP adoption in all the company groups, is considered especially important by medium‐sized enterprises. Finally, the findings suggest that, instead of considering small and medium‐sized enterprises as one homogeneous group of smaller enterprises, differences between these two groups of companies should be acknowledged in information system adoption.
Research limitations/implications
The paper shows that the Finnish context and the sample size should be taken into consideration when generalizing the findings.
Practical implications
The paper points out the differences in objectives and constraints between companies of different sizes that should be acknowledged in ERP adoption.
Originality/value
Instead of resorting to the customary approach of considering small and medium‐sized enterprises as a homogeneous group of smaller enterprises, this study acknowledges the differences between these two groups of companies.
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Abimbola Olukemi Windapo, Oluseye Olugboyega and Sunday Odediran
This study aims to investigate the impacts of procurement strategies on the growing proportion of construction small- and medium-sized enterprises (SMEs) and whether the size of…
Abstract
Purpose
This study aims to investigate the impacts of procurement strategies on the growing proportion of construction small- and medium-sized enterprises (SMEs) and whether the size of the construction company moderates the effect.
Design/methodology/approach
This study adopted a quantitative research approach and a cross-sectional questionnaire survey in achieving its objectives. The survey requires the respondent to identify both the most successful and most outstanding project that the respondent was involved in between 2010 and 2016.
Findings
The study found that only traditional and management-oriented procurement strategies ensure the achievement of all growth plans for construction SMEs in South Africa; and that medium-sized construction enterprises achieve social growth such as community empowerment, managerial skills and advancement on the cidb Register of Contractors.
Practical implications
The findings of the study imply that policymakers should base their decisions regarding macroeconomic issues and growth plans for construction SMEs on the internal and external factors such as differences in the sizes of construction SMEs and differences in the suitability of procurement strategies affecting the growth of construction SMEs.
Originality/value
In past studies, the diversity amongst SMEs is often overlooked and SMEs are erroneously assumed to share similar objectives, possess equal capabilities and face challenges of the same magnitude. The original contribution of this study is shown in the investigation of the moderating effect of SMEs’ diversity (in terms of company size) on their growth proportion as influenced by procurement strategies.
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Gerald Vinten, David A. Lane and Nicky Hayes
There can be no doubt that the small and medium sized enterprise (SME) plays a pivotal role in most if not all economies, and that social policy makers have an interest in…
Abstract
There can be no doubt that the small and medium sized enterprise (SME) plays a pivotal role in most if not all economies, and that social policy makers have an interest in ensuring the viability of this sector of the economy, which plays a crucial role in the contract culture of national and international competitiveness. Quite apart from the essential symbiosis between the large multinationals and public limited companies and this sector, the sustainability of unemployment benefit payouts would be jeopardised should the sector experience a significant downturn. There are already worldwide concerns about the ability to continue to finance state pensions at anything like the present scale, and any loss of viability of the SME sector will simply exacerbate this situation. There are also useful reciprocations to be achieved by comparisons across sectors, including in significant areas such as internal control (Vinten, Lane, Hayes, 1996). The recent flurry of activity has included initiatives of the Institute of Chartered Accountants of England and Wales 1996) and the information needs of owners (Institute of Chartered Accountants of England and Wales 1996a), an Auditing Practices Board (1996) Practice Note, and a Department of Trade and Industry Consultation Document (DTI 1996).
This article analyzes the impact of social insurance on firm performance by obtaining evidence from Vietnamese small- and medium-sized enterprises.
Abstract
Purpose
This article analyzes the impact of social insurance on firm performance by obtaining evidence from Vietnamese small- and medium-sized enterprises.
Design/methodology/approach
The method employed in the research is the generalized method of moments for testing hypotheses of data collected from the General Statistics Office of Vietnam.
Findings
The results show that social insurance contributions can enhance firm performance in three dimensions: return on equity (ROE), labor productivity and total factor productivity (TFP). In addition, financial leverage, firm size, the average wage of workers and fixed assets have an impact on the social insurance costs of these companies.
Originality/value
This article provides a novel explanation of the contribution of social insurance to firm performance. In particular, social insurance contribution not only increases labor productivity but also boosts the growth of the TFP of companies. In addition, the article points out that taking care of the benefits of employees is a valuable investment of companies. These are the unique contributions of the paper to the literature on the economic impact of social insurance.
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