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This study investigates the impact of US dollar volatility and oil rents on the performance of small and medium-sized enterprises (SMEs) in the Gulf Cooperation Council (GCC) region, with an emphasis on understanding how these factors influence SME financing constraints in economies with fixed currency regimes.

Employing a random effects panel regression analysis, this research considers US dollar volatility and oil rents as independent variables, with SME performance, measured through the financing gap, as the dependent variable. Controls such as trade balance, inflation deltas and gross domestic product (GDP) growth are included to isolate their effects on SME financing constraints.

The study reveals a significant positive relationship between dollar volatility and the financing gap, suggesting that increased volatility can exacerbate SME financing constraints. Conversely, oil rents did not show a significant direct influence on SME performance. The trade balance and inflation deltas were found to have significant effects, highlighting the multifaceted nature of economic variables affecting SMEs.

The study acknowledges potential biases due to omitted variables and the limitations inherent in the use of secondary data.

Findings offer pertinent guidance for SMEs and policymakers in the GCC region seeking to develop strategies that mitigate the impact of currency volatility and support SME financing.

The research provides new insights into the dynamics of SME performance within fixed currency regimes, which significantly contributes to the limited literature in this area. The paper further underscores the complex connections between global economic factors and SME financial health.

The purpose of this paper is to investigate the potential link between Sweden’s high reliance on equity capital financing among small and medium-sized enterprises (SMEs) and its recognition as the most innovative economy in Europe according to the European Innovation Scoreboard (EIS). This paper examines the idea that the high levels of trust within Swedish society can explain why private equity financing is more prevalent among Swedish SMEs.

To test these ideas, the authors use data from the Survey on Access to Finance for Enterprises to measure the private equity reliance of firms. The authors also use the EIS to measure the innovation capacity of nations and various aspects of SMEs’ innovation activities. Finally, societal levels of trust are measured through the World Value Survey.

First, the authors find that European countries with a higher proportion of SMEs relying on equity financing tend to be ranked as more innovative by the EIS. Second, the authors find that the correlation between a nation’s share of SMEs relying on equity financing and their level of innovation activities is marginally stronger for product innovations than for business process innovations. Third, the authors find that countries with higher levels of trust tend to have higher equity capital reliance among SMEs.

This study builds upon previous research on equity capital and SMEs’ innovation activity while introducing new insights into the relationship between societal trust and equity financing.

The purpose of this study is to identify the business strategies that entrepreneurs have formulated to establish the business with the intention of scaling up in the information technology (IT) sector in Chile, given that they have managed to scale up sustainably at an average annual rate of 73.3% and an average annual employee growth rate of 37% for four consecutive years after an establishment period of 25 months.

Three methodological steps were used to identify which strategic initiatives are relevant to the establishment of small- and medium-sized enterprises (SMEs) on the path to scaling up. The first part consisted of identifying the literature and defining the research propositions and research questions. The second part was to prepare, collect and analyse the data to conduct the research by applying, transcribing, reviewing and coding the sources of evidence to explore how SMEs are able to develop strategic initiatives for the start-up process. The final stage was to validate the research proposal to identify potential strategic initiatives identified during the multi-case study.

As a result of the data analysis and empirical findings, three deliberate strategic initiatives were identified: staying engaged with customers, delivering successful business solutions and articulating social capital. However, in crisis situations, entrepreneurs readjust their strategies based on their management skills and an emergent strategic initiative was identified as securing the financial structure and revolutionising change. While this research was not designed to identify personal attributes, it did highlight the importance of adaptation and learning as a skill to drive the business model for scaling up during the establishment of their business.

It is clear that the study focused on Chile and cannot be replicated in other regions or sectors due to the characteristics of the sample itself, but it provides empirical evidence that there are cycles prior to scale up that need to be understood. The findings were empirically validated during the establishment phase, but the deliberate and emergent strategic initiatives that consolidated the SME to prepare for its scale-up process are not evident in the theory.

The IT sector will continue to grow and change after the pandemic, and the global economy will use more digital systems, creating new ways of working with the use of IT. This context will impact on SMEs where strategies, whether deliberate or emergent, will need to be part of the new business models, and therefore, caution should be exercised when using the results of this study. Public and private institutions should educate and guide entrepreneurs for the potential scaling up of their SMEs without having to wait 42 months, according to Global Entrepreneurship Monitor 2021-2022 (Hill et al., 2022). Scaling up can begin as early as 25 months after establishment, breaking the paradigm of the theory that the SME must be established in a period of 3.5 years. This period cannot be generalised as business opportunities in the IT sector are faster. The research also contributes by reporting that contingency planning is relevant during the establishment phase.

Educational institutions and the public sector have made efforts to change business cultures regarding the importance of strengthening entrepreneurship, but teaching the emergent strategies that often challenge SME creation is not yet widespread in educational formats. This is a challenge not only for institutions but also for entrepreneurs trying to anticipate the constant changes in the global economy. This research provides an opportunity to create more dynamic business models with more conscious risk planning.

Although the literature has confirmed the findings, this research has provided a pre-scaling picture that links these two important stages on the axis of deliberate and emergent strategies. The findings confirm the importance of correctly embedding five strategic initiatives for the establishment of the SME if it is to continue on its journey towards business scale-up. However, there is a lack of empirical evidence in emerging economies on how entrepreneurs have found the right path to scale-up.

This study aims to examine the dynamics of the market development of Islamic banking in Pakistan. This study investigates how shocks to the economy in the form of changes in benchmark rate and exchange rate and internal factors such as efficiency, profitability and asset quality affect the development of Islamic banking. The study also evaluates the impact of Islamic banking on the real economy in the macro perspective and society at large in terms of inclusiveness, competitiveness and fairness.

Autoregressive distributed lagged model method is used for analysing the short-run and long-run determinants of market development of Islamic banking and the economic impact of Islamic banking on the real economy.

Profitability and exchange rate have a positive effect on market development of Islamic banking while higher inefficiency and interbank rate have a negative effect. On the other hand, financing intensity and profitability in Islamic banking positively affect the large-scale manufacturing sector.

Stable profits, high asset quality, efficiency and rising import demand with low policy rate environment complement Islamic banking growth. Moreover, the economic assessment shows that Islamic banks have been able to achieve the financial inclusion of those who want to avoid Riba, but they need concerted efforts to improve competitiveness and distinction with regard to distributional impact.

To the best of the authors’ knowledge, this is the first study in Pakistan to evaluate determinants of market development of Islamic banking taking 16-year quarterly data and assessing the economic effects of Islamic banking on inclusiveness, competitiveness and fairness.

The importance of financial dependence of small and medium enterprises (SMEs) on their performance is a relatively unaddressed area of research. Relatedly, whether and to what extent foreign bank penetration exerts an impact in the presence of financial dependence also remains an open question. The purpose of the paper in this regard is to exploit unit-level data on Indian SMEs and assess the independent and interactive effects of financial dependence on SME behaviour, in the presence of foreign banks.

This study uses fixed effects specification to address the issue. In subsequent analysis, this study also uses an instrumental variable approach for robustness.

The results indicate that financial dependence improves investment and employment, although there is a decline in productivity. These findings differ across size classes of SMEs. Similar is the evidence in the presence of foreign banks. In particular, foreign bank penetration leads to a decline in investment for micro and medium SMEs, although for small SMEs, the impact is found to be the opposite.

To the best of the author’s knowledge, this is one of the early within-country studies to examine the interface between SMEs and financial dependence and the role played by foreign banks in this regard.

The presence of securities crowdfunding (SCF) FinTech in the Islamic financial landscape opens investment opportunities through shares and sukuk (Sharia bond) instruments. This study aims to examine the effect of investment risk (IR), legal risk (LR), product knowledge (PK), Sharia compliance (SC) and subjective norm (SN) on investment decisions in businesses and projects run by small and medium enterprises (SMEs).

The questionnaires were distributed to prospective investors with prior knowledge of SCF and Islamic investment. The data collected was then examined using partial least square-structural equation modeling using SmartPLS 4.0.

The results show that LR has positive and significant implications for supporting investment through SCF, while IR has the opposite. The main findings in this study explain that PK and SC are proven to strengthen the intention to invest in SCF. Meanwhile, SN, which also strengthens intention, is the greatest influence. Therefore, it is highly recommended that SCF organizers collaborate with regulators (OJK), universities, academics and the investor community, as well as Muslim entrepreneurs, to provide education and literacy regarding SCF products and the underlying contracts, along with the consequences and uniqueness of investment vis SCF.

From a managerial side, Sharia expert educators can be appointed to increase investors’ literacy and confidence to support SMEs’ business expansion via SCF. In addition, to minimize investment risk, SCF organizers are also advised to issue sukuk and shares in different low-risk businesses/sectors, followed by investment amounts that are more affordable for novice investors.

Research on SCF as an alternative to SME financing is still scarce. To the best of the author’s knowledge, this is the first research to empirically test the relationship between risk, SC, PK and SN on potential investors’ decisions to support SMEs through the SCF mechanism.

The study explores how the intention to export affects financing and non-financing variables for small and medium-sized enterprises (SMEs) in a low-income country (LIC). The objectives of this study are (1) to discern between regional and global exporting and (2) to evaluate its policymaking implications.

Primary survey data were collected from 330 Rwandan SMEs and were analysed using ordered logistic models as an application of the expectation-maximisation iterating algorithm, which was tested for robustness using a sampling model variation.

The results show that alternative sources of finance are the predominant choice to finance the intention to export within and outside Africa. As the scope of export intentions broadened from regional to global, there was a shift in preferences from less formal to more formal lending technologies, moving from methods like factoring to lines of credit. Moreover, reliance on bank officers became more significant, with increasing marginal effects. Finally, the study determined that government financing schemes were not relevant for SMEs pursuing either regional or global exporting.

Whilst alternative sources of finance predominate the export intentions of Rwandan SMEs, establishing a robust banking relationship becomes crucial for global exporting. Despite this implication, the intention to export should prompt more transparent communication regarding government financial support programmes. There is an opportunity for increased usage of relationship lending to customise support for SMEs involved in exporting, benefiting both the private and public sectors.

This study accentuates how export distance alters SME financing priorities. The results also contribute to understanding how the value of relationship lending changes when less familiar markets (i.e. global exporting) are the objective. Moreover, the study offers a new perspective on how institutional voids affect entrepreneurial financing decisions in LICs.

The Scottish economy was experiencing steady growth prior the hit of the COVID-19, with the pandemic causing the government to announce extreme lockdown measures with unprecedented impact on small and medium-sized enterprises (SMEs). Whilst some of the industry sectors in Scotland took a lighter hit, a large part of the organizations had to either adapt or completely disrupt their business. An essential aspect of their survival, risk management (RM) was among the areas requiring the most significant acceleration. This study compared the RM practices implemented by Scottish SMEs prior and after the outbreak as well as examined the attitudes of key decision-makers in the SMEs in relation to risk, including their perceived readiness for another crisis of similar significance.

An online survey based on ISO 31000 RM guidelines was distributed to 232 Scottish SMEs. Based on the official government reports and existing knowledge on how SMEs around the world have handled crisis events within the past 20 years, the authors developed the hypothesis that crisis events significantly accelerate SMEs' RM implementation. Around 13 items were tested in relation to the hypothesis and responses were tested via two-tailed T-test to establish significant statistical difference.

The research provides insight into the current state of risk management practices implemented by Scottish SMEs. As expected, SMEs showed significant difference in their RM implementation prior and after the COVID-19 outbreak. Whilst this has been viewed as a positive, motivations, priorities and approaches in managing risk demonstrated by the SMEs is questionable with views to their sustainable long-term recovery. The study highlights the lack of confidence instilled within the SMEs that they can handle another crisis of similar significance and provides directions for further investigation and improvements with the aim of helping the SMEs prepare better to mitigate the consequences of future crisis events.

In academic sense, the study offers a tested universal framework and a detailed questionnaire for assessment of RM strategy, applicable to organisations of various type, size and geography. Several implications with regards to managerial practices have been highlighted, including the neglect of the SMEs’ own internal environments and its significance in their risk strategies, the predominantly reactive approach to RM displayed by most Scottish SMEs as well as the neglect of compliance risk leading to potential quality and customer satisfaction issues preventing SMEs from full post-crisis recovery.

This study analyzes the role of regional cooperative banks in identifying and financing small and medium-sized enterprises (SMEs) from a proximity perspective. Access to finance is a major challenge for SMEs. Regional cooperative banks can remove this barrier based on cooperative bank's characteristics and geographic proximity to SMEs. Understanding the interplay between these financial actors and firms can contribute to a better support of SMEs development.

The results are based on a case study of eight SMEs located in southwestern France. Interviews were conducted with two regional cooperative funds and eight SMEs. The interview guide included questions related to the company, the projects financed and how financing was accessed.

Results reveal that a combination of three forms of proximity allows regional cooperative banks and SMEs to establish effective financing operations. They show that regional cooperative banks are key players in the existing financing mechanisms for SMEs. Such financing is often used to gain access to larger players at a later stage. The findings suggest the need for public policies that promote the integration of financing actors in regional ecosystems to advance SMEs' development.

This article examines how SMEs access financing, with a focus on regional cooperative banks, which have received little attention in the literature. Moreover, the relationships between these actors are studied through the lens of proximity. Regional cooperative banks are able to finance projects that may have been overlooked by traditional banks due to trust-building local dynamics.

To endure and cope in the rapidly changing environment, it is required of firms to gain a deeper acquisition of knowledge on market dynamics and subsequently concentrate on corporations' capacity to create, restructure and integrate their internal and external competences. Hence, the objective of this study is to investigate the influence of eco-dynamic capability (EDC) on the sustainability performance of small and medium-sized enterprises (SMEs).

Structured questionnaires were used to obtain primary data. The data were solicited from 500 employees and owner-managers of SMEs. The study’s hypotheses were tested using standard multiple regression through IBM SPSS Statistics (version 24).

The study revealed that EDC has a substantial positive effect on the economic, social and environmental sustainability performance dimensions.

The focus of this study is on EDC. Thus, although dynamic capability has been the subject of substantial study, little is known regarding the effect of EDC on the economic sustainability performance (ESP) (financial), environmental sustainability performance (ENSP) and social sustainability performance (SSP) of SMEs, predominantly amongst SMEs in emerging economies.