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Article
Publication date: 7 April 2015

Peter John Carey

This study aims to investigate whether “small- and medium-sized enterprises” (SMEs) benefit from their external accountants’ business advice through enhanced firm…

Abstract

Purpose

This study aims to investigate whether “small- and medium-sized enterprises” (SMEs) benefit from their external accountants’ business advice through enhanced firm performance. Most SMEs draw on external support, and their main advisors are external accountants (Bennett and Robson, 1999). The resource-based view of the firm suggests that firms will seek external support if they perceive a gap in their internal resources.

Design/methodology/approach

Data were collected from a questionnaire mailed to a random sample of Australian SMEs, defined as businesses having between 5 and 200 full-time employees.

Findings

An analysis of 380 survey respondents confirms a positive relationship between the voluntary purchase of business advice and SME performance, and that SME performance is further enhanced when business advice is purchased jointly with auditing. These relationships apply to the small (5-49 employees) but not to the medium-sized (50-200 employees) businesses. Findings are consistent with smaller firms having narrower resource bases and thus a greater need to source business advice.

Practical implications

The accounting profession has long encouraged a broadening of its service base, and evidence that small businesses perceive a performance benefit from their accountants’ business advice provides support for the profession’s strategy.

Originality/value

This research extends the empirical literature investigating the link between the business advice of an external accountant and SME performance. It explains small firms’ demand for business advice by extending the application of the resource-based view of the firm and provides new evidence consistent with “knowledge spillover” from auditing to business advice in the small firm environment.

Details

Pacific Accounting Review, vol. 27 no. 2
Type: Research Article
ISSN: 0114-0582

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Article
Publication date: 11 December 2017

Rohit Prabhudesai and Ch. V.V.S.N.V. Prasad

The purpose of this study is to classify and analyze the impact of antecedents studied in the extant literature on two levels of SME alliance performance – alliance-level…

Abstract

Purpose

The purpose of this study is to classify and analyze the impact of antecedents studied in the extant literature on two levels of SME alliance performance – alliance-level and firm-level.

Design/methodology/approach

Using online databases and the bibliography section of the selected articles, 45 peer-reviewed studies specifically analyzing the impact of antecedents on the performance of SME alliances at the two levels were studied to gain insights.

Findings

The study differentiates between the impact of antecedents on the two levels of SME alliance performance, alliance-level and firm-level, and finds that certain antecedents, such as absorptive capacity, corporate entrepreneurship, control, network dimensions, partner opportunism and partner reputation, have a peculiar impact on a single level while other antecedents such as trust, commitment and cooperation, have an influence on performance at both levels. Also, the impact of these antecedents is hypothesized to be weak or strong, depending upon the results obtained by the papers in the review.

Research limitations/implications

In a first-of-its-kind approach, the paper provides a conceptual insight into the differentiating impact of antecedents on SME alliance performance at both levels, as opposed to the unitary analysis approach used in the extant literature. The model provided by the study can be used by researchers to gain a systematic understanding of how alliance outcomes are affected.

Practical implications

While the extant literature remains largely ambiguous on the role of antecedents causing variance in SME alliance outcomes, this paper serves to bridge this gap and enhance the understanding of practitioners by systematically analyzing how specific antecedents affect SME alliance performance at both levels.

Originality/value

As opposed to the unitary approach used in the extant literature, which does not differentiate between the two levels of SME alliance performance, this paper arranges and categorizes these studies based on the level at which alliance performance has been analyzed. Furthermore, the paper identifies the impact of antecedents at each level, thereby providing pioneering insights on understanding SME alliance outcomes.

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Article
Publication date: 7 July 2021

Pedro Mendonça Silva, Victor Ferreira Moutinho and Vera Teixeira Vale

The purpose of this paper is to examine the relationship between product innovation and network and their export performance, particularly in trade fair context. Moreover…

Abstract

Purpose

The purpose of this paper is to examine the relationship between product innovation and network and their export performance, particularly in trade fair context. Moreover, this paper conducts a comparative study among services/industrial small and medium-sized enterprises (SMEs) and considers the home-country context. Innovation and internationalization are stagnant themes in the recent literature on trade fairs, so they require to be renewed.

Design/methodology/approach

The empirical study includes a survey with 341 SMEs’ respondents separated into both industrial/producer and service/other. A conceptual model was developed and examined from three different perspectives: Model A encompasses all surveyed SMEs, Model B includes only industrial/producer SMEs and Model C comprises service/other SMEs. Data analysis happened in two steps. The first step included the structural equation model (SEM) and the assessment of hypotheses (from three different perspectives). Thus, it was possible to make a comparative analysis between the models. In the second step, the ordered logit model (OLM) is used to study relationships between control variables and the criteria variable export performance.

Findings

The SEM’s results confirm a conceptual model about a dynamic trajectory that SMEs, mainly industrial/producer, can take advantage of: innovate to networking and networking to export. The results allowed to verify when comparing services/industrial SMEs that the tangibility which characterizes the innovation of industrial SMEs' products contributed significantly to the performance of business networks and exports. The study also reveals, through the OLM, two catalysts for the success of the SME’s export performance: export experience and continued participation in trade fairs. The OLM results also reveal that the size of the companies is not relevant, so trade fairs are marketing tools accessible to any company, regardless of their size. Finally, the study considered home-country context of the surveyed SMEs, which allowed additional interpretations to be drawn.

Research limitations/implications

The study does not reflect the individual's personality in his network capacity and the export performance was measured based on the level of satisfaction and not on real sales results. However, the study provides relevant practical implications and can support future studies.

Practical implications

The study offers important implications for SME. The results reveal that presenting product innovations at trade fairs is a useful tool for SMEs to create networks, which facilitates their export performance, especially for industrial SMEs residing in small economies such as Portugal. This study is also relevant for business associations of industrial SMEs and/or public or semi-public SME promotion agencies.

Originality/value

This paper contributes to the literature on trade fairs, suggesting a new innovation, networking, export (INE) framework to reflect on the participation in international trade fairs. So, this research especially combines product INE performance in a particular context – international trade fairs for SME. It also considers the home-country context of the SMEs, which adds depth to the study. Finally, the comparative study also provides insightful implications for industrial SMEs on how to improve the export performance from trade fairs by leveraging innovation and networking.

Details

Journal of Business & Industrial Marketing, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0885-8624

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Article
Publication date: 20 August 2020

Manali Chatterjee and Titas Bhattacharjee

This study aims to understand the influence of R&D intensity and ownership concentration on performance of Indian technology SMEs, at the intersection of “value creation”…

Abstract

Purpose

This study aims to understand the influence of R&D intensity and ownership concentration on performance of Indian technology SMEs, at the intersection of “value creation” perspective of corporate governance and country cultural context in innovation.

Design/methodology/approach

Cross-sectional data of 264 Indian technology SMEs have been employed to probe the impact of ownership and R&D intensity on market performance of the technology SMEs.

Findings

This study does not find support of individual influence of R&D intensity on SME performance. The authors find support for the “value creation” hypothesis of corporate governance in Indian technology SME context. This study finds that interaction of promoter's ownership concentration and R&D intensity has a positive influence on the performance of Indian technology SMEs.

Research limitations/implications

This study has deployed cross-sectional data. Future studies can examine the “value creation” hypothesis based on panel data for a long-run understanding. Ownership can be further segregated into different categories of ownership in future studies.

Practical implications

This study underscores on distinct necessity in the concentrated ownership in the context of Indian technology SMEs. The findings of the study may encourage policymakers to focus on the “value creation” of the technology SMEs than “value protection.”

Originality/value

This study aims to understand the market value of R&D practice of SMEs. The findings of this study establish that R&D intensity individually may not have any significant influence on SME performance. R&D intensity coupled with concentrated ownership can significantly increase SME performance. Thus, this study identifies factors that can help in SME innovation and growth options. Additionally, this study advocates for the fact concentrated ownership in technology SMEs of India by establishing the link with SME performance.

Details

South Asian Journal of Business Studies, vol. 10 no. 2
Type: Research Article
ISSN: 2398-628X

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Article
Publication date: 4 September 2017

Hande Karadag

Small- and medium-sized enterprises (SMEs) are crucial for socio-economic growth due to their significant role in creating new workforce, gross domestic product increase…

Abstract

Purpose

Small- and medium-sized enterprises (SMEs) are crucial for socio-economic growth due to their significant role in creating new workforce, gross domestic product increase, innovation and entrepreneurship. This paper aims to examine financial management performance in SMEs with regard to industry, firm age and education level of owner/managers differences.

Design/methodology/approach

The data used in the study are collected from 188 SMEs through structured questionnaires, and three hypotheses regarding the associations are tested by using structural equation modeling.

Findings

Findings of one-way ANOVA tests indicate that performance in financial management practices has a strong and positive correlation with education level of small business owner/managers, whereas no significant difference is found regarding SMEs operating in different industries. For the impact of company age, independent samples t-test is conducted, and a meaningful difference between small- and medium-sized companies which are five years or older and younger is found.

Research limitations/implications

This study shows that a significant difference for age of an SME is present between over and under five-year-old SMEs, with respect to financial management performance, which is an important finding for both small business and financial management literatures. The tests regarding the particular hypotheses about education level of SME owner/managers indicate that education level of SME owner/managers significantly impacts financial management performance.

Practical implications

The present study provides important practical implications. First, the importance of education level of owner/managers on SME financial performance is highlighted. Second, strong empirical support is found for the impact of company age on SME performance, which might be discussed as the importance of accumulation of knowledge of the owner/managers and the changes required with the growth patterns of the company, with increasing company age. Third, the study shows that industry differences do not exhibit a significant performance variation factor in financial management of SMEs, with respect to other demographic factors. Overall, these contributions help us better understand the financial management performance indicators in small and medium sized businesses.

Originality/value

This study focuses on company age, education level and industry differences with respect to financial management performance in SMEs in emerging economies, therefore provides additional empirical evidence to a research area where very few empirical studies exist.

Details

Journal of Entrepreneurship in Emerging Economies, vol. 9 no. 3
Type: Research Article
ISSN: 2053-4604

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Article
Publication date: 24 August 2020

Luh Gede Sri Artini and Ni Luh Putu Sri Sandhi

The purpose of this study is to determine and compare the performance of small and medium enterprises (SME) and manufacturing company stock portfolios in the Indonesian…

Abstract

Purpose

The purpose of this study is to determine and compare the performance of small and medium enterprises (SME) and manufacturing company stock portfolios in the Indonesian, Chinese and Indian capital markets by the Sharpe Index and the significance of differences in average performance in the capital market.

Design/methodology/approach

This is comparative research that compared the performances of SME and manufacturing company stock portfolios in Indonesian, Chinese and Indian capital markets. The hypothesis examination of comparative test used one-way ANOVA technique on the performance of SME and manufacturing company stock portfolios in Indonesian, Chinese and Indian capital markets. One-way ANOVA test was used in the analysis to test the average difference of performance indices of SME and manufacturing company stock portfolios is in Indonesian, Chinese and Indian capital markets.

Findings

The performance of SME and manufacturing company stock portfolios in Indonesian capital market was not better than the performances of IHSG and LQ45 Index, the performance of SME and manufacturing company stock portfolios in Chinese capital market (SZSE) was better than the performance of Shenzhen Composite Index and the performance of Shenzhen A-Share Stock Price Index. The comparison of the performances of SME and manufacturing company stock portfolios in Indonesian, Chinese and Indian capital markets showed that the performance of SME and manufacturing company stock portfolios in Chinese capital market was the best and the performance of SME and manufacturing company stock portfolios in Indonesian capital market was the lowest.

Practical implications

The implication of this study was that SME and manufacturing company stock portfolios had relatively better performances in China and India, so investors should consider investing in SME and manufacturing company stocks. The performance of SME and manufacturing company stock portfolios in Indonesia was not able to exceed market and LQ45 portfolios, so the authority in Indonesia financial market should consider developing a special market for SME and manufacturing company to support the development of SME and manufacturing company in Indonesia and solve the problem of lack of funding source for SME and manufacturing company.

Originality/value

The originality of the present study is in the measurement of the performance of SME and manufacturing company stock portfolio by risk-adjusted return which returns per risk unit measured by Sharpe Index as a more beneficial measurement in measuring stock portfolio performance than average return. Comparative study of the stock portfolio performances of small medium enterprises and manufacturing company In Indonesian, Chinese and Indian stock markets, and object studies conducted in Indonesia, China and India.

Details

Journal of Economic and Administrative Sciences, vol. 37 no. 2
Type: Research Article
ISSN: 1026-4116

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Book part
Publication date: 28 September 2015

Md Shah Azam

Information and communications technology (ICT) offers enormous opportunities for individuals, businesses and society. The application of ICT is equally important to…

Abstract

Information and communications technology (ICT) offers enormous opportunities for individuals, businesses and society. The application of ICT is equally important to economic and non-economic activities. Researchers have increasingly focused on the adoption and use of ICT by small and medium enterprises (SMEs) as the economic development of a country is largely dependent on them. Following the success of ICT utilisation in SMEs in developed countries, many developing countries are looking to utilise the potential of the technology to develop SMEs. Past studies have shown that the contribution of ICT to the performance of SMEs is not clear and certain. Thus, it is crucial to determine the effectiveness of ICT in generating firm performance since this has implications for SMEs’ expenditure on the technology. This research examines the diffusion of ICT among SMEs with respect to the typical stages from innovation adoption to post-adoption, by analysing the actual usage of ICT and value creation. The mediating effects of integration and utilisation on SME performance are also studied. Grounded in the innovation diffusion literature, institutional theory and resource-based theory, this study has developed a comprehensive integrated research model focused on the research objectives. Following a positivist research paradigm, this study employs a mixed-method research approach. A preliminary conceptual framework is developed through an extensive literature review and is refined by results from an in-depth field study. During the field study, a total of 11 SME owners or decision-makers were interviewed. The recorded interviews were transcribed and analysed using NVivo 10 to refine the model to develop the research hypotheses. The final research model is composed of 30 first-order and five higher-order constructs which involve both reflective and formative measures. Partial least squares-based structural equation modelling (PLS-SEM) is employed to test the theoretical model with a cross-sectional data set of 282 SMEs in Bangladesh. Survey data were collected using a structured questionnaire issued to SMEs selected by applying a stratified random sampling technique. The structural equation modelling utilises a two-step procedure of data analysis. Prior to estimating the structural model, the measurement model is examined for construct validity of the study variables (i.e. convergent and discriminant validity).

The estimates show cognitive evaluation as an important antecedent for expectation which is shaped primarily by the entrepreneurs’ beliefs (perception) and also influenced by the owners’ innovativeness and culture. Culture further influences expectation. The study finds that facilitating condition, environmental pressure and country readiness are important antecedents of expectation and ICT use. The results also reveal that integration and the degree of ICT utilisation significantly affect SMEs’ performance. Surprisingly, the findings do not reveal any significant impact of ICT usage on performance which apparently suggests the possibility of the ICT productivity paradox. However, the analysis finally proves the non-existence of the paradox by demonstrating the mediating role of ICT integration and degree of utilisation explain the influence of information technology (IT) usage on firm performance which is consistent with the resource-based theory. The results suggest that the use of ICT can enhance SMEs’ performance if the technology is integrated and properly utilised. SME owners or managers, interested stakeholders and policy makers may follow the study’s outcomes and focus on ICT integration and degree of utilisation with a view to attaining superior organisational performance.

This study urges concerned business enterprises and government to look at the environmental and cultural factors with a view to achieving ICT usage success in terms of enhanced firm performance. In particular, improving organisational practices and procedures by eliminating the traditional power distance inside organisations and implementing necessary rules and regulations are important actions for managing environmental and cultural uncertainties. The application of a Bengali user interface may help to ensure the productivity of ICT use by SMEs in Bangladesh. Establishing a favourable national technology infrastructure and legal environment may contribute positively to improving the overall situation. This study also suggests some changes and modifications in the country’s existing policies and strategies. The government and policy makers should undertake mass promotional programs to disseminate information about the various uses of computers and their contribution in developing better organisational performance. Organising specialised training programs for SME capacity building may succeed in attaining the motivation for SMEs to use ICT. Ensuring easy access to the technology by providing loans, grants and subsidies is important. Various stakeholders, partners and related organisations should come forward to support government policies and priorities in order to ensure the productive use of ICT among SMEs which finally will help to foster Bangladesh’s economic development.

Details

E-Services Adoption: Processes by Firms in Developing Nations
Type: Book
ISBN: 978-1-78560-325-9

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Article
Publication date: 11 June 2020

Stella Zulu-Chisanga, Mwansa Chabala and Bernadette Mandawa-Bray

Notwithstanding that there has been increasing attention on factors that enhance SME performance in developing economies, there is a dearth of studies explicitly…

Abstract

Purpose

Notwithstanding that there has been increasing attention on factors that enhance SME performance in developing economies, there is a dearth of studies explicitly investigating the roles of government support systems and inter-firm collaboration. Drawing on the resource-based view (RBV) of the firm and institutional theories, this study aims to model and examine how government support, inter-firm collaboration and managerial ties affect SME performance and further explores how firm specific resources mediate the relationships.

Design/methodology/approach

A quantitative research design was used. Data were collected using a structured questionnaire from 438 SMEs operating in Zambia, a developing Sub-Saharan African country. Hierarchical linear regression and SPSS PROCESS macro were used to test the hypotheses.

Findings

Findings indicate that managerial ties have both a direct and indirect effect, through firm resources, on financial performance. Also, the relationship between inter-firm collaboration and financial performance is fully mediated by firm resources. Surprisingly, results reveal that government support does not have a significant effect on SME financial performance.

Practical implications

The study has important implications for SME managers and policy makers. It demonstrates that inter-firm collaborations and managerial ties enhance a firm’s financial performance. It also highlights the view that SMEs need to have firm specific resources to transform external resources, accessed from inter-firm relationships, into superior performance. SME policy makers are advised to focus more on policies and support mechanisms that promote inter-firm relationships at firm and managerial levels.

Originality/value

This study is one of the few studies to empirically show that the differential effects of inter-firm collaboration and managerial ties on SME performance are channeled through firm resources, in an under-researched developing Sub-Saharan African economy context. The study is also one of the few studies to reveal that government support is not significantly related to SME performance. Therefore, it provides valuable insights which could be applied to other developing countries with characteristics similar to Zambia.

Details

Journal of Entrepreneurship in Emerging Economies, vol. 13 no. 2
Type: Research Article
ISSN: 2053-4604

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Article
Publication date: 20 September 2019

Raavee Kadam, Srinivasa Rao, Waheed Kareem Abdul and Shazi Shah Jabeen

In environments characterized by high cultural diversity, the ability to understand the cultural makeup of the workforce and the environment would equip business owners…

Abstract

Purpose

In environments characterized by high cultural diversity, the ability to understand the cultural makeup of the workforce and the environment would equip business owners with knowledge required to innovate, take risks and proactively change their business offerings. Drawing on the upper echelons theory and action-characteristics model of entrepreneurship, the purpose of this paper is to test how competencies of small business owners, namely, cultural intelligence (CQ) and entrepreneurial orientation (EO) contribute to the performance of their firms.

Design/methodology/approach

Using a sample of 106 small and medium enterprises (SMEs) from the UAE, the data were collected through structured questionnaires and analyzed using partial least squares–structural equations modeling.

Findings

Results showed that CQ of the SME owner has a positive effect on firm performance (FP) through the mediating role of EO. Also, CQ of the SME owner was found to have a direct effect on FP, thus asserting its importance as a valuable competency that SME owners need to cultivate when operating in a multicultural environment.

Practical implications

Skills of the top managers greatly influence the choices and decisions they make, which in turn impact the effectiveness of their organizations. This study focuses on the role of managerial competencies that need to be cultivated among SME owners that would contribute to the growth of their firms.

Originality/value

This research studies the role of an individual’s cross-cultural and entrepreneurial competencies that enable the organization to achieve higher performance.

Details

Journal of Organizational Effectiveness: People and Performance, vol. 6 no. 3
Type: Research Article
ISSN: 2051-6614

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Article
Publication date: 1 June 2010

Sarah Eyaa, Joseph M. Ntayi and Sheila Namagembe

SMEs especially those in developing countries face a number of challenges that affect their performance and survival in the long run. One of the challenges that has not…

Abstract

SMEs especially those in developing countries face a number of challenges that affect their performance and survival in the long run. One of the challenges that has not been widely explored is that of SME supply chain performance. This study attempts to examine the relationship between collaborative relationships and SME supply chain performance in Uganda. SME supply chain performance is an important area because SMEs account for a large percentage of the private sector. Our study established that collaborative relationships explained 29.5 per cent of the variation in SME supply chain performance. Information sharing and incentive alignment were found to be significant predictors of SME supply chain performance while decision synchronization was not a signification predictor. These findings are important and raise implications for theory and managers of SMEs in Uganda.

Details

World Journal of Entrepreneurship, Management and Sustainable Development, vol. 6 no. 3
Type: Research Article
ISSN: 2042-5961

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