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Article

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…

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.

Details

Journal of Public Procurement, vol. 14 no. 3
Type: Research Article
ISSN: 1535-0118

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Article

Anthony Flynn and Paul Davis

The purpose of this paper is to test the relationship between firms’ experience of small- and medium-size enterprise (SME)-friendly policy and their participation and…

Abstract

Purpose

The purpose of this paper is to test the relationship between firms’ experience of small- and medium-size enterprise (SME)-friendly policy and their participation and success in public procurement.

Design/methodology/approach

Hypothesised relationships between SME-friendly policy and three outcome variables – frequency of tendering, success rate in public contract competitions, and commercial orientation towards the public sector – are tested using survey data from 2,755 SME respondents.

Findings

SME-friendly policy is found to be significant in explaining success rates and commercial orientation towards the public sector marketplace. It is not significant in explaining frequency of tendering.

Research limitations/implications

The context for the study is Ireland. However, given institutional similarities in national public procurement regimes, particularly among EU Member States, the findings have relevance beyond the Irish context. The research design is cross-sectional and so does not allow for any causal claims to be made.

Originality/value

This study puts forward and tests an original model of SME-friendly procurement policy and its associated outcomes for firms. It develops a comprehensive 16-item instrument to measure SME-friendly procurement policy. It uses SMEs as research informants instead of public buyers.

Details

Journal of Small Business and Enterprise Development, vol. 23 no. 3
Type: Research Article
ISSN: 1462-6004

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Article

Kapil Patil

Increasing the share of small and medium enterprises (SMEs) in public procurement through targeted support policies is often fraught with organisational and institutional…

Abstract

Purpose

Increasing the share of small and medium enterprises (SMEs) in public procurement through targeted support policies is often fraught with organisational and institutional challenges as can be seen from the experiences of many developed countries. This has profound implications for emulating such policies in developing countries where administrative capacities may be low for efficient policy management. The purpose of this paper is to widen the canvass of SME procurement policy discourse by exploring a developing country context.

Design/methodology/approach

The study provides qualitative assessment using insights from policy implementation-related theories. Due to limited reporting of target data on SME participation in India, the study conducts analysis based on key informant interviews with 20 public sector enterprises.

Findings

The evidence drawn from India mainly shows uneven performance among the procurers in achieving the SME procurement targets, and reveals serious policy implementation shortcomings. These findings correspond and complement the earlier studies on SME procurement in the developed world. The Indian case additionally reveals barriers which may be common to other developing countries such as the lack of policy-administrative capacity compounded by the prevalence of “efficiency syndrome” on the part of procurers.

Originality/value

By providing an in-depth developing country-specific assessment, the study helps informing assumptions underpinning SME-oriented procurement policies. The study, therefore, fills a gap in the literature on SME-oriented public procurement policy-making and its execution.

Details

International Journal of Public Sector Management, vol. 30 no. 4
Type: Research Article
ISSN: 0951-3558

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Article

Jarunee Wonglimpiyarat

Today, the financing mechanisms to support small-and medium-sized enterprises (SMEs) development have been a subject of great interest and a challenge to policy makers as…

Abstract

Purpose

Today, the financing mechanisms to support small-and medium-sized enterprises (SMEs) development have been a subject of great interest and a challenge to policy makers as SMEs are regarded as an important sector contributing to economic growth and stability. This paper is concerned with the bank financing policies to support SME development in China. The purpose of this paper is to examine the governmental financing policies and the innovation financing system of China. The discussions are focused on the bank financing policies to support SME development in China.

Design/methodology/approach

This study is a qualitative research with the use of case study methodology (Eisenhardt, 1989; Yin, 2003). The research is focused on the policy perspectives of bank financing to support SME development in the case of China, the world’s fastest-growing economy. To explore the role of financial institutions and banks in SME financing in China, the research also derives evidence from a collection of documentary investigation. The research fieldwork and interviews were undertaken in Beijing and Shanghai, major financial centers in China, with the use of semi-structured questionnaire. The analyses are undertaken to answer the key questions of: What are the Chinese government’s strategies to support the development of SMEs? To what extent the government policies in bank financing can support SMEs and promote the development of an innovative economy?

Findings

The empirical study has shown that despite the introduction of the 12th Five-Year National Economic and Social Development Plan to support SMEs development, China still needs to improve regulatory policies in support of innovative businesses which would help its transition to an innovation-driven economy. The study provides lessons and policy guidelines to improve the competitiveness of SMEs in China. The insights from this study can also be applied to other developing and emerging economies attempting to understand the role of financing mechanisms in building an innovative economy.

Originality/value

The study has addressed the policy challenges to support SME development in China, a major Asian emerging country and one of the fastest-growing economies in the world (with averaged growth rate of 10 percent per annum). The empirical study of policy challenges was undertaken in Beijing and Shanghai, major financial centers in China. The study offers insights which can be applied to other developing and emerging economies attempting to understand the role of SME financing policies and mechanisms in building an innovative economy.

Details

World Journal of Entrepreneurship, Management and Sustainable Development, vol. 11 no. 4
Type: Research Article
ISSN: 2042-5961

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Article

Andreas Herbert Glas and Michael Eßig

One of the major methods to promote small- and medium-sized enterprises (SMEs) in public procurement is to split tenders into lots. The basic assumption is that SMEs have…

Abstract

Purpose

One of the major methods to promote small- and medium-sized enterprises (SMEs) in public procurement is to split tenders into lots. The basic assumption is that SMEs have better chances of awarding smaller or more specialized contracts. This paper aims to investigate whether this widely accepted assumption is correct.

Design/methodology/approach

This article examines four hypotheses about the factors that influence SME success in public procurement. The empirical analysis uses real data from 380 contract award files and logistic regression to test the hypotheses.

Findings

The results show that a higher number of lots in a tender does not significantly increase the success rate of SMEs, and other factors, including the type of public procurement procedure, the number of participating companies and the overall tender volume, significantly influence SME success.

Research limitations/implications

There are several implications for theory and practice, including the need to further strengthen the academic evaluation of public procurement policies, the suggestion to implement SME support instruments in public legislation with the utmost caution in practice and the managerial indication that SME competitiveness is more relevant to their success in public bidding than public support policies.

Originality/value

The findings stand in fundamental contrast to the legal regulations, which postulate that lots are the driving force for SME promotion in public procurement. This is also in contrast to public procurement policies that, for many years, have recommended splitting contracts into smaller lots to become SME-friendly.

Details

Supply Chain Management: An International Journal, vol. 23 no. 1
Type: Research Article
ISSN: 1359-8546

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Article

Andrew Atherton and David Smallbone

The purpose of this paper is to examine state promotion of private sector development in China, with particular emphasis on local configurations of support and service provision.

Abstract

Purpose

The purpose of this paper is to examine state promotion of private sector development in China, with particular emphasis on local configurations of support and service provision.

Design/methodology/approach

Via analysis of two cases, constraints on the development of small‐ to medium‐sized enterprise (SME) support and enabling environments and infrastructures are explored.

Findings

The cases highlight several fundamental constraints to state support for private sector development, including: an under‐developed market for business development and other support services; lack of budgetary facility in municipalities to resource publicly supported services to private SMEs; a lack of expertise within local government to develop mechanisms to engage with and support the development of privately owned enterprises.

Research limitations/implications

The localised nature of implementation of the 2003 SME Promotion Law, at municipal and county level, appears to be a constraint on systematic development of comprehensive SME support systems, as mandated by this law.

Practical implications

First, the private sector has grown without emergence of a purposive infrastructure of direct state support to enable this development, which appears to be a positive outcome from reform. Second, future private sector growth may be constrained should local government not develop mechanisms to engage with the private sector to enable its continued growth and development.

Originality/value

The paper offers insight into current, and future, relations state promotion of enterprise in China.

Details

Journal of Chinese Entrepreneurship, vol. 2 no. 3
Type: Research Article
ISSN: 1756-1396

Keywords

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Article

Max V. Kidalov

U.S. and E.U. public and defense procurement rules require large prime contractors to promote subcontracts to small businesses, a.k.a. small and medium enterprises (SMEs)…

Abstract

U.S. and E.U. public and defense procurement rules require large prime contractors to promote subcontracts to small businesses, a.k.a. small and medium enterprises (SMEs). Under the U.S. Small Business Act, large firms encourage subcontracting through publicity, subcontracting plans, and “good faith” efforts to achieve subcontracting goals. However, processoriented measures failed to guarantee definitive results. In contrast, E.U. and member governments can hold large firms accountable to stricter subcontracting standards (often sweetened by incentives). With the Small Business Jobs Act of 2010, the U.S. is trying accountability measures now. Therefore, large contractors must plan for definitive subcontracting commitments in both markets.

Details

Journal of Public Procurement, vol. 13 no. 1
Type: Research Article
ISSN: 1535-0118

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Article

Marian Crowley-Henry, Edward P. O'Connor and Blanca Suarez-Bilbao

This micro-level study unpacks the recruitment and retention of international professionals to small and medium-sized enterprises (SMEs). The study highlights the…

Abstract

Purpose

This micro-level study unpacks the recruitment and retention of international professionals to small and medium-sized enterprises (SMEs). The study highlights the influence of the founders' international experience when applying organisational-level (meso) policies and practices. With their insider experience as skilled migrants, we share how the founders in each of the SMEs mobilised career capital into human resource management (HRM) strategies.

Design/methodology/approach

Combining literature on SMEs and skilled migrants' careers, we draw upon intelligent career theory to illuminate the recruitment and retention of self-initiated expatriates and skilled migrants in SMEs. With three SME case studies as samples–one micro, one small and one medium-sized organisation in Ireland–we consider the influence of the founders' international experience in the design and application of formal and informal HRM strategies (at the organisational level) that are operationalised to recruit and retain international talent to/in these organisations.

Findings

The HRM practices in the three SME cases in this paper, each run by migrant founders, vary from formalised (for our medium-sized organisation), semi-formalised (for our small-sized organisation) to ad hoc and tailor-made (for our micro-sized organisation). These particular SMEs were often more receptive to hiring other migrants. The important role of the three SME case studies' skilled migrant founders and their own international career experiences was apparent in the particular HRM approaches they adopted. The relevance of intelligent career theory when applying micro-level findings at the meso-organisational level is shown.

Originality/value

The paper presents how the international experience of founder–managers, in turn, impacts on the HRM practices and policies that are implemented to recruit and retain international employees. The study highlights how both organisation size and founder-manager international experience influence the degree of customisation of HRM practices and policies in SMEs, specifically pertaining to the recruitment and retention of self-initiated expatriates and skilled migrant employees. The heterogeneity within the sub-categories encompassed under the umbrella label of SME is emphasised; validating our case study approach, where nuance and detail of the specific organisation can be shared.

Details

Journal of Global Mobility: The Home of Expatriate Management Research, vol. 9 no. 2
Type: Research Article
ISSN: 2049-8799

Keywords

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Article

Calvin W.H. Cheong, Miin Huui Lee and Marc Arul Weissmann

This study investigates the effects of credit access and tax structures on the performance of Manufacturing SMEs in Malaysia.

Abstract

Purpose

This study investigates the effects of credit access and tax structures on the performance of Manufacturing SMEs in Malaysia.

Design/methodology/approach

This study uses the dynamic panel system generalized method of moments, controlling for firm-specific as well as macroeconomic effects

Findings

The paper finds that (1) debt funding is not conducive to SME performance; (2) access to non-bank credit sources and tax incentives support SME performance by lowering opportunity costs of riskier projects; (3) existing tax structures in Malaysia inhibit SME growth and encourage manipulation of accounts; and (4) investors in Malaysia prefer SMEs that are more conservative in their accounting and taxation practices.

Research limitations/implications

Access to Malaysian SME data is restricted. Although robust methods are used, there is a chance that different conclusions may arise with a much larger sample.

Practical implications

The findings provide clear direction in the discussion and enactment of new policies that support SME growth especially in support of non-bank credit sources instead of revising tax policies. The paper also contributes by providing guidance to future SME studies that are inhibited by limited access to data.

Originality/value

SME-related studies on credit access and tax structures have often relied on traditional metrics (e.g. total amount of bank loans; tax expenses) to measure its impact on entrepreneurial/SME performance. Although relevant to the past, financial policies have evolved to embrace Industrial Revolution 4.0. This paper is a shift from the traditional by investigating the impact of new and innovative sources of funding such as incubators and crowdfunding. Also, since one cannot exist without the other, examining the joint impact of credit access and tax structures provides a more holistic view on policy-making, something prior studies have not addressed.

Details

International Journal of Managerial Finance, vol. 16 no. 4
Type: Research Article
ISSN: 1743-9132

Keywords

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Article

Arturo Vega, David Brown and Mike Chiasson

The purpose of this paper is to explore, through the use of a multidisciplinary lens, the policy context and the scope for improvements in university‐based public…

Abstract

Purpose

The purpose of this paper is to explore, through the use of a multidisciplinary lens, the policy context and the scope for improvements in university‐based public programmes focused on improving innovation in small and medium enterprises (SMEs).

Design/methodology/approach

The authors use the street‐level bureaucracy (SLB), combined with the systems of innovation approach (SIA) and diagnostic analysis (DA) to understand the context components that impact on public programme services. The study is part of a research programme oriented to the diffusion of information systems in SMEs and which used original interview‐based programme support case studies, interviews with regional policy managers, and documentation relating to the policy system and different public programmes. Although the empirical work was UK and European Union centric the results of the research have wide applicability.

Findings

The paper establishes the importance of programme contexts for diagnosing and providing a basis for public programme improvements. It further demonstrates the robustness of the context analysis framework to provide insights into proposed policy changes. The responsibility of improving programme contexts relies on actors that operate outside programme organisations, for instance EU funding bodies, government departments in charge of SME policies, public‐private partnerships, and private evaluators. Given this complexity it is suggested that SME associations have a potentially important role in increasing participation by SMEs in the public programme for innovation and knowledge support policy. Despite possible policy changes the requirement for public programme support for innovation and hence the role of universities as programme providers is confirmed and expanded.

Research limitations/implications

The results demonstrate the value of a multidisciplinary framework to analyse programme interventions at both macro and micro levels and provide a basis for programme policy and policy implementation improvements.

Originality/value

This research is a novel attempt to use the SLB, SIA and DA to public programme university‐based interventions in SMEs and SME policies in general. It complements extant research on open innovation and knowledge exchange by extending the concept of public programme contexts. Beneficiaries of the findings include policy makers, programme organisations, universities, SME associations, and researchers.

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