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This chapter studies the effect of increasing formality via tax reduction and simplification schemes on micro-firm performance. We develop a simple theoretical model that yields two intuitive results. First, low- and high-ability entrepreneurs are unlikely to be affected by a tax reduction and therefore, the reduction has an impact only on a segment of the micro-firm population. Second, the benefits to such reduction, as measured by profits and revenues, are increasing in the entrepreneur's ability. Then, we estimate the effect of formality on the entire conditional distribution (quantiles) of revenues using the 1996 Brazilian SIMPLES program and a rich survey of formal and informal micro-firms. The econometric approach compares eligible and non-eligible firms, born before and after SIMPLES in a local interval about the introduction of SIMPLES. We develop an estimator that combines both quantile regression and the regression discontinuity design. The econometric results corroborate the positive effect of formality on micro-firms’ performance and produce a clear characterization of who benefits from these programs.

The purpose of the chapter is to contribute to the discussion as to whether some sort of regulation of professional accountants is warranted, by analysing whether professional qualification of accountants affects the provision of accounting services.

A survey method is used. From a sample of 96 accountants providing accounting services in Slovenia, we estimate the structural equation model and measure competences, knowledge, service mix, customer loyalty and litigation risk.

We find that professional qualification is positively associated with competences. Competences, in turn, are positively associated with knowledge and wider service product mix, but not with customer loyalty and litigation risk.

The respondents are practicing accountants. Their self-evaluation of their knowledge should be treated with caution in terms of the absolute values of assessed knowledge as they are inevitably subjective. For other variables, more objective measures are used.

In the absence of accounting profession regulation, the quality of financial reporting may be particularly vulnerable in micro companies. Although answering the question of whether provision of accounting services should be subject to regulation is not straight-forward, the results of our study provide some guidance for regulatory decision making.

The pandemic had a huge negative impact globally on small and micro firms, particularly on cultural enterprises, making it imperative for them to create strategic solutions for sustainable business models and customer relationships. This chapter studies the digital interventions employed by the micro cultural enterprises in the Japanese Onsens (Hot baths) sector during the pandemic period in Japan. Using the theoretical lenses of service dominant logic and value creation, the study extracts four prominent value creation processes from the analysis of the employed secondary data. The study underlines the importance of collaboration between a firm's internal and external resources, their creative use of operant resources, and a robust customer orientation leading to creative digitalization. The results of the study show how cultural enterprises can rethink customer service in the cultural and creative sector. It also draws attention to the need for more robust policies and support systems that can encourage global cultural enterprises to develop sustainable business models.

Small traditional industry has been recognized as an important local economy that support cultural industry and is significant in many parts of the world, particularly in developing countries. The significance of this type industry as a poverty barrier, enables jobs for local rural villagers, and their role in continuing local community based cultural activities have become obvious. However, as the current modern days global pressures affecting many traditional people in developing countries, pathways of small traditional industry toward local sustainable development remain unclear. Further continuous investigations are still required on how this industry provide the platform for greater local, regional and global sustainability. Literatures and debates on the sustainability of the rural developing country concerning small traditional industries may even begin from the establishment of Brundtland sustainability commission in 1987. The conflict between brown and green agenda in Brundtland commission may also point to small-scale traditional industry growth in the developing world. Cultural traditional industries in developing countries could better lead to local sustainability pathway. On the other hand, conflict of the use of natural resources and competition may create different stories. How traditional industry in developing country survive and further innovate for development is a significant knowledge to understand. This chapter uses Jepara traditional furniture industry in Central Java – Indonesia which has been the subject of prolonged study on how small-scale industry implicated to global competition and pressures of raw material resources decline. This chapter further reviews previous research and recent study on Jepara industry upgrade and innovation, and how likely innovation may prosper for the future sustainability of this type of industry.

Micro and small enterprises (MSEs) represent 99% of Peruvian firms, contribute 42% of Peru's Gross Domestic Product, and employ half of the country's labor force. Despite their relevance for the Peruvian Economy, they have low survival rates and are characterized by low productivity and processes inefficiencies. This chapter explores whether the adoption of Business and Supply Chain Management (SCM) practices influences MSEs' performance. We conducted a field study using data from 50 MSEs located in Piura, Peru, specifically from trade, service, and manufacturing sectors. We used the data collection guidelines from the MIT GeneSys to measure the firms' adoption of Business and SCM practices. Our results show that MSEs with higher adoption of Financial Planning, Supply Chain Planning, Supplier Relationship Management, Marketing, Procurement, and Stock Control practices are more likely to have higher revenue (i.e., sales). In addition, a multiple regression analysis reveals that while SCM practices do not seem to directly explain productivity growth in MSEs (as business practices do), they, however, seem to influence the performance of business practices, and, thus, have an indirect effect on the productivity growth of MSEs.

The need for policy to focus on Gozo in the overall developmental needs of Malta is justified on the basis of the indispensable contribution provided by Gozo to the national economy as well as its positive economic growth and well-educated labour force. This indicates that Gozo is not a region to be abandoned but one that requires policy actions to support the growth of micro and small business, facilitate employment, improve residential attractiveness in the territory and develop innovative approaches towards the sustainable development of the island region. The Gozo success story must be extended further, and there is more in the pipeline to sustain and support the restructuring of existing businesses as well as attract new small and micro business that has a strong strategic fit with Gozo’s development model.

The study here responds to the view that the crucial problem in strategic management (research) is firm heterogeneity – why firms adopt different strategies and structures, why heterogeneity persists, and why competitors perform differently. The present study applies complexity theory tenets and a “neo-configurational perspective” of Misangyi et al. (2016) in proposing complex antecedent conditions affecting complex outcome conditions. Rather than examining variable directional relationships using null hypotheses statistical tests, the study examines case-based conditions using somewhat precise outcome tests (SPOT). The complex outcome conditions include firms with high financial performances in declining markets and firms with low financial performances in growing markets – the study focuses on seemingly paradoxical outcomes. The study here examines firm strategies and outcomes for separate samples of cross-sectional data of manufacturing firms with headquarters in one of two nations: Finland (n = 820) and Hungary (n = 300). The study includes examining the predictive validities of the models. The study contributes conceptual advances of complex firm orientation configurations and complex firm performance capabilities configurations as mediating conditions between firmographics, firm resources, and the two final complex outcome conditions (high performance in declining markets and low performance in growing markets). The study contributes by showing how fuzzy-logic computing with words (Zadeh, 1966) advances strategic management research toward achieving requisite variety to overcome the theory-analytic mismatch pervasive currently in the discipline (Fiss, 2007, 2011) – thus, this study is a useful step toward solving the crucial problem of how to explain firm heterogeneity.