Firm-Level Determinants of the Financing Decisions of Small and Medium Enterprises: Evidence from Argentina

This article studies the determinants of the financing decisions of small and medium enterprises (SMEs), which we characterize through three cases: trade-off behavior, pecking order, and extreme aversion to debt. We test our hypotheses using a dataset of firms from Bahía Blanca (Argentina) for two years: 2006 and 2010. We find that firm characteristics related to information asymmetries, such as firm age, size, and legal form; and personal factors, such as owner’s age and education; and perception of emotional bankruptcy costs, are relevant variables in SME financing behavior. The recognition of extreme aversion to debt motivates reconsideration of the underleverage problem of SMEs.     

The role and function of the independent small shop: the situation in Scotland

Independent shops are numerically dominant in the British retail system, providing a range of functions and roles in various locational situations. Reporting on survey work in Scotland with independent shop owners and their customers, this paper details these roles and functions as well as attitudes towards the provision. The community and social role played by these shops in certain locations is emphasized, while in others a breakdown of trust between retailers and consumers is identified. Policy making about independent retailing needs to understand more closely these differences by locational type.     

Role conflict and changing heritage practice: ancestral tourism in Scotland

ABSTRACT

Developing mutually beneficial outcomes in service encounters can be challenging due to resource asymmetry within co-created experiences. Such encounters can result in role conflict for service providers. Limited attention has been paid to the effect on service providers of highly collaborative exchanges which require specific customisation. An example of this is ancestral tourism, a dimension of heritage consumption, in which visitors actively participate in the co-creation of experience at museums, archives and related heritage sites. These institutions, previously seen as repositories of historical information, now act as conduits for visitors to investigate their ancestral past. The purpose of this study is to explore the relationship between changing professional discourse in the cultural heritage sector, specifically ancestral tourism, and role conflict amongst staff. Through interviews conducted with professionals, the extent and outcomes of role conflict in complex and collaborative exchanges are explored.     

Perceived Environmental Uncertainty and Innovation in Small Firms

Employing data, from a recent survey of Scottish and Northern English Small- and Medium-sized Enterprises (SMEs), the current paper provides new evidence of the extent to which perceptions of environmental uncertainty (dynamism, complexity and hostility), along a number of dimensions, discriminate between small firms engaged in various levels of product innovation. Drawing, broadly, upon an extended version of the classic Miles and Snow schema, novel innovators appear to be marked by perceptions of uncertainty in market and technological environments, but by perceptions of a relatively certain or benign competitive environment. Moreover, the paper observes some dissimilarities between manufacturing and service firms. For instance, higher levels of innovation in manufacturing firms are associated with higher perceptions of supplier uncertainty, whilst, higher levels of innovation in service firms are associated with higher perceptions of human resource uncertainty.     

The Financial Structure of Private Held Belgian Firms

We examine the determinants of the debt-equity choice and the debt maturity choice for a sample of small, privately held firms in a creditor oriented environment. Our results, which are based on 4,706 firm-year observations for 1132 Belgian firms in the period 1996–2000, generally confirm the role of asymmetric information and agency costs of debt as major determinants of the financial structure of privately held firms. High growth firms and firms with less tangible assets have a lower debt ratio. We also find that more profitable firms have less debt. Firms tend to match the maturity of debt with the maturity of their assets. Growth options do not seem to influence debt maturity, which would suggest that the underinvestment problem is resolved by lowering leverage and by bank monitoring, not by reducing debt maturity. Credit risk is also an important determinant of debt maturity: firms with higher credit risk borrow more on the short term. Finally, in contrast to most studies on the financial structure of companies, we find that larger firms tend to have a higher debt ratio and a shorter debt maturity.      

Employment change in independent owner-managed high-technology firms in Great Britain

There is a growing volume of literature that points to the potential for small technology-based firms to achieve substantial employment growth. As a direct consequence of such work this sector of any economy has attracted increasing attention from national and local Governments concerned with finding ways of revitalising economically deprived localities and creating employment opportunities. This paper provides up-to-date empirical evidence surrounding the ability of small high-technology firms to create additional jobs in Great Britain. In addition, key founder and business characteristics are isolated which are significantly associated with employment change in growing high-technology firms over the 1986 to 1992 period. With respect to factors influencing these high levels of employment growth, a high firm size (in 1986) was found to act positively on employment growth, as was a graduate level education for the key founder. On the finance side firms which had access to and used a multiplicity of sources of start-up finance tended to grow faster. Futher, on the basis of our results we would suggest (and recommend) a Government policy which at the firm level actively encourages high-technology firm start-ups (who record higher rates of survival than firms in more conventional sectors) as well as providing support for existing high-technology firms who have already demonstrated the inclination and ability to grow in employment size.     

Factors influencing take-up rates on the Loan Guarantee Scheme

This paper uses time-series analysis to model explicitly the take-up rate of the UK Government's Loan Guarantee Scheme over the 1980s. In doing so we consider the rationale for the scheme in the context of empirical and theoretical research into the financing of small businesses and in particular the nature of the small firm/bank relationship. To begin we discuss the history and evolution of the scheme from its inception in 1981. A theoretical model is then outlined in which LGS funds are used to maximise the utility of capital constrained entrepreneurs.Using this framework we find that the UK Government can do much to influence the levels of both take-ups and failures of firms on the scheme by directly altering the parameters. The scheme's apparent success as a [relatively] cost-effective job generation package suggests more could be done to extend the scheme to aid more start-up firms and those existing firms wishing to expand.     

Food shopping behaviour in Scotland: the influence of relative rurality

Despite a number of studies investigating consumer food purchase behaviour, few studies actually address the nature of the rural consumer. This may have implications for the generalization of much research on food purchase behaviour, as official estimates of the UK rural population vary between 8.5% and 24%. This paper compares and contrasts the food shopping behaviour of customers in rural and urban areas in Scotland. Particular focus is given on respondent characteristics, attitudes towards rural and urban locations, distance travelled for food shopping purposes and store patronage. Results from the research emphasize the notion that rural and urban retailing should be conceptualized as a continuum rather than being regarded as dichotomous, and a conceptual framework is proposed.     

Entrepreneurship in the Region: Breeding Ground for Nascent Entrepreneurs?

This paper employs data from the German Socioeconomic Panel (SOEP) and data from the German Social Insurance Statistics to study nascent entrepreneurship. In particular, micro data from the SOEP characterizing employees and nascent entrepreneurs is combined with data characterizing the entrepreneurial environment. The principal findings suggest that individuals are embedded in their local entrepreneurial environment which influences an individual especially at the beginning of the decision process about whether to become self-employed. Work and previous self-employment experience is more important than formal education for the likelihood of being a nascent entrepreneur. Furthermore, social capital is an important stimulus for nascent entrepreneurs. Finally, the results indicate that financial assets are less important for nascent entrepreneurs.     

Access to Financing in a Small Island Economy: Evidence From Mauritius

This relationship between access to financing and firm characteristics was studied. The authors used data from a survey of small and medium-sized enterprises from Mauritius, an island economy that is part of the sub-Saharan African continent. They examined the factors that affect the ability of firms to gain access to financing. Using the principal component analysis, the authors group variables affecting access to financing in four main components including working capital constraint, the external constraint, the size constraint, and the age constraint. The authors show that these components are important factors that influence the ability of firms to gain access to financing.     

Bank Debt Use and Firm Size: Indian Evidence

The paper employs a sample of listed Indian manufacturing firms over the period 1995–2004 to examine the factors influencing the concentration of bank debt in total debt. The results indicate that the factors vary by firm size. Small to medium-sized firms have a high concentration of bank debt. The results support the reputation view that firms face differential debt choice as they grow larger. When evaluating bank regulations, policymakers need to consider the importance of the reputation-building service which banks provide to businesses.     

Entrepreneurship and knowledge management in small service-sector firms

The purpose of the paper is to examine the performance of small UK service-sector firms during a period of poor economic conditions in relation to entrepreneurial behaviour and knowledge management. A mail survey of small rural hotels was undertaken. Hotels achieving higher sales growth exhibited an entrepreneurial orientation and have created effective knowledge management systems. The practical implications of the study are that service firms seeking to survive in turbulent times should focus upon adopting entrepreneurial solutions and the creation of effective knowledge management systems. The originality of this study is in providing empirical evidence of the advantages of small UK service-sector firms during the current economic downturn adopting an entrepreneurial orientation in order to sustain business performance.     

Job generation and new and small firms: Some evidence from the late 1980s

This paper adopts a components of employment change methodology and examines the process of job generation in the late 1980s for three contrasting regions of the United Kingdom. The emphasis in the analysis is on the contribution of new and small firms to regional manufacturing employment growth. The results indicate the important role of new and small indigenous firms in the job generation process, particularly in Northern Ireland, in the period 1986–90. However, the level of displacement associated with these job creations is sufficiently high to cause concern about the longterm sustainability of these trends. The paper concludes by arguing that policies designed to stimulate new firm formation and small firm growth are not in themselves sufficient to promote growth.     

The role of entrepreneurial capital in building service reputation

This paper uses theories of capital to discuss the impact of non-financial capital on small service firm reputation and performance. As the success of service firms is predicated on the ability to develop relationships and build reputation with key stakeholders, theories of capital provide a relevant conceptual framework for exploring the use of non-financial capital in building such relationships. Drawing on findings from a qualitative study, this paper discusses the economic, human, social, and symbolic capital of a matched-pairs sample of male and female entrepreneurs in the business services sector. The results highlight a relationship between symbolic capital and service reputation. Specifically, the interplay between economic, human, and social capital generates the symbolic capital relevant for service reputation and firm performance.     

Early Experiences of the Enforcement of the Unfair Commercial Practices Directive in Scotland

This exploratory study examines the early impact of the Unfair Commercial Practices Directive 2005/29/EC on enforcers in Scotland within the context of current policy developments regarding the use of civil and criminal enforcement mechanisms within the UK. The Directive has been implemented in the UK by means of the Consumer Protection from Unfair Trading Regulations 2008 SI 1277 and the duty to enforce the Regulations falls primarily to local authority trading standards services. Twenty-one in-depth interviews were conducted with a range of officers employed within the trading standards service based in eight local authorities in Scotland on their perceptions of the new Regulations. The main findings were that officers’ views of the new Regulations and the civil and criminal enforcement routes available to them was affected by structural, operational, and cultural issues which varied from one authority to another. A number of officers were finding the Regulations a challenge to old ways and there was evidence that many felt unprepared for the Regulations. A number of positive views were expressed regarding the flexibility of the new Regulations and the advantages of the provisions relating to misleading omissions. Overall officers’ experiences of the Regulations were heavily influenced by the complaints received by their particular local authority service.     

Student Work Placements in Small Firms: Do They Pay-off or Shift Tastes?

We present a model of training investments and employment outcomes. In this model training may enhance trainees’ tastes for particular types of career (taste shift) and/or shift their wage offer distributions (pay-off). An empirical analysis is conducted with a unique data-set of UK graduates. These data contain information on students’ career tastes before small-firm placements as well as their employment outcomes after graduation. Analysis of these data indicates that the placements provide a pay-off among highly employable graduates who face certain disadvantages in the labour market. Conversely individuals, who expressed a taste for small-firm careers before placements, are more likely to take-up small-firm employment after placements suggesting these individuals experience enhanced opportunities for their preferred career. However individuals with pre-placement large-firm preferences have no greater likelihood of entering small-firms’ employment after placements indicating there is no fundamental effect on career tastes.     

论民营中小企业医疗保障制度的建设

民营中小企业医疗保障制度是我国社会保障制度的重要内容之一。但由于政策与法律监督的缺位、劳动力市场供大于求、民营中小企业的劣势地位、企业主和职工的短期行为等因素的困扰,民营中小企业医疗保障存在着参保率普遍偏低、企业参保状况参差不齐、保障明显不足等问题。民营中小企业医疗保障制度建设的重点应是建立和完善大病医疗保险制度,同时要加快立法步伐,明确政府职责,加强保险资金的科学管理,夯实医疗保障的微观基础,发展和完善医疗救助制度,为民营中小企业医疗保障制度建设扫除障碍。     

Closing the regional equity capital gap: The role of informal venture capital

There is evidence from a number of countries that small firms encounter a shortage of long-term investment finance, particularly at start-up and initial growth. Expansion of the institutional venture capital industry has done little to fill this equity gap on account of its preference for making large investments in established companies and management/leveraged buyouts. Moreover, the supply of venture capital exhibits a high level of spatial concentration. Initiatives by state/provincial and local governments, most notably in economically lagging regions, to increase the supply of risk capital for start-ups and early stage businesses have at best provided a very partial, and often costly, solution. A more appropriate approach to increasing the supply of start-up and early stage finance is to facilitate the more efficient operation of theinformal venture capital market. Informal investors, or business angels, are private investors who provide risk capital directly to new and growing businesses in which they have no family connection. Most business angels are unable to find sufficient investment opportunities and so have substantial uncommitted funds available. There is also considerable scope for expanding the population of business angels. The most cost-effective means of closing the equity gap is therefore for the public sector to underwrite the operating costs of business introduction services whose objective is to overcome the two main sources of inefficiency in the informal venture capital market, namely the invisibility of business angels and the high search costs of angels seeking investment opportunities and entrepreneurs seeking investors, by the provision of a channel of communication between informal investors and entrepreneurs seeking finance.     

Export stimulation of micro- and small locally owned firms from emerging environments: New evidence

This paper reports the findings from an empirical investigation into the export stimulation behaviour of micro- and small locally owned firms. It investigates whether the decision to initiate exporting in these smaller firms is a result of a systematic planned investigation into foreign market opportunities or is a mere response to fortuitous circumstances. This issue has received extensive attention in the literature on the internationalisation of firms from large developed environments, but very little is known about it in emerging environments especially small, open economies. This study will add to the literature by investigating export stimulation from a small, emerging Caribbean economy, Jamaica. Using a quantitative approach supported by insights from qualitative data gained during the fieldwork, the study analysed 20 stimuli that are demonstrated to impact export initiation decision. The key finding reveals that export initiation is a result of a planned systematic approach to international market rather than a mere response to fortuitous circumstances. The originality of this finding is in its extension of earlier work from developed economies to an emerging, resource-poor, open economy and its departure from analysing large and multinational firms to focus on micro- and small locally owned firms.