The productivity payoff of information technology in multimarket SMEs

This paper examines the effects of information technology (IT) adoption on the productivity of multimarket small and medium-sized enterprises (SMEs). The main hypothesis is that IT usage increases efficiency to a higher degree in diversified and internationalized firms compared with single-market SMEs. This hypothesis is tested using a large sample of more than 2,000 Spanish SMEs. Overall, intensive use of IT in operations processes is found to be associated with substantial increases in productivity of firms following both related and unrelated diversification. Also, exporting firms with more intensive use of IT have higher productivity. These results are consistent with previous theoretical arguments on the relationship between IT and efficiency of firms and open future research directions related to the role played by IT in the management control systems of both diversified and exporting firms.     

Combining Information Technology and Decentralized Workplace Organization: SMEs versus Larger Firms

This paper examines whether information technology (IT) and decentralized and incentive-based workplace organization are complementary only for large firms or also for smaller firms. Previous empirical evidence suggesting complementarity between IT and decentralization is mainly based on large firms. Using data from a sample of 3,288 small and medium-sized enterprises (SMEs) and 595 larger firms from the manufacturing and service sector in Germany, it appears that SMEs with decentralized and incentive-based work practices tend to use IT more intensively. Moreover, for the sample of SMEs, IT and workplace organization are individually associated with higher productivity, but the combination of IT and decentralization does not yield a productivity premium. In contrast, the productivity of IT depends positively on decentralization for large firms. The findings suggest that combining IT and decentralized workplace organization seems only to be a successful strategy for larger firms.     

The Influence of IT Management Sophistication and IT Support on IT Success in Small and Medium‐Sized Enterprises

This study examined three factors that influence information technology (IT) success in small and medium‐sized enterprises (SMEs): internal IT support, external IT support, and IT management. Using survey data gathered from 289 small and medium‐sized Chartered Accounting firms in New Zealand, the results suggest that IT management in SMEs is best understood as a multidimensional concept consisting of practices related to: IT planning, IT organizing, IT controlling, and IT leading. This view clarifies and improves our understanding of the nature and character of IT management in SMEs. The results show that some SMEs are significantly more sophisticated than others in terms of their IT management practices. Both IT planning and IT leading were found to influence IT success.     

Adoption of Enterprise Application Software and Firm Performance

Due to the rapidly changing business and IT environments, firm-level adoption of IT shifted from in-house development to purchasing EA software. This paper analyzes the effects of EA (Enterprise Application) software – ERP, CRM, SCM, Groupware, KM, EAI – on SMEs’ productivity. The distinct feature of this paper is that I use a formal econometric approach with combined data of SMEs’ accounting and IT usage aspects, while case studies have been mostly used in the previous works. The empirical results show that Groupware and SCM significantly raise the SMEs’ productivity, and the manufacturing sector has stronger effects than the service sector. From these results, the following implications are derived. First, the adoption rate and the real benefits of EA software are not closely related domestically. Second, in SMEs, EA software facilitating the inter-firm relationship is more effective than EA software focusing on the internal efficiency. Third, easy-to-understand, and relatively long-experienced enterprise applications are more effective than hard-to-understand and brand-new applications. Finally, the government IT policy on SMEs should focus on the process coordination and standardization of the manufacturing sector with upstream and downstream firms.     

China goes global: public policies' influence on small- and medium-sized enterprises' international expansion

Despite small- and medium-sized enterprises' (SMEs) significant contribution to China's social and economic development, very little has been written about the influence that public policies (i.e. public funding priorities and regulatory measures) may have on the first stage of international expansion of Chinese SMEs. To help fill this gap, the article analyses five main factors related to public policies and services affecting Chinese SMEs' internationalization: access to public financial resources; participation of the government in ownership; access to public procurement contracts; adverse regulatory and inconsistent legal frameworks; and public assistance on information and knowledge about markets. The main conclusion is that SMEs appear to base their international expansion on private capabilities, rather than on support from the government; in addition, the perceived barriers for the international expansion of these firms may be mainly internal, rather than institutional.     

Do Small and Medium‐Sized IT Firms Form Service Partnerships with Nonlocal IT Firms? An Assessment of Facilitators

For small and medium‐sized information technology firms (IT SMEs), the service partnerships formed with other IT firms are strategic instruments to overcome their resource constraints, increase efficiency, and offer complementary services to their customers. Although these firms have a tendency to form local partnerships due to ease of trust building, few of them are engaged in nonlocal partnerships. This research aims to explore the facilitators of this divergent firm behavior. The findings suggest that a firm's alliance capabilities and organizational proximities between distant partners can substitute the lack of geographical proximity and enable IT SMEs' engagement in nonlocal service partnerships. More importantly, the type of IT service rendered through the partnership acts as a moderator and determines the extent of the organizational capabilities and proximities.     

What holds back high-growth firms? Evidence from UK SMEs

High-growth firms are seen as vital for economic growth. It is important for policy and theory to consider the barriers faced by firms achieving high growth and those with the potential to do so. This article uses data for 4,858 UK SMEs to investigate the obstacles perceived by two sets of firms: (1) firms in periods of high growth and (2) potential high-growth firms, which are observationally similar but are not achieving high growth. The results suggest high-growth firms perceive problems in six areas: recruitment, skill shortages, obtaining finance, cash flow, management skills and finding suitable premises. Potential high-growth firms feel held back by the economy, obtaining finance, cash flow and their management skills, but are less likely to perceive regulation is a problem. The results have implications for theory on high-growth firms and policies focussed at them.     

Barriers to Innovation among Spanish Manufacturing SMEs

Innovation is widely recognized as a key factor in the competitiveness of nations and firms. Small firms that do not embrace innovation within their core business strategy run the risk of becoming uncompetitive because of obsolete products and processes. Innovative firms are a perquisite for a dynamic and competitive economy.
This paper reports on the results of a study that examined barriers to firm innovation among a sample of 294 managers of small and medium-sized enterprises (SMEs) in Spain. The study examined the relation between (1) product, process, and management innovation and (2) 15 obstacles to innovation, which can limit a firm's ability to remain competitive and profitable. Findings of the study show that barriers have a differential impact on the various types of innovation; product, process, and management innovation are affected differently by the different barriers. The most significant barriers are associated with costs, whereas the least significant are associated with manager/employee resistance. Additionally, the results demonstrate that the costs associated with innovation have proportionately greater impact on small than on larger firms.
The findings can be used in the development of public policy aimed at supporting and encouraging the innovation among SMEs in Spain. Government policies that encourage and support innovation among all firms, especially small firms, can help countries remain competitive in a global market. Public policy that encourages innovation can enable firms to remain competitive and survive, both of which have direct implications for employment and a country's economic viability. The results may also be insightful for managers who are attempting to encourage innovation. Understanding barriers can assist managers in fostering an innovative culture by supporting new ideas or by avoiding an attitude that creates resistance to new ideas.     

How firms finance innovation. Further empirics from European SMEs

This paper aims to evaluate the role played by different sources of financing when analyzing firms' attitudes towards innovating. The empirical investigation is based on a large sample of European small and medium-sized enterprises (SMEs) observed over the period 2012–2017. Different measures of finance and several robustness checks are used to select a well-behaved probit model. The results show that the probability to innovate increases when firms use internal financing and grants. The same applies when funds come from family and friends, while no conclusive evidence is found for bank loans. Recommendations for public policy to encourage firm-tailored policies to promote investment in intangibles allow firms to benefit from innovation activities. European SMEs will also benefit from capital market developments and the advancement of new financial tools devoted to supporting innovation.     

Problems and environment of small businesses in the Czech Republic

The impressive and spontaneous build-up of the private small and medium-sized enterprises (SMEs) in the Czech Republic in 1990–93 coincided with the similarly dramatic changes in the public administration and in the whole environment for decision-making. The resulting problems of SMEs in the Czech Republic seem to be common to all economies in transition. A lot of the problems are caused by the macroeconomic policy for which this sector is not the most important part of the national economy. The paper shows some conflicts between macroeconomic anti-inflationary (monetary and fiscal) policies, and interests of small businesses. The authors stress the importance of SMEs during the period of transition. Informal aspects of the functioning of small firms are discussed, especially their relation with banks and public administration. The paper offers some empirical evidence and available statistics on SMEs developments during 1990–94 focusing particularly on manufacturing.     

Rigidity in SME export commencement decisions

In an increasingly globalised world, firms generally have become more internationalised utilising a range of different modes of operation. In the case of small-medium sized enterprises (SMEs), exporting is the favoured mode of international market entry, at least in the early stages of internationalisation, and many governments have supported SME exports through export promotion policies because of the importance of SMEs in employment creation. However, in spite of this policy focus, in most countries, the proportional involvement of SMEs in exporting remains low, which raises an important question as to what factors are inhibiting firms that are successful domestically from exporting. In addressing this question, much scholarly research has focused on the broad concept of ‘export barriers’. These barriers, for example, tariffs, quotas and administrative obstacles, are seen as a primary source of export reluctance. This paper takes a different approach to previous studies and proposes that a firm's resistance to exporting can be better understood through an analysis of the behavioural decision process of firms in line with the Uppsala internationalisation model. We propose ‘lateral rigidity’, first introduced in the literature in the 1970s, as an important concept in export commencement. By applying factor analysis to a survey of Australian SMEs, we provide a measurement model for lateral rigidity, revealing its important factors and thus strengthening understanding of firms' export commencement decisions. We conclude by drawing implications for internationalisation theory, practice and public policy and suggesting ways to extend this work through future research.     

Tax incentives… or subsidies for business R&D?

We study whether firms’ actual use of R&D subsidies and tax incentives is correlated with financing constraints -internal and external- and appropriability difficulties and investigate whether both tools are substitutes. We compare the use of both policies by SMEs and by large firms and find significant differences both across instruments and across firm size. For SMEs, financing constraints are negatively correlated with the use of tax of credits, while they are positively associated with the likelihood of receiving a subsidy. The use of legal methods to protect intellectual property is positively correlated with the probability of using tax incentives, but not with the use of subsidies. For large firms external financing constraints are correlated with instrument use, but results regarding appropriability are ambiguous. Our findings suggest that (1) direct funding and tax credits are not perfect substitutes in terms of their ability to reach firms experiencing barriers associated to market failures; (2) one size may not fit all in innovation policy when the type or intensity of market failure differs across firm size, and (3) subsidies may be better suited than tax credits to encourage firms, especially young knowledge-based firms, to start doing R&D.     

Accounting information quality and trust as determinants of credit granting to SMEs: the role of external audit

This study analyses whether loan officers’ perception of the accounting information quality (AIQ) and the trustworthiness of SMEs are associated with a better willingness to grant them credit. Empirical evidence is obtained from a survey of 471 bank loan officers in Spain, who are asked to answer in relation to audited and not-audited firms. Using a Structural Equation Modeling (SEM) approach, the results obtained confirm that the loan officers’ willingness to facilitate SMEs’ access to credit is positively influenced by their general perception about the AIQ, but only if it is audited. In the case of not-audited firms, AIQ does not play a direct role in credit granting decision, but is relevant in trust formation. Besides, in the case of audited firms, only the “competence” dimension of trust is relevant, whereas in not-audited firms, both “competence” and “honesty” have an impact on credit granting. “Benevolence” does not have an influence in any case. The study has implications for SMEs, banks, policy makers and auditors.     

Unpacking Coordination Benefits in Supply Networks: Findings from Manufacturing SMEs

This paper examines how coordination among firms in supply networks generates benefits in the short and long terms for firms. It focuses on information technology (IT) and process improvement coordination. Analysis was performed on quantitative and qualitative data from a sample of SMEs in plastics manufacturing in Pennsylvania. Results indicate that coordination on both IT and process improvement leads to short‐ and long‐term benefits. These relationships were mediated by the adoption of innovations (when coordinating on IT) and access to new capabilities (in process improvement coordination). These results extend the understanding of how participation in supply networks benefits individual firms.     

Electronic Commerce and the Future for SMEs in a Global Market-Place: Networking and Public Policies

This paper explores three inter-related issues: globalisation; the role of small and medium sized enterprises (SMEs); and electronic commerce (e-commerce). A central question is whether e-commerce offers advantages to SMEs that may facilitate their access to global markets and help them overcome the disadvantages they face vis-à-vis large transnational corporations (TNCs)? The paper starts by briefly considering the extent of globalisation and its relationship to free trade. We then go on to consider recent developments in e-commerce, focusing on the key issue of e-payment systems. Differences in the requirements of large and smaller firms are identified, and we identify a number of key issues concerning access of smaller firms to e-payment systems and the (virtual) market place, and outline their implications for regulatory policy. Our analysis highlights the importance of network externalities, and institutional factors affecting trust and the relationships amongst different economic actors. This leads to a consideration of networking and public policies more broadly. One of the central conclusions of our analysis is that there are important synergies between e-commerce (virtual) networks and (real) production networks. This suggests that policy makers and smaller firms should think in terms of extending existing, and catalysing new, real production networks to incorporate e-payment systems for networks of firms in order to facilitate their access to virtual markets.

     

Fueling Innovation through Information Technology in SMEs*

This paper describes a study that investigates the mediating effects of information technology (IT) on the relationships among product and process innovations and firm performance (measured in multiple profitability and growth rate metrics). Using structural equation modeling on a sample of 397 small and medium‐sized enterprises (SMEs), we find evidence that (1) increases on the strategic emphasis placed on innovation, both product and process, positively impact the prominence managers place on IT; (2) the impact of innovation (both product and process) on performance (both profitability and growth) is primarily indirect, felt via the mechanism of the importance managers place on IT; and (3) an increased emphasis on IT abets managers' perception of their firms' performance, as compared with that observed among peer firms (other SMEs).     

Industrial Policy, FDI and Employment: Still ‘Missing a Strategy’

This paper contrasts the effects of trade, inward FDI and technological development upon the demand for skilled and unskilled workers in the UK. By focussing on industry level data panel data on smaller firms, the paper also contrasts these effects with those generated by large scale domestic investment. The analysis is placed within the broader context of shifts in British industrial policy, which has seen significant shifts from sectoral to horizontal measures and towards stressing the importance of SMEs, clusters and new technology, all delivered at the regional scale. This, however, is contrasted with continued elements of British and EU regional policy which have emphasised the attraction of inward investment in order to alleviate regional unemployment. The results suggest that such policies are not naturally compatible; that while both trade and FDI benefit skilled workers, they have adverse effects on the demand for unskilled labour in the UK. At the very least this suggests the need for a range of policies to tackle various targets (including in this case unemployment and social inclusion) and the need to integrate these into a coherent industrial strategy at various levels of governance, whether regional and/or national. This has important implications for the form of any ‘new’ industrial policy.     

Beyond Environmental Regulations: Exploring the Potential of “Eco-Islam” in Boosting Environmental Ethics Within SMEs in Arab Markets

The recent global increase in environmental regulation does not necessarily signal improvement in firms’ ecological imprints. Like many markets, the Arab world is struggling to implement environmental compliance measures among local firms. For Arab countries, the reliance solely on formal policies to improve local firms’ ecological footprints may be risky given the evident institutional challenges to enforce environmental regulations, specially post the Arab Spring. Drawing from the literature highlighting the merits of combining formal and informal controls to ensure successful implementation of a strategy, we argue that the emphasis for regulation must be accompanied by an emphasis for developing environmental ethics of individuals, who are the expected implementers of any environmental policy. In that light, we propose that the Eco-Islam phenomenon can serve as an influential and effective foundation for building organizational cultures with stronger environmental ethics among local small and medium enterprises (SMEs). We explain the underlying maxims of Eco-Islam then conduct qualitative research among experts preaching or practicing the concept to gain better insights into the potential of leveraging it in Muslim-majority Arab countries. Finally, we conclude with insightful implications for local SMEs in the region.     

现行中小企业税收政策浅析

从各方面大力扶持中小企业发展是我国的一项重要政策，而在所有的扶持手段中，税收政策是最有效的宏观调控政策。本文从中小企业的定义出发．指出我国现行中小企业税收政策中存在的一些不足，提出改革和完善相关税收政策的几点建议。     

SMEs and environmental responsibility: a policy perspective

Environmental policies to promote environmentally sustainable economic activity have often concentrated on larger firms. However, increasing attention is being paid to the role of small‐ and medium‐sized enterprises (SMEs) and entrepreneurial actors. In this paper, we examine how policy tools are being used to improve the environmental performance of SMEs and to redirect entrepreneurial energies in more environmentally benign directions. The empirical section adopts a case‐based comparative method to examine four instances of policymaking, drawn from different countries and industry sectors. The paper argues that while some interventions have proved effective in their own terms, better integrated approaches are required to address today's complex and deep‐rooted sustainability challenges. The paper identifies several policy implications including the need to: clarify the purpose of any intervention, address potential interactions and trade‐offs; select appropriate tools based on informed reviews of the options; remain sensitive to context‐specific factors; and devise effective vehicles for the promotion and governance of entrepreneurial initiatives.