U.K. SMEs' decision to discontinue exporting: an exploratory investigation into practices within the clothing industry

Although the decision to internationalise has been viewed in certain studies as an entrepreneurial act, research has also indicated that some firms may be better served in concentrating on their domestic market, depending on a number of internal and external considerations associated with the profitable exploitation of identified opportunities. This investigation reports on first, reasons why a sample of executives from small firms discontinued export activities and second, perceptions towards policy assistance that may motivate them to recommence overseas activities in the future. Analysis in this study establishes that differences exist between two distinct groups of firms, namely, those indicating their discontinuation of exporting was a short-term measure compared with those that viewed the decision as longer term. Entrepreneurial learning was found to be present in firms that influenced some managers to overcome identified obstacles and engage in alternative modes of international activity to the export route, whereas others decided to pursue domestic opportunities. The study provides recommendations for policymakers in the provision of trade assistance programs.     

How venture capital firms differ

Four potential sources of differences between venture capital (VC) firms were examined—venture stage of interest, amount of assistance provided by the VC, VC firm size, and geographic region where located. Through a questionnaire, 149 venture capitalists provided data about their firms, about what they look for in evaluating an investment, and about how they work with a portfolio company following an investment.Firms were divided into four groups based on venture stage of interest. The earlier the investment stage, the greater the interest in potential investments built upon proprietary products, product uniqueness, and high growth markets. Late-stage investors were more interested in demonstrated market acceptance.There were no differences by stage regarding the desired qualities of management. However, after the investment was made, earlier stage investors attached more importance to spending their time evaluating and recruiting managers. Earlier stage investors sought ventures with higher potential returns—a 42% hurdle rate of return for the earliest stage investor versus 33% for the late-stage investor.Late-stage investors spent more time evaluating a potential investment. However, after the investment was made, there was little difference in the amount of time spent assisting the portfolio company. There were, however, differences in the significance that VCs attached to particular post-investment activities. Firms were split into three groups based upon the amount of time the VC spent with a portfolio company after an investment was made as lead investor. The most active group averaged over 35 hours per month per investment, and the least active group averaged less than seven hours.The difference in assistance provided was not strongly tied to differences in investment stage of interest. There were major differences in the importance the VCs attached to their post-investment activities. Not surprisingly, high involvement VCs viewed their activities as more important.Based upon the amount of capital they managed, firms were also split into three groups. Average fund size varied from 278 to 12 million dollars. The larger firms had more professionals and managed more money per professional. The large firms provided the least, and the medium-sized firms the most, assistance to portfolio companies. Large firms also made larger individual investments. Even though they invested over half their funds in late-stage investments whereas smaller firms focused on the earlier stages, the large firms were still a major source of early stage financing.There were no differences between geographic regions in the proportion of investments where the venture capital firm served as lead investor. There were, however, major regional differences in investment stages of interest. Also differences were observed between regions that were not a result of differing size and investment stage.     

UK export assistance: Are we supporting the best programmes?

This article provides empirical evidence to show that differences exist in how UK exporters rate factors in their export marketing effort between: (1) those that are believed to be desired by importers; (2) the possibility for improving performance of these factors by a change in emphasis by people in the exporting firms; and (3) what international business assistance is actually requested by firms. It then looks at differences between firms based on their level of involvement in exporting, i.e. stage of internationalization, and the extent to which they are successful. It therefore substantially builds upon previous research by showing that there are differences between the factors that firms believe are desirable to importers and how their performance could improve with the emphasis and assistance of internal and external change agents. Furthermore, it shows that exporting firms should not be seen as homogeneous and that significant differences exist between firms based on their level of internationalization and their level of success.

In this way, the study has implications for UK policy makers insofar as it questions the idea that export promotion policies should be standardized, and offers evidence to support the view that firms with different characteristics actually require different kinds of support.     

Increasing the Effectiveness of Export Assistance Programs

Abstract

This study focuses on the export assistance needs of small and medium-sized firms in the California EnviroTech industry. The objectives of this study are to: (1) provide public sector assistance providers research-based recommendations to increase the effectiveness of their export assistance programs to the EnviroTech industry; and (2) promote the advantages of a single industry study as the basis for providing public sector export assistance.     

Who benefits most? The effects of managerial assistance on high- versus low-performing small businesses

This study investigates the relationship between outside managerial assistance and small business performance using a conditional quantile regression approach. The model was tested using a sample of 902 ventures that received managerial or technical assistance from the U.S. Small Business Administration's Entrepreneurial Development Resource Partners. Results show that outside assistance for primary business functions, such as marketing strategy, promotional strategy, financial management and general management, is more effective for firms with lower levels of financial performance. Outside assistance for secondary business functions, such as human resources and obtaining capital, is likely to have a greater impact on firms in the middle- to upper-quantile levels. Based on the results, we propose that managerial outside assistance providers should employ different approaches for firms with lower versus higher levels of financial performance.     

U.K. SMEs’ awareness,use, and perceptions of selected government export assistance programs: An investigation into the effect of the internationalization process

This study reports on an empirical investigation into U.K. managers’ behavior toward and perceptions about selected export assistance programs. Specifically, it investigates whether differences exist between managers of U.K. small and medium-sized enterprises (SMEs) in various stages of internationalization in relation to their awareness and frequency of use of the programs, together with their perceptions about the timeliness, reliability, and availability of the assistance schemes. It provides a contribution to the knowledge in the areas of export management and public policy because despite the fact that a body of literature exists on the topics of both export assistance and the internationalization process of firms, there is a need to bring these two research topics together in the form of a single U.K. study to establish whether current export assistance procedures are suitable for managers from firms in different stages of export development. The rationale for such a study is that if managers of U.K. SMEs in different stages of the internationalization process differ in both their behavior toward and perceptions about government assistance programs, U.K. policymakers may need to reconsider the way in which services are provided to avoid wasting scarce resources.     

Joint Ventures as an Internationalisation Strategy for SMEs

For some time believed to be inferior to Wholly Foreign-Owned Enterprises, Joint Ventures have become a popular vehicle for foreign market servicing. Although there are various proponents of the joint venture strategy as a means of enabling SMEs with limited productive resources and/or market knowledge to enter international markets, relatively few have focused on the actual joint venturing activities of SMEs. This article examines the activities of 9 U.K. and 12 German SMEs that have joint ventures in China. Based on a questionnaire survey and in-depth case interviews, it reveals that the initiatives appear to have been successful but that they are not without their problems and in many ways the experiences of the firms involved seem similar to those of the large multi-national enterprises. It argues that the key to success appears to be the choice of the joint venture partner and concludes that, given the limited resources of small firms, assistance is required to help them locate and select appropriate partners.     

Objectives and Measures at UK Trade Exhibitions

Exhibitions are a major promotional activity for firms in the UK and, indeed, in the rest of the world. The received wisdom is that exhibitions are an effective promotional tool, and large sums are spent on them, yet little evidence exists to demonstrate that exhibitions are effective. Furthermore, few firms routinely collect information regarding the effectiveness of their exhibition activities.

This paper reports on a study of 104 firms who exhibit in the UK. Firms were asked about their objective setting activities, their reasons for exhibiting, and their methods of evaluating the effectiveness of the exhibition. It was found that most firms set few or even no objectives for the exhibitions, that they do not evaluate effectively, and that a surprisingly large number of firms do not evaluate their activities at all.     

A comparison of franchise and independent small business survival rates

Aspiring entrepreneurs choosing to become franchisees certainly expect to improve their chances of survival during the turbulent early years of business startup and operation. Alignment with a franchisor parent company offers the franchisee managerial assistance, access to financial capital, and access to markets via the right to utilize the parent company trademark. This study examines survival patterns among franchise and nonfranchise small firms started between 1984 and 1987: survival through late 1991 is tracked for all firms. Although the franchise operations are larger scale, better capitalized young firms, the independent business startups are found to be more profitable and their survival prospects are better than those of franchises.Research reported in this study was supported by the Woodrow Wilson International Center for Scholars and it was conducted on-site at the Center for Economic Studies, U.S. Bureau of the Census. Findings expressed are those of the author and do not necessarily reflect the views of the U.S. Bureau of the Census. Suggestions and assistance from Alfred Nucci and Robert McGuckin are gratefully acknowledged.     

Talk the Walk: Measuring the Impact of Strategic Philanthropy

Drawing a framework from institutional and legitimacy theory, supplemented by concepts from the accounting literature, this study uses longitudinal cross-sectional and cross-national data on over 500 firms listed in the Dow Jones Sustainability Index (DJSI) to empirically test whether these firms are strategic in their philanthropy as indicated by their measurement of the impact of their philanthropic activities along three dimensions – society, business, and reputation and stakeholder satisfaction. It is predicted that the variables’ company size, amount of philanthropic expenditure, region and industry influence the extent to which the various impact dimensions of philanthropy are measured. Though unexpected considering the lack of common practice in impact measurement, it is found that between 62 and 76% of the DJSI firms measure some sort of impact of their philanthropic activities, mostly impact on society and impact on reputation and stakeholder satisfaction. The number of firms that measure impact increases over the years and so does the number of firms that measure multiple dimensions of impact. Consist with our predictions, we find that larger firms and firms with relatively higher philanthropic expenditures are more likely to measure impact. Moreover, firms in the financial sector and firms from Europe and North America are also more likely to measure impact of their philanthropic activities.     

International strategies of mid-sized firms: A comparison of Indiana and Guangdong Province

A China strategy is becoming more important for a growing number of mid-sized companies as they observe China's increasingly greater impact on the U.S. economy. Our study surveyed Indiana and Guangdong firms to assess their interest in future international engagement in the other's country. Our results confirm current engagement by mid-sized firms from both countries in some activities with the other country, but there is a strong interest in doing more. Hence, there are opportunities for many Indiana organizations to play a role in assisting Indiana firms in developing international expertise, business development, and knowledge of China. In the study, 97 firms from the Guangdong Province and 105 Indiana firms identified their current international activities as well their future intentions relative to business development in the other's country.     

Effects of federal socioeconomic contracting preferences

The 8(a) business development program supports small disadvantaged U.S. federal contractors through benefits such as set-aside and sole-source contracts, management and technical assistance, and mentor-protégé relationships with established firms. This study examines the effectiveness of the 8(a) program at producing positive firm-level outcomes by comparing 8(a) firms with those participating in other preferential contracting programs with different benefits. The average 8(a) program participant performs well relative to baseline firms that do not receive contracting preferences; however, these effects are driven directly by funding and not by broader stimulation of sound business practices as intended by program designers. Program participants perform similarly to service-disabled veteran-owned businesses, which benefit from comparable contract preferences but none of the mentorship, administrative support and management assistance offered to 8(a) firms. While growing at similar rates, 8(a) firms are substantially more likely to go out of business than firms in this comparison group.     

Subsidies for Job Creation: Is Small Best?

Wisdom has it that direct financial assistance to small firms for employment creation may be poor use of resources since these firms have high failure rates. In this paper we identify another feature which works in the other direction, which suggests that small firms will be more responsive to assistance. This is related to these firms relatively poor access to private funds. Recent evidence is reported suggesting that proportionate grant assistance is more effective in small firms, but only in those firms which are new or relatively young. Explanations of this are considered related both to the cost of funds and to other factors.     

The dual role of local sites in assisting firms with developing technological capabilities: Evidence from China

As strong local knowledge bases emerge in some developing countries and regions, more research efforts are devoted to examine the role of local sites in technological-capability development of firms from developing countries. However, most of these studies illuminate the direct input (e.g., knowledge, human capital) and the role of motivating multinational companies (MNCs) to upgrade their local operations in developing countries so as to perform more innovation activities. Few articles are presented that examine the role of local sites in the learning and technological-capability building processes that take place during technology import activities. This study investigates how local sites in developing countries help their firms benefit from the spillovers of international technology diffusion, by empirically scrutinizing Chinese licensee firms. The empirical results support the hypothesis that Chinese local sites assist with their firms’ technological-capacity building, driven by international technology licensing-in activities, in three indirect ways. That is, the enrollments of sufficient R&D personnel from local sites, the collaborations with local universities and research institutes, and the collaborations with local industrial community firms positively influence the relationship between firms’ international inward technology licensing and technological capabilities.     

Perceived Environmental Dynamism and Managerial Risk Aversion as Antecedents of Manufacturing Outsourcing: The Moderating Effects of Firm Maturity

This study investigates how perceived environmental dynamism and managerial risk aversion influence a firm's manufacturing outsourcing activities. Based on a survey of 86 small manufacturing firms, the study found that higher levels of perceived environmental dynamism and managerial risk aversion are associated with increased outsourcing activity. These relationships are moderated by firm maturity such that newer firms engage in more manufacturing outsourcing than their mature counterparts when the environment is perceived to be more dynamic. Mature firms were found to outsource more than newer firms when their top-management teams were relatively more risk averse.     

The endogenous role of location choice in product innovations

The location choice of product innovations is a prevalent phenomenon one that has received little attention in the literature. This study examines the ways in which comparative industry environment, technology and product characteristics, and entry timing affect the firm's location choice of new product development activities between headquarters and foreign subsidiaries and the implications of location choice for performance. Our findings indicate that: (1) firms are more likely to locate their new product development activities at foreign subsidiaries in mainland China than at headquarters in Taiwan when the industry environment at foreign subsidiaries is more favorable, when technologies and products are more mature, and when the entry to mainland China's market is earlier than that of its competitors; (2) in general, firms locating their new product development activities at headquarters in Taiwan perform better than firms locating their new product development activities at foreign subsidiaries in mainland China after controlling for endogeneity bias; (3) firms locating their new product development activities at headquarters (at foreign subsidiaries) perform better than if they had located their new product development activities at foreign subsidiaries (at headquarters). Managerial implications and future research directions are discussed.     

How do small firms possibly survive? A comparison study of marketing skills and logistics infrastructure of small and large wholesalers

Most wholesalers are small family-owned firms that frequently lack marketing skills and an infrastructure capable of setting into practice state-of-the-art marketing distribution systems. They are much more consumed with daily activities and credit and collection functions than they are with developing marketing skills and logistics networks. The purpose of this exploratory study is to identify the elements of marketing skills and logistics that are associated with the performance of small and large wholesalers, and to compare and contrast these variables. Data were collected from 4500 small and large wholesalers in Hyogo and Osaka prefectures in Japan. Multiple regression analysis of this study found that the factors of supplier's financial assistance and buyer's services to wholesalers explained the performance of small wholesalers, and the factors of supplier's service to wholesalers and buyer's service to wholesalers explained the performance of large wholesalers. Multivariate analysis of variance and multiple discriminant analysis revealed that large and small wholesalers differed with respect to supplier's services to wholesalers, the supplier's financial assistance, and the wholesaler's intra logistics activities. Implications are discussed.     

Understanding instrumental motivations for social responsibility engagement in a micro‐firm context

Firms engage in social responsibility activities for diverse reasons. This study focuses on understanding firms' instrumental motivations for engaging in socially responsible activities. We suggest that the instrumental motivations underlying firms' corporate social responsibility (CSR) engagement are associated with their market, learning, and risk‐related behaviors; thus, we identify market orientation, learning orientation, and risk‐taking attitudes as three constructs that influence firms' CSR engagement. This research was conducted in the Norwegian firewood sector, in which CSR expectations are high and in which we expect CSR engagement to be encouraged by both instrumental and normative motivations. The firms in this study are micro‐firms with fewer than 10 employees and represent an important but highly neglected segment of firms in CSR research. Data obtained from 230 firms were analyzed using structural equation modeling. Our results indicate that market orientation, learning orientation, and risk‐taking attitudes affect social responsibility toward different stakeholder groups in different ways. In some cases, the size and age of firms also affect these relationships.     

Can Sinful Firms Benefit from Advertising Their CSR Efforts? Adverse Effect of Advertising Sinful Firms’ CSR Engagements on Firm Performance

This study investigates corporate social responsibility (CSR) of sinful firms, which refer to ones that are operating in controversial industries, including the production and distribution of alcohol, tobacco, gambling, adult entertainment, firearm, military, and nuclear power. We attempt to answer two questions in this study: (1) Do these sinful firms actively advertise their CSR engagements compared to non-sinful firms? And (2) do their advertising efforts really yield increased financial performance? Positing that advertising not only can make sinful firms’ good deeds visible, but also can highlight the contradiction between these firms’ stigma and their prosocial activities, we claim that sinful firms are likely to advertise their CSR engagement to overcome their stigmatized firm image, but these advertising activities will make the firms’ performance vulnerable by inducing skepticism from stakeholders. Using KLD database in conjunction with COMPUSTAT and Center for Research in Security Prices from 1991 to 2010, where 337 firms are involved in the controversial sinful industries, namely tobacco, alcohol, gaming, firearms, military, and nuclear power, we examine the effect of advertising spending of sinful firms’ CSR engagement on performance vulnerability, which is instantiated with idiosyncratic risk. The empirical results indicate that sinful firms increase their advertising expenditure when they engage in CSR programs, but these efforts for advertising CSR tend to increase idiosyncratic risk. This finding indicates that even though sinful firms can benefit from engaging in socially responsible initiatives, advertising their CSR efforts may backfire.     

Small Firms as International Players

In this paper, using aggregate data from the U.S Bureau of Economic Analysis, the author explores the strategies small U.S.-based foreign investing firms follow in their international activities. The aggregate study supports the findings of an earlier study of a few small firms with international activities. These firms have a lower-than-expected tendency to form minority-owned affiliates abroad. An analysis of the industries in which these small foreign investing firms operate supports the notion that these firms follow specific strategies uncovered in the small-scale study. Finally, the paper ties the findings to alliance strategies of small firms.