Finance for SMEs: A U.K. Perspective

This paper provide an overview of recent trends in the financing of smaller businesses in the U.K. It refers in particular to the findings of a major recent programme of work in this area funded by the Economic and Social Research Council, in which the author participated. This programme included the first national survey to address these issues since the Bolton Report of 1971, as well as a range of projects covering the finance of ethnic businesses and hi-tech firms as well as the market for informal venture capital. On the basis of this work and of the results of more recent follow up surveyors it is concluded that the evidence for general equity or debt gaps in the U.K. is weak. If anything SME funding was too easy in the boom of the late 1980s. It is argued that consideration could be given to the promotion through seedcorn funding of SME co-operative or mutual guarantee schemes to reduce information asymmetry in U.K. credit markets.     

The effect of marital status,income, age and other variables on insolvency in the U.S.A.

The prodiction of insolvency among U.S. households was the focus of this study with the use of data drawn from the Surveys of Consumer Finance^1.2 which were sponsored by the Federal Reserve Board of Governors. Analysis of panel data for a random sample of 1,934 households showed that age of the household head had a negative relationship with insolvency while income had a strong, negative effect. In the first period (1983), married couples had lower predicted insolvency rates than other household types. In the second period (1984), the relationship between marital status and insolvency was not as clear, but married couples with children had substantially lower predicted insolvency than did single-parent households.     

The Internationalization Process of Online SMEs in the U.K., U.S. and Australia

ABSTRACT

Starting from a modified version of the Cavusgil and Zou (1994) Cavusgil, S.T. and Zou, S. 1994. Marketing strategy-performance relationship: An investigation of the empirical link in export market ventures. Journal of Marketing, 58(1): 1–21. [Crossref], [Web of Science ®] , [Google Scholar] theoretical framework, in which the level of internationalization of online Small and Medium Enterprises (SMEs) is considered as an aggregated indicator of the export marketing strategy and a measurement of export performance, this paper investigates the influence of a series of internal and external factors on the internationalization of online SMEs. It expands the empirical framework used by Luo et al. (2005) Luo, Y., Zhao, J.H. and Du, J. 2005. The internationalization speed of e-commerce companies: An empirical analysis. International Marketing Review, 22(6): 693–709. [Crossref], [Web of Science ®] , [Google Scholar] in an attempt to explain the internationalization of online SMEs by integrating both organizational and market factors, thus improving the explanatory power of internationalization models, and enhancing their applicability for professionals.     

The Rise in Self-Employment Amongst U.K. Males

This paper uses time-series data to attempt to identify the factors responsible for the rise in self-employment amongst UK males, focusing in particular on the period of rapid growth which was experienced during the 1980s. The empirical results suggest that the most significant long-run influence on the growth of self-employment has been the rise in the real value of personal sector liquid wealth, though rising levels of GDP and, to a lesser extent, increases in the real value of housing wealth have also made a significant contribution. There is tentative support for the notion that Mrs Thatcher may have succeeded in ushering in an 'entrepreneurial renaissance' within the UK economy, though the evidence for this is rather crude. There is no evidence for the view that 'recession-push' effects have been significant in accounting for the rise in self-employment.     

The role of quality assurance in protecting the U.K. consumer

This paper considers the way in which quality assurance is being used as a tool of consumer protection in the U. K. It examines the way that the legislators and the courts have adopted its principles — whether deliberately or not. Several areas of consumer protection are picked out and the effect of quality assurance principles on them is demonstrated.     

Ombudsman schemes for financial services in the U.K.: a consumer view

The ombudsman schemes that have been set up in the financial services sector in the U. K. are intended to meet the needs of consumers for rapid, effective and cheap redress. This paper examines the extent to which these schemes have fulfilled their objectives and draws up a balance sheet from the consumer viewpoint. Suggestions are made for the future development of the schemes. The paper is based on a speech given at the Office of Fair Trading Conference on Consumer Redress, Queen Elizabeth II Conference Centre, London, January 1991.     

The Corporate Social Performance Content of Innovation in the U.K.

This article investigates the influence of innovation on the relationship between corporate strategy and social issues. Specifically, we employ firm-level data for a large sample of U.K. companies drawn from a diverse range of industrial sectors to investigate, given innovation, the determinants of both the probability that the innovation brings reduced environmental impacts and/or improved health and safety, and the strength of this effect. In this connection, we find evidence of a dichotomy between product and process innovations, and roles for firm size, industrial sector, a foreign market presence, access to various information sources (e.g. universities and government research organisations) and the extent to which activities are constrained by regulation. Furthermore, we find a tendency for the influences of many of these factors to vary between older and newer firms. Stephen Pavelin is a Reader in Economics at the University of Reading, UK. His current research agenda focuses upon the application of economic analysis to key issues relating to corporate social responsibility, such as the effect of corporate social performance on the reputation and financial performance of firms. Recent publications include articles in the Journal of Management Studies, the Journal of Business Research, the International Journal of Industrial Organisation, the Journal of Business Ethics, Financial Management, the Journal of Business Finance and Accounting, Business Ethics: A European Review and the European Management Journal. Lynda A. Porter is a Lecturer in Economics at the University of Reading, UK. Her current research agenda focuses upon public policy issues in international economics, including FDI promotion and international competition in corporate tax rates, but also encompasses corporate social responsibility- largely focussing upon CSR issues that pertain particularly to international business. Her most recent publication appeared in the Journal of Business Research.     

Policies Promoting Innovation in Small Firms: Evidence from the U.S. and U.K.

We provide background information on U.S. and U.K. policies promoting innovation in small firms and also summarize the papers that appear in this special issue. These studies were presented at a recent workshop that was jointly organized by the University of Nottingham Institute for Enterprise and Innovation (UNIEI) and the Board on Science, Technology, and Economic Policy (STEP) of the U.S. National Academy of Sciences. Based on a synthesis of these papers and other evidence that was presented during the workshop, we conclude that: (1) program evaluation is much more prevalent in the U.S. than in the U.K.; (2) the U.S. Advanced Technology Program (ATP) and Small Business Innovation Research (SBIR) program have been successful; and (3) shared costs between government and industry and frequent assessment are the keys to ensuring that such programs are successful.     

英国财长空降上海

英国财长高登·布朗2月初开始了对华经济"整体公关",连发"教育、旅游、体育、金融"合作牌.他在对当地媒体简短得不能再简短的发言中说,希望到2007年,英国对华出口会扩大到现在的2倍,2010年英国对华出口能够比现有的水平翻两番.据中国商务部统计,去年英国对中国的出口额为47.6亿美元,同时与英国在内的主要贸易伙伴国的贸易顺差也在拉大.英国希望在金融、旅游、教育、体育等服务产业上有所突破.     

Willingness to Pay for Non‐biotech Foods in the U.S. and U.K.

This study uses closed‐ended and payment card formats to elicit willingness to pay for breakfast cereals made from non‐biotech ingredients. U.S. consumers were willing to pay a 10%∼12% premium to avoid biotech breakfast cereals, whereas U.K. consumers were willing to pay a 19%∼35% premium. Risk perceptions about agrobiotechnology proved to be an important factor shaping willingness to pay a premium for non‐biotech breakfast cereals. If consumers perceived risks to human health or environments from the use of biotechnology in crop/food production, or affiliated biotech foods unfavorably with morality or multinational corporations, they were more likely to pay a premium. Conversely, if consumers associated agrobiotechnology with various benefits (i.e., reduction in chemical use in crop production, mitigation of world food shortages, and improved nutritional content), they were less likely to pay a premium.     

Consumer issues in the evolving environment: characterizations of the U.K. marketplace

It is now 10 years since Greyser and Diamond¹ published their study which examined how U.S. consumers viewed the marketplace. This study, to some extent, is a reprise. It aims to provide an insight into how the U.K.'s marketplace is characterized by household consumers, private and public sector organizations. The result suggests that fundamental changes have occurred in the perception of the marketplace, with less visible consumer activism and less overt support for antibusiness sentiments.     

Healthcare reform and its implications for the U.S. economy

U.S. healthcare is currently a poor value proposition in relation to its cost. This must change. Driven by the fundamental forces of financing, consumer preferences, and technology, the U.S. is heading for a profound revolution in healthcare, one that will affect not only the system itself but also the larger U.S. business community. This new healthcare system will create vast opportunities and commensurately large risks for healthcare innovators. The outcomes of the present healthcare reform debate will either liberate or further shackle these innovators. Reforms that depend on governmental controls are more likely to dampen innovation than those achieved through control by consumers, and given the profound ramifications of healthcare reform outcomes, policy makers would be well-advised to harness the forces of consumerism in fashioning reform.     

Ethical Behaviour in the U.K. Audit Profession: The Case of the Self-Fulfilling Prophecy Under Going-Concern Uncertainties

External auditors owe a professional duty to the company's stockholders and to society in general. However their remuneration is determined by management. The resulting conflicts of interest are particularly acute in distressed companies where the auditors are required to disclose uncertainties regarding future survival. We focus on the consequentialist self-fulfilling prophecy argument whereby auditors may fail to disclose such uncertainties due to the belief that the disclosure itself would precipitate the company's bankruptcy. We find no empirical support for such beliefs for a sample of distressed U.K. companies with audit reports published between 1986 and 1993. Companies whose auditors disclose going concern uncertainties are no more likely to fail than those without such disclosures; indeed three out of four reports containing going concern uncertaintiesare not followed by failure before publication of a subsequent set of accounts. Instead we find that it is the degree of financial distress that drives both bankruptcy and the auditor's going concern disclosure rather than that the disclosure itself causes failure. Belief in the self-fulfilling prophecy effect nevertheless persists, and this despite the profession's clear ethical guidelines that audit opinions should provide an objectively true and fair view, paying no regard to possible consequences. It may be that the continued attractiveness of the self-fulfilling prophecy belief is due to its providing a means of resolving intense auditor/management conflict in what is a particularly complex decision situation. We argue that, if the profession's clear ethical guidelines are to play a greater role in this area, issues such as enforcement will need to be addressed.     

The Corporate Social Responsibility of Pharmaceutical Product Recalls: An Empirical Examination of U.S. and U.K. Markets

The pressure on companies to practice corporate social responsibility (CSR) has gained momentum in recent times as a means of sustaining competitive advantage in business. The pharmaceutical industry has been acutely affected by this trend. While pharmaceutical product recalls have become rampant and increased dramatically in recent years, no comprehensive study has been conducted to study the effects of announcements of recalls on the shareholder returns of pharmaceutical companies. As product recalls could significantly damage a company’s reputation, profitability and brand integrity, this paper investigates the effect on shareholder wealth and the extent to which the adoption of CSR practices by pharmaceutical companies in the United Kingdom (U.K.) and the United States (U.S.), the two largest markets for pharmaceutical products in the world, affected market reactions surrounding product recall announcements. The analysis of product recall announcements from 1998 to 2004 compiled from The Pharmaceutical Journal and U.S. Food and Drug Administration enforcement reports revealed marked differences in the way market participants in the two countries responded to news of product recalls. U.S. investors penalised firms according to the severity of product defects while U.K. investors were indifferent. While U.K. investors rewarded product recalls by firms which were not usually CSR-active, U.S. investors punished non-CSR active firms that performed recalls. These observations could pose strategic challenges to pharmaceutical firms operating in both countries. Jeremy Cheah is an Assistant Professor of Finance at Nottingham University Business School, Malaysia Campus. His research interests lie in the area of applied corporate finance and investment management. Wen Li Chan was an Advocate and Solicitor in Kuala Lumpur, Malaysia before assuming the post of University Teacher in Information Systems and Strategy at Nottingham University Business School, Malaysia Campus. She is currently investigating the roles and implications of information on firm valuation, particularly in the area of corporate cyber-litigation and corporate social responsibility. Corinne Chieng is a Corporate Executive at Star Publications (M) Berhad, Malaysia. She has previously worked as a tax consultant at Arthur Andersen Malaysia. Her research interests include the financial implications of corporate social responsibility on the valuation of firms.     

Environmental Reporting: The U.K. Water and Energy Industries: A Research Note

Last year the Department of the Environment, Food and Rural Affairs (DEFRA) released a new set of revised guidelines upon environmental reporting practices for U.K companies. Two industrial sectors were selected – the Water industry and the Energy industry – and the most recent Environmental Reports produced by companies in these sectors were subjected to content analysis where the coding framework was heavily based on the DEFRA guidelines. Results are reported for the two industries separately and the two industries are also compared. Whilst sectoral differences were found it was clear that many companies addressed most of the issues raised in the guidelines. However, others did not. Whilst no conclusions can be made about the quality of reporting the main areas of emphasis in each sector can be determined.     

Biotechnology Clusters in the U.K.: Lessons from Localisation in the Commercialisation of Science

Today, U.S. biotechnology firms dominate the growing therapeutics and diagnostics sectors despite most of the key discoveries being made by European, and especially U.K. scientists. Lessons have been learned about the economic importance of commercialisation of bioscience. Within Europe, the U.K. is the leading challenger of U.S. hegemony in biotechnology exploitation. Knowledge-driven clusters of start-ups and established smaller and medium-sized businesses have developed in Cambridge and Oxford along with nascent agglomerations in Surrey and Scotland. They are responsible for the turnaround. As in the U.S., intimate links with large pharmaceutical firms and publicly-funded research centres are key to spin-out businesses, suggesting a generic "new economy" model. The specific problem at present is scale and the need to make up ten years lost ground. But the evidence is there that the U.K. is taking up the competitive challenge.     

Support for Investor Activism among U.K. Ethical Investors

An important goal of ethical investment is to influence companies to improve their ethical and environmental performance. The principal means that many ethical funds employ is passive market signalling, which may not, on its own, have a significant effect. A much more promising approach may be active engagement. This paper reports on a questionnaire study of a sample of 1146 ethical investors in order to assess whether U.K. ethical investors would support more activist ethical investment and whether they would be prepared to invest in companies which are failing ethically in order to do so. The results show general support for the current practice of passive signalling accompanied by "soft" engagement in the form of lobbying and the development of dialogue in order to improve corporate practice. The "harder" options of investing in companies that err in order to change them is, however, favoured by consistent minorities.     

The power struggle between accountants and marketers and its consequences for business ethics in the U.K.

The dominant managerial discipline in U.K. companies is finance. Accountants are often viewed as being concerned with what is measurable, definite and controllable. The emphasis is on professional conduct, independence, objectivity, technical competence and confidentiality. This paper explores the concept that the growth of professionalism has created an environment in which functional specialists have different ethical perspectives. The pre-eminence of accountants is now being challenged by the marketers, a profession that takes a much wider view of business ethics. This development is bound to have implications for corporate perspectives on business ethics. The paper gives the views of a focus group of managers from other disciplines on the relations between accountants and marketers, and analyses the potential for better understanding between the two groups and the implications of this for business ethics.     

Business Ethics in the Curriculum: Assessing the Evidence from U.K. Subject Review

The growth of U.K. business ethics education has been charted at the course or micro level by Mahoney (1990) and Cummins (1999) using postal questionnaires. These surveys, normally restricted to elite providers, have not revealed the relative importance of business ethics in the business school curriculum. In the 2000–2001 subject review of business and management programmes conducted by the U.K. Quality Assurance Agency for higher education (QAA), 164 business and management programmes were required to summarise their aims and objectives. Examination of this data using QSR-N6 software shows that only 14 made explicit reference to ethics. Church Colleges of Higher Education were disproportionately represented, indicating the importance of institutional context to curriculum development. An analysis of espoused aims in relation to business ethics suggests that cognition in business ethics is largely conceived as part of a broad contextual comprehension of the business environment rather than an understanding of theoretical constructs. The expression of aims in business ethics is more frequently characterised by affective or attitudinal verbs/nouns with a close link to the promotion of value positions, such as multiculturalism and environmentalism. It is concluded that business ethics occupies a more marginal position within the curriculum than previous studies have suggested.