Corporate Social Responsibility That “Pays”: A Strategic Approach to CSR for SMEs

This study adopts a strategic approach to corporate social responsibility (CSR), puts forward a model of CSR activities that enhance small and medium enterprises (SMEs) growth, and argues that by aligning CSR activities with the competitive strategy of the firm, SMEs enhance firm growth. We test this model using multinomial logistic analysis and data from a survey with 211 U.K.‐based SMEs. We find that CSR activities related to the community enhance firm growth for all SMEs, but especially for firms adopting a cost leadership strategy, and that CSR activities related to the workforce are crucial to avoid sales decline, especially for SMEs adopting a differentiation or a quality‐driven strategy. We also find that environment‐related CSR activities are not beneficial for SMEs' growth and that human rights–related CSR activities slow growth for firms adopting a differentiation or a quality‐driven strategy. Finally, we put forward managerial and policy recommendations.     

The Decision to Enter and Exit Foreign Markets: Evidence from U.K. SMEs

This paper studies the dynamics of the export behaviour of small and medium sized enterprises (SMEs) in the U.K. between 1994 and 1998. I use a dynamic empirical model to disentangle three distinct dimensions of a firms’ participation in foreign markets: sunk cost induced hysteresis, firm heterogeneity and macroeconomic instability. The results show that SMEs view exporting as an irreversible investment, with state dependence being the largest explanatory factor. Moreover, observable firm characteristics, such as size and ownership, play a significant role in distinguishing exporters from non-exporters. Finally, there is no evidence that the 1992–1993 recession influenced firms’ export decisions in subsequent years implying that the results provide a valid indication of SMEs "typical" export behaviour.     

Can an SME Become a Global Corporate Citizen? Evidence from a Case Study

Global Corporate Citizenship (GCC) continues to become increasingly popular in large corporations. However, this concept has rarely been considered in small and medium size enterprises (SMEs). A case study of a Norwegian clothing company illustrates how GCC can be also applied to small companies. This case study also shows that SMEs can be very innovative in exercising corporate citizenship, without necessarily following the patterns of large multinational companies. The company studied engages as partner in some voluntary labor initiatives promoted by the government, employs people in marginal situations, and exerts influence for the adoption of good working conditions in its supply chain. Environmental issues and actions of solidarity are also considered within a global scope. Ethics of care and concern for specific aspects of the common good seem crucial as GCC drivers in this company, as do personal values, character, and leadership of the owner-manager of the firm.     

Performance Effects of External Search Strategies in European Small and Medium‐Sized Enterprises

There is little evidence regarding the performance impact of open innovation on small and medium‐sized enterprises (SMEs), especially across different firm‐size categories and sectors. Using new survey data from 28 European countries, we specify ordered logit and generalized proportional odds models to explore how seven individual external search strategies (knowledge sources) affect SME innovation performance across different size categories and sectors. While we find some consistently positive effects, in particular from using customers as an external knowledge source, we also find that some search strategies may not be beneficial. These findings suggest managerial and policy implications.     

Impact of Outsiders on Firm Performance over Different Generations of Family‐Owned SMEs

From the perspective of agency, resource‐based view, and resource‐dependence theories, we explore the impact of the presence of outside directors on firm performance in family small and medium‐sized enterprise (SMEs). Using survey data from 369 Spanish family SMEs, our findings show an inverted U‐shaped relationship between the proportion of outsiders on the boards of first‐ and second‐generation family firms and firm performance. The results show that a balanced presence of outside directors contributes to value creation in family SMEs and confirm that the composition and the roles of the board of directors differ from generation to generation in family firms.     

Public Credit Guarantee Schemes and SMEs’ Profitability: Evidence from Italy

The aim of this study is to assess the effectiveness of the Italian State Credit Guarantee Scheme (Central Guarantee Fund). The paper analyzes the impact of the program on SMEs’ profitability considering the firm size and sector. The analysis is performed using propensity‐score matching estimators and the Difference in Differences regressions on a proprietary sample of about 38,000 SMEs in the period 2007–2009. Overall, the Central Guarantee Fund generated an increase in the profitability of guaranteed firms during the period of economic downturn. However, significant differences emerged across firms by size and sector. The effect is positive and robust only for micro‐ and small‐sized firms, and the most relevant improvement in the profitability is recorded for firms operating in the manufacturing sector. This implies that more customized programs are necessary to reach a higher value for money in entrepreneurial policies.     

The Relationship Between U.K. Banks and Their Small Business Customers

Much emphasis is placed upon the benefits to both parties of a good relationship between banks and their small business customers. Having explained the significance of SMEs in the U.K. Economy, the papers goes on to consider, briefly, some of the arguments which underpin the rationale for these relationships. The roles of information and communication are discussed and the poor co-ordination between banks, SMEs and their accountants is highlighted. Evidence from over 6,000 small businesses in response to the Forum of Private Business survey in 1994 is then presented. This demonstrates the strong positive association between more participative relationships and more positive perceptions of their banks by firms. Finally it is suggested that a virtuous circle of information and communication could be established if the parties cooperate in a systematic process of risk assessment.     

Firm Characteristics and Managerial Perceptions of NAFTA: An Assessment of Export Implications for U.S. SMEs

The North American Free Trade Agreement (NAFTA) may present significant opportunities or significant threats for small and medium–sized firms based in the U.S. Arguments are developed that explore the relationship among four internal firm characteristics and managers' perceptions of NAFTA. Managers' perceptions of NAFTA are measured as either favorable or unfavorable. The firm dimensions examined are strategy, performance, export experience, and size. The findings imply that managers' exhibiting favorable perceptions of NAFTA are related positively to differentiation strategy, performance, export experience, and size. A cost–leadership strategy demonstrated no discernable relationship with regard to perceptions about NAFTA. Implications and directions for future research are discussed.     

The Use and Deployment of Soft Process Technologies within UK Manufacturing SMEs: An Empirical Assessment Using Logit Models

This study assesses the adoption of different soft process technologies from a survey of 218 British engineering and electronics small and medium-sized firms (SMEs). The new process (soft) technologies that were modeled included total quality management, Kaizan, and statistical process control. Logit models demonstrate that the determinants of soft process technology adoption vary significantly from technology to technology. The study questions a blanket approach to technology adoption. Firm-specific factors make a larger difference to the adoption of process technologies than competitive factors. While on the whole small firms are slow to adopt new techniques, this does not hold for all technologies, and future research might investigate what technologies SMEs adopt and why. Benchmarking, suggestions schemes, problem-solving techniques and ISO 9000 adoption was unrelated to firm size, which holds out the prospect of soft process technologies as an alternative technological path for small firm productivity growth.     

Pecking Order Theory versus Trade-Off Theory: are service SMEs�� capital structure decisions different?

This paper seeks to analyse if the capital structure decisions of service small and medium-sized enterprises (SMEs) are different from those of other types of firm. To do so, we consider four research samples: (i) 610 service SMEs; (ii) 126 service large firms; (iii) 679 manufacturing and construction SMEs; and (iv) 132 manufacturing and construction large firms. Using the two-step estimation method, the empirical evidence obtained in this study shows that the capital structure decisions of service SMEs are different from those of other types of firm. Service SMEs’ capital structure decisions are closer to the assumptions of Pecking Order Theory and further removed from those of Trade-Off Theory compared with the case of other types of firm.     

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.     

Are the determinants of capital structure country or firm specific?

In this paper we investigate the capital structure determinants of Greek, French, Italian, and Portuguese small and medium-sized enterprises (SMEs). We compare the capital structures of SMEs across countries and differences in country characteristics, asset structure, size, profitability, risk, and growth and how these may impact capital structure choices. The results show that SMEs in these countries determine their capital structure in similar ways. We attribute these similarities to the country institutional and financial characteristics and the commonality of their civil law systems. However, structural differences arise due to firm specific effects. We find that size is positively related to leverage while the relationship between leverage and asset structure, profitability and risk is negative. Growth is not a statistically significant determinant of leverage for any of the four countries. Our main conclusion is that firm-specific rather than country facts explain differences in capital structure choices of SMEs.     

The international diversification-performance link in Spain: Does firm size really matter?

This study provides new insights into the link between international diversification and firm performance in a sample of large manufacturing firms and SMEs based in Spain for the 1994–2008 period. Specifically, the focus is on how the nature and shape of this relationship may vary over time with firm size. The results show the existence of a horizontal-S curve when the whole sample of firms is considered in the empirical analysis. However, major differences are found between SMEs and large firms, and even within the actual group of SMEs. Strong support is found in large firms for the existence of a horizontal-S curve. Within the group of SMEs, there are small firms with a linear and negative relationship, whereas medium-sized firms record a U-shaped form. These findings suggest that as the international diversification-performance link is size-dependent, future research should explicitly consider firm size in order to better understand the nature of this relationship.     

Resources,home institutional context and SMEs’ exporting: Direct relationships and contingency effects

Research highlights the role of resources in SMEs’ exporting but is less forthcoming with respect to entrepreneurial perceptions of home institutional quality. Drawing on institution-based lenses, we distinguish among formal, informal, and regulatory institutions, which in concert with firm resources are expected to influence SMEs’ export behavior. Our predictions are tested on a sample of 150 firms located in Greece. The analysis of direct relationships shows that formal and informal institutional dimensions affect significantly, but differently, SMEs’ export activity. The analysis of interaction effects demonstrates that resource decisions for exporting are contingent upon entrepreneurial perceptions of the home institutional context, such that SMEs respond to formal and informal domestic institutional weaknesses by intensifying resource allocations to fuel export sales. In an opposite direction, export regulatory complexity reverses the positive resources-exporting link. These findings suggest the importance of home institutions in the exporting field.     

Market Orientation and Performance Measurement System Adoption Impact on Performance in SMEs

Previous research has shown a connection between market orientation (MO) and firm performance, as well as between performance measurement systems (PMS) adoption, but their mutual interactions are as yet little understood in small and medium‐sized enterprises (SMEs). Using empirical data collected by a survey from 123 Finnish SMEs, we analyze the relationship between MO, PMS adoption, and performance. According to the results, MO has positive relationships with PMS adoption and nonfinancial performance. However, the impact of MO on financial performance is mediated by PMS adoption. PMS adoption is thus an important factor in explaining variance in firm performance. Finally, empirical analysis shows that the larger SME firms adopt PMS more extensively.     

Technological and Organizational Tools for Knowledge Management: In Search of Configurations

Knowledge Management (KM) is becoming a growing concern in management research and practice because of its role in determining firm innovation capability and in enhancing working life quality of knowledge workers. This requires, even for Small and Medium Enterprises (SMEs) the creation of a sustainable work organization in terms of configuration of organizational and Information and Communication Technology (ICT) tools. With a particular emphasis in the area of Product Innovation (PI) and on the basis of a survey on 127 Italian SMEs, this paper aims at analysing the emergent technological and organizational approaches to managing knowledge in the PI process. Three different KM Configurations emerge: the `technical', the `relational' and the `advanced' approach.     

Individual,Organizational, and Institutional Determinants of Formal and Informal Inter‐Firm Cooperation in SMEs

Inter‐firm cooperation has been considered an important strategy for SMEs to overcome competitive difficulties. Despite the relevance of this strategy there are no studies that jointly consider how entrepreneurs' characteristics, organizational factors, and institutional features influence SMEs to establish cooperative agreements. In order to bridge this gap, we analyze what factors at these three levels explain inter‐firm cooperation and whether formal and informal inter‐firm agreements are explained by different factors. Our research is based on a survey of 1,587 Spanish SMEs and the results show that individual, organizational, and institutional factors contribute to jointly shape the decisions concerning inter‐firm cooperation.     

How Small Is Too Small? Firm Size as a Barrier to Exporting from the United States

The purpose of this paper is ask whether there is a minimum size that firms must achieve to take advantage of the benefits of exporting from the United States. An analysis of 2,822 firms in 49 different industries in South Carolina, a rapidly growing export–driven state, was conducted to address this question. This paper builds on the contributions of previous research in the areas of small to medium–sized enterprises (SMEs) and export success and SMEs in the export development process. Analysis of manufacturing exports from South Carolina indicates that firm size serves as a necessary as well as a sufficient condition for export success among small manufacturing firms. Reasons for this are discussed, and implications for managers and policymakers are offered.     

Creation of Biotech SMEs in France

The paper examines the determinants of the creation of high tech SMEs at a regional level. Relations between the scientific and technical profile of a region, the size of the local market for biotech products and services, and economic development are explored in the French biotech industry during the 1990’s. Empirical analysis shows that a high level of scientific activity within a region is necessary to sustain a continuous flow of new business creation. The likelihood of firm creation depends on scientific and technological organizational factors like cooperation between academic and private organizations. Regional policies can have positive impact on firm creation, especially by promoting diversity and excellence in science. However, contrasting with the U.S. results, the size of the local market for biotech products and services matters in the industry development.     

Servant leadership,CSR perceptions,moral meaningfulness and organizational identification- evidence from the Middle East

This article explores a novel process linking servant leadership (SL) to organizational identification (OI). In doing so, the study examines SL as an antecedent of internal corporate social responsibility (CSR) perceptions of employees and assesses moral meaningfulness as a moderator in the relationship between SL and OI through internal CSR perceptions. Utilizing a comparative institutional theoretical lens, it also explores how the SL-OI relationship varies across the UAE, Lebanon, and Tunisia. Two-wave and three-wave survey data are collected from employees working for international SMEs in the three countries. Findings show that the link between SL and OI can be explained by the proposed moderated mediation model and that the SL-OI relationship varies across the nations. Implications of these findings are discussed.