SMEs in Argentina: who are the exporters?

There exists a growing body of literature which looks at export decisions made by firms. Most studies focus on developed countries and do not explore whether different behavioral patterns prevail over the firm size distribution. This paper aims at filling this gap in the literature by analyzing the export behavior of a statistically representative sample of 192 small and medium-size enterprises (SMEs) in a developing country, Argentina, over the period 1996–1998. We find that the level of employment, sourcing from abroad, investment in product improvement, and average productivity are associated with higher probability of exporting. Training activities for employees are important to export outside of MERCOSUR.     

The Credit Crunch of 2007–08: Lessons Private and Public

The current financial crisis has much in common with past crises. Poor investment strategies with respect to risk as well as poor evaluation have contributed to the current crisis. This paper presents the lessons to be learned by the private and public sectors. Why do crises keep happening? Mismatch of assets—long-term liabilities offset by short-term assets—can be profitable but is risky, and robust strategies must be able to cope with the risk. A number of measures can and should be taken by private financial entities for their own sake as well as that of the entire financial system. With respect to the public sector, one should be wary of expanding the role of regulation. What should be done, however, is to make sure that public policies are pursued through on-budget spending and taxation rather than through off-budget initiatives, such as encouraging government-sponsored enterprises to accumulate subprime debt in order to further public policy objectives. It would also be useful to reduce overall levels of private debt by reducing tax incentives to borrow.     

How Could the South Respond to Secular Stagnation in the North?

Developed countries face the risk of a sustained lack of aggregate demand, that is, secular stagnation. Demand‐oriented growth models emphasising the balance‐of‐payments constraint raise concerns about attendant adverse growth impacts on developing countries from reduced export growth. These concerns are well‐founded, albeit less serious than the simplest versions of these models would imply. Relaxing their assumptions and emphasising cumulative causation forces from domestic‐demand growth and relative price effects indicates how developing countries can combine export and domestic‐demand based strategies and how changed policies can maintain rapid growth while reducing the income elasticity of import demand.     

Collectivism and Corruption in Commercial Loan Production: How to Break the Curse?

Recent research suggests that collectivism breeds corruption in bank lending. This finding, together with the stickiness of culture, poses a direct challenge to economic growth in collectivist societies. In this paper, we address this grim outlook by examining the types of firms that are susceptible to the detrimental effect of collectivism on lending integrity and the formal institutions that can help alleviate such effect. We find that the adverse effect of collectivism on bank corruption is more severe in small and medium-sized firms, privately owned firms, and non-exporting firms, while it is considerably weaker in countries with more effective private monitoring, a higher (lower) fraction of foreign-owned (government-owned) banks, a more competitive banking sector, better information sharing, and stronger legal and political institutions. Our findings are robust to using alternative measures of collectivism and alternative dependent variables. These results highlight how firm-level characteristics and formal institutions interact with collectivism in affecting firms’ access to bank credit.     

How does working capital management affect the profitability of Spanish SMEs?

This paper analyzes the relation between working capital management and profitability for small and medium-sized enterprises (SMEs) by controlling for unobservable heterogeneity and possible endogeneity. Unlike previous studies, we examine a non-linear relation between these two variables. Our results show that there is a non-monotonic (concave) relationship between working capital level and firm profitability, which indicates that SMEs have an optimal working capital level that maximizes their profitability. In addition, a robustness check of our results confirms that firms?? profitability decreases as they move away from their optimal level.     

Corporate Social Responsibility in SMEs: A Shift from Philanthropy to Institutional Works?

For Aristotle, virtues are neither transcendent nor universal, but socially interdependent; they need to be understood chronologically and with respect to character and context. This paper uses an Aristotelian lens to analyse an especially interesting context in which to study virtue—the state’s response when social order breaks down. During such periods, questions relating to right action by citizens, the state, and state agents are pronounced. To study this, we analyse data from interviews, observation, and documents gathered during a 3-year study of riot policing in the U.K. In doing so, we contribute by joining a number of other conversations within JBE, suggesting detailed empirical examination of this context is useful in opening up considerations relevant to ‘virtue’ elsewhere. This extreme context helps us raise interesting and empirically informed questions that can encourage future theoretical and empirical contributions to virtue in business ethics. One such question is on the role of habituation in virtue, which is not just the inculcation of a reflex or automaticity, but can also refer to a trained and developed tendency to behave in the right way, for the right reasons, at the right time. Whilst we stop short of a simplistic alignment of habituation and virtue, we show ways in which it can inform understanding of both courage and phronēsis.     

R&;D in SMEs: a paradox?

This paper has three objectives: (1) to survey the relevant literature addressing the (apparent) paradox of Research & Development investments carried out within Small and Medium Enterprises; (2) to provide focused summaries of the articles in this special issue; (3) to draw some general conclusions in terms of policy implications.

How did the notional interest deduction affect Belgian SMEs’ capital structure?

The recently introduced risk capital allowance in Belgium, which allows a notional interest deduction (to be denoted NID hereafter) on a firm’s adjusted equity for tax purposes, has mitigated the tax discrepancy between equity and debt financing. To our knowledge, we provide the first empirical study of the extent to which this regulation has resulted in a strengthening of small and medium sized enterprises’ (to be denoted SMEs hereafter) solvency, which was one of its most prominent objectives. Results from logit regressions reveal that the probability of adopting the NID is higher for lowly leveraged SMEs, SMEs without experience with the tax-exempt investment reserve and SMEs with a sound knowledge of the notional interest deduction regulation. Results on the impact of the NID on the capital structure of SMEs based on panel and first differences regressions reveal that this measure did not result in a significant change of SMEs’ leverage. In view of the discussion regarding the optimal tax and legislative framework that governments should put in place (Poutziouris et al., J Small Bus Enterp Dev 6(1):7–25, 1999), these results cast doubt on the risk capital allowance, as it stands now, being the right government instrument to contribute—at least in the short term—to creating a pro-enterprising tax and legislative climate for SMEs. We conclude by providing some general suggestions for improving the effectiveness of the risk capital allowance.     

How classical and entrepreneurial brand management increases the performance of internationalising SMEs?

Research is limited on how accumulated international experience and decision-making style propel internationalising SMEs toward brand orientation. Our study builds a model of the process on classical and entrepreneurial brand management principles plus the firm's applied experience and decision-making logics. An online survey of 235 internationalising SMEs found that adopted decision-making logic mediated the relationship between cumulative international experience and international brand orientation. We conclude that managers and planners must select the most appropriate approach to international brand management permitted by available international firm-specific experience if they are to achieve strong international brand orientation and superior financial performance.     

Does Trade Credit Affect Technical Efficiency? Empirical Evidence from Italian Manufacturing SMEs

Using firm‐level data from the Italian manufacturing sector, we investigate the relationship between small and medium‐sized firms technical efficiency and trade credit. Our contribution is twofold: we provide evidence on an open empirical question, and disentangle the channels through which trade credit may influence firms' efficiency. According to our findings, based on the Simar and Wilson (2007) procedure, trade credit seems to positively affect firm efficiency by mitigating financial constraints. Indeed, trade credit enhances efficiency especially for firms that are more likely to be financially constrained (i.e., smaller and/or younger firms) and during the most recent financial crisis.     

How Many People are Using Credit Cards in China

CreditCardscomeintoChinesecivilians'daiIylivesinaquickstep.TheSocialSurveyInstitutionofChina(SSIC)madeaninvestigationinBeijing,Shanghai,Nanjing,Wuhan,ChangshaandGuangzhourecently,andobtained1678effectivespecimens.Theinvestigationrevealedthat42.3%individualsheldcreditcards,and17%ofthemhadmorethantwodifferentcardsinhand.Amongthecreditcardholders,reasonsofapplyingforcreditcardsvariedfromonecardholdertoanother.9%peopleappliedforcreditcardsforthesakeoffollowingthefashion;15%peoplewantedtocha…     

Fueling the Credit Crisis: Who Uses Consumer Credit and What Drives Debt Burden?

Excessive household debt contributed to the worst recession in decades. Insights about borrowing and spending behavior can inform economic recovery forecasts, policy decisions, and financial education. This study identifies life cycle and credit attitude as key determinants of who uses debt. Younger households are more likely to borrow for consumption, as are those who believe that it is all right to borrow to purchase luxury goods or cover living expenses. Furthermore, households that condone borrowing for these purposes have a higher consumer debt burden. Debt capacity (or creditworthiness) and financial discipline are also significant factors in determining household debt use.     

Can apprenticeships contribute to innovation in SMEs? The case of Catalonia

The objective of this study is to analyse the contribution of students of vocational education and training (VET) to the innovation processes of small‐ and medium‐sized enterprises (SMEs) during their apprenticeships. Qualitative research was conducted through in‐depth interviews with 97 respondents in Catalonia, including VET teachers and students, SME managers, and social and institutional agents. Our findings reveal that public institutions have a partial view of innovation, mostly influenced by an industrial positioning, which leads to the neglect of other components, such as the social aspects. In addition, regarding public programmes designed to foster innovation through VET, the results show a lack of coordination between VET schools, SMEs and public administrations. Finally, in relation to apprentices, we find a low participation in innovation processes by students during their apprenticeship as a consequence of the bad implementation of innovation public programmes, due to the lack of coordination between VET schools and SMEs.     

Should Access to Credit be a Right?

Discussion on financial ethics increasingly includes the problem of exclusion of the poorer segments of society from the financial system and access to credit. This paper explores the ethical dimensions surrounding the concept of a human right to credit. If access to credit is directly instrumental to economic development, poverty reduction and the improved welfare of all citizens, then one can proclaim, as Nobel Prize Laureate M. Yunus has done, that it is a moral necessity to establish credit as a right. Arguments both supporting and opposing the concept of a right to credit are presented. While there may be general agreement that access to financial services may provide a pathway out of poverty, granting a universal right could induce perverse effects such as overindebtedness. Bearing in mind the ultimate goal of proponents of this right as well as the potential harmful consequences, this paper offers a new perspective on the question of access to credit based on a goal-right system.      

SMS advertising: How message relevance is linked to the attitude toward the brand?

Due to recent technological developments and widespread adoption of mobile handsets, the mobile medium has been transformed into an effective channel for brand communication. Short message service (SMS) advertising is the most primitive and widely used version of mobile marketing, yet the relevant literature still lacks consensus on how SMS ads influence consumer attitudes, and how this influence is generated. The present research aims to investigate how message relevance, the most important success factor of SMS advertising, is transformed into attitudinal reactions toward the advertised brand by introducing perceived intrusiveness and attitude toward the message as mediating variables into the relationship. Implications and future research avenues are discussed.     

Earnings Quality in Private SMEs: Do CEO Demographics Matter?

This study investigates the impact of CEO demographics on earnings quality for private SMEs. Using a 2012 sample of 30,476 French firms, we first find strong empirical support for a gender effect: female‐run firms engage in less earnings management than do male‐run firms. This result is consistent with female CEOs being more risk averse than their male counterparts are when making financial decisions. Second, CEO age is negatively correlated with the magnitude of discretionary accruals, and the relationship between gender and earnings quality is stronger for older CEOs. Overall, our findings suggest that CEO demographics affect the quality of accounting information.