Antecedents of firm performance in emerging economies: Business groups,strategy, industry structure,and state support

A rich literature has investigated the antecedents of firm performance in developed economies, resulting in a consensus view that firm resources and strategy are the key determinants. Several arguments, however, suggest that in emerging economies other factors are more important for firm performance. This study analyzes the impact of firm strategy and industry structure as well as business group membership and state support on firm performance in an advanced emerging economy, Turkey. Using a data set compiled from a selection of the 1000 largest manufacturing firms in this country, the study employs several regression models to identify the main determinants of firm performance as measured by productivity and net profit margin. In contrast to studies of developed economies, the investigation finds that firm-related factors (competitive strategies) do not significantly influence performance; instead factors related to industry structure and business group membership are the strongest determinants of firm performance; further, state support interacts with business group membership and is positively related to productivity.     

Chinese cross‐border mergers and acquisitions in the developing world: Is Africa unique?

China has emerged as an important partner for Africa. Not surprisingly, Chinese business and investment relations with Africa have been growing. This article contends that Africa offers a different proposition to Chinese business interests in non‐African developing economies. In this optic, it takes a “comparative” institution‐based view treating factors that determine Chinese multinationals' cross‐border merger and acquisition (CBMA) decisions as comparatively different for Africa to the rest of the developing world. From a panel data estimation of the number of Chinese CBMAs from 2007 to 2016, we find among market size, natural resources, strategic assets, labor productivity, and institutional governance, only natural resources and market size have a distinctive effect, with Chinese investors being more attracted to African natural resources than the African market. The drive for natural resources provides impetus for Chinese MNEs to choose CBMAs over greenfield investment, and through majority ownership to exercise control. Our inference is that Africa is “significantly” different from other developing regions, in terms of CBMAs, as Chinese multinationals have a strong motive to control access to natural resources.     

An examination of the substitutability of founders human and financial capital in emerging business ventures

Undoubtedly, access to financial capital and other resources is an important antecedent of new venture performance. Indeed, inadequate financial resources often are cited as a primary reason why emerging businesses fail (Barren 1989; McQueen 1989; Otterbourg 1989; Rujoub, Cook, and Hay 1995). Yet, there is some feeling among scholars that competent founders will find a way of coming up with necessary resources and capital Chandler and Hanks 1994, Timmons 1990, Thorne 1989. In this study, we seek to better understand and provide insight into the factors that determine the amount of money needed to start a business, and the factors that drive the decisions of whether such funding should come from founder savings or from outside sources.We explore two questions: (1) What factors are associated with the amount of initial capital raised? and (2) What factors determine the mix of founder savings versus financial capital from outside sources that create the initial capital structure? We seek to answer these questions using a sample of 102 manufacturing and service firms between 3 and 7 years of age. These firms were categorized as manufacturing, retail, wholesale, and business services. In general, the evidence supports our hypotheses. The amount of financial capital at start-up varies by industry. Of key importance in this study, human and financial capital appear to be substitutable. The analysis shows that, on average, firms with high levels of founder human capital and low levels of initial financial capital perform similarly to firms that have low levels of founder human capital and high levels of financial capital. Subgroup analysis provides insights into the degree of substitutability. This finding suggests that founders with strong background experience may be able to start businesses that survive and thrive with less financial capital than their less experienced counterparts.The proportion of initial capital provided by the founder differs significantly across industry types. In more capital intensive industries, founders provide a smaller proportion of the start-up capital. Interestingly, the amount of initial capital provided by the founder does not vary significantly across industry types. This suggests that the amount of initial capital provided by the founder may result from contributing all they can give to the business, which appears to be similar across business types. Finally, founders’ perceptions of their ability to recognize and take advantage of opportunity are positively related to the proportion of initial capital provided by the founder. This research provides insights into the factors that appear to drive the initial capital intensity and structure. To provide better understanding of this phenomenon, future research could investigate such practices as bootstrapping, asset sharing, or other techniques that allow founders to control resources without requiring ownership.     

Assessing the Effects of Employee Turnover on the Performance of Small and Medium-Scale Enterprises in Nigeria

The significant role small and medium-scale enterprises (SMEs) plays in growth and development is acknowledged universally. As a group, they generate more new jobs and introduce innovative ideas, products, and business methods. However, this important group is incapacitated by numerous factors militating against their growth, particularly in Third World countries such as Nigeria. In this study the authors identified major factors that affect the productivity of SMEs thereby hindering their growth. Their findings relate factors such as the dearth of skills, absence of managerial talents, and employee turnover to enterprise performance, productivity, and growth ability. Employee turnover is found to have a significant and negative correlation with SME performance. This indicates that the lower the employee turnover, the higher the performance of SMEs, and vice versa.     

Redefining Business Success: Distinguishing Between Closure and Failure

New firms are believed to have high closure rates and these closures are believed to be failures, but two U.S. Census Bureau data sources illustrate that these assumptions may not be justified. The Business Information Tracking Series (BITS) showed that about half of new employer firms survive beyond four years and the Characteristics of Business Owners (CBO) showed that about a third of closed businesses were successful at closure. The CBO also made it possible to compare results of models of business survival and business success, but because of non-response bias logit models were used. Similar to previous studies, firms having more resources – that were larger, with better financing and having employees – were found to have better chances of survival. Factors that were characteristic of closure – such as having no start-up capital and having a relatively young owner – were also common in businesses considered successful at closure. Hence, few defining factors can be isolated leading to true failures. The significant proportion of businesses that closed while successful calls into question the use of "business closure" as a meaningful measure of business outcome. It appears that many owners may have executed a planned exit strategy, closed a business without excess debt, sold a viable business, or retired from the work force. It is also worth noting that such inborn factors as race and gender played negligible roles in determining survivability and success at closure.     

家族、家族文化与家族企业发展

本文从我国家族和家族文化的视角入手,探讨了家族和家族文化在家族企业发展中的积极影响:节约管理隐性成本;面对多变经营环境快速作出反应;劳资关系的和谐稳定;企业原始积累快;管理决策高效;企业人力资源易整合,及企业发展提供所需的企业精神动力。这些积极因素的有效利用,有助于家族企业在发展中赢得其他经济组织所没有的竞争优势。同时家族企业需善用家族资源,防止家族资源的负化。     

An examination of the relationship between women's personal goals and structural factors influencing their decision to start a business: The case of Pakistan

Most of the work on women entrepreneurs in developing countries relates largely to those who are uneducated and very poor, working in the rural areas or the urban informal sectors. Few studies have attempted to study women entrepreneurs in the urban formal sectors in developing countries, the category of women corresponding to the women entrepreneurs studied in the Western world.Furthermore, most of these studies, conducted largely by international development agencies, have tended to focus on issues from a macroperspective. They assume that women entrepreneurs in developing countries are a homogeneous group, with similar experiences in starting a business.This study departs from earlier research in two major ways. First, it focuses on actual and potential women entrepreneurs in the urban formal sector. Second, adopting a symbolic interactionist approach, it tries to take a closer look at women's experiences in starting a business. Hence, it focuses on women's perceptions and the way they define their goals and the advantages and constraints they face in starting a business at a micro level.Data for the study were gathered through in-depth interviews of 33 participants of an entrepreneurship development program (EDP) run in Karachi, Pakistan. Sixteen of these were women who started a business after attending the EDP. The other 17 women did not start a business, although they had originally intended to do so.The study revealed that women wanted to start a business in order to achieve three types of personal goals: personal freedom, security, and satisfaction.Freedom seekers were mostly women who had experienced some kind of frustration or dissatisfaction in their paid work, and who now wanted to start their own business in order to have the freedom to choose the type of work, hours of work, work environment, and the people they worked with.Security seekers were mostly women who, triggered by some personal mishap (such as death or retirement of husband), wanted to start a business in order to maintain or improve their and their family's social and economic status. An important reason why most of these women opted for their own business rather than paid work was the flexibility that self-employment offered in terms of location (close to home, working from home) and hours of work, to which paid jobs could not cater.The satisfaction seekers were mostly housewives, with no previous work experience, who wanted to start a business in order to prove to themselves and to others that they are useful and productive members of society.The impact of structural factors on women's ability to start a business varied according to the dominant personal goal women had chosen. Structural factors influencing start-up were divided into three categories: internal resources, that is, women's qualifications and/or work experience; external resources, that is, finance and location; and relational resources, that is, family, employees, suppliers, and customers.The relationship between women's personal goals and structural factors influencing start-up led to the development of a conceptual framework that could help explain why some women, despite apparently unfavorable circumstances, succeeded in starting a business, whereas others even under apparently favorable circumstances did not do so.Understanding the different goals women pursue and how the relationship between these goals and the structural factors influenced start-up can be of great help to researchers, planners, as well as practitioners working to promote women entrepreneurs. This understanding can lead to the development of more finely tuned policies and programs of support that not only recognize that women have different goals for wanting to start a business, but that their needs and experiences in starting up vary according to their particular goals for business ownership.     

Do young firms owned by recent immigrants outperform other young firms?

This study compares the performance of new businesses owned by recent immigrants with that of other new firms. It addresses an on-going unresolved discussion in the academic and professional literatures by drawing on a large sample of Canadian business owners whose firms began trading between 2000 and 2004 and using taxation data to track 2004 to 2008 performance. The results provide empirical evidence that young immigrant-owned exporter firms outperformed young domestically-founded firms whether or not they exported; however, immigrant-owned young enterprises that did not export underperformed other young firms. Owner-level factors such as gender, growth intentions and experience also influenced growth performance among young SMEs. The results provide evidence that suggests that immigrants have resources such as access to international networks that provide competitive advantage over non-immigrant owners that export or aspire to export. Not all immigrant business owners, however, are able to lever such advantages. The implications of the findings for research and policy are discussed.     

Productivity Dispersion and its Determinants: The Role of Import Penetration

The new heterogeneous firm models in international economics predict a negative impact of trade openness on within-sector productivity disparities, due to a restructuring process leading to a reallocation of resources towards more efficient firms and the exit of less productive ones. I test this hypothesis for the Italian manufacturing sectors making use of panel data models. I investigate the existence of heterogeneous effects in terms of origin of imports and I account for a geographical dimension computing the productivity dispersion indicator by sector and regional macro-area. The analysis is implemented within a comprehensive framework controlling for other potential determinants, such as technological factors and domestic competition. My findings show that competitive pressure from low income countries reduces the productivity heterogeneity across firms. On the contrary, a positive impact is detected for the increased availability of intermediates originating from developed countries.     

B2B or Not to Be: Does B2B E‐Commerce Increase Labour Productivity?

We implement an endogeneous switching‐regression model for labour productivity and firms’ decisions to use business‐to‐business (B2B) e‐commerce. Our approach allows B2B usage to affect any parameter of the labour productivity equation and to properly take account of strategic complementarities between the input factors and B2B usage. Empirical evidence from 1,460 German firms shows that there is a simultaneous relationship between labour productivity and the adoption of B2B. Firms deciding to use B2B e‐commerce employ their input factors more efficiently than non‐B2B users. Conversely, firms refrain from engaging in B2B probably because they expect the cost of B2B adoption will not be sufficiently compensated by productivity gains.     

The impact of internal,external, and competitor factors on marketing strategy performance

ABSTRACT

Strategy formulation is commonly understood as the match between a firm’s internal resources and skills and its external environment. Marketing strategy performance is the function of a dynamic, interactive process incorporating internal firm resources, external environmental factors, and competitive actions. The study aims to assess the impact of competitor actions on marketing strategy performance. We develop a model that accommodates the effects of 29 variables (comprising internal marketing strategy variables, external environmental factors and competitors’ marketing mix variables) on business performance. We empirically test the model using simultaneous equation modelling of time-series data on UK car manufacturers collected from publically available resources and annual reports. The results show that external factors, in particular competitors’ marketing mix elements, have a greater influence on a company’s business performance than internal (marketing and non-marketing) strategy variables. Implications for marketing theory and management are discussed.     

Lifesizing Entrepreneurship: Lonergan, Bias and The Role of Business in Society

In an era of downsizing and disposable ethics, there is a need to redefine the role of business in society. Central to such a discussion is the frame of reference of the entrepreneur. A traditional business model defines entrepreneurship based on endowing resources with new wealth producing capabilities. This paper defines entrepreneurship as a calling to endow resources with new value. In support of the impact such a distinction would have on repositioning the role of business in society, the paper weaves together writings from the Pope, Drucker, and Lonergan, with emphasis on applying Lonergan’s discussion of bias to the discussion of ethics in business. Adapting the term, “lifesizing”, which was coined by the author in a previous article, to entrepreneurship, the paper takes the position that lifesized entrepreneurship can act as a catalyst similar to Lonergan’s cosmopolis and play a key role in countering bias and repositioning the role of business in society.     

Patterns of Research Productivity in the Business Ethics Literature: Insights from Analyses of Bibliometric Distributions

In any academic discipline, published articles in respective journals represent “production units” of scientific knowledge, and bibliometric distributions reflect the patterns in such outputs across authors or “producers.” Closely following the analysis approach used for similar studies in the economics and finance literature, we present the first study to examine whether there exists an empirical regularity in the bibliometric patterns of research productivity in the business ethics literature. Our results present strong evidence that there indeed exists a distinct empirical regularity. It is the so-called Generalized Lotka’s Law of scientific productivity pattern: the number of authors publishing n papers is about 1/n ^c of those publishing one paper. We discuss the likely processes that underlie the productivity pattern postulated by the Generalized Lotka’s Law. We find that the value of the exponent c is equal to about 2.6 for the comprehensive bibliometric data across the two leading business ethics journals. The observed research productivity pattern in the business ethics area, a relatively young discipline, is interestingly very consistent with those found in much older, related business disciplines like economics, accounting, and finance. We discuss the general implications of our findings.     

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.     

A theoretical overview and extension of research on sex,gender, and entrepreneurship

With the rising number of women-owned businesses has come a considerable amount of research, and even more speculation, on differences between male and female entrepreneurs and their businesses. To date, these findings and speculations have been largely atheoretical, and little progress has been made in understanding whether such differences are pervasive, let alone why they might exist. Thus public policy-makers have had little guidance on such difficult issues as whether or not unique training and support programs should be designed for women versus men. Moreover, lenders who finance new and growing firms have little to go on but their own “gut instinct” in assessing whether women's and men's businesses are likely to run in similar ways, or whether they might be run in different but equally effective ways.The lack of integrative frameworks for understanding the nature and implications of issues related to sex, gender, and entrepreneurship has been a major obstacle. Two perspectives that help to organize and interpret past research, and highlight avenues for future research, are liberal feminism and social feminism.Liberal feminist theory suggests that women are disadvantaged relative to men due to overt discrimination and/or to systemic factors that deprive them of vital resources like business education and experience. Previous studies that have investigated whether or not women are discriminated against by lenders and consultants, and whether or not women actually do have less relevant education and experience, are consistent with a liberal feminist perspective. Those empirical studies that have been conducted provide modest evidence that overt discrimination, or any systematic lack of access to resources that women may experience, impedes their ability to succeed in business.Social feminist theory suggests that, due to differences in early and ongoing socialization, women and men do differ inherently. However, it also suggests that this does not mean women are inferior to men, as women and men may develop different but equally effective traits. Previous entrepreneurship studies that have compared men and women on socialized traits and values are consistent with a social feminist perspective. These studies have documented few consistent gender differences, and have suggested that those differences that do exist may have little impact on business performance.While this interpretation of past findings is relevant to the question of if and how female and male entrepreneurs differ, there are still large gaps in our knowledge. In particular, only one study (Kalleberg and Leicht 1991) has systematically explored whether or not potential differences related to discrimination or socialization affect business performance; the study used limited measures of business performance, and assessed only a restricted range of male I female differences. This article reports on a study that explored other potential differences related to discrimination and to socialization (which are hypothesized based on liberal and social feminism) and looked at their relationship to a more comprehensive set of business performance measures.The study indicates that for a large, randomly selected sample of entrepreneurs in the manufacturing, retail, and service sectors, there were few differences in the education obtained by males and females, or in their business motivations. Women entrepreneurs were, however, found to have less experience in managing employees, in working in similar firms, or in helping to start-up new businesses. Women's firms also were found to be smaller than men's, to have lower growth in income over two years, and to have lower sales per employee. Regressions undertaken to examine predictors of a range of business performance indicators suggest that women's lesser experience in working in similar firms and in helping to start-up businesses may help to explain the smaller size, slower income growth, and lesser sales per employee of their firms.For policy-makers, this article suggests that systemic factors that afford women less access to experience must be addressed. Support for classroom training or related advisory activities may not be warranted; there is little evidence that women lack access to relevant classroom education. However, programs that help increase women's access to hands-on experience in starting firms or in working in the industry in which they hope to set up business does seem advisable. In-class education or counseling would not seem to compensate for lack of real-world experience, which suggests that any available funds should be directed more toward initiatives centered on apprenticeship programs than toward those centered on classroom teaching.Implications for lenders and investors are less clear cut, but suggest that whatever innate differences may exist between men and women are irrelevant to entrepreneurship. While women's businesses do not perform as well as men's on measures of size, they show fewer differences on other, arguably more critical business effectiveness measures-growth and productivity—and no differences on returns. Discrimination against women-owned businesses based on these findings would clearly be both unethical and unwarranted. The fact that women appear to obtain similar growth, productivity, and returns, in fact, suggests that they may be compensating for experience deficits in ways that current research does not illuminate. While more systematic inquiry is required to assist in understanding why men's and women's firms may differ in some predictable ways, this study would suggest that lenders and investors wishing to assist small businesses should focus on evaluating the amount and quality of the business and non-business experience of entrepreneurs, and consider sex an irrelevant variable.For entrepreneurs, this research reinforces the notion that acquiring relevant industry and entrepreneurial experience is of considerable importance if they seek to establish large firms and/or to achieve substantial firm productivity and returns. In particular, helping in the start-up of firms and spending extended periods of time in the industry of choice appear to yield subsequent rewards in the performance of any individual's firm. Future research is needed to investigate whether or not other types of business experience or non-business experience might bring additional benefits in terms of positive impact on future business performance, but the indication of the current work is that one's sex per se is neither a liability nor an asset.     

Productivity efficiency and firm size: An empirical analysis of foreign owned companies

There are various arguments about the impact of firm size on productivity growth. On one hand, it is claimed that large firms could be more efficient in production because they could use more specialized inputs, better coordinate their resources, etc. On the other hand, it is emphasized that small firms could be more efficient because they have flexible, non-hierarchical structures, and do not usually suffer from the so-called agency problem. This paper argues that size exerts an indirect effect on firms’ productivity, as it conditions the impact of internal factors on productivity. By using different methodological approaches to assess the impact of different characteristics of foreign owned firms on productivity, this paper analyzes to what extend the heterogeneous pattern of productivity can be accounted for by the levels of those factors.     

Roles of actors in combining resources into complex solutions

Combining resources to develop complex solutions (e.g., products or services) involves a varied set of business actors. Research tends to assume that actors are more or less autonomous in combining the resources they use. Presenting findings from a study of the construction of the first two pre-discharge homes for patients with cognitive and motor disabilities, we show that the autonomy of the single actor in combining resources is limited and that resource combinations are collectively enacted. Consequently, the features of the emergent resource combinations depend on the set of actors involved. We also argue that each actor takes part in resource combination both as provider and as user of resources; the two roles imply different perspectives that lead to different focal points which, in turn, impact how resources interface. The two roles orient the conduct of parties and, as confronted in business relationships, they shape the development of business relationships and resource combinations.     

Learning problems in transnational business education and training: the case of the MBA in Thailand

The transnational Master of Business Administration (MBA) programme has been one of the most popular official business training programmes amongst Thai business practitioners. Although the numbers of transnational business schools and MBA programmes are rapidly increasing, the programmes face numerous challenges from both local and global factors. This empirical study discusses the concept of learning in transnational MBA programmes in the Thai business training and cultural context. By investigating experiences from various key stakeholders, the study highlights various problems related to learning style and culture, learning and languages, the transferability of the Western managerial concept to the Thai context, and the value of Western learning resources for Thai business learners. The implication of the results of this study for the management of transnational programmes is that such management needs to respond to local conditions, regional forces and global factors rather than being locked into a standard model.     

SME Export Performance in Indonesia After the Crisis

Firms in export-oriented sectors with more exporters and more foreign investment, or firms with more access/use of credit, tend to export a higher share of their output, whether they are small or large. The latter points out that the benefits of size-neutral policies that improve the overall business and foreign investment climate and secure access to formal credit for all enterprises produce benefits for the entire economy. Small firms with higher use of machinery and higher use of domestic inputs displayed a higher likelihood to increase the share of their output exported. SMEs show rising productivity with access and use of appropriate production inputs. Decades of protective size-specific policies, such as the reservation scheme for SMEs still in place in Indonesia’s manufacturing may have distorted, more than supported, adoption of appropriate technologies among SMEs. These policies may need to be revisited and refocused on more size-neutral policies such as improved access to collateral or reduced cost of business registration and licensing.     

Relationships among Strategic Capabilities and the Performance of Women-Owned Small Ventures

This study of small, life-style ventures owned by women focuses on the strategic, firm-level factors related to business performance. A theoretical model drawing on the resource-based theory is developed and tested empirically. The model includes strategic capabilities, management styles, and their relation to performance. It is tested empirically on a sample of 220 Israeli female business owners. Analysis reveals that life-style venture performance is highly correlated with certain aspects of the business owner's skills as well as the venture&apops;s resources. Paradoxically, the owner/managers in the sample rate their skills and their venture's resources as being weak in precisely those areas that correlate positively with business performance. These findings suggest that performance of life-style ventures owned by women depends more on marketing, financial, and managerial skills than on innovation.