The influence of family ownership on SME performance: evidence from public firms in Taiwan

The relationship between family ownership and firm performance has gained increased attention in the business strategy and financial economics literature. Most existing studies use large companies as the research sample; studies that explicitly investigate the influence of family ownership on the performance of small- and medium-sized enterprises (SMEs) remain sparse. This study raises this issue explicitly by investigating the influence of founding-family ownership on the return on assets and Tobin’s q of 341 public SMEs in Taiwan, during the period of 2002–2006. It emerges from the data that family ownership is prevalent and substantial in Taiwan, representing half of the public SMEs and accounting for more than 11 percent of their outstanding equity. It was found that the influence of family ownership on SME performance is positive and significant. Overall, the results suggest that family ownership is an effective organizational structure for SMEs in Taiwan.     

Disaggregating entrepreneurial orientation: the non-linear impact of innovativeness, proactiveness and risk-taking on SME performance

Previous studies have generally established a positive relationship between aggregated measures of entrepreneurial orientation (EO) and firm performance. However, there are theoretical reasons suggesting that three dimensions of EO (innovativeness, proactiveness, and risk-taking) may possess differential relationships with performance in smaller firms. This study utilizes a sample consisting of 1,668 small-to-medium sized enterprises (SMEs) in nine countries across 13 different industries to provide a finer-grained analysis of the EO-performance relationship. Specifically, we theorize and test a non-monotonic influence of innovativeness, proactiveness, and risk-taking on SME performance. Innovativeness and proactiveness displayed predominantly positive U-shaped relationships with SME performance. Risk-taking, however, displayed a predominantly negative U-shaped relationship with SME performance. Further, individualism was found to positively moderate the relationships between innovativeness-performance and proactiveness-performance. Taken together, these results suggest that differential relationships exist between three dimensions of EO and SME performance, with important theoretical implications for future EO research.     

How personal and organizational drivers impact on SME international performance: The mediating role of organizational innovation

This article develops and tests a conceptual model to identify the impact of internal drivers (personal and organizational) on the international performance of small and medium-sized enterprises (SMEs). Drawing on the resource-based view of the firm and its capability extensions, it is argued that the effect of drivers is mediated by organizational innovation. To test the proposed theoretical model, we collected data from 120 exporting SMEs in Portugal. Results show that the indirect mediating effect of innovation is particularly relevant with regard to the organizational driver-performance link. Insights contribute to research on the importance of innovation for capability and resource deployment during internationalization.     

SME development,economic growth,and government intervention in a developing country: The Indonesian story

There is an ongoing debate in the literature on the development of small and medium enterprises (SMEs) in less developed countries (LDCs) on two issues: the survival of SMEs in the course of economic development and the importance of government promotion programs for SME development. This research paper aims to examine those issues empirically with Indonesian data. For this purpose, it develops and tests a set of hypotheses. It shows that both real gross domestic product per capita and government development expenditure (especially that used to finance SME development promotion programs) have positive impacts on SME growth. With this finding, the research argues that SMEs in LDCs can survive, and even grow in the long-run, for three main reasons: (a) they create a niche market for themselves, (b) they act as a “last resort” for the poor, and (c) they will grow along with large enterprises (LEs) because of their increasingly important production linkages with LEs in the form of subcontracting.

SME foreign market entry mode choice and foreign venture performance: The moderating effect of international experience and product adaptation

Firms’ foreign market entry mode choice attracts considerable research attention. However, the performance implications of this choice remain inconclusive, particularly in the context of small and medium-sized enterprises (SMEs). The present paper draws on the resource-based view (RBV) and develops a theoretical model specifically tailored to the context of SMEs in order to study the relationship between entry mode choice and foreign venture performance. Testing hypotheses on 133 German SMEs, we show that international experience as a resource and product adaptation as a capability improve the performance of non-equity entry modes by mitigating liabilities of smallness inherent to SMEs. We furthermore find empirical support for the joint moderating effect of international experience and product adaptation on the focal relation. Our findings contribute to the SME foreign market entry mode literature and have implications for practitioners and future research.     

The impact of education histories on the decision to become self-employed: a study of young,aspiring, minority business owners

Although it is well documented that minorities are underrepresented among the self-employed, no study to date has examined how limited educational opportunity might be responsible. Using data from the High School and Beyond Fourth Follow-Up survey and controlling for detailed educational histories, this study finds that most variables associated with academic success actually reduce the likelihood one will aspire to own their own business at an early age. Positive developers of self-employment aspirations include financial resources and having a parent who is already self-employed. Asians and males are also more likely to anticipate owning their own business.     

The impact of brand authenticity on brand trust and SME growth: A CEO perspective

This article investigates the linkages between brand authenticity, brand trust, and SME growth from a CEO perspective. Brand authenticity is operationalized as consisting of three factors: brand consistency, brand customer orientation, and brand congruency. The hypotheses derived in this paper will be tested with new measures and data from 285 German SMEs using structural equation modeling. The results confirm that brand consistency and congruency foster brand trust, which in turn drives SME growth.     

公共财政视角下的区域内义务教育均衡发展研究

本文从公共品理论范畴定位义务教育,从财政角度将义务教育纳入公共服务均等化建设目标,构造适应公共服务要求的义务教育均衡机制.     

Going public: The impact of insiders' holdings on the price of initial public offerings

Many entrepreneurs dream of seeing their company's securities trading in the public marketplace. Although going public has many benefits for a firm's founders and insiders, the process is often confusing and intimidating. One of the questions that investment bankers are asked frequently by insiders is, “What determines the price of a stock in the initial public offering?” This article presents empirical evidence that the stock price in an initial public offering (IPO) is directly related to the percentage of the firm's equity retained by the insiders. In other words, the offering price is relatively high when it appears that the insiders are not “bailing out” when the firm goes public.This research investigates equity ownership structure as a determinant of the pricing of IPOs. The hypothesis to be tested is: IPOs with higher (lower) insider holdings at the time of the offering are priced higher (lower) as a result of lower (higher) required rates of return. Support for the hypothesis is based on agency theory, which postulates that additional risk is created when there is a perceived separation of ownership and control.There are several implications of this research. First, a greater appreciation of the sophistication of the IPO market with regard to the actions of the insiders should be gained. Second, the reader's knowledge of the activity and relative pricing of IPOs during the 1978–1985 time period should be enhanced. Third, insiders should realize that actions regarding their relative equity holdings at the time of the offering have an impact on the price of the offering. Finally, the reader should recognize that even in “hot markets” the actions of insiders at the time of an initial public offering regarding the sale of equity are monitored by the market.     

The impact of offshored and outsourced call service centers on customer appraisals

Firms are increasingly relying upon offshored and/or outsourced call centers to provide post-sales assistance to their customers. Although the motivation to engage in these practices is efficiency gains, the possibility exists that offshored and outsourced call centers may have a detrimental impact on customer appraisals. The aim of this research is to posit the conceptual reasons as to why differences may arise in customer evaluations from these practices. To this end, we rely on the homophily principle and hybrid organization theory to provide conceptual grounding, and utilize a company dataset of customer post-call evaluations to offer an initial test of the hypotheses.

Institutional difference,organizational experience,and foreign affiliate performance: Evidence from Polish firms

We draw from the institutional economics and organizational learning theories to clarify two international business debates. The first debate involves how institutional distance affects foreign affiliate performance: some propose a negative and others a positive direct effect. We clarify this debate by differentiating between negative and positive institutional difference. The second debate involves how experience modifies this relationship: some propose a negative and others a positive moderating effect. We clarify this debate by differentiating between similar and dissimilar experience, creating four moderating effects: Advantage of Challenge Anticipation, Advantage of Opportunity Anticipation, Disadvantage of Polymath Downgrading, and Disadvantage of Specialist Upgrading.     

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.     

The impact structure of social capital on corporate performance: Empirical evidence from listed companies in China

Vertical relationships with the government, particular relational capital and organizational social network capital, constitute corporate social capital (CSC). Using the empirical data of 97 listed companies in China, this paper examines the impact of CSC on corporate performance, finds that CSC has a positive impact on sales revenue but an insignificant impact on the improvement of ROA. More specifically, when a firm enlarges its sales revenue, the function of organizational network capital is stronger than that of a particular relational capital and that of governmental connections. The paper also finds that state-owned enterprises (SOEs) have more advantages in using governmental connections, therefore leading to better social status than non-SOEs do, who have fewer advantages in using any particular relational capital. The article suggests that managers should appraise carefully the effectiveness of CSC, and combine it with other resources; firms should distinguish the structure of the impact of CSC on performance improvement in a dynamic way. With respect to the implication of this paper, it could help in analyzing firm behaviors in the transitional China. Translated from paper in International Symposium on Entrepreneur Research and Education, 2006, April (in Chinese)     

The impact of public R&D subsidy on small firm productivity: evidence from Korean SMEs

This paper explores the effects of R&D promotion policy on SME performance. We use a large panel data set on public R&D subsidies to Korean manufacturing firms. We control for counterfactual outcomes employing the DID (difference in differences) estimation procedure as well as for the endogeneity of the R&D investment and the R&D subsidy using the 2-stage Tobit/Logit DPD (dynamic panel data) procedure. We find significant evidence for positive effects of the public R&D subsidy on both the R&D expenditure and the value added productivity of Korean manufacturing SMEs. The policy thus appears to have been successful in fostering technological advancement and in promoting economic growth.     

Breakthrough innovation in international business: The impact of tech-innovation and market-innovation on performance

The literature suggests that the greater the perceived novelty of a firm’s products and markets, the greater the potential value to the user (Lepak et al., 2007). In this study we analyze the extent to which breakthrough innovation (both tech-innovation and market-innovation) has a positive impact on both economic and strategic export performance. Tech-innovation incorporates technological developments to improve customer benefits versus existing alternatives in the market. Our findings reveal that tech-innovation has a positive impact on the economic and strategic export performance of firms. This relationship becomes stronger when more human resources are available and the exporter becomes more oriented toward the importer. In less competitive markets, the positive relationship between tech-innovation and both types of export performance becomes even stronger.Market-innovation occurs when the product concept or benefits depart from serving existing or conventional markets. Market-innovation was found to be negatively associated with strategic export performance, as it requires major learning effort by importers. This suggests that to create value, exporters need to develop solutions jointly with importers. Overall, these findings suggest that value creation in terms of both tech-innovation and market-innovation needs to involve importers to achieve expectations, thereby leading to improvement in a firm’s short-term and long-term export performance.     

Signaling and initial public offerings: The use and impact of the lockup period

To reduce information asymmetries for potential investors considering investment in an IPO venture, owners can signal the firm's longer-term viability and quality in several ways. The lockup period, is one signal that can be offered. We investigated the lockup period of a sample of 640 ventures going through the IPO and find that a longer lockup period acts as a substitute signal to venture capital (VC) and prestigious underwriter backing. Furthermore, we find that ventures which have a going concern issue can reduce the amount of underpricing at the time of the IPO by accepting a longer lockup period.     

The effects of experience and education on the organization of marketing knowledge

This research investigates changes in the cognitive organization of marketing knowledge as experience and education increase. In the first of two studies, marketing managers and marketing students were asked to sort terms from an introductory marketing text into groups of related concepts. In the second study, the same managers sorted terms specific to their corporation into groups of related concepts. Unbeknownst to the subjects in both studies, there was an underlying functional structure to the terms. The organization of marketing knowledge corresponded more closely with the expected structure as education increased and, to a much greater extent, as experience increased. Implications of the results for exploiting managerial expertise and for training managers are discussed. © 1993 John Wiley & Sons, Inc.     

New venture development: The costs and benefits of public sector assistance

In recent years there has been an extraordinary level of entrepreneurial activity occurring in the United States. Venture start-ups, new incorporations even bankruptcies are reaching record numbers. Concurrent with the increase in entrepreneurial activity has been an effort within the Reagan Administration to privatize public sector programs designed to aid new and small, ongoing business ventures. The premise behind this movement is that private sector initiatives can better, and more efficiently, serve the needs of entrepreneurs and small business managers and can also offer new business opportunities for some entrepreneurs. At the same time, however, privatization could reduce the assistance programs currently targeting fledgling ventures, many of which are unable to afford a private consultant.The purpose of this article is to examine the economic impact of one public sector assistance program, the Small Business Development Center (SBDC), in terms of its contributions to new venture initiation in Georgia and South Carolina. The focus on the SBDC program is appropriate since over 50% of the counseling activities of most of the centers is devoted to pre-venture clients, i.e., individuals or groups considering starting a business. This study is important and timely, not only in respect to assessing the effectiveness of public sector assistance programs for pre-ventures, but also for assessing whether it is worthwhile from an economic perspective, to offer assistance to such individuals in the first place.Although it is difficult to be precise in attributing cause to effects in dynamic business ventures, our study indicates that the Small Business Development Center's client sample experienced a greater than expected number of business starts, and a higher than expected rate of survival. The results suggest that the net taxable sales, generated by these new ventures in 1984. was approximately $20 million in Georgia and $10 million in South Carolina. Results also suggest that almost 500 new jobs were created in Georgia and 600 new jobs were created in South Carolina between 1981 and 1984 as a result of successful business starts among SBDC pre-venture clients.While such figures are impressive, the bottom line of this study is that the new tax revenues generated by client firms exceeded the cost of delivering the services. Specifically, our conservative estimates suggest a $3.80 to $1.00 and $1.50 to $1.00 benefit to cost ratio for the center's pre-venture consulting services in Georgia and South Carolina, respectively. Furthermore, the value attached to the assistance received, by the entrepreneurs themselves, closely paralleled our estimates, lending additional validity to our conclusions. Resource constrained entrepreneurs can obtain effective business assistance from the SBDC free-of-charge, and the benefits to society accruing from this service far outweigh the cost of providing them.     

Gender as a determinant of small business performance: Insights from a British study

The performance of small businesses, that is the ability of small firms to contribute to job and wealth creation through business start-up, survival and growth, has been an important area of policy and academic debate in the 1980s. Surprisingly little has been written about gender and small business performance. Our literature search revealed only a small number of studies of any substance on this subject, though over forty made some mention of it, Most studies shied away from direct examination of quantitative performance measures (such as jobs created, sales turnover, annual growth), tending to concentrate on qualitative measures of success or failure. The paper examines small business performance and gender using data obtained from a survey of 600 (300 women, 300 men) Scottish and English small business ownermanagers, part of a three year study on the impact of gender on small business management. Analyses suggest that the relationship between gender and small business performance is complex, but that gender still appears to be a significant determinant even after other key factors are controlled for.     

The impact of FDI on the performance and entrepreneurship of domestic firms

This paper examines how foreign direct investments influence the performance and entrepreneurship of domestic firms, a crucial question for economies driven by incursion of exogenous factors and especially transition economies. The intent is to investigate the way foreign direct investments shape the capabilities of domestic firms; hence, for this purpose, we take Macedonia, a Southeast European economy, as a case study. We find that (i) foreign ownership has helped restructure and enhance the productivity of domestic firms, (ii) FDI has positive influence in reinforcing the creation of new firms, and (iii) in line with the established literature, a foreign investment is likely to influence the job seeker to get employed rather to start their own business. Overall, the results confirm the influence of foreign firms in assisting entrepreneurial activity. The impact of foreign investment is, in general, positive and tends to influence the restructuring process of domestic enterprises.