Are Small Firms Really Less Productive?

Small and medium-sized establishments (SMEs) account for a large proportion of industrial employment and production in almost all countries. Moreover, the recent literature emphasizes the role SMEs play in nurturing entrepreneurship and generating new products and processes. Although SMEs could be a source of new ideas and innovations, there are substantial productivity differences between small and large establishments. In this paper, we analyze three sources of productivity differentials: technical efficiency, returns to scale, and technical change. Our analysis on the creation, survival, and growth of new establishments in Turkish manufacturing industries in the period 1987–1997 shows that all these three factors play a very important role in determining the survival probability and growth prospects of new establishments.     

Employment generation by small producers in the Canadian manufacturing sector

This paper uses job turnover data to compare how job creation, job destruction and net job change differ for small and large establishments in the Canadian manufacturing sector. It uses several different techniques to correct for the regression-to-the-mean problem that, it has been suggested, might incorrectly lead to the conclusion that small establishments create a disproportionate number of new jobs. It finds that net job creation for smaller establishments is greater than that of large establishments after such changes are made. The paper also compares the importance of small and large establishments in the manufacturing sectors of Canada and the United States. The Canadian manufacturing sector is shown to have both a larger proportion of employment in smaller establishments but also to have a small establishment sector that is growing in importance relative to that of the United States.     

Ecological dynamics of industrial organizations in South Korea

By utilizing the ecological perspective, this study examines ecological dynamics of industrial organizations in the manufacturing sector of the Korean economy over the period between 1950 and 1990. First, this study investigates how a population of manufacturing establishments grew in size across different age cohorts. The investigation of the age structure of a population of manufacturing establishments shows that the overall growth trajectory follows, by and large, a pattern of dominance of large-scale production units. It also shows that expansion of existing manufacturing establishments rather than entry of new ones has been the significant contributing factor in accounting for the growth of industry. Second, this study examines how certain cohorts of organizations survived over time and how they differentially died out in the face of rapid environmental change. The examination of the underlying population volatility of manufacturing establishments shows that the net mortality rates of different birth cohorts decrease with age. However, during the periods of economic recession and political turmoil, old cohorts have higher net mortality rates than younger ones, indicating their vulnerability toward profound institutional realignments as well as their heavy reliance on political networks. This finding indicates that the liability of newness thesis should be applied with caution.     

The Changing Competitiveness of Taiwan's Manufacturing SMEs

Taiwan's manufacturing SMEs have played an important role in promoting trade, creating jobs, and developing certain industries. Yet, they might not have performed uniformly over time, nor always looked alike. This paper explores the changing position and the source of changes of Taiwan's SMEs during the last three decades. We have found, first, that the industrial development in the 1960s was attributable more to larger firms than SMEs. It was in the 1970s and after that SMEs gained competitiveness consistently. Second, among SMEs, the smallest firms employing fewer than 10 persons became progressively less important in Taiwan's manufacturing sector until the last sub-period between 1986 and 1991. Medium-sized firms, employing 10 to 99 persons, performed very well over time. As the survival principle suggests, keen competition assures efficiency among SMEs. Then, a quick response to market signals is also vital for survival. An industrial policy not against SMEs may be the best that SMEs can expect. A stable macroeconomic environment combined with an open market having low entry barriers and low transaction costs provides the best opportunity for SMEs to grow. The Changing Competitiveness of Taiwan's Manufacturing SMEs to grow.     

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.     

Transaction Structure in Japanese Small Business Sector

An attempt has been made to examine some aspects of transaction structure of the small business sector in Japanese manufacturing. It has been found that there are some interesting findings in the industrial organization of the sector (1) In the transactions of intermediate goods with manufacturing, small businesses have more frequent transactions with other small businesses than with large firms. On the other hand, large firms have more transactions with each other than with small businesses; (2) The transactions between SMEs and large firms, and between SMEs themselves vary from industry to industry, depending on production/demand structure of an industry and product structure of its SMEs sector; (3) In engineering, such as electrical machinery and transport equipment, the intra-industry transactions from small businesses to large firms are great, suggesting a larger extent of subcontracting relationships. Also, textiles, clothing, and printing and publishing also have higher subcontracting transactions.The relationships are different between the two groups.     

Internationalization capabilities of SMEs: A comparative study of the manufacturing and industrial service sectors

Nowadays, the global economy requires developed countries to undergo industrial restructuring. In this context, industrial small- and medium-sized enterprises (SMEs) need to collaborate with the service sector to enhance their competitiveness and strategic capabilities. Indeed, industrial service SMEs have been the object of particular attention from governments since these enterprises have become a key element for manufacturing and innovation networks in developed countries. However, these firms, as well as the manufacturing SMEs they serve, now face the challenge to internationalize. This paper addresses the of the strategic capabilities required by SMEs in general, and manufacturing and industrial service SMEs in particular, to internationalize, as well as the effect of these capabilities on their export performance. These strategic capabilities are presented in a research model, which relates human resources (HR), product development capabilities and market development capabilities to export performance. In testing this model with a sample of 347 Canadian and French SMEs, similarities and differences between the two types of SMEs are highlighted.     

The Determinants of SMEs' Market Share in 1991 – Taiwan Manufacturers

Small and medium-sized enterprises (SMEs) have become increasingly popular in recent decades, having caused concern among scholars of various areas. Our line of research focuses on the determinants of SMEs' market share. This study explores the topic base on Taiwan's manufacturers' data collected in 1991. Our empirical results indicate that Taiwan has witnessed SMEs becoming prosperous in manufacturing industries with higher relative labor productivity, low entry barriers, prosperous subcontracting activities, and young ages. Our results indicate that, in the transitory process of industrial development, Taiwan's SMEs no longer can afford high wage payments when at the same time the quality of labor does not increase accordingly. As Taiwan approaches the status of a developed economy, the beneficiaries of export activities have changed. Unlike 1986, in 1991 there was a smaller share of SMEs in Taiwan's export oriented industries. Furthermore, SMEs benefited from their efforts to increase their automation status. The emphasis on issues concerning environmental protection proved to be another source of entry barrier that kept SMEs from prospering. Certain similarities arise when comparing our conclusions with those of the U.S., Canada, Germany, and Japan, all of whom represent industrialized countries. We can conclude that as Taiwan matures in her industrial development process, SMEs also struggle to a certain maturity in theirs.     

Differing patterns of industrial dynamics: New Zealand,Ohio, and Sweden, 1978–1994

New Zealand, Ohio, and Sweden have experienced sharply divergent macroeconomic developments since the early 1970s. During the 1980s, New Zealand went from being the most heavily regulated and protectionist OECD country to one of the least regulated and most open economies in the world. Ohio suffered severe economic downturns when its major industries (steel, automobiles, and machinery) went through devastating crises. Since then, a major restructuring has taken place, and manufacturing output, exports, and employment have generally grown faster than in the United States as a whole. Sweden had an outstanding industrial growth record for several decades until the mid-1970s but then suffered economic setbacks from which it has not yet fully recovered. Industrial output declined for several years, resumed growth in the early 1980s but then stagnated again in the early 1990s.The object of this paper is to study the microeconomic responses to these differences in the macroeconomic environment. While manufacturing employment declined by more than 20 percent in each country, the number of establishments in manufacturing stayed constant in Sweden while it declined by 9 percent in Ohio and more than doubled in New Zealand.While there are certainly structural differences in the composition of the manufacturing sector in the three economies, these differences explain only a small portion of the differences in development patterns. Only a handful of 3-digit ISIC industries grew in terms of employment in each country between 1978 and 1993, but the growth industries were not the same across countries, and there were substantial differences in the growth patterns within these industries.     

Patterns of Industrial Conflict in Private Sector Service Industries: Evidence from British Survey Data

Patterns of industrial conflict in four major British service industries are analysed using large-scale survey data. The data confirm that strike rates are lower in the service sector than in manufacturing industry. In comparison with manufacturing, service sector establishments appeared less likely to experience multiple stoppages, their disputes involved a smaller proportion of the workforce and more workforce sections were found to be taking action for the first time. The major determinant of the pattern of industrial action appeared to be bargaining structures characterised by multi-employer, industry-wide agreements. The incidence of non-strike action and very short stoppages indicates that official strike returns significantly understate the extent of conflict in service industries.     

常州市产业结构的演变路径及展望

建国后,常州市产业结构的演变路径分为三个阶段:工业体系的构建及工业基础的奠定阶段、工业化道路的积极探索阶段、产业结构的持续调整阶段。在产业结构的调整上经历了重点发展纺、轻、电和加工业及机电工业;提高轻纺、装备制造业;发展高新技术产业三个阶段。结合国际国内经济形势与产业政策发展趋势,常州市产业结构优化升级的愿景,即重点发展新能源和环保、创意产业,加快生产性服务业发展,偏重培养中小企业和民营科技型企业的技术创新能力,加强区域品牌建设,打造"绿色产品制造名城"。     

The Characteristics and Features of SMEs: Favorable or Unfavorable to Logistics Integration?

For small and medium-sized enterprises (SMEs), logistics integration is one of the most significant challenges of modern management. Growing numbers of SMEs are under pressure from large manufacturing enterprises (LMEs) to change their traditional management styles, both operationally and organizationally, replacing them with integrated systems that help increase the speed and fluidity of physical and information flows, help synchronize demand with supply, and help manage transactions more accurately. The recent literature discusses integrated logistics chain management quite extensively, but most studies address the issue from the standpoint of large firms. Given the importance of SMEs in the economies of industrialized countries, and given, too, that a constantly growing number of such firms will have to replace their management methods by logistically integrated practices, the authors of this study believe that it is important to examine the characteristics and features of SMEs in order to identify those favorable and unfavorable to logistics integration.     

The White Paper on Growth,Competitiveness and Employment and Greek Small and Medium Sized Enterprises

This paper makes an assessment of the homo-genous approach and policy measures towards SMEs, adopted by the White Paper on Growth, Competitiveness and Employment and by national policies in Greece. It is demonstrated that there is a key distinction between the structure of competitive, high-tech, highly-specialized SMEs in advanced countries, whose size is determined by the size of the international niche market where they compete, on the one hand and on the other, SMEs in Greece or in other less developed member-states, whose (micro) size is determined by the local markets they serve, while in most cases they do not have the marketing skills/approach to address export markets. Copying successful instruments for SMEs in advanced countries can thus be most dangerous for the less developed countries, since the industrial organization of the typical SME is very different from those SMEs in Northern Europe. Therefore, the effects of policy measures, without further modifications, will be different from those envisioned by the EU policy-makers. Increasing the utilization of assistance by SMEs in less developed member-states is likely to be more effective if the assistance focuses on incentives and services, which support cooperative action in local and foreign markets, rather than on direct SME financing.     

Regulatory costs on entrepreneurship and establishment employment size

In this article, we examine how the level of regulation affects the size distribution of businesses. To the extent that regulation functions as a fixed cost, it should lead to larger firm size. However, regulations may also lead to smaller establishments with firms outsourcing regulated activities or staying small to take advantage of state exemptions for small businesses from regulations. We empirically examine the relationship between the size distribution of establishments and the level of regulation using state- and industry-level panel data from 1992 to 2004. Our results suggest that regulation decreases the proportion of zero employee and 1–4 employee establishments. The proportion of establishments in the 5–9 employee range generally increases with the level of regulation. Thus, regulation appears to operate as a fixed cost causing establishments to be larger.     

Size, strategic, and market orientation affects on innovation

Based on a random sample of 500 South Yorkshire non-hi-tech manufacturing small, medium-sized enterprises (SMEs) the quantitative findings support the hypothesis that size, strategic, and market orientation associate with innovation. The results show that prospectors are medium-sized companies and small companies, defenders. Prospectors are more innovative and market-oriented than defenders. The findings reveal that to succeed in an intense competitive environment, non-hi-tech manufacturing SMEs have to be proactive toward market opportunities, receptive to innovation and take the lead in new product innovation. However, their weaknesses include a lack of flexibility, a partial open culture and an organizational structure that impedes sustained innovation. This study addresses a gap in the literature, by linking innovation to the strategic orientation of the firm instead of examining firms' specific characteristics or the effects of external environment and structural factors. The research focuses on non-hi-tech manufacturing SMEs.     

Network ties and export propensity of Vietnamese small and medium enterprises

This paper investigates the impacts of different network ties on export propensity of Vietnamese small and medium enterprises (SMEs) in the manufacturing sector. Using data from a survey of over 2,600 manufacturing SMEs in 2015, we found that social networks contribute positively to the export propensity of SMEs, while the size of business networks negatively associates with the likelihood of export. However, bank networks and political networks are not significant for the propensity to export of Vietnamese SMEs. We discuss the results in detail and offer recommendations for SME owners, managers and policy makers.     

Establishment Size by Sector and County-Level Economic Growth

Median household income is found to grow faster in counties with smaller manufacturing, retail, wholesale, and service establishments.     

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.     

Korean Manufacturing in Transition: Patterns in the Past,Current Status,and Future Challenges

In recent years, Korea has emerged as one of the world's fastest growing industrial nations. Manufacturing industry has been the foundation of its economic success, and, in this paper, an in-depth analysis of the development process of the Korean manufacturing industry is presented. From an early stage, Korean manufacturers followed a general pattern in achieving their current success: they successfully combined high-quality, but inexpensive and plentiful, human resources with imported technologies and material to produce low-cost goods for a protected market. In this process, the Korean government played the role of planner, protector, and provider for the national economy and the entire manufacturing industry. In recent years, however, the private sector has assumed leadership in terms of planning and executing industrial development plans. With this change, Korean manufacturers are making a clear transition from a low-cost producer to a high value-added competitor with an increasing emphasis on quality and flexibility. This paper offers an empirical analysis of the performance improvements, future competitive priorities, and action programmes designed to achieve this strategic shift.     

中小企业国际化经营转型的制度困境及发展路径

中小企业“浅度”的国际化经营是以出口和加工贸易为主体、以低价竞争为手段、以廉价劳动力资源为核心、以低附加值产品为载体,不利于中小企业在拓展国际市场的同时迅速成长并形成核心竞争力。中国中小企业要实现从“浅度”向“深度”国际化经营的转型,必须以战略规划促进成长,突破企业制度的约束;以特色经营拓展市场,突破贸易制度的约束;以企业集群强化优势,突破产业制度的约束;以品牌塑造提高影响力,突破市场体制的约束;以技术创新形成核心竞争力,突破企业间合作制度的约束。