Small Firms

... Firm investment in imperfect capital markets: A structural estimation. Sangeeta Pratap Corresponding Author Contact Information , E-mail The Corresponding Author , a and Sílvio Rendon E-mail The Corresponding Author , b. ... Agency costs, net worth, and business fluctuations. ...

This study describes the optimality in resource utilization of the manufacturing firms in the south-west region of Bangladesh. A translog production function has been estimated to describe the input-output relationship. The large scale firms have the opportunity to substitute capital for labour for producing the same level of output. On the other hand, scarcity in capital leads to lower productivity of labour in medium and small firms. Therefore, an increase in capital may lead to an increase in labour productivity as well as output for these small and medium firms. The productive labour force may ensure proper utilization of the capital resources as well as the long run growth.

Purpose – To provide an initial assessment of the nature and extent of the involvement of Asian-owned firms in the creative industries in London; to identify and assess any barriers they face; and draw out the implications for policy. Design/methodology/approach – An empirical study, undertaken in late 2002. Data sources included official statistical data and previous reports, as well as a programme of semi-structured, in-depth interviews with 23 Asian entrepreneurs spread across eight sub-sectors. Findings – Asians are making a significant contribution to London’s creative sectors, although they do face a number of specific constraints. Some of these are specific to the creative industries but others are shared with other small firms. However, few of these constraints appear to be exclusively Asian. Research limitations/implications – There are some limitations relating to the small scale of the study and its focus on a single geographical location. Practical implications – The res...

This paper investigates the determinants of the survival, between 2001 and 2004, of 622 small firms in England. Seventy one percent of these firms were less than 5 years old in 2001. Prior work by industrial economists has primarily focussed upon factors such as profitability and exit barriers. In contrast, this paper adopts a more managerial approach by examining whether the human capital of the business owner and organisational variables explain survival and non-survival. Our results suggest the founder's education and bank ...

The objective of the paper is to review the previous studies on factors affecting small business growth or performance for the period of 2006-2014. The review of the literature of factors affecting small business growth or performance based on the papers available in online and published in referred journals is focused. 34 papers are considered as the primary research topic. Each of the articles has been used as the unit of analysis. The four broad areas of factors has been focused namely owner-manager characteristics, characteristics of firm, financial factors and external environment. The paper provides some ideas and approaches used in the previous literature to describe small business growth and factors affecting the growth. The literatures suggest that there is no unified theory or model to describe small business growth. Although there are many studies on the issue, still the theory of small business growth is very fragmented and inconsistent. The new theoretical perspectives ...

This paper explores patterns of adoption and use of information and communications technology (ICT) by small and medium sized enterprises (SMEs) in the southwest London and Thames Valley region of England. The paper presents preliminary results of a survey of around 400 SMEs drawn from four economically significant sectors in the region: food processing, transport and logistics, media and Internet services. The main objectives of the study were to explore ICT adoption and use patterns by SMEs, to identify factors enabling or inhibiting the successful adoption and use of ICT, and to explore the effectiveness of government policy mechanisms at national and regional levels. While our main result indicates a generally favourable attitude to ICT amongst the SMEs surveyed, it also suggests a failure to recognise ICT’s strategic potential. A surprising result was the overwhelming ignorance of regional, national and European Union wide policy initiatives to support SMEs. This strikes at the...

This article proposes that individual small firms, just like large firms, use different approaches to make strategy. Three processes relevant to small firms are identified: simplistic, participative and adaptive. The article examines how these processes are related to performance, depending on industry life cycle stage. Empirical analysis indicates that all three approaches are related to small firm performance, but that

With increasing interest by the software development community in software process improvement (SPI), it is vital that SPI programs are evaluated and the reports of lessons learned disseminated. This paper presents an evaluation of a program in which low-rigour, one-day SPI assessments were offered at no cost to 22 small Australian software development firms. The assessment model was based on

In this paper we analyse and compare,the effects of tariff and quota restrictions on the incentives for national and international mergers in a segmented,oligopolistic market of Cournot-competing firms. We confirm previousresults that tariffs tend to discourage (encourage) mergers involving small firms based in the protected (non-protected) market, at the margin. But we find that quotas tend todiscourage similar mergers

The present paper provides a theoretical framework of the relationship between the rate of entrepreneurship and national economic performance. The first part deals with some aspects of the recent economics literature on the relation between entrepreneurship and small business on the one hand, and economic growth on the other. In particular, it gives a summary of some work of the EIM/CASBEC research group in The Netherlands. In the second part, a framework is presented linking entrepreneurship and growth to different levels of aggregation. The last part of the paper illustrates the framework with some historical case studies. The present paper supplements Wennekers, Uhlaner and Thurik (2002) and is concerned with the causes of the rate of entrepreneurship.

Although the small business sector as a whole is achieving phenomenal growth, an important concern in the field has been identifying the problems, challenges, and success characteristics associated with the prudent growth of individual firms. A strategy utilized by many small firms to achieve their growth objectives is one of geographic expansion. This approach involves expanding a firm’s business from its original location to one or more additional geographic sites, and is particularly well suited for firms that cannot expand in their present location but believe that their products or services may be appealing to consumers in other markets.Surprisingly, despite the prevalence of geographic expansion as a means of small firm growth, this is a neglected area of small business research. Although researchers have examined the common challenges associated with small firm growth, a small business that expands from one location to several locations is subject to a number of potentially unique challenges. For example, during the course of opening a new geographic site, a small business manager will be confronted with the task of managing an existing business and a start-up at the same time. The challenge created by this undertaking, along with the other challenges associated with geographic expansion, have not been specifically identified. An improved understanding of these challenges may help small firm managers maximize their changes of leading successful expansion efforts.As a result of the lack of research in this area, this study used a comparative case study methodology to develop a theoretical model of the antecedents of effective small business geographic expansion. The model was developed in two steps. First, a preliminary model of the antecedents of effective small business geographic expansion was developed from the existing small business growth literature. Second, using analytic induction, the preliminary model was compared with the experiences of five small businesses that have engaged in a growth strategy of geographic expansion for the purpose of developing a more thorough and more valid theoretical model. A unique attribute of the sample is that not all of the businesses have been successful in their expansion efforts. Two of the five small businesses included in the study have had failed expansions, providing us the rare opportunity to contrast failed expansion efforts against successful ones.The model that emerged from this approach supports the notion that geographic expansion involves a unique set of managerial challenges. The consistent evidence across the five case studies indicated that effective small business geographic expansion involves the following six major areas of concern: planning for growth, managing growth, reasons for growth, expansion site characteristics, a set of moderator variables, and expansion performance.Among the implications of the study is that the unique nature of the geographic expansion process adds a layer of complexity to firm growth that exacerbates the need for planning. Along with the normal challenges involved with adding structure to accommodate growth, a firm that engages in geographic expansion must do this in an unfamiliar location, where the market potential and legitimacy of the firm’s business concept is untested. The consistent evidence that emerged from the cases is that planning helps attenuate these challenges. In addition, the recruitment and selection of qualified personnel to staff expansion sites is a critical activity, along with networking in the expansion site locations to establish organizational legitimacy. Three variables were found to moderate the relationship between managing growth and expansion performance. Learning and flexibility were found to have a positive influence on the managing growth expansion performance relationship, whereas environmental turbulence was found to have the opposite impact. Finally, a complex set of relationships emerged from the study pertaining to expansion site characteristics. For instance, the evidence generated across the cases suggested that planning helps a firm develop a set of heuristics for expansion site selection, which helps a firm avoid placing a site in an undesirable location.

Discretionary slack, along with entrepreneurial orientation (EO), are vital to the growth and long- term survival of small firms. This research combines a Penrosian view of growth with structural contingency theory to develop and test a conceptual model of the relationship between slack and growth. Using a survey of Canadian firms with fewer than 50 employees, the study finds that discretionary slack has positive effect on growth which is fully mediated by EO. In addition, the analysis confirms a positive reciprocal effect of a feedback loop between growth and slack. The study controls for, and considers the effects of, firm age, size and industry knowledge intensity. This research contributes valuable insights for further development of firm growth theory, specifically in relation to small firms. The study is also important for policy development given that: a) small firms have the potential to contribute more than larger firms to job creation but may not due to early exit; b) firms exhibiting even modest growth more than double their chances of survival; and, c) those firms that survive grow fast. This study contributes to the literature on firm growth and informs small business leaders. It also provides policy makers with practical insights to facilitate their role in supporting the growth and survival of small firms that make such an important contribution to the economy.

Keywords:  Discretionary slack; entrepreneurial orientation; growth; small firms; resources; Penrose; structural contingency.

The pallet network is an increasingly popular business model in Western Europe. In this model, individual transportation companies organize themselves into a network to efficiently transport pallets throughout a geographic area. This allows them to achieve economies of scale, scope, and aggregation as well as synergies in marketing and information technology. This paper explores how the pallet network business model works, the types of customer value created by pallet networks, determinants of the optimal size of a pallet network, and opportunities for the future expansion of pallet networks.