Applicability of financial theories of capital structure to the Chinese cultural context: a study of privately owned SMEs

Using a new dataset of 1539 Chinese small and medium-sized enterprises this article investigates the firm-level determinants of capital structure and tests them against the predictions of financial theory. Firm size and profitability are both found to be related to leverage as posited by pecking-order theory. In contrast little support is found for the predicted relationship between asset structure and leverage. These findings are discussed in relationship to their Chinese cultural context. The managerial and policy implications of the research are then explored.

Determinants of best HR practices in Chinese SMEs

Abstract
Purpose– The purpose of this paper is to examine the factors which determine the adoption of best HR practices in Chinese small- and medium-sized enterprises (SMEs).
Design/methodology/approach – Regression analysis was utilized to analyse survey data obtained from 345 enterprises operating across China in a wide range of industrial sectors.
Findings – Enterprises with greater resources in terms of their size, their relationships with external organizations, their cooperation with foreign partners and the human capital of their CEO were found to be more likely to adopt best HR practices. Contrary to the findings of the existing literature no relationship was found of a relationship between family ownership and the use of best HR practices.
Research limitations/implications – The cross-sectional design is an obvious limitation of the study. Other limitations relate to the generalizability of the study findings outside the context in which the research was undertaken, and the use of convenience sampling.
Practical implications – Enterprises should consider building strategic relationships with external organizations and developing cooperation with foreign partners as a way of leveraging human resource expertise at a limited cost.
Originality/value – This is the first study to examine how differences in the resource endowments of Chinese SMEs influence their adoption of best HR practices.

Knowledge management view of environmental sustainability in manufacturing SMEs in the Philippines

This study highlights the role of knowledge management (KM) in enabling small and medium enterprises (SMEs) in a manufacturing industry in a developing country to engage in environmentally sustainable business. Drawing on the knowledge-based view of the firm, it argues that resource-constrained SMEs rely on their relational capital to augment their capability to innovate in order to find better and environmentally sound ways of doing business. However, SMEs need to harness their KM orientation in order to leverage the knowledge-based resources emanating from their relational capital towards building their innovation capability. This capability is essential in integrating effective environmental management practices in business. The findings from our analysis of data from a survey of 241 manufacturing SMEs in the Philippines support these hypotheses and underscore the importance of developing an organisational capability to engage in KM in order to adopt sustainable business practices. The implications of the findings are also discussed.

Security and privacy concerns for Australian SMEs cloud adoption: empirical study of metropolitan vs regional SMEs

New national infrastructure initiatives such as the National Broadband Network (NBN) allow small and medium-sized enterprises (SMEs) in Australia to have greater access to cost effective Cloud computing. However, the ability of Cloud computing to store data remotely and share services in a dynamic environment brings with it security and privacy concerns. Evaluating these concerns is critical to address the Cloud computing underutilisation issue and leverage the benefits of costly NBN investment. This paper examines the influence of privacy and security factors on Cloud adoption by Australian SMEs in metropolitan and regional area. Data were collected from 150 Australian SMEs (specifically, 79 metropolitan SMEs and 71 regional SMEs) and structural equation modelling was used for the analysis. The findings reveal that privacy and security factors do not significantly influence the decision-making of Australian SMEs in the adoption of Cloud computing. Moreover, the results indicate that Cloud computing adoption is not influenced by the geographical location (i.e., metropolitan or regional location) of the SMEs. The findings extend the current understanding of Cloud computing adoption by Australian SMEs. The results will be useful to SMEs, Cloud service providers and policy makers devising Cloud security and privacy policies.

The provision of business advice to SMEs by external accountants

Purpose – Business advisory services are an emerging service category for external accountants in the small and medium-sized enterprise (SME) environment. The purpose of this study is to investigate determinants of SME demand for business advice, drawing on the agency theory, relational marketing and resource-based literatures.

Design/methodology/approach – The study empirically tested theoretical predictions based on an Australia-wide survey of SMEs, in which 485 firms responded to a questionnaire.

Findings – The results show that the purchase of business advice is significantly and positively associated with the perceived competence of the external accountant, but significantly and negatively associated with length of the relationship. However, the authors observe a significant positive interaction between tenure of the relationship and competence. A unique contribution of this study is the development of the understanding of the combined role of the external accountant’s competence and the tenure of the relationship. The findings indicate that SMEs require time to verify whether accountants have the competence to provide business advice, suggesting that information asymmetry and uncertainty is minimised only after SMEs have nurtured relationships with their external accountants, and after they have developed some confidence in the competence of their external accountants. At the same time, the negative association with tenure suggests that when accountants are not perceived as competent advisors, SMEs purchase less advice over time.

Research limitations/implications – The paper has important theoretical implications by augmenting agency theory, the relational marketing and the resource-based literature, and it clarifies which antecedent factors are important in explaining demand for business advisory services provided by accountants to their SME clients. In particular, the paper highlights the importance of the combined roles that the external accountant’s competence and tenure play in the SME–accountant relationship, highlighting how these two factors can overcome credence issues and ex ante information problems.

Practical implications – The findings have practical implications for government initiatives targeting support to SMEs, as the findings identify small firms and firms planning to grow as likely to gain the greatest benefit from external advice and support.

Originality/value – This study adds to the limited literature and scant theoretical discussions on the emergence of business advisory services that accountants provide to their SME clients by drawing on several theories to explain the determinants of business advice.

Capital structure of Chinese listed SMEs: an agency theory perspective

Prior work examining the antecedents of capital structure for small and medium-sized enterprises in emerging markets is limited. This paper sheds light on how the corporate governance mechanisms adopted by firms on the newly established Growth Enterprise Market (GEM) in China influence their use of debt. We find that the financial leverage of GEM firms is positively influenced by executives’ shareholding and their excess cash compensation. Ownership concentration appears to reduce leverage, whereas the percentage of tradable shares increases leverage. In contrast, institutional investors’ shareholding does not influence the level of debt. Traditional factors such as tax and operating cash flow are insignificant in explaining the debt levels among GEM firms.

Barriers to BIM adoption: Perceptions from Australian small and medium-sized enterprises (SMEs)

This study draws upon a questionnaire survey distributed amongst SMEs in Australia to offer an insight into the main barriers to BIM adoption within Australian SMEs. Based on analyses of 78 completed questionnaires from non-adopters, the main barriers making SMEs shy away from BIM adoption are discussed. The findings show that currently around 42% of Australian SMEs are engaged with BIM. It comes to light that lack of knowledge and resources within SMEs is not a major barrier for Australian SMEs. In essence, the main barriers stem from lack of interests of clients and subcontractors working for SMEs alongside the risks associated with an uncertain return on investment (ROI) for BIM as perceived by key players in SMEs. The study contributes to the field by providing an updated insight into the status quo of BIM in Australian SMEs and spots the main barriers to target for promoting BIM adoption across Australian SMEs.

BIM adoption within Australian small and medium-sized enterprises (SMEs) : an innovation diffusion model

Despite the envisaged benefits of BIM adoption for SMEs, BIM in SMEs has remained an underrepresented area within the available academic literature. This study proposes and draws upon a framework grounded on innovation diffusion theory (IDT) to provide an illuminating insight into the current state of BIM and the main barriers to BIM adoption within Australian SMEs. Based on analyses of 135 questionnaires completed by SMEs through partial least squares structural equation modelling (PLS-SEM) and grounded on the proposed framework, the current state of BIM adoption and barriers to BIM adoption for SMEs are discussed. The findings show that currently around 42% of Australian SMEs use BIM in Level 1 and Level 2 with only around 5% have tried Level 3. It comes to light that lack of knowledge within SMEs and across the construction supply chain is not a major barrier for Australian SMEs. In essence, the main barriers stem from the risks associated with an uncertain return on investment (ROI) for BIM as perceived by key players in SMEs. The findings also show the validity of the framework proposed for explaining BIM adoption in Australian SMEs.

Cloud computing adoption by SMEs in Australia.

This study aims to examine the important factors that influence SMEs’ adoption of cloud computing technology. The results showing that SMEs were influenced by factors related to advantaging their organizational capability rather than risk-related factors. The findings are useful to SMEs owners, Cloud service providers and government in establishing Cloud computing adoption strategies for SMEs.

The ten commandments for global electronic commerce success in small business

Small to medium-sized enterprises (SMEs) contribute significantly to national economies and employment levels and represent a viable source for inventions and innovations. The emergence of electronic commerce in the early 90's could provide different opportunities to the small business sector to overcome its inadequacies. However, in view of the electronic commerce/business (EC) literature in organizations in general and in SMEs specifically, EC research is scarce. Available research portrays a gloomy picture about EC uptake and use by SMEs. Therefore, this chapter attempts, by reviewing recent EC research, to depict an agenda for EC success in SMEs made up of ten influencing factors. Thus, an attempt is made to develop deeper understanding about the factors influencing EC success in SMEs. By following the suggested guidelines in this chapter, SMEs would be in a better position to assess the Viability o/the new EC perspective 10 their organizations. The same factors are highly important to researchers, SMEs, professionals (including educational institutions) and policymakers in driving SMEs and EC forward.

Innovation theories in retrospect : the case of electronic commerce adoption in small business in New Zealand

A review of the technological innovation adoption literature on small to medium-sized enterprises (SMEs) provides useful insights into factors influencing innovation adoption but points to the need to introduce more determinants of innovation adoption to SMEs research. This research is interested in identifying these factors and hence, introducing more potential determinants to electronic commerce (EC) adoption research in SMEs. Therefore, this research attempts to extend the technological innovation theories to EC adoption research in SMEs by identifying potential constructs and factors from these theories and then checking their face validity using three case studies in New Zealand. This research endeavours to shortlist and discuss the most important determinants of EC adoption and to eliminate the least relevant ones.

A framework for electronic commerce research in small to medium-sized enterprises

It is believed that the recent emergence of electronic commerce (e-commerce) in the early '90s could provide different opportunities to small to medium-sized enterprises (SME's) in overcoming part of their technological, environmental, organizational, and managerial inadequacies. However, recent research portrays a gloomy picture about e-commerce uptake and use in SME's. Therefore, the implication here is twofold. Initially, there is a need to generate more e-commerce research that could penetrate much deeper into main impending issues pertaining to the SME’s in their potential uptake and use of e-commerce. On the other hand, e-commerce is characterized of being embryonic but growing very fast and fragmented across the different disciplines, which makes the task of capturing its different perspectives a very complex one. The preceding two implications represent the greatest challenge for researchers and professionals interested in undertaking e-commerce research in SME’s. In line with the above implications, the first objective of this research aims at capturing the different e-commerce perspectives from the SMEs' point of view, and the second objective aims at capturing the e-commerce perspective from the theoretical and the methodological point of view. Addressing the preceding implications in this research could shed some light into some of the gray areas in the e-commerce research in SMEs.

The Strategic outsourcing Decision of IT and eCommerce: The Case of Small Businesses in New Zealand

In New Zealand, small to medium-sized enterprises (SMEs) play a very important role in the economy by their contribution to both employment and gross domestic product. Addressing issues pertinent to SMEs is of paramount importance in driving this sector forward. Information Technology (IT) emerges as one main enabler for SMEs in automating their operations, seeking new opportunities and enhancing their strategic business positioning in local and international markets. However, the inability of SMEs to handle the dynamic nature of IT due to problems inherent in their size, structure and resources, makes it difficult for them to take appropriate decisions to benefit from the IT technologies. The advent of eCommerce (EC) has only compounded this problem. One way out of this complex situation is to outsource the IT and EC technology requirements by the SMEs. This study endeavours to identify the pattern of IT and EC outsourcing issues of SMEs within New Zealand. This research attempts to identify the main driver for IT/EC outsourcing in SMEs as well as to explore the problems of IT outsourcing and makes suggestions for further research in this crucial sector.

eCommerce for owner-operated restaurants : an exploratory study

This paper reports the findings of an exploratory study of eCommerce adoption by owner-operated restaurants in Melbourne. The study included interviews with 22 owner/managers of small restaurants and 4 restaurant industry association representatives. We discuss the eCommerce applications that are currently being used in the Melbourne restaurant industry and the attitudes and experiences of owner-operators related to eCommerce. We explore the reasons for the slow uptake of eCommerce in the restaurant industry and the competitive structure of the industry
in which owner-managed restaurants operate.