Structural change and productivity growth, 20 years later: old problems, new opportunities

Includes bibliography

Industrialization, new technologies and competitiveness in the Caribbean

Includes bibliography

Relationships between company size, types of production system and supply chain management: evidence from electro-electronics sector in Brazil

Purpose – The purpose of this paper is to investigate how company size and the type of production system affect the adoption of supply chain management (SCM) practices in companies in the electro‐electronics sector in Brazil. Design/methodology/approach – An e‐mail survey of 107 companies associated with the Brazilian Electrical and Electronics Industry Association (ABINEE) was conducted. Statistical techniques were employed to verify the adoption of SCM practices according to the size of the company and its production system. Findings – The major results indicate that the larger the size of the company, the higher the level of adoption of SCM practices, and that the choice of SCM practices depends upon the type of production system implemented. Practical implications – The implications of this study are useful to top management leaders of small and medium‐sized enterprises since the findings enable them to identify the most common practices adopted by either large‐, medium‐ or small‐sized companies in order to benchmark the level of adoption of SCM practices. Production managers can also benefit from this study by identifying the SCM practices that may support certain production systems.

Diverging Development Paths of the Electronics Industry in Korea and Taiwan

This paper examines the process and mechanism of economic development in the Republic of Korea and Taiwan through a comparative analysis of the electronics industry in each country. The paper will show that in its initial stage of development, the electronics industry in both economies had the same type of dual structure: a domestic demand sector based on the protected domestic market, and an export sector intended to capitalize on low-wage labor for the international market. However, this dual structure in the two economies faded away after the mid-1970s as their respective indigenous export-oriented enterprises began to develop. But the primary industrial players in each economy were very different. In Korea they were comprehensive electronics manufacturers affiliated with chaebols, and in Taiwan they were small and medium-size enterprises. Differences in the two economies' development mechanisms have brought about this divergence in development paths. In Korea this mechanism has been characterized by the government's positive role and the chaebol's readiness to react to the government's leadership. In Taiwan the development mechanism has been based on the private sector independent from the government. As an extension of such diverged development paths, ICs and personal computers showed spectacular growth in Korea and Taiwan after the 1980s. The development of ICs in Korea was primarily the result of a decisive role played by the chaebol's sizable financial resources, while the competitiveness in personal computers largely reflected the agility and flexibility of Taiwanese small and medium-size enterprises.

A Distributive Comparison of Enterprise Size in Korea and Taiwan

Research to date on the economic development of the Republic of Korea and Taiwan has frequently contrasted the two economies by depicting the former as centered on large-scale enterprises and the latter on small and medium-size enterprises (SMEs). The purpose of this study is to see if the appropriateness of this perception will also be verified by the statistical data. In Section I the authors utilized census data on the Korean and Taiwanese manufacturing sectors to compare the distribution pattern of the sizes of enterprises in the two economies. However, on examining the available data for making this comparison, the authors discovered that for Korea the statistics provided are those at the level of the establishment (a physical unit engaging in industrial activities such as a factory, workshop, office, or mine) while the statistics for Taiwan are those at the enterprise level. Mindful of this difference, the authors looked at the portion of the economy accounted for by large-scale establishments in Korea that employed 500 workers or more and by enterprises in Taiwan employing the same number of workers, and they discovered that the portion that these large-scale businesses account for, especially in the area of output, has steadily declined since the 1980s. When comparing the share of total production that these large-scale establishments/enterprises account for in the two economies, the authors concluded that those in Korea accounted for a larger share of that economy's production than did their counterparts in Taiwan. The authors then compared the portion of the economy accounted for by establishments in Korea and enterprises in Taiwan that employed less than ten workers, and they found that the portion of the two economies that these very small-scale production units accounted for has also been on the decline. Section II compares the portions of the two economies accounted for by large business groups. After comparing the percentage of GDP accounted for by the total sales of these business groups, the authors found that large business groups in Korea have played a far more important role in Korean economy than has been the case for such groups in Taiwan. This difference in the importance of such business groups in the two economies has also played an significant part in fostering the perceived dichotomy of large-scale enterprises playing the important role in Korea versus SMEs being the important players in Taiwan. Section III compares the percentage of total exports accounted for by SMEs, and shows that SMEs in Taiwan account for a larger share of exports than do their counterparts in Korea. This section also shows that in Taiwan the share of export sales for SMEs has consistently exceeded that for non-SMEs, while in Korea the relationship between enterprise size and the rate of export sales has been directly proportional. This difference in the size of the major export players is another factor fostering the perception of the Korean economy being centered on big business while Taiwan's is on SMEs. Although there were difficulties and limitations when comparing the data of the two economies, the statistical comparison undertaken in this study shows that in general big business has played the major role in the development of the Korean economy while in Taiwan's economic development this role has been played by SMEs. Thus the statistical data also verifies the perceived dichotomy of these two economies.

Regional Cooperation of Small & Medium Firms in Japanese Industrial Clusters

This study examines the effects of intra-regional cooperation among firms and institutions on the growth of firms, using the unique data set of questionnaire survey collected in the three major industrial clusters in Japan. In contrast to the existing studies on regional innovations or agglomeration economies, this study explicitly focuses on the detailed contents of cooperative activities with two specific viewpoints: 1) the contents of regional cooperation in each of the three production stages of R&D, commercialization, and marketing, and 2) the detailed types of alliance partners. Our results demonstrate three points: 1) positive correlations are observed between the intensity of regional cooperation and the firm growth rate and R&D expenditure, 2) horizontal cooperation such as alliances with universities and cross-industry exchange organizations has positive significant effects on the growth rate of firms, which is in contrast with the previous studies that stressed only the role of vertically integrated inter-firm linkages in Japan, and 3) contents and partners of regional cooperation are different among the three clusters based on different dominant industries.

Bank Borrowing and Financing of Medium-sized Firms in Indonesia

The improvement of financial intermediation functions is crucial for a robust banking system. When lending, banks have to cope with such problems as information asymmetry and adverse selection. In order to mitigate these problems, banks have to product information and improve their techniques of lending. During the 1998 financial crisis, Indonesia's banking system suffered severe damage and revealed that the country's banking intermediation functions did not work well. This paper examines the financial intermediation functions of banks in Indonesia and analyzes the importance of bank lending to firms. The focus is on medium-sized firms, and "relationship lending", one of the bank lending techniques, is used to examine financial intermediation in Indonesia. The results of logit regressions show that the relationship between a bank and a firm affects the probability of bank lending. The amount of borrowing and collateral are also affected by a firm's relationship with a bank. When viewed from the standpoint of relationship lending to medium-sized firms, Indonesian banks cannot be criticized for any malfunction of financial intermediation.

The role of a firm's absorptive capacity and the technology transfer process in clusters: How effective are technology centres in low-tech clusters?

This paper analyses how the internal resources of small- and medium-sized enterprises determine access (learning processes) to technology centres (TCs) or industrial research institutes (innovation infrastructure) in traditional low-tech clusters. These interactions basically represent traded (market-based) transactions, which constitute important sources of knowledge in clusters. The paper addresses the role of TCs in low-tech clusters, and uses semi-structured interviews with 80 firms in a manufacturing cluster. The results point out that producer–user interactions are the most frequent; thus, the higher the sector knowledge-intensive base, the more likely the utilization of the available research infrastructure becomes. Conversely, the sectors with less knowledge-intensive structures, i.e. less absorptive capacity (AC), present weak linkages to TCs, as they frequently prefer to interact with suppliers, who act as transceivers of knowledge. Therefore, not all the firms in a cluster can fully exploit the available research infrastructure, and their AC moderates this engagement. In addition, the existence of TCs is not sufficient since the active role of a firm's search strategies to undertake interactions and conduct openness to available sources of knowledge is also needed. The study has implications for policymakers and academia.

Exporting and innovation performance: analysis of the Annual Small Business Survey in the UK

This paper analyses the determinants of the export propensity of UK small and medium-sized enterprises (SMEs) based on the 2004 Annual Small Business Survey. Particular emphasis is placed upon the relationship between innovation activities (distinguishing product from process innovation) and export performance. In general the data suggest that some 17 per cent of firms within this group sell outside the UK. Businesses that export are also characterized by high levels of innovation activity (43 per cent of exporters innovate in products, 27 per cent innovate in process and 21 per cent innovate in both). When considering product and process innovation independently we find that both impact positively on the decision to export. However, once we consider the interdependence between both innovation activities, we find no robust evidence that process innovation increases the probability to export beyond product innovation.

Purchasing in small firms – past assumptions, current evidence and future research

This paper reviews the literature on purchasing in small and medium sized enterprises (SMEs), in the context of the wider literature on SMEs. Evidence from these sources is related to insights from exploratory interviews with the owner-managers of 15 small firms, to derive recommendations for further research. Our findings complement those of Ellegaard (2006) but also extend these with specific proposals for the process and settings of future research, notably that the priority is to understand purchasing in small firms (cf medium or micro-firms) firms and research should be ‘small firm-centric’.

The social and entrepreneurial orientation of small businesses:mutually exclusive or reinforcing? (INTERACTIVE PAPER)

Principal Topic - As argued by Acs and Phillips (2002) it is not only “the creation of wealth (entrepreneurship)” but also “the reconstitution of wealth (philanthropy)”, which has been essential for the inherent dynamism of the market economy (Ibid., p.201). However, we understand little about the entrepreneurship – philanthropy link in institutional contexts that differ from that of leading developed market economies. Accordingly our research agenda is to investigate the entrepreneurship-philanthropy nexus in a very different context of Lithuania, a country which shed a command economy system twenty years ago. In particular, we are interested to see if the cluster of attitudes and strategies of firms conducive to entrepreneurship, i.e. their entrepreneurial orientation (Covin & Slevin, 1989), is consistent or contradictory with philanthropy? In other words, is philanthropy strongly associated with some core components of entrepreneurship, or is it an entrepreneurial anomaly, relying on a minority of economic actors that provide important links with wider, non-economic communities. Method - The study draws on 270 randomly sampled, phone interviews with owners and ownermanagers of small and medium-sized enterprises (SMEs), i.e. firms with less than 250 employees. Interviews were conducted in Lithuania during January- March, 2008. Our results are based on confirmatory factor analysis combined with regression analysis. Results and Implications - Despite the legacy of informal institutions that is conducive neither to entrepreneurship nor to civic society, we found that by now, (i) the companies that score highest on entrepreneurial orientation construct, (ii) that perform best and those (iii) that have foreign owners are also most likely to declare their commitment to philanthropy. Our findings that most entrepreneurial firms are also involved in philanthropy are consistent with the perspective on the pattern of development in an entrepreneurial economy as outlined by Acs and Phillips (2002).

Purchasing green transport and logistics services:implications for small business

Considering its strong environmental impact, logistics plays a critical role in green supply chain management. It provides strategic links in the supply chain and is an essential function in the delivery of green products to the consumer. There is a general consensus on the fact that more environmentally sustainable companies may be achieved only if transport and logistics activities also become greener. To achieve this objective, buyer companies need to incorporate green considerations in the purchasing of transport and logistics services. This appears particularly challenging for small and medium sized enterprises (SMEs) because of their traditional lack of managerial, organisational and financial resources that often result in failure to adopt an environmental perspective. In the extant literature, green purchasing has received increased attention over the past decade and the strategic importance of introducing green aspects into purchasing practices has been recognised. However, little has been written in relation to purchasing green transport and logistics services. The aim of this paper is to explore practices in the buying of green transport and logistics services and to derive implications for small buyer companies. The paper analyses how general environmental company ambitions and environmental purchasing practices are reflected when green transport and logistics services are purchased in three different European countries (Italy, Ireland and Sweden) using a multiple case study research approach. The results of the paper indicate that while the case companies show a relatively high concern for green issues at corporate level, a lower importance is attributed to green issues at the purchasing function level. When green concerns in the purchasing of transport and logistics services are analysed the level of importance decreases further. Thus, a conflicting attitude is evident between the overall corporate level and the purchasing of transport and logistics services specifically. This suggests that there is potential for improvement especially in the area of green collaboration in buyer and supplier relationships.

Small businesses and flood impacts:the case of the 2009 flood event in Cockermouth

Flooding can have a devastating impact on businesses, especially on small- and medium-sized enterprises (SMEs) who may be unprepared and vulnerable to the range of both direct and indirect impacts. SMEs may tend to focus on the direct tangible impacts of flooding, limiting their ability to realise the true costs of flooding. Greater understanding of the impacts of flooding is likely to contribute towards increased uptake of flood protection measures by SMEs, particularly during post-flood property reinstatement. This study sought to investigate the full range of impacts experienced by SMEs located in Cockermouth following the floods of 2009. The findings of a questionnaire survey of SMEs revealed that businesses not directly affected by the flooding experienced a range of impacts and that short-term impacts were given a higher significance. A strong correlation was observed between direct, physical flood impacts and post-flood costs of insurance. Significant increases in the costs of property insurance and excesses were noted, meaning that SMEs will be exposed to increased losses in the event of a future flood event. The findings from the research will enable policy makers and professional bodies to make informed decisions to improve the status of advice given to SMEs. The study also adds weight to the case for SMEs to consider investing in property-level flood risk adaptation measures, especially during the post flood reinstatement process. © 2012 Blackwell Publishing Ltd and The Chartered Institution of Water and Environmental Management (CIWEM).

Out of credit: Evaluating the impact of the EU structural funds on Hungarian small business growth and access to finance

Totaling EUR 29 billion, Hungary is in the midst of implementing its largest economic development program in its young democratic history. At the center of the European Union led development program is an effort to revitalize and reequip Hungary’s languishing small and medium sized enterprises (SME), long the country's heart of employment. This paper examines the efficiency and impact of two Structural Fund's instruments to enhance SME development – ECOP 2.1.1 and JEREMIE. A survey of 1275 SME and interviews with dozens of top policy-makers paint a flawed development program in dire need of reform. Despite this, empirical analysis suggests JEREMIE funds may have dampened the effects of the financial crisis and are crucial for the continued liquidity of SME, who have been particularly hit hard by the world financial crisis.