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This study explores the associations between human capital resources, firm performance, and corporate governance mechanisms. Based on the survey results of the “50 most attractive employers” conducted by Universum Global 2010, human resource, performance, and governance data was collected for the period from 2007 to 2011. Drawing on the strategic human capital and resource management, international governance, and organizational literature, this study examines the extent to which corporate governance mechanisms moderate the relationships between firm performance and human capital resources and posits that human resource performance is positively associated with corporate governance mechanisms that support and enhance strategic human resource management policies. Panel regression analyses are conducted to test the study’s hypotheses. The results show that human capital resources are positively related to firm performance, and that some corporate governance mechanisms may negatively affect performance when interacted with human capital variables. Furthermore, human resource performance is significantly related to some governance mechanisms, with interaction effects between human capital and other organizational attributes showing differential impacts. Overall, the results support a contingency-based view of strategic human resource management in the context of large and attractive global employers and highlight the importance of governance design in supporting investments and deploying human resources and capabilities at the firm and industry levels and across national boundaries.
The literature on lending to small firms has primarily focused on the mechanisms and methods used to evaluate entrepreneurs and businesses and on the types of firms that are more likely to experience unfavourable application outcomes. That is, the focus of most empirical research is on supply-side decisions. The current research attempts to shed some light on demand-side considerations. Drawing upon data collected as the UK SME Finance Monitor (2011-2014), we identify links between entrepreneurs' diligence, business risk and finance-related advice-seeking prior to initiating loan and overdraft applications. The results show evidence of the usefulness of advice in ameliorating, both structural and strategic, business risk and improving the prospects of successful debt applications to banks.
PurposeThe purpose of this paper is to investigate the trend of discouragement in the SME's lending market during the aftermath of the financial crisis of 2008. It detects the extent to which the responses of discouraged firms to improvements in the lending market are lagged. Design/methodology/approachThe results are based on surveys of UK SME Finance Monitor (2011)(2012)(2013)(2014)(2015)(2016). Probit regression models were used to assess the effect of time passed from the financial crisis on the probability of discouragement. FindingsThe analysis, inter alia, shows that the rate of discouragement has reduced significantly since 2013. The results highlight the long-term effect of tightened credit supply on SMEs that are ready to invest, but hold back because of fear of rejection. Practical implicationsThe research suggests addressing imperfect information among discouraged SMEs that are recuperating from the financial crisis. With the rise of information asymmetry, entrepreneurs show a higher level of fear of rejection by financial institutions. The longer the effects of the financial crisis exists among entrepreneurs, the longer they self-ration from credit market, which subsequently leads to reduced levels of investment, growth, and innovation among SMEs. Originality/valueThis research fills a gap in the literature of the effect of financial crisis on the latent demand for lending. It discusses the long-term effect of tightened credit supply among entrepreneurs even though the supply side has recuperated and recommenced pre-crisis activities.
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