Cash holdings and SME performance in Europe: the role of firm-specific and macroeconomic moderators

Rocca, Maurizio La; Staglianò, Raffaele; Rocca, Tiziana La; Cariola, Alfio; Skatova, Ekaterina

doi:10.1007/s11187-018-0100-y

Cited by 61 publications

(65 citation statements)

References 80 publications

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“…Having financial slack -or cash at hand -when a crisis strikes gives firms a considerable advantage in both the short and longer term. A study by La Rocca et al (2019), who examine how cash holdings affected performance in European SMEs, supports these results. Lee (2015), in a study of Korean firms, suggests that the relationship between financial slack and innovation is the strongest in younger and smaller firms.…”

Section: Randd and Innovation After Covid-19mentioning

confidence: 76%

R&D and innovation after COVID-19: What can we expect? A review of prior research and data trends after the great financial crisis

Roper¹,

Turner²

2020

International Small Business Journal

102

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How did the great financial crisis (GFC) of 2008–2010 impact on R&D and innovation in the United Kingdom and internationally? What can we learn about the likely innovation effects of the COVID-19 crisis on small and medium enterprises (SME) innovation? Numerous international studies suggest the strong procyclicality of R&D and innovation investments in firms: investment rises in recovery and falls sharply in times of crisis. This procyclicality is driven in firms by both internal financial resources or slack and varying market incentives for innovation. Cash constraints, in particular, may impact most strongly on R&D and innovation investments by smaller firms. In the United Kingdom, the proportion of innovating firms fell by around a third during the GFC and took around four to six years to recover. Recovery was also uneven – notably weaker in some sectors and regions. The COVID-19 crisis seems likely to leave many firms financially weaker, with the most significant impacts on the willingness or ability of SMEs to sustain R&D and innovation. Where firms are able to sustain these investments, however, the evidence from the GFC suggests that they will lead to better survival chances, stronger growth and higher profitability. Some additional financial support for innovation has been announced by the UK government. Whether this will be sufficient to sustain SME levels of innovative activity, however, remains to be seen.

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Section: Randd and Innovation After Covid-19mentioning

confidence: 76%

R&D and innovation after COVID-19: What can we expect? A review of prior research and data trends after the great financial crisis

Roper¹,

Turner²

2020

International Small Business Journal

102

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“…We use the Rule of Law Index defined by the World Justice Project as the variable to test H3 . This variable indicates the level of effective stakeholder protection, which is assessed by looking at policy outcomes and measuring adherence to the rule of law (e.g., La Rocca, Staglianò, La Rocca, Cariola, & Skatova, 2019). It is based on eight sub‐indices: (a) Constraints on Government Powers, (b) Absence of Corruption, (c) Open Government, (d) Fundamental Rights, (e) Order and Security, (f) Regulatory Enforcement, (g) Civil Justice, and (h) Criminal Justice.…”

Section: Data Variables and Methodologymentioning

confidence: 99%

Effect of corporate social responsibility scores on bank efficiency: The moderating role of institutional context

Forgione

Laguir

Staglianò

2020

Corp Soc Responsibility Env

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This paper examines how corporate social responsibility (CSR) affects bank efficiency in a sample of large commercial banks across 22 countries over the 2013–2017 period. We used a one‐step model of stochastic frontier analysis for panel data to estimate bank profit efficiency and found that the greater the activities in the social and environmental dimensions of CSR, the lower the level of efficiency, whereas activities in the corporate governance dimension are generally not relevant. This result supports the relevance of agent perspectives for these firms. However, we also found that institutional context moderates this baseline result. Specifically, all CSR activities have a positive impact on bank efficiency in common law countries and countries where the effectiveness of stakeholder protection is high. This supports the view that contexts that favor firms' sustainable behavior also increase bank efficiency.

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“…Others have done similar analysis (Rossi et al, 2015;Coleman et al, 2016). Rocca et al (2018) points out that the firm-specific and macroeconomic moderators moderate the baseline relationship between cash holdings and SME performance. Wang and Du (2009) constructs a financial ecosystem structure model, including the internal environment of producers, consumers and decomposers, and the external factors of government management, judiciary environment, financial market environment and economic environment.…”

Section: Financing Ecology Index Systemmentioning

confidence: 95%

“…From the perspective of financial environment, some scholars reveal the level of financial development can ease the financing dilemma (Porta, Lopez-De-Silanes, Shleifer, & Vishny, 1998;Khurana, Martin, & Pereira, 2006). The political and economic environment is also an important factor influencing the financing behavior of enterprises (Bushman, Piotroski, & Smith, 2004; M. L. Rocca, Staglianò, T. L. Rocca, Cariola, & Skatova, 2018). In addition to the external environment, including economic, political and financial environment mentioned above, some scholars focus on the internal characteristics of enterprises (Fernandes, 2011;Rossi, Lombardi, Siggia, & Oliva, 2015;Coleman, Cotei, & Farhat, 2016).…”

Section: Introductionmentioning

confidence: 99%

“…In addition to the external environment, including economic, political and financial environment mentioned above, some scholars focus on the internal characteristics of enterprises (Fernandes, 2011;Rossi, Lombardi, Siggia, & Oliva, 2015;Coleman, Cotei, & Farhat, 2016). The firm characteristics can affect the acquisition of external sources of financing (Gartner, 2012;Rocca et al, 2018). Some scholars suggest the importance of internal controls in financing decisions (Elbannan, 2009).…”

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Research on Financing Ecology and Financing Efficiency of Strategic Emerging Industries in China

Geng

Xiao-shu

2019

Journal of Business Economics and Management

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After integrating external ecological and endogenous factors of the development of the industry, the paper builds a financing ecology index system, and analyses the financing ecology of strategic emerging industries in recent years. Then the paper further analyses the influence of external and internal financing ecology on financing efficiency. The results show that the financing ecology of the strategic emerging industries, external financing ecology in particular, is in the continuous improvement. The financing efficiency is significantly positively correlated with the macro-economy level and the internal financing ecology, and significantly negatively correlated with the role of government. There is a positive but non-significant correlation between financial development and financing efficiency, meanwhile a negative and non-significant correlation between credit environment and financing efficiency. The internal and external financing ecology can be replaced to some extent. Therefore, the strategic emerging industries should give full consideration to the synergistic optimization of the endogenous factors and external financing ecology so as to improve the financing efficiency.

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Cash holdings and SME performance in Europe: the role of firm-specific and macroeconomic moderators

Cited by 61 publications

References 80 publications

R&D and innovation after COVID-19: What can we expect? A review of prior research and data trends after the great financial crisis

R&D and innovation after COVID-19: What can we expect? A review of prior research and data trends after the great financial crisis

Effect of corporate social responsibility scores on bank efficiency: The moderating role of institutional context

Research on Financing Ecology and Financing Efficiency of Strategic Emerging Industries in China

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