Financial factors and export behavior of small and medium-sized enterprises in an emerging economy

Ayob, Abu Hanifah; Ramlee, Shamshubaridah; Abdul-Rahman, Aisyah

doi:10.1007/s10843-014-0141-5

Cited by 21 publications

(23 citation statements)

References 62 publications

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“…Finally, the situation of political stability has great impact on the ease of doing business. Ibeh, Wilson, and Chizema (2012) and Ayob, Ramlee, and Rahman (2015) found that economic-related constraints have significant effect of export potentials of SMEs. Similarly, Okpara (2012) revealed that economic and financial barriers are the most significant barriers in the internationalisation of SMEs.…”

Section: Literature Reviewmentioning

confidence: 99%

Examining economic and technology‐related barriers of small‐ and medium‐sized enterprises internationalisation: An emerging economy context

et al. 2019

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In today's global marketplace, small‐ and medium‐sized enterprises (SMEs) are increasingly looking at internationalisation strategies to boost growth, profitability, and competitiveness. However, challenges, such as, sociocultural differences, political institutions, limited resources, competitive challenges, market threats, and economic and technological barriers all hinder SMEs from entering and competing favourably in the international markets. Considering the important link between lack of resources and internationalisation of SMEs, this study examined economic and technology‐related barriers of SMEs internationalisation from a neglected yet emerging market context in Bangladesh. To compare the relative importance of these two particular categories of barriers, this study developed and validated a partial least square‐based structural equation model (PLS‐SEM) with primary data gathered from questionnaires from 212 Bangladeshi SMEs. The findings of the paper suggest that technology‐related barriers seem slightly more influential than economic barriers. As the difference is very low, importance should be given to both types of barriers as found. Conceptually, this study extends this area of research by reframing economic and technology‐related barriers of internationalisation as a hierarchical reflective model within an emerging economy context. Empirically, it confirms that PLS‐SEM can be used to compare the relative importance of these two types of barriers. Practically, policy makers can give slightly more priorities on the technology‐related barriers where it is not possible to give equal importance to both because of limited resource and research neglect on developing economies.

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Section: Literature Reviewmentioning

confidence: 99%

Examining economic and technology‐related barriers of small‐ and medium‐sized enterprises internationalisation: An emerging economy context

et al. 2019

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“…In other words, the firm's leverage level may have influence on the chances to become an exporter according to the firm's easiness of accessing financial resources. Indeed, acquiring external financing for exporting is imperative but difficult for SMEs (Ayob et al, 2015), and for this reason smaller firms would display less export activities. Hence, it can also be argued that firms are heterogeneous with respect to finance (Antony et al, 2012) and that when a firm opts for the internationalisation pathway its decision is based in part on its borrowing capacity and ability to access financial resources in the past (Graves and Thomas, 2008).…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

“…In fact, in the presence of imperfect capital markets, less financially constrained firms -that is, those whose liquidity and leverage are in a healthy condition (Greenaway et al, 2007) enjoy easier access to foreign markets. While there is empirical evidence of its relevance for the SMEs, as they typically face greater problems obtaining financial resources (Ayob et al, 2015), comparative research between large and SMEs firms has remained underexplored. Thus, in compliance with the heterogeneity perspective we explicitly test the effect of financial constraints on export propensity by firm size.…”

Section: Introductionmentioning

confidence: 99%

Corporate financial structure and firm’s decision to export

Miravitlles

Mora

Achcaoucaou

2018

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Purpose The purpose of this paper is to analyse the decision to export in relation to financial issues, specifically the impact of corporate financial structure on a firm’s export propensity (the likelihood of a firm becoming an exporter) by firm size. Design/methodology/approach A multivariate probit model is applied to a sample of 8,019 Spanish manufacturing firms drawn from the Iberian Balance Sheet Analysis System (SABI). The analysis is performed separately for small, medium and large firms. Findings The paper evidences, by firm size, a positive link between ownership concentration and export propensity, although for SMEs if shareholder concentration is very high it can be counterproductive. In addition, a high degree of liquidity influences the probability of entering export markets, while those firms that face high costs as result of their export activity may need to become indebted in order to secure the necessary financial resources. However, the strength of these latter effects differs in SMEs. Originality/value This paper broadens the understanding of the relationship between firms’ export propensity and their financial health and ownership concentration, an internal factor not previously considered in the international business literature despite its relevance for firm’s decision to export. The paper highlights that their influence is not uniform but affects firms of different sizes in different ways. This is of interest and value to scholars, investors and policy makers worldwide, since handling corporate financial structure and international strategies needs to be addressed in today’s global business environment.

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“…Growing small and medium enterprises (SMEs) play a pivotal role in a country's economy and many other fronts (Ayob, Ramlee and Rahman 2015). They are usually associated with poverty alleviation and food security (Tieguhong, et al 2012), job creation (Ayob, Ramlee and Rahman 2015), social and economic wealth creation (Schoonjans, Cauwenberge and Bauwhede 2013), fostering efficiency and competitiveness (Marchesnay 2011) and are labelled as an engine of growth (Gedajlovic, Cao and Zhang 2012).…”

Section: Introductionmentioning

confidence: 99%

Munificence contingent small business growth model (special emphasis to African SMEs’ context)

Alemayehu

Vuuren

2017

Journal of Small Business & Entrepreneurship

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Classifications:B. Functional management and growth of an SME; C. Strategic management and change in an SME; Factors of success and failure in SME and entrepreneurial firms; Growth of SMEs; Managing change in an uncertain and changing environment Abstract:Despite the growth in number and kind of research emphasizing small and medium-sized enterprises (SMEs), little is known about the relationship between drivers and modes of SMEs' growth. To address this gap, the paper systematically analyzes the relationship between growth drivers and strategies based on the dynamic resource-based view and proposes munificence contingent growth model. The authors argue that the selection of growth strategy should base on firm's resource and environmental munificence settings. Firms can select either organic or inorganic growth strategies based on the abundance or scarcity of certain resources and the accommodative capacity of the economic environment. When the economic environment comes with attractive opportunities SMEs tend to cooperate with other firms either through collaborative framework or diversification strategies. Conversely, when they are faced with very competitive market conditions and the resource availability is limited bootstrapping strategies found to be helpful to maintain competitiveness and thrive. Subsequently, as the resource muscle of the firm develops through bootstrapping strategies SMEs are expected to employ expansion strategies.

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Financial factors and export behavior of small and medium-sized enterprises in an emerging economy

Cited by 21 publications

References 62 publications

Examining economic and technology‐related barriers of small‐ and medium‐sized enterprises internationalisation: An emerging economy context

Examining economic and technology‐related barriers of small‐ and medium‐sized enterprises internationalisation: An emerging economy context

Corporate financial structure and firm’s decision to export

Munificence contingent small business growth model (special emphasis to African SMEs’ context)

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