Financial frictions and the SME investment gap: new survey evidence for Ireland

Martinez-Cillero, Maria; Lawless, Martina; O’Toole, Conor; Slaymaker, Rachel

doi:10.1080/13691066.2020.1771826

Cited by 12 publications

(5 citation statements)

References 21 publications

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“…These authors concluded that the intricacy and the required time to apply, develop, and appraise the projects were the potential cause of these findings [81]. In addition, the authors of [82] ascertained that SMEs' investment ends up being smaller than it would be anticipated by standard economic fundaments, indicating that these firms are particularly vulnerable to funding issues. Another reason for these findings might reflect the use of other sources of financing by these SMEs [38].…”

Section: Analysis Of Sfa Regression Resultsmentioning

confidence: 99%

How Efficient Is the Implementation of Structural Funds Committed to Enhancing ICT Adoption in SMEs?

Henriques

Viseu

2022

Journal of Open Innovation: Technology, Market, and Complexity

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We evaluated the execution of the operational programs (OPs) committed to encouraging the adoption of information and communication technologies (ICTs) in small and medium-sized enterprises (SMEs). To achieve this goal, we employed a novel three-stage weighted Russel directional distance (WRDD) data envelopment analysis (DEA) model in conjunction with stochastic frontier analysis (SFA), which considers indicators officially mandated by the European Union (EU) and environmental factors, to evaluate 51 OPs from 16 EU countries. All in all, we concluded that by removing the environmental factors, about 30% of the OPs (16) reached an efficient procedural performance against 20% (10). The OP more frequently viewed as a benchmark regardless of the environmental factors is “Multi-regional Spain—ERDF” that remains robustly efficient within 5% and 10% tolerances. Without the removal of the environmental factors, the “number of operations supported” is the indicator that requires more attention from management authorities (MAs), whereas with their removal one-third of the OPs need to further reduce the “eligible costs decided” and improve “eligible spending”. According to our findings, more developed regions and a higher rate of ICT specialists seem to be related to an underuse of ERDF funds dedicated to boosting ICT in SMEs. These findings might be related to the administrative burden and the lack of ability of SMEs to deal with the various procedures for applying for and implementing European Regional Development Fund (ERDF) projects. Overall, it is critical to provide further support that simplifies administrative procedures and addresses SMEs’ specific requirements.

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Section: Analysis Of Sfa Regression Resultsmentioning

confidence: 99%

How Efficient Is the Implementation of Structural Funds Committed to Enhancing ICT Adoption in SMEs?

Henriques

Viseu

2022

Journal of Open Innovation: Technology, Market, and Complexity

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“…They ascertained that the difficulties and time required to submit, produce, and assess project proposals were a probable justification for these findings. Furthermore, Martinez-Cillero et al (2020) reported that SMEs' investments are poorer than would be anticipated by standard economic models, proposing that these firms are particularly sensitive to funding difficulties. Another possible explanation might be related to the use of further financing opportunities in the framework of other funding programs (outside ERDF).…”

Section: Results Obtained With Sfamentioning

confidence: 99%

Evaluating the Reasons Behind the Inefficient Implementation of ERDF Devoted to R&I in SMEs

Henriques

Viseu

2022

Springer Proceedings in Political Science and International Relations

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This work is mainly aimed at evaluating the reasons behind the inefficient execution of Operational Programs (OPs) aimed at promoting research and innovation (R&I), especially in small and medium-sized enterprises (SMEs). To achieve this goal, we employed a three-stage slack-based measure (SBM) data envelopment analysis (DEA) model combined with Stochastic Frontier analysis (SFA), which includes a multiplicity of achievement metrics and environmental factors, to evaluate 53 OPs from 19 countries. Our findings suggest that more developed regions (proxied by a higher Gross Domestic Product (GDP) per capita) do not make an efficient application of European Regional Development Funds (ERDF) aimed at fostering R&I in SMEs. Also, a greater proportion of the population with a university degree does not imply an appropriate use of ERDF devoted to R&I in SMEs. Lifelong learning is positively linked with the performance of the outcomes “Researchers Working in Improved Infrastructures” and “Enterprises Supported”. Research and development (R&D) expenditures in the public sector contribute favorably to the needed improvements in “Researchers Working in Improved Infrastructures” but have the reverse effect on the number of “Enterprises Supported” and “Enterprises Working with Research Institutions”. Furthermore, because R&D expenditures in the business sector have a positive impact on the necessary development of “Enterprises Working with Research Institutions”, these results appear to demonstrate that public R&D has a weaker influence on SME innovation than private R&D. Finally, innovative SMEs collaborating with other sources of knowledge show a positive effect on both the number of “Enterprises” and “Enterprises Working with Research Institutions” supported.

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“…Conversely, SMEs may have relatively inadequate investment experience compared with non-SMEs in a business environment for various reasons, including a lack of investment professionals. SMEs’ asset management may not be relatively effective or efficient, and investment may be insufficient compared to non-SMEs due to financial constraints and lack of social networks (Centobelli et al, 2019; Martinez-Cillero et al, 2020; Nguyen, 2020). Therefore, given that the Korean tax system provides preferential tax treatment for SMEs, there is a high possibility that SMEs will make investments that deviate from the appropriate level when they are more concerned about tax savings.…”

Section: Hypothesis Development and Research Methodologiesmentioning

confidence: 99%

Do Governmental Tax Reliefs for Investment Lead to Investment Efficiency and Sustainability for SMEs? Evidence From South Korea

Cho

Yoon

2023

SAGE Open

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Tax credits for investment in productivity enhancement facilities, R&D facilities, and employment-creating initiatives are available to corporate taxpayers in Korea. These incentives are intended to motivate corporations to invest by providing financial support to improve their efficiency and help sustain their survival. This study aims to analyze whether corporations that claim investment tax credits (ITCs) in Korea actually achieve investment efficiency and increase corporate value. This study’s results are as follows. First, based on the statistical analysis of samples from small- and medium-sized enterprises (SMEs) and all corporations, we find empirical evidence that investments through claimed tax credits are inefficient from the standpoint of Tobin’s Q. This finding may be interpreted to mean that corporate taxpayers, including SMEs, consider tax savings more than investment efficiency in claiming ITCs. Second, in testing the investment efficiency for each ITC, we find that SMEs’ investment via employment-creating ITCs is more efficient than other investments with tax credits. This finding implies that SMEs should not only invest in physical facilities, but also retain human resources for sustainability. These results provide policy implications that employment creation should be considered when granting ITCs for SMEs’ efficient investments.

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Financial frictions and the SME investment gap: new survey evidence for Ireland

Cited by 12 publications

References 21 publications

How Efficient Is the Implementation of Structural Funds Committed to Enhancing ICT Adoption in SMEs?

How Efficient Is the Implementation of Structural Funds Committed to Enhancing ICT Adoption in SMEs?

Evaluating the Reasons Behind the Inefficient Implementation of ERDF Devoted to R&I in SMEs

Do Governmental Tax Reliefs for Investment Lead to Investment Efficiency and Sustainability for SMEs? Evidence From South Korea

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