Abstract
The study aims to identify the financial performance measures used as a proxy of the firm-level competitiveness dimensions of small and medium-sized enterprises and their competitiveness. By investigating the factors that affect competitiveness in general, those areas will be introduced, related to an identified competitiveness dimension. Financial and non-financial performance indicators will assess these areas. The paper considers competitiveness as an outcome variable, suggests a relationship between financial performance and the identified areas, and searches for the financial performance measures drivers. A panel data model was tested on Hungarian small and medium-sized enterprises (SMEs) and US SMEs. The collected data cover the period between 2013 and 2017. As a result of the applied panel regression, those variables were successfully identified that drive and could predict financial performance measures related to competitiveness. The research found a significant difference between the two-sample dataset results, which differences can be connected to country, industry, and, in general, to economic development characteristics.The results provide decision-making support and hint about the managerial tools and techniques aiming to control the firm characteristics, performance, and, eventually, firm-level competitiveness. Based on the results, further research can be dedicated to the development characteristics of firm-level competitiveness and the analysis of the relationship between the competitiveness dimensions and competitiveness itself. AcknowledgmentThe research was financed by the Higher Education Institutional Excellence Programme of the Ministry for Innovation and Technology in Hungary, within the framework of the 4th thematic programme „Enhancing the Role of Domestic Companies in the Reindustrialization of Hungary” of the University of Pécs.
Highlights
Competitiveness is a complex, multidimensional phenomenon, a relative concept that combines economic, managerial, political, historical, and cultural aspects (Waheeduzzaman & Ryans, 1996; Chaudhuri & Ray, 1997)
The study aims to identify the financial performance measures used as a proxy of the firm-level competitiveness dimensions of small and medium-sized enterprises and their competitiveness
Pass, lyze firms; it provides essential information for inand Prescott (1988) introduced a mixed concept, vestors, financial analysts, auditors, and manageconsidering competitiveness as the driver of per- ment. As it was summed up formance and a result of that. They distinguished by Katone (2016), small and medium-sized enterprises (SMEs) rarely apply performance competitive performance to assess the past and measurement systems due to the lack of capital and current firm performance; competitive poten- labor resources, and intense competition (Garengo tial to define the current and future competitive et al, 2005); still, most SMEs focus more on finanperformance of a firm based on internal factors; cial indicators (Massalla, 1994; Monkhouse, 1995), firm capabilities to be able to translate competitive relying mainly on accounting information and fipotential into actual or prospective performance. nancial measurements
Summary
Competitiveness is a complex, multidimensional phenomenon, a relative concept that combines economic, managerial, political, historical, and cultural aspects (Waheeduzzaman & Ryans, 1996; Chaudhuri & Ray, 1997). As it was summed up formance and a result of that They distinguished by Katone (2016), SMEs rarely apply performance competitive performance to assess the past and measurement systems due to the lack of capital and current firm performance; competitive poten- labor resources, and intense competition (Garengo tial to define the current and future competitive et al, 2005); still, most SMEs focus more on finanperformance of a firm based on internal factors; cial indicators (Massalla, 1994; Monkhouse, 1995), firm capabilities to be able to translate competitive relying mainly on accounting information and fipotential into actual or prospective performance. Assets determines competitive performance, while the resource of research and development (R&D) is the key to translating competitive potential, in-
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