Enterprises In Transition Economies Research Articles

How does managerial ability affect R&D efficiency of emerging-economy high-tech enterprises

ABSTRACT Numerous publications have discussed the nexus between managerial ability (MA) and innovation capability; however, regarding the hi-tech enterprises in transition economies, the nexus between MA and R&D efficiency will be discussed in depth. Considering the data from high-tech listed companies A-shares in Mainland China in 2012–2017, the data envelopment analysis (DEA) window, Tobit panel model, and panel threshold model is utilised to analyse the direct, moderating effects and threshold effect of MA on R&D efficiency of China’s high-tech enterprises. The findings illustrated that MA could significantly facilitate R&D efficiency, and this enhancement effect is interestingly more evident in state-owned enterprises. Enterprise ownership exerts a significant positive moderation effect between MA and R&D efficiency of China’s hi-tech enterprises. Both equity incentive and salary incentive exerts a significant negative moderation effect between MA and R&D efficiency of China’s hi-tech enterprises. In addition, the panel threshold model proved a nonlinear nexus between MA and its R&D efficiency. Based on the abovementioned findings, corresponding countermeasures are proposed.

Effects of non-technological innovation on technological innovation of small- and medium-sized enterprises: The role of the local business environment

Although non-technological innovation has been found to have influences on technological innovation of firms in the literature, some studies suggest it has no effect on technological innovation. It is unclear why these inconsistent findings have emerged. This study utilises longitudinal data from the biennial surveys of Vietnamese manufacturing small- and medium-sized enterprises and data from the Provincial Competitiveness Index surveys during the period from 2011 to 2015 and applies various estimation techniques. Findings demonstrate that the effects of non-technological innovation, which includes organisational and marketing innovation, on product and process innovation vary with the quality of the local business environment. Enterprises operating in a higher-quality local business environment have a higher probability of adopting product and process innovation than others. These findings suggest that policies to improve the business environment should be combined with other innovation policies to facilitate innovation of small- and medium-sized enterprises in transition economies.

Влияние инновационной активности на производительность предприятий в странах с переходной экономикой

Влияние инновационной активности на производительность предприятий в странах с переходной экономикой

Technological Innovation of Small and Medium Enterprises in Kosovo: Challenges and Barriers

The ability to innovate, is the main challenge in the fast changing global markets, to maintain a stable economic development in the long term. The ICT can carry strategic incentives to adjust the economic structure and to modify the economic model of a country. This process can build a resource-saving and a environmentally friendly society. The technological innovation can improve the international competitiveness of the economy and the overall employment rate of young generations. The rapid development of SMEs has become a major force to support economic growth of Kosovo. However, small and medium enterprises in transitional economies are not always trusting technological innovation. Several businesses due to multiple internal and external environmental factors, show a low level of confidence over technological innovation. In fact, from an internal point of view, the management can be afraid of security issues, like leak of strategic information, or moreover company secrets. The typical example can be the reluctance to adopt cloud technology platforms to improve the management tasks and operations. Meanwhile the external threat can be an overturn of the management style that threatens positions and hierarchy within the organization. This paper aims to analyze some key factors that prevent the spread of technological enhancement in small and medium enterprises in Kosovo. Some typical case studies will be analyzed and further policy recommendations will be suggested.

Potential and Barriers to Adoption of B2B E-Commerce in SMEs in Transition Economies: Case of Albania

Small- and Medium-sized Enterprises (SMEs) can benefit significantly from investments in e-commerce and e-business. However, the adoption of e-commerce has been quite slow and limited among SMEs, especially in transition economies. Interviews were conducted with senior managers from 30 medium-sized enterprises in a transition economy – Albania, three from each of the ten key sectors, namely, information and communication technology (ICT), tourism, banking, financial services, agriculture, healthcare, logistics, manufacturing, construction, and retailing. The qualitative data coded from the in-depth interviews was analysed using NVIVO® for identifying key themes. Four key themes were identified along with ten subthemes. This study identified the four key themes that can guide the organizational leadership of medium-sized enterprises in transition economies in strategically leveraging e-commerce technology. The four key themes identified in this study include resource constraints, external environmental factors, organizational issues, and resistance to acceptance of new technology. The identification of the key barrier factors will help the organizational leadership in transition economies, such as Albania devise strategies to promote adoption of e-commerce in the SMEs. The findings of this study will help the organizational leadership of SMEs in transition economies identify measures to address and resolve the barriers to adoption of e-commerce. This study also adds value to the limited literature on barriers to e-commerce adoption in the context of SMEs in transition economies. The study offers insights on e-commerce adoption by SMEs, which can be applied to other transition and emerging economies attempting to understand the barriers that might hinder the adoption of e-commerce by the SMEs.

Far from the Tree? Do Private Entrepreneurs Agglomerate Around Public Sector Incumbents During Economic Transition?

While it is well known that state enterprises in transition economies were displaced by private enterprises at a macro level, little is known about whether private entrepreneurs emerged in a way that helped preserve or shift preexisting agglomerations of industrial activity at a microgeographic level. To address this question, we integrate competing perspectives on the role of large, bureaucratic incumbents in spawning entrepreneurs. We conceptualize a trade-off between two countervailing effects of large incumbents on potential entrepreneurs: bureaucratic socialization and exposure to capabilities. This yields novel predictions about how different kinds of startups agglomerate around different kinds of incumbents. We test these predictions using fine-grained geographic data on founding rates by private entrepreneurs in China’s bicycle manufacturing industry. Consistent with our theorized trade-off, we find evidence of a nonmonotonic effect of incumbent size on local founding rates by private entrepreneurs. Additional moderating effects are consistent with boundary conditions on the hypothesized mechanisms. Our results provide the first empirical investigation of the extent to which entrepreneurial activity agglomerated around public sector incumbents during economic transition. We discuss how these insights add to the understanding of economic transition as well as how the context of economic transition adds to the understanding of entrepreneurial spawning.

Financial Planning and Corporate Development: Attitude Analysis of Selected Enterprises in Uzbekistan

Financial planning has become an integral part of corporate development strategy in businesses in developed and emerging economies. Despite the rapid spread of advanced business practices, enterprises in transition and developing economies still have been lagging behind in absorbing some elements of modern business conduct skills and methods. This weakness is visible in corporate planning and forecasting practices. Although key elements of the market economy have already been introduced and a business environment is functioning favorably, enterprises in transition economies of the post-Soviet area are facing difficulties in applying and adapting changeable and regularly updating economic climate due to changing business psychology in the society and ongoing gradual structural reforms. Entrepreneurs and finance officers possess basic knowledge and understanding of income-cost and input-output planning. But corporate and business expansion planning, forecasting and risk analysis skills are out of their capabilities when it comes to applying in decision-making processes. It should be admitted that people’s business mind changed significantly and nowadays business sector is a backbone of any post-communist or transition economy. However, it does not suffice to run the business, to stay active in the market and to keep the stable financial structure. In this paper, we examined the attitudes of decision-makers of 24 enterprises in Uzbekistan towards financial planning and its possible benefits for enterprises they are running. The Likert scale-based survey showed that attitudes towards the financial planning are positive since its effect on corporate policy matters is treated comparatively less favorable.

Survival of new private enterprises in transition economies: The case of Vietnam

This paper focuses on determinants of survival of new private firms in the manufacturing sector in a transition economy, Vietnam, during the period 2000–2007. A semi-parametric Cox proportional hazard model is applied with a comprehensive specification of firm-specific, industrial and macroeconomic factors. There is strong evidence in market selection that labour productivity is the most important internal factor supporting firm survival. Other evidence is that firms with higher profitability in terms of profit per employee will have higher survival probability. For private firms, in terms of start-up factors, although total assets increase the probability of survival, total sales decrease it. Besides, industries which have increasing numbers of employees open favourable opportunities for new private firms. Furthermore, the macroeconomic factor, GDP, significantly supports the development of private firms.

Technological Innovation of Small and Medium Enterprises in Kosovo: Challenges and Barriers

The ability to innovate, is the main challenge in the fast changing global markets, to maintain a stable economic development in the long term. The ICT can carry strategic incentives to adjust the economic structure and to modify the economic model of a country. This process can build a resource-saving and a environmentally friendly society. The technological innovation can improve the international competitiveness of the economy and the overall employment rate of young generations. The rapid development of SMEs has become a major force to support economic growth of Kosovo. However, small and medium enterprises in transitional economies are not always trusting technological innovation. Several businesses due to multiple internal and external environmental factors, show a low level of confidence over technological innovation. In fact, from an internal point of view, the management can be afraid of security issues, like leak of strategic information, or moreover company secrets. The typical example can be the reluctance to adopt cloud technology platforms to improve the management tasks and operations. Meanwhile the external threat can be an overturn of the management style that threatens positions and hierarchy within the organization. This paper aims to analyze some key factors that prevent the spread of technological enhancement in small and medium enterprises in Kosovo. Some typical case studies will be analyzed and further policy recommendations will be suggested. Keywords: SME, ICT, confidence, success, transition economy.

Influence of cultural factors on knowledge sharing in medium-sized enterprises within transition economies

Knowledge sharing is subject to organisational and national cultural influences, but medium-sized firms often implement general knowledge-sharing models without considering cultural factors. The purpose of this study was to investigate the influence of cultural factors on knowledge-sharing activities in medium-sized enterprises in transition economies. The study was driven by the central research question: How do cultural factors influence employees’ perceptions of knowledge-sharing initiatives in medium-sized enterprises in transition economies? Qualitative in-depth interviews were conducted with 20 managers working in ten medium-sized enterprises in Albania, which is a transition economy. Six themes revealed the influence of cultural factors on employees’ perceptions of knowledge-sharing initiatives in medium-sized enterprises in transition economies. Specifically, national culture and organisational culture influence employee behaviour and participation in knowledge-sharing activities. Thus, it is critical organisational leaders of medium-sized firms in Albania consider the influence of these factors before implementing knowledge-sharing activities in firms.

Investment opportunity set, political connection and business policies of private enterprises in China

The main purpose of this paper is to examine the factors that determine the business policies of private enterprises in the People’s Republic of China. Little is known about these private enterprises although these are surpassing the state-owned enterprises to become the most important corporate sector in China. The phenomenal growths of these enterprises provide an interesting setting to study the effect of the investment opportunity set (IOS) on business policies. We also examine how a firm’s political connection, generally believed to be instrumental to a firm’s success in transition economies, affects its business policies. We provide evidence on the importance of these factors in shaping the private firms’ business policies in China. More specifically, our results show that growth firms pay lower dividends, have lower overdue receivables relative to sales, have higher percentage of bonus shares, and are more likely to engage in joint ventures. In addition, firms with better political connection are able to borrow more, are more likely to establish a board of directors, and are more likely to acquire SOEs. These results have policy implications with regard to private enterprises in transitional economies in general and those in China in particular.

Transport fleet sizing by using make and buy decision-making

Cost reduction is among the main quoted reasons for logistics outsourcing, while transport capacities and operations are among the most outsourced logistics areas. However, according to transaction costs theory, there is often room for transport insourcing. Furthermore, nowadays many authors stress that mixed solutions can give better results than ?make? or ?buy? alternatives. ?Make or buy? decision-making normative models, methods, and procedures in transport planning are not much explored. Instead, research is rather focused on carrier selection techniques, whereby it is supposed that outsourcing transport capacities is the most suitable solution. The purpose of this paper is to contribute to the body of literature on classical ?makeor-buy? decision-making in transport fleet sizing in a non-logistics enterprise. It goes beyond the basic ?make or buy? decisionmaking, and intermediate solutions (i.e., ?make and buy?) are explored. Practical directions are given according to theoretical principles, and a case study is used to exemplify the main deductions. The research also has practical implications. Many enterprises in transition economies have faced the question of what to do with their in-house transport fleets. The obtained results are of interest to merchants and manufacturing enterprises that already have a private transport fleet and are considering how to rationalize it.

Entrepreneurship in Developing Countries

This study offers that entrepreneurship is consistent with and even complementary to the older and more traditional development strategies. We survey the literature on entrepreneurship in developing countries which, admittedly, is wide and covers a range of issues from culture and values; institutional barriers such as financial sector development, governance, and property rights; and to the adequacy of education and technical skills. A broad literature has also developed on foreign direct investment and its positive and negative effects on technology transfer and entrepreneurship. After the collapse of the Soviet Union, a number of studies examined the development of small- and medium-sized enterprises in transition economies. As these economies moved from centralized economies to market economies, enterprise and entrepreneurship became important. Yet, other studies examine the effects of infrastructural development and the macroeconomy on entrepreneurship. With such a wide scope of issues, a framework for synthesizing the literature is needed. This study offers that the identification of the externalities which affect entrepreneurship provides a useful framework to examine the literature on entrepreneurship in developing countries.

Taxation and Capital Structure: Evidence from a Transition Economy

We examine the effects of taxation on financing policy using the corporate tax reform in 2001 in Croatia as a quasi-natural experiment. Since the extant literature on tax effects on capital structure studies listed firms in developed countries, it is worth investigating whether the same results apply to privately-held small and medium enterprises in transition economies. The findings provide significant evidence that lower taxes have affected the capital structure of Croatian firms, resulting in increased equity levels. These findings are consistent with the trade-off theory of capital structure, which suggests that lower taxes increase the incentive to hold equity due to decreasing interest tax deductibility of debt.

Special knowledge needs of family enterprises in transition economies: experiences from Slovenia

In many countries throughout the world the majority of enterprises are family ones. Particularities in the development and management of family enterprises create needs for special knowledge. Therefore, in providing knowledge to these enterprises consideration must be given to their complexity, which is derived from the involvement of a family in ownership and management. In this paper, we discuss the importance of knowledge created and transferred from external sources such as counselling, publications, and education and training programs. External sources of knowledge considering the unique characteristics of family enterprises are well developed in many countries with established market economies. In Slovenia and, we believe, in many other former socialist countries, such external sources of knowledge are rare and still developing. The results of our research in Slovenia show that more than two-thirds of family business owners-managers regard such sources of knowledge as unimportant. This paper analyzes the reasons for such a finding.

From the Shortage of Jobs to the Shortage of Skilled Workers: Labor Markets in the EU New Member States

Labor markets in the transition economies of Central and Eastern Europe underwent a dramatic transformation. Notably, this transformation took place within just a few years. Until the mid-2000s job opportunities were scarce and unemployment was high. But since then labor demand has picked up and unemployment has dropped substantially. In contrast to the earlier period of weak labor demand, it is now the supply side of the labor market that constrains job creation. These spectacular improvements can hardly be attributed to the greater labor market flexibility or to the more efficient matching of workers with jobs because no major reforms to labor market institutions were recently implemented in the region. Instead, the main cause was a strong increase in labor demand, as evidenced by the increase in the job vacancy rates and real wages. The surge in labor demand is likely to reflect successful enterprise restructuring supported by the improvements in the investment climate and access to global markets associated with the EU accession. For a long time enterprises in transition economies were improving competitiveness by shedding of redundant labor. Now they use productivity gains to invest, expand output and hire more workers. However, the emerging skills shortages may constrain firm growth. Thus the transition economies face a challenge of mobilizing effective labor supply. This requires improving labor supply incentives and investing in education. This paper documents the recent changes in labor market conditions in the transition economies, suggests tentative explanations, and finally suggests policies to address the emerging challenges.

Russian Small Innovative Enterprises (SIEs), intellectual capital and competitiveness: knowledge-based SIEs in a transitional economy. Part I: conceptual framework and preliminary analysis of field research

This paper reports on the first part of a combined conceptual and empirical (field research-based) study that examines the impact of intellectual capital on the competitive performance of Russian small innovative enterprises (SIEs). The research targeted in this study ultimately attempts to measure antecedents and consequents of effective intellectual capital management in small innovative enterprises (SIEs) in the transitional Russian economy. The research reported on this paper represents ground-breaking work on several counts: while a number of studies have looked at the competitive impact of intellectual on enterprise performance, very few have targeted small innovative enterprises and even fewer, if any at all, have examined enterprises in transitional economies. In this paper the notion of the knowledge-based theory of the firm in the context of the small innovative enterprise is developed. Implications of this approach for the enterprise in the Russian transitional economy are derived and a conceptual framework is developed that relates the two forms of intellectual capital (human capital and structural capital) and key external factors to enterprise performance.

Book Reviews

R. J. McIntyre and B. Dallago (eds): Small and Medium Enterprises in Transitional Economies. Palgrave Macmillan in association with the United Nations University / World Institute for Development Economics Research, 2003, 259 pp. (Reviewed by Mihály Laki); S. S. Bhalla: Imagine There's No Country. Poverty, Inequality, and Growth in the Era of Globalisation. Washington, D.C.: Institute for International Economics, 2002, 248 pp. (Reviewed by Beáta Huszka)

Economic Transition, Entrepreneurial Capacity, and Intergenerational Distribution

A defining feature of transition economies is the expansion of the private sector. Motivated by the observation that new enterprises in transition economies seem to have a strong preference for recruiting young people, this paper studies intergenerational redistribution following from market reforms that stimulate private sector activity and firm creation. We implement a theoretical model and find that in some cases more than half of the current working age population may be made worse off by an increase in entrepreneurial capacity. This may help explain why market reforms have been voted down despite their long-run benefits.

Economic Transition, Entrepreneurial Capacity, and Intergenerational Distribution

A defining feature of transition economies is the expansion of the private sector. Motivated by the observation that new enterprises in transition economies seem to have a strong preference for recruiting young people, this paper studies intergenerational redistribution following from market reforms that stimulate private sector activity and firm creation. We implement a theoretical model and find that in some cases more than half of the current working age population may be made worse off by an increase in entrepreneurial capacity. This may help explain why market reforms have been voted down despite their long-run benefits.