Small Firm Growth Research Articles

Utilizing the Internet of Things (IoT), Artificial Intelligence, Machine Learning, and Vehicle Telematics for Sustainable Growth in Small and Medium Firms (SMEs)

New technologies like the Internet of Things (IoT), artificial intelligence, machine learning, and vehicle telematics have tremendous potential to improve SMEs business processes, increase efficiency, and reduce costs to obtain a competitive advantage. However, the application of these technologies is also associated with certain difficulties for SMEs to adopt and incorporate them in their business processes due to limited resources, knowledge and funds. The advancement in technologies such as IoT and the digitization and datafication of physical infrastructure and processes are causing massive shifts across fields. While an increasing number of devices are being connected to the internet and are capturing large volumes of information about operations, users and the physical environment, new opportunities are arising to leverage that big data for better analytics and automation. The purpose of this paper is to assess how SMEs can apply IoT, AI, machine learning and vehicle telematics for sustainable development by enhancing business processes, data analysis, predictive maintenance and efficient supply chain and transportation.

Utilizing the Internet of Things (IoT), Artificial Intelligence, Machine Learning, and Vehicle Telematics for Sustainable Growth in Small and Medium Firms (SMEs)

New technologies like the Internet of Things (IoT), artificial intelligence, machine learning, and vehicle telematics have tremendous potential to improve SMEs business processes, increase efficiency, and reduce costs to obtain a competitive advantage. However, the application of these technologies is also associated with certain difficulties for SMEs to adopt and incorporate them in their business processes due to limited resources, knowledge, and funds. The advancement in technologies such as IoT and the digitization and datafication of physical infrastructure and processes are causing massive shifts across fields. While an increasing number of devices are being connected to the internet and are capturing large volumes of information about operations, users, and the physical environment, new opportunities are arising to leverage that big data for better analytics and automation. The purpose of this paper is to assess how SMEs can apply IoT, AI, machine learning, and vehicle telematics for sustainable development by enhancing business processes, data analysis, predictive maintenance, and efficient supply chain and transportation.

Cybersecurity strategy: future proof cybersecurity for small to medium enterprises in South Africa

Technological development has witnessed tremendous and an increase in business interactions as they execute their daily business. Information technology and broadband are significant drivers of productivity and efficiency growth for small firms as they expand their market. This development has raised growing concerns as it relates to data and information security, infrastructure, and related resources due to an increase in cybersecurity hazards faced by Small to Medium Enterprises globally. In South Africa, although, during the first four months of 2022, cyber-attacks decreased by 13% to account for 419506 internet attacks, this statistic remains high enough for concern. To counter escalating cybersecurity risks, organizations must have a cybersecurity strategy to safeguard their operations, clients, data, and infrastructure. The threat landscape is changing over time, and despite ongoing attempts to strengthen security, they don't appear to be enough to prevent evolving cyberattacks. The study aims to identify cybersecurity threats facing Small to Medium Enterprises in South Africa by reviewing the literature and identifying key Cybersecurity challenges. It also examines the strategies, resources, and techniques used in South Africa to reduce cybersecurity threats. Lastly, the paper recommends adopting a comprehensive Cybersecurity strategy to build future-proof cybersecurity for Small to Medium Enterprises in South Africa.

The event‐driven social responsibility in small and medium‐sized enterprises

AbstractSince the survival and growth of small firms depend largely on their ability to acquire legitimacy within the institutional environment, social responsibility plays an important role in their lives. The aim of this study was to investigate how a disruption in the normal course of business can lead to an evolution and change in the social responsibility activities of small and medium‐sized enterprises. Such disruptions, called critical incidents, interrupt the normal functioning of the business. The case‐based exploratory study found that such critical events can have a positive impact. In particular, they can initiate the integration of socially responsible business practices. This is a journey from philanthropic donations to fully integrated socially responsible practices, often driven by internal triggering events such as organisational growth, unanticipated changes in management, or generational change, which allow new values to be brought on board. When such an internal event is followed by a highly critical but external event, such as the COVID‐19 pandemic, the transformation gains momentum. The findings also suggest that social responsibility can be a new source of competitive advantage.

Small Firm Growth and the VAT Threshold Evidence for the UK

Small Firm Growth and the VAT Threshold Evidence for the UK

What Predicts the Growth of Small Firms? Evidence from Tanzanian Commercial Loan Data

Abstract Not all firms have equal capacity to absorb productive credit. Identifying those with higher potential may have large consequences for productivity. We collect detailed survey data on small- and medium-sized Tanzanian firms who borrow from a large commercial bank, which in turn raises funds via international capital markets. Using machine learning methods to identify predictors of loan growth, we document, first, that we achieve high rates of predictive power. Second, “soft” information (entrepreneurs’ motivations for entrepreneurship and constraints faced) has predictive power over and above administrative data (sector, age, etc.). Third, there is a different and larger set of predictors for women than men, consistent with greater barriers to efficient capital allocation among female entrepreneurs.

THE CONCEPTUALISATION OF HALAL CERTIFICATION ADOPTION MODEL AMONG SMALL AND MEDIUM-SIZED ENTERPRISES (SMES) IN MALAYSIA

This is a conceptual paper for a future study based on the review of the literature related to Halal certification adoption and the role of Resource-Based View (RBV) theory. Despite the Halal industry showing potential for a strong market both locally and globally, the number of Halal-certified Small and Medium-Sized Enterprises (SMEs) remains relatively low. This is partly due to challenges in meeting certification requirements, which are seen as complex and costly, as well as a lack of awareness and concern. Additionally, the Ministry of International Trade and Industry (MITI) has identified various challenges faced by Malaysian manufacturers, including a lack of competitiveness in areas such as processing technology, research and development, distribution networks, product quality, and branding. To address these issues, this study aims to investigate the reasons behind SME owners' reluctance to adopt Halal certification for their food products, and to develop an enhancement model and measurement instrument based on the Resource-Based View (RBV) theory. The paper went on to analyse the issues, concepts and objectives for the forthcoming study through several literatures of various disciplines. The conceptual paper signifies to supplement literatures for academics as reference for their research. The result of this future research may provide information to SMEs on factors and the significance of Halal certification adoption to enhance SMEs’ performance. It will also be relevant to policy-makers who design support mechanisms and schemes to promote the creation and growth of small firms.

Firm growth through disruption: Insights into internal dynamics

ABSTRACT Studies examining how small firms grow have suggested that growth is complex due to ongoing disruptions. However, the dynamics of small firm growth remain underexplored. Using findings from a case study of a small firm, we illustrate that small firms grow by responding to nonroutine disruptions—disruptions that cannot be resolved using current knowledge. Nonroutine disruptions trigger one of two situations: one of ambiguity where individuals form divergent interpretations of the disruption, thereby experiencing high levels of tension, and one of certainty where individuals form convergent interpretations of disruption, thereby experiencing low levels of tension. To generate a novel response to a disruption, individuals must create an optimal level of tension, either by connecting divergent interpretations or breaking convergent ones. In explicating how this unfolds, we illustrate the internal dynamics of growth, occurring in the ebb and flow movement as individuals build new growth pathways in response to disruptions.

Understanding the Impact of Covid-19 on MSMEs in India: Lessons for Resilient and Sustained Growth of Small Firms

The pandemic has raised an issue of survival for most of the micro, small, and medium enterprises (MSMEs) because of their vulnerability in terms of size, limited financial resources, and inefficiency to deal with unpredicted situations. Therefore, the present study has adopted the contingency theory in times of change and uncertainties caused by COVID-19 on MSMEs and found out the ways to enhance its resilience and sustained the growth of this sector. This study has applied descriptive statistics and probit regression analysis to estimate the resilience and sustained growth of the firms through a change in the variables like turnover, labour employed, investment, and age of the firm. Based on the survey of 225 firms, the study observed that around 90 percent of surveyed firms realized a decline in their turnover with a 25 percent reduction in employment that mostly occur in the informal category. Interestingly, there was some increase in formal employment in around 50 percent of firms because of the business commitment of firms, shortage of informal workers, and availability of workers at lower wages. Smaller and younger firms in terms of employment and investment have a higher possibility to be affected by the external shocks indicating that the firm agility increases with firm age and size. Support measures by the government during the pandemic were found to be insufficient and have limited relevance to the MSME sector in its revival. For enhancing the resilience and sustainability of MSMEs, the study suggests small firms should be encouraged to financial planning against business uncertainties and proposes financial security measures viz. Uncertainty Corpus Fund for Small Businesses and Small Business Insurance.

The Influence of Internal Locus of Control and Entrepreneurial Skills Training on the Growth of Micro and Small Enterprises in Bomet County, Kenya

There is an ongoing argument that internal locus of control of business owners or managers can be related to the growth and survival of the business. The internal locus of control might be affecting the growth of enterprises as internal locus of control of an entrepreneur differs from the characteristics of a non-entrepreneur Some researchers have tried to define success in terms of turnover, sustainability, and growth. Some researchers have observed that entrepreneurial traits are indicators of success. The general research issue that has to be addressed in this study is the fact that, in addition to financing and markets, there are additional variables impacting the high mortality rate and stunted growth of micro and small firms in Kenya, particularly in Bomet County. So, this study will look at the connection between the development of micro and small businesses in Bomet County and internal locus of control. In this study, the moderating impact of training in entrepreneurial skills will be examined. The target population was micro and small enterprises in Bomet County which were 14,574 in number in 2016. The unit of observation was the managers and owners of these enterprises. The unit of analysis in the micro and small enterprises in Bomet County and their growth over the past five years. The study used a stratified sampling technique to pick the respondents from the manufacturing, trade, and services strata of micro and small enterprises. The sample size was 384 micro and small enterprises. Data was collected using a questionnaire. Data collection was done by administering the instrument to the owners or managers of the enterprises. The data was processed using computer software. The association between the internal locus of control of entrepreneurs and the expansion of businesses was established using a multiple regression model. The main conclusions were that the expansion of businesses in Kenya's Bomet County is influenced by internal locus of control. The study's main advice is that the key participants in the firms should train to develop the traits of owners and managers. This study also suggests that not everyone can succeed as an entrepreneur. Resources and a methodology should be available to find future entrepreneurs. The necessary resources cannot be accessed before identification.

АЛЬТЕРНАТИВНОЕ ФИНАНСИРОВАНИЕ И МОДЕРНИЗАЦИЯ ФИНАНСОВЫХ УСЛУГ В ЦЕЛЯХ СОДЕЙСТВИЯ ДИВЕРСИФИКАЦИИ ЭКСПОРТА В АФРИКЕ

The article explores the relationship between financial services, private sector development and export diversification, with a special focus on financial factors that affect export diversification at the firm level. In many African countries, the existing financial structure may not provide more flexibility and resources to support the factors determining exports, which leads to a decrease in export potential and diversification of export baskets. The financial system in Africa mainly revolves around the banking sector, which accounts for more than 90 percent of financial sector assets. The author argues that the current financing structure of the banking sector may not be suitable for the growth of small firms and export indicators, which requires special financing mechanisms, such as venture capital, as well as financial technologies that can improve traditional credit channels and offer other promising channels to eliminate the financing deficit of micro, small and medium-sized enterprises.

What Predicts the Growth of Small Firms? Evidence from Tanzanian Commercial Loan Data

What Predicts the Growth of Small Firms? Evidence from Tanzanian Commercial Loan Data

Institutional environment quality and the longevity of billionaire entrepreneurs

Using self-made billionaire entrepreneurs in China as a proxy for large entrepreneurs, we examine the impact of institutional environment quality on the longevity of such entrepreneurs. While property rights institutions and contracting institutions are important in explaining macroeconomic growth and small firm growth, we find no evidence that they matter to the longevity of billionaire entrepreneurs. However, we find access to finance to be important to the longevity of billionaire entrepreneurs. Our results help better understand the relative importance of various institutional environment forces to the continuous success of billionaire entrepreneurs.

The process of growing in small firms: Exploring dialectic adjustments to nonroutine disruption

ABSTRACT Studies examining small firm growth have suggested that growth is complex due to the multitude of internal and external factors that disrupt it. However, in focusing mainly on external factors and paying less attention to internal factors, the process of growing – or what is happening inside a small firm as it grows – remains undertheorized. Using findings from a real-time case study of a small firm and insights from the dialectical perspective, we develop a theoretical model that illustrates growth as a dynamic process occurring through dialectic adjustments in response to disruptions that cannot be resolved with routine practices. Our findings suggest that these disruptions trigger one of two situations – potentially converging or potentially diverging – in which individuals must adjust by connecting their insights (converging) or breaking connections (diverging). As such, our findings illustrate the variability in growing, compelling small firms to complexify their internal workings through dialectical adjustments in response to ongoing nonroutine disruptions.

Small and vulnerable: SME productivity in the great productivity slowdown

We show that the TFP growth of European micro, small, and medium-sized firms (SMEs) diverged from large firms after the global financial crisis. The average postcrisis TFP growth of medium-sized, small, and micro firms was, respectively, 1.1, 2.9, and 5.4 percentage points lower than that of large firms. This SME productivity gap is larger for firms with more severe credit supply shocks. The gap is partially attributable to a larger postcrisis reduction in intangible capital at SMEs than at large firms. Horseraces suggest that SME indicators are more robust and more powerful predictors of postcrisis TFP growth than other indicators.

Farmers’ Markets as Resilient Alternative Market Structures in a Sustainable Global Food System: A Small Firm Growth Perspective

A sustainable food system is a key target of the global Sustainable Development Goals (SDGs). The current global food system operates on market mechanisms that prioritise profit maximisation. This paper examines how small food businesses grow and develop within grassroot economies that operate on different market mechanisms. Focusing on artisan food producers and farmers’ markets, this research highlights the potential of resilient, small-scale, diverse markets as pathways to sustainable food systems. An applied critical realist, mixed-methods study was conducted at a macro (Irish food industry), meso (farmers’ markets in the region of Munster, Ireland) and micro (artisan food producers and their businesses) level. The resulting framework provides a post-growth perspective to sustainability, proposing that farmers’ markets represent an alternative market structure to the dominant industrial market, organised on mechanisms where producers ‘Mind what they make’ and ‘Make peace with enough’. In their resilience, these markets can provide pathways for structural change. This implies a call to action to reorientate policies targeting small food businesses to move beyond the concept of firms as profit-maximizing enterprises and to instead focus on a local food policy framework that reinforces the regional ‘interstices’ within which small food businesses operate to promote diversity, resilience and sustainability in the food system.

On the consequences of firm growth.

Recent contributions to the literature on small firm growth have been marked by a growing sense of frustration with the state-of-the-art and what it implicates in both theory and policy. In short, while growth episodes appear relatively common, a tiny proportion of firms sustain growth and ‘scale’. This calls into question the very basis upon which policies seeking to target high growth firms (HGFs) rest. In addition, it cautions against perspectives that view growth as the essence of entrepreneurship. In this paper, we argue that understanding the frequency of growth episodes and the rarity of sustained growth requires a better understanding of growth consequences. To this end, we describe case study evidence from ambitious entrepreneurs whose firms experienced an episode of high growth followed by longer periods of mixed performance. Our goal is to shed light on how the experience of growing affects further growth. Our data provide initial insights into the mechanisms linking past growth to growth motivations and into the ways in which past growth lays the foundations for future performance.

Local financial development and the growth of small firms in Vietnam

This paper examines whether heterogeneities in financial development among Vietnamese provinces matter for firm growth in Vietnam. Using a nationally representative firm survey that covers more than 41,000 firms for the period 2009 − 2013, we estimate the impact of provincial financial development on the growth rates of firms by accounting for sectoral differences in growth opportunities. We find that province-level financial development promotes the growth rates of sales, investment and sales per worker of small firms, and reduces the growth rate of the wage-to-sales ratio. Our results imply that firms grow faster in provinces with a higher level of financial development. Moreover, the effect of financial development on growth rates is larger when firms operate in sectors with better growth opportunities.

How Innovation Impacts Firm Growth Dynamics in Natural Resource Industries

Growth has generally been considered a crucial objective for a firm, and, consequently, it has become one of the most researched subjects in economic sciences. This paper aims to provide an in-depth study of how incremental innovation, a ubiquitous factor, affects the growth of small and large-sized firms differently. Specifically, this work examines firm growth dynamics in natural resource industries. In these industries, innovation is mainly based on processes in the form of incremental changes, and adoption of innovations has significant sunk costs. We argue that, before incremental process innovation, firm growth is directly proportional to firm size. However, in the presence of incremental innovation events, firm growth is indirectly proportional to firm size, since smaller firms pose higher strategic flexibility and can adopt innovations faster. Our empirical findings not only confirm the dependency of growth rate on firm size, rejecting Gibrat’s Law of Proportionate Effect, but highlight the relevance of incremental innovation as an inflection point of firm growth, creating a competitive opportunity window for small firms.

Structural Relationship Between Environmental Uncertainty, Organizational Agility, and Business Performance in SMMEs

Despite that small and medium-sized manufacturing firms have been playing a role to promote economic growth and development in national industries, the management activities of small and medium-sized manufacturing firms are restricted by numerous internal and external environmental factors and are facing diverse challenges. Therefore, this study empirically verified the structural relationships among environmental uncertainty, organizational agility, and business performance recognized by small and medium-sized manufacturing firms. According to the results of this study, it can be said to be important to identify the characteristics of the uncertain management environment and secure and strengthen agile organizational capabilities to respond to the foregoing in order to secure competitive advantages and achieve sustainable growth of small and medium-sized manufacturing firms in the rapidly changing business environment.