Italian Small And Medium-sized Enterprises Research Articles

Board gender diversity in innovative SMEs: an investigation across industrial sectors

PurposeInvestigating the drivers that contribute to the success of small and medium-sized enterprises (SMEs) is crucial for ensuring the overall growth and sustainability of a country. The purpose of this research is to investigate the role of gender diversity on the Board of Directors of innovative SMEs to understand whether the presence of women on boards can improve the performance of such organizations devoted to introducing technological advancements in the product market.Design/methodology/approachThe study adopts a quantitative approach, using a sample of 2,264 Italian innovative SMEs. These companies were selected from non-financial sectors and collected from Analisi informatizzata delle Aziende Italiane (AIDA), a database provided by Bureau van Dijk. An unbalanced panel data involving a period from 2016 to 2021 was used with a total of 12,173 observations.FindingsOur findings suggest that female representation has a negative effect on a company's financial performance. Moreover, the moderation effect of sector growth opportunities confirms this negative influence since in sectors characterized by high growth opportunities, the presence of women on boards was found to have a negative outcome.Originality/valueThe main contribution of the work lies in offering a comprehensive and thorough examination of the business category of innovative SMEs. Specifically, it extends previous research through a focus on board gender diversity of innovative SMEs by examining the impact of the presence of women in their boardrooms on firm performance outcomes. Furthermore, it provides an analysis of this effect, considering both high-growth and low-growth sectors.

The Role of Digitalization in Cross-Border E-Commerce Performance of Italian SMEs

The utilization of digital technologies is rapidly increasing businesses’ capacities for innovation and growth, especially in the case of small and medium-sized enterprises (SMEs), with strong benefits in efficiency, competitiveness, and market reach. We aimed to study the impact of digital technologies on cross-border e-commerce (CBEC) in Italian SMEs, with regard to three main ICT areas: e-business, e-marketing, and e-commerce. Using a regression analysis, the study found that e-business tools have an unclear impact on cross-border e-commerce, while e-marketing tools, such as data tracking for medium-sized enterprises and social media for all SMEs, have a positive and significant impact on the online export performance. Finally, we examined the impact of being present on a marketplace rather than having a proprietary e-commerce website, and we found that having a presence on marketplaces such as Amazon or Alibaba is more effective than having a proprietary e-commerce website in terms of cross-border online sales. These results are useful both for policy makers and managers, since making informed decisions to develop SMEs is crucial for industrial strategy effectiveness.

Digitalization of small and medium-sized family enterprises: The key role of succession

Family small and medium-sized enterprises (SMEs) represent a peculiar context for investigating digitalization since the vital link between the family and the business turns into distinctive approaches to innovation relative to nonfamily firms. Although extant literature acknowledges that all firms are increasingly required to respond to the challenges of the digital economy, the current knowledge about how family SMEs pursue digital innovation and how it impacts the organization is still limited. Similarly, understanding if and how succession plays a role in innovation and digital change development in family firms is a topic that needs further investigation. A qualitative study of six Italian family SMEs currently undergoing their digitalization journeys detected three types of digitalization (molt, turmoil, and clear-cut) that are deeply connected with different succession experiences, different levels of business family support, and various levels of strategic planning. The findings highlight the central role of succession and intergenerational dialogue in fostering digitalization in family firms. The paper contributes to the general literature about digital innovation in family SMEs and mainly speaks to that literature focused on the relationship between technological innovation and succession, offering new and deeper insights into the relationship between the family, the person who is in charge of managing digitalization in these firms and the whole digitalization process. Contributions to practice are also outlined: the three types of digitalization represent a valuable tool to sustain consultants and family firms’ owners in digitalizing these organizations.

Exploring SMEs innovation paths with augmented and virtual reality technologies

PurposeAugmented reality (AR) and virtual reality (VR) are increasingly recognized among technologies potentially driving the digital innovation of small and medium-sized enterprises (SMEs). Nevertheless, the implications of AR/VR adoption in innovation processes have yet to receive much attention to date, with the need to explore the issues facilitating a systematic implementation in the SME context. This study aims to investigate the possible innovation paths of SMEs as a result of AR/VR adoption.Design/methodology/approachThe authors performed a multiple case study research involving six Italian SMEs in manufacturing and service sectors that are investing in AR and/or VR solutions and are digitally innovating thanks to these technologies.FindingsAR/VR solutions lead to different types of innovation in SMEs, i.e. for innovating product or service offerings, business processes or even the business model, when AR/VR extends to the company business logic. SMEs demonstrate being able to leverage internal sources with the essential commitment of top management and low resistance of employees in all kinds of AR/VR-enabled innovations. Conversely, they involve different external innovation sources according to the type of innovation pursued. Organizational issues emerged as more relevant than technological issues.Practical implicationsResults contribute to the literature on digital transformation of SMEs and provide managerial guidance on innovation sources and organizational issues to be considered to effectively deploy AR/VR solutions into specific innovation paths.Originality/valueThis study explores the impact of emergent technologies in the innovation process along with multiple perspectives, degree of complexity, and strategic importance in the SME context.

Supporting the digitalization of SMEs through maturity models

Over the past two years, small and medium-sized enterprises (SMEs) have faced a crisis due to the Coronavirus pandemic. The use of digital tools has been crucial for SMEs to mitigate the negative impacts of Covid-19, but they still face challenges in their digitalization path due to limited resources, skills, and know-how. To address this, policymakers and practitioner in the SME ecosystem need to understand SMEs' level of digitalization and develop strategies for their digital transformation: digital maturity models can help entrepreneurs and consultants to develop a structured digital roadmap that considers SMEs' resources and constraints. However, even if maturity models and readiness model are effective tools, existing models may not account for SMEs' unique characteristics being either developed for large firm or Industry 4.0 enterprises. Thus, researchers need a better theoretical understanding of the various stages of the digitalization process to account for the heterogeneity among firms' current digital states. Therefore, this research, building on pre-existent literature, aims to identify the elements necessary for developing a digital maturity framework specifically for SMEs. This qualitative research study uses a multiple case study approach, identifying 18 cases of Italian SMEs. The selection of the sample was carried out to consider the industry (manufacturing or services), the size (small or medium) and the geographical location (Northern Italy, Central Italy, Southern Italy), to grant a higher heterogeneity and to allow a better understanding of SMEs approach to digitalization. By departing from existing models exclusively designed for large or manufacturing companies, this research enriches our understanding of digital maturity models for SMEs. Based on the research carried out, a three-layer framework is proposed to illustrate the elements to be considered in the construction of a framework and their connections. The proposed model considers dimensions and elements related to SMEs integrated processes, relationship between SMEs and external actors, and the context in which they operate.

Access to external credit during COVID-19: evidence from green SMEs in Italy

This study explores the impact of being “green” as a response to variability in the business environment. We examine the financial resilience of green Small and Medium-sized Enterprises (SMEs) in Italy compared to non-green during the COVID-19 pandemic. We verify whether green SMEs are more able to attract external funding than non-green and whether green SMEs rely more heavily on trade credit than non-green ones. We carry out an analysis with 215,564 observations, of which 6844 refer to “green” firms, over the period 2017–2020 and we find that before and during the pandemic, Italian green SMEs do not attract more external funding than other SMEs, but they rely more on trade credit than non-green SMEs. Our results partially confirm the traditional substitution effect, and we suggest that the reasons for this relationship are also supplied in the literature which sees trade credit as a component of a long-term portfolio management strategy, i.e., as a tool for consolidating relationships with clients, for price discrimination and/or for increasing firm profitability in facing variable demand conditions. Our paper contributes to the literature in two ways. First, it investigates the relationship between the “green” characteristics of a firm and its level of economic and financial resilience during the pandemic. Second, it verifies whether, during a complex economic shock, green orientation increases or decreases the importance of trade credit relative to bank credit in financing the firm.

Leverage the COBIT 2019 Design Toolkit in an SME Context: A Multiple Case Study

Organizations today exploit IT to achieve business value and competitive advantages; it is the disruptive effect of digital transformation. However, investing in IT without proper control and governance over enterprise IT (GEIT) can expose organizations to cyber-risks and IT project failures. This problem affects both multinationals and small organizations. In particular, small and medium-sized enterprises (SMEs) struggle to implement IT-governance also due to the complexity of the standard IT-governance frameworks. In this study, five case studies were conducted with five manufacturing companies in Italy whose headquarters are located in the Lombardy region to investigate the potential benefits for IT practitioners of using the COBIT 2019 Design Toolkit, an Excel spreadsheet that facilitates the development of a governance system. The results are encouraging, the IT practitioners appreciated the COBIT 2019 Design Toolkit to map the IT resources and issues, prioritize the most important governance and management objectives, and align business and IT strategy. However, some criticalities emerged, for instance, the limited prescriptive power of the tool and the language, which is sometimes difficult to understand for IT practitioners. It should also be noted that current IT-governance implementation in Italian manufacturing SMEs appears to be very limited. Further, it should be highlighted that this study was using COBIT 2019 before ISACA issued “COBIT for Small and Medium Enterprises Using COBIT 2019” which could already have a positive impact on the level of comprehension.
 Keywords: COBIT 2019, IT-governance, IT-governance frameworks, multiple case study

Managing open innovation projects: an evidence-based framework for SMEs and large companies cooperation

PurposeHow can joint open innovation (OI) projects between small and medium-sized enterprises (SMEs) and large companies (LCs) be effectively managed? This study aims to try to answer this research question with a focus on the critical success factors (CSFs) of such cooperation.Design/methodology/approachBased on 40 semi-structured interviews with Italian SMEs and LCs engaged in various industries, 20 open OI projects involving SMEs and LCs are investigated using a reflexive thematic analysis, a methodology involving both deductive and inductive approaches.FindingsFifteen CSFs grouped into seven categories emerge from the analysis of joint OI projects between SMEs and LCs. Among them, shared leadership, dynamic decision-making and priority setting emerge as essential elements at the basis of the proposed SMEs–LCs cooperation in joint OI projects that were not sufficiently addressed by prior studies.Originality/valueTo the best of the authors’ knowledge, this study is the first to provide an evidence-based framework for managing joint OI projects between SMEs and LCs. Relatedly, this study links the practices and most recurring CSFs that facilitate such cooperation.

Overcoming pandemic challenges through product innovation: The role of digital technologies and servitization

The fast-changing scenario related to the COVID-19 pandemic calls for firms to rapidly redefine and innovate their strategies to sustain their businesses, with research emphasizing the key roles of digital technologies and servitization. We aim to enrich the theoretical debate on this matter by assessing how small and medium-sized enterprises (SMEs) achieve product innovation under time constraints by leveraging two specific technology groups (information and communication technologies [ICT] and Industry 4.0 data-processing technologies) and servitization. The research is based on a mixed-method approach consisting of an original survey completed by 257 Italian SMEs (grounded on a previous qualitative study about such SMEs' behaviors during the first Italian lockdown), followed by in-depth interviews with the owners and/or managers of the eight SMEs that participated in the survey. The results show a positive relationship between the increased use of digital technologies (ICT and Industry 4.0 data-processing technologies) during the pandemic with servitization and, in turn, with product innovation. Specifically, the increased use of ICT during the pandemic had a direct positive effect on product innovation, while Industry 4.0 data-processing technologies affected product innovation only through the full mediation of servitization. The qualitative study allowed us to highlight how the different kinds of digital technologies supported SMEs’ innovation (servitization and product innovation) during the pandemic. The theoretical and practical contributions of this study are discussed.

Implementing and Monitoring Circular Business Models: An Analysis of Italian SMEs

The transition from a linear to a circular economy (CE) is at the center of the debate among institutions, enterprises, practitioners, and scholars. Small- and medium-sized enterprises (SMEs), with their high presence in the business environment, play a pivotal role in the successful implementation of CE principles. Therefore, this paper aims to understand the state of the CE among Italian SMEs, considering both their different sizes and sectors. This study investigates CE knowledge and application, strategic relevance, benefits from and barriers to the transition towards circular business models, and the use of CE-related performance indicators in management control and external reporting. Through an online survey carried out in cooperation with the Italian Confederation of Craft Trades and Small- and Medium-Sized Enterprises (CNA), we collected primary data from 623 respondents. Findings revealed the existence of cultural, technological, market and financial barriers, which have hampered the adoption of circular practices among Italian SMEs. Poor understanding of CE potential, combined with difficulty in raising public and private funds to finance the transition from linear to circular, are the greatest problems. To overcome such issues, we recommend serious intervention by public institutions, trade and consumer associations, and the higher education system to develop a climate more favorable to the CE.

Integrating knowledge management with intellectual capital to drive strategy: a focus on Italian SMEs

PurposeThis study aims to provide empirical evidence on the linkage between knowledge management (KM), intellectual capital (IC), planning effectiveness (PE) and innovation performance in Italian small and medium-sized enterprises (SMEs).Design/methodology/approachSurvey data from 172 Italian SMEs was collected through an online questionnaire and analyzed using structural equation modeling (partial least square).FindingsResults show that KM practices have a positive direct impact on each IC component which influences PE. Finally, structural capital and PE have a positive direct impact a firm’s ability to innovate.Research limitations/implicationsFor researchers, this paper fills an important gap in the academic literature by conceptualizing and empirically testing the link between IC and PE. The main practical implication of this study is that developing intangible resources is of particular importance for strategic decision-making in SMEs. The focus on Italian SMEs limits the generalizability of the results.Originality/valueThis study provides empirical evidence on how KM and IC interact and mutually drive PE. Second, results shed light on the importance of IC to enhance a firm’s ability to reach its goals. Finally, the focus on SMEs enriches the extant literature in the field confirming the vital role of KM and IC in managerial decision-making.

The enabling role of formalized corporate networks to drive small and medium‐sized enterprises toward sustainability

AbstractThe global economy's transition toward more sustainable development models is undoubtedly grounded on small and medium‐sized enterprises (SMEs). However, SMEs, individual entrepreneurs, and microenterprises have always encountered barriers to implementing social responsibility and sustainability concepts. The paper investigates the enabling role of formalized corporate networks to drive SMEs toward sustainable behaviors. A quantitative nonlinear regression approach is applied to a content analysis of a sample of network contracts coded. The content analysis is applied to analyze the declared objectives, the purpose of the contract, and sustainability areas. An ordered logistic regression is applied on variables related to the behavior of SMEs before entering in the contract and post‐adhesion phases. Data demonstrates how networks of SMEs can be used as enabling factors to boost sustainability among them. Specifically, the study is based on a sample of 96 formalized network contracts (FNCs), including 1486 Italian SMEs in that sustainability‐oriented networks. It offers an evidence‐based perspective on how networks of companies can play a fundamental role in the development of policies aimed at bringing small companies closer to the concept of sustainability (such as eco‐innovations, eco‐efficiency, environmental performance, and social innovations, among others) and its practical implementation. This paper has two significant strengths. The first is that it uses as a sample a set of 1486 companies, including individual entrepreneurs and microenterprises, whose data are usually difficult to collect. The second is that it demonstrates the efficacy of a contractual form that could be scalable to different countries.

Digital strategy aligning in SMEs: A dynamic capabilities perspective

Digital strategy alignment is a dominant concern for today’s managers and information systems researchers. Yet research in this area remains fragmented, particularly on the digital strategy alignment of small and medium-sized enterprises (SMEs), which is concerning owing to their value to European economies. Employing dynamic capabilities as an analytical lens, we investigate how 43 British, Irish, Italian, and Spanish SMEs, across five industry sectors, enact digital aligning. We identify a model of digital alignment comprising five phases, which we term “passive acceptance,” “connection,” “immersion,” “fusion,” and “transformation,” as well as the specific combinations of sensing, seizing, and reorganizing capabilities associated with each phase. Our model provides a holistic, practice-based perspective and highlights the role of micro-behaviors and leadership in SMEs implementing digital strategy.

Local financial development and cash holdings in Italian SMEs

In this article, we investigate the effect of local financial development on cash holdings of Italian small and medium-sized enterprises (SMEs). Consistent with the hypothesis that local financial development reduces the need to hold precautionary cash because it facilitates access to bank debt, we find that local financial development measured by the density of bank branches in Italian provinces has a negative effect on corporate cash holdings. This effect is driven by SMEs with bank debt. Furthermore, the negative effect of local financial development on cash holdings only exists for younger and smaller SMEs, which are more likely to benefit from increased local financial development. Our work highlights that local financial development is an important driver of policies on holding cash by SMEs and is particularly relevant during crisis periods, such as the recent COVID-19 crisis.

Board of director attributes: effects on financial performance in SMEs

This paper analyses the relationship between board of director (BoD) attributes and financial performance in small and medium-sized enterprises (SMEs). Although SMEs are the backbone of world economies, most studies on this relationship focused on large companies and did not consider many typical or recommended processes and activities carried out by SME BoDs. We monitored a set of variables related to BoD attributes such as composition, characteristics, structure and processes for 184 Italian SMEs along with their financials over a 4-year period (2014–2017). We controlled for enterprise-specific characteristics such as annual sales growth, assets value, sales turnover, leverage, company size (employees), firm age, generational changes, director ownership and familiness. Using an ordinary least squares (OLS) regression model with time-period and industry-fixed effects on financial performance data, we found a significant correlation between certain BoD attributes and financial performance. In particular, in our model, BoD members’ adequate competences and skills, presence of committees or individual delegates within the BoD, adequate and timely-furnished documentation before BoD meetings, monitoring of conflicts of interest of BoD members, BoD risk analysis and management, BoD member performance-based remuneration, and disclosure to stakeholders influenced the ROA ratio, used as a proxy for financial performance.Our findings support the importance of the BoD and its attributes in influencing the financial performance of SMEs. BoDs are proven unique resources for companies.

Family involvement and financial performance in SMEs: evidence from Italy

The aim of this study is to provide new evidence on the relationship between family involvement and financial performance in small and medium-sized enterprises (SMEs). We analysed the effects of family involvement in ownership and in the board of directors (BoD) for 214 Italian SMEs. Using an ordinary least squares (OLS) regression model with time-period and industry-fixed effects and lagged financial data over a four-year period (2014-2017), we found a statistically significant U-shaped relationship between family ownership and return on assets (ROA). Contrary to our expectations, the relationship between family involvement in the BoD and profitability was negative. These results suggest that family involvement in firms may have both positive and negative effects on financial performance depending on the thresholds considered. We also found a few other contextual variables related to company structure that influenced SME financial performance.

The International Marketing Strategy of Luxury Food SMEs: The Case of Truffle

ABSTRACT This paper aims at investigating the international marketing strategy of luxury small- and medium-sized enterprises (SMEs), with a focus on food SMEs operating in the luxury global niche of truffle products. The paper proposes two qualitative case studies of highly internationalized Italian luxury SMEs in the truffle industry. It discusses market selection, entry modes, and international marketing mix in foreign markets. The U.S. and Brazil are considered as emblematic international markets in the empirical investigation. The study shows the need for luxury food SMEs to implement control over the distribution channels. Trust-based relationships with commercial partners are pivotal to this purpose. Moreover, the need to educate consumers and to exploit experiential rely on peculiar promotion strategies. The paper discusses five pillars of the international marketing strategy of luxury food SMEs. Lessons learned from the truffle case can be extended to the study of other luxury SMEs’ international marketing strategies.

Toward a Psychosocial Model of Employees’ Participation in Corporate Social Responsibility. Evidence from Italian Small and Medium-Sized Enterprises

Research has demonstrated that corporate social responsibility (CSR) is a predictor of employees’ shared and personal organizational identity processes and work attitudes. However, there is limited understanding of how to promote employee participation in socially responsible activities in organizations. Drawing on social identity theory, this article aims to validate a psychosocial model that can encourage employees of small and medium-sized enterprises (SMEs) to become involved in CSR practices. We hypothesize that employees’ sense of organizational identity (OI) influences their perception of CSR through the mediating influences of organizational sense of community (SOC) and affective organizational commitment (OC). Quantitative data collected from employees (N = 354) of Italian SMEs, as well as multiple mediation analysis and bootstrap method for indirect effects, is used to evaluate the hypothesized relationship. Results show that employee perceptions of organizational SOC and affective OC mediates the relationship between OI and CSR. Further, employee employment status has been found to have a partial effect on participation in CSR practices.

Financing Decisions of SMEs in the Hotel Industry

The purpose of this paper is to investigate the relationship between investment and financing decisions, focusing on small and medium-sized enterprises (SMEs) operating in the hotel industry. To achieve this purpose, it was carried out a dataset of 72 SMEs (492 firms/year observations). The sample includes Italian SMEs for the period 2010–2015. All the firms included in the sample fall into the definition of SMEs given in European Commission recommendation 2003/361/EC of 6 May 2003. Descriptive statistics, Pearson correlation, and CCA were used. The findings showed the relationship between the groups of balance sheet items. However, results also highlight that firms used their own resources, typically associated with long-term investments, to finance current assets. This behavior may have been caused by environmental and/or market conditions. In particular, the credit crunch that followed the 2008 financial crisis may have affected business behavior.

Industry 4.0 technologies and the servitization strategy: a good match?

Purpose of the paper: The paper aims at investigating whether a relationship exists between the servitization strategy and the adoption of Industry 4.0 (I4.0) technologies in small and medium sized enterprises (SMEs) operating in a B2B context. Methodology: Case study method based on in-depth interviews with the entrepreneurs and managers of 7 SMEs operating in the mechanical sector in Italy Findings: The article provides some preliminary evidence on the interplay between some I4.0 technologies (Internet of Things, cloud computing, simulation, big data and analytics) and the servitization strategies of B2B SMEs, and highlights its performance implications. The authors propose three research propositions to be tested in future studies. Research limits: Although the goal of the research is exploratory, it is worth mentioning that it considers a small sample of B2B SMEs operating in the metals and machinery sector. Future studies could investigate these relationships among larger samples of cross-sectional companies. Practical implications: This work identifies a selection of technologies belonging to I4.0, that could be compatible with one another and functional to the implementation of a servitization strategy of SMEs. Originality of the paper: This work contributes to servitization literature by investigating the role of I4.0 technologies. Also, it contributes to management literature by offering initial empirical evidence of Italian manufacturing SMEs that have adopted I4.0 technologies.