Korean Small- And Medium-sized Enterprises Research Articles

Beyond COVID-19 business transformational opportunities: Develop e-satisfaction for predicting repeat purchase behavior based on “goodwill e-trust” ; Case of South Korean SMEs

The increasing prevalence of e-commerce has transformed online shopping into one of the most favored methods for consumers. This study investigates the factors influencing initial e-trust formation toward e-commerce adoption, focusing on information quality, web interface, and company reputation. It aims to assess how e-trust affects customer satisfaction and the sustained use of e-commerce, and explores the moderating role of perceived privacy concerns. Utilizing a randomized distribution of questionnaires among 236 participants, and employing a seven-point Likert scale, the study gathered data both online and offline.Statistical analyses using SPSS AMOS confirmed the acceptance of all proposed hypotheses. The findings reveal that e-trust, grounded in goodwill-trust theory, significantly influences trust and satisfaction, thereby enhancing future purchase intentions and positively affecting online shopping behavior. The study demonstrates that understanding and addressing the antecedents of e-trust is crucial for fostering consumer satisfaction and promoting continued e-commerce adoption.Notably, Post-COVID-19 consumers showed a decrease in privacy concerns compared to Pre-COVID-19, indicating reduced fear and apprehension associated with online shopping. This reduction in privacy concerns is linked to an increased likelihood of repurchase behavior. Theoretical implications suggest that the research provides valuable insights for small and medium-sized enterprises (SMEs), helping them enhance customer trust and satisfaction, thus gaining a competitive edge over larger e-commerce firms. The findings underscore the long-term impact of e-trust on consumer adoption in the globalized e-commerce landscape.

The moderating effect of ESG pressures on the relationship between the environmental management capabilities and the non-financial performance of Korean SMEs

Based on the resource-based view and institutional theory, this study investigates the impact of their environmental management capabilities and environmental, social, and governance (ESG) pressure on the non-financial performance of small and medium-sized enterprises (SMEs). In particular, it examines the interaction effect of ESG pressures on the relationship between SMEs’ environmental management capabilities and non-financial performance. For this study, a total of 1865 SME lists were obtained through Jeonnam Techno Park and Jeonnam Small Business Job and Economy Promotion Agency. Based on this, a total of 127 questionnaires were returned as a result of a telephone, e-mail, and online survey, and finally, an empirical analysis was conducted based on 120 questionnaires. We conducted an empirical analysis of Korean SMEs and obtained the following results: First, environmental management capabilities have a significant, positive effect on SMEs’ non-financial performance. Second, ESG pressure has a significant, negative effect on the non-financial performance of SMEs. Next, we analyzed the moderating effect of ESG pressures and observed that ESG pressures strengthen the positive effect of environmental management capabilities on non-financial performance. Based on the resource-based perspective and institutional theory, this study provides meaningful academic implications by examining environmental management capabilities and ESG pressures, which have not been identified in previous studies, as factors of non-financial performance that are becoming important under the new management paradigm, such as climate change and ESG. Furthermore, while ESG pressure has a significant negative effect on non-financial performance, we find that it is a moderating variable that strengthens the relationship between SMEs’ environmental management capabilities and non-financial performance, which has useful academic and practical implications for ESG and strategic management.

Unveiling employee perspectives: A comparative analysis of online reviews on Korean SMEs and large corporations

This study analyzes online company reviews from JobPlanet using TF-IDF analysis and LDA topic modeling to explore factors influencing job satisfaction in Korea. By comparing the reviews from employees at small and medium-sized enterprises (SMEs) and large corporations on the advantages and disadvantages, it aims to gain insights into enhancing SMEs' competitiveness regarding employee job satisfaction.The analysis shows that large corporation employees valued personal growth and mutual respect but cited excessive workload as a significant drawback. SME employees appreciated smooth communication and flexible leave but noted unilateral work, long hours, and lack of shared vision. The study concludes that a horizontal organizational culture and opportunities for personal growth significantly impact job satisfaction beyond salary and benefits. SMEs can improve competitiveness by fostering a clear corporate vision, a horizontal culture, and personal growth opportunities.

Firms for Sustainable Manufacturing: Understanding the Key Determinants of Pro-environmental Behaviour

This study examines the factors that influence pro-environmental behaviour intention (PEBI) in manufacturing small- and medium-sized enterprises (SMEs). The data were collected from 517 executives and chief technology officers of Korean SMEs and analysed using a comprehensive research model. The model includes variables such as awareness of consequences (ACs), ascription of responsibility (AR), personal norms (PNs), extrinsic motivation (EM), subjective norms (SNs) and realistic values (RVs). The results show significant relationships between these factors and PEBI. In particular, ACs and AR have positive effects on PNs, with AR having a stronger effect. PNs are the most important predictor of PEBI. EM has a positive impact on behaviour intention, while SNs do not have a significant impact. Interestingly, RVs have a negative impact. These findings have practical implications for encouraging pro-environmental behaviour in manufacturing SMEs. Policymakers and business planners should focus on increasing awareness of environmental consequences and individual responsibility to reinforce PNs. Moreover, offering extrinsic rewards and benefits can motivate pro-environmental behaviour in these firms. Understanding these factors can help design targeted strategies for promoting sustainability practices within manufacturing SMEs. By addressing these aspects, businesses can contribute to environmental innovation and sustainable development.

Understanding user resistance of smart factory adoption: a focus on small and medium-sized enterprises

PurposeThe purpose of this paper is to examine the resistance behavior of smart factories in small and medium-sized enterprises (SMEs). Drawing upon dual factor perspective, this study examines how two types of quality and perceived usefulness impact user resistance as enabling factors and how switching cost, skepticism, habit and inertia contribute to user resistance as inhibiting factors. Additionally, multi-group analysis is employed to compare small and medium enterprises.Design/methodology/approachPurposive sampling technique was employed to collect 460 Korean SMEs employees, consisting of 235 small enterprises and 225 medium enterprises. Partial least squares structural equation modeling was used for data analysis.FindingsThe results reveal that all three inhibiting factors, switching cost, skepticism and habit, are key antecedents of inertia. In small enterprises, skepticism has a greater impact on inertia, which in turn strongly affects resistance. Additionally, system quality is more crucial for small enterprises, whereas information quality holds more importance for medium enterprises in mitigating resistance. Moreover, when the implementation level of a smart factory is high, the effect of perceived usefulness on user resistance diminishes.Originality/valueThis study has revealed the importance of considering both enabling and inhibiting factors for the adoption of smart factory systems in the context of SMEs. Additionally, it has provided evidence that as the level of the smart factory system increases, the effect of perceived usefulness on user resistance decreases, thus making the transition to smart factory systems more challenging.

Trade Facilitation for E-Commerce Export Clearance

Purpose – There is a paucity of literature dealing with exporters’ compliance issues in e-commerce exports. This study aims to fill this gap in the literature by exploring customs initiatives to facilitate the e-commerce exports of small and medium-sized enterprises (SMEs) in the changed compliance environment. The central question of this study was divided into five subquestions: first regarding the pros and cons of trade facilitation measures for Korean e-commerce export clearance; second and third questions about risk and compliance management for facilitation fourth about instruments, the changes in Korean SME compliance burden in e-commerce exports, and ways to improve trade facilitation for e-commerce exports. Design/methodology – This study adopts a qualitative approach using a case study method to understand the SME experience in Korean e-commerce export compliance procedures. A qualitative method was selected to answer research questions requiring an in-depth understanding of the regulatory procedures of customs administration and exporters’ compliance burden. Because this study addresses the changing compliance environment for which statistical data is insufficient, a quantitative method is considered inappropriate. Based on the approach, data were collected using multiple sources, including an extensive literature review, interviews, and field observations. Thematic pattern matching was applied to interpret the data. Findings – This study examined ways to support SMEs in the changed e-commerce export compliance environment. Facilitation measures for e-commerce exports have contributed to SME access to global markets, simplifying export clearance procedures, and saving exporters’ compliance costs. However, such instruments are limited in promoting SME compliance capabilities to cope with intensified competition and strengthened controls over foreign exporters in cross-border e-commerce. Therefore, this study highlights the importance of reshaping facilitation measures for e-commerce exports based on risk and compliance management theories to a system encouraging exporters’ voluntary compliance. Originality/value – This study’s academic significance derives from verifying the relationship between trade facilitation instruments and risk and compliance management procedures using an actual case in Korea. It is also of practical importance in navigating the directions for improving facilitation measures for e-commerce exports in a changed compliance environment.

SME innovation, supply chain strategy fit and business performance: the moderating role of environmental uncertainty

ABSTRACT Innovation continues to be a strategic priority of corporate competitiveness. Despite there is a sizable body of research that addresses how innovations influence various business outcomes, little is known as to whether and how process and product innovation may fuel/hinder the supply chain strategic fit (SCSF) and the business performance of focal small and medium-sized enterprises (SMEs). Employing structural equation modelling on data collected from 258 Korean SMEs, we find that both process and product innovations positively impact SCSF, and that improved SCSF positively influences on SME performance. Our study also suggests a non-monotonic contingency effect of environmental uncertainty on the relationship between SME innovation and SCSF. Specifically, we find that environmental uncertainty strengthens the positive effect of process innovation on SCSF but weakens the positive impact of product innovation on SCSF. Our study contributes to the innovation and supply chain management literature with novel theoretical and managerial knowledge on how to manage innovation and SCSF under different environmental conditions.

The Role of Creating Shared Value and Entrepreneurial Orientation in Generating Social and Economic Benefits: Evidence from Korean SMEs

This study investigates the effect of entrepreneurial orientation (EO; one of the most broadly acknowledged firm-level constructs) on the performance of small- and medium-sized enterprises (SMEs). Furthermore, we analyze the moderator effect of creating shared value (CSV) on firm performance. Our analysis was conducted using a structural equation model on a stratified sampling method of 294 manufacturing and service SMEs in Korea. The results show that an SME’s efforts in some variables in EO constructs are statistically positively related to both its financial (economic benefits) and non-financial performance (social benefits). Our study results also reveal that there is a significant positive moderator effect of CSV on the EO-performance relationship. This implies that CSV, when bundled with EO, can boost firm performance and provide SMEs with not only a competitive and sustainable advantage but also reduces their risk. This research contributes to the extant literature by investigating the interactive effect of CSV on the relationship between EO and firm performance in the context of SMEs, which has received scant attention in the extant literature. In the last section, the limitations and future research agenda of this study are presented.

한국 중소기업의 국제화가 혁신에 미치는 영향: 비선형관계 및 조직의 여유자원의 조절효과

Small and medium-sized enterprises (SMEs) have rapidly expanded their market share and explored technological capability through internationalization. However, after a certain critical point, the overall costs originating from internalization may outweigh the benefits. In this study, we hypothesize that there exists an inverted U-shaped relationship between internationalization and innovation. We also posit that the organizational slacks, financial slack and human resource slack, moderate this relationship. By empirically testing the panel data of 95 Korean SMEs, our results demonstrate that SMEs’ internationalization and innovation have an inverted U-shaped relationship. Our findings also suggest that the financial slack of SMEs negatively moderates the relationship between internationalization and innovation, whereas HR slack is not significant. This study provides vital theoretical implications that the benefit of internationalization diminishes after a certain critical point, and the financial slack weakens the inverted U-shaped relationship.

The effectiveness of public R&D subsidy on SMEs’ innovation capability and catch-up in the Korean manufacturing industry

ABSTRACT This study investigates the effect of R&D subsidy associated with R&D projects on the productivity and internal capacities of Korean manufacturing small- and medium-sized enterprises (SMEs). It also addresses the difference in effectiveness attributed to the characteristics of such projects. We constructed distinctive firm-level panel data combining the National Science and Technology Knowledge Information Service and Korea Enterprise Data databases and used stochastic frontier analysis with multivariate matching techniques. The results reveal that subsidised R&D projects did not help Korean SMEs in improving productivity and efficiency. Compared with the control group, which had similar external features, beneficiaries showed worse productivity growth as well as efficiency changes. Moreover, the effects of R&D subsidies differ depending on project characteristics. Specifically, the amount and period of R&D subsidy had a positive effect on catch-up but a negative effect on SMEs’ innovation capacity. These results demonstrate the need for renovating the current support system for SMEs’ R&D activities in Korea.

Degree of Internationalization and Performance of High-tech Small and Mediumsized Enterprises: Evidence from Korea

Purpose – In this study, we explore the relationship between the degree of internationalization (DOI) and firm performance (DOI–P) of small and medium-sized enterprises (SMEs) in the manufacturing sector. Specifically, we investigate whether the costs and benefits dynamics concerning the internationalization of SMEs differ between high-tech and non-high-tech industries. Design/methodology – We extend the prior literature on this relationship by employing 5-year data on 589 Korean SMEs in the manufacturing sector and examining the moderating impact of the industry characteristics. Our findings reveal a U-shaped relationship between the DOI and SME performance. High-tech SMEs demonstrate an inverted U-shaped relationship, whereas non-hightech SMEs exhibit a U-shaped relationship. Findings – Our findings illustrate the importance of the industry factor in testing the performance impact of the internationalization of Korean SMEs. By incorporating industry dynamics, our results indicate that the DOI–P relationship depends on the context of the industry in which an SME operates. High-tech SMEs also display a higher DOI but are outperformed by non-high-tech SMEs for the entire internationalization path, which implies that high-tech SMEs face more challenges than non-hightech SMEs while seeking internationalization. Originality/value – The findings strongly validate that significant benefits exist for SMEs undertaking internationalization. We also employ the contextual framework contributing to increasing the understanding of the intrinsic value of internationalization and resolving the mixed results issue on the DOI–P relationship, by illustrating that the industry factor leads to different dynamics of costs and benefits of SME internationalization; it also determines the shape and direction of the relationship.

An Empirical Study on the Digital Trade Status of Small and Medium-Sized Businesses in Korea: A Focus on the Top 5 Promising Consumer Goods

Purpose - With the digitalization of trade becoming a hot topic again in the international trade sector, this study aimed to present policy implications for expanding digital trade by exploring the current status of Korean small and medium-sized enterprises (SMEs). Design/Methodology/Approach - Based on a literature review and available statistical data, the trend of global trade digitalization was theoretically considered. On the other hand, the current status of digital trade was analyzed empirically based on a survey of Korean SMEs. Findings - Digitalization of trade brings an opportunity for small and medium-sized companies, relatively weak in competitiveness, such as lack of information on overseas market and inferiority in overseas marketing capabilities. Specifically, the empirical analysis shows that companies have extensive experience in digital trade and online domestic sales in Korea and transaction experience through B2C online platforms account for a higher share of total sales or exports than companies with low digital readiness. Research Implications - First, continuous policy attention and efforts are needed to build a digital trade environment so that SMEs can naturally become accustomed to digital trade. Second, the government’s digital export support programs targeting SMEs should ultimately be centered on B2B transactions. Finally, intelligent digital export support programs are required by items suitable for digital trade through the integrated management of the transaction and transaction history of the export promotion agencies.

Determinants of Selection of R&D Cooperation Partners: Insights from Korea

These days, small and medium-sized enterprises (SMEs) face more severe competition in foreign markets due to the globalization of the economy (e.g., FTA). They usually lack technological capabilities and often depend on external R&D activities. Thus, it is worth exploring what factors facilitate SMEs’ R&D collaboration with partners. This paper empirically analyzes the determinants of SMEs’ selections of R&D cooperation partners in Korea. According to the regression results, SMEs with a larger labor force in R&D, larger sales, younger CEOs, more advanced technologies, and less R&D equipment are more likely to cooperate with external R&D partners. When SMEs produce a product that is not easily imitated by others, they are more willing to cooperate with universities or research institutions but not with suppliers or customers. In sum, for Korean SMEs, the arguments of appropriability and resource complementarity appear to work in their R&D activities. However, the former is more important for collaborations with universities or research institutions, and the latter is more influential to those with suppliers and customers. This paper contributes to the literature in two aspects—quantitative studies on the collaborative innovation of SMEs are still limited, and the differences in cooperation determinants across types of partners are explored due to the richness of the dataset.

Harmonious passion, bricolage, and firm performance: The role of entrepreneurial autonomy

Drawing from the theory of entrepreneurial bricolage and the resource-based view, we study the indirect influence of harmonious passion on firm performance through bricolage, i.e., achieving specific goals with existing resources. We propose that in small and medium-sized enterprises (SMEs), CEOs with high harmonious passion establish bricolage through deliberate practice, creative solutions, and awareness of organizational capacity. Moreover, firms with high levels of bricolage enhance firm performance through creatively recombining accessible resources, acting on without biases to overcome the liability of smallness, and maximizing the firm’s potential by use of all possible methods. Entrepreneurial autonomy positively strengthens this mediation model by providing independent decision-making and promoting organizational creativity. We test the proposed model using a six-month lagged survey data collected from 237 CEOs of Korean SMEs.

New Distribution Strategies of Korean SMEs in Post COVID-19 Pandemic Era: Focusing on the Innovation of Official Distribution Channels

Purpose - In this study, we aim to explore new distribution strategies for sustainable growth in the era of the 4th industrial revolution, focusing on SMEs (small and medium-sized enterprises) in Korea, and suggest ways to upgrade the government s official distribution channel to the next level. Design/methodology - First of all, this paper explored the prior research, the current status of sales support for SMEs, and the changes in the distribution industry due to COVID-19 pandemic. Based on Moon (2016)’s ABCD strategic model - Agility, Benchmarking, Convergence, and Dedication, the study then derived directions in which official distribution channels should move and the new distribution strategy for Korean SMEs to secure competitive advantage. Findings - First, in terms of ‘Agility’, in order to upgrade official distribution channels, which are currently at some competitive disadvantages compared to private distribution companies, we must quickly introduce technologies for the 4th industrial revolution, such as AI, Big Data, etc., and establish precise strategies to strengthen the capabilities of SMEs. Second, in terms of ‘Benchmarking’, the use of “Chamelezones” has been increasing to enhance the competitiveness of offline stores in line with recent ontact trends. Therefore, official distribution channels should also benchmark such cases, strengthening their competitiveness by utilizing offline spaces more efficiently and effectively. Third, in terms of ‘Convergence’, in line with the rapidly changing trend of the times, official distribution channels should also promote active partnerships with media commerce, e-commerce and ICT platforms, as well as cooperation with private retailers, and focus on creating synergy effects through them. Finally, from the perspective of ‘Dedication’, digitalization should be promoted step by step, finding the sector that can accelerate digital among the value chains of official distribution channels, and continuing to discuss how to digitize it realistically. Originality/value - Based on this analysis, we have presented strategies and implications for innovating official distribution channels for SMEs, which will contribute to enhancing the competitive advantage of official distribution channels in the post COVID-19 pandemic era.

A Study on the Improvement of Customer Satisfaction in Reverse Direct Purchases for the Promotion of Exports of Korean SMEs

Purpose - Reverse direct purchase is an emerging useful method for Korean SMEs (Small and Medium-sized Enterprises) to promote exports. While prior studies have looked at reverse direct purchase without considering the size of the firms, this study investigated activation of reverse direct purchase considering the size of the firms. More specifically, in terms of customer satisfaction and Chinese consumers, this study investigated whether there were differences in methods to promote reverse direct purchase between SMEs and large firms. Design/Methodology/Approach - Survey data were collected via an online questionnaire survey of Chinese consumers that had have experienced purchasing Korean products through reverse direct purchase. Correlation analysis was conducted among variables. IPA (importance-performance analysis) and t-test analysis were conducted between SMEs and large firm product users. Findings - As a result of IPA, the area of concentrated improvement for SMEs are value for money, price, delivery length and refund, while the area of concentrated improvement for large firms is value for money. Satisfaction with authentic product, design, quality, product explanation and buying process for SMEs was significantly or marginally significantly lower than those of large firms. Research Implications The implications - of the findings in this study for the activation of reverse direct purchase between SMEs and large firms are described.

The relationship between entrepreneurial orientation and corporate performance: the mediating effects of product development speed and product quality

ABSTRACT This study analysed the effect of entrepreneurial orientation on the performance of SMEs (small and medium-sized enterprises). This study attempted to measure the mediating effects of product innovation performance between SMEs to identify the missing links between entrepreneurial orientation and the performance of SMEs. We also investigate the relationship between product development speed and product quality. A survey was administered to 1775 Korean SMEs, of which a total of 233 responses were used for the empirical analysis by applying a structural equation model. The empirical results show that entrepreneurial orientation has a positive effect on corporate performance, mediated by the product development speed and product quality. It was found that the product development speed had a positive effect on the product quality and that the path leading to the product development speed and product quality mediated the relationship between entrepreneurial orientation and corporate performance.

한·중·일의 스마트시티 해외진출 전략 비교 연구 (An Analysis of Strategies for Overseas Advancement of Smart Cities in Korea, China, and Japan)

한·중·일의 스마트시티 해외진출 전략 비교 연구 (An Analysis of Strategies for Overseas Advancement of Smart Cities in Korea, China, and Japan)

Organizational preparedness for corporate entrepreneurship and psychological capital: does the managerial level matter?

ABSTRACTThis study explores the effects of organizational preparedness for corporate entrepreneurship (OPCE) on psychological capital and innovative behaviour in South Korean small and medium-sized enterprises (SMEs), with a particular focus on the moderating effects of the managerial level. Building on the literature review regarding the OPCE and psychological capital, hypotheses are constructed and tested using a sample of 217 collected from middle managers of South Korean SMEs. Regarding analytical techniques, structural equation modelling and moderated regression analysis were applied. Results indicate that two of the four OPCE dimensions affect the development of psychological capital. More notably, this study finds that the relationship between middle managers’ perception of OPCE dimensions and psychological capital is more significantly positive for higher level managers than for lower level managers. It also finds that innovative behaviour is driven by psychological capital. Contributions, implications and limitations with suggestions for future studies are presented.

Organizational Capabilities, Export Growth and Job Creation: An Investigation of Korean SMEs

In the new global economy, export promotion and job creation have become two central issues for economic sustainability. This study aims to raise awareness of the importance of organizational capabilities in job creation through exports. By emphasizing the role of exports in shaping a linkage between organizational capabilities and job creation, this research focuses on how to improve exports that benefit employment creation in the context of Korean small- and medium-sized enterprises (SMEs). Using survey data of 414 SMEs collected by jointly working with the Korea Federation of SMEs and the Ministry of SMEs and Startups, this study employs a structural equation model to investigate a mediation model that links organizational capabilities to job creation through export growth. The main findings of this study are that both technological and manufacturing capability positively influence export growth; export growth has a positive effect on job creation, fully mediates a positive linkage between technological capability and job creation and also plays a partial mediating role in the relationship between manufacturing capability and job creation. Finally, the present study contributes to the literature on exports and job creation and also provides useful information for SME operators and policymakers.