Local Small And Medium-sized Enterprises Research Articles

Impact and Resilience of Mauritian SMEs: Sales Dynamics during the COVID-19 Pandemic

The COVID-19 pandemic has left an indelible mark on the global economy, significantly impacting small and medium-sized enterprises (SMEs) in Mauritius. This study investigates the sales dynamics of local SMEs during the COVID-19 pandemic. Through a quantitative survey, data was collected data on sales performance during the pandemic to gain comprehensive insights into the challenges faced and the adaptive strategies employed by these businesses. The findings underscore the challenges that the majority of participants encountered during the pandemic, with a notable decline in sales emerging as a central concern. The study reveals the diverse measures adopted by these enterprises to navigate the unprecedented economic turbulence. Notably, many turned to online sales channels, implemented cost-cutting measures, and adjusted their workforce. Furthermore, our research sheds light on the perceptions of government intervention among these businesses. A significant proportion expressed satisfaction with the government's response, believing in its effectiveness. This study offers valuable insights into the multifaceted impact of the COVID-19 pandemic on local SMEs in Mauritius and identifies the strategies adopted by these enterprises to adapt to the continually evolving economic landscape. These findings hold significance for policymakers, business proprietors, and other stakeholders as they craft and implement strategies to support and rejuvenate local businesses in the post-pandemic era.

The China Belt and Road Initiative: The Struggles and Opportunities for the SMEs Development of an Emerging Economy

Following the economic crisis in 2008, several Algerian small and medium-sized enterprises (SMEs) in key economic sectors were negatively affected. More than 30,000 companies closed in a single year and more than 70,000 jobs were lost as a result of the financial crisis. These negative effects led to several bankruptcies and a deterioration in business management. The government’s efforts to address the crisis include an important measure to promote SME development under the China–Algeria Belt and Road Initiative (BRI). However, there are divided concerns with regard to the impact of the BRI, which seems to reflect on both prospects and challenges for SME development. Therefore, this study aims to explore the struggles and opportunities of BRI projects in the development of local SMEs in Algeria. In this study, a combination of face-to-face interviews and focus group discussions are conducted with 20 participants. The target group includes general managers, CEOs, entrepreneurs and managers of SMEs. All interviews were recorded face-to-face, later transcribed, translated and thematically analysed. The results show that the BRI has positive impacts on SME development, which reflect on economic opportunities, namely, trade partnerships, market efficiency and productivity, and improve employment opportunities. However, the dominance of Chinese enterprises and the lack of appropriate enterprise policies are among the challenges that hinder the rapid development of SMEs. Therefore, policy reform is needed to ensure the enforcement of foreign enterprise policies that limit the dominance of foreign enterprises and instead encourage the expansion of local enterprises to promote socio-economic growth.

Internationalization of SMEs: A Developing Country Perspective

Internationalization has become increasingly important to the competitiveness of firms of all sizes, including small and medium-sized enterprises (SMEs). SMEs play a crucial role in the development of lower-income countries. In Bangladesh, SMEs account for between 80 and 85 percent of industrial employment and 23 percent of total employment and are critical to economic growth. Though the literature on firm internationalization is well established, the internationalization process of SMEs from developing countries, such as Bangladesh, remains relatively under-explored. The main aim of this study is to explore factors that hinder the internationalization of SMEs in a developing country, with Bangladesh serving as the context of the investigation. Qualitative research methods were adopted, comprising semi-structured interviews with leaders of 16 SMEs in Bangladesh. Six major themes were identified as hindrances to the firms’ internationalization: (1) lack of market knowledge, (2) lack of family support, (3) the proliferation of ‘scammer buyers’, (4) the (negative) involvement of third parties, (5) mismanagement of domestic ports, and (6) unregulated local market. Regarding positive factors, only one theme emerged from the data, the strong support from the local government, which provides considerable backing for local SMEs with international ambitions. This study’s primary contribution and originality lie in the context of the investigation, with Bangladesh primarily overlooked in the international business literature. Therefore, the study presents several novel insights into the internationalization process of SMEs.

Frustrating Times: Notes from the Field

Business Law Clinics’ involvement in advising Small and Medium Sized Enterprises (SMEs) reached an interesting crescendo during the pandemic as businesses were often left high and dry by business customers and suppliers who could or would not fulfil their contractual obligations. SMEs, often sole traders or limited companies with no business premises, found themselves unable to access government support and facing insolvency. Many had no contracts in place, or they sought to rely on their terms and conditions of business only to find them lacking due to reasons grounded in law (there is no freestanding concept of force majeure under English law and if a contract is silent on it, English law will not imply it) or process (lack of incorporation of terms through their own fault). In this note I seek to examine the impact of the pandemic on the concept of force majeure and contractual remedies for SMEs in the UK and to contemplate the role of business law clinics in advising SMEs on the use of terms and conditions in business-to-business (B2B) contracts as part of successful operations in the post-Covid world. Drafting sets of terms and conditions for SME clients is a perfect vehicle for meeting the goals of a university business law clinic – community engagement with local SMEs providing them with fast, tailored advice with a bespoke tangible document to take away plus student experience of real- world learning in commercial law (experience which is not always readily available for students outside the big cities).

Research Note: Greater risk and a smaller opportunity: The opportunity space of SME internationalization in lower-income countries

Why do small and medium-sized enterprises (SMEs) from lower-income countries internationalize using high-commitment modes? In this exploratory, qualitative study of 22 SMEs from South Africa (a middle-income country) and Malawi, Zambia and Zimbabwe (low-income countries), we document that the SMEs typically have both a greater tolerance for risk, likely due to the region from which they originate, and an appetite for opportunities smaller than what would be acceptable to multinational enterprises (MNEs) from advanced economies. This provides a very different opportunity space for the two types of enterprises. The size of the home country seems to matter: SMEs from middle-income countries often work on their own and target other emerging markets, but in poorer countries, SMEs often work synergistically with MNEs from more advanced economies, acting as their “delivery arm” into the small markets in their immediate region. This opens up a new way of understanding MNE-led development. Facilitating the development of partnerships between local SMEs and advanced MNEs is a potentially fruitful avenue that policymakers from poor countries can pursue to help their countries open to the benefits of internationalization.

Social Innovations and the Mountain Economy: The Case of 100% Valposchiavo and Its Influence on Small- and Medium-Sized Enterprises

This article examines how social innovations influence the economic growth orientation of small- and medium-sized enterprises (SMEs) in mountain regions. Social innovations can help mountain regions solve local challenges by creating novel ideas to improve the situation. This, in turn, can have various effects on the mountain economy. However, there is still no consensus on the ways in which social innovations create economic impulses such as economic growth or even economic growth independence. This article aims to improve our understanding of social innovations and their impact on the local mountain economy. We examine the 100% Valposchiavo initiative, which aims to close regional value chains by bringing together economic actors in agriculture, production, and hospitality in a Swiss mountain region. In particular, the article examines the evolution of the initiative and its impact on local SMEs. We employed the novel method of innovation biographies and conducted narrative and guided interviews to examine the ways in which the initiative evolved and what its effects are on participating SMEs. The results show that 100% Valposchiavo induced potential growth effects through its focus on increased collaboration, whereas (re)localization created growth-independent effects. Some companies are growth dependent because of higher demand, junior management, modernization efforts, or a fast-growing market. The growth-independent companies pursue this strategy through personal contacts, their corporate philosophy, their management age, or their business form. Our study adds a postgrowth perspective to the discussion around the role of social innovations in mountain economies.

Does FinTech improve the investment efficiency of enterprises? Evidence from China’s small and medium-sized enterprises

Using the number of FinTech firms in each prefecture-level city to measure its development, this study explores the impact of FinTech on the investment efficiency of small and medium-sized enterprises (SMEs). The results show that FinTech development can significantly promote the investment efficiency of local SMEs. These results remain robust after conducting a series of robustness tests, including replacing alternative, dependent variables, controlling for firm fixed effects, controlling for time-varying fixed effects, and using the instrumental variable approach and Difference-in-difference (DID) methods. The mechanism analysis shows that FinTech alleviates the financing constraints of SMEs by reducing the information asymmetry between financial institutions and SMEs, thereby improving their investment efficiency. In addition, a heterogeneity analysis shows that the impact of FinTech on the investment efficiency of SMEs is more pronounced in small-scale private enterprises, industries lacking competition, and cities with slow marketization. Moreover, the findings have important practical significance in the form of policy suggestions for promoting the integration of FinTech and the real economy.

Kontribusi Adopsi Media Sosial dalam Menaikkan Penjualan dan Pengembangan Usaha Kecil dan Menengah di Indonesia

Small and medium-sized enterprises (SMEs) are becoming an increasingly important economic factor in many developing countries, including Indonesia. Previous research shows that small businesses establish the concept of self-reliance. Even in times of economic hardship, small businesses are able to keep prices of national staples such as food and clothing low. In West Kalimantan, local SMEs produce a unique fabric called sasirangan, which has become the region's main product. As the use of IT infrastructure and platforms is usually concentrated in big cities such as the state capital of Pontianak, SMEs in the regions can rely on social media to promote their products. Therefore, this study aims to understand the attitudes of local SMEs towards using social media for commercial purposes. The sample size of this study includes 45 West Kalimantan SMEs in five districts outside the capital city of West Kalimantan. In this study, we used Partial Least Squares Structural Equation Modeling (PLS-SEM) to study the interaction between variables. The survey results show that small business entrepreneurs generally have a strong desire to use social media for commercial purposes. A more detailed description of the results and limitations of this study is available at the end of this document.

Corruption and the Development of Small- and Medium-Sized Enterprises (SMEs) in Vietnam

This document studies the nature of corruption in Vietnam and its impact on the development of SMEs. The author surveyed the experience of SMEs’ leaders on corruption and their perception about the impact of such dishonest behavior on the development of their firms. One thousand two hundred questionnaires were distributed by mail resulting in 612 usable responses. Traffic police, taxation, and customs are considered as most corrupt. Besides, 81.7% of enterprises say there is no effect on corruption to their business, 10.5% conclude it is positive, but only 7.8% see corruption as a constraint on their firm’s performance. The results provide that there is no relationship between corruption to enterprises’ development and prove local SMEs can adapt to this environment.

Website and pricing strategy development: a business coaching at local SME

<em>Small and medium-sized enterprises (SME) make a very large contribution to Indonesia's gross domestic product (GDP) and absorb a lot of labor from the entire workforce. Unfortunately, many SMEs face so many problems in their business operation. Whether the issues arising from internal factors such as management or external factors such as the COVID-19 pandemic, therefore they need support and insights from the experts on how to solve their problems. The current business coaching was conducted in PT Bumi Perkasa Internasional, a small business located in Bekasi, West Java and is engaged in the manufacturing industry with the scope of expertise in the Dust Collector System. The Business Coaching used a qualitative approach that mapping the real conditions and problems of SMEs, then propose solutions, and implement them for SMEs improvement. this method requires two types of data, primary data and secondary data Primary data collection technique is obtained by interview, observation and documentation. Secondary data was obtained by conducting a literature study related to information on the manufacturing industry, SMEs itself, finance, marketing, operations management and human resource management The result shows that the company did not have an effective website as its marketing channel and an unfavorable pricing strategy, indicated by no leads originating from the company's website and inability to profit from the project. The business coaching suggests the management to develop their website and pricing strategy to improve their conditions.</em>

Dynamic collaboration between small- and medium-sized enterprises from highly dissimilar markets

Emerging markets have created significant opportunities for European small- and medium-sized enterprises (SMEs). Highly dissimilar market contexts compared to traditional markets and missing resources present substantial barriers to successfully serve those markets. Collaborative partnerships with local SMEs can help to overcome the barriers. Knowledge on how SMEs can develop lasting collaborative relationships in highly dissimilar contexts is scarce. This research investigates which factors influence the stability of more informal collaborative partnerships of Central European SMEs with SMEs located in China. A qualitative analysis of four cases confirms the importance of complementarity of partner resources, working well together based on mutual trust and commitment, shared sensemaking, and the balanced consideration of partner interests. Mutual learning and adaptation in iterative steps to enhance shared sensemaking and seeing differences in interpretation and behavior arising from contextual dissimilarity as opportunities instead of threats turn out to be SME-specific factors essential for building stable informal collaborative relations.

A Study on Internal Communication factors as Determinant of Organizational Health : Evidence from Small and Medium-sized Enterprises (SMEs) in Vietnam

After the economic reform in the 1980s, the Vietnamese government began to restructure state-owned enterprises (SOEs) to accelerate private sectors and opened the market to facilitate commerce and foreign investment. As a result of this policy, the number of small and medium-sized enterprises (SMEs) has been increasing at a rapid pace for the last decade. On the downside, however, as Vietnam is deeply integrating into the global economy and the trend of globalization is on the rise, a wide range of multinational corporations (MNCs) have entered Vietnam to seek new business growth opportunities and to compete with local SMEs. This intensifying competition poses a threat to the overall performance of domestic SMEs. Meanwhile, there is little interest in organizational health in the field of communication.BRThis study is, therefore, to examine the important factors of internal communication which are related to organizational health of SMEs in Vietnam. The results indicate that workplace communication and goal alignment are two significant dimensions of organizational health of SMEs in the context of Vietnam while transformational leadership and employee well-being are unrelated to health of local SMEs. These findings would provide managerial implications to the top management of SMEs as well as contribute to the extant literature on organizational health within the domain of human resource management and communication research. Based on these findings, this study has given insightful recommendations to practitioners with a focus on enhancing the corporate communications and fostering the fit between employees and organizational goals besides improving the mental illness for employed staff.

The Adoption of Social Media as Marketing Tools

The rapid adoption of social media in business is becoming more evident over the years. Most businesses view social media as a chance to build two-way communication with customers and to create unique marketing communication tools. Nonetheless, research on social media adoption, particularly, in the case of small and medium-sized enterprises (SMEs) is still limited. In Brunei Darussalam, SMEs are regarded as a key player in industrial development. Thus, the objectives of this study are to investigate the factors that mainly drive social media adoption among the SMEs in Brunei, to determine the types of social media platforms that they used as well as to examine the potential benefits and challenges of adopting it. The researchers administered online questionnaires to 57 CEO or managers of local SMEs. Based on the empirical findings of this research, technological factors, ease of use and perceived benefits, are the prominent drivers for social media adoption among SMEs in Brunei.

The impact of sub-national institutions on SMEs’ diversification into new businesses: evidence from China

ABSTRACTThis study explores how sub-national institutions affect the diversification of small and medium-sized enterprises (SMEs) into new businesses. Using a sample of 3240 SMEs in China, we found that the dominance of state-owned enterprises (SOEs) and the development of market systems in a province were related to local SMEs’ diversification. Specifically, in provinces dominated by SOEs, SMEs were less likely to diversify into new businesses. The development of market systems tended to reduce the odds of diversification for SMEs that primarily served local markets, and lower the likelihood of unrelated diversification. As a rare attempt to examine the impact of sub-national institutions on SMEs’ diversification, this study contributes to the research on diversification, institutions, and SME management.

Multilevel policy governance and territorial adaptability: evidence from Japanese SME innovation programmes

ABSTRACT Science, technology and innovation (STI) policies increasingly operate in a multilevel policy governance structure. This paper analyzes the variety of local authorities’ innovation support mechanisms for small and medium-sized enterprises (SMEs) in Japan, drawing on a unique data set of 241 local SME research and development (R&D) subsidy programmes at the prefecture and city/municipality levels. The variation of SME R&D subsidy programmes in terms of institutional forms and coordination practices of multilevel innovation support mechanisms is analyzed as manifestations of the complex territorial adaptability. The institutional co-evolutionary processes between different levels of governments help both vertical and horizontal coordination in a highly centralized system.

Small- and medium-sized enterprises in a multilingual region: best practices in multilingualism or missed opportunities?

The paper focuses on small- and medium-sized enterprises (SMEs) located in bilingual/multilingual regions. We analyse how they manage multilingual communication, multilingual knowledge sharing, and internationalisation. The findings are based on a qualitative and quantitative study conducted on SMEs located in multilingual South Tyrol, Italy. Our data reveal that exploiting multilingualism as a competitive advantage represents a challenge for the local SMEs well before internationalisation. Language-related challenges are partly similar to those faced by large international multinationals. However, some of the specific characteristics of SMEs have a notable impact on language practices, (multilingual) knowledge sharing, and internationalisation paths.

Local governance and business performance in Vietnam: the transaction costs’ perspective

ABSTRACTLocal governance and business performance in Vietnam: the transaction costs’ perspective. Regional Studies. This paper adopts a transaction costs’ perspective to explain why the growth of small and medium-sized enterprises (SMEs) may vary across regions of an emerging economy. Furthermore, it is argued that young and small firms gain more from the improvement of local governance than do old and large firms. In addition, depending on the institutional history, SMEs will respond differently to the incentives provided by local governance. Analysing more than 300,000 SMEs in Vietnam during 2006–12, it is shown that higher-quality local governance positively influences local SME revenue growth; this effect is stronger for young and small firms, and matters more where institutional history suggests there is less support for entrepreneurship.

Between vocational education and training centres and companies: study of their relations under the regional innovation system approach

ABSTRACTIn the current context of economic crisis, the European Union seeks to promote the integration of the vocational education and training system (VET) system and foster greater cooperation between this system and enterprises. Education and innovation are part of the answer to achieve this goal. This research explores the relationship between the VET centres and small and medium-sized enterprises (SMEs), and what aspects of that relationship could be improved. Methodologically, it combines case studies of VET centres in relation to local SMEs and the use of a survey to SMEs in two industrialised Spanish regions. The paper examines, in the context of the regional innovation system approach, how the local environment and the characteristics of local actors are crucial to understanding the level of interaction between the VET system and companies, and the contributions of the former to the innovation system of the regions.

Protecting the survival of local SMEs during rapid tourism growth: ongoing lessons from Macao

PurposeThe purpose of this paper is to investigate how rapid tourism growth in Macao affected local small and medium-sized enterprises (SMEs). The liberalization of the gaming industry to multinational corporations (MNCs) in 2002 led to a sevenfold increase in foreign direct investments (FDI) in Macao.Design/methodology/approachA survey grounded in issues concerning how SMEs adapt to the effects of FDI in Macao was carried out by interviewing managers of local SMEs, MNCs and an SME association. Information from various published sources was also consulted to complement and update the analyses.FindingsFindings revealed that the emergence of investments by MNCs in Macao brought favorable and unfavorable effects to local SMEs. Local SMEs were challenged in terms of recruiting and retaining human resources, given the attractive salaries and training offered by MNCs. Equally challenging for local SMEs was the effect of economic growth on the costs of property space in Macao’s small territory. However, local SMEs have advantages when collaborating with MNCs as the former serves as important partners in networking. Local SMEs can collaborate quicker with their network of local stakeholders which MNCs lack and need. The government and various stakeholders will need to continue their role in developing the capacities and capabilities of local SMEs.Research limitations/implicationsThe research study has important public policy implications on structuring the foreign labor and property needs of local SMEs.Originality/valueThis paper provides insights on the challenges SMEs in small-open economies experience during rapid tourism growth fueled by MNCs, and some policy recommendations are proposed.

CHALLENGES AFFECTING USE OF I.C.T BY SMALL & MEDIUM SIZED ENTERPRISES (SMES) IN KENYA: A CASE STUDY OF TSAVO SECURITIES LTD

Purpose: The purpose of the study was to underscore the challenges faced by Small and Medium Sized Enterprises (SMEs) in using Information Communication Technologies (ICT) in the case of Tsavo Securities Ltd.Methodology: A descriptive case study design was used in this study and the population (32 employees) constituted all the employees appearing on the employment register. A sample of 50% (16) was selected from the population. A self-report questionnaire was the data collection tool used in this study. The data was analyzed by use of inferential statistics and presented using graphs and charts.Results: Findings in this study indicate that inadequate funds and costs of acquiring hardware and software, inadequate training, lack of an ICT policy and poor ICT security were fundamental challenges facing SMEs in Kenya. Benefits accruing to SMEs from the use of ICT were competitive advantage, local expansion and cost saving.Unique contribution to theory, practice and policy: The researcher concluded that the above challenges affected the use of ICT use by SMEs. Consequently, the researcher suggested several solutions to curb these challenges. The deepening of the local SME financial market was advocated for to curb the challenge of finance. In addition, the introduction of an ICT policy was advocated for. Training needs needed to be addressed by the introduction of government sponsored ICT training initiatives. The study recommended an investigation into the causal relationship between ICT use and financial performance.