Portuguese Small And Medium Enterprises Research Articles

Applying deep learning to predict innovations in small and medium enterprises (SMEs): the dark side of knowledge management risk

PurposeThis study aims to predict the dark side of knowledge management risk to innovation in Portuguese small and medium enterprises (SMEs). It examines the spinner innovation model factors of knowledge creation, knowledge transfer, private knowledge, public knowledge and innovation in uncertain environments.Design/methodology/approachThe authors developed a conceptual model to support the analysis. The survey data stemmed from a sample of 208 Portuguese SMEs in Portugal. The authors analyzed the primary data from the ad hoc survey using the data mining (deep learning) technique.FindingsThe research sets out and tests factors relevant to understanding how to predict innovation in uncertain business environments. This study identifies four factors fostering innovation in SMEs: knowledge creation, knowledge transfer, public knowledge management and private knowledge management. Knowledge creation showed the best return and presented the closest relationship with innovation.Originality/valueInnovation models generally measure the relationships between variables and their impacts on the economy (economic and regional development). Predictive models are considered in the literature as a gap to be filled, especially in an uncertain environment in the SME context.

On stochastic aspects of impact modeling of the innovation incentive system and business internationalization: evidence from Portuguese SMEs

Multivariate normal distribution is base for many statistical techniques, including ordinary least square inference. Here we show that in order to make research on Internationalization of Companies, more flexible approach is needed, namely partial least squares (PLS). It is a nonparametric technique, used in Structural Equation Modeling (SEM), which makes no distributional assumptions and also may be applied with small sample sizes. In this study we discuss on regularity conditions for PLS from the perspective of semi-continuous covariance which fills the gap in the current studies. The stochastic aspects, especially those related to usage of PLS-SEM, can be well integrated to the topologically grounded regression, where jumps in the covariances can occur. The purpose of the research is to analyze and understand the impact of the Incentive System (IS) for Innovation, within the scope of the National Strategic Reference Framework (QREN) 2014-2020, on the Internationalization of Portuguese Small and Medium Enterprises (SMEs). We study stochastic aspects of theoretical model which aggregates the variables Product Innovation, Marketing Innovation, Organizational Innovation and Working Conditions as determinants of Internationalization of Companies. Data were collected based on a quantitative methodology, through a self-completion questionnaire using the Likert psychometric scale, which registered 120 participants. Organizational Innovation (exogenous latent construct) and Product Innovation have shown a statistically significant indirect effect on the Internationalization of Companies (endogenous latent construct) through Marketing Innovation. The latter has a direct effect on the Internationalization (target construct). However, Working Conditions has the greatest impact on Internationalization, meaning that measures such as increasing wages, decreasing the use of temporary work and precarious work conversion into labor effective relations have a very relevant direct effect on the Internationalization of Portuguese SMEs.

Innovative and Sustainable Business Strategies: The Case of Portuguese SMEs

The definition and implementation by Small and Medium Enterprises (SMEs) of innovative and sustainable strategies have increased over time as a solution to obtain a competitive advantage over competitors and to generate positive socio-environmental externalities.

Is the Financial Report Quality Important in the Default Prediction? SME Portuguese Construction Sector Evidence

This work analyses whether financial information quality is relevant to explaining firms’ probability of default. A financial default prediction model for SMEs (Small and Medium Enterprises) is presented, which includes not only traditional measures but also financial reporting quality (FRQ) measures. FRQ influences the decision-making due to its impact on financial information, which has repercussions on the accounting ratios’ informativeness. A panel data of 1560 Portuguese SMEs in the construction sector, from 2012 to 2018, is analysed. First, firms are classified as default or compliant using an ex-ante criterion which allows us to identify signs of financial constraints in advance. Then, the stepwise method is employed to identify which variables are more relevant to explain the default probability. Results show that FRQ measures, namely accruals quality and timeliness, impact firms’ defaulting, supporting their relevance in predicting financial difficulties. Finally, using a logit approach, the accuracy of the model increased when FRQ variables were included. Results are confirmed using “new age” classifiers, namely the random forest methodology. This work is not only relevant to the extant financial distress literature but has also relevant implications for practice since stakeholders can understand the impact of financial reporting quality to prevent additional risks.

Effects of Total Quality Management (TQM) Dimensions on Innovation—Evidence from SMEs

This research study aims to study and identify which dimensions of TQM have influence on and support innovation strategies within the Portuguese small and medium enterprises (SMEs), in the context of products or services’ innovation and process innovation, as well as to analyze the extent to which this relationship occurs. To examine the linkage between TQM dimensions and innovation strategies, concerning innovation products and innovation processes, a multiple linear regression analysis was chosen and an eight-predictor multiple linear regression model was proposed. The data was collected through a questionnaire sent by email. This research study allows to conclude that several dimensions of TQM, such as benchmarking, quality/conception and product design, and continuous improvement, have a significant and positive association with product innovation. Although the data analysis/measurement of the results dimension has a significant association with product innovation, this association is negative. Conversely, several TQM dimensions, such as leadership/management’s commitment, benchmarking, involvement/empowerment of employees, and continuous improvement, revealed a positive and significant association with process innovation. Our research is of crucial importance for the knowledge of Portuguese SMEs and the fundamental factors that companies must address to both improve their efficiency and be more competitive, thereby increasing profitability and ensuring financial sustainability in the medium and long term.

The role of firm location and agglomeration economies on export propensity: the case of Portuguese SMEs

PurposeThe present study seeks to assess whether the firm's location and agglomeration economies affect the firm's export propensity.Design/methodology/approachThis work is based on a sample of 20,234 Portuguese manufacturing small and medium enterprises (SMEs) and resort to the estimation of a probit model.FindingsEmpirical results show that the location and agglomeration economies have an important role in determining the firm's export propensity. In particular, the study concludes that SMEs located in coastal areas or close to the border are more likely to export. Furthermore, the study also concludes that specialization economies are an important driver of small and medium-sized firms' export propensity while export spillovers are particularly relevant for micro firms. However, urbanization, measured through firms density in NUTS3 region, negatively affects firms' export propensity, which may be due to high congestion costs in the regions with a high firms density.Originality/valueThis study focus on the determinants of the decision to export or the export propensity, particularly the external factors such as the firm's location and agglomeration economies. This is a relatively neglected topic in the literature that has focused on the determinants of export intensity.

Motivation at work: Case studies of Portuguese SMEs

This study intends to quantitatively and qualitatively evaluate the motivation of the employees of three Portuguese Small and Medium Enterprises (SMEs) with the statutes of Excellence, Leader and both statutes. These statutes were assigned by the Institute for Support to Small and Medium Enterprises and Innovation. A questionnaire was applied in 2016 based on the Multi-Factorial Scale and a brief interview with the managers of these Portuguese companies was conducted. It was found that the dimensions “work organization” and “commitment” presented lower results in the three companies, while the other dimensions had higher ones in terms of motivation at work. Only in the “performance” dimension were there significant differences in motivation at work that occurred between SME Leader and SME Excellence. It should be noted that, according to the results obtained, both in the opinion of managers and employees, the statutes did not contribute to motivation at work.

Vantagens e Dificuldades na Gestão do Desempenho Organizacional: Percepção de Gestores de PMEs Brasileiras e Portuguesas

Small and Medium Enterprises (SMEs) need management tools to assure its survival. Performance Management Systems (PMS) are important mechanisms and may provide a range of benefits, besides the difficulties on the SME using. This study aims to identify the advantages and difficulties using PMS tools and if they are in accordance with the managers perception of Brazilian and Portuguese SMEs. Therefore, a literature review was conducted, identifying the main advantages and difficulties, having been formulated a questionnaire, applied on Brazilian and Portuguese SMEs. The perception among managers is similar, validating 13 of the 15 advantages and 3 of the 13 difficulties found on the literature, which portray more consistently most of the advantages identified and with discrepancy the difficulties. Therefore, it can be said that there are gaps on the scientific literature about PMS on SME.

Implementing and certifying ISO 14001 in Portugal: motives, difficulties and benefits after ISO 9001 certification

The purpose of this study is to characterise the environmental management systems (EMS) certification process (International Organization for Standardization (ISO) 14001) in Portuguese small and medium enterprises (SMEs) following quality management system (QMS) certification (ISO 9001). The study is based on a sample from Portuguese SMEs which characterise the local reality in terms of companies certified in accordance with ISO 14001 after ISO 9001 certification. Some Portuguese SMEs have the EMS implemented but not certified, mainly given the lack of investment support and because it is considered merely a form of marketing. As such, they do not feel motivated to certificate an EMS in the company since they consider that it is a form of advertising and not a way to protect the environment. Nonetheless, it is already evident form other Portuguese SMEs that gained EMS certification that gains supersede marketing benefits and allow for evermore enduring benefits such as prevention of environmental risks, environment protection, improved company image, compliance with legislation and efficient use of natural resources. This paper also presented the main difficulties in achieving an EMS certification, including high certification costs, human resources, motivation issues and difficulties in changing the company's culture.

Portuguese SME toward energy efficiency improvement

About 50 % of world energy consumption is due to industrial use (DOE/EIA 2011), with consequences in carbon dioxide emissions and climate change. Reducing energy consumption in industry is therefore an important strategy to achieve the target of energy policies in Europe, of reducing the energy consumption of 20 % by 2020. In order to identify the situation in Portuguese small and medium enterprises (SME) concerning energy efficiency, the project EFINERG involved several stakeholders and was developed and implemented in five sectors: food, agriculture and beverage; ceramics and glass; wood, furniture, and cork; metal industry; and textile and clothes. The objective was to analyze the situation mainly in SME with energy consumption between 250 and 500 toe, in order to provide SME the necessary conditions to adopt energy efficiency improvements, best practices, and technological solutions that answer the problems diagnosed. In the companies involved in the project, the barriers to energy efficiency were listed and classified according to different levels: information, organizational, training/behavioral, economic, and financial. The main barriers and the result of the discussion with the different stakeholders in order identify measures that can contribute to overcome the problem are also included.

Banking Relationships, Managerial Ownership and Operational Performance: A Simultaneous Equations Approach in the Context of SMEs

This paper provides new evidence for the relationship between the nature of banking relationships, managerial ownership and operational performance in supporting reciprocal effects between these variables in the context of small and medium enterprises (SMEs). A simultaneous equations model was applied to a sample of 4,163 Portuguese SMEs and to cross-section data. Evidence was found that these attributes provide simultaneous relations among themselves. In particular, on the one hand, our results support a negative effect of the number of banks with which the company works and managerial ownership on operational performance. On the other hand, the number of banks with which the company maintains a relationship is positively conditioned by operational performance and negatively by managerial ownership. In turn, managerial ownership is negatively conditioned by operational performance and the nature of the banking relationship.

Training evaluation levels and ROI: the case of a small logistics company

Purpose– This study’s purpose is to contribute to literature on training evaluation following Kirkpatrick’s four-levels model and estimating each training program’s return on investment (ROI) using evidence from a small firm.Design/methodology/approach– This case study uses data collected at a logistics company based upon training output indicators like training program evaluation data; individual performance evaluation reports; information on attained objectives; service and productivity levels; quality audit reports; and accounting data.Findings– Results show that all the training programs addressed report evaluation procedures at the four different levels (reactions, learning, behavior and results). ROI for each training program was estimated based upon costs and benefits associated to each program. The two training programs presenting above-average returns address work quality and conditions. The program addressing corporate social responsibility issues produced below-average results.Research limitations/implications– Limitations to this study may result from collecting data in a single moment in time and using data from a single organization, excluding generalization and extrapolation of results.Practical implications– This case study should inspire managers in small and medium enterprises (SME) to implement training evaluation practices and ROI estimation. Having the ROI estimation available allows better management of the training budget, as ROI’s presentation is an argument to assign value and progress.Originality/value– The originality of this study regards the way it reports training evaluation practices at the four levels established by Kirkpatrick’s framework (2005) and complements it with ROI estimation regarding five training courses run at a Portuguese SME logistics firm.

Are There Non-linear Effects of Banking Relationships and Ownership Concentration on Operational Performance? Empirical Evidence from Portuguese SMEs Using Cross-section Analysis and Panel Data

This paper provides new evidence for the relationship between the stability of the banking relationship, ownership concentration and operating profitability, supporting non-linear effects between those variables in the context of small and medium enterprises (SMEs). From a sample of 4,163 Portuguese SMEs and cross-section data and panel data, we found evidence for a U-shaped quadratic relationship between the stability of the banking relationship and operational performance. This result indicates that the consolidation of new banking relationships, the difficulties experienced by SMEs in overcoming the problems of adverse selection and moral hazard reflect negatively on their operating profitability. However, when the banking relationship is solidified, and banking institutions acquire information, supervision and monitoring costs decrease, credit constraints are lower and contractual conditions are tailored to the needs of the company, with positive impacts on operating profitability. In turn, the quadratic specification established between ownership concentration and operating profitability suggests that the expropriation hypothesis prevails for low levels of control rights and the supervision hypothesis prevails for high levels.

Examine ERP post-implementation stages of use and value: Empirical evidence from Portuguese SMEs

There is a great interest among researchers and practitioners in accounting information systems (AIS) value. This is particularly important in cases of systems such as enterprise resource planning (ERP). This paper empirically measures and analyses the determinants of ERP use and value in a single framework, as well as provides empirical evidence from Portuguese small and medium enterprises (SMEs). Drawing upon theories on the process and contexts of information technology (IT) we postulate nine hypotheses. Used the technology–organization–environment (TOE) framework to hypothesize how compatibility, complexity, efficiency, best-practices, training, and competitive pressure explain ERP use. Based on the resource-based view (RBV) theory we hypothesize how ERP use, collaboration and analytics explain ERP value, and its potential contribution for the nature of management control and accounting information systems on Portuguese SMEs. Through structural equation modeling, a data set of 134 web-surveyed firms is used to test the hypotheses. Our empirical analysis leads to six main findings: 1) compatibility, complexity, best-practices, and efficiency are more important determinants for ERP use as well as training and competitive pressure, suggesting that technological, organizational and environmental characteristics are the main drivers of ERP use among Portuguese SMEs. 2) Similarly, collaboration and analytics are more important for ERP value upon use, suggesting that system capability characteristics are the main drivers of ERP value. 3) ERP value benefits from system enhancements to firms' business processes in the post-implementation phases. 4) For Portuguese SMEs the mostly valued metric attained through ERP is management control. 5) Impelled by legislation, Portuguese SMEs are using ERP as the accounting system for management, financial and tax accounting. 6) Portuguese SMEs invest more than 70% of their annual IT budget to ERP use. Together, these findings offer insights into how Portuguese SMEs use and extract value from ERP, and how enhancements positively impact the system's value. Unlike the typical focus on ERP adoption described in the literature, this research focuses on the post-implementation phase, linking actual use with value creation, adding an empirical study to the AIS literature.

Financing of SMEs: Do They Match Their Assets and Liabilities?

For small and medium enterprises (SMEs), various types of debt are not identical. There are specific costs and benefits associated with each funding source. Using a sample of Portuguese SMEs over the years 1990-2000, we show that the asset and liability side of the balance sheet are interrelated. The type of financing obtained depends upon the type of asset being financed — meaning that SMEs often match their assets and liabilities. As a result, there is no single weighted average cost of capital (WACC) for all projects.

Certification and integration of management systems: the experience of Portuguese small and medium enterprises

The purpose of this study was to characterize the situation of Portuguese Small and Medium Enterprises (SMEs) concerning the certification of their Quality Management Systems (QMS), Environmental Management Systems (EMS) and Occupational Health and Safety Management Systems (OHSMS), in their individually form, to identify benefits, drawbacks and difficulties associated with the certification process and to characterize the level of integration that has been achieved. This research was based on a survey carried out by the research team; it was administered to 46 Portuguese SMEs. Our sample comprised 20 firms (43%) from the Trade/Services activity sector, 17 (37%) from the Industrial sector, 5 (11%) from the Electricity/Telecommunications sector and 4 (9%) from the Construction area. All SMEs surveyed were certified according to the ISO 9001 (100%), a quarter of firms were certified according to the ISO 14001 (26.1%) and a few certified by OHSAS 18001 (15.2%). We undertook a multivariate cluster analysis, which enabled grouping variables into homogeneous groups or one or more common characteristics of the SMEs participating in the study. Results show that the main benefits that Portuguese SMEs have gained from the referred certifications have been, among others, an improvement of both their internal organization and external image. We also present the main difficulties in achieving certification. Overall, 7 of the Portuguese SMEs examined indicated that the main benefits of the IMS implementation management included costs reduction, increased employee training and easier compliance of legislation. The respective drawbacks and difficulties are also presented. Finally, we presented the main integrated items in the certified Portuguese SMEs we examined.

Electronic Business Maturity in Portuguese SME and Large Enterprises

Since the introduction of computer technology into organizations in the 1960s, there have been numerous attempts to develop models of Information Systems/Information Technology (IS/IT) maturity. The maturity models are based on the premise that the planning process, development or adoption, use and management of IS/IT organizations, evolves through a learning process that can move through stages of maturity. If these stages (and their associated features) can be identified, could then be used to develop a plan for the IS and provide guidelines for action for the orderly progression through several stages from the current culture of the organization. This work focuses the e-business maturity stages of Portuguese SMEs (Small and Medium Enterprises) and large enterprises. Our goal is to identify in which ebusiness maturity stage they are and explore the relationship between their e-business maturity and the associated constrains to e-business evolution (previously identified in an exploratory study).

Are there non-linearities between SME growth and its determinants? A quantile approach

This article uses quantile regressions to study the relationship between the growth of Portuguese small and medium enterprises (SMEs) and its determinants. To control a sample selection bias, we use a two-step estimation. In the first stage, we verified that past growth, size, age, R&D intensity, and cash flow are important determinants for the survival of Portuguese SMEs. Then, after controlling for possible bias of data, we now find that relationships between determinants and growth in Portuguese SMEs present significant non-linearities over growth distribution: (i) Gibrat’s Law cannot be rejected in the context of reductions in the size of Portuguese SMEs, but is rejected when company size increases; (ii) debt and R&D intensity are restrictive determinants of Portuguese SME growth when there is reduction in size, being determinants promoting growth in the case of increased size; (iii) age is a restrictive factor of Portuguese SME growth only when there is an increase in size; and (iv) cash flow, although a determinant promoting Portuguese SME growth regardless of the level of growth, takes on greater importance when there is a reduction in size.

E-business Maturity and Information Technology In Portuguese SMEs

The latest technological advances made over recent times led to a profound market change, characterized by increased competition. In order to be competitive, organizations have been forced to adapt themselves to this new reality, seeking innovative solutions permitting them to achieve lower costs, greater productivity and differentiation from competition. This work focuses the e-business maturity stages of Portuguese small and medium enterprises (SMEs). Our goal is to identify in which e-business maturity stage they are and explore the relationship between their e-business maturity and the technology they use.

Performance measures and quality tools in Portuguese small and medium enterprises: survey results

This paper describes a survey that was undertaken at the initial stage of a research project looking at performance measures and quality tools. Its objective was to determine the level of knowledge of performance measures and their degree of implementation in small and medium enterprises (SMEs) in Portugal. It also addressed the level of use of quality tools in the same companies, since they provide some degree of integration between the external requirements of a business and its internal activities and performance (Gregory, 1993). Most research to date has concentrated on large companies and so an important part of this work is to assess whether or not SMEs can adopt similar approaches with respect to quality, or in general, to management methodologies. For example, are ISO standards, TQM, balanced scorecard, or other excellence models beneficial to all companies and how are they implemented? The paper starts with a brief literature review and then presents the methodology used for the survey, the questionnaire construction and the pilot study. The full survey is described together with a comprehensive analysis of the results, including respondent bias and questionnaire reliability and validity. The general opinions of Portuguese SMEs with regard to performance measurement, the most important measures to use and the biggest obstacles to their adopting new ones are discussed. The paper culminates with an analysis of quality tools and the conclusions drawn from the study.