Portuguese SMEs Research Articles

Why do SMEs Implement Open Innovation? The Case of Portugal

The concept of open innovation is gaining popularity in both the world of engineering and management. However, despite this growing interest, most existing studies tend to focus mainly on large companies. Thus, the purpose of this paper is to explore the drivers of the implementation of the open innovation concept in SMEs. This study uses a survey carried out through an online questionnaire that was sent to some Portuguese SMEs. The results show that there is a high level of receptivity to implement open innovation. The findings also suggest the existence of a positive relationship between the application of open innovation and the level of satisfaction with the R&D unit’s performance. Overall, SMEs seem to be more motivated to apply open innovation to improve their innovation process and capacity than to reduce costs, share innovation risks, or improve reputation. Moreover, findings also demonstrate that the main drivers for the adoption of open innovation vary along with company size. For micro-enterprises, the main driver is to complement internal skills. Small enterprises look for the most effective way to develop new products and services whilst medium-sized enterprises are mainly driven to monitor market trends and improve their innovation process.

Understanding the HRM systems double contribution to radical and incremental innovation in SMEs: A configurational approach

Aim/purpose – In this paper, we explore the contribution of Human Resource Manage- ment Systems (HRMS) to innovation in SMEs. We consider two HRMS with different orientations: Commitment HRMS (focusing on long-term career development to in- crease employees’ creativity) and Collaboration HRMS (focusing on the use of external human capital to achieve innovation). We believe that SMEs’ radical and incremental innovation follow different paths from a configurational perspective. We want to under- stand how the two HRMS influence radical and incremental innovation, consequently, we explore the contributions of Commitment HRMS and Collaboration HRMS. Design/methodology/approach – We apply a set-theoretic method, an analytic quanti- tative and qualitative technique to approach data – fuzzy-set Qualitative Comparative Analysis (fsQCA) – to test our models. We use a sample of 377 Portuguese SMEs from across industries. Findings – Results show there are two pathways that lead SMEs to high levels of incre- mental innovation and three alternative paths that originate high levels of radical innova- tion. By contrast, there are ways that lead to lower levels of incremental (two options) and radical innovation (three options). Research implications/limitations – We provide propositions for theory development on the contribution of HRMS to innovation. Managerial contributions regard the several options provided to SME managers in search of innovation. Limitations regard the lack of generalization power of results due to the cross-sectional nature of the work. However, the research design is replicable without restrictions. Originality/value/contribution – We suggest that SMEs’ radical and incremental inno- vation follow different paths from a configurational perspective. With this study, we contribute to showing the diversity of ways to reach higher innovation levels at SMEs, so that managers know the alternatives they have at their disposal. Additionally, we reveal the ways that lead to lower innovation levels at SMEs, so we alert managers to the undesired pathways they should be cautious about. Keywords: Human Resources Management Systems, incremental innovation, radical innovation, SME, fsQCA. JEL Classification: M12, O15, O31.

Earnings Management in Hospitality Firms

This study examines whether Portuguese hotel sector firms engage in earnings management (EM) practices to provide specific accounting results and test the main determinants in explaining EM. We use the SABI database to collect panel data regarding 1615 Portuguese SME hotels from 2006–2013. In order to obtain results, a graphical representation of the distribution of the net income and the estimation of the discretionary accruals were used, from which two estimation models were formulated. The results obtained provide empirical evidence that firms in the Portuguese hotel sector seem to engage in earnings management practices and that the main determinants behind them appear to be debt level, return on assets, and firm size. The adoption of earnings management practices by firms is a widespread phenomenon across various sectors and nations. Yet, despite the general awareness regarding the importance of the tourism sector for communities at a financial, social, and cultural level, the lack of empirical studies with application to the accommodation sector makes it pertinent to investigate this phenomenon.

Does Tax, Financial, and Government Incentives Impact Long-Term Portuguese SMEs’ Sustainable Company Performance?

This article aims to assess how fiscal and financial incentives and government support conditioned the profitability of Portuguese SMEs between 2010 and 2019. The high tax and financial burdens on SMEs have consequences for sustainability and business development. Thus, the study analyzes different incentives provided by the Portuguese government to ease this burden and improve business profitability. The study uses panel data with fixed effects using five different sources of information from five internal tax grant types, three different European Union program financial subventions, and three national budget-specific expenses. The results obtained suggest that tax incentives influence the profitability of SMEs; however, government incentives do not have any impact. The QREN (financial) incentives positively decide the ROA and negatively impact the ROE, contributing to sustainable performance. Portugal 2020 incentives have a weak effect on the first years, improving in the following years. However, the incentive related to R&D is not relevant. This work aims to contribute to decision making for managers, shareholders, and government entities, allowing them to choose those measures that could increase the company’s added value, and for governments, as a tool to select incentives that will most benefit SMEs’’ profitability. This work identifies the key incentives that impact companies’ profitability.

Open-Innovation Practices: Diversity in Portuguese SMEs

This study aimed to explore the diversity of open-innovation practices that are adopted in Portuguese SMEs considering the outside-in, inside-out, and coupled paradigms. A quantitative study was carried out considering a sample of 187 Portuguese SMEs. The findings revealed that these organizations favored the adoption of the outside-in paradigm. The inside-out model was the least relevant, especially for smaller companies (i.e., small and micro-companies). The most adopted outside-in practices were the integration of external knowledge from suppliers and clients; in the inside-out model, licensing processes were more important; while in the coupled model, joint ventures and network consortiums stood out. The increase in the innovation capacity of these organizations was highlighted as the most relevant benefit, while the lack of resources and difficulties in integrating knowledge emerged as challenges. This study is especially relevant for the establishment of public-support policies that promote the involvement of Portuguese SMEs in open-innovation processes.

Which Way to Cope with COVID-19 Challenges? Contributions of the IoT for Smart City Projects

Many activities and sectors have come to a halt due to the COVID-19 crisis. People and workers’ habits and behaviors have changed dramatically, as the use of technologies and connections, virtual reality, and remote support have been enhanced. Businesses and cities have been forced to quickly adapt to the new challenges. Digital technologies have allowed people to have better access to public services due to improved use of resources. Smart cities have significant potential for linking people to work and services as never done before. Additionally, the technological convergence produces data that can enhance interactions and decisions toward the “new normal”. In this paper, the aim is to assess how Portugal is prepared to respond to the accelerated process that this context demands from cities. Portuguese SMEs have developed a good capacity for entrepreneurship and innovation; however, they are still behind in converting the knowledge acquired in sales and exports and there is still limited collaboration at the public-private level. The acceleration of smart cities through the Internet of Things (IoT) may encourage changes in these issues. A more assertive alignment between the emergent technologies and the digitization goals of companies is required. This paper opens a discussion around major needs and trends of IoT (and related technologies) since the pandemic has leveraged them. The relationship between innovation and city smartness is approached to assess main contributing and limiting variables (through the European Innovation Scoreboard), to clarify future directions toward smarter services. The tourism sector, as the largest export economic activity in the country, is addressed in this matter. An analytical framework (using, for example, Power BI and Azure IoT Hub) around this approach can choose and support the most suitable areas of development in the country.

The Influence of Dynamic and Adaptive Marketing Capabilities on the Performance of Portuguese SMEs in the B2B International Market

The present investigation aims study the sustainability of the business model of the Portuguese SMEs operating in the B2B International market analyzing the influence of dynamic marketing capabilities and adaptive marketing capabilities in their international marketing performance. It will also analyze the moderating effects of Competitive Intensity within this international scenario. A quantitative study was developed, using a questionnaire as a research method. In total, 335 valid responses were collected from Portuguese SMEs in June 2020. To test the hypotheses, multiple hierarchical regressions were performed. As for the analyzes involving Competitive Intensity environments, namely low and high intensity, dummies were developed to evaluate the different effects produced by the capacities in the International Marketing Performance. This study shows the positive impact of the dynamic marketing capabilities and adaptive marketing capabilities on the international marketing performance of the surveyed companies, essentially from the product development management, supply chain management, vigilant market learning and open marketing. when in a low competitive intensity environment only dynamic marketing capabilities had a positive effect on performance, but in a high, competitive, intensity environment both dynamic marketing capabilities and adaptive marketing capabilities showed positive effects in relation to performance. This study innovates by bringing international marketing, through two marketing capacities, from the perspective of SMEs that perform B2B activities.

SMEs’ International Strategic Groups and Top Managers’ Psychological Characteristics

This research analyzed the small and medium-sized enterprises’ (SMEs) international strategies concerning the scale and scope of the international activities. The major purpose was to study the international top managers’ psychological characteristics as distinctive capabilities within the defined international strategic groups. The international top managers’ cultural intelligence and emotional intelligence were taken as main characteristics to act in the international business environment. Therefore, we took as the main motivation to perform the present investigation the need to understand which psychological characteristics may help the international top managers to pursue high degrees of internationalization in their firms. This study was conducted in Portugal, and the sample was composed of 307 Portuguese SMEs’ international top managers directly responsible for the firms’ international decisions. The multinomial logistic regression method was used to test the hypotheses. The firms were classified into three international strategic groups based on the internationalization scale and scope. The degree of internationalization reflects that combination, creating groups with a high, medium, and low international exposure. The main result indicates as a distinctive capability, the international top managers’ cultural intelligence within the firms that exhibit a high international strategic positioning. Regarding the main contributions, this article contributes to the bodies of knowledge of international SMEs, cultural intelligence, emotional intelligence, and networking. This study also contributes to upper echelons theory and the resource-based view.

The Effect of Emotional and Cultural Intelligences on Networks' Behaviors in International SMEs: Evidence from Portugal.

The major purpose of this research was to study the predictive value of the top managers’ psychological characteristics regarding their networking behavior. In the international business management context of small- and medium-sized enterprises, we took the top managers’ cultural intelligence and emotional intelligence as determinant capabilities to perform better in their external networking. The sample was composed of 307 Portuguese SMEs’ international decision-makers, specifically founders, owners, chief executive officers (CEOs), managers of international activities, international market managers, or commercial managers. The data was collected from 2–30 April 2019 through online surveys directed to the Portuguese decision-makers that were directly responsible for the firms’ international activities. As a data collection instrument, the surveys were pretested and sent by e-mail. The average age of the participants was approximately 50 years old for males and 45 years old for females. We used self-reported measures to assess the different constructs and the hierarchical regression analysis to test our hypotheses. The results showed that cultural intelligence and emotional intelligence were significant drivers of decision-makers’ external networking behavior. A new factor structure concerning external networking behavior was retained. The major results exhibited the predictive value of some cultural and emotional intelligence dimensions over the new retained external networking behavior factors. Therefore, in the international business management context, the capability to adapt to new cultural contexts, as well as the capability to reason about emotions, improved the international decision-makers’ external networking behavior.

Strategic alliances, exploration and exploitation and their impact on innovation and new product development: the effect of knowledge sharing

PurposeThis study delves in the controversy about the nature and the sign of the effect of strategic alliances and exploration and exploitation capabilities on innovation and new product development. The paper analyses the effects of knowledge sharing and strategic alliances relationships at the firm level. Specifically, we study the influence of strategic alliances relationships in new product development and the mediating role of exploration and exploitation as dynamic capabilities.Design/methodology/approachThis investigation proposes a theoretical model tested using structural equation modeling (SEM). The multigroup analysis was performed to understand the moderating role of. A questionnaire survey was developed to explore the relations between strategic alliances and innovation and new product development variables. For this study, 387 valid questionnaires were collected from a sample of Portugal SME' firms. A 90-item questionnaire was submitted to employees managers of a large number of Portuguese SMEs, which consists to study the relationships among all the variables.FindingsThe results show that exists a positive direct influence of strategic alliances on innovation and new product development, and mediating impact the exploration and exploitation by the moderating role of knowledge sharing.Research limitations/implicationsThis study has some methodological limitations affecting its potential contributions. A cross-sectional study that captures one image in time and its ability to identify strict causality between variables is limited. Furthermore, the results are based on log collected from a key respondent, rather than broader actual data. The results are restricted to one country, Portugal. Future research should initially target different countries. Such research could then test the generalizability of the results.Practical implicationsTo fill this managerial relevance gap, we propose a process model in which the main antecedents of alliance stability will be examined. We argue that an alliance's evolutionary dynamics depend on these factors and variables that the partners must assess and manage over its developmental stages. In this sense, managers have significant scope to influence the ultimate success of strategic alliances. This study highlights the need to actively manage the cooperation – competition (coopetition) tension with the alliance partner and to apply the knowledge acquired from the partner to create new knowledge to enhance innovative performanceOriginality/valueThis paper contributes to fill the gap between strategic alliances and new product development mediated by exploration and exploitation in the dynamic capabilities view.

Economic Crisis Effects on SME Dynamic Capabilities

Based on dynamic capabilities theoretical framework, this research sought to understand the implications of the recent economic crisis on the capability of developing new products by Portuguese SMEs. Specifically, we assessed how this capability was affected by variables such as entrepreneurship, innovation capacity, the knowledge accumulation, and partnerships. The hypotheses were tested using two samples, one before the crisis, with 180 and another with 105 respondents, applied during the crisis (2012). Results reveal that during the crisis SMEs were more objective and effective in the use of their resources and capabilities. In particular, was found that during the crisis the entrepreneurship, innovation capacity, accumulation of knowledge and partnerships, have an impact on the capability of developing new products. Before the crisis, only entrepreneurship and knowledge accumulation have affected this capability.

The importance of Latin American space in the internationalization of Portuguese SMEs

In the light of the transformation undergone in the last decade by the Portuguese economy, the internationalization of Portuguese companies through exports had a considerable growth, reducing the importance of domestic demand as the main variable in the contribution to GDP, this work addresses the role of SMEs in this process, analyzing the case of their internationalization to the Latin American space. The study is based on an empirical analysis of data resulting from a survey conducted in 2014, period where the transformation became clear, through the responses of 50 internationalized Portuguese SMEs to Latin America, which have been validated. Also, and with a focus on this research, the process was correlated with the relevant theories of internationalization, paving the way for more in-depth and methodologically based studies on this relationship with significant potential, but still little analyzed in the context of the Portuguese economy.

The impact of R&D incentives in the competitiveness of Portuguese SMEs

The impact of R&D incentives in the competitiveness of Portuguese SMEs

The impact of R&D incentives in the competitiveness of Portuguese SMEs

The aim of the present study is to evaluate whether the European incentives received by SMEs to invest in R&D projects make these companies more competitive. With this purpose, was collected data from 151 SMEs, which received subsidies for R&D, from the COMPETE - operational program competitiveness factors, during the period from 2007 to 2013. According to the economic literature, the return on R&D investment made by companies is not immediate, and the results on the competitiveness may not be observed in the early years. Using an econometric methodology of panel data, this study concludes that the incentives reflect a positive effect on SMEs' competitiveness only in the third year after the R&D investment.

Does export intensity affect corporate leverage? Evidence from Portuguese SMEs

This paper examines the effect of export intensity on a firm's capital structure using a sample of 7,676 Portuguese SMEs. Results obtained from a system GMM estimation method show that the leverage ratio is negatively affected by export intensity. We document that firms with more growth opportunities have a higher leverage, while firms that have more profits, higher asset tangibility and face higher business risk have lower debt ratios. Our results also show that the implementation of governmental mechanisms that support export firms’ borrowing activities are critical in economies facing a financial crisis.

Indústrias transformadoras e estrutura de capital das PME

This study investigates the effect of the manufacturing industries and the characteristics of the companies on the capital structure of 14,254 Portuguese SMEs. The results suggest that the characteristics of industrial SMEs have different relevance in the way firms finance themselves and, for the most part, are more consistent with the pecking order theory, placing short-term debt next to equity. This should merit the attention of managers, given that short-term debt carries higher financial charges. Considering each of the industries separately, the empirical evidence also confers more consistency to the pecking order theory. The observed effect on the manufacturing industries reveals that the capital structure of the companies concerned cannot be explained solely by the characteristics of the companies, but also by the industry in which they are inserted.

Big Data Analysis in Supply Chain Management in Portuguese SMEs “Leader Excellence”

With the market becoming increasingly competitive, companies are looking for ways to differentiate themselves from competitors, thereby increasing the interest of organizations in analysing large data and their potential benefits to supply chain management. The objective of this study is to understand the involvement of the Portuguese SMEs “Leader Excellence” with the Big Data theme and their analysis as a function of the Supply Chain Management, as well as to understand if these companies are in the same line as the companies of worldwide reference, in what concerns to the topic in question. For this study, a survey was carried out with 18 questions and applied to 80 SMEs distinguished as “SMEs Leader Excellence” certified by IAPMEI. With this random sample, from the analysis of the results, it was possible to verify that the Portuguese SMEs are not yet at the level of the big world companies with respect to the use of Big Data in the management of the supply chain. Although the Big Data theme is often explored by the scientific community, since they are relatively recent concepts, when the focus is on SMEs, the number of available studies is scarce, hence this work is a further contribution to broadening the body knowledge in this area.

O papel dos consultores como intermediários no processo de construção do conhecimento. Uma análise à luz do campo de pesquisa da estratégia como prática

Embora a literatura existente apelide o setor de consultoria de gestão como um setor extraordinário e um fenómeno único no contexto empresarial, na verdade, estas afirmações não vêm acompanhadas por um número de estudos académicos que realcem a importância do trabalho efetivo dos consultores de gestão. Para combater a falta de estudos nesta área emergente, este artigo visa construir um modelo que permita combinar, numa mesma estrutura, os papéis dos consultores de gestão, as variáveis a equacionar em cada um destes papéis e o tipo de consultoria implícita em cada uma destas análises. Os resultados da análise empírica sob a forma de entrevistas semiestruturadas e questionários aplicados a consultores de gestão e gestores de PME em Portugal demonstram que os papéis dos consultores não podem ser apenas definidos nas variáveis visibilidade organizacional e estatuto do consultor.

THE ROLE OF THE APPROPRIABILITY MECHANISMS FOR THE INNOVATIVE SUCCESS OF PORTUGUESE SMALL AND MEDIUM ENTERPRISES

This study investigates the role of formal and informal appropriability mechanisms to appropriate revenues from innovation in several sectors. This relationship depends on factors such as sector, type of product or service, firm’s characteristics, etc. The set of appropriability mechanisms used by a firm depends on their availability and on the firm’s appropriability strategy. An empirical test using a sample of 2,122 Portuguese SMEs from four different sectors of the 2012 Community Innovation Survey indicated that for manufacturing; water supply, sewerage, waste management and remediation activities; and wholesale and retail trade, repair of motor vehicles and motorcycles; informal appropriability mechanisms, such as lead-time and complexity, are more effective for converting product innovation into financial performance in the short term. On its turn, for extractive sectors (Mining and Quarrying), formal mechanisms (e.g., patents) are better to protect product innovation and informal mechanisms are more effective to protect process innovation.

The Contribution of Design to the Development of Products and Manufacturing Processes in the Portuguese Industry

The aim of this work is to contribute to the new perspective of modernization of Portuguese manufacturing SMEs, evaluating innovation through design and its contribution to the improvement of development of products and manufacturing processes, as well as, to demonstrate how design thinking is a useful tool in manufacturing engineering. The survey will allow a new approach to the improvement of Industrial design in SMEs, as well provide evaluation tools of the company’s and promote innovation systems. Through mapping the fundamental processes, it was possible to group these routines into three dimensions, production, interactivity and through the impact on the economic system. For this work were validated 17 SMEs in the inquiries, that represents the sample.The main findings of the survey was, among others, 14% of the SMEs tend to perform external design contests, 43% of the analyzed SMEs create partnerships with schools, less than half of the surveyed companies use sources that allow direct interaction with the market, 43% of SMEs have a designer as responsible for the creation of its products; 18% say that their products reflect a Portuguese identity, 43% of the companies have defined the launching dates of new products and 21% considers innovation as the motor element in the company strategy. With these results it was possible to understand where the Portuguese SMEs, which are mostly manufacturing SMEs, are stand towards innovation through design. A draft of a grid to assess the modernization criteria of Portuguese SMEs through design is presented, to propose a useful tool for the modernization of manufacturing Portuguese SMEs.