Small And Medium Enterprises In China Research Articles

Proposed Study on the Existing Body of Literature on Innovation Performance in China’s High-Tech SMEs

This study investigates the intricate relationship between top management capability, relational capability, technological capability, learning capability, innovation strategy, and innovation performance within the context of high-technology Small and Medium Enterprises (SMEs) in China. Through a synthesis of the Resource-Based View and Dynamic Capability Theory, this research delves into how these diverse capabilities intersect to shape innovation outcomes in a rapidly evolving market landscape. Drawing upon empirical data collected from a comprehensive sample of high-tech SMEs operating across various industries in China, this study examines how top management capability influences the firm's strategic direction and innovation agenda. Furthermore, the research explores the role of relational capability in fostering collaborative relationships with stakeholders, such as customers, suppliers, and partners, to access valuable resources and knowledge for innovation initiatives. Moreover, the study investigates how technological capability enables firms to harness advanced technologies and expertise to drive innovation, while learning capability facilitates the absorption, assimilation, and application of new knowledge and insights to fuel continuous innovation efforts. Through an analysis of innovation strategies adopted by high-tech SMEs and their alignment with dynamic capabilities, this research elucidates the mechanisms through which firms leverage their diverse capabilities to formulate and execute effective innovation strategies, ultimately impacting innovation performance. The findings contribute to both theoretical understanding and practical implications, providing insights for high-tech SMEs in China on how to develop and leverage dynamic capabilities across multiple dimensions to enhance innovation performance and achieve sustainable competitive advantage in today's dynamic business environment.

Sustainability Practices of Small and Medium Enterprises (SMEs) in China: Basis for Strategic Plan

The study presents a comprehensive analysis of small and medium sized enterprises (SMEs) situated in Rizhao City, Shandong, China, focusing on their profiles, sustainability practices, challenges, and a proposed strategic plan. The respondents, SME managers, play a crucial role in shaping sustainability strategies. Among the key findings, 70% of surveyed companies adopt a corporate organizational structure, while 45% primarily operate in the manufacturing sector. SMEs in China exhibit a strong commitment to economic, social, and environmental sustainability practices, with notable percentages actively seeking cost reduction through sustainability, monitoring financial impacts, and investing in research and development for sustainable innovation. Economic challenges, including difficulties in securing funds for sustainable projects, dominate the SME landscape (88%). Social challenges emphasize meeting community expectations (80%), and environmental challenges center on reducing carbon footprints (90%). The proposed strategic plan advocates phased sustainability investments, diversification of funding sources, talent management, and a circular economy approach to address economic, social, and environmental challenges collectively. The study recommends internal reviews of organizational structures, cross-industry collaboration, exploration of alternative financing, and robust monitoring and evaluation systems to enhance SMEs' success in China's dynamic business environment. These recommendations underscore the importance of adaptive, innovative approaches to foster sustainability and resilience in SMEs while contributing to societal well-being and environmental conservation.

M&A contractual innovation in SME sector: the effect of valuation adjustment mechanism clause on SME growth

Identifying and effectively managing growth models for small and medium enterprises (SMEs) poses a significant challenge for entrepreneurs. Prior research has indicated that the dominant model is an acquisition-led growth strategy. Our paper introduces a novel acquisition growth model for SMEs in China, which incorporates the use of valuation adjustment mechanism (VAM) clauses in M&A contracts. We thoroughly analyze the financial implications of this innovative model on SME growth, the specific SME profiles that favor this approach, and the prevalent types of VAM clauses adopted by these SMEs. All hypotheses were rigorously tested using primary data from Chinese public SME companies. The results reveal a positive financial impact of VAM clauses in M&A contracts on SME growth. It was found that SMEs with lower equity concentration or smaller holdings are more likely to adopt the VAM Clauses Model, and the inclusion of equity payments as compensation in the VAM clause is highly common in practice. These findings hold significant implications for both theoretical research on SMEs and the practical strategies of entrepreneurs.

Linking digital leadership and employee digital performance in SMEs in China: The chain-mediating role of high-involvement human resource management practice and employee dynamic capability

BackgroundIn the digital era, the role of digital leadership is becoming increasingly prominent. However, the exploration of the alignment between digital leadership and high-involvement human resource management practices (HI-HRMPs) in influencing employee-based resources remains an overlooked research area among current scholars. ObjectiveThis study aims to analyze the influence of these elements on the digital performance of employees. Based on the Resource-Based View (RBV) and Dynamic Capability Theory (DCT), this research focuses on Chinese Small and Medium Enterprises (SMEs) and employs purposive sampling to select four representative regions in China (Shanghai, Guangzhou, Guizhou, and Anhui). The survey targeted employees within SMEs and was conducted using questionnaire surveys. Structural equation modeling (AMOS) is utilized for analysis. ResultsThe findings indicate that: (1) digital leadership cannot directly influence employee digital performance and employee dynamic capability but can directly influence HI-HRMP; (2) HI-HRMP mediate the influence of digital leadership on employee digital performance, but employee dynamic capability cannot mediate the influence of digital leadership on employee digital performance; (3) HI-HRMP and employee dynamic capability play a chain mediating role between digital leadership and employee digital performance. ConclusionIn the digital market, digital leadership improves employee digital performance by boosting HI-HRMP and enhancing employee dynamic capabilities. The findings support studies on practical applications and link between digital leadership and employee digital performance. The uniqueness of this study lies in applying HI-HRMP and employee dynamic capabilities as chain mediating variables in the digital market. This approach extends the application of HRMPs and dynamic capability theory, providing theoretical guidance and decision support for the digital operations of SMEs.

Coping with the storm: The role of fintech in SME survival

COVID-19 decimated the global real economy, to what extent did the epidemic jeopardize the survival of small and medium enterprises (SMEs)? This study examines 13,026,723 SMEs in China to assess their resilience under the application of fintech in the banking sector. Our findings suggest that the epidemic reduced the probability of SME survival and increased the negative impacts of excessive distance between banks and enterprises and a banking structure dominated by large banks on SME survival. Fortunately, fintech strengthens SMEs’ resistance to risk shocks. Specifically, when banks and enterprises are farther apart and the banking structure is dominated by large banks, the positive impact of fintech on the resilience of SMEs to risk shocks becomes more evident. This suggests that fintech reduces the impact of geographical distance on the interaction between banks and enterprises and inverts the traditional notion that large banks are unsuited to serving SMEs.

Digital inclusive finance: A lever for SME financing?

This paper systematically investigates the relationship between digital inclusive finance and small and medium enterprises (SMEs) financing constraints. We extrapolate the influence model between them from an economic theory perspective and conduct an empirical test using two-way fixed effects and a mediation effect model. The results show: (1) Digital inclusive finance significantly alleviates the financing constraints of SMEs; (2) Compared to the breadth of coverage, the depth of use of digital inclusive finance has a more noticeable effect; (3) The alleviation effect of digital inclusive finance exhibits heterogeneity. It can correct the attribute mismatch, field mismatch, and regional mismatch of traditional financial loan services; (4) Digital inclusive finance alleviates SME financing constraints by reducing financing costs and controlling leverage levels, increasing internal sources of enterprise funds. This research is significant for promoting digital inclusive finance to alleviate the financing difficulties of SMEs in China and provides valuable solutions for other countries to mitigate the “Macmillan Gap” phenomenon.

Institutional Ownership, Capital Structure and Performance of SMEs in China

This article examines the relationship between ownership, leverage, and performance for Chinese small and medium enterprises (SMEs). Our study sheds light on how institutional ownership affects the performance of Chinese SMEs. We use agency and the pecking order perspective as background theories for analysing the relationships between institutional ownership, capital structure, and firm performance. We use a range of regression estimations for robustness checks and include Quantile regression, static and dynamic panel regression models, and a two-step system Generalized Method of Moments (GMM) approach to explore data covering 2009–2015. Our findings show that institutional investor’s ownership affects the performance of Chinese SMEs positively and significantly. The negative relationship between leverage and performance indicates the dominance of family ownership in Chinese SMEs, where firms rely more on retained earnings for financing, which aligns with the pecking order theory (POT) perspective. The results also suggest that institutional ownership could mitigate agency issues in Chinese SMEs. JEL Classification: G30, G38, G39

A systematic knowledge graph-based smart management method for operations: A case study of standardized management

Standardized routine operation management (SROM) has been widely accepted and applied by kinds of enterprises and played a key supporting role. With full use of the emerging knowledge-based smart management technology, SROM will further increase comprehensive efficiency and save human resources greatly at the same time, especially for small and medium enterprises (SMEs). Hence, we propose a systematic knowledge-based smart management method to transfer SROM activities from human operations to automatic response by means of knowledge explicitation, organization, sharing and reusing, which can be further achieved by employing knowledge graph. We took a typical SROM instance, ISO 9000 implementation management, as an example to validate the transformation from human activities to knowledge graph-based automatic operation. We firstly analyzed characteristics of domain knowledge and constructed an ontology model according to the knowledge stability. Secondly, a hybrid knowledge graph construction and dynamic updating framework together with related algorithms were designed by deliberately integrating semantic similarity calculation and natural language processing. Thirdly, we developed a question-answering mechanism and reasoning system based on the ISO 9000 implementation knowledge graph to support automatic decision and feedback for ISO 9000 routine operation management including knowledge learning and processes auditing. Finally, the practicability and effectiveness of SROM knowledge graph has been validated in a SME in China, realizing the application of question-answering, job responsibility recommendation, conflict detection, semantic detection, multidimensional statistical analysis. The proposed method can also be generalized to support auxiliary optimization decision, vertical risk control, operation mode analysis, optimization model improvement experience and so on.

The Relationship Between Human Resource Management Innovation and Enterprise Innovation Performance and the Mediating Role of Employee Competencies in SMEs in China

In the face of today’s competitive and complex environment, small and medium enterprises (SMEs) in China need to innovate in order to foster their development and achieve their business goals. Human resource management is a part of business innovation that cannot be ignored. How to innovate through human resources so as to improve the innovative performance of enterprises and how to ensure that enterprises’ human capital contributes to the achievement of their goals are issues that every SME needs to face. This research proposes a model of the relationship between human resource management innovation, employee competencies, and enterprise innovation performance. The model was tested on a survey of 110 employees from a sample of Chinese SMEs. The results show that human resource management innovation is positively related to enterprise innovation performance; human resource management innovation is positively related to employee competencies; employee competencies are positively related to enterprise innovation performance; employee competencies play a partially mediating role in the positive relationship between human resource management innovation and enterprise innovation performance.

Can innovation vouchers promote SMEs’ innovation in China: A flexible conditional difference-in-differences analysis

Abstract Innovation voucher is a market-oriented policy instrument to encourage the external resource utilization of small and medium enterprises (SMEs) so as to foster their innovation activities and outcomes. This study extends the extant literature on the effectiveness of innovation voucher policy by investigating whether this small innovation subsidy can promote the innovation output of SMEs in China, a typical emerging economy, and identifying policy-relevant heterogeneities. By using the samples of Chinese technology-based SMEs and a flexible conditional difference-in-differences approach, our results show that innovation vouchers generally do promote SMEs’ innovation output and exert a more salient effect on medium-sized enterprises. Furthermore, the incentive effect of innovation vouchers is stronger on the recipients in the regions where the institutional environment is more developed. This study has important implications for policy makers and SMEs.

Environmental regulation and ESG of SMEs in China: Porter hypothesis re-tested

We examined the policy impact on the environmental and economic performance of small and medium enterprises (SMEs), which is understudied in the literature. Using the Chinese National Private Firm Biannual Survey data from 2006 to 2014 for empirical testing, we found evidence for the positive effects of environmental regulation on firm environmental investment (weak Porter hypothesis) and predictive power of environmental, social, and governance (ESG) factors for firm profitability. Particularly, resources allocated for fulfilling social responsibilities (both internal and external) contribute to firm profitability, and firm owners/managers' membership with the Federation of Industry and Commerce and involvement in firm decision-making both are profit-enhancing but hindering environmental investment. Besides offering a large-N evaluative study of regulatory impact on SMEs, the results can also inform regulators and/or investors of screening strategies in engaging SMEs in sustainability transition, which has implications for both the success of the regulatory regime and the advancement of environmental and social wellbeing.

Green business practices and corporate financialization: Role of female directors in Chinese small and medium enterprises (SMEs)

AbstractThis study examines the impact of green business practices (GBP) on firm financialization and, analyzes the moderating role of female directorship in China. A‐share listed non‐financial firms are sampled (total 1049 firms including 284 small and medium enterprises [SMEs]) from Shanghai and Shenzhen stock exchanges from 2009 to 2020. OLS and fixed‐effects regression techniques are applied and the results show a significantly positive relationship between GBP and firms’ financialization level (FIN) in the whole sample. Also, greater female directorship strengthens this relationship in Chinese firms. However, for SMEs in China, this study does not support a relationship between GBP and firm financialization. Nonetheless, the moderating role of female directorship is more significant among SMEs. The findings of this study may assist policymakers in devising policies tailored separately for SMEs and non‐SMEs in China.

Examining the Relationship between COVID-19 Related Job Stress and Employees' Turnover Intention with the Moderating Role of Perceived Organizational Support: Evidence from SMEs in China.

The outbreak of COVID-19 has exerted an enormous impact on society, enterprises, and individuals. It has affected the work attitudes and psychology of employees to a certain extent and their job stress (JS) has also augmented accordingly, leading to increased turnover intention (TI). With the survey responses of 720 employees of small and medium enterprises (SMEs) in China as the sample, we studied the impact of COVID-19 related JS and TI with the moderating effect of perceived organizational support (POS). We utilized linear and multiple regression analysis using Windows SPSS 25. The research findings indicated that the JS caused by COVID-19 in the first affected region (Hubei) was significantly stronger than that in other regions (non-Hubei). JS had a significant positive relationship with employees’ TI, while POS had a significant negative connection with employees’ TI. We also identified that POS weakened the positive association between JS and employees’ TI. These findings are expected to be conducive to and conductive for the upcoming theoretical and empirical investigations as the founding guidelines, as well as for managers in formulating effective policies to curb JS, which would ultimately be helpful in reducing TI.

Dynamic capability, ambidexterity and social network—empirical evidence from SMEs in China

PurposeThe investigation of organization's ambidextrous innovation is a challenge in the research studies of management sciences. As existent literature showed a positive relation between dynamic capability (DC) and innovation, few empirical studies are conducted to explain how DC impacts on the balanced and combined dimension of ambidexterity and still less on how social network moderates this relation. As a result, this paper aims to investigate and provide empirical evidence on DC’s influence on ambidexterity in the context of China.Design/methodology/approachBy a relational model of DC, ambidextrous innovation and social network, this study has conducted multiple regression analysis on the data collected from 350 small and medium enterprises (SMEs) in mainland China.FindingsThe results show that, DC has positive influence on both the combined and balanced dimension of ambidexterity; and both the relational network and structural network play an inverted U moderating role, where the moderation of relational network is stronger than that of structural network.Originality/valueThis study provides empirical support on DC's influence on ambidexterity together with the moderation of social network.

Supply chain network and financing performance of small and medium enterprises in China: a survey and quasi-replication using fuzzy-set qualitative comparative analysis

PurposeThis paper examines how weak ties and strong ties in the supply chain network influence the financing performance of small and medium enterprises (SMEs) through the mediation of information sharing and innovation capability.Design/methodology/approachQuestionnaires were administered to 208 financial managers responsible for supply chain finance in SMEs in China. Data analysis techniques used included multiple regression analysis and fuzzy-set qualitative comparative analysis.FindingsThe authors found that weak ties had a more substantial impact on the financing performance of SMEs than strong ties did. Information sharing and innovation capability played a mediating role between weak and strong ties and the financing performance of SMEs. In addition, information sharing and innovation capability complement each other and jointly influence the financing performance of SMEs.Practical implicationsSMEs are suggested to actively embed themselves in the supply chain network to increase financing opportunities and reduce financing costs. The authors also recommend SMEs to enhance the level of their information sharing in the supply chain network and take advantage of their network ties to access and adopt new technology from other organisations and conduct collaborative innovation with partner institutions.Originality/valueThe paper extends the authors’ understanding of supply chain finance by exploring the intrinsic mechanism of how various constructs (weak ties, strong ties, information sharing and innovation capability) in the supply chain network have an impact on the financing performance of SMEs. In particular, the authors explore the under-researched mediating effect of information sharing and innovation capability on the relationship between network ties and the financing performance of SMEs.

The Study of Factors on the Small and Medium Enterprises' Adoption of Mobile Payment: Implications for the COVID-19 Era.

The coronavirus disease 2019 (COVID-19) pandemic pushes people looking for shopping alternatives, seeking to avoid handling cash in favor of a safe and quick mobile payment. At this juncture, this paper examines the determinants of the adoption of mobile payment services among small and medium enterprises (SMEs) in China. The study proposes four-dimensional factors (business factors, technological competence, environment, and consumers' intentions) based on the literature review findings to understand the challenges of adopting mobile payment. A questionnaire is designed to solicit information from the participants. The findings reveal that business factors, technological competencies of SMEs in China, and the environment positively influence mobile payment adoption. Consumer intention has almost no influence on the adoption of mobile payment. Potential implications for the COVID-19 era are also discussed.

How knowledge affects incremental innovation in SMEs: Knowledge base and knowledge heterogeneity

While scholars have widely examined the effect of knowledge base (i.e. knowledge breadth (KB) and knowledge depth (KD)) on innovation performance, the relationship between KB/KD and incremental innovations remains not clear. This article examines how existing knowledge base interacts with external and internal knowledge heterogeneity (KH) to affect incremental innovation in small and medium enterprises (SMEs). A collection of 230 samples from high-technology SMEs in China demonstrate that the effects of KB and KD are contingent on external and internal KH in opposite ways. The study proposes that a firm with a broad knowledge base is better able to develop incremental innovations matched with internal KH rather than external KH; firms with high depth of knowledge benefit more from external KH than internal KH for fostering its incremental innovations.

Adoption of supply chain finance by small and medium enterprises in China

PurposeSupply chain finance (SCF) is a promising financing solution for small and medium enterprises (SMEs). The study aims to highlight the determinants of the adoption of SCF and the theoretical implications for SCF in SMEs.Design/methodology/approachDrawing on the theory of planned behaviour (TPB), the authors develop a model and test hypotheses about the factors (1) SE, (2) attitude toward SCF, (3) social influence (SI), (4) adoption intention (AI) and (5) actual adoption (AA) of SCF. Data collected from a survey of 211 managers in SMEs in China were used to conduct a partial least squares (PLS) estimation.FindingsThe empirical results indicate that attitude toward SCF and SI positively affect AI towards SCF, whereas AI positively affects the AA of SCF. Specifically, the authors find that AI plays a mediating role in the relationship between SE and AA of SCF, whereas attitude toward SCF plays a mediating role between SI and AI.Originality/valueFirst, the authors use the TPB to study the adoption of SCF in SMEs. Second, the authors apply PLS to clarify the influence mechanism of behavioural factors on the adoption of SCF. The authors provide a useful approach for practitioners in examining the adoption of SCF by SMEs.

Inventory stickiness, environmental dynamism, financial constraints and survival of new SMEs in China

PurposeAlthough the adoption of lean inventory management for performance improvement has been widely recognized, sticky inventory management is still a stopgap measure for new small and medium enterprises (SMEs) against survival risks. The purpose of this paper is to demonstrate the nonlinear relationship between new SMEs inventory stickiness and venture survival by focusing on the moderating effects of environmental dynamism and financial constraints.Design/methodology/approachClassical moderating model is employed to investigate the effects of environmental dynamism and financial constraints on the relationship between inventory stickiness and venture survival. This study uses the accelerated failure time model for survival analysis and tests the relationships based on a large set of new manufacturing SMEs in China over the period from 1999 to 2007.FindingsThe main finding is that inventory stickiness has an inverted U-shaped impact on the likelihood of survival. However, the inflection point of this inverted U-shaped relationship lies at the end of the sample. Further moderation analysis indicates that environmental dynamism positively moderates the inverted U-shaped relationship between inventory stickiness and venture survival, while financial constraints negatively moderate this relationship.Practical implicationsMost new SMEs have great potential to increase the likelihood of survival by improving inventory stickiness before achieving effective lean inventory management. Sticky inventory management can help new SMEs achieve better survival in a dynamic environment. However, new SMEs that are financially constrained should prudently implement sticky inventory management.Originality/valueThis paper contributes to the existing understanding about the likelihood of SMEs survival by addressing the role of sticky inventory management. It may be the first study to empirically demonstrate the moderating effect of environmental dynamism and financial constraints on the inverted U-shaped relationship between inventory stickiness and venture survival.

SMEs’ Survival Apprehension from the University Students’ Perspectives in China

China registered more than 34 million SMEs (small and medium enterprises) in 2018; unfortunately, a great proportion of them (50%) vanishes in 3 years. We explored perceived causes and contours of SMEs insolvency from the Chinese students’ perspectives. Using multiple institutional logic, we aimed to identify internal and external primers of students’ judgement about Chinese SMEs insolvency. After interviewing 680 participants over several years, we coded the textual data in three steps: axial coding of the meaning-making unit, thematic coding to integrate sub-unities into 29 categories, and theoretical coding in the extant literature on the SMEs’ insolvency. Our findings divide the responses into two streams: internal versus external factors, and technical versus normative logic. Our study contributes to the literature in three ways. First, we identified primers of attention to the insolvency of SMEs in China. Second, we introduced sixteen potential variables for survey research. Third, the perceived causes of insolvency of SMEs in China highlights the students’ apprehension about entrepreneurship and career development in SMEs. We discuss implications for research and practice in the broader world.