Taiwanese Small And Medium-sized Enterprises Research Articles

Entrepreneurial orientation and product innovativeness: the mediating roles of technology diversity and intellectual property protection

ABSTRACT This study examines two important mediating roles, namely, technology diversity (TD) and intellectual property protection, in the relationship between product innovativeness and entrepreneurial orientation (EO) in small- and medium-sized enterprises (SMEs). Based on survey data from 119 Taiwanese SMEs, EO enhances product innovativeness indirectly through TD and IP protection. In addition, market uncertainty moderates three relationships, as follows: TD/product innovativeness positively, and EO/IP protection and IP protection/product innovativeness negatively. Our results improve knowledge of EO and product innovativeness in SMEs.

Antecedents of internationalization of Taiwanese SMEs: a resource-based view

PurposeThis study aimed to explore the antecedents of small- and medium-sized enterprises (SMEs) internationalization and to compare the different resources required to enter different geographical regions. This study adds to the discussion on internationalization from a resource-based view (RBV) and a focus on dynamic capability, especially the linkage with resources such as digital capability, domestic industrial networks and the business-to-business (B2B) model.Design/methodology/approachThis study used secondary data collected by an SME association in 2020, using a logistic regression model to examine the hypotheses. The respondents were selected according to stratified random sampling.FindingsDigital capability and the B2B model significantly and positively affect the likelihood of internationalization by SMEs, while domestic industrial networks were negatively correlated with this process. In addition, Taiwanese SMEs with high digital capability tend to expand to North America, Europe, Southeast Asia, Northeast Asia, Oceania and the Middle East. Smaller firms tend to develop in Southeast Asia, whereas larger firms opt to establish business in Oceania.Research limitations/implicationsA research limitation is the generalizability of the sample. Findings could be enhanced if future studies include more industries and draw comparisons among different industries or countries. Future studies could explore digital entrepreneurship from a global perspective.Practical implicationsManagers need to emphasize better the development of digital capabilities and skills for SMEs. With limited financial resources and workforce, SMEs can strengthen the competence in international markets by adopting a suitable business model. When SMEs join an association to expand SMEs foreign networks, the study suggests that SMEs carefully evaluate the characteristics of each industrial association first, given that some associations are domestic-oriented. As for public policymakers, a project grant can be used to provide digital capability training for SME employees and owners or promote building a B2B model when internationalizing.Originality/valueThe authors' findings fill the research gaps in RBVs of internationalization, especially in linking resources such as digital capability, domestic industrial networks and the B2B model. The outcomes of this research serve as a reference not only to policymakers for improving the current SME ecosystem, but also to business practitioners positioning themselves in this system.

Organizational Commitment Impact on Job Well-Being of SMEs Employees in Taiwan in Post-COVID-19 Era

Taiwan's industrial structure is mainly composed of small and medium-sized enterprises (SMEs), with over 98% of enterprises being SMEs and employing more than 80% of the workforce in Taiwan. Many industries are under severe stress due to the COVID-19 outbreak, and many companies are reducing staff hiring or staff working hours. The main purpose of this study was to examine the factors influencing the job well-being of Taiwanese SME employees in the context of the COVID-19 epidemic, including organizational justice, job insecurity, decent work, and organizational commitment. Through a questionnaire survey, 653 valid questionnaires were collected and analyzed using structural equation modeling to verify the effects between the study constructs. The study found that organizational justice, job insecurity, and decent work all had significant effects on organizational commitment, with job insecurity having the least effect. Organizational commitment has a positive and significant effect on employees' job well-being, with a standardized regression coefficient of 0.469. In the research model, the R2 of employees' organizational justice, job insecurity, decent work, and organizational commitment on job well-being was as high as 0.724. The results of the study show that Taiwan has a large number of SMEs that can respond quickly and flexibly to the environment. Even in the unsettled environment of an epidemic, employees' organizational commitment to the company remains a decisive factor in employee well-being. The smaller-than-expected impact of employee job insecurity is indirect evidence of the resilience of the Taiwanese industry.

Ambidexterity in Social Capital, Dynamic Capability, and SMEs' Performance: Quadratic Effect of Dynamic Capability and Moderating Role of Market Orientation.

The importance of organizational ambidexterity was stressed in different fields of management. This study was using a distinct method to measure the differences in the degree of ambidexterity to bridge the gap with the previous studies and to provide more insights in the successful management of exploitation and exploration. This study surveyed Taiwanese small and medium-sized enterprises (SMEs) to test the hypotheses. We issued 1000 questionnaires in total and received 234 valid ones. Results indicate exploitative and explorative capabilities exerting non-linear effect on performance. Likewise, ambidexterity and its interaction with market orientation have positive influence on firm performance. This study used structural equation modeling to analyze data, as this approach is known to be particularly advantageous for the exploratory nature of this study. We also used hierarchical regression analysis to test interaction and moderating effects. The study contributes to the literature in two ways. First, we offer a clearer understanding of the complete concept of social capital, including inter-firm and intra-firm social capital, and how contributes to improving and extending existing exploitative capabilities. Second, this study outlines how market orientation can have different effects on an ambidextrous strategy that is adopted to improve Taiwanese SMEs performance.

Extracting key factors for sustainable development of enterprises: Case study of SMEs in Taiwan

In general, enterprises should pay close attention to sustaining sufficient competitiveness in turbulent global business environments that focus on sustainable operations, especially environmental issues. It is obligated for enterprises to protect the environment, utilize sustainable resources and establish eco-industries. Many large enterprises have joined the World Business Council for Sustainable Development (WBCSD). However, the small and medium-sized enterprises (SMEs) pay various degrees of attention to environmental issues and sustainable operations. This paper investigates the sustainable development and innovation of 233 SMEs in Taiwan to find out how to develop a business model that helps them operate in a more sustainable and environmentally friendly way. According to our results, a sustainable business model is a key factor for competitive advantages with straightforward connections to business success. Results also indicate that a sustainable business model is performed with the agreement of colleagues in an organization and it requires comprehensive strategic efforts. This study has limited findings to show the insights of Taiwanese SMEs and should not be generalized in other contexts.

The impact of science parks on small- and medium-sized enterprises’ productivity distributions: the case of Taiwan and South Korea

In this article, the effectiveness of policy creating science parks is evaluated with respect to small- and medium-sized enterprises (SMEs). Science parks created to support innovation and regional growth often target productivity gains through agglomeration economies. However, spatial proximity of firms may also stimulate selection, less competitive firms being forced to exit, a cluster of high-productivity, surviving firms being observed at the regional level. Empirical studies also show that high- or low-productivity firms or both may spatially sort into a region. Using estimates of firm-level total factor productivity, the science park sorting and selection behavior of Taiwanese and South Korean SMEs is analyzed. The results indicate heterogeneity in location choice of SMEs arising from the economic environment of science parks. Overall, the empirical evidence suggests that science parks can generate real productivity improvements if the incentives are reinforced through national-level policies; otherwise, such incentives may end up protecting inefficient firms.

Investigating the success of knowledge management: An empirical study of small- and medium-sized enterprises

Most firms have started to realize the importance of KM in streamlining their operations and processes to improve organizational performance. So in this paper, we try to survey and present a model for measuring success of KM in small- and medium-sized enterprises (SMEs). This study is the first empirical test of an adaption of the Jennex and Olfman (J&O) KM success model considered a better description of KM success due to its strong theoretical grounding to analysis the influences of KM and inter-actions on workers' productivity in Taiwanese SMEs settings. Structural equation modeling techniques are applied to data collected through questionnaires from 277 knowledge workers. All the hypothesized relationships between the variables are significantly supported by the data. The findings served as useful reference points for researchers interested in investigating issues related to the successful implementation of KM, and for practitioners aiming to achieve the benefits of KM in SMEs.

Tracing National and Global Forces in a Taiwanese SME's Product Innovation

Taiwan's competitiveness in the global arena has often been attributed to the country's dynamic small and medium-sized enterprises (SMEs). In the most recent decade, the Taiwanese government has increased support to innovative SMEs, and with the emergence of new fields such as biotechnology, companies with highly innovation-driven agendas are surfacing. The innovation focus provides not only new opportunities but also challenges for Taiwanese SMEs. In this article I aim to increase the understanding of how national and global forces affect SME innovation in Taiwan. To this end, I use an industrial network approach to trace the national and global interdependencies that follow the network of a Taiwanese SME in the biopharmaceutical sector.

Family Ownership, Institutional Ownership, and Internationalization of SMEs

Family ownership has been recognized as an important determinant of corporate strategic choices; however, little research investigates the effects of family ownership and corporate governance on internationalization in small and medium‐sized enterprises (SMEs). This paper utilizes agency theory and the resource‐based view to analyze the relationships between family ownership, institutional ownership, and internationalization. Using a sample of Taiwanese SMEs, the finding of a positive family ownership–internationalization relationship suggests that family ownership may encourage internationalization. The interaction of family ownership and institutional ownership is positively related to internationalization, suggesting that SMEs with high family ownership are more likely to internationalize as institutional ownership increases.

Global integration strategies of small and medium multinationals: Evidence from Taiwan

This study replicates and extends Birkinshaw et al.’s (1995) model of the predictors of business unit integration of large Western multinational corporations (MNCs). Our study investigates the global integration strategies of Taiwanese small and medium sized enterprises (SMEs) competing in the global information technology (IT) industry. It confirms the importance of some structural forces (i.e. economies of scale and standard market demands) in the global integration strategies of Taiwanese SMEs thereby expanding the applicability of existent internationalization theories developed primarily in the context of large Western MNCs to non-Western SMEs. This study finds three results that add new knowledge to the current SME literature and provides managerial implications. First, it finds a negative relationship between competitive actions and business unit integration. Second, it finds that in the optimally globalized IT industry there is no direct effect of business unit integration on performance. Third, it finds a direct effect of differential comparative advantage on performance.

Adoption of Practices by Subsidiaries and Institutional Interaction within Internationalised Small- and Medium-Sized Enterprises

This study examines the “intra-organisational dynamics” of the adoption of internal practices by subsidiaries of internationalised small- and medium-sized enterprises (SMEs) from the perspective of institutional theory. Based on a survey of 149 foreign subsidiaries of Taiwanese SMEs, the findings show that parent-firm executives of SMEs who are deeply involved in subsidiary operations will assess strong pressure from their home-country institution to adopt internal standard practices within a subsidiary. However, subsidiary executives of SMEs who assess heavy pressure from the host-country institution will resist this adoption. When executives of SME parent firms and subsidiaries concurrently assess high pressure but from opposing sources, creating a case of “institutional interaction” within SMEs, the subsidiary will either partially adopt a limited but sufficient level of all internal practices or only adopt internal managerial practices while forgoing internal production practices.

Internationalization, intangible assets and Taiwanese SMEs' performance: Evidence of an Asian newly-industrialized economy

This paper investigates the impact of internationalization and intangible assets on the performance of Small and Medium sized enterprises (SMEs) in newly industrialized economies (NIEs). Examining a sample of 3,194 Taiwanese SMEs, we find that: (1) the relationship between internationalization and performance is characterized by an inverted U-shaped curve; (2) SMEs investing more heavily in research and development achieve greater gains in profitability; and (3) though the hypothesized linear relationship between advertising and profitability is not confirmed, further analysis indicates a U-shaped curvilinearity between the two, suggesting that a minimum level of investment is required if advertising is to be effective. Key words: Internationalization, intangible assets, performance, SMEs, NIE.

A Synthetic Assessment of E-business for SMEs’ in Taiwan

The adoption and implementation of e-business by small and medium sized enterprises (SMEs) in Taiwan has become increasingly important in order to stay competitive. Due to the disparities between industries and the differing maturity levels of e-business, SMEs must apply diverse strategies and activities to deploy their e-business projects. Employing questionnaire surveys and interviews, this study demonstrates that management, process innovation, and resource infusion play a major role in the performance of Taiwanese SMEs to implement e-business, and, therefore, have the potential to promote e-business growth. Results revealed that implementation of cost reduction along with revenue increments during the midterm of the e-business project had good benefits. The factors of management, process innovation, and resource infusion were statistically significant and this implies that they have positive influences on e-business when applied in different industries. Keywords: E-Business, Small and Medium Sized Enterprises (SMEs)

Toward a unified knowledge management model for SMEs

Adoption of knowledge management (KM) has become the emerging agenda in developing business strategies. However, due to the resources and budget constraints, many small and medium-sized enterprises (SMEs) fail to realize and recognize the potential benefits of KM, hence they are reluctant to participate in advancement and transformation of knowledge management. Moreover, SMEs are usually encountering ambiguity and uncertainty of adopting and implementing KM. This study examines the infrastructure and process capabilities of Taiwanese SMEs and conducts a comparative analysis of KM in SMEs in Hong Kong. The research results indicate that a successful KM implementation depends on a harmonious amalgamation of infrastructure and process capabilities, including technology, culture and organizational structure. This analysis may also help in understanding the government role in providing necessary assistance to the SMEs for pursing KM.

The journey from market orientation to firm performance

PurposeThis paper aims to investigate the link between market orientation and performance of US and Taiwanese small‐ and medium‐sized enterprises (SMEs). This study is primarily centred on empirically investigating two issues: test the effectiveness of MARKOR (a widely used market orientation measure developed by Kohli et al.) in US and Taiwanese SME contexts, and investigate the factors influencing US and Taiwanese SMEs’ performance.Design/methodology/approachThis study's participants were owners or managers from 138 SMEs located in three states in the USA (i.e. Maryland, New York, and Pennsylvania) and 151 SMEs located in Taiwan. A survey was created to collect data: market orientation scale items used in this survey were mainly adopted from MARKOR; performance scale items were adopted directly from previous studies. Structural equation modelling was employed to analyse the data collected.FindingsThis study finds that neither US and Taiwanese SMEs’ intelligence generation, nor intelligence dissemination had a significant relationship with their firm performance. However, the findings do indicate that there was a significantly positive link between US and Taiwanese SMEs’ responsiveness and their firm performance.Originality/valueIn almost all previous studies in this field, the primary emphasis has focused on the market orientation of large businesses. Research on market orientation in SMEs has been scarce. Hence, this paper contributes to the extant literature by changing the research direction and studying market orientation in SME context. In addition, this paper provides SME managers with a more understandable guide to specific market‐oriented activities.

Minimum Shareholding Requirements for Insiders: Evidence from Taiwanese SMEs

ABSTRACTManuscript Type: EmpiricalResearch Question/Issue: This study aims to evaluate the suitability of Taiwan's minimum shareholding requirement for small‐ and medium‐sized enterprises (SMEs), and to examine whether stewardship theory and both incentive and entrenchment effects can characterize the ownership‐performance relationship simultaneously.Research Findings/Results: We apply new empirical methods to a balanced panel dataset including 496 firm‐level observations of 62 Taiwanese SMEs publicly traded from 1999 to 2006. The results show a nonlinear ownership‐performance relationship, first negative then positive, with a single threshold value of insider ownership (5.4 per cent). This indicates that both effects combine and that the current regulated minimum level of insider shareholdings for public SMEs may be too high.Theoretical Implications: Our evidence supports both convergence‐of‐interests and entrenchment effects and suggests a better specification that prevents spurious relations obtained from traditional methods. The stewardship theory does work in Taiwan. Insiders behave as loyal stewards rather than motivated by desire for entrenchment. Our empirical evidence suggests an avenue of future research, specifically to form better strategies for those involved in corporate governance.Practical Implications: We suggest that Taiwanese authorities should lessen ownership obligations, thereby leading to improved corporate governance by increasing the independence of the boards of directors. Emerging markets can learn from the Taiwan experience and then formulate their own regulations. Publicly traded SMEs could offer compensation to insiders such as stock options and performance shares. Asymmetric information problems often experienced by outside stockholders and foreign investors can be alleviated by these signals of insider ownership.

Social ties and foreign market entry: An empirical inquiry

Abstract and Key Results This study attempts to document the influence of social ties on two critical components of foreign market entry (FME) decisions by small and medium-sized enterprises (SMEs): timing of entry and resource commitment. An ethnic Chinese group serves as the best candidate to underlie this research because ethnic Chinese networks often build on personal connections that are based on regional collegiality and kinship. From a sample of 173 Taiwanese SMEs, hierarchical regression results indicate that social ties are significantly related to FME decisions by Taiwanese SMEs in terms of both the timing of entry and resource commitments.

Proliferation of computers among Taiwanese SMEs

To upgrade the technology and thereby the economy, governments worldwide have actively encouraged their Small- and Medium-sized Enterprises (SMEs) to adopt Computer-Based Information Systems (CBIS). SME managers, however, often question the benefit of computers and use their small size as an excuse to avoid using sophisticated computers. Using Taiwan as an example, this study shows empirically the extent of computer success in SMEs. Other than exploring the current and potential uses of CBIS in Taiwan SMEs, this study identified the effects of computer technology on various jobs and organisational performances and explored how these effects were related to the success. Motivators and inhibitors for SME computer adoption are also discussed. The major conclusion is that, while firm size may influence the initial adoption of computers, the costs and effort put into the subsequent implementations are the key factors that determine the success of such use in SMEs.

Performance, Internationalization, and Firm-specific Advantages of SMEs in a Newly-Industrialized Economy

In light of the lack of empirical evidence regarding issues of internationalization as they affect small and medium-sized enterprises (SMEs) from newly-industrialized economies (NIEs), this study aims to expand the applicability of existent internationalization theories. So far, such theories have largely been developed with MNCs from industrialized economies in mind. In examining a 1996 sample of 1,419 Taiwanese SMEs, we found that the relationship between internationalization and performance could be graphically depicted as one of inverted U-shaped curvilinearity, and that a specific level of internationalization corresponded to maximum profitability. Our empirical findings also confirmed a relationship of U-shaped curvilinearity between advertising investment and performance, indicating that a minimum level of investment is required in order for advertising to be effective. Investments in research and development (R&D) were also shown to be positively associated with firm performance. The external validity of our internationalization theories regarding SMEs from NIEs was generally supported, though some modifications allowing for consideration of the particular context of individual SMEs will ultimately become a necessity.

Taiwan's Economic Development: The Role of Small and Medium-Sized Enterprises Beyond the Statistics

Abstract: Taiwanese enterprises are efficiently producing a great deal of goods they had no experience in at all a few years ago. Moreover, in modern economies an increased utilisation of more and more advanced technologies as well as the more intensive use of physical and human capital can be observed. In this regard, the economic development of Taiwan is considered to be a complementary process of capital accumulation, innovation and learning. This economic evo-lution primarily takes place within the corporate sector. However, in reality the real activities of enterprises cannot be separated from their financial counterpart. Therefore, it is assumed that financial general conditions influence the investment and innovation behaviour of com-panies and vice versa. Regarding the above-outlined complementarities, it seems to be appropriate to include the heterogeneity of the company sector into the analysis. Here it has to be taken into considera-tion that small- and medium-sized enterprises (SMEs) contribute to a great deal of entrepre-neurship, innovation and learning that play a decisive role in the process of economic devel-opment. In the spirit of Schumpeter (1912) it is argued that the importance of smaller enter-prises is not adequately disclosed in statistical data. Furthermore, SMEs may have advantages as far as the implementation of new technology in general and new capital-embedded tech-nology in particular is concerned. There is evidence that Taiwanese SMEs are playing a decisive role in technology assimilation as well as in the implementation of further technological advancements because of their en-trepreneurial characteristics. However, most economic contributions consider “entrepreneur-ship” to be exogenous. Therefore, a few characteristics of the Taiwanese economy are pre-sented suggesting why entrepreneurship is so prevalent in Taiwan’s economy. In this respect, the relationship between competitive environment and entrepreneurship seems to be a matter of special importance.