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Article
Publication date: 7 March 2016

Antonia Madrid-Guijarro, Domingo García-Pérez-de-Lema and Howard Van Auken

The purpose of this paper is to provide a better understanding of the determinants of small and medium-sized enterprises (SME) financing constraints and their impacts on…

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Abstract

Purpose

The purpose of this paper is to provide a better understanding of the determinants of small and medium-sized enterprises (SME) financing constraints and their impacts on investments in innovation. To explicate these factors, the authors use a general definition of innovation, distinguishing between product and process innovations, and highlight the role played by banking relationships.

Design/methodology/approach

On the basis of a literature review covering works specializing in innovation, financing constraints, and SME characteristics, a quantitative study is carried out in Spain, using a sample composed by 267 Spanish SMEs. Information was gathered by applying surveys addressed to the firm managers.

Findings

The findings reveal that financing constraints hinder innovation among Spanish SMEs functioning in hostile environments, though long-term banking relationships can moderate these financing constraints. The longer the duration of a firm’s banking relationship, the fewer financing constraints it faces, because the relationship significantly reduces information asymmetry.

Practical implications

To reduce financing constraints on their innovation, SMEs should establish long relationships and low debt concentration with their main bank. The more banks a firm works with, the greater its financing constraints. The findings have managerial implications, not just for firms but also for government policymakers and providers of consulting services.

Originality/value

This paper provides an in-depth analysis of the factors that affect innovation, along with insights into which financing constraints limit innovation during a severe recession.

Propósito

Este trabajo profundiza en los determinantes de las restricciones financieras en las PYMEs y su impacto en la inversion en innovación durante una época de crisis económica. Para explicar estos factores, se ha utilizado una definición general de innovación distinguiendo las innovaciones en productos y procesos, y considerando el papel desempeñado por las relaciones bancarias.

Diseño/metodología/enfoque

Sobre la base de la revisión de la literature donde se encuentran trabajos centrados en innovación, restricciones financieras y características en la PYME, llevamos a cabo un análisis cuantitativo en España usando una muestra de 267 empresas españolas. La información se recopila a través de una encuesta al gerente de la empresa.

Resultados

Los resultados muestran que las restricciones financieras perjudican la innovación en las PYMEs que se encuentran en entornos hostiles, aunque es destacable que las relaciones bancarias de larga duración pueden atenuar estos efectos. Cuanto más sólida, en términos de tiempo, sea la relación con la entidad financiera principal, menores restricciones financieras tendrá la empresa puesto que esta relación disminuye significativamente los problemas de información asimétrica entre los agentes.

Implicaciones prácticas

Para reducir los efectos perversos de las restricciones financieras sobre la innovación en la PYME, la empresa debería construir relaciones bancarias de larga duración y mantener una baja concentración de las deudas con el banco principal. Por otra parte, cuanto mayor es el número de bancos con el que la empresa trabaja mayores son las restricciones financieras a las que se enfrenta cuando se plantea inversions en innovación. Estos resultados tienen importantes implicaciones tanto para los empresarios, como para los agentes políticos dinamizadores de la economía y los consultores de empresas.

Originalidad/valor

Este trabajo realiza un análisis en profundidad de los factores que afectan a la innovación en la PYME, junto con ideas sobre cómo las restricciones financieras están afectando a la innovación durante una crisis económica severa.

Details

Academia Revista Latinoamericana de Administración, vol. 29 no. 1
Type: Research Article
ISSN: 1012-8255

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Article
Publication date: 29 June 2010

Pol Herrmann, Jeffrey Kaufmann and Howard van Auken

The purpose of this paper is to study the influence of corporate governance and internationalization on research and development (R&D) investments in US‐based international firms…

884

Abstract

Purpose

The purpose of this paper is to study the influence of corporate governance and internationalization on research and development (R&D) investments in US‐based international firms.

Design/methodology/approach

The paper draws from agency theory to examine the influence of corporate governance mechanisms and internationalization on R&D intensity by the use of longitudinal data from 1991, 1994, 1997, and 2000 in a sample of large, manufacturing US firms with international operations.

Findings

The paper finds that CEO total compensation is positively associated with R&D intensity, whereas equity voting power, insider ownership, and duality are negatively associated.

Research limitations/implications

The findings regarding insider ownership confirms agency theory, in that agents will tend to make decisions to maximize their own utility and thus would be expected to reject R&D investments. In terms of duality, the augmented discretion that CEOs assume when they also hold the chairmanship position may reduce the monitoring function of the board, making it easier for the CEO to avoid engaging in short‐term risky ventures. Additionally, CEOs are likely to demand larger salaries when faced with risky decisions because their employment stability and reputation are at stake.

Practical implications

Boards concerned with firm innovation should focus their decisions on CEO salaries on total compensation rather than on short‐term performance. Total compensation may motivate CEOs to commit to R&D investments that lead to innovations despite the risk of failure and detrimental impact on short‐term profits. Firms should be cautious in granting ownership to board members. Although ownership often stimulates commitment to strategic decisions, over‐involvement of board insiders may result in risk aversion, leading to decreases in R&D efforts.

Originality/value

This paper extends the literature by integrating agency theory and organization learning in a comprehensive framework, showing that governance and internationalization play a significant role in firm R&D intensity.

Details

International Journal of Commerce and Management, vol. 20 no. 2
Type: Research Article
ISSN: 1056-9219

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Available. Content available
Article
Publication date: 9 March 2012

Mark J. Ahn

284

Abstract

Details

International Journal of Commerce and Management, vol. 22 no. 1
Type: Research Article
ISSN: 1056-9219

Keywords

Available. Content available
Article
Publication date: 1 January 2006

James Werbel

268

Abstract

Details

Journal of Managerial Psychology, vol. 21 no. 1
Type: Research Article
ISSN: 0268-3946

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Article
Publication date: 10 March 2022

Christian Espinosa-Méndez and Alejandra Inostroza Correa

The purpose of this paper is to investigate how chief executive officer (CEO) gender relates to financial performance in small and medium enterprises (SMEs) in a Latin American…

463

Abstract

Purpose

The purpose of this paper is to investigate how chief executive officer (CEO) gender relates to financial performance in small and medium enterprises (SMEs) in a Latin American emerging economy like Chile.

Design/methodology/approach

The authors apply a questionnaire on a sample of 188 SMEs in Chile in 2017. The authors apply multiple ordinary least squares regression models to test the effects of CEO gender on SME performance using the industry location indicators to account for unobserved heterogeneity in the sample. As a robustness test the authors use hierarchical regression analysis.

Findings

The authors find a positive relationship between the presence of female CEOs and firm performance. Then, when probing whether the sociodemographic characteristics of the CEO are related to firm performance or moderate the gender-performance relationship, the authors do not find statistically significant evidence that these types of characteristics affect the performance of SMEs.

Originality/value

To the best of the authors’ knowledge, the present study is the first to investigate the relationship between CEO gender and financial performance of SMEs in an emerging Latin American economy. The study contributes to the general literature by reporting comparable evidence with studies in developed economies.

Details

Gender in Management: An International Journal , vol. 37 no. 5
Type: Research Article
ISSN: 1754-2413

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Article
Publication date: 28 December 2023

Andres Felipe Cortes and Pol Herrmann

Building on the premise that the CEO position is complex and challenging, and drawing on research on upper echelons, executive job demands and emotions, this study explores how…

380

Abstract

Purpose

Building on the premise that the CEO position is complex and challenging, and drawing on research on upper echelons, executive job demands and emotions, this study explores how chief executive officers' (CEOs’) perceptions of job-associated difficulty can influence negative emotional displays and subsequently hamper firm innovation. Additionally, the authors explore how CEOs with higher levels of emotional intelligence might mitigate the influence of job demands on negative emotional displays.

Design/methodology/approach

The authors conducted a two-stage survey with a sample of CEOs and top management team members from 120 small- and medium-sized firms operating in multiple industries in Colombia.

Findings

The authors found that CEOs' perceptions of job demands are positively associated with CEOs' displays of negative emotions, which in turn are negatively associated with firm innovation. The authors also find that two dimensions of emotional intelligence (self-appraisal and regulation) weaken the influence of CEO perceptions of job demands on CEO negative emotional displays.

Originality/value

The authors advance a novel perspective on the challenges of leading organizations by explaining the emotional implications of the CEO position, underscoring their repercussions for important organizational outcomes such as innovation and suggesting potential ways CEOs can handle the emotional consequences of their position.

Details

Management Decision, vol. 62 no. 1
Type: Research Article
ISSN: 0025-1747

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Available. Content available
Article
Publication date: 14 September 2015

Shawn Carraher

387

Abstract

Details

Journal of Management History, vol. 21 no. 4
Type: Research Article
ISSN: 1751-1348

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Details

Seminal Ideas for the Next Twenty-Five Years of Advances
Type: Book
ISBN: 978-1-78973-262-7

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Article
Publication date: 22 April 1991

Phyllis G. Holland, Arthur R. DeThomas and Howard N. Ray

Microcomputer technology and spreadsheet software are widely available to small businesses and offer the small firm owner a means of planning more effectively and efficiently. A…

108

Abstract

Microcomputer technology and spreadsheet software are widely available to small businesses and offer the small firm owner a means of planning more effectively and efficiently. A survey of the planning practices of electronic spreadsheet owners reveals a gap between ownership of the planning tools and their effective use. The study shows the importance of preplanning the purchase of software, of motivation to plan, and of tailoring planning systems to the goal orientation of the firm in order to effectively use the electronic spreadsheet as a small business planning tool.

Details

American Journal of Business, vol. 6 no. 1
Type: Research Article
ISSN: 1935-519X

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Book part
Publication date: 14 September 2007

Frances Fabian and Hermann Achidi Ndofor

Past entrepreneurship research has emphasized the importance of the context of the entrepreneur (e.g., personality) along with environmental characteristics as predictors of the…

Abstract

Past entrepreneurship research has emphasized the importance of the context of the entrepreneur (e.g., personality) along with environmental characteristics as predictors of the success of new ventures. Additional literature has expanded our understanding of how implementation processes such as business planning, social networking, and external financing may be key to new venture performance. This paper offers 12 propositions that link these two literatures. Specifically, we argue that the personality and goals of the entrepreneur, as well as the dynamism and munificence of the environment, may affect how well implementation processes enhance new venture performance.

Details

Entrepreneurial Strategic Processes
Type: Book
ISBN: 978-0-7623-1429-4

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