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Capital budgeting and investment.

Undergraduate level.

Ms Kamariza, a young Rwandan citizen, established the non-profit organization “Solid Africa” in December 2010. She created the organization together with young professionals, friends and family members with the aim of supporting the most socioeconomically vulnerable individuals’ needs for medical, hygiene, emotional and food services. Ms Kamariza became the Chief Executive Officer and her sister the Chief Financial Officer; together with the help of other additional volunteer staff they carry out this important work. The founders have done an excellent job of maintaining the organization for five years, feeding an average of 1,000 patients every day, and gaining widespread favorable reputation. However, the organization has heavily relied on donations through fundraising events and member contributions (currently 148 members). In 2011, the founders decided that the organization should become self-reliant by planning to build an industrial kitchen, which would cater to different companies (new customers) while also providing free meals to socioeconomically vulnerable patients. This kitchen is foreseen to continuously generate revenue and profits.

The case is aimed at undergraduate students, pursuing their bachelor, management or social science studies. The teaching is mainly suited for students focused in the fields of social entrepreneurship, finance and social innovation. Students should be able to demonstrate the challenges faced by social entrepreneurs in their quest for capital investment; they should understand how management biases can affect business decision-making; they should also demonstrate the importance of capital budgeting techniques in a social enterprise to achieve better investment decision-making.

Teaching notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.

CSS 3: Entrepreneurship.

Global value chains (GVCs) have become increasingly influential in determining the patterns of international trade and foreign direct investment (FDI) and in providing growth opportunities in Asia and the Pacific while small- and medium-sized enterprises (SMEs) have been an engine of economic development. The purpose of this paper is to provide effective development strategies and relevant policy approaches to facilitate dynamic insertion of SMEs into GVCs.

This paper was developed based on various Economic and Social Commission for Asia and the Pacific works in the fields of the development of SMEs and GVCs in Asia and the Pacific. Sectoral case studies on agribusiness, garment/apparel, automotive and electronics illustrate SMEs’ effective integration into GVCs.

SMEs face multiple obstacles and challenges which may limit the benefits derived from the development of GVCs in Asia and the Pacific. Policymakers are suggested to design and implement appropriate strategies and polices in order to facilitate the development of SMEs under the ongoing globalization.

This paper is mainly based on existing policy papers which were developed by the United Nations Secretariat, its specialized agencies and others. Further empirical and policy studies are expected to be conducted in order to deepen the understanding of the present topics and to come up with practical policy options.

Policymakers are suggested to consider strategies and policy options recommended by this paper for their works on SME development and trade and investment promotion.

This is the first policy paper which proposes a comprehensive framework for SMEs’ effective participation in GVCs, specifically suggesting seven approaches, namely, SME development; trade policy; behind-the-border and cross-border trade facilitation; regional integration frameworks; FDI promotion; SME clusters; and national innovation system.

The purpose of this paper is to propose policy suggestions for the financing of small and medium enterprises (SMEs) in the Asia-Pacific region. Recent literature suggests that lack of capital is the most severe constraint for SME survival and growth. Enabling policymakers to assist SMEs in their search for financing will boost economic growth.

The methodology includes both quantitative and qualitative components. Current World Bank data on the strength of various financial institutions in the countries of interest is analyzed to discover areas of improvement. Additionally, 32 experts from East and South Asia were interviewed several times to determine areas of concern in financing SMEs. Their responses and the evidence from the World Bank data form the basis of the policy prescriptions in the paper.

Financing is a critical constraint for SMEs for several reasons. Many SME owners do not manage working capital effectively, information asymmetry between banks and SMEs retards the loan application and approval process, and underdeveloped equity markets deny SMEs future growth opportunities. Policymakers can ameliorate conditions by serving as facilitators and communicators; governments should not provide financing directly if possible.

It is hoped and expected that the policy prescriptions offered herein will enhance the growth and survival prospects of SMES, thereby creating more employment, innovation, and economic growth.

The main contribution of this work is its scope. While the financing of SMEs is a familiar topic, the review of issues and policies in East and South Asia, and their distillation into practical advice for officialdom, is what makes this manuscript unique.