Korean SMEs in the Wake of the Financial Crisis: Strategies, Constraints and Performance in a Global Economy

South Korea was one of the most adversely affected economies from the Asian financial and economic crisis of 1997. This paper focuses upon the contribution that the SME sector in this country is making towards the recovery of the economy, and, in particular, focuses upon their contribution in a knowledge-based society. In this paper we present an overview of the contribution and significance of SMEs to the economy. We follow this with a discussion of the impact of the Asian financial crisis on the SME sector. Next, we look at the involvement of SMEs in the global economy, focusing on the globalisation readiness of Korea's SMEs. Based on a recent study of nearly 1,800 SMEs in Korea, we look at the existing impediments in globalising operations, along with areas government should support in assisting SMEs to become globalisation ready. Finally, we present the prospects for Korea's SMEs in the 21st century and the emphasis on venture enterprises as a way to promote the technological competitiveness of SMEs.South Korea, Asian financial crisis, SME sector, economic recovery

SME adaptive capacity in response to environmental requirements: understanding it as a complex adaptive system

The pressure on Small and Medium sized Enterprises (SMEs) in emerging economies to adapt their production and management to meet global industrial environmental standards is enormous. These pressures come from both the international supply chain and the government’s environmental legislation. Yet, an effective way to help SMEs adapt to these challenges in emerging economies is not reported. Little is available about environmental adaptation process at SMEs in developing countries. This paper attempts to address this gap in knowledge. It uses the theory of Complex Adaptive Systems to understand the complex nature of environmental adaptation at SMEs, and more importantly, it outlines an agenda for further research to identify key success factors for the environmental adaptation process at SMEs based on the key components of such a system

Imprinting effects, managerial knowledge and the internationalisation of small and medium size enterprises from emerging economies

This thesis examines the internationalisation behaviour of small and medium size enterprises (SMEs) from emerging economies. In summary, the thesis comprises of five chapters: First, Chapter 1 provides a brief introduction to the full thesis. Chapter 2 systematically reviews 55 selected articles, first examining the underlying reasons why SMEs in emerging markets internationalise, followed by their corresponding barriers. Concurrently, by examining theories that have been used to study the internationalisation of SMEs from emerging markets, findings from the literature are analysed. Findings suggest that through collaborations, in the form of networks, these SMEs have been able to indulge their resources, and in turn benefit from superior impacts on their overall performance. The management of information, knowledge and collaboration is therefore re-emphasised in this review, to ensure the success of emerging markets SMEs’ internationalisation. The analysis on this review provides valuable input on research suggestions and directions for future work in this area. Next, Chapter 3 discusses the issue of whether a firm’s ‘home’ environment influences SMEs’ scope of internationalisation. This chapter uses institutional and organisational imprinting theories to argue that emerging market SMEs born during the market liberalisation period are likely to have a greater scope of internationalisation than those founded in other periods. It also argues that this effect is moderated by the SMEs’ size, its dispersed ownership structure, and its geographical diversification. Hypotheses are tested using a sample of 177 Indian SMEs collected using secondary data from the Bureau Van Dijk’s ORBIS database. Results support the hypothesis on the relationship between home-market liberalisation imprinting and SMEs’ scope of internationalisation. Findings also support that the moderating effect of SMEs’ size, geographical diversification and ownership dispersion reduces the imprinting effect of the above relationship. Chapter 4 is about the relationship between SMEs’ managerial knowledge (i.e., foreign institutional knowledge, foreign business knowledge, foreign supply chain knowledge, and internationalisation knowledge) and their financial and non-financial performance. It examines the above link based on data collected from questionnaire survey responses of 295 SMEs from India involved in internationalisation. Research findings suggest that (1) SMEs’ managerial knowledge has a direct impact on their financial and non-financial performance, and that (2) SMEs financial performance plays a mediating role between their managerial knowledge and their non-financial performance. Hypotheses are based on the knowledge-based view of internationalisation, and the chapter provides deeper insights into the role of managerial knowledge on emerging-market SMEs’ internationalisation performance. Finally, Chapter 5 includes a discussion and conclusions of research findings from the PhD study. First, it describes how the research questions mentioned in the introduction chapter were addressed. Second, some suggestions and recommendations are given for continuation of the work presented in this thesis

Investigating the technology catching-up trajectory of Chinese Hi-Tech SMEs: an integrated framework from industry-, resource-, and institution-based view

Accepted for WLICSMB 2010Purpose This paper intends to review the literatures on the technology catching-up trajectory of latecomers in order to understand the innovation strategies of Chinese Hi-Tech SMEs (Gu & Tse, 2010; Xie & White, 2006; Chen & Qu, 2003; Lee & Lim, 2001; Kim, 1997). It also tries to construct an integrated framework to investigate their innovation strategies and the impact on organizational performance from the Industry-, Resource-, and Institution-based view (Peng, Wang, & Jiang, 2008). Design/methodology/approach The authors have reviewed papers published in the leading journals in the R&D field and proposed an integrated conceptual framework of innovation strategies of Chinese Hi-Tech firms based on Peng, Wang and Jiang (2008)’s institution-based view framework to examine the innovation strategy from Industry-, firm-specific Resource-based, and Institution-based View Originality/Value This paper pays attention to the institution factors in shaping Chinese SMEs to develop innovative capabilities. Chinese firms have comparative advantages, such as better comprehending Chinese local market, better understanding of local business environment comparing to MNEs. Our paper argues that by developing effective innovation strategies and improving innovative capabilities, Chinese SMEs will be able to survive from the severe competitions from state-owned enterprises and foreign firms in China

Building knowledge-based economies: research projects in knowledge management and knowledge transfer

Small and medium-sized enterprises (SMEs) are viewed as the growth engines of the new knowledgebased economy. This new economic growth model differs from the old in significant ways, many of which are related to the knowledge base that will be required by the SMEs. Based upon prior research a set of factors important to the success of SMEs in a knowledge-based economy is described. Focusing on those factors related to the knowledge base, the paper concludes with a set of research questions and brief descriptions of three research projects on knowledge management and knowledge transfer

Entrepreneurship in transition countries: a review

The aim of this paper is to provide an overview of the key issues surrounding entrepreneurship development in transition countries focusing on six main themes. Though it can be argued that the transition countries started from more or less the same point when they embarked on their transitional path, in this paper, we indicate a number of the differences in initial conditions which further influenced SME development. By surveying the existing literature on SME development, this paper illustrates that as the transition process progresses, entrepreneurship development in transition countries is a story of increasing divergence. The transitional context provides unique opportunities for entrepreneurship activities to develop. However, at the same time this environment presents unique challenges for entrepreneurial development especially knowledge-based entrepreneurship as the free-market system matures within a context with low levels of SMEs and inherited negative views towards entrepreneurship

Internationalisation of SMEs and firm performance: evidences from Bangladesh

One of the key objectives of this paper is to identify the impacts of internationalisation of SMEs on firm performance. Although there have been a number of research that examined the relationship between SME internationalisation and firm performance, research from the context of smaller developing economies are really scant. This is against the fact that SMEs are main vehicle for growth in those economies and extensive research on various dimensions of SMEs including its impact on firm performance may help to better understand the operational aspects of SMEs in those economies. Using primary data and structural equation modelling to analyse those data, the paper has found that internationalisation of SMEs has significant impact on both financial and non-financial performance of SMEs in Bangladesh. More specifically, the paper has found that internationalisation impacts in two dimensions (Financial impacts and non-financial impacts) with 8 indicators (higher sales, higher profit, assets maximization, market expansion, competitive advantage, better reputation, better customer service and added knowledge)

The political economy of convergence: The case of IFRS for SMEs.

This paper examines the processes used by the International Accounting Standards Board (IASB), in achieving widespread convergence to the International Financial Reporting Standards (IFRS) by developing economies. Global convergence of financial reporting standards is a politically motivated agenda. The movement towards standardisation of financial reporting has been described in various ways including, adoption, application, transitioning, implementation (Brown and Tarca 2012), harmonization (Strouhal 2012) and convergence (Stevenson 2012; Street 2012; Pawsey, Brown and Chatterjee 2013). In this paper the term convergence encapsulates the efforts by developing countries to revise their national standards to be the same as IFRSs. The IFRS for Small and Medium sized Enterprises (IFRS for SMEs) was partly to facilitate developing economies’ commitment to convergence (UNCTAD 2009). Introducing a two-tier system implied by a special IFRS for SMEs is the first synthesis of the international convergence process (Rodrigues and Craig 2007). Given that small and medium sized enterprises (SMEs) are increasingly important in the global economy, it is equally important that there is a clear set of principles underpinning financial reporting for these entities. However, there is limited discussion on the development of the IFRS for SMEs in the academic literature. Only very recently have academics from developing countries engaged in discussions on IFRS for SME adoption (Phang and Mahzan 2013). Therefore, this paper provides an understanding of the activities that led to the promulgation of the standard and the efforts of the World Bank, the United Nations and other international organisations to bring this issue onto IASB’s agenda since early 2000. This paper is timely as the IASB has commenced its comprehensive review of the IFRS for SMEs (IASB 2012)

From export entry to de-internationalisation through entrepreneurial attributes

Purpose: This study examines export behaviour from a broad perspective considering the influence of entrepreneurial attributes on export entry, export sustainability and de-internationalisation in Romanian small and medium-sized enterprises (SMEs). Design/methodology/approach: Based on theoretical underpinnings from the Resource-Based View (RBV) of the firm and the Institutional Economics (IE) framework, the proposed hypotheses are tested with a rich survey dataset of 319 Romanian SMEs. The data are analysed by means of a multinomial logit regression. Findings: The study reveals that exporting is not a single event and that variables commonly used to study export propensity linked to the entrepreneurial attributes have a differential influence over the export decisions. More concretely, export entry is positively impacted by the presence of management studies and an entrepreneurial team while sustainment in the international arena is strongly and positively influenced by decision-makers’ prior labour experience. De-internationalisation is explained by the entrepreneurs’ fear of business failure. The conclusions of this study point towards a holistic view of export policy-making revealing relevant implications for SMEs’ internationalisation. Originality/value: This study enriches the international business literature by simultaneously examining different export decisions, namely export initiation, sustainability and de-internationalisation, at the SMEs’ level in a Central and Eastern European (CEE) emerging market. The paper also highlights the dynamic character of entrepreneurial resources and suggests that at distinct stages in the international development of a SME, different entrepreneurial attributes may play a significant role.Peer ReviewedPostprint (author’s final draft