scholarly journals The Role of Trade Credit in Activities of Small and Medium-Sized Enterprises

2020 ◽  
Vol 12 (6) ◽  
pp. 126-135
Author(s):  
E.A. Panova ◽  
Keyword(s):  
Small Businesses ◽  
Price Competition ◽  
Trade Credit ◽  
Small And Medium Enterprises ◽  
Negative Relationship ◽  
Bank Lending ◽  
Cash Flows ◽  
Accounts Payable ◽  
Medium Enterprises ◽  
Return On Sales

Trade credit has a special meaning for small and medium-sized enterprises (SMEs). When they act as a supplier, it allows them to increase sales and cash flows, and helps establish and maintain permanent relationships with clients. Deferred payment provision is a tool for non-price competition, giving a client time to make sure of product quality. Trade credit as a financial source is an important alternative to bank lending. The article is devoted to studying the determinants of accounts payable in Russian industrial SMEs.It is based on the financial indicators calculated using the SMEs’ accounting statements for the period 2010–2018, published by Rosstat. The statistical data analysis has led to the conclusion that accounts payable are the main borrowed financial source for Russian industrial SMEs. The results of the regression analysis demonstrate a direct dependence of the accounts payable amount on sales growth and a reverse dependence of the former on the liquidity both in small and medium enterprises. Small businesses are also characterized by a negative relationship between return on sales and the accounts payable amount.

SMEs’ financial risks in supply chain trade with large companies: The case of Italian automotive component industry

2021 ◽  
Vol 47 (2) ◽  
pp. 126-137
Author(s):  
Marco Errico ◽  
Ivan De Noni ◽  
Claudio Teodori
Keyword(s):  
Supply Chain ◽  
Small Businesses ◽  
Financial Stability ◽  
Small And Medium Enterprises ◽  
Scale Efficiency ◽  
Accounts Payable ◽  
Product And Process Innovation ◽  
Product And Process ◽  
Casting Industry ◽  
Medium Enterprises

Becoming a supplier of large companies is traditionally considered to be positive for small and medium enterprises’ (SMEs) competitiveness. Small businesses can take several advantages by joining supply chain trade with large companies such as scale efficiency and productivity as well as technological and managerial abilities, product and process innovation, market positioning, and reputation. However, not everything is convenient per se. The subcontracting by large companies might provide some financial criticalities that need to be faced and properly managed by SMEs to exploit supply chain benefits without affecting financial stability and losing competitiveness. In this direction, the literature on supply chain finance has recently focused on financial issues related to working capital optimization in terms of accounts payable, receivable, and inventories. Adopting this perspective, the study contributes to a better understanding of SMEs’ financial constraints in supply chains driven by large companies by investigating a sample of small Italian firms, which operate in the metal casting industry and by comparing firms joining and not joining the automotive supply chain.

Family Firms, Enterprise Development and Tacit Knowledge Transformation: Small and Medium Enterprises (SMEs) Innovation in Malaysia

2021 ◽  
pp. 097215092110476
Author(s):  
John Lee Kean Yew
Keyword(s):  
Tacit Knowledge ◽  
Small Businesses ◽  
Global Economy ◽  
Family Firms ◽  
Small And Medium Enterprises ◽  
Enterprise Development ◽  
Generational Change ◽  
Knowledge Transformation ◽  
Family Smes ◽  
Medium Enterprises

In light of the global economy, it is undeniable that small businesses such as family-owned small and medium enterprises (SMEs) affect economic performance globally. They offer a key basis of flexibility and innovation but also face some challenges along the way. Since family SMEs form a large portion in the Malaysian corporate sector, the economy of this country is highly dependent on family firms’ entrepreneurial capacity. During the past decade, although family SMEs innovation is analytically and empirically reviewed in terms of theory building, it still lacks a systematic adoption of thorough and theoretically-based frameworks to gain understanding on the evolution of knowledge transformation surrounding this topic. This study primarily focuses on the development of tacit knowledge through innovation during generational change with specific attention given to three family firms ranging from old, new and declining wealth enterprises. Besides, this article appraises the evolution of SMEs innovation when new generations attempt to transform the tacit knowledge in advancing the products innovation and quality branding in Malaysia.

scholarly journals Customer expectations and service delivery: Are SME’s aware of the service quality standards gap?

2015 ◽  
Vol 12 (4) ◽  
pp. 175-184
Author(s):  
Johannes Arnoldus Wiid ◽  
Michael Colin Cant ◽  
Carly Prinsloo
Keyword(s):  
Service Quality ◽  
Service Delivery ◽  
Competitive Advantage ◽  
Small Businesses ◽  
Quantitative Research ◽  
Small And Medium Enterprises ◽  
Quality Standards ◽  
Customer Expectations ◽  
Medium Enterprises ◽  
Service Standards

Competition among small businesses are high, as small businesses compete for market share which larger business do not engage with. A definite competitive advantage that small and medium enterprises (SMEs) can rely on is service quality (Kasul & Motwani in Anuar & Yusuff 2011:328; Tseng & Wu 2014:77). SMEs do not necessarily understand service standards and how to ensure that the service standard is implemented. The research utilised a quantitative research design whereby the data was collected by means of a 5-point Likert scale survey known as the SERVQUAL model. The results indicate that there are discrepancies between dimensions those owners feel should be adhered to and the extent to which they perceive their businesses to adhere to these dimensions.

Electronic Commerce Opportunities, Challenges and Organizational Issues for Australian SMEs

2011 ◽  
pp. 297-314
Author(s):  
Mohini Singh
Keyword(s):  
Electronic Commerce ◽  
Small Businesses ◽  
Small And Medium Enterprises ◽  
Process Reengineering ◽  
The Internet ◽  
Organizational Issues ◽  
Integrated Environment ◽  
Technological Developments ◽  
Research Findings ◽  
Medium Enterprises

Australian small businesses are increasingly adopting the Internet and the World Wide Web as a medium of doing business to reach new customers and suppliers, cut costs and expand business. They also use it to enhance communication between buyers and suppliers. This chapter discusses the findings of an exploratory study in Australia that identified the objectives, opportunities and challenges of e-commerce experienced by small businesses that were mostly early adopters of the Internet as a medium of trade. E-commerce issues presented in this chapter include research findings, supported by theory from literature. Electronic commerce opportunities, challenges and organizational learning by small and medium enterprises (SMEs) in Australia indicate that small businesses have created value with e-commerce, although benefits are long term and dependent on a plethora of technological, business and management issues that need to be addressed. Due to the fast-evolving nature of e-business and technological developments that are new to many small businesses, challenges such as managing the expanded flow of information, cross-border taxation, authentication, trust and security, as well as the high costs of acquiring the required technologies and skills, are prevalent. Other challenges of e-commerce range from Web site maintenance to business process reengineering for an integrated environment. Research findings also highlight the fact that small businesses need formal methods of evaluating the performance of e-commerce to realize the benefits of investment and to further expand their e-commerce venture.

Climate Governance for Micro, Small, and Medium Enterprises

2020 ◽  
pp. 295-308
Author(s):  
Janis Sarra
Keyword(s):  
Small Businesses ◽  
Small And Medium Enterprises ◽  
Business Owners ◽  
Social Enterprises ◽  
Vulnerable Groups ◽  
The European Union ◽  
Climate Governance ◽  
Net Zero ◽  
Set Up ◽  
Medium Enterprises

Chapter 9 explores why management of climate-related risks can be particularly challenging for micro, small, and medium enterprises (‘MSME’) to address. MSME comprise about 99 per cent of all businesses globally and they often lack the infrastructure and resources to manage deep shifts in their business activities. This chapter explores how one could build financing and infrastructure to support the MSME sector to advance in their transition to net zero. It discusses how the European Union has taken the lead globally on microfinance for vulnerable groups that want to set up or develop their businesses and microenterprises. It is building the institutional capacity of microcredit providers and supporting development of social enterprises by facilitating access to finance. It also examines climate governance for MSME, offering examples of toolkits being developed for micro and small businesses. The chapter concludes with a discussion of contributions that women entrepreneurs and micro-business owners are making in the transition to net zero.

The Post-Adoption Phase of Broadband in Small Businesses

2010 ◽  
Vol 23 (1) ◽  
pp. 35-52 ◽  
Author(s):  
Roya Gholami ◽  
Elizabeth Koh ◽  
John Lim
Keyword(s):  
Small Businesses ◽  
Service Providers ◽  
Small And Medium Enterprises ◽  
Strong Predictor ◽  
Strong Support ◽  
Business Environment ◽  
Influential Factors ◽  
Perceived Usefulness ◽  
Internet Service ◽  
Medium Enterprises

In spite of the increasing significance of broadband, many small and medium enterprises (SMEs) are unaware of or unappreciative of its benefits. This is potentially a problem for governments, Internet Service Providers and other supply side institutions. The current study empirically verifies applicability of an extended IS continuance model controlling for organizational variables based on the Technology-Organization-Environment framework to examine factors influencing broadband post-adoption behavior of SMEs in Singapore. Strong support for the model has been manifested by the results, providing insight into influential factors. Results of the study suggest that perceived usefulness is a strong predictor of users’ continuance intention, followed by satisfaction with broadband usage as a significant but weaker predictor. SMEs in a more competitive business environment and whose key executive possesses greater IT knowledge are more likely to use broadband.

scholarly journals Factors behind trade credit financing of SMEs in Croatia

2020 ◽  
Vol 8 (1) ◽  
pp. 59-76
Author(s):  
Sandra Pepur ◽  
Dujam Kovač ◽  
Marijana Ćurak
Keyword(s):  
Trade Credit ◽  
Small And Medium Enterprises ◽  
Added Value ◽  
Knowledge Generation ◽  
External Financing ◽  
The European Union ◽  
East European ◽  
Funding Sources ◽  
Credit Financing ◽  
Medium Enterprises

Small and medium enterprises (SMEs) contribute to the national economy in terms of employment, added value, knowledge generation, and innovation. However, their potential and in the case of economic downturns even their survival is affected by the difficulties in their access to external financing under acceptable terms and adequate timing and amount. In the case of asymmetric information problems, which make SMEs more sensitive to financial market imperfections, trade credit can be a valuable source of financing. In the European Union, trade credit is among the most relevant external funding sources and it is among the most important alternatives to financial intermediaries’ financing. However, there are substantial differences between the countries with respect to availability and use of trade credit. Therefore, this research examines determining (company-specific and country-specific) factors behind the use of trade credit as a financing source in Croatia. The empirical analysis is based on the data for 1,225 SMEs operating in Croatia in the period from 2008 to 2017 and is done using the panel data methodology. The findings confirm that firms’ characteristics, as well as the characteristics of financial, macroeconomic and legal environment in which the firms operate, influence the use of trade credit in SMEs in Croatia. The paper contributes to relatively scarce empirical evidence on the determinants of trade credit use by SMEs in South-East European countries.

scholarly journals Credit Scoring in SME Asset-Backed Securities: An Italian Case Study

2019 ◽  
Vol 12 (2) ◽  
pp. 89 ◽  
Author(s):  
Andrea Bedin ◽  
Monica Billio ◽  
Michele Costola ◽  
Loriana Pelizzon
Keyword(s):  
Small And Medium Enterprises ◽  
Credit Scoring ◽  
Bank Lending ◽  
Default Probability ◽  
Loss Distribution ◽  
Recovery Rates ◽  
Italian Case ◽  
Level Data ◽  
Asset Backed Securities ◽  
Medium Enterprises

We investigate the default probability, recovery rates and loss distribution of a portfolio of securitised loans granted to Italian small and medium enterprises (SMEs). To this end, we use loan level data information provided by the European DataWarehouse platform and employ a logistic regression to estimate the company default probability. We include loan-level default probabilities and recovery rates to estimate the loss distribution of the underlying assets. We find that bank securitised loans are less risky, compared to the average bank lending to small and medium enterprises.

scholarly journals Can Trade Credit Maintain Sustainable R&D Investment of SMEs? — Evidence from China

2019 ◽  
Vol 11 (3) ◽  
pp. 843 ◽  
Author(s):  
Langzi Chen ◽  
Zhihong Chen ◽  
Jian Li
Keyword(s):  
Developing Countries ◽  
Panel Data ◽  
Propensity Score ◽  
Information Asymmetry ◽  
Financial Constraints ◽  
Trade Credit ◽  
Small And Medium Enterprises ◽  
Medium Enterprises ◽  
D Investment

Due to the long-term nature and information asymmetry, SMEs (Small and Medium Enterprises) experience serious financial constraints that affect their R&D investments. This article examines the effect of trade credit maintaining sustainable R&D investment of SMEs under financial constraints. Using the panel data of Chinese SMEs from 2002–2014, it was found that although the R&D investments of SMEs are restricted by financial constraints, trade credit can maintain the sustainability of enterprises’ R&D investment. Private enterprises are more reliant on trade credit, which can be intensified during periods of monetary tightening. Considering the counterfactual framework and the endogenous problems, the empirical results were also robust when using propensity score matching. To summarize, this article develops a new explanation for maintaining sustainable R&D investment of SMEs under financial constraints in developing countries.

scholarly journals Microbiological Quality and Contamination Level of Water Sources in Isiolo County in Kenya

2018 ◽  
Vol 2018 ◽  
pp. 1-10 ◽  
Author(s):  
Abok Elisha Onyango ◽  
Michael Wandayi Okoth ◽  
Catherine Nkirote Kunyanga ◽  
Bernard Ochieng’ Aliwa
Keyword(s):  
Staphylococcus Aureus ◽  
Surface Water ◽  
Ground Water ◽  
Food Processing ◽  
Potable Water ◽  
Small And Medium Enterprises ◽  
Negative Relationship ◽  
Water Sources ◽  
Medium Enterprises ◽  
Isiolo County

Water security and safety is of vital concern in arid and semiarid regions of Kenya. Potable water accessibility and supply is limited due to fluctuating climatic conditions and environmental pollution that lower the wholesomeness of most water sources. The aim of this study was to establish the suitability of these water sources for drinking and use in industrial food processing by the small and medium enterprises (SME’s). The aim of this study was to establish suitability of these water sources for drinking and use in industrial food processing by the small and medium enterprises (SME’s). A total of 60 surface and ground water sources samples were purposively collected aseptically from the four administrative units (Ngare Mara, LMD, Leparua, and Wabera) of Isiolo County. ISO 16649-3, 688-2, 7937, 9308-1, and 18744 were used for enumeration of E.coli, Staphylococcus aureus, Clostridium pafringens, Coliforms, and cysts. Highest mean Clostridium pafringens counts in ground and surface water were 1452 Cfu/ml and 3421 Cfu/ml, respectively. Mean Staphylococcus aureus counts were 740 Cfu/ml and 1333 Cfu/ml in surface water and ground water, respectively. Escherichia coli and Coliforms contamination accounted for 29.88 % and 88.2 %, respectively. Microbial counts in the water sources differed significantly (p≤0.05). Total coliforms had a significant negative relationship (r = -0.76) with residual chlorine. Ground and surface water sources were highly contaminated with microorganism to levels regarded as unsafe by the Kenyan and WHO standards for potable water. Point-of-use water disinfection is thus necessary.

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