Analysing drivers of efficiency in the leather industry: a two-stage double bootstrap DEA approach

PurposeThe Indian leather industry contributes to economic growth at a significant environmental cost. Due to the rising global demand for sustainable leather products, promoting efficient input utilisation has become vital. This study measures input efficiency and its determinants for leather industry in order for it to improve its future performance.Design/methodology/approachIn the first stage, bootstrap data envelopment analysis (DEA) approach is used for measuring efficiency and analysing firms' differences based on their geographical location, organisational structures, urban-rural location and sub-industrial groups. A second stage regression examines efficiency determinants using size, age, skill and capital-labour intensity as the explanatory variables.FindingsEfficiency result shows a significant potential of minimising inputs by 47% provided the firms adopt best practices. West Bengal firms, urban located firms, individual and proprietorship owned firms and leather consumer goods firms are found to be relatively efficient to their counterparts. Size, skilled managerial staff and labour-intensive firms positively affect efficiency.Practical implicationsConstruction of well-connected roads for accessing urban retail markets and provision of reliable electricity would improve efficiency of rural firms. Small-scale enterprises have a larger share in Indian leather industry; therefore, policy should focus on enhancing the firms' scale and investing in training facilities to skill employed labour for ensuring optimal use of inputs.Originality/valuePrevious studies on the leather industry have used the conventional DEA efficiency measurement approach. This study uses DEA bootstrapping model for robust efficiency estimates and provides consistent inferences about the determinants.

Bringing innovation back in–strategies and driving forces behind entrepreneurial responses in small-scale rural industries in Sweden

PurposeThe paper contributes to the debate about local food and conceptualization of rural entrepreneurship by analysing the performance of small-scale dairies departing from their relation to innovations, innovative activities and risk.Design/methodology/approachThe authors use phenomenography to identify representative categories, and to draw conclusions about how these are consistent or different from dominant definitions of rural entrepreneurship and self-employment. The authors conducted semi-structured interviews, participatory workshops and compiled a database of all small-scale dairies established between 1968 and 2020.FindingsA focus on innovations contributes to differentiate between rural entrepreneurship and self-employment and how these interact in the process of economic growth. Innovations are seldom disruptive. Instead, innovative behaviour is strongly related to business models and to imitation. Social capital and collective action play a key role for the innovative capacity of small businesses, especially to realize disruptive innovations, such as the establishment of a new market.Research limitations/implicationsThe innovative capacity of rural businesses can be understood through their ability to break patterns, alter institutions and turn embededdness into assets. Rural entrepreneurship and self-employment are intertwined in the economic growth process.Practical implicationsInnovative behaviour is a significant aspect for firm survival over time, and it is also strongly related to new business models. Most rural firms can be characterized as self-employment, the latter are essential because they provide rural livelihoods and help bring maturity to newly established markets.Social implicationsThe right type of support, e.g. adopting enabling industrial regulations and granting access to constructive experiences of others, contributes to the innovative behaviour of small-scale rural firms.Originality/valueThis study differentiates rural entrepreneurship from rural self-employment by analysing the role of innovation. The authors show how innovations and innovative behaviour work their way through the process of economic growth and how innovation can break patterns by turning rural embeddedness into assets; and how innovative behaviour related to self-employments contributes to the creation of value and interacts with entrepreneurship in the process of economic growth.

Digital Innovation in Small Firms of Rural Canada

Unless there are systemic investments in digitization of rural economies, rural entrepreneurs will suffer, and digital innovation activity will remain modest. Nonetheless, the authors do find examples of digital innovation practiced by firms in rural economies. These firms successfully fostered growth and revitalization due to co-evolution of business and digital strategies, investments in technology, and digitization of business processes. In this chapter, using three such small, rural firms in Ontario, Canada, the co-evolution of business and digital technology strategies and related performance impacts are described by using the lens of “digital ecodynamics,” which is defined as the holistic confluence among environmental factors, capabilities, and digital technologies—and their fused dynamic interactions unfolding as an ecosystem. The focus on the development of resources and capabilities that are critical for the survival of the firms and the local ecosystem centered around a business incubator that supports and sustains them.

Os Processos de Inovações e o Desempenho Financeiro das Pequenas Propriedades Rurais: uma Avaliação Empírica em Mato Grosso do Sul

ResumoA inovação em propriedades rurais se torna um fator importante, principalmente, nas questões relacionadas à produção com maior eficiência e o da concorrência. Este artigo analisou, empiricamente, qual a relação entre uso de inovações incrementais e radicais e o desempenho financeiro nas pequenas propriedades rurais em Mato Grosso do Sul. A pesquisa foi realizada por meio de uma abordagem quantitativa, de natureza básica, coletando informações de 55 pequenas propriedades rurais, com área de até 100 hectares, utilizando um questionário estruturado e entrevistas face a face, durante os meses de abril e maio de 2018. Os dados foram tratados e analisados quanto a sua consistência interna empregando o indicador do alfa de Cronbach, obtendo-se as variáveis latentes de desempenho financeiro (DF), inovação radical (IR) e inovação incremental (II). As diferenças significativas a p<0,05 entre as variáveis latentes em relação ao tipo de administração da pequena propriedade rural, familiar ou profissional, foi utilizada a técnica estatística de estimação de amostras independentes pelo teste t. Os resultados apontaram que, para esta amostra, existem diferenças significativas para a percepção do DF e para a II. As propriedades rurais com administração profissional são mais críticas com relação do DF e utilizam mais da II, característica de melhoria contínua na produção e na operação rural. O destaque do artigo foi de providenciar dados empíricos deste tipo de empresa rural, muito similar à agricultura familiar, colaborando com o conhecimento acadêmico e com a possibilidade de sugerir estratégias de extensão aos agentes públicos de desenvolvimento rural. Palavras-chave: Empresas Rurais. Inovação. Gestão Profissional. AbstractInnovation in rural properties becomes an important factor, especially in issues related to more efficient production and competition. This article analyzes empirically the relation between use of incremental innovation and radical and financial performance in small farms in Mato Grosso do Sul. The research was carried out using a basic nature quantitative approach, collecting information from 55 small rural properties, with an area of up to 100 hectares, using a structured questionnaire and face-to-face interviews, during the months of April and May of 2018. The data were treated and analyzed for internal consistency using the Cronbach's alpha indicator, obtaining the latent variables of financial performance (DF), radical innovation (IR) and incremental innovation (II). The significant differences at p <0.05 between the latent variables in relation to the type of management of the small farms, family or professional, the statistical estimation technique of independent samples was used by the t test. The results showed that, for this sample, there are significant differences for the DF perception and for II. Farms with professional management are more critical in relation to DF and use more of II, a characteristic of continuous improvement in production and operation. The article highlight was to provide empirical data for this type of rural firms, very similar to family farming, collaborating with academic knowledge and the possibility of suggesting extension strategies to public rural development agents. Keywords: Rural Firms. Innovation. Professional Management.

The Urban-Rural Telecommunications Divide Endures: A Historical Perspective from Landline Telephony

The popular press and academic literature show that the urban-rural divide persists with regard to recent telecommunications technologies, such as broadband and wireless service. As was the case for landline telephony, this lack of deployment in rural areas is rooted in cost differentials and lack of agglomeration economies. This paper provides historical insights on this divide, using 1990 data on voice communications in a region located in the northeastern United States, and investigates (1) whether there are differences in telecommunications usage between urban and rural firms, (2) whether advanced telecommunications technologies provide an economic advantage to rural firms, and (3) what are the factors encouraging and inhibiting the provision of these technologies in rural areas. Exchange-level data on telephone usage by eleven economic sectors are first linked, through regression analysis, to data characterizing the exchange employment, rural character, availability of advanced technology, and geography. Rural activities turn out to use telecommunications less than urban ones in the absence of advanced technologies, but the latter tend to significantly increase usage. Next, a logit model is estimated to link the deployment of one advanced technology—digital switching—to market and geographical variables. The results tend to support the idea that an advanced telecommunications infrastructure in rural areas may be important to attract activities that make heavy use of telecommunications, but also that its provision is inhibited by the traditional rural barriers of distance and low population density.

Effect of location on access to finance: international evidence on the moderating role of employee training

PurposeThe paper answers the following questions: (1) Do firms located in rural areas experience greater problems in accessing financial services? (2) If this is the case, what can these firms do to improve their access to finance?Design/methodology/approachThis paper uses the pooled logistic regression and the data collected by the World Bank's Enterprise Surveys during the period between 2008 and 2018 to answer the aforementioned questions.FindingsThe results of this paper show that firms headquartered in rural (urban) areas experience greater (lower) problems in accessing finance than other firms. This paper attributes these findings to higher (lower) levels of information asymmetry and lower (higher) levels of density of banking operations in rural (urban) areas. The results of this paper also show that firms headquartered in rural areas can improve their access to finance by increasing the skill levels of their employees.Originality/valueThis paper highlights the actions that rural firms can undertake to overcome the adverse impact of their geographic location.

Exploring innovation creation across rural and urban firms

Purpose The innovation creation literature primarily focuses on urban firms/regions or relies heavily on these data; less studied are rural firms and areas in this regard. The purpose of this paper is to employ a new firm-level data set, national in scale, and analyze characteristics that potentially influence innovation creation across rural and urban firms. Design/methodology/approach The authors use the 2014 National Survey of Business Competitiveness (NSBC) covering multiple firm-level variables related to innovation creation combined with secondary data reflecting the regional business and innovative environments where these firms operate. The number of patent applications filed by these firms measures their innovation creation, and the paper employs a negative binomial regression estimation for analysis. Findings After controlling for industry, county and state factors, rural and urban firms differ in their innovation creation characteristics and behaviors, suggesting that urban firms capitalize on their resources better than rural firms. Other major findings of the paper provide evidence that: first, for rural firms, the influence of university R&D is relevant to innovation creation, but their perception of university-provided information is not significant; and second, rural firms that are willing to try, but fail, in terms of innovation creation have a slight advantage over other rural firms less willing to take on the risk. Originality/value This paper is one of the first to analyze the 2014 NSBC, a firm-level national survey covering a wide range of innovation-related variables. The authors combine it with other regional secondary data, and use appropriate analytical modeling to provide empirical evidence of influencing factors on innovation creation across rural and urban firms.

Creating a smart rural economy through smart specialisation: The microsphere model

The failure of most developed western economies to return to the rates of economic growth enjoyed in earlier times has raised the spectre of secular stagnation first identified by Hansen in the 1930s. Central to secular stagnation is the complex link between capital investment and innovation, prompting fears that the recent collapse in investment is both a cause and an effect of the so-called end of innovation. The emergence of so-called zombie companies suggests a curtailment of creative destruction. The paper looks to the smart specialisation agenda and demand-led strategies for innovation as a means of removing innovation activity from reliance on large-scale top-down capital investment, instead shifting the focus to the role of the entrepreneur in the innovation and growth process. Key features of smart specialisation are used to underpin the construction of a conceptual model (the microsphere) that presents policymakers with a framework to reconnect with the entrepreneur to boost innovation and growth at the level of the region. The model frames the microsphere within which smart specialisation takes place, and how this can encourage innovation among small non-growth rural firms. Influenced by New Industrial Policy and the social geographies underpinning reflexive capitalism, the model builds on the entrepreneurial discovery process inherent in smart specialisation. The model provides policymakers with a guide to operationalise a smart specialisation strategy. Finally, the model is tested in a case study based on the priorities of an economic strategy of a rural region of Scotland.