International Journal of Globalisation and Small Business (18 papers in press)

Regular Issues

• Regional cultural diversities amongst small business entrepreneurs in India  
  by P. Prasannavadanan Thampi, Amalendu Jyotishi, Ramaratnam Bishu 
  Abstract: Small businesses are entrepreneur driven initiatives and are usually influenced by the entrepreneur's cultural environment including their attitudes, and beliefs. This paper attempts to study the nature of cultural diversities of the entrepreneurs across two different regions in India. The six cultural dimensions enunciated by Geert Hofstede and the ethnic orientation dimension brought out by Thampi et al are the core constructs for this study. Data collected from small business entrepreneurs across two sample Indian states were analysed. Significant variations were observed in the cultural attributes of small entrepreneurs across the two sample states, and within these states across locations (rural-urban), and business types (manufacturing and service). In all these contexts power distance, risk propensity, collectivism, masculinity, indulgence, and ethnic orientation significantly varied across different segment combinations. The finding of this study, therefore, could be useful pointers towards explicitly incorporating cultural factors in policy design.
  Keywords: MSME; Hofstede’s cultural dimensions; etic; emic; ethnic orientation; Kerala; Maharashtra; Malayalam; Kudumbashree; India.
  
  
• THE INTERPLAY BETWEEN FIRM RESOURCES AND GOVERNMENT AGENCY SOCIAL CAPITAL ON THAI FIRMS SATISFACTION WITH EXPORT PERFORMANCE  
  by Peerayuth Charoensukmongkol 
  Abstract: The objective of this research was to investigate the contributions of resources available for international expansion, product advantage, and government agency social capital to Thai firms satisfaction with their export performance. The sampling frame used for this study included Thai firms listed in the directory of the Thai Exporter. Data were obtained using a self-administered questionnaire (total n = 124). The findings from partial least squares regression analysis showed that firms that have more resources available for international expansion, product advantage, and government agency social capital tended to demonstrate a higher level of satisfaction with their export performance. However, the moderating effect analysis found further that government agency social capitals positive contribution to satisfaction with export performance tended to be more crucial for firms that had few resources available for international expansion and for those that had less product advantage.
  Keywords: export; firm resources; social capital; government supports; Thailand.
  
  
• Internationalization of an Austrian SME with a sales agent to Mexico and the USA in the automotive sector from cost perspective  
  by Caroline Philippi, Vito Bobek, Anita Macek, Gorazd Justinek, Tatjana Horvat 
  Abstract: Many Austrian SMEs in the manufacturing sector opt for expanding to further markets. Especially for the automotive industry Mexico and the USA are attractive locations. The purpose of this paper is to identify a strategy for an Austrian SME in the automotive sector for its business expansion to Mexico and the USA. Therefore, factors influencing the expansion strategy, as well as operational measures increasing the success rate of the company are identified. Additionally, it is analyzed if a combined market entry and strategy formulation for both countries is recommendable. The aim is to present solid results regarding how the company should tackle the upcoming challenges for its strategic direction of internationalization. For this purpose a literature review and an empirical qualitative study were chosen as a main method. Based on the results of the study the company is provided with recommendations on how to design its strategy and which factors are to be considered when opting for the two markets. Based on the research the company is advised to consider both markets as individual and parallel processes. Many SMEs face issues regarding availability of resources and enter two markets at a time, which becomes cost and time intensive, also costs in general have a great decision power for them.
  Keywords: SME internationalization; business expansion; market development; market entry strategy; USA; Mexico.
  
  
• Are Alternative Food Networks winning strategies to increase organic SMEs profitability? Evidence from a case study  
  by Riccardo Testa, Antonino Galati, Giorgio Schifani, Maria Crescimanno, Anna Maria Di Trapani, Giuseppina Migliore 
  Abstract: The aim of this study was to understand how and how much Alternative Food Networks (AFNs) contribute to increasing the profitability of the organic SMEs, compared to traditional organic sales channels. For this purpose, an economic analysis and an in-depth interview was carried out in a case study located in the Sicilian northern coast. The economic parameters chosen to estimate the farmers profitability were the Net Income and the Profit. Findings showed a clear convenience of the participation to Alternative Food Networks compared to the case in which all farm production was conferred to traditional sales channels, highlighting an increase both of farm profit (+76.9%) and net income (+72.1%). However, the in-depth interview revealed that AFNs are a mean, not only to have economic benefits, but also to satisfy consumers social and environmental needs. According to the findings of this study, Alternative Food Networks could represent a strategy to increase the profitability of many small and medium-sized farms (organic and non-organic) managed by the farmer and his family, especially in an increasingly global and diversified market.
  Keywords: Local food; Short supply chain; Economic sustainability; Business management; Business performance; Sicily; Net Income; Organic farming.
  
  

Special Issue on: EURAM-SIG ENT T03_08 Growth Strategies and Internationalisation for SMEs

• MISSION STATEMENTS IN MEDIUM SIZED LISTED FIRMS: A CONTENT ANALYSIS  
  by Lara Penco, Giorgia Profumo, Scarsi Roberta 
  Abstract: Consistent with extant management literature, mission statements are crucial communication instruments for any firms and have been considered as elements of the strategic management process. Despite the considerable attention awarded to this theme, most of the studies are focused on large firms, while the role of mission statements in the strategic management of small and medium sized companies has not been sufficiently highlighted. Considering its central role within the strategic management process, the definition of a good mission statement may indeed be very useful for small and medium enterprises, as it can help to understand and identify the key factors of the strategic growth strategies, in terms of markets, products, innovation and internationalization. The present paper tries to bridge this literature gap aiming at: i) analyzing specific content characteristics of medium sized listed firms mission statements; ii) identifying differences among medium sized firms belonging to different cultural clusters; iii) investigating the stakeholder orientation and the prioritization versus particular stakeholders groups. Applying a content analysis method to a sample of 150 continental European medium sized listed firms, we document that a typical mission statement does not exist. Moreover, the results suggest that it is possible to identify differences in the content and role of the mission statements of firms belonging to diverse cultural clusters and, as regards stakeholder orientation, firms tend to mention few stakeholders groups in their mission statements, with subgroups prioritizing different stakeholders. This contribution presents some valuable research implications mainly useful for researchers and academics, but also professionals and investors could benefit from this knowledge.
  Keywords: mission statement; content analysis; medium sized firms; cultural cluster; stakeholder orientation.
  
  
• Do all entrepreneurs want to make their New Technology Based Firm grow? An approach through expected consequences of growth  
  by Caroline Tarillon 
  Abstract: Because the French government is aware of the high potential of New-Technology based Firms (NTBFs) in terms of supporting economic growth, it has set up specific support measures since many years. However, there still is a strong heterogeneity of their growth trajectories. This research aims to better understand this heterogeneity by analyzing entrepreneurs motives for growth. We study the representations of 253 NTBFs entrepreneurs whose firms have been supported by the French Ministry in charge of Research. We show that it is necessary to better understand the expected consequences that those entrepreneurs anticipate in case of strong growth in order to better understand their motivation to make their business grow.
  Keywords: Growth trajectories; New-Technology Based Firm; Entrepreneurs’ motivation.
  
  
• International growth of Italian mid-sized firms: An analysis of post-acquisition performance  
  by Michela Matarazzo, Gabriele Barbaresco, Riccardo Resciniti 
  Abstract: Purpose - The purpose of the paper is to analyse the performance differences (labour productivity, employment and wages) of all the mid-sized firms acquired in the period between 1999 and 2009, compared with purely domestic firms (non-acquired), with two specific research focuses: 1) differences between industrial and financial investor, 2) geographic distance between acquirer and target firm. Design/methodology/approach - We conduct a t-test analysis by using firm-level accounting data from the Italian Mediobanca Research Department database. Findings - Results suggest that the performance of the acquired firms improve. Furthermore, the study show that industrial and European acquirers adopt a cherry picking approach and tend to keep pre-acquisition performance levels unchanged, whereas financial and non-European ones take the opposite approach with the explicit aim to increase post-acquisition performance. Originality/value This study for the first time analyses the performance implications of cross border acquisitions of all the acquired Italian mid-sized firms.
  Keywords: mid-sized firms; growth strategies; cross-border acquisitions; post-acquisition performance; industrial and financial investors; Italy.
  
  
• Internationalisation Strategies and Firms Performance. A Co-Evolutionary Study on Italian SMEs  
  by Matteo Cristofaro, Giacomo Caterini 
  Abstract: The hypercompetitive business landscape that SMEs are currently facing is increasingly pushing them to internationalise their businesses. In doing that, entrepreneurs and executives make important strategic choices related to their investments in cost leadership and differentiation strategies to improve, or at least maintain, their current performance. However, despite the great interest of scholars on this theme, there are no studies about the effects of these different courses of action on firms performance, especially considering the concurrent influence of sectorial and macroeconomic trends. This contribution, which looks at the dialectical relationship between firms strategic choices and their environment according to a co-evolutionary perspective, tries to fill this gap presenting evidence from a panel study of 4,098 Italian SMEs over ten years (20082017). Findings show that environmental trends and strategic choices simultaneously influence internationalised SMEs performance and that these firms adapt their strategic choices according to market munificence. Entrepreneurs and executives of SMEs may benefit from the results of this study in order to make better strategic choices when defining their internationalisation strategies.
  Keywords: internationalisation; strategy; decision making; co-evolution; small medium enterprise; SMEs.
  DOI: 10.1504/IJGSB.2020.10020702
   
  
• How cultures facilitate the entrepreneurial thinking-doing link?  
  by Chiara Cannavale, Iman Zohoorian Nadali 
  Abstract: Despite many studies on culture and entrepreneurship, still little is known about the role culture can play in the relationship between entrepreneurial intention and actual behavior. This study adopts cultural entrepreneurial approach to tackle this problem by employing behavioral theories. Global Entrepreneurship Monitor (GEM) as well as Global Leadership & Organizational Behavior Effectiveness (GLOBE) project data were employed to test the moderating effects of cultural values on the relationship between entrepreneurial intention (EI) and entrepreneurial activities at a country level. The analysis covers the period of 2007 to 2017. OLS regression analyses in R package indicate that behavioral theories still hold, i.e. intentions lead to actions in the field of entrepreneurship. It was also found that future orientation, performance orientation, and gender egalitarianism facilitate the relationship between entrepreneurial intentions and activities. The novel findings as well as the academic and practical implications of the study are discussed in the concluding section.
  Keywords: Entrepreneurial Intention; Entrepreneruirial Activity; Cultural Values.
  
  

Special Issue on: Financial Resources for SMEs From Bank Loans to Venture Capitalist Support. The Old and the New Ways to Raise Capital for Smaller Firms

• When Do Subsidies Facilitate High-Tech Firms Access to Venture Capital? An Examination of Cross-National and National Grants  
  by Elmar Lins 
  Abstract: This study addresses the key question of how grant-based subsidies might serve differently as quality certificates for new technology-based firms (NTBFs) when trying to raise venture capital (VC). Therefore, we distinguish between cross-national, national, and sub-national subsidies. Based on the data of 1,568 German NTBFs, we apply a non-parametric matching procedure to control for the endogenous nature of subsidy reception. Our results show that cross-national grants have a strong certification effect, which reduces the information asymmetry between NTBFs and VC providers to the benefit of the new venture. Similarly, sub-national grants, awarded by regional government authorities, exhibit the same certification effect but less pronounced compared to cross-national grants. No significant effect can be observed for national subsidies.
  Keywords: Public subsidies; grants; subsidies; cross national subsidy; national subsidy; venture capital; venture capital access; new ventures; high tech start-ups; technology based firms.
  
  
• How did the global financial crisis impact the determinants of SMEs capital structure?  
  by Antonio D'Amato 
  Abstract: While there is sufficient evidence that a crisis impacts lending behavior and corporate leverage, the literature on the effects of the global financial crisis on small and medium enterprises (SMEs) capital structure is limited if not absent. This paper aims to analyze how and to what extent various macroeconomic states impact the capital structure determinants of SMEs. Based on a comprehensive dataset of Italian SMEs during the 2006-2016 period, we use a fixed effects panel approach to examine SMEs capital structure decisions before, during and after the 2008 financial crisis. Our results show that the financial crisis negatively affected SMEs financial leverage, as the total debt ratio significantly declines in our sample period. However, we also find that the financial crisis negatively impacted trade credit, given that it does not substitute for the reduction of credit from financial institutions. Finally, the impact of capital structure determinants significantly changed during and after the crisis compared to the pre-crisis levels. Our results indicate that compared to the pre-crisis period, profitability, profit volatility and liquidity are the main determinants of the total debt ratio during and after the crisis. These results have implications for firms and policy makers.
  Keywords: Capital structure; Financial crisis; SMEs.
  
  
• Venture Capitalists and value creation. The role of informal investors in the growth of smaller European firms.  
  by Matteo Rossi, Elvira Martini 
  Abstract: In the last few decades, the innovation process has involved research systems, production systems, and governmental/institutional systems (Etzkowitz and Leydesrdoff 1998, 2000; Fagerberg et al., 2005; Chesbrough, 2006). In this new context, both formal and informal investorsbanks, business angel investors, venture capitalists, and corporate venture capitalistsplay an important role. The aim of this paper is to analyse the particular role of venture capitalists (henceforth, VCs) in the innovation system, with a specific focus on new, small, innovative firms in the European context. This research is based on secondary data (Boston Consulting Group, 2015; DealRoom, 2018). The paper can be defined as a descriptive paper, and it attempts to illustrate a phenomenon. The limitations of the paper are a consequence of its very nature, i.e., the fact that it is largely conceptual and based on a secondary data.
  Keywords: Venture capital; value creation; firm performances; innovation process; Europe.
  
  
• Smaller firms and public equity: new platforms with old problems  
  by Catherine Macaulay 
  Abstract: Paradoxically, while numbers of listed companies are declining in advanced economies, new SME equity markets are being developed and recommended as an alternative way of raising capital. This paper contests the conventional wisdom that persistently low levels of SME listing represents deficiencies of market design and presents publicly traded equity as fundamentally unsuitable for SMEs due to inherent structural flaws. It begins with the controversial origins of public equity corporations and the share as a financial instrument and finds that developing other investment channels in a culture of direct investment in enterprise would be more beneficial to both SMEs and economies than the development of an equity culture with its associated unproductive trading. In particular, internal funding, recognised as a widespread SME financing preference and common denominator of successful small firms, is found worthy of further examination for opportunities and efficiencies rather than dismissal as an inconsequential or temporary financing method.
  Keywords: SME; small and medium sized enterprises; small business; publicly traded equity; investment platforms; corporate structure; financial instruments; secondary markets; stock exchange; internal finance; Dutch East India Company.
  
  
• CROWDFUNDING IN WINE BUSINESS AS FINANCING OPPORTUNITY FOR SMALLER WINERIES  
  by Giuseppe Festa, Gerardino Metallo, Maria Teresa Cuomo, Mario Situm 
  Abstract: Crowdfunding is an innovative form of financial support for enterprises, most of all when smaller and engaged in ethical/sustainable issues. This is true also for wineries: in fact, they are ideal subjects for crowdfunding experiments, especially if active also in vine cultivation. Very few platforms, however, are currently available especially for wine crowdfunding: one of the most important is Fundovino, whose so far accomplished projects provide no recourse to dividend from equity, but recourse to in-kind return (above all wine, of course). In other platforms, wine crowdfunding could find attraction also in equity (WineFunding, for example), but in every circumstance of wine crowdfunding a sentiment of involve-ment/engagement/commitment of the backers seems present, as clearly emerges from the in-vestigation on Fundovino as case study. The research, with exploratory nature, analyses spe-cifically the possible mix of reward (how), together with the presumable expectations of the backers (why), for wine crowdfunding projects with non-equity finality. Prevalence of in-kind reward as return for the contribution (on every wine crowdfunding platform), and no statistical evidence of connection between reward mix and financial success of the single project (on the Fundovino platform) suggest that in this field, backers involve-ment is a key factor for financial coverage. Thus, winemakers, both as entrepreneurs and man-agers, should take into due consideration this psychological aspect to design potentially suc-cessful initiatives about wine crowdfunding.
  Keywords: Crowdfunding; wine business; financial support; SMEs; smaller wineries.
  
  

Special Issue on: Networks and Governance in Changing Business Ecosystems

• Influence of mentors on networking behaviour of small business owners: a conceptual framework.  
  by Jalleh Sharafizad 
  Abstract: The core purpose of this paper is to review the literature on networks and networking in relation to mentors within the small business context. The method was a review of literature including research and case studies related to mentors and networks and networking within the small business context from various databases. This literature review presents six propositions and a research framework for future studies in these areas where gaps are identified. New directions offered include: (a) examining the influence of mentors on small business owners networks (structure, interaction and content) during different stages of network formation for both planned and accidental, or one off interactions; (b) researching the influence of mentors on the two main types of barriers to networking: operational and psychological barriers, and (c) whether mentors can affect the success of inter-firm networks between a small business and other businesses.
  Keywords: Small Business; Small Business Owners; Networks; Networking; Social Network Theory; Mentors; Mentoring.
  
  
• The role of internal resources in the competitive positioning of Sicilian wine cooperatives  
  by Antonino Galati, Antonio Tulone, Salvatore Tinervia, Maria Crescimanno 
  Abstract: The paper is an original article that uses accounting frameworks to determine what creates a competitive advantage in a cooperative business model. In particular, it investigates the influence of tangible, intangible, and financial resources on the business performance of cooperatives operating in the Sicilian wine industry, with the RBV of the firms as a theoretical background. Using a linear regression model, our results show that tangible and financial resources are a source of a sustained competitive advantage. This study fills the gap existing in the strategic management literature related to the role of resources, tangible and intangible, in the cooperative system, providing both theoretical and practical implications.
  Keywords: Tangible resources; Intangible resources; RBV; Wine.
  
  
• Regional Strategic Networks in Southern Brazil  
  by Ingridi Bortolaso, Jorge Renato Verschoore, Giovanni Battista Dagnino 
  Abstract: Regional Strategic Networks (RSNs) are long-term purposeful arrangements among firms that cooperate and compete in a regional context allowing them to win or sustain a competitive advantage. RSN coopetitive strategy requires an open approach with inclusiveness of members and internal transparency of the formulation and implementation processes. This open approach of a coopetitive strategy raises questions concerning the outcomes of RSNs. How does strategic openness affect the outcome of RSNs? What are the outcomes of an open strategy formulation and open strategy implementation? This paper focuses on the effects of greater strategy openness on the outcomes of RSNs. To achieve this goal, the study follows a quantitative exploratory survey based on 150 firms associated to 50 RSNs established by a regional public policy in southern Brazil. The unit of analysis of this study are the RSN. Results indicate that an open approach supports the RSNs coopetitive strategy and ultimately affects their collective outcomes. Results also show a significant relationship between the member inclusion and internal transparency of the strategy process and the networks outcomes.
  Keywords: Regional Strategic Networks; Open Strategy; Coopetition; Networks; Small Firms;.
  
  
• Creating a little bit of La Dolce Vita. Explaining resilience and transformation in the Hunter Valley wine region, NSW, Australia.  
  by Sidsel Grimstad, Jenny Waterhouse, John Burgess 
  Abstract: Using the Hunter Valley wine region as a case study, this paper examines how a region, renowned internationally for specific wine varieties, reinvents itself through becoming a gastronomic landscape. Using a case study approach, this paper identifies, through qualitative data how, in spite of being a small national producer, the Hunter Valley still strongly identifies with and protects its wine-region identity. The importance of having regional identity custodians such as the old wine families that ensure that the landscape maintains the rural aesthetic, creates embedded institutions that benefit both old and new entrants. While new entrants may be considered a risk, they also provide a continuous stream of creative solutions and investments, leading to continuous improvement of quality and luxury provision of wine and gastronomy sensory experiences. Hunter Valley wine-tourism actors have contributed to its resilience through simultaneously maintaining a strong wine region identity, while at the same time using this as a means to regenerate itself into a gastronomic landscape where lifestyle, food, wine and tourism complement each other. Through this the Hunter Valley manages to maintain its lead among the top Australian destinations for both national and international wine and food tourists.
  Keywords: Regional renewal; regional resilience; regional transformation; wine regions; gastronomy tourism.