International Economic Development and SMEs
- LAST MODIFIED: 26 April 2018
- DOI: 10.1093/obo/9780199846740-0141
- LAST MODIFIED: 26 April 2018
- DOI: 10.1093/obo/9780199846740-0141
The economic development literature, at one time, was heavily concerned with governmental prescriptions and planning to spur development. With the economic liberalization of numerous economies, such as in eastern and central Europe, India and other parts of Asia, there is a global epiphany surrounding the role of small and medium enterprises (SMEs) in development. The advent of knowledge-based economies is also prominent in the development focus of SMEs, as newly emerging business firms control significant resources. Over the past thirty years, the academic literature has responded to the impact that SMEs have in economic development. The articles reviewed include a variety of business and non-business disciplines, such as business strategy, finance, entrepreneurship, innovation, globalization, and economics. The bibliography addresses the contribution of SMEs to economic development and the entrepreneurial activities, strategies, and policies that help promote these firms. This research tool provides those seeking to learn about or to expand this field of study the opportunity to do so in as few steps as possible—and by providing the most meaningful arguments within this subject matter. The support of the University of Michigan-Flint School of Management is gratefully acknowledged.
A large percentage of global and national economies are comprised of small and medium enterprises (SMEs). Therefore, the health of the SME market sector translates to the economic and employment health of the host nation and the global economy. Institutional policy is important for developing competitive advantages for SMEs due to the pressures of globalization and SME specific growth constraints (Wright, et al. 2007). The first problem in establishing effective policy is the fundamental misunderstanding of determinants of SME growth and development. A poor understanding of basic principles leads to misguided research. Misguided research leads to bad institutional policy (Gibb 2000). The dangers of bad SME policy extended past being ineffective, they can be harmful as well (Tambunan 2005). One of the key growth constraints for SMEs is access to finance. The effects of policy gaps in assisting SMEs with the acquisition of financial capital has proven to be harmful (Pissarides 1999). Once effective policy is implemented effectiveness must be measured by assessing how SMEs in the market sector are impacted (Honjo and Harada 2006). In some cases groups of SMEs can be neglected by policy leading to loss of growth potential. This is the case in rural areas in Europe (North and Smallbone 2006).
Gibb, Allan A. “SME Policy, Academic Research and the Growth of Ignorance, Mythical Concepts, Myths, Assumptions, Rituals and Confusions.” International Small Business Journal 18.3 (2000): 13–35.
This charming piece skewers many misconceptions related to the growth and development of SMEs. Since these errors can find expression in government action, it is important to understand baseline assumptions and terminology, so as to avoid ineffective policies being adopted.
Honjo, Yuji, and Nobuyuki Harada. “SME Policy, Financial Structure and Firm Growth: Evidence from Japan.” Small Business Economics 27.4–5 (2006): 289–300.
This study employed firm surveys in SMEs in the manufacturing sector to attempt to evaluate the effectiveness of the Creative Business Promotion Law (CBPL), a Japanese effort to stimulate growth. Honjo and Harada found that it was possible to stimulate growth through financial structure and the Creative Business Promotion Law (CBPL), with a more meaningful effect seen in younger SMEs.
North, David, and David Smallbone. “Developing Entrepreneurship and Enterprise in Europe’s Peripheral Rural Areas: Some Issues Facing Policy-Makers.” European Planning Studies 14.1 (2006): 41–60.
Rural areas in Europe still have little support for entrepreneurs of SMEs. The current state of rural policy support as it relates to SMEs is addressed, as well as the policy needs and potential roles of such policies in stimulating growth and entrepreneurship. In addition to more policy support, well-determined and defined goals for SMEs in rural areas are thought to be critical.
Organization for Economic Co-operation and Development. SMEs, Entrepreneurship and Innovation. Paris: OECD, 2010.
This book presents data and policy information from forty economies that are active in innovation policy: specifically, how do these countries nurture and encourage innovation performance in small and medium enterprises (SMEs) by their favorable government policy environments. Three critical areas for growth were focused on: knowledge flows, skills and education, social entrepreneurship and social innovation.
Organization for Economic Co-operation and Development. Financing SMEs and Entrepreneurs 2017: An OECD Scoreboard. Paris: OECD, 2017.
A review of the finance trends in thirty-nine countries supporting SMEs and entrepreneurs and country “OECD Scoreboard” from 2007 to 2015. Almost ten years after the 2007–2008 financial crisis, the financing situation improves yet remains vulnerable to downside risks in the economy. Weak demand for credit and a lack of investment opportunities are factors in holding back a stronger recovery.
Pissarides, Francesca. “Is Lack of Funds the Main Obstacle to Growth? EBRD’s Experience with Small- and Medium-Sized Businesses in Central and Eastern Europe.” Journal of Business Venturing 14.5 (1999): 5319–5539.
This article discusses the financial and credit barriers for SMEs that can develop due to inadequate financial institution policy. The European Bank for Reconstruction and Development (EBRD) failed to provide SMEs in central and eastern Europe with proper finance and credit support. The EBRD evaluates strategies to correct these failures by focusing on “local financial intermediaries, a commercial approach to provision of finance, and a focus on development of local financial systems. . . .
Tambunan, Tulus. “Promoting Small and Medium Enterprises with a Clustering Approach: A Policy Experience from Indonesia.” Journal of Small Business Management 43.2 (2005): 138–154.
Indonesian SME policy focuses primarily on clustering, an approach in this case that appears to be largely unsuccessful. The main factor appears to be an inability of Indonesian SMEs to reach domestic and foreign markets, potentially due, in this case study, to government policies which either missed targeted problems or created new ones. This case suggests that SMEs should be able to achieve growth with established connections with markets.
Wright, Mike, Paul Westhead, and. Deniz Ucbasaran. “Internationalization of Small and Medium Sized Enterprises (SMEs) and International Entrepreneurship: A Critique and Policy Implications.” Regional Studies 41.7 (2007): 1013–1030.
The authors discuss SME policy that creates an environment for growth through internationalization. They introduce international entrepreneurship as a “counterpoint to the established international perspectives.” This perspective is represented as integral to establishing policy that is more flexible and conducive to the diverse and complicated needs of SMEs as they enter the international marketplace.
Users without a subscription are not able to see the full content on this page. Please subscribe or login.
- Abusive Supervision
- Adverse Impact and Equal Employment Opportunity Analytics
- Alliance Portfolios
- Alternative Work Arrangements
- Applied Political Risk Analysis
- Approaches to Social Responsibility
- Assessment Centers: Theory, Practice and Research
- Authentic Leadership
- Bayesian Statistics
- Behavior, Organizational
- Behavioral Approach to Leadership
- Behavioral Theory of the Firm
- Between Organizations, Social Networks in and
- Brokerage in Networks
- Business and Human Rights
- Career Studies
- Career Transitions and Job Mobility
- Charismatic and Innovative Team Leadership By and For Mill...
- Charismatic and Transformational Leadership
- Compensation, Rewards, Remuneration
- Competitive Dynamics
- Competitive Heterogeneity
- Computational Modeling
- Conditional Reasoning
- Conflict Management
- Considerate Leadership
- Corporate Philanthropy
- Corporate Social Performance
- Counterproductive Work Behavior (CWB)
- Cross-Cultural Communication
- Cross-Cultural Management
- Cultural Intelligence
- Culture, Organization
- Data Analytic Methods
- Decision Making
- Emotional Labor
- Employee Aging
- Employee Engagement
- Employee Voice
- Empowerment, Psychological
- Entrepreneurial Firms
- Entrepreneurship, Corporate
- Entrepreneurship, Women's
- Equal Employment Opportunity
- Faking in Personnel Selection
- Family Business, Managing
- Financial Markets in Organization Theory and Economic Soci...
- Findings, Reporting Research
- Fit, Person-Environment
- Global Leadership
- Global Talent Management
- Goal Setting
- Hofstedes Cultural Dimensions
- Human Capital Resource Pipelines
- Human Resource Management
- Human Resource Management, Strategic
- Human Resources, Global
- Human Rights
- Humanitarian Work Psychology
- Humility in Management
- Impression Management at Work
- Innovative Behavior
- Intelligence, Emotional
- International Economic Development and SMEs
- International Economic Systems
- International Strategic Alliances
- Job Analysis and Competency Modeling
- Job Crafting
- Job Design
- Job Satisfaction
- Judgment and Decision Making in Teams
- Knowledge Sharing and Collaboration within and across Firm...
- Leader-Member Exchange
- Leadership Development
- Leadership Development and Organizational Change, Coaching...
- Leadership, Ethical
- Leadership, Global and Comparative
- Leadership, Strategic
- Management History
- Management In Antiquity
- Managerial Discretion
- Meaningful Work
- Multinational Corporations and Emerging Markets
- Neo-institutional Theory
- Neuroscience, Organizational
- New Ventures
- Organization Design, Global
- Organization Development and Change
- Organization Theory
- Organizational Adaptation
- Organizational Behavior, Emotions in
- Organizational Citizenship Behaviors (OCBs)
- Organizational Control
- Organizational Corruption
- Organizational Identity
- Organizational Justice
- Organizational Legitimacy
- Organizational Networks
- Organizational Performance, Personality Theory and
- Organizational Responsibility
- Organizational Surveys, Driving Change Through
- Organizations, Big Data in
- Organizations, Gender in
- Organizations, Political Ideology in
- Organizations, Social Identity Processes in
- Paternalistic Leadership
- Pay for Skills, Knowledge, and Competencies
- People Analytics
- Performance Appraisal
- Planning And Goal Setting
- Proactive Work Behavior
- Psychological Contracts
- Psychological Safety
- Regional Entrepreneurship
- Reputation, Organizational Image and
- Research, Ethics in
- Research, Longitudinal
- Research Methods
- Research Methods, Qualitative
- Resource-Dependence Theory
- Response Surface Analysis, Polynomial Regression and
- Role of Time in Organizational Studies
- Safety, Work Place
- Selection, Applicant Reactions to
- Self-Determination Theory for Work Motivation
- Self-Fulfilling Prophecy In Management
- Self-Management and Personal Agency
- Sensemaking in and around Organizations
- Service Management
- Shared Team Leadership
- Social Cognitive Theory
- Social Evaluation: Status and Reputation
- Social Ties and Network Structure
- Status in Organizations
- Strategic Alliances
- Strategic Human Capital
- Strategy and Cognition
- Structural Contingency Theory/Information Processing Theor...
- Team Composition
- Team Conflict
- Team Design Characteristics
- Team Learning
- Team Mental Models
- Team Newcomers
- Teams, Global
- Technology and Innovation Management
- Technology, Organizational Assessment and
- the Workplace, Millennials in
- Theory X and Theory Y
- Time and Motion Studies
- Training and Development
- Training Evaluation
- Trust in Organizational Contexts
- Unobtrusive Measures
- Virtual Teams
- Work and Family: An Organizational Science Overview
- Work Contexts, Nonverbal Communication in
- Work, Mindfulness at
- Workplace Aggression and Violence
- Workplace Coaching
- Workplace Commitment
- Workplace Gossip
- Workplace Meetings
- Workplace, Spiritual Leadership in the
- World War II, Management Research during