The price of a disadvantaged location: Regional variation in the price and supply of short-term credit to SMEs in the UK

The price of a disadvantaged location: Regional variation in the price and supply of short-term credit to SMEs in the UK

By Marc Cowling, Neil Lee & Elisa Ughetto

Originally published online: 19 Nov 2019

ABSTRACT

Access to inexpensive short-term credit from banks is vital for many small and medium enterprises (SMEs), which face liquidity problems because of an imbalance between cash outflows and receipt of outstanding payments. This article investigates the key determinants of short-term credit access and pricing for UK SMEs, disentangling between regional effects and firm-specific effects (that is, credit risk ratings). We use a large dataset of 30,183 responses to six waves of the SME Finance Monitor survey. While there are underlying differences at the firm level in risk behavior across regions, our key finding is that, faced with the same risk, banks do react fairly to funding applications in terms of access but not price at the regional level. We conclude that regional differences directly and indirectly affect the way banks allocate and price short-term credit. There is evidence of a peripheral region price penalty.

CLICK HERE TO READ FULL ARTICLE >

Click here to read all Journal of Small Business Management articles > 

The price of a disadvantaged location: Regional variation in the price and supply of short-term credit to SMEs in the UK

CEO learning goal orientation and firm innovation: The mechanism and boundary conditions

By Cuilian Zhang & Hui Wang

Originally published online: 19 Nov 2019

ABSTRACT

This study explores how and when chief executive officer (CEO) learning goal orientation affects firm innovation. A sample of 164 small and medium-sized firms in China, with 164 CEOs and 488 top management team (TMT) members, reveals that CEO learning goal orientation exerts positive influences on firm innovation. TMT learning goal orientation mediates this link. Environmental uncertainty and TMT centralization moderate both the direct effect of CEO learning goal orientation on TMT learning goal orientation and the indirect, mediated effect of CEO learning goal orientation on firm innovation through TMT learning goal orientation. Therefore, the effects are amplified at high environmental uncertainty or low TMT centralization.

CLICK HERE TO READ FULL ARTICLE >

Click here to read all Journal of Small Business Management articles > 

The price of a disadvantaged location: Regional variation in the price and supply of short-term credit to SMEs in the UK

The price of a disadvantaged location: Regional variation in the price and supply of short-term credit to SMEs in the UK

By Marc Cowling, Neil Lee & Elisa Ughetto

Originally published online: 19 Nov 2019

ABSTRACT

Access to inexpensive short-term credit from banks is vital for many small and medium enterprises (SMEs), which face liquidity problems because of an imbalance between cash outflows and receipt of outstanding payments. This article investigates the key determinants of short-term credit access and pricing for UK SMEs, disentangling between regional effects and firm-specific effects (that is, credit risk ratings). We use a large dataset of 30,183 responses to six waves of the SME Finance Monitor survey. While there are underlying differences at the firm level in risk behavior across regions, our key finding is that, faced with the same risk, banks do react fairly to funding applications in terms of access but not price at the regional level. We conclude that regional differences directly and indirectly affect the way banks allocate and price short-term credit. There is evidence of a peripheral region price penalty.

CLICK HERE TO READ FULL ARTICLE >

Click here to read all Journal of Small Business Management articles > 

The price of a disadvantaged location: Regional variation in the price and supply of short-term credit to SMEs in the UK

Sustainable firms and legitimacy: Corporate venture capital as an effective endorsement

By Deborah de Lange & Dave Valliere

Originally published online: 22 Nov 2019

ABSTRACT

This empirical study investigates the legitimizing effects of the presence of different investor types supporting entrepreneurial ventures. These effects may differ for sustainable ventures that face greater liabilities of newness due to powerful incumbents and negative halo effects of prominent failures. Drawing on institutional theory, this study developed and tested a model of investor legitimization with data on 184 entrepreneurial ventures using negative binomial regression. Findings suggest that the legitimizing effects of investor types for sustainable ventures differ from those of other ventures. In particular, corporate venture capital seems to legitimize sustainable ventures in a manner unlike other venture types.

CLICK HERE TO READ FULL ARTICLE >

Click here to read all Journal of Small Business Management articles > 

The price of a disadvantaged location: Regional variation in the price and supply of short-term credit to SMEs in the UK

SME open innovation for process development: Understanding process-dedicated external knowledge sourcing

By Jose-Luis Hervas-Oliver, Francisca Sempere-Ripoll, Carles Boronat-Moll & Sofia Estelles-Miguel

Originally published online: 17 Dec 2019

ABSTRACT

Small and medium enterprise (SME) open innovation has received attention only for new product development, overlooking the fact that process innovation is a strategy commonly pursued by SMEs which requires organizing search strategies or external knowledge sourcing for that purpose. Focusing on 3,348 process-oriented innovative SMEs, defined as those that usually and primarily only introduce process rather than product innovation, this study empirically identifies key external sources of SME innovation for process technologies, linking open innovation to SME performance, and highlighting a very important distinction to literature focused on product development. The results contribute to the literature on SME open innovation.

CLICK HERE TO READ FULL ARTICLE >

Click here to read all Journal of Small Business Management articles >