IDEAS home Printed from https://ideas.repec.org/a/pes/ieroec/v14y2023i1p327-354.html
   My bibliography  Save this article

The impacts of innovative and competitive abilities of SMEs on their different financial risk concerns: System approach

Author

Listed:
  • Mehmet Civelek

    (European Centre for Business Research, Pan-European University, Czechia)

  • Vladimír Krajèík

    (European Centre for Business Research, Pan-European University, Czechia)

  • Vendula Fialova

    (Pan-European University, Czechia)

Abstract

Research background: The lack of financial resources of small and medium enterprises (SMEs) make them face high financial risk. Their entrepreneurial abilities that belong to Resource-based View (RBV), such as innovativeness and competitiveness, might reduce SMEs’ financial risk because those entrepreneurial abilities increase the financial performance of businesses. Purpose of the article: This paper aims to investigate the effects of the innovativeness and competitiveness of SMEs on their financial concerns based on financial risk, including bankruptcy, financial performance, and financial risk management. Methods: The authors use a method of data analysis and synthesis, including advanced knowledge and digital processing of background studies. This paper examines 1221 SMEs from the Czech Republic, Slovakia, and Hungary. Those firms are chosen by random sampling method from Cribis and the Budapest Chamber of Commerce databases. Then the researchers directed an online questionnaire to collect the research data from the randomly selected firms. The researchers use Ordinal Logistic Regression Test for analysis purposes. Findings & value added: This paper's results indicate that SMEs' competitiveness does not impact SMEs’ bankruptcy prediction, financial performance, or financial risk management. On the other hand, while more innovative SMEs are less likely to face bankruptcy issues than less innovative SMEs, less innovative SMEs indicate better financial performance than their more innovative counterparts. Since this paper focuses on the influences of intangible assets of SMEs (such as characteristics based on RBV and Entrepreneurial Orientation) on their tangible assets (financial performance etc.) and puts emphasis on this fact from an International perspective, this paper makes a significant contribution to the literature. Furthermore, analyzing multiple relationships between SMEs’ different entrepreneurial characteristics and various financial risk concerns is another important fact that might draw prospective readers’ attention.

Suggested Citation

  • Mehmet Civelek & Vladimír Krajèík & Vendula Fialova, 2023. "The impacts of innovative and competitive abilities of SMEs on their different financial risk concerns: System approach," Oeconomia Copernicana, Institute of Economic Research, vol. 14(1), pages 327-354, March.
    • Handle: RePEc:pes:ieroec:v:14:y:2023:i:1:p:327-354
    DOI: 10.24136/oc.2023.009
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.24136/oc.2023.009
    Download Restriction: no
    File URL: https://libkey.io/10.24136/oc.2023.009?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Kayhan Tajeddini, 2016. "Financial Orientation, Product Innovation and Firm Performance — An Empirical Study in the Japanese SMEs," International Journal of Innovation and Technology Management (IJITM), World Scientific Publishing Co. Pte. Ltd., vol. 13(03), pages 1-30, June.
    2. Tristan Boyer & Régis Blazy, 2014. "Born to be alive? The survival of innovative and non-innovative French micro-start-ups," Small Business Economics, Springer, vol. 42(4), pages 669-683, April.
    3. Wayne Irava & Ken Moores, 2010. "Resources supporting entrepreneurial orientation in multigenerational family firms," International Journal of Entrepreneurial Venturing, Inderscience Enterprises Ltd, vol. 2(3/4), pages 222-245.
    4. Gormley, Todd & Gupta, Nandini & Jha, Anand, 2018. "Quiet Life No More? Corporate Bankruptcy and Bank Competition," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 53(2), pages 581-611, April.
    5. Aziz, Saqib & Rahman, Mahabubur & Hussain, Dildar & Nguyen, Duc K., 2021. "Does corporate environmentalism affect corporate insolvency risk? The role of market power and competitive intensity," Ecological Economics, Elsevier, vol. 189(C).
    6. Shashi, & Centobelli, Piera & Cerchione, Roberto & Singh, Rajwinder, 2019. "The impact of leanness and innovativeness on environmental and financial performance: Insights from Indian SMEs," International Journal of Production Economics, Elsevier, vol. 212(C), pages 111-124.
    7. Stefan Mayr & Christine Mitter & Andrea Aichmayr, 2017. "Corporate Crisis and Sustainable Reorganization: Evidence from Bankrupt Austrian SMEs," Journal of Small Business Management, Taylor & Francis Journals, vol. 55(1), pages 108-127, January.
    8. Aleksandr Kljuènikov & Mehmet Civelek & Cyril Klimeš & Radim Farana, 2022. "Export risk perceptions of SMEs in selected Visegrad countries," Equilibrium. Quarterly Journal of Economics and Economic Policy, Institute of Economic Research, vol. 17(1), pages 173-190, March.
    9. Giorgia Giovannetti & Giorgio Ricchiuti & Margherita Velucchi, 2011. "Size, innovation and internationalization: a survival analysis of Italian firms," Applied Economics, Taylor & Francis Journals, vol. 43(12), pages 1511-1520.
    10. Róbert Štefko & Jarmila Horváthová & Martina Mokrišová, 2020. "Bankruptcy Prediction with the Use of Data Envelopment Analysis: An Empirical Study of Slovak Businesses," JRFM, MDPI, vol. 13(9), pages 1-15, September.
    11. Julian F. Kölbel & Timo Busch & Leonhardt M. Jancso, 2017. "How Media Coverage of Corporate Social Irresponsibility Increases Financial Risk," Strategic Management Journal, Wiley Blackwell, vol. 38(11), pages 2266-2284, November.
    12. Alexis Catanzaro & Christine Teyssier, 2021. "Export promotion programs, export capabilities, and risk management practices of internationalized SMEs," Small Business Economics, Springer, vol. 57(3), pages 1479-1503, October.
    13. Marco Cucculelli & Valentina Peruzzi, 2020. "Post-crisis firm survival, business model changes, and learning: evidence from the Italian manufacturing industry," Small Business Economics, Springer, vol. 54(2), pages 459-474, February.
    14. Vittoria Cerasi & Alessandro Fedele & Raffaele Miniaci, 2017. "Product market competition and access to credit," Small Business Economics, Springer, vol. 49(2), pages 295-318, August.
    15. Manuel Ángel Nogueira & Sara Fernández-López & Nuria Calvo & David Rodeiro-Pazos, 2018. "Firm characteristics, financial variables and types of innovation: influence in Spanish firms' survival," International Journal of Entrepreneurship and Innovation Management, Inderscience Enterprises Ltd, vol. 22(1/2), pages 57-79.
    16. Calantone, Roger J. & Kim, Daekwan & Schmidt, Jeffrey B. & Cavusgil, S. Tamer, 2006. "The influence of internal and external firm factors on international product adaptation strategy and export performance: A three-country comparison," Journal of Business Research, Elsevier, vol. 59(2), pages 176-185, February.
    17. Assaf Eisdorfer & Po‐Hsuan Hsu, 2011. "Innovate to Survive: The Effect of Technology Competition on Corporate Bankruptcy," Financial Management, Financial Management Association International, vol. 40(4), pages 1087-1117, December.
    18. Iza Lejárraga & Harald Oberhofer, 2015. "Performance of small- and medium-sized enterprises in services trade: evidence from French firms," Small Business Economics, Springer, vol. 45(3), pages 673-702, October.
    19. Nigel Jenkinson & Adrian Penalver & Nicholas Vause, 2008. "Financial Innovation: What Have We Learnt?," RBA Annual Conference Volume (Discontinued), in: Paul Bloxham & Christopher Kent (ed.),Lessons from the Financial Turmoil of 2007 and 2008, Reserve Bank of Australia.
    20. Kaya, Orcun, 2022. "Determinants and consequences of SME insolvency risk during the pandemic," Economic Modelling, Elsevier, vol. 115(C).
    21. Saqib Aziz & Mahabubur Rahman & Dildar Hussain & Duc Nguyen, 2021. "Does corporate environmentalism affect corporate insolvency risk? The role of market power and competitive intensity," Post-Print hal-03344206, HAL.
    22. Ko Wai Wai & Catherine Liston-Heyes & Weixi Liu & Gordon Liu & Marc Cowling, 2022. "Organizational capabilities and SME exports: the moderating role of external funding intentions and managerial capacity," Small Business Economics, Springer, vol. 58(1), pages 247-261, January.
    23. Marek Zinecker & Martina Skalicka & Adam P. Balcerzak & Michał Bernard Pietrzak, 2022. "Identifying the impact of external environment on business angel activity," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 35(1), pages 83-105, December.
    24. Songling Yang & Muhammad Ishtiaq & Muhammad Anwar, 2018. "Enterprise Risk Management Practices and Firm Performance, the Mediating Role of Competitive Advantage and the Moderating Role of Financial Literacy," JRFM, MDPI, vol. 11(3), pages 1-17, June.
    25. Mehmet Civelek & Vladimír Krajèík, 2022. "How do SMEs from different countries perceive export impediments depending on their firm-level characteristics? System approach," Oeconomia Copernicana, Institute of Economic Research, vol. 13(1), pages 55-78, March.
    26. Boine Kim & Byoung-Goo Kim, 2021. "An Explorative Study of Korean Venture Companies: Do CSR and Company Competitiveness Improve Non-Financial and Financial Performance?," Sustainability, MDPI, vol. 13(23), pages 1-12, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Michal Karas & Mária Režòáková, 2023. "A novel approach to estimating the debt capacity of European SMEs," Equilibrium. Quarterly Journal of Economics and Economic Policy, Institute of Economic Research, vol. 18(2), pages 551-581, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Meles, Antonio & Salerno, Dario & Sampagnaro, Gabriele & Verdoliva, Vincenzo & Zhang, Jianing, 2023. "The influence of green innovation on default risk: Evidence from Europe," International Review of Economics & Finance, Elsevier, vol. 84(C), pages 692-710.
    2. Ugur, Mehment & Vivarelli, Marco, 2020. "The role of innovation in industrial dynamics and productivity growth: a survey of the literature," GLO Discussion Paper Series 648, Global Labor Organization (GLO).
    3. Giovanni Marin & Marco Modica, 2019. "The Survival of Italian Individual Firms to Local Demand Shocks During the Great Recession," Working Papers 1902, University of Urbino Carlo Bo, Department of Economics, Society & Politics - Scientific Committee - L. Stefanini & G. Travaglini, revised 2019.
    4. Chun Yang & Bart Bossink & Peter Peverelli, 2017. "High-tech start-up firm survival originating from a combined use of internal resources," Small Business Economics, Springer, vol. 49(4), pages 799-824, December.
    5. Zhenjie Wang & Jiewei Zhang, 2023. "Nexus between corporate environmental performance and corporate environmental responsibility on innovation performance," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(10), pages 11645-11672, October.
    6. Mehmet Ugur & Marco Vivarelli, 2021. "Innovation, firm survival and productivity: the state of the art," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 30(5), pages 433-467, July.
    7. Yu Zhao & Huaming Du & Qing Li & Fuzhen Zhuang & Ji Liu & Gang Kou, 2022. "A Comprehensive Survey on Enterprise Financial Risk Analysis from Big Data Perspective," Papers 2211.14997, arXiv.org, revised May 2023.
    8. Lee, Jun-won, 2021. "Analysis of technology-related innovation characteristics affecting the survival period of SMEs: Focused on the manufacturing industry of Korea," Technology in Society, Elsevier, vol. 67(C).
    9. Eleonora Cutrini & Federico Ninivaggi, 2024. "Pandemic crisis and firm survival: evidence from the Italian manufacturing industry," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 51(2), pages 265-297, June.
    10. Mehmet Ugur & Marco Vivarelli, 2020. "Technology, industrial dynamics and productivity: a critical survey," DISCE - Quaderni del Dipartimento di Politica Economica dipe0011, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    11. Eman Ismail & Yasser Tawfik Halim & Mohamed Samy EL-Deeb, 2023. "Corporate reputation and shareholder investment: a study of Egypt's tourism listed companies," Future Business Journal, Springer, vol. 9(1), pages 1-15, December.
    12. Liu, Haiyue & Wang, Yile & Shi, Xiaoshuang & Pang, Lina, 2022. "How do environmental policies affect capital market reactions? Evidence from China's construction waste treatment policy," Ecological Economics, Elsevier, vol. 198(C).
    13. De Masi, G. & Giovannetti, G. & Ricchiuti, G., 2013. "Network analysis to detect common strategies in Italian foreign direct investment," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 392(5), pages 1202-1214.
    14. Jessica Birkholz & Jarina Kühn, 2021. "Entrepreneurship Perception during the first COVID-19 Shock: Mental Representations of Entrepreneurship and Preferences of Business Models during the Pandemic," Bremen Papers on Economics & Innovation 2105, University of Bremen, Faculty of Business Studies and Economics.
    15. Gundula Glowka & Andreas Kallmünzer & Anita Zehrer, 2021. "Enterprise risk management in small and medium family enterprises: the role of family involvement and CEO tenure," International Entrepreneurship and Management Journal, Springer, vol. 17(3), pages 1213-1231, September.
    16. Abiodun Tope Samson, 2015. "The Impact of Entrepreneurial Orientation, Reconfiguring Capability and Moderation of Environmental Turbulence on Export Performance of SMEs in Nigeria," Journal of Economics and Behavioral Studies, AMH International, vol. 7(3), pages 76-87.
    17. Anne Musson & Damien Rousselière, 2020. "Exploring the effect of crisis on cooperatives: a Bayesian performance analysis of French craftsmen cooperatives," Applied Economics, Taylor & Francis Journals, vol. 52(25), pages 2657-2678, May.
    18. Marco Grazzi & Chiara Piccardo & Cecilia Vergari, 2022. "Turmoil over the crisis: innovation capabilities and firm exit," Small Business Economics, Springer, vol. 59(2), pages 537-564, August.
    19. Baier-Fuentes, Hugo & Andrade-Valbuena, Nelson A. & Huertas Gonzalez-Serrano, Maria & Gaviria-Marin, Magaly, 2023. "Bricolage as an effective tool for the survival of owner-managed SMEs during crises," Journal of Business Research, Elsevier, vol. 157(C).
    20. Lixiang Wang & Wendi Hou & Yupei Liu, 2023. "How do co‐shareholding networks affect negative media coverage? Evidence from China," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 63(4), pages 4221-4249, December.

    More about this item

    Keywords

    financial risk management; financial performance; bankruptcy; innovativeness; competitiveness;
    All these keywords.

    JEL classification:

    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pes:ieroec:v:14:y:2023:i:1:p:327-354. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Adam P. Balcerzak (email available below). General contact details of provider: https://edirc.repec.org/data/ibgtopl.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.