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Growth and profitability of small and medium-sized enterprises: Some Welsh evidence

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  • James Foreman-Peck
  • Gerry Makepeace
  • Brian Morgan

Abstract

Foreman-Peck J., Makepeace G. and Morgan B. (2006) Growth and profitability of small and medium-sized enterprises: some Welsh evidence, Regional Studies 40, 307-319. Policy-makers throughout the Organization for Economic Co-operation and Development (OECD) are keen to promote the development of small and medium-sized enterprises (SMEs) by a wide variety of means. The present study of over 1600 Welsh SMEs casts doubt on the effectiveness of doing so by grants, by encouraging trade associations, by pursuing current initiatives in training or by stimulating innovation as defined by SME management. On the other hand, it finds that support for selective Information Technology investment and for marketing planning could be beneficial. Additional results that might be addressed by policy are short-termism by older managers - preferring current to future profits more than younger managers - signs that fixed costs of tax compliance bear substantially more heavily on the profitability of smaller SMEs, and evidence for a substantial partnership and sole trader 'risk premium' between SMEs, suggesting considerable entrepreneurial risk aversion. Foreman-Peck J., Makepeace G. et Morgan B. (2006) La croissance et la rentabilite des Petites et Moyennes Entreprises: etude de cas du Pays de Galles, Regional Studies 40, 307-319. A travers l'OCDE, les decideurs tiennent a encourager le developpement des Petites et Moyennes Entreprises (PME) par tous les moyens. Cette etude aupres de plus de 1600 PME au Pays de Galles emet des doutes sur l'efficacite de le faire en octroyant des primes, en encourageant les associations professionnelles, en poursuivant les measures en vigueur dans le domaine de la formation, ou en stimulant l'innovation comme la definit la direction des PME. D'autre part, on conclut que le soutien en faveur de l'investissement selectif dans la technologie de l'information et pour le planning de la commercialisation pourraient s'averer avantageux. Des resultats supplementaires que pourrait aborder la politique sont la tendance des managers plus ages a mettre l'accent sur le court terme-aiment mieux engranger des benefices a court terme, plutot qu'a plus long terme, que ne le font les managers moins ages-des signes qui laissent supposer que les frais fixes de mise en conformite fiscale pesent plus lourdement sur la rentabilite des PME plus petites, et des preuves en faveur d'un partenariat important et d'une 'prime tous risques entreprise individuelle' entre les PME, ce qui laisse supposer une tendance non-negligeable a ne pas prendre des risques commerciales. Petites et Moyennes Entreprises (PME), Croissance, Rentabilite, Politique, Risques, Periodicite Foreman-Peck J., Makepeace G. und Morgan B. (2006) Wachstum und Rentabilitat kleiner und mittelgrosser Unternehmen: Beweise aus Wales, Regional Studies 40, 307-319. Parteiideologen in der ganzen OECD sind darauf bedacht, die Entwicklung kleiner und mittelgrosser Unternehmen (small and medium-sized enterprises = SMEs) auf die verschiedensten Arten zu fordern. Die vorliegende Studie einiger 1600 SMEs in Wales lasst Zweifel an der Wirksamkeit aufkommen, dies dadurch zu erreichen, dass man Zuschusse gewahrt, Handelsverbande fordert, aktuelle Ausbildungsinitiativen verfolgt oder Innovationen der von der SME Verwaltung definierten Art anregt. Andrerseits lasst sich feststellen, dass Unterstutzung ausgewahlter IT Investierungen und Planung der Vermarktung vorteilhaft sein konnten. Zusatzliche Ergebnisse, die Bestrebungen ansprechen konnten, sind kurzfristiges Denken alterer Bestriebsleiter, die, im Gegensatz zu jungeren, momentane Gewinne zukunftigen vorziehen, Anzeichen, dass Fixkosten der Einhaltung der Steuervorschriften sich weitaus harter auf die Rentabilitat kleinerer SMEs auswirken, und Beweis einer wesentlichen Partnerschaft und Alleinganghandler 'risikopramie' unter SMEs, die damit weitgehende Abneigung gegen unternehmerische Risikos andeuten Small and medium-sized enterprises (SMEs), Wachstum, Rentabilitat, Politik, Risiko, Ungeduld Foreman-Peck J., Makepeace G. y Morgan B. (2006) Crecimiento y rentabilidad de pequenas y medianas empresas: El ejemplo de Gales, Regional Studies 40, 307-319. Los responsables politicos en la OCDE estan muy interesados en fomentar el desarrollo de las pequenas y medianas empresas (pymes) mediante toda una serie de mecanismos. El presente estudio, llevado a cabo con mas de 1600 pymes de Gales, pone en entredicho la eficacia de este fomento, tanto si se pretende conseguir mediante subvenciones como mediante el estimulo de asociaciones comerciales, la aplicacion de iniciativas actuales para la formacion o el estimulo de la innovacion, definida por la gestion de las pymes. Por otra parte, se observa que el apoyo a la inversion selectiva en TI y la planificacion comercial podrian ser beneficiosos. Otros resultados que podrian ser utiles a la hora de decidir sobre una politica son la perspectiva a corto plazo que siguen los ejecutivos mas mayores, que, a diferencia de ejecutivos mas jovenes, prefieren obtener beneficios presentes y no futuros, lo que sugiere que los costes fijos de cumplimiento fiscal suponen un mayor peso en el beneficio de las pymes mas pequenas, y es muestra de una importante 'prima de riesgo' solo para las sociedades y los comerciantes entre las pymes, lo que indica una marcada aversion al riesgo empresarial. Pymes, Crecimiento, Rentabilidad, Politica, Riesgo, Preferencia de tiempo

Suggested Citation

  • James Foreman-Peck & Gerry Makepeace & Brian Morgan, 2006. "Growth and profitability of small and medium-sized enterprises: Some Welsh evidence," Regional Studies, Taylor & Francis Journals, vol. 40(4), pages 307-319.
    • Handle: RePEc:taf:regstd:v:40:y:2006:i:4:p:307-319
    DOI: 10.1080/00343400600725160
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    References listed on IDEAS

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    1. Andy Cosh & Alan Hughes & Melvyn Weeks, 2000. "The Relationship Between Training and Employment Growth in Small and Medium-Sized Enterprises," Working Papers wp188, Centre for Business Research, University of Cambridge.
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