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Technology Transfer, Finance Channels, And Sme Performance: New Evidence From Developing Countries

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  • MEHMET HUSEYIN BILGIN

    () (Faculty of Political Sciences, Istanbul Medeniyet University, D-100 Karayolu 34732, Goztepe-Kadikoy, Istanbul, Turkey)

  • CHI KEUNG MARCO LAU

    () (Faculty of Economics & Administrative Sciences, Zirve University, Gaziantep, Turkey)

  • ENDER DEMIR

    () (Advanced School of Economics, Ca' Foscari University of Venice, Venice, Italy)

Abstract

This paper attempts to explore the determinants for small and medium enterprise (SME) performance. In particular, we investigate how training, technology adoption, finance channels and exporting behavior affect SMEs' performance by examining the determinants of theprofit per worker. Using a rich and up to date firm-level dataset, we find evidence that SMEs can improve performance by importing more foreign materials inputs and by utilizing foreign technologies from technologically advanced economies. This effect of technology spillover is particularly important for smaller enterprises in developing countries because in-house innovation is expensive. We further find that both informal finance sources and formal finance channels do not enhance the performance of smaller enterprises in financing daily operations and interestingly, informal channels hamper a firm's performance. There is no evidence for the effect of on-the-job training on firm performance. The exporting behavior of firms measured by the percentage of exports has no significant impact on firm performance.

Suggested Citation

  • Mehmet Huseyin Bilgin & Chi Keung Marco Lau & Ender Demir, 2012. "Technology Transfer, Finance Channels, And Sme Performance: New Evidence From Developing Countries," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 57(03), pages 1-20.
  • Handle: RePEc:wsi:serxxx:v:57:y:2012:i:03:n:s0217590812500208
    DOI: 10.1142/S0217590812500208
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    References listed on IDEAS

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    1. Jonathan E. Haskel & Sonia C. Pereira & Matthew J. Slaughter, 2007. "Does Inward Foreign Direct Investment Boost the Productivity of Domestic Firms?," The Review of Economics and Statistics, MIT Press, vol. 89(3), pages 482-496, August.
    2. Benoit Dostie, 2013. "Estimating the Returns to Firm-Sponsored On-the-Job and Classroom Training," Journal of Human Capital, University of Chicago Press, vol. 7(2), pages 161-189.
    3. N. Ngoc Thang & D. Buyens, 2008. "Training, organizational strategy, and firm performance," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 08/541, Ghent University, Faculty of Economics and Business Administration.
    4. Rita Campos e Cunha & Miguel Pina e Cunha & Antonio Morgado & Chris Brewster, 2002. "Market forces, strategic management, HRM practices and organizational performance, a model based in European sample," FEUNL Working Paper Series wp415, Universidade Nova de Lisboa, Faculdade de Economia.
    5. Matthew J. Slaughter, 2002. "Does Inward Foreign Direct Investment Contribute to Skill Upgrading in Developing Countries?," SCEPA working paper series. SCEPA's main areas of research are macroeconomic policy, inequality and poverty, and globalization. 2002-08, Schwartz Center for Economic Policy Analysis (SCEPA), The New School.
    6. Emilio Colombo & Luca Stanca, 2008. "The Impact of Training on Productivity: Evidence from a Large Panel of Firms," Working Papers 134, University of Milano-Bicocca, Department of Economics, revised Jan 2008.
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    Cited by:

    1. Giray Gozgor & Muhlis Can, 2016. "Effects of the product diversification of exports on income at different stages of economic development," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 6(2), pages 215-235, August.
    2. Dr. Arif Anjum, 2018. "Impact of Technology Adoption on the Performance of Small and Medium Enterprises in India," The Journal of Social Sciences Research, Academic Research Publishing Group, pages 857-867:5.

    More about this item

    Keywords

    Technology transfer; finance channels; SME performance; L25;

    JEL classification:

    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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