TECHNOLOGY TRANSFER, FINANCE CHANNELS, AND SME PERFORMANCE: NEW EVIDENCE FROM DEVELOPING COUNTRIES


BİLGİN M. H. , Marco L. C. K. , Demir E.

SINGAPORE ECONOMIC REVIEW, vol.57, no.3, 2012 (Journal Indexed in SSCI) identifier identifier

  • Publication Type: Article / Article
  • Volume: 57 Issue: 3
  • Publication Date: 2012
  • Doi Number: 10.1142/s0217590812500208
  • Title of Journal : SINGAPORE ECONOMIC REVIEW
  • Keywords: Technology transfer, finance channels, SME performance, HUMAN-RESOURCE MANAGEMENT, FOREIGN DIRECT-INVESTMENT, FIRM-LEVEL ANALYSIS, ORGANIZATIONAL PERFORMANCE, TRADE LIBERALIZATION, BUSINESS PERFORMANCE, MANUFACTURING FIRMS, ECONOMIC-GROWTH, DOMESTIC FIRMS, CAPITAL GOODS

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 the profit 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.