Diagnosing Asset Pricing Models Using the Distribution of Asset Returns

A common finding in the literature on heterogeneity in entrepreneurial entry is that workers of small firms relative to large firms are more likely to become entrepreneurs (i.e., the “small firm effect”). Researchers disagree, however, on how to interpret this relationship, and in which contexts. A traditional argument is that work experience in small firms facilitates the acquisition of knowledge relevant to entrepreneurship, which, in turn, facilitates transitions into entrepreneurship. An alternative explanation argues that, at least in technical domains, the small firm effect derives from the potential for large firms to better integrate ideas internally (i.e., intrapreneurship). We inform this debate by leveraging a unique, nationally representative survey that provides rich details about the emergence of entrepreneurial ideas and their potential implementation inside vs. outside of firms. Consistent with the former explanation of the small firm effect, for the average worker, we find strong evidence that small firms (relative to large firms) are better at providing an environment that facilitates transitions to entrepreneurship. However, we also find that technical workers are more likely to attempt to implement ideas in larger firms relative to non-tech workers. Our results thus imply that while the traditional mechanism drives the small firm effect for non-tech workers, both mechanisms contribute to the effect for the tech workers, thus helping to reconcile competing explanations in prior studies. In addition to unpacking the drivers of the small firm effect, our study has broader implications for the recent discussion on the drivers of entrepreneurial dynamism.

Introduction The economic achievement of China during the last two decades has been impressive. The manufacturing industry has made the most significant contribution to the spectacular economic growth in China (Lee and Yu 1997). However, the Chinese manufacturing industry is now in a critical stage of its development. The business environment in global markets is very turbulent, reflecting keen competition both in price and in product advantages. Manufacturers in the developed nations provide high-quality products at reasonably low prices, while other developing countries' manufacturers are challenging Chinese firms seriously by producing the similar products at a lesser cost. Furthermore, consumers from all over the world are becoming more quality-conscious. The new wave of quality awareness and emphasis has given a significant impact on business operations in the world. These recent developments force Chinese firms to consider quality management practices to enhance the quality of their products. China must move away from its reactive, low-cost-based strategy that relies on cheap labor. Chinese firms must develop a new competitive edge based on quality. To meet these challenges, Chinese firms have been paying more attention to quality management (Lee and Yu 1997). Actually, many Chinese firms now try to implement quality management practices, such as total quality management (TQM), as a part of their manufacturing/business strategies (Lee and Zhou 2000; Zhao, Young, and Zhang 1995). Investment for quality improvement is being made mostly in large corporations in China. However, there are few studies about TQM implementation in Chinese small manufacturing firms even though most of the Chinese manufacturers are small or medium-sized firms (Lee and Yu 1997). Small firms are still dominant in many areas, such as services, trade, construction, textiles, and satellite suppliers to the larger firms in China. This research will provide analysis of TQM implementation in Chinese small manufacturing firms by investigating how TQM was introduced to them and how it was perceived. It examines the present status of TQM practices and its development and impacts on organizational performance in Chinese small manufacturing firms and makes suggestions for the successful implementation of TQM. Even though this study is focused on Chinese small manufacturing firms, most of the considerations and suggestions can be applied to small manufacturing firms in other countries. Although the United States Small Business Administration (SBA) defines a manufacturing firm with fewer than 500 employees as a small firm, this study considers firms to be small in size if they employ less than 300 workers. This definition of small business size is based on Lee and Yu (1997). Applicability of TQM to Small Manufacturers There are several articles published on the applicability of TQM and its practices in small firms (Lee 1998; Ahire and Golhar 1996; Price and Chen 1993; Yam and Tang 1993). Most of these studies focus on U.S. or Japanese small firms, with little thought being given to their applicability to small manufacturing firms in developing countries, such as China. Small firms are very different from large ones in many areas, such as management style, production processes, available capital, purchasing practices, inventory systems, and negotiating power (Lee 1998; Ahire and Golhar 1996). However, some studies (Lee 1998; Ahire and Golhar 1996; Black and Porter 1996; Price and Chert 1993; Yam and Tang 1993) suggest application of TQM to small firms by identifying more attractive conditions in small firms than in large ones. Some of the TQM elements and programs appear to be more compatible with small manufacturers. Some TQM benefits may be relatively more significant to small firms. In addition, they indicated that most small firms are suitable for applying TQM because of certain basic features of TQM. …

This paper studies competition and financial market performance of the US grocery sector over a period of almost 50 years (1960-2007), using the Sharpe-Fama-French-Carhart standard performance attribution methodology. Following Hou and Robinson (2006), investors in industries with strong (resp. weak) competitive pressures demand a positive (resp. negative) return premium commensurate with the competitive risk incurred. We examine whether such a Hou-Robinson premium exists in the US grocery sector.We find no statistical evidence of a Hou-Robinson premium for the sector as a whole. The sector thus appears to be correctly priced. When, however, our sample is separated into larger and smaller firms, the portfolio of larger firms exhibits a positive Hou-Robinson premium, while that of smaller firms exhibits a negative premium. This result supports the dual nature of competition in the US grocery sector.Furthermore, when we compare the risk-adjusted average return of the larger retail firms in the grocery portfolio with that of the larger manufacturing firms in the same portfolio, we find no statistically significant difference. The larger manufacturing and retail firms in the grocery supply chain seem to share the same level of competitive risk. However, the portfolio of smaller manufacturing firms does not exhibit the negative premium seen in the portfolio of smaller retail firms, indicating that the latter are able to shield themselves from competitive pressures in a way that their manufacturing counterparts are not.

Job Creation by Company Size Class: Concentration and Persistence of Job Gains and Losses in Canadian Companies

Small and large firms’ trade-off between benefits and risks when choosing a coopetitor for innovation

Many studies have compared various characteristics of large and small business firms. For example, recent studies have documented the “small firm effect”. These articles have indicated a tendency for small companies to exhibit greater risk‐adjusted stock returns than large companies. Other research has focused on comparing the financial aspects of small and large firms. These previous studies found a positive relationship between size and liquidity as measured by the current and quick ratios. Little, however, has been written in recent years that compares the liquidity characteristics of small and large firms.

New technologies and technological information in small businesses

Small hospitality firms are very important to the Egyptian economy because of their potential contributions to economic growth and job creation. However, there is a paucity research about small hospitality firms in developing countries, i.e. Egypt. This research bridges a gap in knowledge and investigates human resource management practices in small versus large hospitality firms in Egypt. A pretested questionnaire was self-administered to workers in four groups of hospitality firms: large chain, large independent, small chain, and small independent. The results showed that chain hospitality firms are more likely to practice formal and appropriate human resource management in comparison to other independent firms regardless their size. The results showed that there are statistical significant differences within small firms and also within large firms. Small hospitality firms are not homogenous and recognizing the level of heterogeneity within these firms, will lead to better understanding human resource management practices in these firms. Policy makers in Egypt should pay serious attention to small hospitality firms. Failure to this will impact negatively on the hospitality industry and ultimately on tourism development, which is critical to the Egyptian economy.

Costs of short-term credit for small and large firms

This study aims to examine the impacts of globalization on the performance gap between small and large firms in Indonesia, specifically in the manufacturing sector. First, the study addresses whether there are performance differentials between small and large firms, and if so, whether such gap is increasing while controlling for firm characteristics such as age, finance, export orientation, industry, and macroeconomic indicators. Second, the study discusses whether the opening of domestic market through trade and FDI liberalization affect firms disproportionately with respect to firm size. The study highlights such impacts amid successive economic reforms from 1986 to 1994. The empirical results suggest that opening the economy through market liberalization increased the productivity and wages gaps between large and small firms before it stabilized. Factors such as industrial agglomeration, financial access, export orientation have minimal impact on firms. The findings also suggest that while empirically, small firms benefit from more open trade regime after Asian financial crisis, the medium and large firms have more chance to benefit from the liberalization of the economy in general. Policy implications are also further explored.

The Financing of Small Innovative Firms: The Italian Case

<h3>Introduction</h3> Small firms, while more numerous than large firms, often face greater challenges in implementing effective occupational health and safety and return-to-work programs. Research has rarely looked at firm size as a determinant of work disability duration and has been limited to single jurisdictions. <h3>Objectives</h3> To identify whether there were differences in work disability duration between injured workers employed by small, medium and large firms and whether these differences varied between workers’ compensation jurisdictions in Canada (CAN) and Australia (AUS). <h3>Methods</h3> Workers’ compensation data were used to identify comparable lost-time, work-related injury and musculoskeletal disorder claims in five Canadian and five Australian jurisdictions between 2011 and 2015. Work disability duration was measured using cumulative days in receipt of disability benefit payments up to one-year post-injury. Jurisdiction-specific quantile regression models were used to compare cumulative disability days paid from small ( &lt; 2 0 full-time equivalents (FTEs), medium (20–199 FTEs), large (200+ FTEs) firms at 25th, 50th, and 75th percentiles in the disability distribution, adjusting for confounders. <h3>Results</h3> Differences in work disability duration by firm size were observed in all jurisdictions except the Northern Territories (AUS). Compared to large firms, small firms were paid the most disability days at each percentile, particunarly in Victoria (AUS), Saskatchewan (CAN), the Australian Capital Territory, and Tasmania (AUS), where an additional 63.0, 31.1, 37.0, and 27.4 days were paid at the 75th percentiles of the distributions, respectively. Claims from medium-sized firms were generally paid more disability days than large firms except in Western Australia and Tasmania, where they were paid less. <h3>Conclusions</h3> Small firms were shown to have the longest work disability durations in 9 of the 10 study jurisdictions. Claims management processes need to be sensitive to the challenges that small firms face in accommodating and returning injured workers back to work.

Project portfolio management (PPM) is defined as a collection of portfolio components (projects, programs, and other activities) grouped together to facilitate their management to fully or partially meet a set of strategic objectives of the organization. These projects constitute an important part of the business and play a central role in the development, strategic vision, and maintenance of a company’s competitiveness and performance. However, from a strategic perspective, for these projects to generate value for the company, it must be guaranteed that the selected group of projects contributes to implementing the business strategy in terms of product lines, markets, technological platforms, and so on. PPM plays a vital role in enhancing a company’s competitiveness and overall performance, particularly in small firms where strategic alignment and resource optimization are crucial. This study examines the implementation of PPM practices in small software development firms, and explores managers’ perceptions of their impact on organizational performance. A mixed-method research design was employed, beginning with a quantitative exploratory study that identified small firms that actively applied PPM practices. Following this, a multiple case study was conducted to investigate how these firms implement PPM at the strategic, portfolio, and project levels. The findings support the hypothesis that small firms require a different approach than large firms and reveal the best practices that can support small software development firms in leveraging PPM to improve strategic coherence and operational effectiveness.

SummaryDo small and large firms respond differently to tax cuts? Using new narrative measures of the exogenous variation in corporate marginal tax rates and a unique dataset of US manufacturing firms, we find that the investment of large firms is more sensitive to a marginal tax cut than that of small firms. Furthermore, we show that small firms finance their new investments almost entirely through debt, whereas large firms use both cash and debt. Following a tax cut, the tax advantage of debt financing falls relative to cash financing. This substitution effect is more pronounced for large firms and induces them to rely on cash financing to a larger extent than small firms.

Recent academic and practitioner research suggests that small firms are disadvantaged in strategic alliances. However, relatively little work explores the potential sources of these disadvantages. Using the comparative approach of transaction cost economics and the capability emphasis of the resource-based view, this chapter develops a framework that explores the extent to which differences in the partners available to small firms, the forms of governance chosen by small firms, the types of problems examined by small firms, and other firm attributes affect alliance organization decisions and subsequent performance across small and large firms.