Is political risk a driver of listed SMEs leverage?

Papageorgiou, Theofanis; Savvakis, Georgios; Kenourgios, Dimitris

doi:10.1080/13504851.2020.1819949

Cited by 3 publications

(3 citation statements)

References 12 publications

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“…In addition, we sought an SME focus in sampling. SME exporters are more vulnerable to the significant changes of the global business environment (Papageorgiou et al. , 2020).…”

Section: Methodsmentioning

confidence: 99%

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Fencing or balancing? An exploratory study of Australian and New Zealand exporters’ strategic responses during the US-China trade war

Ren,

Chugh,

Gao

2024

IMR

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PurposeA key challenge for exporters and international marketing/purchasing managers is formulating strategic responses to deal with geopolitical disruptions during a trade war between superpowers. While past studies provide insightful analysis of the influence of changes in the institutional environment (regulatory pressures) on national and firm-level trade activities, they tend to ignore the association between inward (sourcing) or outward (export) international activities of firms during a trade war. In this study, we aim to explore various strategic options employed by third-party SME exporters in response to geopolitical disruptions, institutional pressures and constraints during a trade war.Design/methodology/approachWe adopted a qualitative methodology and applied a hermeneutical approach in collecting, analysing and theorising interview findings. We conducted interviews with 15 owners or senior managers from 12 Australian and New Zealand exporters that exported or sourced significantly from at least one party of the trade war, the USA or China, between 2018 and 2020.FindingsOur study developed a typology of fencing vs. balancing for explaining third-party SME exporters’ response strategies in terms of export market and international sourcing locations during a trade war. Fencing strategy centres on location choice decisions based on a fence or a secure buffer zone. Balancing strategy focuses on leveraging opportunities outside the conflict zone, i.e. third-party countries. Our study finds that exporters’ location choice decisions are influenced by a number of institutional factors during the trade war.Research limitations/implicationsFirstly, our study examined only the early phase of the trade war under the “Trump” era. Future research may consider a longitudinal study design that examines exporters’ responses to global political uncertainty over a longer term. Secondly, we chose Australia and New Zealand as the focal context of this study. Future research could investigate exporters from other third-party countries that have different institutional conditions during the US-China trade war.Practical implicationsFirstly, an exporting firm should monitor and assess closely the wider changes in international relations between their home country’s major security partner and major trading partner, and the impact of these changes on the political risks of operating in international locations. Secondly, as the trade war intensifies, the fencing option needs to be given a greater weight than the balancing option in the strategic decision making of an exporter from a third-party country. Lastly, we encourage marketers and managers to reflect on and differentiate short-term and long-term benefits in strategic market-sourcing location decisions.Originality/valueOur study makes a pioneering effort to theorise the linkages between institutional factors and the combined evaluation of export market selection and sourcing location selection choices under global political uncertainty based on the institution-based view. We present a conceptual framework highlighting the importance of institutional avoidance, embeddedness, comparative institutional advantages and multiple institutional logics for SME exporters’ international location selections during the trade war. Furthermore, we combine these institutional factors into two overarching constructs namely institutional buffer and institutional pluralism.

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“…In addition, we sought an SME focus in sampling. SME exporters are more vulnerable to the significant changes of the global business environment (Papageorgiou et al. , 2020).…”

Section: Methodsmentioning

confidence: 99%

“…In addition, we sought an SME focus in sampling. SME exporters are more vulnerable to the significant Exporters' trade-war strategic responses changes of the global business environment (Papageorgiou et al, 2020). We use the Australian Bureau of Statistics (ABS) [1] definition to determine the size of an exporting business.…”

Section: Samplingmentioning

confidence: 99%

Fencing or balancing? An exploratory study of Australian and New Zealand exporters’ strategic responses during the US-China trade war

Ren,

Chugh,

Gao

2024

IMR

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“…Due to their recent introduction, use of the FEF model in the existing economics literature is light. Mullings and Mahabir (2018), Papageorgiou et al (2020), and Laliotis and Minos (2022) are recent studies in the general economics literature that use this approach specifically to estimate the effect of TI variables, but to the best of our knowledge there are no studies using this approach in the agricultural economics literature. However, we believe the FEF model is ideally suited for examining wheat variety adoption because it addresses the shortcomings of each of the other empirical models discussed above.…”

Section: Fixed Effects Filtermentioning

confidence: 99%

Estimating the effect of time‐invariant characteristics in panel data: wheat adoption in Western Canada

Syme

Torshizi

2023

American J Agri Economics

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A growing global population and the challenges of climate change have made the need to develop new and improved wheat varieties increasingly important. Creating varieties that are more disease resistant and tolerant to changing environmental conditions such that they will be widely adopted requires breeders to understand the needs of producers. Existing literature suggests that time‐invariant traits such as disease resistance and brand matter in crop adoption decisions; however, studies using common panel data approaches are unable to identify the individual effects of time‐invariant variables, as they are captured by fixed effects dummies. This study uses a recently developed econometric approach—the fixed effects filter model—that can estimate the effects of time‐variant, slowly changing, and time‐invariant traits. Using wheat variety adoption in the Canadian Prairies as our empirical setting, we find that both time‐variant traits, such as varietal adaptability, and time‐invariant traits, such as resistance to stripe rust infection, are positively correlated with adoption. We also find that seed brand has a statistically significant effect on adoption. Prior panel data studies on crop adoption have not given much consideration to time‐invariant variety characteristics like disease tolerance and seed brand, but a better understanding of their impact on adoption can assist breeders in responding to emerging problems, particularly new diseases, more quickly and more efficiently. This will also enhance the work by crop research institutions, prevent considerable economic loss to farmers, and improve crop production.

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Digitalization as a driver of European SMEs’ financial performance during COVID-19

Savvakis,

Kenourgios,

Trakadas

2024

Finance Research Letters

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Is political risk a driver of listed SMEs leverage?

Cited by 3 publications

References 12 publications

Fencing or balancing? An exploratory study of Australian and New Zealand exporters’ strategic responses during the US-China trade war

Fencing or balancing? An exploratory study of Australian and New Zealand exporters’ strategic responses during the US-China trade war

Estimating the effect of time‐invariant characteristics in panel data: wheat adoption in Western Canada

Digitalization as a driver of European SMEs’ financial performance during COVID-19

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