Profit efficiency and its determinants in small and medium-sized enterprises in Spain

Abstract

This paper estimates profit efficiency and its determinants in small and medium-sized manufacturing enterprises in Spain. The stochastic frontier methodology and the model proposed by Battese and Coelli (1995) were used to determine the impact of the technological and environmental differences between these companies on their efficiency. The results indicate that the average profit efficiency of food SMEs is 49.37%. The results also reveal that company size, export orientation, government assistance and labour productivity are all positively related to the efficiency of food SMEs; age, however, is negatively related. Finally, the strategic implications of these findings are discussed.

Are Wine Producers With Subsidies More Technically Efficient?

“…A positive relationship between the size and efficiency of SMEs was found for example by Balios et al (2015), Charoenrat et al (2013), Margono & Sharma (2006), Yang (2006) and Latruffe et al (2006). This demonstrates that larger SMEs are able to take advantage of economies of scale to a greater extent and have better opportunities to access information and technological resources (Pérez-Gómez et al, 2018).…”

“…On the opposite hand, Schiefer and Hartmann (2008) find that for German food processing firms, that the size has no influence. Pérez-Gómez et al (2018) estimated the efficiency in small and medium-sized manufacturing enterprises. Average efficiency of food SME is 49.37%.…”

Small and Medium-Sized Enterprises (SMEs): The Engine of Economic Growth through Investments and Innovation

“…For instance, in 2015, there were about 23 million SMEs that provided 90 million jobs, generating a higher added value of 3.9 billion EUR [4]. Different to large corporations, SMEs are highly flexible, revealing a superior flexibility to technical shifts, higher promotion of income distribution and better adaptability to fluctuations in the market and new customer requirements, while their organizational structure allows for quicker decision making [5]. Nevertheless, to achieve this potential, SMEs need a continued source of longstanding funding so as to invest in growth opportunities [6].…”

Macroeconomic and Microeconomic Determinants of Efficiency of Indian Construction & Engineering Firms: An Investigation

“…The existing literature also identified different factors having significant impact on the efficiency of the large size firms. Some of the important factors identified by the earlier research studies were size of the firm, age of the firms, ownership structure, number of employees, profitability, prevalence of competition, liberalization, export intensity , import penetration, labour cost, foreign ownership, capitalization, subsidies, management costs, education of the owners, quality of human capital, liberalization, R & D, existence of crimes and political risk, infrastructure, product diversification and international diversification, use of technology, managerial efficiency, remuneration to the top management and workers, market to book value ratio, financial leverage, Government quality, taxes, foreign investment and training cost of the employees (Pitt & Lee, 1981;Blomström, 1986;Kumbhakar Ghosh & McGuckin, 1991;Zheng, Liu & Bigsten, 1998;Chuang & Lin, 1999;Piesse & Thirtle, 2000;Chapelle & Plane, 2005;Ismail & Sulaiman, 2007;Yu, Barros, Yeh, Lu, & Tsai, 2012;Forlani, 2012;Doaei, Ahmad Anuar & Ismail, 2015;Giokas, Eriotis & Dokas , 2015;Firth et al, 2015;Jain, Kundu & Newburry, 2015;Baek & Neymotin, 2016;Pilar, Marta & Antonio, 2018;Maji, Laha & Sur , 2020a;Mazorodze, 2020). Hanousek et al (2015) suggested that the efficiency of the firms also depends upon the control of the domestic owners and the importance of the minority shareholder.…”