Study on the Utilization of National and EU Funds in Financing Capital Investments of ICT Companies

Springer Proceedings in Political Science and International Relations

Viseu

2022

This work is mainly aimed at evaluating the reasons behind the inefficient execution of Operational Programs (OPs) aimed at promoting research and innovation (R&I), especially in small and medium-sized enterprises (SMEs). To achieve this goal, we employed a three-stage slack-based measure (SBM) data envelopment analysis (DEA) model combined with Stochastic Frontier analysis (SFA), which includes a multiplicity of achievement metrics and environmental factors, to evaluate 53 OPs from 19 countries. Our findings suggest that more developed regions (proxied by a higher Gross Domestic Product (GDP) per capita) do not make an efficient application of European Regional Development Funds (ERDF) aimed at fostering R&I in SMEs. Also, a greater proportion of the population with a university degree does not imply an appropriate use of ERDF devoted to R&I in SMEs. Lifelong learning is positively linked with the performance of the outcomes “Researchers Working in Improved Infrastructures” and “Enterprises Supported”. Research and development (R&D) expenditures in the public sector contribute favorably to the needed improvements in “Researchers Working in Improved Infrastructures” but have the reverse effect on the number of “Enterprises Supported” and “Enterprises Working with Research Institutions”. Furthermore, because R&D expenditures in the business sector have a positive impact on the necessary development of “Enterprises Working with Research Institutions”, these results appear to demonstrate that public R&D has a weaker influence on SME innovation than private R&D. Finally, innovative SMEs collaborating with other sources of knowledge show a positive effect on both the number of “Enterprises” and “Enterprises Working with Research Institutions” supported.

Section: Results Obtained With Sfasupporting

confidence: 52%

Evaluating the Reasons Behind the Inefficient Implementation of ERDF Devoted to R&I in SMEs

Springer Proceedings in Political Science and International Relations

Viseu

2022

“…These results demonstrated that richer regions and a larger number of ICT specialists may not always imply a better rate of execution of ERDF funds targeted at strengthening the ICTs in SMEs. In line with these results, [73] recognized the underutilization of ERDFs by Croatian SMEs' ICTs from 2014 to 2020. The authors of the study proposed that the complexities and time necessary to apply, create, and evaluate the projects were a possible explanation for these outcomes [73].…”

Section: Second Stage: Obtaining the Adjusted Input And Output Factor...supporting

confidence: 67%

“…In line with these results, [73] recognized the underutilization of ERDFs by Croatian SMEs' ICTs from 2014 to 2020. The authors of the study proposed that the complexities and time necessary to apply, create, and evaluate the projects were a possible explanation for these outcomes [73]. Furthermore, [74] reported that SMEs' investments were lower than would be predicted by typical economic models, suggesting that these enterprises are especially sensitive to financing challenges.…”

Section: Second Stage: Obtaining the Adjusted Input And Output Factor...supporting

confidence: 67%

Are ERDFs Devoted to Boosting ICTs in SMEs Inefficient? A Three-Stage SBM Approach

Viseu²

2022

Sustainability

We assessed the implementation of operational programs (OPs) aimed at boosting the deployment of information and communication technologies (ICTs) in small and medium-sized enterprises (SMEs). We performed a three-stage slack-based measure (SBM) data envelopment analysis (DEA) model combined with the stochastic frontier analysis (SFA), which considered data and contextual factors reported from the European Union (EU) to appraise 51 OPs from 16 countries. Overall, we discovered that by eliminating the contextual factors, almost 27% of the OPs (14) attained efficient procedural results. The OP “Multi-regional Spain—ERDF” is widely perceived as a benchmark, irrespective of its contextual factors, remaining robustly efficient for data perturbations ranging from 5% to 10%. The “Number of Operations Supported” is the indicator that requires attention, both with or without the removal of contextual factors. Our findings suggest that more developed regions, with a greater proportion of ICT professionals, are associated with a poor utilization and allocation of ERDF funds to promote ICT adoption in SMEs. This could be attributed to an inability of SMEs to handle the complex bureaucratic processes of submitting and executing European Regional Development Fund (ERDF) initiatives. Consequently, it is vital to provide additional assistance that streamlines the management formalities and satisfies the needs of SMEs.

“…These findings suggest that more developed regions and a higher rate of ICT specialists do not necessarily mean a higher absorption rate of ERDF funds dedicated to boosting ICT in SMEs. The underuse of ERDF by ICT Croatian SMEs was also acknowledged by the authors of [81] for the period of 2014-2020. These authors concluded that the intricacy and the required time to apply, develop, and appraise the projects were the potential cause of these findings [81].…”

Section: Analysis Of Sfa Regression Resultsmentioning

confidence: 95%

“…The underuse of ERDF by ICT Croatian SMEs was also acknowledged by the authors of [81] for the period of 2014-2020. These authors concluded that the intricacy and the required time to apply, develop, and appraise the projects were the potential cause of these findings [81]. In addition, the authors of [82] ascertained that SMEs' investment ends up being smaller than it would be anticipated by standard economic fundaments, indicating that these firms are particularly vulnerable to funding issues.…”

Section: Analysis Of Sfa Regression Resultsmentioning

confidence: 95%

How Efficient Is the Implementation of Structural Funds Committed to Enhancing ICT Adoption in SMEs?

Journal of Open Innovation: Technology, Market, and Complexity

Viseu

2022

We evaluated the execution of the operational programs (OPs) committed to encouraging the adoption of information and communication technologies (ICTs) in small and medium-sized enterprises (SMEs). To achieve this goal, we employed a novel three-stage weighted Russel directional distance (WRDD) data envelopment analysis (DEA) model in conjunction with stochastic frontier analysis (SFA), which considers indicators officially mandated by the European Union (EU) and environmental factors, to evaluate 51 OPs from 16 EU countries. All in all, we concluded that by removing the environmental factors, about 30% of the OPs (16) reached an efficient procedural performance against 20% (10). The OP more frequently viewed as a benchmark regardless of the environmental factors is “Multi-regional Spain—ERDF” that remains robustly efficient within 5% and 10% tolerances. Without the removal of the environmental factors, the “number of operations supported” is the indicator that requires more attention from management authorities (MAs), whereas with their removal one-third of the OPs need to further reduce the “eligible costs decided” and improve “eligible spending”. According to our findings, more developed regions and a higher rate of ICT specialists seem to be related to an underuse of ERDF funds dedicated to boosting ICT in SMEs. These findings might be related to the administrative burden and the lack of ability of SMEs to deal with the various procedures for applying for and implementing European Regional Development Fund (ERDF) projects. Overall, it is critical to provide further support that simplifies administrative procedures and addresses SMEs’ specific requirements.