Why and How to Evaluate the Creditworthiness of SMEs’ Business Partners

Čančer, Vesna; Knez-Riedl, Jožica

doi:10.1177/0266242605050510

Cited by 11 publications

(5 citation statements)

References 12 publications

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“…While, Cancer and Knez-Riedl (2005) discuss the creditworthiness of SME's business partners, Berger and Frame (2007) emphasize the importance of credit scoring on the credit availability of SMEs. However, SMEs cover more than 95 percent of the GNP of Turkey therefore understanding of their credit risk attributes poses a particular importance.…”

Section: Introductionmentioning

confidence: 99%

Credit Risks and Internationalization of Smes

Arslan

Karan

2009

Journal of Business Economics and Management

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Abstract. The purpose of the paper is to identify common attributable factors causing credit risks to domestic and international SMEs of an emerging market in Turkey. We call domestic fi rms as the ones only making local sales and international fi rms as the ones also making sales abroad. Therefore in this study, cross-border sales are assumed to lead the fi rms to internationalization. We study totally 1,166 SMEs for the year 2007, which coincide with an economic expansion in Turkey. We fi nd that different factors affect credit risks for the two types of fi rms. For domestic fi rms, our results present a direct relationship between the likelihood of corporate default and trade credits, corporate tax, fi nancial expenses and net profi t margin yet the relationship turns negative for gross profi t margin. For international fi rms, likelihood of corporate default increases with the ratio of inventories to total assets but decreases with net profi ts and net sales.

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Section: Introductionmentioning

confidence: 99%

Credit Risks and Internationalization of Smes

Arslan

Karan

2009

Journal of Business Economics and Management

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“…The model and experimental research on the evaluation of teaching cases discloses that the KANP method is effective in conducting a knowledge management of the entrepreneurship education. Čančer and Knez-Riedl [ 27 ] presented a method for developing the internal ratings to best select among the business partners of a firm using AHP. Since qualitative factors come into play, special attention is given to determining not only quantitative but also qualitative criteria.…”

Section: Literature Reviewmentioning

confidence: 99%

An Application of a Hybrid MCDM Method for the Evaluation of Entrepreneurial Intensity among the SMEs: A Case Study

Rostamzadeh

Ismail

Noubar

2014

The Scientific World Journal

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This study presents one of the first attempts to focus on critical success factors influencing the entrepreneurial intensity of Malaysian small and medium sized enterprises (SMEs) as they attempt to expand internationally. The aim of this paper is to evaluate and prioritize the entrepreneurial intensity among the SMEs using multicriteria decision (MCDM) techniques. In this research FAHP is used for finding the weights of criteria and subcriteria. Then for the final ranking of the companies, VIKOR (in Serbian: VlseKriterijumska Optimizacija I Kompromisno Resenje) method was used. Also, as an additional tool, TOPSIS technique, is used to see the differences of two methods applied over the same data. 5 main criteria and 14 subcriteria were developed and implemented in the real-world cases. As the results showed, two ranking methods provided different ranking. Furthermore, the final findings of the research based on VIKOR and TOPSIS indicated that the firms A3 and A4 received the first rank, respectively. In addition, the firm A4 was known as the most entrepreneurial company. This research has been done in the manufacturing sector, but it could be also extended to the service sector for measurement.

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“…gradient and dynamic sensitivity) and to detect the key success or failure factors for goal fulfillment (e.g. performance sensitivity), which is of special importance when developing creative ideas into innovations.We have already implemented the framework procedure for MCDM in several real‐life applications, mainly in small and medium‐sized enterprises (SMEs): a creditworthiness assessment (Čančer and Knez‐Riedl, 2005), an environmentally oriented business decision‐making (Čančer, 2004), process benchmarking (Čančer, 2005), a choice of investments, and the selection of the most appropriate project portfolio in SMEs (Vrečko et al , 2010).…”

Section: The Cps Processmentioning

confidence: 99%

Multi‐criteria decision making in creative problem solving

Čančer

Mulej

2013

Kybernetes

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PurposeThe purpose of this paper is to present the adapted model per phases of the creative problem solving (CPS) process, where multi‐criteria decision making (MCDM) methods are used in the decision‐making phase. Also, to adapt and complete the steps of the six‐question technique, in order to establish the criteria's importance.Design/methodology/approachThe framework procedure of MCDM, together with the Dialectical Systems Theory's guidelines when solving complex problems has already been introduced. The procedure was well‐verified in practice, but lacked the support of creative qualitative techniques in defining problems, and in generating and choosing alternatives. To eliminate this deficiency, in terms of prescriptive approach, the authors adapted the phases of the CPS process, where MCDM methods are used when choosing alternatives, and completed the steps of the six‐question technique to establish the criteria weights. The discrete Choquet integral was used to consider interactions among criteria.FindingsThe article shows that creative approaches are not limited to merely problem definitions and problem structuring. They can also be used in typically analytical steps in the framework procedure.Research limitations/implicationsThe completed and adapted phases of the CPS process can allow the mutual assistance of creative and decision‐making methods when solving problems – a step forward to holism.Practical implicationsThis article develops and introduces the use of the six‐question technique, in the establishment of criteria weights.Originality/valueThe innovative aspect of this article is that it adapts and completes the CPS process so that MCDM methods can be used when choosing alternatives. It extends the use of creative approaches to typically analytical steps of MCDM, where synergies and redundancies among criteria are considered.

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Why and How to Evaluate the Creditworthiness of SMEs’ Business Partners

Cited by 11 publications

References 12 publications

Credit Risks and Internationalization of Smes

Credit Risks and Internationalization of Smes

An Application of a Hybrid MCDM Method for the Evaluation of Entrepreneurial Intensity among the SMEs: A Case Study

Multi‐criteria decision making in creative problem solving

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