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Empirical evidence shows that large firms are generally more efficient than small and medium-sized firms. Empirical tests have evaluated cost efficiency while assuming homogeneity among firms and mainly examined the size-efficiency relationship in a hypothetical average firm. However, in practice, firms have different resources for multiple reasons and are therefore heterogeneous. This paper uses the concept of profit efficiency to study size-efficiency relationships in individual firms while assuming heterogeneity among firms. For this purpose and in contrast to the traditional approach, we estimate a stochastic frontier model with random coefficients using Bayesian techniques to assess the differences in profit efficiency between small and large firms in the manufacturing industry in Spain. The results show that the relationship between efficiency and size heavily depends on the internal properties and characteristics of the firm and environment in which it operates and that there is heterogeneity among firms; ignoring such heterogeneity can lead to an overestimation of inefficiency of 4.92 percentage points. We also discuss the implications of these results. [ABSTRACT FROM AUTHOR]

The purpose of this paper is to explore whether collaborating with public research organizations (PROs) contributes to strengthening the innovation culture of small and medium sized enterprises (SMEs). We examine to what extent their innovation culture is reinforced by collaborations with research organizations and investigate the type of organizational strategies that enhance this effect of collaboration. The empirical study is based on a survey of firms that collaborate with the largest Spanish PRO, Spanish National Research Council (CSIC). Our results indicate that SMEs differ greatly in their capacity to strengthen their innovation culture through collaboration with research organizations. We show also that firms with formal innovation plans that develop internal and external search strategies are more likely to improve their innovation culture as a result of collaboration with PROs. These findings provide managers with new insights into how to strengthen their firms' innovation culture through collaboration with research organizations. [ABSTRACT FROM AUTHOR]

The main objective of this paper is to extend the literature on the granting of trade credit. The focus is to test whether the accounts receivable decisions follow a model of partial adjustment. To do that, we use a sample of 2,922 Spanish SMEs. Using a dynamic panel data model and employing the GMM method of estimation we control for unobservable heterogeneity and for potential endogeneity problems. The results reveal that firms have a target level of accounts receivable and take decisions in order to achieve that level. In addition, we find that sales growth (if positive), the size of the firms, their capacity to generate internal funds and get short term financing, and economic growth are important in determining trade credit granted by firms. [ABSTRACT FROM AUTHOR]

The aim of this paper is to test the individual effects of total quality management (TQM) on customer results, people results, society results and quality performance in a small- and medium-sized enterprise (SME) context. The research is based on information from 85 ISO 9000 certified SMEs in Spain. A number of regression analyses are applied in order to examine the impact of TQM on these four results and identify which factors of TQM have the greatest effect. After analysing the survey data, 10 SMEs were randomly selected for individual visits, in order to check the results. The results show that TQM may improve customer results, people results, society results and quality performance. TQM factors related to training and specialist training are showed to be the most significant predictors of quality outcomes. The contribution of this paper is to study this association in SMEs in Spain. Copyright © 2007 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

This paper analyzes the relation between working capital management and profitability for small and medium-sized enterprises (SMEs) by controlling for unobservable heterogeneity and possible endogeneity. Unlike previous studies, we examine a non-linear relation between these two variables. Our results show that there is a non-monotonic (concave) relationship between working capital level and firm profitability, which indicates that SMEs have an optimal working capital level that maximizes their profitability. In addition, a robustness check of our results confirms that firms' profitability decreases as they move away from their optimal level. [ABSTRACT FROM AUTHOR]

SME innovation strategy and motivation has become one of the most challenging subjects of innovation policy. New innovation models proposed recently have captured the attention of policy makers. However, these models seem for the most part to be applicable to medium-sized or large enterprises. The objective of this paper is to analyse the open innovation model in the case of outsourced cooperative R&D in SMEs. Although the driving forces for outsourcing innovation in SMEs are in some respects similar to those for large firms, others are linked to lack of resources, but both have in common the pursuit of efficiency in R&D and technology transfer. This paper is based on an empirical study of open innovation in SMEs and proposes a model for analysing the critical elements which influence performance and strategic alignment between R&D performers and their partners (in most cases, SMEs). [ABSTRACT FROM AUTHOR]

The main proposal of the paper is to analyze the human resources management practices adopted by some Spanish SMEs in order to promote and develop corporate entrepreneurship. A case study method is used to explore the corporate entrepreneurship activities developed by three SMEs. The main results show the importance of establishing good relationships among companys' members, creating an appropriate working environment. Also, the relevance of promoting risk attitudes and the participation of employees in corporate entrepreneurship activities is highlighted. [ABSTRACT FROM AUTHOR]

The achievement of competitiveness advantages by companies is something vital for their survival and success. With this paper we try to know which factors explain the competitive success of SMEs, using a sample of 1.201 Spanish enterprises that develop their activity in the industrial sector. [ABSTRACT FROM PUBLISHER]

Small and medium-sized enterprises (SMEs) usually have wide cooperation networks. High levels of cooperation facilitate the acquisition of knowledge by clients, suppliers and competitors. The objective of this paper is to analyze the influence trust, compromise, knowledge, the management team, and the expected benefits have on three levels of cooperation (suppliers, clients and competitors). The results indicate that whilst expected benefits are the key to moving on to further levels of cooperation, trust is needed. Satistical confirmation of the hypothesis was carried-out using a logistical polytomic regression model, and the data came from 88 SMEs in Murcia, Spain. An additional investigation in other regions, to analyze the interrelation of different forms of IT cooperation in SMEs and large enterprises, could help improve the rigor of the results. [ABSTRACT FROM AUTHOR]

There is an intense debate in the literature on the impact of process management on innovation, and the division of opinions becomes particularly apparent with regard to radical innovation. Furthermore, organisational ambidexterity, the organisational capability to undertake incremental as well as radical innovation activities, has been underlined as a key source of competitiveness. In this article, we analyse how the cultural divergence driven by process management can affect organisational ambidexterity. Through a survey carried out on a sample of Spanish firms in the furniture and textile sectors, both of which have been drastically hit by competition from Asian firms, we conclude that the cultural context created by process management practices applied in a total quality management framework, which embraces exploitation along with exploration values, acts as a platform for developing organisational ambidexterity. Since organisational ambidexterity constitutes the capability of undertaking a rich variety of learning and innovation activities, these results could also have significant implications for practitioners, pointing to the need for close coordination between different functional areas in order to manage cultural change. [ABSTRACT FROM AUTHOR]

A good creative climate is considered one of the main capacities inherent in groups that establish innovation processes. Creative climate emerges from different forces interacting in a way that can be stimulated or inhibited. We identify six dimensions of creative climate. By analysing them jointly, we find that some are more relevant than others for the purposes of innovation. To test the model, we designed an empirical study based on a group of medium-sized firms in traditional sectors in Spain involved in non-high technology innovation. The results show that trust and support are the dimensions that favour innovation and that the dimension of relationship conflict has neither a positive nor a negative effect on innovation. Nevertheless, relationship conflict has a significant positive effect on the autonomy–innovation association and a significant negative effect on the commitment–innovation association. We find synergistic effects between apparently contradictory forces with implications for change and thus for organizational flexibility. [ABSTRACT FROM PUBLISHER]