Profitability and size of newly established firms Fonseca, Sofia; Guedes, Maria João; da Conceição Gonçalves, Vítor
International entrepreneurship and management journal,
06/2022, Volume:
18, Issue:
2
Journal Article
Peer reviewed
Open access
Does size matter for new firms and do they need to be large to be profitable? From small to large firms, a wide range of arguments have explored the possible strengths and liabilities associated with ...size. Despite the long interest in the relation between size and profitability, the empirical evidence is mixed and inconclusive. To date, studies focus mainly on established firms. In order to advance the knowledge on the relation, we examine the effects of size on the profitability of newly established firms in their first years of business. Overall, the results show that size has a positive impact on the profitability of new firms. In particular, increases in the number of employees have a positive effect on the return on assets that indicates that being small is a liability for new firms. Further, this finding indicates the need for a certain critical mass of employees when firms start out. By starting out with a higher number of employees, new firms may invest in the development of their performance by stimulating learning and motivation and, in this way, increase their profitability and their chances of survival. In addition to the liability of smallness, we also investigate the moderator effect of age. Our conclusions support the liabilities of obsolescence and senescence arguments that state that as firms age, they have difficulties in adapting to the external environment and face internal inertia.
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CEKLJ, EMUNI, FIS, FZAB, GEOZS, GIS, IJS, IMTLJ, KILJ, KISLJ, MFDPS, NLZOH, NUK, OILJ, PNG, SAZU, SBCE, SBJE, SBMB, SBNM, UKNU, UL, UM, UPUK, VKSCE, ZAGLJ
The service innovation literature lacks empirical studies that focus on the links between service firms and universities. This paper aims to contribute to a better understanding of these links. This ...paper applies the Portuguese version of the Community Innovation Survey (CIS 2006) to obtain data on 967 service firms. The model uses a random intercept in an ordered probit regression to empirically assess which factors influence the collaboration of service firms with universities for innovation related activities. The regression also considers the unobserved firm heterogeneity. The results demonstrate that innovation success, radical innovations, and innovation intensity are crucial to the development of links between innovative service firms and universities.
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GEOZS, IJS, IMTLJ, KILJ, KISLJ, NUK, OILJ, PNG, SAZU, SBCE, SBJE, UL, UM, UPCLJ, UPUK
This paper analyzes the roles of social entrepreneurship and transformational leadership in explaining the social value and the organizational performance of non-profit social organizations. By ...evaluating the role of socioeconomic context as the moderating variable, the results confirm the strong influence of social entrepreneurship on social value and the effects of social entrepreneurship and transformational leadership on organizational performance. The socioeconomic context proves to be an important moderator of the hypothesized relations. In an unfavorable context, transformational leadership becomes relevant in explaining social value and organizational performance. However, in a favorable context, social entrepreneurship provides more significant support to social value and organizational performance, and social value itself also has an effect on organizational performance.
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GEOZS, IJS, IMTLJ, KILJ, KISLJ, NUK, OILJ, PNG, SAZU, SBCE, SBJE, UL, UM, UPCLJ, UPUK
This paper proposes that the frequently established association between alliances and performance can be further explained by the alliance management capability. It unfolds some relationships that ...are encapsulated in the simple link between the alliance-related construct and the performance measures. The research hypothesis formed a structural model and the results confirmed that the proposed moderating role for the alliance management capability is significant and that alliances are effectively used for growing and for innovating.The main outcomes are: (a) a discussion and a test of 'what is' the alliance management capability; (b) a better understanding of the reasons why alliances enhance performance, namely by leveraging growth and innovation.
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BFBNIB, IZUM, KILJ, NUK, PILJ, SAZU, UL, UM, UPUK
This study investigates whether configurations of situational determinants impact R&D intensity. Using a qualitative comparative analysis (QCA), the study assesses the consistency and coverage, both ...cross-sectionally and over time, of these configurations. The global solution presents four alternative combinations conducive to R&D intensity and concludes that situational determinants matter. The way managers use their aspirations, the proximity of bankruptcy, and the availability of slack affects the propensity to engage in R&D. Further, the results show that firms are not all alike and highlight the differences in how these determinants combine to impact R&D intensity.
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GEOZS, IJS, IMTLJ, KILJ, KISLJ, NUK, OILJ, PNG, SAZU, SBCE, SBJE, UL, UM, UPCLJ, UPUK
This paper focuses on the interconnections between sovereign debt and the competitiveness of nations in the aftermath of the recent sovereign debt crises in the Eurozone. Further, it identifies new ...challenges to improving competitiveness. Based on a deductive approach, we analyse secondary data regarding sovereign debt and competitiveness in 28 EU countries for the period from 2006 to 2017. We also look at the recent theoretical developments in the competitiveness of companies, nations, and regions with the goal of identifying the new challenges to Portuguese competitiveness. In the period under analysis, Greece, Ireland, and Portugal had considerable losses in competitiveness and increases in their sovereign debt ratio. Despite benefiting directly from Porter's insights into improving the country's competitiveness, the Portuguese sovereign debt ratio has increased steeply. A previous analysis identified a path; however, there are new challenges such as those associated with EU competitiveness, shared value, and smart connected products. These need to be considered to support the creation of new strategies and policies for a small and open economy. Based on our analysis, we argue that competitiveness-oriented policies must more explicitly consider the negative implications of sovereign debt, and must recognize the new challenges to competitiveness.
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CEKLJ, NUK, ODKLJ, UL, UM, UPUK
We use a fuzzy-set qualitative comparative analysis to examine how four characteristics of top managers (narcissism, sense of control, tenure, and workload) explain their high or low self-reported ...performance. Our survey sample comprises 784 top managers (572 males and 212 females) from non-listed firms in all industries in Portugal. While the results show that none of the characteristics is either a necessary or sufficient condition, they do show that three different paths exist that are conducive to high self-reported performance. The results indicate that the self-images of the managers and the control they exert over others influence their judgements about their performance and the reality of the firm. This finding highlights the important effect that top managers' characteristics have on performance, and stakeholders should consider this effect when analyzing a firm.
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GEOZS, IJS, IMTLJ, KILJ, KISLJ, NUK, OILJ, PNG, SAZU, SBCE, SBJE, UL, UM, UPCLJ, UPUK
We investigate the complementary roles of corporate governance; property, plant, and equipment (PPE) volatility; and intangible asset volatility in improving the returns from R&D volatility. With ...increasing R&D volatility, corporate governance can help align divergent goals and heterogeneous resources both internally and externally. PPE volatility or intangible asset volatility could help synchronize asset turnover with R&D volatility. The findings show that corporate governance and PPE volatility complement R&D volatility in improving a firm's performance.
•R&D volatility and firm performance association could be conditional on governance.•Moderators: Corporate governance, Intangible asset volatility, and PPE volatility•Sample is publicly traded firms (325 firms; 2003–2010) in the UK.•Corporate governance improves the R&D volatility and performance relation.•PPE asset volatility improves R&D volatility and performance relations.
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GEOZS, IJS, IMTLJ, KILJ, KISLJ, NUK, OILJ, PNG, SAZU, SBCE, SBJE, UL, UM, UPCLJ, UPUK
The specific aim of this study is to identify the performance features of cancer centers in the European Union by using a fuzzy-set qualitative comparative analysis (fsQCA). The fsQCA method ...represents cases (cancer centers) as a combination of explanatory and outcome conditions. This study uses data on seven centers from a European benchmarking project: BENCH-CAN. The fsQCA uses the net income and productivity as the outcome conditions and five explanatory conditions: the level of dedication to R&D, annual budget level, size, type, and whether the center is a comprehensive cancer center. Despite the modest number of cases, the study successfully applies the fsQCA. The findings show that public, comprehensive cancer centers with at least two of the three other explanatory conditions (dedication to R&D, annual budget, or size) have an association with high net income and high productivity.
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GEOZS, IJS, IMTLJ, KILJ, KISLJ, NUK, OILJ, PNG, SAZU, SBCE, SBJE, UL, UM, UPCLJ, UPUK
10.
GUEST EDITORIAL Gonçalves, Vítor da Conceição; Ruiz-Garcia, Jesús
The Service industries journal,
07/2013, Volume:
33, Issue:
9-10
Journal Article
Peer reviewed
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BFBNIB, IZUM, KILJ, NUK, PILJ, SAZU, UL, UM, UPUK
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