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The study investigated various aspects of market orientation and innovation performed by small-sized businesses in small towns of the U.S. The objectives for the study were: 1) to examine market orientation in relation to business innovation and business performance and 2) to examine business innovation in relation to business performance in small businesses in small towns.
Quantitative data were collected from small business owners/managers operating with less than 20 employees and with annual sales of $1 million or less across the continental U.S. Small businesses located in communities of less than 20,000, counties adjacent and non-adjacent to non-metropolitan areas were chosen for the study.
The results of the multiple regression analyses indicated that the competitor and customer market orientation were found to be positive and significant in explaining the variability of business innovation in small town business firms. The small town businesses were more innovative if they were more market-oriented. Among the three variables-business innovation, competitor market orientation, and customer market orientation-customer market orientation had the most significant influence on small business owners/managers’ perceived overall business success. Only business innovation among the three variables significantly influenced small town business firms’ gross profits. Contrary to conventional findings, competitor market orientation and customer market orientation did not significantly affect small businesses’ gross profits with innovation included in the equation. Implications and directions for future research are discussed. |
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| Drawing on the concept of exploration and exploitation, we examine 1) whether possession of patents abroad strengthens the core competence of the firm, which in turn promotes exploration and 2) whether outsourcing to foreign markets affects the procurement of resources and knowledge, which in turn promotes exploitation. Furthermore, we test the moderating effect of the product timescale (short-term and long-term orientation) to better explain the nature of innovation in emerging countries. To test our hypotheses, we use the data from the World Bank Group that includes 1555 firms in 11 developing nations. The results show strong support for the relationship between patenting and outsourcing abroad, and innovation. However, the moderating variable was not supported. Our post hoc analysis reveals the importance of balancing exploration and exploitation in innovation. |
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| This study empirically analyzed the various determinants that might influence both inbound and outbound open innovation activities in the perspectives of environmental characteristics, firm-specific characteristics and government institutional characteristics based on the survey results of 108 manufacturing SMEs in Korea. Our findings reveal that for the environmental characteristics, the degree of market competition and technological change showed a positive relationship with inbound open innovation activities, which implies that when pushing for open innovation, SMEs need to be equipped with a systematic monitoring system to better understand their environment. For the firm-specific characteristics, R&D personnel, R&D investment, overseas sales and the openness of their organizational cultures were correlated with inbound open innovation activities. However only R&D investment and the openness of their organizational culture positively influenced inbound open innovation activities. These results suggest that SMEs strategically need to utilize internal resources, and try to enable employees to become more open through the proper training and rewards system for facilitating their open innovation. For the government institutional characteristics, technology networking showed a positive relationship both with inbound and outbound open innovation activities. We believe that a government needs to help SMEs strengthen technology networking by developing and implementing various government-supported policies and programs for promoting open innovation in SMEs. |
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We compare the tax aggressiveness of venture companies and non-venture companies. We examine how tax aggressiveness varies depending on the type of the venture company, where types are defined based on the capital structure and R&D intensity.
Our results show that tax aggressiveness of venture companies is higher than that of non-venture companies. This suggests that venture companies face a more competitive environment and financial constraints. Due to the environment and characteristics of venture companies, despite various tax benefits, they are more likely to engage in aggressive tax planning.
We categorize venture companies into three types according to the capital structure and R&D intensity, and we find the following. Venture companies that obtain equity financing (Type 1) show relatively high degree of tax aggressiveness compared to companies who obtain debt financing (Type 3). This suggests that financing through the guarantee of KTFC (Korean Technology Finance Corporation; Type 3) or borrowed from SBC (Small and medium Business Corporation; Type 3) is recorded as liability on the financial statement. Moreover, tax expense decreases because of the tax benefits from interest expenses. This shows that capital structure affects the tax aggressiveness of venture companies. Venture companies with high R&D intensity (Type 2) have relatively high degree of tax aggressiveness. As venture companies spend a significant part of their profit in R&D they record it as expenses rather than capitalize them as assets to minimize tax expenses.
This study has three contributions. First, this paper extends the field of tax research related to venture companies. Second, even if venture companies have small tax burden due to various benefits and support policies, our results suggest that they are likely to establish aggressive tax planning presumably due to the special environment and characteristics. This result provides important insights in policy decisions regarding tax benefits for venture companies. Third, by categorizing venture companies by capital structure and R&D intensity, this study compares the different level of aggressiveness for each type of venture companies. We find a dissimilar result about tax aggressiveness for each type of venture companies, suggesting that tax authorities need to evaluate the tax policy individually according to the firm type. |
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중소기업연구
