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Financial support for micro and small enterprises: Economic benefit or social responsibility?
Zhejiang Gongshang Univ, China.
Linnaeus University, Faculty of Technology, Department of Informatics.
Zhejiang Gongshang Univ, China.
Zhejiang Gongshang Univ, China.
2020 (English)In: Journal of Business Research, ISSN 0148-2963, E-ISSN 1873-7978, Vol. 115, p. 266-271Article in journal (Refereed) Published
Abstract [en]

Regarding the financial support provided to micro and small enterprises (MSEs), deciding whether to prioritize economic benefit or social responsibility is a crucial policy choice, especially in developing countries. This paper establishes a new research framework for density of enterprise output value and wages conditional on loans to balance economic benefit (sales revenue) and social responsibility (employee payroll). Using data on 9125 Chinese enterprises from January 2015 to December 2017, this paper shows that loans have a range effect on sales revenue and employee payroll, which ascends gradually to a plateau and eventually descends. Based on this finding, this paper proposes a reallocation scheme. With total loans unchanged, fixed sales revenue can increase employee payroll by 3.8%. Similarly, fixed employee payroll can increase sales revenue by 5.2%. This study not only provides empirical evidence for financially supporting MSEs, but also provides alternative decision support for policy design.

Place, publisher, year, edition, pages
Elsevier, 2020. Vol. 115, p. 266-271
Keywords [en]
Financial support, Micro and small enterprises (MSEs), Conditional density, Reallocation scheme, Economic benefit, Social responsibility
National Category
Economics and Business
Research subject
Economy
Identifiers
URN: urn:nbn:se:lnu:diva-96285DOI: 10.1016/j.jbusres.2020.01.071ISI: 000535976300024Scopus ID: 2-s2.0-85078965108OAI: oai:DiVA.org:lnu-96285DiVA, id: diva2:1441570
Available from: 2020-06-16 Created: 2020-06-16 Last updated: 2021-05-07Bibliographically approved

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Costa-Climent, Ricardo

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