Technology transfer, finance channels, and sme performance : New evidence from developing countries

Mehmet Huseyin Bilgin, Chi Keung Marco Lau, Ender Demir

    Research output: Contribution to journalArticlepeer-review

    3 Citations (Scopus)


    This paper attempts to explore the determinants for small and medium enterprise (SME) performance. In particular, we investigate how training, technology adoption, finance channels and exporting behavior affect SMEs' performance by examining the determinants of the profit per worker. Using a rich and up to date firm-level dataset, we find evidence that SMEs can improve performance by importing more foreign materials inputs and by utilizing foreign technologies from technologically advanced economies. This effect of technology spillover is particularly important for smaller enterprises in developing countries because in-house innovation is expensive. We further find that both informal finance sources and formal finance channels do not enhance the performance of smaller enterprises in financing daily operations and interestingly, informal channels hamper a firm's performance. There is no evidence for the effect of on-the-job training on firm performance. The exporting behavior of firms measured by the percentage of exports has no significant impact on firm performance.

    Original languageEnglish
    Article number1250020
    JournalSingapore Economic Review
    Issue number3
    Publication statusPublished - Sept 2012

    Bibliographical note

    Copyright 2012 Elsevier B.V., All rights reserved.


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