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SME Performance

Separating Myth from Reality John Watson, formerly Professor of Accounting and Finance, The University of Western Australia
The performance of Small and Medium-sized Enterprises (SMEs) has been a subject of continual interest to both researchers and practitioners. This enlightening book investigates the pitfalls which have affected the assessment of SME performance in much of the past research.
Extent: 168 pp
Hardback Price: $120.00 Web: $108.00
Publication Date: 2010
ISBN: 978 1 84542 977 5
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  • Business and Management
  • Entrepreneurship
  • Economics and Finance
  • International Accounting
The performance of Small and Medium-sized Enterprises (SMEs) has been a subject of continual interest to both researchers and practitioners. This enlightening book investigates the pitfalls which have affected the assessment of SME performance in much of the past research.

In this book, John Watson dispels a number of myths that have become part of the SME landscape – including that SMEs suffer from excessively high failure rates; that female-owned SMEs under-perform male-owned SMEs; and that SME growth (particularly for female-controlled SMEs) is severely limited by a lack of external funding.

Making extensive use of both cross-sectional and longitudinal data, this book will appeal to research students interested in entrepreneurship and SMEs, teachers of entrepreneurship courses and policymakers. Advisors to the SME sector will also find that the material presented provides them with a good background understanding of performance in this sector.
‘Watson addresses some of the most pervasive myths related to small business performance in an engaging manner, capturing the nuances of these important issues. His review of the definitions of business failure and study of the differences those definitions make for research outcomes is particularly striking and useful for policy makers, researchers, and educators. This book helps us think more deeply about the variety of motivations, approaches, and outcomes that make up the world of small business.’
– Patricia Greene, Babson College, US

‘John Watson is my type of researcher. His scholarly career has been devoted to finding out what actually happens to small businesses, based on looking in detail at their performance and the factors influencing their performance. This frequently means that sacred cows have been sent to abattoir. The most notable of these is that most small business closures are “failures”. They are not, and Watson makes this point with clarity. This book further develops this insight. It then moves on to derive a better understanding of important policy issues such as the extent and relevance of financial constraints in small firms, and the role that governments might play in relaxing such constraints. Policy makers take note.’
– David Storey, University of Sussex, UK
Contents: Part I: Background 1. Introduction Part II: SME Performance 2. Defining and Measuring SME Failure/Success 3. The Effects of Age, Size, Industry and the Economy on SME Failure Rates Part III: Comparing the Performance of Female- and Male-Controlled SMEs 4. Failure Rates 5. Relating Outputs to Inputs 6. Adjusting for Risk Part IV: Growth Financing for SMEs 7. A Qualitative Analysis 8. A Quantitative Analysis Part V: Networking and SME Performance 9. The Association between Networking and Performance 10. Networking: Comparing Female- and Male-Controlled SMEs Part VI: Conclusions 11. Conclusions, Implications and Areas for Future Research References Index