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In many markets, large and small firms coexist. As large firms can in principle out-compete small ones, the actual presence of the latter asks for an explanation. In ours, we focus on the dimensionality of markets, which can change as a consequence of product innovations, preference elaboration or institutions. We show that increasing market dimensionality substantially enlarges the market periphery relative to the market center, which creates new potential niches for small firms. We thereby provide a parsimonious explanation for small firm subsistence.

The study of patterns of small firm strategic behavior, or strategic orientation, is gradually gaining prominence in the literature. Strategic behavior is a consequence of various antecedents, such as the prevalent management philosophy and environmental dynamism. It, in turn, determines the particular engineering stance adopted, structures and processes deployed, and ultimately, organizational performance.

The purpose of this paper is to critique, enhance and extend a model proposed by Aloulou and Fayolle (2005) that is focused particularly on the entrepreneurial orientation of small firms. A model is proposed for small firm strategic orientation that is based on a configurational approach, and applies the concepts of the adaptive cycle and the firm's lifecycle. The rationale for, and the various dimensions of the proposed model are described, and recommendations made for future research on small firm strategic behavior.

Social capital and access to finance have been identified as key resources that influence the growth of small firms however, these variables have rarely been studied. This paper, therefore, examines the relationship between social capital and firm growth with access to finance as a moderating role. 250 small firms in the Kumasi Metropolis in Ghana were used for the study. Structural Equation Modelling using Partial Least Square (PLS) was used to analyze the data collected using area sampling. The results indicated that social capital does not directly influence firm growth. In addition, access to finance does not moderate the relationship between social capital and firm growth. However, a positive relationship was found between social capital and access to finance. Access to finance and firm growth, though significant, had a negative relationship. It is recommended that since social capital influences the capability to access finance, entrepreneurs should be encouraged to build more relationships within their networks. Moreover, government agencies and financial institutions should devise strategies that will reduce the interest rates so that though these small firms in Ghana can access finance, the high interest rates will not erode the gains they may achieve in the long run.

The properties inherent in Advanced Manufacturing Technology (AMT) create new opportunities for firms, and in particular small firms. The capability of this technology to modify production specifications quickly and accurately means that firms can customize their products and attain economies of scope based on low volume and low cost production. While traditionally technology has been perceived merely as a tool in implementing business strategy, this paper suggests that AMT has the potential to directly affect a firm's innovation strategy. To date, however, empirical analysis to examine the technology-strategy relationship has not been forthcoming. Through empirical analysis this paper focuses on the relationship between the adoption of AMT and one element of firm's strategy choice, that is, their innovation strategy. This relationship is examined in the context of firm's market and industry structure and internal non-technological resource capabilities.

Drawing upon data from a sample of 597 small manufacturing firms, the current paper hopes to contribute to the emerging body of empirical literature, which seeks to distinguish the characteristics of more and less innovative small firms. Importantly, in so doing, a definition of innovation is employed which, at least partially, resolves many of the difficulties associated with operationalising the relativity of "innovativeness" and which places the emphasis upon innovation as a commercial, rather than a technological, phenomenon. To this end, a number of noteworthy observations are apparent. In broad terms, the paper points to the limits of viewing innovation output as a simple function of the volume of inputs. In other words, capability appears to matter at least as much as capacity. Moreover, the findings place the means of improving innovativeness firmly within the ambit of executives and suggest that these are likely to involve internal strategising and the development of human and intellectual capital.

This study examines the findings of a survey of small, high innovator firms and their assessment of the risks and benefits of forming strategic alliances with third party "complementors". The study found that the entrepreneurs of these small innovator firms were willing to form strategic alliances where such collaboration would assist in reducing customer perceptions of risk in the adoption of their innovation, while also enhancing the customer's understanding of the innovation. However, the entrepreneur of the small firm also needed to be confident that the alliance would allow him or her to retain control over the quality of the final outcome to their customer. These findings suggest that education of the entrepreneur in the development and management of strategic networks may be a useful enhancement to the process of innovation in small firms.

This paper examines how innovative small firms achieve innovation within lean environments. Writers taking a resource-based view (RBV) approach to innovation by small firms in lean environments have argued that they are resource-constrained through shortages of skilled labour, finance and social networks. This paper builds on the RBV approach by adopting a dynamic capabilities (DCs) lens to investigate how innovative small firms adopt and acquire DCs to achieve innovation in a lean environment in a small country with an open economy that is distant from major markets. We argue that entrepreneurs will engage in pragmatic solutions to overcome resource constraints. We provide qualitative evidence from a programme of 30 interviews and find that innovative small firms achieve innovation through ingenuity and patience. Our entrepreneurs use methods such as bricolage and bootstrapping and make cooperative arrangements with early adopters to maximise use of their limited resources.

This paper presents and discusses some findings of a research study that applied social network theory to small, professional business service firms. These findings demonstrate that social networks impact upon the innovative behaviour of small firms. They reveal that through the innovative use of social networks, small, professional business service firms are able to expand their customer and resource base while minimising the costs involved. The paper draws attention to the contents of the social networks in which a purposive sample of graphic design agencies are embedded. It demonstrates that multiplex relationships, particularly with individuals holding broker positions within these networks, are perceived to be important to innovative behaviour. The paper concludes by suggesting a number of recommendations for owner-managers, policymakers and researchers.

It is maintained that processes such as lean construction can reduce costs within the construction process. These costs often arise due to a lack of harmonization between contracting parties. Historically, the relationship between contractors and subcontractors has been transactional in nature, with both parties seeking to secure value added at minimal cost. Despite this fact, evidence suggests that mutual cooperation that can supersede a traditional cost led approach offers a new hope for prosperity in the construction industry. This paper provides preliminary case study research, highlighting that the competent implementation of lean construction should include the full integration of the small subcontracting firm. Thus, it is argued that harmonization between contractors and subcontractors is a prerequisite for lean construction. The paper finally posits that new practices will continue to have only a limited appeal to small subcontracting firms if they continue to facilitate contractor opportunism instead of reducing the transaction costs of all parties.

The average idiosyncratic volatility of small public firms is a positive predictor of future stock returns. This is true for returns of both large and small firms. We consider several economic arguments for this result, including a liquidity premium, and we rule out all but one of them. Our evidence supports the entrepreneurial risk hypothesis, which states that small firms’ idiosyncratic risk is a proxy for risk faced by private business owners, who also happen to be significant shareholders of stock. Expected returns are increasing functions of entrepreneurial risk, and therefore returns are predictable using proxies for this risk, which include small-firm idiosyncratic volatility.