Journal of Finance and Accounting
Volume 2, Issue 3, May 2014, Pages: 41-47
Received: Apr. 9, 2014;
Accepted: Apr. 18, 2014;
Published: Apr. 30, 2014
Views 3214 Downloads 228
Togtokhbuyan Lkhagvasuren, College of Economics and Management, Northwest A&F University, Yangling, China
Huo Xuexi, College of Economics and Management, Northwest A&F University, Yangling, China
This study analyses the profitability of small and medium-sized enterprises (SMEs) in Mongolia. SMEs play a crucial role in the Mongolian economy and are considered to be the stimulus of economic development in the country. The present paper investigates the factors that affect the performance of SMEs. It examines the relationship between returns, gender, age, education, bank advances, turnover volume, innovation, management experience, labour, interest rates, customer base, inflation and exchange rate based on data collected from 200 SMEs that have different capital structures. The equation specified profitability as the dependent variable and loans, sales, firm age, firm size and interest rates as independent variables. All data except interest rates which were derived from Central Bank data were gathered from a primary field survey. The conclusion to our study is that there is a strong positive correlation between sales growth, bank advances, business size and profitability.
Analysis of the Returns of Small and Medium-Sized Enterprises in Mongolia, Journal of Finance and Accounting.
Vol. 2, No. 3,
2014, pp. 41-47.
H. Bartb, “Fit among competitive strategy, administra-tive mechanisms, and performance: A comparative study of small firms in mature and new industries,” J. Small Bus. Manag., 41(2), 2003, 133 - 147.
Batra, “Job Reallocation, the Export Market, and Firm Performance: Microeconomic Evidence,” World Bank Policy and Research; Business Environment Unit; Ref. 683-26; Vol. 10(1); Jan-Mar, 1999.
D. J Brooksbank, N. C Clifton, D. Jones-Evans, and D.G Pickernell, “The End of the Beginning?” Welsh Regional Policy and Objective One, European Planning Studies, 9-(2), 2001, pp. 255-274.
C. Y. J. Cheah, J. Kang, D. A. S. Chew, “Strategic analysis of large local construction firms,” in China, Construct. Manag. Econ., 25(1), 2007, pp. 25–38.
A.C. Cooper, (1995). Challenges in pre-dicting new venture performance. In: I. Bull, H. Thomas, and G. Willard (eds.), Entrepreneurship: Perspectives on Theory Building. London: Elsevier Science. 1995.
Da Silva, A. P, Hall G, Hutchinson, P, “Fi-nancial and Strategic Factors Associated with the Prof-itability and Growth of Small and Medium-Sized Firms,” in Portugal. A paper presented at International Council for Small Business, 52nd World Conference, 13th to 15th June, Turku, Finland, 2007.
L. Daniels and A. Ngwira, “Results of a Nation-wide Survey on Micro, Small and Medium Enterprises,” in Malawi, GEMINI Technical Report No 53. PACT Publications, New York, 1993.
H. Davies and P. Walters, “Emergent pat-terns of strategy environment and performance in a transition economy,” Strat. J. Manage, 25(4), 2004, pp 347-364
F. Delmar, P. Davidsson and W. Gartner, (2003). “Arriving at the high-growth firm,” Journal of Business Venturing, 2003, 18: 189–216.
Fu, et al, “Capital Growth, “Financing Source and Profitability of Small Businesses: Evidence from Taiwan Small Enter-prises,” Small Business Economics, 2002, 18: 257-267.
K. Hallberg, “A Market Oriented Strat-egy for Small and Medium Scale Enterprises,” Interna-tional Finance Corporation Discussion Paper, 40, April, 2000.
P. C. Ike and S. A. N. D. Chidebelu, “Analy-sis of the influence of socio-economic variables on eco-nomic performance of women small scale business en-terprises,” in Nigeria: The case of the restaurant indus-try in Enugu State. J. Home Econ. Res., 2003, 5: 44 -51.
R. K. Kakani, B. Saha and V. N. Reddy, De-terminants of Financial Performance of Indian Corporate Sector in the Post-Liberalization Era: An Exploratory Study. NSE Research Initiative, Paper No. 5, Mumbai: National Stock Exchange of India, 2001.
P. Liar-govas and K. Skandalis, Factors affecting firms’ financial performance: The Case of Greece, University of Pelo-ponnese, 2008.
G. T. Lumpkin and G. Dess Link-ing two dimensions of entrepreneurial orientation to firm performance: The moderating role of environment, firm age, and industry life cycle; Journal of Business Venturing; Forthcoming, 1999.
G. D. Markman and W. B. Gartner, Is Extraordinary Growth Profitable? A Study of 500 High Growth Companies. Entrepreneurship: Theory and Practice, 27, (1), 2002, pp 65 -76.
J. McMahon, Employee relations in small manufacturing firms. In: T. Turner and M. Morley, (eds.) Industrial Rela-tions and the New Order: Case studies in conflict and co-operation, Oak Tree Press, Dublin, 1995.
G. T. Olutunla, T. M. Obamuyi “An empirical analysis of factors associated with the profitability of Small and medium – enterprises,” in Nigeria. Afr. J. Bus. Manag. 2(11), 2008, pp 195-200.
A. T. Ojo, Partnership and Strategic Alliance Effective SME Development Small and Medium Enterprises Development and SMIEIS: Effective Implementation Strategies, CIBN Press Ltd, Lagos, 2003, pp 185-212.
N. Regan, A. Ghobadian and D. Gallear, ”In search of the drivers of high growth in man-ufacturing SMEs,” Technovation, 26, (1), 2006, pp 30 – 41.
L. Rantamaki-Lahtinen, H. Vesala, K. Vesala, M. Ylatalo, J. Karttunen, V. Tuure, (2007). How to Meas-ure Success in Rural Small Business. A paper presented at International Council for Small Business, 52nd World Conference, Turku, Finland, 13th to 15th June, 2007,
P. J. A. Robson and R. J. Bennett, SME Growth: The Relationship with Business Advice and Ex-ternal Collaboration. Small Business Economics, 15(3), 2000, 193 - 208.
G. Sabato Modeling Credit Risk for SMEs: Evidence from the US Market. ABACUS Vol. 43 (3), 2007, pp. 332-357.
J. O. Sanusi, Overview of Government’s Efforts in the Development of SMEs and the Emergence of Small and Medium Industries Equity Investment Scheme (SMEIS). A Paper Presented at The National Summit on SMEIS Organized by the Bankers’ Committee and Lagos Chambers of Commerce and In-dustry (LCCI), Lagos on 10th June, 2003.
D. J. Storey, Understanding the small business sector. London: International Thomson Business Press, 1994.
T. E. Stuart, Interorganizational alliances and the perfor-mance of firms: A study of growth and innovation rates in a high-technology industry. Strategic Management Journal, 21, 2000, pp 791 - 811.
D. L. Sexton, et al. Measuring performance in high growth firms. Paper presented at the Babson college/Kauffman Foundation Entrepreneurship Research Conference, Babson College, MA, 2000.
J. Wiklund, “The sustainability of the entrepreneurial orientation–performance relationship,” Entrepreneurship Theory and Practice Fall, 1999, pp 37 -48.