• Corporate social responsibility and performance: A case study of mining companies in Ghana

      Clement, A; Adibo; Tackie, G; University of Cape Coast (International Knowledge Sharing Platform, 2017)
      Corporate Social Responsibility (CSR) has become very important in recent years, especially its impact on business operations. Using mining companies in Ghana as a case study, this study investigates the extent to which CSR activities engaged by companies relate to their performance.Content analysis is used in measuring the CSR activities of mining companies in Ghana. The study reveals a positive relationship between return on equity and all the CSR variables(environmental management systems, employee relations and community performance). Net profit margin relates positively with CSR activities such as environmental management system and employee relations whilst return on asset was found to have a positive relationship with only oneemployee relations. Mining companies should be engaged in CSR activities that positively impact on financial performance since this eventually translate into creating value for host communities.
    • The innovation debt penalty: Cost of debt, loan default, and the effects of a public loan guarantee on high-tech firms

      Cowling, M; Ughetto, E; Lee, N.; University of Brighton (Elsevier, 28/06/2017)
      High-technology firms per se are perceived to be more risky than other, more conventional, firms. It follows that financial institutions will take this into account when designing loan contracts, and that this will manifest itself in more costly debt. In this paper we empirically test whether the provision of a government loan guarantee fundamentally changes the way lenders price debt to high-tech firms. Further, we also examine whether there are differential loan price effects of a public guarantee depending on the nature of the firms themselves and the nature of the economic and innovation environment that surrounds them. Using a large UK dataset of 29,266 guarantee backed loans we find that there is a high-tech risk premium which is justified by higher default, but, in general, that this premium is altered significantly when a public guarantee is provided for all firms. Further, all these loan price effects differ on precise spatial economic and innovation attributes.
    • The role of loan commitment terms in credit allocation on the UK small firms loan guarantee scheme

      Cowling, M; Matthews, C; Liu, W.; University of Brighton (Senate Hall Academic Publishing, 31/03/2017)
      In this paper we provide empirical evidence concerning the nature of loan commitment contracts as reflected by individual loan contract parameters in influencing the size of bank commitments. Specifically, we consider how the quantitative allocation of credit, the loan amount, is affected or altered by changes to other components of the total loan package. By doing so we shed some more light on the types of real world trade-offs that credit constrained firms might face when approaching banks for funds, using the UK governments loan guarantee programme. Our results point at the importance of relationship lending in the UK.
    • On the productive efficiency of Australian businesses: firm size and age class effects

      Cowling, M; Tanewski, G.; University of Brighton (Elsevier, 22/06/2018)
      After 26 years of growth, the Australian economy is beginning to show signs of stress and declining productivity. In this paper, we consider aspects of productive efficiency using an Australian business population data set. Using a production function approach, several key findings are uncovered. Firstly, decreasing returns to scale are identified as a significant feature of the Australian business sector. This implies that not all firm growth will lead to productivity gains. Secondly, there are significant differences in the way value added is created between small and large firms. In the largest 25% of firms, the capital contribution to value added is four times that of the smallest 25% of firms. Thirdly, efficiency follows an inverted ‘U’ shaped in firm age with the youngest (0–2 years) and oldest (> 9 years) firms being less productive than the middle 50% of firms. Fourthly, there are also huge industry sector variations in productivity. In particular, financial services appears to be the most productively efficient sector in the Australian economy and mining the least efficient.
    • Internal financial management in smaller, entrepreneurial businesses

      Cowling, M; Matthews, C.; University of Brighton (Sage, 13/01/2018)
    • Growth processes of high-growth firms as a four-dimensional chicken and egg

      Coad, A; Cowling, M; Siepel, J.; University of Brighton (Oxford Academic, 03/10/2016)
      This article investigates whether high-growth firms grow in different ways from other firms. Specifically, we analyze how firms grow along several dimensions (growth of sales, employment, assets, and operating profits) using Structural Vector Autoregressions. Causal relations are identified by using information contained in the (non-Gaussian) growth rate distributions. For most firms, the growth process starts with employment growth, which is then followed by sales growth, then growth of operating profits, and finally growth of assets. In contrast, high growth firms put more emphasis on growth of operating profits driving other dimensions of growth, with employment growth occurring at the end.
    • Access to bank finance for UK SMEs in the wake of the recent financial crisis

      Cowling, M; Liu, W; Zhang, N.; University of Brighton (Emerald, 05/09/2016)
      The purpose of this paper is to investigate how entrepreneurs demand for external finance changed as the economy continued to be mired in its third and fourth years of the global financial crisis (GFC) and whether or not external finance has become more difficult to access as the recession progressed. Using a large-scale survey data on over 30,000 UK small- and medium-sized enterprises between July 2011 and March 2013, the authors estimate a series of conditional probit models to empirically test the determinants of the supply of, and demand for external finance. Older firms and those with a higher risk rating, and a record of financial delinquency, were more likely to have a demand for external finance. The opposite was true for women-led businesses and firms with positive profits. In general finance was more readily available to older firms post-GFC, but banks were very unwilling to advance money to firms with a high-risk rating or a record of any financial delinquency. It is estimated that a maximum of 42,000 smaller firms were denied credit, which was significantly lower than the peak of 119,000 during the financial crisis. This paper provides timely evidence that adds to the general understanding of what really happens in the market for small business financing three to five years into an economic downturn and in the early post-GFC period, from both a demand and supply perspective. This will enable the authors to consider what the potential impacts of credit rationing on the small business sector are and also identify areas where government action might be appropriate.
    • Non-founder human capital and the long-run growth and survival of high-tech ventures

      Siepel, J; Cowling, M; Coad, A.; University of Brighton (Elsevier, 16/11/2016)
      This paper considers the impact of non-founder human capital on high-tech firms' long-run growth and survival. Drawing upon threshold theory, we explore how lack of access to complementary skills at different points in the life course impacts founders' thresholds for exit. We examine these factors using a unique longitudinal dataset tracking the performance and survival of a sample of UK high-tech firms over thirteen years as the firms move from youth into maturity. We find that firms that survive but do not grow are characterized by difficulty in accessing complementary managerial skills in youth, while firms that grow but subsequently exit are characterized by shortfalls of specialized complementary skills during adolescence. Firms that grow and survive do not report skills shortfalls. We discuss the implications of these resource constraints for entrepreneurs’ decisions to persist or exit through the life course.
    • How entrepreneurship, culture and universities influence the geographical distribution of UK talent and city growth

      Cowling, M; Lee, N.; University of Brighton (Emerald, 06/03/2017)
      The creation and distribution of human capital, often termed talent, has been recognised in economic geography as an important factor in the locational decisions of firms (Florida, 2002), and at a more general level as a key driver of economic growth (Romer, 1990). The purpose of this paper is to consider how talent is created and distributed across the cities of the UK and the key factors which are driving this spatial distribution. They also consider what the economic outcomes of these disparities are for cities. The multivariate models can estimate the dynamic inter-relationships between human capital (talent), innovative capacity, and economic value added. These can be estimated, using talent as an example, in the form: human capital measurei =α0i+α1i innovative capacity +α2i quality of life + α3i labour market indicators + α4i economic indicators + α5i HEI indicators + β6i population demographics + β7i population + υi. The first finding is that talent is unequally distributed across cities, with some having three times more highly educated workers than others. Talent concentration at the city level is associated with entrepreneurial activity, culture, the presence of a university, and to a lesser degree the housing market. This feeds into more knowledge-based industry, which is associated with higher gross value added. The research is limited in a practical sense by the fact that UK data at this level have only become available quite recently. Thus, it is only possible to capture talent flows and city growth in a relatively small window. But the prospects going forward will allow more detailed analysis at the city level of the relationship between talent flows and local economic growth. And additional insights could be considered relating to the on-going changes in the UK university system. The question of whether universities are simply producers of talent or play a much broader and deeper role in the socio-economic landscape and outcomes of cities is an open one. This research has identified what the key drivers of city level economic growth and knowledge creation are, and sought to explain why some cities are capable of attracting and harnessing three times more talent than other cities. This has significant implications for the future development of UK cities and for those seeking to address these imbalances. Universities are a major economic agent in their own right, but they are increasingly being asked to play a wider role in local economic development. The authors’ evidence suggests that universities do play a wider role in the growth and development of cities, but that there are large discrepancies in the subsequent spatial distribution of the talent they create. And this has significant implications for those seeking to address these imbalances and promote a broader and less unequal economic landscape. The authors explore how cities create economic value via a process whereby talent is attracted and then this stimulates knowledge-based industry activity. The originality relates to several key aspects of the work. First, the authors look at the stock of talent, and then the authors explore how “new” talent from universities is attracted by looking at graduate flows around the cities of the UK, differentiating between top-level graduates and less talented graduates. The authors then allow a wide variety of economic, cultural, and population factors to influence the locational decision of talented people. The results highlight the complexity of this decision
    • Multiple disadvantage and wage growth: The effect of merit pay on pay gaps

      Woodhams, C; Lupton, B; Perkins, G; Cowling, M; University of Brighton (Wiley, 24/02/2015)
      This article concerns rates of wage growth among women and minority groups and their impact on pay gaps. Specifically, it focuses on the pay progression of people with more than one disadvantaged identity, and on the impact of merit pay. Recent research indicates that pay gaps for people in more than one disadvantaged identity category are wider than those with a single‐disadvantaged identity. It is not known whether these gaps are closing, at what rate, and whether all groups are affected equally; nor is it known whether merit pay alleviates or exacerbates existing pay gaps. In addressing these issues, the analysis draws on longitudinal payroll data from a large UK‐based organization. Results show that pay gaps are closing; however, the rate of convergence is slow relative to the size of existing pay disparities, and slowest of all for people with disabilities. When the effect of merit pay is isolated, it is found to have a small positive effect in reducing pay gaps, and this effect is generally larger for dual/multiple‐disadvantaged groups. These findings run counter to the well‐established critique of merit pay in relation to equality outcomes. The implications of this are discussed, and an agenda for research and practice is set out. © 2015 Wiley Periodicals, Inc.
    • You can lead a firm to R&D but can you make it innovate? UK evidence from SMEs

      Cowling, M; University of Brighton (Springer, 16/02/2016)
      The UK Government introduced tax credits for SMEs to promote and support R&D in 2000. Since then the policy has become more generous in this respect, particularly since 2008. In this paper, we use the National Systems of Entrepreneurship as a conceptual framework in which to question whether SMEs take-up of tax credits has actually led to an increase in product, service, or process innovations. Our evidence suggests that (a) SME engagement with the policy is fairly randomly distributed across the sector, and (b) there is little additional product–service innovation to justify the expenditure in foregone taxes given the current distribution of credits, but (c) there is evidence of enhanced radical process innovations, particularly when combined with strong capability and planning at the firm level.
    • Did firm age, experience, and access to finance count? SME performance after the global financial crisis

      Cowling, M; Liu, W; Zhang, N.; University of Brighton (Springer, 10/05/2017)
      This paper examines the relationships between firm age and entrepreneurs experience on SME performance after the 2008/09 global financial crisis. We find that in general the crisis had a long-lasting scarring effect on the SME sector, but there is evidence of some recovery in performance. Interestingly, the well-established, and negative, firm age-growth relationship still holds, but entrepreneurial experience did not have any substantive effects on small business performance. Our findings suggest that the severity of the crisis meant that previous entrepreneur experiences had little value in this unique and uncertain environment. However, young firms still accounted for a disproportionately high share of growth, especially among the fastest growing firms.
    • What really happens to small and medium-sized enterprises in a global economic recession? UK evidence on sales and job dynamics

      Cowling, M; Liu, W; Ledger, A; Zhang, N.; University of Brighton (Sage, 13/01/2014)
      This article uses UK data to consider how small and medium-sized enterprises (SMEs)1 coped during the recent financial crisis. This is important, as SMEs are major contributors to job creation, but are vulnerable to falling demand. It finds that 4 in 10 SMEs experienced a fall in employment during the recession, and 5 in 10 experienced a fall in sales. Within 12 months of the recession, three-quarters of entrepreneurs had a desire to grow. This suggests that while the immediate effects of recession are severe, entrepreneurs recover quite quickly. Importantly, the analysis found that recessionary growth is hugely concentrated among entrepreneurs with the highest human capital.
    • UK credit and discouragement during the GFC

      Cowling, M; Liu, W; Minniti, M; Zhang, N.; University of Brighton (Springer, 06/06/2016)
      The availability of credit to entrepreneurs with good investment opportunities is an important facilitator of economic growth. Under normal economic conditions, most entrepreneurs who requested loans receive them. In a global financial crisis, popular opinion is that banks are severely restricting lending to smaller businesses. This assumes that low levels of investment are caused by supply-side restrictions in the credit market. Little is said about potential changes in the demand for credit and how it is influenced by entrepreneurs’ perceptions about supply-side restrictions. One particularly interesting, and under-researched, group of small businesses is that who have potentially good investment opportunities, but are discouraged from applying for external funding as they fear rejection. In this study, we question whether these entrepreneurs were correct in their assumptions. We find that levels of discouragement are quite low in general at 2.7 % of the total smaller business population. Further analysis implies that 55.6 % of discouraged borrowers would have got loans had they applied.
    • The World is your Oyster: The Effects of Knowledge, Human Capital, Technology and Entry Timing on International Growth

      Cowling, M; Liu, W; Zhang, N.; University of Brighton (Senate Hall Academic Publishing, 27/06/2016)
      We draw on elements of several established theories of internationalization to provide a framework for exploring international market entry and scale of entry measured by number of foreign markets entered for a sample of young, high-tech, firms from the UK and Germany. We find that founding team human capital is associated with more extensive internationalization, as is intensity of R&D, early internationalization and early stage venture capital. We also find that internationalizing firms who choose the US as their first international market entry are also those most likely to develop more extensive international market presence. Degree of asset specificity, in contrast, is associated with less extensive internationalization.
    • Do rural firms perceive different problems? Geography, sorting, and barriers to growth in UK SMEs

      Lyee, N; Cowling, M; University of Brighton (Sage, 01/01/2015)
      Support for small businesses is often delivered separately for urban and rural areas, based on the idea that the barriers to business growth differ geographically. Yet firms in rural and urban areas will also differ in their characteristics, and these may be more important influences on firm growth than location. In this paper we test whether firms in urban, semirurals, and rural areas perceive each of eight obstacles to their success differently, based on a large sample of UK SMEs. After controlling for selection effects, rural and semirural firms are more likely to perceive regulation as a problem while rural firms are more likely to see the economy as an obstacle to success. We also find some evidence that skills shortages may be more acute for rural firms, once selection effects are controlled for. The results provide only limited support for geographically differentiated policy for small businesses.
    • The use and value of freelancers: The perspective of managers.

      Burke, A; Cowling, M; University of Brighton (Senate Hall Academic Publishing, 11/2015)
      In this paper we provide an overview of the various means through which executives and entrepreneurs in Great Britain perceive freelancers as adding value to their businesses. To this end the paper reviews research on users of freelancers in large and small firms across industries in Great Britain. The evidence comprises a mix of case study and survey data. The results illustrate that managers perceive freelancers as a relatively high value added segment of the labour force which is particularly useful in dynamic and innovative business environments. In essence, freelancers are less of a cheap shadow precariat workforce and more a skilled specialised workforce that enable businesses to reduce: barriers to entry, risk and financial requirements while enhancing: business agility, flexibility and efficiency. Freelancers are viewed as important inputs that enable an innovation driven and entrepreneurial economy to perform.
    • Access to finance for innovative SMEs since the financial crisis

      Lee, N; Sameen, H; Cowling, M; University of Brighton (Elsevier, 7/11/2014)
      In the wake of the 2008 financial crisis, there has been increased focus on access to finance for small firms. Research from before the crisis suggested that it was harder for innovative firms to access finance. Yet no research has considered the differential effect of the crisis on innovative firms. This paper addresses this gap using a dataset of over 10,000 UK SME employers. We find that innovative firms are more likely to be turned down for finance than other firms, and this worsened significantly in the crisis. However, regressions controlling for a host of firm characteristics show that the worsening in general credit conditions has been more pronounced for non-innovative firms with the exception of absolute credit rationing which still remains more severe for innovative firms. The results suggest that there are two issues in the financial system. The first is a structural problem which restricts access to finance for innovative firms. The second is a cyclical problem has been caused by the financial crisis and has impacted relatively more severely on non-innovative firms.
    • The role of radical economic restructuring in truancy from school and engagement in crime

      Farrall, stephen; Gray, Emily; Jones, Philip Mike; University of Derby (Oxford University Press, 2019-07-28)
      Of late, criminologists have become acutely aware of the relationship between school outcomes and engagement in crime as an adult. This phenomenon – which has come to be known as the ‘school-to-prison-pipeline’ – has been studied in North America and the UK, and requires longitudinal datasets. Typically, these studies approach the phenomenon from an individualist perspective and examine truancy in terms of the truants’ attitudes, academic achievement or their home-life. What remains unclear however is a consideration of a) how macro-level social and economic processes may influence the incidence of truancy, and b) how structural processes fluctuate over time, and in so doing produce variations in truancy rates or the causal processes associated with truancy. Using longitudinal data from two birth cohort studies, we empirically address these blind-spots and test the role of social-structural processes in truancy, and how these may change over time
    • Council house sales, homelessness and contact with the criminal justice system: Evidence from the NCDS and BCS70 birth cohorts.

      Farrall, Stephen; Gray, Emily; Jones, Phil; University of Derby (Elsevier, 2019-07-26)
      Focussing on the changes in sitting tenants’ right to buy their council house (introduced in the UK in 1980), we explore the long-term impact of this policy change upon the lives of UK citizens. Using two longitudinal studies of UK citizens born in 1958 and 1970, we exam how policies aimed at achieving one set of goals (providing families with their own homes, reducing the control of councils and weakening the Labour Party’s voting bloc) may have also altered experiences of housing, homelessness, and contact with the criminal justice system not just for those for whom the policies were initially designed (adults living in council owned properties in the 1980s) but also for subsequent generations (most typically their children). Our contribution examines how legislative changes may have altered the lives of citizens, and highlights some of the unintended consequences of the ‘right to buy’ in the UK. We are able to investigate what happens when systems which have previously been tightly regulated suddenly become much less well regulated. Our paper utilises ideas developed by life-course theorists and historical institutionalists in order to understand in more depth how radical policy changes may shape and alter the lives of citizens.