Small and Medium Enterprises and Global Risks: Evidence from Manufacturing SMEs in Turkey

Ali Asgary; Ali Ihsan Ozdemir; Hale &#214;zy&#252;rek

doi:10.1007/s13753-020-00247-0

Article Contents

Article Navigation > International Journal of Disaster Risk Science > 2020 > 11(1): 59-73

Ali Asgary, Ali Ihsan Ozdemir, Hale Özyürek. Small and Medium Enterprises and Global Risks: Evidence from Manufacturing SMEs in Turkey[J]. International Journal of Disaster Risk Science, 2020, 11(1): 59-73. doi: 10.1007/s13753-020-00247-0

Citation:

Ali Asgary, Ali Ihsan Ozdemir, Hale Özyürek. Small and Medium Enterprises and Global Risks: Evidence from Manufacturing SMEs in Turkey[J]. International Journal of Disaster Risk Science, 2020, 11(1): 59-73. doi: 10.1007/s13753-020-00247-0

Citation:

PDF

Small and Medium Enterprises and Global Risks: Evidence from Manufacturing SMEs in Turkey

doi: 10.1007/s13753-020-00247-0

1 Disaster and Emergency Management, School of Administrative Studies, York University, Toronto, ON M3J 1P3, Canada;
2 Business Administration Department, Business School, Ankara Yıldırım Beyazıt University, Esenboǧa Campus, Ankara, Turkey;
3 KOSGEB(Small and Medium Industry Development Organization), Ankara, Turkey

Funds:

This research has been partially supported by the Scientific and Technological Research Council of Turkey (TUBITAK) through the 2221-Fellowship Program for Visiting Scientists and Scientists on Sabbatical Leave. The project has been also supported in part by York University's Advanced Disaster, Emergency, and Rapid response Simulation (ADERSIM) funded by Ontario Research Fund.

Available Online: 2021-04-26

Abstract

Abstract

This study investigated how small and medium enterprises (SMEs) in a country perceive major global risks. The aim was to explore how country attributes and circumstances affect SME assessments of the likelihood, impacts, and rankings of global risks, and to find out if SME risk assessment and rankings differ from the global rankings. Data were gathered using an online survey of manufacturing SMEs in Turkey. The results show that global economic risks and geopolitical risks are of major concern for SMEs, and environmental risks are at the bottom of their ranking. Among the economic risks, fiscal crises in key economies and high structural unemployment or underemployment were found to be the highest risks for the SMEs. Failure of regional or global governance, failure of national governance, and interstate conflict with regional consequences were found to be among the top geopolitical risks for the SMEs. The SMEs considered the risk of largescale cyber-attacks and massive incident of data fraud/theft to be relatively higher than other global technological risks. Profound social instability and failure of urban planning were among the top societal risks for the SMEs. Although the global environmental and disaster risks were ranked lowest on the list, man-made environmental damage and disasters and major natural hazard-induced disasters were ranked the highest among this group of risks. Overall, the results show that SMEs at a country level, for example Turkey, perceive global risks differently than the major global players.
- Global risks,
- Risk assessment,
- Risk matrix,
- Small and medium enterprises,
- Turkey

FullText(HTML)

References(75)

References

Abadie, A., and J. Gardeazabal. 2008. Terrorism and the world economy. European Economic Review 52(1):1-27.

Abbasoğlu, O.F., A. İmrohoroğlu, and A. Kabukçuoğlu. 2019. The Turkish current account deficit. Economic Inquiry 57(1):515-536.

Alegre, J., and R. Chiva. 2013. Linking entrepreneurial orientation and firm performance:The role of organizational learning capability and innovation performance. Journal of Small Business Management 51(4):491-507.

Allianz. 2019. Allianz risk baromter 2019 SME business risks. https://www.agcs.allianz.com/news-and-insights/expert-risk-articles/risk-barometer-2019-sme-business-risks.html. Accessed 21 Jan 2020.

Araz-Takay, B., K.P. Arin, and T. Omay. 2009. The endogenous and non-linear relationship between terrorism and economic performance:Turkish evidence. Defence and Peace Economics 20(1):1-10.

Asgary, A., and A.I. Ozdemir. 2019. Global risks and tourism industry in Turkey. Quality & Quantity. https://doi.org/10.1007/s11135-019-00902-9.

Asgary, A., M.I. Anjum, and N. Azimi. 2012. Disaster recovery and business continuity after the 2010 flood in Pakistan:Case of small businesses. International Journal of Disaster Risk Reduction 2:46-56.

Asgary, A., N. Azimi, and M.I. Anjum. 2013. Measuring small businesses disaster resiliency:Case of small businesses impacted by the 2010 flood in Pakistan. International Journal of Business Continuity and Risk Management 4(2):170-187.

Ates, A., P. Garengo, P. Cocca, and U. Bititci. 2013. The development of SME managerial practice for effective performance management. Journal of Small Business and Enterprise Development 20(1):28-54.

Auzzir, Z., R. Haigh, and D. Amaratunga. 2018. Impacts of disaster to SMEs in Malaysia. Procedia Engineering 212:1131-1138.

Ballesteros, M.M., and D.N. Sonny. 2015. Building Philippine SMEs resilience to natural disasters. PIDS discussion paper series, No. 2015-20. Makati:Philippine Institute for Development Studies (PIDS).

Bao, C., D. Wu, J. Wan, J. Li, and J. Chen. 2017. Comparison of different methods to design risk matrices from the perspective of applicability. Procedia Computer Science 122:455-462.

Bilgel, F., and B.C., Karahasan. 2017. The economic costs of separatist terrorism in Turkey. Journal of Conflict Resolution 61(2):457-479.

Briozzo, A., and C. Cardone-Riportella. 2012. Evaluating the impact of public programs of financial aid to SMEs during times of crisis:The Spanish experience. Working Papers 12.04. Seville, Spain:Department of Financial Economics and Accounting, Universidad Pablo de Olavide.

Brustbauer, J. 2016. Enterprise risk management in SMEs:Towards a structural model. International Small Business Journal 34(1):70-85.

Cefis, E., and O. Marsili. 2006. Survivor:The role of innovation in firms' survival. Research Policy 35(5):626-641.

Chacko, J.G., and G. Harris. 2006. Information and communication technology and small, medium, and micro Enterprises in Asia-Pacific-size does matter. Information Technology for Development 12(2):175-177.

Chatterjee, R., K. Shiwaku, R.D. Gupta, G. Nakano, and R. Shaw. 2015. Bangkok to Sendai and beyond:Implications for disaster risk reduction in Asia. International Journal of Disaster Risk Science 6(2):177-188.

Chatterjee, R., N. Ismail, and R. Shaw. 2016. Identifying priorities of Asian small-and medium-scale enterprises for building disaster resilience. In Urban disasters and resilience in Asia, ed. R. Shaw, A.S. Atta-ur-Rahman, A. Surjan, and G.A. Parvin, 179-194. Oxford:Butterworth-Heinemann.

Chowdhury, S.R. 2011. Impact of global crisis on small and medium enterprises. Global Business Review 12(3):377-399.

Cox, A.L. 2008. What's wrong with risk matrices? Risk Analysis 28(2):497-512.

Crichton, D. 2006. Climate change and its effects on small businesses in the UK. London:AXA Insurance UK.

Deloitte. 2017. European CFO survey. http://financedocbox.com/Investing/71637212-Deloitte-seb-cfo-survey-comparison-between-nordic-and-european-cfos.html. Accessed 31 Jan 2020.

European Commission. 2015. Annual report on European SMEs 2014/2015. Brussels:European Commission.

Ezgi, O. 2014. The role of lifeline losses in business continuity in the case of Adapazari, Turkey. Environmental Hazards 13(4):298-312.

Filardo, A. 2011. The impact of the international financial crisis on Asia and the Pacific:Highlighting monetary policy challenges from a negative asset price bubble perspective. Bank for International Settlements Working Paper No. 356, Monetary and Economic Department.

Gagliardi-Main, D., P. Muller, E. Glossop, C. Caliandro, M. Fritsch, G. Brtkova, N.U. Bohn, D. Klitou, et al. 2013. Annual report on European SMEs 2012/2013:A recovery on the horizon? Brussels:European Commission.

Gasbarro, F., F. Rizzi, and M. Frey. 2018. Sustainable institutional entrepreneurship in practice. International Journal of Entrepreneurial Behavior & Research 24(2):476-498.

Gregory, G., C. Harvie, and H.H. Lee. 2002. Korean SMEs in the wake of the financial crisis:Strategies, constraints, and performance in a global economy. Australia:Department of Economics, University of Wollongong. https://ro.uow.edu.au/commwkpapers/58. Accessed 13 Jan 2020.

Gül, H., T. Kandemir, and E. Çakır. 2010. Risk and uncertainity expectations in SMEs:The case of Karaman. Afyon Kocatepe University Social Science Journal 12(2):119-144 (in Turkish).

Gunawansa, A., and H.W. Kua. 2014. A comparison of climate change mitigation and adaptation strategies for the construction industries of three coastal territories. Sustainable Development 22(1):52-62.

Güneş, Ş., and S. Teker. 2010. Awareness of corporate risk management in Turkish energy industry. Journal of Doğuş University 11(1):64-76 (in Turkish).

Halkos, G., A. Skouloudis, C. Malesios, and K. Evangelinos. 2018. Bouncing back from extreme weather events:Some preliminary findings on resilience barriers facing small and medium-sized enterprises. Business Strategy and the Environment 27(4):547-559.

Han, Z., and J. Nigg. 2011. The influences of business and decision makers' characteristics on disaster preparedness-A study on the 1989 Loma Prieta Earthquake. International Journal of Disaster Risk Science 2(4):22-31.

Hopkin, P. 2012. Fundamentals of risk management:Understanding, evaluating and implementing, 2nd edn. London:Kogan Page.

Igwe, P.A., A.N. Amaugo, O.M. Ogundana, O.M. Egere, and J.M. Anigbo. 2018. Factors affecting the investment climate, SMEs productivity and entrepreneurship in Nigeria. European Journal of Sustainable Development 7(1):182-200.

IPCC (Intergovernmental Panel on Climate Change). 2013. Climate change 2013:The physical science basis. Contribution of working group I to the fifth assessment report of the Intergovernmental Panel on Climate Change. Cambridge:Cambridge University Press.

Karadag, H. 2016. The role of SMEs and entrepreneurship on economic growth in emerging economies within the post-crisis era:An analysis from Turkey. Journal of Small Business and Entrepreneurship Development 4(1):22-31.

Kaya, H.P., and S. Uzay. 2017. The risks that will threaten going concern and control recommendations:Case study on SMEs. The Journal of Accounting and Finance, Special Issue:46-64.

Kilian, L. 2008. A comparison of the effects of exogenous oil supply shocks on output and inflation in the G7 countries. Journal of the European Economic Association 6(1):78-121.

Kossyva, D., K. Sarri, and N. Georgopoulos. 2014. Co-opetition:A business strategy for SME in times of economic crisis. South-Eastern Europe Journal of Economics 1:89-106.

Kuo, H.I., C.C. Chen, W.C. Tseng, L.F. Ju, L.F. and B.W. Huang. 2008. Assessing impacts of SARS and avian flu on international tourism demand to Asia. Tourism Management 29(5):917-928.

Leopoulos, V.N., K.A. Kirytopoulos, and C. Malandrakis. 2006. RM for SMEs:Tools to use and how. Production Planning & Control 17(3):322-332.

Linnenluecke, M.K., and A. Griffiths. 2010. Beyond adaptation:Resilience for business in light of climate change and weather extremes. Business & Society 49(3):477-511.

Linnenluecke, M.K., and A. Griffiths. 2012. Assessing organizational resilience to climate and weather extremes:Complexities and methodological pathways. Climatic Change 113(3-4):933-947.

Marks, D., and F. Thomalla. 2017. Responses to the 2011 floods in central Thailand:Perpetuating the vulnerability of small and medium enterprises? Natural Hazards 87(2):1147-1165.

Mbuyisa, B., and A. Leonard. 2017. The role of ICT use in SMEs towards poverty reduction:A systematic literature review. Journal of International Development 29(2):159-197.

Mekinc, J., T. Kociper, and B. Dobovsek. 2013. The impact of corruption and organized crime on the development of sustainable tourism. Journal of Criminal Justice and Security 15(2):218-239.

Modarres, M. 2006. Risk analysis in engineering:Techniques, tools, and trends. New York:CRC Press.

Mulhall, R.A., and J.R. Bryson. 2014. Energy price risk and the sustainability of demand side supply chains. Applied Energy 123:327-334.

Ni, H., A. Chen, and N. Chen. 2010. Some extensions on risk matrix approach. Safety Science 48(10):1269-1278.

OECD (Organisation for Economic Co-operation and Development). 2000. Economic effects of the 1999 Turkish Earthquakes:An interim report. OECD Economics Department working paper no. 247. Paris:OECD.

OECD (Organisation for Economic Co-operation and Development). 2014. Financing SMEs and entrepreneurs 2014:An OECD scoreboard. Paris:OECD Publishing.

Omay, T., B. Araz-Takay, A. Eruygur, and I. Kilic. 2013. The effects of terrorist activities on foreign direct investment:Nonlinear evidence from Turkey. Review of Economics 64(2):139-158.

Onur, B.F. 2018. Turkey:A crossroads of risk and opportunities. http://www.hurriyetdailynews.com/turkey-a-crossroads-of-risk-and-opportunities-136068. Accessed 08 Mar 2019.

Pascual-Ramsay, A. 2015. Global risks and EU businesses. In The global context:How politics, investment, and institutions impact European businesses, ed. J. Solana, and A. Saz-Carranza, 10-37. Barcelona, Spain:EsadeGeo.

Salgado-Gálvez, M.A. 2018. Estimating the lost economic production caused by internal displacement because of disasters. International Journal of Disaster Risk Science 9(4):496-506.

Sannajust, A. 2014. Impact of the world financial crisis to SMEs:The determinants of bank loan rejection in Europe and USA (IPAG Working Paper No. 2014-327). Paris:IPAG Business School (Institut de préparation à l'administration et à la gestion). http://www.ipagcn.com/wp-content/uploads/recherche/WP/IPAG_WP_2014_327.pdf. Accessed 13 Jan 2020.

Schaefer, A., S. Williams, and R. Blundel. 2011. SMEs' construction of climate change risks:The role of networks and values. In Proceedings of International Conference on SMEs:Moving Towards Sustainable Development, 20-22 October 2011, Montreal, Canada. 1-18.

Sharma M.K., and R. Bhagwat. 2006. Practice of information systems:Evidence from select Indian SMEs. Journal of Manufacturing Technology Management 17(2):199-223.

Snyder, L.V., and Z.J.M Shen. 2006. Supply chain management under the threat of disruptions. The Bridge 36:39-45.

Talbot, J. 2011. What's right with risk matrices? A great tool for risk managers. Version 1, 31000 risk, 9 April 2011. https://31000risk.wordpress.com/article/what-s-right-with-risk-matrices-3dksezemjiq54-4/. Accessed 13 Jan 2020.

Topçu, B. 2013. Corporate risk management in businesses. İstanbul Chamber of Trade Publications. No. 2013-19, Istanbul (in Turkish).

Tumen, S. 2016. The economic impact of Syrian refugees on host countries:Quasi-experimental evidence from Turkey. American Economic Review 106(5):456-460.

TÜRSAB and TUADER (Association of Turkish Travel Agencies and Turkish Association of Tourism Academicians). 2017. Tourism industry report, 2017 January-July term. https://www.tursab.org.tr/tr/tursabdan-haberler/kurumsal-haberler/tursab-tuader-turizmsektor-raporu-yayinlandi_16736.html. Accessed 13 Jan 2020 (in Turkish).

UNDP (United Nations Development Programme). 2013. Small businesses:Impact of disasters and building resilience:Analysing the vulnerability of micro, small, and medium enterprises to natural hazards and their capacity to act as drivers of community recovery. Background paper for the global assessment report on disaster risk reduction 2013. New York:UNDP.

Watkins, R.E., F.C. Cooke, R.J. Donovan, C.R. MacIntyre, R. Itzwerth, and A.J. Plant. 2008. Tackle the problem when it gets here:Pandemic preparedness among small and medium businesses. Qualitative Health Research 18(7):902-912.

Wedawatta, G., B. Ingirige, and D. Amaratunga. 2010. Building up resilience of construction sector SMEs and their supply chains to extreme weather events. International Journal of Strategic Property Management 14(4):362-375.

Wehinger, G. 2014. SMEs and the credit crunch:Current financing difficulties, policy measures and a review of literature. OECD Journal:Financial Market Trends 2:115-148.

Weinhofer, G., and T. Busch. 2013.Corporate strategies for managing climate risks. Business Strategy and the Environment 22(2):121-144.

World Economic Forum. 2019. The global risks report 2019. Geneva:World Economic Forum.

Ye, L., and M. Abe. 2012. The impacts of natural disasters on global supply chains. ARTNeT working paper series, No. 115. Bangkok:Asia-Pacific Research and Training Network on Trade (ARTNeT).

Yoshino, N., and F. Taghizadeh-Hesary. 2018. The role of SMEs in Asia and their difficulties in accessing finance. Asian Development Bank Institute. http://hdl.handle.net/11540/9483. Accessed 31 Jan 2020.

Yuwen, H., X. He, X. Qian, and M. Yuan. 2016. Controlling town industry explosion hazard in China. International Journal of Disaster Risk Science 7(4):440-444.

Zheng, S., M.E. Kahn, and H. Liu. 2010. Towards a system of open cities in China:Home prices, FDI flows and air quality in 35 major cities. Regional Science and Urban Economics 40(1):1-10.

Relative Articles

Supplements(0)

Cited By

Proportional views