Borrower discouragement and SMEs new product development: evidence from the UK

Baah, BA

Abstract

Purpose
This research aims to investigate the issues of borrower discouragement and new product development (NPD) among SMEs in the UK. Specifically, the study investigates the relationship between discouraged borrowers and ethnic minority SMEs, the relationship between discouraged borrowers and NPD, and the impact of growth obstacles on SMEs NPD. These purposes were organised into three empirical essays.
Methodology
In order to gather data for this study, secondary data from the longitudinal small business survey (LSBS) was extracted from the UK data archives, the largest telephone survey of SMEs in the UK. The raw data extracted was cleaned and coded quantitatively using excel, and the relevant variables were selected. The selected data were entered into STATA to generate descriptive statistics, correlation matrixes, and hypothesis testing. The models used for data analysis were mainly probit regression and logit regression models. We also used propensity score matching (PSM) and instrumental variable two-stage least squares (IV2SLS) to control for possible biases and endogeneity problems that may arise among the variables.
Findings
The following findings were established: First, ethnic minority SMEs have a significantly positive relationship with discouraged borrowers. Second, discouraged borrowers have a strong positive impact on SMEs’ NPD engagement. Third, crowdfunding positively moderates the relationship between borrower discouragement and NPD. Finally, growth obstacles negatively impact SMEs’ engagement in NPD.
Implication
Management needs to identify other cost-effective sources of capital for the smooth operation of their activities. Additionally, SME owners and managers could take advantage of crowdfunding platforms to raise capital and provide an immediate market for their prospective products. Lastly, management must take the necessary steps to mitigate the growth obstacles so as to eliminate their impact on NPD.

Citation

Baah, B. (2023). Borrower discouragement and SMEs new product development: evidence from the UK. (Thesis). University of Salford

• Thesis Type: Thesis
• Deposit Date: Apr 12, 2023
• Publicly Available Date: Oct 12, 2023
• Additional Information: Funders : Ghana Scholarships Secretariat
• Award Date: Jan 11, 2023