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Information technology and survival of SMEs: an emprical study on Malaysian manufacturing sector

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Abstract

This study focuses on the impact of information technology on the survival rate of small and medium enterprises (SMEs) in the manufacturing sector in Malaysia. It analyses the effects of information technology on survival of SMEs in 2000 and 2005, based on two separate groups of firms. It sets out to show that information technology has positive and significant effect on survival of the firms, besides other factors such as minimum efficient size, market and firms attributes, transaction cost, uncertainty, opportunism, information asymmetry and atmosphere, profitability and learning have impact on the survival of SMEs. With using Cox proportional hazard regression model, we found that factors such as profits, R&D, location, ownership, market size, entry rate, industry growth and capital–labor ratio affect the survival of SMEs. Of equal importance is the expenditure on information technology, which is said to have an impact on the viability of firms. The results further demonstrate that being in certain stage of maturity of firms could be important in the effect of information technology on survival of SMEs.

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Notes

  1. There was no late entry, because during the study period, we did not observe any late entry as they were closed. Moreover, due to lack of annual data, the collected data were considered as time–fixed variables.

  2. It is published every 5 years.

  3. Based on the definition by SMIDEC, the firms with less than 150 full-time employees are considered as SME.

  4. The hazard ratio is calculated based on the estimated coefficients as hri = eBi.

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Jamali, M.A., Voghouei, H. & Mohd Nor, N.G. Information technology and survival of SMEs: an emprical study on Malaysian manufacturing sector. Inf Technol Manag 16, 79–95 (2015). https://doi.org/10.1007/s10799-014-0180-6

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