Does public behavior and research development matters for economic growth in SMEs: Evidence from Chinese listed firms

Abstract

Previous studies have largely ignored the role of small and medium-sized businesses (SMEs) and instead concentrated on corporate social responsibility (CSR) in large corporations. In the developing Chinese economy, promoting responsible behavior​ among manufacturing SMEs has taken on greater significance. Using mixed-level probit regression and qualitative comparative analysis, this study examines data from Chinese SMEs between 2010 and 2018. Results show that worker productivity has a positive impact on how public spending and R&D spending are related. The study reveals a wide range of relationships between various SME categories. Results show that public spending and R&D significantly contribute to the economic expansion of Chinese SMEs. Pre-crisis financial flexibility, which has little impact on R&D employment flexibility during a crisis, also undermines the positive relationship between increased R&D flexibility and post-crisis business performance. These observations clarify how SMEs participate in international R&D and highlight opportunities and management challenges.