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PERFORMANCE EFFECTS OF COMMERCIAL DEPENDENCY FOR MANUFACTURING SMEs

Author

Listed:
  • Louis Raymond

    (UQTR - Université du Québec à Trois-Rivières)

  • Josée St-Pierre

    (INRPME - Institut de recherche sur les PME - UQTR - Université du Québec à Trois-Rivières, UQTR - Université du Québec à Trois-Rivières)

Abstract

The commercial dependency of manufacturing SMEs upon certain important customers or the absence of diversification in their customer base can have significant impacts upon the productivity and profitability of these organizations. Through an empirical study of 210 Canadian SMEs, it was found that more commercially dependent firms have higher manufacturing costs but lower sales and administrative costs as a percent of sales. These firms also have a lower return on investment and are perceived by their chief executive to be less profitable. In effect, commercial dependency renders manufacturing SMEs more vulnerable and increases their business risk.

Suggested Citation

  • Louis Raymond & Josée St-Pierre, 2002. "PERFORMANCE EFFECTS OF COMMERCIAL DEPENDENCY FOR MANUFACTURING SMEs," Post-Print hal-01701620, HAL.
    • Handle: RePEc:hal:journl:hal-01701620
    Note: View the original document on HAL open archive server: https://hal.science/hal-01701620
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    References listed on IDEAS

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