SAES-422 Multistate Research Activity Accomplishments Report

Status: Approved

Basic Information

Participants

Sharon Danes, University of Minnesota, sdanes@umn.edu; Margaret Fitzgerald, North Dakota State University, Margaret.Fitzgerald@ndsu.edu; George Haynes, Montana State University, haynes@montana.edu; Cynthia Jasper, University of Wisconsin, crjasper@wisc.edu; Yoon Lee, Utah State University, yoon.lee@usu.edu; Maria Marshall, Purdue University, mimarsha@purdue.edu; Diane Masuo, University of Hawaii at Manoa, masuo@hawaii.edu; Glenn Muske, Oklahoma State University, glenn.muske@okstate.edu; Linda Niehm, Iowa State University, niehmlin@iastate.edu; Timothy Park, University of Georgia, tpark@uga.edu; Holly Schrank, Purdue University, schrankh@purdue.edu; Kay Stafford, The Ohio State University, stafford.2@osu.edu.

Accomplishments

Milestones The NC-1030 group is ahead of schedule with regard to our milestones. We had anticipated that in 2008 we would develop and pre-test instruments, select the sample and begin data collection. Because of the receipt of an NSF grant (Danes, Stafford and Haynes), we have completed each of these tasks. The NSF researchers have also completed the preparation and distribution of the data set and codebooks to the NC 1030 group. Moreover, they have conducted three webinars on using the three waves of data with a fourth webinar on filters scheduled for early December, 2008. Therefore, as the group moves into 2009, we are conducting preliminary analysis on the 2007 data and conceptualizing longitudinal analyses with the three waves of panel data (1997, 2000 and 2007), and have secured a special edition of the Journal of Family and Economic Issues (Neihm & Lee as co-editors) with the goal of paper submissions for 2009. Selected Research Findings and Outreach Applications Individual state reports and the list of 2008 publications/presentations (linked to this site) provide more information on our accomplishments. The following is a summary of highlights to date: The NC 1030 data on family business response to disaster has been linked to the Spatial Hazard Events and Losses Database for the United States (SHELDUS), Public Entity Research Institute (PERI) and County Business Patterns (CBP) data. Preliminary analysis suggests that disaster assistance has a positive effect on the number of business establishments remaining open, number of employees and total payroll. Business survival from 1997 to 2000 was not affected by the severity and frequency of risk exposure from natual disasters, nor did the diasters affect the growth of gross revenue. However, the frequency of risk exposure to natural disasters did impact the owners' perceptions of their business success in 2000. Several variables, including the econonomic vulnerability of rural counties, were identified as predictors of business closing. Firms in more economically vulnerable counties have a lower hazard rate. Using the National Minority Business Survey (informed by the NFB survey) to examine the debt strcture of small businesses owned by Mexican- and Korean-Americans, researchers found differential borrowing patterns by those with higher household net worth and financial strength of the community. Empirical results show that Korean American and Mexican American entreprenerus have greater role demands, and subsequently, higher levels of difficulty in managing work-family conflict than African Americans and Whites. Furthermore, difficulty in managing work-family conflict negatively impacts business performance whether performance is measured through the perception of the business owner, or through more objective financial measures. Outreach pieces developed as a result of the project's research results were used in the natural disaster work done in Rushford, MN because of a natural disaster caused by the flooding of the Root River.

Impacts

  1. Training small business owners in a holistic approach to quality management would increase the annual revenue of the average firm by more than $495,396 a year. Given the size of the average family firm, these firms could potentially increase their revenue 48.7% using a more holistic quality framework.
  2. It is important for practitioners such as SBDC counselors to consider business conditions before soliciting participation in support groups. Support groups may disproportionately advantage those who are meeting business challenges successfully and represent further constraints on time and personal energy for struggling business owners.
  3. It is no longer possbile to depend solely on human capital theory and household charactersitic descriptions to understand the complex and interdependent relationships between the ethnic owning-family, its firm, and the community context in which the firm operates.
  4. Preliminary results of research to assess the impact of federal disaster assistance on family-owned small business suggests that family reslience is critically important to the survival and success of family-owned businesses.
  5. A study of financial patterns addressing the relationship between commercial banks and other lenders suggests that commercial banks and finance companies complement one another. This information is important to SBDCs and others advising clients about access to financial capital.
  6. Research indicates that internal funds are at least as important as debt capital in small business growth. This information is important to SBDCs and others advising clients about how to finance their growth.
  7. Community dynamics are critically important in assessing the demand for financial capital from commercial banks. Understanding these dynamics is important to lenders in assessing the financial records supplied by minority owned businesses and ultimately in making the decision to loan money.
  8. Family business managers prior knowledge and level of integrated use of information technology (IT), business location (in home or not), community size, and business size (number of employees) are important antecedents to perceived ease of IT use and the decision to adopt IT by small family firms. Ease of use and decision to adopt IT accounted for over 60% of the variance in the usefulness of IT and implementation of Internet and IT capabilities. The implementaion of IT capabilities accounted for nearly 40% of the variance in actual use of IT and perceived impact of the Internet on firm performance.
  9. Small business development specialists in Hawaii should inform entrepreneurs about the characteristics that were found among the more profitable businesses in Hawaii. They include: higher levels of education, age (older vs. younger) and work in service and construction industries.
  10. A list of guiding questions for family business consultants working with ethnic family businesses was developed for them to work through and become more cognizant of their own cultural values and assumptions. The self-awareness questions focus on consultants family and cultural heritage and on beliefs and biases that they might carry.

Publications

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