SMEs performance and subsidies in it investments: A vis-à-vis approach

Abstract

In the knowledge-based and globalized economy, information provides value to firms and Information Technology (IT) is the mechanism through can be achieved. Companies that exploit endless possibilities of Information Technology obtain the capacity to overcome future challenges. This study is focused on the case of Greek SMEs that face an extremely competitive and unfriendly macro environment and examines the performance of IT investments of Greek SMEs through a combination of qualitative and quantitative longitudinal data. A variety of financial as well as qualitative (primary) data are used for the examination of the correlation between profitability and IT.Α survey-based methodology was used for the collection of qualitative data of Greek SMEs covering the time period of 2004-2010. The examining period is divided into two sub-periods: pre-crisis and post crisis periods. Additionally, the examination of the relationship of European IT investment subsidy with firm profitability is examined. The results of this empirical study indicate that companies with IT investments present higher profitability than their rivals. SMEs are the backbone of national economy, thus their competitiveness plays a significant role to national development and growth. Therefore, the findings of this research have implications for practitioners, managers and policy makers.

Keywords: IT investments, SMEs Performance, Profitability, Competitiveness and European Subsidies.