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This study aims to document the effect of educated workforce on the decision of small and medium enterprises (SMEs) to use external auditors to verify their financial statements.

This paper uses the probit regression models and the data from 141 developing countries to test the arguments presented in this paper. The data is provided by the World Bank’s Enterprise Surveys and is collected during the period between 2006 and 2020.

The paper shows that SMEs with inadequate access to educated workforce are more likely to use external auditors to verify their financial statements. The findings are robust to the comprehensive inclusion of relevant controls and to a number of sensitivity tests. The sensitivity tests include dividing samples based on SME’s size, country’s gross domestic product and country’s location. The results also remain qualitatively the same after correcting for potential endogeneity concerns. Furthermore, the paper shows that the relationship between access to educated workforce and the choice of external audit is moderated by several SME-specific characteristics, such as its size, ownership concentration, managerial experience and tax-related problems.

This is an initial attempt to highlight the role played by the quality of workforce on the choice of external audit among SMEs in an international context. Most of prior literature on this topic focuses on the publicly listed firms.

The paper answers the following questions: (1) Do firms located in rural areas experience greater problems in accessing financial services? (2) If this is the case, what can these firms do to improve their access to finance?

This paper uses the pooled logistic regression and the data collected by the World Bank's Enterprise Surveys during the period between 2008 and 2018 to answer the aforementioned questions.

The results of this paper show that firms headquartered in rural (urban) areas experience greater (lower) problems in accessing finance than other firms. This paper attributes these findings to higher (lower) levels of information asymmetry and lower (higher) levels of density of banking operations in rural (urban) areas. The results of this paper also show that firms headquartered in rural areas can improve their access to finance by increasing the skill levels of their employees.

This paper highlights the actions that rural firms can undertake to overcome the adverse impact of their geographic location.

The aim of this paper is to document the impact of competition on managerial practices adopted by small and medium enterprises (SMEs).

The paper uses the data provided by the World Bank’s Enterprise Surveys to test the arguments presented in this paper. The data were collected during the period between 2013 and 2014 and the sample consists of firms from Egypt, Jordan, Lebanon, Tunisia and Yemen.

The authors show that SMEs with higher exposure to competition are more likely to adopt better managerial practices than SMEs with lower exposure to competition. The authors argue that competition disciplines the managers by exposing firms to the possibility of bankruptcy and/or the loss of market share to competitors. Therefore, these firms are compelled to adopt good managerial practices to protect themselves against negative impact of competition. The results show that positive impact of competition on managerial practices is confined only to the competition that comes from foreign competitors. Local competitors or competitors from informal sector have no significant impact on the adoption of good managerial practices.

An important contribution of this paper is that it documents how various types of competition affect SME’s decision to adopt better managerial practices. Another important contribution is highlighting of the role played by the competition in shaping the management practices among SMEs in the MENA (Middle East and North Africa) region.